Universal Music Australia Pty Ltd v Miyamoto (No 2) - [2003] FCA 894

FEDERAL COURT OF AUSTRALIA
Universal Music Australia Pty Ltd v Miyamoto (No 2) [2003] FCA 894
UNIVERSAL MUSIC AUSTRALIA PTY LTD
(ACN 000 158 592) & ORS v JUN MIYAMOTO & ORS
N 1331 OF 2002
LINDGREN J
21 AUGUST 2003
PERTH (VIA VIDEO LINK TO SYDNEY)

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1331 OF 2002

BETWEEN:

UNIVERSAL MUSIC AUSTRALIA PTY LTD
(ACN 000 158 592)
FIRST APPLICANT

SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED
(ACN 000 033 581)
SECOND APPLICANT

WARNER MUSIC AUSTRALIA PTY LIMITED
(ACN 000 815 565)
THIRD APPLICANT

MURDER INC RECORDS
FOURTH APPLICANT

MCA RECORDS
FIFTH APPLICANT

UNIVERSAL RECORDS
SIXTH APPLICANT

SONY MUSIC ENTERTAINMENT INC
SEVENTH APPLICANT

ATLANTIC RECORDING CORPORATION
EIGHTH APPLICANT

ELECTRA RECORDS
NINTH APPLICANT

ISLAND DEF JAM MUSIC GROUP
TENTH APPLICANT

AND:

JUN MIYAMOTO also known as DJ MOTO
FIRST RESPONDENT

DAVID PACHECO
SECOND RESPONDENT

PETER PAPALII
THIRD RESPONDENT

TAHI CROFT
FOURTH RESPONDENT

NICK GARCIA
FIFTH RESPONDENT

MINESTO PTY LIMITED (ACN 079 106 791)
trading as ANTHEM RECORDS
SIXTH RESPONDENT

UNSOUND RECORDS PTY LIMITED (ACN 002 677 456)
SEVENTH RESPONDENT

DANIEL MAXWELL NYAVOR
EIGHTH RESPONDENT

EDMOND NICHOLAS KALEEL trading as SOUL SENSE
NINTH RESPONDENT

CHRISTO PATSANTZOPOULOS trading as
PATSAN'S DANCE MUSIC SPECIALIST
TENTH RESPONDENT

GEORGE PATSANTZOPOULOS trading as
PATSAN'S DANCE MUSIC SPECIALIST
ELEVENTH RESPONDENT

JOE SOU ANAU SITOA
TWELFTH RESPONDENT

JUDGE:

LINDGREN J

DATE OF ORDER:

21 AUGUST 2003

WHERE MADE:

PERTH (VIA VIDEO LINK TO SYDNEY)

THE COURT ORDERS:
1.The motion brought by the seventh and eighth respondents by notice of motion filed on 18 July 2003 be dismissed.
2.The applicants have leave to enter the orders made against the seventh and eighth respondents on 18 July 2003.

3. The costs of the motion brought by the seventh and eighth respondents be reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1331 OF 2002

BETWEEN:

UNIVERSAL MUSIC AUSTRALIA PTY LTD
(ACN 000 158 592)
FIRST APPLICANT

SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED
(ACN 000 033 581)
SECOND APPLICANT

WARNER MUSIC AUSTRALIA PTY LIMITED
(ACN 000 815 565)
THIRD APPLICANT

MURDER INC RECORDS
FOURTH APPLICANT

MCA RECORDS
FIFTH APPLICANT

UNIVERSAL RECORDS
SIXTH APPLICANT

SONY MUSIC ENTERTAINMENT INC
SEVENTH APPLICANT

ATLANTIC RECORDING CORPORATION
EIGHTH APPLICANT

ELECTRA RECORDS
NINTH APPLICANT

ISLAND DEF JAM MUSIC GROUP
TENTH APPLICANT

AND:

