CATCHWORDS COPYRIGHT - Copyright Tribunal - NSW Police Service acquired training video from applicant for use in educating police officers about problems in relation to sexual harassment - Police Service edited video and added to it - Police Service made copy of substantial part of video - act of copying done for service of State of New South Wales - Police Service alleges licence granted by applicant permitting it to edit video - applicant denies grant of licence - question of fact - principles to be applied by Tribunal in fixing terms for the doing of the act of copying - costs. Copyright Act 1968, ss.10, 13, 14, 86, 115, 174, 183. SEVEN DIMENSIONS PTY LIMITED NO. CT 1 of 1995 TRIBUNAL: Sheppard P PLACE: Perth (matter heard in Sydney) DATE:19 July 1996 COMMONWEALTH OF AUSTRALIA COPYRIGHT ACT 1968 IN THE COPYRIGHT TRIBUNAL NO. CT 1 of 1995 Application by: Seven Dimensions Pty Limited under s.183 of the Copyright Act 1968 MINUTES OF ORDER TRIBUNAL: Sheppard P DATE:19 July 1996 PLACE: Perth (matter heard in Sydney) THE TRIBUNAL: 1.Fixes the terms for the doing of the act of copying for the service of the State of New South Wales of the applicant's video on Sexual Harassment at a payment by the State to the applicant of $5,000, such amount to be paid to the applicant within fourteen days. 2.Orders the State of New South Wales to pay to the applicant two-thirds of its costs of the application, such costs, in default of agreement, to be taxed by the Secretary to the Tribunal in accordance with the highest scale of costs applicable to actions brought in the Federal Court of Australia. COMMONWEALTH OF AUSTRALIA COPYRIGHT ACT 1968 IN THE COPYRIGHT TRIBUNAL NO. CT 1 of 1995 Application by: Seven Dimensions Pty Limited under s.183 of the Copyright Act 1968 TRIBUNAL: Sheppard P DATE:19 July 1996 PLACE: Perth (matter heard in Sydney) REASONS FOR DECISION THE PRESIDENT: This is an application by a company, Seven Dimensions Pty Limited ("Seven Dimensions"), under s.183 of the Copyright Act 1968 ("the Act"). The application concerns a video which Seven Dimensions produced and distributed. It is the owner of the copyright in the video. The video was for use by employers concerned with problems associated with sexual harassment. It was designed for use as an instructional or training film. It is made up of a series of acted incidents in which one or other of the employees depicted in it engages in conduct which may, or may not, amount to sexual harassment together with studio audience segments in which these hypothetical incidents are discussed. The idea was that the film could be used by an instructor or lecturer to show groups of employees some of the problems that might be encountered and thus to help them to react appropriately in a variety of circumstances. The New South Wales Police Service ("the Police Service") became interested in the video in June 1992. Through Senior Sergeant Keys (now Inspector Keys) it purchased the video from Seven Dimensions. Inspector Keys found the video not quite suitable for the needs of the Police Service and made alterations to it. These consisted of removing the copyright warning at the beginning of the video, substantially editing or shortening the acted incidents and the studio audience segments and adding further acted incidents produced by the Police Service. The re-edited video was used by Inspector Keys and other instructors in educating members of the Police Service in relation to problems connected with sexual harassment. Inspector Keys claims that the editing of the Seven Dimensions' video was done with its consent; this is denied by Seven Dimensions. The applicant alleges that the act of copying and editing of the video by the Police Service constituted an act comprised in the copyright in the video and that it was done on behalf of the State of New South Wales. This act, it is alleged, was done for the services of the State of New South Wales within the meaning of s.183 of the Act and that, contrary to subsec. 183(4) of the Act, the State of New South Wales failed to inform Seven Dimensions of the doing of the act and failed to furnish it with such information as to the doing of the act as it reasonably required. It is finally alleged that the State of New South Wales failed to agree upon the terms for the doing of the act with Seven Dimensions. It is in those circumstances that Seven Dimensions requests' the Tribunal, pursuant to subsec. 183(5) of the Act, to make an order fixing the terms and conditions between it and the State of New South Wales that the Tribunal considers reasonable for the doing of the act comprised in the copyright. Section 183 of the Act provides for the use of copyright material for the services of the Crown. So far as it is relevant, the section is as follows: " (1) The copyright in a literary, dramatic, musical or artistic work or a published edition of such a work, or in a sound recording, cinematograph film, television broadcast or sound broadcast, is not infringed by the Commonwealth or a State, or by a person authorized in writing by the Commonwealth or a State, doing any acts comprised in the copyright if the acts are done for the services of the Commonwealth or State. (4) Where an act comprised in a copyright has been done under subsection (1), the Commonwealth or State shall, as soon as possible, unless it appears to the Commonwealth or State that it would be contrary to the public interest to do so, inform the owner of the copyright, as prescribed, of the doing of the act and shall furnish him or her with such information as to the doing of the act as he or she from time to time reasonably requires. (5) Where an act comprised in a copyright has been done under subsection (1), the terms for the doing of the act are such terms as are, whether before or after the act is done, agreed between the Commonwealth or the State and the owner of the copyright or, in default of agreement, as are fixed by the Copyright Tribunal." There are some other provisions of the Act to which reference needs to be made. The first of these is s.86 which is in Division 2 of Part IV which deals with copyright in subject- matter other than works. Section 86 deals with the nature of copyright in cinematograph films. It provides in para. (a) that, for the purposes of the Act, unless the contrary intention appears, copyright, in relation to a cinematograph film, is the exclusive right to make a copy of the film. At one stage counsel for Seven Dimensions contemplated relying also on para. 86(b) which confers on the copyright owner the exclusive right to cause the film to be seen and heard in public. In the end, however, no reliance was placed upon para. 86(b). The expression "cinematograph film" is defined in s.10 of the Act to mean the aggregate of the visual images embodied in an article or thing so as to be capable by the use of that article or thing of being shown as a moving picture or of being embodied in another article or thing by the use of which it can be so. shown. The expression includes the aggregate of the sounds embodied in a sound-track associated with such visual images. In the same section, the word "copy" is defined, in relation to a cinematograph film, to mean any article or thing in which the visual images or sounds comprising the film are embodied. Section 13 provides that a reference in the Act to an act comprised in the copyright in a work or other subject-matter shall be read as a reference to any act that, under the Act, the owner of the copyright has the exclusive right to do. Section 14 provides that, unless the contrary intention appears, a reference to the doing of an act in relation to a work or other subject-matter shall be read as including a reference to the doing of that act in relation to a substantial part of the work or other subject matter. In the present case there is no issue concerning Seven Dimensions' ownership of the copyright in the video, its exclusive right to make a copy of the video, that the alterations to the video and the production by the Police Service of the edited version of it constituted a copying of a substantial part of the video or that the copying was done for the services of the Police Service and thus the State of New South Wales. The only issue to be determined in relation to whether or not Seven Dimensions is entitled to an order under the section is whether, within the meaning of subsec. 