FEDERAL COURT OF AUSTRALIA

Re Universal Music (Australia) Pty Ltd v Sharman Licence Holdings Ltd;

Ex parte Merlin BV [2008] FCA 783

PROCEDURE – non-party applied to inspect court file of defunct proceedings – application for inspection made for the purposes of litigation where orders for preliminary discovery would not be available – application for inspection not limited to documents admitted into evidence – leave to inspect ordinarily to be granted except where the interests of justice require otherwise – open justice – access to justice – leave to inspect limited to affidavit material admitted into evidence – exhibits not the property of the Court – leave to inspect exhibits refused

Federal Court Rules O 46 r 6

Australian Competition and Consumer Commission v ABB Transmission & Distribution Ltd (No 3) [2002] FCA 609discussed

Churche v Australian Prudential Regulation Authority (No 3) [2006] FCA 1168 referred to

Dawson Nominees v Multiplex (2007) 64 ACSR 53 distinguished

Dian AO v Davis Frankel & Mead (a firm) [2005] 1 All ER 1074 referred to

Dobson v Hastings [1992] Ch 394 referred to

eisa Ltd v Brady [2000] NSWSC 929referred to

Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 referred to

GIO Personal Investment Services Ltd v Liverpool and London Steamship Protection and Indemnity Association Ltd [1999] 1 WLR 984 referred to

Harman v Secretary of State for the Home Department [1983] 1 AC 280 referred to

John Fairfax Publications Pty Ltd v Ryde Local Court (2005) 62 NSWLR 512referred to

Macquarie Radio Network Pty Ltd v ABA [2002] FCA 1408 referred to

Nyangatjatjara Aboriginal Corporation v Registrar of Aboriginal Corporations [2006] FCA 606 referred  to

Re Bond; Ex parte Hongkong Bank [1999] FCA 403 cited

Re Richstar Enterprises Pty Ltd; Australian Securities and Investments Commission v Carey (No 2) (2006) 232 ALR 398 referred to

Rich v Harrington (2007) 99 ALD 297 referred to

Seven Network Ltd v News Ltd (No 9) (2005) 225 ALR 256applied

Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217 referred to

RE UNIVERSAL MUSIC AUSTRALIA PTY LTD, FESTIVAL RECORDS PTY LTD AND MUSHROOM RECORDS PTY LTD TRADING AS FESTIVAL MUSHROOM RECORDS, EMI MUSIC AUSTRALIA PTY LIMITED, SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED, WARNER MUSIC AUSTRALIA PTY LIMITED, BMG AUSTRALIA LIMITED, UMG RECORDS, INC., SHADY RECORDS, INC./INTERSCOPE RECORDS, AFTERMATH RECORDS, REAL HORRORSHOW PTY LTD, THE LIVING END PTY LTD, VIRGIN RECORDS AMERICA, INC, EMI RECORDS LTD, CAPITOL RECORDS, INC, ARISTA RECORDS, LLC (FORMERLY KNOWN AS ARISTA RECORDS, INC.), CIRCA RECORDS LTD, CHRYSALIS RECORDS LTD, SONY MUSIC (AUSTRALIA) PTY LTD, SONY MUSIC ENTERTAINMENT (CANADA) INC., SONY BMG MUSIC ENTERTAINMENT, MAYER MUSIC LLC, TIMOTHY JAMES FREEDMAN, WARNER BROS. RECORDS, INC., ATLANTIC RECORDING CORPORATION, WARNER MUSIC UK LTD, J RUBY PRODUCTIONS, INC. DBA SLASH RECORDS, ZOMBA RECORDING LLC (FORMERLY KNOWN AS ZOMBA RECORDING CORPORATION), BMG MUSIC (BMG MUSIC DBA THE RCA RECORDS LABEL, A UNIT OF BMG ENTERTAINMENT), BMG UK & IRELAND LTD, LAFACE RECORDS v SHARMAN LICENSE HOLDINGS LTD, SHARMAN NETWORKS LTD, LEF INTERACTIVE PTY LTD, NICOLA ANNE HEMMING, PHILIP MORLE, ALTNET INC, BRILLIANT DIGITAL ENTERTAINMENT INC, BRILLIANT DIGITAL ENTERTAINMENT PTY LTD, KEVIN GLEN BERMEISTER, ANTHONY ROSE; EX PARTE MERLIN BV