JUN MIYAMOTO also known as DJ MOTO
FIRST RESPONDENT

DAVID PACHECO
SECOND RESPONDENT

PETER PAPALII
THIRD RESPONDENT

TAHI CROFT
FOURTH RESPONDENT

NICK GARCIA
FIFTH RESPONDENT

MINESTO PTY LIMITED (ACN 079 106 791)
trading as ANTHEM RECORDS
SIXTH RESPONDENT

UNSOUND RECORDS PTY LIMITED (ACN 002 677 456)
SEVENTH RESPONDENT

DANIEL MAXWELL NYAVOR
EIGHTH RESPONDENT

EDMOND NICHOLAS KALEEL trading as SOUL SENSE
NINTH RESPONDENT

CHRISTO PATSANTZOPOULOS trading as
PATSAN'S DANCE MUSIC SPECIALIST
TENTH RESPONDENT

GEORGE PATSANTZOPOULOS trading as
PATSAN'S DANCE MUSIC SPECIALIST
ELEVENTH RESPONDENT

JOE SOU ANAU SITOA
TWELFTH RESPONDENT

JUDGE:

LINDGREN J

DATE:

21 AUGUST 2003

PLACE:

PERTH (VIA VIDEO LINK TO SYDNEY)

REASONS FOR JUDGMENT (NO 2)