183(5) of the Act, there was an agreement made between the State and Seven Dimensions. The State of New South Wales, through Inspector Keys, contends that there was such an agreement; Seven Dimensions contends that there was not. It contends that it knew nothing about the copying until it received some information from another source. The Police Service, through Inspector Keys, contends that it had the express licence of Seven Dimensions to do exactly as it did for no additional payment. If that be correct, the Tribunal has no jurisdiction because the act was done pursuant to an agreement. In such circumstances Seven Dimensions would have no right to approach the Tribunal for an order that the Tribunal fix the terms for the doing of the act, they having been fixed by the agreement of the parties. Although Seven Dimensions is the applicant in the proceedings, the assertion that there was an agreement was made by the Police Service through Inspector Keys. It was the Police Service that made the positive case. In those circumstances, I propose to refer to the evidence which there is in support of the agreement before coming to the evidence which tends the other way. Only two witnesses are directly involved, Inspector Keys, and Mrs Reeves, who was employed by Seven Dimensions at the material time and had at least one conversation with Inspector Keys. At the time of these conversations Mrs Reeves was not married. She was then Miss Rutherford. Inspector Keys said that in March 1992 he was directed by the then Assistant Commissioner to develop, in consultation with Sergeant Juergens, an education program to increase awareness and understanding of personnel attached to the North Region of the Police Service as to the issue of sexual harassment. He made enquiries with the Police Academy library as to the existence of a training video on the subject. He received a "Short" Police Service produced video which illustrated some examples of sexual harassment. He considered the video not to be adequate for the program and made further enquiries about the existence of a suitable training video outside the Police Service. Information was received concerning Seven Dimensions, which carries on business in Victoria, which suggested that it had produced a video on the subject. Inspector Keys said that, on 10 June 1992, he telephoned Seven Dimensions and spoke with "the Manager of Education and Distribution, Annie Rutherford". He recounted his recollection of the substance of the conversation he had with her. According to him, he said to her, "I have received information that you have a video on sexual harassment." He was told that Seven Dimensions did have such a video. Inspector Keys asked whether there was any advertising material Ms Rutherford could send him so that he could see what the content of the video was. He told her that the Police Service was looking to purchase a video to complement lectures on sexual harassment. Mrs Reeves told him that there were advertising brochures which she offered to fax to him. Later on 10 June 1992, Sergeant Keys received a facsimile from Ms Rutherford together with copies of sample pages from a handbook relating to the video. Still later, on 10 June 1992, Inspector Keys telephoned Mrs Reeves and said that a conversation took place: "...in words in or to the following effect: Keys:'I spoke to you earlier this morning in respect of the video Sexual Harassment and you sent me some documentation about it. I now want to know what the situation is if we purchase the product and it is not suitable for our training purposes?' Rutherford:'It can be returned to the firm if no other arrangement can be reached and payment will be refunded to you if it has been received before you make a decision on suitability.'" Inspector Keys said that at the time the conversation occurred, he made a file note of it on the reverse side of the facsimile cover sheet received from Ms Rutherford. A copy of the file note is annexed to Inspector Keys' statement. The original is in evidence. The note is in Inspector Keys' handwriting and is as follows: "Contacted Anni Rutherford after receiving material and asked her what the situation would be if we purchased the video and it was not suitable. She advised that it could be returned and payment would be refunded if another arrangement could not be reached. 10.45 a.m. 10.6. L.P.O. faxed 10.6. to Seven Dimensions , 18 Armstrong Street, Middle Park by Sushina Tanna L.P.O. No. 4002 496826." The letters "L.P.O." are a reference to a purchase order. Inspector Keys procured a purchase order in the sum of $250. It was faxed to Seven Dimensions on 10 June 1992. The video was received on 11 June 1992 together with an invoice for $250. Paragraphs 10 and 11 of Inspector Keys' affidavit are as follows: "10.Shortly after receiving the video, I recall viewing it with Sergeant Juergens and other staff at North Region headquarters. The content of the video was appropriate, however, Sergeant Juergens and I agreed that its introduction and segments of debate displayed in the video would not be suitable for a lecture to Police Service staff. "11.I recall that as a result of viewing the video, I telephoned Annie Rutherford and a conversation took place in words in or to the following effect: Keys:'I am Senior Sergeant Keys from North Region of the New South Wales Police Service. We have received your video in relation to Sexual Harassment.' Rutherford: 'Yes, I know, I forwarded it to you.' Keys: 'We have viewed it and found it to be very suitable in most areas. However, there are a few debating segments in it that myself and others feel are inappropriate and will lose a police audience in a_ lecture situation.' Rutherford:'Do you have editing facilities to take parts out that you don't want?' Keys: 'We have a video unit in the Police Service who would have the capacity to edit or copy the video, but first we must have the explicit authority of your firm to make the changes to the original product, because it is copyright protected.' Rutherford: 'If you pay for the video you can alter or copy it however you want, to suit your training needs.' Keys:'Do I need anything in writing from your firm to alter or copy the video?' Rutherford: 'That will not be necessary.' At the same time that this conversation occurred I made a file note of it on the reverse side of the facsimile coversheet received from Annie Rutherford on 10 June 1992. I refer to Annexure 'B' herein." Annexure B was also written on the back of the facsimile cover sheet from Seven Dimensions underneath Inspector Keys' earlier note. The note is as follows: "Again spoke to Annie Rutherford re unsuitable parts of video. She asked if we had editing facilities and was advised that we did. Then I told her we needed explicit approval to change copyright products. She advised if you pay for it you can alter or copy it however you want to suit your training needs. PK Also asked her if I need anything in writing. She told me that would not be necessary." It may be observed that Inspector Keys' earlier note was timed and dated 10.45 a.m. on 10 June. The second note bears no time nor date. As mentioned, both notes are in handwriting. The handwriting on the two is similar but there are some minor differences in some of the letters. For instance, the "S" in the word "She" is written differently when used in the second note from the way it appears in the first note. It is written differently again in the last line of the note where it say, "She told me..." There it appears more like a capital letter than in the script form in which it is written in the first note and earlier, i.e. before the initials, "P.K." in the second note. There are some other differences of this kind. The first note is written in a dark blue biro pen. The second note is written with a black pen thought by Inspector Keys to have been a felt pen. I do not think that one can take very much from these differences. It is well known that the handwriting of people, even handwriting at about the same time, may contain variations particularly in the way in which letters are formed. There is not necessarily complete consistency in handwriting styles. After the conversation deposed to in para. 11 of his affidavit, Inspector Keys said that he attended the Police Service Video Operations Unit and arranged for the video to be copied on to a blank tape. He deleted "the areas" which he considered inappropriate and added a short segment to the video depicting examples of sexual harassment taken from the video produced by the Police Service. Inspector Keys said that only one copy of the edited version was made. Inspector Keys said that, in the period 28 May 1992 to 18 December 1992, 43 lectures were given in connection with the sexual harassment education program in North Region. In all but two of these lectures, the edited video was used. The original video supplied by Seven Dimensions was not used in any of the lectures. The edited video was not used again after the completion of the program. It remained in Inspector Keys' possession from 18 December 1992 until October 1994. He last saw the original video at North Region headquarters at Hornsby prior to its being relocated to Gosford in July 1993. Inspector Keys said that, in September 1994, he received a telephone call from a Mr Peter Quarry whom he described as being "of Seven Dimensions". He said that Mr Quarry told him that "my company" was going to make a new version of the sexual harassment video and that he was hoping that Inspector Keys could give Seven Dimensions a copy "of the one we let you alter" so that it could be looked at to see what had been done. Reference was made to improving the Seven Dimensions' "new product". Inspector Keys said that there was only one copy and that it might be needed to be used again. Mr Quarry said that, if Inspector Keys sent it to Seven Dimensions, they would look at it and send it straight back. Inspector Keys said that he would arrange this. Mr Quarry asked him how he "found" the video. Inspector Keys said that, with the alteration, it was a very useful training aid. He said that it had been shown to about 1,000 people. Inspector Keys said that, about two weeks later, he was telephoned by Mr Quarry who said that he was ringing to "confirm" whether he had forwarded the video. Mr Quarry said that he was concerned that it might have gone astray. Inspector Keys apologised. Mr Quarry said there was no rush. Inspector Keys said that, in December 1994 whilst he was relieving at the Woy Woy Police Station, he received a call from a person whose name he did not recollect asking for the Seven Dimensions video. Inspector Keys again apologised and directed a Sergeant Nicholls to send it to Seven Dimensions. In February 1995, Inspector Keys was relieving at the Terrigal police station. He received a telephone call from a Mr Fletcher who said that he was a new executive with Seven Dimensions. He said that he had viewed an edited copy of the sexual harassment video and that it contained alterations that were