Q_ 1993 vuvuM EN 1b INU. -ccccccseccccecccee! eenesevcscce HWORD Copyright - application for costs of proceedings before {Tribunal - Subsequent Constitutional invalidity of Part VC of the Copyright Act 1968 - whether party entitled to costs in 'circumstances - fTribunal's jurisdiction to award costs - relevant considerations. Copyright Act 1968, s.153E, Part VC, s.174, Part VI. Copyright Tribunal: Application by BMG Arista Ariola Limited & Ors;. Australian Tape Manufacturers' Association Limited & Ors No. 1 of 1990 Sheppard P 10 May 1993 Sydney COMMONWEALTH OF AUSTRALIA COPYRIGHT ACT 1968 In the JP' R. APPLICATION PURSUANT TO SECTION 153E(5) OF THE COPYRIGHT ACT 1968 No. 1 of 1990 licatio 2 BMG Arista Ariola Limited Australian Record Industry Association Limited Mushroom Music Pty Limited Australasian Mechanical Copyright Owners' Society Limited for and on beha of: Private Audio Copyright Collection Society Limited (a company being formed) Applicants Australian Tape Manufacturers' Association Limited Australian Federation of Consumer Organisations, Incorporated Australian Consumers' Association, Incorporated Respondents MINUTE F ORDER TRIBUNAL MAKING ORDERS: SHEPPARD P. DATE ORDERS MADE: 10 May 1993 WHERE _MADE : SYDNEY THE TRIBUNAL ORDERS THAT: 1. 2. Application dismissed. The applicants pay the respondent, Australian Tape Manufacturers' Association Limited, its costs of the proceedings incurred on or after 25 July 1990, and that such costs, if not agreed, be taxed by the Secretary of the Tribunal. COMMONWEALTH OF AUSTRALIA COPYRIGHT ACT 1968 In the PYRIGHT TRIB APPLICATION PURSUANT TO SECTION 153E(5) OF THE COPYRIGHT ACT 1968 No. 1 of 1990 Application by: BMG Arista Ariola Limited Australian Record Industry Association Limited Mushroom Music Pty Limited Australasian Mechanical Copyright Owners' Society Limited for and on behalf of: Private Audio Copyright Collection Society Limited (a company being formed) Applicants Australian Tape Manufacturers' Association Limited Australian Federation of Consumer Organisations, Incorporated Australian Consumers' Association, Incorporated Respondents REASONS FOR DECISION TRIBUNAL: SHEPPARD J., PRESIDENT DATE: 10 May 1993 PLACE: SYDNEY Ex Tempore THE PRESIDENT: The application in this matter was made pursuant to Part VC of the Copyright Act 1968. The essential parts of Part VC have been found to be invalid by the High Court because the legislation purported to impose a tax and was not contained in single subject matter legislation. The -2- application must therefore be dismissed and there is no argument about that. The matter that has been raised this morning is an application for costs by Australian Tape Manufacturers' Association Limited which had been joined as one of the respondents to the application which a number of record companies and certain other parties had brought pursuant to Part VC. The application was filed on 30 January 1990, one day after the legislation came into force. At an early directions hearing a number of companies which manufacture tapes sought to be joined but it was foreshadowed that a company to be formed, Australian Tape Manufacturers ' Association Limited, would be formed in order to carry the opposition to the application on behalf of the tape manufacturers which would then drop out. Additionally, it was foreshadowed that there would be a challenge by Australian Tape Manufacturers' Association Limited, when formed, to the validity of the legislation. Notwithstanding the foreshadowed application to the High Court to have the legislation declared invalid the applicants indicated that they wished to proceed with the application pursuant to Part VC so that it at least could be got ready for trial prior to the application in the High Court being dealt with. Their anxiety in this respect stemmed from the fact that the Tribunal's determination, if one were made, could -3- have no retrospective operation. There could be no blank tape royalty imposed until it was determined; it could not be determined until the Tribunal had conducted its hearing. There was no power in the tribunal to make its determination operative at some time or from some time in the past. The question of costs of the application, which was the subject of some directions hearings, was mentioned from time to time. The attitude which the Tribunal took, and which is to be seen in the transcript, is that the legislation must, until found to be invalid, be assumed to be valid legislation so that the applicants were entitled to proceed with their application. They therefore incurred costs in preparing it and the respondents incurred costs in relation to it. Eventually, at a directions hearing that was held in 1991, the applicants sought an advance ruling on what the Tribunal was likely to do in relation to costs should the legislation be found to be invalid. The Tribunal did not commit itself, but indicated that it might not be unlikely that there would be an order for costs thrown away as a consequence of the legislation being found to be invalid legislation. I think I am correct in saying that, at that time, the parties stopped the further preparation of their cases and either no, or very little, further costs were incurred. The question is what should be paid, if anything, by way of costs by the respondents to the applicants. The applicants - point out that the respondent, Australian Tape Manufacturers' - 4 -" Association Limited, was not joined by the applicants; it applied to be joined, but of course