Pontello, J. v Ceselli, C
[1989] FCA 279
•11 May 1989
J3DGMENT No. a?q.. K.. J q
LIMITED DISTRIBUTION
CATCHWORDS
COPYRIGHT - Infringement - Possession of infringing video
cassette tapes - Maklng of unauthorised coples - Defendant
knowingly concerned in the commission of an offence agalnst
the Copyright Act - Penalty - Factors taken into account -
Postponement of time to pay fines.
Copyright Act 1968 s.132.
NOS. NG 56 to 63 of 1989
JOHN PONTELLO V COSIMO CESELLI
Wllcox J
Sydney
11 May 1989
REGISTRY
[q RECEIVED v, .-. FEDERAL COURT OF '
AUSTRALIA
PRINCIPAL
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA
) )
NEW SOUTH WALES DISTRICT REGISTRY ) No. 56 of 1989
)
GENERAL DIVISION 1
BETWEEN: JOHN PONTELLO
Prosecutor
AND: COSIMO CESELLI
Defendant
CORAM: WILCOX J PLACE: SYDNEY DATE : 11 IIIAY 1989
MINUTES OF ORDER
THE COURT ORDERS THAT:
1. Wlthin six months from thlz eay the defendant pay fines of three hundred dollars ($300) per infringing artlcle; the total fine being slx thousand nine hundred dollars ($6,900).
All infringing video cassette copies of cinematograph
fllms, labels, stickers, dust covers and printing
materials, which were in the possession of the
defendant and are now in the possession of the
Australian Federal Police, are to be destroyed.The roll of silver mylar paper which was in the possession of the defendant and is now in the possession of the Australian Federal Police,is to be delivered up to the Australasian Film and Video Security Organisation to be destroyed.
All video recorders, television sets, assorted
cables, leads, plugs, Kambrook portable local centre,
remote control units, video dubbing kits, video
duplicators, wooden printing templates and blank
tapes, which were in the possession of the defendant
and which are now in the possession of the Australian
Federal Police, are to be delivered up to the
Australasian Film and Video Security Organisation, on
behalf of the copyright owners, to be used in relation to further investigations.
The genuine video cassettes now labelled 39, 123, 124, 146, 150, 151, 153, 155, 169, 193, 204, 205, 206, 207, 208, 209, 210, 211, 213 and 214, which were
in the possession of the defendant and which are now in the possession of the Australian Federal Pol~ce, are to be delivered up to the Australasian Film and
Video Security Organisation on behalf of the copyright owners, to be used in relation to further investigations.
Leave be reserved to the defendant to make an application for a further extension of time in respect of the payment of the fine.
Note: Settlement and entry of orders is dealt wlth in Order 36 of the Federal Court Rules.
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA
) )
NEW SOUTH WALES DISTRICT REGISTRY
) NO. N G 57 of 1989 1 GENERAL DIVISION )
BETWEEN: JOHN PONTELLO
Prosecutor
AND: COSIMO CESELLI
Defendant
CORAM : WILCOX J PLACE: SYDNEY DATE : 11 MAY 1989
MINUTES OF ORDER
THE COURT ORDERS THAT:
1. Within six months from this day the defendant pay
fines of five hundred dollars ($500) per infringing
article; the total fine being two thousand dollars
cS2,ooo).
Leave be reserved to the defendant to make an
application for a further extension of time in
respect of the payment of the fine.Note: Settlement and entry of orders is dealt with in Order
36 of the Federal Court Rules.
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA ) 1 NEW SOUTH WALES DISTRICT REGISTRY
) No. N G 58 o f 1 9 8 9 ) GENERAL DIVISION )
BETWEEN: JOHN PONTELLO
P r o s e c u t o r
AND: COSIMO CESELLI
D e f e n d a n t
CORAM : WILCOX J PLACE : SYDNEY DATE :
1 1 MAY 1 9 8 9
MINUTES OF ORDER
THE COURT ORDERS THAT:
1 . W i t h i n s i x months from t h l s day t h e d e f e n d a n t pay
f i n e s o f f i v e hundred d o l l a r s ( $ 5 0 0 ) p e r i n f r i n g i n g
a r t i c l e ; t h e t o t a l f i n e b e i n g f o u r t h o u s a n d f i v e
hundred d o l l a r s ( $ 4 , 5 0 0 ) . Leave be reserved to the defendant to make an
application for a further extension of tlme in
respect of the payment of the fine.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NO. N G 59 of 1989
)
GENERAL DIVISION 1
BETWEEN: JOHN PONTELLO
Prosecutor
AND: COSIMO CESELLI
Defendant
CORAM: W1 LCOX J PLACE: SYDNEY DATE : 11 MAY 1989
MINUTES OF ORDER
THE COURT ORDERS THAT:
1. within six months from thrs day the defendant pay fines of five hundred dollars ($500) per lnfrlnging article; the total flne being two thousand dollars
($2,000).
