a Ceol ' é t = a ' CATCHWORDS Administrative Law - Export Market Development Grants Act - claim for grant from the Export Market Development Grants Board - application by way of appeal from the Administrative Appeals Tribunal - Eligible industrial property rights - copyright - licence - exclusive licencee of copyright - assignment of rights - rights in relation to copyright etc. Export Market Development Grants Act 1974 ss.3(1) and (2), 4(1)(h), 14(3). Copyright Act 1968 ss.86, 87, 196 Acts Interpretation Act 1901 ss.23(b). 15AA NOMAD FILMS INTERNATIONAL PTY. LTD. v. EXPORT DEVELOPMENT GRANTS BOARD VG No. 159 of 1985 Smithers, Sweeney and Northrop JJ 30 May 1986 Melbourne. REC 2 — JUN 1986 BREDERIL SY AYSTASLI PRENCIPAL IN THE FEDERAL COURT GF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) VG No. 159 of 1985 ) GENERAL DIVISION ) On appeal from the Administrative Appeals Tribunal Between: NOMAD FILMS INTERNATIONAL PTY. LTD. (Applicant) AND: EXPORT DEVELOPMENT. GRANTS BOARD (Respondent) COURT: Smithers, Sweeney and Northrop JJ. DATE OF ORDER: 30 May 19986 WHERE MADE: Melbourne MINUTE OF ORDER THE COURT ORDERS THAT: 1. The appeal be allowed. tw The application be remitted ta the Administrative Appeals Tribunal for reconsideration in accordance with the reasons for judgment. 3. The respondent pay the costs of the appeal. NOTE: Settlement and entry of orders 1s Order 36 of the Federal Court Rules. applicant of the dealt with in IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) VG No. 159 of 1985 ) ) GENERAL DIVISION On appeal from the Administrative Appeals Tribunal Between: NOMAD FILMS INTERNATIONAL PTY. LTD. (Applicant) AND: EXPORT DEVELOPMENT GRANTS BOARD (Respondent) COURT: Smithers, Sweeney and Northrop Jd. DATE: 30 May 1986 REASONS FOR JUDGMENT Smithers J.: This is an application by way of appeal to this Court from a decision of the Administrative Appeals Tribunal dismissing an application to it by the applicant (Nomad) seeking a review of a decision adverse to it of the Export Development Grants Board in respect to acclaim by Nomad for a grant under the Export Market Development Grants Act 1974 (the Act) in respect of expenditure incurred in the exploitation overseas of rights of copyright in respect of a film called "Sun Kosi - River of Gold". Ww The first question before the Tribunal was whether rights in industrial property for the purpose of seeking opportunities for the disposal of which Nomad had incurred expenditure, were rights owned by it. That question arose under s.4(1)(h) of the Act which 1s in the following terms: "4,(1) Subject to the succeeding provisions of this section, a reference in this Act to eligible expenditure is a reference to expenditure that, in the opinion of the Board, has been incurred by a person primarily and principally for the purpose of creating or seeking opportunities, or creating or increasing demand, for - (h) the disposal, by that person, for reward, 1n the course of carrying on business in Australia, to persons resident outside Australia, for use and enjoyment outside Australia, of eligible industrial property rights owned by him or of eligible know-how owned by him;" The second question was whether the financial rewards gained as aresult of the efforts of Nomad 1n exploiting rights in the film overseas constituted earnings of Nomad. The Board had taken the view that those earnings were not its earnings within the meaning of s.14(3) of the Act. That question arose because Nomad had received grants under the Act 1n respect of three years prior to the grant year for which the current claim was made. Section 14(3) is in the following terms: "Where a person, other than an approved body, received, or became entitled to receive, grants in respect of eligible expenditure incurred by him during any 3 or more grant years preceding a particular grant year, a grant 15 not payable to him in respect of eligible expenditure incurred by him during that grant year unless the amount of his export earnings in that grant year exceeds $25,000 or, if the whole of that amount consists of consideration for the disposal of eligible industrial property rights or eligible know-how, $10,000." The Administrative Appeals Tribunal decided not to review the decision of the Board on the ground that the rights in respect of which Nomad had incurred the relevant expenditure were not rights owned by Nomad, but were rights in which its only interest was that of an exclusive licensee of rights of copyright. Unfortunately 1t did not deal with the second question on the ground that its decision on the first determined the fate of Nomad's application. I turn therefore to consider that decision. It appears that on 11 December 1980 an agreement called "This production agreement" was entered into between Radial Industries Pty. Ltd. (Radial) (called, 1n the agreement "the Investor") and Nomad Films International Pty. Btd. (called the Producer). The agreement recited that: A. The Producer has been arranging for the production of a documentary film, provisionally entitled "River of Gold" ("the Film") based on a script or treatment prepared by the Producer and annexed hereto ("the Script") and has made all the arrangements necessary to enable the production of the Film to commence. B. The Producer has agreed to transfer and assign the copyright to the Investor in the Film and to produce the Film on the terms contained in this agreement Provisions of the agreement included the following: 1l.(a) the copyright in the Script; (b) (c) (ad) the sole and exclusive right to produce as a film the Script and to exhibit the Film anywhere in the world; the sole and exclusive right to reproduce the Script and any adaptations thereot by means of sound recordings; the sole and exclusive right to use for the purposes of the production of the Film any information about the Fiim or its method of production communicated by the producer or its directors and employees to investor. The producer hereby transfers and assigns to the investor all its right title and interest in and to the Rights including without limiting the generality thereof the copyright in the Film. The Producer warrants that: (i) it is the beneficial owner the copyright in the Scri and holds the sole & exclusive right to i reproduction by means of fil of pt nd ts mn; (ii) the Script does not in any way infringe the copyright of a other person or corporation; (111) no part of the Script actionable for defamation otherwise; (1v) at the date of this agreeme 1t has not encumber mortgaged or charged t ny is or nt ed he Script or the copyright thereof ; tv) that 1t has not granted to any other person a licence of the Rights or any part thereof; (v1) that ait holds a valid and subsisting certificate issued pursuant to Section 124K of the Income Tax Assessment Act 1936 in respect of the film. 4. The Investor grants to the producer the exclusive licence subject to the due performance of the producer's obligations hereunder, to use the Script and all of the rights of the Investor therein to produce the Film. 5. The producer shall: (a) be responsible for all aspects of the production of the Film including, without limitation - 7. Upon the completion of the Film to the extent contemplated in Clause 5, it shall be delivered to the Investor or such distributor as the Investor directs, and the delivery of the Film shall complete the obligations of the Producer hereunder. 8.(1) The Investor shall pay to the Producer a fee of $60,000.00 for the production of the Film... 15. This agreement shall be interpreted in accordance with the laws of the State of Victoria. On the same day, 11 December 1980 another agreement, also called "production" agreement, which, however, provided not for production of the film, but for 1ts distribution, was entered into between Radial Industries Pty. Ltd. (called "the Manager") and Nomad (called the Distributor). This agreement recited that, Sun Kosi - River of Gold Producer (the "Partnership) was the beneficial owner of the film, that the partnership was desirous of appointing the distributor as exclusive distributor thereof, and that the distributor had agreed to accept that appointment upon the terms contained in the agreement. Included in the agreement were the following provisions: 2. Fiduciary Capacity: (a) The Manager enters into these presents in 1ts capacity as manager of the Partnership. (b) The Partnership Agreement empowers the Manager to enter into this Agreement in the terms hereof, and to bind the partners thereto. 3. Grants of Licence: (a) The Manager hereby grants to the Distributor an exclusive licence to distribute the film throughout the world. (b) Without limiting the generality of the foregoing, the licence shall confer upon the Distributor exclusive right throughout the world - (i) to exhibit, distribute, market, reissue, transmit, perform and otherwise deal in and exploit the film, in any and all languages and versions and in any form, in all media and for all purposes; and (11) to exercise the rights conferred herein in relation to television, including any diffusion service, cable or other proprietary transmission networks, and any other means of exhibition, transmission or broadcasting. (c) The licence shall subsist for a period fo sixty calendar months from the date hereof. (a) (b) (c) (d) (e) (a) (b) Rights of the Distributor: The distributor shall have the following additional rights: to change the title of the Film, to grant sub-licences, to enter into agency agreements, to make copies of the film in its original version, and in any other size, or by way of transfer to video tape, or make dubbed, titled, cut~in, synchronized and super- imposed versions in any or all languages, or authorise sub- licencees or agents to do so. to use 1ts name, and any trade mark or service mark on copies of the Film and all publicity material relating thereto. to make extracts or tra1lers of the Film, to protect the copyright of the Partnership in the Film. Covenant by the Distributor: The Distributor covenants to use its best endeavours to promote, publicise and exploit the Film. Distribution Fees: In consideration of the covenants by the distributor herein, the Manager shall pay to the Distributor by way of fees, the amount specified in the Second Schedule hereto. The said fees shall be paid by the instalments, and at the times specified in the Third Schedule. Distribution Costs: The Distributor shall bear all of the costs and expenses of every kind which are or may be incurred in or in connection with the distribution and exhibition of the Film. Provided however, that the Distributor shall have the right to deduct from the gross proceeds of the Film, as defined hereunder, withholding or other taxes imposed by countries other than Australia or any reasonable and usual fees or commissions due to any non-resident agents or sub-contractors. Appropriation of Profits: (a) (1) (1i) (111) (b) {(c) (d) In this clause, "gross proceeds of the Film" means money receivable by the Manager from: the distribution and exhibition of the Film in any part of the world; the disposal of the whole or any part of the copyright in any Music score, song or incidental music composed for the Film, or the disposal of the whole or any part of the copyright in the Script from which the Film is produced - net of any withholding or other taxes imposed by countries other than Australia or of any reasonable and usual fees or commissions due to any non-resident agents or sub- distributors. The Distributor shall maintain at its office books of account and records sufficient to accurately disclose gross proceeds of the Film. The Distributor shall provide reasonable access to books of account and records to the Manager or its authorised agent. The Distributor shall pay the gross proceeds of the Film into a bank account to be operated by the Distributor. The Distributor shall appoint a director to be co-signatory to cheques drawn against the account. The Distributor shall be deemed to receive the gross proceeds of 10. il. the Film as the agent of the Manager. (e) The Distributor shall account to the manager for all gross proceeds of the film, at intervals not exceeding 31X months. (f£) the gross proceeds of the Film shall be appropriated by the Manager as follows: (i) The first gross proceeds of the film, representing recoupment by the Manager of capital expended ta purchase the copyright in the Film and the distribution fees, being the amount specified in the Fourth Schedule hereto, shall be paid to the Manager. (11) And thereafter: Seventy per centum of the gross proceeds shall be paid to the Manager; Thirty per centum of the gross proceeds shall be paid to Nomad Films International Pty. Ltd. Covenant by the Manager: The Manager covenants with the Distributor to do any acts and execute any documents necessary to enable the Distributor to exercise the rights conferred herein. Termination of Licence: On the termination of the licence granted herein, the Distributor shall deliver to the Manager, or as the Manager may direct, all negatives, video tapes and advertising and publicity material relating to the Film, then 1ts possession or under its control. Proper Law: The proper law of this Agreement shall be the laws tor the time being of the State of Victoria." 10. The sum specified in the second schedule was $10,000. The sum specified in the fourth schedule was $70,000. Thus it appears that Radial or the Partnership agreed to pay to Nomad $60,000 for the production of the fiim and $10,000 as distribution tees and that the proceeds of the distribution less taxes to foreign countries and certain commissions were to be paid by Nomad into a bank account controlled by it, then paid to Radial to be appropriated by Radial, first, to recoup the Manager, presumably for the Partership, 1n the sum of $60,000 paid to Nomad for the production of the film and $10,000 for distribution fees, and thereafter 70% of the gross proceeds to Radial as Manager, presumably for the partnership and 30% to Nomad. The return to Nomad for its distribution work was $10,000 received from the Manager and 30% of the gross proceeds after provision of sums of $60,000 and $10,000 to the Manager. It 1s clear that, as a result of the production agreement between Radial and Nomad, Radial became the owner of the copyright in the film. The introduction of the Partnership into the distribution agreement raises questions as to who were the partners therein and how they acquired the beneficial ownership of the film. But the proceedings before the Tribunal and in this Court have been conducted on the basis that the Partnership did have such beneficial ownership including ownership of the copyright therein. ll. It is apparent that for Nomad to succeed in this appeal 1t must establish, either that the effect of the distribution agreement was to assign the copyright in the film to it for the five years of the agreement, or, that being an exclusive licensee of copyright rights in the film, ownership of the licence constituted an eligible industrial property right owned by 1t within the meaning of s.4(1)(h) of the Act. Construction of the definition in s.3(1) T turn first to this latter aspect of the problem. Eligible industrial property rights are defined in s.3(1) as follows:- "Seligible industrial property rights' means rights in relation to inventions or trade marks, or copyright in relation to works, designs and other things, being - (a) inventions, works, designs or things that, in the opinion of the Board, have, to a substantial extent, resulted from research or work performed in Australia; or (b) trade marks that, in the opinion of the Board, were first used in Australia or have increased in significance or value by reason of their use in Australia;" The question is whether upon its proper construction the expression "eligible industrial property rights" means, in relation to copyright, the rights comprised in copyright, in relation to works, designs or other things, conceived of as copyright and every right therein being in the ownership of some person. 