Texas Way Pty Limited v Thanh Hung Video (Aust) Pty Ltd

[1992] FCA 1037

1037 1 1941

JUDGMENT NO. ........ ........ .. ........ ..,	I.
l '

IN THE FEDERAL COURT OF AUSTRALIA	)	1 -
)	I
VICTORIA DISTRICT REGISTRY	)	VG 373 of 1992

) VG 353 of 1992 !

GENERAL DIVISION 1 ::

VG 373 of 1992

;-,

BETWEEN:	TEXAS WAY PTY LTD. TINOS PTP LTD,
TVB INTERNATIONAL LTD. TELEVISION
BROADCAST LTD and TVB INTERNATIONAL (OVERSEAS) LTD

. .

(Applicants)

AND: THANH HUNG VIDEO (AUST) PTY LTD

and OUOC HUNG VIDEO PTY LTD

L ..

(Respondents)

I -

VG 353 of 1992	!
1- ,

BETWEEN: THANH HUNG VIDEO (AUSTI LTD and

THUAN HUNG VIDEO PTY LTD	1
i

FEDERAL COURT OF (Applicants) I

AUSTRALIA

I

I	AND:	TEXAS WAY PTY LTD. TINOS PTY LTD,	I
l	TVB INTERNATIONAL LTD and TELEVISION	l
BROADCAST LTD	I. .

(Respondents)

Coram:  Ryan J

Place: Melbourne

Date:  22 December 1992

.

EX TEKPORE REASONS FOR JUDGMENT

Rvan Z: On 21 October 1992, Heerey J made an order on applications for interlocutory relief in these proceedings which

I :  included the following paragraphs:

"1.	The Respondents in proceedrng No. VG 373 of 1992 whether by	I
themselves, then directors, officers, servants or agents or	!
otherwise be restrained until the detenninat~on of the said	t
proceeding or further Order from infringing any copyright held by	, ,
the Applicants in the said proceeding in the crnematograph films	I
referred to in paragraphs 8 and 9 of the Statement of Claim
herein and Exhibits "KAA4", to the Affidavit of Kenneth Alexander	I
Adams sworn 29 September, 1992 and filed herein and any TVB	, .

cinematographic films of TVBI cinematographic f~lms and/or vrdeo

t .

cassettes and/or sound recordings constituting coples thereof and rn particular from, without the licence or author~ty of thc said ApplaCantS evidenced by the afflxation to a copy of any of the sald films of a strcker issued by the Firstnamed Applicant or otherwise:

(a)	making or authorasing the making of the said fllms or any of them; causlng or authorasing the said frlms or any of them to be
(b)	seen in publ~c;

(C) lmporclng into Australia or causing or authorising the

im~orcatlon into Australia of the said fllms or any of them .

fo; the purpose of:

(i)   selling, lending for hare or by way of trade offering or exposing for sale or hire the said films;

(ii) drstributing the said films or any of them for the purposes of trade;

(~ii) exhibit~ng the said films or any of them in publ~c;

(d) selling, letting for hrre or by way of trade offering or

exposing for sale or hire or by way of trade exhibating in

public the fllms.

2 .     That upon the Firstnamed Respondent Ln the said proceedang paying the sum of $33,000 into an interest bearang trust account to be opened in the joint names of the Flrstnamed Applicant and the Firstnamed Respondent and to be operated only upon the joint

signatures of these parties or by Court Order, the Firstnamed

Applicant provide to the Flrstnamed Respondent until the determination of the saad proceeding such master tapes of video programmes and cinematographic films in the Cantonese and Vietnameae languages made by any of the Applicants as may reasonably be requested by the Firstnamed Respondent, together with such number of stickers for affixation to copies of the said programmes and films as may reasonably be requested by the Firstnamed Respondent and such promotional materlal as available to the Firstnamed Applacant in respect of such programmes and films, the reasonableness to be referable to the lrcence fee paid by the Firstnamed Respondent.

