FEDERAL COURT OF AUSTRALIA Hill v Lang [2012] FCA 349 Citation: Hill v Lang [2012] FCA 349 Appeal from: Hill v Lang [2012] FMCA 573 Parties: BRENTON HILL v FRANK LANG File number: SAD 177 of 2011 Judge: BESANKO J Date of judgment: 5 April 2012 Catchwords: COPYRIGHT – appeal from decision of Federal Magistrates Court – ownership of copyright in cinematograph film – where applicant filmed music performance of live band – where respondent claims applicant was paid for services – whether the applicant was the "maker" of the film for purposes of s 22(4) of the Copyright Act 1968 (Cth) – whether film was a "commissioned film" for purposes of s 98(3) of the Act. Held: the appeal be dismissed. Legislation: Federal Court of Australia Act 1976 (Cth) s 25, s 27 Copyright Act 1968 (Cth) s 10, 22, 98, 131 Copyright Amendment (Film Directors' Rights) Act 2005 (Cth) (No 130 of 1995) Cases cited: Seven Network (Operations) Ltd v TCN Channel 9 Pty Ltd (2005) 146 FCR 183 cited Sobey v Nicol and Davies [2007] FCAFC 136; (2008) 245 ALR 389, cited Wills v Australian Broadcasting Commission (No 3) (2010) 89 IPR 252, cited Date of hearing: 27 February 2012 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 39 Counsel for the Appellant: The Appellant appeared in person Counsel for the Respondent: The Respondent appeared in person IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 177 of 2011 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: BRENTON HILL Appellant AND: FRANK LANG Respondent JUDGE: BESANKO J DATE OF ORDER: 5 APRIL 2012 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The appeal be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 177 of 2011 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: BRENTON HILL Appellant AND: FRANK LANG Respondent JUDGE: BESANKO J DATE: 5 APRIL 2012 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 This is an appeal from orders made by the Federal Magistrates Court ("FMC"). In hearing and determining the appeal I am sitting as a single Judge exercising the appellate jurisdiction of the Court: Federal Court of Australia Act 1976 (Cth) s 25 (1AA). 2 The appellant was the applicant in the proceeding before the FMC. He claimed damages from the respondent for breach of copyright. The trial of the proceeding took place before Federal Magistrate Simpson in December 2010. On 27 July 2011 the FMC made an order dismissing the application and an order that the appellant pay the respondent's costs to be taxed or agreed. Federal Magistrate Simpson delivered reasons for his decision: Hill v Lang [2011] FMCA 573. 3 At the trial both parties appeared in person. This created difficulties for the proper conduct of the proceeding and those difficulties were described by Federal Magistrate Simpson in the following passage (at [2]): Neither party has had legal representation throughout the proceedings. Whilst orders were made that the matter proceed by way of pleadings, I have not found the Statement of Claim and Defence to have properly identified the issues to be decided. This is, in large part, as a result of the applicant making no effort to comply with the rules as to pleadings. In the circumstances, I have not thought it appropriate to make further orders that the parties file amended pleadings that comply with the Rules. Instead, I have proceeded on the basis that the trial concerns each of the parties claiming that they are the true owner of the copyright. I have also allowed affidavits to be received as evidence notwithstanding that they contain much objectionable material and do not comply with the rules. I have thought it necessary to adopt this approach to pleadings and evidence as no adjournment of the proceedings or further trial directions would, in my view, be likely to result in a significant improvement in either. 4 Again, on the appeal both parties appeared in person. The Federal Magistrate's reasons 5 The alleged breach of copyright related to a cinematographic film with a sound recording. 6 The Federal Magistrate began his reasons by identifying the evidence before him. The evidence in chief in the case was given by affidavit. The Federal Magistrate had made orders before the trial for the filing and serving of what he called "trial" affidavits. 7 The Federal Magistrate received in evidence five affidavits of the appellant, and the appellant was cross-examined by the respondent. Two affidavits of the respondent were received in evidence and he was cross-examined by the appellant. The respondent called three witnesses, Mr Martin McNicol, Mr Trevor Draper and Mr David Salamon, and affidavits from each of those persons were received in evidence. Mr McNicol, Mr Draper and Mr Salamon were cross-examined by the appellant. I have read the transcript of the trial. 8 The Federal Magistrate then summarised the evidence of the various witnesses and set out his assessment of the witnesses and what he referred to as the statutory framework. I will come back to those topics. Based on all the evidence before him the Federal Magistrate made the following important findings. 