Universal Music Publishing Pty Ltd v Palmer

1. The amended interlocutory application filed on 12 October 2020 be dismissed.
2. The respondent pay the applicants' costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

KATZMANN J: 1 This is a case about copyright infringement. It arises out of the alleged use by the United Australia Party (UAP) during the last federal election campaign of a substantial part of the music and lyrics of the song "We're Not Gonna Take It". The undisputed evidence is that the song was composed and written by Dee Snider, the lead singer of the American heavy metal band, Twisted Sister. While the respondent, Clive Palmer, initially disputed the applicants' copyright, agreed facts filed in the proceeding include the facts that copyright in the song is held by the second applicant, Songs of Universal, Inc. and that the first applicant, Universal Music Publishing Pty Ltd is the exclusive licensee. Evidence has been filed disclosing that inquiries were made of Universal Music Publishing on behalf of the UAP, of which Mr Palmer is the registered officer, about licensing the song for a "re-recording with local talent", that Mr Palmer declined to pay the licensing fee, and that he went on to authorise or arrange the production of a recording of "Aussies Not Gonna Cop It" and videos which incorporated it. Mr Palmer denies that the recording and videos use a substantial part of the Twisted Sister song. He also raises a defence of parody or satire. 2 The proceeding is fixed for a five-day hearing commencing next Monday, 19 October 2020. 3 On 7 October 2020 Mr Palmer filed an interlocutory application seeking orders that the trial be vacated and that the costs of the application be the parties' costs in the cause. The application was supported by an affidavit sworn by Mr Palmer's lawyer, Sameh Morris Iskander. The application was fixed for hearing yesterday. That day an amended interlocutory application was filed seeking in the alternative to the vacation of the trial an order that any cross-examination and re-examination of Mr Palmer and the parties' oral closing arguments take place on a date to be fixed. 4 The applicants (Universal) opposed the application. They relied on an affidavit affirmed by Sebastian David Tonkin, a solicitor employed by Simpsons Solicitors, the lawyers for Universal. 5 At the hearing of the amended interlocutory application both sides presented written submissions and spoke to those submissions. At the conclusion of the argument I refused the application with costs and, after Mr Palmer's barrister informed the Court that he required reasons, indicated I would give my reasons today. These are those reasons. 6 The Court may make an order of the kind Mr Palmer sought if it considers the order appropriate in the interests of justice: Federal Court Rules 2011 (Cth), r 1.32. Like any power conferred by the Rules of Court, it must be exercised in the way that best promotes the overarching purpose of the civil practice and procedure provisions, namely, the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: Federal Court of Australia Act 1976 (Cth) (FCA Act), s 37M(3). Section 37M(2) provides that: Without limiting the generality of subsection (1), the overarching purpose includes the following objectives: (a) the just determination of all proceedings before the Court; (b) the efficient use of the judicial and administrative resources available for the purposes of the Court; (c) the efficient disposal of the Court's overall caseload; (d) the disposal of all proceedings in a timely manner; (e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. 7 The proceeding was fixed for hearing on 4 December last year. At that time the expectation of the Court and the parties was that the hearing would take place in court in Sydney. Then the COVID-19 pandemic struck. Initially, this Court, like most Australian courts, took the precaution of deferring hearings in non-urgent cases. But the Court quickly adapted to the crisis by using digital technology to provide virtual hearings. 8 My preference and that of the parties was always for an in-person hearing. But the Court has the power to order that any testimony be given by video link, audio link or other appropriate means: FCA Act, s 47A(1). While certain conditions must be satisfied before the power is exercised (see s 47C), it was no part of Mr Palmer's argument that these conditions were not satisfied in the present case. 9 On 7 July 2020 my chambers contacted the parties to seek their views on whether an in-person hearing was essential or appropriate. Both sides indicated that it was their "preference". Universal's lawyers all live in Sydney and all but three of their witnesses live in NSW. Universal noted that two of their witnesses were located in the United States. Given the international travel restrictions then in place, they informed the Court that any cross-examination of those witnesses could be conducted through Microsoft Teams, the platform the Court had been using and continues to use to conduct hearings during the pandemic. One of Universal's witnesses lives in Victoria. Mr Palmer and all his other witnesses are based in Queensland. So are his lawyers. On 20 July 2020 Mr Iskander notified the Court that Mr Palmer agreed with Universal's proposal, "subject to any mandatory national travel restrictions". 