FEDERAL COURT OF AUSTRALIA
Garrett v Emap Australia Pty Ltd t/as Zoo Weekly [2008] FCA 431
DEFAMATION – whether defamatory imputations reasonably capable of being conveyed – tests to be applied.
SUMMARY DISMISSAL – whetherno reasonable prospect of success on copyright claim - need to identify defect incapable of cure by amendment.
Conveyancing Act 1919 (NSW) s 12
Copyright Act 1968 (Cth) s 35, s 115, s 115(1) s 120(1), s 126B, s 126B(1), s 126B(2), s 126B(3), s 126B(5), s 126B(6), s 196, s 196(1), s 196(2), s 196(3)
Federal Court of Australia Act 1976 (Cth) s 31A
Federal Court Rules O 11 r 16
Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 6
Acorn Computers Ltd v MCS Microcomputer Systems Pty Ltd (1984) 6 FCR 277
ACTEW Corporation Ltd v Pangallo [2002] FCAFC 325
Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158
Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399
Byrne v Australian Airlines Limited (1995) 185 CLR 410
Construction, Forestry, Mining and Energy Union v Gordonstone Coal Management Pty Ltd (1997) 78 FCR 437
Dixon Projects Pty Ltd v Masterton Homes Pty Ltd (1995) 36 IPR 136
Favell v Queensland Newspapers Pty Ltd (2005) 79 ALJR 1716
Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401
Global Brand Marketing Inc v Cube Footwear Pty Ltd [2005] FCA 479, 65 IPR 44
Josephson v Walker (1914) 18 CLR 691
Kinzett v McCourt (1999) 46 NSWLR 32
Malcolm v Nationwide News Pty Ltd [2007] NSWCA 254
Microsoft Corporation v P C Club Australia Pty Ltd (2005) 148 FCR 310
National Auto Glass Supplies (Australia) Pty Ltd v Nielsen and Moller Autoglass (NSW) Pty Ltd (2006) 156 FCR 148
Preston v Star City Pty Ltd [1999] NSWSC 1273
Rich v Olzak [2000] VSC 191
Robert J Zupanovich Pty Ltd v B & N Beale Nominees Pty Ltd (1995) 59 FCR 49
Rogers v Asset Loan Co Pty Ltd [2007] FCA 195
T S & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444
Taypar Pty Ltd v Santic (1989) 21 FCR 4
Telephonic Communicators International Pty Ltd v Motor Solutions Australia Pty Ltd [2004] FCA 942
NSD 1562 OF 2007
BUCHANAN J
2 APRIL 2008
SYDNEY
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NSD 1562 OF 2007 |
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BETWEEN: |
NIKKI GARRETT First Applicant
GIRLS IN GOLF PTY LIMITED Second Applicant
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AND: |
EMAP AUSTRALIA PTY LIMITED T/AS ZOO WEEKLY First Respondent
PAUL MERRILL Second Respondent
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BUCHANAN J |
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DATE OF ORDER: |
2 APRIL 2008 |
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WHERE MADE: |
SYDNEY |
THE COURT ORDERS THAT:
1. Paragraph 6(a) of the amended statement of claim filed 17 September 2007 is struck out.
2. The amended notice of motion filed by the first and second respondent on 18 March 2008 is otherwise dismissed.
3. Costs are reserved.
THE COURT DIRECTS THAT:
1. The parties are to confer with a view to reaching agreement on a timetable to include at least the following matters;
(a) the time within which the applicants should file, if they wish, a further amended statement of claim;
(b) a time within which the respondents must file their defences;
(c) the time within which the applicants should, if they wish, file any reply to a defence;
(d) times for filing evidence.
2. The proceedings will be listed for directions on a date to be arranged with my Associate.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NSD 1562 OF 2007 |
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BETWEEN: |
NIKKI GARRETT First Applicant
GIRLS IN GOLF PTY LIMITED Second Applicant
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AND: |
EMAP AUSTRALIA PTY LIMITED T/AS ZOO WEEKLY First Respondent
PAUL MERRILL Second Respondent
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JUDGE: |
BUCHANAN J |
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DATE: |
2 APRIL 2008 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
BUCHANAN J:
1 These proceedings concern claims alleging defamation and infringement of copyright. The first applicant is a professional golfer. The second applicant is the publisher of the ‘Girls in Golf Calendar 2007’. The applicants allege that the first respondent, which is the publisher of a magazine called ‘Zoo Weekly’, obtained and published a photograph of Ms Garrett which was taken for the Calendar. The publication of the photograph, which shows Ms Garrett posed scantily clad, was accompanied by captions and commentary which are accepted to be vulgar. The second respondent is the editor of Zoo Weekly. It is alleged that he authorised the publication.
