Approval, sanctioning or countenancing
42 The Metro contract states that Metro does not authorise or permit any particular performance, whether containing copyright material or otherwise and that the hirer warrants that it will ensure that all performances comply with the Act and the licence requirements of APRA.
43 The inclusion of these clauses in the Metro contract is said by Metro to bring it within s 36(1A)(c) of the Act, being a reasonable step to prevent or avoid the doing of the act, being the act comprised in the copyright.
44 The inclusion of the warranty in the Metro contract was a reasonable step to take which, if implemented by the hirer, would have prevented an unlicensed performance. However, s 36(1A)(c) does not address steps to prevent or avoid infringement generally, rather it addresses steps to prevent or avoid the doing of the act itself, that is the act comprised in the copyright in a work. Metro did not take steps to prevent or avoid the performances.
45 Further, the inclusion of the warranty in the Metro contract was not, in the majority of cases, implemented. It did not result in the hirer obtaining an APRA licence, although some hirers did. APRA informed Metro that unlicensed performances had taken place and there is no evidence that Metro took any action. Metro did not take steps to inquire whether a licence had been obtained or to ensure that it had. From the evidence, it is apparent that Metro took the view that it need do nothing further. While the warranty under the Metro contract amounted to more than a warning, to the extent that it notified the hirers of their obligations it was, in the circumstances, insufficient to exonerate Metro.
46 Mr Bannon submits that authorisation or permission requires knowledge or suspicion of particular acts of infringement and questions whether that was present here. In my view, the authorities and, in particular, Moorhouse (at 13) support Mr Catterns' submission that the absence of prior notice as to which particular works would be performed does not assist Metro. There can be no dispute that Metro, after the May letter at the least, had reason to suspect that works in APRA's repertoire would be performed, even if there was no knowledge of a particular work.
47 Metro asserts that, in the absence of the identification of a particular act or acts on the part of Metro, finding Metro liable for authorising infringement would require expansion of accepted principle. This submission is not borne out by examination of the relevant authorities. In Jain the Court considered authorisation in the sense of 'countenance' (at 671). It was held that a studied and deliberate course of action ignoring APRA's rights and allowing a situation to develop and to continue in which the alleged infringer must have known that it was likely that APRA's music would be played without any licence, where it was within power to control what was occurring, was sufficient to amount to authorisation of infringement.
48 Metro has not established that it was not aware or had no reasonable grounds for suspecting that performances would be an infringement of copyright. It was made clear in the letter from BHF of 15 July 2002, that APRA's contention was that unlicensed performances were taking place at Metro and that they constituted, in APRA's view, infringements of copyright. At least from this time, Metro was on notice that, despite the clause in the Metro contract, hirers of the venue were not taking APRA licences and that the clause was being ignored. Mr Doughty's attitude remained unchanged and was not affected by the termination of the venue licence or by APRA's notification of the infringements. I am satisfied that, prior to the July letter, Metro was either aware of or was indifferent to the occurrence of unlicensed performances at Metro on George. The failure to make an inquiry of the hirer, in the face of APRA's assertions, can at best be described as a wilful disregard of whether the performance of works which it knew or ought reasonably to have known would include works within APRA's copyright were performed with APRA's authorisation or not. As was said by Kiefel J in Golden Editions Pty Ltd v Polygram Pty Ltd (1996) 34 IPR 84 at 93, 'a deliberate choice not to inquire, in such circumstances, may enable a further finding, since it may suggest a mind in which real suspicion resided' and a failure to put such a question operated 'to his peril'. It is inconsistent with the application of s 39(2) of the Act.
49 Metro was aware that APRA asserted that promoters had not obtained licences, despite the Metro contract. The fact of public performances at Metro on George in respect of which there were no licence fees paid by Metro or by any other party was expressly stated by APRA, at least in the letter from their solicitors to Metro's solicitors on 15 July 2002. Performances of specific works on 26 June 2002 and 3 July 2002 were described as was the basis for APRA's claim as against Metro. There is no evidence that Metro took any action to ascertain whether licenses had been held for those performances.
50 At least from 15 July 2002, Metro was aware of what APRA asserted were "actual infringements" having occurred at Metro on George 'in the period since it has been unlicensed' and, in particular, on 26 June and 3 July 2002. That letter also stated 'we are instructed that, since at least 30 June 1999, music has been performed in public at the Premises by way of live artist performers in respect of which your client has not paid fees under that licence'. That was despite the contract in place since 17 April 2002, in which the hirer warranted that an APRA licence would be obtained.
51 Metro knew that APRA contended that hirers were not obtaining APRA licences and that, consequently, there were infringements of copyright. APRA had a practice of licensing promoters and Metro was prepared to give to APRA the promoter details for upcoming events. Metro's belief was that it should not be required to obtain a licence when its competitors were not, that it was APRA's problem, not Metro's to "chase" unlicensed promoters, and that it was for APRA not Metro to ensure that the licence was obtained. It believed that a licence should be obtained but not by Metro.
