Record companies
123 The record companies commenced oral argument first by submitting that the website operated by Mr Cooper was not analogous to a general search engine because the only purpose of the website was to facilitate the downloading of sound recordings stored as MP3 files on remote computers. They submitted that Mr Cooper's appeal had a narrow focus and did not challenge the underlying findings of fact. They argued that the law in Australia attributed a wide meaning to the word 'authorize' in this context; and the appellants' attempt to narrow the concept of authorization was inconsistent with the decision of the High Court in The University of New South Wales v Moorehouse (1975) 133 CLR 1 ("Moorehouse").
124 According to the record companies, infringements occurred in Australia in consequence of the remote website operators transmitting and communicating the recordings in Australia. It was reasonably to be inferred from the nature of the popular songs that were catalogued on the website operated by Mr Cooper that most, if not all, were the subject of copyright. They submitted that, in the context of the case, including the structure of the site and its subject matter, there was an "inescapable inference…that every download…absent some other evidence…would infringe copyright".
125 The record companies argued that Mr Cooper authorized a specific transmission that occurred as a direct consequence of activating the hyperlink on the website. Mr Cooper was, so they said, in a position to ensure that the sound recordings stored in the MP3 files accessed by the hyperlinks on the website were not transmitted over this path. The record companies argued that Mr Cooper had a direct relationship with the operators of the remote websites and internet users. They contended that the findings of the primary judge as to the nature and structure of the website gave rise to a reasonable inference that Mr Cooper knowingly permitted the use of the website for infringing downloading. The primary judge was, so they said, entitled to have regard to the fact that Mr Cooper did not give evidence. The record companies also contended that Mr Cooper did not present any coherent statement of the rights of internet users in relation to the downloading of sound recordings.
126 The record companies also submitted that, by connecting the website to the internet, E-Talk authorized copyright infringements by internet users. Further, they relied on the fact that E-Talk and Com-Cen advertised internet services on the website, both on webpages and via hyperlink, and enjoyed the financial benefits of their association with the website. They referred to Jain and the primary judge's findings about Mr Bal and E-Talk, submitting that his Honour's ultimate conclusion about their liability was correct.
127 Similarly, the record companies contended that the primary judge's findings supported his ultimate finding with respect to Mr Takoushis. Although they accepted that he did not have a managerial role in the business of E-Talk, they submitted that Mr Takoushis had a degree of discretion, the ear of Mr Bal, and was instrumental in setting up Mr Cooper's website. This was enough, so they said, to justify his Honour's ultimate finding with respect to Mr Takoushis.
128 Finally, the record companies contended that his Honour erred in not finding that each of E-Talk, Mr Bal and Mr Takoushis was party to a common design with Mr Cooper so as to render them liable as joint tortfeasors. They relied on the findings of fact made by the primary judge in relation to the knowing involvement of each of these appellants in Mr Cooper's infringements of copyright. They argued that his Honour took too narrow a view of what constitutes "common design or concerted action to make them joint tortfeasors". Each of the appellants refuted this contention.
The parties' supplementary submissions
129 In supplementary submissions filed on 16 August 2006 pursuant to leave granted on 9 August 2006, the record companies "object[ed] to [the appellants] being granted leave to raise issues as to proof of infringements in Australia (including the application of s 104) and the form of orders". The bases for their objection were that neither issue was the subject of any ground of appeal; the record companies deliberately confined their approach to the appeals because of their narrow ambit; and the new issues would require more extended consideration of material before the primary judge than had hitherto been necessary.
130 The record companies said:
"Mr Cooper did make a general submission before the primary Judge to the effect that there was no evidence of infringements in Australia; however, his assertions in this regard…were obviously wrong. There was evidence of infringements in Australia.
The fact that his Honour did not deal expressly with that general submission reflects the fundamental weakness in the argument as opposed to any weakness in the primary Judge's judgment."
131 The record companies stated that s 104, which was not raised as a ground of appeal, was also not raised before the primary judge. Had it been raised, it would have led to a factual inquiry that, as it happened, was never undertaken. Further, if leave were given to the appellants, then the record companies sought leave to amend their notice of contention to agitate the question whether Mr Cooper was a joint tortfeasor in the acts of the operators of the remote servers to which his website had links. The record companies accepted that an amended form of orders might nonetheless be made.
