Telstra Corporation Ltd v A/asian Performing Right Association Ltd

High Court of Australia|1997-08-14|Before: Kirby JJ, Gaudron JJ, Gummow J, Black CJ, Burchett J, Sheppard J, Kirby J

High Court of Australia Dawson, Toohey, Gaudron, McHugh and Kirby JJ Telstra Corporation Ltd v A/asian Performing Right Association Ltd (FC 97/035) [1997] HCA 41

The respondent, the Australasian Performing Right Association Ltd (APRA), owns the copyright in a number of musical and literary works (the works) which are the music and lyrics of various songs. The appellant, Telstra Corporation Ltd (Telstra), which previously traded under the name of Telecom, holds a general telecommunications licence under the TelecommunicationsAct 1991 Cth and supplies, maintains and owns a telecommunications network in Australia. This test case arises from the participation by Telstra in the provision, in various ways, of music to telephone users who are placed on hold (music-on-hold). It is common ground that the works were used in providing music-on-hold.

(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:

(v) to cause the work to be transmitted to subscribers to a diffusion service.

APRA contended before Gummow J at first instance in the Federal Court that Telstra had engaged in activities which fell within each of the three sub-paragraphs of s 31(1)(a) set out above. Gummow J rejected APRA's contentions in relation to each sub-paragraph [1] . APRA appealed to the Full Court of the Federal Court, but no reliance was placed upon sub-par (iii) and it may be disregarded for present purposes. The Full Court allowed APRA's appeal [2] . It held unanimously that Telstra had broadcast the works within the meaning of sub-par (iv) and held by majority (Black CJ and Burchett J, Sheppard J dissenting) that Telstra had caused the works to be transmitted to subscribers to a diffusion service within the meaning of sub-par (v). Telstra now appeals to this Court against the decision of the Full Court.

See Australian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 2. See AustralianPerforming Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221

The evidence revealed that Telstra participated in the provision of music-on-hold in three different ways. The first was where a person made a telephone call to a Telstra service centre and heard music played by a machine at the centre when he was placed on hold. The second situation involved a person who heard music-on-hold after calling various business and governmental organisations to which Telstraprovided a transmission facility for that purpose. The third situation involved a person hearing music-on-hold after making a telephone call to a subscriber to a service known as CustomNet, which is provided by Telstra. Where the telephone line of a subscriber to CustomNet is busy, the electromagnetic current carrying the call is diverted to a music-on-hold facility situated at Telstra's nearest telephone exchange. In any of these three situations the music-on-hold may be pre-recorded and played from a compact disc or tape recording or may consist of music broadcast from a radio station which transmits to the general public.

Each of the three situations outlined above may occur in one of two ways. The first is where the caller uses what might be described as a conventional telephone; the second is where the caller uses a mobile telephone. APRA contends that, in respect of music-on-hold heard by callers using a conventional telephone, Telstra has caused the transmission of theworks to subscribers to a diffusion service within the meaning of s 31(1)(a)(v). In the case of music-on-hold heard by a caller using a mobile telephone, APRA contends that Telstra has broadcast the works within the meaning of s 31(1)(a)(iv).

It is convenient to turn first to the question whether, by its participation in the provision of music-on-hold to callers using conventional telephones, Telstra has infringed APRA's exclusive right to cause the works to be transmitted to subscribers to a diffusion service within the meaning of s 31(1)(a)(v). The right conferred by s 31(1)(a)(v) had its origin in the right of public communication guaranteed by the 1886 Berne Convention for the Protectionof Literary and Artistic Works, in the manner described by Kirby J in his judgment. The provision itself contains three requirements which must be considered in this case. First, there must be a diffusion service. Secondly, the work must be transmitted to subscribers to that service. Thirdly, the alleged infringer must have caused that transmission.

Section 31(1)(a)(v) is amplified by s 26 of the Act. It is necessary to set out s 26 in full as it stood at the relevant time:

(1) A reference in this Act to the transmission of a work or other subject-matter to subscribers to a diffusion service shall be read as a reference to the transmission of the work or other subject matter in the course of a service of distributing broadcast or other matter (whether provided by the person operating the serviceor by other persons) over wires, or over other paths provided by a material substance, to the premises of subscribers to the service.

(2) For the purposes of this Act, where a work or other subject-matter is so transmitted:

(a) the person operating the service shall be deemed to be the person causing the work or other subject-matter to be so transmitted; and

(b) no person other than the person operating the service shall be deemed to be causing the work or other subject-matter to be so transmitted, whether or not he provides any facilities for the transmission.

(3) For the purposes of the application of this section, a service of distributing broadcast or other matter shall be disregarded where the service is only incidental to a business of keeping or letting premises at which persons reside or sleep, and is operated as part of the amenities provided exclusively for residentsor inmates of the premises or for those residents or inmates and their guests.

(4) A reference in this section to the person operating a service of distributing broadcast or other matter shall be read as a reference to the person who, in the agreements with subscribers to the service, undertakes to provide them with the service, whether he is the person who transmits the broadcast or other matter or not.

(5) Where a service of distributing matter over wires or over other paths provided by a material substance is only incidental to, or part of, a service of transmitting telegraphic or telephonic communications, a subscriber to the last-mentioned service shall be taken, for the purposes of this section, to be a subscriber to the first-mentioned service.

Although there is no dispute about it, reference should be made to s 199(4) at this point. That sub-sectionprovided:

A person who, by the reception of an authorised television broadcast or sound broadcast, causes a literary, dramatic or musical work or an adaptation of such a work, an artistic work or a cinematograph film to be transmitted to subscribers to a diffusion service shall be treated, in any proceedings for infringement of the copyright, if any, in the work or film, as if he had been the holder of a licence granted by the owner of that copyright to cause the work, adaptation or film to be transmitted by him to subscribers to that service by the reception of the broadcast. The sub-section is limited to transmission to subscribers to a diffusion service but appears to reflect a policy that royalties paid for an authorised broadcast ought to be regarded as covering the extension of the broadcast to the subscribers to a diffusion service.

Returning to s 26 and to the first requirementof s 31(1)(a)(v), it is not contested that the transmission of music-on-hold to users of a conventional telephone occurs "over wires, or over other paths provided by a material substance", within the meaning of s 26(1). However, the question remains whether there can be said to be a "service of distributing broadcast or other matter". In the light of s 199(4), it is "other matter" which is the more significant category for present purposes, but under s 26(1), both in the case of broadcast matter and other matter, the matter need not be provided by the operator of the diffusion service. That is important because music-on-hold comes from both sound recordings and radio broadcasts. In either case it is irrelevant that Telstra has not itself provided or selected the music. But there still must, under s26(1), be a service of distributing such matter. It is this aspect of the concept of a diffusion service which is contested.

Turning for a moment to the second requirement of s 31(1)(a)(v), whilst that provision refers to transmission to "subscribers to a diffusion service", s 26(1) requires that reference to be read as a reference to transmission to "the premises of subscribers to the service". The shift in meaning required by s 26(1) would seem to have a practical explanation: it could not be expected that a transmission by means of a diffusion service would always be to a subscriber personally whereas it would necessarily be to his or her premises. But the point made by Telstra is that the premises to which music-on-hold is transmitted are not those of subscribers. On the contrary, Telstra says, where a businessor organisation has arranged for a music-on-hold transmission facility to be provided to it by Telstra or subscribes to CustomNet, it is that business or organisation which constitutes the subscriber to the facility of providing music-on-hold. It is said that the operation of such a facility could not involve transmission to those subscribers because the music-on-hold is transmitted straight to the caller to those premises; it is never transmitted to the premises which the caller is calling. In the case of a call to a Telstra service centre, it is said that there are no subscribers at all.

Allied to this submission is the contention by Telstra that music on hold cannot be a service to callers who receive it because they may not want to receive it but are compelled to do so while waiting to be connected to the person they have called. This brings us back to the first requirement of s 31(1)(a)(v), namely, that there must be a diffusion service.In our view, a service may nevertheless be a service even if it is unwanted by, and offers no choice to, those whom it is meant to serve. No doubt those who arrange for Telstra to provide music-on-hold to their callers are provided with a service, but that is not to say that music-on-hold is not also a service to those to whom it is played. Obviously, those who arrange for the music-on-hold to be played to callers who cannot get through regard it as a service to those callers or they would not make the arrangement. In the same way, music played in commercial premises may not be appreciated by persons frequenting the premises, but if it is provided it must be because it is perceived to be a benefit and good for business. This is recognised by s 26(3) which requires a diffusion service to be disregarded where it is only incidental to a business of keeping or letting premises at which persons reside or sleep and is operatedas part of the amenities provided exclusively for residents or inmates of the premises or for those residents or inmates and their guests. It is not to be supposed that all the guests in a hotel, for example, will want to hear the music transmitted by the hotel as a service to them, but from the terms of s 26(3) it is apparent that that characteristic does not preclude an amenity from being regarded as a service for the purposes of the Act.

No doubt a service requires some system or organisation whereby those intended to be served receive the service. If there is any doubt about this, it is, we think, removed by the reference in s 26(1) to the transmission of the work or other subject matter "in the course of" a service of distributing broadcast or other matter. This is significant for present purposes because it means that the mere transmission of a work in which there is copyright fromone telephone user to another - by whistling a tune, for example - would not constitute a service. The system or organisation required must, under s 26(1), be for the purpose of distributing matter. Distribution involves the spreading abroad or dispersal of the thing being distributed. That is what happens with music-on-hold. From a common source the music is conveyed over wires to the various destinations at which it is received. A telephone service is ordinarily a means of communication between two persons, but this does not mean that it cannot also be used to provide a service of distributing matter. Indeed, while music-on-hold is played to a caller, the communication ceases to be two-way and may for that reason be more easily seen as a distribution. Moreover, the dispersal of matter need not be simultaneous for there to be a distribution of that matter. There may, of course, be more than one caller at a time who receives music-on-hold,but that does not mean that a single holder does not also receive it in the course of its distribution, notwithstanding that others receive it at different times. We are therefore satisfied that the transmission of the works occurred in the course of "a service of distributing broadcast or other matter", namely, the systematic provision of music-on-hold. It is this which constitutes the diffusion service referred to in s 31(1)(a)(v).

Identifying the relevant diffusion service in this way has certain consequences when one turns to the second requirement of s 31(1)(a)(v) and attempts to identify subscribers to the diffusion service. Realising this, APRA did contend that the telephone service provided by Telstra was itself a diffusion service, but that contention cannot be sustained. A diffusion service within the meaning of s 31(1)(a)(v) and s26(1) is a service of distributing broadcast or other matter and that is an inapt description of a telephone service. The primary function of a telephone service is to facilitate communication between persons - usually two persons - and not the distribution of matter. Moreover s 26(5), in using the words "a service of distributing matter over wires or over other paths provided by a material substance" is describing a diffusion service within the meaning of s 26(1) (although without the requirement of subscribers), which it envisages as being distinct from a telephone service, although capable of being incidental to or part of that service. One may therefore accept that the systematic provision of music-on-hold is a diffusion service without accepting that the telephone service itself is a diffusion service, even though the formeris only incidental to or part of the latter. But without more, the mere existence of a diffusion service does not identify any subscribers other than, perhaps, the subscribers for which Telstra contends, namely, those who arrange for the diffusion service to be provided. In this case, of course, the music-on-hold is not transmitted to those persons. It was for that reason that APRA sought to rely upon the telephone service (to which those who receive music-on-hold are subscribers) as a diffusion service. That argument having been rejected, APRA is forced to rely upon s 26(5).

