Primary judge's reliance on chain of emails
171 It is necessary at this juncture for us to turn to consider the appellants' challenge to what they described as the primary judge's reversal of certain rulings on evidence, particularly in relation to the admissibility of, and reliance to be placed on, certain email correspondence. The conclusions reached in respect of that issue bear heavily on the appellants' challenges to the correctness of the primary judge's findings represented by the third, fourth and fifth "essential" propositions. The significance of those propositions, and particularly the third and fourth of them, is that they establish the "knowledge" requirement of s 38 of the Copyright Act. The Aristocrat parties' case on infringement by dealing could not and cannot succeed without that requirement being established with respect to the Global/Impact parties.
172 During the course of submissions before the primary judge, a great deal of time was taken over objections to admissibility of certain emails, both as to the purpose for which they could be admitted, and their relevance to the particularised infringing transactions. On appeal, particular issues in relation to the way in which the email correspondence was used arose. They were:
whether certain emails, held to be admissible only against the respondents from whom they derived under the "usual s 136 ruling" could then be admitted against all respondents (subject to relevance) after the close of evidence; and
whether the primary judge could rely on the contents of the emails to establish the connection between the joint venture and the conduct constituting the alleged copyright infringement.
173 It is apparent that the proceedings concerned serious allegations of wrongful joint activity. In this regard, the primary judge was mindful that he needed to be satisfied to the level of "actual persuasion" and "exactness of proof", and specifically indicated that he had reached a level of actual persuasion in relation to the claims. His Honour did this on the basis of all the email correspondence relied upon by him as supporting the "essential propositions". Whether or not s 140 of the Evidence Act has replaced the test in Briginshaw need not be debated in the circumstances of this proceeding. The primary judge clearly proceeded upon the basis that the allegations were serious, and sought to apply the appropriate principle in that regard.
174 Part of the rulings by the primary judge on the contested evidence involved admitting a substantial body of evidence during the trial subject to the "usual s 136 ruling", meaning that it was admitted as evidence against one or more (but not all) of the respondents. This evidence included documentary evidence (such as the chains of email correspondence relating to the supply of gaming machines to the Latin American region) and other material (such as the CD-Rom Exhibit CCC-14, counterfeit EPROMs and blank compliance plates), which enabled the primary judge to make some "preliminary factual findings".
175 For the purposes of this appeal, we focus on the email communications relied upon by the primary judge, as these formed an essential part of the reasoning process of the primary judge. It would appear that not all the emails referred to by the primary judge were subject to the usual s 136 ruling, but most of those relied upon by the trial judge as essential to reach the conclusions he did were subject to the usual s 136 ruling.
176 The majority of this evidence is to be found in Exhibit A1. Exhibit A1 was a bundle of documents that were extracted from documents of the Global parties available to the Aristocrat parties in around late 2006, following the initial disputes between the Aristocrat parties and the Global parties. A number of other documents were also tendered as separate exhibits.
177 The Aristocrat parties submitted that many of the email communications contained in Exhibit A1 constituted "instances of unguarded communications that make plain the true nature of the joint venture's trade (a counterfeiting operation)". A large number of email communications were extracted and put to the respondents' witnesses in cross-examination. It is important to appreciate that the emails essential to the primary judge's reasoning did not relate to any of the transactions the subject of the alleged infringements. This becomes significant when we come to address the relevance of the contents of the emails and the use made of them by the primary judge.
178 It is important to set out briefly the chronology leading up to the s 136 ruling, the basis upon which it was made, and subsequently lifted. In doing so, the purpose for which the parties, and then his Honour, used the evidence will also become apparent.
179 The chronology can be set out as follows.
180 On day one of the trial, the Aristocrat parties' oral opening made clear they would seek to establish joint liability.
181 The Aristocrat parties said they would ask for evidence (including the email correspondence) to be admitted against all the respondents, pending a ruling on relevance. No reliance was placed upon the provisions of the Evidence Act relating to tendency evidence (see Pt 3.6). On appeal, it was accepted that the evidence was not led pursuant to Pt 3.6 of the Evidence Act. The email correspondence was, however, relevant to establishing the nature and existence of the joint venture and the witnesses' credit. At the outset, it can be observed that whilst the emails relied upon by the primary judge may have been relevant to the nature and existence of the joint venture and credit, they could not be used to prove the particularised infringing transactions unless they were admitted under Pt 3.6. We will return to this observation later.
182 Each respondent at trial objected to the course proposed by the Aristocrat parties where provenance of the emails did not directly relate to that respondent and instead sought a ruling under s 136, or rejection under s 135 of the Evidence Act.
183 The primary judge then directed that the Aristocrat parties would need to lay a foundation for the joint venture case before evidence could be admitted against all respondents.
184 During the course of the Aristocrat parties' evidence, the primary judge ruled that "until further order" evidence would be admitted only against the Global/Impact parties and the Allam parties respectively. Senior Counsel for the Aristocrat parties indicated that he would revisit the usual s 136 ruling when appropriate.