considered to be a breach of copyright laws. Inspector Keys said that the video was sent back at the request of Mr Quarry to assist Seven Dimensions in making a new sexual harassment video. Inspector Keys said that the video was purchased from Seven Dimensions and "at that time authority to make alterations to the original product was granted to me by a person who was in authority with Seven Dimensions as a condition of purchase". Mr Fletcher asked who had given him permission. Inspector Keys said that he was unable to tell him because he was not at his normal "work location" and did not have access to documents relating to the purchase or the notes he made at the time. He said that the video had been forwarded to Mr Quarry in good faith in the belief that it might assist him in the production of a better quality product. Mr Fletcher said that he was only new to the firm and that it was his responsibility to look after the firm's interests. Inspector Keys reiterated that the video was altered in good faith and returned on the basis that permission had first been obtained to make alterations as a condition of purchase. Inspector Keys' affidavit concludes with reference to the evidence of witnesses who made affidavits on behalf of Seven Dimensions. I shall deal, as necessary, with this part of his statement when I have referred to the evidence of the other witnesses. There is also an affidavit from Senior Sergeant Juergens. She had no conversation with Ms Rutherford nor with Mr Quarry. She does say in her affidavit that, after the video had been viewed when it first arrived, Inspector Keys said to her, "We should contact Seven Dimensions with a view to seeking their approval to edit the video." Sergeant Juergens said that shortly afterwards Inspector Keys advised her that he had contacted the supplier regarding the alterations and was pleased that they had no objection to the changes. Both Inspector Keys and Sergeant Juergens were cross- examined. So far as Sergeant Juergens is concerned, all she said was that she was not present at any conversation Inspector Keys had with Ms Rutherford. She did not see Inspector Keys make any file notes of his conversations. I shall refer to some of Inspector Keys' cross-examination after I have referred to the other evidence. I find it convenient to refer to the affidavit made by Mrs Ash first of all. She is the managing director of Seven Dimensions. She said that in 1988-1989 it produced a 44 minute video entitled, "Sexual Harassment", "starring" psychologist, Peter Quarry, who presents dramatic "vignettes" to a_ studio audience. She said that Seven Dimensions owned the copyright and was the major "royalty holder". Mr Quarry was also a "royalty holder". She referred to the purchase order for the video received on 10 June 1992. Mrs Ash said that, at all times, it had been Seven Dimensions' standard practice "that my permission is mandatory before a customer may copy or edit or request Seven Dimensions to copy or edit one of our videos." Mrs Ash said that permission was only ever given after a fee had been agreed upon and "a letter form agreement" had been entered into. She said that Seven Dimensions' customers rarely made a request to edit or copy videos themselves. She said, however, that if a client specifically requested permission to do the editing or copying itself (which was not a practice that Seven Dimensions encouraged), not only would a written licence be signed first and a licence fee paid, but Seven Dimensions would also provide the customer with a master quality tape of the program as opposed to a VHS copy and insist on approving the revised program before it was shown elsewhere. She said that Seven Dimensions adopted this practice to ensure that the quality of videos produced by it and its reputation were protected. She said that the standard licence fee that Seven Dimensions charged in such a case was in the vicinity of $15,000. She also said that if a customer wished to have a program altered substantially, Seven Dimensions! general practice was to produce a new tailored program for a fee of approximately $50,000. Mrs Ash said that copyright protection of Seven Dimensions! programs was given the highest priority within the company. Seven Dimensions' main source of income was in the form of royalties received from its copyright users. Its practice was from time to time to send customers a letter reminding them that its videos were the subject of copyright. The form of such a letter was attached to her affidavit. I do not refer to the detail of it but it as Mrs Ash says. Mrs Ash said that on 15 September 1994, one of her employees, a Ms Tasha Forget, told her that she had been updating the database. She had telephoned Senior Sergeant Keys who purchased the sexual harassment video "several years ago". He said to her that they used the sexual harassment video a lot but had edited out the parts that they considered not to be relevant. Mrs Ash said that she was extremely concerned when she heard this. She spoke to another distributor, a Ms Gerney of Video Communicators, and asked her as a favour to call Senior Sergeant Keys and ask if he needed a video on sexual harassment. Mrs Ash's idea was to determine whether the Police Service had copied and edited the Seven Dimensions' video to suit their purposes. Ms Gerney later rang Mrs Ash and told her that the video had been purchased in 1992. "Bits" had been edited out and new "dramas" had been added. They had used it to train about 1,000 police officers. On 4 November 1994 Mrs Ash telephoned Mr Quarry and asked him to make a call along the lines of that made by Ms Gerney. Mr Quarry's information was the same except that Inspector Keys told Mr Quarry, so Mr Quarry said, that the film had been used to train 3,000 police officers. Mr Quarry said that he had asked Inspector Keys to send a copy of the revised video to Mrs Ash "out of curiosity". Paragraph 12 of Mrs Ash's affidavit is as follows: "Had the Police Service of New South Wales sought Seven Dimensions' permission to edit and copy the video concerned, there would at least have been a letter form agreement to this effect and a licence fee paid and a master copy provided. No such agreement exists nor was any licence fee paid nor was a master copy provided. In addition, Seven Dimensions computer records, stock records and notes would have indicated this request. Seven Dimensions' computer records, stock records and notes do not contain any reference to a request being made by the Police Service of New South Wales to edit and copy the Sexual Harassment video. In addition, I have never provided my permission for this editing or copying to take place which as stated above is mandatory." I next refer to the affidavit of Mr David Butcher who is presently the Marketing Director of Cinevision which carries on business in Melbourne. He held the position of general manager of another company, Comcopy, from 1987 to 1994. He has had 15 years experience in the television and video industry. He specialises in video quality, duplication, technical standards, copyright protection and editing facilities. Mr Butcher said that, since 1987, he had managed the duplication of Seven Dimensions' library of video masters. He helps Seven Dimensions establish strict guidelines to ensure quality reproductions of their video masters and protection of their proprietary rights as video copyright owners. He described the system which he had instituted in Seven Dimensions. I do not refer to the detail of this. He said that Seven Dimensions also had a stock code numbering system whereby a sticker containing a unique stock code number, or more recently a unique barcode was placed on each individual VHS video. This enabled each VHS video to be tracked and monitored. Part of his service involved applying stickers to the VHS tapes. These stickers included a copyright warning. Mr Butcher said that quality and copyright protection had been paramount issues for companies like Seven Dimensions. The industry of producing and distributing training and educational videos could not survive without these protective measures. Mr Butcher viewed the edited version of the Seven Dimensions' video. He said that the video had clearly been copied from a VHS video as opposed to a master. This could be seen by "bleeding" and "tearing" of the image. The label placed on the video was not one of Seven Dimensions! labels and _ the commencement of the program had been "clumsily edited". There is of course not any issue about all this. Inspector Keys makes no bones about the fact that the video was copied. He did not trouble Seven Dimensions for a master or ask it to do the copying or the editing. It was done within the Police Service. The editing may have been "clumsy"; it is not material for me to make a finding about this. The copying was done; the question remains was it done with Seven Dimensions' permission. The only relevance which Mrs Ash's and Mr Butcher's evidence can have in relation to this question is that the systems and procedures which they describe as being in place tend to make it unlikely that their permission would have been given. But the critical witness from Seven Dimensions' point of view is Mrs Reeves (formerly Ms Rutherford) to whose evidence I now turn. Mrs Reeves said that from 13 January 1992 to December 1995 she was employed as the Manager for the Educational Distribution Department of Seven Dimensions. She remembered that in June 1992, she received a telephone call from Sergeant Keys of the Police Service of New South Wales who told her that there was a problem concerning sexual harassment within the New South Wales Police Service. He was interested in purchasing a copy of the video on