Warner Music Australia Pty Ltd and Ors v Swiftel Communications Pty Ltd and Ors (No.2) - [2005] FMCA 706

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WARNER MUSIC AUSTRALIA PTY LTD & ORS v SWIFTEL COMMUNICATIONS PTY LTD & ORS (No.2)

[2005] FMCA 706

PRACTICE AND PROCEDURE – Transfer of proceedings to the Federal Court – question of general importance.

Copyright Act 1968 (Cth)
Disability Discrimination Act 1992 (Cth)
Federal Magistrates Act 1999 (Cth), s.39
Federal Magistrates Court Rules 2001 (Cth)

Nizzari v Westpac Financial Services [2003] FMCA 255
Universal Music & Ors v Hendy Petroleum & Ors [2003] FMCA 373
Xiros v Fortis Life Assurance Limited [2001] FMCA 15

First Applicant:

Second Applicant:

Third Applicant:

Fourth Applicant:

WARNER MUSIC AUSTRALIA PTY LIMITED

UNIVERSAL MUSIC AUSTRALIA PTY LTD

EMI MUSIC AUSTRALIA PTYLTD

SONY BMG MUSIC ENTERTAINMENT (AUSTRALIA) PTY LTD

First Respondent:

Second Respondent:

Third Respondent:

Fourth Respondent:

Fifth Respondent:

SWIFTEL COMMUNICATIONS PTY LTD

SWIFT BROADBAND PTY LTD

PEOPLE TELECOMMUNICATIONS PTY LTD

PEOPLE TELECOM LTD

JOHN DOE

File Number:

SYG596 of 2005

Judgment of:

Driver FM

Hearing date:

20 May 2005

Delivered at:

Sydney

Delivered on:

20 May 2005

REPRESENTATION

Counsel for the Applicant:

Mr A J L Bannon, SC

Mr S Balafoutis

Solicitors for the Applicant:

Gilbert + Tobin

Counsel for the Respondent:

Mr J M Ireland, QC

Mr S C G Burley

Solicitors for the Respondent:

Clayton Utz

ORDERS

The proceedings are transferred to the Federal Court of Australia, pursuant to s.39 of the Federal Magistrates Act 1999 (Cth) and rule 8.02 of the Federal Magistrates Court Rules 2001 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG596 of 2005

WARNER MUSIC AUSTRALIA PTY LIMITED

First Applicant

UNIVERSAL MUSIC AUSTRALIA PTY LTD

Second Applicant

EMI MUSIC AUSTRALIA PTY LTD

Third Applicant

SONY BMG MUSIC ENTERTAINMENT (AUSTRALIA) PTY LTD

Fourth Applicant

And

SWIFTEL COMMUNICATIONS PTY LTD

First Respondent

SWIFT BROADBAND PTY LTD

Second Respondent

PEOPLE TELECOMMUNICATIONS PTY LTD

Third Respondent

PEOPLE TELECOM LTD

Fourth Respondent

JOHN DOE

Fifth Respondent

REASONS FOR JUDGMENT

(revised from transcript)