185 The primary judge indicated that the usual s 136 ruling was to be adopted as a "standing procedure" throughout the trial and indicated that it was not necessary to seek the ruling every time.
186 No usual s 136 ruling was expressly sought in respect of any evidence adduced in cross-examination from a witness called by the Aristocrat parties, or in respect of any evidence in chief by any of the respondents, or in respect of any cross-examination of any witness called by the respondents at the trial.
187 During the course of the trial, the parties expressly acknowledged the temporal nature of the usual s 136 rulings that would apply "in the first instance".
188 Eventually, on 20 October 2008, before the close of their case, the Aristocrat parties sought to have their tender bundles, including Exhibit A1, admitted into evidence.
189 The Aristocrat parties provided an index which set out the respondents against whom the Aristocrat parties would seek to have each email admitted on the usual s 136 basis. The Aristocrat parties reminded the respondents before the primary judge that they would seek to tender the evidence against all of them if the joint liability case was established.
190 Again, no reliance was placed upon Pt 3.6 of the Evidence Act, and cross-examination on the emails was based upon credit, or establishing the existence of the joint venture.
191 The respondents made a number of objections as to the relevant respondent against whom the Aristocrat parties sought to tender specific emails. The primary judge ruled on the parties' objections as the email evidence was sought to be tendered.
192 On day 14 of the trial, on 24 October 2008, Senior Counsel for the Aristocrat parties indicated that the Aristocrat parties' case had closed, subject to receiving and considering amended defences from the respondents.
193 The hearing was adjourned until 5 March 2009, for the completion of evidence by the Global/Impact parties and for final addresses.
194 On 5 March 2009 a directions hearing was heard. There was no suggestion of re-opening evidence raised by the parties.
195 Thereafter, on 9 March 2009 the evidence of the Global/Impact parties concluded.
196 Between 10 and 13 March 2009, the Allam parties' evidence was completed.
197 On 10 March 2009, the Global/Impact parties advised that their case was closed (subject to whether Mr Andrews might be required to prove a document further to a notice to produce).
198 Thereafter, on 12 March 2009 there was a further tender of evidence by the Aristocrat parties. The Aristocrat parties then advised that they had completed their case in chief, such as it had remained open.
199 The respondents before the primary judge expressed a desire to have time to analyse the Aristocrat parties' written submissions in advance of the oral closing submissions.
200 The respondents stated that they wanted to have a clear understanding of the allegations the Aristocrat parties were pursuing, and the evidence in support.
201 The matter was adjourned to the next day, at which time a timetable was set for written submissions in advance of the final oral submissions.
202 The hearing of oral submissions was adjourned for seven weeks. On 19 March 2009, the Aristocrat parties served their written closing submissions.
203 In the written closing submissions of Aristocrat, the Global/Impact parties were characterised as the "Joint Venture". The Allam parties were characterised as acting as executives of the "Joint Venture" and some respondents were said to be liable for their activities on the usual principle of vicarious liability. The submissions on infringement were framed in terms of the joint venture's liability, and made no distinction between evidence that was subject to the usual s 136 rulings and that which was not.
204 On 8 April 2009, the Allam parties' written closing submissions were served. The Allam parties recognised that Aristocrat's joint enterprise case relied on material from Exhibits A1 and A2 and the email correspondence the subject of the usual s 136 ruling.
205 The Allam parties revealed their position that it was now too late for the Aristocrat parties to make any application to reverse the usual s 136 rulings. Nevertheless, the Allam parties made submissions on evidence that they contended should not have been admitted against them.
206 On 29 April 2009, the Global/Impact parties' written closing submissions were served.
207 They raised the Aristocrat parties' entitlement to apply for reversal of the usual s 136 rulings in the same way as the Allam parties had done.
208 On 30 April 2009, Aristocrat applied for a variation of the usual s 136 ruling. The primary judge made the variation and admitted all evidence on a provisional basis subject to relevance.
209 On 5 May 2009, the primary judge made the following orders:
1. All previous orders made pursuant to s 136 of the Evidence Act 1995 that had the effect of limiting the admissibility of evidence (whether by affidavit, oral testimony or documentary tender) against particular respondents while allowing it against other respondents be revoked, subject to their reinstatement by order 3.
2. All evidence whose use was previously limited on the basis that it was only admitted as against particular respondents and not against other respondents be admitted provisionally against all respondents, subject to relevance.
3. To the extent that the Court decides not finally to admit evidence referred to in order 2 above against a party or parties, the admissibility of the evidence against those parties be only in accordance with the previous orders referred to in order 1 above.
210 In his reasons, the primary judge referred to his decision made during the course of the closing submission, as follows:
932 Nor did I consider it was appropriate to exercise my discretion under s 136 to limit the evidence as was sought by the respondents.
933 I was satisfied that evidence which was admitted provisionally was admissible against all the respondents. The case of joint liability was made good for the reasons referred to above.