12. It is clear that s.4(1l)(h) of the Act 1s the relevant operative statutory provision of the Act. It is designed to identify expenditure which will constitute eligible expenditure upon which a claim for an export grant may be founded. One category of such expenditure is that it was incurred in seeking opportunities for disposal overseas of rights in industrial property. It 1s disposal of rights in property, not property itself which is contemplated. Section 3(1) of the Act contains the definition of rights spoken of ain 3.4(1)(h). If the expression "eligible industrial property rights" is to be defined, that objective might he achieved by defining the relevant classes of rights in property, or the relevant classes of property in which the rights might be held, or both. The word "industrial" 15 satisfied by the nature of the property in which the relevant rights are stated to exist, namely inventions, trade marks and copyright. Ali of these are industrial in nature. So far as the definition purports to define the property which is to qualify as industrial property, that also is satisfied by the specification of three kinds of property, namely, inventions, trade marks and copyright. The question then arises whether the definition purports to specify the kind of rights in the specified property which qualify, for the purposes of the definition, as rights in that property, or, whether, on the other hand, the definition 1s unconcerned with the kind of rights, e.g. original ownership, ownership by assignment, exclusive licence on mere licence or any other 13. class of right, and 1s satisfied by the existence of any kind of right in the specified property. The definition, so far as it relates to inventions and trade marks, does not concern itself with the kind of rights in those classes ot property which qualify. It 1s satisfied where rights of any kind exist in such property. It is suggested, however, that the position is different in relation to copyright and that, for some reason, the definition in relation to copyright descends to deal with the nature of the rights held by the person concerned and specifies that the only right in copyright which satisfies the definition is the right of absolute ownership. I cannot accept this. If one were permitted to construe the definition without reference to the presence of the comma between the words "trade marks" and "or", it would be clear that eligible industrial property rights included rights of any kind in relation to copyright. Such rights would of course include rights held under ticences, exclusive or otherwise, to pertorm acts the right to perform which are comprised in copyright in relation to works, designs and other things. It 1s said, however, that the comma must be given full weight, and 1f that 1s done 1t will prevent the expression "rights in relation to" having any relationship with the word "copyright". There is, to my mind, much to be said for the 14. view that this approach to the construction of the definition 1s too narrow, and gives to the comma a significance that it does not properly possess. But accepting for the present, the view that the expression "rights in relation to" does not apply to or qualify the word "copyright", one is required to interpret the definition accordingly. The restriction necessitates that the relevant part of the definition be read as follows, namely, "eligible industrial property rights means copyright in relation to works, designs and other things", or perhaps "eligible uiundustrial property rights" means rights copyright in relation to works, designs and other things." Obviously each of these is, 1n its context, an awkward sentence. And it 1s difficuit to believe that the draughtsman would countenance its use. The former slips from the plural to the singular and each sentence slips from a reference to rights to a designation of a class of property. The definition being expressed to concern itself with rights one would expect to find therein a description or identification of rights, of some kind in some kind of property. In the first part of the definition, namely, "eligible industrial property rights means rights in relation to inventions or trade marks", it is clear that the rights referred to are rights of any kind in specified kinds of property. And it would be natural for this feature to persist in relation to copyright unless there was some reason for a different approach. Approaching the problem from this angle the key to the interpretation of the definition would appear to be to recognise that copyright 1s personal property, a chose in action comprising a collection of rights asserted by statute and recognized by the law (see per Lord Danckwerts in Chaplin v. Leslie Frewin Publishers Ltd. (1966) Ch 79 at 93. When, therefore, one derines the expression "eligible industrial property rights" as meaning copyright, one 1s inevitably saying that the eligible industrial property rights in question are those rights which are recognized by the law as appertaining to copyright. In this definition, copyright has wide coverage, namely copyright in relation to works, designs and other things. And in relation to films, those rights comprise the exclusive rights to make a copy of the film, to cause 1t to be seen and heard in public, to broadcast it and to cause the film to he transmitted to subscribers to a diffusion service. (See s.86 of the Copyright Act 1968). On this basis 1t is clear that the expression "eligible industrial property rights" includes the exclusive rights to do each and all of these things. The right to do each or any of these things is an eligible industrial property right for the purpose of the Export Market Development Grants Act 1974. And so far as the definition 1s concerned, it matters not whether that right is held as owner, assignee or licensee. Of course so far as the definition 1s concerned the plural includes the singular. See Acts Interpretation Act 1901 s.23(b). In a definition where property rights are being defined and the form of words in the definition is that those rights 16. "means rights" etc. 1t 18 peculiar to say that to accommodate the effect of the comma after "trade marks" one must, with respect to copyright, eliminate the word "rights" or the notion of rights from the expression "means rights", and read the definition as though, in relation to copyright, 1t read "eligible industrial property rights means copyright", and interpret that as meaning ownership of copyright. Yet that appears to be the result ot accomodating the comma in the way suggested. One knows that what are being defined are property rights and one sees that aclass of industrial property 1S specified. One knows that that 1s aclass of property 1n which the holding ot various classes of rights to exercise one or more of the rights comprised in copyright 1s provided for by law. One is left to conclude therefore that the rather ineleqant sentence "eligible industrial property rights" means copyright 1n relation to works, designs and other things, and does not descend to specify what kind of right in the rights comprised in copyright or one or more of them qualifies as a relevant property right. Any kind of right in what is comprised in copyright will satisfy the definition. In this way it matters not whether the words "rights in relation to", where first appearing, qualify copyright. The notion that the definition purports to identify the kind of industrial property in which rights may exist and 1s satisfied where rights of any kind exist in that property, is strong. And this 1s manifest, of course, in respect of rights in inventions and trade marks. 17. And all of this 1s supported by the consideration that 1t is the legislative purpose of the Act that, for national purposes, persons shall gain export earnings through the exploitation of industrial rights owned by them. There is no hint therein that the rights the subject of that ownership must be those of absolute ownership of the industrial property concerned rather than rights in the property arising from an interest therein, such as those of a licensee. When one comes to s.4(1)(h) ownership of rights in the industrial property the subject of exploitation is essential, but not ownership of that property. Accordingly, 1t 1s my view that even if the expression "in velation to" or "rights in relation to" in this definition are not to be read as qualifying "copyright", the definition is to be interpreted as saying that eligible industrial property rights means each of those rights which appertain to the class of property known as copyright in relation to works, designs and other things. According to circumstances persons other than the original owner of the copyright, namely, an assignee, an exclusive Licensee and a bare licensee, will have those same rights or one or more of them. Whether or not the exploitation, otherwise than by the grant of sub-licences, to do any of the relevant acts, a licensee 1s authorised to do, and whether or not an exclusive licensee has the right to grant sub-licences, Nomad certainly had that right pursuant to clause 4(b) of the distribution agreement. If thus owned, rights of copyright are capable of 18. disposal, including being granted, to another, 1n accordance with s.4(1)(h) ot the Act. See the definition of "disposal" in s.3(1) of the Act. And to refer to the rights of a licensee as rights in copyright or rights of copyright or copyright rights, would be a natural use of words and reflect the relevant concept. The detinition if inserted into 3.4(1)(h) If one accepts that wherever in the Act, "eligible industrial property rights" are referred to, one should substitute the words of the definition, then one would read s.4(l)(h) as veferring to expenditure for the purpose of seeking opportunities for the disposal by a person "of rights in relation to inventions or trade marks, or copyright in relation to works, designs or other things owned by him or of eligible know how owned by him." The "of" before "eligible know how" indicates that where 1t was the intention to refer to an item of property as opposed to a right in property, 1t was felt necessary to include that preposition. Similarly, one would think, that 1f it had been intended to refer to copyright as an item ot personal property as distinct from a right therein 1t would have been natural to include the preposition "ot" after "or" ain the expression "or copyright etc.". If it is said that the comma after "trade marks" does the work of such an "ot", and copyright is in the objective case after the expression "seeking opportunities for the disposal ot", rather than atter the expression "rights in relation to", then the "or" before copyright is unnecessary. ebro el © 19. Indeed 1f the expression copyright was used in the sense of an item of property as opposed to being related to rights in property, one might have expected to tind the expression "owned by him" after the words "trade marks", just as it appears atter the bundle of items ending with "and other things," and again after "eligible know how". Indeed the appéarance ot the expression "owned by him" after the words "and other things", being obviously applicable to the rights referred to earlier, including copyright, and then again after "know-how" indicates that there was a change in the composition, in which there was a logical break between the concept the subject of the tirst "owned by him", which were rights, and that of the second, which was an item ot property. If rights and items of property e.g. copyright, were equally the object of "disposal of" the sentence might have read "disposal of rights in relation to inventions or trade marks, or copyright 1n works designs and other things or know-how owned by him." But if, as I think, "copyright" was in the objective to "rights in relation to", but "know-how" was not, 1t was necessary to indicate this by the "of" before "eligible know-how". In my opinion this examination of the situation which obtains 1f one anserts the words of the detinition into s.4(l)(h) in lieu of the words "eligible industrial property rights" tends to support the view that, despite the comma, the words "rights in relation to" in the definition do qualify the words "copyright 1n relation to works, designs and other things." "Rights in relation to" copyright etc. A question arises as to why, 1f the meaning sought to be expressed in the definition, were that which it would bear 1f the expression "rights in relation to" applied to copyright, the same form ot enumeration of items was not used following the expression "in relation to", where 1t first appears, as 1s used where it secondly appears. Why repeatedly insert the expression "or""? Why was the definition not expressed in the terms "eligible industrial property rights" means rights in relation to inventions, trade marks and copyright in relation to works, designs and other things"? However, if this form of expression had been adopted the words "in relation to works, designs and other things" might be regarded as attached to inventions and trade marks as well as to copyright. In addition, the repetition ot "in relation to" would not have been less elegant than it 1s when the repetition is separated by the comma. There was, therefore, reason to use the expression "or" before trade marks and copyright. And once that torm of expression was adopted the comma after "trade marks" had a role to play which facilitates reading and does not unterfere with or determine the interpretation of the words in the definition. The role 1s to reflect the circumstance that inventions and trade marks are single items spoken of by single words, whereas the reference to copyright 1s not copyright simpiliciter, but a concept encompassed 1n a long phrase, namely, "copyright in relation to works, designs and other things". The comma introduces a pause appropriate to the text, "copyright" being a compound involving numerous words. Normally punctuation 15 intended to serve the words, according to the meaning sought to be expressed thereby. Without the words there is no meaning. [It 1s the meaning conveyed by the words which is the operative meaning. And where, as in this case, the comma 1s explicable in the role of the servant rather than a Master, that 1s the role which should be regarded as being played by it. {ft 18 proper to use punctuation as an aid to interpretation or as supportive of a particular interpretation where, im the context, 1t does so aid or support. see per Gibbs CJ in Ryde Municipal Council v. Macquarie University (1978) 23 ALR 41 at 44. But 1t 158 always necessary to identify the role which the comma plays. If, as for instance in relation to the comma in the definition after "works" it 1s merely to indicate that enumeration 1S in progress, or that a pause 1s convenient, it does not have any effect on the meaning. If, as in my view, 1n relation to the comma after "trade marks" it merely indicates a convenient place for a pause because there 1s a change in the construction of the enumeration, or because i1t 1s convenient to retlect the tact that the description 22. expressed 1n respect to copyright, "in works, designs and other things," does not apply to inventions and trade marks, it also has no place as a tactor controlling meaning. Mr. Pearce ian his work "Statutory Interpretation in Australia" 2nd Ed. at pp.54 and 55 expresses the view that in general courts are loath to pay regard to the punctuation of an Act. He bases that view upon the decision of the High Court in President otf the Charleton Shire v. Ruse (1912) 14 CLR 220 where the problem before the High Court was not essentially different from that arising in this case. Referring to English decisions that ain the construction of statutes punctuation 1s to be disregarded Isaacs J. at p.229 said: "But although I am not