Substantive claims and counter claims of the respective parties in further detail, including balance of convenience issues
42 As has been already indicated, UBI seeks interlocutory relief upon the basis of an exclusive license, claimed by UBI to have been granted in October 2006 by JRTS, to transmit the television broadcast signals into Australia of the subject Bosnia and Herzegovina television channel BHT-1. That television license is said by UBI to constitute a class license for subscription to television narrowcasting services, the conditions whereof being set out in Schedule 2 to Part 7 of the Broadcasting Services Act 1992 (Cth). TV Plus disputes that claim and denies the existence of any prima facie case at the instance of UBI,and hence of any serious question of copyright infringement on the part of TV Plus to be tried. Alternatively TV Plus contends that if the Court is minded nevertheless to grant any interlocutory relief in favour of UBI, then the usual undertaking as to damages required of UBI should be personally guaranteed by a director of UBI in view of the so-called apparent 'frailty' of UBI financially. In that regard, TV Plus put on evidence purportedly to the effect that there would be extensive damage to its existing subscription base, and hence to its business generally, if the injunctive relief sought by UBI was to be granted.
43 UBI pointed out that TV Plus had been obtaining for 18 months up until October 2006 commitments from members of the public by way of subscriptions to TV Plus,on the basis in reality of merely two hours or so of televised material each day (or so UBI contended). UBI contended further that there was a genuine risk to members of the Balkan community in Australia that they may subscribe to the television broadcasting services of TV Plus, yet not receive what they would have thought they had paid for. In that regard UBI further asserted that the evidence demonstrated 'a general lack of concern for the interests of their customers' on the part of TV Plus.
44 There is some evidence of the effect of a stance adopted by JRTS that it had terminated its earlier copyright license agreements with TV Plus in April 2005, and that it was only thereafter that JRTS committed itself to an exclusive license in favour of UBI. TV Plus has continued in any event to take or endeavour to take the BHT-1 signal and broadcast it in Australia. The case of UBI is further that TV Plus has not as yet paid JRTS any moneys for taking and broadcasting that signal. Leaving aside the matter of payment (or offer of payment) by TV Plus to JRTS of any outstanding license fees, it was contended by UBI that there exists '… a serious matter to be tried in relation to the Copyright claim, the Trade Practices claim and the anticipated breach of contract claim'. In that regard UBI asserted that it '… is not getting what it is paying JRTS bona fide, because part of [UBI's] prospective audience is being dissipated by the actions of [TV Plus]'. As I have elsewhere indicated in these reasons, virtually the same circumstances are relied upon by UBI for the establishment of its TP Actclaims as in the case of its copyright claim.
45 As to the standing of JRTS and its absence as a party to the proceedings, it was mutually acknowledged by the parties that the joinder of JRTS as a party to the proceedings would be required at least by the time the proceedings for final relief would fall to be litigated and resolved. UBI acknowledged that whether JRTS should be joined as a respondent in the context of the resolution of issues as to breach of contract, as well as breach of copyright, needed to be addressed and determined before the granting of any final orders.
46 It was the contention of UBI that the balance of convenience supported the imposition of at least the interim restraints it required from TV Plus,for the following reasons:
(i) the absence of any curial challenge by TV Plus to the termination by JRTS of its agreement with TV Plus, whether in Bosnia and Herzegovina or in Australia, which termination was apparently notified by JRTS to TV Plus on 28 April 2005;
(ii) the ongoing use and exploitation by TV Plus of the controversial JRTS material since 28 April 2005, yet without any payment by TV Plus to JRTS in respect thereof; in that context it was said by UBI that the contention that TV Plus was not making payment for the JRTS material it was using and exploiting for profit, ostensibly because it had not been invoiced, was 'fatuous and an indication that [TV Plus is] prepared to take unfair commercial advantage if it suits them';
(iii) the 'alarming admission' said to have been made by Mr Jeremic (of course of TV Plus)in the course of cross-examination that '… steps were taken to improperly bypass the interests of JRTS, and, by extension, the applicant, to obtain increased broadcast time to allow [TV Plus] to compete with [UBI] in the broadcasting of BHT-1';
(iv) the acknowledgment by Mr Jeremic that TV Plus only obtained capacity to broadcast BHT-1 for 18 hours a day because UBI came into the market.