3.    That until the determination of the saad proceeding the Firstnamed Applicant provide to the Secondnamed Respondent such master tapes of video programmes and crnematographac films in the

together such number of stickers for affixation to copies of the as may reasonably be requested by the Secondnamed Respondent Cantonese and Vietnamese languages made by any of the Applicants

* said programmes and fllms as may reasonably be requested by the Secondnamed Respondent and such promotronalmater~al as available to the Firstnamed Applicant in respect of such programmes and fllms, the reasonableness to be referable to the licence fee paid by the Secondnamed Respondent."

His Honour gave further directions to provide for what has been called a "stock-taking" of video cassettes and films in the possession of the respondents and ordered that the proceeding number VG373 of 1992 be joined with proceeding number VG353 of 1992 and that hereafter all pleadings and other interlocutory steps and affidavits be filed in proceeding number VG 373 of 1992. His Honour, by paragraph 10 of his order, reserved to the parties liberty to apply to the Court upon 48 hours notice.

By notice of motion dated 28 October 1992, the applicants in the consolidated proceedings ("the applicants") moved for the following orders, amongst others:

"1.	That leave to Appeal from paragraphs 2 and 3 of the Orders made by the Honourable Mr Justrce Heerey on 22 October, 1992 be granted.
2.	That pending the hearing and determinatron of t h ~ s Appeal, the Orders in paragraphs 2 and 3 made by the Honourable Mr Justice Heerey on 22 October, 1992 be stayed."

On 4 November 1992, with some encouragement from the Court which had already devoted a disproportionate amount of its limited judicial resources to interlocutory hearings in these

proceedings, the parties agreedto compromise the application for leave to appeal from the orders of Heerey J with a view to having a speedy trial of the action. The terms of settlement embodying that compromise were as follows:

.

"1.	The parties hereto agree to resolve the differences and dlsputes
between them arising out of orders made by Heerey J on the 22nd of October 1992 ('the Orders') as set out in the Notice of Motion
of Texas Way Pty. Ltd. & Ors. dated 28 October 1992 subject to these Terms of Settlement.
2.	Wlthout prejudice and in reservation of the Respondents' [in proceedings No VG 373 of 19921 rights in proceedrng No. VG 373 of 1992 and in proceeding No VG 353 of 1992, the Respondents in proceed~ng VG 373 of 1992 and each of them undertake to the
Applicants in that proceeding not to hire TVB/TVBI vadeo tapes
referred to in paragraphs 2 and 3 of the Orders at a hire price of less than $3 per tape or at such other h~ring price as may be required to compare with the hire price or terms of hiring offered by any hirer of TVB/TVBI videotapes within a proxim~ty of
5 kilometres of the premises of each Respondent.
3.	Each of the parties hereto agrees not to make or caused to be made [sic] public or issue any media releases m relation to the subject matter of this settlement.
4.	The parties hereto agree that these Terms of Settlement may be produced to the Cou~l; as an exhibit to an Affrddvit of any party applying to the Court for enforcement of these Terns of Settlement an the event of breach by any other party hereto."

The terns concluded with some variations of the interlocutory directions made by Heerey J on 22 October 1992. It is unnecessary to set out paragraph 5 of the terms of settlement.

By a further motion on notice dated 18 November 1992, the applicants sought orders:

"1.	That paragraphs 2 and 3 of the Orders made by the Honourable Mr Justice Heerey on 22 October, 1992 be vacated.
2.	That the Respondents forthwith cease trade Ln all TVB or TVBI clnematographrc falms.
3 .	That the Respondents serve an Affidavrt in the terms required by paragraph 7 of the Orders made by the Honourable Mr. Justice Heerey on 22 October, 1992, on or before 25 November, 1992."

The claim Ior the order described in paragraph 3 of that motion was disposed of by an order which I made in the course of the hearing of the motion on 14 December 1992 and need not be considered further.

