#EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ FEDERAL CIRCUIT COURT OF AUSTRALIA PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LTD & ORS v HAIRY LITTLE SISTA PTY LTD & ANOR [2018] FCCA 2794 Catchwords: COPYRIGHT – Infringement of copyright in protected sound recordings – where sound recordings played in restaurant/bar operated by the respondents without licence – proceedings brought by collection society after numerous attempts made to negotiate compliance – damages claimed for loss of licence fees – no appearance by the respondents – application in a case filed by applicant for summary or default judgment – assessment of damages under s.115(2) Copyright Act 1968 (Cth) – additional damages awarded. Legislation: Copyright Act 1968 (Cth), ss.85, 101, 115, 126 Federal Circuit Court of Australia Act 1999 (Cth), s.77 Federal Circuit Court Rules 2001 (Cth), rr.13.03, 13.07 First Applicant: PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LIMITED Additional Applicants: THE PARTIES SPECIFIED IN ANNEXURE C TO THE APPLICATION First Respondent: HAIRY LITTLE SISTA PTY LIMITED Second Respondent: KRISTINE BECKER File Number: SYG 1943 of 2018 Judgment of: Judge Baird Hearing date: 12 September 2018 Date of Last Submission: 12 September 2018 Delivered at: Sydney Delivered on: 12 September 2018 Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Cover sheet and Orders: Page 1 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ REPRESENTATION Solicitor for the Applicants: Ms R. Porter, Corporate Counsel, Phonographic Performance Company of Australia No appearance by or on behalf of the First and Second Respondents Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Cover sheet and Orders: Page 2 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ ORDERS THE COURT: (1) ORDERS, pursuant to r.13.07 of the Federal Circuit Court Rules 2001 (Cth), summary judgment against the Respondents. (2) DECLARES that the Respondents have infringed the relevant Applicants’ copyright in the following sound recordings referred to in the Application and the supporting affidavits of Lynne Small, Nartarsha Lea Wisewould, Michelle Irene Quinn and Adriana Ibic (the Identified Infringed Sound Recordings); Song Title Artist Copyright Date Performed The Ballad of The Beatles John & Yoko EMI Music Australia Pty Limited 23/11/2012 Hooked on a Feeling Blue Swede Warner Music Australia Pty Limited 26/02/2016 Saturday Night Bay City Rollers Sony Music Entertainment Australia Pty Limited 26/02/2016 T.S.O.P Kevin Rowland & Dexys Midnight Runners Universal Music Australia Pty Limited 26/02/2016 Be My Baby Bay City Rollers Sony Music Entertainment Australia Pty Limited 26/02/2016 Blow Blossoms Universal Music Australia Pty Limited 27/10/2017 Stokholm Atlas Genius Warner Music Australia Pty Limited 27/10/2017 Imaginandote feat Daddy Yankee Reykon Warner Music Australia Pty Limited 27/10/2017 Andy Last Dinosaurs Universal Music Australia Pty Limited 27/10/2017 Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Cover sheet and Orders: Page 3 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ (3) ORDERS that the Respondents, whether by themselves, their servants, agents or otherwise, be permanently restrained from causing or authorising any protected sound recordings licensed to the First Applicant (being those sound recordings owned or controlled in Australia by the entities listed at www.ppca.com.au/labels/list-ofcurrent-licensors) being heard in public, without the licence of the First Applicant or the respective copyright owner(s). (4) ORDERS pursuant to s 115(2) of the Copyright Act 1968 (Cth), that the Respondents pay the First Applicant damages in the sum of $35,529.87 (with the First Respondent’s liability for suc h s 115(2) damages being limited to $11,524.94). (5) ORDERS pursuant to s 115(4) of the Act, that the Respondents pay the First Applicant additional damages in the sum of $150,000.00. (6) ORDERS the Respondents pay the First Applicant interest pursuant to s 77 of the Federal Circuit Court of Australia Act 1999 (Cth) on the amount of $35,529.87 (being the total sum of s 115(2) damages). (7) ORDERS that the Respondents pay the First Applicant ’s costs fixed in the sum of $8,559.50 under Schedule 1 of the Rules. Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Cover sheet and Orders: Page 4 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY No. SYG 1943 of 2018 PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA PTY LIMITED First Applicant THE PARTIES SPECIFIED IN ANNEXURE C TO THE APPLICATION Additional Applicants And HAIRY LITTLE SISTA PTY LIMITED First Respondent KRISTINE BECKER Second Respondent REASONS FOR JUDGMENT (Ex tempore, revised from transcript) 1. The First Applicant, Phonographic Performance Company of Australia Limited (PPCA), is a collecting society representing the interests of owners of copyright and recorded music. As it is a non-exclusive licensee of that music, it is obliged, in order to establish certain requirements of the Copyright Act 1968 (Cth), to join as parties the recording companies for whom it acts. These are the addition al Applicants in this proceeding. 2. The Second Respondent, Ms Kristine Becker, is the sole director and shareholder of the First Respondent, Hairy Little Sista Pty Limited, which the evidence before me shows has been conducting a restaurant and bar known as “Hairy Little Sista” since at least 4 June 2015 at 240 Little Collins Street in Melbourne. At that bar, recorded music is Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Reasons for Judgment: Page 1 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ played, and the evidence shows that that is primarily pop and rock music. 