prepared to disregard wholly the punctuation of an Act, 1t would be unsate to allow it to govern construction." The decision of the Court reflected this approach. Also Schutt J. in Mayor of Geelong v. Geelong Harbour Trust Commission (1923) VLR 652 said at p.657, "although punctuation is not to be entirely disregarded, 1t 1s not to be allowed to control the meaning ot the words where such meaning seems otherwise reasonably clear." Brinsden J. in Conigrayve v. Tanner (1978) WAR 225 at 230, said: "{f the meaning of the statute 128 so strong, punctuation and brackets, however used, would not persuade a court to interpret the statute contrary to that meaning". In relation to the detinition in question it 1s the case, that 1f the comma 1s given its proper role, not only are rights 1n relation to copyright within the meaning of the expression being defined, but that meaning accords with the purpose and object of the Act. According to s.15AA of the Acts Interpretation Act 1901 a construction of a provision of an Act that would promote the purpose or object underlying the Act (whether that purpose or object 15 expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object. Obviously the underlying purpose of the Export Market Development Grants Act 1974 1s to encourage persons to expend effort and money in the exploitation overseas of rights in industrial property such as inventions, trade marks and copyright and todo so for the purpose of encouraging Australlans to improve their skills and capacity to produce works ot signiticance and of building up the foreign credits to be reflected in Australia's balance of trade. Both of these purposes are of importance to the nation. tt 1s clear that the encouragement factor, the grant under the Act, 1s available to the person who exploits overseas rights of any kind in inventions and trade marks. [t is clear that 1t 18 available ta a person who exports a copyright of which he is the owner by authorship or assignment. There is, as Lord Danckwerts said in Chaplin v. Leslie Frewin (Publishers) Ltd. (supra) at p.93 very little difference between an assignment and an exclusive licence relating to copyright. The amount of #tfort and expenditure put into the exploitation ot the copyright by a licensee will not be less than that used or expended by an assignee or original owner. The object or burlding up of export earnings will be achieved by the licensee to the same extent and with the same benetit to Australia as it would by an author or assignee exploiting the copyright. And the merits ot the licensee, in the way of expenditure of money or effort in earning export income 1s no less than that of an owner. Exclusion of the licensee of copyright rights from those encouraged to expend relevant ettort would be 1n contlict with the purposes and objects of the Act. It would discriminate against a licensee for no conceivable reason. It would bear all the marks or caprice or accident. Such exclusion could not be accepted 1£, ona reasonable interpretation the text or the Act would permit the inclusion or the licensee. As indicated above, to interpret the Act as providing tor such inclusion does not involve tampering with the text in any way. I have no doubt that the intention of Parliament was to include within the meaning of the expression "eligible industrial property rights" the rights of an exclusive licensee of riqhts in a copyright. In other words that on. the Proper interpretation of the definition in the expression, "in relation to" where it first appears qualities "copyright in relation to works, designs and other things". The definition may be likened toa tree, the trunk ot which 1s that part thereot which states that "eligible industrial property rights" means rights and every other part ot which 18 supported by that trunk. pection 4(i)(h) (Ownership) {It 1s said, however, that 1f the applicant 1s only the licensee of the right to perform acts of the nature of those which the owner has the exclusive right to perrorm under the Copyright Act, it 1S not the owner ot rights within the meaning ot s.4(1)(h) of the Act. {t 1s to be noted that the anterest of the applicant in the rights in question, as licensee, 15 that of one to whom has been granted an exclusive licence to distribute the film throught the world, which licence, according to the terms ot the grant, conferred upon 1t the exclusive right throughout the world to do specified things in relation to the film, including those things which by virtue of s.86 of the Copyright Act the owner ot the copyright therein had the exclusive right to do unless he has parted with such right. When one speaks of rights in relation to copyright it 1s clear that a licence granted to the licensee to pertorm acts which the owner is entitled to perform by reason of his exclusive rights therein confers a right within that description. When one speaks of copyright considered as a collection of rights recognized by the law residing 1n the owner and entitling him to the exclusive right to pertorm certain acts with respect to the relevant work, and considers the situation of an exclusive licensee of rights granted by the owner to do those same acts or one or more of 26. them, the right ot the Licensee to do those same acts 1s, in my view a property right. The collection ot rights known as copyright 1s a subject of personal property the very nature of which 18 that it consists ot rights in respect of any one ot which, separate rights in others may be created by assignment or licence. It 15 the exclusive right to do any one or more of those acts which constitutes a right of copyright. When the exclusive right to do those same things is granted to another by way of licence, that grant 18 of a property right in the relevant sense. Expenditure in seeking opportunities tor the disposal of such a right will qualify as a support for a claim for a grant under the Act. By sub-s.(2) of s.196 of the Copyright Act an assignment may be limited im any way, including any one or more of the tollowing 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 aclass of acts that 1s so specified); (b) so aS to apply to a place in or part of Australia; (c) so as to apply to part ot the period for which the copyright 15 to subsist." By sub-s.(4) of s.196: "A licence granted in respect ot a copyright by the owner of the copyright binds every successor in title to the interest in the copyright of the grantor ot the licence to 27. the same extent as the licence was binding on the grantor." Thus a licence or an exclusive licence may be granted so as to apply to any one or more ot the classes of acts that the owner of the copyright has the exclusive right to do, during any part of the period for which the copyright 1s to subsist 1s clear. Accordingly, the right to do the thing which 1s granted to the licensee 1s itself a chose in action and property of an incorporeal kind. It is therefore something of which there may be ownership. The right to exploit rights appertaining to the copyright in the film by doing the things which copyright conters the right todo, is not something capable of being in the possession of any person. Because one has an exclusive right to do something, one inevitably owns that right. There 1s nothing ancongruous about the notion ot ownership of a licence, that 18 ownership of the right to exercise an authority to do something. Thus to speak of ownership of a licence to sell liquor, to sell anything, to travel over land, is a natural use of the word and describes a well understood concept. In my view, theretore, 1f Nomad 15 but a _ licensee, expenditure incurred by 1t in creating or seeking to create opportunities for the disposal of rights for use and enjoyment outside Australia to do the things referred to in clause 3 and in clause 4(c) of the agreement which are those things set forth in 3.86 or 38.87 of the Copyright Act. 28. constitutes eligible expenditure within the meaing or s.4(1) of the Act. Assignment or Gicence It 18 said by the applicant that the distribution agreement or 11 December 1980 operated as a limited assignment to 1t of copyright in the film "Sun Kosi - River or Gold", The agreement does not contain words expressly purporting to assign the copyright to the applicant. [It 1s said, however, that this feature of the agreement 15 not conclusive. What has to be ascertained from all the terms of the agreement, interpreted in its relevant circumstances, 415 whether it was the intention of the parties that the copyright be assigned rather than that an exclusive licence of copyright rights be granted. This proposition, I apprehend, is not 1n dispute. It is discussed and relevant authorities referred to in Ricketson, Intellectual Property lst Ed. at p.359. The following authorities are in point Messager v. BBC £19293 AC 151; Jonothan Cape Ltd. v. Consolidated Press Ltd. €1954) 3 All ER 253; Re Jude's Musical Compositions Co. Ltd. (1907) 1 Ch. 651; and Chaplin v. Leslie Frewin Publishers Ltd. (1966) Ch. 79. {[t 1s pointed out by the applicant that each ot the rights constituting copyright in the tilm, as provided by . ss.86 and 87 of the Copyright Act 1s the subject of the grant ot the exclusive licence reterred to in clause 3(a) of the agreement. Thus the Licence confers on the licensee the right: (a) to cause the tilm to be seen and heard in public (clause 3¢a) amd 3(b)(1) and (211)); (b) to broadcast the film (clause 3(b) (ii); (c) to cause the film to be transmitted to subscribers to a diffusion service; (clause 3(b)(11). Clause 4 confers, as am additional right, the right to make copies of the film (clause 4(d)). It 15 clear therefore that the licence together with clause 4(d) extended to every right of which the grantor's copyright consisted. And it 1s pointed out that the operative words used in the grant of the licence are very close to those which would constitute an express assignment. By clauses 3(a) and 3(b) there 15 an express grant ot an exclusive licence to distribute the film throughout the world which "shall confer upon the distributor the exclusive right throughout the world" to exercise the rights referred to in items (a), (b) and (c) above. There can be little doubt that these words could. in certain circumstances and contexts, evidence an assignment. 30. But there is, I think, one circumstance of importance which I[ think i3 properly to be taken into account which points in the other direction. That is that two agreements were made between the applicant and Radial on the same day and each was concerned with the falm and the copyright rights therein. The first was the production agreement by which the applicant agreed in express terms "to transter and assign to (Radial Industries Pty. Ltd.) all its right, title and interest in and to the rights including without limiting the generality thereof the copyright in the Film". It was a grant ot rights in that same copyright which was the subject of the distribution agreement. The terms of the operative words of that agreement are in contrast to those in the production agreement. It 1s to be noted also that the second agreement describes the role of Radial as a Manager and the applicant as the Distributor. It 1s 1n those capacities that they enter into that agreement. The agreement arises from the desire of Radial to appoint an exclusive distributor of the film and the desire of the applicant to accept appointment as exclusive distributor upon the stated terms. Essentially the agreement zs designed to provide for distribution of the fiim by the applicant for the benefit ot both the applicant and Radial or the Partnership. It would be reasonable that only those rights in the copyright necessary to permit the applicant to carry out the distribution of the film, t# achieve its exhibition in theatres and on television by video throughout 31. the world, would be conferred on the distributor. Those rights would be the rights to exhibit, and the right to authorise other persons to exhibit. And those rights are conferred by clause 3(b)(1) and clauses 4(b) and (c). Arguments have been submitted by the parties based upon various clauses 1n the agreement that with the exception of clause 8(a)(111) no decisive indications are to be discerned therein. It seems to me, however, that with regard to clause 8(a)(211) a decisive indication does arise. It acknowledges that the licensee has the right to dispose the whole or any part of the copyright in the script from which the film is produced. Copyright in the script was expressly assigned by the applicant to Radial inthe production agreement of 11 December 1980. (Clause l(a) and 2). Clause B8(a)(1ii) of the distribution agreement provides expressly that, amongst the proceeds of the film which are receivable by Radial from the licensee, are moneys trom the disposal of the whole or any part of the copyright in the script from which the film is produced. A licensee does not have the right to dispose of the copyright in respect ot which he 1s a mere licensee, exclusive or otherwise. I[f there are to be proceeds from the disposal of the copyright 1n the script 1t can only be because the licensee may lawfully dispose of 1t. And that can only be if the licensee owns that copyright. Of course, in the context, ownership of the copyright would refer to ownership of only those aspects ot the copyright limited in time which were 32. assigned to 1t according to the provisions of s.196 of the Copyright Act. And disposal of the copyright by the applicant could only extend to those aspects thereot. The word "disposal" 13, 1n the context, not flexible 1n meaning. It inevitably includes "getting rid of". Accordingly, it would include a sale of the copyright in the script. The circumstance that the distribution agreement expressly acknowledges that the licensee, so called, has the capacity to dispose ot the copyright in the script, is significant with respect to the copyright in the tilm generally. The capacity to dispose of the copyright in the script could have been acquired only from the operative words in clause 3 ot the distribution agreement. If by those words the copyright in the script was assigned to the applicant, the copyright in the tilm was similarly assigned. Whatever surrounding circumstances have to be given weight in the interpretation of the distribution agreement, it 1s clear, that the plain meaning and necessary amplication from an express provision, which is not subject to some compelling contrary indication, must ultimately be accorded its full weight. I see nothing in or relating to the terms of the agreements of 1lL1 December 1980 carrying any such compelling contrary indication. Clause 3(g) does not do soa. On the contrary 1t requires Nomad not to overlook infringements ot copyright which might injuriously affect the value of the reversionary interest therein of Radial or the Partnership on termination of the period of the applicant's ownership thereot. The Tribunal attached great weight to the 33. probability that Radial or the Partnership it represented, would have been unlikely to part with the copyright because of income tax considerations. I have the greatest doubt whether 1t 1S permissible to use such a consideration in the interpretation of this written agreement, especially as 1t was dratted by legal advisers of Radial or the Partnership. It would be equally arguable that, it the respondent be correct in saying that the export grant depended on the applicant owning the copyright, the applicant would have been unlikely to enter the agreement unless it did assign the copyright to 1t. In addition 1t 15 not clear from the reasons for decision of the Tribunal or trom anything put before this Court in this appeal, that if the agreement did operate as a limited assignment of the copyright, income tax benefits to Radial or the Partnership would have been lost. In the end, in my view, the question of assignment or licence, must be decided by reference to the terms of the two agreements