211 It appears from the transcript of the argument which occurred on 30 April 2009, which led to the order made on 5 May 2009, that the primary judge proceeded on the basis that it was open to him to rule that the disputed documents be admitted against all the respondents "at least provisionally", and he would rule on admissibility upon giving his final judgment. The primary judge indicated that the documents in dispute only became relevant in relation to any particular respondent if there was "a joint enterprise". However, it is important to bear in mind, that during the course of the evidence, the primary judge had already, albeit until further order, exercised his discretion under s 136 to limit the use to be made of the evidence.
212 Up until 30 April 2009, the position was as follows:
(a) all the parties knew that an important issue in the proceeding involved the allegation of joint enterprise or conspiracy;
(b) evidence going to prove this was admitted against some respondents but not all, and this was the limitation addressed in the usual s 136 ruling;
(c) the ruling was interlocutory and was expressly made subject to further order;
(d) whatever flexibility the respondents gave the Aristocrat parties in presenting their evidence:
(i) the respondents at all times pressed their reliance on the usual s 136 rulings;
(ii) the parties closed their case on the basis of the usual s 136 rulings still subsisting, so that that the evidence the subject of the ruling was not evidence against all the respondents until the variation was made during the course of final submissions;
(e) cross-examination did occur, without any express limitation on the use that could be made of it, on some of the disputed email evidence, but the Aristocrat parties necessarily had to rely on the content of email correspondence (and other evidence) to prove their claims;
(f) no reliance was placed by the Aristocrat parties on Pt 3.6 of the Evidence Act in relation to the emails that were not related to the particularised infringing transactions.
213 Bearing this in mind, it is important to emphasise that the emails were central to the conclusion reached by the primary judge in three ways. First, they were relevant to the findings about credit. Secondly, they were relevant to findings in relation to the joint venture and to the "tacit agreement" between the parties. Thirdly, they were relevant to the primary judge being satisfied as to "the counterfeiting operation" as alleged (see eg, [768]). As such, without the emails being relied upon by the primary judge, he could not have connected the particularised infringing transactions with the joint venture and "tacit agreement" as to the counterfeiting operations that his Honour found existed.
214 As we have already indicated, the primary judge expressly stated that that the emails were not tendered as proof of the facts stated in them, but nevertheless found the contents of the communication "revealing" (at [321]). His Honour also stated that to a large extent, the emails spoke for themselves (at [325]). It was upon this basis he made certain findings (outlined at [325]-[340]). He did not accept the explanations given about the contents of the emails by various witnesses.
215 To demonstrate the significance of these emails to the reasoning of the primary judge, it is necessary to set out in detail the email chain the subject of the rulings, and the use made of them by the primary judge.
216 There were six email chains in total, all included in Exhibit A1.
217 The first email chain was on 9 and 10 November 2004. The primary judge described it as follows, along with the relevant cross-examination:
274 The next relevant document is an email chain contained in the tender bundle between Mr Andrews, Mr Allam and a Mr Richard Foote dated 9 and 10 November 2004 that was originally tendered against the Global and Tonita respondents.
275 The first email in the chain is from Mr Andrews to Mr Foote and states:
Hi Richard
Just testing your email address - Riad will probabl;y [sic] send me the software later on tonight and I'll forward it to you then.
276 To this email, Mr Allam replied:
hi toni
[t]his is the new version of wcard bet 50 to suit 1c 2c 5c 10c and20c riad
277 In cross-examination, Mr Cobden put it to Mr Andrews that the "new version of wcard" to which Mr Allam referred was software that was suitable to run an Olympic game called Wildcard Bet 50. Mr Andrews accepted that "wcard" meant "Wildcard", however refuted the suggestion that the software that had been sent by Mr Allam and that was referred to in the email was an Olympic game, but "was to do with the bill acceptor that was attached to the machine".
218 The primary judge, in relation to the email chain (and others) made significant findings as follows:
647 Indeed, the answers given by Mr Andrews to questions he was asked about the emails which I have set out at [275], [284], [292], [296], [306], [308], [310] and [319] contain further examples of his untruthfulness.
…
726 The inference to be drawn from the relevant email correspondence referred to above is that the Tonita respondents sent the pirated Aristocrat software to South America for use in the South American market: see [275], [276], [284], [286], [295], [296], [312], [316].
…
751 It is clear, in my view, from the email correspondence that Mr Andrews and Mr Cragen were aware of the fact that Mr Allam was burning Aristocrat game software onto blank EPROMs. I reject their explanations of the emails.
752 The relevant emails are those set out at [275], [284], [286], [295], [296], [312] and [316].
219 The second email chain was on 12 and 15 November 2004. The primary judge described it as follows along with the relevant cross-examination:
278 The next relevant document is an email chain dated 12 and 15 November 2004 between Mr Andrews and a Mr Kirill Mendelson, a customer of the Joint Venture who had purchased a large quantity of gaming machines for sale in the Russian market. The subject line of the emails is "Manufacturers Plates", which Mr Andrews acknowledged in cross-examination referred to compliance plates.
279 The most relevant part of the email chain is a part of an email from Mr Andrews to Mr Mendelson, copied to Mr Cragen, as follows:
Hi Kirill
I can organise the manufacturers plates for you as per your discussions with George.
