FEDERAL COURT OF AUSTRALIA INTELLECTUAL PROPERTY - copyright – remedies for Infringement – conviction – knowingly concerned in possession of copyright material – penalty where circumstances of defendant warrant leniency – costs order where substantial parts of prosecution not proved Copyright Act 1968 (Cth) ss133 and 139 Crimes Act 1914 (Cth) s5 Pontello v Giannotis (1989) 16 IPR 174 considered RAYMOND HENRY PAUL HOLDER V BRADLEY WILLIAM SEARLE QG 189 of 1996 SPENDER J 15 DECEMBER 1998 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 189 of 1996 BETWEEN: RAYMOND HENRY PAUL HOLDER Applicant AND: BRADLEY WILLIAM SEARLE Respondent JUDGE(S): SPENDER J DATE OF ORDER: 15/12/98 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The defendant be convicted in proceedings QG 189 of 1996. 2. The defendant be released without penalty being recorded upon the defendant entering into a recognisance in the sum of $5,000.00 to be of good behaviour for a period of two years from today. The recognisance to be given before a Registrar of the Court. 3. The defendant have one-third of the costs of proceedings QG 187 of 1996, QG 188 of 1996 and QG 189 of 1996 to be paid by the prosecution, to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 189 of 1996 BETWEEN: RAYMOND HENRY PAUL HOLDER Applicant AND: BRADLEY WILLIAM SEARLE Respondent JUDGE(S): SPENDER J DATE: 15/12/98 PLACE: BRISBANE REASONS FOR JUDGMENT I am concerned presently with questions of penalty and costs in respect of three prosecutions brought for offences under the Copyright Act 1968. At the commencement of the hearing there were applications by the prosecutor to amend each of the information and summonses and there were later applications to amend the summonses for failure to provide proper particulars. There were extensive objections to the affidavit evidence of the prosecutor, many of which were successful. On the third day of the hearing the prosecutor conceded that in the light of the rulings on evidence that I had made, the prosecution was not able to establish the elements of the charge dealing with importation, which were proceedings QG 187 of 1996 and the charge dealing with sale, QG 188 of 1996. I dismissed those charges and the questions of costs in respect of those matters was reserved. On 23 October 1998 I convicted Mr Searle of the offence, in proceedings QG 189, that he was knowingly concerned in the possession by a company, B.W. Searle Pty Ltd, of a total of nine video laser discs, four of which were of a film "Bye Bye Love", and five of which were in respect of a film "Speechless". The information of which Mr Searle was convicted alleged an offence contrary to s 139(2A) of the Copyright Act of 1996 combined with the operation of s 5 of the Crimes Act 1914, which provides that: "Any person who aids, abets, counsels or procures, or by any act or omission is in any way, directly or indirectly, knowingly concerned in or party to the commission of any offence against any law of the Commonwealth, whether past, before or after commencement of this Act, shall be deemed to have committed that offence and shall be punished accordingly." The last part of s 5 brings the operation of s 133(1)(b) into play. That section at the relevant time provided (although it has since been repealed) as follows: "A contravention by a person of subsection ... 2A of section 132 is an offence punishable on summary conviction by: … (b) if it is the first conviction of the person of an offence by reason of a contravention of that section and the article or each article to which the contravention relates is an infringing copy of a cinematograph film: (i) if the person is a natural person - a fine not exceeding $1500 for the article, or for each article, to which the offence relates or imprisonment for a period not exceeding 2 years or both; …" Since there was a total of nine articles involved, the maximum monetary penalty which may be imposed pursuant to that section as it then was, is $13,500. It is necessary to have regard to the particular facts in this case. A large number of video laser films, which were genuine products of the copyright owners of those films, were found on the Gold Coast in premises with which Mr Searle was associated. Those discs were seized in September 1995. Informations associated with those discs were not issued until October 1996 and, as I indicated, Mr Searle was convicted in October 1998 in respect of one of the three informations which had been proferred in October 1996. I am told from the bar table, and it is not disputed, that Mr Searle was made bankrupt in July of this year with a deficiency of liabilities