sexual harassment produced by Seven Dimensions and asked her for some information. She confirmed sending the facsimile with some sample pages from the accompanying handbook. She also referred to the order with which was despatched copies of Seven Dimensions! Business and Educational catalogues. She referred to the invoice sent to the New South Wales Police Service. Paragraphs 7, 8 and 9 of Mrs Reeves' affidavit are as follows: "7,.I do not recall having any further conversations with Sergeant Keys following the purchase of the video in June 1992. I certainly have never had a discussion with Sergeant Keys regarding the copying or editing of the video that he had purchased. Had we had such a discussion, I would have informed him of Seven Dimensions' standard practice which is that none of our videos are to be copied or edited without the permission of our Managing Director, Eve Ash. Furthermore, if that permission is given, Seven Dimensions' practice is to insist that the copying is done from a master tape not a VHS copy to maintain quality and protect Seven Dimensions' reputation and a letter form agreement is entered into once a licence fee has been agreed upon. 8.The common practice of Seven Dimensions is and always has been to suggest that it copies and edits the video itself so as to protect the royalty holders, the quality of the copy (and therefore Seven Dimensions! reputation) as well as the numbers of copies that are made. In addition, Seven Dimensions always, without exception, prepares a letter-form copyright licence agreement to be signed by both parties before the copying or editing occurs. In determining the licence fee, which varies greatly depending on whether Seven Dimensions undertakes' the copying and editing itself or whether it allows the client (which as stated above is very rare) to edit and copy the video itself. The licence fee when a customer copies and edits the video itself is in the vicinity of $15,000.00. 9.At no stage during my employment with Seven Dimensions do I recall ever giving permission to a client to copy or edit a Seven Dimensions' video itself. I certainly did not ever reach an agreement for the copying or editing of the video purchased by Sergeant Keys to be done either by Seven Dimensions or by the Police Service of New South Wales." It needs to be remembered that I have dealt firstly with Inspector Keys' evidence and secondly with that of Seven Dimensions. The order in which I have referred to the affidavits was not the order in which they were filed. Seven Dimensions! affidavits were filed first; those from the Police Service were filed afterwards. Counsel for the Crown understandably relied heavily on para. 7 of Mrs Reeves! affidavit where she said that she did not recall having any further conversations with Sergeant Keys following the purchase of the video in June 1992. Mrs Reeves gave some oral evidence in chief before she was cross-examined. She said that when she commenced employment with Seven Dimensions there was an "induction session" and also on-the-job training. She said that copyright issues were "pretty much drummed into everybody as soon as they started..." She said that the induction course was given by Ms Rutherford who, I gather, was Mrs Reeves' sister. Mrs Reeves was shown the educational catalogue which had been sent with the order and referred to copyright warnings which appeared in it. Similar words were contained in the business catalogue. Again, of course, there is no issue about this except in so far as it may shed light on the inherent probabilities of the matter. Mrs Reeves was referred to para. 11 of Inspector Keys' affidavit in which Inspector Keys says that Mrs Reeves gave Seven Dimensions' consent to the editing of the video. She denied ever having any such conversation. In the course of her cross-examination, Mrs Reeves was asked whether she would agree that she was "new to the job" at the time she was dealing with Inspector Keys. Her answer was, "Five months new, I guess." She said that she had been a travel consultant for two years previously and before that she had trained to be a teacher. Later, when asked about the same matter, Mrs Reeves said, "Well, I don't think five months is that new, it is something that was, as I said, drummed into me from the time that I started, so I would have recalled a conversation to that effect about editing definitely." Mrs Reeves was referred to para. 8 of her affidavit in which she said that Seven Dimensions always, without exception, prepared a letter form licence. She gave the following evidence: "You would know yourself, would you, whether or not the company always does?---No, I only --- Or always has done?---No, I only know my own practice and the policy that was relayed to me. At the bottom of that paragraph you refer to a licence fee, when a customer copies and edits the video is in the vicinity of $15,000?---Yes. Where does that figure of $15,000 come from?---Well, there's a general amount charged when a licence fee is given and it's calculated at three to four hundred dollars per minute of video program and this video runs for forty odd minutes. But you say when a licence fee is given, a licence fee to do what?---Well, I think when a licence fee is given the person is given the - the right to reproduce as many copies as they wish to use the video in any way they wish. You think but - - -?---A licence. - - - you are not sure?---Well, I've never personally given a licence - a licence to someone, so I'm not exactly sure of the details, but that's the way I understand it." She was asked further questions about the amount of the licence fee. Amongst other things she was asked whether she knew what the fee would have been if a customer had wanted to make a single copy of a video. She said that she did not nor did she know any way in which that could be calculated. She agreed that the video was to be used "in-house" to educate members of the Police Service. She was reminded that she had said that she did not have experience of Seven Dimensions entering into licence agreements because persons asking about this "were put off by the figure." She said, "It - it - it stopped with me and was referred on to the managing director and my understanding was that when negotiations progressed people weren't - the customers - potential customers weren't interested in going ahead because of the - the high fee. So, it was incorrect to say that the people that I quoted directly." Mrs Reeves agreed that Seven Dimensions had no problem about the original video being used for the purpose of educating police officers in relation to matters connected with sexual harassment . She agreed that the video could be used for an unlimited number of screenings. There was no limit to the time or period over which these screenings might take place. There was no question of the video having to be returned eventually to Seven Dimensions or not being able to be used after a particular period had expired. Mrs Reeves was asked whether it was her view at the time she spoke to Sergeant Keys that customers had no right to edit a video. She said it was. The reason for this stemmed from the fact that editing the video would necessarily involve the making of an "illegal copy" of it. Persons wishing to edit a video would need to copy it first and then edit it. Mrs Reeves added, "Copying is illegal." In the course of her re-examination, Mrs Reeves gave the following evidence. "Why do you say you would be able to recall what you did not speak about, ie editing and copying videos?--- Well, it's a major issue within this industry, illegal copying and so if someone asked me a question about editing or if - you know, permission to whatever, I would remember it. It's not something that commonly happens, it does happen and - yes, that's why I would remember. Some of the questions you were asked by my learned friend I think were restricted to the question of editing but am I correct in thinking that your evidence goes to both a request whether it is for editing or copying - - -?---Yes." The original hearing of this matter took place on 6 May 1996. On that day the evidence was completed and counsel addressed. In the course of his address, counsel for the Crown referred to Inspector Keys! account of the conversation he had when Mr Quarry rang him in order to find out whether the video had in fact been edited. According to Sergeant Keys Mr Quarry referred to the copy as being a copy "of the one we let you alter." Mr Quarry had not given evidence up to that point. He had not been called in its case. Counsel for the Crown strongly submitted that Seven Dimensions was bound by Mr Quarry's words. They were not denied and plainly tend to indicate that the video was altered with Seven Dimensions' consent. If that were correct, it would be very difficult for the Tribunal to conclude otherwise that that was indeed the case. Counsel for Seven Dimensions saw the force of this submission and applied for an adjournment in order to lead evidence from Mr Quarry. This application was opposed by counsel for the Crown. The submissions made by both counsel and my own remarks are recorded in the transcript. With some hesitation I decided to accede to the application and the matter was adjourned. During the period of the adjournment, an affidavit was sworn by Mr Quarry. The matter was put back in the list on 4 July 1996. On that occasion Mr Quarry was cross- examined. Mrs Ash was recalled for further cross-examination. There were some further submissions made as a consequence of what occurred. The hearing was conducted in part by video transmission from Melbourne. Mr Quarry said that he was not an employee, shareholder or director of Seven Dimensions but had, from