I need to let me know [sic] the exact information you want on the plates as follows
Mark 6
Date of Manufacture - do you want them all made in the same year or do they have to be a month and year
Serial Numbers - (is there a set serial number you need to use for each machine as per the import you have made or can they be random that we think up or can they be running numbers
…
You can use the XAW5…….series which is normally used by Aristocrat for their conversions of MVPs to Mark 6 or if they are an original Mark 6 then the series of serial numbers will be XAW6…………etc.
Please let me know what you want and we will sort it out for you.
280 This document was originally tendered against the Global and Impact respondents.
281 Mr Cragen accepted that this email resulted from a discussion between himself and Mr Mendelson. Mr Cragen strongly denied in cross-examination that in the discussion, Mr Mendelson had asked him to make up fake Aristocrat compliance plates. He said that Mr Mendelson had indicated that he was willing to purchase the entire Uruguay shipment for sale in Russia, and wanted two sample machines to be sent to him beforehand. Mr Cragen said that he believed that Mr Andrews' email was a reference to the possibility of sending leftover compliance plates from Sydney on the sample machines, or using the numbers that were on leftover compliance plates that had been removed from stripped machines.
282 The email was also put to Mr Andrews in cross-examination. Mr Andrews did not accept that the email was an offer from him to arrange to have compliance plates made and have serial numbers placed on them. Mr Andrews stated that in the email, he was offering to procure original compliance plates for Mr Mendelson that had been taken off gaming machines. He said that if Mr Mendelson provided him with the information that he required on compliance plates, he (Mr Andrews) would be able to source compliance plates that contained that information from his supply of compliance plates that had come off original machines and that were kept in bins at the Botany Premises. If Mr Andrews was unable to source compliance plates containing the particular information that Mr Mendelson wanted, he said that he would have "gone back and said I can't supply that".
220 The primary judge then made these findings:
331 …, Mr Andrews offered to arrange for Aristocrat compliance plates with fake serial numbers to be made for a customer of the Global/Impact Joint Venture. He did so following a conversation between Mr Cragen and the customer about the supply of gaming machines.
332 This is quite clear from the email chain of 12 and 15 November 2004 and, in particular, from the extract set out at [279]. Mr Cragen accepted that the email resulted from a discussion between himself and the customer. I am inclined to accept Mr Cragen's denial that the customer, Mr Mendelson, asked him to make up fake Aristocrat compliance plates, but I do not consider that he gave me a truthful account of the conversation which took place.
333 The inference I would draw from the email communication, and from Mr Cragen's concession that a discussion took place, is that he discussed the topic of the compliance plates with Mr Mendelson and that he would leave it to Mr Andrews to contact Mr Mendelson about it.
334 Implicit in this is, at very least, the acceptance by Mr Cragen that the Global/Impact Joint Venture was prepared to supply gaming machines with false Aristocrat compliance plates.
…
642 There were other examples of prevarication by Mr Andrews. One was his refusal to accept that the email which I have set out at [279] was an offer to have compliance plates made up with fake serial numbers placed on them.
…
744 This is supported by the evidence contained in the emails and the inferences to be drawn from them. The clearest example is the email from Mr Andrews to Mr Mendelson and Mr Cragen set out at [279].
745 In that email Mr Andrews said he could organise the "manufacturers plates" for Mr Mendelson. It is plain that this was an offer to manufacture counterfeit compliance plates.
…
753 In my opinion, Mr Andrews and Mr Cragen were aware that Mr Allam was manufacturing counterfeit compliance plates for export to foreign markets.
754 That is precisely what Mr Andrews told Mr Mendelson that he could organise in the email set out at [279]. The email was copied to Mr Cragen.
755 Whilst I am prepared to accept Mr Cragen's denial that Mr Mendelson asked him to make up fake Aristocrat compliance plates, I reject his explanation of the email: see [281].
756 In my opinion, the email was sufficiently clear on its face to reveal what Mr Andrews had in mind. Mr Cragen's suggestion that the email referred to the use of leftover compliance plates from sample or stripped machines is not consistent with Mr Andrews' statements, in particular "can they be random that we think up".
…
869 The more probable explanation, in line with the business communications of the respondents recorded above and in particular the email set out at [279], is that Mr Andrews selected serial numbers to go on compliance plates that he knew would pass an inspection. It is for this reason that various serial numbers were duplicated on one or more invoice issued by the respondents.
…
879 I am satisfied that 11 of the 54 impugned transactions comprised gaming machines which contained infringing components of the Aristocrat companies' gaming machines. Four of these transactions fell into the "MC" category, namely transactions 34, 36, 48 and 54. Seven of the transactions fell into the "DN" category, namely transactions 13, 20, 28, 29, 41, 46 and 51.
…
748 The emails at [279] and [289] were initially admitted only against the Global/Impact respondents but I subsequently admitted them provisionally against all the respondents. In my view, the emails were probative evidence against the Tonita respondents when considered in the light of the counterfeit compliance plates seized from the Bankstown, Georges Hall and Botany Premises and from the revelation that Mr Allam had a hand engraver.