132 In responsive submissions filed on 24 August 2006, the appellants argued that no leave was sought or required to raise issues as to proof of infringements in Australia, including s 104. They contended that "[i]f the Record Companies are to be permitted to salvage what they can of the orders made by the primary Judge - even by recasting those orders so as to provide a territorial limitation which is presently totally lacking - they can hardly deny the Appellants the opportunity to argue that the proposed amendments cannot be sustained without some evidentiary foundation that something (relevant) happened in Australia." The appellants also stated that the contention that the record companies foreshadowed that they would wish to raise by amendment to their notice of contention was not pleaded nor otherwise explored at trial.
133 Notwithstanding the appellants' opposition, the Court subsequently permitted the record companies to file further supplementary submissions. It also received the appellants' further supplementary submissions in response.
consideration
134 Section 101(1) creates two kinds of infringements: the first is the doing in Australia of any act comprised in the copyright by a person not being the owner of the copyright and without the licence of the owner of the copyright; and the second, the authorizing (again by a person not being the owner of the copyright and without the licence of the owner of the copyright) of the doing in Australia of any act comprised in the copyright. These appeals are primarily concerned with the meaning of 'authorization' in s 101. Each kind of infringement created by s 101(1) has a territorial connection to Australia. In the first case, there must be the doing in Australia of an act comprised in the copyright and, in the second case, there must be the authorizing of the doing in Australia of an act of the same description. Section 101(1) will be attracted in the latter case if the act of infringement that is authorized is done in Australia, though the 'authorization' took place outside Australia. That is, s 101 operates so as to exclude the ordinary presumption that a Commonwealth Act is concerned only with conduct in Australia: see s 21 of the Acts Interpretation Act 1901 (Cth). The question whether or not the primary judge adverted to the need for a relevant territorial connection and the extent of the evidence for it assumed additional significance in submissions filed after the hearing of the appeal. I return to this matter below at [175]-[176].
135 Section 101(1A) was introduced into the Act by the Copyright Amendment (Digital Agenda) Act 2000 (Cth) ("the Copyright Amendment Act"), an object of which was to provide "a practical enforcement regime for copyright owners" in the online environment: see s 3 of the Copyright Amendment Act. Presumably, the provision has particular significance in the context of alleged infringements of s 101(1) across the internet. Section 101(1A) requires that certain matters must be taken into account in determining whether a person has authorized the doing of an infringing act in Australia contrary to s 101(1). Section 101(1A) does not, however, prevent the Court from taking into account other relevant considerations. Whether one person has authorized another to commit an infringement will depend on the circumstances of the case: compare Moorehouse at 12 per Gibbs J and 17 per Jacobs J (with whom McTiernan ACJ agreed).
Authorization
136 Section 101(1A) was enacted at a time when Moorehouse represented the Australian law with respect to 'authorization'. Before the introduction of s 101(1A) into the Act, any discussion of the concept of authorization began with Moorehouse. Today, reference to Moorehouse assists in construing s 101(1A) because, as the following discussion shows, s 101(1A) is premised on the concept of 'authorization' developed by the High Court in that case.
137 Moorehouse concerned the circumstances in which literary copyright was infringed by the making of photocopies in a library at the University. Jacobs J, with whom McTiernan J agreed, said, at 20:
"The question is whether in the circumstances of the case the appellant
in supplying the book from its library and in providing a machine at the
library which would enable copies to be made authorized the infringement. The answer depends upon the meaning of the word 'authorize' in s 36(1) of [the Act] and on a conclusion of fact once the meaning of the word is ascertained."