3. Ms Becker was also the sole director and shareholder of the company the Hairy Group Pty Limited until its deregistration on 10 March 2017. The Hairy Group operated the restaurant and bar known as “Hairy Canary” which operated less than one minute’s walk from Hairy Little Sista, at 212 to 218 Little Collins Street. The evidence before me today shows that both Hairy Little Sista and Hairy Canary were operating as venues from at least 1 August 2012, although it is not clear whether Hairy Little Sista was operated directly by Ms Becker or through the company the Hairy Group prior to the incorporation of Hairy Little Sista Pty Ltd. The evidence shows that both venues operated as restaurant and bars 7 days a week, excluding public holidays, and that recorded music was played at both ve nues. The evidence shows that Hairy Canary’s music tended to the R&B, disco and soul end of the repertoire. 4. PPCA has attempted, since at least April 2012, to negotiate with Ms Becker and respectively with Hairy Group Pty Limited and Hairy Little Sista Pty Limited to license both venues, and Ms Becker has been notified since 2012 of the venues’ need to be licensed. The evidence shows that on about 4 February 2014 she submitted a licence application on behalf of the Hairy Group for the 2 venues, but apparently the negotiation stalled and the venues have remained unlicensed notwithstanding communications by letter, email and telephone from PPCA in the intervening years. Proceeding in this Court 5. This proceeding was commenced by application filed on 12 July 2018 accompanied by a principal affidavit of Ms Lyn Small sworn 11 July 2018 and a number of investigator affidavits, which evidence recorded music within PPCA’s repertoire being played at one or both of the venues variously in 2012, 2016 and 2017. Alt hough Hairy Canary closed its doors sometime prior to 10 March 2017, the evidence before me shows that Hairy Little Sista continues to operate as a restaurant/bar venue, opening 7 days a week. Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Reasons for Judgment: Page 2 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ 6. This matter was first before me on the first case management hearing on 3 August 2018. Whilst the Respondents did not appear in person, there had been last minute communications from Ms Becker, and in the event, Ms Porter for PPCA mentioned the appearance of the Respondents. On that occasion, I made orders by consent dispensing with the rules requiring the Second Respondent to be personally served and that it was sufficient the application, Applicant’s genuine steps statement, affidavit of Ms Small, and 3 affidavits of investigators be taken to be served on 23 July 2018, that being the date when those documents were delivered to the premises of Hairy Little Sista Pty Limited, and thus being served upon the First Respondent company as well as Ms Becker. 7. Whilst directions were made for the filing and service of responses and evidence on which the Respondents wished to rely, and I requested that the Respondents be urged to obtain independent legal advice and to file notice of address for service, there has been no communication with the Court and no responses or evidence filed and served. Whilst the evidence before me today shows that there were some brief telephone communications initially after the first case management hearing between Ms Porter’s office (at PPCA) and Ms Becker, those communications have not continued. 8. In the circumstances, on 7 September 2018 the Applicants filed an application in a case for summary judgment pursuant to r.13.07 of the Federal Circuit Court Rules 2011 (Cth) or, alternatively, default judgment against the Respondents pursuant to r.13.03(b) of the Rules. That application was returnable before me at the further case management hearing today. 9. I am satisfied that the application in the case and supporting affidavit of Ms Porter sworn 7 September 2018 have been duly served on the Respondents by express post to the business premises of Hairy Little Sista at Shop 1, 240 Little Collins Street, Melbourne, and that the documents were received on 11 September 2018 at 11.07 am. In addition, I am satisfied that Ms Becker was informed by email of the application in a case on 10 September 2018 at 5.20 pm. Thus, I am satisfied that the Respondents have been duly notified about the application today. Accordingly, I have heard the application. Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Reasons for Judgment: Page 3 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ 10. I should note that there was no appearance for the Respondents today. The proceeding has been heard by me in Sydney and by video-link to the Court in Melbourne. The Respondents have been called outside Court 2K in Melbourne at approximately 9.35 am, and there has been no appearance. 