Leave be reserved to the defendant to make an
application for a further extension of time in
respect of the payment of the fine.Note: Settlement and entry of orders is dealt with in Order
36 of the Federal Court Rules.
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NO. N G 60 of 1989
)
GENERAL DIVISION )
BETWEEN: JOHN PONTELLO
Prosecutor
AND: COSIMO CESELLI
Defendant
CORAM : WILCOX J PLACE : SYDNEY DATE : 11 MAY 1989
MINUTES OF ORDER
THE COURT ORDERS THAT:
1. Within six months from this day the defendant pay fines of frve hundred dollars ($500) per infringing article; the total fine being seventeen thousand five hundred dollars ($17,500).
Leave be reserved to the defendant to make an
application for a further extension of tlme in
respect of the payment of the fine.
Note : Settlement and entry of orders is dealt wlth in Order 36 of the Federal Court Rules.
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NO. N G 61 of 1989
)
GENERAL DIVISION )
BETWEEN: JOHN PONTELLO
Prosecutor
AND: COSIMO CESELLI
Defendant
CORAM: WILCOX J PLACE: SYDNEY DATE : 11 HAY 1989
MINUTES OF ORDER
THE COURT ORDERS THAT:
Within six months from this day the defendant pay fines of five hundred dollars ($500) per infrlnglng article; the total fine belng twenty-two thousand
dollars ( $ 2 2 , 0 0 0 ) .
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA
) )
NEW SOUTH WALES DISTRICT REGISTRY 1 No. N G 62 of 1989
1
GENERAL DIVISION )
BETWEEN: JOHN PONTELLO
Prosecutor
AND: COSIMO CESELLI
Defendant
CORAM : W1 LCOX J
PLACE: SYDNEY
DATE : 11 HAY 1989
MINUTES OF ORDER
THE COURT ORDERS THAT:
1. Within six months from this day the defendant pay a fine of one thousand dollars ($1,000).
Leave be reserved to the defendant to make an application for a further extension of tlme in respect of the payment of the fine.
Leave be reserved to the defendant to make an application for a further extension of time in respect of the payment of the fine.
Note: Settlement and entry of orders is dealt with in Order
36 of the Federal Court Rules.
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NO. N G 63 of 1989
1
GENERAL DIVISION 1
BETWEEN: JOHN PONTELLO
Prosecutor
AND: COSIMO CESELLI
Defendant
CORAM: WILCOX J PLACE: SYDNEY
DATE : 11 HAY 1989
MINUTES OF ORDER
THE COURT ORDERS THAT:
1. Within six months from this day the defendant pay a fine of one thousand dollars ($1,000).
Leave be reserved to the defendant to make an application for a further extension of tlme in respect of the payment of the fine.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) Nos. N G 56 to 63
1 of 1989
GENERAL DIVISION )
BETWEEN: JOHN PONTELLO
Prosecutor
AND: COSIMO CESELLI
Defendant
CORAM : WILCOX J PLACE : SYDNEY DATE : 11 MAY 1989
EXTEMPORE REASONS FOR JUDGMENT
There are before the Court eight informations
alleging offences under s.132 of the Copyright Act 1968. The
informant in each case is John Pontello, a senior constable of
the Australian Federal Police. The defendant is Cosimo
Ceselli, a person who, untll last November, operated a vldeo
hire business at Seven Hills. Section 132 relevantly
provides:
"132. (1) A person shall not, at a time when
copyright subsists in a work--
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
(a) make an article for sale or hire;
(b) ...
(c) .. . (d) ...
if the person knows, or ought reasonably to know, the article to be an infringing copy of the work.
(2A) A person shall not, at a time when
copyright subsists in a work, have in his or her
possession an article for the purpose of--
(a) selling, letting for hire, or by way of
trade offering or exposing for sale or
hire, the article;(b) distributing the article for the purpose of trade, or for any other purpose to an extent that will affect prejudicially the owner of the copyright in the work; or
(C) by way of trade exhibiting the article in
public,
if the person knows, or ought reasonably to know, the article to be an infringing copy of the work.
(3) A person shall not, at a time when
copyright subsists in a work, make or have in his
or her possession a plate that the person knows, or
ought reasonably to know, is to be used for makinginfringing copies of the work.
