Prosperity Group International Pty Ltd ACN 110 539 636 v Intellectual Properties Opportunities Pacific Pty Ltd ACN 130 769 578
[2009] FCA 403
•27 April 2009
FEDERAL COURT OF AUSTRALIA
Prosperity Group International Pty Ltd ACN 110 539 636 v Intellectual Properties Opportunities Pacific Pty Ltd ACN 130 769 578 [2009] FCA 403
PRACTICE AND PROCEDURE - consideration of an application pursuant to s 31A of the Federal Court of Australia Act 1976 on the part of an applicant for judgment
INTELLECTUAL PROPERTY – consideration of an application for judgment under s 31A as aforesaid in respect of a claim for infringement of the copyright subsisting in a literary work comprising text descriptive of the services of the applicant and reproduced on a website by the respondents
Federal Court of Australia Act 1976, s 31A
Copyright Act 1968 (Cth), ss 10, 14, 22, 29, 31, 32, 36, 115 and 116
Hocking v Bell (1945) 71 CLR 430 - cited
Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2007) 236 ALR 720 - cited
Jefferson Ford Pty Ltd v Ford Motor Co. of Australia Ltd (2008) 246 ALR 465 - cited
Vans, Inc. v Offprice.Com.Au Pty Ltd [2006] FCA 137 - cited
White Industries Aust. Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 - citedPROSPERITY GROUP INTERNATIONAL PTY LTD ACN 110 539 636 v INTELLECTUAL PROPERTIES OPPORTUNITIES PACIFIC PTY LTD
ACN 130 769 578 and PAUL MICHAEL DRABSCHQUD33 of 2009
GREENWOOD J
27 APRIL 2009
BRISBANE
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD33 of 2009
BETWEEN: PROSPERITY GROUP INTERNATIONAL PTY LTD
ACN 110 539 636
ApplicantAND: INTELLECTUAL PROPERTIES OPPORTUNITIES PACIFIC PTY LTD ACN 130 769 578
First RespondentPAUL MICHAEL DRABSCH
Second Respondent
JUDGE:
GREENWOOD J
DATE OF ORDER:
27 APRIL 2009
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.The first respondent and second respondent are restrained from infringing the applicant’s copyright subsisting in a document described as “Copyright Material” in a schedule to the application filed on 29 January 2009 and described as “Marketing Material” in Schedule A to the statement of claim filed on 29 January 2009 (described in these orders as “the Copyright Work”) by reproducing (including by way of publication upon a website) or authorising the reproduction of the Copyright Work or a substantial part of the Copyright Work, without the licence of the applicant.
2.An account be taken of the profits derived by the first respondent and second respondent as a result of the infringement of copyright in the Copyright Work.
3.The first respondent and second respondent pay to the applicant such profits determined upon the taking of accounts, together with interest thereon pursuant to s 51A of the Federal Court of Australia Act 1976.
4.The first respondent, by Paul Drabsch, make, file in the Federal Court of Australia and serve on the solicitors for the applicant on or before the expiration of one month after the making of this order, an affidavit setting out in respect of the business named “I.P.O. Pacific” and operated by the first respondent or formerly operated by the first respondent whether by Paul Drabsch or by him together with others, the total number of clients of the first respondent to whom services described by the first respondent’s website were provided, the nature of the services so provided to those clients and a schedule setting out the revenue derived from those clients and the costs and expenses incurred in deriving that revenue.
5.The first respondent on or before the expiration of one month after making this order, make, file in the Federal Court of Australia and serve upon the solicitors for the applicant an affidavit setting out a list of documents which relate to the services provided by the first respondent to its clients and those documents relied upon by the first respondent in formulating the schedule of revenue, costs and expenses derived and incurred by the first respondent as required by order 4, and the respondents shall permit the applicant to inspect such documents identified by the affidavit at a time and place agreed between the parties.
6.The first respondent by Paul Drabsch make, file in the Federal Court of Australia and serve on the solicitors for the applicant, an affidavit identifying the number of copies of any material which contains a substantial part of the Copyright Work which are in the possession, custody or power of the first respondent or Paul Drabsch and such copies be delivered up to the solicitors for the applicant, and Paul Drabsch shall identify in that affidavit any website established by him or the first respondent or anyone on their behalf or either of them which hosts in electronic form any reproduction of a substantial part of the Copyright Work.
7.The respondents pay the applicant’s costs of and incidental to the proceeding.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD33 of 2009
BETWEEN: PROSPERITY GROUP INTERNATIONAL PTY LTD
ACN 110 539 636
ApplicantAND: INTELLECTUAL PROPERTIES OPPORTUNITIES PACIFIC PTY LTD ACN 130 769 578
First RespondentPAUL MICHAEL DRABSCH
Second Respondent
JUDGE:
GREENWOOD J
DATE:
27 APRIL 2009
PLACE:
BRISBANE
REASONS FOR JUDGMENT
This is an application by notice of motion by which the applicant seeks an order that judgment be entered substantially in terms of the application in the proceeding, pursuant to s 31A of the Federal Court of Australia Act 1976 (“the Federal Court Act”) on the footing that the Court ought to be satisfied the respondents have no reasonable prospect of successfully defending the proceeding.
