FEDERAL COURT OF AUSTRALIA Asia Television Ltd v Yau's Entertainment Pty Ltd (No 3) [2001] FCA 811 COPYRIGHT – damages pursuant to s 115(4) Copyright Act 1968 (Cth) Copyright Act 1968 (Cth) ss 115(2), 115(4) Asia Television Ltd v Yau's Entertainment Pty Ltd [2000] FCA 254 referred to Asia Television ltd v Yau's Entertainment Pty Ltd (No 2) [2000] FCA 838 referred to Polygram Pty Ltd v Goulburn AdditionsGolden Editions Ltd Pty Ltd (No 2) (1997) 76 FCR 565 referred to Autodesk Australia Pty Ltd v Cheung (1990) 94 ALR 472 referred to ASIA TELEVISION LIMITED and ATV ENTERPRISES LIMITED v YAU'S ENTERTAINMENT PTY LIMITED, AND YAU'S ENTERTAINMENT PTY LIMITED and ASIA TELEVISION LIMITED, ATV ENTERPRISES LIMITED, CHINATOWN ENTERTAINMENT (AUSTRALIA) PTY LIMITED N 343 OF 1999 GYLES J SYDNEY 29 JUNE 2001 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 343 OF 1999 BETWEEN: ASIA TELEVISION LIMITED FIRST APPLICANT ASIA TELEVISION ENTERPRISES LIMITED SECOND APPLICANT AND: YAU'S ENTERTAINMENT PTY LIMITED ACN 003 584 183 RESPONDENT AND YAU'S ENTERTAINMENT PTY LIMITED (ACN 003 584 183) CROSS CLAIMANT ASIA TELEVISION LIMITED AND ATV ENTERPRISES LIMITED FIRST CROSS RESPONDENT CHINATOWN ENTERTAINMENT (AUSTRALIA) PTY LIMITED (ACN 073 003 675) SECOND CROSS RESPONDENT JUDGE: GYLES J DATE OF ORDER: 29 JUNE 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: The respondent pay the applicant the sum of $24,960 in damages. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 343 OF 1999 BETWEEN: ASIA TELEVISION LIMITED FIRST APPLICANT ASIA TELEVISION ENTERPRISES LIMITED SECOND APPLICANT AND: YAU'S ENTERTAINMENT PTY LIMITED ACN 003 584 183 RESPONDENT AND YAU'S ENTERTAINMENT PTY LIMITED (ACN 003 584 183) CROSS CLAIMANT ASIA TELEVISION LIMITED AND ATV ENTERPRISES LIMITED FIRST CROSS RESPONDENT CHINATOWN ENTERTAINMENT (AUSTRALIA) PTY LIMITED (ACN 073 003 675) SECOND CROSS RESPONDENT JUDGE: GYLES J DATE: 29 JUNE 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 10 March 2000 I delivered judgment in relation to some of the issues in this proceeding (Asia Television Ltd v Yau's Entertainment Pty Ltd [2000] FCA 254) ("the first judgment"). On 22 June 2000 I delivered judgment in relation to a number of other issues in the proceeding (Asia Television ltd v Yau's Entertainment Pty Ltd (No 2) [2000] FCA 838) ("the second judgment"). The proceedings were stood over for the making of orders. The orders were made on 30 June 2000. That left outstanding monetary claims by the successful applicant. After some delay and hesitation on the part of the applicant, the claim was defined on 18 December 2000 as follows: "1. It be noted that the applicants elect to claim damages under the following heads: (a) infringement of copyright of the programs 'Flaming Brothers' and 'Forest Cat II' for those episodes not supplied under the licence agreement; (b) additional damages pursuant to section 115 of the Copyright Act 1968; and (c) any amounts due and payable under the Licence Agreement between the Applicants and the Respondent." 2 As result of concessions made by both parties and rulings made during the hearing, the issue for decision is narrow, namely, the additional damages to be awarded pursuant to s 115(4) of the Copyright Act 1968 (Cth) ("the Act") for infringement of copyright in respect of the films "Flaming Brothers" and "Forest Cat II". 3 In the second judgment, I found infringement of copyright as pleaded. That was a reference to pars 52 to 56 inclusive of the amended points of claim which alleged infringement of copyright by the making and distributing of copies of episodes 31 to 36 of the film Flaming Brothers and episodes 1 to 3 of the film Forest Cat II. Examination of the orders which were made on 30 June 2000 indicates that no order was made in relation to that issue. I will proceed upon the basis that an order was intended to be, and will be, made. It will be up to the applicants to attend to this formality. 4 The applicants have elected to pursue damages under s 115(2) of the Act in relation to nine hours of film and the parties are agreed that a licence fee approach is appropriate. On that basis, the amount of damages should be assessed at $1,300 per hour, making a total of $11,700. 5 The applicants also seek damages pursuant to s 115(4) of the Act. The applicants submit that the infringement was flagrant within the meaning attributed to it by Lockhart J in Polygram Pty Ltd v Golden Editions Ltd (1997)76 FCR 565. It is submitted that the infringements were clearly deliberate, designed to deceive and for the purpose of obtaining a financial benefit. Attention was drawn to the fact that I had previously found that the conduct of the respondent was "serious, persistent and secret". Counsel for the applicants pointed out that as the licensor was located in Hong Kong it faced considerable difficulty in protecting its copyright and it was only by mistake, through the attendance of an officer at various video stores in March 1999, that the infringement was discovered. He submits that a licensee in circumstances such as the respondent is in a position of trust, which was abused in the present case. He submits that the conduct of the respondent when the issue was raised with it was misleading and deceitful. He refers me to the manner in which Wilcox J approached this issue in Autodesk Australia Pty Ltd v Cheung (1990) 94 ALR 472 (at 477-480). 6 I accept the substance of these submissions, although noting that my comment about the breaches being serious, persistent and secret was in relation to breach of the licence agreement. However, one of the matters which I had considered in coming to that conclusion was the conduct now in issue. There is no doubt that the respondent was prepared to infringe copyright deliberately for its own commercial gain. 7 Counsel for the respondent reminded me of aspects of the first judgment and took me to certain parts of the evidence to submit that when the respondent's conduct is seen in context the criticism of it loses its sting. He submitted that the applicants were acting either contrary to their obligations or unreasonably in various way at the time the infringements took place. In particular, the applicants were refusing to supply film in the quantity and of the type provided for in the agreement and, at the same time, were refusing to restrain the activities of the second cross-respondent. He submits that the infringements were a reaction to this conduct. There is substance to these submissions, as a reading of my first judgment will show. I have some sympathy for the position in which the respondent found itself at the time of these infringements. In my view, this background does take a good deal of the sting away from the points made by counsel for the applicant. 8 However, deliberate breach of copyright is not an available measure of self-help to be used with impunity. The mere payment of a commercial licence fee does not, in my view, do justice to the interests of all parties and the policy lying behind s 115(4) of the Act. Taking all things into account, I award damages of $11,700 pursuant to that section. 9 It is agreed that there is an amount of $1,560 due pursuant to the licence agreement. There will thus be an order in favour of the applicants for payment of damages totalling $24,960. I will hear argument as to costs, including costs in relation to the subpoena left outstanding from the hearing. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate: Dated: 29 June 2001 Counsel for the Applicant: JS Drummond Solicitor for the Applicant: Gilbert & Tobin Counsel for the Respondent: SD Epstein SC Solicitor for the Respondent: Frank Low Yeung & Co Date of Hearing: 18 June 2001 Date of Judgment: 29 June 2001