11. I am satisfied, on the evidence before me, that Ms Becker has had a close involvement with each of the businesses operated under the names Hairy Canary and Hairy Little Sista, and that she has been directly informed by PPCA since at least February 2014, when she submitted the licence application on behalf of the Hairy Group, but for the two venues. Indeed it is reasonable to infer, and I do infer, that she has been aware that both venues need to be licensed for the use of sound recordings since at least August 2012 by reason at least of letters sent by the licencing department of PPCA through 2012, in the case of Hairy Canary, since at least 18 May 2012 and, in the case of Hairy Little Sista, since at least 30 July 2012. Consideration 12. Rule 13.07 of the Rules provides for summary judgment. Rule13.07(1) and (2) read together provide, relevantly, that if, in a proceeding there is evidence of the facts on which the claim is based, and either: (i) there is evidence given by a party or by some responsible person that the opposing party has no answer to the claim; or (ii) the Court is satisfied that the opposing party has no reasonable prospect of successfully defending the claim, then the Court may give judgment on that claim and make any orders or directions that the Court considers appropriate. 13. Whilst the Applicants have sought default judgment in the alternative, I am satisfied that in the circumstances of this case and the evidence read on this application today, that it is appropriate to order summary judgment. 14. Section 85(1)(b) of the Copyright Act provides that the copyright owner of a sound recording has the exclusive right to cause the recording to be heard in public. The evidence is that PPCA is granted a Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Reasons for Judgment: Page 4 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ non-exclusive licence by the remaining Applicants, who it is convenient to refer to as the record companies, to grant licences for the public performance of protected sound recordings which are o wned or controlled by the record companies for the territory of Australia. PPCA is, pursuant to agreements entered into between PPCA and the respective record companies, entitled to commence proceedings in connection with infringement of the sound recording rights. As a holder of a non-exclusive licence, PPCA has properly joined the owners of the copyright in its repertoire as co-applicants. 15. Before me today the Applicants seek to rely on the presumption set out in s.126 of the Copyright Act, relevantly, (1) first, that copyright is presumed to subsist in the subject matter to which the action relates if the respondent does not put the question of subsistence of copyright in issue; and (2) secondly, where the subsistence of copyright is established then the plaintiff – in the present case, the Applicants – shall be presumed to be the owner of the copyright if they respectively claim to be the owner and the Respondents do not put the question of ownership of copyright in issue. 16. Because the Respondents have not appeared, nor filed any documents to bring into issue the subsistence of copyright in identified sound recordings which the evidence shows have been played at the venues, I am satisfied that the Applicants have established that each of them owns the copyright in the identified sound recordings and that copyright subsists in those sound recordings. 17. The evidence is that neither Hairy Canary nor Hairy Little Sista were ever licensed by PPCA or the relevant record companies to cause the sound recordings to be publicly performed at those venues. 18. As the venues continued to operate as restaurant/bars, and as I am satisfied that, at various times in 2012, 2016 and 2017, recorded music was performed at each of the venues (noting not Hairy Canary after March 2017), I am prepared to infer that for the duration each of the venues have been in operation, the venues have been unlicensed and have continued to publicly caused sound recordings owned or Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Reasons for Judgment: Page 5 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ controlled by the record companies to be publicly performed. As I have said, Ms Becker has been aware, at least since May 2012, of the requirement that the venues hold a licence for the public performance of protected sound recordings. 19. Section 101(1) of the Copyright Act provides that copyright is infringed by a person “who not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorises the doing in Australia of, any act comprised in the copyright”. In the present case, I am satisfied that the First Respondent, Hairy Little Sista Pty Limited, has, without the licence of the owners of the copyright, publicly performed protected sound recordings at the Hairy Little Sista premises without a licence since June 2015. 20. I am further satisfied that Ms Becker, was the sole director of Hairy Canary until it was deregistered. The evidence from the company search records is that the premises continued to operate until about 10 March 2017. I am satisfied that Ms Becker authorised the performance of protected sound recordings at the premises of Hairy Canary throughout that time. 21. Because Ms Becker is the sole director of Hairy Little Sista, and because the Hairy Group operated, or Ms Becker operated, Hairy Little Sista prior to the incorporation of Hairy Little Sista Pty Ltd, I am also satisfied that Ms Becker has either infringed copyright in the protected sound recordings by their performance at the business premises of Hairy Little Sista, or has authorised that unauthorised performance by the First Respondent after it was incorporated. 22. Ms Becker is thus an authoriser and joint tortfeasor of the infringement of Hairy Little Sista Pty Limited. She is also the authoriser and/or joint tortfeasor of infringements of the business operated by the Hairy Group, namely, at least Hairy Canary, prior to its deregistration. 