FEDERAL COURT OF AUSTRALIA Connect TV Pty Ltd v All Rounder Investments Pty Ltd No 2 [2012] FCA 92 Citation: Connect TV Pty Ltd v All Rounder Investments Pty Ltd (No 2) [2012] FCA 92 Parties: CONNECT TV PTY LTD ACN 119 901 932, NTV HUNGARY COMMERCIAL LIMITED LIABILITY COMPANY, PSJC NTV BROADCASTING COMPANY, JSC CHANNEL ONE RUSSIA WORLDWIDE and CHANNEL ONE RUSSIA LTD v ALL ROUNDER INVESTMENTS PTY LTD ACN 064 031 714, IP TV SOLUTIONS PTY LTD ACN 135 797 527, LINSYS NETWORKS PTY LTD ACN 088 520 825, ARTHUR DZHAGINYAN, ANATOLI ROUBINCHTEIN, RUSSIAN TV 4 U CO, LEONORA LURIE, YURI GRINBERG, STANISLAV KOZIN, GLOBUSNETTV INC, ANDREW SOMOV, V ASH TELEKANAL LTD, RUSSIAN STATE TELEVISION AND RADIO BROADCASTING COMPANY and VLADIMIR GRINBERG File number: VID 768 of 2010 Judge: TRACEY J Date of judgment: 14 February 2012 Legislation: Federal Court Rules 2011 r 39.05 Cases cited: Paras v Public Service Body Head of the Department of Infrastructure (No 2) [2006] FCA 652 cited Thomas A Edison Limited v Bullock (1912) 15 CLR 679 cited Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543 cited Dates of hearing: 13-14 February 2012 Place: Melbourne Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 19 Counsel for the Applicants: Mr J Korman Solicitor for the Applicants: Lloyds and Barclay Lawyers Counsel for the First, Tenth and Eighteenth Respondents: Mr M Goldblatt Solicitor for the First, Tenth and Eighteenth Respondents: Geoff Dillon & Co Commercial Lawyers IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 768 of 2010 BETWEEN: CONNECT TV PTY LTD ACN 119 901 932 First Applicant NTV HUNGARY COMMERCIAL LIMITED LIABILITY COMPANY Second Applicant PSJC NTV BROADCASTING COMPANY Third Applicant JSC CHANNEL ONE RUSSIA WORLDWIDE Fourth Applicant CHANNEL ONE RUSSIA LTD Fifth Applicant AND: ALL ROUNDER INVESTMENTS PTY LTD ACN 064 031 714 First Respondent IP TV SOLUTIONS PTY LTD ACN 135 797 527 Second Respondent LINSYS NETWORKS PTY LTD ACN 088 520 825 Third Respondent ARTHUR DZHAGINYAN Fourth Respondent ANATOLI ROUBINCHTEIN Eighth Respondent RUSSIAN TV 4 U CO Ninth Respondent LEONORA LURIE Tenth Respondent YURI GRINBERG Eleventh Respondent STANISLAV KOZIN Twelfth Respondent GLOBUSNET TV INC Thirteenth Respondent ANDREW SOMOV Fourteenth Respondent VASH TELEKANAL LTD Fifteenth Respondent RUSSIAN STATE TELEVISION AND RADIO BROADCASTING COMPANY Seventeenth Respondent VLADIMIR GRINBERG Eighteenth Respondent JUDGE: TRACEY J DATE OF ORDER: 14 February 2012 WHERE MADE: MELBOURNE UPON THE FIRST APPLICANT by its counsel giving the usual undertaking as to damages: THE COURT ORDERS THAT: 1. The injunctions made 14 September 2010 and 15 March 2011 against the first, tenth and eighteenth respondents respectively ("the injunctions') be discharged. 2. The first, tenth and eighteenth respondents be restrained, whether by themselves, their servants or their agents, or otherwise howsoever until the hearing and determination of this proceeding or further order from broadcasting, or otherwise facilitating the broadcast, of the television channel known as "NTV World" and also known as "NTV Mir" whether by satellite, internet or otherwise. 3. The first applicant pay the first, tenth and eighteenth respondents' costs of and incidental to their application to discharge the injunctions, such costs to be paid forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 768 of 2010 BETWEEN: CONNECT TV PTY LTD ACN 119 901 932 First Applicant NTV HUNGARY COMMERCIAL LIMITED LIABILITY COMPANY Second Applicant PSJC NTV BROADCASTING COMPANY Third Applicant JSC CHANNEL ONE RUSSIA WORLDWIDE Fourth Applicant CHANNEL ONE RUSSIA LTD Fifth Applicant AND: ALL ROUNDER INVESTMENTS PTY LTD ACN 064 031 714 First Respondent IP TV SOLUTIONS PTY LTD ACN 135 797 527 Second Respondent LINSYS NETWORKS PTY LTD ACN 088 520 825 Third Respondent ARTHUR DZHAGINYAN Fourth Respondent ANATOLI ROUBINCHTEIN Eighth Respondent RUSSIAN TV 4 U CO Ninth Respondent LEONORA LURIE Tenth Respondent YURI GRINBERG Eleventh Respondent STANISLAV KOZIN Twelfth Respondent GLOBUSNET TV INC Thirteenth Respondent ANDREW SOMOV Fourteenth Respondent VASH TELEKANAL LTD Fifteenth Respondent RUSSIAN STATE TELEVISION AND RADIO BROADCASTING COMPANY Seventeenth Respondent VLADIMIR GRINBERG Eighteenth Respondent JUDGE: TRACEY J DATE: 14 February 2012 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 On 14 September 2010 I granted interlocutory injunctions against a number of respondents in this proceeding, including the first respondent, All Rounder Investments Pty Ltd ("All Rounder"). The injunctions were granted on the motion of Connect TV Pty Ltd ("Connect TV") which, at that stage of the proceeding, was the only applicant. The injunctions restrained some of the respondents from dealing, in various ways, in what were described as "copyright broadcasts". 2 "Copyright broadcasts" were defined, for the purposes of the order, to cover a range of Russian language broadcasts. They were identified as: (a) NTV Broadcasting Company broadcasts; (b) Channel 1, Vremya, and Dom Kino Channels; (c) Russian Television and Radio – Planeta Channel; and (d) Russian language channel 'Israel Plus/Channel 9'. Connect TV asserted copyright in the various broadcasts on the basis of licensing or distribution agreements which, for the most part, were in the Russian language. 3 Although All Rounder had been served with notice of the hearing at its registered address it was not represented at the hearing. 4 Later in September 2010 Connect TV filed a statement of claim in which it pleaded breach of its copyright in the "copyright broadcasts" by some respondents including All Rounder. It was alleged that All Rounder was using the internet to transmit broadcasts of the same programs over which Connect TV was asserting copyright entitlement. 