ot 11 December 1980. It is a strong argument for the respondent that the production agreement uses language of assignment and that the distribution agreement uses the language of licence. But the language of licence may be sufficient according to context and surrounding circumstances to effect an assignment. The Court will look to the substance rather than the form. If one looks at the form of the operative words in clause 3 of the distribution agreement one tinds a "grant" of "an exclusive licence to distribute the film throughout the 34. world", tegether with a statement that that licence "shall conter upon the distributor exclusive right throughout the world" to pertorm the very acts the right to pertorm which are said by s.86 of the Copyright Act 1968 to constitute the copyright in the film. That section provides, "copyright 1s the exclusive right to do all or any ot the following acts". A licence 1s something which authorises the licensee to perform certain acts. But the agreement under consideration conters something difterent, namely the exclusive right to do the acts in question. This is repetitive of s.86. It certainly describes a situation in which, to the limited extent specified, the owner of the copyright 1s conferring upon the licensee the very rights which constitute his copyright. If one adds to this the positive indication contained in clause 8(a)(111) of the agreement, one 1s forced to the conclusion that the agreement should be interpreted as ettectuating an assignment. From a commercial point of view there was a consideration which may have led to the use in the distribution agreement of the language of licence. The interest being given to the applicant was not the whole of the copyright, but one limited as to time, and the reversionary unterest therein belonged at all times in Radial or the Partnership. And the ftilm did belong to Radial or the Partnership. The applicant was to distribute the film, otherwise than as an agent tor those parties, and it had substantial obligations to them. And they hada distinct interest in maintaining what might be called a close association, and so tar as money was concerned, a dominant position. So that Radial or the Partnership or their advisers 35. although willing to grant to the applicant the rights which constituted the copyright, may have wished, so far as words went, to emphasize that the project was ina sense, ultimately theirs and Nomad's interest was essentially a partial one. And of course, aS a matter ot substance, 1t was quite immaterial to Radial or the Partnership whether the transaction was a licence or an assignment. For their purposes 1t was desirable to equip the distributor, upon whose success in distributing the film their hopes of recovering the expenses already incurred by them depended, with such rights as 1t was desirable it should have to exploit tully the potential of the film. And 1t us relevant that under the modern copyright statutes, the position of an exclusive licensee may ditfer very little from that of an assignee of the same right or rights. Accordingly, it is my view that the distribution agreement did confer upon the applicant eligible industrial property rights in the relevant copyright, even if in that description ot such rights, ownership of copyright is an essential element. Whose Earnings? There were two other 1ssues with which the Tribunai appears not to have dealt. First, whether the money gained by the applicant in its transactions with strangers in the course of distributing the film were its earnings or those of Radial or the Partnership. Hereinatter I use the term "Radial" as day a comprehending Radial or the Partnership. It the answer were that those earnings were earnings of Radial and not ot the applicant, then, the moneys gained in the course of distribution of the film would not constitute earnings of the applicant within the meaning of "his earnings" in 3.14(3) of the Act. The second was whether in distributing the film pursuant to 1ts obligations under the distribution agreement the applicant acted as agent for Radial. If the answer to this latter question were in the affirmative then, by reason of s.3(2) of the Act all the work ot distribution would be deemed to have been performed by Radial and not by the applicant and the proceeds thereof would not be earnings of the applicant but of Radial. Also in that event a question would arise as to whether the expenditure uncurred by the applicant in distributing the film was expenditure incurred by it within the meaning of s.4(1) of the Act. These issues were debated before this Court and with respect thereto I make the following observations. It was argued by Mr. Pose, for the respondent, that Nomad could not be said to have any export earnings within s.14(3) of the Act because all proceeds received by 1t, were held pursuant to the distribution agreement between itself and Radial. That agreement created a principal and agency relationship regarding their respective obligations thereunder. As the act of earning export earnings by Nomad 37. was done as an agent on behalf ot its principal, s.3(2) of the Act deems that act as done by the principal and theretore the export earnings are those not ot Nomad but of Radial. The substance or the total transaction between the applicant and Radial was that Radial wished to participate i1naé_e project which would have had advantages tor 1t and under which, 1f the film were a success, profits would accrue to it from the exploitation of the film. The applicant desired to sell the film and to distribute it throughout the world for a fee, and also to make prorit from the distribution in addition to that fee. But Radial did not desire or intend to do any of the work or incur any of the expense of exporting the film. It incurred the outlay to buy the f11lm and was willing to pay a fee to the applicant to do the work and bear the incidental expense ot distributing if. To achieve these objectives Radial bought the fiim for $60,000 and agreed to pay the $10,000 distribution fee to the applicant. It agreed also toa equip it with authority to exhibit and deal with the film and rights of copyright for the purpose of distributing the film. The applicant agreed to use its best endeavours to distribute the film and to bear the expenses involved therein and thus, hopefully, gain money from the exploitation of the tilm. It agreed to hold that money when received for the purposes of appropriation in accordance with clause 8 of the distribution agreement under which each party would receive benefits ancluding profits. The answers to each of the questions cited above depend on similar considerations. The basic question 1s whether in performing the work and incurring the expense involved in distributing the rilm the applicant acted as a principal or as the employee or agent of Radial or perhaps in partnership with Radial. To answer this question one must go to the two agreements of 11 December 1980. Did they or either of them provide that 1n doing the work and including the expenditure involved in distributing the film the applicant was to be the employee or agent or partner of Radial? It 18 clear that the terms of the agreement did not constitute the applicant an employee. None of the elements ot control or right to control the applicant in the performance of its work in distributing the tilm were present. Similarly, to my mind it is equally clear that the agreements do not provide that in distributing the film the applicant was to be the agent of Radial. The essence of the relationship of principal and agent 1s that contracts made by the agent with another in the course of his authority, create legal relationsips between the principal and that other. Agency primarily involves "the employment of a person" for the purpose of placing the principal in contractual or other relationship with a third party. The essence of such an agent's position 1s that he is but an intermediary between the other two parties". See Halsbury 4th Ed. Vol. 1 p.701. of the two agreements ot 11 December 1980 the critical one for present purposes 15 the distribution agreement. That agreement proceeds on the basis that the fiim belonged to Radial, that the Partnership desired to appoint the applicant as exclusive distributor thereof and that the applicant agreed to accept the appointment upon the terms contained in the agreement. 'Those terms provided that Radial conferred on the applicant an exclusive licence to exhibit, distribute, market and otherwise deal in the tilm for all purposes. The applicant covenanted to use its best endeavours to promote, publicise, and exploit the film. And "in consideration of the covenants" ot the applicant Radial should pay to 1t by way of fees the sum of $10,000. It was a term of the agreement that the applicant should bear all the costs and expenses which Might be incurred in connection with the distribution and exhibition of the film. The agreement provided further, by clause 8(d), that the proceeds from distribution of the tilm, less certain foreign taxes and commissions should be deemed to he received by the applicant for and on behalf of Radial, should be paid to a bank account in the name of the applicant, thereatter paid to the Manaqer ot Radial and "appropriated" by the Manager tirst, in recouping the partnership's $60,000 being the cost to it of production of the tilm and $10,000 being the fees of distribution and next by paying 70% of the balance to the Partnership and 30% thereof to the applicant. Putting clause 8(d) aside for the moment, the terms provide that the applicant shall use its best endeavours to distribute the film, and that it shall enter into such transactions with third parties as are necessary to exploit the film. It gives 1t no authority to do these things otherwise than as a principal contractor doing business on its own behalf. The agreement 1s specific that the expenses of the distribution are to be borne by the applicant. Obviously neither Radial nor the Partnership could be brought into contractual or any 40. other relationship with third persons by the applicant. Radial would have been surprised to be told it had entered into any contract negotiated by the applicant. The agreement did not constitute the applicant the agent of Radial in any way. It is clear also that for cognate reasons there was no partnership between Radial and the applicant. There was obviously no agreement between Radial and the applicant that losses incurred by the applicant in distributing the film should be shared equally or at all between Nomad and Radial. The contrary was expressly stipulated. [It 1s not unnatural that clause 8(d) of the distribution agreement should raise questions as to whether in carrying on its business as distributor of the tilm the applicant was not acting as agent tor Radial. Why else, on the receipt of money earned by 1t 1n carrying on that business should that money be deemed to be received on behalf of Radial. The answer 1s that clause 8(d} 18 a provision designed to change as between the applicant and Radial, the capacity in which the applicant should be deemed to have received and held the proceeds of its business of distributing the film. Clause 8(d) 18 expressed 1n terms ot fiction. The reality was that the proceeds had been earned by the applicant in transactions undertaken by 1 as a principal. The agreement provided that as between the applicant and Radial the proceeds, when received, should be deemed to have been received by the applicant tor and on behalf of Radial. This was a binding, albeit fictional basis upon which the relationship between the applicant and Radial should thencetorth proceed. It did not affect the character 41. or capacity ain which intact the applicant had gained the entitiement to that monev. It was because the applicant had earned and owned that money that 1t was able to make the fictional agreement with Radial in the terms ot clause 8d). Clause 8(d), in turn, recognizes the reality, namely, that the proceeds when received belonged to Nomad. It then proceeds, by way of agreement, to provide that the applicant should hold the money for Radial for the purposes of clause 8. Clause 8(d) 12s but a machinery provision, part of a scheme of appropriation ot money earned and owned by the applicant from the distribution of the film, but subject to appropriation by agreement, on terms calculated to benefit both Radial and the applicant, as therein provided. Tt 1s not a clause which purports to change the character in which the applicant earned the gross proceeds referred to. It 1S an agreement by the applicant to hold on behalf of another. money which it had earned and owned. When a person agrees that, upon receipt of money due to him as a principal party to some contract, he will hold that money as agent for another, that does nothing to the capacity as principal contractor in which the person earned, and thus came to own, the money. Once he has an entitlement as principal to the money in question, he can agree to hold 1t as agent or trustee or deal with it in any Manner without compromising his original capacity as a principal contractor. Of course, from the moment of receipt, the new agreement stamps his relationship with the new party as agent or trustee as the case may be. 42. There was, accordingly, no basis for the view that the gross proceeds ot the applicant in distributing the tilm were not "1its" earnings or, that in distributing the tilm it did so as agent tor Radial or the Partnership. Looked at in this way the agreements of 11 December 1980 achieve the objectives of the parties in relation to the project comprising the production, distribution and profitable exploitation or the film, and defined the capacity in which each should act in the carrying out of the project. Accordingly, there 1s no basis to doubt that the gross earnings referred to in clause 8 of the distribution agreement were moneys earned by the applicant and were earned as its money. The existence of an agreement that when earned it would deal with or hold that money in a particular way would not atfect the nature or ownership or those earnings when earned. And the important consideration is who earned those moneys. They were owned by the person who as a principal pertormed the services and incurred the expense which entitled him thereto in the course ot his business. Having regard to the foregoing I would allow the appeal and remit the application to the Tribunal tor reconsideration in accordance with the conclusions expressed. I further order that the respondents pay the applicant's costs of this appeal. I certify that this and the preceding forty-one (41) pages are a true copy of the Reasons for Judgment herein of his Hoppur Mr. Justice Smithers. Witeewhs Associate Dated: 30 April 1986 [N THE FEDERAL COURT UF AUSTRALIA YVicTuRIAS DISTRICT REGISTRY NO. VG 159 of 1985 GENERAL OfVISTON On appeal from the Administrative Appeals Tribunal Between: NOMAD FILMS INTERNATIUNAL PTY LTD Appellant and EXPORT DEVELOPMENT GRANTS BOARD Respondent CORAM : Smithers, Sweeney and Northrop JJ. DATE 30 May 1986 PLACE : Melbourne Reasons ror Judgment sweeney J. By notice dated 4 July 1985 Nomad Films International Pty Ltd ("Nomad") appealed against a decision of the Administrative Appeals Tribunal ("the Tribunal"), given on 7 June 1985, by which it aftirmed a decision or the Export Development Grants Board c"the Board"), rejecting a claim by Nomad tor a grant under the Export Market Development crant3 Act 1974 ("the Grants Act"). The facts were conveniently set out by the Tribunal, which recited that Nomad makes documentary films and promotes their sale and exhibition. In the grant years '(1.e. 1 July to 30 June) no 1978/79, 1979/8u and ly80/dl it incurred expenditure promoting in overseas countries tilms which 1t had made: 10 was paid in respect or that expenditure grants under the Grants Act. fn 198l/B2 it incurred expenditure overseas in respect ot