Sony Music Australia Ltd v Tansing, R.W. t/as Apple House Music

[1993] FCA 787

787     93

JUDGh4ENi Ro. O. l10 . . l . ..... .s.m.sm.m..

IN THE FEDERAL COURT OF AUSTRAT-IA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) No. G649 of 1993

)

GENERAL DIVISION j

ON APPEAL FROM A JUDGE OF THE FEDERAL

COURT OF AUST-

BETWEEN:  SONY MUSIC AUS-

First Appellant

MICHAEL JACKSON

Second Appellant

AND :

APPLE HOUSE MUSIC

Respondent

COURT	:	LOCKHART, SHEPPARD and FRENCH JJ.
DATE	:	29 SEPTEMBER 1993

PLACE : SYDNEY

REASONS FOR JUDGMENT

LOCKHART J.

This is an appeal by leave from an interlocutory judgment of a ludge of the Court (Einfeld J). His Honour was asked by the appellants to grant an interlocutory injunction restraining the respondents from, in trade or commerce, releasing, advertising, marketing, promoting, distributing, selling or offering for sale certain records, whether as compact disks, audio compact cassettes or otherwise, styled "Michael Jackson King of Pop". His Honour refused to grant the injunction.

and compact audio cassettes. It is beneficially owned by Sony

The material facts are in a narrow compass. The first

appellant, Sony Music Australia Limited, carries on the business

of manufacturing and distributing records including compact disks

Music Entertainment Inc of the United States of America (Sony US). In 1988 Sony US acquired the business previously carried on by the CBS Records Division of CBS Inc, including rights and obligations under "exclusive term recording" agreements with performing and recording artists.

It appears that since at least 1976, the first appellant and Sony Music Productions Pty Limited have been exclusively entitled to exploit and license the exploitation of sound recordings controlled by the Sony music business in Australia. Whether this matter is established at the trial is another matter, but there is a degree of evidence which was before the learned primary Judge on the point for the purposes of the interlocutory injunction only.

Under arrangements that have been in place continuously since 1976, the second appellant, Michael Jackson, has recorded exclusively for the Sony music business. Since 1976 the second appellant has performed as a solo artist for the recording of a

number of sound recordings referred to in the evidence as	"Michael Jackson recordings". Michael Jackson recordings have
been released on records in Australia by the first appellant, and a large number of those records have been sold and advertised by it in Australia.
The second appellant is very well known to people in Australia as a recording and performing artist. The appellants' case is (there is evidence in support for interlocutory purposes) that each of the appellants has acquired a substantial reputation
and goodwill in Australia.
The respondent, trading as Apple House Music, carries on business in South Australia selling records by wholesale. The respondent has released or proposes to release in Australia for sale to the public certain records which are referred to in the evidence as "the Banana label records", embodying performances of musical works which include songs attributed in origin to the second appellant and which are listed in the schedule to the statement of claim, and which I find it unnecessary to recite for present purposes.
The respondent proposes to sell Banana label records in trade or commerce in Australia, and those records embody performances (so the evidence establishes at this stage of the case) by the second appellant.
There is in evidence the particular form which the packages in which the records are contained (that expression is used to include compact disks, audio compact cassettes and other forms
of recording) will take when released to the public. The front cover of such records contains on a black background in large print the name "Michael Jackson" and underneath that in smaller print "The King of Pop", together with certain other material. Although there is no picture of the second appellant appearing on the proposed cover of the respondent's records, it is common ground that it is proposed to include a picture of him in the space that is presently coloured white on the cover in evidence before us.
The respondent led evidence before the primary Judge that the form of its record cover would have written in large and bold print and coloured red, the word "UNAUTHORISED" place transversely across the cover over the picture of the second appellant and would have at its top in white print on a red background the words "the unauthorised recordings"; in smaller print "this live recording and its release has not been authorised by Michael Jackson or his record company" and; at the bottom of the cover, also in white print on a red background the words "this sound recording may not be of the same quality as an authorised release". What I have described as a record cover is, in the case of compact disks, the frontispiece of the leaflet which is readily slipped into and removed from the front plastic cover of the disk.
The back of the container housing the record is in basic black and has in bold blue print the words "MICHAEL JACKSON" and in smaller print "The King of Pop", with a description of its
vocal contents and in very small print towards the foot of that document the words:

"This recording was not made with the consent of the performing artist or any other person or corporation who has any rights to the performance or recording services of the artist, nor has the artist or any other person controlling the performance or recording services of the artist sponsored, endorsed, consented to or

otherwise approved this release.

It was argued before the primary Judge that there were serious questions to be tried in the case. It was alleged that the respondent was engaging in misleading or deceptive conduct in contravention of S. 52 of the Trade Practices Act 1974 and the equivalent section in the Fair Trading Act of South Australia, and was committing the tort of passing off.

