FEDERAL COURT OF AUSTRALIA Australasian Performing Right Association Limited v Metro on George Pty Limited [2004] FCA 1371 COSTS – "one-third off" rule – where the court has found breach of copyright - whether proceedings could more suitably have been brought in another court – where a small amount of damages is claimed – where an injunction is also sought Federal Court RulesO 62 r 36A(1) and O 62 r 36A(2) Australian Performing Right Association Ltd v Pashalidis [2000] FCA 1815 Fasold v Roberts (unreported, Sackville J, 11 September 1997) LED Builders Pty Ltd v Hope (1994) 53 FCR 10 Magenta Nominees Pty Ltd v Richard Ellis (Western Australia) Pty Ltd [1994] FCA 302 McCormick v Riverwood International (Australia) Pty Ltd [2000] FCA 32 Reidy's Lures Pty Ltd v Basser Millyard Pty Ltd [2003] FCA 1242 Tenji v Henneberry & Associates Pty Ltd [1999] FCA 1259 Universal Music Australia Pty Ltd v Miyamoto [2004] FCA 982 AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LIMITED (ACN 000 016 999) v METRO ON GEORGE PTY LIMITED (ACN 064 086 693), PETER WARREN HEARNE and WARWICK WILLIAM DOUGHTY NSD1278 OF 2002 BENNETT J 26 OCTOBER 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD1278 OF 2002 BETWEEN: AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LIMITED (ACN 000 016 999) APPLICANT AND: METRO ON GEORGE PTY LIMITED (ACN 064 086 693) FIRST RESPONDENT PETER WARREN HEARNE SECOND RESPONDENT WARWICK WILLIAM DOUGHTY THIRD RESPONDENT JUDGE: BENNETT J DATE OF ORDER: 26 OCTOBER 2004 WHERE MADE: SYDNEY THE COURT: 1. Declares that the First Respondent by: (a) authorising; and (b) permitting a place of public entertainment to be used for, performances in public of the musical and literary works set out in Schedule A ('Works') at "Metro on George" at 624 George Street, Sydney, New South Wales on the respective dates specified in Schedule A ('Dates'), without a licence from the Applicant, has infringed the Applicant's copyright in the Works. 2. Declares that the Third Respondent by authorising performances in public of the Works on the Dates, without a licence from the Applicant, has infringed the Applicant's copyright in the Works. 3. Orders that the First and Third Respondents pay damages in the amount of $2,047.41. 4. Orders that the First and Third Respondents pay the Applicant's costs of the proceedings as agreed or as taxed. 5. Orders that costs not be reduced pursuant to Order 62 rule 36A of the Federal Court Rules. 6. Orders that the proceedings be dismissed as against the Second Respondent. 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 NSD 1278 OF 2002 BETWEEN: AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LIMITED (ACN 000 016 999) APPLICANT AND: METRO ON GEORGE PTY LIMITED (ACN 064 086 693) FIRST RESPONDENT PETER WARREN HEARNE SECOND RESPONDENT WARWICK WILLIAM DOUGHTY THIRD RESPONDENT JUDGE: BENNETT J DATE: 26 OCTOBER 2004 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I have determined that Metro on George Pty Limited ('the first respondent') and Warwick William Doughty ('the third respondent') have infringed Australasian Performing Right Association Limited's ('the applicant') copyright in the musical and literary works set out in the statement of claim. The parties agree on the orders to be made, save as to costs. 2 The proposed orders are otherwise by consent. They are: 'The Court: 1. DECLARES that the First Respondent by: (a) authorising; and (b) permitting a place of public entertainment to be used for, performances in public of the musical and literary works set out in Schedule A ('Works') at "Metro on George" at 624 George Street, Sydney, New South Wales on the respective dates specified in Schedule A ('Dates'), without a licence from the Applicant, has infringed the Applicant's copyright in the Works. 2. DECLARES that the Third Respondent by authorising performances in public of the Works on the Dates, without a licence from the Applicant, has infringed the Applicant's copyright in the Works. 3. ORDERS that the First and Third Respondents pay damages in the amount of $2,047.41. 4. ORDERS that First and Third Respondents pay the Applicant's costs of the proceedings as agreed or as taxed. 5. … 6. ORDERS that the proceedings be dismissed as against the Second Respondent.' 3 The agreed quantum of damages is $2047.41. As noted by the applicant, the agreed damages in respect of the particular infringing performances are 'trifling'. The applicant seeks a further order that costs not be reduced pursuant to O 62 r 36A of the Federal Court Rules. 4 Order 62 r 36A provides as follows: (1) Where a party is awarded judgment for less than $100,000 on a claim (not including a cross-claim) for a money sum or damages any costs ordered to be paid, including disbursements, will be reduced by one-third of the amount otherwise allowable under this Order unless the Court or a Judge otherwise orders. (2) If the Court or a Judge is of the opinion that a proceeding (including a cross-claim for a money sum or damages) brought in this Court could more suitably have been brought in another court or in a tribunal and so declares, then any costs to be paid, including disbursements, will be reduced by one-third of the amount otherwise allowable under this Order. 5 It has been said that both subrules (1) and (2) of O 62 r 36A relate to the suitability or otherwise of bringing the proceedings in the Federal Court (Magenta Nominees Pty Ltd v Richard Ellis (Western Australia) Pty Ltd [1994] FCA 302 at [10] per Carr J). It has also been held that, if the bringing of the proceeding in this Court was not inappropriate having regard to all the circumstances, it is likely to be appropriate to make an order that there be no reduction in costs (Tenji v Henneberry & Associates Pty Ltd [1999] FCA 1259 at [12] per Lee J). 