the promotion of two Tilms which 1t had made, "Some of Our Airmen... Are No Longer Missing" and "Sun Kos1 - River ot told". In December 1982 it submitted to the the Board a claim ror a grant to be paid to 1t under the Grants Act 1n respect ot that expenditure, In vuctober 1983 the claim was rejected by the Board. The applicant then sought reconsideration of the decision by the Board, but the Board confirmed it in June 1984. The applicant then applied to the Tribunal under section 40A(6) of the Grants Act for review of the decision. Section 15 of the rants Act provides for the arant entitlement ot a claimant as rollows:~ "1S. Subject to this Act, the grant entitlement of a claimant in relation to a grant vear 18 an amount equal to /0% ot the eligible expenditure incurred by the claimant during that year." The meaning of "eligible expenditure" 1s stated in section 4 of the Grants Act. So tar as is relevant to these proceedings that section is as tollows:- "4, 1) Subject to the succeeding provisions of this section, a rererence in this Act to eligible expenditure 1s a reterence to expenditure that, in the opinion of the Board, has been incurred by a person primarily and principally for the purpose of creating or seeking opportunities, or creating or increasing demand, for - th) the disposal. by that person. for reward. in the course of carrying on business in Australia, to persons resident outside Australia, tor use and enjoyment outside Australia, of eligible industrial property tights owned by him; (2) For the purposes ot this section, expenditure' means expenditure to the extent to which 1t 1s incurred by a claimant .. . by way of - (a) expenses of. contributions towards expenses OL, oF payments made to an agent for the purpose or - (1) the carrying out of market research or the obtaining ot market intrormation; or (21) advertising or other means of securing publicity or soliciting pusiness, (b) expenses (including costs of delivery) that, in the opinion or the Board, are directly attributable to providing, without charge, samples or technical information to a person outsiae Australia; However, a limitation on the payment of grants 185 imposed by section 14(3) of the Grants Act in the following teérms:- "Id, (3) Where a person, other than an approved body, received, or became entitled to receive, grants in respect ot eligible ¢xpenditure incurred by him during any 3 or more grant years preceding a particular grant year, A grant 15 not payable to him in respect of eligible expenditure incurrred by him during that grant year unless the amount of his export earnings in that grant year exceeds $25,000 or, if the whole of that amount consists of consideration tor the disposal ot eligible industrial property rights or eligible know-how, $10,000." As Nomad had received grants under the Grants Act for the three grant vears immediately preceding the grant year in respect 4. or which the claim which was the subject of the decision under review in these proceedings was made. a grant was not payable to 1t unless the amount of Nomad s export earnings either exceeded $25,000 or, if the whole ot its export earnings consisted of consideration tor the disposal ot eligible industrial property rights, $10,000. Arter investigating the claim, the Board came to the conclusion that, although income had been earned by Nomad overseas in respect of the two films, 1t had not been earned by Nomad in its own right but as agent for the beneficial owners of the copyright in the films. section 3(2) of the Grants Act provides that acts done by an agent on behalf of his principal are to be deemed, ror the purposes of the Act, to be done only by the principal and not by the agent. Consequently the Board decided that Nomad's export earnings were nil, so that it did not meet the requirements ot section 14(3). At the hearing betore the Tribunal there was evidence - and 1t was agreed by the parties ~ that the export earnings in respect or the tilm "Some of Our Airmen . . ." in 1981/82 was considerably less than $10,000 and that the export earnings in respect of the rilm "Sun Kosi - River of Gold" were well in excess or $25,000. Counsel for Nomad, Mr Magee, accepted that, it the export earnings in respect of the film "Sun Kosi - River of Goid" were not the export earnings of Nomad, its export earnings did not reach the minimum required by section 14(3), even it the export earnings in respect of "Some of vUur Airmen . . ,." were attributable to Nomad. Consequentiy, both parties concentrated thelr presentation ot evidence, and their arguments before the Tribunal on matters related to the film "Sun Kosi - River of Gold" ("the frim"). Evidence was given berore the Tribunal by Nomad's finance director, Mr N.S. Manthorpe, that films made by Nomad were financed by other persons. Frovision was contained in the Income Tax Assessment Act 1936 ("the Income Tax Act") for amounts spent on making Australian tiims to be deductible from gross income in the calculation of taxable income and 1t was common ror a group or persons who otherwise had no connection with the tilm industry to combine together, or to he combined together by an entrepreneur, to provide the finance tor a film. That was the manner in which the film "Sun Kosi ~ River or Gold" was financed. Mr Manthorpe also gave evidence that 1t was usual for Nomad to enter into an agreement with the persons financing a film, or with the entrepreneur on their behalr, not only for Nomad to make a film and transfer the copyright to them, but also for them to appoint Nomad as exclusive distributor of the film throughout the world. In the present case there were two written aqreements, executed on the same day, 11 December 1980. The other party to both was Radial Industries Pty. Ltd. ("Radial"). The first was referred to by Mr Manthorpe and in the agreement itself as the "production agreement"; the second was rererred to by Mr Manthorpe as the "distribution agreement". Copies of both agreements were tendered 1n evidence. Apparently due toa drafting or typing error, the second agreement commences with the words "This production agreement is made", but the content of the agreement makes it plain that "distribution agreement" would be a more appropriate description ot it and it is so referred to by the Tribunal and in these reasons. At one stage of the investigations carried out by the Board prior to its making its decision, Mr Manthorpe informed it that the distribution agreement was not executed, that it represented a draft ot a proposed distribution arrangement which was never accepted by Nomad and that Nomad did not act in accordance with its terms in relation to the banking of the proceeds ot sale and did not receive the gross proceeds trom the distribution of the Tilm as agent for Radial. However, at the hearing before the Tribunal he said that he had not been an officer of, or employed by, Nomad at the time when the agreement was executed and that he had supplied that information to the Board as a result of a Misunderstanding. He and the managing director of the applicant, Mr D.A. Stanley, gave evidence that the distribution agreement datea 11 December 1980 was in Tact executed and during the course of the hearing before the Tribunal a signed copy was tendered as evidence. It appeared to the Tribunal from the distribution agreement that a mumber of persons tormed a partnership for the purpose of providing finance for the film, and that Radial was manager of the partnership and was acting on behalf of the persons in the partnership when Mr Stanley executed the agreements. As part of the context 1n which the production agreement and the distribution agreement came to be executed, the Tribunal reterred to the taxation aspects of the arrangements between the members of the partnership, Nomad and Radial, and set out' the 7. relevant sections or the Income Tax Assessment Act 1936, under which ownership of copyright was a condition or entitlement to certain deductions in respect or amounts spent on making Australian films. The Tribunal was of opinion that, as the persons who provided the finance for the tilm "Sun Kosi - River of Gold" did so to derive taxation benefits. 1t was unlikely that any or them intended to do anything, or did anything which would have involved them in loss of ownership of copyright. Mr Stanley gave evidence that the agreements were drafted by Radial's solicitors and that he travelled to Sydney to sign them. The Tribunal expressed the opinion that "undoubtedly the solicitors would have been concerned to ensure that the effect of the agreements was that the persons financing the tilm would 'use the unit of industrial property of which they were the owners for the purpose ot producing assessable income (see section 1241)". Sub-sections (2) and (3) of s.98 of the Copyright Act 1968 ("the Copyright Act") provide as tollows:- "98. (2) Subject to the next succeeding sub-section, the maker of a cinematograph film 1s the owner of any copyright subsisting in the rilm by virtue of this Part. (3) Where - (a) a person makes, for valuable consideration, an agreement with another person for the making of a cinematograph film by the other person; and (b) the film is made in pursuance or the agreement, 8. the first-mentioned person is, i1n the absence ot any agreement to the contrary, the owner of any copyright subsisting 1n the rilm by virtue or this Part." In the hearing before the Court 1t was common ground between the parties that the effect of s.98 was that Radial became the owner of the copyright subsisting in the film by virtue of the production agreement made by 1t and Nomad for valuable consideration. The production agreement began by reciting that Nomad had been arranging for the production of the tilm and had made all the arrangements necessary to enable the production of the film to commence, and that Nomad had "agreed to transrer and assign" the copyrignt in the film to Radial and to produce the film on the terms contained in the agreement. In the operative clauses Nomad transferred and assigned to Radial "all its right title and interest in and to the Rights including without limiting the generality thereof the copyright in the film". "The Rights" were defined in the agreement as follows: "In this agreement, the Rights' means - (a) the copyright in the Script; (b) the sole and exclusive right to produce as a film the Script and to exhibit the Film anywhere in the world; (c) the sole and exclusive right to reproduce the Script and any adaptations thereof by means otf sound recordings; (d) the sole and exclusive right to use for the purposes of the production of the Film any anformation about the Film or its method or production communicated by the Producer (Nomad) or 9. its directors and employees to Investor (Radial)." Nomad warranted that 1t was the beneficial owner of the copyright in the script and that 1t held the sole and exclusive rights to 1ts reproduction by means ot tilm, that the script did not untringe the copyright of any other person or corporation, that no part 'of 1t was actionable for defamation or otherwise, that Nomad had not encumbered mortgaged or charged the script or the copyright thereor, that it had not granted to any other person a licence of the Rights or any part thereor and that 1t held a valid and subsisting certificate issued pursuant to s.J24K of the Income Tax Act in respect of the film. Radial granted to Nomad an exclusive licence, subject to the due performance of Nomad''s obligations under the agreement, to use the script and ail the rights ot Radial therein to produce the film. Nomad accepted responsibility for all aspects of the production of the film, as set out in the agreement, and agreed to include in the completed film a copyright claim by Nomad in the usual form. Radial agreed to pay Nomad a fee of $60,000 for the production of the tilm. The distribution agreement, also made on 11 December 1980, began by reciting that "Sun Kosi - River of Gold Producer" was the beneficial owner of an Australian film, that the partnership was desirous of appointing Nomad as exclusive distributor of the film, and that Nomad had agreed to accept that appointment upon the 10. terms contained in the distribution agreement. The contrast between the recitals in the two agreements 1s striking. In the production agreement they spoke of an agreement having been made by Nomad to transter and assign the copyright in the film to Radial, whereas in the distribution agreement they made no reterence to any transfer or assignment of the copyright but rather to the desire ot the partnership to appoint Nomad as the exclusive distributor of the tilm, and Nomad's agreement to accept that appointment. There 1s an equally striking contrast between the operative clauses of the two agreements. In the production agreement Nomad transfers and assigns to Radial all its right title and interest in and to the rights specified in 1t "including without limiting the generality thereort the copyright in the film". The rights included the copyright in the script. In the operative clauses of the distribution agreement Radial granted to Nomad an exclusive licence to distribute the film throughout the world, and without limiting the generality of the foregoing, provided by clause 3(b) that "the licence shall confer upon the Distributor (Nomad) exclusive right throughout the world (1) to exhibit, distribute, market, reissue, transmit, pertorm and otherwise deal in and exploit the Film, in any and all languages and versions and in any form, in all media and for all purposes; and (11) to exercise the rights conferred herein in relation to television, including any diffusion service, cable or other proprietary transmission networks, and any other il. means of exhibition, transmission or broadcasting." The distributor (Nomad) was given, by clause 4, the following addit "(a) to change the title of the Film, (b) to grant sub-licences, (c) to enter into agency agreements, (d) to make copies of the film in its original version, and 1n any other size, or by way of transfer to video tape, or make dubbed, titled, cut-in, synchronized and superimposed versions in any or all languages, or authorise sub-licencees or agents to do so. 