I published reasons for judgment in this proceeding on 18 July 2003 and will take them as read. On that occasion orders were made in three groups: orders against the first, second, third, fourth, fifth, sixth and twelfth respondents; orders against the seventh and eighth respondents alone; and orders against all of the first, second, third, fourth, fifth, sixth, seventh, eighth and twelfth respondents.
The reason for the distinction between the seventh and eighth respondents and the others mentioned is that just before I delivered judgment on 18 July 2003, Mr Charles Michael McCooe (‘Mr McCooe’), solicitor, filed in court a notice of motion seeking orders that judgment against his clients, the seventh and eighth respondents, not be delivered, and that those respondents be given leave to file an appearance and a defence out of time. I declined to delay delivery of judgment, but directed that orders against the seventh and eighth respondents alone not be entered until further order.
The motion for leave to file a defence out of time is supported by an affidavit of the eighth respondent, Daniel Maxwell Nyavor (‘Mr Nyavor’), sworn 18 July 2003, and an affidavit by his solicitor, Mr McCooe, sworn 19 August 2003. On the hearing of the motion today, Mr McCooe relies on both of those affidavits.
Mr Nyavor is the director of the seventh respondent (‘Unsound Records’). I granted leave to the applicants to join Unsound Records and Mr Nyavor as parties on 14 February 2003. The background to their joinder, which is also relevant to the present motion, relates to the selling and offering for sale by Unsound Records, of compact discs which reproduced sound recording in infringement of the applicants’ copyright in the sound recordings, as explained in my earlier reasons for judgment.
On 8 January 2003, Gilbert and Tobin, the solicitors for the applicants, sent a letter to Unsound Records notifying it of an injunction which had been granted ex parte by the Duty Judge against the five DJ respondents on 12 December 2002, and requesting an undertaking that Unsound Records cease selling, distributing, offering or exhibiting the infringing compact discs for sale. The letter enclosed evidence of purchases of compact discs made at Unsound Records.
It is important to note that the undertaking sought was given promptly. It was given in writing by the return to Gilbert and Tobin of a copy of their letter signed by Mr Nyavor as director of Unsound Records on 8 January 2003.
One might have thought from the terms of the letter that, in view of the prompt proffering of the undertaking, Mr Nyavor and his company would not in fact be joined as respondents. It is true that the letter did not promise this but what it did say was that if the undertaking was not returned by 10.00 am the following morning, they would be joined as respondents. It seems a reasonable understanding of the letter that if the undertaking was promptly returned they would not be joined, at least in the absence of anything further happening.
According to the affidavit evidence relied on by the applicants, on 13 January 2003 Gilbert and Tobin again wrote to Unsound Records requesting information in relation to the sale of the compact discs. No response was received, and, on 20 January 2003, a further letter was sent indicating the applicants’ intention to join Unsound Records as a respondent should the information not be provided. According to the affidavit of Mr Nyavor, he did not receive either of those two letters.
Since there was no response to the two further letters, the applicants applied for leave to join Unsound Records and Mr Nyavor as respondents. As I said earlier, I granted that leave on 14 February 2003.
On 4 April 2003 I made orders requiring the respondents to file and serve their defences. No defence was filed on behalf of Mr Nyavor or his company.
On 9 May 2003 the applicants wrote to Messrs McCooe & McCooe, solicitors who were advising for Unsound Records and Mr Nyavor (Mr McCooe did not go onto the record as the solicitor for those respondents until I delivered judgment on 18 July 2003), indicating the applicants’ intention to file a notice of motion for summary judgment or other orders against Unsound Records and Mr Nyavor on account of their failure to file defences. Notwithstanding this, there was no attempt made by Unsound Records or Mr Nyavor to file a defence.
The applicants served, as they necessarily had to do, voluminous affidavits and the notice of motion for summary judgment but still no defence was forthcoming. Messrs McCooe & McCooe have been acting for Unsound Records and Mr Nyavor certainly since 3 April 2003 and I think perhaps since an earlier time, and there was ample opportunity for a defence to be filed by 18 July 2003.
The explanation which is offered for the failure to file a defence is the impecuniosity of Unsound Records and Mr Nyavor. Mr Nyavor’s affidavit, omitting formal parts, was as follows:
‘1.I am a Director of the Seventh Respondent, Unsound Records Pty Limited and I have also been joined in these proceedings as the Eighth Respondent.
2.I was born in Ghana on the 21^st of August 1963 but have lived in Australia for the past 14 years. I am now an Australian Citizen. I commenced working in the record industry about four years ago and during that time I have established the business known as Unsound Records.
3.Late last year I was visited in my store by a representative of a Company which I now believe to be connected with the First Respondent in these proceedings. I received 2 copies only of each of the four offending CDs which were supplied to me on a promotional basis. I did not examine the CDs in detail nor did I listen to them. My initial impression was they each appeared to be professionally produced, I had no reason to believe the product had been pirated. I placed each of the CDs on the racks for sale. To the best of my recollection the only CDs that were sold were one each of “Bizarre Ride” and “Allstars Showtime”.
4.On the 8^th of January 2003 I received a fax from Gilbert & Tobin ... I gave the Undertaking that was sought; the signature appearing at the foot of the page on the document [annexure A to Mr Nyavor’s affidavit] is mine. On the 8^th of January 2003 I removed the offending CD’s from my racks, and I have fully complied with the undertaking.
5.My Solicitor has drawn to my attention today an Affidavit sworn by Michael John Williams on the 13^th of February 2003 and specifically clauses 22 and 23 thereof. Notwithstanding the fax reports attached to Mr Williams’ Affidavit, I say that I did not receive either of those letters.
6.After proceedings were commenced I telephoned Sophia Finter at Gilbert & Tobin. I said to her words to the effect of “Why are you doing this to me, why are you suing me, you asked for an Undertaking and I gave it” she replied “Yes, but we asked you for some more information and you didn’t co-operate” I said “when” she said words to the effect of “I asked you for copies of all invoices, stock records and receipts” I said “Well if you give me a chance I’ll get them to you” she said “No, it’s too late” I said “Why are you doing this, I haven’t got a cent. Could you please give me the opportunity of supplying this information?” She said, “No, it’s too late”.
7.I was served with two large foolscap folders full of pleadings. I spoke to my Solicitor Mr McCooe who informed me that he was not an expert in copyright law and suggested that I contact Mr Adam Simpson [sic – Mr Shane Simpson?]. I told him that I could not afford legal representation. Mr McCooe agreed to correspond with Gilbert & Tobin with a view to effecting settlement but indicated to me that he was not in a position to represent me or file an appearance unless I was in a position to cover the cost of Counsel’s fees.
8.When the matter failed to settle he again advised me to contact Mr Simpson.
9.I have not until now instructed a solicitor to represent me because I am unable to afford legal representation and because I have been traumatized by these proceedings. I have suffered bouts of anxiety and I have not been in a position to even bring myself to read the copious correspondence that has been forwarded to me by Gilbert & Tobin. I acknowledge that I have been guilty of delay of this matter and I apologise to the Court for that. I nonetheless believe I have a defence to these proceedings and wish to be heard as to the issue of my alleged liability.”
While one must be sympathetic with a party who cannot afford legal representation, I do not accept that this is an adequate explanation for the failure over such a long period of time, and in the face of repeated indications from the applicants’ solicitors that the matter was going to judgment, for the failure either to file a defence or to come to terms with the applicants. After the undertaking was given on 8 January 2003, Unsound Records and Mr Nyavor simply did nothing.
Because I am not satisfied on that issue, I think the present motion should be dismissed. I should, however, say something about both costs and pecuniary relief. In fairness to the applicants, I record that I have not had the opportunity of reading their counsel’s submissions dated today and received just before I came into Court. No doubt their counsel will wish to make submissions in response to what I am about to say. My present impression, however, is that this may well be a case where there should be no order for costs against Unsound Records and Mr Nyavor and that there should be no order for damages or an account of profits against those parties.
I say this for several reasons. First, the undertaking sought was promptly given. Secondly, the second and third letters may not have been received. Thirdly, the applicants may not have obtained an order that the further information sought in those letters be provided. Fourthly, apparently only two compact discs were sold. It may be that I will be asked to infer that Unsound Records and Mr Nyavor engaged in further selling, but if the evidence remains as it is, I find it hard to see why this case should proceed against them merely for the loss which the applicants have suffered on the sale of two compact discs or the loss of the profits of which they have been deprived on the sale of those two compact discs. Indeed, if ultimately I were to be of the view that the sale of the two compact discs represents the totality of the infringing conduct involved, not only would I be inclined not to order costs in favour of the applicants, but I may be disposed to order that they pay the costs of Unsound Records and Mr Nyavor.