In the principal proceeding, the applicant claims that the respondents have reproduced in a material form, without the licence or authority of the applicant, the whole or a substantial part of the applicant’s copyright work consisting of text comprising a document which describes approaches to wealth creation, the virtues of financial freedom and various approaches to engaging with the stock market. The document sets out an overview of the preferred balanced approach to investment, a description of the services offered by the applicant, solutions to achieving financial independence and other matters. The document is designed for electronic use in connection with the applicant’s website.
The applicant says that the respondents have used that document in connection with the business of the first respondent and in doing so they have made a reproduction or substantial reproduction of the work.
In the principal proceeding, the applicant claims an injunction restraining each respondent from further infringing the copyright in the work or authorising an infringement by reproduction or substantial reproduction of the work; an order that each respondent pay damages in an amount to be assessed; an order that the respondents pay damages pursuant to ss 115(2), 115(4) and 116 of the Copyright Act 1968 (Cth) (“the Copyright Act”); an order for an inquiry as to the extent of the applicant’s loss and damage by reason of the infringement; in the alternative an order that an account be taken of the profits derived by the respondents by reason of the infringement; and orders for directions as to aspects of those claims for relief.
The procedural matters
The proceeding was commenced by filing an application and statement of claim on 29 January 2009. The proceeding was listed for directions on 24 February 2009. An appearance was entered by Paul Drabsch, the second respondent, on 23 February 2009. Paul Drabsch is the sole director of and sole shareholder in Intellectual Properties Opportunities Pacific Pty Ltd, the first respondent in the proceeding. Paul Drabsch has appeared on his own behalf on each occasion that the proceeding has come before the Court and on those occasions he has also sought and has been given leave to represent the company. In that sense, both respondents are self‑represented litigants.
Paul Drabsch prefers the description “the freeman commonly called Paul Michael Drabsch, Principal” and has requested the Court to address him in the course of proceedings as “Principal”. Paul Drabsch does not wish to be addressed as Mr Drabsch. Notwithstanding the style which Paul Drabsch has chosen to adopt to describe himself, the Court with no disrespect to him, has addressed and continues to address him simply as Paul Drabsch.
When the matter came before the Court for the first directions hearing on 24 February 2009, I explained the nature of the applicant’s claims and the future steps that would need to be put in place to deal with the orderly conduct of the proceeding. An order was made that the first and second respondents file a defence in the proceeding by 10 March 2009 with the applicant to file a reply by 13 March 2009. The matter was listed for further review at 9.30am on 18 March 2009. Paul Drabsch anticipated that he would seek legal advice concerning the issues raised by the applicant’s claim although financial limitations on his capacity to do so were a real concern to him. Paul Drabsch accepted that since the company no longer maintained its registered business address at the address nominated to the Australian Securities and Investments Commission (“ASIC”), documents relating to the company could be served upon him personally at his own address which he identified as 8 Nauru Place, Pacific Pines, Queensland, 4211. His nominated address for service is also set out in his notice of appearance filed on 23 February 2009.
The matter came before the Court on 18 March 2009 at 9.30am. By then, Paul Drabsch had signed and filed a defence on behalf of the respondents. The defence is in these terms:
1.The respondents conditionally accept[s] the claims mentioned on the agreement as long as each point outlined by the applicant’s state[ment] of claim is accompanied by a signed affidavit from the applicant/injured party bearing full commercial liability to the claimant/applicant.
2.That the appropriate evidence is shown that the respondents breached the copyright laws and that the applicant was the actual copyright owner.
It seems from the terms of the defence that the respondents accept the claims of the applicant on the condition that each material fact alleged in the statement of claim can be supported by, that is, proven up by, affidavit evidence making out each factual allegation contained in the statement of claim. Secondly, the defence of the respondents puts the applicant to proof of injury, damage or commercial loss, described as “commercial liability”, incurred by the applicant. Thirdly, the defence called upon proof of infringement on the part of the respondents and proof of ownership of the copyright subsisting in the work, in the applicant. The defence does not assert a denial of any material fact pleaded in the statement of claim. Nor does the defence assert an affirmative case in answer to the contentions of infringement of copyright. Rather, the respondents by their defence put the applicant to proof whilst, subject to proof, conditionally accepting the applicant’s claim.
On 18 March 2009, Paul Drabsch appeared on both his own behalf and that of the company. A copy of the defence filed on 12 March 2009 had not been served upon the applicant. A copy was provided to the applicant at the directions hearing. Paul Drabsch advised the Court that he had unsuccessfully made attempts on behalf of the respondents to resolve the matter with the applicant. He contended that the applicant had refused to negotiate a settlement of its claim. Paul Drabsch made oral submissions that, consistent with the defence of the respondents, he, on their behalf, conditionally accepted the applicant’s claim so long as the applicant could show evidence of ownership of the copyright and proof of the loss alleged to have been suffered. Paul Drabsch said that he wanted to see in the form of affidavit evidence proof of the applicant’s claims to demonstrate the truth of the claims as for present purposes, the claims were simply “claims with no evidence to back it”.
The applicant submitted on 18 March 2009 that it may well file an application for summary judgment.