9 The Federal Magistrate found that the respondent is an "enthusiastic" musician who, in or about 1987, formed a band called "Hoy-Hoy!" ("the band"). The band played in live venues in the Adelaide area but its income was modest and insufficient for any of the members "to give up their day jobs" (the Federal Magistrate's words). 10 The Federal Magistrate found that the respondent was the creator and driving force behind the band. He regularly considered ways in which he could promote the band and generate income. In 1996 and 2002, the respondent initiated projects to create CDs of the band's music. 11 In or prior to May 2005 the respondent conceived of an idea of a special performance of the band later in the year to celebrate its 18th birthday. He called together two other members of the band and a Mr Mauri Berg, who was soon to become a fourth member of the band. He informed those present that he intended to invite other performers he had worked with over the years to perform at the event and that the event would be filmed and a sound recording made with the intention that a DVD would be produced. The "Celebration Performance" (as the respondent called it) would take place at the Governor Hindmarsh Hotel on 13 November 2005. 12 The funds for the project were relatively modest. Each band member, Mr Berg and a friend of the respondent decided to contribute relatively small amounts and there was a further $1,000 "available from the band's last CD project". 13 The Federal Magistrate found that in June or July 2005 there was a meeting at the Governor Hindmarsh Hotel in Adelaide to discuss the DVD project. The appellant and the respondent were present at the meeting, together with Mr Salamon and his partner, Carol. Mr Salamon was an experienced TV and film producer who was a colleague of the respondent at the Warriappendie School where they taught. The respondent knew the appellant as a music enthusiast who was also an experienced hand in film making in Australia. At the meeting the respondent discussed the nature of the project, the equipment that would be needed, the camera operators who might be available and the payments that would be made to them. Mr Salamon had previously worked with a camera operator, Ms Rachael Thompson, and he said that he would ask her whether she would be interested in being a camera operator on the project. The Federal Magistrate found that the respondent made it clear to those at the meeting that the budget was small and that camera operators would be paid only modest sums. 14 The Federal Magistrate found that after the meeting the following occurred: 1. Mr Salamon and Ms Thompson indicated to the respondent that they would act as camera operators for $200 each. 2. The appellant agreed with the respondent that he would accept payment of $300 in the first instance and $200 subsequently to act as the principal camera operator on the shoot and to edit all of the camera footage into a film for release as a commercial DVD. The respondent also agreed with the appellant that should it be necessary to hire or purchase any extra equipment or video tapes that the appellant should do so and the respondent would reimburse him for those costs. The respondent also said to the appellant that, should the completed film be successful in either sales or in being used on commercial television, the respondent would make additional payment to the appellant of an unspecified sum for his services as a camera operator and editor. 15 Over the next few months, the respondent had several discussions with the appellant concerning the composition of shots and the editing of live music video productions. It is unnecessary for me to set out the details. 16 Shortly before the Celebration Performance the respondent engaged Mr Brendon Davis, a professional audio engineer, to capture a multi-track audio recording of the performances, and to subsequently create a stereo mix of the performance of the film's soundtrack. 17 The Federal Magistrate found that the Celebration Performance took place on 13 November 2005 "apparently without difficulty". The three camera operators shot their film and the audio engineer recorded the sound. Soon after the shoot the respondent paid those who had worked on the project. Mr Salamon and Ms Thompson were each paid $200. The appellant was paid a total of $500 ("first $300 and then $200 in cash"). The appellant was also paid for the extra equipment hire costs. 18 The next stage was for the appellant and Mr Davis to work together to create the DVD. The Federal Magistrate found that the subsequent working relationship between the appellant and Mr Davis was not a happy one. It is not necessary for me to set out the details. After considerable delay, the respondent engaged Mr McNicol, who is a professional editor, to edit the original camera footage and audio into the final version of the performance for release as a DVD. The DVD was released in November 2009 and the appellant's moral rights were acknowledged in the completed DVD. 19 The above is a summary of the Federal Magistrate's findings of primary fact. As I have said, before making those findings the Federal Magistrate summarised the evidence of the various witnesses who gave evidence before him. He referred to the appellant's evidence and, in particular, his denial that there was any agreement that the respondent would pay him for his work as a camera man. He referred to the respondent's evidence about the numerous arrangements he made for the film to be produced. 