NSD 110 of 2004

RE BRILLIANT DIGITAL ENTERTAINMENT PTY LTD AND KEVIN GLEN BERMEISTER v UNIVERSAL MUSIC AUSTRALIA PTY LTD, FESTIVAL RECORDS PTY LIMITED AND MUSHROOM RECORDS PTY LIMITED T/AS FESTIVAL MUSHROOM RECORDS, EMI MUSIC AUSTRALIA PTY LTD, SONY MUSIC ENTERTAINMENT AUSTRALIA PTY LIMITED, WARNER MUSIC AUSTRALIA PTY LIMITED AND BMG AUSTRALIA LIMITED; EX PARTE MERLIN BV

NSD329 of 2004

SHARMAN LICENSE HOLDINGS LTD, SHARMAN NETWORKS LIMITED, LEF INTERACTIVE PTY LIMITED, NICOLA ANNE HEMMING, PHIL MORLE v UNIVERSAL MUSIC AUSTRALIA PTY LTD, FESTIVAL RECORDS PTY LIMITED AND MUSHROOM RECORDS PTY LIMITED T/AS FESTIVAL MUSHROOM RECORDS, EMI MUSIC AUSTRALIA PTY LTD, SONY MUSIC ENTERTAINMENT AUSTRALIA PTY LIMITED, WARNER MUSIC AUSTRALIA PTY LIMITED AND BMG AUSTRALIA LIMITED

NSD 333 of 2004

JACOBSON J

28 MAY 2008

SYDNEY

THE COURT ORDERS THAT:

1.         The matter be stood over to a date to be fixed for the making of orders.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

THE COURT ORDERS THAT:

1.         The matter be stood over to a date to be fixed for the making of orders.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

THE COURT ORDERS THAT:

1.         The matter be stood over to a date to be fixed for the making of orders.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

Introduction

1                          Merlin BV is a company incorporated in Holland.  It is apparently a not-for-profit company which was established in 2007 to operate as a non-exclusive licensing agency, and to protect the intellectual property of independent record labels.  It currently represents over 10,000 record labels from around the world. 

2                          By a Notice of Motion filed 2 April 2008 Merlin seeks orders under O 46 r 6 of the Federal Court Rules for leave to inspect and copy a large number of documents on the Court file in respect of proceedings in the matter of Universal Music Australia Pty Ltd v Sharman Licence Holdings Ltd (2005) 65 IPR 289.

3                          Those proceedings are commonly known as “the Kazaa proceedings” which are said to have been the largest copyright case ever brought before an Australian court, and amongst the largest intellectual property cases in the world. 

4                          The Notice of Motion as originally filed sought access to an extraordinarily wide range of material.  It appears on its face to extend to almost every document in the now defunct court file.  However, Merlin subsequently confined the application in a way that I will refer to later.  Even then, the application seeks a large body of material.

5                          Merlin’s application was opposed by a number of parties to the Kazaa proceedings.  The principal opponents were a number of record companies in the EMI, Sony BMG, Universal and Warner Groups (“the Record Companies”) who were applicants in the Kazaa proceedings and by the sixth to ninth respondents in those proceedings.  The sixth to ninth respondents are referred to as the “Altnet Respondents”.

6                          The application raises an important question of principle which does not seem to have been dealt with in any earlier authority.  Although Dr Bell invoked the principle of open justice, referred to in cases such as Seven Network Ltd v News Ltd (No 9) (2005) 225 ALR 256, ultimately he put the application on the footing that it was for access to justice.

7                          The purpose for which Merlin seeks access to the documents is to obtain information concerning possible infringements of its members’ copyright in the same period as was covered by the Kazaa proceedings.  Merlin seeks to obtain evidence of copyright infringement by the respondents to the Kazaa proceedings, by the same conduct as was in issue in those proceedings. 

8                          The essential issue which arises is whether a non-party ought to be given access to a defunct court file in order to gather evidence for a case it (or, more accurately, some of its members) may wish to bring against the respondents to the Kazaa proceedings in circumstances in which the non-party cannot satisfy the requirements for an order for preliminary discovery under O 15A of the Federal Court Rules.