221 The third email chain occurred on 18 November 2004. The primary judge described it as follows:
283 The next document is an email chain between a Mr Kevin Hirst, who was involved with Huricane, Mr Andrews and Mr Allam. The email chain is dated 18 November 2004 and was initially tendered against the Global and Tonita respondents.
284 In an email to Mr Andrews, Mr Hirst indicated that he was waiting for a "complete set of game Roms [sic]". He continued:
Riad has sent only 2 color proms and both of them are blank files So he has either mis read the prom or has a defective ones.
With regard to the EPROM size the ones in the games that we have erased are 16 times the size of the files that Riad has sent for the Low res games and will require about 1-2 days to convert the Files there are 42 files involved that will require modification and I am not certain that we have all the ROMs for all the games. [sic]
285 Mr Andrews acknowledged in cross-examination that he understood this email to be a reference to a misread EPROM, that is to say that there was a mistake when copying an EPROM. However, he denied that the email referred to the exercise of copying game EPROMs on to a computer by Huricane.
286 In response to the above email, Mr Allam replied by email in the same email chain as follows:
If Kevin requires the games that I sent to him by mail, I still have the complete set of games on eprom. If he wants then I will send the games to him tomorrow by mail (express post).
Thanks
Riad
287 In cross-examination, Mr Allam denied that he had ready access to games such that he would be able to mail them immediately because he kept a master copy of the games.
222 The primary judge then made the following findings:
367 An example of this may be found in the email conversations to which I have referred above. The email referred to at [279] contains an offer by Mr Andrews to make compliance plates with false numbers. Mr Allam was the "technical guy" for the Joint Venture and it is therefore likely that he would have carried out that work. Other emails, such as those at [284] and [312], suggest that Mr Allam burned Aristocrat games onto blank EPROMs.
…
647 Indeed, the answers given by Mr Andrews to questions he was asked about the emails which I have set out at [275], [284], [292], [296], [306], [308], [310] and [319] contain further examples of his untruthfulness.
…
751 It is clear, in my view, from the email correspondence that Mr Andrews and Mr Cragen were aware of the fact that Mr Allam was burning Aristocrat game software onto blank EPROMs. I reject their explanations of the emails.
…
726 The inference to be drawn from the relevant email correspondence referred to above is that the Tonita respondents sent the pirated Aristocrat software to South America for use in the South American market: see [275], [276], [284], [286], [295], [296], [312], [316].
…
768 Moreover, the email correspondence to which I have referred at some length makes it plain that the Global and Impact respondents sanctioned, approved or countenanced the infringements of copyright carried out by the Tonita respondents: see [284]ff. Indeed, whilst there was no joint venture between the Tonita respondents and the other respondents to the proceedings, there was, in my view, something in the nature of concerted action or agreed common action; it was not necessary for the Aristocrat companies to prove an express plan mapped out by the primary offenders. The evidence more than sufficiently establishes "tacit agreement" between the parties: see Universal Music v Cooper at [135].
223 The fourth email chain occurred between 17 and 19 February 2005. The primary judge described the email chain as follows:
288 The next relevant document is an email chain between Mr Andrews and Mr Mendelson (copied to Mr Cragen) with the subject "Atronic". The emails are dated 17, 18 and 19 February 2005 and were originally tendered against the Global respondents only. There are several relevant parts within the chain of emails.
289 First, in an email to Mr Mendelson, Mr Andrews says:
Hi Kirill
Re the Atronic shipment …
I have been advised that the plates that were to be put on the machines dont have the Atronic logos and I'm trying to get a list of the serial numbers by COB this afternoon so that I can get Riad to make them up by Tuesday next week and I'll take them to Melbourne with me for fitting on the machines. …
I need some dummy invoices made up for say 80 machines and 50 machines by that date …
[D]id you fix up the last lot of freight … or is this being held pending the recent problems with the incorrect plates / serial numbers for the shipment of 119?
290 When questioned on this part of the email, Mr Andrews conceded that it was possible that the email was a reference to Mr Allam making up or engraving some compliance plates for the "Atronic" machines, a set of gaming machines that had been purchased from Tabcorp. Mr Andrews gave evidence that because of the way the machines were manufactured, and the practice of the Victorian gaming industry, it was necessary to arrange for the manufacture of additional compliance plates for the Atronic machines.
291 The second relevant part of the email chain is in the reply to Mr Andrews' email from Mr Mendelson as follows:
Please make sure that the tags are attended to and for a change we have the right ones attached.
Mr Andrews indicated that he believed that the reference to "tags" in this email was to compliance plates.
292 Mr Andrews then replied to Mr Mendelson as follows:
Hi Kirill
Is there any particular year of manufacture you want on the plates or do you want me to just go with the series of dates within the numbers of the ones that have passed before (I should be able to get close based on previous lists) or do you want to nominate dates.
293 Mr Andrews acknowledged that this email was a reference to engraving on blank compliance plates the year of manufacture and serial numbers that suited Mr Mendelson, however he denied that this involved using serial numbers that were on existing lists obtained from Tabcorp because those number had been accepted by regulatory authorities in the past. He explained the practice of engraving compliance plates for the Atronic machines by reference to the Victorian gaming system, which involved putting two sets of serial numbers on compliance plates.