'e) to use 1ts name, and any trade mark or service mark on copies of the Film and all publicity material relating thereto. (f) to make extracts or trailers of the Film, (g) to protect the copyright of the Partnership in the Fiin." The term of the licence was expressed to be a period of sixty calendar months from the date of the agreement. Radial agreed to pay Nomad $10,000 for a1ts promotion and distribution of the film. Nomad agreed to bear all of the costs and expenses in connection with the distribution and exhibition of the film, provided however that 1t was to have the right to deduct from "the gross proceeds of the film as defined hereunder" withholding or other taxes imposed by countries other than Australia or any reasonable and usual fees or commissions due to any non-resident agents or sub-contractors. In clause 8 of the agreement 1t was stated that "in this clause" gross proceeds of the film means money receivable by 12. Radial from the sources then set out. The words "in this clause" must be read as "in this agreement", when one bears in mind the reference in the previous clause to the gross proceeds or the film "as defined hereunder" and to the general sense of the agreement. Clause 8 read as follows: "8. Appropriation of Protits (a) In this clause, 'gross proceeds of the Film' means Money receivable by the Manager (Radial) from: (1) the distribution and exhibition of the Film in any part or the world; (iz) the disposal of the whole or any part of the copyright in any music score, song or incidental music composed for the Film, or (11i)the disposal of the whole or any part of the copyright in the Script from which the Film 1s produced - net of any witholding or other taxes imposed by countries other than Australia or of any reasonable and usual fees or commissions due to any non-resident agents or sub~-distributors. (b) The Distributor (Nomad) shall maintain at its office books of account and records sufficient to accurately disclose gross proceeds of the Film. The Distributor shall provide reasonable access to books of account and records to the Manager or its authorised agent. (c) The Distributor shall pay the gross proceeds of the Film into a bank account to be operated by the Distributor. The Distributor shall appoint a director to be co-signatory to cheques drawn against the account. (d) The Distributor shall be deemed to receive the gross proceeds of the Film as the agent of the Manager. (e) The Distributor shall account to the Manager for all gross proceeds of the film, at intervals not exceeding six months. (£) The gross proceeds of the Film shall be appropriated by the Manager as follows: (1) The first gross proceeds of the Film, 13. representing recoupment by the Manager of capital expended to purchase the copyright in the Film and the distribution fees, being the amount specified in the Fourth Schedule hereto, shall be paid to the Manager. (i1) And thereafter: Seventy per centum or the gross proceeds shall be paid to the Manager; Thirty per centum of the gross proceeds shall be paid to Nomad Films International Pty. Ltd." Clause 10 provided for the termination of the licence as follows: "On the termination of the licence granted herein, the Distributor shall deliver to the Manager or as the Manager may direct, all negatives, video tapes and advertising and publicity material relating to the Film, then its 1ts (sic) possession or under its control." The parties presented their cases to the Tribunal on the footing that the production and distribution agreements were the only relevant agreements, but 1t appears from their terms that there was a partnership, presumably consisting of the investors in the film, of which Radial was the manager, and that there was a partnership agreement which empowered Radial as manager to enter into the distribution agreement on behalf of the partnership. It also appeared that the partnership was the beneficial owner of the film and, as has been seen, the distribution agreement spoke of Nomad protecting the copyright of the partnership in the film. The partnership agreement did not form part of the evidence before the Tribunal, nor was there any documentary evidence to 14. show that the copyright transferred and assigned by Nomad to Radial was transterred by Radial to the partnership. When this was pointed out to the parties trom the bench, they were unable to throw any further light on the question. They stated that they were content to have the case decided by the Court as turning on the answer to the question whether copyright was assigned to Nomad by Radial so 'that Nomad was entitled to claim a grant from the Board in respect or eligible expenditure within the meaning of s.4 of the Grants Act. As set out previously, s.4 defines eligible expenditure, unter alia, as expenditure that, in the opinion of the Board, has been incurred by a person primarily and principally for the purpose or creating or seeking opportunities, or creating or increasing demand for the disposal by that person, for reward, in the course of carrying on business in Australia, to persons resident outside Australia, for use and enjoyment outside Australia, of eligible industrial property owned by him. Before the Tribunal, and in the Court, Nomad's case was based on the proposition that 1t owned eligible industrial property rights. The interpretation section of the Grants Act (s.3) states that: "eligible industrial property rights" means "rights in relation to inventions or trade marks, or copyright in relation to works, designs and other things" being of the kind specified in the section. 15. Before the Tribunal, counsel for Nomad did not seek to argue that the words "rights in relation to" qualified the word "copyright" as well as the words "inventions or trademarks". The Tribunal said that they had no doubt that they did not do so. In the written summary of Nomad's submissions, handed to the Court as 1ts case was about to be opened, counsel did not seek to submit that there was any error in this opinion of the Tribunal. However, as discussion proceeded in the course of the presentation of the case tor Nomad, its counsel embraced, for the first time, the proposition that the Tribunal had erred in this respect, and that the words "rights in relation to" qualified the word "copyright", so that the section should be read as if 1t said, amongst other things, that eligible industrial property rights "means rights ain relation to copyright in relation to works, designs and other things". Such a construction would, of course, greatly simplify Nomad's task. It would not need to show that 1t owned copyright, as a right in relation to copyright would suffice. Despite the obvious advantage to Nomad of this submission, 1t had not previously been made and, in my opinion, tor good reason. When one reads the words "rights in relation to inventions or trade marks, or copyright in relation to works designs and other things" one sees that the legislature 1s making two prescriptions, one in relation to inventions or trade marks and the other in lo. relation to works designs and other things. For the former, what 1s embraced in the derinition is "rights in relation to" them, for the latter, "copyright 1n relation to" them. In relation to works, designs and other things the draftsman preferred the specific word "copyright" to the general word "rights". The comma which separates the two phrases serves to emphasize the separate treatment or the two subject matters. Nomad submitted that the phrase referring to copyright should be read as if ait said, "rights in relation to copyright in relation to works, designs and other things". That phrase would not include copyright itself, which can hardly be described as "a right in relation to copyright", which would be avery strange result. As the section is drawn, 1t evinces a plain intention to include copyright within the meaning or "eligible industrial property rights". The only way 1n which this intention could be respected, and the phrase "rights in relation to copyright" also be included would be to read the section as if it said: "'eligible industrial property rights' means rights in relation to inventions or trade marks, or copyright or rights in relation to copyright in works, designs and other things". The extent of this departure from the words of the section cannot, in my opinion, be justified. Accordingly, s.4(1)(h) of the Grants Act should be read as 17. including a requirement that eligible expenditure must be in relation to the disposal. by the person seeking a grant, of copyright in relation to works, designs and other things, owned by him. This requirement ot ownership as a condition of entitlement to a grant clearly indicates the policy ot the Act as enacted by the Parliament. I[t 1s not, 1n my opinion. open to the Court to discern some general policy that anyone who has an interest in copyright, which falls short of ownership, has an entitlement toa grant. The question then remains whether Nomad was the owner of copyright in relation to the film, within the meaning of s.4(1)(h). Section 86 of the Copyright Act provides: "For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a cinematograph film, 1s the exclusive right to do all or any of the following acts: (a) to make a copy or the film; (b) to cause the film, in so far as it consists of visual images, to be seen in public; (c) to broadcast the film; (d) to cause the film to be transmitted to subscribers to a diffusion service." Nomad submitted to the Court, as 1t had to the Tribunal, that the distribution agreement amounted to an assignment of the copyright. 18. During the course of Nomad's submissions to the Court, reference was made from the bench to the provisions of the Copyright Act relating to exclusive licences, as a result of which Nomad then submitted, in the alternative, that as the holder of an exclusive licence, 1t was the owner of copyright within the meaning of the Grants Act, even if the grant of the licence did not amount to an assignment of the copyright. It will be convenient to deal first with Nomad's original submission. Section 196 of the Copyright Act reads as follows: "(1) Copyright 1s personal property and, subject to this section, 1s 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 ot acts that is not separately specified in this Act as being comprised in the copyright but falls within a class of acts that 1s 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 etfect unless it is in writing signed by or on behalt of the assignor. (4) A licence granted in respect of a copyright by the owner of the copyright binds every successor in title to the interest in the copyright of the grantor of the licence to the same extent as the Licence was binding on the grantor." 19. An assignment of copyright may thus be Limited as to time, as to locality and as to means ot reproduction (sub-sec.(2)). In Copinger and James on Copyright (12th Edition, para 430) 1t is said that "a licence which amounts merely to a consent does not confer any interest in the right iSee Nelson v Horniman (1905-10) Macg. Cop.Cas 234). As i1t was put by Tindal C.J. in Muskett v Hill (1840) 5 Bang, N.C.694 'a dispensation or licence properly passes no interest, but only makes an action lawful which, without it, would have been unlawful'". This characteristic of a licence appears to have been recognized in s.196(4), which speaks of a licence granted in respect of a copyright by the owner binding every successor in title to the interest in the copyright of the grantor to the same extent as the licence was binding on the grantor. This provision would be unnecessary 1f, by the grant of a licence, property passed to the grantee. Section 119 of the Copyright Act confers rights upon an exclusive licensee in these terms - "Subject to the succeeding sections of this Division- (a) except against the owner of the copyright, the exclusive licensee has the same rights of action as he would have, and 1s entitled to the same remedies as he would be entitled to, by virtue of section 115 of this Act if the licence has heen an assignment, and those rights and remedies are concurrent with the rights and remedies of the owner of the copyright under that section; (b) except against the owner of the copyright, the exclusive Licensee has the same rights of action as he would have, and 1s entitled to the same remedies 20. as he would be entitled to, by virtue of section 116 of this Act if the licence had been an assignment; and (c) the owner of the copyright does not have any rights of action that he would not have, and is not entitled to any remedies that he would not be entitled to, by virtue of section 116 of this Act 1f the licence had been an assignment." Speaking of s.19 of the Copyright Act 1956 of the United Kingdom, upon which s.119 1s based, Copinger and James on Copyright (cited above) said (in para 432): "The rights of the exclusive licensee are contractual and not proprietary. The provisions of $.19 are purely procedural, entitling the exclusive licensee to enforce the proprietary rights of the copyright owner. The exclusive Licensee 1s not, however, himself the owner ot the copyright, 18 not treated as such owner (otherwise than for procedural purposes) and is not entitled to the copyright (C.8.S. United Kingdom Ltd v Charmdale Record Distributors Ltd (1979) unreported)." The Copyright Committee (UK), which was set up before the 1956 Act of the U.K. was introduced, included 1ts recommendation that a licensee be permitted to sue without joining the owner of the copyright as a defendant in Part XII of its Report, dealing with "proposals for alterations ot the law 1n matters relating to the details of procedure (p.101)". The phrase in s.119(a) of the Copyright Act "it the licence had been an assignment" means, by virtue of s.117, "1f instead of the licence there had been granted (subject to conditions corresponding as nearly as practicable with those subject to which the licence was granted) an assignment of the copyright in respect of its application to the doing, at the places and times al. authorized by the licence, ot the acts so authorized". It may be seen trom the Copyright Act that what 1s permitted to be done by an exclusive licensee may correspond closely with the rights of an assignee of copyright, but the Act continues' to recognize the distinction that an assignment passes property whereas a licence merely sanctions an action which, without it, would have been a breach of copyright. This may also be seen from the words in s.119(a) and (b) "except against the owner of the copyright" which make 1t clear that an exclusive licensee does not have the right of action based on property which an assignee would have, but 1s limited to rights based upon the contract conferring the licence, with the ownership of the copyright remaining in the assignor. In support of 1ts original submission Nomad cited cases which show that 1t is not necessary to use the words "grant" or "assign" 1f the intention to assign the copyright can be gathered from the context. (Chaplin vy Frewin 1966 Ch 79 at 94, Message v_B.5B.C. 1929 AC 151 at 155-6, Jonathon Cape v Consolidated Press 1954 1 W.L.R. 131). In my opinion, an intention to assign the copyright cannot be gathered trom the context of the present case. As has been seen, the production agreement recited that Nomad had "agreed to transfer and assign" the copyright in the film to Radial, whereas the distribution agreement did not recite any such agreement by Radial to transfer and assign the copyright to Nomad. 