Warner Music Australia Limited v Swiftel Communications Pty Limited

introduction 1 On 24 June 2005 I made orders pursuant to O 6 r 2 of the Federal Court Rules that Melissa Ong ('Ms Ong') and Ryan Briggs ('Mr Briggs') be joined as respondents to this proceeding. These are my reasons for making those orders.

background 2 The applicants are Australian record companies. They together control a large proportion of the commercially related sound recordings and music videos released in Australia and the copyright therein. They are concerned about alleged infringements of copyright in sound recordings and music videos by internet users. 3 On 9 March 2005 the applicants sought and obtained ex parte relief in the Federal Magistrates Court, including Anton Piller orders and interim injunctions. The application and an amended application filed on that day named five respondents, namely Swiftel Communications Pty Limited, Swiftel Broadband Pty Limited, People Telecommunications Pty Limited, People Telecom Limited and John Doe (AKA 'Archie'). Neither Ms Ong nor Mr Briggs was then named as a respondent. 4 The applicants' original statement of claim was filed in the Federal Magistrates Court on 5 April 2005. The heading to that document described the respondents as 'Swiftel Communications Pty Limited (ABN 18 090 877 008) and 5 Ors'. The body of the pleading disclosed that the '5 Ors' did not include John Doe (AKA 'Archie') but did include Ms Ong and Mr Briggs. Presumably by this time it had become apparent that 'Archie' was one or more of the first to fourth respondents. Each of Ms Ong and Mr Briggs was alleged to be employed by one or more of the first to fourth respondents. They were alleged to be system administrators responsible for the administration of internet services provided to internet customers of the first to fourth respondents. They were also alleged to be responsible for and involved in policy implementation concerning, and technical administration and support of, internet websites and user computers (hubs) hosted by the first to fourth respondents or accessible to their customers. Each of them was alleged to have infringed the Copyright Act 1968 (Cth), the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW). 5 It appears that on 7 April 2005 the applicants moved the Federal Magistrates Court for an order joining Ms Ong and Mr Briggs as respondents to the proceeding. The motion was rejected. Curiously the order of the Federal Magistrates Court dated 7 April 2005 shows in its heading the five respondents named in the amended application dated 9 March 2005 and additionally a respondent shown as 'John Frederick Howard Collins, Respondent'. I think it likely that the naming of Mr Collins in the heading of this document was a slip. He does not seem to have been referred to in any later document. 6 The amended statement of claim filed on 11 April 2005 in its heading shows the respondents as 'Swiftel Communications Pty Limited (ABN 18 090 877 008) and 3 Ors.' In this pleading the descriptions of Ms Ong and Mr Briggs as respondents are deleted as are the allegations that they infringed statutory provisions. However, the allegations concerning their respective roles with the first to fourth respondents, or one or more of them, remain in the pleading. 7 By order dated 20 May 2005 this proceeding was transferred from the Federal Magistrates Court to this Court. It came before me as duty judge on 24 June 2005 when the applicants moved for orders under O 6 r 2 of the Federal Court Rules for Ms Ong and Mr Briggs to be joined as respondents. A notice of motion concerning the orders sought had been filed on 5 May 2005 in the Federal Magistrates Court.

submissions 8 The respondents argued that Ms Ong and Mr Briggs were not persons who 'ought' to have been joined as a party or whose joinder was not 'necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon' within the meaning of O 6 r 8(1). 9 The respondents further argued that the proceeding had reached an advanced stage and, given that the applicants sought an expedited hearing, it would be inappropriate to order that Ms Ong and Mr Briggs now be joined as respondents. Additionally the respondents challenged the applicants' contentions that the evidence showed that Ms Ong and Mr Briggs held positions of seniority or had directed or procured infringement of copyright. 10 The applicants argued that the authorities revealed that their application to join Ms Ong and Mr Briggs should be granted if they established that there are causes of action against Ms Ong and Mr Briggs that cannot be demonstrated to be 'manifestly groundless'. They referred to the decision by Tamberlin J in Universal Music Australia Pty Ltd v Cooper [2004] FCA 78 ('Cooper's case'). 11 The applicants further placed reliance on the fact that they could, if they chose, commence separate proceedings in this Court against both Ms Ong and Mr Briggs in which they could make the same allegations against them as they intended to make in this proceeding should the joinder application succeed.