2 The proceedings were commenced by application and statement of claim in August 2007. An amended statement of claim was later filed. No defences have yet been filed by the respondents. I ruled against an earlier suggestion from the applicants that they should be required to do so because the respondents indicated their desire to bring a notice of motion to strike out all, or some, of the amended statement of claim before they were required to plead to it. Pursuant to directions made on 15 October 2007 the respondents filed a notice of motion seeking to strike out the amended statement of claim or alternatively so much of it as alleged infringement of copyright. A timetable was fixed which included the exchange of written submissions. However, when the matter came before the Court again for hearing the respondents advanced a modified position.
3 At the hearing of the motion on 18 March 2008 I gave the respondents leave to file in court an amended notice of motion. The first order sought was that there be a separate trial of the question whether the publication complained of was reasonably capable of conveying the imputations pleaded in para 6 of the amended statement of claim. Another order was that para 6 of the amended statement of claim be struck out under O 11 r 16 of the Federal Court Rules. I raised with counsel for the respondents the way in which these two orders might be reconciled as the same legal issues needed to be decided on either approach. I expressed my disinclination to deal with an application to strike out part of the pleading if at the same time I was being asked to refer the matters for separate hearing and determination based upon the same arguments. The respondents elected to proceed upon the application to strike out para 6 of the amended statement of claim.
4 There were also orders sought that so much of the proceedings as concerned an alleged infringement of copyright be struck out. It became clear in discussion with counsel for the respondents that this aspect of the notice of motion should be regarded as based on s 31A of the Federal Court of Australia Act 1976 (Cth) (‘the FCA Act’)
Defamation
5 Publication of the photograph of Ms Garrett is attributed to a letter from a reader in the following terms:
‘Dear ZOO, until last weekend I thought all female golfers were ugly dykes were bloated arses. But from a fairway of fat-thighed femmos appeared a golfing godess, putting a solid wood in my pants. She had brown hair and was an Aussie.
DEAN, BROOME, WA’
6 There is, apart from the photograph and the letter, also an image of Ms Garrett on a television screen (in golfing attire) and a number of captions added by the publisher.
7 Amongst the captions which accompany Ms Garrett’s photograph are the following:
‘YOU SPOT ’EM
WE STRIP ’EM’
‘Wedge? Nah, just the way my knickers ride up’
‘That’s the very tidy Nikki Garrett. And yes, you’d definitely driver. Arguably the hottest hole on any green she plays, the 21-year-old from Tuggerah in northern NSW says she likes it “long, strong and accurate” when she’s out on the course.’
Ms Garrett claims that her reputation has been injured. It is difficult to convey the effect of any photograph by the written word. Ms Garrett is posed scantily clad but not indecently exposed. Although the photograph is no doubt intended to be alluring I very much doubt that it could be said to be offensive to most people. However, the accompanying captions are admittedly vulgar.
8 Paragraph 6 of the amended statement of claim pleads that the following imputations are conveyed by the words and pictures in the material published in Zoo Weekly on 29 January 2007:
‘a) The First Applicant is a prostitute.
b) The First Applicant is the sort of person who is willing to pose for a low grade smutty magazine like Zoo Weekly.
c) The First Applicant was the sort of person who allowed herself to be stripped and photographed in a provocative pose by Zoo Weekly.
d) The First Applicant is sexually promiscuous.
e) The First Applicant is so lustful she likes having sex on a golf course.
f) The First Applicant allows her underpants to move up from their proper position so as to expose herself.
g) The First Applicant is the type of girl who has sex indiscriminately with men.
h) The First Applicant is sexually lustful.
i) The First Applicant is a hypocrite in that in public she maintains a conservative image as a golfer when in fact she permits herself to be photographed in lewd sexual poses.
j) The First Applicant deliberately permitted a photograph to be taken exposing her body for the purpose of reproduction in a publication of widespread readership.’