However, in our view, s 26(5) is sufficient to serve the purpose of APRA in identifying subscribers to the diffusion service which otherwise clearly exists in this case. The systematic transmission of music-on-hold is, as we have said, a diffusion service, being a service of distributing broadcast or other matter to callers whoreceive the music. If it is not part of the telephone service which is used for the transmission because it is merely a one-way communication, then it is clearly incidental to the telephone service. The result of this is that, under s 26(5), a subscriber to the telephone service is deemed, for the purposes of s 26, to be a subscriber to the diffusion service. The evident intent of s 26(5) is to create subscribers to a diffusion service conducted as part of or incidentally to a telephone service where otherwise they would not exist. It is to be noted that the opening words of s 26(5) do not use the term "diffusion service", for to do so might suggest the requirement under s 31(1)(a)(v) and s 26(1) that there be subscribers to it. Instead, s26(5) commences with that part of the definition of a diffusion service contained in s 26(1) which does not contain the requirement of subscribers and then deems the subscribers to the telephone service to be the subscribers to the diffusion service. The works were undoubtedly transmitted to the premises of the subscribers so deemed.

The result is to give an expanded operation to s 26(1) and, consequently, to give s 31(1)(a)(v) an extended application. But s 31(1)(a)(v) cannot be construed without reference to s 26 and unless sub-s (5) of that section is given the meaning which we have given it, it is difficult to see what meaning it could be given. Simply as a matter of construction that result is required, for it is notpossible to read s 31(1)(a)(v) in isolation from s 26.

The third and final requirement which APRA must establish is that it was Telstra which caused the works to be transmitted to the premises of the deemed subscribers. Under s 26(2), the person operating the service is deemed to be the person causing the work or other subject matter to be transmitted to the exclusion of any other person. Telstra would fall within the description of the person causing the work to be transmitted but under s 26(4) that term is to be read as a reference to the person who, in the agreements with subscribers to the service, undertakes to provide them with the service, whether he is the person who transmits the broadcast or other matter or not. Of course, Telstra has no agreements with callers who receive music-on-holdto provide them with that service. But they are deemed to be subscribers to that service under s 26(5) by reason of their being subscribers to the telephone service. The agreement to provide the telephone service must, in those circumstances, be deemed to extend to the provision of the diffusion service, for it is not possible to be a subscriber to a service in the absence of an agreement with a provider to provide it. It will be seen that by this means Telstra is deemed under s 26(5) to have agreed with subscribers to its telephone service to provide them with the diffusion service so that, under s 26(4), Telstra was the operator of the diffusion service by which the works were transmitted. Under s 26(2) Telstra was not only the operator of that service but the only operator of that service.

It follows that in each of the situationsin which Telstra participated in the provision of music-on-hold to callers using conventional telephones, it was the operator of a diffusion service and the works were transmitted to subscribers to a diffusion service within the meaning of s 31(1)(a)(v) of the Act.

The remaining question is whether, by participating in the provision of music-on-hold to callers using mobile telephones, Telstra broadcast the works within the meaning of s 31(1)(a)(iv) of the Act. The term "broadcast" is defined by s 10(1) of the Act and means "transmit by wireless telegraphy to the public". "Wireless telegraphy" is also defined to mean "the emitting or receiving, otherwise than over a paththat is provided by a material substance, of electromagnetic energy". Mobile telephones have a radio transmitter and a radio receiver by which communication is made to a nearby base station. Through the base station, radio transmissions to and from the mobile telephone are connected to the rest of the telephone network. When a caller from a mobile telephone hears music-on-hold, he has received a transmission, otherwise than over a path provided by a material substance, of electromagnetic energy, that is to say, by wireless telegraphy. The only issue is whether the transmission in question can be said to be "to the public".

Music-on-hold may be transmitted to mobile telephones from different base stations or, if the callers are in the same area, from the one base station using different frequencies. But at any one time only one caller may be receiving music-on-hold. At other times there may be considerably more callers hearingmusic-on-hold. The music is transmitted to each caller individually by means of his or her mobile telephone and the caller may receive it in private or domestic circumstances. The privacy of mobile telephone calls is protected by legislation [3] . Different callers may call the number in question for different purposes. It is against this background that Telstra contends there is no transmission of music-on-hold "to the public" where the caller is using a mobile telephone.

See Telecommunications (Interception) Act 1979 Cth, s 7.

Until 1986, "broadcast" was defined in s 10 of the Act to mean "broadcast by wireless telegraphy" and "broadcasting" had a corresponding meaning. The Copyright Amendment Act 1986 Cth added the words "other than from point to point" before the words "by wireless telegraphy". Section 10(1A) was also added and it provided that a broadcast was to be taken to be from point to point if it was intended by the broadcaster to be received only by particular equipment at a particular location.

There was a further amendment by the Statute Law (Miscellaneous Provisions) Act (No 2) 1986 Cth. In introducing the Bill for that Act, the Attorney-General said in his second reading speech [4] :

The amendment will clarify the definition of "broadcast", which was modifiedby the Copyright Amendment Act 1986, passed last sittings. Interested groups have submitted that the wording inserted by that Act is ambiguous, and does not express the Government's intention that "broadcast", in this context, should cover transmissions to the copyright owner's public, whether the "general" public or part of the public. Following consultations there is agreement with the policy and wording of the proposed new definition. The Statute Law (Miscellaneous Provisions) Act (No 2) omitted s 10(1A) and replaced the definition of "broadcast" with the words which now appear in the Act, namely, "transmit by wireless telegraphy to the public". That definition removes from the definition of "broadcast" the word "broadcast" itself and replaces it withthe concept of transmission to the public. That means that it is not helpful to resort to the ordinary meaning of the word "broadcast" in construing the definition. The addition of the words "to the public" was, if the Attorney-General's second reading speech is any guide, intended to incorporate the notion of the copyright owner's public. 1. See House of Representatives, Commonwealth Parliamentary Debates (Hansard), 15 October 1986, p 2067.

The concept of the copyright owner's public was developed in a series of cases which, however, were concerned with the distinction between a performance in public and a private or domestic performance. Section 31(1)(a)(iii) speaks of the right to perform a work "in public", but the definition of "broadcast", with which we are concerned, speaks of transmission "to the public". If anything, the use of the words "to the public" conveys a broader concept than the use of the words "in public"since it makes clear that the place where the relevant communication occurs is irrelevant. That is to say, there can be a communication to individual members of the public in a private or domestic setting which is nevertheless a communication to the public. A broadcast by a radio station is just such a communication.

A performance or broadcast to the world at large is obviously a performance or broadcast to the public. But the situation becomes a little more difficult in the case of a performance or broadcast to a limited class of persons. In that context, in considering what constitutes a performance in public, the cases recognise that the relationship of the audience to the owner of the copyright is significant in reaching a conclusion. It is from this that the notion of the copyright owner's public developed. In Duck v Bates [5] , Brett MR said:

therepresentation must be other than domestic and private. There must be present a sufficient part of the public who would go also to a performance licensed by the author as a commercial transaction; otherwise the place where the drama is represented will not be a "place of dramatic entertainment" within the meaning of the statute. In Harms (Inc) Ltd and Chappell & Co Ltd v Martans Club Ltd [6] , Lord Hanworth MR said: In dealing with the tests which have been applied in the cases, it appears to me that one must apply one's mind to see whether there has been any injury to the author. Did what took place interfere with his proprietary rights? As to that, profit is a very important element. The idea of the copyright owner's public first explicitly emerged in Jennings v Stephens [7] where Greene LJ said: The question may therefore be usefully approached by inquiring whether or not the act complained of as an infringement would, if done by the owner of the copyright himself, have been an exercise by him of the statutory right conferred upon him. In other words, the expression "in public" must be considered in relation to the owner of the copyright. If the audience considered in relation to the owner of the copyright may properly be described as the owner's "public" or part of his "public", then in performing the work before that audience he would in my opinion be exercising the statutory right conferred upon him; and any one who without his consent performed the work before that audience would be infringing his copyright. The view expressed by Greene LJ in Jennings v Stephens was repeated by him in Ernest TurnerElectrical Instruments Ltd v Performing Right Society Ltd [8] and was adopted by Luxmoore and Goddard LJJ, the latter adding that the relevant question is: "Is the audience one which the owner of the copyright could fairly consider a part of his public?" [9] In Performing Right Society Ltd v Harlequin Record Shops Ltd [10] , Browne-Wilkinson J also adopted the view of Greene LJ, saying that it is important to see whether the performance is given to an audience for performances to which the composer would expect to receive a fee, this being what he understood Greene LJ to have meant by the copyrightowner's public. 1. (1884) 13 QBD 843 at 847. 2. [1927] 1 Ch 526 at 532. 3. [1936]Ch 469 at 485. 4. [1943] Ch 167 at 171, 172-173. 5. Ernest Turner Electrical [1943] Ch 167 at 175-176. 6. [1979] 1 WLR 851 at 857; [1979] 2 All ER 828 at 833.

In this country, the concept of the copyright owner's public was adopted in Australian Performing Right Association Ltd v Canterbury-Bankstown League Club Ltd [11] and Rank Film Production Ltd v Dodds [12] . In the latter case the playing of films transmitted by a video cassette recorder to television sets in motel rooms was held to be "in public". Rath J observed [13] :

In the present case the motel guest in his room may easilybe envisaged as part of the copyright owner's public. It is not the restricted size of the audience, or the privacy of the surroundings, that is decisive on the issue; the critical matter is the presentation of the movie by the occupier of the motel to his guest in that capacity. 1. (1964) 81 WN (Pt 1) (NSW) 300 at 305-306. 2. [1983] 2 NSWLR 553 at 559. See also the discussion in Australian Performing Right Association Ltd v Commonwealth Bank of Australia (1992) 40 FCR 59 at 67-75 3. Rank Film Production [1983] 2 NSWLR 553 at 559.

The distinction between what is "in public" and what is "in private" is of little assistance in determining what is meant by transmission "to the public". The transmission may be to individuals in private circumstances but nevertheless be to the public. Moreover, the fact that at any one time the number of persons to whom the transmission is made may be small does not mean that the transmission is not to the public. Nor does it matter that those persons in a position to receive the transmission form only a part of the public, though it is no doubt necessary that the facility be available to those members of the public who choose to avail themselvesof it. In Rank Film Production Ltd v Dodds the number of guests playing films in their rooms may not have been large, but the motel was open to the paying public. Similarly, those members of the public who choose to call a relevant number on their mobile telephone may be relatively small, but the facility is available to members of the public generally.