It was therefore submitted by UBI that there existed already sufficient material on an interlocutory basis to satisfy the Court at least that there were serious issues to be tried in relation to its copyright claim, its TP Act claim and its anticipated breach of contract claim. The restraints which UBI is seeking against TV Plus were said to be justifiable on each of those footings. UBI pointed additionally to what it claimed to be the absence of empirical evidence in support of Mr Jeremic's testimony as to TV Plus sustaining losses in the prevailing contextual arrangements.
47 UBI submitted moreover that the Court should decline to rule on the issue as to provision of any security for costs sought to be provided conversely by UBI in favour of TV Plus,at least for the time being, for the following reasons:
(i) the 'strong arguable case' of UBI;
(ii) despite TV Plus' assertions that UBI has only a nominal paid-up capital and does not hold any assets which are at least tangible, UBI was able to satisfy an award of costs in the previous proceedings involving TV Plus; and
(iii) the evidence thus far adduced by UBI demonstrates that it is already operating a well-established business.
Alternatively an appropriate security to be provided by UBI was contended by it to be in the sum of $60,000, together with the giving by Mrs Regina Boulos (she being presently the sole director of UBI), of an undertaking personally to meet any such costs.
48 TV Plus submitted that it would be an untenable proposition of law in any event for UBI to advance that TV Plus, or any other entity inclusive of UBI, should not be entitled to re-broadcast or otherwise communicate the BHT-1Channel originating from Bosnia and Herzegovina to the public in Australia. TV Plus contended in that regard that since at the centre of the dispute there is an issue as to Australian copyright, founded as it must therefore be from the making of a broadcast from a place in Australia as required by s 91 of the Copyright Act, the so-called provenance of the subject broadcast in Bosnia and Herzegovina prior to it being bought into Australia by UBI is 'quite irrelevant'. That was said to be because there is no provision for the protection of broadcasts made from that overseas country to Australia under the Copyright (International Protection) Regulations 1969 (regs 3 and 4(6)), that country not being a member of the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations 1961. Therefore so the TV Plus submission continued, it will only be the broadcast of the subject television channel from within Australia that can receive protection under Part IV of the Copyright Act, and s 22(5) thereof in particular, unless of course that broadcast may be proscribed as misleading and deceptive conduct under Australian legislation, as is UBI's additional or alternative case in any event.
49 The yet further matter advanced by TV Plus in the context of the copyright issues, in sequence of presentation, was that broadcast copyright is 'distinct' from copyright in other works in relation to what may constitute the taking of 'a substantial part' of the copyright work within s 14(1) of the Copyright Act. I was referred in that regard to the decision of the High Court in Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 218 CLR 273, and in particular at 299-303. The particular copyright work there established by the High Court consisted essentially of identified televised programmes or certain segments of televised programmes, as established by a majority of the High Court,rather than merely single images. In the course of the reasons for judgment of the majority of the High Court, it was explained that television broadcast copyright concerns broadcasts 'made from a place in Australia', and so made 'under the authority of a license…or class license' issued under the Broadcasting Services Act 1992 (Cth), and thereby involved the notion that the maker of the broadcaster is taken to be 'the person who provided the broadcasting services by which the broadcast was delivered'. The statutory scope of 'provide' or 'provision' may therefore be seen to be comprehensive. TV Plus did not appear to explain at the present stage of the proceedings why the notion of 'substantial part' was not susceptible to satisfaction in the particular circumstances of the present proceedings.