It was also alleged before the primary Judge that the respondent was threatening to infringe what the appellants assert is their right of publicity. That last mentioned issue, though squarely raised in the pleadings, was not an issue that appears to have-been canvassed before the primary Judge. The argument centred essentially on S. 52 of the Trade Practices Act, doubtless for the reason that if the appellants do not succeed on that cause of action it is unlikely that they will succeed on the cause of action based on the Fair Trading Act or in passing

off.

The questions were argued before his Honour on the basis that they were reasonably arguable. They were not, of course, argued on a final basis, and the evidence to which I have referred and to which his Honour referred must, of course, all be treated on that interlocutory footing. His Honour found that there was no reasonably arguable or triable issue on the questions raised by S. 52, the Fair Trading Act and passing off. He referred in the course of his reasons for judgment in substance to the question of balance of convenience, though his Honour did not feel it necessary for him to embark upon an examination of that question in the light of the findings which he made, namely, that it was a plain case of there being no triable issue.

The appellants have made three broad submissions challenging his Honour's findings. First, they assert that there is in truth a triable issue or serious question to be tried. Second, that in any event, his Honour erred in his approach to the questions before him by requiring the appellants to meet too high a test, namely, that it was likely in all the circumstances that the respondent had contravened S. 52 rather than what was said to be the lower threshold of a triable issue or serious question to be tried.

Third, it was submitted that his Honour erred by not looking

at all, in the resolution of the issues before him, to the

question of balance of convenience; that, in all the	circumstances, his Honour should have done so and that had he
done so, the balance of convenience was overwhelmingly in favour of the grant of injunctive relief.
The tests which have been propounded by the courts to establish when it is appropriate to grantor refuse interlocutory relief are well known and need no restatement in this case.
The expositions of the relevant principles are by no means totally harmonious with each other, but the differences are in my view in most cases simply differences of emphasis rather than of principle. The classic exposition of principle is that to be found in American Cyanamid CO v Epicon Limited [l9751 App Cas
396, a judgment of the House of Lords which has been frequently
applied in this country by the High Court, this Court and State and Territory Supreme Courts.
Different formulations of the test have been made including expressions such as "triable issue", "arguable case" and "reasonably arguable" or "serious question" to be tried. In some of the cases it is stated by high authority that the court first considers whether or not there is a seriously arguable case; and it is only if a positive answer to that question is made that the court then turns to the balance of convenience. In other cases, the two questions are merged.
In my experience, it all depends upon the facts of the given case as to how the test is applied. Sometimes, if a case is
demonstrably untenable, such that it is impossible to imagine that the plaintiff could succeed at the trial, there is no need to go to the balance of convenience. At the other end of the scale, a case may be an extremely obvious one, where the plaintiff's chances of success are obviously very high indeed. Although it is probably necessary to go to the balance of convenience in such a case, one sometimes does not dwell on that issue for any length of time.
Most cases are somewhere in the centre, and, although some judges might in the present case have looked at the balance of convenience in the light of the findings made on the triable lssue point by his Honour, other judges might not. His Honour took the course of not finding it necessary to go to the balance of convenience because he reached a view that the appellants' prospects of success at the final hearing were obviously not very strong.
The appellants' case of misleading or deceptive conduct is that, although the proposed labels of the respondent's records make very plain disclaimers of the authority of the appellants to the production and sale of the respondent's records, a prima face case of misleading or deceptive conduct is still made out, in that some people in the community may think that the respondent's records were records of the same provenance or quality as those produced by the appellants; or others might think that the disclaimer statements are really part of a marketing technique of the appellants, a form of limited release
of a particular recording called "unauthorised".
It was said on behalf of the appellants that one must approach this case on the footing that the class of persons likely to be misled or deceived is very wide; it embraces people in their teenage and early to mid 20s as perhaps the most likely class of consumer, though not limited to those people, and that it would include the intelligent, the not so intelligent and the dull.
It seems to me that this last mentioned proposition is plainly correct. In this case, it must be a very wide class indeed that one must have in mind when considering the question of misleading or deceptive conduct or passing off.
As I read his Honour's reasons for judgment on the S. 52, the related Fair Trading Act and passing off points, his Honour did not find the argument on behalf of the appellants (which I have just summarized) to be sound, and concluded that it was a case that was most unlikely to succeed.
I am not persuaded that his Honour has been shown to have fallen into error in concluding for interlocutory purposes as he did, that a triable issue or serious question to be tried had not been established by the appellants. Although his Honour could have dealt with the question of balance of convenience, I discern no error on his part by not traversing that particular issue.
I do not accept the proposition advanced by counsel for the appellants that his Honour erred in approachingthe matter before
him as if it was the final hearing. It is difficult, in giving judgments in interlocutory matters, not to enter into the merits of the case to some extent. His Honour certainly did embark upon that course, but it seems to me that it has not been shown that he did not keep in mind the application of the proper principles, namely, that you must be satisfied of there being a triable issue or serious issue to be tried. That was the proposition advanced by his Honour and it seems to me that he has not been shown to have strayed from it.
I turn then to the one remaining matter: whether the appellants' submission should be accepted with respect to the right of publicity. The right of publicity, as it is called, has been described as the inherent right of every human being to control the commercial use of his or her identity. It has been referred to in many learned articles and in a fair number of
decisions, especially in the United State of America; and we were
handed an interesting summary of the position in the United States in McCarthy on Trade Marks, Chapter 28, headed "The Right of Publicity - Origins and Definition".
I do not find it necessary to explore the elements of that right. Certainly it has not been held to be part of the law of Australia at this stage of this country's development. There are certain cases to which we were referred by counsel, including Henderson v Radio Corporation Pty Limited [l9601 NSWR 279, Moorgate Tobacco CO Limited v Philip Morrls Ltd (No 2) (1984) 156
CLR 414 at 445, 10th Cantanae Pty Limited v Shoshana Pty Ltd (1987) 10 IPR 289 especially at 295 and 305, to mention but some
of the cases.
This is not the occasion for this Court to examine the question whether a right of publicity is part of the law of Australia or not. In the appropriate case, courts will examine and decide that question. We were not invited by counsel for the appellants to make findings with respect to the question whether the right of publicity is part of the law of Australia unless we concluded that his Honour had erred in principle in his approach to the questions before him, in which event it would be open to this Court to re-examine all the issues in the case afresh. In my view, no discernible error has been established, so it is not necessary to examine this interesting question.
Counsel for the respondent has proffered an undertaking to the Court that, when the respondent produces and markets its records which are impugned in this case by the appellants, it will, in addltion to what I have called the disclaimers that appear presently in the evidence (in particular at page 352 of the appeal papers) insert certain other disclaimers which are clearly described in exhibit l in this appeal.
I would be disposed to accept that undertaking and, on the basis of that undertaking being given to this Court, otherwise to dismiss the appeal and order the appellants to pay the respondent's costs of the appeal.