What is important is the nature of the audience constituted by those who receive music-on-hold. Lying behind the concept of the copyright owner's public is recognition of the fact that where a work is performed in a commercial setting, the occasion is unlikely to be private or domestic and the audience is more appropriately to be seen as a section of the public. It is in a commercial setting that an unauthorised performance will ordinarily be to the financial disadvantage of the owner's copyright in a work because it is in such a setting that the owner is entitled to expect paymentfor the work's authorised performance. In this case it is not so much the preparedness of the audience of music-on-hold to pay to hear the works were it not for their unauthorised performance that is significant. That simple analysis belongs to an age where communications were less technologically advanced and business and marketing techniques were less developed. Rather, it is the preparedness of those who wish the music-on-hold to be played to bear the cost of the arrangement which provides the key, for it reveals the commercial character of the broadcast and the commercial deprivation suffered by the copyright owner. Callers on hold constitute the copyright owner's public, not because they themselves would be prepared to pay to hear the music, but because others are prepared to bear the cost of them having that facility. For the performance of the music to that audience the copyright owner would expect to receive payment, even if not from the members of the audience. For these reasons,we conclude that when the works were transmitted to persons using mobile telephones when placed on hold, in each of the three situations revealed by the evidence, they were broadcast within the meaning of s 31(1)(a)(iv).

The circumstances giving rise to this appeal and the relevant provisions of the Copyright Act 1968 Cth (the Act) appear in the judgment of Dawson and Gaudron JJ.

In this Court Telstra Corporation Ltd (Telstra) challenged the judgment of the Full Court of the Federal Court that it had broadcast works in which the copyright was owned by Australasian Performing Right Association Ltd (APRA) and that it had caused the works to betransmitted to subscribers to a diffusion service. In the first case there was held to be a breach of s 31(1)(a)(iv) of the Act; in the second case there was held to be a breach of s 31(1)(a)(v) [14]

Australian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221

I agree with Dawson and Gaudron JJ that, by participating in the provision of music-on-hold to callers using mobile telephones, Telstra broadcast the works within the meaning of s 31(1)(a)(iv). I have nothing to add to what their Honours have written in this regard. Accordingly, the appeal in relation to this part of the judgment of the Full Court must be dismissed.

As to the appeal in relation to s 31(1)(a)(v), Iagree with much of what Dawson and Gaudron JJ have written. In particular, I agree that Telstra was the operator of a diffusion service. But I cannot take the further step of concluding that the works, that is the music in question played on hold to callers using conventional telephones, were thereby transmitted to subscribers to a diffusion service. On this aspect I find the reasons of Sheppard J in the Full Court persuasive. I shall explain why this is so.

Section 26(1) of the Act provides that a reference to the transmission of a work to subscribers to a diffusion service

shall be read as a reference to the transmission of the work in the course of a service of distributing broadcast or other matter (whether provided by the person operating the service or by other persons) over wires, or over other paths provided by a material substance, to the premises of subscribers to the service. Neither "diffusion"nor "diffusion service" is defined in the Act but s 26 is critical in determining whether there has been a breach of s 31(1)(a)(v).

There are three situations in which Telstra participates in the provision of music-on-hold which is played to callers using conventional telephones:

(1) where the service is provided by Telstra itself when its customers are placed on hold when they telephone one of its offices or service centres; (2) where the call is made to an organisation which has availed itself of the transmission facility provided by Telstra; (3) where an organisation causes music-on-hold to be played to customers from the service known as CustomNet, provided by Telstra. This involves the diversion of a call, where the line is busy, to a music-on-hold facility at Telstra's nearest telephone exchange. Clearly enough, in each of these cases there is a transmissionof recorded music which may be the subject of copyright. And there is a transmission of that music in the course of a service of distributing matter over wires or other paths. The real problem, and the source of difference between Black CJ and Burchett J on the one hand and Sheppard J on the other, is whether that transmission is "to the premises of subscribers to the service".

It is apparent that the persons who listen to the music are not themselves subscribers to the service of transmitting the music. Indeed, in the words of Sheppard J [15] :

They are strangers to it. They do not solicit it and they do not subscribe to it. Their purpose in telephoning the number is to deal with the organisation, [Telstra] or otherwise, with which they have business. It mustbe remembered that it is the service of distributing the matter to which s 26(1) refers. That is the service of distributing the music. It is not the telecommunications service to which a caller may subscribe. The two are separate. That much is apparent from s 26(5) which reads: Where a service of distributing matter over wires or over other paths provided by a material substance is only incidental to, or part of, a service of transmitting telegraphic or telephonic communications, a subscriber to the last-mentioned service shall be taken, for the purposes of this section, to be a subscriber to the first-mentioned service. Sub-section (5) contemplates two services which are related but are nevertheless distinct. The sub-section may well apply where there is a subscription to a combined diffusion service and telecommunications service. It may also applywhere there are separate subscriptions to two such services. But, in the present case, it is the services received by the caller which are relevant. And from the caller's perspective there is but one service. The service of receiving telephonic communication and the service of hearing music during that communication are the same thing. For the caller, it is of no moment whether there is music-on-hold or an answering machine or indeed silence. An argument that receiving a transmission of music-on-hold is incidental to receiving a telephonic transmission cannot be accepted. Sub-section (5) cannot fairly be construed so as to confer rights which are not otherwise to be found in the relevant provisions of the Act. As Gummow J, the primary judge, observed [16] : Subsection(5), in deeming a person to be a subscriber to the service, cannot be taken to also deem an agreement with the subscriber and an undertaking to provide them with the service, for the section provides no guidance as to who would be deemed to have made such an undertaking. The very process of identification of the person who is to be taken to be operating this service set down in subs (4) requires an analysis of the agreement to ascertain who is undertaking to provide the service, an analysis which cannot be performed upon a deemed agreement. 1. Australian Performing Right Association (1995) 60 FCR 221 at 233. 2. Australian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 137

That the music-on-hold facility would have to be treated as separate from the facility of making telephone calls for s 26 to operate is made abundantly clear from s 26(4) which reads:

A reference in this section to the person operating a serviceof distributing broadcast or other matter shall be read as a reference to the person who, in the agreements with subscribers to the service, undertakes to provide them with the service, whether he is the person who transmits the broadcast or other matter or not. The sub-section places emphasis on the existence of agreements with subscribers to the service, that is the service of providing subscribers with material which is copyright.

Section 26 relevantly is concerned with the distribution of recorded music to the premises of subscribers to a diffusion service. The obvious illustration of such a service is the transmission of music (or film), whether for a fee or not, to those who wish to listen (or watch), by providing them with a facility for listening to (or watching) the material over wires, or other paths provided by a material substance, to the premises of the subscribers. The use of the term "premises" shows,as Sheppard J noted [17] , "that what was intended to be covered was the physical transmission of copyright material from some central source to the premises of the various subscribers to the service".

Australian Performing Right Association (1995) 60 FCR 221 at 234.

It follows that the majority in the Full Court erred in allowing the appeal in respect of s 31(1)(a)(v). I would allow the present appeal in that regard and, to that extent, restore the judgment of Gummow J.

Telstra Corporation Ltd (Telstra) [18] appeals against an order of the Full Court of the Federal Court of Australia which held that Telstra was liable for infringing the copyright in material that was transmitted through its telephonic and telecommunications services [19] . The respondent, Australasian Performing Right Association Ltd (APRA) was, for relevant purposes, the assignee of the copyright in the material. At first instance Gummow J had held that Telstra was not liable [20] .

At the commencement of these proceedings, Telstra Corporation Ltd traded under the name "Telecom". 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221(Black CJ and Burchett J, Sheppard J dissenting in part). 3. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131

The principal question in the case concerns the correct interpretation of s 31(1)(a)(iv) and (v)as informed by s 26 of the Copyright Act 1968 Cth (the Act). Section 31(1)(a)(iv) and (v) provide:

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:

(v) to cause the work to be transmitted to subscribers to a diffusion service.

The right recognised by s 31(1)(a)(iv) is commonly referred to as the "broadcast right", and that recognised by s 31(1)(a)(v) as the "diffusion right".

(1) A reference in this Act to the transmission of a work or other subject-matter to subscribers to a diffusion service shall be read as a reference to the transmission of the work or other subject-matter in the course of a service of distributing broadcast or other matter (whether provided by the person operating the service or by other persons) over wires, or over other paths provided by a material substance, to the premises of subscribers to the service.

(2) For the purposes of this Act, where a work or other subject-matter is so transmitted:

(a) the person operating the service shall be deemed to be the person causing the work or other subject-matter to be so transmitted; and

(b) no person other than the person operating the service shall be deemed to be causing the work or other subject-matter to be so transmitted, whether ornot he provides any facilities for the transmission.

(3) For the purposes of the application of this section, a service of distributing broadcast or other matter shall be disregarded where the service is only incidental to a business of keeping or letting premises at which persons reside or sleep, and is operated as part of the amenities provided exclusively for residents or inmates of the premises or for those residents or inmates and their guests.

(5) Where a service of distributing matter over wires or over other paths provided by a material substance is only incidentalto, or part of, a service of transmitting telegraphic or telephonic communications, a subscriber to the last-mentioned service shall be taken, for the purposes of this section, to be a subscriber to the first-mentioned service. [21]

After the commencement of the present proceedings, s 26(2)(b) was amended by Sch 2 of the Law and Justice Legislation Amendment Act (No 2) 1994 Cth by substituting the words "he or she" for "he".

By s 10(1) of the Act, "broadcast" is defined to mean "transmit by wireless telegraphy to the public".