10 On 7 September 2020 I informed counsel for the parties that I had not yet obtained approval for witnesses to give evidence in person and the Court's position was that there were to be no witnesses from interstate. On that occasion Mr Palmer's then counsel, Edmund Robinson, was justifiably concerned that his client would be disadvantaged if Universal's lawyers and some of their witnesses were able to appear in person but Mr Palmer and all of his witnesses could not. I concluded that there were two options available to the Court: adjourning the hearing or conducting it entirely remotely through Microsoft Teams. Mr Palmer embraced the first option. Universal vigorously opposed it. Through his counsel, Mr Palmer raised no objection, however, to a purely remote trial. The parties then conferred on a remote trial protocol. The protocol was agreed on 1 October 2020. 11 The sole reason for the present application set out in Mr Iskander's affidavit is that he believes "there is a real possibility that the border between New South Wales and Queensland will be reopened within the next month". That belief was based on a joint media statement released on 2 October 2020 by the Premier of Queensland, the Hon Annastacia Palaszczuk and the Deputy Premier and Minister for Health, the Hon Steven Miles, which is annexed to the affidavit. Insofar as it is relevant, the media release includes the following statement: If there is no unlinked community transmission in NSW for 28 days, Stage 5 could start from 1am 1 November and will see the Queensland border open up to NSW visitors and return travellers ... 12 The media release says nothing, of course, about the right of Queenslanders to enter NSW but the application and the submissions in support of it are premised on the presumption that the border closure is the only impediment to the Queensland witnesses travelling to Sydney to give their evidence in person. 13 In his submissions advanced by new counsel only recently briefed, Mr Palmer claimed that at the time of the last case management hearing he did not appreciate the extent to which his credibility was in issue in relation to his primary defence that the recording and videos said to infringe Universal's copyright were made for the purpose of parody or satire. He claimed that he only appreciated this when he read Universal's outline of submissions on 1 October 2020. He pointed to three matters. The first was the argument that the defence should be rejected, amongst other reasons, because Mr Palmer did not intend a parodic or satirical purpose when he authorised the creation and exploitation of the recording and videos or, to the extent that the recording and videos had such a purpose, that purpose was "either a pretence for, or has been supplanted by an ulterior, political purpose". The second was the submission that Mr Palmer knew of Universal's copyright in the musical and literary work when he exploited it. The third was that he deliberately intended to discourage Universal and Mr Snider from enforcing their rights. He pointed out that the first two submissions are directly contrary to Mr Palmer's evidence in chief that his purpose was parodic and satirical and that he did not believe that Universal owned copyright in "We're Not Gonna Take It". 14 Mr Palmer also suggested that there may be issues concerning the credit of Mr Snider, who is required for cross-examination and who resides in the United States. 15 Mr Palmer argued that, in circumstances where issues of credit arise, it is in the interests of justice that the trial be adjourned until witnesses may give evidence in person. He submitted that the interests of justice are served by ensuring that "the highest quality evidence is put before the court" and in-person assessment of witnesses and cross-examination is "critically important" when credit is in issue. Relying on Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 3) (2009) 181 FCR 152 at [78], he contended that in such a case "evidence should be given in the solemnity of a court room, before a judge and under the rigors of cross-examination" and "litigants should not lightly be deprived of the forensic benefits that attend the cadence and chemistry between physically proximal bar, bench and witness box". He acknowledged that these matters had to be balanced against any prejudice occasioned by the adjournment but submitted that there was no such prejudice. 16 Mr Palmer submitted that the proceeding is not time sensitive, contrasting it with proceedings in which urgent relief is sought. He also submitted that there was no "cost prejudice" to Universal, since, despite the order sought in his interlocutory application and maintained in the amended interlocutory application filed that very day, he offered to pay the costs incurred by Universal as a result of any adjournment forthwith on an indemnity basis. 17 Mr Palmer posited that if the Court were troubled by the uncertainty around the opening of international borders and therefore when the two overseas witnesses could give evidence in person, then a shorter adjournment until interstate borders are opened would be appropriate. If there were too much uncertainty about the reopening of the Victorian border, he submitted that the trial should be adjourned until the border between New South Wales and Queensland has been reopened. 