Telstra Corporation Ltd v Australasian Performing Right Association

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S89 of 1996

B e t w e e n -
TELSTRA CORPORATION LIMITED
Appellant
and
AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LIMITED

Respondent

DAWSON J
TOOHEY J
GAUDRON J
McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 11 DECEMBER 1996, AT 10.15 AM

MR J. McL EMMERSON, QC: If the Court pleases, I appear with my learned friend, MR B.N. CAINE, for the appellant. (instructed by Holding Redlich)

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

DAWSON J: Dr Emmerson.

MR EMMERSON: If the Court pleases, I first hand up nine copies of our outline of argument.

DAWSON J: Perhaps if you could give us a minute to read that, Dr Emmerson. Yes, Dr Emmerson.

MR EMMERSON: If the Court pleases, the parties have approached this case on the footing that both parties have wanted the various issues which have been raised by our learned friends to be adjudicated. The matter is of particular importance, clearly to my clients, because the effect of the decision below is that my clients have been held liable for copyright infringement because of acting as a general carrier of telecommunications where those telecommunications include copyright works. We say that on the reasoning of the majority of the court below on the first issue and the whole of the court below on the second issue, it does not seem to matter whether Telstra initiates or controls the contents of those telecommunications. Since, in general, it does not, this raises very critical matters.

DAWSON J: There are two methods of putting music over the telephone lines. One is that the customer itself has some means of providing music when it is on hold; the other is a service provided by Telstra itself to the customer, is that right?

MR EMMERSON: With the qualification that - the matter has, in fact, further subdivisions. Perhaps I could just refer the Court to the appeal book at page 34 where his Honour Justice Gummow sets out the four different types of cases that were considered. The first is:

the provision of music on hold by some third party to a caller -

and he gives, as an example, the case in which somebody telephones for a taxi and instead of speaking to somebody at the taxi company, hears music on hold.

DAWSON J: Who is the third party there?

MR EMMERSON: The third party in that case would be the taxi company, so that corresponds to the first of the two cases that your Honour the presiding Justice was putting to me. But then there are three other cases which his Honour identifies and it is perhaps useful to bear in mind what one is talking about in connection with those. The next is the provision of music on hold by Telecom Service Centre to a caller ‑ ‑ ‑

DAWSON J: So that is if you ring Telecom itself.

MR EMMERSON: Yes. That is, of course, a very limited case but if somebody rings Telecom itself and instead of speaking to a person hears music on hold, that is his Honour’s category B. Now, the third is what is known as CustomNet. That is a system in which Telecom itself provides service to certain customers so that those customers have facilities for music on hold to be played to callers to those customers. Now, the critical thing to note in the case of the CustomNet is the direction in which the signal flows and that is dealt with by his Honour at page 38 in which he summarises the position in the paragraph beginning at the top of the page and the conclusion that he reaches at line 18 and following is this:

What is important for present purposes is that the electro‑magnetic current carrying music never passes to the premises of the subscriber, and a person operating a telephone at the subscriber’s premises will never hear the music on hold.

By “subscriber”, his Honour there is referring to CustomNet subscriber, that is to say some organisation which engages Telecom to provide it with a bundle of facilities known as CustomNet which, on the evidence, can include a music on hold facility.

TOOHEY J: Is the difference between (a) and (c) simply one of the identity of the provider?

MR EMMERSON: That is, I think, a correct statement. Your Honour, there are slight factual differences but they probably do not affect the analysis of the points that are raised for this Court. The factual differences are concerned with where the machinery is located. If the customer, itself, provides music on hold, that is case (a) on page 34, then the customer will have a machine under the customer’s control and will simply arrange that telephone calls which are not being dealt with immediately are diverted to that machine.

That is the system which is described at page 37 of the appeal book, where his Honour says this:

Where the communication emanates from a commercial telephone system, such as a PABX, the position is complicated by the fact that such systems use their own power source rather than power provided by the exchange.

And he deals with where the power goes and then says at line 15 and following:

From a technical point of view, the playing of music on hold has the same effect as someone speaking. The electro‑magnetic current originating in the PABX, for example, is modulated by the music source and this modulated current then moves through the network to the person listening to the music.

So, in that particular case, the entire relevant machinery is at the customer’s premises; it is controlled by the customer, and of course, Telstra has no control over the content, at all.

In the case of CustomNet, which is described on the following pages - it is, perhaps, convenient to take the Court to the whole of the first paragraph on that page because it elucidates the matter:

Music on hold is also played by Telecom at a number of its “service centres” to callers who telephone the centres. The music at these centres is provided by means of a machine -

That is case (b). Then, case (c):

Telecom also provides a music on hold facility to certain subscribers of a service called “CustomNet”. Subscribers to CustomNet are provided with call handling capabilities equivalent to those available from a PABX system. Telephone handsets at the business premises of the subscribers are connected directly to a Telecom exchange.

Subscribers here are the subscribers to CustomNet, not the callers to those subscribers. This is a distinction which is of importance in the argument in this case. Continuing reading at line 10 on page 38, his Honour says:

The subscribers pay a fee to receive the facilities of CustomNet. One optional feature available to subscribers is a music on hold facility which is provided by means of a compact disc player. When a person calls a subscriber to CustomNet and the subscriber is engaged, the caller’s electro-magnetic current does not pass beyond the subscriber’s nearest exchange, but is instead diverted to the music on hold facility until the subscriber’s telephone line becomes available.

That is the qualification to which I referred in answer to a question from your Honour Justice Toohey. It may be that nothing turns on it, but there is that technical difference. Then his Honour continues:

What is important for present purposes is that the electro-magnetic current carrying music never passes to the premises of the subscriber -

that is to say the subscriber to CustomNet -

and a person operating a telephone at the subscriber’s premises will never hear the music on hold.

So, where a person subscribes to CustomNet, the effect of that is that in certain circumstances music on hold may be heard by callers to that subscriber, but the subscriber itself does not hear music on hold. That distinction is important when one comes to construing some of the provisions of the Copyright Act with which this case is concerned.

The final category of case, which his Honour Justice Gummow mentions at page 34, is at line 21:

the transmission of music on hold through the mobile telephone network.

And his Honour gives as an example there one of the incidents as to which there was evidence -

a witness, Mr O’Neill, used a mobile phone to call the Australian Musical Copyright Owner’s Society and heard three songs.

Now, just pausing there, the Court will appreciate the significance, from the point of view of my clients, if it amounts to an infringement of copyright by my clients for them to be, in effect, set up in this way, that one copyright collecting agency rings another copyright collecting agency; my clients have no control over the content of that transmission, but it is said against us that if one copyright collecting agency sends music to another copyright collecting agency then we are in breach of copyright in case (d), that is the mobile case.

The reason why his Honour separates out case (d) from the first three cases is simply this, that the first three cases raise issues concerned with an allegation that my clients have transmitted to subscribers to a diffusion service, whereas under (d) the allegation is that my clients have broadcast the work. Now, the structure of the Act is such that those two cases are non‑overlapping. That is to say, it is a requirement in any event for transmission to subscribers to a diffusion service that the transmission go over wires or other material links. By contrast, it is a requirement on the mobile telephone network, to the extent that it raises the issue of broadcast, that the broadcast should not go over material links.

So the effect of this is that it is not put against us that there are any cases which involve both. The position is determined in the case against us by whether or not the person making the call uses a mobile telephone. If he does use a mobile telephone, then what is put against us is that there is a broadcast. If he does not use a mobile telephone, then what is put against us is that there is a transmission to a subscriber to a diffusion service.

TOOHEY J: Dr Emmerson, from the point of view of the caller, is there any difference in the use of a mobile telephone as against a conventional telephone dialling a number which has music on hold, whether provided by Telecom or by some other commercial agency?

MR EMMERSON: No, your Honour, there is not. In either event, he will dial, for example, the taxi company and either he will speak to a human being or, if there is a music on hold facility, however it arises, he will hear music. It is of importance, we say, that in the first and fourth case considered by Justice Gummow, Telstra acts as a carrier. It does not control, nor can it control, the content of the transmission that is carried. Furthermore, in the case of CustomNet, sometimes it does and sometimes it does not control the content of the transmission.

In the final case, which is case (b) on page 34, of course, Telstra does control the content of the transmission, but its position as a carrier is one of the reasons why this case is, of course, of very great importance to Telstra itself. There is a second factual matter in addition to the fact that Telstra is, for the most part, found liable in its capacity as a general carrier, and that is this. Many of the authorities considered in argument before the courts below and dealt with in the decision under appeal, are concerned with cases in which people go to a place of entertainment, whether it be a theatre or a dance hall or something of that sort. They go, in the case of a theatre, with the intention of hearing the particular work which is there performed. They go to a dance hall with the intention of at least hearing works of that general kind performed as part of the entertainment that is provided for them.

In stark contrast to that, in the case of music on hold, the caller is not seeking to hear either the particular works that he hears or works of that general kind. What he wants in the example we have been considering is to order a taxi, and it is merely an interruption in that process that whether he wants it or not, he hears music.

Now, the lack of consensus in that sense between the caller and the music provider is of some significance in considering the authorities cited in the Full Court.

KIRBY J: It may not be relevant, but I think it is not entirely accurate to say it is an interruption. In current circumstances getting music whilst you wait for a taxi is just part and parcel of life. You cannot expect there to be sufficient operators to answer every call that you make instantaneously.

MR EMMERSON: Yes, your Honour, but the point that I was seeking to make is that you make a call in order to order a taxi, not in order to hear music. So that there is a factual contrast between this case and a case in which you go to a theatre to hear a play or you go to a music hall amongst other things to hear music.

DAWSON J: The only suggestion is, is it, that the subscribers to the diffusion service are the callers who call up the number and hear the recorded music?

MR EMMERSON: In the diffusion service point to which I will be coming in just a moment, yes, it is said against us that it is the callers who are the subscribers to the diffusion service and we, of course, deny that point. Could I just before i ‑ ‑ ‑

DAWSON J: How is it said that they subscribe?

MR EMMERSON: It is said that they subscribe to the general telecommunication system and it is said as a result of that they subscribe to a service of music on hold.

DAWSON J: The subscriber is not necessarily the caller but the person who pays for the telephone.

MR EMMERSON: Well, we would, with respect, entirely agree, your Honour, but the case that is put against us has the caller as subscriber. That is, indeed, a critical element, We say, in the analysis of the diffusion service point. Perhaps it would be convenient next to take the Court to section 31 of the Act.

TOOHEY J: Dr Emmerson, in using the Act, which print should we work from?

MR EMMERSON: I do not think it matters.

TOOHEY J: There have been some recent amendments to some of the relevant sections, have there not?

MR EMMERSON: I think there has been a change in the positioning of the definition of “broadcast”. I do not think there has been a change in the substance. The correct printing would be the printing as it existed when these proceedings began in 1992.

TOOHEY J: I think many, or all of us, have reprint No 6, which is as at 31 October 1992.

MR EMMERSON: Yes. Subject to correction, your Honour, I do not think that there is any difficulty at all in using that printing.

TOOHEY J: Thank you.

MR EMMERSON: Could I take the Court to section 31 of the Act? Perhaps, before I do that, I should say one extra thing. There appears, set out extensively, I think, all the relevant statutory provisions in the reasons for judgment of his Honour Justice Gummow at first instance. Going to section 31, it provides that:

For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a work, is the exclusive right -

and then -

(a) in the case of a literary, dramatic or musical work, to do all or any of the following acts -

Now, pausing there, the Copyright Act proceeds by way of conferring certain specific and defined exclusive rights on the copyright owner. It does not have a structure giving the copyright owner all rights whatever, or all rights of a commercial sort. It states expressly what rights the copyright owner has and it sets them out, and, in the case of diffusion service, defines them in very considerable detail and with very considerable care. If one looks at the list of rights that are given, there are only two which are still relevant in these proceedings, and they are the rights under paragraph (iv):

to broadcast the work -

and under paragraph (v):

to cause the work to be transmitted to subscribers to a diffusion service -

No question arises, in this appeal, of performance of a work in public, although that was one of the matters which was agitated at first instance. Now, it is convenient to follow the order which has been adopted by both courts below and to deal with the diffusion service point first and then go on to the broadcast point.

So far as diffusion service is concerned, the point that falls for consideration is a novel one. There is no relevant judicial authority on this point and so we are concerned here solely with a matter of statutory construction.

DAWSON J: Can you give me an example of what would be a conventional diffusion service?

MR EMMERSON: Yes, a conventional diffusion service would, for example, include cable television, that is to say, a service in which you pay to have particular programmes sent to you. Going then to the definition in ‑ ‑ ‑

TOOHEY J: I am sorry, could I just stop you for a moment, Dr Emmerson, with that answer you gave Justice Dawson?

MR EMMERSON: Yes.

TOOHEY J: Do you derive that from section 26 which speaks of “References to transmission to subscribers to a diffusion service”, or elsewhere?

MR EMMERSON: Elsewhere, your Honour. As I understood his Honour’s question, it was seeking, without the aid of the statute, an answer as to what is the ordinary understanding of the meaning of “diffusion service”. I was attempting to answer that in general. We would say, of course, that the answer that I gave is entirely in accordance with section 26, but there is an initial question, “What is the general notion of diffusion service?”.

TOOHEY J: What do you say about that general question?

MR EMMERSON: I would say that the general notion of diffusion service involves a service sending programmes to a multiplicity of recipients who pay or otherwise give consideration for that service. So you could pay, for instance, to have music sent in some fashion to your house or, more likely in these days, to have television or video sent to your house. The notion of diffusion entails sending out to a substantial number of places.

TOOHEY J: But you place emphasis on the idea of subscribers to the service, do you?

MR EMMERSON: In a conventional diffusion service, yes, you would certainly have that.

TOOHEY J: I mean, the word itself does not necessarily suggest subscription to a particular service - at least it does not to me.

MR EMMERSON: No, the word itself suggests wide dispersal.

TOOHEY J: It suggests almost the opposite.