Jacobs J drew a distinction between 'authority' and 'authorization'. The latter was a broader concept than the former. Like Gibbs J in his separate judgment, Jacobs J attributed to the word 'authorization' the meaning of 'sanction, approve, countenance'. Jacobs J observed, at 20-21:
"It is established that the word is not limited to the authorizing of an
agent by a principal. Where there is such an authority the act of the agent
is the act of the principal and thus the principal himself may be said to do the
act comprised in the copyright. But authorization is wider than authority. It
has, in relation to a similar use in previous copyright legislation, been given the meaning, taken from the Oxford Dictionary, of 'sanction, approve,
countenance'…It is a wide meaning which in cases of permission or
invitation is apt to apply both where an express permission or invitation
is extended to do the act comprised in the copyright and where such a permission or invitation may be implied. Where a general permission
or invitation may be implied it is clearly unnecessary that the authorizing party have knowledge that a particular act comprised in the copyright will be done."
Jacobs J held that in the circumstances of the case the University had impliedly invited the users of the library to use the photocopiers as they thought fit, including committing copyright infringements.
138 Gibbs J also said, at 12, that, in legislation "of similar intendment", the word 'authorize' had been held to mean 'sanction, approve, countenance' or even 'permit'. His Honour added that "[a] person cannot be said to authorize an infringement of copyright unless he has some power to prevent it": see Moorehouse at 12. Gibbs J continued, at 12-13, that:
"Express or formal permission or sanction, or active conduct indicating approval, is not essential to constitute an authorization…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.…[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."
Gibbs J held that the University did not adopt measures reasonably sufficient for the purpose of preventing infringements taking place and that in the circumstances an infringement resulting from the use of the University's photocopier was relevantly authorized by the University: see Moorehouse at 17.
139 In WEA International Inc v Hanimex Corporation Ltd (1987) 17 FCR 274 ("WEA International Inc"), which also concerned infringement of copyright in sound recordings, Gummow J considered the history of the concept of 'authorization' in Australian law. His Honour noted and concluded at 285-286:
"The evolution of the meaning of 'authorisation' in [the Copyright Act 1911 (UK)]and [the Act] has pursued an even more tortuous course than the doctrine of contributory infringement in the United States. One view of the 1911 Act was that the expression 'to authorise' described a situation where the defendant purported to confer on a third party, for example as an agent or licensee, a right or authority to perform an activity which in truth would be, if carried out, an infringement of the plaintiff's copyright: Transatlantic Film Co Ltd v Albion Cinema Supplies Co [1917-23] MacG CC 118 at 121; Finn v Pugliese (1918) 18 SR (NSW) 530 at 541; Evans v E Hulton and Co Ltd (1924) 131 LT 534; Falcon v Famous Players Film Co [1926] 2 KB 474 at 499. This would have given to 'authorisation' a conceptually distinct field of operation from that of principles of joint tortfeasance.
…
But the course of authority has shown that the concept of 'authorisation' is not so confined. In Moorehouse's case…the High Court, following Adelaide Corporation v Australasian Performing Right Association Ltd (1928) 40 CLR 481 at 489, accepted that the word 'authorised' as used in s 36 of [the Act] had the meaning of 'sanction, approve, countenance'. This meant that express or formal permission or active conduct indicating approval was not essential to constitute authorisation."
140 The appellants have contended for a narrow concept of 'authorization', which, as this passage from Gummow J's judgment in WEA International Inc shows, was rejected by the High Court in Moorehouse and Adelaide Corporation v Australasian Performing Right Association Ltd (1928) 40 CLR 481 ("Adelaide Corporation"). The proposition that the concept of 'authorization' is to be understood in the narrow way for which the appellants contended is incompatible with these authorities: see also Jain at 57 per Sheppard, Foster and Hill JJ. For this reason, I reject the appellants' submissions in this regard.