18 Mr Palmer submitted that any prejudice to Universal caused by the proposed adjournment was "outweighed by the parties' common interest in improving the quality of evidence before the Court". He added that if the adjournment was subject to border openings within Australia or between New South Wales and Queensland, it is the respondent, and not the applicants, who would be deprived of the opportunity to cross-examine witnesses in person, where two witnesses are based overseas and one in Victoria. 19 Based on the media release, Mr Palmer submitted that there was good reason to think that the border between Queensland and New South Wales "will occur in the relatively near term". 20 In the alternative, Mr Palmer argued that his oral evidence should be taken and consequently closing submissions should be made once it is possible for him to give his evidence in person because issues of credit are "particularly acute" in his case. He pointed out that this alternative approach would enable a good deal of the trial to proceed. 21 I was unpersuaded by these submissions. 22 First, as Universal submitted, there has been no material change of circumstances since the case management hearing. 23 The documents annexed to Mr Tonkin's affidavit show that the possibility that the border will be opened as early as 1 November 2020 is remote. NSW COVID-19 case statistics up to 8pm on 11 October 2020 issued by the NSW Department of Health disclose that this week there have been 19 new cases and the source of the infection in five of those cases is unknown. The Queensland Government has reportedly given southern officials 48 hours to identify the source of those cases failing which, according to an article in yesterday's Sydney Morning Herald annexed to Mr Tonkin's affidavit and admitted without objection, the cases with unknown sources will reset the border clock to zero. The NSW Premier was also reported as saying that "until the end of the pandemic, it's highly unlikely, highly improbable that NSW will ever get to 28 days of no community transmission, because that is not how a pandemic works". 24 That means that there is no real chance that the condition set by the Premier and Deputy Premier of "no unlinked community transmission in NSW for 28 days" will be satisfied by 1 November. As Queensland is in the middle of an election campaign at the moment and the election is to take place on 31 October, it is fanciful to think that the condition will be removed. 25 In fact, the prospect of the opening of the Queensland/NSW border is no more predictable now than it was at the time of the last case management hearing. That unpredictability and the general uncertainties with which we all live during the pandemic are perhaps underscored by the fact that Mr Palmer's application is for an indefinite adjournment. 26 As Universal pointed out, there is currently no legal restriction on any of Mr Palmer's witnesses from entering NSW for the purpose of attending Court unless they were in Victoria within the previous 14 days: Public Health (COVID-19 Border Control) Order (No 2) 2020 (NSW), cll 3(1) and 5(1). At the moment, under the terms of the Border Restrictions Direction (No 15) (Qld), they would be required to go into quarantine on return to Queensland for at least 14 days. The Court was informed that Mr Palmer was not willing to pay that price. 27 Second, there can be no doubt that Mr Palmer would have been aware that his credit was likely to be an issue in the proceeding from the outset. Universal's claims include one for additional damages. Universal pleads that Mr Palmer knew that a licence was required to use both the musical and the literary work in the advertisements because his agent applied for a licence but, despite the fact that a licence was not procured, he reproduced and/or authorised the reproduction and/or communication to the public of a substantial part of that work. Universal also pleads that he ignored Universal's requests that he cease doing so. At a case management hearing on 27 July 2020 Mr Flynn SC on behalf of Universal told the Court that Mr Palmer's credit "may be an issue" "on the additional damages type questions". 28 Mr Palmer's claim that he did not appreciate the extent to which his credibility was in issue is not supported by evidence. Mr Iskander is silent about the subject. In those circumstances his submission to that effect is entitled to little, if any, weight. In any event, it is difficult to see how Mr Palmer could have been unaware that his evidence as to his purpose was likely to be called into question. Mr Palmer has long been required for cross-examination. The second and third matters upon which counsel relied were raised in Universal's statement of claim. And in its reply, filed on 20 March 2019, Universal denied Mr Palmer's defence that the incorporation and reproduction of the musical and literary work was for the purpose of parody or satire and asserts that it was for the purpose of political advertising. 