MR EMMERSON: Not necessarily, no. The word suggests wide dispersal. I answered the question of his Honour the presiding Justice to say that the ordinary sense of it included the example I gave, but of course we rely - and I will develop this fully - on the specific definition which is included in section 26 of the Act.

TOOHEY J: Which does mark out subscribers as an element?

MR EMMERSON: It does, indeed, yes.

TOOHEY J: Yes, I was just trying to come to 26 via the ordinary understanding of the word.

MR EMMERSON: Yes, your Honour. We would have thought that the normal notion does involve persons either subscribing and paying or at least giving some consideration for the service.

TOOHEY J: Yes, thank you.

MR EMMERSON: Going then to section 31(1)(a)(v), the specific right that is given is an exclusive right:

to cause the work to be transmitted to subscribers to a diffusion service -

Now, that immediately brings in a number of matters. First, there must be a diffusion service, and I will deal with that when I come to section 26. Secondly, the recipients of the work must be subscribers to that service as distinct from another service. Now, that is important in the case, for example, of CustomNet, which I was referring to earlier in the submissions, because it is not sufficient to show that person A subscribes to a service and person B receives the transmission. What you have to have is the transmission to subscribers to the diffusion service, and of course in contexts like pay television or analogous diffusion service that makes perfectly good sense; you pay and you receive the transmission. But the language of section 31 is not apt to cover the case in which one person subscribes to a service pursuant to which another person receives a transmission.

DAWSON J: That is the distinction I was making, is it?

MR EMMERSON: Yes, if your Honour pleases, and we would, with respect, of course, adopt that.

DAWSON J: The owner of the telephone is not necessarily the one who is making the call.

MR EMMERSON: Precisely.

McHUGH J: But has that anything to do with the matter, having regard to the definition in section 26(1)?

MR EMMERSON: Yes.

McHUGH J: It is to the “premises of subscribers to the services”, so it is irrelevant who makes the call, is it not?

MR EMMERSON: But it still has to go under section 26(1) to the premises of the subscriber to the service, not to somebody else’s premises.

McHUGH J: Exactly, but the fact that the caller is not a subscriber has got no real relevance, has it?

MR EMMERSON: Your Honour, I would wish to deal in some depth with section 26. Could we perhaps postpone that question? There is a discrepancy in language between section 31(1)(a)(v) and section 26(1), but could I deal with that in just a few minutes time?

McHUGH J: Certainly.

MR EMMERSON: Regardless of the definition of “diffusion service”, the exclusive right that is given by section 31(1) is a right to cause the work to be transmitted to subscribers to that service. The next point that we would make, arising out of section 31(1)(a)(v), is that the right is a right:

to cause the work -

that is to say, a specific copyright work -

to be transmitted -

Now, this is the first of several indications that the area of discourse with which we are concerned here is an area of discourse in which the person who exercises the right under paragraph (v) has control over the content of what is transmitted. So this is the first of a number of indications which we say arise throughout this statutory scheme, that it is not intended to apply to a case in which liability is sought to be imposed on a carrier as such, where the carrier does not control the content of what is transmitted.

That brings me to the next part of the statutory scheme and that is section 26, and it is going to be necessary to deal with this section in some detail. Could I first take the Court to subsection (1):

A reference in this Act to the transmission of a work or other subject-matter to subscribers to a diffusion service shall be read as a reference to the transmission of the work or other subject‑matter -

then the next words are important -

in the course of a service of distributing broadcast or other matter (whether provided by the person operating the service or by other persons) over wires, or over other paths provided by a material substance, to the premises of subscribers to the service.

There are a number of things to be noted ‑ ‑ ‑

McHUGH J: Before you come to those, Dr Emmerson, what does “broadcast matter” mean in that section? Ordinarily, “broadcast” means the transmission by wireless telegraphy to the public, or a section of the public, but what does “broadcast matter” mean in that context?

MR EMMERSON: I think it may well have the same meaning. That is to say, it is concerned here with a service in which the matter was originally broadcast and then is picked up and diffused along wires to ‑ ‑ ‑

TOOHEY J: That is dictated by the definition of “broadcast”.

MR EMMERSON: Yes. I think the position is that, historically, that was a live possibility at the time when the English Act of ‘56 on which our 1968 Act is based was enacted. The position was, historically, at first that this type of provision only applied to broadcast matter, but then the addition of the words “or other matter” probably make the word “broadcast” superfluous because the section will apply to any matter whether or not that matter was originally broadcast.

McHUGH J: Thank you.

MR EMMERSON: There is another point which I should note in passing and that is this. The words, “over wires, or over other paths provided by a material substance”, are the basis for what I was putting to the Court that this section does not apply to the mobile telephone network. If the mobile telephone network has any relevance at all, it is under the broadcasting provision because, by definition, a diffusion service must involve diffusion “over wires, or other paths provided by a material substance”. There is, in fact, no dispute between the parties about that, but it is part of the framework for the argument in the present case.

Now, the intention behind this definition was dealt with by his Honour Mr Justice Shepherd at page 89 in the appeal book and perhaps before I go on to our own detailed submissions, his Honour’s useful summary should be looked at. In the paragraph on page 89 beginning at line 7, his Honour says this:

The matters to which I have so far referred provide the starting point for the consideration of the problem, but, as will be seen, they place, in my opinion, what I regard as an insuperable obstacle in the path of APRA’s submission. The work which section 26 of the Act is intended to do is to spell out with some care the content of the exclusive right conferred by subparagraph (1)(a)(v) of section 31 of the Act. That right is to cause the work to be transmitted to subscribers to a diffusion service. What the subparagraph contemplates, and this is confirmed by subsection 26(1), is the distribution, inter alia, of recorded music to the premises of subscribers to the service. In my opinion, these two critical provisions of the Act were not intended by the draftsman of the legislation to deal with a case of this kind. Rather, they were designed to deal with cases where a person provided a service to those wishing to listen to music or other recorded material, or to watch film or video, by providing them, whether on payment of a fee or not, with a facility for listening to or watching such material over wires or other paths provided by a material substance to the premises of the subscribers.

So that is what his Honour says, and we respectfully agree, is the work which is intended to be done by section 26 when read together with section 31(1)(a)(v).

Now, the next matter that we note is that the service that is defined is a service of distributing the matter to the premises of subscribers to the service; that is to say, the service provided is a service to the recipients of the matter and not to the senders. Furthermore, the subscribers that are referred to are people who subscribe to receive the matter, not who subscribe to send it. That, in our submission, clearly distinguishes all of the first three cases identified by his Honour Justice Gummow at the start of his reasons for judgment. Service that is contemplated is a service to the recipients rather than a service to any sender of a signal.

Could I now perhaps return to the point that your Honour Justice McHugh raised with me about the distinction between the language of 31(1)(a)(v) and 26. We would say this. Clearly it is necessary, if our learned friends are to succeed on the present contention, for them to succeed under both provisions; that is to say, they would have to show that Telstra had caused the work to be transmitted to subscribers to a diffusion service and also that the diffusion service was one in which the matter was sent over paths to the premises of subscribers to the service. So you have to have, we would say, both things there.

The significance, in our submission, of the reference to premises of subscribers is to reinforce the notion that what is being here referred to is what I have described as the ordinary understanding of a diffusion service. That is to say, you subscribe for some system pursuant to which the matter comes to your premises over wires.

TOOHEY J: Why do you interpolate “your premises”, Dr Emmerson?

MR EMMERSON: Because it is to the premises of subscribers to the service under section 26(1). So that section 31 requires that the matter must go to subscribers to the service, but in defining the service, it is a service to the premises of subscribers, not to some other premises.

TOOHEY J: But if the person operating the business decides that they want to make use of music on hold, they are subscribers to a service, are they not?

MR EMMERSON: If a person decides that they want to have music on hold which will be heard by people who call them, then they have a number of different options, none of which, in our submission, falls within section 26.

TOOHEY J: Is that because they are not subscribers or because the transmission is not to the premises of the subscribers?

MR EMMERSON: It is for both.

TOOHEY J: Why are they not subscribers?

MR EMMERSON: Perhaps rather than saying it is both, there is a composite definition which requires both elements. That is to say, you are not asked to say, “Do they subscribe to any service?”, what you have to ask is, “What is the service which is referred to as a diffusion service?” and in order to do that you have to read the whole of section 26(1) and that includes in it a restriction on where the signal goes. It must go to the premises of subscribers to the service. So, if someone subscribes to have a service of sending matters somewhere else, then it is not a diffusion service because it does not fall within the definition.

TOOHEY J: But if that is right, and it may be, it is not because they are not subscribers to a service, is it?

MR EMMERSON: It is because it is not a service as defined. In essence, I think one is chasing one’s tail a little bit over this. In order to see what is the service that is defined, it has got to be a service which has subscribers and it has got to be a service pursuant to which the matter is sent to subscribers to the service.

TOOHEY J: Well no, sent to the premises of subscribers to the service.

MR EMMERSON: Premises of subscribers to the service, yes.

TOOHEY J: And you say that does not happen.

MR EMMERSON: That does not happen, no.

DAWSON J: At first sight, you would think, talking about subscribers to the diffusion service, it was the person who paid a fee to Telecom to get into CustomNet, but you say that cannot be because what comes from CustomNet never gets to that person or that person’s telephone, so you have to look around for another subscriber, so you say it is the caller ‑ ‑ ‑

MR EMMERSON: Yes.

DAWSON J: ‑ ‑ ‑who does get the music, but does not pay anything for it.

MR EMMERSON: He gets music, but he is not a subscriber to receive that music.

DAWSON J: And the owner of the telephone pays for the telephone service and it comes to his premises so, only in that sense can you say that he is a subscriber.

MR EMMERSON: Yes, but he is a subscriber to the ordinary telephone network. He is not a subscriber to a diffusion service.

DAWSON J: If in fact the music came to the premises of the person - let us say it is CustomNet - if the music came from Telecom to the premises of the person who was paying for the CustomNet service, you would have a different situation which might fit within section 26.

MR EMMERSON: Well, it might satisfy some of the words. There are other parts of the section on which we rely, but I would accept what your Honour is putting to me, that the distinction is an important one.

DAWSON J: One tends to think that the word “subscriber” is used in both instances and it is confusing.

MR EMMERSON: Yes, and it is necessary, in our submission, to bear clearly in mind the fact that you have subscribers in two different senses.

McHUGH J: You are spending a lot of time on these earlier sections and obviously it is necessary for you to explain the purpose of the section as a whole but, without subsection (v), do your opponents rely on 26(1) standing on its own? Does their case depend entirely upon the assistance they get from 26(5)?

MR EMMERSON: Maybe I cannot necessarily speak for our opponents but, as we would understand it, their case depends critically on section 26(5) in the sense that if that were not present then their case would fail.

McHUGH J: Yes. So 26(5) is the critical section ultimately.

MR EMMERSON: Section 26(5) is the critical section for the purpose of their argument, but for the purpose of our argument that subsection is to be read in the context of the whole statutory scheme and we say that the construction that they put on it is one which is wrong and one of the reasons why one can see that it is wrong is that one looks at the whole statutory scheme.

McHUGH J: Justice Shepherd said much was made of 26(5). I assumed that everything was made of 26(5).

MR EMMERSON: I think everything from the point of our learned friend’s case was made of it, yes. On the point of the distinction between the persons who hear music on hold and the subscribers to the service, could I just note that his Honour Mr Justice Shepherd at page 88 of the appeal book deals with this matter and I would refer in particular to what his Honour says, beginning at line 11:

There are two aspects of this. The first is the meaning to be ascribed to the expression “the subscribers to the service”, that is the diffusion service; and the second, the significance to be ascribed to the reference to “premises” in the provision.

Then he goes on to say for reasons which we, of course, endorse that:

The persons who perforce listen to music on hold are not themselves subscribers to the service.

On that page, page 88, Mr Justice Shepherd deals with the point. Justice Gummow deals with the point at page 46 of the appeal book in a passage which is taken up and quoted by Mr Justice Shepherd.

McHUGH J: Is this the distinction between the two arguments in this case, that from your point of view the reference to a service in section 26(5) is a reference to a service understood in the context of the Act having regard to the earlier provisions, whereas on the respondent’s side the argument really is that 26(5) is almost an independent provision which might have some points of reference to the earlier provision, but really is an independent substantive enactment; is that it?

MR EMMERSON: The respondents would say, as we understand it, that the effect of section 26(5) is such that a person who provides a general telecommunications network is caught by the remaining provisions of section 26, and we of course deny that. This is perhaps one way of looking at the issue that divided the majority below from the judge at first instance and Mr Justice Shepherd in the Full Court.

Could I now turn to the structure of the next three subsections of section 26. Subsection (2) says this:

For the purposes of this Act, where a work or other subject‑matter is so transmitted:

(a) the person operating the service shall be deemed to be the person causing the work or other subject-matter to be so transmitted; and
(b) no person other than the person operating the service shall be deemed to be causing the work or other subject-matter to be so transmitted, whether or not he or she provides any facilities for the transmission.

I will return to this subsection in a little while, but what one notices immediately about it is that it identifies the person who is deemed to be causing the work or other subject matter to be transmitted. It identifies it, that person, by the words “the person operating the service”.

You find out who is the person operating the service by going to subsection (4) and that subsection again, in our submission, supports the view that what these provisions are talking about is a diffusion service as more or less conventionally understood, rather than merely provision of a telecommunication network. Subsection (4) says as follows:

A reference in this section to the person operating a service of distributing broadcast or other matter shall be read as a reference to the person who, in the agreements with subscribers to the service, undertakes to provide them with the service, whether he is the person who transmits the broadcast or other matter or not.

That limits the nature of the agreement that is contemplated by this statutory scheme because you have to find somebody who has agreed with the subscribers to the service and that is a service pursuant to which the subscriber receives the subject matter. He has to undertake to provide them with that service. Again, we say that this makes perfectly good sense in the ordinary context of a diffusion service but it makes no sense at all in the present context because there are no agreements pursuant to which Telstra agrees with a subscriber that that subscriber will hear music on hold. No one is entitled to complain under any agreement if he dials his taxi and either gets a voice or an engaged signal but does not hear music on hold. There is no undertaking that anyone is going to hear, by agreement, music on hold.