224 The primary judge then made the following findings:
647 Indeed, the answers given by Mr Andrews to questions he was asked about the emails which I have set out at [275], [284], [292], [296], [306], [308], [310] and [319] contain further examples of his untruthfulness.
…
747 … there was other evidence from which it is to be inferred that Mr Andrews was to make up a set of compliance plates, albeit for machines manufactured by a different gaming machine manufacturer: see [289].
748 The emails at [279] and [289] were initially admitted only against the Global/Impact respondents but I subsequently admitted them provisionally against all the respondents. In my view, the emails were probative evidence against the Tonita respondents when considered in the light of the counterfeit compliance plates seized from the Bankstown, Georges Hall and Botany Premises and from the revelation that Mr Allam had a hand engraver.
225 The fifth email chain occurred between 21 and 25 October 2005. The primary judge described this chain as follows:
306 The next relevant communications are two email chains between Mr Andrews, Mr Vladimir Trajkovski, Mr Andres Kan and Mr Cragen dated 21 and 25 October 2005. The emails relate to machines that formed part of the Uruguay transaction. The first email chain contained an email from Mr Andrews as follows:
Hi Vladimir
What has happened to all the original artwork we sent down to you for projects - I thought you were supposed to keep these and return them to us here?
…
If we cant get the originals back then we will have to charge the group for these sets of artwork which have a value in the local market place here of arouns$1000. [sic]
I cant believe we are sending more of the same gear down there when I was fairly sure that we had made it very plain that we were to have all the originals returned to us.
307 In cross-examination, Mr Andrews denied that the implication to be drawn from this email was that he had sent original artwork to Vladimir with the intention that it would be copied in South America, the copies distributed for sale, and the original returned to him in Australia. He said that the reference to sending artwork back was meant to convey that the surplus that was not used in the project was to be sent back to him in Australia. Mr Cragen also denied any understanding that Mr Trajkovski was borrowing the artworks with an intention of copying them.
308 The second email chain contained another email from Mr Andrews as follows:
Hi Vladimir
…
2/ I have attached a full list of all the original artwork sent - This was given to you / Dante with the instructions that these were to be returned to us here as each one has a value in this market place.
So I need to know
…
c) Original artwork was given to Tony Nuevo and this was again given with instructions for their return to us here …
309 Mr Andrews again denied in cross-examination that this email was a reference to sending artworks to Mr Trajkovski, all of which he expected to be returned to him in Australia.
310 Following this email in the chain was an earlier email that had been sent by Mr Trajkovski to Mr Andrews. The relevant part is as follows:
3. Original artwork, it was sent to us in the last seconds prior to shipping to install them in the machines to Macedonia as we did not have any graphics (what Riad sent was partial) and those where [sic] only 3 or 4 games if I remember well, we did not have time to take copies. But all of this was talked on the phone with you and Riad.
311 In relation to this email, Mr Andrews denied that he understood Mr Trajkovski to mean that he had to use some original artworks, because contrary to the understanding he had with Mr Andrews to make copies of the artwork and send the originals back, he did not make the copies. Mr Cragen also denied that he understood this explanation to be the case at the time that Mr Trajkovski had sent the email, but conceded that when he read the email now, that may be a possible interpretation.
226 The primary judge then made the following findings:
322 I reject the explanations given in cross-examination by each of Mr Andrews, Mr Cragen and Mr Allam. The explanations were, in my view, quite unconvincing and were at odds with the terms of the communications which were, themselves, reasonably clear on the face of the documents.
…
329 There were other offers to the same effect, including the email chain dated 21 and 25 October 2005, and a request from South America for artwork to be translated into Spanish: see email of 10 November 2005.
330 The email chain of 21 and 25 October 2005 is an example of Mr Cragen's tacit acceptance of the Joint Venture's role in the South American counterfeiting operations.
…
647 Indeed, the answers given by Mr Andrews to questions he was asked about the emails which I have set out at [275], [284], [292], [296], [306], [308], [310] and [319] contain further examples of his untruthfulness.
…
660 The second example is Mr Cragen's attempt to explain the email set out at [306]. This was an email from Mr Andrews to Mr Trajkovski about the failure to return original artwork.
661 Mr Cobden put to Mr Cragen that the intention at the time was to send the original artwork to South America for the purpose of having it copied and then returned. Mr Cragen said initially that he did not know; he then said he did not believe that was the intention. Next he tried to explain the difficulty away by saying "but [Mr Trajkovski] kept them" and "didn't pay for them".
662 Eventually Mr Cragen conceded that his intention and understanding of the plan was that Mr Trajkovski would borrow the artwork and return it. He went so far as conceding that Mr Trajkovski may have had the intention to copy the artwork, but Mr Cragen refused to concede that he knew the plan to be for Mr Trajkovski to do so.