The proceeding was adjourned to 8 April 2009. Since the respondents were represented by Paul Drabsch and were thus, in effect, self‑represented litigants and since Paul Drabsch had made submissions about limitations upon his financial capacity to address the issues, the matter was adjourned to 8 April 2009 in the expectation that substantial filing fees might be avoided for the party that might ultimately bear those costs, by adopting the following course. If the underlying matter of concern to the respondents was simply a question of whether the applicant could file and serve affidavit material which provided an evidential foundation for the contentions in the statement of claim, substantial filing fees would be incurred in allocating a trial date for the determination of that matter. The hearing fees would be $3,135.00 which might ultimately be borne by the self‑represented parties if the Court ultimately entered judgment for the applicant and made an order in its favour for costs. If however the matter was listed for further directions coupled with an order that the applicant file and serve any affidavits on which it proposed to rely in respect of any relief to be sought in the proceeding generally or at the directions hearing on 8 April 2009 in terms of either interlocutory relief or other relief, the respondents would then have an informed basis for understanding whether the affidavit evidence satisfied them as to the contentions made in the statement of claim. Accordingly, orders were made on 18 March 2009 that the applicant file and serve any affidavits upon which it proposed to rely in respect of any relevant relief by 27 March 2009; the respondents were to file and serve any affidavits upon which they proposed to rely, by 3 April 2009 and the matter was listed for directions at 9.30am on 8 April 2009. The costs of the directions hearing were reserved.
On 8 April 2009, Paul Drabsch appeared on his own behalf and that of the company. He described the company as insolvent. The applicant sought to rely upon affidavits which, in the applicant’s submission, provided proof of those matters pleaded in the statement of claim and in particular, proof of the matters the respondents had sought to have established, responsive to the condition the respondents had incorporated in their defence. The first affidavit of the applicant was an affidavit of Jonathan Mark King, a director of the applicant, sworn on 27 March 2009 and filed on 30 March 2009. That affidavit had been sent to Paul Drabsch on 30 March 2009 and Paul Drabsch confirmed at the directions hearing on 8 April 2009 his receipt of that affidavit on or about that date. It is a Spirax bound affidavit with 24 annexures. The second affidavit was one sought to be filed by leave on 8 April 2009 and read in support of relief the applicant intended to seek on 8 April 2009. The affidavit is that of Emily Louise Middleton Barrett sworn 7 April 2009. It was served upon Paul Drabsch on Tuesday, 7 April 2009 at 11.00am. Served with that document was a copy of a notice of motion the applicant proposed to rely upon, with leave, to formally support an application for judgment pursuant to s 31A of the Federal Court Act in reliance upon the affidavit material previously mentioned. Since the matters in issue seemed to be formal proof by affidavit of each of the matters asserted in the statement of claim so as to demonstrate an evidential foundation for the contentions not otherwise put in issue, the applicant elected to seek judgment pursuant to s 31A(1)(b) on the footing that, in the light of the affidavit material, the respondents had no reasonable prospects of successfully defending the proceeding.
Section 31A of the Federal Court Act relevantly provides:
Summary Judgment
31A. (1) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a)the first party is prosecuting the proceeding or that part of the proceeding; and
(b)the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2)…
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a)hopeless; or
(b)bound to fail;
for it to have no reasonable prospect of success.
(4)…
The affidavit of Mr King had been served on Paul Drabsch on or about 30 March 2009 and the affidavit of Ms Barrett together with the draft notice of motion had been served upon Paul Drabsch on 7 April 2009. Thus, Paul Drabsch was not in a position to respond to the affidavit of Ms Barrett or deal with an application for final judgment in the proceeding. In addition, Paul Drabsch made submissions that although he had received the affidavit of Ms Barrett, aspects of the document were difficult to read.
Accordingly, the applicant was directed to file and serve a notice of motion in terms of the notice of motion delivered to Paul Drabsch on 7 April 2009, returnable at 10.15am on 20 April 2009, so as to formally bring an application for summary judgment under s 31A of the Federal Court Act before the Court for hearing at that time. The applicant was directed to serve a further copy of the affidavit of Ms Barrett on Paul Drabsch so as to ensure that a clear and readable copy of that material was available to him. The applicant was also ordered to file and serve any further material upon which it proposed to rely in support of the notice of motion, together with a further copy of the notice of motion and a further copy of Ms Barrett’s affidavit, all of which were to be served upon Paul Drabsch in accordance with the Federal Court Rules, having regard to the return date of 20 April 2009 at 10.15am for the hearing of the motion.
The proceeding was adjourned to 10.15am on Monday, 20 April 2009 on the footing that the proposed notice of motion would be dealt with at that time. Paul Drabsch had raised objection on 8 April 2009 to the receipt of Ms Barrett’s affidavit and contended that the applicant’s reliance upon that affidavit was procedurally unfair to the respondents. The Court made it plain that the matter was to be stood over to 10.15am on 20 April 2009 so as to ensure that the notice of motion together with all material to be relied upon by the applicant in support of the orders sought by the notice of motion, would be available to Paul Drabsch in accordance with the Federal Court Rules. Further, all objections of the respondents to any or all of the applicant’s material would be preserved and heard and determined on 20 April 2009 on the hearing of the motion.