29 Third, the submission that, where issues of credit arise, it is in the interests of justice that the trial be adjourned until witnesses may give evidence in person, is at least an overstatement. It is certainly not invariably so. Mr Palmer's reliance on Campaign Master at [78] is to some extent misplaced. In that case Buchanan J expressed concerns about the effectiveness of taking oral evidence by video link. But he was particularly concerned about doing so "on an unwilling cross-examining party, rather than the reverse": Campaign Master at [77]. At [78] his Honour said: I share the concerns expressed by Spender J in World Netscape and by Stone J in Dorajay about the limitation on the effectiveness of video link arrangements as a means of taking oral evidence. I am particularly troubled by the prospect (or possibility) that the cross-examination of an important witness might be rendered less effective by the limitations of video link technology or the absence of the witness from the courtroom. Although the days are gone when witnesses are expected to feel any sense of intimidation as an aid to telling the truth, there is no doubt in my mind that the requirement to give evidence on oath or affirmation in the (generally) solemn atmosphere of a courtroom in the presence of a judge, and to answer questions in cross-examination in the presence also of cross-examining counsel, has at least three potential benefits. It enhances the prospect that the witness will remain conscious of the nature and solemnity of the occasion and of his or her obligations. It affords the cross-examiner some reassurance that the gravity and immediacy of the moment, and of the supervising presence of the judge, are not lost on the witness and the cross-examination is not thereby rendered any less effective, to the possible prejudice of the cross-examining party. It provides the Court with a more satisfactory environment in which to assess the nature, quality and reliability of responses by a witness, both to questions and to the overall situation presented by the necessity to give evidence in court. To my mind there remains, even in the modern context, a certain "chemistry" in oral interchanges in a courtroom, whether between a judge and counsel (or other representative) or between cross-examiner and witness. I would not wish too lightly to deprive a cross-examiner of that traditional forensic element in the exchange although, as the cases universally make clear, the Court must now, if asked to do so, balance the interests of a cross-examining party against claimed inconvenience both in individual cases and with respect to individual witnesses. Notwithstanding the increased availability and use of video link technology, in my view, a case must be made out for the use of video link evidence if it is opposed by an affected party …. 30 Here, it is the cross-examiner who opted for cross-examination by video link. If there is any significant disadvantage to the giving of evidence by video link, it will be suffered by Universal, not Mr Palmer. While all of Universal's witnesses are required for cross-examination, credit is only said to be a possible issue in relation to Mr Snider and then only in a limited respect. 31 In any event, even if the remarks in Campaign Masters have more general application, they were not made in the context of the current extraordinary circumstances. Considerations which may have influenced courts in the past against taking evidence by video link "take on a different complexion when in person evidence becomes a matter of practical impossibility for an indefinite time": Australian Securities and Investments Commission v Wilson [2020] FCA 873; 146 ACSR 149 at [20] (Jackson J). 32 What is more, the technology is different from the technology with which the earlier cases were concerned. This year I have presided over a number of cases in which witnesses have been cross-examined using the Microsoft Teams platform. While I was initially sceptical about the effectiveness of cross-examination in this way, my scepticism proved to be unjustified. It transpired that I had no difficulty assessing credit or demeanour. In fact, my experience was that changes in facial expressions, reactions, bodily movements and gestures are much easier to discern when the witnesses are pinned to the screen directly in front of me than is normally the case when witnesses give evidence from the witness box some distance from the bench. In this respect my experience is not unique. Lee J made similar observations in Australian Securities and Investments Commission v GetSwift Limited [2020] FCA 504 at [33]. So did Perram J in Capic v Ford Motor Company of Australia Limited (Adjournment) [2020] FCA 486 at [19]. See also Tetley v Goldmate Group Pty Ltd [2020] FCA 913 at [16] (Bromwich J). 33 In Rooney v AGL Energy Limited (No 2) [2020] FCA 942 at [18], Snaden J said that his experience of the current technology was "slightly less positive". In that case an application to vacate trial dates was successful in circumstances where the trial could only take place remotely as it was a Victorian matter and a lockdown would be in force. His Honour observed that "the available technology cannot fully replicate the court room environment that is so often central to an adversarial system of civil justice". He went on to say (at [18]-[19]): In my experience, the technology inhibits (if not prohibits) the cadence and chemistry - both as between bar and bench, and bar and witness box - that personify well-run causes. Those are traditional forensic benefits of which litigants ought not too lightly be deprived [citing Campaign Master at [78]]. Further, the technology often begets delay, particularly when documents are to be supplied remotely. Although broadly reliable, it is not uncommon for connections to be momentarily of poor quality, occasionally to the point that they are unusable. All of these factors influence the user experience of a justice system