9                          A number of discretionary considerations are raised by the Record Companies and the Altnet Respondents including delay, prejudice and the failure of Merlin to offer any of the protections, including compensation, as would be provided by an application under O 15A, or upon the service of a subpoena.

The Kazaa Proceedings

10                        The Kazaa proceedings were commenced by way of the largest number of Anton Pillar orders ever made in Australia.  There were simultaneous raids on twelve locations in three states of Australia.  At the time of the execution of the Anton Pillar orders, sixty members of the firm of solicitors representing the Record Companies and associated applicants were engaged in the matter.

11                        The Kazaa proceedings concerned copyright infringement by the respondents in 98 specified sound recordings.  When the proceedings were commenced, other sound recordings were included in the claim but the proceedings were ultimately confined to the number referred to above. 

12                        Sixty one affidavits, many of them lengthy, made by 34 witnesses, were read at the trial.  Seventeen witnesses gave oral evidence.  The trial judge, Wilcox J, observed that whilst an enormous quantity of evidence was tendered, little of it was the subject of objection by the parties.

13                        The judgment of Wilcox J was handed down on 5 September 2005.  His Honour found that each of the 98 recordings had been able to be downloaded, and had been downloaded, through the file-sharing facility of the Kazaa system: Universal Music v Sharman at [17].  His Honour also found at [181] that a major use of the Kazaa system was the transmission of copyright material.  At [186], Wilcox J made a finding that the Kazaa file sharing system:

… necessarily involved copyright infringement on a massive scale.

14                        His Honour’s findings were expressed in summary form in [194] as follows:

In short, I find that all the respondents knew the predominant use of Kazaa was for the sharing of copyright-infringing material.  None of them had an interest to prevent or curtail that predominant use; if anything, the contrary.  Each of the respondents was at least acquiescent in the use of Kazaa for copyright-infringing activities.

15                        Following his Honour’s orders, Sharman Networks Ltd, the second respondent in the Kazaa proceedings agreed to pay US$115 million to the Record Companies and movie studios who had brought the proceedings. 

16                        An appeal was lodged against his Honour’s judgment but the proceedings were apparently settled in about August 2006.

The documents sought

17                        In an affidavit sworn in support of Merlin’s application by Ms Julie Robb, solicitor, on 15 April 2007, the deponent refers to inspections that have so far been made by her firm of documents on the Court file that are publicly available under O 46 r 6(2).

18                        Ms Robb goes on to say that as a result of those inspections, and her reading of the judgment of Wilcox J, eight documents or classes of documents:

may contain information that Merlin seeks in order to prosecute its members’ claims.

19                        The eight documents or classes are as follows:

(a)          affidavit of Anthony Johnsen dated 29 September 2004;

(b)          affidavit of Philip Morle dated 24 November 2004;

(c)          the digital music files produced by Mr Morle as part of the discovery process, whether in the form that existed on the computers at his premises, or in the form they had been recovered by the forensic technician;

(d)          the digital music files produced by the Sharman parties as part of the discovery process;

(e)          affidavit of Tom Mizzone sworn 1 December 2004;

(f)           all affidavits of Ms Ball of Gilbert + Tobin concerning the evidence of specific infringements collected by her;

(g)          the digital music files collected from university campuses on the execution of Anton Piller orders on 6 February 2004 copied by Mr Lyons from computers at the offices of Baker & McKenzie; and

(h)          all affidavits of Mr Lyons related or referring to this material.

20                        Ms Robb also says in her affidavit that she believes any method other than access under O 46 r 6 would be attended by significantly greater cost and difficulty, including costs to be incurred by third parties.  She goes on to say:

I have considered whether Merlin could commence proceedings for preliminary discovery under Order 15A.  However, I am concerned that, without access to the material it presently seeks, Merlin cannot identify which of its members would be the proper applicants to such proceedings.