(4) The preceding provisions of this section
apply in relation to copyright subsisting in any
subject-matter by virtue of Part IV in like manner as they apply in relation to copyright subsisting
in a work by virtue of Part 111.
( 5 ) ...
( 6 ) This section applies only in respect of
acts done in Australia.
(7) Prosecutions for offences against this
sectlon may be brought in the Federal Court of
Australia or in any other court of competentjurisdiction.
(8) Jurlsd~ctlon is conferred on the Federal
Court of Australia to hear and determine
prosecutions for offences against thls sectlon.
The first of the informations, in order of fillng, is
an information alleglng that the defendant had in his
possession 23 articles belng pre-recorded video cassette tapes
of various films. The second, thlrd, fourth, fifth and slxth
informations each allege that the defendant made unauthorised
coples of various fllms, being video copies. The numbers of
films alleged in respect of each information are four, nine,
four, 35 and 44 respectrvely
The last two lnformatlons allege that the defendant
was knowingly concerned in the commission of an offence by
Arie Piet Theo Seymonsbergen against s.132(3) of the Act, the
particular offence being the making of a plate which Mr
Seymonsbergen knew was to be used for making infringing copies
of works. These two informations refer, in each case, to four
different films; the gravamen of the offence being that the
plates were to be made for slicks for the video cassettes,
that is to say the materlal on the outside of the cassette
cover. The allegation 1s that Mr Ceselli caused Mr
Seymonsbergen to make those plates in order that he could use
them for the distribution of the illegal tapes which he had
himself made.
Section 133 of the Copyright Act prescribes the
penalties applicable to the offences created by s.132. In the
case of a first conviction of a person for an offence under
s.132(1), that is to say, making an article for sale or hire,
under s.132(2), that is, distribution, or under s.l32(2A),
possession, the maximum fine is $1,500 for the article, or for
each article to which the offence relates; or imprisonment
for a period not exceeding two years or both. In the case of
a contravention of s.132(3), the relevant maximum fine for a
natural person on first conviction is $1,500. In effect,
therefore, the fine applicable to each of the offences with
which we are here concerned is $1,500 per article.
It is, however, appropriate for me to emphasise that
the statute does provide for a gaol term for contraventions of
s.132(1) and 132(2A). I am informed that, so far as counsel
for the informant is aware, no person has yet been gaoled for
a breach of these provisions; but the fact that a gaol term is provided by the legislation does indicate the seriousness with which the offences have been regarded by the legislature.
It may well be that, in a serious case of multiple
infringement of these provisions, it will be appropriate for a
gaol sentence to be pronounced. I do not think that this is
an appropriate case in which to take that step. I bear in
mind that, despite the number and scale of his offences, the
defendant is facing conviction under the Act for the first
time. However, those who might be tempted to involve
themselves in the pirate copying industry ought to take heed
of the fact that gaol sentences are provided and they should
expect that they will be imposed, in appropriate cases.
The evidence indicates that the defendant was
involved in pirate copying on a substantial scale. This is
already indicated by the fact that two of the charges, in
relation to which he has pleaded guilty to making copies,
refer respectively to 35 copies of one title and 44 copies of
another. In addition to that matter, I note that the agreed
statement of the relevant facts includes schedule C, whlch
sets out a long list of unauthorised -- that is to say, pirate
-- tapes which were found in the possession of the defendant,
and in relation to many of which no charge has been made.
According to the evidence of Mr William Roy Taylor, a licensed
private inquiry agent, some 317 video tapes were taken from
the possession of the defendant. Upon examination it was
found that 237 of these tapes were plrate tapes.
The evidence also shows that the defendant's home at
Prospect was set up with elaborate recording equipment whlch enabled him to make multiple coples of individual tapes. I think that it is right to describe the nature of the
defendant's activities in his home, in the words of his
counsel, as being a "cottage industry"; with the comment that
it was a fairly large scale industry, as cottage lndustrles
go. It is qulte obvious that the defendant systematically
copied tapes for commercial profit.
Evidence was given by the defendant of several
matters. He said in his evidence that he made no money from
the activity and that he used the pirate tapes only for the purposes of his business, or for exchanging against genuine tapes provided by other people. However, there is some
evidence of cash receipts. It also appears that the defendant
supplied tapes, on a regular basis, to at least one
distributor. I find it very difficult to believe that the
defendant gained so little from the activity as he maintained
in his evidence. The gist of his evldence was that it was
only his illegal activities that kept the video shop golng and that, without the pirate tapes, the shop was unprofitable. No doubt the pirate tapes did make a substantial contribution to
the business; but it seems to me that the scale of hls
activities was such that there must have been significant cash
receipts from time to time.