20 The Federal Magistrate referred to Mr McNicol's evidence. For reasons which will become clear it is necessary to set out his summary of Mr McNicol's evidence: Mr McNichol described himself as a video producer and editor. Mr McNichol was engaged by Mr Lang in 2007 and therefore well after the film was shot and sound recorded. He was engaged to assist with the editing of the film and sound recordings as that it could be made into a commercial DVD. Mr McNichol's evidence is particularly relevant in relation to certain conversations that he says he had with Mr Hill in about September 2009. Mr McNichol says that Mr Hill came to his home to tell him (ie Mr McNichol) that he was going to be added as a further respondent to these legal proceedings and asked Mr McNichol how he felt about that. Mr McNichol responded by asking Mr Hill whether he had come to his house to threaten him in circumstances where Mr McNichol did not know Mr Hill and did not consider that he was involved in the legal issues that Mr Hill had with Mr Lang. Mr McNichol says that at some stage in the conversation he asked Mr Hill whether he had been paid to which Mr Hill responded that he had been paid but had not received as much as Mr McNichol had been paid. Mr McNichol then asked Mr Hill how much he had been paid and he said $500. Mr McNichol then asked Mr Hill whether he realised that in accepting a commission for the work done as a camera operator, the person who commissioned him owned the copyright and that Mr Hill's position was therefore flawed. 21 The Federal Magistrate also referred to the evidence of Mr Salamon to the effect that at the meeting at the Governor Hindmarsh Hotel in June or July 2005, the respondent made it clear to those present that all of the camera operators were to be paid but, because of the tight budget, they were only to be paid small sums of money. As I have said, Mr Salamon and Ms Thomson were subsequently paid for their camera work. 22 Finally, the Federal Magistrate referred to the evidence of Mr Draper who was the band's drummer and who looked after its finances. He said that prior to the Celebration Performance he paid the appellant the sum of $570 in cash from the band's funds to enable him to purchase film stock and to hire cameras for the shoot. 23 The Federal Magistrate then referred to his assessment of witnesses. He acknowledged that there were "inconsistencies in the cases presented by each of the parties". However, he said that he preferred the respondent's evidence to that of the appellant in relation to the major issues. He referred to the manner in which the respondent gave evidence and the fact that his evidence was "substantially" corroborated by the evidence of his other witnesses. Importantly, he said: In particular, I accept the evidence of Mr Lang and Mr Salamon that there was agreement reached at the July 2005 meeting that all camera operators were to be paid for the camera work that they performed. I also accept the evidence of Mr McNichol that the applicant admitted to him that he had accepted a commission of $500 for, amongst other things, the camera operator work that he performed on the project. 24 The Federal Magistrate then referred to the definition of "cinematograph film" in s 10 of the Copyright Act 1968 (Cth) and to subsections 98(2) and (3), and 22(4) of that Act. It is not necessary for me to set out the definition of cinematograph film. The other subsections provide as follows: 98 Ownership of copyright in cinematograph films … (2) Subject to the next succeeding subsection, the maker of a cinematograph film is the owner of any copyright subsisting in the film 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 of the agreement; the first mentioned person is, in the absence of any agreement to the contrary, the owner of any copyright subsisting in the film by virtue of this Part. 22 Cinematograph films (4) For the purposes of this Act: (a) a reference to the making of a cinematograph film shall be read as a reference to the doing of the things necessary for the production of the first copy of the film; and (b) the maker of the cinematograph film is the person by whom the arrangements necessary for the making of the film were undertaken. 25 The Federal Magistrate then referred to the following passage from the reasons for judgment of Lindgren J in Seven Network (Operations) Ltd v TCN Channel 9 Pty Ltd (2005) 146 FCR 183 ("Seven Network (Operations) Ltd v TCN Channel 9 Pty Ltd") (at 186-187 [12]-[13]): Professor Lahore (Copyright and Designs, at [20,145]) states in relation to s 22(4): 'The owner is therefore the producer who arranges the production of the first negative or tape of the film. The directors, actors and others involved in the making of the film have no copyright interests in the film unless they are "makers" of the film.' Also in relation to s 22(4), Professor Ricketson states (The Law of Intellectual Property: Copyright, Designs and Confidential Information at [5.45]) that the subsection's reference to the doing of things that are necessary for the production of a film: '... could include the business and financial "things" that are necessary for the production of the first copy as much as the actual physical acts involved in its making, such as the direction, shooting and editing.' Professor Ricketson suggests that s 22(4) has the effect that ordinarily the owner of the copyright in a cinematograph film is the producer, rather than the camera operator or the director. 