time to time, provided consulting services and had composed scripts, directed films and presented videos. He learned about the possible copying of the video in question in this case from Mrs Ash and Ms Forget. Early in November 1994 Mrs Ash asked him to contact Inspector Keys to see if he could obtain the copy of the "illegal video". He said that he telephoned Inspector Keys on 4 November 1994. He introduced himself and asked him what changes had been made to the Seven Dimensions' video and who had carried out the editing and copying. Inspector Keys told him that the copying had been done by the Internal Police Video Production Unit. He described the equipment which was used. He said that "slow bits" had been edited out of the video and "our own anti- discrimination scenarios" had been included. There are about ten of these. According to Mr Quarry, he (Mr Quarry) said that Seven Dimensions and he were thinking of producing another program on sexual harassment. He asked, "Can you send me a copy of the edited video so that I can see what you've done to get a sense of what a client finds positive and negative in the video." Inspector Keys said that the tape he thought was currently in Newcastle. He offered to go to Newcastle in the following week and pick it up. There was some delay eventually in the video being sent. Mr Quarry told Mrs Ash of his conversation. Mr Quarry said that he was aware that Seven Dimensions had very strict procedures in place to protect its copyright. He explained that copyright for companies such as Seven Dimensions was of the utmost importance. He referred to the copyright warnings which appear on the video and when the video is played. He said that he was aware that Seven Dimensions! practice was only to copy videos from a master tape and never, so far as he was aware, to allow copying to be done from a VHS tape to another VHS tape. He said that licences granted by Seven Dimensions, were, as he understood the position, in writing. He then dealt with the question of remuneration. I shall refer to his evidence in that respect generally when I come to that question. Mr Quarry was cross-examined as was Mrs Ash. I do not refer to the detail of these cross-examinations. It is sufficient to say that counsel for the Crown in the course of his submissions acknowledged that he could not rely any longer on the submission he had originally made based on an admission by Mr Quarry that the tape which was the edited version of the police tape had been made with the consent of Seven Dimensions. Whilst that takes that matter out of the matters to be considered, there remains the need to resolve the conflict of evidence which there is between Mrs Reeves and Inspector Keys. Mr Quarry's evidence does not advance the Police case. All that resulted from the further hearing was that the statement which was attributed to Mr Quarry by Inspector Keys was neutralised. There remains an issue as to whether Mr Quarry said what Inspector Keys said he did or whether the conversation was as Mr Quarry said it was. It is possible that, in order to persuade Inspector Keys to part with the video, Mr Quarry did use the words attributed to him by Inspector Keys. On the other hand, it may be that their conversation was as Mr Quarry said it was. Except to the extent that there is in the contest between them a conflict which may shed some light on the credibility of Inspector Keys' evidence, nothing of any significance turns on this. It is clear that Mr Quarry engaged in a subterfuge. His object was to procure the edited version of the video to see what had been done by way of copying and editing the Seven Dimensions' video. He does not deny that he engaged in a subterfuge. He was cross-examined to suggest that this was somewhat underhanded but, in all the circumstances, I think that that is by the way. Whatever version of the conversation be the correct one, it is clear that the issue in the case remains the question whether the conversation between Mrs Reeves) and Inspector Keys was as she said it was or as Inspector Keys said it was. I need, therefore, to come to the detail of Inspector Keys' oral evidence. He said that the first note was written as he was speaking "to the girl". He said the same applied in relation to the second note. The words were written "as I spoke to her." In relation to the second note he added, "All of those words were during the phone call, but then I went back and I just proof read it and I... added a little bit at the end of it. Where I say added a bit, I put 'or copy' and I put a reference." He said the words "or copy" were probably added a minute after he wrote the note and the last two lines after his initials were put in at the same time. Inspector Keys' attention was drawn to the fact that the first note was dated and timed; the second note was not. He was asked why that was so. He said that it was "just an omission - an omission by me." He agreed that it was something police officers were usually careful about. Inspector Keys said that he had been in the Police Service for 30 years. He was asked a number of times about his failure to put any time or date on the second note, especially when he had timed and dated the first one. He agreed that this was an omission, as I have said, and also that it was not in accordance with proper police practice. Inspector Keys was asked a number of questions about his reaction to the copyright notices which appear on the video case, the outside of the video itself and at the beginning and the end of the video when it is played. It will be recalled that these were not included in the edited version. It was put to him as improbable that he could have thought that he would be permitted to edit a copy of the video. His answer was that he was told clearly by Mrs Reeves that he could do what he did and that there was no need to seek permission in writing. He made it clear that Mrs Reeves spoke emphatically so that he was left in no doubt as to his entitlement to make the copy and to omit certain portions of the video from the edited version. Inspector Keys' evidence was, in part, as follows: "You said to her in that conversation on 11 June: 'We have a video unit in the police service who would have a capacity to edit or copy the video but first we must have the = explicit authority of your firm to make the changes to the original product because it is copyright protected. ' So you were well aware of the fact that if you copied it there would be an infringement of the copyright?--- Without permission, sir, certainly. Without permission?---Yes. At that stage, I take it, you were not aware that the Crown had a pre-emptive right to copy material, even against the wishes of the copyright owner?---I didn't know. So you were acting on the basis that you had to get their consent to do what you did?---Yes, sir. And that is why you rang her?---That's right. Did it occur to you when she said 'I£f you pay for the video you can alter or copy it however you want to suit your training needs.' Did that seem to you to cut right across the notices that you had read and the understanding you had yourself as revealed by what you said to her?---Yes, it did. It was almost a negation of what you had believed to be the position anyhow on what was said in the video and on the notices?---Sir, what it - it meant that the video was not going to be retained by the police service if those type of sections in it that were not suitable couldn't be altered we would send it back. In other words, if you could not have done it with their consent you would have returned it?---Yes, certainly. It wasn't suitable for us in its - in that format. Did you tell her that?---Sir, I spoke to her on the second day, I asked her what that position would be and she said if we can't come to another arrangement, well, they would refund money to us if we'd paid for it before we'd made that decision. But did you ever say to her, in either conversation, the video or the film is not suitable for our needs?---I'm sure I would have, sir, because that's why we spoke about the situation. I told her it wasn't suitable and that was the purpose of the third phone call." Inspector Keys was then taken to some of the detail of the second note, he was referred to the words "or copy" which appear after the words "you can alter" in the second last line of the main body of the note before the addition. The words "or copy" were interlined, i.e. they were not in the original script. At the end of the main body of the note appear Inspector Keys' initials. These are above the last two lines of the note which say, "Also asked her if I need anything in writing. She told me that would not be necessary." Inspector Keys denied that his initials were present on the document as an acknowledgment that what appeared above them was correct. He asserted that the initials were on the document to verify the fact that the interlined words "or copy" were inserted with his authority. It has to be said that the initials, as they appear on the original document, are not at all close to the words "or copy". They are at the end of the main part of the note before the additional two lines. They are not in the margin of the line in which the words "or copy" have been interlined and they are not above those words, beside them or underneath them. Inspector Keys insisted that this was his usual practice when he made alterations to statements of evidence. In other words, if he interlined something, his initials did not necessarily appear close to the interlineation. I must say that I find this difficult to accept. I would have thought a police officer of Inspector Keys' experience would have followed the customary practice in the community of placing