…
760 Other emails sent after the establishment of the Global/Impact Joint Venture show that both Mr Andrews and Mr Cragen were aware that Aristocrat artwork was sent by them to South America for the purpose of copying.
761 This can be seen in the email set out at [306] from Mr Andrews in which he asked Mr Trajkovski what had happened to the original artwork "we sent". I reject the denials given in evidence by Mr Andrews and Mr Cragen that the implication from the email was that the artwork had been sent to Mr Trajkovski to be copied and returned: see [307].
227 Finally, the sixth email chain was on 10 April 2005. The primary judge described it as follows:
314 The next relevant document is an email from Mr Andrews to Mr Trajkovski and Mr Cragen dated 10 April 2005 which states in relevant part:
In future all correspondence regarding the Uruguay project and any other sensitive subject such as parts etc for this project etc is to be sent to the following address
kgbird1947@yahoo.com.au
315 The Aristocrat companies submit that this email, and Mr Andrews' use of a web-based "and therefore untraceable" Yahoo email address, was evidence of the adoption of protocols to avoid detection of infringing activities. Mr Andrews denied that this was the purpose of adopting a web-based email address, and also denied any connection between the adoption of this email address and the discovery that Anton Piller raids were being carried out in the Vidtech proceedings. The email was also put to Mr Cragen, who said that he did not recall having received it.
228 The primary judge then found:
339 I accept that Mr Andrews adopted protocols to avoid detection of the Global/Impact Joint Venture's involvement in copyright infringement, in particular the adoption of a web-based, Yahoo email address.
340 Although there are other innocent explanations which could have been given for the adoption of this course, Mr Andrews' email of 10 April 2005 was written shortly after an Anton Piller raid on a business associate of his, Mr David Parry: see Aristocrat Technologies Australia Pty Ltd v Vidtech Gaming Services Pty Ltd (2006) 68 IPR 229. I cannot accept that it was mere coincidence that the adoption of the Yahoo email address and the sending of the email set out in [314] by Mr Andrews corresponded with the raids on Mr Parry's premises.
229 The significance of the content of the emails to the findings of the primary judge is apparent from the above descriptions and actual findings. Some findings arose from the accumulative impression created by the totality of the emails. It is clear from his Honour's reasoning that he relied on the content of the emails. Contrary to the submission of the Aristocrat parties, it is difficult to see how it can be said that the emails did become evidence of the truth of their contents through the cross-examination as, in the main, the primary judge rejected the evidence of the witnesses under cross-examination. The primary judge, as he expressly stated, clearly treated the emails as speaking for themselves. Further, the primary judge could only have done this on the basis of the contents of the emails themselves, not by reference to evidence adduced in cross-examination. Further it was apparent throughout the trial that the email correspondence referred to above was admitted on a limited basis, and this did not change by reason of the cross-examination.
230 Returning to the first issue that arose in relation to the evidence, by the time the application was made to vary the usual s 136 ruling, the evidence had closed. The effect of the variation was to lead evidence against all the respondents whereas before it was only led against specific respondents. Until the variation order they did not need to respond to it in an evidentiary way.
231 The real question was whether, on 30 April 2009, and at that stage of the proceedings, Aristocrat should have been allowed to effectively re-open the case, after the close of evidence. There are a number of matters to consider in that context, and it involves an exercise of discretion - see eg, Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 at 478D per Clarke JA with whom Mahoney and Moagher JJA agreed; Daniel v State of Western Australia (2004) 138 FCR 254 at [67] and [68]; and generally The Movie Network Channels Pty Ltd v Optus Vision Pty Ltd [2009] NSWSC 132 and BMG Poseidon Corp Pty Ltd v Adelaide Bank Ltd [2009] FCA 389.
232 Undoubtedly, the trial judge purported to consider the prejudice to the parties and procedural fairness. However, the learned judge did not consider the overall interests of justice, and he did not consider the matter as effectively re-opening the case. In his reasons for judgment the primary judge seemed to suggest that he had not exercised his discretion under s 136, when in fact during the trial he had done so, and had later reversed that decision during closing submissions.
233 All parties to litigation are entitled to the benefit of the "opportunity of informed and reasonably contemporaneous assessment of relevant evidence and issues so that, with the benefit of contemporaneity, choices can rationally be made in the conduct of such an expensive and difficult endeavour as litigation": see Gambro Pty Ltd v Fresenius Medical Care Australia Pty Ltd [2004] FCA 1025 at [21] per Allsop J.
234 The Aristocrat parties charted their own course. It may have been anticipated a variation to the usual s 136 ruling could be made after the cross-examination of opposing witnesses, but not at the time of final submissions when the course of evidence had been well completed.
235 The primary judge failed to appreciate the real nature of the application made by the Aristocrat parties on 30 April 2011 to vary the usual s 136 ruling. As we have indicated, it was to re-open the case of the Aristocrat parties. However, to allow the emails to be introduced as evidence against respondents who had not been required to respond in any way to the email evidence, even if tendered for what their contents revealed against other respondents, was to put the respondents in an unsatisfactory position.