.

By a cross-notice of motion dated 27 November 1992, the

respondents ("Thanh Hung and Quoc Hung") sought orders that:

"1.

Paragraph 1 of Heerey's Order be vacated.

2.

The Respondents be released from complaance with that part of paragraph 2 of the Terms of Settlement dated 4th November 1992 (annexed hereto) entered lnto between the partles which require rnter alia the Respondents to hire TVB and TVBI video tapes referred to in paragraphs 2 and 3 of Mr. Justrce Heerey's Order dated 22nd October 1992 ("Heerey's Order") at a prlce not less than $3.00 per tape or such other price as comparable with the hire price or terms of hiring offered by other hirers of TVB/TBVI video tapes within a proximity of 5 kilometres of the Respondents' respective premises."

The applicants invoke two grounds in support of their application for dissolution of paragraphs 2 and 3 of Heerey J's order of 22 October 1992. In the first place, they allege that Thanh Hung and Quoc Hung have committed breaches of the terns of settlement of 4 November 1992 by letting video tapes on hire at rental rates less than those charged by other outlets in the specified radius and as low as $1 per day. There is evidence of so-called "trap hirings" by Wai Weng Choy at that rate after 4 November 1992 from Quoc Hung and Thanh Hung on 7 November 1992 and at the rate of

$2 per tape from Thanh Hung on 9 November 1992.

Mr Tran, a director of Thanh Hung, has acknowledged that before 11 November 1992, his company let on hire TVB and TVBI tapes at less than $2 per day and asserts that on 5 November 1992, other outlets within the five kilometre radius were charging $2 per day. He also asserts that since 5 November 1992, he has instructed his staff to let out TVB and TVBI video taps at $2.50 per day and has been losing custom to his competitors who

.	continue to charge $2 per day. Similar assertions have been made by Mr Ly, the managing director of Quoc Hung. However, neither
Wai weng Choy that he hired tapes from their respective Mr Tran nor Mr Ly specifically contradicted the allegations by

establishments at $1 each per day on 7 November 1992. Nor has Mr Tran specifically contradicted Mr Choy's assertion that he hired five tapes from Thanh Hung on 9 November 1992 for $2 each.

Representatives of other outlets in the relevant five kilometre radii have all sworn that they invariably let out TVB and TVBI serials for $3 per day or $2.50 per day to "special members" who pay an annual membership fee of $50. On 27 November 1992, one Khoeung Tan swore that, on 20 November 1992, he hired three relevant tapes from an outlet named Hung Long in Station Street Box Hill for $2 each. On the same date, one Khai Le has sworn to similar hirings from outlets at 57A Leeds Street, Footscray, 27 Leeds Street, Footscray, 196 Nicholson Streat, Footscray and 331 Racecourse Road, Flemington. An affidavit to similar effect by one Linh Ngu deposes to hirings on 17 November 1992, 19 November 1992 and 20 November 1992 also at $2 each from an outlet at 186 Victoria Street, North Richmond, and on 20 November 1992, from another outlet at 379 Victoria Street, Abbotsford.

Cogent criticisms have been made by blrs Crennan QC, who appears with M r Hess for the applicants, of omissions from the original affidavits of those trap hirers which were conceded in subsequent

affidavits. Those omissions primarily consisted of a fallure to

acknowledge that the trap hirer had used membership cards when making the hirings deposed to. That omission, it is urged by

.	Mrs Crennan, casts doubt on the assertions in the original
affidavit of the trap hirers relied on by Thanh Hung and Quoc Hung to the effect that they had asked staff in the relevant
outlets whether there were any membership requirements and had been told that there were none.

However, that criticism does not enable me to conclude, on a prima facie basis, the disputed question of whether competitors of Thanh Hung and Quoc Hung in the two five kilometre radii have routinely been hiring serial tapes at less than $3, and specifically at $2, as alleged by the deponents relied on by Thanh Hung and Quoc Hung. It is, as I have observed, conceded that "special members" of outlets in the relevant areas have been permitted to hire tapes at $2.50 instead of the standard rate of

$ 3 .