from which all litigants are entitled to benefit. Moreover, there is a sense of solemnity - perhaps even intimidation - that attaches to the receipt of oral evidence from a courtroom witness box that not even the best technology can replicate. When all witnesses (or crucial witnesses) in a matter are subjected to that same stage, the truth is less easily spun, and unsuccessful parties are less inclined or less able to find fault with the process that delivered their defeat. That is especially important in cases such as this one, where serious allegations of statutory contravention are advanced, and the outcome of the cause turns upon contested facts and the credit of those who recount them: see, in that vein, Roberts-Smith v Fairfax Media Publications Pty Limited (No 4) [2020] FCA 614, [22] (Besanko J). Appreciating that there should be no one-size-fits-all approach and that, as Lee J put it in Wilson, care should be taken to ensure that the perfect does not become the enemy of the good, the circumstances that currently present in this matter favour, in my view, an orthodox approach to the receipt of crucial witness evidence. 34 I recognise that conducting hearings using remote technology is not ideal. I also appreciate the importance of the sense of solemnity of which Snaden J spoke. Nevertheless, in this State and elsewhere it has been standard procedure for years in criminal trials for certain sexual offences where credit is almost invariably in issue that complainants give evidence and are cross-examined from a remote location. 35 I accept that technological issues can arise. But this was no concern of Mr Palmer. It did not rate a mention in his submissions or Mr Iskander's affidavit. Nor did Mr Palmer suggest that he or his witnesses might approach the giving of evidence any differently if the oral evidence were given remotely rather than in person. I am not satisfied that it would be unfair to Mr Palmer that he and his witnesses give evidence by video link when all of the witnesses will give evidence in this way. It has long been recognised, even in criminal cases, that a fair trial is not synonymous with a perfect trial "free from possible detriment or disadvantage of any kind or degree to the accused": Jarvie v The Magistrates' Court of Victoria at Brunswick [1995] 1 VR 84 at 90 (Brooking J); cited with approval by the NSW Court of Criminal Appeal in R v Ngo (2003) 57 NSWLR 55 at [98]. 36 Fourth, case management considerations weigh against vacating the trial. The proceeding was commenced in February 2019. Universal's opening submissions have been filed. The interlocutory application was filed very late. The trial is due to begin in a matter of days. Universal submitted that trial preparation is already well under way. Although there is no evidence to support the submission it would be surprising, to say the least, if that were not so. I took into account Mr Palmer's offer to pay Universal's costs. That must be given some weight. But it is by no means the only relevant consideration. As French CJ observed in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [5] and [27]: [T]here is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. [T]he mischief engendered by unwarranted adjournments and consequent delays in the resolution of civil proceedings goes beyond the particular effects on the court in which those delays occur. In that connection, there have been a number of cases … in which it has been accepted … that the public interest in the efficient use of court resources is a relevant consideration in the exercise of discretions to amend or adjourn. 37 In the same case at [100] the plurality (Gummow, Hayne, Crennan, Kiefel and Bell JJ) cited with approval the following remarks of French J, as his Honour then was, in Bomanite Pty Ltd v Slatex Corp Aust Pty Limited (1991) 32 FCR 379 at 392: Non compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary. 38 Of course, every case will turn on its own facts. No doubt there will be cases in which, despite these considerations, an adjournment will be warranted. In the present case, however, I do not believe that the overarching purpose of the civil practice and procedure provisions, including the objectives in s 37M(2), would be served by an indefinite adjournment. If the trial were now to be vacated, having regard to my own court commitments, it is unlikely to be listed before September next year. I have no idea whether any or all of the witnesses will be available then or at any other time the Court may be able to accommodate a hearing. For some 10 months now, every day next week has been reserved for the hearing of this matter, depriving other litigants of those dates. If I were to accede to Mr Palmer's application, public resources will have been squandered and there will be undue delay. 39 True it is that some of the prejudice to Universal would be alleviated by Mr Palmer's alternative proposal, namely that only his evidence and the closing submissions should be postponed. I have given this option serious consideration. On balance, however, taking all relevant factors into account and bearing in mind that the discretion must be exercised in the way that best promotes the overarching purpose, I concluded that both the primary and the alternative relief Mr Palmer sought in his amended interlocutory application should be refused. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Katzmann.