Since Paul Drabsch was not represented by a lawyer, the Court explained to him that the application to be dealt with on 20 April 2009 would be an application for final judgment in the proceeding.
The applicant filed its notice of motion on 15 April 2009. The affidavit of Ms Barrett was also filed on 15 April 2009. Copies of that material were sent prior to filing, enclosed with a letter from the applicant’s lawyers to Paul Drabsch on 8 April 2009, the day of the earlier directions hearing at which the hearing date of 20 April 2009 was allocated. The documents that were enclosed were in the same terms as the material sent to Paul Drabsch on 7 April 2009 and that filed on 15 April 2009. The application came before the Court for hearing at 10.15am on 20 April 2009 as foreshadowed at the directions hearing on 8 April 2009. At the hearing of the notice of motion on 20 April 2009, Paul Drabsch advised the Court that the copy of the notice of motion and the further copy of the affidavit of Ms Barrett enclosed with the letter had been received by him on 14 April 2009. The applicant says that it follows that the respondents were provided with the notice of motion and Ms Barrett’s affidavit on 7 April 2009 and further copies of that material in precisely the same terms, by 14 April 2009. The respondents had been provided with the affidavit of Mr King on or about 30 March 2009.
The notice of motion was heard on 20 April 2009. Paul Drabsch appeared on his own behalf and on behalf of the first respondent.
The application
The affidavit of Mr King establishes these things at [22] to [26].
The applicant is and was at all material times a duly incorporated company. Mr King is a director of the company. From 30 August 2004, Mr King was an employee of the applicant and in that capacity and in the course of that employment, he was the author of a number of works consisting of descriptive text. Those works are literary works for the purposes of the Copyright Act. Each work is annexed to Mr King’s affidavit at annexures “JMK4” to “JMK16”. Annexure “JMK17” consists of a document showing the electronic document properties for each of those documents. Each of the documents authored by Mr King were brought together in a consolidated document drawing upon various parts of the earlier documents. The consolidated document is annexure “JMK18”. That document is the work in which copyright is said to subsist as an original literary work of authorship of Mr King. That document is the source of the applicant’s copyright and is described as the “Copyright Material” and is annexed as a schedule to the application filed on 29 January 2009 and the statement of claim also filed on that date. The applicant published the work on its website. The applicant’s website for the product described by the document was first published in Australia in or about July 2007. The final consolidated document, “JMK18”, was published in September 2007 and remained in that form from September 2007 to 9 February 2009. Each of the documents described at annexures “JMK4” to “JMK16” were used to create the work upon which the applicant relies. Mr King was at the date of authorship of each work “JMK4” to “JMK16” and “JMK18”, a resident of Australia.
Accordingly, Mr King’s affidavit establishes that the work attached to the application as a schedule and the subject of the statement of claim is an original literary work of authorship of a qualified person, Mr King, reduced to a material form at the dates deposed to by Mr King and first published on the date deposed to by him, in which copyright subsists. The owner of the copyright is the applicant: ss 10(1), 22, 29, 31, 32 and 36 of the Copyright Act.
Mr King says that on or about 21 November 2008 he logged on to a website ipopacific.com.au established by the first respondent. At “JMK19”, Mr King annexes colour printouts of a series of screens which appear at that website under the heading “IPO Pacific”. The screen printouts describe the company; set out an explanation about what the company does; describe its services; and identify solutions to the problems persons confront in engaging with the stock market and other matters. On 17 December 2008, Mr King caused a further examination to be made of the website and printouts of a series of screens arising out of that examination are set out at annexure “JMK21”. At annexure “JMK22”, Mr King sets out a side by side comparison in two columns of the text adopted by the applicant comprising its work the subject of the proceedings and the text adopted by the first respondent in its document. The text in the applicant’s document is grouped under a series of headings described as “Prosperity Group”, “About Us”, “Company Profile”, “Overview”, “Solutions” and “Privacy Policy”. The first respondent’s document is grouped under the headings “IPO Pacific”, “Company”, “Services”, “Solutions”, “Privacy Policy” and “Terms and Conditions”. The comparison at “JMK22” identifies in black text, the text forming part of the first respondent’s material which is in precisely the same terms as the material contained in the applicant’s document. The text which is either an addition or a variation to the applicant’s text is set out in red ink. Material contained in the applicant’s text which is not present in any of the respondent’s screen text is also set out in red.
It is clear from the comparison of the text contained in the two columns that a substantial part of the applicant’s text has been reproduced in the text adopted by the first respondent. The contextual description of the environment within which investment decisions are made is virtually identical in both. Similarly, the description of the determination of each company to achieve the goal of bringing information to investors is identical in both. Sections of the descriptions under the headings “About Us” and “Company Profile” in the applicant’s material are the same as the material under the heading “Company” in the first respondent’s material. The “Overview” of the applicant’s services is reproduced almost identically under the heading “Services” in the first respondent’s material. Similarly, the material appearing under the heading “Solutions” in the first respondent’s material is virtually identical to the text under the heading “Solutions” in the applicant’s material although there is additional material under the heading in the applicant’s material. The “Privacy Policy” text in each case is the same.