52 This resulted in Metro turning "a blind eye" to the continued infringements, knowing or having reason to suspect that the promoters who were not national promoters were not taking out licences. In that sense, Metro tolerated or permitted, that is, countenanced, the unlicensed performances of works subject to copyright. It relied upon the mere existence of the warranty in the Metro contract as fulfilling its obligations. It took no steps to ascertain whether the hirer complied with the warranty or to enforce it, knowing of APRA's assertion (which it did not dispute) that unlicensed performances were taking place on its premises. This was part of a course of continuing conduct by Metro.
53 Metro took a strong stand that it did not require a licence for those performances. It did not require the promoter to produce an APRA licence, nor did it enquire whether the promoter had one or intended to procure one. It took the view that it was a matter between APRA and the promoter. It asked no questions and took no notice of the issue.
54 Mr Crawford, the Hiring Manager for the theatre, was responsible for approving hirers and hiring arrangements. He was not aware of the content of works to be performed. He was not provided with a list of works to be performed. He says that Metro 'merely supplies a venue that it hires out at a set fee'. Neither he nor Metro, he said, were aware of the agreement between the hirer and the various performers. He believed that the hirers of Metro on George would comply with their obligations and warranties under the Metro contract. He also says that, prior to the performances, he had no cause to suspect or believe that the hirers would not so comply.
55 Metro clearly knew that a licence was required. It had taken out a licence in 1994 and, by the Metro contract, had sought a warranty from promoters that a licence would be obtained. That Metro declined to ask promoters if they were obtaining or had obtained a licence for a performance, is not sufficient to establish a defence by the application of s 39(2) of the Act. In the light of the warranty, such a question would have been reasonable.
56 APRA contends that the present facts "are relevantly indistinguishable" from those in Canterbury Bankstown. This is based on the argument that Metro has power to control what music is performed on its premises, that it provides facilities for and advertises those performances and that, whatever songs will be performed, they will be songs in APRA's repertoire. In effect, where Metro knew or had reasonable grounds to suspect that the hirer would not obtain a licence, as in Canterbury-Bankstown, and the promoter was given a general authority for the bands to play what they liked irrespective of copyright. Further, once Metro knew that its contract was ineffective in ensuring that a licence was obtained for the performance, it could have asked to see the promoter's licence or sought to enforce the warranty. In the circumstances and where the warranty was inserted into the Metro contract for the apparent purpose of passing the obligation of taking an APRA licence to the hirer, it would have been reasonable for Metro to alter its contractual arrangements for subsequent performances after the first realisation that the hirer had not obtained an APRA licence. While the failure to alter the contractual arrangement does not, of itself, imply consent, it stands against Metro's reliance on s 36(1A) and s 39(2) of the Act.
57 Consistently with the factors enunciated by Knox CJ in Adelaide Corporation at 487, Metro knew or had reason to anticipate or suspect that the infringing act, although not necessarily the particular act, was to be or was likely to be done (Metro conducted the advertising), had the power to prevent it (by not allowing the performance or by insisting in advance that a licence be obtained by the promoter), made default in some duty of control or interference (duty to ensure that a licence was in fact obtained, continuing to facilitate the performance) and thereby failed to prevent it.
58 To paraphrase Jacobs J in Moorhouse (at 22), knowledge that performers at Metro on George were doing acts comprised in the authors' copyright 'could become important if the invitation were qualified in such a way as to make it clear that the invitation did not extend to the doing of acts comprised in the copyright and if nevertheless it were known that the qualification to the invitation was being ignored and yet [Metro] allowed that state of things to continue. Then it might be found as a fact that [Metro] authorized the continued state of things, the continued use of [the venue] to do acts comprised in authors' copyrights, and thus to infringe those copyrights'. In those circumstances, Jacobs J concluded (at 22-23) that a warning to users that they had a responsibility to obey the law under the Act could not be regarded as a limitation on the invitation apparently extended.
59 The clause in the Metro contract can be described as such a qualification and Metro had the knowledge, at least after notification from APRA, that APRA asserted that unauthorised performances were taking place.
60 In Adelaide Corporation, Higgins J emphasised that a lessor of premises did not have the function of policing the provisions of the Act on behalf of the owners of copyright and expressed the view that 'mere indifference or omission cannot be treated as 'permission' unless the Corporation had the power to permit the performance, and unless there was some duty to interfere'. His Honour's view of permission was, however, affected by his conclusion that the permission must extend to the particular work and that general authority was not sufficient. That is no longer the law.
61 Higgins J also stated that "smashing the lease" was not required as a reasonable step. That was a view also expressed by Gavan Duffy and Starke JJ who held (at 505) that no inference of consent should be drawn 'against one who having no such right remains quiescent and declines to alter his legal relations in order to acquire such a right'. This does not mean that an inference cannot be drawn against a party which remains quiescent, knowing of the likelihood of infringement on its premises and declines to create a right to prevent it happening on the next occasion that it enters into legal relations. The extent to which a party is obliged to use legal powers in a contract in order to take reasonable steps must, I would have thought, vary with the facts of the particular case, as Higgins J noted by his discussion of what is reasonable "under the circumstances" (at 499).
62 Metro, in the words of Knox CJ in Adelaide Corporation (at 488), in a passage approved by Gibbs CJ in Moorhouse (at 13) 'abstained from action which under the circumstances then existing it would have been reasonable to take, or, in other words... it exhibited a degree of indifference from which permission ought to be inferred'.