Relevant considerations
141 Prior to the introduction of s 101(1A), the authorities identified various considerations as being relevant to the issue of 'authorization' as developed by the High Court. In Moorehouse, the High Court identified as relevant the degree of control over and the nature of the relationship between the alleged authorizer and the person supposedly authorized to do the directly infringing act: see also Adelaide Corporation at 497 per Higgins J and 503 per Gavan Duffy and Starke JJ and Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 ("Australian Tape Manufacturers") at 497-498 per Mason CJ and Brennan, Deane and Gaudron JJ. Gibbs J in Moorehouse also identified as a relevant consideration the knowledge or reasonable suspicion of the authorizer that the infringing act would be done: see also Adelaide Corporation at 487 per Knox CJ in dissent. Building on this idea, the High Court in Australian Tape Manufacturers at 498 said that the "[m]anufacture and sale of articles such as blank tapes or video recorders, which have lawful uses, do not constitute authorization of infringement of copyright, even if the manufacturer or vendor knows that there is a likelihood that the articles will be used for an infringing purpose such as home taping of sound recordings, so long as the manufacturer or vendor has no control over the purchaser's use of the article."
142 The question what degree of control can constitute a sufficient basis for a finding of authorization does not admit of a straightforward answer. As the authorities show, it will be a question of fact and degree in each case.
143 In Adelaide Corporation, a majority of the High Court held that a lessor of a hall had not 'permitted' the lessee to perform songs in a concert in breach of copyright, notwithstanding that that the lessor was told that the proposed program would infringe copyright and did nothing to dissuade the lessees from performing the songs. In a passage referred to in Moorehouse, Gavan Duffy and Starke JJ at 504 cited Performing Right Society v Ciryl Theatrical Syndicate [1924] 1 KB 1 at 9 per Bankes LJ in support of the proposition that:
"Mere inactivity or failure to take some steps to prevent the performance of the work does not necessarily establish permission. Inactivity or 'indifference, exhibited by acts of commission or omission, may reach a degree from which an authorization or permission may be inferred…'"
144 Nationwide News Pty Ltd v Copyright Agency Ltd (1996) 65 FCR 399 ("Nationwide News") considered the relationship between control, knowledge and inactivity, albeit in obiter dicta. In a passage on which the appellants relied, Sackville J, with whom Jenkinson and Burchett JJ agreed, said at 422 that "a person does not authorise an infringement merely because he or she knows that another person might infringe the copyright and takes no step to prevent infringement". Referring, amongst other cases, to Adelaide Corporation and Australian Tape Manufacturers, his Honour added at 424 that "[k]nowledge that a breach of copyright is likely to occur does not necessarily amount to authorisation, even if the person having that knowledge could take steps to prevent the infringement".
145 On the one hand, mere inactivity or indifference will be insufficient, especially where there is no knowledge or reason to suspect that the infringement might occur. On the other hand, inactivity or indifference, coupled with other factors, may support an inference of authorization. In Jain, the combination of inactivity, knowledge and control led the Full Court to uphold the finding at first instance that a company's chief executive officer had authorized the infringement of copyright that occurred in the unlicensed performance of musical works in a hotel owned by the company. The chief executive officer, who was also a director, was not involved in the daily operations of the hotel. The company employed a manager to select and arrange performances. In upholding the finding below, the Full Court emphasised that the finding of authorization was one of fact. It said at 61-62:
"The judgment of the High Court in the Moorehouse case establishes that one of the meanings of the word 'authorise' in the context in which it is here used is 'countenance'. It may be that not every act which amounts to the countenancing of something is an authorisation. Every case will depend on its own facts. Matters of degree are involved. But the evidence in the present case reveals, in our opinion, a studied and deliberate course of action in which Mr Jain decided to ignore the appellant's rights and to allow a situation to develop and to continue in which he must have known that it was likely that the appellant's music would be played without any licence from it. It was within his power to control what was occurring but he did nothing at all. In those circumstances we have reached the conclusion that the appellant established that Mr Jain authorised the infringement of copyright in question contrary to s 36 of the Act."
For decisions to like effect, see Australasian Performing Right Association Ltd v Canterbury-Bankstown League Club Ltd [1964-5] NSWR 138 ("Canterbury-Bankstown") at 140 per Ferguson J with whom Heron CJ agreed and Australasian Performing Right Association Ltd v Metro on George Pty Ltd (2004) 210 ALR 244 ("Metro on George") at 252 per Bennett J.
146 As such cases as Jain and Canterbury-Bankstown emphasize, prior to s 101(1A), an alleged authorizer's failure to take reasonable steps to prevent the infringing act that the person knows, or had reason to suspect, would be, or would be likely to be, done was also treated as a consideration relevant to a finding of authorization: see also Metro on George at 259.