6 The respondents submit these two subrules are not linked. They point to Universal Music Australia Pty Ltd v Miyamoto [2004] FCA 982 at [43] where Wilcox J observed that, even where the case is appropriately brought in this Court, O 62 r 36A(1) may apply to reduce costs where less than $100,000 is recovered, to improve the proportionality between the amount of costs required to be paid and the outcome of the case. The respondent refers to Weinberg J's decision in McCormick v Riverwood International (Australia) Pty Ltd [2000] FCA 32 at [21] – [22], wherein his Honour said there are two separate rules, one dealing with amounts recovered and the other dealing with the appropriate court in which to bring the proceedings. 7 I agree that the two subrules are to be considered independently. Where the Court is of the view that the proceedings should have been brought in another court or where judgment is for a sum less than $100,000 and the circumstances are such that the court should not exercise its discretion to reduce the amount allowable for costs, there will be a reduction in the costs to be paid by one-third. 8 Generally, the Court has taken the view that copyright litigation is appropriately commenced in this Court, even where the claim is small in monetary terms (LED Builders Pty Ltd v Hope (1994) 53 FCR 10 ('LED') at 12 per Tamberlin J; Fasold v Roberts (unreported, Sackville J, 11 September 1997) ('Fasold'). In each case, the Court made an order under O 62 r 36A. As in Australian Performing Right Association Ltd v Pashalidis [2000] FCA 1815 ('Pashalidis'), APRA has in this case made numerous attempts to have the respondents procure a licence to authorise the performance of the relevant works before commencing the proceedings and there is no suggestion that the proceedings were not prosecuted with due diligence. In Pashalidis Moore J determined that O 62 r 36A may apply where relief other than an award of a money sum is sought and his Honour applied Fasoldand LED in exercising his discretion not to reduce the costs. 9 In this case, both sides were represented by senior counsel experienced in copyright matters. The matter proceeded as a test case for the parties. The issues, at the least in respect of "approval, sanction or countenance" and the degree of control that constituted authorisation of a breach of copyright were complex. I am of the view that the proceedings were appropriately commenced and heard in this Court. 10 The respondents now submit that the only order made against the respondents, apart from the order for damages, is a declaration 'which has no practical utility as it merely embodies the reasons for decision'. It is on this basis that they seek to distinguish the above cases. They rely upon the decision of Mansfield J in Reidy's Lures Pty Ltd v Basser Millyard Pty Ltd [2003] FCA 1242 where his Honour held that, while the proceedings had been properly instituted in this Court, the matter was one that involved a relatively small monetary claim, so that the scale of applicable costs should be relatively lesser. In that case, the applicant had sought injunctive relief and the matter was resolved by consent orders without the need for a hearing. Mansfield J was of the view that it was appropriate, in the circumstances of that case, that O 62 r 36A apply and that costs be reduced accordingly. 11 In the present case, it was not suggested that the quantum of damages in respect of the particularised performances was the key issue between the parties. As I noted in my reasons, the respondents were of the view that the first respondent was not required to take a licence for the venue from the applicant. In those circumstances, the real issue between the parties was their respective rights, to be reflected by a declaration from the Court. There was no need for consequential orders, other than the agreed order for damages, as the parties would clearly abide by the decision of the Court in their future dealings. It was not suggested otherwise. 12 The applicant has been successful in the principal relief sought. The subject matter of the litigation was complex. The fact that a small amount of money was involved did not reduce the complexity. In my opinion, it is appropriate to make an order under O 62 r 36A(1) so that the amount of costs allowable is not reduced by one-third. 13 The orders proposed by the applicant should be made. The Court: 1. Declares that the first respondent by: (a) authorising; and (b) permitting a place of public entertainment to be used for, performances in public of the musical and literary works set out in Schedule A ('Works') at "Metro on George" at 624 George Street, Sydney, New South Wales on the respective dates specified in Schedule A ('Dates'), without a licence from the applicant, has infringed the applicant's copyright in the Works. 2. Declares that the third respondent by authorising performances in public of the Works on the Dates, without a licence from the applicant, has infringed the applicant's copyright in the Works. 3. Orders that the first and third respondents pay damages in the amount of $2,047.41. 4. Orders that the first and third respondents pay the applicant's costs of the proceedings as agreed or as taxed. 5. Orders that costs not be reduced pursuant to Order 62 rule 36A of the Federal Court Rules. 6. Orders that the proceedings be dismissed as against the second respondent. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. Associate: Dated: 26 October 2004 Counsel for the Applicant: M Leeming Solicitor for the Applicant: Banki Haddock Fiora Solicitor for the Respondent: Esplins Date of Judgment: 26 October 2004