University of Newcastle v Audio-Visual Copyright Society Ltd [1999] FCA 103 (2 February 1999)

Last Updated: 17 February 1999

FEDERAL COURT OF AUSTRALIA

University of Newcastle v Audio-Visual Copyright Society Ltd [1999] FCA 103

UNIVERSITY OF NEWCASTLE & ORS v AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED

N 112 of 1999

Burchett J

2 February 1999

Sydney

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 112 of 1999

BETWEEN:	THE UNIVERSITY OF NEWCASTLE AND OTHERS Applicants
AND:	AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED Respondent

JUDGE:	BURCHETT J
DATE:	2 FEBRUARY 1999
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

1 This matter was originally brought before me as President of the Copyright Tribunal by way of a request for clarification of the meaning of interlocutory orders which I had made by consent in that Tribunal. After some discussion, it was agreed on both sides that the matter should proceed as an application for declaratory relief in the Federal Court of Australia, and it is on that footing that I now deal with it.

2 The problem arises out of circumstances which I must recount, though as briefly as may be. The applicants (to which I shall refer as "the Universities"), on or shortly after 20 December 1993, entered into agreements with the respondent Audio-Visual Copyright Society Limited (to which I shall refer as "Screenrights"), the collecting society declared under s 135P of the Copyright Act 1968 (Cth), intended to govern the payment of equitable remuneration for the copying of television and radio broadcasts by the Universities under Part VA of the Act.

3 Those agreements implemented remuneration notices, based on a sampling system within the meaning of s 135G, by providing for the carrying out of sampling and payment of remuneration in relation to a period commencing on 1 January 1994, referred to as "the commencement date". They contained, inter alia, the following clauses:

"2. Term

2.1 Subject to clause 2.3, the Term of this Agreement shall be from the Commencement Date and shall continue to 31 December 1997.

2.2 If at any time prior to 31 December 1997, the University requests by notice in writing to AVCS an extension of the Agreement after 31 December 1997, AVCS may, in its discretion, grant an extension of the Agreement to the University and notify the University to this effect in writing.

2.3 If AVCS agrees to an extension under clause 2.2, the Term of the Agreement shall continue thereafter from calendar year to calendar year unless terminated in accordance with clause 2.6 of the Agreement.

2.4 Subject to clause 2.5, upon AVCS accepting the exercise of the option to extend the Term of the Agreement by the University under clause 2.3, the parties shall continue to be bound by the terms and conditions of the Agreement.

2.5 The University acknowledges that it shall not be entitled to the benefit of the Discount in calculating Remuneration for any calendar year of the Term or part thereof after 31 December 1997.

2.6 Subject to clause 2.7, this Agreement may be terminated during the Term of the Agreement provided that:

(a) the party seeking to terminate this Agreement provides the other with three months notice in writing of the termination; and

(b) the termination shall not take effect until the end of the calendar year immediately following the expiration of the three month notice period referred to in the preceding subclause.

2.7 The earliest date that this Agreement can come to an end is 31 December 1997.

3. Remuneration Notice

3.1 The University hereby undertakes to pay AVCS equitable Remuneration for Copies of Broadcasts made by it or on its behalf under Part VA of the Act with such Remuneration to be assessed on the basis of the Sampling System as set out in the Agreement. The University acknowledges that this undertaking is the Remuneration Notice.

3.2 The University undertakes and agrees that the Remuneration Notice in clause 3.1 shall not be revoked while this Agreement is in force."

4 It is apparent that, as the agreements stood during their currency, the words "during the Term of the Agreement" in clause 2.6 must be understood to refer only to any extended term under clauses 2.2 and 2.3, since by clause 2.7 the agreement could not be terminated before 31 December 1997. It is also apparent that the remuneration notice, which (by clause 3.2) could not be revoked while the agreement was in force, was the notice, and only the notice, given under clause 3.1. In fact, the agreements were not extended, so they came to an end on 31 December 1997. They were purportedly terminated, but this was a superfluous act since they expired. After that, the remuneration notices were revoked, and fresh remuneration notices were served pursuant to which proceedings have been heard in the Copyright Tribunal. In those proceedings, a decision is presently pending.

5 Before the hearing could be held in the Tribunal, the parties sought to put in place an interlocutory regime for sampling and for the payment of equitable remuneration. The interlocutory orders, the effect of which is now in question, were made by consent on 9 February 1998. Omitting formal parts, those orders were:

"BY CONSENT ORDER:

1. until further order that subject to orders 2, 3 and 3A, and the matters noted in 4, 5, 6 and 7, the arrangements set out in the agreements between the applicant [Screenrights] and the respondents [the Universities] ("Agreements") for the payment of remuneration for the making of licensed copies of broadcasts ("Remuneration") and for sampling continue as if the Agreements were not terminated until the date which is the earliest of:

(a) 31 December 1998;

(b) the date on which the Tribunal makes the determination sought in paragraphs 7, 8 and 9 of the Application;

(c) the date of a further agreement between the parties covering the matters raised in 1(b); and

(d) the date of any order of the Tribunal which supersedes these orders;

2. that the applicant use its best endeavours to deliver to the Australian Vice-Chancellors' Committee (`AVCC') on or before 31 March 1998 the report for the 1997 sample ("Report"), conforming with the requirements of the agreement dated 20 December 1993 between the applicant and AVCC and also identifying the universities and academic organisational units involved in the 1997 sample;

3. that when Remuneration for the 1998 calendar year is determined ("Determined Remuneration") by agreement or by the Tribunal, the difference between the Determined Remuneration in respect of each respondent and any payments of Remuneration made by the relevant respondent for the 1998 calendar year will, within a month of the determination, be repaid by the applicant or the respondents as the case may be;