DAWSON J: But there is an agreement to transmit telegraphic or telephonic communications.

MR EMMERSON: That is all there is, yes.

DAWSON J: That is where subsection (5) comes in.

MR EMMERSON: But that is as far as it gets. So, there is an agreement relating to that service, the service of a general carrier of telegraphic or telephonic communications. There is not an agreement to provide the particular service which is defined in subsection (1). Nor, of course, for the most part, could there be, because again we note that Telstra has, in the general case, no control over whether one of its customers chooses to install a PABX system with a music on hold facility or, indeed, whether its customers will choose to take part in CustomNet. That is entirely a matter for the customers themselves. It is not part of the general duty of Telstra. So far as the hearers of music on hold are concerned, there is no possible cause for complaint if you make a telephone call and you do not hear music on hold.

There is a further pointer, we say, which goes in the same general direction and that is that subsection (4) contemplates an agreement between the service provider and the subscriber and, in speaking about who is the service provider, it adds these words:

whether he is the person who transmits the broadcast or other matter or not.

That is to say, the person who operates the network need not be - and we say in this case is not - a provider of a diffusion service. The same point arises from the final words in section 26(2). Subsection (2)(b) says:

no person other than the person operating the service shall be deemed to be causing the work or other subject‑matter to be so transmitted, whether or not he or she provides any facilities for the transmission.

So, again, the distinction in concept between the person who is operating the service and the carrier is made. We say that reading those two sections together it is perfectly clear that it is not the intention of Parliament that merely by providing a telecommunications network one is to be taken as providing a diffusion service.

TOOHEY J: I understand the significance of that, Dr Emmerson. In a sense it does not touch section 31, does it? It might touch the person who may be held responsible in relation to the breach of the right created by section 31, but is all this relevant to the exclusive right created by section 31?

MR EMMERSON: It is really relevant to the issue of whether there is a diffusion service, at all. That is to say section 26 describes a particular type of activity and a particular relationship between the parties involved and unless you can fall within that, then there is no diffusion service, there are no subscribers to the diffusion service. Section 31 makes it an exclusive right to cause the work to be transmitted to subscribers to a diffusion service, and in order to understand who it is who is taken to be causing the work to be transmitted, you go to section 26(2). That tells you that the only person who can do that is “the person operating the service”. You then go to subsection (4) and you find out who is the person operating the service and you have not got anybody operating the service and you have not any relevant service unless there are agreements of the kind specified in subsection (4).

TOOHEY J: Does that mean that not only Telstra, but there is no‑one who can be held culpable in those circumstances?

MR EMMERSON: No, which we say is not surprising because we say it is straining the concept of diffusion service to imagine that it could possibly apply to something like music on hold.

Now, it follows that we would make the following submissions about the analysis so far: first, we would say music on hold is not a diffusion service; secondly, we say that persons who receive music on hold do not do so in the capacity of subscribers to a diffusion service; third, we say in any event Telstra does not operate a diffusion service; and, finally, Telstra does not cause any work or other subject matter to be transmitted within the meaning of section 26(2) and, hence, it cannot infringe under section 31(1)(a)(v). Now, that brings us to section 26(5), which is, of course, the linchpin of the respondent’s case on this part of the dispute and it is convenient first to read that subsection:

Where a service of distributing matter over wires or over other paths provided by a material substance is only incidental to, or part of, a service of transmitting telegraphic or telephonic communications, a subscriber to the last‑mentioned service shall be taken, for the purposes of this section, to be a subscriber to the first‑mentioned service.

Now, in our submission, that subsection is put in to deal with a case in which you might have a general telecommunications network and somebody might have the facility to subscribe to that telecommunications network but also have the right to receive music or television or something else of that sort at that person’s choice.

Now, if you have that sort of combined system, then subsection (5) makes it clear that you do not have to have two separate and entirely independent agreements. However, subsection (5) cannot, we would say, operate where there is simply no agreement at all pursuant to which anyone will receive music on hold. It is one thing to say that a person, who subscribes to a telecommunication network, is entitled to complain if he does not hear music on hold; it is quite another thing to say that a person, who simply subscribes to a telecommunication network and whether he likes it or not happens to hear music on hold, is covered by section 26.

We say that all that subsection (5) deals with is the case in which you have a single agreement, incidental to or part of which there is a service of distributing matter over wires or other paths provided by a material substance and so that allows you to conclude that where there is a composite service of this sort then that can be covered by section 26, provided of course all the other conditions are satisfied. But you have still got to find that you have agreements pursuant to which the service provider agrees to provide the recipients of music on hold, with that music on hold. That, we say, is perfectly sensible construction.

GAUDRON J: It does not emerge, though, from the language of the subsection, does it?

MR EMMERSON: The language of the subsection deals only with working out whether someone is a subscriber. It does not deal with whether there is a service at all.

GAUDRON J: But it does not require that there be a single agreement, for example, does it?

MR EMMERSON: It requires that there be a service which is incidental to or part of another service. It does not, we would say, dispense with the requirement that there must be an agreement.

McHUGH J: Has the subsection got any work to do on your construction?

MR EMMERSON: Yes.

McHUGH J: Why is it not caught by subsection (1) on your construction? If you have to have an agreement ‑ ‑ ‑

MR EMMERSON: By subsection (1), you have to have a service, but part of that definition is that it must go to premises of subscribers to the service, and section 26(5) is dealing with what happens where you have a composite service. So it says, “Well, if you subscribe to the composite service, you’re taken to have subscribed, in particular, to the diffusion service”. But it still has to be a service of distributing broadcast or other matter to subscribers to the service. You still have to identify who is the person operating the service and there still has to be an agreement.

McHUGH J: That is what I am putting to you which I am just not quite grasping at the moment. If you did have such an agreement for such a service, then what is the point of subsection (5) deeming you to be a subscriber to that service? You are already there, are you not?

MR EMMERSON: You probably would be, yes.

McHUGH J: Subsection (5) does not seem to do any work.

MR EMMERSON: Subsection (5) is, on that view, put in from an abundance of caution. It is dealing expressly with the composite case. It is to be noted, incidentally, that the language of subsection (5) does not suggest that it is intended to somehow be the dominant provision in this subsection.

McHUGH J: That is what I was putting to you earlier, as to whether or not it is said as part of an overall provision or whether, on the respondent’s argument, it must have some independent force and which the earlier sections are almost only a background or a point of reference.

MR EMMERSON: The only force that it can take on its own language is to identify subscribers, that is to say, it is looking to see the identity of particular individuals, or corporations, of course: are they or are they not subscribers to the service? But it does not deem an agreement which is not there and it does not deem a person to operate a service if he does not, in fact, do so. What it does is make it clear that these persons are subscribers. If the intention was to, as it were, override the other provisions in the section, one would expect it to begin with such words as “notwithstanding any other provision in this section so and so”, or “other subsections to be specified as operating subject to subsection (5)”. That is not the way it goes. Subsection (2), for instance, says:

For the purposes of this Act -

and it identifies the person operating the service. And subsection (4) says:

A reference in this section to the person operating a service -

so, they are both, we would say, on their language, dominant clauses. All that subsection (5) does, whether necessarily or not necessarily, is to identify or make clear who are the subscribers to the service. It does not deem an agreement; it does not deem an undertaking, and it does not deem someone to be operating a service. If there is no agreement and no undertaking and no operating a service, then there is no room for anything to be deemed here.

McHUGH J: Supposing Telecom advertised that for the payment of $100 a year to each subscriber to a telephone service, upon ringing up, they could get music played - any song they liked played over the phone.

MR EMMERSON: Yes.

McHUGH J: Would that be caught by subsection (1) on its own or would subsection (5) be necessary to bring it in or would it be outside the section altogether?

MR EMMERSON: The particular example you gave, your Honour, may or may not be within the section, because it was involving a choice, one to one, saying, “Please transmit this particular subject matter,” and that is not within the ordinary concept of diffusion.

McHUGH J: Yes.

MR EMMERSON: I appreciate that that may not be precisely what your Honour was wanting to put to me, but I think the way the question is framed does probably take it outside the language of section 26 in any event. The more ordinary case would be one in which ‑ ‑ ‑

McHUGH J: Just dial up a number and ‑ ‑ ‑

MR EMMERSON: You would dial up a number and receive music of a particular sort.

McHUGH J: Yes. Well, that would be in 26(1), independently of (5), would it not?

MR EMMERSON: What you can imagine are two different possibilities, perhaps: one, a case in which you can, pursuant to a general agreement, get both general telecommunication service, and you also agree that if you dial a particular number you are entitled to receive music of a particular sort. Another would be a case in which you had some separate agreement, maybe not even with the carrier, but someone undertook to provide you with a service along your telephone line.

McHUGH J: But on the respondent’s argument, I take it then that people who have these 0055 services, or whatever they are, who tell you stock exchange prices or matters of that nature, theoretically may be causing you to be breaching the copyright of the owners of the stock exchange prices, TAB prices, or anything else that you like.

MR EMMERSON: If the respondent’s argument is right, then the transmission of any copyright material from one telephone user to another would involve an infringement of copyright by my clients. But we say that that is simply not the case. Certainly there are separate issues which arise under the 0055 system and it is, of course, much easier to see that that could fall within the scope of section 26. It is not necessary, for these purposes, to examine that type of service in depth, because it is simply very far removed from the service that we have in the present case.

It is interesting, in looking at subsection (5), to note that it uses the expression:

service of distributing matter over wires or over other paths provided by a material substance -

and says that is:

only incidental to, or part of, a service of transmitting telegraphic or telephonic communications,

Now, we would say that that makes clear that subsection (5) does not contemplate that the words:

a service of distributing matter over wires or over other paths provided by a material substance -

is sufficiently too broad to cover any general telecommunications service, that is to say, it is looking at a narrower concept because, again, otherwise section 26(5) would make no sense.

DAWSON J: If your argument is correct, why did not subsection (5) just say “where a diffusion service is only incidental to”?

MR EMMERSON: I am afraid I cannot answer that.

DAWSON J: In other words, it uses the words “service of distributing matter” et cetera upon the assumption that it may not be a diffusion service and will only be made a diffusion service by reason of the fact that it is incidental within the meaning of the section. That is to say there may not be an agreement and there may not otherwise be described ‑ ‑ ‑

MR EMMERSON: There may not be an agreement and if there is not an agreement, of course, you do not have a diffusion service at all.

DAWSON J: Exactly, and that is why it did not use the word “diffusion service” but it sought to use the agreement which would be behind the transmission of the “telegraphic or telephonic communications” to bring in the diffusion service. Why would that not be the purpose of the section?

MR EMMERSON: The purpose of the section is not to make something a service which would not otherwise have been a service ‑ ‑ ‑

DAWSON J: Why would it not?

MR EMMERSON: ‑ ‑ ‑ but to identify a subscriber to the service.

DAWSON J: You say that, but if you start from the assumption that it is directed to this very case then, of course, you can see the way it operates. You do not say where a diffusion service is incidental, but you use “service” in another sense which does not necessarily imply an agreement and you get the agreement from the “telegraphic or telephonic communications” to which it is incidental and you get the subscriber as well.

MR EMMERSON: But you only get the agreement if you satisfy the other parts of this section.

DAWSON J: Yes, but I am not making myself clear. Under subsection (5) the agreement is provided by the agreement to transmit telegraphic or telephonic communications and that serves as the agreement for the diffusion service. Why is that not the purpose of the section?

MR EMMERSON: The purpose of the section is not to deem an agreement where there is no other agreement; the purpose of the section ‑ ‑ ‑

DAWSON J: The purpose is to deem a diffusion service where there otherwise is not one, and in so far as a diffusion service involves an agreement, it is to deem an agreement; that is what I am putting to you.

MR EMMERSON: Well, with respect, it is not to deem a diffusion service where there would otherwise have been one, save for one element of the ‑ ‑ ‑

DAWSON J: No, save for two: agreement and subscriber. They are bound up.

MR EMMERSON: You still have to have, whether as the broad agreement or the narrow agreement, an agreement pursuant to which one party undertakes to provide the other party with the service.

DAWSON J: Yes, and the service which is relevant for subsection (5) is the service of transmitting telegraphic or telephonic communications.

MR EMMERSON: No, your Honour, because, if that were so, then subsection (5) would just simply say, “For the purpose of this section, a person who operates a general telecommunication system is deemed to be providing a diffusion service”.

DAWSON J: Together with:

a service of distributing matter over wires -

et cetera, is deemed, and that is exactly what it does say.

MR EMMERSON: But that is why I say that the “service of distributing matter over wires or over other paths provided by a material substance” cannot be simply a reference to any general telegraphic or telephonic communication, because there would then be no point in subsection (5) taking its present form. The subsection can only have point on its own language if you find that a “service of distributing matter over wires or over other paths provided by a material substance” does not mean the same thing as a service of operating a general telecommunication or telephonic network. So what you have to find is that, incidental to the latter service, you get the former service, and that is not the same thing as saying that the latter service must necessarily entail the former service; it does not, and that is not the structure of this section.

McHUGH J: Dr Emmerson, I think I am having some trouble. My real trouble about this case, I think, maybe, is I am not sure that I really understand what is meant by “diffusion service” even as it is defined. Take the ordinary telephonic service to the home. That is not a diffusion service on its own?

MR EMMERSON: No.

McHUGH J: So what is a diffusion service then, independently of the section?

MR EMMERSON: Yes. Independently of the section, the distinction between ordinary telephonic communications and a diffusion service is that with ordinary telephonic communications, what the network operator is doing is putting one customer in contact with another customer. There is communication between the two of them and that communication is at their choice. In those circumstances, that is not a diffusion service in the ordinary sense. The contrasting case where you have a diffusion service is where the operator of the service, whether or not he also operates the telecommunication network, is providing, as it were, programmes which go out to everyone.

McHUGH J: Which go out to everybody, like the cable service. Is the cable service the paradigm - - -?

MR EMMERSON: Yes.