APRA is, forrelevant purposes, the owner of the copyright in certain works which include the lyrics and music of the songs "Tell Me a Story", "Change" and "Let It Be". For the purpose of testing the operation of s 31(1)(a)(iv) and (v), APRA and Telstra co-operated in presenting evidence relating to certain factual situations. The learned trial judge said [22] :

Those factual situations include (a) the provision of music-on-hold by some third party to a caller (eg one of the witnesses, Mr Bowden, telephoned Premier Cabs and heard "Tell Me a Story" and "Change"), (b) the provision of music-on-hold by a Telecom service centre to a caller (eg Mr Bowden called the Epping-Ryde Telecom office andlistened to "Let It Be"), (c) the provision of music-on-hold by Telecom to a caller in the course of a special music-on-hold service provided by Telecom to certain customers, and known as "CustomNet", and (d) the transmission of music-on-hold through the mobile telephone network (eg a witness, Mr O'Neill, used a mobile phone to call the Australian Musical Copyright Owner's Society and heard three songs). In each case, the music is provided either by a device which plays recorded music, or by a radio. 1. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 132

Telstra holds a general telecommunications licence issued under the Telecommunications Act 1991 Cth. When the Act was passed, Telstra owned most of the telephone lines and equipment used for the carriage of telecommunications in Australia. However, Telstra is no longer responsible for every line and piece of equipment. The TelecommunicationsAct declares that Telstra's responsibility for the lines and equipment of domestic customers ends at the first telephone socket and for those of commercial customers at the main distribution frame [23] in the building of those customers. If the customer is a domestic customer, the customer is the owner or lessee of and is responsible for all equipment beyond the first socket. If the customer is a commercial customer, the customer is responsible for all equipment beyond the main distribution frame. The operation of the system was described by the learned trial judge as follows [24] :

Inthe case of a telephone call from an ordinary domestic telephone, when a person (the caller) picks up a telephone in order to make a call, the caller draws electro-magnetic current which is provided by the nearest telephone exchange. When the caller dials a number the dialling signal is sent back to the nearest exchange and is routed by that exchange through the network to the exchange nearest to the person being dialled (the recipient). If the recipient is engaged, then the signal does not pass beyond the exchange nearest to the recipient. An engaged signal is sent back to the caller. Where the caller is connected and begins to speak, the electro-magnetic current sent from the exchange to his telephone is modulated in response to his voice by a device located in the base of the handset. This modulated current returns to the nearest exchange where it is amplified and sent through the network to the recipient. The earpiece in the handset of the recipient contains a device which convertsthe electro-magnetic current into sound.

Where the communication emanates from a commercial telephone system, such as a PABX, the position is complicated by the fact that such systems use their own power source rather than power provided by the exchange. Thus, if a person uses a PABX, an electro-magnetic current is drawn from the electricity grid, is modulated by the person speaking, and is sent to the nearest exchange. There it is amplified and sent through the network to the recipient. Therefore, the recipient receives, at least in part, an electro-magnetic current which originates from the caller's PABX. In other cases, the recipient receives a current which originates from the caller's exchange and is modulated by the caller. It should be noted that where the caller and the recipient are reasonably close to one another, the modulated current may not necessarily be amplified. From a technical point of view, the playing of music-on-hold has the same effect as someone speaking.The electro-magnetic current originating in the PABX, for example, is modulated by the music source and this modulated current then moves through the network to the person listening to the music.

Many commercial telephone systems have the capacity to play music-on-hold. A music source, such as a compact disc player or radio, may be connected to such equipment. Some of the equipment to which music sources can be attached is supplied by Telecom. The remainder is supplied by other companies unrelated to Telecom. In its advertising for products with a music-on-hold facility, Telecom refers to the advantages of such a facility.

Music-on-hold is also played by Telecom at a number of its "service centres" to callers who telephone the centres. The music at these centres is provided by means of a machine playing recorded music. Telecom also provides a music-on-hold facility to certain subscribers of a service called "CustomNet".Subscribers to CustomNet are provided with call handling capabilities equivalent to those available from a PABX system. Telephone handsets at the business premises of the subscribers are connected directly to a Telecom exchange. The subscribers pay a fee to receive the facilities of CustomNet. One optional feature available to subscribers is a music-on-hold facility which is provided by means of a compact disc player. When a person calls a subscriber to CustomNet and the subscriber is engaged, the caller's electro-magnetic current does not pass beyond the subscriber's nearest exchange, but is instead diverted to the music-on-hold facility until the subscriber's telephone line becomes available. What is important for present purposes is that the electro-magnetic current carrying music never passes to the premises of the subscriber, and a person operating a telephone at the subscriber's premises will never hear the music-on-hold. Instead, the current carrying the music moves directly fromthe Telecom exchange to the caller.

The main distribution frame connects external telephone lines owned by Telstra to the customer's internal telephone lines. 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 133-134

Section 26 defines, for the purpose of s 31(1)(a)(v), what constitutes a diffusion service, what is involved in transmitting a work or other subject matter to a diffusion service, the person who causes that work or subject matter to be transmitted by a diffusion service, and the subscribers to that service.

By necessary implication, if not express words, s 26(1) identifies a diffusion service as "a service of distributing broadcast or other matter over wires, or over other paths provided by a material substance, to the premises of subscribers to the service" [25] . Central to the concept of a diffusion service is the distribution of "broadcast or other matter". In s 26 "broadcast" is used as an adjective while in s 10(1) it is defined as a verb. But there can be no doubt that the definition in s 10(1) applies and that the phrase "broadcast matter" in s 26(1) refers to matter that has been, is being, or will be transmitted by wireless telegraphy to the public [26] . Section 10(1) defines "wireless telegraphy" as "the emitting or receiving, otherwise than over a path that is provided by a material substance, of electromagnetic energy" (emphasis added). As Professor Ricketson points out in his work on the Berne Convention [27] :

Essentially, [the term "broadcasting"] refers to the transmission of sounds or images, or both, by electromagnetic waves without any artificial means of guidance or support (such as a wire or cable), for the purpose of enabling reception of the sounds or images which are transmitted by members of the general public. However, there are now many ways, apart from broadcasting in its pure sense, in which sounds and images can be transmitted to the final listener or viewer. For example, it has long been possible to do this with the aid of an artificial conductor, such as a wire or cable, and the range of conductors has now expanded enormously, even including such intangible means as laser beams. These methods can also be used in combination with broadcasts, for example, as a means of further diffusion once a broadcast has been received.(footnotes omitted) 1. See also the Second Reading Speech on the Copyright Bill 1968 (Cth), in whichthe Attorney-General, Mr Nigel Bowen, said: "A diffusion service is one in which transmission is effected by landline and not by broadcasting": Commonwealth of Australia, House of Representatives, Parliamentary Debates (Hansard), 16 May 1968, p 1529. 2. In s 10(1)broadcast is defined to mean "transmit by wireless telegraphy to the public " (emphasis added). The italicised words were not in the Act when it became law in 1968 although they may have been implied. They reinforce the conclusion that, for the purpose of s 26, the phrase "broadcast matter" refers to matter that has been, is being, or will be transmitted to the public independently of its transmission to subscribers to a diffusion service. 3. TheBerne Convention for the Protection of Literary and Artistic Works: 1886-1986 (1987), pp 435-436.

The reference to wireless telegraphy in the definition of broadcast in s 10(1), however, makes it clear that "broadcasting" in s 26(1) is used "in its pure sense" and that it does not refer to matter that is sent by wire or cable or over a path that is provided by a material substance. As the Copyright Convergence Group reported to the relevant Minister [28] :

Section 10 of the Copyright Act defines "broadcast" as to "transmit by wireless telegraphy to the public". This excludes transmissions over wires or other material paths. This approachis in accordance with the provisions of the international copyright conventions to which Australia is party, and in particular the Berne Convention. These conventions distinguish between wired and wireless transmissions and only recognise wireless transmissions as broadcasts. However, the CCG considers that the separation of what may be the same activities by a service provider into two separate categories of protection based on the means of delivery of the service is no longer equitable in today's communications environment, and that this anomalous distinction should be removed from the Act. In s 26(1), therefore, the phrase "broadcast matter" means matter which is transmitted by wireless telegraphy to the public other than by a service "over wires, or over other paths provided by a material substance". 1. Copyright Convergence Group, Highways to Change: Copyright in the New Communications Environment, August 1994, p 16.

It necessarily follows that, when s 26(1)refers to "a service of distributing broadcast matter over wires" etc, it is referring to the relaying of matter to subscribers which has been, is being, or will be transmitted to the public by electro-magnetic waves without any artificial means of support such as wire or cable. When s 26 was enacted, it is likely that the relaying of broadcast material in this sense was perceived as the type of service in respect of which the section would have its largest application. It also seems likely that the relaying of material already broadcast, being, or to be broadcast was the principal activity which the drafters of Art 11bis(1) of the Berne Convention [29] , the primary source of s 26, had in mind when Art 11bis(1) was drafted and revised. Installations which received broadcasts, amplified them, and sent them by cable to individual subscribers seem to have been common in Europe at the relevant times in the evolution of the Berne Convention [30] . Mr Catterns QC, who appears for APRA, contends that retransmission of broadcasts is also "a very important aspect" of s 26. He referred to "community antennas" in areas of Sydney,which relay television broadcasts by means of "wire" to houses with poor television reception, as constituting a diffusion service to which people could subscribe.

See the 1948 Brussels Revision (the Brussels Act 1948); the 1967 Stockholm Revision (the Stockholm Act 1967); the 1971 Paris Revision (the Paris Act 1971). The history of the relevant provisions of the Berne Conventionis conveniently set out in the judgment of Kirby J. See also Ricketson, The Berne Convention for the Protection of Literary and Artistic Works: 1886-1986 (1987). 2. See, eg, the factual background to Performing Right Society Ltd v Marlin Communal Aerials Ltd [1977] FSR 51

The music that was sent over the telephone wires in this case was not broadcast matter within the definition in s 26(1) of the Act. Even if the music was transmitted to the telephone system by means that would answer the description "wireless telegraphy" within s 10(1), it was not broadcast "to the public". The music is not heard until it is transmitted to the caller and that occurs only because of the transmission of electro-magnetic signals over the path provided by a material substance, viz, the telephone line.

Section 26(1) also refers to "a service of distributing other matter over wires" etc. Are the words "other matter" wide enough to cover a case where music is transmitted to a telephone caller, as occurred in the present case? Certainly, they are wide enough to include every combination of words, signs, symbols, sounds or pictures, whatever their source. But the expression "other matter" cannot be at large. Unless the expression is given a restricted meaning, the term "broadcast matter" in s 26(1) is effectively redundant.

Courts often avoid reading down general words in an instrument when they follow the enumeration of a class or classes of persons or things unless "in the particular case the true construction of the instrument requiresyou to conclude that they are intended to be used in a sense limited to things ejusdem generis with those which have been specifically mentioned before." [31] Nevertheless, there are numerous reported cases where the courts have read the word "other" to mean "other like" [32] even when, as here, the specified genus itself comprises only one category [33] . In Stag Line Ltd v Foscolo, Mango & Co Ltd [34] , the House of Lords was called on to interpret a charterparty which gave liberty to the vessel "to call at any ports in any order, for bunkering or other purposes". Lord Buckmaster said [35] :

The word "bunkering" must have some demonstrative and limiting effect, and the phrase "or other purposes" following it cannot be so construed as to disregard the effect of the first example and assume that any purpose is thereby permitted. If that were so, the word "bunkering" might be left out. 1. Anderson v Anderson [1895] 1 QB 749 at 753 2. Thames & Mersey Marine Insurance Co Ltd v Hamilton, Fraser & Co (1887) 12 AC 484 at 491, 494-495, 501-502; In re Richardsons and M Samuel & Co [1898] 1 QB 261 at 266-267; Bond v Foran (1934) 52 CLR 364 at 376-377 Nelson Hospital Board v Cook [1946] NZLR 287 Gregory v Fearn [1953] 1 WLR 974 at 976[1953] 2 All ER 559 at 560 Corn v Weir's (Glass) Ltd [1960] 1 WLR 577 at 582-583[1960] 2 All ER 300 at 304-305 Canwan Coals Pty Ltd v Federal Commissioner of Taxation [1974] 1 NSWLR 728 at 733-734 3. Stag Line Ltd v Foscolo, Mango & Co Ltd [1932] AC 328 Parkes v Secretary for the Environment [1978] 1 WLR 1308[1979] 1 All ER 211 Re Collins; Ex parte Official Trustee in Bankruptcy v Bracher (1986) 10 FCR 209 Director of Public Prosecutions v Vivier [1991] 4 All ER 18 at 19-20 4. [1932] AC 328. 5. StagLine Ltd [1932] AC 328 at 334.