On 2 December 2008, Mr King caused a letter to be sent to the first respondent asserting a reproduction by the first respondent of the applicant’s script. The applicant requested the first respondent to remove all information that directly copied the applicant’s material or linked the respondent’s website to the applicant’s website, within seven days failing which action would be commenced. On 18 December 2008, Mr King instructed the applicant’s solicitors to write to the first respondent setting out a similar complaint and asserting infringement of copyright, conduct constituting passing off and conduct in contravention of the Trade Practices Act 1974 (Cth). The letter sought a series of undertakings which in large part are consistent with the relief ultimately claimed in the application. On 28 January 2009, Mr King instructed the applicant’s lawyers to write a further letter to the first respondent drawing attention to the letter of 17 December 2008 to which there had been no response. The letter of 28 January 2009 advised the first respondent that the applicant proposed to instigate proceedings in the Federal Court of Australia. The letter enclosed an application and statement of claim which the applicant intended to file and serve. Those documents set out the orders the applicant would seek. The applicant called for a resolution of the matter by 4.00pm that day. On 29 January 2009, the application and statement of claim were filed.
The affidavit of Emily Barrett establishes these things at [28] to [31].
On 17 December 2008, Ms Barrett conducted a search of a website under the description “Whois Lookup” to determine registered details relating to the operation of the ipopacific website. The search revealed that the site is registered under the “Eligibility Name” of Intellectual Properties Opportunities Pacific Pty Ltd of the same ACN number as the first respondent. The registrant for the website is Paul Drabsch and the website was last modified on 16 May 2008. Ms Barrett conducted a company search of the first respondent which shows that Paul Drabsch was on 11 February 2009 the sole shareholder and director of the first respondent. Paul Drabsch has been a director since 23 April 2008. The company was registered on 23 April 2008.
On 21 February 2009, Ms Barrett received an email from Paul Drabsch in these terms:
I can arrange to meet you Monday my company stopped trading in December and haven’t been using website (it can only be found if the exact name is typed in due to the popular initials [website address] so there should be no concern for clients finding a similarly scripted website unless they have been directly contacted by me in the first place (probably 700 leads) … my latest concern now that I can afford to remove the writing is apparently the IT guy that made the website has apparently put a pass code to protect any alterations to the site so only he can alter it so I’ll get on to him now … speak soon.
Also on 21 February 2009, Ms Barrett received a further email from Paul Drabsch confirming that he had retained a web developer to assist in removing writing from the first respondent’s website. On 2 March 2009, Ms Barrett received a telephone call from Paul Drabsch in which he advised Ms Barrett that “the script on the web page has now been removed”. Ms Barrett deposes that she then checked the first respondent’s website and confirmed that the script the subject of the applicant’s complaint had been removed from the website. Ms Barrett annexes to her affidavit an historical company search of the first respondent conducted on 26 March 2009 (annexure “J”) which confirms that the company commenced on 23 April 2008; its principal place of business from 19 September 2008 was Riverside Centre, Level 18, 123 Eagle Street, Brisbane; Paul Michael Drabsch was appointed a director on 23 April 2008 as sole director; and the sole shareholder in the company is Paul Michael Drabsch of 8 Nauru Place, Pacific Pines, Queensland, 4211.
The affidavits of Mr King and Ms Barrett demonstrate that the first respondent operated at all material times the website upon which the respondent displayed the material said to infringe the applicant’s copyright in the work in suit. The material establishes that Paul Drabsch was the registrant for the website and that in the face of letters of complaint Paul Drabsch caused steps to be taken to remove the material complained of by the applicant from the first respondent’s website. The defence filed by the respondents puts the applicant to proof. The defence does not assert that either of the respondents was an independent author of an original non‑infringing work in the form of the text ultimately removed by Paul Drabsch from the website. The evidence establishes that the respondents have caused the applicant’s work to be reproduced in a material form by bringing into existence a document placed on the first respondent’s website that is a reproduction of a substantial part of the applicant’s work for the purposes of ss 14 and 31 of the Copyright Act and thus an infringement of the applicant’s copyright for the purposes of s 36 of the Copyright Act. The evidence demonstrates that the first respondent conducts the website on which the infringing material appeared. Its infringing conduct is the reproduction of a substantial part of the applicant’s work in a material form. Paul Drabsch is the registrant for the website. The infringing conduct of Paul Drabsch is either the act of reproduction of the applicant’s work on behalf of the company as its prime mover or alternatively, the authorisation as sole director of and sole shareholder in the company operating the website, of the company’s conduct.
Paul Drabsch’s affidavit
On 6 April 2009, Paul Drabsch filed an affidavit affirmed on 3 April 2009. That affidavit was filed in response to the orders made on 18 March 2009. Paul Drabsch asserts these things.
2.Principal demands the matter in question be brought to immediate dismissal on the basis that the conditions of the acceptance of the applicant’s claim have not been adequately met.
3.After revising the proof of claim provided by applicant, Principal finds no admissible evidence proving a link with respondent 1 or 2 with the alleged copyright infringing material nor do respondent 1 or 2 lay claim to any ownership of control over any information or website unless evidence can prove otherwise.
