Australasian Performing Right Association Limited v Metro on George Pty Limited

STATUTORY REGIME 11 The following sections of the Act are relevant: Section 31(1): 'For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a work, is the exclusive right: (a) in the case of a literary, dramatic or musical work, to do all or any of the following acts: … (iii) to perform the work in public' Section 13: '(1) A reference in this Act to an act comprised in the copyright in a work or other subject-matter shall be read as a reference to any act that, under this Act, the owner of the copyright has the exclusive right to do. (2) For the purposes of this Act, the exclusive right to do an act in relation to a work, an adaptation of a work or any other subject-matter includes the exclusive right to authorize a person to do that act in relation to that work, adaptation or other subject-matter.' Section 36: '(1) Subject to this Act, the copyright in a literary, dramatic, musical or artistic work 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 authorizes the doing in Australia of, any act comprised in the copyright.' Section 36(1A): 'In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in the copyright in a work, without the licence of the owner of the copyright, the matters that must be taken into account include the following: (a) the extent (if any) of the person's power to prevent the doing of the act concerned; (b) the nature of any relationship existing between the person and the person who did the act concerned; (c) whether the person took any reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.' Section 39: '(1) The copyright in a literary, dramatic or musical work is infringed by a person who permits a place of public entertainment to be used for the performance in public of the work, where the performance constitutes an infringement of the copyright in the work. (2) This section does not apply where the person permitting the place to be so used establishes: (a) that he or she was not aware, and had no reasonable grounds for suspecting, that the performance would be an infringement of the copyright; or … (3) In this section, "place of public entertainment" includes any premises that are occupied principally for purposes other than public entertainment but are from time to time made available for hire for purposes of public entertainment.'

THE EVIDENCE 12 The following facts were not in dispute: (a) Metro on George holds regular live performances of music. It is a prominent venue for live music in Sydney. (b) Metro on George sells alcohol from a bar within the theatre during performances, operates a box office, advertises as a venue suitable for the performance of live music and has established and maintained a reputation as a live-music venue. (c) Metro advertise the concerts to take place at Metro on George. (d) Other theatres, such as the Enmore Theatre, operate in the same manner as Metro on George with respect to, for example, tickets and the bar but are not required by APRA to take a Live Performance licence. It is not agreed that the theatres are of a similar nature. (e) Metro on George is used for a variety of activities, including "in standing mode", "cabaret mode" for performances, award nights and dinners, and "theatre mode". It is hired out for live music performances approximately 150 nights per year. (f) Until it was terminated in 2002, Metro held a Live Performance licence ('venue licence'). That is not relied upon by APRA as an admission of the obligation on the part of Metro to hold such a licence. (g) Metro has also held a number of other APRA licences. (h) APRA usually grants licences with respect to the whole of its repertoire on a "blanket" basis. (i) APRA grants different kinds of licences, for example, a venue licence (which it claims is the licence appropriate for Metro), a Promoter's licence (granted to certain "national promoters" (approximately 33) who deal directly with APRA), a Halls and Function Centre licence and a licence for Recorded Music for Dancing. (j) If a concert were to be held at a place for which there was no venue licence and the promoter approached APRA, APRA would put a licence in place with the promoter. If a national promoter wished to add Metro on George to his or her schedule, APRA would accept that addition and issue a licence. That occurred on a number of occasions. On at least one occasion, a national promoter added Metro on George to his schedule and in fact paid for the performance there but APRA returned the money preferring, apparently, to rely on the venue licence. (k) Many promoters, who are not national promoters, obtain licences from APRA in respect of individual performances at venues, including Metro on George, which do not have a venue licence. The Concert Promoter's licence is a scheme administered by APRA which applies to promoters who are not national promoters. (l) APRA recognises that, in relation to any given performance, it may directly licence the promoter or licence the venue and has developed different schemes to accommodate these situations. (m) A venue licence is a blanket licence that covers all performances of music in APRA's repertoire by live performers at the venue. (n) Since 31 May 2002, Metro has not entered into any venue licence with APRA. (o) Metro has taken promoter's licences for performances where Metro was itself the promoter. (p) Subsistence and ownership of copyright by APRA in the musical works performed at Metro on George on dates between 26 June 2002 and 12 September 2002, as specified in the schedule to the statement of claim ('the eleven performances'). (q) In the eleven performances various artists performed works the subject of APRA's copyright. (r) The eleven performances were performances in public. (s) The eleven performances required an APRA licence. (t) No applications for promoter's licences were received by APRA in respect of the eleven performances and APRA did not grant promoter's licences for those performances. (u) Four promoters, not national promoters, did approach APRA for licences for other performances to be held at Metro on George. APRA issued a licence in each case. (v) On 