50 TV Plus next advanced the submission that in order to establish infringement here on the part of any one or more of the TV Plus companies, it would be necessary in any event for UBI to establish interception and thereafter broadcast (or what may conceivably be termed as 're-broadcast') within Australia, and it would not be enough in that regard for UBI's copyright cause of action to demonstrate interception from a place outside of Australia. Given the complexity of the modern technology involved in television transmission of televised programs originating offshore, and the apparent need for TV Plus to comprehensively establish the circumstances as to interception etc, it would be inappropriate to resolve any such complex as well as apparently controversial issues at this interlocutory stage. In that regard I refer to what I have earlier merely outlined in [4] above of these reasons. Mr Jeremic testified broadly and in a sense imprecisely as to the signals being transmitted 'in part from within Bosnia and Herzegovina', and the signals thus supposedly standing outside any notion of an Australian broadcast. TV Plus also pointed to the need for UBI to demonstrate copying in a television context, explaining that '[s]imilarities alone, or even complete identity, between the parties' works or their subject matter, are not enough in the absence of copying, as copyright is not a monopoly right such as a patent'. It is enough from a practical perspective to merely record and not resolve any such issues at the present stage of the proceedings, particularly given that more evidentiary precision, and further expert evidence, would appear to be required.
51 As earlier foreshadowed, UBI has pleaded further causes of action upon the footing of conduct on the part of TV Plus in trade and commerce in Australia in contravention of ss 52 and 53(a), (b) and (d) of the TP Act, said to be constitutedby the making of false, misleading and untrue representations to members of the public, and/or persons interested in receiving ethnic television broadcasts, to the effect that:
(i) TV Plus held the right to broadcast the BHT-1channel in Australia; and
(ii) The rebroadcasting of the BHT-1channel by TV Plus and the efforts of TV Plus to obtain subscribers based on their purported right and capacity to broadcast the BHT-1channel was duly authorised by JRTS.
For the purposes of establishing moreover liability for misleading and deceptive conduct under s 52 of the TP Act, TV Plus emphasised that there must be a relevant misrepresentation in order to be actionable, the Court being referred by TV Plus in that regard to Campomar Sociedad Ltd v Nike International Ltd (2000) 46 IPR 481 at 508-509; however there had been no representation by TV Plus concerning UBI's own broadcasts, that is, those broadcasts in relation to which UBI might own the copyright, so the TV Plus submission continued, because TV Plus had made those broadcasts from Australia. Nothing in the advertising or promotional activity otherwise of TV Plus was said by it to have suggested any association with UBI, and therefore no issue with respect to ss 52 or 53 of the TP Act arose adversely to TV Plus, so TV Plus further asserted. Essentially or largely, the same circumstances pleaded by UBI for breach of copyright were relied upon to support those pleaded causes of action. Damages and injunctive relief were similarly or correspondingly sought by UBI, in line with the relief sought for breach of copyright.
52 As to the issue of contractual entitlement, TV Plus submitted that there could be no misrepresentation relevantly to be imputed to TV Plus, in view of the fact (being a fact in issue from UBI's perspective) that there was a subsisting agreement between TV Plus and JRTS reached earlier on 4 January 2005 and which, among other things, constituted TV Plus Operations in particular as an exclusive licensee of the BHT-1 Channel along with 'its programming contents together with all associated rights …'. While the purported grant of broadcast rights in the nature of copyright to TV Plus may have been nugatory because broadcasts from Bosnia and Herzegovina are not protected in Australia under the Copyright (International Protection) Regulations 1969, so that TV Plus submission continued, so much was said to indicate that there was in any event a pre-existing contractual relationship between JRTS and TV Plus. Moreover TV Plus asserted that although it was said by UBI to have been acknowledged by TV Plus that there had been an earlier rejection by JRTS of any subsisting contractual obligation on its part in favour of TV Plus, nevertheless that any such rejection had occurred otherwise than within the terms of the TV Plus/JRTS contractual arrangements, and had not been in fact accepted by TV Plus. In that context it was further said by TV Plus to be beside the point for UBI to assert that TV Plus had never made payments under those arrangements, since TV Plus had always acknowledged its contractual liability to make such payments, though it maintained that the time for making even the initial payment falling due to JRTS has not yet crystallised for payment in favour of JRTS. In that regard, TV Plus asserted that no payment was due and payable under that TV Plus/JRTS agreement during the first six months of its term, yet the purported termination by Mr Hadzijamakovic on behalf of JRTS took place before the end of that six months period.