I have adverted frequently in the course of discussion with Counsel to the difficulty of resolving disputed questions of fact in an interlocutory application of this kind without the benefit of cross-examination and the consideration of documents, many of which in this case are in Chinese or Vietnamese characters which

I could not decipher without expert assistance. In the

circumstances, I am not, on that first ground, disposed to dissolve the orders made by Heerey J, but I am persuaded that it

is appropriate to incorporate in the injunction granted by his

Honour a provision to the effect of paragraph 2 of the terms of settlement requiring Thanh Hung and Quoc Hung not to let on hire, without the prior leave of the Court, serial video tapes produced by TVB or TVBI within the past 12 months, at a rental price of

.	less than $2.50 a day. This order contemplates that such a
material which has been on the market for more than 12 months. restriction will not apply to non-serial video tapes or older

The second ground invoked by the applicants for dissolution of Heerey J's order is that in breach of that order, Thanh Hung and Quoc Hung have, or one or other of them has, knowingly let on hire copies of TVB and TVBI serial programmes which have not been authorised by the relevant applicant as owner or licensee of the copyright but, which, it has been suggested, have been taped

' directly from television programmes in Hong Kong.

There has been a great deal of disputed evidence directed to that issue. That evidence has continued to be filed as late as today. It is evidence which is impossible to reconcile. It compels one to a conclusion that one or othnr deponents to the disputed questions of fact has deliberately lied on affidavit. For the reasons already indicated, I do not propose to attempt to resolve that issue in these interlocutory proceedings. I am, however, disposed, in an endeavour to avoid further interlocutory recourse to this Court before a directions hearing before the trial judge which I shall fix shortly, to deal with the matter left open by the order of Heerey J which was the fixing of a licence fee referable to the period after 31 January 1992 until the hearing and determination of the consolidated proceedinas.

The trial of those proceedings has been fixed to commence on 10 March 1992 and has been estimated to occupy something of the order of three weeks. Having regard to the fact that the amount

I

.	of $33,000 ordered by his Honour to be paid into a trust account,
was the last instalment of an a~lnual licence fee of $110,000, I consider it an appropriate consideration for the continuation of .

some form of relationship between these parties from 31 January until the determination of these proceedings, whlch cannot, on any view, occur before the end of March, to require payment into the interest bearing trust account referred to in paragraph 2 of his Honour's order after 31 January of a further sum of $24,000.

I consider it appropriate that there be a substantial directions hearing in this mattel: to ready it for trial. I have ascertained that such a directions hearing can be accorded by the trial judge on 5 February 1993. I shall direct that. there be such a directions hearing. I also ask that, in the meantime, the parties give consideration to the many evidentiary difficulties that have revealed themselves in the course of the interlocutory hearings which have occurred before me. Without pretending to be exhaustive about those difficulties, I instance, in particular, the need to examine a large number of allegedly plrate or infringing video tapes for presence or absence of indicia of authorisation or authenticity.

I shall reserve the costs of all parties of the proceedings before me, including any previously reserved costs.

I certify that this and the

preceding eight (8) pages L

are a true copy of the	L ~
Reasons for Judgment of his	i
Honour Mr Justice Ryan	t '

Counsel for the applicants	S M Crennan QC and
in the consolidated proceedings:	B J fIess
Solicitor for the applicants
in the consolidated proceedings:	Middletons Moore and Bevins
Counsel for the respondents in
the consolidated proceedings and
for the second applicant in
proceeding VG 353 of 1992:	Mr P R Hayes QC and
Mr I R Jones
solicitor for the respondents in
the consolidated proceedings and
for the second applicant in
proceeding VG 353 of 1992:	Karamountzos and Kiatos