9 The respondents challenged each suggested imputation as not reasonably capable of being conveyed by the published material. In addition, it was argued that some suggested imputations are in substance the same as others. Accordingly, it was argued that imputations b), c) and j) were not each actionable even if each imputation was reasonably capable of being conveyed. Similarly, it was argued that the suggested imputation in g) was in substance the same as in d) and that in h) was in substance the same as in e). It was accepted by the applicants that appropriate elections would need to be made if all the suggested imputations survived the respondents’ challenges.
10 The test to be applied to evaluate whether a suggested imputation is reasonably capable of being conveyed by a publication may be found in the judgments of Hunt CJ at CL in Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 at 164 – 165 and Beazley JA in Malcolm v Nationwide News Pty Ltd [2007] NSWCA 254. The guiding principles were also considered by this Court in National Auto Glass Supplies (Australia) Pty Ltd v Nielsen and Moller Autoglass (NSW) Pty Ltd (2006) 156 FCR 148 (esp. at [14] to [19]).
11 The following aspects of these principles (which were not in dispute in the present case) are relevant to my present task:
- the question is whether a suggested imputation is capable of being conveyed by the publication;
- a strained or forced or utterly unreasonable interpretation must be rejected;
- the mode or manner of publication is relevant;
- the more sensational a publication the less likely it is that it (or its contents) will be analysed with care;
- sensational material is prone to foster loose thinking;
- a wide degree of latitude is allowed in favour of a conclusion that material is capable of conveying a suggested imputation where loose, ambiguous or unusual language is used.
12 The question at the moment is not whether the suggested imputations are conveyed by the publication. It is whether they are capable of being so conveyed. In Favell v Queensland Newspapers Pty Ltd (2005) 79 ALJR 1716 the High Court approved observations by McPherson JA in the Queensland Court of Appeal to the effect that striking out a pleading on the basis that material is not capable of a defamatory meaning should be approached with great caution. McPherson JA also said, in the passage approved, ‘The fact that reasonable minds might possibly differ about whether or not the material is capable of a defamatory meaning is a strong, perhaps an insuperable, reason for not exercising the discretion to strike out’.
13 Apart from the latitude which must, in accordance with the relevant principles, be allowed for the possibility that reasonable people might accept that a suggested imputation was conveyed by the publication, the onus to show that the publication is not capable of conveying the suggested imputation lies here on the respondents. They are seeking to strike out every aspect of paragraph 6 of the amended statement of claim or so much of it as they can. They bear the burden of persuasion.
14 It is convenient to deal first with those suggested imputations which relate to Ms Garrett’s possible sexual proclivities. I do not propose to engage in an elaborate discussion of matters which are essentially matters of impression rather than analysis. The only question at this stage is whether I should prevent the applicants from proceeding upon each of the suggested imputations. I do not think there is any material to satisfactorily sustain suggested imputation a). There is no inference which arises from the published material that Ms Garrett exchanges sex or sexual favours for money. However, in my view, imputations d) and g) are reasonably capable of being conveyed by the published material. Similarly, in my view, imputations e) and h) are reasonably capable of being conveyed. Finally, in my view, imputation f) is reasonably capable of being conveyed.
15 The remaining suggested imputations refer to the circumstances in which the photograph was taken. The respondents argue that a small caption which appears on the same page as the photograph, and which is able to be read when the page is turned sideways, sufficiently conveys recognition of someone else’s copyright in the photograph. They say that it ought be regarded as clear to any reasonable person that Ms Garrett did not pose for the photograph for Zoo Weekly but rather that Zoo Weekly acquired it from elsewhere. On this line of argument it is contended that each of the suggested imputations in b), c), i) and j) is not reasonably capable of being conveyed. One difficulty with the contention is the use of the caption – ‘YOU SPOT ’EM, WE STRIP ’EM’. Another difficulty is that this caption has much greater prominence than the small and formal caption relied upon by the respondents. In the circumstances, the possibility is not excluded that imputations b), c), i) and j) are reasonably capable of being conveyed.
16 As to the question of overlap, there appears to be some force in the suggestion by the respondents that some of the suggested imputations are in substance to the same effect. In particular, b) and c) might be argued to be the same in substance, also d) and g) and also e) and h). The applicants and the respondents agreed that the applicants should have the right to elect which imputations to proceed upon after I had ruled on whether they were capable of being conveyed. The applicants will have that opportunity.
17 I propose to strike out paragraph 6(a) of the amended statement of claim. Otherwise I will dismiss the motion so far as it seeks to strike out the remaining parts of that paragraph.