3 October 2002, Metro offered to advise APRA of all details of events held at Metro on George where they were promoted by others. Other licences required for events held at Metro on George, such as events where Metro was itself the promoter or where a Recorded Music for Dancing licence was appropriate, were obtained and payment made. (w) There is no evidence of any relevant industry code of practice as referred to in s 36(1A)(c) of the Act. 13 The respondents rely on the Metro Theatre Hire and Box Office Contract ('the Metro contract') which Metro adopted on 17 April 2002. The respondents also assert that, although the format and wording of the Metro contract have changed since 1999, Metro's method of doing business has remained the same. The Metro contract included the following: 'Metro requires to know the description and details of events to enable Metro to maintain the image and reputation of Metro as a venue. The Hirer must obtain written approval to any change to the description and details provided which Metro may in its discretion refuse to consent. Metro does not authorise or permit any particular performance whether containing copyright material or otherwise. The Hirer warrants that it will ensure all performances at the event will comply with the Copyright Act and the licence requirements of the Australian Performing Rights Association ("APRA"). Metro agrees to provide ticketing services to the Hirer in the form of box office sales. This does not constitute a joint venture agreement or business partnership between the parties.' 14 This first sub-paragraph of this was subsequently amended to: 'Metro requires the Hirer to advise the name and description of the event. The Hirer warrants that the event so named and described will be the event that takes place.' 15 The Metro contract also included clauses 2.4, 5 and 6: '2.4 The Hirer acknowledges that nothing in the Master Terms or the Hire Contract or otherwise amounts to Metro authorising or giving legal power for the doing of any act. … 5. Copyright 5.1 The Hirer acknowledges the provisions of section 39 of the Copyright Act and that Metro is unaware of the arrangements between the Hirer and the artist(s) performing at the Event. 5.2 The Hirer warrants in favour of Metro that all performances conducted at the Metro Theatre will comply with the Copyright Act (including without limitation the obtaining of all appropriate licences from and the approval of the Australian Performing Rights Association ("APRA") and the Phonographic Performance Co of Australia Limited ("PPCA") and all other bodies relevant to ensuring broadcasting of music and performance of musical works comply with lawful and statutory requirements. 6. Warranties by the Hirer 6.1 The Hirer warrants that the Event(s) shall comply with all relevant laws and regulations (including but not limited to those regarding copyright, intellectual property and entry into Australia) and with any relevant union requirement relating to local content of the Event(s), and that the Hirer shall not infringe or breach, or permit to suffer to be infringed or breached any copyright, performing right or any other protected right in connection with the Event(s) during the period of this licence or user or users of the Theatre. 6.2 The Hirer acknowledges that it is and will be at all times responsible for ensuring that the Event(s) and the actions of all persons involved in the Event(s) comply with the terms of this Agreement where applicable, and otherwise comply with the reasonable requests of Metro with respect to the staging of the Event(s). 6.3 The Hirer hereby indemnifies and agrees to keep Metro indemnified against all liabilities arising out of any breach of a warranty under Clause 5 and 6 hereof.'

LEGAL PRINCIPLES 16 The question, for the purposes of s 36(1) of the Act, is whether the respondents have authorised, in the sense of 'sanction, approve or countenance' the infringement of copyright (The Corporation of the City of Adelaide and The Australasian Performing Right Association Limited (1928) 40 CLR 481 ('Adelaide Corporation')at 489; The University of New South Wales v Moorhouse (1975) 133 CLR 1 ('Moorhouse')at 12 per Gibbs J and at 20 per Jacobs J). Authorise can also mean "permit" (Moorhouse at 12 per Gibbs J). It applies both to an express and an implied permission or invitation and it is unnecessary that the authorizing party have knowledge that a particular act comprised in the copyright will be done (Moorhouse at 13, 21 c.f. Adelaide Corporation at 490-1 per Isaacs J). 17 A finding of authorisation depends upon all of the facts of the particular case. The acts and omissions of the alleged authorising party must be viewed in the circumstances in which the act comprised in the copyright is done. It is helpful, however, to have regard to factors that have been held to amount to authorisation, or otherwise (Moorhouse at 12). 18 Control is necessary to constitute authorisation to infringe copyright; mere facilitation of the infringing conduct is insufficient, as is knowledge that there is a likelihood that there will be infringing use (Australian Tape Manufacturers Association Ltd v The Commonwealth of Australia (1993) 176 CLR 480 ('ATMA')at 497-498). The presence or absence of control was said in ATMA at 498 to be the 'critical distinction' between the circumstances in C.B.S. Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013 ('C.B.S.') and Moorhouse. In C.B.S., the sale of articles such as blank tapes or video recorders, which were capable of both infringing and lawful use, where the manufacturer or vendor had no control over the purchaser's use of the article did not render the vendor liable for copyright infringement. In Moorhouse, the power to control photocopying by the provision of both the copyright material and the photocopying machines by which copies could be made did constitute authorisation. A person cannot be said to authorise an infringement unless he or she has some power to prevent it. 19 Express or formal permission or sanction or active conduct indicating approval are not essential to a finding of authorisation (WEA International Inc and Another v Hanimex Corporation Ltd (1987) 17 FCR 274 at 362). While mere inactivity or indifference is insufficient, if there is no knowledge or reason to suspect that the particular infringing act might be done, inactivity or indifference, exhibited by conduct, by acts of commission or omission, may reach a degree from which authorisation or permission may be inferred (Adelaide Corporation at 504 per Gavan Duffy and Starke JJ; Moorhouse at 13 per Gibbs J). Declining to interfere may constitute acquiescence, particularly if the party was notified that the infringing work was probably going to be performed (Adelaide Corporation at 490-491 per Isaacs J). However, mere indifference cannot be treated as "permission" unless there was some power to permit the performance and unless there was some duty to interfere (Adelaide Corporation at 497 per Higgins J). Gibbs J concluded, in Moorhouse at 13: 'a person who has under his control the means by which an infringement of copyright may be committed - such as a photocopying machine - and who makes it available to other persons, knowing, or having reason to suspect, that it is likely to be used for the purpose of committing an infringement, and omitting to take reasonable steps to limit its use to legitimate purposes, would authorize any infringement that resulted from its use'. 20 One important question is whether there was an invitation to be implied that the users might make such use of the facilities as they thought fit (see Jacobs J in Moorhouse at 21). The likelihood of the occurrence of the infringing act is relevant, as is evidence of the degree of indifference displayed. 21 In C.B.S., the House of Lords drew a distinction between the circumstances in Moorhouse and a situation where there was no control over the use of a twin-tape recorder once it is sold, that is, between authorisation which comes from someone having or purporting to have authority and someone who merely enables another but does not purport to have any authority to grant or justify the doing of an act. Interestingly, in coming to this conclusion, Lord Templeman with whom the other Law Lords agreed, commented, at 1055, that the proposition in Laddie, Prescott and Vitoria, the Modern Law of Copyright (London: Butterworths,1980) at 403 that authorisation extends to the placing in another's hands materials which by their nature are almost inevitably to be used for the purposes of infringement, was expressed too widely. To the extent that this view conflicts with Moorhouse, the position in Australia is, of course, settled by the High Court. 22 In Australasian Performing Right Association Limited v Canterbury-Bankstown League Club Limited [1964-5] NSWR 138 ('Canterbury-Bankstown'), the club engaged an orchestra to play music for dances held at the premises. The band leader would select the music without reference to the club. The club had no knowledge of what music was to be played. It did not select it, was not asked for approval and was not consulted. However, the clubprovided entertainment of which music was an integral part. The person engaged to play music was given a general authority to play whatever music he liked irrespective of copyright. APRA had reminded the club that it controlled the rights of public performances in Australia of practically all current musical works and that the authorisation of a public performance of such music without a valid licence from APRA constituted infringement of copyright. Ferguson J, with whom Herron CJ agreed, held that, in giving to the band leader a general authority to play whatever music he liked irrespective of copyright, the club either performed or authorised the performance (at 140). Asprey J came to the same conclusion. 23 In Australasian Performing Right Association Ltd v Jain (1990) 26 FCR 53 ('Jain') the Full Court of this Court revisited the authorities on authorisation of infringement in an action against a company and its directors in respect of music played at a tavern both through a jukebox and by live bands. With respect to the bands, the evidence was that the respondents took no part in the selection of the bands or of the music performed. APRA had notified one of the respondents of the unlicensed performance of works at the premises. From the Court's consideration, the following conclusions relevant to this case are: · A reference to the act comprised in the copyright is a reference to any act that, under the Act, the owner of the copyright has the exclusive right to do. · The right to authorise is a separate and distinct right so that infringement of that right is a distinct tort. · Authorisation has its own independent operation which does not exclude the general law principles relating to joint tortfeasors operating on primary infringement. · Authorise means 'sanction, approve, countenance' and also 'permit'. · Authorisation has a wide meaning and applies to both express and implied permission or invitation. · A person cannot be said to authorise an infringement of copyright unless he or she has some power to prevent it. · Express or formal permission or sanction or active conduct is not essential to constitute authorisation but mere inactivity is not sufficient if there was no knowledge or reason to suspect that the act might be done. · In Moorhouse it was not necessary that all of the books which might be copied were subject to copyright or that all copying would constitute infringement. The library had been given enough information to raise the suspicion that some infringing copies were likely to be made. · Where a general permission or invitation may be implied it is unnecessary that the authorising party have knowledge that a particular act comprised in the copyright will be done. · The acts and omissions of the alleged authorising party must be looked at in the circumstances in which the act comprised in the copyright is done, including the likelihood that such an act will be done. · Acts which fall short of being direct and positive such as indifference, exhibited by acts of commission or omission, may reach a degree from which authorisation or permission may be inferred. It is a question of fact in each case.