53 The foregoing circumstances propounded by TV Plus were therefore said by TV Plus to provide a firm basis for itsasserted continuing belief that TV Plus was entitled to take the broadcast signals from JRTS originating in Bosnia and Herzegovina, and to distribute the same in Australia, and that accordingly the representation said to arise from the conduct of TV Plus was not misleading. Hence TV Plus submitted therefore that there was no prima facie case or serious question arising at least as to the first misrepresentation pleaded by UBI against TV Plus. Once again there needs to be pointed out the difficulties as to giving expression to the TV Plus case in circumstances where it has (at least thus far) withheld from joining JRTS as a third party to the proceedings.
54 As to the second misrepresentation on the part of TV Plus pleaded by UBI pursuant to ss 52 and/or 53 of the TP Act, it was apparently the contention of TV Plus that it had proceeded with its present course of taking television signals from JRTS in the purported belief as to the continued existence of a valid and subsisting contractual arrangement with JRTS in operation in Bosnia and Herzegovina, irrespective of the concession by Mr Jeremic at least to the effect that there may have been some 'ill feeling' between he and Mr Hadzijamakovic. Nevertheless Mr Jeremic claimed to have always believed that the purported termination had not been validly effected by JRTS, and had not been in any event accepted by TV Plus, and that accordingly TV Plus remained under a continuing contractual liability to make payments to JRTS upon receipt of an invoice issued in accordance with the relevant contract. Moreover Mr Jeremic testified that in the course of his most recent telephone conversation with Mr Hadzijamakovic, it had been indicated by him to Mr Jeremic that if the agreement between TV Plus and JRTS had not been terminated, then 'TV Plus Operations should do whatever it considered was appropriate'. It was submitted by TV Plus, in my opinion at least controversially, that there was insufficient evidentiary material presently provided on the part of UBI in order for UBI to maintain a prima facie case for the existence of a serious question to be tried as to contraventions of ss 52 and 53 of the TP Act on the part of TV Plus. UBI's submissions in reply, filed on 6 February 2007, contended that '[h]aving regard to [the] evidence, it is not open to the respondents to say that they believe they have a right to broadcast the BHT-1 signal'. Counsel for UBI further contended that '[i]f such a "right" to broadcast had existed, and the respondents considered they were entitled to exercise that "right", the Court is entitled to ask why no action was taken for eighteen months to assert that right by challenging JRTS's termination of the contract'.
55 No case of imminent damage was said by TV Plus to have been established prima facie by UBI, such that could not be appropriately satisfied by any award of damages at the ultimate trial, for the following reasons next outlined by TV Plus:
(i) BHT-1 represents only one of a large number of TV and radio broadcasts operated by UBI in Australia; Mr Bilge was said to have referred to 120 in total number produced in 12 languages. In particular, it is alleged that this is part of UBI's 'Balkan Bouquet' service to subscribers, comprising 11 TV and radio channels from the Balkan region;
(ii) UBI had only been transmitting the BHT-1 broadcasts since 10 October 2006;
(iii) moneys were not payable under the UBI licence agreement with JRTS until 1 January 2007, which date was subsequent of course to the only interlocutory hearing in the proceedings held on the second last day of the 2006 Federal Court sittings (as I have earlier recorded); I was referred to what appeared under the heading 'Licence Fee' on page 5 of the Licence Agreement of 25 September 2006 entered into between JRTS and UBI, and to the contention of UBI that no payment of that fee had been as yet made by UBI to JRTS;
(iv) UBI testified generally as to the large scale of investments that it had made in establishing its ethnic broadcasting services in Australia, but did not seemingly identify what part of that investment had been made directly in relation to establishing the BHT-1 broadcast;
(v) there was no evidence of loss of subscriptions by UBI attributable to the TV Plus activities and at best, the only damage to UBI occasioned by any wrongdoing on the part of TV Plus, and which was open to be inferred from the evidence to date, concerned its ability to gain subscribers which had been 'slowed down';
(vi) UBI must have had prior knowledge of the TV Plus broadcast activities relating to what appeared onBHT-1, since TV Plus had been advertising the same to potential Australian subscribers since 2005; moreover the existence of the agreement between TV Plus and JRTS was said to have been disclosed in the course of litigation between the parties in early 2005.