initials intended to verify an alteration somewhere in the proximity of the alteration. Nothing significant, however, I think turns on this because it would have been very easy for Inspector Keys to have agreed that the initials "PK" at the end of the main part of the note were put there in order to indicate his authentication of it. Of course, he had not initialled or signed his first note. But the two notes are in his handwriting which is no doubt well known in the department where he is employed. Counsel for Seven Dimensions used the fact that the initials were apparently intended to authenticate the whole of the first part of the note and not just the alteration as support for his submission that the last two lines had been added as an afterthought long after the first part of the note had been made. I do not think that this could be right. The appearance of the handwriting used in the main part of the note and in the addition is the same. The pen is obviously the same and the condition of the ink is the same. Furthermore, the critical part of the note is not in the last two lines but in the main part of it, particularly in the words, "if you pay for it you can alter or copy it however you want to suit your training needs." It follows, in my opinion, that if the note is false, the whole of it is false. It is not a matter of distinguishing the last two lines from the main part of it. What is possible, and counsel for Seven Dimensions put this submission, is that Inspector Keys made the whole of the second note well after 11 June 1992 when he said it was made. Counsel submits, as he has to, that the note is a fabrication and that no conversation to the effect of that recounted in the note ever took place. I do not think the acceptance or rejection of that submission depends upon the place of the initials on the document . I say that not unmindful of my conclusion that I should reject so much of Inspector Keys! evidence as suggests that the initials were placed on the document in order to authenticate the interlined words "or copy". Another matter upon which Inspector Keys was pressed was the copyright notice which appears when the video is shown. It was Inspector Keys' evidence that "we" wanted to get straight into a lecture situation and that was the reason why the copyright notice was removed. It was his evidence that the copyright notice at the beginning of the video was "very, very long". He said that it was holding up the purpose of the lectures. They were long lectures and "we had a lot of people to cover in the region". He wanted to trim it as far as he could to make it suitable for their needs. It was suggested to him that the copyright notice appeared for no more than three seconds. He said that he did not really know but he said that he had been given approval to alter it or change it in any way he wished and that is what occurred. My own viewing of the video discloses that counsel is correct; the copyright notice does not occupy more than two or three seconds. Again, however, I do not know that I can take a great deal from this. If Inspector Keys' evidence is correct, he was entitled to remove the copyright notice from the edited version. But he did give the impression that the notice was a very long one. It may be that he had not looked at the video for some time and that his recollection was faulty. The fact remains the notice was quite short and would not have held up the lecture for any appreciable period. Finally, there was raised with Inspector Keys the question of how this matter had gone to the Ombudsman. It emerged that there had been a reaction in the Assistant Commissioner's office when Seven Dimensions' account and the letter that accompanied it were received. There was some criticism in the letter about the attitude of the Police Service to copyright and this was thought to call for an investigation. Inspector Keys agreed that it was his conduct or involvement in the matter that was being investigated. He agreed that it was important that his report be supported by documentation consistent with what he was putting in that report. The purpose of this was to suggest that a reason why Inspector Keys gave a false account of what had happened was to protect himself from untoward consequences that might have arisen from an adverse report after the investigation was completed. All that is, of course, true but again I do not think that it bears substantially on the difficult question of credibility which I have to resolve. Of course the matters raised in a cross-examination such as occurred here have to be looked at cumulatively and not in isolation of each other. One has to weigh a witness's evidence having in mind one's impression of the witness in the witness box and the inherent probabilities or improbabilities of the story which is being told. One has also to take into account relevant documents. The most relevant document is, of course, Inspector Keys' second note. But that itself is under serious challenge in this case and, it not being accepted by counsel for Seven Dimensions, does not take Inspector Keys much further. In a similar way I need to weigh carefully the evidence given by Mrs Reeves. I must take into account my impression of her as a witness, the inherent probabilities and again any relevant documents. In her case it does not seem to me that there are any relevant documents. The probabilities favour her vehement refusal to accept that any conversation of the kind relied upon by Inspector Keys ever took place. She has the problem of not being able to remember more than one conversation with him. I think at least two must have occurred, once when the initial facsimile was sent with extracts from brochures and the other when the video was actually ordered. There may not have been any more than this, but I think there must have been at least two. It is understandable, of course, that Mrs Reeves may have forgotten a conversation with a customer or potential customer which took place some two years or so before the matter became a matter of contention and she was asked about it. People in that situation frequently do not remember conversations which they have undoubtedly had. They are able always, however, to say, if it be the case, that a particular form of conversation would not have taken place, or would not have been likely to have taken place, because it would have been against all probabilities that it would have. It would be contrary to the person's ordinary way of doing business and also with his or her employer's instructions. Courts often have this problem. There are many cases in courts concerning conversations with bank managers or with insurance company managers where the manager has no recollection of the conversation but is able to say with confidence that a conversation along the lines alleged by a disappointed customer did not take place. The customer will claim a vivid recollection of the conversation because, for the customer, the transaction is an isolated one. For the manager, the transaction is but one of a continuing series of transactions conducted week in and week out with a great variety of people, usually with there being no reason to remember the conversation at all. The principal matter in Mrs Reeves' favour is the essential probabilities of the matter. I accept completely the evidence given by Mrs Ash, Mr Butcher and Mr Quarry. The totality of that evidence makes it unlikely that Mrs Reeves would have acted as Inspector Keys claims she did. I accept that she had the induction course to which she referred early in her employment. I am satisfied that, at the time she spoke to Inspector Keys, she was well aware of what to do if anyone made a request such as he says he then made. On the other hand, Inspector Keys has the note which, if reliable, establishes fairly clearly that the conversation was as he said it was. One aspect of Mrs Reeves' evidence which has caused me concern is to be found in para. 8 of her statement and in her subsequent cross-examination. In para. 8 she said that the common practice of Seven Dimensions was to suggest that it copied and edited the video itself. She mentioned that "letter- form copyright licence agreement" and dealt with this. Finally, she said that the licence fee when a customer copied and edited the video was in the vicinity of $15,000. That is inconsistent with the way in which Mrs Ash said that the figure of $15,000 was arrived at. Moreover, in the course of her cross- examination, Mrs Ash was asked where the figure of $15,000 came from. It was then that she mentioned a calculation based on three or four hundred dollars per minute of program. Mrs Reeves also said that she had never personally given a licence so that she was not exactly sure of the details. It may be that the problem lies with the form of the statement which was no doubt composed by a solicitor. I have no way of telling. All I would say is that I do not think that Mrs Reeves would have had any detailed knowledge of the way in which licence fees were calculated at the time she spoke to Inspector Keys. I have weighed all these matters and some others. I have taken into account the seriousness of the situation. I think I should apply, at least by analogy, the standard of proof which would apply in a case such as this in an ordinary court. The standard of proof is upon a balance of probabilities but the court, in this case the Tribunal, must bear in mind the seriousness of the situation from the point of view of both Mrs Reeves and Inspector Keys. Neither, for reasons I have given, can I think be mistaken about their evidence. It is not a case which can be explained away on that basis. I wish that it were. The need to exercise caution