McHUGH J: It is, yes. The majority judgments in the Full Court left me with the impression, perhaps wrongly, that they took the view that the telephonic service itself was a diffusion service, and it said ‑ ‑ ‑

MR EMMERSON: That seems to be implied in some of the reasoning, and we would say implied incorrectly because we say that section 26 draws a distinction between an ordinary telephony service and a diffusion service, and that is really the work that the whole thing is intended to do.

The submissions that I have made so far relating to diffusion service, if accepted, have the consequence that Telstra has a complete defence to this action for each of the first three factual situations discussed by Justice Gummow at page 34. That is to say, what we have been putting does not depend, so far, on whether Telstra does or does not have control over the subject matter that is transmitted. It depends on looking at music on hold, whoever is responsible for the subject matter, and saying, “Well, that simply does not fall within the definition of “diffusion service” set out in section 26”.

There is a separate point that we make and rely on in the context of the first of the factual situations that his Honour Justice Gummow refers to at page 34, and that is:

the provision of music on hold by a Telecom service centre to a caller -

because in these circumstances, one important aspect of the case is that Telstra has no control over what one customer will choose to send to another customer. Indeed, this was illustrated fairly graphically in one example chosen to test these points by the respondent in which one copyright collecting agency telephoned another and heard music on hold and heard music on hold which was a copyright work.

Now, we, of course, do not object to our learned friends testing the water in this way, but it does have this consequence that it would be very surprising if the operation of section 26 in conjunction with subsection 31(1)(a)(v) was, in effect, to impose on the network operator strict liability for any copyright infringement. So that, in effect, customers could choose to transmit copyright information to each other and Telstra would be required to pay either damages or royalties for that transmission.

Now, in our submission, it would be extremely surprising if, under these rather complex provisions dealing with the special and specific case of a diffusion service, Parliament had somehow brought about the consequence that any transmission of any copyright work, over a telephone network, renders the operator of that network liable.

TOOHEY J: But you would say that is not a diffusion service.

MR EMMERSON: We would say that is not a diffusion service, yes, and it only becomes a diffusion service if you read subsection (v) so widely that you do not have to have any agreements with Telstra that anybody will receive copyright subject matter; those agreements are simply deemed.

TOOHEY J: I was not thinking of it in terms of any particular subsection, but simply given the ordinary acceptance of the term you would say that is not a diffusion service.

MR EMMERSON: That is not a diffusion service and nothing in section 26 makes it so.

TOOHEY J: But what does that do to the respondent’s argument?

MR EMMERSON: What we say is that that is another point that we rely on as demonstrating that the respondent’s argument, in fact, stretches section 26 beyond what it will bear, because if it did lead to that consequence, that consequence would, on our submission, be absurd, and that is another reason for us saying that it does not lead to that consequence; you have got to read section 26 in a sensible way so that it will not impose a general liability on a carrier which cannot control the content of what is carried if that content happens to include copyright work.

TOOHEY J: Is that a necessary consequence of the respondent’s argument?

MR EMMERSON: We would say it is, because assuming that you follow the respondent’s path as to the meaning of section 26(5), where else do you stop, because on the respondent’s argument you eliminate the need for an agreement between customers and Telstra that the customers will receive particular works, on their argument that does not require it, and you eliminate the need for Telstra to be operating a service of diffusion. It said, well Telstra is doing that simply by operating a telephone network, and it is responsible, so it said against us, for the content of anything that is transmitted, because, on this part of the argument, nothing seems to turn on whether it is music on hold or on whether one customer may choose, in some other way, to send copyright subject matter over telephone wires.

GAUDRON J: But may there not be another way of looking at subsection (5), namely, that if the matter is being transmitted by the customer rather than Telecom, it is not in any sense a service which is incidental to the Telecom service or the telephone service?

MR EMMERSON: We would, of course, say that, yes.

GAUDRON J: But that does leave section 25 then, or it may then leave section 25 to operate in respect of the material which Telecom itself broadcasts or transmits.

MR EMMERSON: Well, I would, with respect, accept that, your Honour. As your Honour would appreciate, our primary submission is that section 26 does not apply at all to music on hold. But, of course, we have an independent argument which we say is overwhelming, where the music on hold is simply provided by one customer to another. I think that amounts to full agreement with what your Honour was putting to me.

GAUDRON J: Yes.

MR EMMERSON: There are two matters which I just point out for completeness, though they do not seem to be raised in the matter before this Court. It was held below that section 199(4) provides a limited protection to Telstra in any event in cases where a person receives an authorised television or sound broadcast and causes that “to be transmitted to subscribers to a diffusion service”.

Now, as we understand it, it is not in issue that Justice Gummow and, subsequently, the Full Court, were right in saying that in any event that is not caught in this case. However, I thought I should mention that so that this Court is fully seized of the ambit of the dispute.

There is another matter in which again no issue arises before this Court but it does affect the ambit of the dispute. The statement of claim in the present case alleged that APRA had what was called a repertoire, and it is sufficient, for these purposes, to look at page 4 in the appeal book. The Court will see that that sets out a schedule which makes this allegation:

The Applicant owns the copyright or represents the owner in respect of its application to the performance in public broadcast and transmission to subscribers to a diffusion service of musical and literary works, in practically all musical and literary works performed in public throughout Australia.

Now, the Court will see that that is a very wide statement. In fact, perhaps unsurprisingly, that was denied by my clients and for the purposes of the present proceedings we are concerned only with certain specific literary and musical works in respect of which Telstra has admitted for the purpose of these proceedings that APRA has copyright or is entitled to have copyright. The result is that with the cases being tested with respect to those works there is no finding below and no admission that the much wider group of allegations made by APRA is correct. It follows that the principle is being tested with respect to only a narrow range of subject matter but the parties have in substance agreed on the view that that is sufficient to test the point.

If the Court pleases, those were the submissions that I wish to make on the subject of diffusion service and, if there are no further matters that members of the Court wish to put to me on that at this stage, I would now go on to the issue of broadcasting.

Broadcasting is, again, one of the rights which is dealt with under the Copyright Act and section 31(1)(a)(iv) provides that:

For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a work, is the exclusive right:

(a) in the case of a literary, dramatic or musical work, to do all of any of the following acts:
.....
(iv) to broadcast the work;

Now, broadcast is given a definition in section 10(1), which is the interpretation section, and what that says is that:

In this Act, unless the contrary intention appears:

then omitting other definitions:

“broadcast” means transmit by wireless telegraphy to the public;

So, putting those two provisions together, there is an exclusive right given to the copyright owner in respect of a work to transmit that work by wireless telegraphy to the public. This raises the issue of what is meant by “broadcast” because the case that is put for the respondent entails the proposition that where you have the use of a mobile telephone, there you have a broadcast.

The position of Telstra can be summarised by saying that we do not dispute that a mobile telephone, when used, involves a transmission by wireless telegraphy. That is just simply telling you that the mechanism involves the use of airwaves. But, what we say is that that does not involve a broadcast either in the ordinary sense which suggests wide distribution or in the defined sense in the Act which also suggests wide distribution.

So, it is necessary in this context to look at the circumstances of the use of mobile telephones which we say is the exact antithesis of the notion of broadcasting. Now, it is important to bear in mind that although there is a use of the airwaves, that is to say, a transmission by wireless telegraphy, nevertheless, we are talking here about telephone conversations which are not only private by nature but very careful precautions are taken to ensure that they are private, in fact.

This is dealt with in a passage in the reasons for judgment of his Honour Justice Gummow beginning at page 53, line 19. His Honour, having dealt with the machinery that takes place for the use of a mobile telephone which, so far as relevant, really simply amounts to the fact that instead of the use of wires or material paths, you use, at least in part, the airwaves. What his Honour says is this:

Because the number of mobile telephones in use at a particular time out-numbers the number of available frequencies, the same frequencies may be allocated to more than one telephone operating in Australia at the same time. However, this will not happen within one cell or within two adjacent cells.

Cells are explained by his Honour a little bit earlier on, but they arise out of this, that the range of transmission on the mobile network is a limited and small one, and what happens is that the transmission only occurs within a limited geographical area called a cell. What his Honour is there pointing out at page 53, line 19 and the following, is that within any cell, that is, within the range of a mobile telephone, you only have one frequency. His Honour goes on to explain that beginning at line 24:

By ensuring that each mobile telephone within a given area uses different frequencies, Telecom attempts to protect the privacy of the call and prevent the telephone from receiving any interference from any other call.

His Honour then at page 55, line 17 and following, deals further with privacy and confidentiality. He says:

It is necessary to examine the nature of the transmissions involved. As noted above, any two mobile telephone users at a given time will either receive transmissions from different base stations or will receive transmissions on two different frequencies. The system is designed to ensure, so far as is possible, the privacy and confidentiality of the communication.

Then his Honour refers to the Telecommunications Interception Act, which prohibits persons from trying to intercept other people’s telephone calls, and at line 9 on page 56, his Honour says:

Taken together, these considerations indicate that each mobile telephone user is properly to be viewed as receiving a separate transmission. It is possible that when two people telephone the same organisation and are placed on hold, they may listen to the same music. The point was not explored in the evidence. So far as Telecom is concerned, this would be purely coincidental. As soon as one person is attended to by an operator, the two will be receiving different material. The fact that more than one person may on occasion receive identical signals does not alter the fact that Telecom is essentially providing a service of confidential communication between two people.

Now, that is a point which is of importance when one looks at the language of section 10(1) in its definition of “broadcast”. It says:

“broadcast” means transmit by wireless telegraphy to the public;

So it is the act of transmission, if any act of Telstra is relevant, with which we are concerned, and the act of transmission takes place in a technical context in which both technical and statutory precautions combine to ensure that each individual transmission goes to only one telephone user and is not widely disseminated.

That remains true even if there are cases - which, as his Honour says, is not explored in the evidence - in which you might find that a customer who has many lines operating from his premises happens to be sending music on hold to more than one caller. That is the customer’s doing; it is not Telstra’s doing. Since it is the act of transmission, if any act, which is relevant so far as Telstra is concerned, each transmission is a transmission to an individual telephone user, not to more than one. So we say that it does not matter for this analysis even if in some cases a large commercial organisation may happen to be sending a signal to more than one caller. That is the doing of that customer. It has nothing to do with the only aspect which concerns Telstra, which is the act of transmission, and that act of transmission is never to more than one person.

This leads me to the defences that we raise against this allegation that we have broadcast the work. We say that the notion of broadcast and the notion of transmission to the public necessarily entail transmission of the work to a substantial audience - and, indeed, I will later be saying a substantial audience of a particular type - but in any event, it must be a substantial audience. That is simply not consistent with the type of one‑to‑one transmission which occurs in the one relevant part of a mobile telephone use which is the transmission by wireless telegraphy from one caller to an individual other caller.

The subsidiary point which I will come to a little bit later, which arises in cases where Telstra does not control the content of what is transmitted, is that the infringement involves broadcasting the work. We say that that language should not be read as including the case where a common carrier who has, by statute, no control over the content of the work transmits that work by wireless telegraphy.

The meaning of the expression “to the public” has been the subject of some debate and it is our submission that “to the public” has at least the following two elements: one is that one is talking about transmission to people generally, or at least to a large group of people; and the second thing is that if there is transmission to only a narrow class of people, we say that what is here being talked about is a class of people who desire to hear either the particular work in question or at least work of that general class in question.

In our submission, the phrase “to the public” is not satisfied by simply a small selection of the public which are chosen for reasons which are unrelated to the desire to hear the work or the class of work in question. So that for these purposes the class of persons who want to order taxis, to take the example which is much used in discussion and in the evidence, is not to be equated with the public. This is dealt with by Mr Justice Gummow, in part, at page 60 in the transcript. His Honour first deals with some of the earlier cases and then at line 32 says:

What the earlier cases do suggest is that the broadcast must be received or must be able to be received by a number of members of the public.

Then he goes on to deal with what is meant by “the public” and at page 62 line 8 says:

In Australia, the phrase used in relation to broadcasting is “to the public” which may involve a more restrictive meaning than the phrase “in public”. The words “the public” commonly mean “the community as an aggregate” (Oxford English Dictionary, 2nd ed.) and likewise “to the public” would normally involve some form of general distribution.
In any case, what is relevant is not just the number of recipients of the transmission, but its essential nature. As has been pointed out, transmissions to mobile telephones are provided by Telecom to facilitate private communication between two people. It would be distorting the language of the broadcasting provisions to hold that if during the course of this private communication one party was to communicate a work to the other party, this amounts to a broadcast by Telecom to the public.

Well, we would respectfully adopt what his Honour there says.

Now, that brings me to what the court below had to say about some of the cases. There have been a number of cases in which the words “in public” have fallen for consideration. These have been generally in the context of dramatic or musical performances and the question has been whether, having regard to the character of the audience, these were to be taken as being performances in public.

The great majority of these cases has not considered the expression “to the public” and it is our submission that contrary to the view that was taken by the court below, the words “in public” and the words “to the public” have very substantially different meanings. The expression “in public” is talking about the characteristics of a particular audience. The expression “to the public” is looking at, in this case, the recipients of a broadcast, and asking what it is that links together those recipients.

Now, in our submission, “in public” and “to the public” are not expressions which are coextensive in meaning. It is necessary to look to some extent at the cases because Mr Justice Shepherd, with whose analysis the Court will gather my clients are in agreement up to a point, in our submission, goes wrong when considering the cases and extrapolating from what is said in the context of, say, people coming to a dramatic performance to the case of music on hold.

I now turn to a selection of the cases for the purpose, in part, of showing a difference between these two expressions, but also to show that in the copyright context the notion of “the public” as referring to people rather than places has a certain amount of history to it, and what it suggests is not just any members of the community, but that section of the community who have an interest in the copyright subject matter and would ordinarily be prepared to pay for hearing it.

For that reason we say that there is a distinction between the case in which a whole lot of persons go together to a hall, for example, to watch a dramatic entertainment where they are united in their wish to see that piece of dramatic entertainment and they have this characteristic that they are part of that section of community who will go out of its way to see that particular dramatic entertainment.