147 The Court is now required by s 101(1A) to consider three matters that the authorities had previously identified as relevant to the High Court's concept of 'authorization'. These factors are: (1) the extent (if any) of the person's power to prevent the doing of the infringing act; (2) the nature of the relationship between the alleged authorizer and the person who did the infringing act that was supposedly authorized; and (3) whether the alleged authorizer took reasonable steps to prevent or avoid that infringing act.
The extent (if any) of Mr Cooper's power to prevent the doing of the infringing act
148 Bearing in mind the findings of the primary judge that were not challenged on appeal, the hyperlinks on the website operated by Mr Cooper permitted an internet user to access the sound recordings stored in the MP3 files on remote computers. Every time an internet user activated a link on the website, which was effective to download a sound recording in Australia that was stored on a remote computer, there was an infringing act. Mr Cooper created and operated the website. He could have prevented these infringing acts, either by not establishing the link in the first place or, subsequently, by disabling or removing the link. The fact that internet users could make other online copies of the sound recordings by other means does not detract from the fact that there were infringements as a consequence of effective activations of the links on the website operated by Mr Cooper.
149 In the circumstances, it was not reasonably open to Mr Cooper to claim mere indifference to the use internet users made of the website. The findings at first instance as to the nature, the contents and structure of the website, which were not seriously contested, plainly supported the further finding that Mr Cooper deliberately designed the website to facilitate infringing downloading of sound recordings. Mr Cooper's position was, in this respect, entirely different from that of the manufacturers and vendors of blank tapes, which was considered in Australian Tape Manufacturers.
The nature of the relationship between Mr Cooper and the internet user and operators of remote websites
150 There was no error in the primary judge's finding that Mr Cooper established a relationship between him and the remote website operators when he created the facility for them to put links on the website that he operated. This was a relevant and direct relationship. Mr Cooper also created relationships with relevant internet users when he provided facilities to initiate direct downloading of the sound recordings at these remote websites. The existence of a relevant relationship is also supported by the primary judge's finding that Mr Cooper derived financial advantage from it. That is, he was able to enter into commercial arrangements on account of internet users' patronage.
Whether Mr Cooper took reasonable steps to prevent or avoid that infringing act
151 The finding made by the primary judge entitled him to conclude that Mr Cooper did not take reasonable steps to prevent or avoid the infringements that occurred in the downloading of sound recordings. His Honour found, and it is not disputed, that the disclaimers did not accurately state the law and that Mr Cooper did not take any steps "to ascertain the legality of the MP3s to which the hyperlinks related or the identity of the persons submitting the MP3s": see Universal Music at 21 [87].
Conclusions with respect to Mr Cooper
152 So far as internet users and remote website operators were concerned, the website was in substance an invitation to use the hyperlinks provided and to add new links in order that sound recordings could be downloaded from remote websites, and a principal purpose of the website was to enable infringing copies of the downloaded sound recordings to be made. The fact that the website also carried a warning that some downloading could be illegal did not lessen the force of the invitation. Mr Cooper countenanced the specific infringing downloading and copying that occurred as a direct consequence of activating the hyperlink on the website operated by him. For the reasons stated below at [168]-[170], Mr Cooper's activities took him outside the protection of s 112E.
153 I agree with Branson J that Mr Cooper authorized the infringement in Australia of the record companies' copyright in sound recording by authorizing internet users to make copies of sound recordings in which copyright subsisted, and operators of remote websites to communicate these sound recordings to the public.
The extent (if any) of E-Talk's power to prevent the doing of the infringing act
154 I reject the submission made on behalf of E-Talk and Mr Bal that there was no proper foundation for the primary judge's adverse view of Mr Bal. His Honour's reasons for judgment reveal an adequate foundation. I also reject the submission that that there an insufficient evidentiary basis for the primary judge's finding that E-Talk and Mr Bal authorized the relevant copyright infringements.