18 It is convenient also to record that during the proceedings Mr Evatt, without objection, amended para 6 of the amended statement of claim to omit the words ‘were meant to convey and were understood to’. The opening words of para 6 now read:
‘6) The words and pictures in the defamatory matter complained of and referred to in paragraph 1 above in their natural and ordinary meaning convey the following imputations.’
Copyright
19 The respondents sought summary judgment under s 31A of the FCA Act of that part of the proceedings which alleges breach of copyright. The respondents accept that they may not have summary judgment under s 31A with respect to so much of the proceedings as alleges infringement of copyright unless the proceedings have no reasonable prospect of success. They also accept that s 31A is not directed simply to striking out pleadings and they must identify a fatal defect in the proceedings (see also Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 and Rogers v Asset Loan Co Pty Ltd [2007] FCA 195 (at [59] – [60]).
20 Section 115(1) of the Copyright Act 1968 (‘the Act’) provides:
‘115(1) Subject to this Act, the owner of a copyright may bring an action for an infringement of the copyright.’
21 At the time of publication the owner of copyright was the photographer, Mr De Chazel, (see s 35 of the Act). The statement of claim filed when the proceedings were commenced, and the amended statement of claim, pleaded that Ms Garrett was the owner by assignment of copyright in the photograph. The second applicant was alleged to be the exclusive licensee of Ms Garrett. It was joined in the proceedings as required by s 120(1) of the Act which provides:
‘120(1) Where:
(a) an action is brought by the owner of the copyright or by the exclusive licensee; and
(b) the action, in so far as it is brought under section 115, relates, in whole or in part, to an infringement in respect of which the owner and the licensee have concurrent rights of action under that section;
the owner or licensee, as the case may be, is not entitled, except with the leave of the court, to proceed with the action, in so far as it is brought under that section and relates to that infringement, unless the other party is joined as a plaintiff in the action or added as a defendant.’
22 The respondents argued that, at the date of the alleged infringement of copyright, neither applicant had the right to bring proceedings for infringement of copyright and no assignment of any right to sue on past infringements had been made before the proceedings were commenced. They contended that the defect is incurable by any amendment to the pleadings and is therefore fatal to this part of the proceedings. Although they accepted that the applicants could be granted a right to sue on past infringements, their submission was that any such right if, subsequently assigned, could only be exercised in a freshly commenced action. Hence the respondents were entitled, so far as the present proceedings were concerned, to summary dismissal of the copyright claim and an order for costs, whatever future step might be taken.
23 In support of the argument the respondents read an affidavit which identified and annexed a request for particulars of certain allegations in the amended statement of claim and the answer to that request. One request concerned the pleaded allegation that Ms Garrett was the owner of copyright in the photograph. It was in the following terms:
‘3. In respect of paragraph 9, please provide proper particulars of the First Applicant’s contended proprietorship of the photograph including, without limitation, the following:
(a) Identify the author of the photograph;
(b) Identify the date and place of creation of the photograph;
(c) Was the photograph created pursuant to a contract of employment and, if so, identify the employer and provide a copy of the contract of employment?; and
(d) Identify the date of assignment of the copyright in the photograph and provide a copy of the assignment.’
24 The response was as follows:
‘3.(a) Richard De Chazel
(b) On or about 29 September 2006 at the Villa, 34 Riverside Drive, Nerang, Gold Coast, Queensland.
(c) The photograph was created pursuant to an agreement between Richard De Chazel and the second applicant (Girls in Golf Pty Limited).
(d) Copyright in the photograph was assigned pursuant to a Deed of Assignment between Richard De Chazel and the second applicant. We enclose a copy of the Deed of Assignment dated May 2007 between Richard De Chazel and the second applicant. Copyright in the photograph was then assigned pursuant to a Deed of Assignment between the second applicant and the first applicant (Nikki Garrett). We enclose a copy of the Deed of Assignment between the first applicant and the second applicant dated 9 July 2007.’
25 The deed of assignment from Mr De Chazel to the second applicant provided:
‘Introduction
A. The Assignor at the request of the Assignee took various photographic images of the professional women golfers for the purpose of use by the Assignee in a calendar.
B. Each of the said professional women golfers gave consent to both the Assignor and Assignee for the use of their images in the calendar.