21                        However, the documents sought on the application were further narrowed.  The documents were described in Exhibit A1 in this application as follows:

(a)       all affidavits and exhibits identified in paragraph 24(a), (b), (e), (f), (g) and (h) of Mr Williams’ affidavit [sworn 17 April 2008];

(b)       the digital music files referred to in paragraph 24(d) of Mr Williams’ affidavit;

(c)        the “Applicants’ Main Tender Bundle”, the index to which is reproduced at pages 42 to 60 of Exhibit MJW-1A to Mr Williams’ affidavit;

(d)       the appeal books filed in the appeal from the Main Proceedings; and

(e)        the transcripts of the Main Proceedings.

22                        For convenience, I will reproduce the paragraphs of Mr Williams’ affidavit listed in Exhibit A1 as follows:           

(a)       Affidavit of Johnson.  The body of affidavit makes no reference to any recordings by the artists set out at paragraph 2.6 of Ms Robb’s affidavit sworn 15 April 2008 (Merlin Artists).  There are 4 references in Exhibit AEJ-1 to recordings by the Merlin Artists (pages 5, 8 and 16).

(b)       Affidavit of Phil Morle.  The body of the affidavit makes no reference to any recordings by the Merlin Artists.  Exhibit PDFM-1 contains lists of the files that were discovered by Mr Morle.  There are 43 references to recordings by the Merlin Artists.

            …

(d)       Digital music files discovered by the Sharman respondents.  Sharman discovered 2 recordings by the Merlin Artists.

(e)        Affidavit of Tom Mizzone.  The body of the affidavit of [sic] makes no reference to any recordings.  There are also no references to the Merlin Artists in Exhibit TM-2.  In the time available the Record Companies have not be [sic] able to review Exhibit TM-3 to determine whether there are any recordings by any of the Merlin Artists in Exhibit TM-3.

(f)        Affidavits of Ball.  The body of the affidavit of Elise Ball sworn 27 January 2004 makes no reference to any recordings.  There are 9 references to Merlin Artists on a screenshot which is contained on page 36 of Exhibit EEB-3.

(g)       Digital music files seized from the Universities.  These will not be on the Court file because the seized information was held by the independent solicitor following the execution of the orders and subsequently a limited class of data relating to the case brought by the Record Companies was extracted by a computer forensic expert.  Of the extracted files, there are only 2 references to one of the Merlin Artists (Billy Bragg) that appear on Exhibit NJC-3 to the affidavit of Nigel Carson sworn 12 August 2004.

(h)       Affidavits of Mr Lyons.   The bodies of the affidavits make no reference to any recordings.  There are no references in the non-confidential exhibits to Mr Lyons’ affidavits to any recordings by any of the Merlin Artists.

23                        According to Merlin’s written submissions, the key information which is sought through the current applications is as follows:

·    Results of searches conducted between June and September 2004 of works in the ARIA top 50 or 100 most popular records which had been made available for file sharing and downloading by Kazaa members.  At least some of these results are contained in affidavits of Mr Ellis [filed in the Kazaa proceedings]: Judgment [64] – [66], Robb 5.7.  This information was publicly available and non-confidential when gathered by Mr Ellis, but cannot now be replicated;

·    Data images of music downloads which Merlin understands the Applicants deployed [in the Kazaa proceeding] for the relevant period of alleged infringement and which would be likely to evidence “downloading” of sound recordings owned by Merlin members: Sharman Judgment [237] – [242] and Robb 5.10.  Although the witness Mr Mizzone was concerned about the confidentiality of the technical means deployed to gather this data, the data itself and the results of his inquiries were in an open affidavit: Judgment [238].

Order 46 rule 6

24                        I do not propose to reproduce the text of O 46 r 6.  It is sufficient to say that this Rule regulates the extent to which a non-party can have unfettered access to documents contained in Court files.  It does so by drawing a distinction between specified classes of documents which may be inspected without prior leave of the Court and other specified categories which a non-party “must not inspect” except with leave of the Court.

25                        The first types of document are listed in O 46 r 6(2).  The second are listed in
O 46 r 6(3).  The documents in the first class include pleadings and written submissions.  Even then, access is subject to some restriction because the document may be inspected unless the Court or a Judge has ordered that it is confidential: O 46 r 6(1).

26                        The documents which fall into the second class include affidavits and unsworn statements of evidence.

