Phonographic Performance Co of Aus & Ors v Fed. of Aus Commercial TV Stations

[1997] HCATrans 228

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S54 of 1997

B e t w e e n -

PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LIMITED

First Applicant

EMI MUSIC AUSTRALIA PTY LIMITED

Second Applicant

BMG AUSTRALIA LIMITED

Third Applicant

CASTLE COMMUNICATIONS AUSTRALIA LIMITED

Fourth Applicant

DINO MUSIC PTY LIMITED

Fifth Applicant

ETC ELECTRICAL PTY LIMITED trading as SUBTERRANEAN RECORDS

Sixth Applicant

FESTIVAL RECORDS PTY LIMITED

Seventh Applicant

HADLEY RECORDS PTY LIMITED

Eighth Applicant

LARRIKIN ENTERTAINMENT PTY LIMITED

Ninth Applicant

MIDNIGHT RECORDS PTY LIMITED

Tenth Applicant

MCA MUSIC ENTERTAINMENT LIMITED

Eleventh Applicant

POLYGRAM PTY LIMITED

Twelfth Applicant

SONART MECA PTY LIMITED

Thirteenth Applicant

SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED

Fourteenth Applicant

STONEBARD PTY LIMITED trading as NATURAL SYMPHONIES

Fifteenth Applicant

THE MASSIVE RECORDING CO PTY LIMITED

Sixteenth Applicant

WARNER MUSIC AUSTRALIA PTY LIMITED

Seventeenth Applicant

MOIRA McCOURT trading as GIRL ZONE RECORDS

Eighteenth Applicant

MARTIN WRIGHT trading as MOVE RECORDS

Nineteenth Applicant

WAYNE SMITH trading as RIGID RECORDS

Twentieth Applicant

NEVILL LOUIS SHERBURN trading as SWAGGIE RECORDS

Twenty-First Applicant

and

FEDERATION OF AUSTRALIAN COMMERCIAL TELEVISION STATIONS

Respondent

Application for special leave to appeal

GAUDRON J
McHUGH J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 AUGUST 1997, AT 11.09 AM

Copyright in the High Court of Australia

_____________________________

MR D.K. CATTERNS, QC:   May it please the Court, I appear with my learned friend, MR R. COBDEN, for the applicants. (instructed by Gilbert & Tobin)

MR P.G. HELY, QC:   If the Court pleases, I appear with MR M.R.J. ELLICOTT for the respondents.  (instructed by Boyd House & Partners)

GAUDRON J:   Yes, thank you.  Mr Hely, the Court considers it would be advantaged by hearing from you first in this matter.

MR HELY:   There are some features of this case that indicate that it is an attractive case for special leave to appeal, but our basic submission is that special leave ought to be refused because the decision of the majority is correct and that the matter is not attended by sufficient doubt to justify the granting of special leave.  Can I endeavour to make that proposition good shortly because I appreciate if I cannot make it good shortly, I am not going to make it at all.  The starting point is my friends’ submissions.  If one looks at page 108 of the appeal book, paragraph 16 is the basic thesis which underlies the applicants’ case, namely that section 23 is a one purpose provision designed:

to prevent copyright subsisting in the same aggregate of sounds both as part of a cinematograph film and as a sound recording.

If one goes to page 75 lines 20 to 30 in the judgment of Mr Justice Lockhart one can see that the same theme informs his Honour decision and if we go back to page 72 lines 35 to 45 one sees the same theme, that is to say a legislative purpose:

of ensuring that the owner of the copyright in the film does not have vested in him the further right of copyright in the sound recording.

GUMMOW J:   I am not sure that a simple but unfashionable perhaps attention to the black letters of the definitions would not achieve the result for which Mr Catterns contends.

MR HELY:   One of the problems with Mr Catterns’ contention, he says that “For the purposes of this Act” means for some of the purposes of this Act but not for all of them, but he never identifies which particular provisions ‑ ‑ ‑

GUMMOW J:   For the purposes of the definitions?  There is a question here of the interrelation between then pseudo or supplementary definitional sections like 23 and the main definition section like section 10 and how that impacts on the structure of the Commonwealth statute.