In my view, the preferred construction of s 26(1) is that "other matter" must be read ejusdem generis with "broadcast matter". Unless that is done, the latter expression is effectively redundant, notwithstanding that the term "broadcast" is a key term in Pt III of the Act. In s 26(1) the term "broadcast" must have a limiting effect. It would be surprising if the legislature, having usedthis key term to limit matters that came within the section, then intended to make it superfluous by using the expression "other matter".

A much better construction of the expression "broadcast or other matter" in s 26(1) is that it refers to matter that is transmitted to the public by wireless telegraphy or some like means involving the transmission of signals, sounds or images by electro-magnetic energy but without any means of guidance by wires or other paths provided by a material substance [36] . On that hypothesis, s 26(1) deals with the further transmission of such matter by means of wires or other paths provided by material substance to the premises of subscribers to a service. The words in parenthesis in s 26(1) "distributing broadcast or other matter (whether provided by the person operating the service or by other persons)" support this construction.

See the definition of wireless telegraphy in s 10(1) of the Act and cf the definition of the expression telegraph or telegraph line in s 3 of the Post and Telegraph Act1901 Cth which means "a wire or cable used for telegraphic or telephonic communication or any apparatus for transmitting messages or other communications by means of electricity".

The terms of Art 11bis(1) of the Berne Convention also support this construction. Article 11bis(1) provides [37] :

(1) Authors of literary and artistic works shall enjoy the exclusive right of authorizing:

(i) the broadcasting of their works or the communicationthereof to the public by any other means of wireless diffusion of signs, sounds or images;

(ii) any communication to the public by wire or by rebroadcasting of the broadcast of the work, when this communication is made by an organization other than the original one;

(iii) the public communication by loudspeaker or any other analogous instrument transmitting, by signs, sounds or images, the broadcast of the work.

TheParis Act 1971, reproducing the language used in the Stockholm Act 1967. The Copyright Bill 1967 (Cth) was revised following the changes to the Berne Convention, including Art 11bis(1), introduced by the Stockholm Act 1967. In the Second Reading Speech on the Copyright Bill 1968 (Cth), the Attorney-General, Mr Nigel Bowen, stated: "Since the 1967 Bill was introduced, the Berne Convention has been again revised at a conference in Stockholm at which Australia was represented. Those further changes in our copyright law which would be required to give effect to the Stockholm Revision have been incorporated in this Bill": Commonwealth of Australia, House of Representatives, Parliamentary Debates (Hansard), 16 May 1968, p 1528.

Article 11bis(1)(ii) is the primary source of s 31(1)(a)(v) and s 26 of the Act. In his useful commentary on Art 11bis(1)(ii), Professor Ricketson states [38] :

Article 11bis(1)(ii) deals onlywith the distribution of broadcast programmes, and does this under the same condition that applies to rebroadcasting: a separate authorisation for this secondary utilisation of a broadcast is only required where the "communication by wire" is done by an organisation other than the original one. In the same way, no question as to whether this communication is made to a "new public" arises, so long as this is a communication to the public. In the case of the original organisation, therefore, it is free to distribute its broadcast programmes by cable without having to seek further permission. This "licence" can be viewed in several ways. On the one hand, it enables a broadcasting organisation to carry out its broadcasting effectively, particularly in areas where direct reception of programmes is difficult and would involve the broadcasting organisation in additional expense ifit had to rely on broadcasting alone. In this sense, cable distribution can be assimilated to rebroadcasting. On the other hand, the character of the act, involving as it does distribution through some form of artificial conductor, is qualitatively different from broadcasting, and the question arises as to whether it should be treated as a distinct act of dissemination requiring the authorisation of the copyright owner. It is for this reason, that some national laws treat the acts of broadcasting and cable distribution as distinct acts, even where the cable distribution is of programmes which have been broadcast by the same organisation. (Footnotes omitted, emphasis added.) In a footnote to this passage, the learned author refers to s 31(1)(a)(v) of the Act as an example of a national law that has treated broadcasting and cable distribution as distinct acts. 1. The Berne Convention for the Protection of Literary and Artistic Works: 1886-1986 (1987), pp 450-451.

Mr Catterns contends that the phrase "broadcast or other matter" "really could not be broader". He submits:

It is broader than the notion of the UK Act "programmes" on the one hand, and it is also broader than the early Wireless Telegraphy Act We submit that the phrase is a broad phrase certainly apt to cover the sort of communications that we are involved in here. [39] But, for the reasons that I have given, the expression "other matter" in s 26(1) is not at large. No doubt it includes every conceivable signal, sound or image, whether or not it is contained in a programme. But not every signal, sound orimage is "broadcast matter". For the purposes of s 26, such signals, sounds or images are "broadcast matter" only when they have been, are being, or will be conveyed to the public by electro-magnetic waves without any support from wires, cables or other paths provided by a material substance. 1. Section 48(3) of the Copyright Act 1956 UK referred to "a service of distributing broadcast programmes, or other programmes".

There can be no doubt that music which is transmitted can be "broadcast or other matter". But if the construction that I have placed on that composite expression is correct, the transmission of music by itself is not enough to fall within the expression. Once the view is accepted that "other matter" is describing matter that is analogous to broadcast matter, it seems to follow that the matter - whether it be music, news, stock exchange prices or the like - must possess a special quality when it is distributed "over wires, or over other pathsprovided by a material substance". In the case of broadcast matter, that quality is that it is matter that has been, is being, or will be transmitted "by wireless telegraphy to the public". In the case of "other matter", that quality is that it is matter which has been, is being, or will be transmitted to the public by similar means. That is to say, the matter must be transmitted to the public by electro-magnetic energy but without guidance or support from wires, cables, or other paths provided by a material substance.

It follows that, with great respect, I differ from the view expressed by Burchett J in the Full Court when his Honour said [40] :

The source of the music, whether a radio set, or record, tape or compact disc, is not of significance forthe application of s 26. 1. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 252

Section 26(1) also makes it clear that central to the idea of a diffusion service is the distribution of a common pool of "broadcast or other matter" which will be shared by a number of subscribers. The use of the term "distributing" implies that what the subscriber receives is the same "broadcast or other matter" that other subscribers receive. A diffusion service therefore is a service in which matter is distributed to a number of persons. The section is concerned with a service of distributing matter from a common source to a number of premises controlled or occupied by subscribers to the service. Of course, in some cases only one subscriber may in fact receive the service. In that case, the service will not be within the definition in s 26(1) unless other persons have the opportunityto share in the distribution of the matter. The right of subscribers to have access to the broadcast or other material is therefore central to the operation of s 26. An agreement that a subscriber should receive matter that was not accessible by any other person would not in my view be a diffusion service within the meaning of s 26(1). The subscribers may receive the material at different times. But each subscriber must have a right of access to the common material. Further support for this construction of the term "distributing" arises from the construction that I have placed on the expression "broadcast or other matter". That construction requires that the matter which is distributed be matter that has been, is being, or will be transmitted to the public.

Relying on the French translation of the Berne Convention, Mr Catterns submits that the term "distributing"in s 26 means transmission even though the English version of the Convention uses the term "distributing". Professor Ricketson also suggests that the English translation should be given the same meaning as the French translation of the Convention [41] . This argument has considerable force. If the Act had given the relevant parts of the Convention the force of law, I would be inclined to uphold it. But the Act has not done that. Instead, it has relied on the English translation in creating the domestic law. Because the legislature has used the English version, those words should be given their ordinary English meaning.

The Berne Convention for the Protection of Literary and Artistic Works: 1886-1986 (1987), p 431.

Plainly, s 26(1) distinguishes between the transmission ofcopyright works or other subject matter and the service of distributing broadcast or other matter. It may often be the case, however, particularly in the case of cable television, that the service of distributing broadcast or other matter will consist almost entirely of distributing works or other subject matter that are the subject of copyright. Nevertheless, for the purposes of the subsection, a distinction exists between the service of distributing "broadcast or other matter" and the transmission of the "work or other subject matter". The former is the collective name for all the material which is distributed as part of the service whether or not it is the subject of copyright.

Sub-sections (2), (3), (4) and (5) of s 26 expand and restrict the definition of diffusion service in s 26(1). Importantly, they define theperson who, for the purposes of s 31(1)(a)(v) of the Act, causes a work to be transmitted to subscribers to a diffusion service. Sections 26(2) and (4) combine to define the person who is responsible for the transmission of the material. Section 26(2) provides that, for the purposes of the Act, the person operating the service which transmits a work or other subject matter "shall be deemed to be the person causing the work or other subject matter to be so transmitted". That sub-section goes on to provide that no other person shall be deemed to cause the work or other subject matter to be transmitted. To determine who is the person operating the service for the purpose of sub-s (2), it is necessary to refer to sub-s (4). Sub-section (4)provides that a person operates a service when that person under an agreement with subscribers to the service undertakes to provide them with the service whether or not he or she is the person who transmits the broadcast or other matter.

The provisions of s 26(5) are curious and somewhat obscure. The words "a service of distributing matter" in s 26(5) refer back to the service referred to in s 26(1). That is to say, they refer back to the service of distributing broadcast or other matter. Mr Catterns accepts this is so. If circumstances exist so as to attract the operation of sub-s (5), that sub-section defines the subscriber to the diffusion service. So much is common groundbetween the parties. However, they disagree as to what else it does.

Where the service of distributing broadcast or other matter is only incidental to or part of a service of transmitting telegraphic or telephonic communications, the subscriber to the telegraphic or telephonic communication service is also deemed to be a subscriber to the service of distributing broadcast or other matter. But nothing in sub-s (5) makes the person providing the telegraphic or telephonic communication service the person operating the service for the purpose of s 26(2). By s 26(4) the person who operates the service is the person who, by agreement with the subscribers to the service, undertakes to provide them with the service of distributing broadcast or other matter. That makes it very difficult to give sub-s (5)an operation independent of s 26(1).

The preferred construction of s 26(5), therefore, is that the "service of distributing matter over wires" etc in the opening words of that sub-section is a reference to the "service of distributing broadcast or other matter" referred to in s 26(1). However, s 26(1) does not define the provider of the service. Nor does s 26(1) define, for the purpose of s 31(1)(a)(v), who is the person who "cause[s] the work to be transmitted to subscribers to a diffusion service" - which is after all the main reason for enacting s 26. That function is fulfilled by s 26(2) and (4).