27                        Except with the leave of the Court or a Judge, or other permission as prescribed in
O 46 r 6(4), a non-party must not inspect a document that is not referred to in sub-rule (2) or (3).  Thus, documents such as tender bundles and other exhibits may only be inspected with leave under this sub-rule.

28                        Special provision is made for access to transcripts of proceedings.  Transcripts may not be inspected except with leave: O 46 r 6(8).

29                        A non-party may only copy a document that has been produced for inspection if the Registrar gives permission to do so and the person pays the prescribed fee: O 46 r 6(6).

The relevant principles

30                        With the exception of one authority to which I will refer later, the principles which govern the exercise of the discretion to grant access by a non-party under O 46 r 6 are to be found in cases dealing with applications by media organisations.

31                        This is hardly surprising because the principle which informs the exercise of the power is that of open justice, the underlying rationale being the belief that exposure to public scrutiny is the surest safeguard against abuse of power of the courts: see Seven Network at [21]ff; Re Richstar Enterprises Pty Ltd; Australian Securities and Investments Commission v Carey (No 2) (2006) 232 ALR 398 at [16]ff; Rich v Harrington (2007) 99 ALD 297 at [17]ff.

32                        In Australian Competition and Consumer Commission v ABB Transmission & Distribution Ltd (No 3) [2002] FCA 609, Finkelstein J said at [7] that the proper approach is that access should be allowed unless the interests of justice require a different course.  His Honour went on to say that there is a strong presumption in favour of allowing any member of the public who wishes to do so to inspect any document or thing that is put into evidence.

33                        Sackville J has expressed his agreement with the abovementioned statements of principle by Finkelstein J: Seven Network at [25].  However, I do not think it follows that the principle is as broad as was submitted by Dr Bell SC for Merlin.  Dr Bell’s submission was that, at least with respect to documents which have been admitted into evidence, exceptional circumstances are required for an application under O 46 r 6(3) to be refused. 

34                        It is true that in ACCC v ABB Finkelstein J expressed the principle in terms which reflect Dr Bell’s submission.  It is also true that Sackville J has expressed his agreement with the passage of the judgment; Seven Network at [25]; see also Nyangatjatjara Aboriginal Corporation v Registrar of Aboriginal Corporations [2006] FCA 606 at [14].  But in my opinion, Seven Network and other relevant authorities do not establish a rule that there must be exceptional circumstances for an application to be refused.

35                        As Sackville J observed in Seven Network at [24], O 46 r 6 does not confer a right on a non-party to obtain access to documents admitted into evidence.  Leave from the Court is required.  His Honour referred with approval to the statement made by Spigelman CJ in John Fairfax Publications Pty Ltd v Ryde Local Court (2005) 62 NSWLR 512 at [29] that open justice is a principle, not a “freestanding right”.

36                        The guiding principle seems to me to be as stated by Sackville J in Seven Network at [27].  His Honour there said that, unless the interests of justice require otherwise, the Court would ordinarily take the view that a non-party should have access to all non-confidential documents and other material admitted into evidence.

37                        Sackville J went on at [27] to make the important point that in each application the Court will have to take into account the particular circumstances of the case.  A convenient “touchstone” will be whether the documents have been admitted into evidence.  Access to that material:

… can be expected to be helpful to a person seeking to understand or explain the proceedings, or to evaluate, the court’s determination of the issues arising in the proceedings: see Seven Network at [27].

38                        This was the view taken by French J in Richstar at [18] where his Honour agreed with the observations of Sackville J in Seven Network to which I have referred in the two preceding paragraphs of my judgment.  So too did Branson J in Rich v Harrington at [23].  Her Honour said that this approach recognises that the discretion under O 46 r 6 must be exercised having regard to the particular circumstances of the case.

39                        Branson J went on to say at [24] that where a non-party seeks access to material which has been relied upon by a judge, the proper approach tends more strongly in favour of public disclosure; access should be allowed save where the interests of justice require a different course.   That is not identical with the exceptional circumstances test stated by Finkelstein J.

40                        ACCC v ABB is the only Australian authority to which I have referred in which access was granted to a non-party who was not a media organisation.  The applicant was a non-party who sought access to a statement of agreed facts and joint submissions of the parties in proceedings brought by the Commission against a company and its executives for civil penalties for contravention of s 45 of the Trade Practices Act 1974 (Cth): see ACCC v ABB at [1].  The applicant sought access to those documents to determine whether it should bring an action to recover losses suffered as a consequence of the admitted breaches.