I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.
Associate:
Dated: 26 August 2003

Solicitors for the Seventh and
Eighth Respondents
(applicants on the motion): Mr C M McCooe of McCooe and McCooe

Counsel for the Applicants
(respondents to the motion): Mr R Cobden

Solicitors for the Applicants
(respondents to the motion): Gilbert and Tobin

Date of Hearing: 21 August 2003

Date of Judgment:
21 August 2003

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1331 OF 2002

BETWEEN:	UNIVERSAL MUSIC AUSTRALIA PTY LTD (ACN 000 158 592) FIRST APPLICANT SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED (ACN 000 033 581) SECOND APPLICANT WARNER MUSIC AUSTRALIA PTY LIMITED (ACN 000 815 565) THIRD APPLICANT MURDER INC RECORDS FOURTH APPLICANT MCA RECORDS FIFTH APPLICANT UNIVERSAL RECORDS SIXTH APPLICANT SONY MUSIC ENTERTAINMENT INC SEVENTH APPLICANT ATLANTIC RECORDING CORPORATION EIGHTH APPLICANT ELECTRA RECORDS NINTH APPLICANT ISLAND DEF JAM MUSIC GROUP TENTH APPLICANT
AND:	JUN MIYAMOTO also known as DJ MOTO FIRST RESPONDENT DAVID PACHECO SECOND RESPONDENT PETER PAPALII THIRD RESPONDENT TAHI CROFT FOURTH RESPONDENT NICK GARCIA FIFTH RESPONDENT MINESTO PTY LIMITED (ACN 079 106 791) trading as ANTHEM RECORDS SIXTH RESPONDENT UNSOUND RECORDS PTY LIMITED (ACN 002 677 456) SEVENTH RESPONDENT DANIEL MAXWELL NYAVOR EIGHTH RESPONDENT EDMOND NICHOLAS KALEEL trading as SOUL SENSE NINTH RESPONDENT CHRISTO PATSANTZOPOULOS trading as PATSAN'S DANCE MUSIC SPECIALIST TENTH RESPONDENT GEORGE PATSANTZOPOULOS trading as PATSAN'S DANCE MUSIC SPECIALIST ELEVENTH RESPONDENT JOE SOU ANAU SITOA TWELFTH RESPONDENT
JUDGE:	LINDGREN J
DATE OF ORDER:	21 AUGUST 2003
WHERE MADE:	PERTH (VIA VIDEO LINK TO SYDNEY)

JUDGE:	LINDGREN J
DATE:	21 AUGUST 2003
PLACE:	PERTH (VIA VIDEO LINK TO SYDNEY)

Solicitors for the Seventh and Eighth Respondents (applicants on the motion):	Mr C M McCooe of McCooe and McCooe
Counsel for the Applicants (respondents to the motion):	Mr R Cobden
Solicitors for the Applicants (respondents to the motion):	Gilbert and Tobin
Date of Hearing:	21 August 2003
Date of Judgment:	21 August 2003