It was distinction, we say, between that and the case of someone who telephones for a taxi, hears a particular piece of music and is not, in telephoning a taxi, seeking either the particular piece of music that he hears or music of a particular class.

In the authorities there are some earlier authorities which are referred to again and again in later authorities and it is perhaps convenient to take the Court to those to see how this particular part of the law has been developed, albeit that the context in which it has been developed is one which we say is very different from the present. First, turning to Duck v Bates (1884) 13 QB 843, that was a case which concerned an amateur dramatic club and it put on a performance at Guy’s Hospital in London of a dramatic piece called “Our Boys” and the persons who attended that were persons connected with Guy’s Hospital. Now, the actual issue in that case was whether the place of performance was a place of dramatic entertainment. That was the issue that arose under then statute.

However, the case has been cited in subsequent authorities in the context of the word “public” and, indeed, the headnote, which the Court will see at page 843, has the holding by the majority as “the room where the drama was represented was not a place of public entertainment”. That is not the precise issue in the case but it has been treated as that in subsequent cases and we can proceed to analyse it on that footing.

The notion of “public” that is developed, in particular, by the learned Master of the Rolls, begins at page 847 at about point 4 of the page after considering performances put on by children or family performances in a drawing room, says this:

As I have already intimated, the author wants protection for the pecuniary value of his drama; and a representation in a private room is of no pecuniary value. In order to entitle the author to penalties, there must be a representation which will injure the author’s right to money; such, for instance, as a representation, which, although it is not for profit, would attract persons who are willing to pay money, and would induce them not to go to see a performance licensed by the author.

The notion of “public” from this case onwards in this context takes on an overtone not of meaning people in general, but meaning that class of people in general who would be willing to pay money for the performance. Indeed, one can see why in the context of copyright that distinction makes good sense. The learned Master of the Roll continues:

Suppose that a representation in the presence of friends takes place for the amusement of friends and of the members of the household in an unfurnished house hired for the occasion; that is not an infringement of the statute: the representation must be other than domestic and private. There must be present a sufficient part of the public who would go also to a performance licensed by the author a commercial transaction; otherwise the place where the drama is represented will not be a “place of dramatic entertainment” within the meaning of the statute.

That analysis is not precisely followed by the other members of the Court of Appeal in that case, but it is the analysis that finds its way into later authorities. I am conscious of the time.

DAWSON J: Is that a convenient time, Dr Emmerson?

MR EMMERSON: It would be a convenient time, if Court pleases.

DAWSON J: Court will adjourn until 2.15 pm.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

DAWSON J: Yes, Dr Emmerson.

MR EMMERSON: If the Court pleases, I had been dealing with cases which refer to the meaning of the phrase “in public” and I had taken the Court to Duck v Bates which although not, in fact, concerned with that phrase in a statutory instrument, has been generally treated as being the start of this line of authorities. Could I next take the Court to Harms v Martans Club (1926) Ch 870, at first instance. I take the Court to the first instance report because one member of the Court of Appeal simply endorsed the judgment “at first instance”. Here was a case in which a performance took place at a social club and it was a social club which was one which is described as “of high standing” and the question was whether this performance was in public.

The court at first instance, constituted by Mr Justice Eve, considered the problem of what was “in public” and at page 874, beginning at line 4, he said this:

An audience, for example, composed in the main of those who would in the ordinary course pay for admittance to a performance authorized by the owner might well be regarded as more representative of the public than a larger aggregation of persons less interested in the subject matter, and certainly the resultant loss in the former case would be likely to exceed that in the latter.

Now, this again is part of the development of the use of the word “public” not simply meaning the public at large, but in the context of particular copyright work referring to those persons who were likely to be interested in the subject matter of the copyright work and, in particular, those who would be likely to pay to hear or see the copyright work performed.

TOOHEY J: But is that line of argument helpful for your case?

MR EMMERSON: Well, the way we put it, your Honour, is in a way partly offensively and partly defensively. We say that, in fact, the language that is used in the statute with which we are concerned consists of the words “to the public” and we say that is different and, indeed, it has been held in one or two authorities that it is different.

TOOHEY J: But not only different, I understood you to say, but embraces a much wider range of persons than the sort of audience that is referred to in these cases.

MR EMMERSON: No, we do not say that, we say it is a different range of persons. That is to say that if you say that something is to the public, that is not satisfied by merely showing that some members of the public were present, we say it contains a notion of some general dissemination.

TOOHEY J: Yes, well I think I understand that, but I do not then understand quite how these authorities advance the matter.

MR EMMERSON: Well, these are authorities which were taken up by Justice Shepherd in the decision under appeal and were used to found a conclusion against us and so, we say that if you look at these authorities properly, first they are concerned with different words, but to the extent that they elucidate the notion of the “copyright owner’s public”, which does come up in various explanatory memoranda, which we will come to in due course, they in fact assist our argument rather than go against it.

TOOHEY J: Is it possible, just so that we can use it as a measuring stick, so to speak, to see what Justice Shepherd distilled from these cases; does he deal with them ‑ ‑ ‑

MR EMMERSON: Well, he in fact deals with them in quite a long ‑ ‑ ‑

TOOHEY J: Yes, but at the end, does he distil some proposition or principle?

MR EMMERSON: His Honour starts dealing with authorities at page 102 of the appeal book. He accepts that:

only transmissions intended to be received by the public -

were covered. That is at page 105. He introduces the idea of “copyright owner’s public”, which is a phrase that I will come to presently, which is used in an explanatory memorandum and a second reading speech. He does that at page 106, lines 16 to 17. Then he quotes fairly extensively from a number of cases, going up to about page ‑ ‑ ‑

DAWSON J: Pages 117 and 118 are where he reaches his conclusion and refers to the dicta in various cases.

MR EMMERSON: Yes. So, there is a fairly lengthy development of the cases, part of which we would accept. It had seemed to us that perhaps the easiest way to deal with it was nevertheless to go to the key cases, see where they stand in the development of this line of authority, and then put submissions as to what extent we say this line of authority is of assistance to the Court.

TOOHEY J: I understand that, Dr Emmerson. I was interested to know, though, while you are embarking on that exercise, what was the principle that, if there were one, upon which Justice Shepherd relied which you seek to challenge by reference to these authorities.

MR EMMERSON: Could I take your Honours to page 117, at line 27, where his Honour, to some extent, with all respect to him, seems to go off at a little bit of a tangent. He says:

Applying the tests propounded in the various cases to which I have referred and taking into account the conclusion reached by Rath J in the Rank Case with which I respectfully agree, I am unable to perceive how the playing of music on hold in the circumstances in which it is played over mobile telephones is not an act which falls within the exclusive right -

Now, your Honours will see that what happens there, at least, in our submission, is that his Honour carries out an analysis but then really distinguishes, or departs from the early line of authority. At page 118, line 9, he says:

If it be right to say, as I have concluded it is, that it is the copyright owner’s public which has to be considered, the provision of music on hold could not be described as “domestic or quasi‑domestic in character” -

Pausing there, the element of domesticity is, in our submission, something which excludes the notion of something being in public, but it is not the only test and it is not a substitute for the tests as developed in the authorities.

DAWSON J: And he goes on to say:

These and other expressions used in the various dicta.....indicate that the use of the copyright work here is a use which the copyright owner may reasonably regard as his or hers to control.

MR EMMERSON: Yes. The difficulty with that latter expression, as is said in one or two of the cases, is that there is an element of circularity in it, in that the question is what is the sort of use which the copyright owner might reasonably expect to control. We say that the ‑ ‑ ‑

DAWSON J: The answer seems to be, for the cases so far, that use which would detract from the profits which you would otherwise make.

MR EMMERSON: It does not go quite as widely as that. What it has dealt with so far is what it is public, and is public are people who might otherwise have paid to hear the performance. We say that, in the case of music on hold, what happens is that people who want taxis or something of that sort are the people who receive it and they are not defined as the class of persons who would otherwise have paid to hear music on hold.

DAWSON J: But anyway, if it is being broadcast over the air, no‑one is going to pay for it in any event.

MR EMMERSON: That may well be, yes.

DAWSON J: The broadcasting station is, but those who are hearing are not.

MR EMMERSON: Yes, but with a broadcasting station, again the class of listeners that you have are the people who are interested in either this particular work or at least subject matter of this character, and we say that those are the public for the purposes of that expression in the Copyright Act. We distinguish those from persons who are merely chosen at random or who are chosen by reference to some completely extraneous criterion as, for example, the desire to order a taxi.

TOOHEY J: Sorry to prolong this. Could I just ask you this, Dr Emmerson? Do I understand, in reference to page 118, line 9, the passage that appears there, that you would take issue with the idea that it is the copyright owner’s public which is the test?

MR EMMERSON: What we say is that that is not the test, but if it were the test, then the persons who hear music on hold are not within the traditional concept of copyright owner’s public because they are not the persons who would ordinarily go to a concert, for example, to hear these works.

TOOHEY J: At the other of the scale where you say it is not the public at large ‑ ‑ ‑

MR EMMERSON: Say it is not the public at large, that is right.

TOOHEY J: ‑ ‑ ‑ can you tell us with some precision what the public is in, as you see it, relation to broadcast?

MR EMMERSON: We would say that in the context of broadcast to the public, what it is referring to is either the public at large or at least a public which is sufficiently large that it has a large number of persons who would ordinarily pay to hear the performance. It is difficult to be more precise than that, your Honour, because so far as our researches go, the cases are not more precise than what I have just put to your Honour.

TOOHEY J: Yes, thank you.

MR EMMERSON: What we do say, however, is that the distinction is not simply a distinction between domestic and non-domestic. I think I had got to Harms v Martans Club (1927) 1 Ch. 526, on appeal. In that case, Lord Hanworth, the Master of the Rolls, set out a number of tests which, again, are tests of a fairly general character. It is perhaps convenient to go first to page 532 and five lines from the end of the paragraph which occupies most of that page. What his Lordship says is this:

It appears to me that these authorities are an abundant foundation for what Eve J -

that is to say, the judge at first instance -

has determined - namely, that the question whether there was a performance in public is largely a question of fact and to be determined by the facts of each case.

Pausing there, the cases up till now, although they contain one or two broadish propositions, do not attempt to define the word “public” beyond the general suggestion that you construe the word in the statutory context in which it appears. However, both at first instance and on appeal in this particular case there was a reference to it being largely a question of fact. That proposition is later disapproved in a case which I will come to in a moment or two and it is qualified, obviously enough, by saying it must depend on its facts but there are nevertheless principles of law involved. At the bottom of page 532, two lines from the end, Lord Hanworth refers to proprietary rights and he says:

As to that, profit is a very important element. Next, you must consider whether there has been admission of any portion of the public, with or without payment, and when you are considering what you mean by any portion of the public you will find in Duck v Bates that according to Brett MR it means the public who would go either with or without payment - the class of persons who would be likely to go to a performance if there was a performance at a public theatre for profit.

So, again, the test for the public is not just the public at large but it is the public with a sufficient interest in the performance that it would be likely to go to a performance in a public theatre for a profit. Then his Lordship considers as a separate question, in our submission, the issue of domesticity:

Then one has also to consider whether or not the performance is a domestic one so as to exclude the notion of “public” - domestic in the sense that it was private and domestic, a matter of family and household concern only.

So it seems to suggest, at least tentatively, a double test that has to be satisfied. One is that you have to have an audience with a sufficient interest in the subject matter that it would be prepared to pay to go and hear it. The other is that the circumstances must not be domestic. His Lordship concludes at the bottom of page 533 and the top of page 534:

It seems that a number of persons had an opportunity there of enjoying the production who were of the class likely to go to a similar performance if an entrance fee was required. That brings me, therefore, to say that upon these facts Eve J came to a right conclusion.

TOOHEY J: It has got a real 19th century ring about it, has it not? “A high class club”. What does that mean?

DAWSON J: You have to pay a lot to be a member.

TOOHEY J: I am not inviting you to answer, but some of these cases are sort of redolent of 100 years ago.

MR EMMERSON: All the facts of these cases, your Honour, are redolent of 100 years ago. The notion of a production in the servants’ hall which is discussed in one of the earlier cases is, again, perhaps something which suggests 100 years ago. The attitude to performances by children and performances in a gentleman’s drawing room all have a flavour of an earlier age.

TOOHEY J: That is why I wonder how much we get from them.

MR EMMERSON: Your Honour, all we really say about this is that you cannot get anything adverse to us from them and that as it happens these are the lines of cases which are constantly being referred back to in later authorities.

The next case I wanted to refer to is Jennings v Stephens (1936) 1 Ch 469. That is another case in which there was a play produced and the question was whether there was a performance in public or in private, the fact being that it was a meeting of the Duston Women’s Institute and this was an institute to which many of the local women in fact belonged. Now, it is of significance in the development of this line of cases because Lord Justice Greene in this case introduced what is the germ of the idea of “copyright owner’s public”, which is later taken up in an explanatory memorandum and a second reading speech.

Could I first take the Court to page 475, at the bottom, and 476 at the top. That is the basis for my saying that the proposition that whether something was in public or in private was simply a matter of fact is, in fact, qualified here by saying, in substance, that there is a mixture of fact and law. Lord Wright at page 476 in the main paragraph on that page, about five lines down the paragraph has this to say:

“The public” is a term of uncertain import; it must be limited in every case by the context in which it is used.

Now, we would certainly accept that proposition and, indeed, it is important for seeing the work done by the words “to the public” in the present case. There is then a discussion of a number of the earlier cases which I need not take the Court to.

Lord Justice Romer again takes up the idea of “public” meaning a section of the public and at the top of page 482, having drawn a distinction between the near domestic circle and public, in the latter he says:

In the other they are present in their capacity of members of the music loving section of the public.