26 The Federal Magistrate then said that in the case before him the only maker of the film was the respondent. He expressed his important conclusions as follows: On the basis of my findings detailed above, I am satisfied that Mr Lang has sole copyright in the film and sound recordings. It is he who has been the project's producer. It is he who has done the things necessary for the production of the first copy of the film. It is he who has undertaken the necessary arrangements for the making of the film. Mr Hill on the other hand, has been a camera operator who has performed those duties for a valuable consideration pursuant to an agreement with Mr Lang. He has no claim to copyright. Issues on the Appeal 27 The grounds of appeal are as follows: 1. It is clear under Sc22(4)(a)(b) that I made the necessary arrangements for the making of this film and its soundtrack. And that being correct, I am the maker and author, therefore the owner of copyright in this film. Mr Lang has claimed copyright ownership under Sc 98(3), it is an offence to claim such copyright, prior to release and without the approval of release, of this film, and Mr Lang has committed offences under Sc132AK. Further claim under Sc22(7) only applies to sound recordings, Mr Lang has no claim to the film soundtrack or has any claim to copyright in this film. Under Sc195AWB, whilst under continual duress, as from 'November 2005' Mr Lang has had no consent. 2. Mr Lang is in default of Order 11 rule 10 of Federal Magistrates Court Rules (35a Federal Court Rules) in relation to a document submitted during trial, not previously in pleadings or in any hearing or affidavit. This document was produced in a manner of surprise, misleading and designed to be prejudicial to my reputation. 3. Mr Lang has breached my Moral rights, particularly my right of Integrity. This is distressful under duress, and prejudicial to my reputation. Documents with statements I wish to be enforceable, don't appear to be in the Magistrates Court. The Magistrates Court clearly doesn't understand copyright law or the elements of the criminal code in it. I believe this decision to be an obstruction of justice, incorrect and unworthy of the law. I believe the Magistrates Court to be bias [sic] and vexatious in its decisions and that justice has not prevailed under its judgment. 4. The Director of Photography is the principle [sic] creative person responsible for the artistic and technical aspects of the film. The success of the Director of Photography reflects deeply on the success of the film. 5. In reference to Mr Lang and his associates, it is clear, I am a victim of theft, deception, exploitation and conspiracy. 28 The appellant sought to tender further evidence on the appeal. The Court has a discretion to receive further evidence in appropriate circumstances (Federal Court of Australia Act 1976 (Cth) s 27) and the relevant considerations in terms of the exercise of the discretion were identified in Sobey v Nicol and Davies [2007] FCAFC 136; (2008) 245 ALR 389 at 403-405 at [68]-[80]. The further evidence was three affidavits the appellant had sworn. At the hearing of the appeal I received the first affidavit but rejected the tender of the second and third affidavits. 29 The appellant sought to tender an affidavit he had sworn on 5 August 2011. Although it contained mainly submissions and legal argument, the respondent did not object to its tender and I received it. 30 The appellant sought to tender an affidavit he had sworn on 1 November 2011. By this affidavit he in effect sought to tender paragraphs from earlier affidavits sworn in the proceeding by the respondent and by Mr McNicol. In other words, he set out paragraphs from those affidavits in his affidavit. In addition he sought to put forward affidavit material that was before the Federal Magistrate at the trial. As to this latter category, it is not further evidence and need not be tendered. He also sought to put forward transcripts of pre-trial hearings before the Federal Magistrate, s 131 of the Copyright Act and an earlier affidavit he had sworn in the proceeding. 31 It was not easy to understand from the appellant's submissions the relevance of this material. As far as I can tell it was put forward in support of the appellant's contention that the respondent's account of the relevant events contained a number of inconsistencies, particularly as to the time at which he said he made the payments totalling $500 to the appellant. 