Date of termination of Metro's APRA licence 24 In 1994, Metro obtained a Recorded Music for Dancing licence and the venue licence from APRA for the live performance of works in APRA's repertoire. Since June 1999, Metro has refused to pay licence fees. On 22 September 1999 Metro notified APRA that it believed that it had been wrongly classified by APRA and requested a reassessment of licence fees for the period 1 August 1994 to 30 June 1998. Metro asserted that it did not require a venue licence. APRA did not agree. From that time, the parties have been in correspondence but have not resolved the dispute. 25 The statement of claim alleges that APRA terminated the venue licence on 31 May 2002 or, alternatively, on 30 June 2002 by letter from APRA's solicitors to Metro's solicitors. 26 The Metro application which constituted a licence on acceptance by APRA ('the Metro licence'), specified as the date on which music usage commenced and as the date from which figures are specified, 22 July 1994. Clause 3 of the Metro licence provides: 'Subject to the terms and conditions set out herein, the licence shall be for an Initial Period of twelve (12) calendar months (commencing on that first day of that calendar month being nearest to the Commencement Date specified overleaf), and shall thereafter continue for successive annual periods until determined by either party by the giving to the other, by certified mail, at least one month's notice in writing so as to expire in any year on the same day and month as the expiry date of the Initial Period.' 27 Mr Bannon contends that the commencement date for the venue licence was, therefore, 1 August 1994 and that the annual period concluded on 31 July each year. 28 Clause 6 provides: 'If the applicant breaches any provision of the licence, or fails to make payment of the licence fees when due or thereafter within thirty days of APRA's first request for payment of such overdue fees, APRA may forthwith determine the licence by written notice sent to the Applicant at the address shown in the particulars of the licence and thereupon the licence shall determine save as to APRA's rights to recover any monies previously due thereunder. All sums payable under the licence shall be recoverable by APRA in any court of competent jurisdiction. In any such proceedings proof that the notice of revised provisional and/or Annual licence Fee/s purporting to have been calculated in accordance with the terms of the licence hasbeen sentto the Applicant shall be prima facie evidence that the sum therein mentioned is the sum payable by the Applicant to APRA.' 29 In correspondence between the parties and their solicitors, Banki Haddock Fiora ('BHF') for APRA and Esplins Solicitors ('Esplins') for Metro, Metro continued to assert that it did not require the venue licence and declined to pay fees under such a licence. APRA insisted that Metro did require the licence and owed fees to APRA. On 31 May 2002, by letter from BHF to Esplins, apparently sent by facsimile ('the May letter'), APRA asserted that, although amounts owing under the licence had not been paid because of the dispute, the licence remained current. It was also asserted in the May letter that APRA presumed that Metro no longer regarded the venue licence as binding, although it had never sought to terminate it and added 'if this is the case, please let us know the date from which Metro believes the licence was not binding'. The May letter then stated: 'This letter serves as immediate notice of termination under clause 8(a) of the licence agreement dated 1 July 1997. Any performances of live music within APRA's repertoire at the Metro Theatre after today, without a licence from APRA, will constitute an infringement of copyright in the works. We note that your client maintains it is not the appropriate holder of such a licence.'