3A. that the verification procedure used in the sampling referred to in order 1 be as follows:

(a) all relevant staff in the departments chosen for sampling at a particular university sign a form (in the form of annexure A hereto which forms are to be prepared and issued at the university's expense) a reasonable period before the beginning of the sampling process certifying whether or not they have copied in the past year or intend or expect to copy in the sampling period;

(b) all staff who respond `yes' to either question in giving the certification referred to in (a) above will complete the verification forms weekly in the relevant survey period;

(c) all staff who respond `no' to both questions in giving the certification referred to in (a) above will only be required to complete the verification forms at the end of weeks 3 and 6 in the relevant survey period whether or not they copy in the survey period;

(d) all staff who respond `no' to both questions in giving the certification referred to in (a) above but who in fact make any copy in the survey period shall from the week in which the first copy is made complete the verification form weekly for the duration of the survey period; and

(e) the particular university chosen for sampling will provide to Screenrights within a reasonable period before week 1 of the relevant sampling period a schedule identifying which staff in which departments are:

(i) within the class of staff covered by (b) above; and

(ii) within the class of staff covered by (c) above;

3B. liberty to apply on 7 days notice;

AND NOTE:

4. that the orders are made as interim orders only and do not represent arrangements that the Tribunal, the applicant or the respondents regard as otherwise appropriate or acceptable;

5. any payments made by any of the respondents pursuant to these orders are made:

(a) subject to any determination of the Tribunal or agreement of the parties; and

(b) without any admission by any of the parties that they equate to equitable remuneration for the purposes of section 135J of the Copyright Act 1968;

6. the agreement between the applicant, the respondents and AVCC that each will use its best endeavours to provide information concerning the 1997 sample and to ensure information concerning the 1997 sample is provided by and to the relevant bodies, including AC Nielsen and the respondents, in order to allow the timely delivery of the Report in accordance with order 2; and

7. that the sampling period at Edith Cowan University will run from 21 February 1998 to 3 April 1998."

6 The final event in the circumstances which have led to the present dispute occurred after I had reserved my decision, at the end of the Tribunal hearing, but before the final written submission was received from counsel for the universities on 23 December 1998. That event was the revocation, on 24 November 1998, by most of the universities, of their then current remuneration notices, the subject of the proceedings in the Tribunal, with effect from 28 February 1999; and the substitution of remuneration notices, on the basis of a record keeping system, to operate from 1 March 1999.

7 What Screenrights seeks is a declaration that the terms of the consent orders precluded the universities from taking this course, except upon three months notice to come into effect at the end of a calendar year. That is said to follow from the application of clause 2.6 of the 1993 agreements, as revived by the orders made by consent on 9 February 1998 and by the agreements which underlay those orders.

8 It has required the statement of a series of matters to explain the setting in which the issue arises; but, once exposed, the issue itself is a short one. When the first of the consent orders provided that "the arrangements set out in the agreements between the applicant and the respondents ... for the payment of remuneration ... and for sampling continue as if the Agreements were not terminated", did it catch up clause 2.6 of those agreements so as to give it new life? Mr Catterns QC, for Screenrights, says clause 2.6 was part of the arrangements, and therefore must have been included with them. Mr Campbell QC, for the Universities, would confine the arrangements in question to the procedures involved in sampling and the details of payments.

9 In my opinion, it is the context which provides the answer. The context includes the nature of the order, as one operating only "until further order" and until the occurrence of one of several events, or at latest, until 31 December 1998. The context also involves the practical need to provide, in an interim way, for the copying that would be done under existing remuneration notices pending the determination being sought from the Tribunal.

10 In this context, it seems to me the orders clearly contemplated an operation which would have some continuing effect beyond 31 December 1998, because payments might still have to be made, but not an operation so as to create a new long-term relationship between Screenrights and the Universities. Such a relationship was the very matter the terms of which were to be settled by the Tribunal because the parties could not agree on it.

11 Accordingly, I do not construe the first order as using the expression "arrangements" in a sense so wide as to incorporate clause 2.6. I think it simply referred to the sampling and payment procedures for which the agreements provided, not to the terms on which those agreements could have been terminated had they still had life as persisting agreements. They did not still exist as agreements, and it would have been incongruous to have incorporated in the orders the clauses which had governed their possible termination at a time when they did exist. By the orders, some of their terms were revived, but only by force of the orders, and only whilst the orders continued in force. It was the orders, not the expired agreements, which provided by their own terms for the ending of the period of their operation. The orders did so expressly, and in some detail.

12 It must be acknowledged, as Mr Catterns QC says, that the sampling and payment procedures are complex, so as to make termination much less than clear cut; but whatever the difficulties therefore inherent in the orders, I think they did contemplate the limited period, confined by a definite end no later than 31 December 1998, to which I have referred. Of course, that means some continuing regime will have to be worked out in the cases of those universities which have not revoked their sampling notices.

13 For these reasons, the application must be dismissed. I direct the applicant to bring in short minutes accordingly on a date to be fixed.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Burchett.

Associate:

Dated: 16 February 1999

Counsel for the Applicants:	Mr D K Catterns QC with Mr N Manousaridis
Solicitor for the Applicants:	Mallesons Stephen Jaques
Counsel for the Respondent:	Mr J C Campbell QC with Mr R J Webb
Solicitor for the Respondent:	Baker & McKenzie
Date of Hearing:	2 February 1999
Date of Judgment:	2 February 1999