C. The Assignee produced and distributed the calendar.
D. The parties acknowledge that the Assignor holds copyright in and intellectual property in the images, the negatives and all PDF files of such images stored or reproduced (collectively referred to as Intellectual Property).
It is Agreed
1. The Assignor is the owner of the Intellectual Property.
2. Pursuant to an agreement (the Agreement) the Assignee had the right to use such Intellectual Property for the purposes of a calendar.
3. As the calendar is now published and otherwise at an end (save for sale or distribution) the Assignor has agreed with the Assignee and at that the Assignee’s request to transfer all his right title and interest in and to the said Intellectual Property to the Assignee including all rights to subsequently use the images and any copyright or Intellectual Property of and incidental thereto.
4. In consideration of good and valuable consideration for the said Intellectual Property (the receipt of which is acknowledged by execution of this Deed) the Assignor transfers to the Assignee to hold absolutely and for all time the Assignor’s right title and interest in and to the said Intellectual Property.’
26 The submissions of the respondents on the present motion challenge whether this assignment was effective to assign the right to sue on copyright infringements which predated the deed. That raises a question of construction of the terms of the deed which are set out above. The assignment from the second applicant to Ms Garrett occurred on 9 July 2007. It expressly assigned, amongst other things:
‘any and all common law rights and statutory or common law remedies in relation to the Works available to the Assignor at the date of this Deed.’
No issue has been raised about the effectiveness of this assignment but it can rise no higher than the assignment which preceded it.
27 The respondents relied upon the judgment of Spender J in Taypar Pty Ltd v Santic (1989) 21 FCR 485 (‘Taypar’) where his Honour said (at 491):
‘Apart from the rights which the Act gives to an exclusive licensee, actions for infringement are required by the Act to be brought by the owner of the copyright. It is possible, as s 30 of the Act recognises, for different persons to be the owners of a copyright in respect of the application of the copyright to the doing of different acts or classes of acts, or the doing of one or more acts or classes of acts in different countries or at different times. In my view the owner of a copyright or the respective owners of parts of the copyright are the only persons entitled to bring an action for infringement of the copyright or the respective parts of the copyright, and it is not competent for an assignee of a copyright to bring an action in respect of an infringement that occurred prior to his becoming the owner of the copyright, merely by virtue of being the assignee of the copyright.
In this case, even if there be a valid assignment to the applicant of the subject copyright constituted by the letter and receipt of 24 March 1988 from Hancox Butt, any infringement of that copyright predated that assignment. The plan entitled “Proposed Residence Lot 405 Pebble Beach Drive, Runaway Islands, Runaway Bay for Mr. B. Santic” came into existence on or before 22 January 1988 and all building construction in respect of the house at Pebble Beach Road which required the reproduction of that plan in a material form, was completed prior to 24 March 1988. Any infringement of the copyright in the drawing 87.404, the "Reflections plan, or the house at Drayton Terrace, occurred at a time when Taypar was not the owner of the copyright, and in my view, Taypar is not competent to sue in respect of any such infringement.
The documents of 24 March 1988 are relied on as an assignment of copyright. In my view there is nothing retrospective in any assignment effected by those documents. In particular there was no assignment or purported assignment of any right to litigate in respect of earlier breaches of the copyright.’
(Emphasis added.)
28 Spender J followed Taypar in Dixon Projects Pty Ltd v Masterton Homes Pty Ltd (1995) 36 IPR 136 (‘Dixon Projects’) at 140 but Dixon Projects was a case (unlike the present) where an action was commenced before any assignment of copyright. In the present case there is no doubt that Ms Garrett was the owner of copyright in the photograph at the time the proceedings were commenced. The question to be examined is whether either of the applicants were, as a result of the assignment from Mr De Chazel in May 2007, able to sue for an infringement of copyright occurring before the date of the assignment.
29 The respondents emphasised Spender J’s finding that mere assignment of copyright does not assign a right to sue on prior infringements. However, the observations in Taypar must be seen in a context which is informed by the documents relied upon in that case as an assignment of copyright. Those documents were recorded in the following terms (at 486):
‘These documents consist of a letter on the letterhead of Hancox Butt dated 24 March 1988 signed by Mr. Robin Butt, in these terms : -
"To Whom it may Concern,
I hereby relinquish copyright of the 'REFLECTIONS’
design as enclosed and as constructed at Lot 53,
Drayton Terrace, Mermaid Waters to Jupiter Homes
Pty. Ltd."