22. In the operative clauses of the production agreement Nomad transterred the copyright to Radial, whereas in the distribution agreement Radial granted to Nomad an exclusive licence for sixty calendar months. The contrast in the language of the two agreements made between the same parties, upon the same day, justifies and requires, 1n my opinion, the rejection of Nomad's contention that copyright was assigned to 1t by Radial. There remains for consideration Nomad' s alternative submission that as an exclusive licensee 1t should be held to own copyright. The requirement that a disposal of copyright, in order to give rise to an entitlement to a grant, must be made by the owner of copyright was introduced into the Grants Act by s.4 of Act No.192 of 1978, which inserted into s.3 of the Grants Act the present definition of "eligible industrial property rights". Then, as now, the Copyright Act did not equate the holding of an exclusive licence with ownership, but distinguished one from the other. See, for example, the interpretation section (s.10) in which 1t is said: exclusive licence' means a licence in writing signed by or on behalf of the owner or prospective owner of copyright, authorizing the licensee, to the exclusion of all other persons, to do an act that by virtue of this 23. Act, the owner of the copyright would, but for the licence, have the exclusive right to do, and exclusive licensee' has a corresponding meaning." Section 15 provides that: "For the purposes ot this Act, an act shali be deemed to have been done with the licence of the owner of a copyright if the doing of the act was authorized by a licence binding the owner of the copyright." It may be difticult in individual cases to decide whether a particular transaction amounts to the grant of a licence or to an assignment ot copyright, but the concepts themselves are separate and distinct. The latter, unlike the former, involves a change of ownership, whether 1t be 1n respect ot the whole copyright, or in the limited sense ot s.30, in respect of the doing or different acts or classes otf acts in ditterent countries or at different times. The conclusion that a person 15 no more than an exclusive licensee 1S, 1n my opinion, fatal to the contention that he owns copyright. I would dismiss the appeal, with costs. I certity that this and the preceding twentytwo (22) pages are a true copy of the Reasons for Judgment herein of The Honourable Mr. Justice Sweeney. Dated: 30 Mex Bee ca =D Associate IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V. No. G 159 of 1985 GENERAL DIVISION ON APPEAL FROM THE GENERAL ADMINISTRATIVE DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY DEPUTY PRESIDENT I.R. THOMPSON, AND MESSRS. L.J. COHN AND H.E. TRINICK, MEMBERS. BETWEEN: NOMAD FILMS INTERNATIONAL PTY. LTD. Applicant and EXPORT DEVELOPMENT GRANTS BOARD Respondent COURT: SMITHERS, SWEENEY AND NORTHROP JJ. DATE: 30 MAY 1986 PLACE: MELBOURNE REASONS FOR JUDGMENT NORTHROP J. One of the policies of the Export Market Development Grants Act 1974 ("the Grants Act") is to provide incentives for the development of export markets. This policy is made clear by a reference to the long title of the Grants Act, part of which reads as follows:- "An Act relating to Grants for the purpose of providing Incentives for the Development of Export Markets ...". The Grants Act gives effect to this policy hy the establishment of a Board by the name of the Export Development Grants Board to hear and determine claims made by persons seeking to obtain a grant under that Act; see sections 21, 12 and 13 of the Grants Act. Subject to the Grants Act, the grant entitlement of a claimant in relation to a grant year is an amount equal to 70% of the eligible expenditure incurred by the claimant during that year; see 5.15 of the Grants Act. The amount of the grant entitlement is determined by the Board; see sub-section 12(1) of the Grants Act. It should be stressed that the grant entitlement is a percentage of eligible expenditure incurred. It follows therefore, that subject to compliance with the other provisions of the Grants Act, the Hoard is required to determine the amount of the eligible expenditure incurred by a claimant during the year to which the claim relates. Once that amount has been determined, the grant entitlement is determined by a mathematical calculation and the amount of the grant entitlement is paid to the claimant out of moneys appropriated by the Parliament for the purpose; see s.42 of the Grants Act. For the purposes of these proceedings, the relevant eligible expenditure as expressed in s.4 of the Grants Act is the:- ".,. expenditure that, in the opinion of the Board, has been incurred by a person (in this case the applicant) primarily and principally for the purpose of creating or seeking opportunities, or creating or increasing demand, for- (a) eae (h) the disposal, by that person, for reward, in the course of carrying on business in Australia, to persons resident outside Australia, for use and enjoyment outside Australia, of eligible industrial property rights owned by him ...". For the purpose of these proceedings, the crucial Phrases to consider are the phrases "eligible industrial property rights" and "owned by him". Under sub-section 3(1) of the Grants Act, in that Act, unless the contrary intention appears, the phrase "eligible industrial property rights":- "means rights in relation to inventions or trade marks, or copyright in relation to works, designs and other things, being- (a) inventions, works, designs or things that, in the opinion of the Board, have, to a substantial extent, resulted from research or work performed in Australia; or (b) trade marks that, in the opinion of the Board, were first used in Australia or have increased in significance or value by reason of their use in Australia;". Nomad Films International Pty. Ltd. ("Nomad") makes documentary films and promotes their sale and exhibition outside Australia. In each of the grant years 1978/79, 1979/80 and 1980/81 Nomad claimed and was paid grants under the Grants Act. It claimed a similar grant for the grant year 1981/82. During that year, Nomad incurred expenditure in promoting, selling and exhibiting films outside Australia, but because of sub-section 14(3) of the Grants Act, was not entitled to a grant unless its export earnings exceeded the amounts specified in that sub-section. For the purposes of these proceedings, the relevant film from which export earnings were received was entitled "Sun Kos1 - River of Gold". In considering the claim by Nomad, the Board, by implication, held that in promoting, selling and exhibiting that film outside Australia, Nomad was acting as an agent on behalf of its principal, Radial Industries Pty. Ltd., ("Radial"). The Board held that the export earnings received with respect to that film were not the earnings of Nomad, but were the earnings of Radial being the principal of Nomad. Thus the Board held that sub-section 14(3) of the Grants Act prevented Nomad from being eligible for payment of a grant for that year. See also sub-section 3(2) of the Grants Act, which provides that for the purposes of the Grants Act, where an act is done by an agent on behalf of his principal, it shall be deemed to be done by the principal and not by the agent. Under the Administrative Appeals Tribunal Act 1975, Nomad sought a review of the decision of the Board rejecting its claim for a grant under the Grants Act for the grant year 1981/82. By a decision given on 7 June 1985, the Administrative Appeals Tribunal, constituted by Messrs. Thompson, Deputy President, and Cohn and Trinick, Members, affirmed the decision of the Board on the ground that the eligible industrial property rights with respect to the film were not owned by Nomad and thus Nomad did not come within the requirements of paragraph 4(1)(h) of the Grants Act. The Tribunal expressed no opinion on whether the export earnings received by Nomad were so received by it as agent for Radial. Nomad appealed from that decision of the Tribunal. The appeal is on a question of law and is within the original jurisdiction of this Court, but must be heard by a Full Court; see sub-section 44(3) of the Administrative Appeals Tribunal Act. The question of law involved, stated broadly, is whether, with respect to the film, Nomad is the owner of eligible industrial property rights under the Grants Act. That question is to he determined by a consideration of the definition of the phrase "eligible industrial property rights" and whether Nomad is the owner of those rights having regard to the proper construction of two separate agreements entered into between Nomad and Radial. Each of the agreements between Nomad and Radial was made on 11 December 1980. One agreement can be described as the production agreement and it is so named in that agreement. The other agreement can be described as the distribution agreement, although wrongly described in that agreement as the production agreement. In the production agreement, Radial 1s called the investor and Nomad is called the producer, while in the distribution agreement, Radial is called the manager and Nomad is called the distributor. The relevant terms of each of the production agreement and the distribution agreement are set out in the reasons for judgment of Smithers J. and it is not necessary to set them out in full in these reasons. Under the production agreement, Nomad was to produce the film at its own expense but Radial was to pay to Nomad §60,000 for the production of the film. Under the production agreement, Nomad transferred and assigned to Radial all its right, title and interest in and to the copyright in the film. As a resuit of the production agreement and the provisions of the Copyright Act 1968, Radial acquired the copyright in the film. This is accepted by the parties to this appeal. Before the Administrative Appeals Tribunal, the then counsel for Nomad presented the case for Nomad on the basis that the distribution agreement constituted an assignment of the copyright in the film from Radial to Nomad and thus at all relevant times, Nomad, as assignee, was the owner of the copyright in the film. The Tribunal found that the distribution agreement did not constitute an assignment of the copyright in the film and held therefore that Nomad was not the owner of the copyright in the film. In presenting the case for Nomad before this Court, senior counsel for Nomad adopted a similar approach to that which had been adopted before the Tribunal and made his submissions by reference to the two agreements and by reference to authorities which held that agreements which were in the form of licences were to be construed in an appropriate case as assignments. During the course of his submissions, his attention was drawn to the provisions of the Copyright Act 1968 relating to exclusive licences. As a result, counsel relied upon a further submission that under the distribution agreement, Radial had granted an exclusive licence of copyright in the film to Nomad and that as a result, copyright in the film was, under and for the purposes of the Grants Act, owned by Nomad. There 15 much to be said for the view that the distribution agreement does not constitute an assignment of copyright in the film from Radial to Nomad. On this issue, I agree with the reasoning of Sweeney J. Nevertheless, in my opinion, the distribution agreement grants an exclusive licence of copyright in the film to Nomad and that by reason of having that exclusive licence, Nomad is the owner of copyright in the film within the meaning of the words "owned by him" in paragraph 4(1)(h) of the Grants Act. In these proceedings, the Court has to apply the provisions of the Grants Act. In applying those provisions, the Court must keep in mind the policy and purpose of that Act. To that end, in giving reasons for judgment in this case, it is neither necessary nor desirable to develop an exegesis in relation to the concept of copyright and the law relating to copyright. It is necessary however, to make a brief reference to some aspects of copyright. These days, copyright forms part of the law which comes within the generic phrase "intellectual property". Copyright developed from common law, but now depends upon Statute. Since 1 May 1969, copyright in Australia has been regulated by the Copyright Act 1968. There are differences between the provisions of that Act and the equivalent English statutes relating to copyright. Nevertheless, the basic concept of copyright is the same in England as in Australia. As Danckwerts L.d. said in Chaplin v. Leslie Frewin (Publishers) Ltd. £1966] Ch. 71 at 93:- "There can, of course, be no question of possession because copyright is a chose in action, that is to say, a collection of rights recognised by law. There is, therefore, very little difference between assignment of the copyright and the grant of an exclusive licence," In Pacific Film Laboratories Pty. Ltd. v. Federal Commissioner of Taxation (1970) 121 C.L.R. 154, Windeyer J. discussed the essential nature of copyright as copyright existed before the Copyright Act 1968 came into operation. The passage of his judgment at pages 166-170 should be read in full. At p.167, in discussing the essential nature of a copyright, he said:- "It is not a right in an existing physical thing. It is a negative right, as it has been called, a power to prevent the making of a physical thing by copying. At one time the single word 'copy' meant the right or privilege now called copyright." Since 1 May 1969, the provisions of the Copyright Act 1968 have governed all questions of copyright in Australia. It 1s in this context that consideration must he given to the meaning of "eligible industrial property rights" in the Grants Act. For present purposes, the relevant part of the defined meaning to be given to that phrase is:- "Means ... copyright in relation to works, designs and other things, being- (a) 4... works, designs or things that, in the opinion of the Board, have, to a substantial extent, resulted from ... work performed in Australia ...". The Copyright Act does not contain any one definition of the word ""copyright". Part III of the Copyright Act, containing sections 31 to 83, is headed "Copyright In Original Literary, Dramatic, Musical and Artistic Works". That part contains provisions relating to the nature of copyright in works. Thus, sub-section 31(1) provides:- "31. (1) For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a work, is the exclusive right- (a) in the case of a literary, dramatic or musical work, to do all or any of the following acts: (i) to reproduce the work in a Material form; (ii) to publish the work; (iii) to perform the work in public; (iv) to broadcast the work; (v) to cause the work to be transmitted to subscribers to a diffusion service; (vi) to make an adaptation of the work; (vii) to do, in relation to a work that is an adaptation of the first-mentioned work, any of the acts specified in relation to the first-mentioned work in sub-paragraphs (i) to (v), inclusive; and (b) in the case of an artistic work, to do all or any of the following acts: (i) to reproduce the work in a material form; (ii) to publish the work; (iii) to include the work in a television broadcast; ~ 10 - (iv) to cause a television programme that includes the work to be transmitted to subscribers to a diffusion service." Division & of Part III of the Copyright Act contains provisions relating to designs. Those provisions are necessary because of the provisions of the Desiqns Act 1906. Part IV of the Copyright Act, containing sections 84 to 113, is headed "Copyright In Subject-Matter Other Than Works". That part contains provisions relating to the nature ef copyright in a number of things. Thus 5.85 relates to copyright in sound recordings, 5.87 relates to copyright in television broadcasts and sound broadcasts and 5.88 relates to copyright in published editions of works. For present purposes, the relevant provision is that relating to copyright in cinematograph films since here the film "Sun Kosi - River of Gold" is a cinematograph film. That section is set out in full:- "86. For the purposes of this Act, unless' the contrary intention appears, copyright, in relation to a cinematograph film, is the exclusive right to do all or any of the following acts: (a) to make a copy of the film; (b) to cause the film, in so far as it consists of visual images, to be seen in public; or, in so far as it consists of sounds, to be heard in public; (c) to broadcast the film; (d) to cause the film to be transmitted to subscribers to a diffusion service." -1l1- It is interesting to note on the facts of the present case, even without the express assignment of copyright contained in the production agreement, the copyright in the film vested in Radial; see 5.98 of the Copyright Act. Having regard to the provisions of the Copyright Act, in applying the definition of the phrase "eligible industrial property rights", in 50 far as it applies to copyright in relation to the film, the word "copyright" is to be read as the exclusive right to doall or any of the following acts: (a) to make a copy of the film; (b) to cause the film, in so far as it consists of visual images, to be seen in public; or, in so far as it consists of sounds, to be heard in public; (c) to broadcast the film; (d) to cause the film to be transmitted to subscribers to a diffusion service. It is to be stressed that the copyright is the exclusive right to do all or any of the specified acts; emphasis added. Section 30 of the Copyright Act recognises this and makes provision for cases where different persons are the owners in respect of different rights of copyright in the same mark or thing. ~ 12 - In these circumstances, it is not necessary for me to consider whether, in the definition of "eligible industrial property rights" the words "rights in relation to" apply to or qualify the word "copyright". In the present case, it does not seem to be in dispute that the film resulted from work performed in Australia. It is mow necessary to consider whether any copyright in relation to the film, in the sense of any of the exclusive rights to do any of the acts lettered (a) to (d) above, is owned by Nomad under paragraph 4(1)(h) of the Grants Act. Under the distribution agreement, Radial conferred certain rights and privileges upon Nomad. They are set out in clauses 3 and 4 of the distribution agreement and are as follows:- "3. Grant of Licence: (a) The Manager hereby grants to the Distributor an exclusive licence to distribute the film throughout the world. (b) Without limiting the generality of the foregoing, the licence shall confer upon the Distributor exclusive right throughout the world- (i) to exhibit, distribute, market, reissue, transmit, perform and otherwise deal in and exploit the Film, in any and all languages and versions and in any form, in all media and for all purposes; and (c) - 13- (ii) to exercise the rights conferred herein in relation to television, including any diffusion service, cable or other proprietary transmission networks, and any other Means of exhibition, transmission or broadcasting. The licence shall subsist for a period of sixty calendar months from the date hereof. 