23. What Ms Becker has done, however, is to ignore or disregard the attempts by the Applicants, principally PPCA, to ensure that the venues have been licensed for the performance of sound recordings. The modus operandi of Ms Becker and the corporate Respondent appears to have been intermittent engagement with Ms Porter’s office at PPCA Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Reasons for Judgment: Page 6 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ and the licencing department but not so as to accept the need to be licensed to perform the sound recordings or to engage with her (and the 2 companies’, of which she was, or is, sole director) responsibilities under the Copyright Act. The Respondents appear to have either acted in a flagrant disregard of copyright, or at least to have turned a blind eye or put their “heads in the sand”. Relief sought 24. The Applicants seek 3 forms of relief against the Respondents: (1) first, permanent orders restraining the Respondents from publicly performing the sound recordings owned or controlled by the record companies without the licence of the relevant record company or PPCA; (2) secondly, damages pursuant to s.115(2) of the Copyright Act calculated by reference to PPCA’s applicable rate under what is known as tariff R1, “restaurants, cafes and similar establishments”, taking into account the capacity of the 2 venues as had been advised by Ms Becker in the application for licence agreement in February 2014, noting that PPCA has capped the licence fee at a lower capacity than at least Hairy Little Sista’s stated capacity, namely capped at 60 seats whereas Ms Becker had indicated that the venue could seat up to 65 persons; and (3) thirdly, additional damages pursuant to s.115(4) of the Copyright Act. The Applicants also seek their costs. 25. Turning, first, to the permanent orders sought by the Applicants, the Applicants first seek a declaration that the Respondents have infringed relevant copyright in a number of sound recordings. I am satisfied on the evidence read on this application today that it is appropriate to make a declaration in the terms sought and I will do so. Secondly, in terms of permanent injunctions, I am satisfied that it is appropriate to order permanent injunctions. I am satisfied that the behaviour of the Respondents is such that without an injunction there is a likelihood of continuing infringement and a likelihood of – indeed a probability of – damage, being at least the non-payment of licence fees. Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Reasons for Judgment: Page 7 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ 26. The failure to engage at any time meaningfully in at least the last 4 years, and since these proceedings have been contemplated and brought, is such that injunctive relief is appropriate. I am satisfied that an injunction should issue in terms sought by paragraph 4 of the proposed short minutes. 27. In relation to damages under s.115(2) of the Copyright Act, I am satisfied that this is an appropriate case to adopt a licence fee approach. By reference to the applicable licence fees, by way of damages I will order that the Respondents pay to the First Applicant damages under s.115(2) in the sum of $35,529.87, with the First Respondent’s liability for damages under s.115(2) of the Copyright Act being limited to $11,524.94 of that total. Additional damages 28. Turning to additional damages pursuant to s.115(4) of the Copyright Act, prior to commencing these proceedings one or other of the Respondents have received numerous forms of correspondence from PPCA, including some 20 letters and 18 emails, notifying them of the requirement to hold a licence. I am also informed that PPCA has contacted Ms Becker via telephone over 40 times, and has had several telephone conversations with her since December 2012 regar ding the requirement to hold a licence. 29. I am also cognisant that damages under s.115(4) contain an element of deterrence, and can recognise the need to effect deterrence, and the concern that the Court has about the Respondents’ lack of engagement and lack of respect for the copyright rights of the Applicants. Ms Porter has indicated a range of additional damages that other judges of this Court and the Federal Court have awarded against respondents including in circumstances where the use has been of sound recordings in nightclubs. Taking into account effectively 6 years of unauthorised use I am prepared to order additional damages, in the sum of $150,000, noting that the Respondents have acted with contumelious disregard for the Applicants’ rights and have ignored the attempts of the First Applicant to engage with them over the long period of their unauthorised use. Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Reasons for Judgment: Page 8 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP #EEGRVGF D[ VJG %QWTV 5KIPGF D[ #WUV.++ 30. The Applicants also seek interest pursuant to s.77 of the Federal Circuit Court of Australia Act 1999 (Cth). I am prepared to order interest on the amount of s.115(2) damages but not on the additional damages amount. Finally, the First Applicant seeks its costs, and I will order that the Respondents pay the First Applicant the sum of $8,559.50, being costs fixed under schedule 1 of the Rules, and I will so order. 31. I will make orders effective as of today. I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Judge Baird. Date: 27 September 2018 Phonographic Performance Company of Australia Pty Ltd & Ors v Hairy Little Sista Pty Ltd & Anor [2018] FCCA 2794 Reasons for Judgment: Page 9 4GVTKGXGF HTQO #WUV.++ QP 1EVQDGT CV 8GTKH[ XGTUKQP