And a receipt addressed to “Jupiter Homes” dated 24 March 1988
acknowledging payment of $2,000, for “RELINQUISHING OF ‘REFLECTIONS’ DESIGN COPYRIGHT as constructed at lot 53 Drayton Tce, Mermaid Waters."
(Emphasis added.)
30 Although his Honour accepted that the renunciation of the copyright in the case before him amounted to an assignment of it, he did not accept, as a matter of construction, that it was an assignment of any right to litigate in respect of earlier breaches of copyright.
31 In Global Brand Marketing Inc v Cube Footwear Pty Ltd [2005] FCA 479, 65 IPR 44 (where there had been a retrospective assignment after commencement of proceedings) Goldberg J declined to strike out an action for infringement of copyright based on arguments which relied on Taypar and Dixon Projects. Taypar and Dixon Projects were each also referred to in Microsoft Corporation v P C Club Australia Pty Ltd (2005) 148 FCR 310 where Conti J held (at [123] and [124]) that an assignment of a right to sue on infringement of copyright (which infringement occurred before the date on which copyright itself was assigned) was not the assignment of a bare right of action but the assignment of a right incidental to the assignment of intellectual property rights (cf. Taypar at 491-2). On the other hand, Taypar was referred to with apparent approval by Finkelstein J in T S & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444 (at [78]).
32 Like Goldberg J, I would not be prepared to regard the legal aspects of this issue as sufficiently settled for the purpose of a motion for summary dismissal. In any event, accepting for the moment the correctness of the analysis in Taypar, resolution of the issue whether Mr De Chazel assigned a legal right to sue on infringements of copyright prior to May 2007 would turn, as it did in Taypar, upon construction of the deed made between him and the second applicant at that time.
33 It appears from the deed that the circumstances in which it was made included the completion of production, publication and distribution of the calendar for which various photographs were taken. The respondents argue that this supports a construction that the assignment took effect only from May 2007 and was not intended to operate retrospectively. On this construction any right to sue upon infringement of the copyright before assignment remained with Mr De Chazel.
34 However, I do not think it can be said that a contrary construction of the deed is not reasonably arguable. It seems clear that an assignment of copyright may be accompanied by a right to sue on a past infringement. The contrary has not been suggested in this case. Attention has focused on whether there was such an assignment at the time copyright passed from Mr De Chazel to the second applicant. On one view of the deed the assignment was of the whole of Mr De Chazel’s interest in both the copyright and the intellectual property in artistic works which include the photograph in question. No reservation to the effective transfer of the whole of his interest, including his right to proceed upon any past or future infringement of copyright or intellectual property, was made.
35 This issue should be resolved at the trial. It is not, in my view, a suitable one to attempt to resolve upon an application for summary dismissal. The tests for summary dismissal are not made out to the necessary standard.
36 Furthermore, although the applicants made it clear that they relied in the first instance on Ms Garrett’s right to sue for infringement of copyright as a result of the assignments from Mr De Chazel to the second applicant and from the second applicant to Ms Garrett, three subsidiary matters were also relied upon – (a) s 126B(5) of the Act, (b) an argument that the second applicant was, at the time the proceedings were instituted, the equitable owner of the copyright so that it had, if necessary, standing to sue in its own right and could, if necessary, perfect the proceedings by joining Mr De Chazel as a respondent to them, and (c) an assertion that Mr De Chazel had, in any event, now perfected Ms Garrett’s right to sue by executing unmistakeable assignments of such a right.
37 My conclusion that it is arguable that upon its proper construction, the deed of assignment from Mr De Chazel to the second applicant included an assignment of a right to sue on past infringements of copyright, makes it strictly unnecessary to explore these further contentions but some brief discussion of them may be useful in case they arise again for later consideration.
38 Although, in written submissions, the applicants referred to s 126B(5) I will assume that they intended to refer to s 126B(6) because s 126B(5) operates in circumstances where a copy bears a label (s 126B(2)) or is the subject of a certification from another country (s 126B(3)). Sections 126B(1) and (6), on the other hand, provide:
‘126B
(1) This section applies to an action under this Part in which the defendant puts in issue the question of the plaintiff’s ownership of copyright in the work or other subject matter to which the action relates.