The defendant also sald that he sold his business for
$18,000 at the end of 1988; and that, out of thls sum, he
paid fines which had been Imposed upon hlm at the St James
Local Court, totalling $7,250. Those frnes were related to
the present facts. They were offences under the Trade Marks
~ c t
- 1955 in respect of the possession of a metal plate for the
purpose of forging a registered trade mark and the possession
of an article to which a forged registered trade mark was
applled. I accept the submission of counsel for the defendant
that, in a broad way, I should take into account the facts
that the defendant has already incurred these penalties, and
has paid the penalties out of the sale of his business, in
considering the fines which ought to be imposed in the present
matters.
The defendant claimed that, at the present tlme, he
has a bank balance of only about $2,000 and that he is
receiving unemployment benefits. In support of that last
claim there was tendered a letter from the Department of
Social Security which confirms that unemployment benefits are
being pard. I accept that this is the situation. However, I
am somewhat sceptical of the defendant's claims regarding his
general financial position. As I have said, I find it
difficult to believe that he did not receive more significant
benefits from the activities than he has claimed.
Nonetheless, as the defendant's counsel has pointed out, there is no contrary evidence. Accordingly, it would be wrong to approach the case upon the basls that the defendant has significant cash sums secreted. I do not do so.
In considering the scale of penalities which ought to
be imposed, it is proper to take Into account not only the
fact that the defendant has pleaded gullty to each of the
present informations, but also to the facts that he fully
co-operated with the police when they went to hls home to
execute a search warrant and that, thereafter, he accompanied
them to hls shop, where they made a search and took further
material. Both at his home and at the shop, the defendant
asslsted the police in locating the material required. He
answered questions freely, and subsequently he attended for a
formal record of interview. It has to be said that he has
fully co-operated in respect of all aspects of the
investlgation. As I have sald, it 1s also proper to take into
account in his favour in a general way the fines which were
imposed in respect of the trade marks matters.
As against those factors I have to take into account
the scale of the operation. It is quite clear that this is
not a case of a video shop proprietor who, lacking a
particular tape for his customers, declded illegally to copy
that tape. This is a person who has gone into the activity of
making and distributing lllegal tapes in a substantial way,
and over a significant perlod of tlme. I do not think that lt
matters very much whether the period of the activity was some
11 months, as stated by the defendant in his evidence, or a
period of four and a half years; that is to say, spanning hls
total involvement in the video industry, as Mr Ceselli agreed
he told Constable Pontello at the tlme of the first interview.
mr Ceselli said in evidence that this in fact was incorrect.
Whichever be the correct length of time, the activlty went on
for a long time.
Moreover, and I regard this as a serious aspect of
the matter, the activity went on at a time when Mr Ceselli was
aware that what he was doing was illegal. He not only had
whatever general knowledge one might have from being involved
in the video industry; it appears that he received a specific
warning about the illegality of copying tapes from Mr Stephen
Howes, the director of the Australasian Film and Video
Security Office who visited his shop in about 1986. Although,
in his evidence, Mr Ceselli could not specifically remember Mr
Howes, he did agree that he received a visit at about that
time from a person who specifically warned hlm about making
pirate videos. It seems that, notwithstanding that warning,
mr Ceselli decided to continue, or to commence as the case may
be, the large scale operation to which I have referred. It is
difficult to conceive circumstances involving a more
deliberate defiance of the rights of the copyright owners and
the provisions of the Copyright Act.
This deliberate defiance and the scale of the
activity makes it very difficult to put much welght upon the
impecuniosity claimed by the applicant, although I should say
that I have taken that matter lnto account particularly in
regard to the penalties for making lllegal coples. There was
some discussion during argument as to the comparatxve
seriousness of the offences of maklng tapes as distinct from
possession or distribution. The maximum penalty in respect of
each matter 1s the same. But I must say that I would have
thought that the offence of making a tape is more serious than
possessing or distributing, other factors being equal. It is
the person who makes the tape who creates the possibility of
that tape going into existence. And in doing so he
deliberately transgresses the rights of the copyright owner.
In respect of the first information, that 1s to say the possession of 2 3 unlawful tapes, I have been informed of certain fines which were imposed by Lockhart J on 2 0 March
1989. One of the defendants upon that occasion was a person
who was associated with Mr Ceselli. So far as the evldence
revealed, the involvement of that person, Mr Reich, was as a
distributor, he apparently going around the suburbs of Sydney
and selling tapes from a van. Mr Reich and Mr Ceselli
apparently exchanged tapes. Money may or may not have changed
hands between them.