It also stated that the May letter served as notice under 'clause 2 of the agreement, effective 30 June 2001'. 30 The difficulty with the May letter is that the Metro licence had a commencement date that was not 1 July 1997, did not contain a clause 8 and clause 2 refers to the scope of the licence, not to notice. 31 On 15 July 2002, BHF gave notice in writing of alleged infringements that occurred at Metro on George 'in the period since it has been unlicensed', citing performances on 26 June 2002 and 3 July 2002 and naming some particular works. The letter also asserted that unlicensed performances constituted infringements by Metro of APRA's copyright. 32 On 26 August 2002, further alleged infringements on 18 July 2002, 25 July 2002 and 1 August 2002 were cited in a letter from BHF. The letter also said: '4.2 The right of public performance in each of these works is owned by APRA. This letter serves as formal notice of these infringements. APRA reserves its right to rely on additional infringements of works in its repertoire performed on these dates, and of further infringements of APRA's copyright at your client's premises generally. 4.3 We remind you of the extent of APRA's control of the right of public performance of the vast majority of the world's repertoire of works. Particulars can be supplied if required. This letter also serves as further notice that unlicensed performances of musical works in APRA's repertoire at the premises will be an infringement of our client's copyright.' 33 There is no dispute that Metro had failed to make payment of licence fees so that APRA was entitled forthwith to determine the licence, as set out in clause 6 of the Metro licence 'by written notice sent to the applicant at the address shown in the particulars of licence'. There is no dispute that the notice on which APRA relies, the May letter, was sent by facsimile to Esplins and not to Metro's George Street address. The fact that the wrong clause was referred to in the letter does not, of itself, invalidate the notice of termination (Mannai Investments Co Pty Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749; JW Carter and DJ Harland, Contract Law in Australia (4th ed)(Sydney: Butterworths, 2000) at 735-736. What matters is the 'substance' of the notice and whether it would have conveyed a clear message to a reasonable person in Metro's position (Carter and Harland (2000) at 736). The May letter expressed APRA's wish to terminate the contract in unmistakable terms. 34 Metro asserts that a written notice sent to the specified address was a condition precedent to the exercise of the right. Accordingly, it is said, the letter only amounted to an offer to terminate which was accepted by Esplins by letter of 30 August 2002, after the alleged infringements. 35 There is nothing in the nature of a facsimile transmission which excludes it as a means of giving notice (NM Superannuation Pty Ltd v Hughes (1992) 27 NSWLR 26 at 35; ASC v Bank Leumi Le-Israel (Switzerland) (1996) 69 FCR 531 at 550). No evidence was put as to why the facsimile transmission did not give the respondents adequate written notice. Accordingly, I find that a written notice was sent. In its defence, Metro does not rely on the failure to send the notice to the George Street address; it is acknowledged that the letter purported to terminate the licence but other bases for ineffective termination are raised. There is no suggestion that the notice was not received on or about the date it bears. In view of the correspondence between the solicitors for the parties over the previous two months and the fact that the notice was clearly received, I am of the view that the parties agreed to communicate through their solicitors or, in the alternative, Metro waived its entitlement to receive the notice at its own address. 36 There was no suggestion that Metro was in doubt as to APRA's purported termination of the agreement. At no time did Metro assert in the correspondence that the alleged infringements were covered by any ongoing license agreement between Metro and APRA. The evidence is that Metro had paid no fees under the venue licence since June 1999. While Metro disputed its obligation to make any such payments, the fact of non-payment was not disputed. Accordingly, under clause 6, APRA had the right to terminate. 37 In any event it is clear that, by 31 May 2002, Metro had refused to pay licence fees for almost three years and had demanded repayment of licence fees previously paid. In adopting that stance, Metro evinced an intention not to be bound by the licence, amounting to repudiation. That repudiation was not accepted by APRA prior to 31 May 2002, as the May letter affirms that the licence remains current. However, it is clear from the May letter that APRA, noting that Metro maintained that it was not the appropriate holder of the venue licence, accepted Metro's repudiation. 38 Accordingly, there was no venue licence in place when the alleged infringements occurred.

General 39 In detailed correspondence between the parties, the respondents assert: · Metro does not arrange or provide performances or entertainment by "live artist performers" or by recorded means. It simply hires out its theatre to third parties so that those third parties can then promote or arrange live artists or dance parties. Metro does not retain any "gross sums paid for admission" to Metro on George. If the theatre has not been hired out to a third party, it does not open for business. · Metro does not exercise any artistic judgment in the decision to hire the venue to potential bands and has no control over what performances will be given at any event. · Metro does not authorise or permit the performance of any copyright material at Metro on George. · Licence fees paid to APRA from 1 August 1994 to 30 June 1998 were incorrectly paid, as no venue licence was required. 40 APRA rejects the assertion that Metro has been incorrectly licensed as a venue for live performance. It contends that the fact that Metro entered into contracts with agents, such as concert promoters, to organise events does not absolve Metro of legal responsibility under the Act. APRA points to the operation by Metro of a bar within the theatre and of the box office, as well as the advertisement of and reputation of Metro on George as a venue suitable for the performance of live music. 41 Mr Bannon relied upon evidence that linked the decision by Metro to disregard the venue licence with a realisation that other theatres were not paying direct licence fees to APRA. The submission is that it became reasonable, at least from that time, for Metro to cease to pay fees directly to APRA. However, as noted earlier, the relationship between APRA and other venues is not relevant to the question of infringement in this case.