32 The further evidence relates to a disputed issue of fact. It was available to the appellant to put forward at trial and the appellant proffered no explanation as to why that was not done. In so far as he asks me to infer that it was not put forward because of his lack of legal expertise or assistance, that was a circumstance that applied to both parties. I have read the transcript of the trial before the Federal Magistrate and I am satisfied the appellant was given an adequate opportunity to put his case. 33 In any event, I formed the view that the further evidence ought to be rejected because there was no reason to think it would have affected the result. The Federal Magistrate acknowledged inconsistencies in each party's case including that of the respondent, and in the end, based on Mr McNicol's evidence, he accepted that the respondent had paid the appellant. The Federal Magistrate was entitled to accept Mr McNicol's evidence and to proceed in that way. 34 The appellant sought to tender an affidavit he had sworn on 11 November 2011. That affidavit consisted mainly of submissions and legal argument and is plainly not admissible as further evidence. I rejected it for that reason. 35 It was not easy to follow the appellant's submissions on the appeal. I have carefully considered his written submissions filed on 8 February 2012, the submissions attached as Annexure A to his affidavit sworn on 5 August 2011 and his oral submissions. His principal contentions appear to be as follows. 36 First, the Federal Magistrate was biased against him. Having considered all of the material including the transcript of the trial, I do not think there is any basis for such a contention. Nor am I able to discern any error or even arguable error in the Federal Magistrate's rulings on evidence. Secondly, the Federal Magistrate erred in failing to recognise the distinction between arranging the performance and producing the film and that the respondent did the former but not the latter. He was therefore not the owner of the copyright in the cinematograph film. This is a challenge to a finding of fact made by the Federal Magistrate. In the end it amounted to no more than an assertion that the Federal Magistrate had erred and I reject the challenge. Thirdly, the appellant referred to various sections in the Copyright Act dealing with the assignment of copyright. That issue is only relevant if the prior issue – ownership of copyright – is decided in the appellant's favour. In that respect, I see no reason to interfere with the Federal Magistrate's conclusion that the respondent was the owner of the copyright. For the same reasons it is not necessary to address the fourth submission, which consisted of a series of submissions broadly to the effect that the respondent had committed criminal offences and that he and his associates had caused damage to the appellant which the appellant quantified at nearly $31.5 million. Fifthly, the appellant referred to various presumptions in the Copyright Act – ss 126 and 131 – and suggested that they were decisive on the question of ownership and the making of the film. Plainly that is not so in the circumstances of this case and the submission must be rejected. Sixthly, the appellant contended that the film was not a commissioned film and that he was the owner of the copyright. He referred to s 98(4) of the Copyright Act and submitted that he was a director of the film. This submission is not referred to in the Federal Magistrate's reasons. At all events, subsection 98(4) is referred to in the appellant's Statement of Claim. There are a number of answers to the submission. Subsections 98(4), (5), (6) and (7) were introduced into the Copyright Act by the Copyright Amendment (Film Directors' Rights) Act 2005 (Cth) (No 130 of 1995) and the effect of the transitional provision is that the subsections apply to films that commence to be made after 19 December 2005. This film was made or at least commenced to be made on 13 November 2005. Even if that be wrong, on the Federal Magistrate's findings (see [14] and [17] above) which, in my opinion, are not affected by error, this film would be a commissioned film and outside the scope of s 98(4). 37 Finally, there was a general complaint by the appellant about the Federal Magistrate's acceptance of the evidence of various witnesses, in particular, the respondent. I have read the transcript of the evidence and the Federal Magistrate's reasons and there is no error of law or fact in his reasoning. There is no reason to think that the two key conclusions of the Federal Magistrate – that the respondent was the maker of the film or, in the alternative, the facts fell within s 98(3) – were in error. As to the former point, a reference to Wills v Australian Broadcasting Commission (No 3) (2010) 89 IPR 252 at 258 may be added to the Federal Magistrate's reference to Seven Network (Operations) Ltd v TCN Channel Nine Pty Ltd. 38 In addition to the above matters, the appellant made reference to moral rights under the Act and film classifications, but he never made clear how any of the assertions he made demonstrated error on the part of the Federal Magistrate. 39 I reject the appellant's challenges to the Federal Magistrate's conclusions and in those circumstances the appeal must be dismissed. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate: Dated: 5 April 2012