There, again, what is meant by “public” are people who have in common an interest in the copyright subject matter. That notion and the notion of the copyright owner’s public also appears in the judgment of Lord Justice Greene and if one goes to the top of page 485 one finds that his Lordship first deals with the question of whether the issue is simply one of fact. Then, about two‑thirds of the way down the page he deals with the rights of the owner of the copyright, and he says:

The question may therefore be usefully approached by inquiring whether or not the act complained of as an infringement would, if done by the owner of the copyright himself, have been an exercise by him of the statutory right conferred upon him. In other words, the expression “in public” must be considered in relation to the owner of the copyright. If the audience considered in relation to the owner of the copyright may properly be described as the owner’s “public” or part of his “public,” then in performing the work before that audience he would in my opinion be exercising the statutory right conferred upon him;

So he is developing the notion of a relationship between the public and the copyright owner. Now he illustrates that on the following page, page 486, by way of an example drawn from a lecture and about two‑thirds of the way down the page he says this:

If the case be taken of a lecture in which the distracting features to which I have referred are not present -

and we need not bother about that -

the point will more clearly appear. If a lecturer makes his living by composing and delivering lectures to an audience wherever he can find one, delivery by him of such a lecture to the members of a Women’s Institute (its constitution and objects being what they are) would, in my opinion, be a delivery of the lecture in public. One of the objects of a Women’s Institute is to obtain for its members entertainment and education by means of (among other things) lectures: and persons who desire to obtain entertainment and education by means of lectures form the lecturer’s “public”.

So “public” is not used in this context as meaning simply a random selection of persons chosen on another basis; it is limited by the concept of those persons who are interested in the copyright subject matter. His Lordship continues:

The opportunity of hearing lectures is one of the advantages which the members of the Institute enjoy and to obtain which they pay their subscriptions.

And he goes on to emphasise the importance of the payment of the subscription. So again, “public” is here being used in a sense which links it to the copyright owner and the work. They are persons who have a real interest in the subject matter and are likely to pay to hear it.

We, of course, submit that this is in sharp contrast with the present case, where the persons who hear the music are persons who are, as it were, selected for entirely different reasons. They are the taxi‑wanting public, rather than the members of the public who would want to hear particular music.

McHUGH J: But does that make any difference in this context? Take the person who sits in a barber’s chair while the barber has got the wireless on, there is publication there. The barber is liable, and does usually pay a fee to APRA or its equivalent.

MR EMMERSON: Yes, your Honour. But that is taking the word “public” or, as your Honour put it to me “published”, in a different statutory context. That is looking at a performance in public, which is a separate right given under section 31. It is a right which my clients were, at an earlier stage of the present proceedings, said to have infringed. That was held not to be so by the judge at first instance, and that point is not being pursued by our learned friends. But that is looking at “public” in the sense of “public place”, rather than looking at “public” in the sense of “copyright owner’s public”. So, the issue there would be, in the barber shop‑type of case and other cases on performance in public, whether the place was a public place. That, in our respectful submission, is a quite different issue.

The next case that is often referred to, which takes up from Jennings v Stephens is Ernest Turner Electrical Instruments Ltd v Performing Right Society Ltd (1943) 1 Ch 167. This was another case in which the question was whether the performance was in public and it arose out of the movement in England at the time to have music while you work in factories as an inducement to people who were in the factories to work harder. It is a case which takes up Jennings v Stephens, and it is perhaps sufficient for present purposes to simply take the Court to the headnote. Held the music was a “performance ‘in public’ ”, Jennings v Stephens was applied, and the view expressed by Lord Justice Greene in that case, that in deciding whether a performance was in public, the relationship to the audience of the owner of the copyright was a primary consideration and that proposition was approved. There are references in this case to “copyright owner’s public”, but perhaps I have sufficiently made the point not to need to take the Court to that in detail.

This idea is also taken up in an Australian case, Australian Performing Right Association Ltd v Canterbury‑Bankstown League Club Ltd (1964) 81 WN (Pt 1) NSW 300. That is a case which we have reproduced in our volume of supplementary materials. It is behind tab 1 in that volume. It was a decision of the Full Court. The issue was whether music played at a social and sporting club had been performed in public and the headnote, item 2 towards the bottom of page 300, says this:

The importance, in determining whether a performance of a musical work is a performance in public, of the relation of an audience to the owner of copyright as his public or part of his public, referred to.

Duck v Bates distinguished and Jennings v Stephens applied.

I should say one thing about Duck v Bates. Duck v Bates has had a mixed reception in the courts. It is fair to say that the principle which it enunciates has been taken up and expanded in later decisions. The actual decision in the case has been received with less enthusiasm. Again, the Court will see that in going through the cases beginning at 309, the line of cases to which I have drawn attention is taken up and those propositions are extracted from it.

While we are in that folder, behind tab 2 is the case of Performing Rights Society Ltd v Rangers F.C. Supporters Club (1975) RPC at 626. That, again, depends on whether the performance was in public and it takes up the same point that you look at the matter from the point of view of the relationship between the public and the work. The Lord Justice-Clerk says right at the bottom of page 637:

In any event while that matter could be said to be conjectural, if it is looked at from the point of view of people going out of their homes for a night-out’s entertainment which includes having a drink and listening to music, it seems to me that such people would be likely to go to a place where such entertainment was provided for payment if the facilities of the club were not available to them.

So, again, the context in which the act takes place is a context in which the people who hear the work are people who have an interest in the work of a character which would make them likely to want to pay for the performance.

There is a further development of this line of cases which emphasises the fact that you must construe the word “public” in the statutory context in which it occurs and that the word “public” does not always have the same meaning and that the question “Is something in public?” is not the same as the question “Is it in private?” A succinct statement of the latter proposition is found in the decision of Mr Justice Rath in Rank Film Production v Dodds (1983) 76 FLR 351. If one goes to the headnote and looks to the last part of that headnote, one finds that his Honour has said:

It would be wrong to convert the test in the Copyright Act 1968 from the question “Is the performance in public?” to the question “Is the performance in private?”, as the answers to the two questions do not necessarily lead to the same conclusions.

We would endorse that in the present case. We say that you do not answer the question that arises under the alleged infringement by broadcasting by asking whether the transmission was in private. What you have to ask is whether it was a broadcast to the public, though we would say that in any event, if you ask the question “Is the performance in private?”, the answer is yes, it is.

His Honour proceeds down what is now a fairly well‑worn track. At 354 he quotes from Duck v Bates, at 355 from Harms v Martans Club, and here he is concerned with the display of films in motel rooms where, of course, you have people who have the relationship with the copyright work, that they want to see it, and his Honour concludes at the top of 356 that:

there would be an interference with the plaintiffs’ proprietary rights, because the statement of agreed facts shows that there is a market for the display of films in motel rooms.

A little further down the page in the second paragraph on that page he points out that:

Sargant L.J. laid stress on the fact that there had been an invitation to the public, and an invitation to listen at a price or at a payment. So there is in this case an invitation to the public to watch in‑house movies, and the provision of such movies should be regarded as part of the consideration for the guests’ payments.

So there is a relationship between the work and the members of the public in that the part of the public that was there concerned are persons who want to see the work and would be prepared to pay for it.

The passage dealing with the proposition that the question “Is it in private?” is not the same or is not going to give the same conclusion as the question “Is it in public?” is set out on the last page of his Honour’s judgment, that is page 358 in the first two paragraphs on that page. I need not read those in detail. They deal with the same point.

For completeness, I would also refer the Court to Australian Performing Right Association Ltd v Commonwealth Bank of Australia (1992) 40 FCR 549. That is a case in which the bank produced a video cassette and played it to some of its employees. The issue there was an issue under the performance right and the question was whether the performance was in public. His Honour Justice Gummow held that it was in public because, his Honour held, in the context of that case, that you could determine the answer to the question, “Was it in public?”, by asking whether it was or was not in private? However, his Honour did not treat the two questions as being identical and in his conclusion, at the top of page 74, his Honour says this:

The phrase in section 31(1)(a)(iii) of the 1968 Act is “to perform the work in public” not before “members of the public” or “a public audience” or “the general public”.

So he expressly is not answering the question of whether there is a performance before a public audience and, indeed, his Honour deals with this case in his reasons for judgment in the present case at page 58. His Honour there says, beginning at line 7, in the Commonwealth Bank Case:

I reviewed a number of these authorities and expressed the following conclusion, at 74:
“The phrase in section 31(1)(a)(iii) of the Copyright Act is ‘to perform the work in public’ not before ‘members of the public’ or ‘a public audience’ or ‘the general public’. Running through the authorities I have discussed is the notion that for the purposes of this performing right a performance will be ‘in public’ if it is a not ‘in private’, and the perception of an antithesis between performances which are in public and those which are ‘domestic’ or ‘private’ in character. In determining whether a performance answers the latter description, the nature of the audience is important. In coming together to form the audience for the performance were the persons concerned bound together by a domestic or private tie or by an aspect of their public life? Their ‘public life’ would include their presence at their place of employment for the supply of a performance to assist the commercial purposes of their employer.”

Now, you will notice that the question that his Honour considers that he had to deal with in the earlier case was why did these people come together for the performance? What is the nature of the tie between them? They had come together for the purpose of watching this video tape and his Honour looks to see why they had done that. Now, that is an entirely different question as his Honour, of course, recognises in his decision from the question that arises in the present case where the people who hear the music on hold are not people who come together for the purpose of hearing music on hold or, indeed, in any way hear music on hold voluntarily, but, rather, they are people who simply have music on hold, in effect, foisted on when they want to hear something else.

The final case to which I refer is a Canadian case, which is found at first instance and on appeal in our supplementary volume of authorities behind tab 3 at first instance and tab 4 on appeal. That was a case concerned with cable television and the question was whether the cable television went to the public and at page 537 the court at first instance deals with what is meant by “to the public” beginning at letter C:

The Act now specifies that such communication, to be within the sole right of the copyright owner, must be “to the public”. This is precisely the language of the Rome Convention of 1928 which, in the view of Pigeon J., the Parliament of Canada had unsuccessfully sought to implement in the 1931 amendments -

And he goes on to say:

The applicant of course contends that its members do not engage in communicating “to the public” because that which renders the music audible is the television set in the subscriber’s home or business which the subscriber must turn on before any music is heard.

He then says that is mere sophistry, and just below letter F he says:

It is not disputed that the subscribers of cable television systems pay those systems a monthly fee for the very purpose of being able to turn on their television sets, connected to that system, to hear whatever the signals transmitted -

So, in construing the words “to the public”, what is important is not just that some randomly selected group of people happen to hear the performance, but there were people who paid a monthly fee for the very purpose of having access to cable television and they, of course, did hear it, and that was to the public.

The case went on appeal, but the matter does not really go much further. We have set out the text on appeal in a format derived from Lexsee behind tab 4. If one goes to page 9, about two thirds of the way down the page there is a paragraph, and four lines from the bottom of that the court says so far as performances are concerned it:

applies only to those that are ‘in public’.

and deals with how one gets to the notion of “public performance”.

In our submission, then, the review of the authorities supports the view that the words “to the public” are words which have real work to do in the context of the present case and that they are directed to broadcasts to persons who want to hear the work in question or at least want to hear works of this general character.

In our submission, there is further support for this view in the statutory history of the matter. The position was that before 1986 amendments, “broadcast” was simply defined as meaning “broadcast by wireless telegraphy”. This is conveniently set out in the judgment of Justice Gummow at page 57. His Honour says at line 18:

Prior to the Copyright Amendment Act 1986, the definition of “broadcast” read as follows:

“ ‘Broadcast’ means broadcast by wireless telegraphy, and ‘broadcasting’ has a corresponding meaning.”

Just pausing there, in that definition, there are the twin elements of the use of the word “broadcast” which, in our submission, suggests a wide distribution, and the restriction to the means of distribution which is by wireless telegraphy.

Then the Act was further amended so that one got transmission by wireless telegraphy and then it became necessary to limit that and the words “to the public” were added. In the explanatory memorandum which deals with this, this point is made clear. The explanatory memorandum is conveniently to be found in the respondent’s bundle of extrinsic materials. I am sorry, my learned friend tells me he has not handed it up. It is a very short passage and, if it would be convenient for the Court, either I can hand it up on behalf of my learned friend now or I will simply read the ‑ ‑ ‑

DAWSON J: Just one paragraph, is it, Mr Emmerson?

MR EMMERSON: It is just one paragraph, yes.

DAWSON J: If you read it, it will be read in the transcript.

MR EMMERSON: It says:

Amendment of the Copyright Act 1968.
Proposed amendments of section 10 substitute a new definition of “broadcast” to better express the intention that only wireless transmissions to the public are covered by the Act.

The word “public” is underlined.

Accordingly programme‑carrying signals not intended to be received by the copyright-owner’s public will not be “broadcasts” even if a few members of the public possessing specialised equipment are able to pick them up.

In our submission, that is entirely in accordance with what I have been putting, namely that the words “to the public” are intended to have a limiting construction and they do have that limiting construction. They are limited to what is here referred to as the copyright owner’s public which takes up the expression as used in the cases, meaning those persons with an interest in the works who would normally pay to hear them.

So, again, one reaches the same conclusion that there is a very important limitation in the definition of “broadcast” which simply does not apply to the facts of this case. A similar analysis appears amongst English textbook writers, and we have produced some passages from two successive editions of Copinger in the extrinsic materials. The first of them is behind tab 9. That is the edition of Copinger before the 1988 Copyright Act. At paragraph 887, which we have extracted on the following page, the learned authors say this:

Broadcasting, for the purposes of the Act of 1956 is defined by reference to the same expression in the Wireless Telegraphy Act 1949, and means, in substance, the emission of messages by electro‑magnetic energy otherwise than over wires.

So the meaning is talking about, as it were, the mechanical method of transmission. The learned authors add:

It will be observed that the expression “broadcast” is not defined in such a way as to distinguish it from other forms of wireless communication, but it is assumed that the expression necessarily involves that the messages shall be received, or be capable of being received, by a large public.

Now, that passage had, in fact, been in successive editions of Copinger going back to the edition following the enactment of the 1956 Act. In the interval between that edition and the succeeding edition, the 1988 Act came into force and we have extracted behind tab 10 the relevant parts of the 13th edition of Copinger of 1991 and at page 35, under the heading “Broadcasts”, the learned authors say this:

Statutory definition. By section 6(1) of the 1988 Act a broadcast is defined as meaning a transmission by wireless telegraphy of visual imagines, sounds or other information which -
(a) is capable of being lawfully received by members of the public, or

(b) is transmitted for presentation to members of the public.