over assets in excess of $350,000. He is currently employed as a shop assistant at a very modest salary. He is 36 years of age, married, and is expecting a child in 1999. He has no previous convictions. The personal circumstances of the defendant therefore suggest that the Court's attitude to penalty ought be lenient. On the other hand, as the section makes plain by the possibility of imprisonment for the breach with which I am presently concerned, the information on which Mr Searle has been convicted is for a serious offence. I recognise that in this case - unlike Pontello v Ceselli (1989) 16 IPR 645, Pontello v Plenty and Pontello v Giannotis (1989) 16 IPR 174, where the offences in those cases concerned pirate copies - the video laser discs the subject of the information on which Mr Searle was convicted, are genuine articles which were the subject of parallel importation contrary to the provisions of s 132 of the Copyright Act. Moreover, it seems to me that not only is there interference with the proprietary rights of others for gain, the evidence here establishes that there was a deliberate flouting by Mr Searle of the provisions of the Copyright Act; a matter which the legislature by the penalties which it imposes for such a breach, indicates is to be regarded very seriously. As early as May 1993 Mr Searle had been advised of the provisions of the Act and the possible penalties that might be imposed for contraventions of it. On the evidence I am quite satisfied that he was aware that his conduct was unlawful and it was conduct that was embarked on for financial gain. The question then is how best to reflect the seriousness of the breach with the personal circumstances of the defendant. It seems to me not irrelevant in that question to consider the question of costs. Here the prosecution failed in two of the three informations it proferred against the defendant, and was successful, in the remaining information only in respect of a small number of articles compared with the number of articles which were the subject of the information. The circumstance that the company B.W. Searle Pty Ltd is in liquidation and Mr Searle is bankrupt are factors which also have to be considered. I think the costs order that I have to make has to reflect the fact that there has been a substantial failure by the prosecution in the charges that it brought against Mr Searle. Two of the charges failed completely. In respect of the third charge, the conviction was in respect of considerably fewer articles than the prosecutor had alleged. In the particular circumstances of this case, I think that a fair way of resolving the question of costs is that, in respect of all three proceedings, I should order that the defendant have one-third of its costs to be paid by the prosecutor, those costs to be taxed if not agreed. That is a broad-brush way of dealing with the question where in respect of two matters the prosecutor failed, and in respect of a third matter it succeeded; and I have, in a way quite favourable to the prosecution, set off the costs in respect of the two matters in which it failed against the costs of the one matter in which it succeeded. On the question of penalty to be imposed in respect of the charge on which the prosecution was successful, I have had regard to the observations and the penalties that were imposed in each of the three cases to which I have earlier referred. Having regard to the personal circumstances of Mr Searle and notwithstanding the serious nature of the offence and the deliberate flouting of the provisions of the Copyright Act that the conviction involves, I think, in the circumstances, that I ought to deal, as Shepherd J did in Pontello v Giannotis in proceedings QG189 of 1996, pursuant to s 20 of the Crimes Act 1914, Commonwealth. I order that the defendant be released without sentence being passed upon him, on his entering into a recognizance in the sum of $5000, on condition that he will be of good behaviour for a period of two years from today. I direct that the recognizance be taken before a Registrar of the Court. In respect of the offence alleged in proceedings QG189 of 1996 and in respect of which I, in my reasons of 23 October 1998, indicated that I was satisfied beyond reasonable doubt, I convict the defendant. I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate: Dated: 15/12/98 Counsel for the Applicant: D K Boddice Solicitor for the Applicant: Commonwealth Director of Public Prosecutions Counsel for the Respondent: S S W Couper QC Solicitor for the Respondent: McLaughlins Date of Hearing: 15 December 1998 Date of Judgment: 15 December 1998