236 This was a strongly contested proceeding, and each party was in a position to know and adhere to the rules of evidence and procedure to be applied. If the emails had been tendered against a particular respondent prior to 30 April 2009, then in a case of this complexity, a different course may well have been adopted by the respondent in question. It is important again to appreciate that by the usual s 136 ruling the evidence covered by that order was not admitted against certain respondents, even provisionally. The variation that occurred on 30 April 2009 during the course of the final addresses was to admit the evidence against all respondents, albeit provisionally subject to relevance.
237 Therefore, the position of the respondents was that on 30 April 2009 they were confronted with different evidence upon which to make submissions as to liability and relevance.
238 We do not think it was incumbent on any respondent to consider whether to re-open its or his case. The Aristocrat parties' case was completed, cross-examination undertaken and responsive evidence led by the respondents as necessary during the course of the trial. Of course, the Aristocrat parties were entitled to lead evidence as to the alleged infringing transactions and the joint venture activities, but that evidence needed to be put before the Court, subject to specific agreement by the respondents, before the case was completed. The proper course to have followed was for the evidence to be admitted provisionally at the outset against all the respondents, and then for it to have been considered in submissions. In this proceeding, it was too late to admit the evidence during closing submissions, as it was, even on a provisional basis.
239 Putting aside the s 136 ruling and turning to the second evidentiary issue that arose, we conclude that the chain of emails should not have been relied upon by the primary judge to reach the conclusion that the infringing transactions occurred as alleged by the Aristocrat parties.
240 At this point, it must be reiterated that the applicants' case at trial was primarily based on circumstantial evidence which the applicants sought to relate to a number of transactions in which some or all of the respondents were said to have exported counterfeit gaming machines to Latin America. A second critical point to note is that the significant emails tendered did not relate to the alleged infringing transactions. So in themselves, these emails could have had no relevance to proving that the alleged transactions occurred. However, they could have use in discrediting witnesses or proving the existence of a joint venture. This appears to be the way in which they were used by the parties.
241 The primary judge accepted that the emails were not tendered as proof of the facts stated in them. It seems that the emails were tendered without express qualification at the time of their tender. Nevertheless, we consider that the primary judge did treat the contents of the chain of emails as supporting more than just the existence of the joint venture, or as going beyond being only relevant to credit. The primary judge necessarily had to connect the particularised infringing transactions with the joint venture. The only way that he could have made this connection was to draw the inference from the contents of the emails that the respondents had the tendency to act in a particular way, that is, engage in the alleged infringing transactions.
242 The admissibility of tendency evidence is tightly regulated by Pt 3.6 of the Evidence Act. Tendency evidence is evidence of "character, reputation or conduct of a person, or a tendency that a person has or had… to act in a particular way, or to have a particular state of mind": s 97(1) of the Evidence Act. There are specific dangers in treating evidence of tendency as being probative of the occurrence of a fact in issue. In this respect, Pt 3.6 contains a number of safeguards to limit the potential misuse of tendency evidence.
243 Under s 97(1)(a), if a party seeks to adduce tendency evidence, that party must give reasonable notice to the other party that they intend to do so. Under s 97(1)(b), the Court will only admit that evidence if it has "significant probative value". However, the threshold requirement of notice was not given at trial; the Aristocrat parties did not seek to use the emails as evidence that the respondents at trial had a tendency to engage in the infringing conduct. On appeal, it was confirmed that the parties did not seek to rely on Pt 3.6 of the Evidence Act.
244 Whilst the emails were admitted into evidence for other purposes (namely credit, and evidence of the joint venture) Pt 3.6 guards against the evidence being admitted to show a tendency even if the evidence has a dual purpose (for example, it is also relevant and admissible to proving the existence of a joint venture): see s 95. This is to be contrasted with other provisions of the Evidence Act relating to hearsay evidence, whereby if hearsay evidence has a non-hearsay purpose (for example, is also relevant to credit) it can be admitted for its hearsay purpose: s 60. The primary judge was right in saying that he should not rely on the contents of the emails for the truth of their contents, but fell into error in doing just that in relying upon evidence that did not relate to the particularised infringing transactions. Used in this way, the evidence in the emails could show nothing more than a tendency on the part of the respondents at trial to engage in infringing transactions.
245 The error the primary judge made was to treat the chain of emails as being able to prove the particularised infringing transactions, and to use the contents of the emails to demonstrate the connection with the particularised infringing transactions with the joint activity. Without the chain of emails, the primary judge could not have found such connection to the infringements as alleged.
246 Therefore, the findings of the primary judge in relation to the third, fourth and fifth "essential propositions" cannot be supported, and the Aristocrat parties fail to prove the alleged infringing transactions, even accepting proof of a joint venture. Looking at the primary judge's findings in relation to these propositions they extensively relied upon the chain of emails - see [751] to [752], [754] to [756], and [757] to [762]. No attempt was made by the Aristocrat parties before the primary judge or before us to prove the "essential propositions" without reference to the emails relied upon by the primary judge. It seems to be accepted that without reliance upon the emails, the third, fourth and fifth "essential propositions" cannot be supported, and the case brought by Aristocrat must fail.