I have before me an application for transfer of these proceedings to the Federal Court pursuant to s.39 of the Federal Magistrates Act 1999 (Cth) (“the Federal Magistrates Act”) and rule 8.02 of the Federal Magistrates Court Rules 2001 (Cth) (“the Federal Magistrates Court Rules”). The application has come before me previously on 16 March 2005. At that time I declined to order a transfer on the basis that I was not persuaded that the issues arising were of such novelty or complexity as to require a transfer to the Federal Court, that the procedures of this Court could be adopted to deal with litigation that was more complex than average, and also on the basis that the Court could give priority to the case if necessary. I also expressed the view that the Court should not shy away from dealing with difficult cases falling within its jurisdiction.
In my earlier decision[1] at [7] I left open the possibility of a future transfer of the proceedings. The matter has been more thoroughly argued in written submissions prepared on behalf of the parties. It is the respondents who seek the transfer of proceedings and Mr Ireland and Mr Burley have prepared written submissions in support of the application, which were filed on 9 May 2005.
[1] Warner Music Australia Pty Limited & Ors v Swiftel Communications & Ors [2005] FMCA 627
The applicants quite vigorously resist the transfer and submissions opposing transfer have been prepared by Mr Bannon and Mr Balafoutis, filed on 17 May 2005. Both Mr Bannon and Mr Ireland made short oral submissions before me this afternoon.
The parties are agreed that, while there are outstanding interlocutory issues, the issue of transfer should be dealt with first in the expectation that, should there be a transfer of proceedings to the Federal Court, the Federal Court could deal with those outstanding interlocutory issues. The general principles relating to transfer of proceedings have been dealt with by this Court on a number of occasions, including by me in Nizzari v Westpac Financial Services [2003] FMCA 255. The relevant provisions of the legislation and rules are conveniently set out in paragraphs 4 and 5 of the respondent's written submissions and I adopt those paragraphs for the purposes of this judgment:
Section 39(3) of the Federal Magistrates Act provides that in deciding whether to transfer a proceeding to the Federal Court the Court must have regard to:
(a)any rules of court made for the purposes of subsection 40(2);
(b)whether the proceedings in respect of an associated matter are pending the Federal Court;
(c)whether the resources of the Federal Magistrat4es Court are sufficient to hear and determine the proceedings; and
(d)the interests of the administration of justice.
Rule 8.02(4) of the Federal Magistrates Court Rules states in relevant part:
(4)In addition to the factors required to be considered by the Court under subsections 39 (3) and (4) of the Act for transfer of proceedings to the Federal Court … the following factors are relevant:
(a)     whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court … on one or more of the points in issue;
(b)     whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred;
(c)     whether the proceeding will be heard earlier in the Federal Magistrates Court;
(d)     the availability of particular procedures appropriate for the class of proceeding;
(e)     the wishes of the parties;
Mr Ireland notes in his submissions that the Federal Magistrates Court was established to deal with less complex federal proceedings on a basis that it should be quicker, simpler and cheaper than the conduct of proceedings in the superior federal courts. He notes that the issues arising in the proceedings are not easy ones and that the proceedings are novel, at least in relation to the BitTorrent and Direct Connect technology at issue. Mr Ireland notes in paragraph 14 of his written submissions that the question of the degree of the involvement of an internet service provider in the actions of one of its customers in utilising the BitTorrent or Direct Connect technology will necessarily involve a detailed examination of the means by which internet service providers operate and communicate with customers who make use of their services.
In his submissions, Mr Ireland develops the theme of the complexity and importance of the issues arising in the proceedings and submits that, by reason of the general importance of those issues, the factors of cost and convenience to the parties, the likelihood of being able to obtain a reasonably early hearing date in the Federal Court, the availability of appropriate procedures and the wishes of the respondents, a transfer order should be made.
In response, in their written submissions, Mr Bannon and Mr Balafoutis dispute most of the contentions advanced in support of the transfer. While acknowledging that the issues arising in these proceedings are by no means simple and that the technology involved is novel, the applicants point out that this Court has in the past dealt with novel issues. For example, in Xiros v Fortis Life Assurance Limited [2001] FMCA 15, I dealt with a novel issue of a defence against liability under the Disability Discrimination Act 1992 (Cth). In relation to copyright proceedings Raphael FM dealt with a somewhat novel issue in Universal Music & Ors v Hendy Petroleum & Ors [2003] FMCA 373.
The applicants note that other copyright proceedings of significance are before the Federal Court, notably Universal Music Australia Pty Ltd v Cooper and Universal Music Australia Pty Ltd v Sharman License Holdings Ltd. Mr Bannon submits that both of those judgments, when available, will provide relevant guidance to this Court and that, in particular, in relation to the Sharman proceedings, there is no real comparison in terms of the complexity of the litigation. Mr Bannon submits that apart from the issue of the novelty of the proceedings and the issues of public importance, none of the factors to be considered weigh in favour of a transfer.
In my view there are two principal issues to be considered. One is whether the importance of the litigation in itself warrants a transfer to the Federal Court and, secondly, whether it would be a more efficient and effective disposition of judicial resources to make a transfer. As to the first, I have in the several months that the proceedings have been before me gained a better understanding of the issues arising in the litigation. That would both better equip me to deal with the trial of the matter and also is more likely to persuade me that there should be a transfer of proceedings. There is no doubt that complex and novel factual issues arise in the proceedings and that the Court would be called upon to rule upon provisions of the Copyright Act 1968 (Cth), (“the Copyright Act”) the application of which is far from settled.
While there are proceedings on foot in the Federal Court which, when resolved, may provide some useful guidance, that guidance is not yet available. I also have reservations about the appropriateness of this Court dealing with litigation which might be decided differently from outstanding litigation in the Federal Court on an important issue. It is likely that an appeal from a decision of this Court in these proceedings would have to be heard by a Full Court, given the novelty of the issues. That reduces the advantage in terms of judicial efficiency of the proceedings remaining in the Court. In addition, it would be desirable where issues of public importance concerning the interpretation of the Copyright Act are arising in several proceedings on foot at the same time, that the proceedings be dealt with by the same court.
I am told that the trial in this case is likely to take between one and two weeks. When I dealt with this issue on 16 March this year I indicated that I would give to the proceedings such priority as was warranted.

I have not retreated from that commitment but it must be borne in mind that in order to give an early hearing date to this matter in a proceeding that will take between one and two weeks there would necessarily be significant disruption to other litigation with the result that possibly 20 other short matters would have to be deferred until a later date, which could be well into next year. That may be an unreasonable detriment to impose on other litigants in cases which they would regard as important.
On balance, having regard to the public importance of the litigation and the obvious public interest in it, the fact that other similar litigation of equal importance remains outstanding in the Federal Court, the desirability of the issues arising in the three cases being dealt with by the same court, the fact that some significant disruption to other litigants would result from an early hearing in this Court and the fact that I am told by the Federal Court that an early hearing could be given to this case if it were required following a transfer, there should be an order for transfer of proceedings pursuant to s.39 of the Federal Magistrates Court Act and rule 8.02 of the Federal Magistrates Court Rules. I will so order.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate:

Date: 27 May 2005