4. Rights of the Distributor: (a) (b) (c) (d) (e) (f) (g) The Distributor shall have the following additional rights: to change the title of the Film, to grant sub-licences, to enter into agency agreements, to make copies of the film in its original version, and in any other size, or by way of transfer to video tape, or make dubbed, titled, cut-in, synchronized and superimposed versions in any or ali languages, or authorise sub-licencees or agents to do so. to use its name, and any trade mark or service mark on copies of the Film and all publicity material relating thereto. to make extracts or trailers of the Film, to protect the copyright of the Partnership in the Film." It is not disputed that at the least, Nomad is exclusive licensee of the the rights and privileges referred to in those clauses and that some, if not all, of those rights are rights referred to in 5.86 of the Copyright Act. - 14 - In the Copyright Act 1968, unless the contrary intention appears, the phrase "exclusive licence" means:- "a licence in writing, signed by or on behalf of the owner or prospective owner of copyright, authorizing the licensee, to the exclusion of all other persons, to doan act that, by virtue of this Act, the owner of the copyright would, but for the licence, have the exclusive right to do, and 'exclusive licensee' has a corresponding meaning;". Copyright is personal property transmissible by assignment. Any successor in title to the interest of the owner of copyright takes that interest subject to any existing licence. Generally see 5.196 of the Copyright Act 1968. Part V of the Copyright Act, comprising sections 115 to 135, is headed "Remedies For Infringements of Copyright". Division 2 of Part V is headed "Actions by Owner of Copyright" and comprises sections 115 and 116. Under 5.115, the owner of a copyright may bring an action for an infringement of the copyright. Division 3 of Part V is headed "Proceedings where Copyright is subject to Exclusive Licence" and comprises sections 117 to 125. Section 119 confers rights or privileges on an exclusive licensee to bring an action for an infringement of the copyright. Paragraph (a) of that section is set out:- "119. Subject to the succeeding sections of this Division- (a) except against the owner of the copyright, the exclusive licensee has the same rights of action as he would have, and is entitled to the same remedies as he would be entitled to, by virtue of section 115 if the licence had been an assignment, and those rights and remedies are concurrent with the rights and remedies of the owner of the copyright under that section; - 15 - It should be noted that by reason of s.117, the phrase "if the licence had been an assignment" appearing in that paragraph means:- "if, instead of the licence, there had been granted (subject to conditions corresponding as nearly as practicable with those subject to which the licence was granted) an assignment of the copyright in respect of its application to the doing, at the Places and times authorized by the licence, of the acts 50 authorized;". As a result of the distribution agreement and having regard to the provisions of the Copyright Act 1968, it follows that Nomad, except as against Radial, has the same rights of action as if the exclusive licence had been an assignment. Nomad has contractual rights against Radial, but as against all other persons, Nomad has rights of action with yespect to copyright in the film, including the right to bring an action for an infringement of the copyright in the film. The procedural provisions of s.120 of the Copyright Act 1968 apply equally to Nomad and to Radial; see s.117 for the meaning to be given to the words "the other party". Thus, Radial as owner of the copyright in the film by reason of the Copyright Act 1968 cannot, except by leave of the Court, bring an action for an infringement of the copyright in the film unless Nomad is joined as a party. Likewise, with respect to Nomad. Those procedural provisions are similar to principles developed by the Courts with respect to legal and equitable owners of copyright where the equitable - 16- owner sought remedies; see Performing Right Society Ltd. v. London Theatre of Varieties Ltd. £19241 A.C. 1 per Viscount Cave L.C. at pp.13-15 and Merchant-Adventurers Ltd. v. M. Grew and Co. Ltd. £19711 3 W.L.R. 791 per Graham J. at pp.797-80. Having regard to the provisions of the Copyright Act and the provisions of the distribution agreement, can it be said that, for the purposes of the Grants Act, Nomad is the owner of eligible industrial property rights? There is no doubt that Nomad has the exclusive right to do some, if not all, of the acts specified in s.86 of the Copyright Act 1968. Nomad has the right and privilege to enforce those rights against the whole world namely by way of contract against Radial and by way of an action for infringement of the copyright against all other persons. In my opinion, Nomad has all the attributes of ownership of eligible industrial property rights. Subject to what may be said with respect to agency, Nomad has copyright in the film which has resulted from work performed in Australia. Nomad has incurred expenditure primarily and principally for the purpose of creating or seeking opportunities for the disposal for reward in the course of carrying on business in Australia to persons resident outside Australia for the use and enjoyment outside Australia of copyright in the film. For the purposes of the Grants Act, Nomad is the owner of that copyright. This is so, particularly having regard to the policy and purpose of the - 17 - Grants Act. There 1s nothing unusual or exceptional in this conclusion. One of the meanings attributed by The Shorter Oxford English Dictionary to the verb "to own" is "to have or hold as one's own, possess". In the same dictionary, the word "owner" is defined as "one who owns or holds something; one who has the rightful claim or title to a thing". There can be no question of a person having possession of copyright. Copyright in relation to the film is the exclusive right to do specified acts. In the present case, Nomad has the exclusive right to do some, if not all, of those specified acts with respect to the film. Copyright is enforced by the bringing of legal action for an infringement of the copyright. Nomad is able to bring legal action for any infringement of the copyright in the film. It can bring those legal proceedings to enforce the copyright it has in the film against the whole world. For the purposes of the Grants Act, 1t can in truth be said that it is the owner of the copyright in the film. Accordingly, I would allow the appeal and set aside the decision of the Tribunal. It remains to consider however what other orders, if any, should be made. Because the Administrative Appeals Tribunal decided that Nomad was not the owner of eligible industrial property rights in relation to the film "Sun Kosi - River of Gold", the Tribunal did not consider whether the export earnings received by Nomad with respect to that film were received by - 18 - Nomad as agent for Radial. Accordingly, the Tribunal did not consider whether Nomad had satisfied the requirements of sub-section 14(3) of the Grants Act. Likewise, the Tribunal did not determine whether the eligible expenditure incurred by Nomad was incurred by Nomad as agent for Radial; see Paragraph 4(1)(h) of the Grants Act, nor did the Tribunal determine the amount of eligible expenditure so incurred. It will be recalled that the Board, in determining that Nomad did not qualify for a grant entitlement under sub-section 12(1) of the Grants Act, held that export earnings received by Nomad with respect to the f1rlm were' s0 received as agent for Radial and accordingly, sub-section 14(3) of the Grants Act made Nomad ineligible to receive the grant. Before the Court, counsel for the Board submitted that sub-section 14(3) of the Grants Act applied. They relied upon sub-section 3(2) of the Grants Act and clause 8 of the distribution agreement. In particular, they relied upon the scheme set up by that clause and the statement in sub-clause 8(d) which is as follows:- "the Distributor (Nomad) shall be deemed to receive the gross proceeds of the Film as the agent of the Manager (Radial)". In essence, under the principles of law relating to principal and agent, the agent 1s only an intermediary between the principal and other persons. The true position is stated in Halsbury, Laws of England, 4th Ed., paragraph - 19 - 701. Agency is the relationship which exists where one person has an authority or capacity to create legal relations between a person occupying the position of principal and third persons. The relationship arises wherever one person, called "the agent", has authority to act on behalf of another, called "the principal" and consents so to act. The words "agent" and "principal" appearing in sub-section 3(2) of the Grants Act are used in this sense. Thus, if Nomad incurred eligible expenditure under paragraph 4(1)(h) of the Grants Act with respect to the film as agent of Radial, that expenditure in law would have been expenditure by Radial. In addition, under sub-section 3(2) of the Grants Act, that expenditure would be deemed to have been expended by Radial. Implicit in those propositions is the fact that expenditure incurred by Nomad, in reality, would have been expenditure incurred by Radial. However, under the distribution agreement, Nomad covenanted to use its best endeavours to promote, publicise and exploit the film. In return, Radial was to pay Nomad $10,000 by way of fees. No opinion is expressed on whether that $10,000 is to be set-off against the eligible expenditure incurred by Nomad in promoting, publicising and exploiting the film outside Australia. What is clear is that under clause 7 of the distribution agreement, Nomad is to bear all the costs and expenses incurred in or in connection with the distribution and exhibition of the film. In this context, clause 8 provides a scheme for the distribution of the profits from the film. Those profits are paid to Nomad. In clause 8, the phrase "gross proceeds of the Film" has a defined meaning but, - 20 - consistent with the unprofessional standard of the drafting of the two agreements, in that sub-clause the word "Manager" should be read "Distributor", otherwise the defined meaning of the phrase becomes meaningless. The purpose of the scheme is to ensure the orderly distribution of the gross profits of the film between Radial and Nomad in a manner which can be confirmed by reference to books of account. From moneys received, Nomad is to deduct certain taxes. The balance is to be paid into a bank account under the control of Nomad. From that amount, $70,000 is to be paid to Radial and thereafter 70% is to be paid to Radial and 30% is to be paid to Nomad. It is in this context that sub-clause 8(d) must be construed. The substance of the submission made on behalf of the Board was that Nomad, in carrying out its obligations under the distribution agreement, acted as the agent of Radial and that sub-section 3(2) of the Grants Act applies. That submission must be considered having regard to the fact that, in my opinion, Nomad was the owner of eligible industrial property rights in the film for the purposes of the Grants Act. Nomad had the exclusive right to do all or some of the acts specified in 5.86 of the Copyright Act 1968 in relation to the film. In exercising those rights, Nomad was relying upon the exclusive licence granted to it by Radial under the distribution agreement. The distribution agreement contains no express provision that in promoting, publicising and exploiting the film, Nomad was to be the agent of Radial in the sense of acting on behalf of Radial as en ad a. - 21 - an intermediary between Radial and third parties. Under the distribution agreement, in promoting, publicising the exploiting the film, Nomad was acting on its own behalf. It was taking the financial risk. It is true that Radial was to pay Nomad $10,000 but Nomad was to be responsible for all costs arising in connection with the promoting, publishing and exploiting of the film. There is nothing in either of the agreements to suggest that in so promoting, publicising and exploiting the film, Nomad was acting as agent for Radial in the sense discussed above and in the sense of the meaning of that word appearing in sub-section 3(2) of the Grants Act. What then, is the meaning to be given to sub-clause B(d) of the distribution agreement? Under clause 7 of that agreement, Nomad is liable to pay all costs and expenses of promoting, publicising and importing the film other than the specified withholding of certain taxes. Those costs and expenses are not a charge on any part of the gross proceeds of the film. In all the circumstances of this case, in my opinion, the word "agent" appearing in sub-clause 8(d) of the distribution agreement should not be given the same meaning as the word "agent" appearing in sub-section 3(2) of the Grants Act. In the sub-clause, the use of the word ""agent" is not to be given the meaning of creating a relationship where Nomad is given authority or capacity to create legal relations between Radial and third persons. The word "agent" is used in the sense of establishing rights and obligations as between Nomad and Radial only, there being no third person involved. In my opinion, in sub-clause 8(d) of the Se ae teed - 22 - o distribution agreement, the word "agent" is used in the sense of describing the position of Nomad when performing its duties in relation to distributing the gross proceeds of the film which it has received. In this regard, see Halsbury, above, paragraph 702 and in particular the following extract from that paragraph which is apposite to the present case:- "The word 'agent' is also frequently used to describe the position of a person who is employed by another to perform duties often of a technical or professional nature which he discharges as that other's alter ego and not merely as an intermediary between the principal and the third party." It follows therefore that in my opinion, the Board was in error when it decided that Nomad did not, under sub-section 14(3) of the Grants Act, receive export earnings in relation to the film "Sun Kosi - River of Gold". The amount of those export earnings has not yet been determined. In the result, I would allow the appeal, set aside the decision of the Administrative Appeals Tribunal and remit the case to the Tribunal to be heard and decided according to law after hearing such further evidence as it may decide to receive. The Board should pay Nomad's costs of the appeal. a 2 4 T cetuly rhet tins and thet weul Wone (2\) ; p.ccediay pages are 2 Luc copy Of the } Reason, tor Judement bere of the Honomable Mr. Jusnce hoor Vnrop Associate Dated: és Ey {8 6