preceding ten (10) pages are a	I certify that this and the
Dated: 29 September 1993

IN THE FEDERAL COURT OF AUSTRALIA )

1

NEW SOUTH WALES DISTRICT REGISTRY ) NO. G649 of 1993

1

GENERAL DIVISION 1

ON APPEAL FROM A JUDGE OF THE FEDERAL

COURT OF AUSTRALIA

BETWEEN :  FONY MUSIC AUSTRALIA LIMITED

First Appellant

MICHAEL JACKSON

Second Appellant

AND :  ROBERT WILLIAM TANSING t/as
APPLE HOUSE MUSIC

Respondent

C O W :	LOCKHART, SHEPPARD and FRENCH JJ.
U:	29 SEPTEMBER 1993
PLACE :	SYDNEY

REASONS FOR JUDGMENT

SHEPPARD J: I agree, I would only add these things. The reason

why I consider that his Honour's judgment ought not to be disturbed is because I take the view that it has not been shown that his Honour's discretion miscarried when he concluded that there was no serious question to be tried. As the presiding judge has said, there are a number of authorities about the way in which this court approaches the question of whether it will grant or not grant interlocutory relief. There is no occasion for any lengthy discussion of the authorities, but I mention in passing E~itoma Ptv. Limited v. The Australasian Meat Industry

Em~lovees' Union (1984) 3 F.C.R. 55, particularly at 58-59 and

the decision of the High Court in Mur~hv	v. _Lush in (1986) 65
A.L.R. 651 at 652.

In my opinion the reason why there is no serious question to be tried stems from the terms of the disclaimers which appear on the get-up of the proposed jacket for the respondent's records as presented to his Honour at the trial of this question. The word, "unauthorised", in large red letters appears diagonally right across the front of the jacket and amongst other things, it is said in substantial print, "This sound recording may not be of the same quality as an authorised release". Counsel for the appellant relied on a comparison of the quality of recordings to be issued by the respondent with the quality of the applicant's recordings, as one basis for his attack on his Honour's judgment. It seems to me that the words which I have just read put an end to that criticism, notwithstanding counsel's submission that the evidence, if looked at in detail, would ..

disclose that the words were something of an understatement because the quality of the respondent's records is contended by

the appellants to be very bad.

It seems to me that there is very little else the respondent could have done to make the position clear, notwithstanding that the class of persons to whom these words may come in the course of trade or commerce in shops or otherwise, may be of a very diverse kind. That is a matter which the presiding judge has dealt with.