6.Principal has not seen any proof that the first or second respondent own or control any website much less the one alleged with copyright infringement nor does he believe any exists.
7.Principal believes neither first nor second respondent has made any verbal or written correspondence with applicant and truly believes it is impossible for any communication to be made by non living things.
10.Principal believes after reading statement of claim and proof of claim that the conditions of acceptance have not been adequately met.
Apart from those matters, Paul Drabsch in his affidavit sought leave to appear on behalf of the first respondent. He also said at para 5 that he had been attempting to reach a remedy in the matter. He said that the applicant was not seeking to reach a resolution with him. He said that on three occasions he tried to remedy the claims of the applicant with an out of Court settlement and no settlement proposal had been presented to him.
As to the claim that the affidavit material did not establish a factual foundation for the claims of the applicant, the affidavit of Paul Drabsch was filed before service upon him of the affidavit of Ms Barrett which was served on 7 April 2009 and re‑served on 14 April 2009. The substantial point made by Paul Drabsch in his affidavit is that the affidavit of Mr King did not establish a link between either respondent or the ownership by the first respondent of the website upon which the offending material was published namely the ipopacific website. That point is made particularly at paras 3 and 6 of the affidavit. At para 3, the point is put on the footing that the applicant has failed to adduce admissible evidence proving a link between the offending website and the first or second respondents. Secondly, the assertion is made that the first or second respondents did not lay any claim to ownership or control of any information “unless evidence can prove otherwise”. At para 6, the point is put on an affirmative basis by which Paul Drabsch asserts that he has not seen any proof of ownership or control of any website in either respondent “much less the one alleged with copyright infringement”. He then asserts that “nor does he believe any exists”. It is not clear whether Paul Drabsch says that he does not believe that any evidence exists of proof of a link between either respondent and the offending website or whether he believes that there is no such link. In any event, the evidence of Ms Barrett establishes the link; the control of the company by Paul Drabsch; and the control of the offending website by Paul Drabsch. Nothing could be more plain. Moreover, the evidence of Ms Barrett establishes the steps taken by Paul Drabsch to remove the relevant text from the first respondent’s website.
Paul Drabsch says that the applicant ought not to be able to rely upon the affidavit of Ms Barrett because it was served on 7 April 2009, the day before the directions hearing on 8 April 2009 and was not ultimately filed until 15 April 2009. Plainly enough, it would be entirely inappropriate to consider any application under s 31A of the Federal Court Act in part reliant upon an affidavit filed the day before the hearing of the application. The application by notice of motion foreshadowed by the applicant was brought on for hearing on 20 April 2009 by which time Paul Drabsch had had an opportunity to consider the factual matters asserted in Ms Barrett’s affidavit and particularly the evidence demonstrating a link between the respondents and the offending website. No affidavit was filed by Paul Drabsch seeking to contradict any aspect of Ms Barrett’s affidavit on this point. Nor was any oral submission made that the first respondent did not operate or had not operated at the material time, the relevant website. Moreover, Paul Drabsch took steps to remove the offending text from the first respondent’s website.
The affidavit of Paul Drabsch filed on 6 April 2009 does address the question of whether the applicant sought to engage in negotiations with a view to resolving its claims. The affidavit does not describe those matters in any detail. Paul Drabsch says that on three occasions he tried to resolve the matter out of Court. The basis for those discussions which were no doubt conducted on a “without prejudice” basis is not clear. In any event, the matter did not resolve by reason of any discussion or otherwise and proceedings were commenced seeking the relief the subject of the application.
Further considerations
The respondents do not assert any matter that goes to a triable issue. No controversy of fact has been raised by the respondents and the issues of law raised by the applicant’s claim are clear and unarguable. The respondents have failed to depose to facts disclosing a defence on the merits. There is no affidavit which identifies a defence to the applicant’s claim as a matter of law nor any facts identified by affidavit or otherwise which might give rise to a controversy of fact which if resolved in the respondents’ favour would give rise to a defence to the applicant’s claim (Hocking v Bell (1945) 71 CLR 430, per Latham CJ at 441‑442, adopted by Rares J in Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2007) 236 ALR 720; cf., generally, Finkelstein J in Jefferson Ford Pty Ltd v Ford Motor Co. of Australia Ltd (2008) 246 ALR 465, as to the test to be applied in exercising the discretion under s 31A). Rather, the respondents have simply put the applicant to proof. The defence, properly construed, does not reach the threshold of a denial of the claim. In any event, a general denial of the claim is not sufficient. Nor is it sufficient to simply put the applicant to proof in response to an application under s 31A of the Federal Court Act (Vans, Inc. v Offprice.Com.Au Pty Ltd [2006] FCA 137). Section 31A is directed to the proceeding itself not simply with deficiencies in the pleadings and in that sense the section addresses the substance and not just the form by which the action or proceeding is structured (White Industries Aust Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 at [50]). Before judgment might be entered pursuant to s 31A of the Federal Court Act, the Court is required to be satisfied that the respondents have no reasonable prospect of successfully defending the proceeding. Even though the defence filed by the respondents need not be hopeless or bound to fail for it to have no reasonable prospect of success, it is clear in the face of the affidavit evidence of the applicant and the terms of the defence filed by the respondents, that the defence is bound to fail. The evidence clearly establishes the case made by the applicant. The Court is satisfied that the respondents have no reasonable prospect of successfully defending the proceeding.