The essential element of this definition, that copyright is conferred in respect of visual images and sounds which are broadcast, remains the same as under the definition in the 1956 Act, although the distinction, maintained in the 1956 Act, between television broadcasts and sound broadcasts is abandoned -

We do not need to deal with the next sentence, but if one goes to paragraph 2‑33 one finds this:

Reception by the public. Whilst the expression “broadcast” was not defined under the 1956 Act in such a way as to distinguish it from other forms of wireless communication, it was assumed -

and the learned editors there refer back to the preceding edition of Copinger -

that the expression necessarily involved the messages being received, or being capable of being received, by a large public. The present definition, by referring to the public in sub‑paragraphs (a) and (b), makes this requirement clear.

Now, the position then is that although we are not able to point to any judicial authority in the United Kingdom considering this point, the textbook authority has continued unchanged in the leading English text going back to the enactment of the 1956 Act and continuing up to the most recent edition.

There is a similar statement in another English text which we have extracted behind tab 11. That text is The Modern Law of Copyright by Laddie Prescott and Vitoria and the relevant passage is at page 320 paragraph 9.3. If one looks at that paragraph and goes to about eight lines from the bottom:

A transmission by wireless telegraphy is presumably not a broadcast unless it is intended to be transmitted to and received by a significant section of the public. Therefore presumably a transmission by wireless telegraphy from an outside broadcasts newsreporter.....receiving station for editing and braodcasting by the BBC or ITA as the case may be, is not a broadcast within the Act and is not protected -

So mere transmission to one other person is not a broadcast in the view of the editors of Laddie, Prescott and Vitoria. The later edition of Laddie, Prescott and Vitoria comes after the 1988 Act came into force.

In our submission, when one looks to these authorities and when one
looks to the statutory background and the work that is being done by the words “to the public” in the present case, the conclusion follows that what is being talked about is transmission to substantial numbers of people of a class who have an interest in the work so that they would be likely to be prepared to pay for hearing it. Now, those submissions on broadcasting apply to music on hold whether or not Telstra has control over the subject matter that is transmitted.

There is a further argument which we raise which applies to the somewhat more limited, but still very important, category of cases in which the content is not determined by Telstrar and, indeed, in no sense controlled by Telstra, because what happens is that one telephone subscriber fits up his paddocks with music on hold, and another telephone subscriber rings him on his mobile telephone and hears the music on hold.

Now, where Telstra has no control over the transmission it cannot, in our respectful submission, be fairly said that Telstra has transmitted those works to the public. It has simply provided a general telecommunications service. Finally, on this part of the case again we would say that if the reasoning of the respondents is correct it would not be confined to music on hold but it would have the consequence that if any customer of Telstra chose to send any copyright material to another customer and that customer happened to be using a mobile phone, then it would be Telstra which would infringe copyright. In our respectful submission that cannot have been the intention of Parliament and, indeed, we note that Mr Justice Shepherd in the decision below expresses concerns about the ramifications ‑ ‑ ‑

DAWSON J: That would be so whether it was a mobile telephone or not, would it not?

MR EMMERSON: Absolutely, yes, your Honour. I am just for completeness saying that this occurs under both headings in our argument, both in respect of diffusion service and in respect of broadcasting. Could I conclude then by taking the Court to what His Honour Mr Justice Shepherd says beginning at page 95, line 25, on this latter point:

I would add that there are large questions of policy involved in this matter. If Parliament were considering whether to amend the Act to provide for what APRA wishes to achieve, it is likely that considerable thought would be given by it to the whole question of how owners of copyright material used by persons providing music on hold should be compensated for this use. One of the critical matters would be whether the operator of a comprehensive telephone service such as Telecom should be required to pay what will prove to be a very large sum of money payable regularly for the indefinite future for something which appears to have little to do with it except that it happens to be the operator of the telephone service. Further, it is not unlikely, unless agreement can be reached between APRA and Telecom, assuming the APRA submissions prevail, that the recognition of the right will cast a large administrative burden on those responsible for the payments, not only because of the need to ensure that the amounts which are paid are correct, but in determining how Telecom itself should deal with those responsible for providing music on hold services. At bottom is the question of fair or equitable remuneration (expressions used elsewhere in the copyright legislation) for uses of copyright material. This should be adequate, but it should not be excessive. The underlying difficulties of this whole problem are numerous.

His Honour draws this conclusion so far as the approach which he says should be taken to the construction of these statutory provisions:

It follows that there is much to be said for the view that the matter ought to be dealt with by legislation rather than judicial decision unless the right contended for is provided for in the legislation with reasonable clarity. A court ought not to be astute to find it.

In our submission, far from being provided for with reasonable clarity in the present case, it is not provided for at all and one simply cannot conclude, reading the language of the sections which apply to either part of this case, that it was the intention of Parliament that a carrier should be liable in copyright infringement for the contents of music on hold. If the Court pleases.

DAWSON J: Thank you, Dr Emmerson. Mr Catterns.

MR CATTERNS: May it please the Court. Your Honours, may I hand up eight copies of our submissions.

DAWSON J: We might just read them. Yes, Mr Catterns.

MR CATTERNS: Your Honours, before I deal with the question of diffusion - and we were proposing to follow our friend’s order: do diffusion first and then broadcast - could I just remind your Honours with respect to that last passage that our friends read from the judgment of his Honour Justice Shepherd that that is part of his Honour’s reasons in relation to the diffusion right where his Honour was in dissent. The practical considerations that his Honour referred to did not deter his Honour from finding for us on the question of broadcast. We do propose to deal, if I may do so in a few minutes, in some detail with the practical questions that have been raised by members of the Court including your Honour Justice McHugh.

But we would submit that, first, the matter needs to be approached as a question of statutory interpretation. In that context, your Honours, it is important to understand what we mean when we say the ordinary meaning of the phrase “transmit to subscribers to a diffusion service” and whether in fact there was such a thing as an ordinary meaning of that phrase in 1968/69. Of course, if I may respectfully remind the Court, that is not the question. The question is: what is its meaning in the present context? Really its ordinary meaning outside the Act, we submit, will not provide a lot of help here, particularly where there is a definitional code in section 26.

Your Honours, before I go to that, if I may, just for completeness, mention a few very basic matters in the structure of the Act just to remind your Honours. First, this case relates to both, as our friends say, literary and musical works, only six literary and six musical works in fact. They appear at 147, your Honours, in the orders, and they are the musical works of the six songs set out there and the literary works being the words of the songs set out there.

Your Honours, our friends have taken the Court to section 31(1) and that relevantly (a) sets out the exclusive rights in relation to both the literary and musical works. Your Honours, as I say just for completeness, could I remind your Honours that by section 13(1), those exclusive rights are called the “acts comprised in the copyright” and then by section 14, “the doing of an act in relation to a work” includes the doing of an act “in relation to a substantial part of the work”, and that is why there has been no issue in this case that when one hears a part of a song, when one hears music on hold, our friends have taken no point about substantiality and we have been able to focus on the critical issues that our friends have discussed because, for the purposes of this case, they have accepted that they are substantial parts of the works being transmitted or broadcast if they otherwise are. Your Honours, section 36(1) is the provision we sue under and, omitting the words, your Honours:

the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.

The two relevant acts, as the Court knows, are transmitted to subscribers to a diffusion service and broadcast.

Your Honours, may I had up a bundle of extrinsic material? Your Honours, we gave our friends notice of this, I think last week, and also gave them a copy of a submission, which is behind tab 15. The reason we did not supply this to the Court earlier is we did not want either the Court or our friends to think we were stealing a march by exceeding the three page rule by putting a lengthier submission on the extrinsic material at the back of this bundle. I hope the Court does not think that. I will be making those submissions orally, and we would only view that as an aide‑memoire on what we say one gets from the extrinsic material.

Your Honours, the first, and we think almost only guide as to what is the ordinary meaning of the phrase “transmit to subscribers through a diffusion service” is the Berne Convention. Your Honours remember that that is one of the earliest of the international instruments that the various countries in the world entered into. It was entered into in 1886 at Berne, and amended at various times. The Canadian judgment that our friends took your Honours to referred to the Rome Convention. That was, in fact, the Rome Act of 1928 of the Berne Convention. There have been various Acts.

In 1948, the Convention was revised at Brussels, and it is that revision which led to the series of reports and enactments which preceded our Act of 1968. The Brussels Act in 1948 was agreed upon, then the UK committee, known as the Gregory Committee, was asked to look into the British Act and to recommend what changes were necessary (a) generally and (b) to give effect to Brussels. They did. That led to the 1956 Act and, similarly, the Spicer Committee in Australia looked at the same questions. That led to the 1967 and 1968 Bills, and then our 1968 Act. The Attorney‑General, then Mr Bowen, mentions the Brussels Act in both his second reading speeches.

Your Honours, the diffusion right, we submit, is part of a package - if I can call it that - of the three rights in section 31(1)(a), namely, the three rights: to perform the work in public, to broadcast the work, and to cause the work to be transmitted to subscribers to a diffusion service. They really add up to all the forms of public communication that one could think of in 1948. Your Honours, behind tab 1 of our extrinsic bundle we set out the relevant Article. That is Article 11 of the Brussels Act of Berne - and reminding your Honours, if I may, that the Berne Convention sets up a union of countries for the protection of literary, et cetera, works, promising to give each other - nationals and residents - the same treatment as we give our own citizens, et cetera. There are a number of, as it were, guaranteed rights, and 1948 was the first time this particular right, or this package of rights, was dealt with expressly. Article 11(1):

The authors of dramatic, dramatico-musical or musical works shall enjoy the exclusive right of authorizing: (i) the public presentation and public performance of their works;

in our Act, that is perform the work in public.

(ii) the public distribution by any means of the presentation and performance of their works.

Now, your Honours, distribution, it has been thought, is perhaps not the best translation of the French word, and I am sorry, I forget the French word, but by the time the Act was revised in Stockholm ‑ ‑ ‑

McHUGH J: Transmission, I think it was, was it not?

MR CATTERNS: I will find it out, if I may, overnight, your Honour; we do know it. By the time the Convention was revised in the Stockholm Act 1967, referred to by the Attorney in his second reading speech on the 1968 Bill, had been replaced, as your Honours will see behind the next tab, with communication. Yes, your Honour, it is transmission, pronounced in the French way.

McHUGH J: Yes.

MR CATTERNS: In the Stockholm Act 1967 the word is “any communication” in Article 11(1)(ii) and that has been continued, behind tab 3 in the Paris Act 1971 Article 11(1)(ii), and we will hand your Honours later a little section from Professor Ricketson’s book on the Berne Convention, where he explains that, and as being a poor translation in the 1948 case and the better word being communication, but, your Honours, our submission is that what the Convention guarantees and in what the Australian Act attempts to give effect to, as we promise, is the exclusive right to authorise the public distribution by any means or the public communication by any means of their works and, your Honours, that covers both broadcast by wireless telegraphy and transmission by wire, and I think that is a complete class.

Your Honours, for completeness, that provision - I am back behind tab 1, your Honours, Article 11(1) - reserves the provisions of 11 bis and 13. 13 is irrelevant for present purposes. That relates to the right to make records or mechanical contrivances, but, your Honours, 11 bis goes on:

Authors of literary and artistic works shall have the exclusive right of authorizing: (i) the radio‑diffusion of their works or the communication thereof to the public by any other means of wireless diffusion of signs, sounds or images; (ii) any communication to the public, whether over wires or not, of the radio‑diffusion of the work ‑

that is the concept of by retransmission and then loudspeakers and in Article 11 bis (2) there is the possibility allowed that there may be some restrictions upon the exercise of the broadcast right and the rebroadcast right.

Your Honours, so in beginning our search for the ordinary meaning of the concept of “transmission to subscribers to a diffusion service”, we start with the proposition that the legislature was trying to give effect to this broad right of communication in a way parallel to the right to broadcast by wireless telegraphy. Your Honours, there is very little to be gained from the various reports, but if I may just go through those quickly. Behind tab 4 is an extract from the Gregory Report ‑ ‑ ‑

TOOHEY J: Which report is this?

MR CATTERNS: The Gregory Report. That is the English report which reported in 1952. We give its proper title in our little submission at the back, your Honour, behind tab 4. It is put in for completeness because, in effect, nothing is said about this point unless it is in the cryptic paragraph 120 on the second of the two pages which says:

We do not suggest any alteration in the present relationship between the Postmaster‑General, the BBC and the Relay Companies.

Your Honours, that report amongst other things led to the UK Copyright Act 1956 behind tab 5 where, at page 10 of our bundle - I am referring to a handwritten number at the bottom of the page - we set out section 2(5)(e) - it is in the middle of the page, your Honours:

causing the work to be transmitted to subscribers to a diffusion service.

We see no difference between that and the Australian section, and on the next page, which is our handwritten 11, there is section 48(3), which covers some, but your Honours will notice not all, of the ground of our section 26. The principal differences, your Honours, are these - it begins:

References in this Act to the transmission of a work or other subject‑matter to subscribers to a diffusion service.....of distributing broadcast programmes, or other programmes -

Our Act appears to be broader in that it says “broadcast or other matter”. Secondly, the English paragraph (a) combines the concepts of our 26(2)(a) and our section 26(4), the parenthesis in the English (a) is, in effect, our 26(4). The UK (3)(b) is, near enough, for present purposes the same as our (2)(b). Your Honours, the proviso at the bottom of the page is the equivalent to our section 26(3), and there is no equivalent to 26(5).

DAWSON J: The proviso looks to be similar - I see, no it is not.

MR CATTERNS: It is our 26(3).

DAWSON J: Yes, it is.