Sections 26(2), (4) and 199(4) give content to s 31(1)(a)(v) of the Act which defines copyright in relation to a work as including the exclusive right to cause a work to be transmitted to the subscribers to a diffusion service. Section 26(2) declares that the person operating the diffusion service referred to in s 26(1) "shall be deemed to be the person causing the work or other subject matter to be so transmitted" and that no other person "shall be deemed to be causing the work or other subject matter to be so transmitted, whether or not he provides any facilities for the transmission " (emphasis added). Section 26(2) therefore has the effect of exemptingthe person who provides the facilities for further transmission of the "broadcast or other matter" from liability for the wire or cable distribution of "broadcast or other matter" unless that person is the person who operates the diffusion service. And by s 26(4), the person who operates the diffusion service is the person "who, in the agreements with subscribers to the service, undertakes to provide them with the service, whether he is the person who transmits the broadcast or other matter or not " (emphasis added). Section 199(4) reinforces this protection of the person who merely provides the means for further transmitting broadcast or other matter by declaring that a person who, by the reception of an authorised television or sound broadcast, causes a copyright work to be transmitted to subscribers to a diffusion service is tobe treated for the purpose of infringement proceedings as having a licence from the copyright owner to cause the work to be so transmitted. Sections 26(2), (4) and 199(4) ensure therefore that the only persons who will be liable for breach of s 31(1)(a)(v) are those persons who undertake to subscribers to further transmit material which has been, is being, or will be transmitted to the public by wireless telegraphy or similar means.

Because the music-on-hold played to callers had not been transmitted to the public by wireless telegraphy or similar means before being transmitted to any subscribers to a diffusion service, it was not "broadcast or other matter" for thepurpose of s 26(1). On this ground alone, the present appeal could succeed. But Telstra did not rely on this point. Moreover, both Gummow J and the Full Court acted on the assumption that music-on-hold was at least "other matter" for the purpose of s 26(1). It is true that Mr Catterns, for APRA, submitted that the expression "broadcast or other matter" was wider than the equivalent provision in the Copyright Act 1956 UK and was certainly wide enough to cover the music played in this case. But this was a passing reference. If there had been an appeal on this point, he would certainly have submitted a more detailed argument. As a result of the way the case has been conducted, therefore, it would be inappropriate to allow the appeal on this point.

In my view, however, the appeal on the diffusionright issue must be allowed on the ground that, within the meaning of s 26(1) and (4), Telstra was not a person who by agreement undertook to provide subscribers with "a service of distributing broadcast or other matter", whatever meaning is given to the expression "broadcast or other matter". There is no doubt that a person who provides a telegraphic or telephonic service may at the same time provide a distribution service for the purpose of s 26(1). But as s 26(2) and (4) make clear, the only person who causes "the work or other subject matter to be so transmitted" for the purpose of ss 26 and 31(1)(a)(v) is the person who has entered into agreements with subscribers and undertaken to provide them with a service of "distributing broadcastor other matter". Where the circumstances of a case attract the operation of s 26(5), the subscriber to the telegraphic or telephonic service is taken to be the person who receives the copyright work that is distributed as part of the broadcast or other matter. But s 26(5) does not deem the provider of the telegraphic or telephonic service to be the person causing the work to be transmitted. Depending on the facts of the case, that sub-section may create a statutory fiction [42] . But it does no more than make the subscriber to the telegraphic or telephonic service the subscriber to the diffusion service. I can see no ground for concluding that, where s 26(5) operates, it not merely deems the subscriber tothe telegraphic or telephonic service to be a subscriber to the diffusion service but also deems the provider of the telegraphic or telephonic service to be the person who by agreement undertakes to provide the subscriber with a service of "distributing broadcast or other matter". A deeming provision must be read strictly. It is "improper to extend by implication the express application of such a statutory fiction." [43]

cf Hunter Douglas Australia Pty Ltd v Perma Blinds (1970) 122 CLR 49 at 65-67 2. Federal Commissioner of Taxation v Comber (1986) 10 FCR 88 at 96See also The Commonwealth v Genex Corporation Pty Ltd (1992) 176 CLR 277 at 291-292

Accordingly, in my opinion, the appeal should be allowed on the diffusion right issue.

Iagree for the reasons given by Dawson and Gaudron JJ that the appeal on the broadcast right issue must fail.

I would allow Telstra's appeal on the diffusion right issue but reject its appeal on the broadcast right issue.

This appeal from a decision of the Full Court of the Federal Court of Australia [44] , concerns music provided to telephone users who are placed on hold (music-on-hold). The question is whether, under the Copyright Act 1968 Cth(the Act), provision of such music may constitute a breach of copyright in the musical works used for that purpose.

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221, per Black CJ, Sheppard and Burchett JJ.

In April 1993, the Australasian Performing Right Association Ltd (APRA) commenced proceedings in the Federal Court against Telstra Corporation Ltd (Telstra) which, at the time, traded under the name "Telecom" [45] . APRA was the owner of copyright in certain literary and musical works which are the subject of this litigation (the works). Telstra was the holder of a general telecommunications licence under the Telecommunications Act 1991 Cth. APRA sought declaratory and injunctive relief to restrain Telstra from performing, or authorising the performance of, the works in public; broadcasting them; or transmitting themto subscribers to a Telstra telecommunications service. APRA also sought to restrain Telstra from authorising, or permitting, any person to connect the works to the Telstra telecommunications network through equipment capable of transmitting the works to Telstra's subscribers.

For convenience, the appellant is referred to throughout as "Telstra".

At first instance in the Federal Court, Gummow J held that none of the activities challenged by APRA amounted to an infringement of APRA's copyright. His Honour dismissed the application [46] . The appeal to the Full Court of the Federal Court was allowed [47] . In this Court, Telstra challenges the construction of theAct adopted by the Full Court.

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 144 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221

The detailed technical information describing the operation of the telephone system, as used to play music-on-hold, is contained in the reasons of Gummow J [48] . Only a few of these technical details are important for the resolution of the issues before this Court. At the relevant times Telstra participated in the provision of music-on-hold in three ways:

When calls made to Telstra service centres were placed on hold. The music at such centres was supplied by a machine at the service centre playing recorded music to the waiting caller.

Telstra also facilitated the transmission of music-on-holdthrough telephone systems with the capacity to play such music to callers who could not be attended to immediately. A music source, such as a radio broadcast transmitter or a compact disc player, could be connected to such systems. In such a case, it was the transmission facility, and not the music, which was provided by Telstra. Until shortly before the hearing at first instance, Telstra was the only general carrier of telecommunications in Australia. As such, it was then the sole owner and operator of the telecommunications network through which music-on-hold was provided [49] .

Finally,such music was provided by a service known as CustomNet. When a person telephoned another who was a subscriber to CustomNet and the subscriber's telephone was engaged, the electromagnetic current carrying the call was diverted to the music on hold facility at the Telstra exchange nearest to the subscriber, until the subscriber's telephone line became available. Under the CustomNet system, the electromagnetic current carrying music-on-hold did not pass to the premises of the subscriber and thence to the caller. It moved directly from the Telstra exchange to the caller.

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 132-134 2. See Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 132-133, describing the role of Telstra in providing the telecommunications system under the Telecommunications Act 1991 Cth.

In each of the foregoing forms of music-on-hold, the music might either be pre-recorded music, derived from a compact disc player or tape recorder, or music and words broadcast from a radio station transmitting to the general public.

The technical evidence accepted by Gummow J establishes that telephone calls are transmitted in two ways. Most are transmitted by way of the telephone lines,or as expressed in s 26(1) of the Act, "over wires, or over other paths provided by a material substance". However, this is not so with calls to and from mobile telephones. They are transmitted by radio signals. Each mobile telephone has a radio transmitter and receiver which allow it to communicate with the nearest base station connecting its radio transmissions to the rest of the telephone network. In receiving signals from a base station, a mobile telephone operates in a way similar to an FM radio receiver. The telephone does not have its own set frequency dedicated to it. When a user makes a call from a mobile telephone, it communicates with the nearest base station seeking a frequency allocation. This request is then sent to the nearest telephone exchange. It allocates frequencies for transmission and reception. The telephone switches to those frequencies and commences the connection.

Thepresent proceedings therefore concern several forms of music on hold, based upon combinations of the elements of the systems described above [50] : (1) music-on-hold played to callers who telephone Telstra's own service centres; (2) music-on-hold played to callers who telephone subscribers to CustomNet; (3) pre-recorded music-on-hold played to callers who telephone organisations which provide music themselves or who have acquired the facilities to provide a music source from a supplier other than Telstra (in this case, Telstra transmits the music-on-hold, but does not provide it); (4) broadcast music-on-hold played under the circumstances described in par (3); and (5) recorded or broadcast music played to callers using mobile telephones in the circumstancesdescribed in pars (1) to (4).

See Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 230, per Sheppard J.

APRA brought its proceedings on the basis of a claim that the activities described above, and all of them, constituted an infringement of its copyright in the works in question. Such copyright is conferred by s 31 of the Act. That section provides, relevantly:

(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:

(v) to cause the work to be transmitted to subscribers to a diffusion service;

Section10(1) of the Act defines the word "broadcast" to mean "transmit by wireless telegraphy to the public". The same section defines "wireless telegraphy" as "the emitting or receiving, otherwise than over a path that is provided by a material substance, of electromagnetic energy".

Further indications of the meaning of "broadcast" are to be found in other provisions of the Act. Section 25(1) states:

A reference in this Act to broadcasting shall, unless the contrary intention appears, be read as a reference to broadcasting whether by way of sound broadcasting or of television. Section 22(5) provides, relevantly: For the purposes of this Act, a sound broadcast shall be deemed to have been made by the person by whom, at the time when,and from the place from which, the sounds constituting the broadcast were broadcast. The meaning of "sound broadcast" is, by s 10(1) of the Act, "sounds broadcast otherwise than as part of a television broadcast".

Section 26 is critical. It contains detailed provisions concerning the meaning of "diffusion service", as contemplated by s 31(1)(a)(v). The section and s 199(4), which is also important, are set out in the reasons of Dawson and Gaudron JJ. I will not repeat them.

In order to isolate the issues relevant to the appeal, it is useful to identify several matters which are not the subject of dispute:

The proceedingswere brought by APRA as a test case. Indeed, APRA and Telstra have cooperated in the litigation, which nonetheless presents a real legal controversy for decision [51] . The factual context for the litigation was, for this reason, uncontentious. The subject of the music-on-hold in dispute comprised six literary and six musical works, set out in the statement of claim. Nothing turns on the identification of the particular works. It was agreed that evidence that such works were used as music-on-hold was sufficient to support the test case on the legal issues applicable to all music-on-hold.