41                        The extension of the principle of open justice to those circumstances is perfectly understandable. The Commission’s proceedings were brought in the public interest and parties affected by the contravention ought to be given access to determine whether a private action for damages caused by the contravention would be justified.  The documents sought were confined in nature.  The applicant did not seek to trawl willy-nilly through the court file. 

42                        The question of whether access should be granted to Merlin arises in different circumstances.  The authorities to which I have referred indicate, in my view, that the discretion is one to be exercised in the interests of justice, having regard to all the circumstances.

43                        Where leave is sought to inspect documents that have not been read in open court, or at least tendered in evidence and considered by the judge as evidence or submission, the rule in my opinion is that leave will ordinarily be refused to inspect that material.  This approach is consistent with that suggested by Sackville J in Macquarie Radio Network Pty Ltd v ABA [2002] FCA 1408 at [21]; cf. ACCC v ABB at [6].

44                        It is true, as Finkelstein J said in ACCC v ABB at [6] that O 46 r 6(3) does not distinguish between documents that have been admitted into evidence and those which have not.   But as Santow J observed in eisa Ltd v Brady [2000] NSWSC 929, there is a risk of serious injustice if untested allegations can be published to the world at large: cited in Macquarie Radio Network at [21].

English authorities

45                        In Dobson v Hastings [1992] Ch 394 at 401-402, Sir Donald Nicholls VC considered that the Rules of the Supreme Court indicate that save when permitted under the rules, documents on the court file are not intended to be inspected or copied.  He said that:

… a court file is not a publicly available register.  It is a file maintained by the court for the proper conduct of the proceedings.  Access to that file is restricted.  Non-parties have a right of access to the extent, but only to the extent, provided in the rules.

46                        It seems to me that these observations are equally applicable to the scheme established under O 46 r 6, as construed in authorities such as Seven Network.

47                        In GIO Personal Investment Services Ltd v Liverpool and London Steamship Protection and Indemnity Association Ltd [1999] 1 WLR 984 at 995, Potter LJ said that when evidence, including court bundles, are read out in court they “enter the public domain” and a member of the press or public may quote from the document:

… but the right of access to it for the purposes of further use or information depends upon that person’s ability to obtain a copy of the document from one of the parties or by other lawful means.

48                        Nevertheless, the approach taken by his Lordship was not as narrow as this passage might suggest.  FAI General Insurance Co Ltd sought access to counsel’s written submissions in the proceedings to identify documents that might be the subject of a subpoena in parallel litigation.  His Lordship at 996 regarded this as a legitimate purpose for the grant of access to the documents.

49                        In Dian AO v Davis Frankel & Mead (a firm) [2005] 1 All ER 1074, a non-party applied to the court for permission to inspect and copy the court file in proceedings which had been concluded by compromise some eight years earlier.  The non-party made the application in the hope of obtaining information which would be of use to it in litigation which was on foot in the British Virgin Islands.

50                        Moore-Bick J granted access to affidavits and pleadings notwithstanding the substantial delay.  Of course, he did so under the relevant English rules of court but a number of his observations are in my view applicable to the regime established under O 46 r 6.

51                        First, the principle of open justice is primarily concerned with monitoring the decision-making process as it takes place, not with reviewing the process long after the event:  Dian at [30].

52                        Second, an application for permission to use the court file as a source of potentially useful information to assist in other litigation does not engage the principle of open justice.  Nevertheless, one consequence of the application of the principle of open justice is that persons who are present in Court may obtain access to information that they may be able to use to their advantage in other litigation.  But this is merely a consequence of doing justice in public.  It is not one of its primary objects:  Dian at [31].

53                        Third, the rules do not contemplate permission to inspect the file as a whole.  The documents which an applicant wishes to inspect must be identified with reasonable precision:  Dian at [32].

Home Office v Harman

54                        There is an implied undertaking by parties to litigation that documents produced by one party to another in the course of discovery will not be used for any purpose other than in relation to the litigation:  Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 32 (per Mason CJ), citing inter alia Harman v Secretary of State for the Home Department [1983] 1 AC 280 (“Home Office v Harman”).