155 E-Talk connected the website operated by Mr Cooper to the internet. Had it declined to provide connection services, transmissions that led to infringing downloading by internet users from files available at remote websites would have been prevented, as well as the communication to the public of recordings by remote website operators without the licence of the record companies. Had Mr Cooper persuaded another service provider to connect the website to the internet, different transmissions would presumably have resulted in other infringements. This is not, however, to the point. The fact is that E-Talk could have prevented the infringements that actually occurred.
The nature of the relationship between E-Talk and the internet user and operators of remote computers
156 There was no immediate relationship between E-Talk and the internet users who visited the website operated by Mr Cooper, although E-Talk advertised its services on the website and thereby sought to attract these users' custom. The opportunity to so advertise conferred a financial advantage, as is evident from the fact that E-Talk hosted the website largely for free in return for the opportunity to advertise. I differ from Branson J in that I would place some weight on this factor, whilst her Honour would place none. I would not place much weight on it, however.
Whether E-Talk took reasonable steps to prevent or avoid infringing acts
157 E-Talk could have taken down the website itself. It could have declined to provide its host facilities. E-Talk did not, however, take any further steps to prevent the infringing acts after Mr Cooper failed to comply with its request to take the website down, even though it, through Mr Bal, knew the contents of the website and the copyright problems that arose from its operation.
Conclusions with respect to E-Talk
158 In the circumstances of this case, E-Talk countenanced the infringing downloadings by internet users who visited the website that it hosted and Mr Cooper operated. For the reasons stated below at [168]-[170], its activities were outside the protection of s 112E.
The position of Mr Bal
159 In WEA International Inc Gummow J said at 283:
"Where the infringer is a corporation questions frequently arise as to the degree of involvement on the part of directors necessary for them to be rendered personally liable. Those questions are not immediately answered by principles dealing with 'authorisation' or joint tortfeasance. Rather, recourse is to be had to the body of authority which explains the circumstances in which an officer of a corporation is personally liable for the torts of the corporation".
160 The law concerning the liability of directors and other officers for corporate wrongdoings is unclear: see Allen Manufacturing Co Pty Ltd v McCallum & Co Pty Ltd (2001) 53 IPR 400 ("Allen Manufacturing") at 409-411 per Wilcox, French and Dowsett JJ. There are two relevant lines of authority, each supportive of a different test. As the Full Court said in Allen Manufacturing at 409:
"One line supported…the 'Performing Right Society test': whether the director had 'directed or procured' the company's infringement. The other line supported 'the Mentmore test': whether the director had engaged in 'the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it'."
161 No Full Court of this Court has settled which of these two tests is to be preferred: see Allen Manufacturing at 410-411 and Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157 ("Sydneywide") at [160]-[161] per Weinberg and Dowsett JJ. In Root Quality Pty Ltd v Root Control Technologies Pty Ltd (2000) 177 ALR 231 ("Root Quality"), Finkelstein J discussed both tests and concluded at 268 [46] that "[t]he director's conduct must be such that it can be said of him that he was so personally involved in the commission of the unlawful act that it is just that he should be rendered liable." I tend to agree with his Honour's approach: compare also Universal Music at [134].
162 As we have seen, however, counsel for the record companies did not confine their case against Mr Bal to his role as director, and contended that his conduct was such as to make him personally liable for infringement by authorization for the purposes of s 101(1). They made the same contention with respect to Mr Takoushis.
163 Mr Bal was plainly liable for the wrongdoing of the company, whether the Performing Right Society test or the Mentmore test (Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc (1978) 89 DLR (Ed) 195) is adopted, or, indeed, the approach in Root Quality is preferred. Mr Bal directed and procured E-Talk's authorization, in circumstances where he knew about the contents of the website and the copyright difficulties to which the website gave rise. He knew that, by hosting the site, E-Talk was permitting internet users to download and copy sound recordings in which copyright subsisted. He consented to the arrangement entered into between his companies and Mr Cooper, whereby they advertised on the website in return for largely free hosting. Through his companies, he sought to derive financial benefit from the internet users' use of the website. Mr Bal took no steps to prevent the infringing acts after Mr Cooper failed to comply with E-Talk's request to take the website down, although, as the controlling mind of E-Talk, he could have caused E-Talk itself to take the website down or decline to continue to host the site.