On 14 April 2009, Paul Drabsch sent to the Court by facsimile transmission a document setting out grounds of objection to the application. By grounds 1 and 2, he says that his first and foremost objection is that due process was not carried out which resulted in unfair surprise. Those grounds address the service of Ms Barrett’s affidavit upon Paul Drabsch on 7 April 2009 which was the day before the directions hearing on 8 April 2009. However, 20 April 2009 was identified as a Court day available on which the foreshadowed notice of motion on the part of the application could be listed and heard. It thus became appropriate to consider Ms Barrett’s affidavit on the application on 20 April 2009. Paul Drabsch had by that time received a copy of Ms Barrett’s affidavit on 7 April 2009 and a further copy as indicated previously by 14 April 2009. Ground 3 relied upon by Paul Drabsch is that the applicant was required to file and serve its affidavit material by 27 March 2009. The affidavit of Mr King was sworn 27 March 2009 and filed on 30 March 2009. Paul Drabsch was served with that affidavit on or about 30 March 2009. In any event, the motion was heard on 20 April 2009 by which time Paul Drabsch had had an opportunity to consider the content of the affidavit and annexures. On 3 April 2009, he affirmed an affidavit in response which was filed on 6 April 2009. Paul Drabsch contends that the failure to file and serve all affidavits by 27 March 2009 renders that material inadmissible on grounds of default. The material was received for the purposes of the application on 20 April 2009.
Ground 4 contends that the applicant’s material was not served within the requirements of the Federal Court Rules. The notice of motion was listed for 10.15am, 20 April 2009. By that time, Paul Drabsch, on behalf of the respondents, had received the affidavit of Mr King, a copy of the proposed notice of motion and the affidavit of Ms Barrett on 7 April 2009 and a further copy of the notice of motion and Ms Barrett’s affidavit on 14 April 2009. The notice of motion as filed on 15 April 2009 was in precisely the terms of the notice of motion served on Paul Drabsch on 7 April and 14 April 2009.
By ground 5, Paul Drabsch contends that he has not had adequate time to file or create a defence on behalf of the respondents. However, Paul Drabsch maintains the position that he accepts the claim of the applicant subject to proof by affidavit of the elements of that claim. The respondents do not assert any facts in contradiction of facts asserted by the applicant and nor do the respondents put forward any affirmative case as a matter of fact or law in answer to the applicant’s claim. By ground 8, Paul Drabsch asserts that the evidence of the applicant gives rise to undue prejudice and “therefore must be inadmissible if a fair trial is to be had for the respondents”. The affidavit material is admissible and speaks to the foundation facts pleaded in the statement of claim. By ground 9, Paul Drabsch asserts that he has not had sufficient time and “less than 24 hours before a second directions hearing is not acceptable practice”. That ground goes to the directions hearing on 8 April 2009 and the service on 7 April 2009 of the proposed notice of motion and the affidavit of Ms Barrett. It was precisely for that reason that the applicant was directed to file the notice of motion returnable at 10.15am on 20 April 2009 and provide Paul Drabsch on behalf of the respondents with a further copy of the notice of motion, a clear copy of the affidavit of Ms Barrett and any other affidavit upon which the applicant would rely on 20 April 2009. The application was not dealt with on 8 April 2009. Paul Drabsch reasserts that the failure to file material by 27 March 2009 and the service of supplementary material on 7 April 2009 must necessarily be fatal to the application on 20 March 2009. Plainly, that is not so for the purposes of the hearing on the later date of 20 April 2009.
By grounds 6 and 7, Paul Drabsch refers to Practice Note 5 and Practice Note 15 issued by the Court. He says that Practice Note 5 supports his objection to the applicant’s affidavits, as earlier identified. Practice Note 5 is directed to the observation that the filing and service of affidavits does not make them part of the evidence before the Court. The affidavits must be read and relied upon in support of an application. The Practice Note recognises that the requirement of the rules or any order of the Court that affidavits be filed and served is a condition precedent to their becoming part of the evidence. Here, there was an order for filing and service of affidavits by particular dates and the applicant’s affidavits were read in support of the application. The applicant’s affidavits were required to be filed by 27 March 2009 and the affidavits of the respondents were required to be filed by 3 April 2009. Those orders were made in anticipation of the matter being listed for 8 April 2009. The affidavits formed part of the evidence in the hearing of the application on the later date on 20 April 2009. Practice Note 5 is not relevant for present purposes.
Practice Note 15 deals with the orderly provision of information to the Court and to parties before a hearing. The classes of information concern titles by which a person might be described, the correct pronunciation of names, details of interpreting services that might be required, whether an oath is to be taken, any practical and procedural arrangements that may need to be made to accommodate any person and any other information of a similar kind which may be required to facilitate the appropriate treatment of persons before the Court. Practice Note 15 requires such information to be provided no later than 24 hours before a particular hearing. Paul Drabsch relies upon this Practice Note as supporting his criticism of the service upon him on 7 April 2009 of the foreshadowed notice of motion and Ms Barrett’s affidavit. Practice Note 15 does not address that topic and in any event the notice of motion was filed and listed for hearing on 20 April 2009. No application was heard and determined on 8 April 2009.