MR HELY:   What we say the structure of the statute is this, that if one looks at the definition of cinematograph film which appears on page 2 of the book that has been handed up to your Honours one can see that it:

includes the aggregate of the sounds embodied in a sound‑track associated with such visual images;

GUMMOW J:   Then one has to go to the definition of “sound‑track”.

MR HELY:   Yes, I suppose so, one does.

GUMMOW J:   Well, one does.

MR HELY:   But what I would seek to put to your Honours is essentially this, that the copyright does include the sound‑track.  The sound‑track means the matters referred to in the definition which appears on page 7.  It is the maker of the film which is an integrated product resulting from the amalgamation of the sound and the visual images who owns the copyright in the film.  That comes from section 22(4), which is on page 16, and from section 98(2), which I think is not reproduced.  It therefore follows from section 86 that it is the maker of the film who has the exclusive right to make a copy of the film.  If one then comes to the definition of “copy” on page 3:

in relation to a cinematograph film, means any article or thing in which the visual images -

and this is the important part -

or sounds comprising the film are embodied;

and section 14 would extend that to a substantial part.  It therefore follows that if anybody makes a copy of the film or a copy of the sound‑track appearing upon the film my client has the right to proceed for infringement.  It therefore follows that the purpose of section 23 cannot be the purpose assigned by Mr Catterns and adopted by Justice Lockhart because although there are not two section 85 copyrights, there is a section ‑ ‑ ‑

GAUDRON J:   Whether or not it is the purpose does not seem to me really to be the question.  The question is whether there is an infringing copy of the record.  Is that not the question that ‑ ‑ ‑

MR HELY:   The ultimate question is whether, when my client broadcasts a cinematograph film, it is broadcasting a sound recording.

GAUDRON J:   No.

MR HELY:   Yes, because that - I am sorry, with respect, yes, because ‑ ‑ ‑

GAUDRON J:   No, is it not whether it is making an infringing copy in terms of the Act?

MR HELY:   The basic section which triggers this inquiry and which was the foundation of the stated case was section 152 and the question under section 152(2) and (6) is whether, when a cinematograph film is being broadcast, that amounts to the broadcast of a sound recording in which Mr Catterns’ clients have copyright.  Clearly but for section 23 it would, but section 23 says “For the purposes of this Act”, and we would interpolate including the purpose of section 152, a sound‑track ‑ ‑ ‑

GUMMOW J:   Yes, but one cannot forget section 86, can one, and section 85?

MR HELY:   No, one cannot, but that, with respect, does not impact upon the question.

GUMMOW J:   It does because 85(a) talks about - maybe not this particular question which is agitating these gladiators - but section 85(a) talks about “to make a copy of the sound recording” and section 86(a) “to make a copy of the film”.

MR HELY:   Yes, but clearly Mr Catterns can stop me making a copy of the sound recording at the point prior to it being incorporated in the film, but once it gets incorporated into the film as part of the film it ceases to be a sound recording.  Therefore, if it comes to the question, “Can I make a second copy of the film?”, the answer is yes, because what I am doing is exercising my 86(a) right and I am not copying his sound recording because once the sound recording is incorporated into the film it ceases to be, for relevant purposes, a sound recording.

GUMMOW J:   That is the question, but you agree, do you not, that there would be some overlapping applies, namely, if one goes to the definition “cinematograph film” the concluding words of inclusion “the sounds embodied in a sound‑track” and then one looks at the definition of “sound recording” and “record”, they would be answered, would they not?

MR HELY:   Yes, I agree.

GUMMOW J:   So there would be an overlap or duality or whatever you would like to call it.

MR HELY:   But for section 23?

GUMMOW J:   Yes.

MR HELY:   Yes, clearly, but the question is, “Is section 23 exhausted by preventing that duality?”

GUMMOW J:   Well, that is the question.

MR HELY:   That is the question and we say, firstly, section 23 says “For all the purposes of this Act”, one of ‑ ‑ ‑

McHUGH J:   Well, it does not use the word “all”, does it?