…
(6) If:
(a) neither subsection (2) nor (3) applies; and
(b) the plaintiff produces a document stating the following:
(i) the original owner of the copyright the subject of the action;
(ii) each subsequent owner of that copyright (including the plaintiff’s ownership);
(iii) the date each owner became the owner of that copyright;
(iv) a description of the transaction resulting in each owner becoming the owner of that copyright;
then the matters described in subparagraphs (b)(i), (ii), (iii) and (iv) are presumed to be as stated in the document, unless the contrary is established.’
39 The necessary statement was provided by the answer to the request for particulars which I set out earlier. However, s 126B(6) does not appear to me, at the moment, to advance the applicants’ position on the present issue. The relevant dates when copyright ownership changed are not in issue for the purpose of the present motion. What is in issue is whether the second applicant acquired a right to sue on an infringement of copyright which occurred before it became the legal owner of the copyright. Section 126B does not appear to assist in that regard.
40 Another way in which the applicants asserted a possible foundation for the proceedings was to contend that, whatever the position about legal ownership, the second applicant had a right to sue for infringement of copyright as the equitable owner of the copyright at the time the infringement occurred. The applicants relied upon a judgment of Smithers J in Acorn Computers Ltd v MCS Microcomputer Systems Pty Ltd (1984) 6 FCR 277. In that case Smithers J considered the effect of an agreement to assign copyright. His Honour rejected the proposition that no assignment of copyright was effective unless it accorded with s 196(3) of the Act. Section 196(1), (2) and (3) provide:
‘196
(1) Copyright is personal property and, subject to this section, is transmissible by assignment, by will and by devolution by operation of law.
(2) An assignment of copyright may be limited in any way, including any one or more of the following ways:
(a) so as to apply to one or more of the classes of acts that, by virtue of this Act, the owner of the copyright has the exclusive right to do (including a class of acts that is not separately specified in this Act as being comprised in the copyright but falls within a class of acts that is so specified);
(b) so as to apply to a place in or part of Australia;
(c) so as to apply to part of the period for which the copyright is to subsist.
(3) An assignment of copyright (whether total or partial) does not have effect unless it is in writing signed by or on behalf of the assignor.’
41 His Honour said (at 282):
‘It appears to me that just as prior to the 1968 Act, which provided for the legal assignment of future copyright, equity would treat an enforceable agreement for value to assign such a right as creating an equitable interest capable of sustaining an interlocutory injunction in the absence of the legal owner, and of sustaining a perpetual injunction once the legal owner was joined as a party to the proceedings, so equity will treat as the equitable owner, and as a person entitled to commence proceedings for infringement of copyright, a person in whom there resides an enforceable right to an assignment of the relevant copyright. This appears to conform to the requirements of justice. It would not be just that a person should infringe a copyright, the right in equity to which had been acquired for value by another party from the owner merely because writing was absent and the legal owner would not become a party to the proceedings. I am therefore not persuaded that the agreement or arrangement as pleaded is not such as to confer upon Acorn equitable ownership of the relevant copyrights.’
(Emphasis added.)
42 His Honour went further. He observed (at 283):
‘In this case there is no joinder of the legal owner as applicant or respondent. But, soon after action brought, Acorn became the owner of the legal estate by written assignment. Assuming that the agreement or arrangement between Acorn and CPUL which is pleaded was sufficient to make Acorn the equitable owner of the relevant copyrights the question is whether the “getting in” of the legal estate by written assignment will relieve the applicants from actually joining as a party the person who was legal owner at the date of action brought but who has since ceased to be so. If the assignment to Acorn of the legal interest in the copyright to it had occurred prior to action brought the legal owner would not have been a proper party to the action. If the legal owner had been joined prior to the assignment of his interest to Acorn his presence in the action would, when the assignment was given, have become unnecessary and embarrassing. It appears to be therefore that at this stage its presence would serve no useful purpose and is unnecessary. Nevertheless, the assignment should be pleaded although it is something that has occurred after action brought.’
43 On the approach taken by Smithers J the applicants could plead equitable title in the second applicant at the date of alleged infringement and the subsequent assignment of the legal interest without it being necessary to join Mr De Chazel to the proceedings. His Honour, indeed, thought joinder unnecessary and embarrassing if legal title had passed even after the action was commenced.