that was the only way it could appear. It, subject to matters concerning the public interest, had the greatest interest in appearing in the proceedings and it was only natural that it should seek to be joined. In the circumstances, I do not feel able to treat it as being in some different situation from a party who has been joined in an application by an applicant. It was therefore the applicants' decision to proceed as far as it did. They were not to blame for that, it was a perfectly natural thing for them to do. In the light of the fact that no retrospectivity could be awarded, a most understandable thing for them to do. But the fact remains that the legislation, as events turned out, was found to be invalid and a great deal in costs has been thrown away by both parties. Should the respondent be entitled to recover from the applicants at least some of what has been lost by it as a consequence? The tribunal's jurisdiction to award costs is provided for in s.174 of the Copyright Act 1968, subsection (1) of which provides that the Tribunal may order that the costs of any proceedings before it, incurred by any party, or a part of those costs, shall be paid by any other party and May tax or settle the amount of the costs to be so paid or specify the manner in which they are to be taxed. The Tribunal thus has a wide discretion. I do not regard it as a discretion which is limited or governed in any way by the -5- principles which guide courts on the question whether or not they will award costs. No doubt some of those principles are useful to be referred to on occasions, but the Tribunal is an 'administrative tribunal that sits in a variety of cases affecting a large range of persons, some large corporations, some government agencies or departments and some persons of little means. I wish to say here that nothing I say or do this morning is intended in any way to indicate that from now on it will be the rule rather than the exception for costs of proceedings in the Tribunal to be awarded. The Tribunal has only awarded costs twice in its history. It did so once by consent and once in the unusual circumstances which arose in the decision of WEA Records Pty Limited v Stereo FM Pt Limited (17 May 1983, unreported). The question of costs is not dealt with in those reasons because the matter was stood over for costs to be argued. I have not been able to obtain a copy of its reasons dealing with costs. Having reflected on this matter, I think the circumstances are special. They are special because the applicants went into the matter knowing that there was a risk that the legislation might be held to be invalid. They wanted to proceed as far as they could before the challenge was disposed of so that they would be ready to go on in the event that the legislation was found to be valid. That was to ensure, so far as they could, that they would have a royalty which could be imposed at the earliest opportunity. The challenge succeeded and _ the intentions of the applicants were thwarted. That is - 6 - unfortunate for them, but in all the circumstances I do not see why, particularly bearing in mind what was said at the various directions hearings about costs and about' the possibility of costs being thrown away, the ordinary rule which does apply in courts that the respondent recover at least part of its costs should not follow. It was suggested by counsel for the applicants that there was no jurisdiction to award costs. Reference was made to the decision of the Full Court of New South Wales in Pezet v Pezet, (1947) 47 SR(NSW) 45. That is the more usual case, but it seems to me that, although the legislation is invalid, there is nothing invalid about the existence of the Tribunal or its general powers. It is dealing with an application which as events have turned out it had no power to deal with but its other powers remain. Those include the power conferred by s.174. Accordingly, I am of the opinion that I do have power to award costs in this case. Counsel for the respondent sought costs on an indemnity basis but I am not satisfied that this is an appropriate case in which to award costs on that basis. The other matter that I think I should take into account is the fact that the present respondent, Australian Tape Manufacturers' Association Limited, was not the original respondent. I am not prepared to award it costs of the proceedings prior to it being joined as a respondent. - 7 - Accordingly, the order I propose to make will be one in which the applicants pay to the respondent, Australian Tape Manufacturers' Association Limited, its costs of the proceedings as from the date of its joinder as a respondent, 25 July 1990, but not before. The orders I make are that the application be dismissed and that the applicants pay to the respondent, Australian Tape Manufacturers' Association Limited, its costs of the proceedings incurred on and after 25 July 1990 and that such costs, if not agreed, be taxed by the Secretary of the Tribunal. I certify that this and the 6 preceding pages are a true copy of the reasons for a decision herein of the Copyright Tribunal debveas Associate to the President Dated 4 M Any 19 RH Appearances Counsel for the applicants: D.K. Catterns QC Solicitors for the applicants: Gilbert & Tobin Counsel for Australian Tape Manufacturers' Association Limited: A.J.L. Bannon Solicitors for Australian Tape Manufacturers' Association Limited: Blake Dawson Waldron Date of Hearing: 10 May 1993 Date of Decision: 10 May 1993 Place of Hearing: Sydney