MR CATTERNS: Your Honour, it is similar in this way, and I do not think our friends addressed this, in a way thought important by both Chief Justice Black and Justice Burchett, because there is an example where people are not going to somewhere particularly to get particular pieces of music or particular classes of music, and it is very much an incidental to whatever that particular transaction may be. Yet, whether rightly or wrongly, the legislature thought it necessary to accept that kind of service. I was going to expand that later, if I may, your Honours. Your Honours, behind tab 6 is the Spicer Committee Report chaired by Sir John Spicer which reported in 1959, following the UK Act. At the bottom of our page 12 in paragraph 62 the committee sets out section 2(5) of the UK Act, (e):

causing the work to be transmitted -

and says on the last line:

We recommend the adoption of those provisions.

Your Honours, the last page behind that tab, page 14, paragraph 440, refers to section 48(3) of the UK Act which I drew attention to. They do not actually say “we recommend adoption of that,” but it is clear that they are. Your Honours, then the second reading speeches are beginning behind tab 7. If I could remind your Honours that the government brought a Bill in ‘67 which was intended to lay before the House for a period of time so the people could discuss it and there was, indeed, as is set out in the second second reading speech, a great deal of controversy largely about different issues including the right of the copyright owner in sound recordings which, as your Honours recall, is an entirely distinct subject matter from that in music, being dealt with in a different part of the Act, Part IV, the extent of their rights.

Your Honours, just briefly, at 2327 of Hansard, right‑hand column at the bottom, there is mention of the UK Act and the Spicer Committee Report. At page 2328, left‑hand column, last paragraph, there is reference to the Brussels revision of the Berne Convention and also the Universal Copyright Convention. Your Honours remember the Universal Copyright Convention was what one might call a second‑rate convention in terms of the protection afforded to authors, brought in at the insistence of the US which wanted to maintain its copyright registration system. It is of very little practical importance nowadays, the UCC.

TOOHEY J: Mr Catterns, could I just say I feel some unease about the way in which we are approaching this question. The use of extrinsic materials to ‑ ‑ ‑

MR CATTERNS: Yes, your Honour.

TOOHEY J: ‑ ‑ ‑ to either, in terms of section 15AB of the Acts Interpretation Act, to confirm that the meaning of the provision is the ordinary meaning conveyed by the text, or to determine the meaning when the provision is ambiguous or obscure and so on. Ordinarily one starts with a section ‑ ‑ ‑

MR CATTERNS: Yes, your Honour.

TOOHEY J: ‑ ‑ ‑ and then falls back on extrinsic material to aid in interpretation. The way you are approaching it seems to be that the extrinsic material really, in a sense, determines what the interpretation of a section will be.

MR CATTERNS: I do not think we need to say that, your Honour, and I do not think we do say that, but the reason we did it this way, which is not so much the order that we put it in our submissions even, is that there has been quite a lot of discussion today between our friends and the Bench of the concept of the ordinary meaning of “transmission to subscribers to a diffusion service”. It is really our submission that it does not spring off the page in section 31(1) that there is such an ordinary meaning. Our real submission is that its meaning is to be found in section 26, and for the reasons given by the Full Court majority, we are right in that. What we get out of this - I do not think we try to place too much weight on it, and I hope it is not impermissible in terms of the Acts Interpretation Act.

TOOHEY J: No, I was not suggesting it was impermissible, except in the sense that it was not clear to me for what aspect of section 15AB it was being used, whether it was because “provision” was ambiguous or obscure in your submission, or it was an aid in determining the ordinary meaning conveyed by the text of the provision or for what purpose?

MR CATTERNS: Your Honour, our submission is it is not necessary because of our construction of section 26, which I will take the Court to in detail. Perhaps our alternative or fall back submission, and it is perhaps not good advocacy to begin with it but I thought this gave the context, is that really both. If there be an ordinary meaning, it is the one that one can find from these extrinsic materials and, perhaps as a second alternative, if, contrary to our submission that section 26 is clear enough, there be ambiguity, then these materials help.

In particular, we are using these materials, first of all, to support the submission that there is intended to be a right broadly parallel to the broadcast right, as I have submitted already, your Honour. In other words, there is not a great deal of magic in that word “service” upon which his Honour Justice Gummow and our friends place such importance.

KIRBY J: Australia is a party to all of the Acts and conventions that you have collected here, is it?

MR CATTERNS: Yes, your Honour.

KIRBY J: But there is a principle of construction, is there not, that one construes Australian legislation which is designed to give effect to a convention in a way that conforms to our international obligations?

MR CATTERNS: Yes, your Honour, and in our written submission behind tab 15 we give a reference purely for convenience to passages in Teoh’s Case, not in relation to the legitimate expectation question, of course, but just to where that principle is conveniently ‑ ‑ ‑

TOOHEY J: That would really be an alternative submission.

MR CATTERNS: Yes, your Honour. There is no legitimate expectation question here.

KIRBY J: I think in Teoh there is a collection of the authorities which are well established in England and in this country.

MR CATTERNS: Yes, your Honour, and I think we give the reference to that. We will get the reference to that.

TOOHEY J: I am sorry, I distracted you.

MR CATTERNS: I am wondering whether I ought to take your Honour’s hint and go straight to section - not hint, help - your Honour’s assistance.

TOOHEY J: It was just a thought that went through my mind. I do not want to divert you from the course of your argument, Mr Catterns.

MR CATTERNS: No, I am grateful to your Honour.

McHUGH J: I like the United States approach to statutory interpretation. You look at the reports of what is said on the floor of Congress rather than worry about the legislation itself to find the meaning.

MR CATTERNS: Your Honour, in the case of the US Copyright Act it is deliberately done that way, that you are expected to have resort to reports in construing their 1976 Act. But I hope I am not being so unconventional in the Australian context because we in the end are very happy to rest on 26.

KIRBY J: The suggestion was that you were being too conventional.

MR CATTERNS: Well if I can broaden the Acts Interpretation Act with what your Honour Justice Kirby put to me, that is I think as far as we need to go. Your Honours, if I may just quickly, at the bottom of page 2328 left‑hand column the Attorney mentions the Brussels Revision and at page 2329 left-hand column in discussing the predecessor of the current section 3(1), the bottom paragraph, he refers to clause 30 and refers to the:

exclusive rights of reproduction, publication, public performance, broadcasting and communication of the works to subscribers to a diffusion service, that is, a service in which transmission is effected by land line and not by broadcasting.

And I am going to submit in a moment that cable TV, of the kind I now subscribe to from Foxtel, was not by any means the only thing that the legislature had in mind when it enacted section 31(1)(a)(v).

Your Honours, behind the next tab is the speech on the 1968 Bill, and in the right-hand column “abrogates noticed in relation to its market power”, and one aspect of that, just while I am there, your Honours, is I will be taking your Honours later to the copyright tribunal provisions, which are a large answer to the practical problems that have been raised both today and also below.

Your Honours, at 1528, right‑hand column, Mr Bowen refers again to the Brussels Revision at the beginning of the first full paragraph and, at the bottom of the page, he refers to the Stockholm Revision. I do not think I completed answering a question your Honour Justice Kirby put to me. We, Australia, did not accede to the substantive provisions of Stockholm for the reason, as it were, foreshadowed by Mr Bowen at the bottom of that page, which is it was too generous to developing countries. There was a great controversy in the copyright world between 1967 and the Paris Act of 1971 about those and really the substantive revisions of Stockholm did not come into any practical effect.

Your Honours, at 1529, finally on this, at the middle of the right‑hand column with respect to clause 31 the Attorney says I think the same words as were said with respect to the clause in the previous Bill:

A diffusion service is one in which transmission is effected by landline and not by broadcasting.

So, your Honours, our submission of what the ordinary meaning of “transmission to subscribers to a diffusion service” was in 1968, and is today, is that it is a broader term than that which our friends contend for. It certainly includes cable TV or pay TV. But your Honours will remember that did not exist in Australia in 1968 and was illegal until 1992 when the Broadcasting Services Act finally contemplated pay TV, first by satellite and then by wire and, even when this case was run, had not commenced in any commercial way. So we submit that it is far from limited to that. Second, and a very important aspect, was the retransmission of broadcasts in areas of poor reception.

There is different phrases used to describe that. Sometimes it is called “community antennas”, which were, as it were, self‑help, non‑profit services, but may well have been profit‑earning services, and the idea was if you live on the waterfront at the bottom of the hill at Balmoral in Sydney - if your Honour’s will forgive a Sydney example - and you have poor TV reception, you could put a tall antenna at the top of the hill and one or a thousand houses can be wired up to it, and that is a diffusion service, and people can subscribe to it in one way or another.

It is not an important right from the copyright owner’s point of view because we cannot control that by virtue of section 199(4). That is the purpose of section 199(4). It says:

A person who, by the reception of an authorized television broadcast or sound broadcast, causes a literary, dramatic or musical work or an adaptation.....artistic work or a cinematograph film to be transmitted to subscribers to a diffusion service -

is, in effect, treated as if he had a licence. If I may go to section 199(5), if it turns out that the broadcast was unauthorised, still the retransmitter is not liable but his acts are added to the damages suffered by the broadcaster. That was a concept sometimes called “completion of relay”, so the idea was, and it is one of the concepts which, but for section 199(4) - I beg your pardon - it is one of the concepts which comes within the phrase “transmission to subscribers to a diffusion service” which would otherwise infringe but for section 199(4).

Your Honours, as well as that though, the most obvious wire transmission was that controlled by then the Postmaster-General. They were the only wires allowed to be used to carry signals in 1968. The Postmaster-General had the monopoly on the use of wires to communicate anything other than within a private premises. So, at the very least, one of the modes of carriage or, better still, one of the systems of carriage, one of the organised mechanisms of carriage contemplated in 1968, was transmission over the telephone lines.

That is obviously why 26(5) is there and I will come to that in more detail, but we submit that to the forefront in one’s consideration of the ordinary meaning of “diffusion service” in 1968 is the concept of carriage of matter over the telephone lines. Really, there are two aspects of that. The first is the use of the telephone lines as the physical means of transmission, the wires, the paths, and the second is the types of service that may be part of the telephone service or incidental to it we submit are part of the concept.

For example, his Honour Justice McHugh mentions 0055 services and, in the evidence in the case, there was evidence that you can ring 0055 and listen to heavy metal rock if it so happens that that is something that you are interested in. That is now, of course, your Honours. But things like that where you could use the phone and ring up and at the far end of it somebody would be playing a record we submit are well within what was contemplated within the ordinary meaning of that phrase in 1968 and it was contemplated that the physical phone lines would be used to transmit it and that the service, using that term in an ordinary general sense, the service whereby you get access to the heavy metal rock or the Beatles or whatever we were listening to in 1968, might be part of or incidental to a phone service.

McHUGH J: Perhaps my recollection is a bit erroneous, but as a boy in North Queensland I seem to have a recollection of hearing discussion on the radio of radio landline programmes, say, sporting programmes coming from, say, Melbourne to North Queensland were overheard. Am I wrong or is there any such ‑ ‑ ‑

MR CATTERNS: They used the landline, your Honour, to get it from, to use the jargon of 1986, point to point. The landline from Melbourne to Sydney allowed live broadcasts of the cricket and so on. They did not then go to the premises of subscribers. As far as I am aware, that was not permitted until the 1992 Act.

McHUGH J: What about if it went to, say, 4TO Townsville radio station, which then broadcasts it? Is that a diffusion service at that stage from Melbourne or do you look at it merely from the point of view of the local radio station in Townsville?

MR CATTERNS: Your Honour, I think it was - well, the principal focus is certainly they are broadcast by the local station. I suppose there might be a question about who transmitted it to the station from Melbourne or wherever it was from. I think one would need to know more facts to answer whether ‑ ‑ ‑

McHUGH J: Yes. I have got the vague recollection that it was some other radio station in another State, for example.

MR CATTERNS: Your Honour, I think the notion of networks, such as the ABC networks, existed, and they got their programmes from station to station in the various technological means that were possible and the 1986 amendments were partly - when we get to broadcasting - were principally directed to that, because they were dealing with different modes of getting transports. Landlines had been known for a long period of time. Physical shipping of video cassettes still took place but also there were, what would otherwise be broadcasts or may otherwise be broadcasts, microwave to microwave, and the way the programmes got to Alice Springs from Darwin were by microwave links. Then in 1986 there was the satellite, which allowed Channel 9 Sydney to send its programmes to Channel 9 Perth, up to the AUSSAT satellite and down to Perth - that is why the 86 amendments, the first set, came in.

TOOHEY J: In any of those situations, Mr Catterns, to which you have just referred, can you identify the subscribers to the service in terms of section 26?

MR CATTERNS: Your Honour, most of the ones I gave his Honour then were broadcast examples, but in the landline case, it is probably not transmission to subscribers to a diffusion service, particularly at least where the ABC station 3 or whatever it is in Melbourne is transmitting to 2BL in Sydney. I do not think his Honour has postulated, as it were, a central originator of material going to people to whom it provides that service because, as far as I am aware, that was not taking place.

TOOHEY J: No, that is really what prompted the question, whether it was possible to put any of those examples really within the framework of section 26, assuming of course that they met the requirement of wires or other paths.

MR CATTERNS: Your Honour, I accept, not without difficulty, and really, I am not submitting that that was necessarily one of the ones contemplated. The last of my ones that was contemplated was the heavy metal example. So, your Honours, our submission is that partly, as I said,

one of the types of diffusion service contemplated was those involving the telephone infrastructure and possibly part of the telephone service. Therefore, when we get to 26, we see that the Act has provided for two different concepts: first, where the provision of material or matter is part of a telecommunications service - and what is now Telstra provides that service - but there is also the case where Telstra merely provides the physical infrastructure and somebody else contracts to provide the broadcast or other matter. Those two possibilities of using the physical lines are provided for in section 26.

DAWSON J: I see it is one minute off quarter past four, Mr Catterns. How long is your argument likely to take?

MR CATTERNS: I will finish at lunch, I think, your Honour. I will try and do it before lunch so as to give my friend a chance to reply before lunch, but I think I need to go to a few of the public performance cases.

DAWSON J: Thank you. The Court will adjourn until 10.15 tomorrow morning.

AT 4.14 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 12 DECEMBER 1996

[1996] HCATrans 389

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