44 In Robert J Zupanovich Pty Ltd v B & N Beale Nominees Pty Ltd (1995) 59 FCR 49 Carr J found (at 53) that an oral agreement obliged a copyright holder to hold a copyright in equity for the benefit of the applicant from the time payment was made for certain services. His Honour applied Acorn. He recorded:
‘The respondents conceded that if the applicant held the equitable title to the copyright in the Drawings at the time of infringement then a subsequently-acquired legal title would give it sufficient standing to maintain these proceedings. The applicant acquired that legal title by the deed of assignment dated 11 March 1994.’
45 The principle also appeared to be accepted by Selway J in Telephonic Communicators International Pty Ltd v Motor Solutions Australia Pty Ltd [2004] FCA 942 (at [41(d)]).
46 A method of reconciling this approach with the views expressed by Spender J in Taypar is not immediately apparent. Normally a right created by statute must be vindicated in a manner which is consistent with any restrictions or limitations imposed by the statute creating the right (Josephson v Walker (1914) 18 CLR 691, see also Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 421, 456; ACTEW Corporation Ltd v Pangallo [2002] FCAFC 325; Rich v Olzak [2000] VSC 191; Preston v Star City Pty Ltd [1999] NSWSC 1273; Construction, Forestry, Mining and Energy Union v Gordonstone Coal Management Pty Ltd (1997) 78 FCR 437. Similarly, in Kinzett v McCourt (1999) 46 NSWLR 32 Spigelman CJ referred (at 43) to the common law presumption that a remedy specified in a statute is intended to be exclusive and in Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399 McHugh and Gummow JJ (with whom Brennan CJ, Deane and Dawson JJ agreed at 415) said (at 446), in relation to s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW):
‘… what s 6 achieves is the creation of a new right with an associated remedy to enforce it. The section does so by sweeping up distinctions in the general law between legal and equitable assignments of whole or part of presently existing or future choses in action …’
47 The application of such an approach to the requirements of the Act (ss 115 and 196 in particular) raises some doubt in my mind about the correctness of the approach taken by Smithers J. However, it is not necessary to resolve that question at the moment. Despite the respondents’ reliance on Taypar I would not be prepared to conclude that Smithers J’s analysis was unarguable in the context of an application for summary dismissal.
48 I was also informed that Mr De Chazel has now executed express assignments of a right to sue for infringement of copyright before May 2007. For the reasons explained by Spender J in Dixon Projects at 140-141 there may be a question whether such an assignment, (even if not the assignment of a bare chose in action (see Microsoft at [123]-[124]) and not raising any issue under s 12 of the Conveyancing Act 1919 (NSW) (see Microsoft at [128]-[135]) might nevertheless be ineffective so far as the present proceedings at least are concerned. It is not necessary to express any firm view about that matter. It cannot be decisive one way or the other of the matters for present attention.
49 There is, at present, no evidence about these additional matters (equitable ownership and later assignments) upon which the applicants may wish to rely. The debate before me proceeded by reference to possible forms of pleading which might sustain the proceedings. I have already indicated why it would not be appropriate to give summary judgment having regard to the present pleadings, quite apart from the correct view about any additional matters. It is a matter for the applicants whether, in due course, they wish to rely on such matters. I will allow an opportunity for some amendment to accommodate that possibility.
50 The amended notice of motion, so far as it seeks summary dismissal under s 31A of the FCA Act of the claim that copyright was infringed, will be dismissed.
51 The orders which I will make are:
1. Paragraph 6(a) of the amended statement of claim filed 17 September 2007 is struck out.
2. The amended notice of motion filed by the first and second respondents on 18 March 2008 is otherwise dismissed.
3. Costs are reserved.
52 I will also make the following directions:
1. The parties are to confer with a view to reaching agreement on a timetable to include at least the following matters;
(a) the time within which the applicants should file, if they wish, a further amended statement of claim;
(b) a time within which the respondent must file their defences;
(c) the time within which the applicants should, if they wish, file any reply to a defence;
(d) times for filing evidence.
2. The proceedings will be listed for directions on a date to be arranged with my Associate.
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I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. |
Associate:
Dated: 2 April 2008
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Counsel for the Applicant: |
Mr C Evatt and Ms J Rawlings |
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Solicitor for the Applicant: |
Bale Boshev Lawyers |
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Counsel for the Respondent: |
Mr P R Sibtain and Ms N McGarrity |
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Solicitor for the Respondent: |
Addisons |
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Date of Hearing: |
18 March 2008 |
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Date of Judgment: |
2 April 2008 |