5 On 15 March 2011 injunctions in similar terms were made against the tenth and eighteenth respondents. They were both represented on that occasion. 6 By interlocutory application the first, tenth and eighteenth respondents seek to have the interlocutory injunctions discharged insofar as they bind each of them. 7 The Court's power to vary or set aside an order after it has been entered is dealt with in Rule 39.05 of the Federal Court Rules 2011 ("the Rules"). The power is discretionary in nature and may be exercised in a range of circumstances including that the order has been made in the absence of a party or that it is interlocutory in nature. The power is to be exercised with caution. As Young J observed in Paras v Public Service Body Head of the Department of Infrastructure (No 2) [2006] FCA 652 at [4], citing, inter alia, Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543 at 549-552, "the authorities in this Court indicate that it is ordinarily only exercised in exceptional circumstances." 8 Exceptional circumstances may be found to exist where there has been a failure to disclose material facts to the Court when application is made for the making of the order. 9 A particular duty falls on the party who seeks orders in the absence of another party against that party. That duty was explained by Isaacs J in Thomas A Edison Limited v Bullock (1912) 15 CLR 679 at 682 in these terms: "Uberrima fides is required, and the party inducing the Court to act in the absence of the other party, fails in his obligation unless he supplies the place of the absent party to the extent of bringing forward all the material facts which that party would presumably have brought forward in his defence to that application. Unless that is done, the implied condition upon which the Court acts in forming its judgment is unfulfilled and the order so obtained must almost invariably fall." 10 The respondents contended that, at the time the injunctions were granted, the Court was not advised of various material matters relating to each of the four classes of copyright broadcasts. 11 As to Category (a), it was contended that Connect TV's rights were granted under a distribution agreement, executed on 1 January 2007, with NTV Hungary. That agreement granted exclusive rights to Connect TV to rebroadcast programs in Australia from "NTV World". This was but one form of programming produced by NTV. Connect TV was given rights to rebroadcast NTV World by pay, cable and satellite transmission and, probably, by internet. 12 As to Category (b) the relevant licensing agreement only granted Connect TV rights in relation to satellite transmission. Furthermore Channel 1 had both domestic and international programming and the license only applied to the international programming. It was further submitted that the agreement had expired by the time the application for the injunction was made. 13 As to Category (c) the licensing agreement covered satellite transmission only. It was originally an exclusive agreement which expired on 1 May 2010. It was superseded by a non-exclusive agreement which was in force at the time the first injunction was granted. 14 As to Category (d), the relevant agreement applied only to satellite transmission. More significantly, however, the applicants' current pleading, the second further amended statement of claim, does not assert any cause of action or seek relief in relation to any rights relating to this category of broadcast. 15 Connect TV submitted that, because All Rounder had been on notice of the hearing on 14 September 2010 and had not attended, Connect TV was not under the same obligations of disclosure as would have been obtained had its application been made ex parte. In making this submission Connect TV made an implicit concession that, at that hearing, the Court had not been advised of the material matters which had been identified by the respondents. A reading of the transcript confirms that the Court's attention was not drawn to these matters. 16 It is not necessary to resolve the dispute as to whether or not the same obligations of disclosure fell upon Connect TV on 14 September 2010 as would have been the case had it made an ex parte application on that day. This is because r 39.05 allows the Court to vary or set aside an order if it was made in the absence of a party and, in any event, if the order was interlocutory in nature. Both these conditions are satisfied in this case. 17 I am mindful that caution needs to be exercised in determining whether to vary or set aside the injunctions. I am also mindful that the applications to discharge the injunctions were not made until 31 August 2011 and that the respondents have failed to establish a legal entitlement to broadcast similar programming using the internet. I am, nonetheless, persuaded that, had full disclosure occurred on 14 September 2010, injunctions in the terms which were made on that day would not have been made. "Copyright broadcasts" would have been confined to Category (a) and then only in respect of NTV World. Category (d) might also have been included. No cause of action, is, however, currently pleaded in respect of these transmissions. Connect TV concedes that it cannot justify an entitlement to injunctions covering Categories (b) and (c). 18 In these circumstances I consider that the injunctions granted on 14 September 2010 and 15 March 2011 against the first, tenth and eighteenth respondents should be discharged save as to Category (a) and then only to the extent that it covers NTV World broadcasts. 19 I will hear the parties on the form of orders which should be made to give effect to my reasons for judgment. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. Associate: Dated: 14 February 2012