55                        The effect of O 15 r 18 of the Federal Court Rules is to abrogate this principle insofar as it would apply to a document after it has been read to or by the Court or referred to in open court in such terms and to disclose its contents, unless the Court otherwise orders.

56                        Nevertheless, the implied undertaking continues to apply to documents produced on discovery; it also applies to witness statements, affidavits and other documents produced by one side to the other for the purposes of the litigation:  Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217 at 221-223 (per Wilcox J).

57                        Leave of the court to be released from the undertaking in order to use the documents in other proceedings will only be granted in “special circumstances”; they include the nature of the document, the absence of prejudice to the author and the likely contribution of the document to achieving justice in the second proceeding: Springfield Nominees at 225.

58                        What underlies the implied undertaking not to use documents obtained in the course of litigation except for the purpose of that proceeding is that a party ought not to use an advantage obtained for the limited purpose of the litigation for a collateral or ulterior purpose:  Home Office v Harman at 302 per Lord Diplock.

59                        In his speech in Home Office v Harman, Lord Diplock referred at 303 to the inevitable side effect of administering justice in open court and the corollary that persons present in court may use documents that are read out in court for purposes other than the attainment of justice in the particular case.  The observations of Moore-Bick J in Dian at [31] are to the same effect.

60                        It seems to me to follow from Home Office v Harman that although non-parties are not subject to the implied undertaking, they are subject to the same type of restriction in relation to documents that have not been read in open court, or at least considered by the judge as evidence or submission.  After all, why should a non-party, by the side-wind of access to a court file, be free from the constraint which applies to the persons who supplied the contents of the file?

61                        It also seems to me that this restriction informs the requirement of leave to inspect the categories of documents referred to in O 46 r 6(3) and the approach taken in the authorities which draw a distinction between access to documents admitted into evidence and those which are not.

Whether Merlin ought to be granted leave

62                        Merlin seeks leave to inspect and copy a large volume of specified documents, only some of which appear to have been admitted into evidence.

63                        Although Sackville J said in Seven Network at [27] that a convenient “touchstone” for the grant of access is whether the material has been admitted into evidence, the effect of his Honour’s judgment is that this is a general rule which will serve the interests of open justice; but all the circumstances must be considered.

64                        Here, the application is not made in furtherance of the principle of open justice.  It uses, as a springboard, the corollary to which Moore-Bick J referred in Dian, namely that persons present during a court hearing may learn of information they can use to their advantage.  But in truth it goes further because it seeks “access to justice” based upon the modern approach to commercial litigation with its emphasis upon creation, and preservation of large volumes of written material, much of which is not read out in open court. 
Finkelstein J referred to this in ACCC v ABB at [4] – [5].

65                        The difficulty with Merlin’s application is that, even in its modified form, it is not confined to affidavits which were admitted into evidence.  It extends to discovery documents and files obtained on the execution of Anton Piller orders, which do not appear to form part of the court file.

66                        All of the documents referred to in O 46 r 6(2) and (3) are documents which are typically filed in the Registry.  Order 46 r 6(4) and (5) deal with other documents.

67                        In my view, the prohibition against a non-party inspecting exhibits, tender bundles and other documents which may be located in the Registry is covered by O 46 r 6(4).  They fall within the expression in that sub-rule “any document in the proceeding that is not referred to in sub-rule (2) or (3).”  Access may only be granted with leave.

68                        It seems to me that the distinction drawn in O 46 r 6(4) recognises that access may be sought to documents which are not filed or lodged with the Registry.  Typically, these documents will be exhibits.  Access may be sought while they are in the Registry, but ordinarily they will only remain there during the course of the trial and for a period of 21 days after judgment, that is to say after the appeal period has expired.

69                        The usual practice used to be for the court to order that exhibits may be returned after the expiration of the appeal period.  No doubt this was done in recognition of the fact that exhibits are the property of the party who tendered them.  It is not the function of the Registry to preserve exhibits long after the expiry of appeal periods or after appeal books have been prepared.