MR HELY:   No, I am sorry, it says “For the purposes of this Act” which, I appreciate it can be constrained by the context, but we would submit that there is no constraining context and to the extent to which the context bears upon the question, it operates in the other direction.  If your Honours look at section 110(3) ‑ ‑ ‑

GUMMOW J:   If I can distract you for a minute, one purpose of the Act are those in sections 85 and 86.

MR HELY:   Yes.  Another purpose of the Act is section 101 and section 152.  Another purpose, I suppose, is section 97, I think it is.

GUMMOW J:   But the first stop would be 85 and 86, I suppose, would it not, because that tells you what the nature of the rights are and then you work out whether there is an infringement?

MR HELY:   No, I think the first stop is probably 97, which says that the maker have the sound recording, which is the owner of the copyright subsisting in the recording, but I accept ‑ ‑ ‑

GUMMOW J:   Yes, 97 and 98 and 85 and 86.

MR HELY:   Yes, and I accept that a sound‑track, but for section 23, would be a sound recording.

GUMMOW J:   And, therefore, you would have to read 85 and 86 in that fashion unless it were for 23 and 96 and 97.

MR HELY:   There are two factors which are relevant and I hope I am not seeking to avoid your Honour’s question, but can I seek to come at it through this route:  once that sound recording becomes incorporated into the film via the sound‑track it is the maker of the film who has the right to object or to sue for copying of it and copying of it can by virtue of the definition of “copy” of a film ‑ ‑ ‑

GUMMOW J:   There being no sound recording right because 23 has already worked.

MR HELY:   No, I am sorry.  Step one is that I cannot make a copy of the sound recording without the consent of the owner of the sound recording.  Step two is once I get that consent I incorporate the sound recording into the film as the sound‑track.  Step three, section 86 gives me the exclusive right to copy and to broadcast that film.  Step four, a copy of the film includes a copy of the sound‑track or a substantial part.  Therefore, if a person, including Mr Catterns’ client, were to copy the sound‑track, I would have a right against him for infringement, but section 110(3) in effect reinforces section 23 and there is the other side of it and it says that I have no right against people who are in effect reproducing the sound‑track if they are doing so through a route other than the film. 

So that when you look at section 23 and when you look at section 110 and when you take into account for the purposes of the Act the consequence is that it is my client who has the rights to complain of people taking copies of the sound‑track rather than Mr Catterns’ and that when one says to oneself in section 152 terms, “Am I broadcasting a sound recording?”, the answer is, “No, I am not.  I am broadcasting a

cinematograph film and the sound‑track is deemed not to be a sound recording.”  That is why we submit that the decision of the majority is clearly correct and either your Honours instantly accept that proposition or you do not, I suppose.  It is very hard to come to grips with the proposition that something is not arguable unless the immediate impact of one’s submissions is to that effect. 

The only other matter I want to put is this.  This is a matter which is of importance, if it is important at all, only to the owners of  the copyright in sound recordings and broadcasters.  One cannot incorporate a sound recording into the sound‑track of a film without the consent of the owner of the copyright in the sound recording.  It would be open to the owner of the copyright in the sound recording at that point to include in the contract a term to the effect that if the maker of the film or anybody claiming through or under him afterwards broadcast that film, then a royalty or some other reward would be payable, so that ‑ ‑ ‑

GUMMOW J:   But there could be problems of privity and all sorts of difficulties with conditions running ‑ ‑ ‑

MR HELY:   No, because one is giving a right against the other contracting party that he pays if he or somebody further down the track does something and it is a matter for him to protect himself by shunting that stipulation through the subsequent contractual links.

GUMMOW J:   Yes, one has to think of that sort of argument in international dimensions too.  Australian films go all over the world.

MR HELY:   Yes, it can, but the point simply is that it is open to the owner of the sound recording to impose whatever conditions at the time of the initial consent he conceives to be necessary to protect his position.  Those are my submissions, if the Court pleases.

GAUDRON J:   Yes, thank you, Mr Hely.  Mr Catterns, we need not trouble you further.  There will be a grant of special leave in this case.

MR CATTERNS:   May it please the Court.

AT 11.25 AM THE MATTER WAS CONCLUDED