There was no issue about the legality of the transmission of music-on-hold by way of the telecommunications network, other than the question whether such transmission constituted a breach of APRA'scopyright. Telecom was at all material times, as Telstra still is, the holder of a general telecommunications licence, issued on 25 November 1991 under the Telecommunications Act. Most of Australia's telecommunications network is supplied, maintained and owned by Telstra [52] .

In the Federal Court, the parties pressed submissions concerning the effect of s 199(4) of the Act, in cases where the source of the music-on-hold was a radio broadcast transmitted through a diffusion service to waiting callers who had been placed on hold. Those submissions were not repeated in this Court. Consideration of the effect of s 199(4) is therefore limited.

Atfirst instance, APRA contended that the activities described above fell within the scope of the right "to perform the work in public" contained in s 31(1)(a)(iii) of the Act [53] . However, this contention was not pressed in the Full Court of the Federal Court [54] or in this Court. The point need not be considered.

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 132 2. Telecommunications Act, s 123. 3. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 138-139 4. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 232

The remaining issues in the appeal can be simply stated. APRA contends that Telstra has infringed its copyright by the provision of music-on-hold in the following ways:

By playing its own music-on-hold to callerswho telephone Telstra service centres by transmitting music-on-hold played by third parties, or by playing music-on-hold to callers who telephone subscribers to CustomNet, Telstra has "cause[d] the work to be transmitted to subscribers to a diffusion service" under s 31(1)(a)(v) of the Act ("The diffusion right issue"); and

By playing or transmitting recorded or broadcast music-on-hold to callers using mobile telephones either directly or via the CustomNet service, Telstra has "broadcast the work" within the meaning of s 31(1)(a)(iv) of the Act ("The broadcast right issue").

At first instance, Gummow J held that none ofTelstra's actions in playing or transmitting music-on-hold could be considered to have "cause[d] the work to be transmitted to subscribers to a diffusion service", within the meaning of s 31(1)(a)(v) [55] . His Honour concluded that the transmission of music-on-hold was the transmission of the work "over wires, or over other paths provided by a material substance", as required by s 26(1) of the Act [56] . However, he did not consider that such transmission was undertaken "in the course of a service of distributing broadcastor other matter to the premises of subscribers to the service" (the Act, s 26(1)). He pointed to the fact that music-on-hold was not provided for the benefit of the listener, but was a service benefiting, if anyone, the transmitter of the music [57] :

Although this might conceivably be viewed as a service to the latter class of persons, subs (1) requires transmission to the premises of subscribers to the service. 1. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 138 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 135 3. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 137

Noting that the ordinary meaning of the word "distribute" was to "spread or disburse", and that "[a] central feature of any distribution is a uni-directional flow of something from one to more than one",Gummow J also concluded that a service with the primary function of facilitating communication between two people could not properly be described as "distributing" a service [58] .

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 137

Even if the provision of music-on-hold was properly to be regarded as satisfying the requirements of s 26(1), Gummow J emphasised the lack of any "agreements with subscribers to the service" under which Telstra "undertakes to provide them with the service" (s 26(4) of the Act). His Honour's conclusions on the diffusion right issue applied equally to the transmission of recorded or radio broadcast music [59] .

Australasian Performing Right Association Ltd v TelstraCorporation Ltd (1993) 46 FCR 131 at 138

By majority [60] , the Full Court of the Federal Court allowed the appeal by APRA on the diffusion right issue. Black CJ and Burchett J rejected Gummow J's finding that the transmission of music-on-hold had not been undertaken "in the course of a service of distributing" the work to subscribers to the service. While the service of music-on-hold was undoubtedly for the benefit of persons calling the subscriber, "[w]hat is provided is still a service even if it is not sought or appreciated by members of a class to which it is intended to appeal" [61] .

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221, per Black CJ and Burchett JJ, Sheppard J dissenting on this point. 2. Australasian Performing Right AssociationLtd v Telstra Corporation Ltd (1995) 60 FCR 221 at 226, per Black CJ; similarly, see Burchett J at 252-253.

Black CJ and Burchett J also considered that the provision of music-on-hold was a service of "distributing" the work. It was distributed to "everyone within the class of people who are intended to hear it" [62] . There may be many people calling the same number at the same time, all hearing the same work from the same source. The disbursement from a common source was crucial. The fact that a separate electromagnetic current flowed to each caller did not deprive the service of its distributive character. Their Honours found support in s 26(5) of the Act,which recognises that a service of "distributing" matter can be "part of" a service to which there are subscribers [63] . This appeared to be an express negation of the argument that the person to person nature of telephone communication, and the inherent limitations placed on the capacity to distribute music-on-hold, prevented such communication of music-on-hold from constituting "a service of distributing" matter for the purposes of s 26(1) of the Act.

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 226, per Black CJ; see also Burchett J at 253. 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 226-227, per Black CJ; at 251-252, per Burchett J.

For Black CJ, the critical point was whether the provision of music-on-hold could be said to be distributed "to the premises of subscribers to the service", as required by s26(1). The answer to this question depended upon the construction of s 26(5) of the Act, which his Honour saw as operating to define the requisite "subscribers" [64] . He concluded that the provision of music-on-hold was a service "incidental to" the telephone service, within the terms of s 26(5) [65] :

But incidental to the telephone service, and only incidental to it, there will be the service, appreciated no doubt by some and perhaps the source of annoyance to others, of music being playedfor the caller if the call cannot be attended to immediately. In such a case, s 26(5) provided that a subscriber to the telephone service is to be taken, for the purposes of s 26(1), to be a subscriber to the distribution service. No actual subscription to the incidental service was required. When s 26(5) was viewed in this way, there was no need for any "agreements" between Telstra and subscribers to provide the service of music-on-hold, under s 26(4). The "agreements" needed only to provide for the telephone service. The same analysis was adopted by Burchett J [66] : If a subscriber to one service is required,by the statute, to be "taken, for the purposes of this section, to be" a subscriber to the other, it must also be taken that the agreement to provide him with the one service covers the other. 1. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 227 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 227 3. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 254

Both Black CJ and Burchett J distinguished between the situation where the source of the music-on-hold was a radio broadcast as opposed to the provision of recorded music. Where the music-on-hold was a radio broadcast, s 199(4) of the Act operated to treat the person who caused the work to be transmitted to subscribers as if he or she had been the holder of a licence granted by the owner of a copyright [67] .

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 229, per Black CJ; at 254-255, per Burchett J.

In dissent on the diffusion right issue, SheppardJ recognised the possible injustice to APRA of the result which flowed from his interpretation of the Act [68] . However, his Honour preferred the construction of s 26 favoured by Gummow J. In his view, the language of that section was not apt to deal with cases presented by the development of the new technology of music-on-hold [69] . This was a defect which the Judges could not repair. Sheppard J was particularly critical of the reliance placed by the majority on the effect of s 26(5) [70] :

Much was made of s 26(5) but it cannot control the whole meaning of the section nor be read so as to confer rights which are not to be found even incidentally in the provisions of s 31, which, after all, is the provision which confers the right, or in the remaining provisions of s 26. 1. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 232 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 234 3. Australasian PerformingRight Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 234-235

Sheppard J, like Gummow J, also rested his opinion on this issue upon the legislative history of ss 31 and 26 [71] . Taking into account the purpose of the provisions in the equivalent Englishlegislation [72] , and the way in which they had come to be mirrored in the Act, Sheppard J considered that it was "very difficult to impute to those responsible for the drafting of s 26 an intention to provide for a situation such as that contended for by APRA here." [73]

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 235-236 2. Copyright Act 1956 UK. 3. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 236

Any injustice required a legislative rather than a judicial response [74] .

On the second issue, Gummow J found that transmissions to mobile telephones by the base stations, involving as they did the emission of electromagnetic energy, clearly constituted a transmission "by wireless telegraphy" within the definition of broadcast in s 10(1) of the Act [75] . However, whether the transmission of music-on-hold to an individual mobile telephone caller could be said to be transmission "to the public", was more problematical. His Honour reviewed the legislative history of the definition of "broadcast" in the Act. He considered the available authorities on the proper construction of "public" as that word appears in variousprovisions of the Act and similar legislation in other jurisdictions [76] . He emphasisedthat the words "to the public" depended for their meaning not upon the number of recipients of the transmission but upon its essential character [77] . The operation of the mobile telephone system was designed to ensure privacy and confidentiality of each transmission. There were also statutory prohibitions on the interception of communications passing through the telecommunications system [78] . These considerations led Gummow J to conclude that it would be "distorting the language of the broadcasting provisions to hold that if during the course of this private communication oneparty was to communicate a work to the other party, this amounts to a broadcast by [Telstra] to the public" [79] . This conclusion would hold equally if Telstra itself were playing the music, as well as merely transmitting it, to mobile telephones [80] . The provision of s 22(5) focused on the point in space and time at which the electromagnetic energy was transmitted. The playing of music-on-hold by Telstra would not alter the circumstance that the transmission itself was not "to the public", and was not, therefore, a "broadcast".

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 141 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 141-143discussing the Copyright Amendment Act 1986 Cth, s 10(1A); Statute Law (Miscellaneous Provisions) Act (No 2) 1986 Cth; Australasian Performing Right Association Ltd v Commonwealth Bank of Australia (1992) 40 FCR 59 Rank Film Production Ltd v Dodds [1983] 2 NSWLR 553 Chappell & Co Ltd v Associated Radio Co of Australia Ltd [1925] VLR 350 Mellor v Australian Broadcasting Commission [1940] AC 491 Copyright Act 1976 US. 3. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 144 4. See s 7 of the Telecommunications (Interception) Act 1979 Cth. 5. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 144 6. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1993) 46 FCR 131 at 144

All members ofthe Full Court disagreed with Gummow J's conclusions on this point. They found that, by playing or transmitting recorded or broadcast music-on-hold to callers using mobile telephones, Telstra had "broadcast the work" within the meaning of s 31(1)(a)(iv) of the Act. The reasoning of all three Judges rested upon a construction of the words "to the public". Their Honours rejected the contention that the fact that the transmission of music-on-hold was private, and directed to individuals, as such, prevented it from being made "to the public".

Sheppard J agreed with the primary Judge's characterisation of telephone communications as "private affairs" [81] . However, in his view thisdid not prevent them from being "to the public" any more than the fact that most listeners to radio will do so in the privacy of their own homes or cars. The determining factor was not the privacy of telephone communication (which was a given), but the nature of the use of the copyright material [82] . His Honour saw no significant distinction between the words "to the public" in the definition of broadcast in s 10 and the term "in public" in s 31(1)(a)(iii) of the Act and similar provisions, as interpreted by court decisions [83] . The cases cited identified the relevant "public" as being "the copyright owner's public", particularlywhere the performance of the work in question occurred as an adjunct to a commercial activity. The size of the particular "public" was irrelevant.