70                        I have not been able to determine whether an order for the return of exhibits was made in the Kazaa proceedings.  But even if it were not, I would not be prepared to grant access to documents, other than affidavits or documents falling within O 46 r 6(3).  This is because the exhibits and other documents are the property of the parties who tendered them, in proceedings now long since defunct.  If they are still present in the Registry, this is only because the Registry has failed to return documents no longer required for the proper purpose of the functions of the Court: see [45] above.

71                        Nor is “access to justice” an appropriate gateway for an application to exhibits, discovery documents and the like.  The Court has ample power to order pre-trial discovery under O 15A.  Ms Robb has acknowledged that Merlin may have difficulty in making an application under that Rule.

72                        It seems to me that the appropriate exercise of my discretion in the present case is to order access to the affidavits identified by Merlin but not to the other documents: see [21](a) above.    Access will be granted only to the body of the affidavits because the exhibits remain the property of the parties for the reasons mentioned above.  Access will not be granted to those parts of the affidavits which were not read, or to which objection was upheld. 

73                        This seems to me to be consistent with the approach taken by Cowdroy J in Churche v Australian Prudential Regulation Authority (No 3) [2006] FCA 1168 at [26].  His Honour granted access to affidavits admitted into evidence, but access was otherwise refused.  Access was granted to annexures but they form part of the affidavit and are to be distinguished from exhibits in the proceedings.

74                        Dr Bell pointed to [64] – [66] of the judgment of Wilcox J in which his Honour referred to the evidence of Mr Johnsen, stating that it contained evidence of routine downloading of ARIA Top 50 and Top 100 recordings.  Dr Bell referred me to the decision of Heerey J in Dawson Nominees v Multiplex (2007) 64 ACSR 53 at [30] to support the proposition that access to the exhibits to the affidavits ought to be granted.  But the observations of Heerey J in Dawson Nominees v Multiplex are not a charter for access to documents by non-parties.  His Honour’s remarks were made in the context of existing proceedings where the documents had potential relevance to the issues in the litigation.

75                        So too in Dian, the documents were sought for the purpose of obtaining information of potential use in litigation that was already on foot.  It was not to determine whether a case may be launched, and if so, by whom.

76                        Mr Cobden submitted that I ought not to grant access to Ms Ball’s affidavits.  It is true that Ms Ball made copies of sound recordings in circumstances in which she obtained the protection of s 104 of the Copyright Act 1968 (Cth).  However, I do not think that the grant of access to those parts of her affidavit which were read in evidence would put her in breach of that provision, or in breach of the implied undertakings pursuant to which she obtained and used the material.

77                        I will not allow access to the digital music files discovered by the Sharman respondents, or to the digital files seized from the universities.  They are not part of the Court file and they do not appear to have been admitted into evidence.  Particular caution is required before granting access to this class of documents: Re Bond; Ex parte Hongkong Bank [1999] FCA 403 at [4] (per Hely J).

78                        The “Applicant’s’ Main Tender Bundle” may have been admitted into evidence but it was a compilation of exhibits and is therefore covered by what I said above about the property in those documents. 

79                        The same approach is applicable to the appeal books.  Access will be obtained by Merlin to the body of the affidavits but the balance of the appeal books (other than pleadings and other documents otherwise available under O 46 r 6(2)) merely reproduce exhibits and transcript.

80                        I will grant access to the transcript but will not permit photocopying. 

81                        I recognise that there are references in some of the exhibits mentioned above to recordings made by Merlin artists.  But these references were apparently to matters which did not form part of the subject matter of the Kazaa proceedings.  I do not see that open justice requires access to those matters.  Nor does “access to justice” support it. 

82                        Finally, I have considered the submission that access ought to be refused to any of the documents on the ground of delay.  One of the parties submitted that the delay would cause prejudice to it.  This would appear to be based upon the difficulty of meeting claims of copyright infringement arising from evidence about the downloading of material some four years ago.  However, I do not think that the suggestion of prejudice was supported by evidence which would justify the refusal of access to affidavits that were admitted into evidence or to the transcript of the hearing.

83                        The parties are to bring in short minutes reflecting my reasons.  I will hear brief argument on costs and on conditions for access.

Associate:

Dated:         28 May 2008

Date of Hearing:                          23 April 2008

Date of Judgment:                        28 May 2008