Conclusion and orders
Accordingly, judgment will be entered in the proceeding for the applicant.
On the hearing of the application, the applicant made an election to seek an account of profits from the respondents. Mr King at para 22 of his affidavit expresses his concern about the reference by Paul Drabsch in his email to Ms Barrett of “probably 700 leads” in connection with matters related to the first respondent’s website. At para 23 of his affidavit, Mr King deposes to a meeting between him, Mr Panozzo, Paul Drabsch and Mr King’s solicitor at which Paul Drabsch made an observation in these terms:
The whole point of the website was so that I can refer my clients to the website. I actually give marketing material to my clients.
By para 3 of the application, the applicant seeks an order for damages on various bases and by para 5 of the application, the applicant seeks in the alternative to a claim for damages, an order pursuant to s 115(2) of the Copyright Act for an account of profits so as to ensure that the respondents do not retain profits derived by reason of their infringement of the applicant’s copyright. The factual material establishes infringement on the part of the respondents and an entitlement to the relief contemplated by the Copyright Act including an order that an account be taken of the profit derived by the respondents by reason of the infringement coupled with an order that those profits quantified upon the taking of accounts, be paid to the applicant.
Accordingly, judgment will be entered for the applicant and the orders are these.
1.The first respondent and second respondent are restrained from infringing the applicant’s copyright subsisting in a document described as “Copyright Material” in a schedule to the application filed on 29 January 2009 and described as “Marketing Material” in Schedule A to the statement of claim filed on 29 January 2009 (described in these orders as “the Copyright Work”) by reproducing (including by way of publication upon a website) or authorising the reproduction of the Copyright Work or a substantial part of the Copyright Work, without the licence of the applicant.
2.An account be taken of the profits derived by the first respondent and second respondent as a result of the infringement of copyright in the Copyright Work.
3.The first respondent and second respondent pay to the applicant such profits determined upon the taking of accounts, together with interest thereon pursuant to s 51A of the Federal Court of Australia Act 1976.
4.The first respondent, by Paul Drabsch, make, file in the Federal Court of Australia and serve on the solicitors for the applicant on or before the expiration of one month after the making of this order, an affidavit setting out in respect of the business named “I.P.O. Pacific” and operated by the first respondent or formerly operated by the first respondent whether by Paul Drabsch or by him together with others, the total number of clients of the first respondent to whom services described by the first respondent’s website were provided, the nature of the services so provided to those clients and a schedule setting out the revenue derived from those clients and the costs and expenses incurred in deriving that revenue.
5.The first respondent on or before the expiration of one month after making this order, make, file in the Federal Court of Australia and serve upon the solicitors for the applicant an affidavit setting out a list of documents which relate to the services provided by the first respondent to its clients and those documents relied upon by the first respondent in formulating the schedule of revenue, costs and expenses derived and incurred by the first respondent as required by order 4, and the respondents shall permit the applicant to inspect such documents identified by the affidavit at a time and place agreed between the parties.
6.The first respondent by Paul Drabsch make, file in the Federal Court of Australia and serve on the solicitors for the applicant, an affidavit identifying the number of copies of any material which contains a substantial part of the Copyright Work which are in the possession, custody or power of the first respondent or Paul Drabsch and such copies be delivered up to the solicitors for the applicant, and Paul Drabsch shall identify in that affidavit any website established by him or the first respondent or anyone on their behalf or either of them which hosts in electronic form any reproduction of a substantial part of the Copyright Work.
Costs
The applicant contends that the infringement on the part of the respondents is flagrant. Further, the applicant says that the respondents have not been able to offer any explanation for the conduct of reproducing a substantial part of the Copyright Work in suit. On that footing, the applicant seeks an order that the respondents pay the costs of the applicant of the proceeding on an indemnity basis. The respondents have elected to put the applicant to proof on its various contentions. That is of course entirely open to the respondents. The applicant has, in a way responsive to the defence filed by the respondents, filed and served affidavit material which establishes each element of the cause of action in suit and an entitlement to the relief ordered against the respondents. The respondents are entitled to test the evidence of the applicant in order to be satisfied that claims made in correspondence are well‑founded. However, having put the applicant to the cost of preparing the necessary evidence to support those claims, the respondents must pay the cost of the proceeding. I am not satisfied that those costs should be ordered to be paid on anything other than a party and party basis.
Accordingly, a further order will be made that the respondents pay the applicant’s costs of and incidental to the proceeding.
I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. Associate:
Dated: 27 April 2009
Counsel for the Applicant: Mr C P Taylor Solicitor for the Applicant: Michael Sing, Lawyers Counsel for the Respondents: Respondents appeared by Paul Michael Drabsch Solicitor for the Respondents: Respondents appeared by Paul Michael Drabsch Date of Hearing: 20 April 2009 Date of Judgment: 27 April 2009
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