164 Furthermore, the Full Court in Jain accepted that the liability of a director or other officer does not solely depend on the principles referred to in Allen Manufacturing, Sydneywide and Root Quality: that is, a director procuring an infringement may also be liable on the basis that his or her conduct amounts to an 'authorization' for the purposes of s 101(1). Upon this basis, Mr Bal also authorized infringements by internet users in the same way as E-Talk did. The fact is that Mr Bal could have prevented the infringements that actually occurred by causing E-Talk not to host the website operated by Mr Cooper. Mr Bal had no immediate relationship with the internet users who visited the website but, through his companies, he derived a commercial advantage from the opportunity to advertise on the website. Mr Bal took no steps to prevent the infringements after Mr Cooper failed to comply with the request to take his website down, even though he knew the contents of the website and the copyright problems that arose from its operation.
165 For the reasons stated below at [168]-[170], his activities were outside the protection of s 112E.
The position of Mr Takoushis
166 E-Talk employed Mr Takoushis to provide technical support. He did little more than this. He had no control over the company's affairs and no policy-making role in the company. When problems arose or a decision affecting the company needed to be made, he went to his superiors.
167 Plainly enough, Mr Takoushis could not be held liable for the wrongdoing of the company on the Performing Right Society test or the Mentmore test, or, indeed, on the Root Quality approach. Further, he could not, on the facts found by the primary judge, be liable as a person who 'authorized' either the infringing downloading of sound recordings by internet users or the communication of these recordings to the public by the operators of the remote websites. Let it be accepted that Mr Takoushis knew the contents of the website operated by Mr Cooper and that it was likely to give rise to infringements of copyright in the recordings to which it was providing links. Such knowledge was insufficient to attract liability. Mr Takoushis was unable to cause E-Talk to take down the website and discontinue its hosting arrangements with Mr Cooper. Mr Takoushis had no relationship of his own with internet users or operators of remote websites. His superiors, such as Mr Bal, already knew about the website operated by Mr Cooper and the copyright difficulties to which it was likely to give rise; and there was no other reasonable step that he could take to prevent the infringements. In these circumstances, Mr Takoushis cannot be said to have relevantly 'authorized' the doing in Australia of acts infringing the record companies' copyright.
The protection of s 112E not available to the appellants
168 In order for s 112E to apply, there must be a person providing facilities "for making, or facilitating the making of, a communication". The appellants fall within this description. By force of s 112E, such a person is not to be taken to have authorized an infringement "merely because" another person uses the facilities in such a way as to infringe copyright. That is, if the most that can be said is that they have provided the facilities another person has used to infringe copyright, they are not to be taken to have authorized the infringement. As Wilcox J said in Universal Music Australia Pty Ltd v Sharman License Holdings Ltd [2005] FCA 1242 at [396], "[s]o understood, s 112E operates as a legislative reversal of the High Court's decision in Telstra Corporation Limited v Australasian Performing Right Association Limited (1997) 191 CLR 140". As his Honour noted at [399], s 112E "does not preclude the possibility that a person who falls within the section may be held, for other reasons, to be an authoriser". Whether there are "other reasons" depends on the matters identified in s 101(1A) and any other relevant matters.
169 As already stated, the website constituted an invitation by Mr Cooper to internet users to use the hyperlinks that it provided and to add new links, in order that sound recordings could be downloaded from remote computers and thereby copied. Having regard to the matters already mentioned with respect to Mr Cooper, it cannot be said that he did no more than provide the facilities that were used to infringe the record companies' copyright.
170 Nor can it be said that E-Talk and Mr Bal did no more than provide the facilities that were used to infringe the record companies' copyright. E-Talk, and, through E-Talk, Mr Bal, derived a commercial advantage from the website operated by Mr Cooper that was over and above payment for hosting services. Mr Bal, and through him, E-Talk knew about the website and the infringements of copyright that were likely to be committed through its operation. In that knowledge, neither took reasonable steps to prevent the infringements.