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'.

Control 63 APRA asserts that Metro was in a position to prevent infringements of works in APRA's repertoire. APRA points to a number of clauses in the Metro contract that go to the control exercised by Metro over the venue in respect of its licensing obligations under the Liquor Licensing Act 1982 (NSW), recording or filming, signage rights, sponsorship and reasonable requests of the duty manager concerning technical matters. Further, under clause 16.2 of the Metro contract, Metro could terminate for breach of warranty, including the breach of the licensing warranties. 64 The respondents' case is that the elements of control are not present and that the only authorisation was of performances which either did not need or did have the necessary licences from APRA. If those licences were not held, according to Mr Bannon there was nothing the respondents could do, as they did not have the requisite control. It was, he asserted, up to APRA to licence the promoters. APRA did issue licences to promoters, so that the respondents did not know and could not be expected to know which promoters were and which were not licensed nor which particular works would be performed. 65 The evidence does not directly establish Metro's power to prevent a performance. The relationship between Metro and the hirer was that of independent contractor and Metro had no direct relationship with the bands that perform at Metro on George. Metro had no control or input into the choice of songs. It could, however, refuse to hire out Metro on George to unlicensed hirers. APRA points out that Metro could take the simple step of either asking APRA in advance whether a licence has been granted for a particular performance or asking hirers for a copy of a relevant APRA licence. 66 The platform of Mr Bannon's case is that Metro did not control the content of the performances at Metro on George. Metro did not supply to the performers the copyright material, it was not entitled to control what material the performers performed, there was no specific direction to perform any work and Metro was not aware of any particular work to be performed. 67 Mr Bannon's submission is that the authorities establish that one cannot permit or authorise what one cannot control. This has been expressed in various ways: 'having the legal power to prevent it' (Adelaide Corporation at 491); 'some power or authority to control the act to be done' (Adelaide Corporation at 503); 'A person cannot be said to authorize an infringement of copyright unless he has some power to prevent it' (Moorhouse at 12 per Gibbs J citing Adelaide Corporation in support). Metro's submission is that mere suspicion or even knowledge that there would be infringements of copyright is not sufficient if Metro had no control over the performances. 68 The issue is whether Metro exercised any relevant control over performances which infringed APRA's copyright. Clearly, the performances took place on Metro's premises, which were premises routinely used for live performances of music. It is not in dispute that Metro did not provide the material to be performed, exercised no control over the choice of material to be performed, nor over the range of material from which the particular works were chosen. As the choice of material was for the band, it cannot be said that Metro actively gave permission for the performance of any particular work but it is the case that Metro was aware, knew or suspected that the bands would perform material the subject of copyright. 69 The Metro contract does not give Metro any control over the choice of music to be played. Metro submits that it is not to the point to speculate what terms Metro could have inserted into the Metro contract; one takes the contract as it is. The failure to prevent the performances or to alter the legal relations with the hirer is not evidence of consent (Adelaide Corporation at 504-5 per Gavan. Duffy and Starke JJ; per Higgins J at 498-9). 70 Where there is no control, even knowledge of a likelihood that there will be infringing use will not constitute authorisation (ATMA at 498 per Mason CJ and Brennan, Deane and Guadron JJ). In Moorhouse, there was control, by reason of the fact that the copying was done on the University premises, a failure to take steps to prevent infringement and the University's provision of both the copyright material and photocopying machines by which copies of the material could be made. 71 In the circumstances of this case, the words of Gibbs J in Moorhouse (at 12-13) are apposite: 'A person cannot be said to authorize an infringement of copyright unless he has some power to prevent it: Adelaide Corporation v. Australasian Performing Right Association Ltd.. Express or formal permission or sanction, or active conduct indicating approval, is not essential to constitute an authorization; "Inactivity or 'indifference, exhibited by acts of commission or omission, may reach a degree from which an authorization or permission may be inferred'": Adelaide Corporation v. Australasian Performing Right Association Ltd.. However, the word "authorize" connotes a mental element and it could not be inferred that a person had, by mere inactivity, authorized something to be done if he neither knew nor had reason to suspect that the act might be done. Knox C.J. and Isaacs J. referred to this mental element in their dissenting judgments in Adelaide Corporation v. Australasian Performing Right Association Ltd. Knox C.J. held that indifference or omission is "permission" where the party charged (amongst other things) "knows or has reason to anticipate or suspect that the particular act is to be or is likely to be done". Isaacs J. apparently considered that it is enough if the person sought to be made liable "knows or has reason to know or believe" that the particular act of infringement "will or may" be done. This latter statement may be too widely expressed: cf. Sweet v. Parsley. It seems to me to follow from these statements of principle that a person who has under his control the means by which an infringement of copyright may be committed -- such as a photocopying machine -- and who makes it available to other persons, knowing, or having reason to suspect, that it is likely to be used for the purpose of committing an infringement, and omitting to take reasonable steps to limit its use to legitimate purposes, would authorize any infringement that resulted from its use.' (Footnotes omitted) 72 Mr Crawford explained, for each of the eleven performances, the limited role of Metro and, where the hirer chose to use the Metro on George box office, the provision to the hirer of box office details (ticket summary listing, number of tickets sold on behalf of the hirer and hirer's proceeds for tickets sold through the Metro box office). The box office revenue was the property of the hirer or promoter of the event. In each case, the hirer is the producer and promoter of the event and all decisions with regards to marketing of the event are at their discretion. Either Mr Crawford or a duty manager was present at each performance, in connection with the provision of bar services, ticket collection and security but did not have any control or input into the content of the performances. 73 The question is whether Metro had any control. In my view, it did. Unlike the circumstances in ATMA where the infringements did not take place on the vendor's premises, Metro was in control of the premises. Metro advertised the performances. It operated the box office, provided refreshments and provided and operated the electricity necessary for the performances to take place. The Metro contract formed the basis of the hiring of the premises. This may not have amounted to control over the content of the performances but, in my view, it gave a measure of control over the use of the premises in circumstances where Metro knew or had grounds to believe that unlicensed performances were to take place or were in fact taking place at Metro on George.

Authorisation of the second and third respondents 74 As to the eleven performances, Mr Hearne did not know the time or content of the performances on the relevant dates, nor the identity of the hirer, nor whether the hirers performed works in APRA's repertoire nor whether they were licensed with APRA. He says that he believed that the hirers would comply with their warranties and obligations under the Metro Contract, a belief that Mr Doughty also stated that he held. 75 Mr Doughty knew at the relevant times that the bands which performed at Metro were likely to perform songs in their own repertoire and that APRA asserted that it owned the performing rights in practically all such works. He also knew that the performance would infringe APRA's copyright unless someone was licensed and that APRA was of the view that, without its licence, there would be infringement of copyright. His position was that licensing fees should be paid but that it was a matter for APRA and the hirer and not the venue. He was of the view that it is up to APRA to collect licence fees from promoters rather than to require Metro to "do their job" for them. 76 I am satisfied that Mr Doughty was aware that infringements of APRA's copyright would take place if the promoters did not obtain an APRA licence. He was also aware that Metro had no system in place to ensure that promoters did obtain such a licence. 77 From the evidence of Mr Doughty, it is clear that he was aware that APRA asserted that some of the promoters of the specified events were unlicensed. His view was that Metro had no obligation to ensure that the promoter had a licence and it did not do so, before or after the performance. He also understood, on receipt of the May letter, that APRA asserted that it had not granted a licence to any person with respect to those performances. 78 In addition, Mr Doughty was the person who instructed Esplins on behalf of Metro. He was fully aware of APRA's asserted position and the allegations of performances conducted in the absence of any APRA licence. He was personally involved in and directed the acts which constituted Metro's authorisation of the infringing performances. He deliberately countenanced the lack of action by Metro, even after being made aware of the fact that some hirers had not taken out APRA licences (c.f. Jain at 671). 79 I should observe, that, while Mr Doughty did, within the principles enunciated above, authorise the infringements, I am of the view that his actions were due to a strongly held belief that what he was doing was justified by reason of the different arrangements that some of Metro's competitors had with APRA, where those competitors were not required to take a venue licence. It was that belief that caused him to direct Metro on a course that resulted in Metro's authorisation of the infringing acts The evidence leads to the conclusion that Mr Doughty ordered, directed or procured Metro to carry out its activities (Performing Rights Society Ltd v Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1 ('Performing Rights') per Atkin J at 14-15). Mr Doughty's actions can be characterised as a 'knowing, deliberate, wilful' pursuit of a course of conduct (Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc (1978) 89 DLR (3d) 195 ('Mentmore') at 203; King v Milpurrurru(1996) 34 IPR 11;Allen Manufacturing Co Pty Ltd v McCallum & Co Pty Ltd (2001) 53 IPR 400 ('Allen') at 409). He was indifferent to whether the hirers obtained an APRA licence, as he was of the view that it was a matter between the hirer and APRA. He was indifferent to the risk of infringement. Accordingly, as in Allen, Mr Doughty is liable under both the test in Mentmore and in Performing Rights, to the extent that there is a difference between them. 80 Accordingly, Mr Doughty himself authorised the infringements and was a joint tortfeasor in respect of Metro's authorisation of the infringements. 81 On the evidence, I am not satisfied that Mr Hearne's knowledge or actions were sufficient to amount to personal involvement in the acts of Metro or to authorisation by him of the infringements under s 36 of the Act. The case against Mr Hearne's satisfies neither the Mentmore nor the Performing Rights test. I find that he is not personally liable for the infringement under s 39 of the Act.