in a case such as this is emphasised by the decision of the High Court in Briginshaw v Briginshaw (1938) 60 CLR 336, especially per Dixon J at 361-4. Having given the matter a good deal of thought, I have reached the conclusion that I should prefer the evidence of Mrs Reeves. My principal reasons for that conclusion are that I found nothing in her demeanour which troubled me at all. Coupled with this were my assessment of the inherent probabilities of the matter which, in my view, very strongly tell in her favour. The evidence establishes that the company had a policy and a practice which would clearly have been affronted by the course proposed by Inspector Keys. So far as Inspector Keys is concerned, I did not find anything particularly disturbing about his demeanour. He appeared to give his evidence straightforwardly. But I am left concerned about the fact that the second note is not timed and dated as the first one was. If his evidence were correct, he would have written the second note with the time and date of the first note clearly before him. It was on the same sheet of paper. He is a most experienced police officer. Of course it can be said, as indeed it was during the argument, that, if the note is a fabrication there is every reason to think that Sergeant Keys would have made a good job of it and put a time and date on it. But it is possible that he could not bring himself to do this so long after the event. I think the matter that has impressed me most is a matter I have not mentioned with any great emphasis up to now. I really am at a loss to understand why there was not a letter written to Seven Dimensions by Inspector Keys confirming the arrangement he had made with Mrs Reeves. The addition to the note deals with this matter. It is something which is especially mentioned. It is as if it has been written by someone concerned by the fact that someone might ask the question, "Why did you not get it in writing." This is where I think the reliance by counsel for Seven Dimensions on the copyright notices on the case of the video and in the video itself has some point. Again one must remember that Inspector Keys is a most experienced police officer. Why would he not have thought that he should take the precaution, whatever Mrs Reeves may have said, of having her agreement to do what he did recorded in writing so that there could never be any doubt about it. At that stage he did not know that the Crown had a pre-emptive right to make copies if it wished to. He thought that he may have been infringing copyright. I find, therefore, that there was no agreement with the consequence that the Tribunal does have jurisdiction to entertain this application. The remaining question to be dealt with is the amount to be fixed. Before I come to the evidence, there are some things that need to be said. If this were a case for damages brought against a private company for infringement of copyright, the provisions of subsec. 115(4) of the Act might well apply to it. That section enables the Court, in assessing damages for an infringement, to award such additional damages as it considers appropriate in the circumstances in a case where' the infringement, in its view, is a flagrant one or in other circumstances referred to in the provision. So far as I am aware, this is the first case brought under s.183 of the Act to reach a stage where a decision has to be made. There have been other cases, but they have been settled before they have been determined. The words of the section which apply in this case are those of subsec. 183(5) which, in effect, provide that the terms for the doing of the act, that is the copying which was here done, are such terms as are fixed by the Copyright Tribunal. I take it that underlying the section is the intention that the Tribunal will act fairly and reasonably as between the parties and, by fixing appropriate terms, compensate the copyright owner for the copying which has been done. I do not take the section to contemplate that there may be included in the award any sum in the nature of aggravated damages. In reaching that conclusion, I have borne in mind the statutory licence which is conferred upon the Commonwealth and the States to take advantage of copyright material if the acts in question, such as the copying here, are done for the services of the Commonwealth or a State. It is true that subsec. 183(4) obliges the Commonwealth or State, if it has used material for its services, to inform the owner of the copyright of the doing of the act and to furnish such information as to the doing of it as may reasonably be required. That was not done here. If Seven Dimensions had not heard about the matter from another source, it would not have known of the copying and editing. No submission was made which would support the award of anything in the nature of aggravated compensation because of failure to give this notice. As at present advised, I do not think that a breach of that provision would justify such a course because I think the approach of the section when read as a whole is one whereby there is to be compensation only and not the award of any sum which may be seen as akin to an award of aggravated damages. Then the question arises how does one approach the question of assessment. As will be seen in a moment, the evidence gives one little guidance. Ordinarily the Tribunal would have regard to the going or market rate for the use of material. Seven Dimensions says that there is evidence of a going or market rate here, but the difficulty in its maintaining that submission will be revealed in a moment. What has to be done is to assume that the two parties were in an arms length bargaining situation. One has to assume they would have done business. Neither can be heard to say that they would not have done business on any terms. Nor, I think, could either say that they would only have done business for a sum which was grossly excessive or grossly inadequate. The exercise involves the two parties being placed in a hypothetical situation which will be artificial and unreal to them. It was clear from Mrs Ash's evidence that there were no circumstances in which she could possibly have envisaged giving the Crown the right to do what Inspector Keys in fact did with the video. I understand that, but I must do the best I can, on the basis of what evidence there is, to reach a conclusion on what the parties themselves would have agreed upon if they had intended to reach a bargain along the lines of that which would have been reached. They must be deemed to act reasonably and treated as willing but not anxious parties to the bargain which has to be constructed. In her oral evidence Mrs Ash explained how she arrived at the figure of $15,000 which she claims. She said that people who own copyright in videos or films usually have fees that they charge for selling minutes of that copyright. She said the program in question was 44 or 45 minutes. The going rate was between $300 and $400 per minute. Sometimes a fee of $500 per minute was charged. Usually people chose not to buy licences. They retained Seven Dimensions to make a tailored video or they bought bulk productions from Seven Dimensions. Mrs Ash said that she discouraged people from obtaining Seven Dimensions' masters and making copies. She referred to some other examples and mentioned that in the week in which she gave evidence she was purchasing from the ABC 30 seconds of an ABC production for $800. She said this was in order to enable her to use extracts from other people's videos or films in her own productions. What was being purchased from the ABC was some particular footage of scenes in an ABC produced video that she needed for a video being specially produced for Telstra for which she was receiving $60,000. She was asked whether it was appropriate to apply that rate to the changes to the video here in question. She said that the Police Service was making a completely new program. She said there were ten new "scenarios" in the program of police harassing and showing examples of police harassment which were not produced by Seven Dimensions. She said that she would never allow copying from VHS because her high standards would be affected. It was put to her that there was a disparity in the cost of the film to the purchaser, $250, and the amount of $15,000 which she sought to recover. Amongst other things she said: "When clients are seeking something different about what we've made we usually move towards producing something tailored for them, as we have done for the Victoria Police and many government departments and major companies in Australia. And if a company goes to us and says, your $250 program or your $500 program is not suitable we usually move towards saying, well, can we make something tailored. For example, we have one program where we made - they didn't - they wanted it but they wanted it changed and in the end we agreed we would produce something tailored and that was for $150,000 for a series of six videos. So, for us our livelihood is in selling our creative ideas and in this case the police used other dramas which we didn't shoot and we felt had we been given the opportunity to consult on somebody trying to get a licence to our footage we would have that opportunity to look at offering an opportunity to actually produce something quite tailored and quite specific for their needs. I mean, as it turns out we were unaware that the program was even being altered until three years later." Mr Quarry said that the standard industry charge for specific tailor made productions of broadcast quality videos for non-broadcast use was about $3,000 to $5,000 per minute. He said that, if a production company purchased pre-existing