56 The occasioning of ongoing loss to TV Plus, if TV Plus was to be relevantly enjoined in this interlocutory proceeding at the instance of UBI, was asserted by TV Plus to be 'considerable and would potentially threaten its whole undertaking', for the following reasons set out in Mr Jeremic's affidavit evidence (TV Plus used the anglicised description therein of PBS rather than JRTS in those submissions, but for consistency in these reasons I have at least for the most part maintained reference to JRTS):
(i) its primary subscription base involves the Balkan States and approximately 90% of its revenue is derived by reference thereto;
(ii) the BHT-1 broadcasts are a significant part of the so-called 'Balkans package' offered by TV Plus and there are close linguistic similarities between broadcasts from each of Bosnia, Serbia and Macedonia, being a factor which has the consequence that the BHT-1 broadcasts are not just taken up by members of the Bosnian community in Australia;
(iii) restraining TV Plus from broadcasting BHT-1 would place the TV Plus in breach of its contractual obligations to its subscribers, since it would no longer be able to offer BHT-1 as part of its Balkans package; Mr Jeremic estimated that there would be cancellations of approximately 1,500 subscribers (out of its approximate 3000 subscriber base) with a consequential loss of revenue to TV Plus of $100,000 per month;
(iv) Mr Jeremic also estimated a further loss of 350 subscribers likely to be sustained by its so-called website streaming platform amounting to $22,750 per month, so much involving more than a 50% reduction in the TV Plus' income flow;
(v) enjoining TV Plus to the extent proposed would lead to staff reductions and cancellations of service contracts, both in Australia and abroad, and would alone jeopardise the survival of TV Plus;
(vi) there have also been threats to the TV Plus service providers, such as to Globecast Australia (ante); though I should observe that the nature and extent of those threats were not indicated, nor evidence adduced from an officer of Globecast in that regard, despite the extent otherwise of evidence tendered by TV Plus already;
(vii) the evidence was said to suggest that UBI does not have the financial resources to meet any undertakings as to damages necessary in order for UBI to obtain interlocutory relief, TV Plus referring thereby to UBI's paid up share capital apparently comprising merely one share of $1 par value, and to its membership being confined to one person (Ms Regina Boulos), yet UBI's assets were subject to a registered charge to secure up to $60 million over all of its undertaking and assets; moreover no balance sheets or profit and loss accounts of UBI had been produced or made available to TV Plus; accordingly no injunction should be granted in any event until an undertaking could be given by a natural person individually, such as the sole director and member presently of UBI earlier recorded Ms Boulos; I was referred in that context to Select Personnel Pty Ltd v Morgan and Banks Pty Ltd (1988) 12 IPR 167, cited with approval by the Full Court of this Court in First Netcom Pty Ltd v Telstra Corporation Ltd (2000) 101 FCR 77 at [23]-[24], and also to Permanent Promotions Pty Ltd v Independent Distillers (Aust) Pty Ltd (2004) 62 IPR 538 at [25-26];
(viii) the notice to produce which had been issued by TV Plus to UBI was said to have been in the following terms:
(a) the minutes of board meetings of the applicant for 2005 and 2006;
(b) the most current balance sheet and profit and loss statement of the applicant; and
(c) all subscription agreements entered into by customers of the applicant for its Balkan Bouquet package between July 2006 and 6 December 2006,
and no such material had been as yet produced to the Court.
57 As foreshadowed, a further factor said by TV Plus to 'tilt' the balance of convenience factor in favour of the withholding of interim relief by way for instance of injunction against TV Plus, was said to be the fact that TV Plus had already given, and would continue to provide, the undertaking appearing at [39] above. UBI submitted rhetorically that if TV Plus were 'genuinely at risk of… heavy financial loss, why was nothing done for some 18 months to put the "unreliable" broadcast right'. It was further contended by UBI that 'the fact that nothing was done by [TV Plus] for so long casts huge doubt on the genuineness, not only of their argument, but of the evidence that has been provided by Mr Jeremic'.