Notices of contention
171 In each appeal, the record companies have filed notices of contention. I have had the benefit of reading in draft the reasons for judgment of Branson J. I agree with her Honour, for the reasons she gives, that the contentions sought to be raised in the appeals of Mr Cooper and E-Talk and Mr Bal should not be further considered.
172 I also agree with her Honour that only two of the contentions sought to be raised in the appeal of Mr Takoushis are appropriately raised. The first is the contention that Mr Takoushis was a joint tortfeasor with Mr Cooper, E-Talk and Com-Cen; and the second is that Mr Takoushis directed or procured the acts of E-Talk and Com-Cen whereby the record companies' copyright was infringed or deliberately or recklessly directed the commission of those acts so as to make the conduct his own. I have already considered this latter contention at [167].
173 The circumstance that two or more persons assisted in or contributed to a tortious act causing damage is insufficient to attract liability as joint tortfeasors. There must also be some common design: see Morton-Norwich Products Inc v Intercen Ltd [1978] RPC 501 at 515-516 per Graham J; also WEA International Inc at 283 per Gummow J. As Brennan CJ, Dawson and Toohey JJ said in Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 at 580-581, after considering the position of principal and agent and persons who breach joint duties, "to constitute joint tortfeasors two or more persons must act in concert in committing the tort".
174 In the circumstances previously discussed with reference to Mr Takoushis, I can discern no error in the primary judge's finding that there was insufficient evidence of common design. As already noted, within E-Talk, Mr Takoushis was employed to provide little more than technical support. I reject the proposition that he had authority to terminate the hosting arrangement that existed between E-Talk and Mr Cooper. His role in providing technical support in establishing and maintaining the website, and his knowledge of the website and the copyright infringements to which it was likely to give rise, are insufficient to amount, in the circumstances, to common design.
The doing in Australia of acts comprised in the copyright
175 An authorization infringement under s 101(1) is not complete unless there is an act of infringement of the kind allegedly authorized (that is, the doing in Australia of any act comprised in the copyright): see Nationwide News at 421 per Sackville J, with whom Jenkinson and Burchett JJ agreed, and the authorities there cited. The Court may, however, enjoin a defendant in an appropriate case in respect of an authorization where the act of infringement that is the subject of the authorization is apprehended quia timet: see WEA International Inc at 288. There was no basis in this case for quia timet injunctive relief.
176 The primary judge found that the website operated by Mr Cooper "attracted internet users from around the world and a significant traffic from Australian internet users": see Universal Music at 11 [29]. His Honour expanded on this finding by reference to what he termed the 'Access Log File'. It is implicit in his Honour's reasons that he regarded this as tantamount to a finding that acts had been done in Australia that were comprised in the record companies' copyright and that these acts were the subject of the relevant authorizations. In the circumstances of the case, the primary judge was not required to deal with this point in any greater detail than he did: see Kovan Engineering (Aust) Pty Ltd v Gold Peg International Pty Ltd [2006] FCAFC 117 at [45]-[48] per Heerey and Weinberg JJ, with whom Allsop J substantially agreed and Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 at 244 per Kirby P and 256-258 per Mahoney JA. None of the notices of appeal challenged his Honour's judgment and orders on the ground that there was no evidence to support such a finding. Nor did they contest his Honour's judgment on the ground that it depended this finding, and that his Honour did not make it and was unable do so. The appellants have said that they do not seek leave to raise any issue as to proof of infringements in Australia (including the application of s 104 of the Act). It follows that no issue as to proof of infringements in Australia properly arises in these appeals.
DISPOSITION OF THE APPEALS
177 For the reasons stated, I would allow the appeal of Mr Takoushis and dismiss the appeals of Mr Cooper, E-Talk and Mr Bal, although in the case of Mr Cooper, E-Talk and Mr Bal I would vary the declarations and injunctions that the primary judge has made in the manner proposed by Branson J.
178 I agree with her Honour that Mr Cooper, E-Talk Communications and Mr Bal should pay the record companies' costs of their appeals. The record companies should pay Mr Takoushis costs at first instance and on appeal.
I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.