I have no information about the other person who was
dealt with by Lockhart J on 2 0 March 1989. The penalty
imposed by his Honour in respect of both of those defendants,
for possession, was at the rate of $300 per article. As was
pointed out by counsel for the present defendant, I have no
lnformatlon about the financial position of either of those
offenders; but, even if I act upon the assumption that their
financial position was better than that of the present
defendant, it seems to me reasonable to treat the present
defendant as being more heavrly involved in the pirate tape
industry, at least than Mr Reich. Bearing all these things in
mind, and taklng into account the favourable aspects in
relation to the defendant to which I have referred, I have
decided to impose the same penalty as was imposed by Lockhart
J on those defendants; that is to say $300 per tape.
Accordingly the order in respect of matter G 56 is
that the defendant pay fines of $300 per article; the total
fine being $6,900.
In relation to the offences of making tapes, I have
already indicated that I regard those as more serious
offences. But for the favourable factors to which I have
already referred, I would have imposed a penalty much higher
than the figure of $500 per item which I propose to impose.
The making of these tapes were blatant offences. It is
difficult to see why the appropriate penalty should not be on
the upper end of the scale of penalties provided. However,
bearing in mind all of the factors to whlch I have referred,
and also the number of tapes and my deslre not to Impose a
penalty whlch will be financlally crushing, I propose to
impose penalties at the rate of $500. This means that, in
respect of G 57 where four copies are involved, the penalty
will be $2,000, in G 58, where there are nine copies involved,
$4,500, in G 59 where there are four copies, $2,000, in G 60
where there are 35 copies, $17,500; and in G 61, where there
are 44 copies, $22,000. These fines, in respect of the
offences of maklng, total $48,000.
In relation to the last two offences, that is being
knowingly involved in the offences committed by Mr
Seymonsbergen, I think that the appropriate penalty in each
case in $1,000.
In total, the fines which I impose come to $56,900.
I appreciate that the defendant is unlikely to be in a position to pay that amount immediately and I wlll entertain any application for time to pay.
[Counsel for the defendant applied for time to pay the fines.]
In relation to time to pay, the submission has been put on behalf of the defendant that the Court should fix a
trme which would be consistent with the defendant paying the
fines out of his unemployment benefits, to the extent of, say,
one half of the benefit. I do not think that this is the
proper approach. The evidence of the defendant is that his
home is unencumbered and is worth $150,000. whether that
flgure rs correct I do not know; but it seems to me unlikely,
glven Sydney property values, that it is worth any less than
that amount.
I do not think that it is realistrc to assess the
matter upon the basis that the defendant will remain
unemployed. His record has been of running his own
businesses, in a service station and then in the video shop.
He has expressed a desire to get back into the service statlon
business, at which he is experienced and in respect of which
he has, apparently, been successful. I have no doubt at all
that, at his age and bearing in mind his buslness experience
and the fact that he is physically fit, he will be back into
employment, whether as an employee or on his own account,
before very long. I think that it 1s realistrc to expect that
he can raise the money required to pay the fines by mortgaging
his home and repaying the mtrtgage out of future earnings.
I do not wish to take a course which would force the
defendant to sell his home and to dispossess his family of
assessed seems to me to be wrthin the range of a mortgage their accommodation. The amount of the fines which I have provrding that the defendant 1s given sufficient time to
organrse thls. It seems to me that the appropriate course 1s
to order that each of the fines be pard withrn six months from
today, but I reserve leave to the defendant to make an
application for a further extensron of that time in respect of
any or all of the fines if he so desires. The defendant
should approach the matter upon the b a s ~ s that an extens~on of time would be unlikely to be granted unless, at that time, he
is able to satisfy the Court that he has taken all steps
reasonably open to him to secure employment and to raise money
to pay the fines, against the security of his house.[Counsel applied for additional orders involving seized
articles ]
On behalf of the informant, counsel has sought
certain further orders in relation to items taken from the
possession of the defendant. The proposed orders are set out
on a document entitled "Draft order" and numbered 3 to 6
inclusive. Counsel for the defendant does not oppose the
making of any of those orders and I so order.
I certify this and the thirteen (13)
preceding pages to be a true copy of
the Reasons for Judgment of
his Honour Justice Wilcox.
rssosiate: y2q.~di\, A J ~ -
Date: 5 June 1989 Counsel for the Prosecutor: MS E Fullerton Solicitors for the Prosecutor: Director of Public
ProsecutionsCounsel for the Defendant: Mr B Scott Solicitors for the Defendant: Moffatt sullivan Date(s) of hearing: 11 May 1989
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