58 As to matters pertaining to what was asserted by UBI to be detrimental to assertions of good faith on the part of TV Plus, and its director Mr Jeremic in particular, the same were said by TV Plus not to be relevant to balance of convenience issues, and not to be decisive in any event, for the following reasons:
(i) it is not appropriate on an interlocutory hearing, where the parties have not had a full opportunity to present their final case, for there to be findings on all relevant disputed questions of fact, inclusive of credit;
(ii) it was acknowledged by TV Plus that there had been difficulties in the relationship between TV Plus and JRTS, but that did not mean, on the partial examination of the evidence in these interlocutory proceedings that had taken place, that their contractual relationship had terminated according to law, as contended by UBI, or that TV Plus had been 'helping themselves' to something to which there was no entitlement; TV Plus claimed to have acknowledged throughout the subject litigious disputes a continuing contractual liability to pay JRTS what would become due and payable;
(iii) criticism that TV Plus took no steps against JRTS formally to enforce and/or terminate 'the agreement' between them was to be appraised in the broader context that TV Plus had earlier been engaged in very expensive litigation (to which I have already made brief reference) in order to enforce its entitlements, and that so much carried the consequence that so long as TV Plus could still obtain some BHT-1signals, TV Plus could duly satisfy its obligations to its subscribers,andthere was no apparent need therefore for the parties to incur further expenditure on legal proceedings; moreover it was said that the fact that there was ill will between Messrs Jeremic and Hadzijamakovic made the conduct of TV Plus all the more explicable, and all that was not a matter upon which TV Plus needed to incur additional expenditure, at least until the present proceedings arose from 'the second agreement made by PBS' (ie of course JRTS);
(iv) as to Mr Jeremic's acknowledgment that TV Plus only obtained capacity to broadcast BHT-1 for 12 to 15 (and not 18) hours per day because UBI 'came into the market', so much was said by TV Plus to be an understandable and purely commercial response that would be made by any businessman in the present circumstances; until that time, there was asserted by TV Plus to have been insufficient complaints from TV Plus' subscribers about the brevity of theBHT-1 transmission by TV Plus, and further that it only became necessary, as a competitive response, to gain fuller access when there appeared another operator (UBI) providing the same service; TV Plus maintained that JRTS was not contractually free to grant those rights to UBI in any event because of the terms of JRTS's prior agreement with TV Plus, though it was seemingly accepted that so much would not be relevant in the context of the present application of UBI, and perhaps understandably so in the light of the non-joinder by TV Plus of JRTS in the proceedings;
(v) any liability of UBI to pay JRTS had only arisen from 1 January 2007 and hence at the time of issue of the present proceedings, UBI had not yet incurred any expenditure in favour of JRTS; I am presently unable to perceive why that would be material in any forensic sense.
59 As to the application of TV Plus for security for costs in the sum of $200,000 sought by TV Plus to be provided by UBI, it was emphasised by TV Plus further that there must be grave doubts as to the capacity of UBI to meet any order for costs that may be made against it in the present proceedings, since it appeared to be continuing the same business of a previously failed company, that being TARBS World TV Australia Pty Ltd, and the single director and member of UBI (the abovementioned Mrs Boulos) had been the director, secretary and only member of that failed company. It was further submitted by TV Plus to be an inadequate answer to the case for security that UBI has already met a substantial award for costs in previous proceedings involving TV Plus; that factor alone was said by TV Plus to be suggestive of the opposite conclusion, namely that UBI would now be less able to meet any award for costs hereafter made in the present proceedings in favour of TV Plus than might otherwise have been the case, seemingly an elusive proposition even in the extraordinary context of the present litigation at least as presently structured.
60 It was said by TV Plus that its solicitors had provided a solid basis for their estimate of $200,000 for TV Plus' likely costs of the subject proceedings, by reference to the applicable costs scale identified in the evidence; it was further said in that regard that the actual cost of the prior litigation between the same parties, which was settled before trial, amounted to $332,000 (presumably attributable to TV Plus alone), but of course it is not feasible to gain sufficient assistance per se from the nomination of that monetary figure in isolation. In any event as I have foreshadowed, TV Plus indicated that it would accept that the minimum that should be provided at this present stage of the proceedings is $60,000, subject however to liberty to apply being granted to increase that amount as the proceedings subsequently progressed.