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 239 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 248 3. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at242-248discussing Duck v Bates (1884) 13 QBD 843 Harms (Inc) Ltd and Chappell & Co Ltd v Martans Club Ltd [1927] 1 Ch 526 Performing Right Society Ltd v Hawthorns Hotel (Bournemouth) Ltd [1933] Ch 855 Jennings v Stephens [1936] Ch 469 Ernest Turner Electrical Instruments Ltd v Performing Right Society Ltd [1943] Ch 167 Australasian Performing Right Association Ltd v Canterbury-Bankstown League Club Ltd (1964) 81 WN(Pt 1) (NSW) 300; Performing Right Society Ltd v Rangers FC Supporters Club [1975] RPC 626 Rank Film Production Ltd v Dodds [1983] 2 NSWLR 553 Australasian Performing Right Association Ltd v Commonwealth Bank of Australia (1992) 40 FCR 59See also at 259-260, per Burchett J.

Burchett J agreed that it was the relationship of the audience to the owner of the copyright in question which was of prime importance [84] , and not the size of the audience. Black CJ agreed in the reasons and conclusions of the other members of the Full Court on this point [85] . Accordingly, the Court unanimously allowed the appeal on the broadcast right issue.

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 259, 261. 2. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 229

Inthis Court, Telstra propounded two arguments critical to the general approach of the Federal Court.

First, Telstra argued that the Full Court had erred in concluding that Telstra was liable for copyright infringement, in transmitting music-on-hold in its capacity as a general carrier of telecommunications. The fact that Telstra did not initiate or control the contents of those communications was said to be crucial. Even in the case of CustomNet, Telstra would often have no control of the content of the transmission. The Act could never have intended to impose upon an operator of a telecommunications network, in effect, strict liability for any copyright infringement, with the result that customers could transmit copyright information to each other and thereby render Telstra liable for the breach, although it had no way of knowing that such a breach had occurred and no chance of preventing it from happening.

Secondly, Telstra arguedthat the Full Court was incorrect in disregarding the fact that persons listening to music-on-hold had no necessary desire or intention to do so. In making a telephone call, a caller would rarely, if ever, seek to hear either the particular music played, or even music generally. A call would invariably be made for a different purpose, namely communicating with a person for a business or personal reason. So far as callers were concerned, there would be no possible cause for complaint if they made a telephone call and did not hear any music-on-hold. Telstra emphasised that this factual distinction between the case of music on hold, and the cases relied upon by the Full Court, involving an element of consensus between the audience and the music provider, was a significant one.

On the other hand, APRA formulated its case on the basis that the diffusion and broadcast rights in the Act had their genesis in, and were elements of, the right of "public communication" guaranteedby the Berne Convention for the Protection of Literary and Artistic Works 1886 (the Convention) [86] . APRA submitted that the Convention was the primary guide to the ascertainment of the meaning of the phrase"transmitted to subscribers to a diffusion service" [87] . The legislative history of the Act demonstrated that it intended that a copyright owner should, consistently with revisions of the Convention, enjoy the broad right to communicate its work to the public. Subject to limited exceptions (such as s 199(4)), the relevant rights in s 31(1)(a) of the Act were intended to be co-extensive. In particular, no significant distinction was contemplated by the Convention between the right to broadcast (s 31(1)(a)(iv)) and the right to transmit to subscribers to a diffusion service (s 31(1)(a)(v)). Thus, in APRA's submission, the words of those provisions shouldnot be given the narrow construction which Telstra attached to them. The overriding intention of the Act, as of the Convention, was that the copyright owner should receive broad protection.

Article 17 of the Berne Convention 1896 provided for periodic revisions of the Convention. These have occurred in 1896, 1908, 1928, 1948, 1967, and 1971. "Berne Convention" is a generic term. A particular revision of the Convention is identified by reference to the conference at which the revision was made by member states. The main revisions have been as follows: the 1896 Paris Revision; the 1908 Berlin Revision; the 1948 Brussels Revision (the Brussels Act 1948); the 1967 Stockholm Revision (the Stockholm Act 1967); the 1971 Paris Revision (the Paris Act 1971). See Ricketson, The Berne Convention for the Protection of Literary and Artistic Works: 1886-1986 (1987), Ch 3. 2. Relying on Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287-288

The meaning of the legislation under scrutiny in this appeal is not absolutely clear. The primary duty of a court in such a case is to give effect to the imputed will of the Parliament as expressed in the legislation. But where that will is ambiguous it is relevant to elucidate pertinent considerations of legal principle or legal policy. The importance of the competing policy considerations was recognised by the Full Court [88] . The law of copyright is concerned with balancing the public interest in economic and cultural development against the interests of individualsin securing a fair and equitable return for their intellectual efforts [89] . The potential liability of a telecommunications carrier for infringement of copyright, promoted through its network, is a matter of considerable public importance. The potential financial consequences of the decision in this case for telecommunications carriers (and therefore for the customers who may ultimately bear the costs of such potential liability) are considerable. The impact of a decision imposing liability on a telecommunications carrier may, in time, be heavier still, given the increasing integration of transmission technologies and the resulting technological blurring of the boundaries between the roles of carriers and content-providers [90] . Such considerations led Sheppard J to the conclusion that a legislative rather than a judicial response to the suggested injustice of denying copyright protection to the owner for the use of its work in a diffusion service was what was called for [91] . I agree that in this area, where the interests are large, and the rights are ultimately derived from the language of an international treaty of national as well as globalimportance, judicial restraint is called for where an Act is obscure or arguably inapplicable.

Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 237, per Sheppard J. 2. Cornish, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights, 3rd ed (1996), p 11. 3. See Loughlan,Music on Hold: The Case of Copyright and the Telephone. Telstra Corporation Ltd v Australasian Performing Rights Association Ltd, Sydney Law Review, vol 18 (1996) 342, at p 342; Report of the Copyright Convergence Group, "Highways to Change. Copyright in the New Communications Environment" (1994). 4. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 237, per Sheppard J.

However, the determination of whether the playing or transmission of music-on-hold by Telstra through its telecommunications network constitutes an infringement of the exclusive rights described by s 31(1)(a) of the Act ultimately involves the construction of an Act of the Australian Parliament. A court must seek to ascertain the purposes of the Parliament as expressed in the language which it has used in the legislation [92] . It may consider the purposes of the Act to determine whether more than one construction is available. So far as possible, it shouldadopt the construction which best promotes those purposes. The comment of Dawson J in Mills v Meeking [93] is in point:

[I]f the literal meaning of a provision is to be modified by reference to the purposes of the Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and it must be consistent with the wording otherwise adopted by the draftsman. A court must give effect to the clear meaning of a statute even where the result seems anomalous or unfair [94] . The potential consequences of assigning a particular interpretation to a provision may be taken into account in seeking the purpose of the Parliament. However, this will only be one factor among many to be considered [95] : If the choice is between two strongly competing interpretations the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative intention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended. 1. Acts Interpretation Act 1901 Cth, s 15AA; Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 517-518 2. (1990) 169 CLR 214 at 235. 3. See R v L (1994) 49 FCR 534 at 537-539 4. CooperBrookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321

With these familiar rules of statutory construction in mind I approach the task presented by the appeal.

Whether the provision of music-on-hold involves an infringement by Telstra of the exclusive right of APRA to "cause the work to be transmitted to subscribers to a diffusion service" necessitates, ultimately, an elucidationof s 26 of the Act. That section identifies the three relevant elements of that exclusive right: the "diffusion service"; the "subscribers" to the service; and the persons who "cause the work to be transmitted". Let me deal with each of these elements in turn:

(1) Music-on-hold is a " diffusion service " : Section 26(1) requires that, for there to be a "diffusion service", there must be a "service of distributing broadcast or other matter". To succeed, APRA was therefore obliged to demonstrate that the transmission of music-on-hold by Telstra (1) constituted a "service" and (2) amounted to the act of "distributing" the works.

Telstra submitted that as definedin s 26(1), a "diffusion service" was a service to the recipients of the matter, not to the senders. Subscribers to such a service are persons who subscribe to receive the matter, not to send it. According to s 26(4), there must also exist agreements with the subscribers that they will receive the service. These conditions were not satisfied in the present case.

It is true that callers obliged to listen to music-on-hold do not explicitly seek, or necessarily want, to hear the music. The real purpose of their call is, at least initially, unrelated. Music-on-hold may even frustrate or annoy them. They have no means of preventing the provision of the particular music or of altering its content. Some might prefer silence so that, while waiting, they can get on with work, reading, or doing other things. They might, if they could choose, select ancient music bylong deceased performers to which no copyright attaches, rather than the kind of modern music described in the evidence, for which copyright was fresh and protected by APRA.

However, the word "service", in its ordinary use, involves no notion of the desirability or congeniality of the thing provided. Otherwise, the occasional reception of nuisance calls or unwanted calls from unloved relatives or persistent creditors over the telephone might render the provision of the telephone facility no longer a "service". From the fact that the market has led in recent years to the proliferation of music-on-hold services, it may be inferred that many, perhaps most, callers are thought to prefer music to the frustrations of silence. It seems reasonable to infer from the growth of such facilities, in Australia as elsewhere, that market research or business estimates have convinced those who pay for them that providing them is in their economic, social or other interests.I agree with the comments of Black CJ on this point [96] :

[T]he service, whether provided directly by the trader itself or by a third party, is provided for the benefit of the trader's customers. It is the perceived benefit to the customers that makes the provision of the service of benefit to the trader. 1. Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 60 FCR 221 at 226

To constitute a "service" there would be no need for the music to be provided as an independent and distinct commercial operation. Sections 26(3) and 26(5) of the Act both assume that an activity "only incidental to" certain commercial operations may constitute a "service". This suggests that the word was intended to be given a broad interpretation encompassing activitiesincidental to more general services, such as "a business of keeping or letting premises" (s 26(3)) or "a service of transmitting telegraphic or telephonic communications" (s 26(5)).

It is also clear that, by transmitting music-on-hold, Telstra was "distributing" the works, despite the fact that they were played to individuals through individual telephone connections and, depending upon the number of simultaneous callers, only one person would ordinarily hear the same work at the same time from the same subscriber's handpiece. The Macquarie Dictionary defines "distribute" as "to divide and bestow in shares; deal out; allot to disperse through a space or over an area; spread; scatter". As Gummow J pointed out, "[a] central feature of any distribution is a uni-directional flow ofsomething from one to more than one" [97] . While it is indeed difficult to see how a service facilitating communication between two people could fulfil such a requirement, this is not the "service" to which s 26(1) of the Act refers. The relevant "service" is the entire "service of distributing broadcast or other matter to the premises of subscribers to the service". It is not, as such, the facilitation of the individual transmissions from one telephone to another. The terms of s 26(1) are wide enough to include a process consisting of the dissemination of various musical works to different people at multiple premises via the Telstra network. Over time, works emanating from a particularsource are carried to everyone within the class of persons intended to hear them, that is, the callers to a particular number. No element of simultaneity is necessary, any more than in the distribution of a publication or of presents at the festive season. When properly characterised in this way, the "service" is undoubtedly one of "distributing" matter.

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