footage from the ABC, the ABC charged a rate of approximately $600 per minute. Annexed to his affidavit are documents which bear out these figures. He said that, in light of standard industry practice, he was of the view that Seven Dimensions' charge of $15,000 to the Police Service for use of its sexual harassment footage was entirely reasonable. He added that the standard industry practice was that there was no relationship whatsoever between the unit cost of a copy of a video tape and the cost of footage extracted from that tape. As I understand the way in which Mrs Ash arrived at $15,000, she assumed a rate of $400 per minute, multiplied that by the 44 minutes of the program which gave her $17,600, and discounted this down to $15,000. That is what, in the submission of counsel for Seven Dimensions, I should award. My reluctance to make an award as large as that stems from my belief that the rates to which both Mrs Ash and Mr Quarry have referred are rates which apply for the use by production companies of short excerpts from other productions. Counsel's answer is to ask what is the difference between a take of one or two minutes and a take of the whole video. The Crown could have called evidence to rebut the approach taken by Mrs Ash and Mr Quarry. It did not. Nor did it lead evidence to suggest that their approach was wrong because it related to another type of use. Counsel for the Crown, however, emphasised the disparity between the cost of $250 for the video bought by the Police Service and the amount of $15,000 sought because some editing of and some additions to that video were made. He emphasised that it was not as if the work was done by Seven Dimensions. They were not troubled about the matter at all. The fact that they did not approve of what was done was not to the point. An amount of $15,000 would, in all the circumstances, represent an extravagant award. One matter that has occurred to me is that, if a production company seeks to use excerpts from a video made by another production company, it will usually be making a production which will be sold for a substantial fee. If it is a tailor made production for a client, the fee which it receives is obviously substantial as witness the figures which are in evidence here. If the production is to be sold, as the video here was sold, in large numbers of copies, again the fee or award will be substantial because of the bulk of the sales which are made. In each of those cases, the figure I have mentioned will not represent clear profit. Substantial expense will have been incurred in production costs. The Police Service did not copy this video for the purpose of resale or because it made a tailor made production for a customer which itself wanted that production for commercial purposes. It made a one-off edited copy for its own purposes for purely internal training use which was shown over a period of a few months to no more than 1,000 or so police officers. There is reference in the evidence to a figure of 3,000 officers but I think the better view of the evidence is that the figure should be 1,000. The Police Service did not use the video for commercial purposes; it did not on sell it; it made no money from it; and its use of it was, comparatively speaking, extremely limited. The commercial rates which are referred to in the evidence and relied upon by Seven Dimensions seem to me inappropriate for such a use. I do not say that they are irrelevant and they are indeed the only guidepost I have toward making an award. When one analyses Mrs Ash's evidence, one can see that one of her major complaints is that she was deprived of an opportunity of herself producing a tailor made production for the New South Wales Police Service. But it seems unlikely that she would ever have had that opportunity and, in any event, that, if a relevant factor at all, can only be of tangential relevance. She is not being compensated for the loss of an opportunity of doing business with the New South Wales Police Service; she is being compensated for her copyright material being taken without her permission and put to the use it was by the Police Service. The edited version of the film runs for 44 minutes. Of these 44 minutes, 20 minutes and 28 seconds are occupied by the showing of the dramatisations produced by the Police Service and not by Seven Dimensions. Even if one approaches the matter upon the basis contended for by Seven Dimensions, it would seem to me difficult to compensate it for so much of the film as consists of dramatisations produced by the Police Service. It should be explained that these are shown towards the end of the video and form a distinct and separate compartment of it. It is not as if they are blended in with the Seven Dimensions' dramatisations. There are firstly the edited Seven Dimensions dramatisations, and very distinctly secondly, the Police dramatisations. If one were to approach the matter in the way contended for by Mrs Ash, one would need to apply her rate of $400 per minute to the number of minutes occupied by the edited versions of Seven Dimensions' dramatisations and not over the whole length of the video. Such a result would involve a figure of approximately $9,600 rather than $17,600. That is another matter I have taken generally into account. In the end, one has to do the best one can upon the basis of the evidence which there is. In all the circumstances I have reached the conclusion that an appropriate award would be an award of $5,000 and that is the award I propose to make. There remains the question of costs. Section 174 of the Act empowers the Tribunal to order that the costs of any proceedings incurred by any party, or a part of those costs, be paid by any other party. It has not been the practice of the Tribunal to order costs to successful parties as a matter of course. The view has been taken that orders for costs will only be made in cases where there are circumstances which justify the making of the order. Otherwise costs are borne by the parties who appear before the Tribunal themselves. The reason for this is that cases before the Tribunal often involve matters of doubt and difficulty between substantial parties who are owners or substantial users of copyright material. These cases often involve parties who are in an ongoing relationship who are in genuine dispute about the amount or amounts to be paid for the use of copyright material. In those circumstances, it is thought fair, particularly if parties have acted in good faith, that there should be no order for the payment by one party to another party of costs incurred before the Tribunal. This case, I think, is exceptional in that the Tribunal's jurisdiction was contested because of the view that there was an agreement, that being the agreement contended for by Inspector Keys, which provided for the terms upon which the copyright material could be used. No charge was involved. I have rejected that case in the circumstances which appear earlier in these reasons. If that case had not been maintained, the exercise would have been a very much more confined one. Furthermore, there would then have been a likelihood that the matter may have been settled for a reasonable amount without the need for a hearing. In those circumstances I think that I should make an order that the State of New South Wales pay to Seven Dimensions a portion of its costs. The reason why I have thought that it is right to award only a portion of the costs is because I regard the case brought by Seven Dimensions, in so far as it claimed $15,000, as an extravagant one. I realise that Seven Dimensions will have difficulty in understanding why I should reach this conclusion. I endeavoured to explain the position to Mrs Ash while she was in the witness box. A number of things were said in her presence to counsel in order to explain the way in which the Tribunal works and the nature of the exercise which is in question. There was never any indication that Seven Dimensions was prepared to resile from the extreme position which it maintained all along. In my opinion the amount it claimed was unreasonable and unjustified. In those circumstances I think that the correct order for costs is that the State pay to Seven Dimensions two-thirds of those costs. In default of agreement, the costs are to be taxed by the Secretary to the Tribunal as if the proceeding were a proceeding in the Federal Court of Australia and an order had been made that Seven Dimensions be paid its costs by the other party to the litigation. The costs are thus to be taxed in accordance with the scale of costs which applies to proceedings in the Federal Court. They are to be taxed on the highest scale, there being no other avenue of redress which Seven Dimensions could have sought. The orders I make are that the terms for the copying of the video produced by Seven Dimensions by the State of New South Wales are fixed at the sum of $5,000 to be paid within 14 days by the State to Seven Dimensions. The State of New South Wales is to pay to Seven Dimensions two-thirds of its costs of the proceedings, such costs in default of agreement, to be taxed in accordance with the highest scale of the scales of costs provided for proceedings brought in the Federal Court of Australia. I certify that this and the fifty (50) preceding pages are a true copy of the reasons for decision herein of the Copyright Tribunal. Associate to President: Dated: APPEARANCES Counsel for the Applicant: Mr D.B. Studdy Solicitors for the Applicant: Holding Redlich Counsel for the Respondent: Mr M.M. Macrossan Solicitors for the Respondent: Office of the Solicitor, NSW Police Service Dates of Hearing: 6.5.96, 4.7.96 Place of Hearing: Sydney Date of Decision: 19 July 1996