For those reasons, I have reached the conclusion that, on the evidence as presented to the trial judge, there was no serious question to be tried. I add though, that that does not conclude the matter on a final hearing as against the appellants because it may be that evidence will be led at the final hearing of attitudes and of reactions of various persons who may be concerned in the purchase of these records which may after all show that notwithstanding the presence of the disclaiming words, there is nevertheless established misleading or deceptive conduct. Until the whole of the evidence is led, one cannot tell. All I can say is that on the present state of the evidence I do not think that it was wrong to conclude that there was no serious question to be tried. I agree that the appeal should be dismissed.

[It is appropriate to mention that the appellants did not

rely on any action for infringement of copyright or performer-ls .-
protection right. In particular no reliance was placed upon
s.248J of the Co~vriaht Act 1968 which entitles a performer to

bring an action for an unauthorised use of his or her

performance. Section 2486 defines the circumstances in which a use will be unauthorised. This matter was raised during the argument and it was explained to us that, because of the provisions of s.248U and regulation 4A of the Couvriaht JInternational Protection) Reaulations 1 the appellants, particularly Mr. Jackson, were not entitled to rely on these provisions notwithstanding that two of the recordings which were in question were made after the amendments to the Co~vriaht Act which introduced Part IXA. Section 248J is in Part IXA.]

I certify that the 3 preceding pages
are a true copy of the reasons for

judgment herein of The Honourable

Mr. Justice Sheppard subject to the

fact that the last paragraph was added at the time the ex tempore judgment delivered in Court on

29 September 1993 was revised.

Associate

Dated 4 Iddhbo~ 1 3 3

IN THE FEDERAL COURT	1
OF AUSTRALIA	)
NEW SOUTH WALES	)
DISTRICT REGISTRY	1
GENERAL DIVISION	1 No. G 649 of 1993

ON APPEAL from a Single Judge of

the Federal Court of Australia

B E T W E E N :  SONY MUSIC AUSTRALIA LIMITED

First Appellant

MICHAEL JACKSON

Second Appellant

and

ROBERT WILLIAM TANSING t/as

APPLE HOUSE MUSIC

Respondent

C O W :  LOCKHART, SHEPPARD and FRENCH JJ
29 September 1993

REASONS FOR JUDGMENT

FRENCH J:

His Honour the presiding judge and Sheppard J have

set out the background to the decision appealed from. The

appellants' case. There were matters before his Honour reasons for that decision focused upon the strength of the	relevant to the balance of convenience. He referred in
passing in his judgment to possible harm to the second appellant's reputation by reason of the alleged inferior quality of the respondent's products, and also made mention of this possibilty in dealing with the question of leave to appeal. He referred to evidence that there was a considerable amount of money likely to be at stake in the case, whatever its outcome.
His Honour came to the view that the appellants had little real prospect of success. Whether, strictly speaking, their case so characterised fell below or just upon the threshold of a serious case to be tried, is not of great moment. The judgment involved in deciding whether or not to grant interlocutory relief is a pragmatic one to be informed by a provisional assessment of the strength of the case and the consequences of granting or refusing the relief sought. The authorities require consideration of both questions but the decision is necessarily practical rather formulaic. The absence of a segmented analysis is not necessarily an indicator of error.
The concept of a serious case to be tried suggests a finite, non-trivial probability of success. It may be so low :
that it may be thought on any view of the balance of convenience not to support the grant of an interlocutory injunction. That point may be reached before the point at
which one would dismiss the case as hopeless on a motion for its summary disposition.
The appellants' case on the material before his Honour faced considerable difficulties. The very prominent and explicit disclaimers on the respondent's products make it difficult to conceive of any rationally based view or approach to the appearance of the product which could lead a person to
be misled or deceived as to its approval or endorsement by, or other association with, the second appellant. It might be that at trial evidence will be able to be led to demonstrate a non-rational association which falls within the rubric of misleading or deceptive conduct. But there was little beyond some generalised trade evidence to support such an inference before his Honour.
Reference was made to the possibility of a cause of action based on the right of publicity which, on one view, may be regarded as a species of industrial property in name and/or appearance. At this stage, however, the proposition that such a cause of action exists is little more than a glint in the eye of counsel. While the possibility of its development is open, it cannot and should not, in my opinion, at this stage, support the grant of interlocutory relief. I agree that the appeal should be dismissed.

I certify that this and the preceding

two (2) pages are a true copy of the Reasons for

Judgment of his Honour Justice French.

Associate:  &a&n f&&&t&-

Date :  29 September 1993

Counsel for the Appellants: Mr D.K. Catterns and Mr R. Cobden

Solicitors for the Appellants: Allen Allen & Hemsley

Counsel for the Respondent: Mr D. Shavin

Solicitors for the Respondent: Freehill Hollingdale & Page

Date of Hearing: 29 September 1993 Date of Judgment: 29 September 1993