Defences 82 The respondents have not made out the defences under ss 36(1A)(c) or 39(2)(a) of the Act. It is clear from the above consideration that the Metro contract did not, on its own, constitute 'reasonable steps to prevent or avoid the doing of the act' under s 36(1A)(c). There is no evidence that Metro checked whether the promoters were licensed, nor that it took any action once aware that unlicensed performances had taken place. 83 Metro cannot, after the notification in the letter of 15 July 2002, avail itself of the defence afforded by s 39(2). The correspondence concerning the need for a venue licence, pre-dated the first of the eleven performances. This correspondence establishes that Metro was indeed aware, or at least had reasonable ground for suspecting, that unlicensed performances of work subject to APRA's copyright might occur. Accordingly, I am not satisfied that Metro has established that s 39(2) applies to the pre-15 July 2002 performances.

Conclusion 84 There can be no doubt that Metro was aware after 15 July 2002 that APRA asserted that performances at Metro on George were unlicensed. That put Metro on notice that some promoters had not obtained licenses. Metro was aware of the possibility that unlicensed performances might occur even before 15 July 2002. BHF asserted that Metro needed a venue licence well before this date. Metro knew at the relevant times that the bands which performed at Metro were likely to perform songs in their own repertoire and that APRA asserted that it owned the performing rights in practically all such works. Metro still made no enquiries of the promoters because it held the firm view that it was not Metro's problem. That does not derogate from the position that since 15 July 2002 Metro was on notice that unlicensed performances had taken place. Metro took no action, believing it was for APRA and the promoter to arrange the licensing of performances. Neither of those parties took any action, a matter which Metro ignored. Metro thereby effectively waived the express requirement in the Metro contract and permitted the unlicensed situation to continue for any promoter. In this way, Metro permitted or countenanced the unlicensed performances. Metro has not established the application of s 39(2) of the Act. 85 The facts establish infringement under s 36(1) of the Act and negate reliance by Metro on s 36(1A)(c). Metro did not take reasonable steps to prevent any of the eleven infringing performances. Accordingly, I find that Metro authorised infringement of APRA's copyright in 29 original musical and literary works in the eleven performances under s 36(1) of the Act. In my view, the same evidence establishes that Metro permitted Metro on George, a place of public entertainment, to be used for the eleven performances, where the public performance constituted infringement of copyright within s 39(1) of the Act. 86 The evidence does not establish that Mr Hearne was personally involved in, or that he authorised the infringements. Mr Hearne denied knowing the time or content of the performances and claimed that he believed that hirers would comply with their warranties and obligations under the Contract. Mr Doughty, on the other hand, was put on notice of the infringing performances by the May letter. He was aware of APRA's assertions that some of the promoters were unlicensed and knew that the performances were likely to infringe APRA's copyright unless someone was licensed. Acting on his belief that Metro should not be required to pay for a venue licence, Mr Doughty directed the company on a course which led directly to it infringing APRA's copyright. His conduct satisfies the tests for liability of directors in intellectual property cases, as expressed by the Court in Allen.

Nature of relief 87 APRA is entitled to a declaration that the first and third respondents have infringed the applicant's copyright in the musical and literary works set out in schedule two of the statement of claim. I am satisfied that the respondents genuinely held the view that they were not liable for infringement. There is no evidence of continuing infringements. No case has been made out for additional damages pursuant to s 115(4) of the Act. I will hear the parties on the need for quia timet relief and, if necessary, the form of any such injunction and any other appropriate orders to give effect to these reasons. I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

Counsel for the Applicant: D K Catterns with M Leeming

Date of Hearing: 24, 25 and 26 February 2004