consideration 12 In Cooper's case Tamberlin J gave consideration to an application for the joinder of additional respondents to a proceeding. His Honour treated the application as one requiring consideration under O 6 r 8 of the Federal Court Rules. Order 6 r 8 of the Federal Court Rules provides: '(1) Where a person who is not a party: (a) ought to have been joined as a party; or (b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon; the Court may order that the person be added as a party and make orders for the further conduct of the proceeding. (2) A person shall not be added as an applicant without the person's consent.' 13 I am inclined to doubt that a joinder application of the kind that Tamberlin J was required to rule upon in Cooper's case is appropriately considered under O 6 r 8. It seems to me that O 6 r 8 is concerned with proceedings improperly constituted by reason of the failure to join a person as a party. A person does not become a person who 'ought to have been joined as a party' or whose joinder as a party is 'necessary to ensure that all matters in dispute in the proceeding may be … completely determined and adjudicated upon' simply because a cause of action against that party may legitimately be prosecuted in the proceeding. 14 The extent to which causes of action against different persons may legitimately be prosecuted in the one proceeding is governed by O 6 r 2 of the Federal Court Rules. Order 6 r 2 provides: 'Two or more persons may be joined as applicants or respondents in any proceeding: (a) where: (i) if a separate proceeding were brought by or against each of them, as the case may be, some common question of law or of fact would arise in all the proceedings; and (ii) all rights to relief claimed in the proceeding (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or (b) where the Court gives leave so to do.' 15 It is plain that O 6 r 2(b) may be invoked after a proceeding has been instituted. Order 6 r 4 relevantly provides: '(1) The Court may grant leave under rule 2 before or after the joinder … (2) An applicant may apply for leave under rule 2 … either before or after the filing of his originating process and may apply without serving notice of the motion on any person on whom the application has not been served.' 16 In Trade Practices Commission v Westco Motors (Distributors) Pty Ltd (1981) 58 FLR 384 ('Westco Motors') Sheppard J gave consideration to an application to join additional defendants to a proceeding alleging contraventions of the Trade Practices Act 1974 (Cth). His Honour at 386 upheld a submission that the proposed additional defendants were not persons who ought to have been joined as parties or whose joinder as parties was necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon. He observed: 'In my opinion that submission is sound. The breaches of the Act to be relied upon against each of the defendants are separate and independent breaches. If the defendants are liable for the penalties for which the plaintiff sues, their liability will be several and not joint. The action as presently constituted is one in which the existing defendant is sued for penalties for breaches of s. 48 of the Act. The action is properly constituted as to parties and there is no person other than the first defendant who is interested or concerned in the relief which is claimed. All matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon in the proceedings as they are presently constituted.' 17 Nonetheless, Sheppard J ordered the joinder of the proposed additional defendants under O 6 r 2 of the Federal Court Rules. At 388 his Honour said: 'Plainly the present case falls within r. 2(a) so that, if the joinder had been made originally, it would have been proper. That might lead one to think that a case such as this does not fall within r. 2(b). But one has to consider the operation of r. 4. It enables the court to grant leave before or after the joinder. In those circumstances it would seem to me that a case which otherwise falls within r. 2(a) may also fall within r. 2(b) if the parties sought to be added were not originally joined. What it comes down to is that an applicant may join pursuant to r. 2(a) without leave if the joinder is of respondents in a proceeding which is within that part of the rule. For all other joinders he requires leave, whether they be joinders in proceedings not falling within r. 2(a), or joinders sought to be made after the commencement of proceedings in proceedings otherwise within that provision … I should perhaps mention that if I had been against the application which is now made, the position could have been overcome by the commencement by the plaintiff of separate proceedings against the new defendants and consolidation of the existing proceedings and the new proceedings. Without wishing to pre‑empt any future exercise of discretion by any of the judges of this Court including myself I would have thought that this would have been a clear case for the making of an order pursuant to O. 29, r. 5, the words of which follow closely those of O. 6, r. 2. The matters I have decided are therefore, to a degree, academic.' 18 I prefer the approach adopted by Sheppard J in Westco Motors to that adopted by Tamberlin J in Cooper's case as it seems to me to more closely reflect the intention of the relevant rules as disclosed by the language in which they are drawn. However, there would seem to be little, if any, practical significance attending the respective approaches. In Cooper's case, after setting out the terms of O 6 r 8, Tamberlin J observed at [6]‑[7]: 'The rules confer a discretion and should be construed liberally so that a determination of related disputes is achieved. The applicant on a joinder application must show that there is an arguable case sufficient to resist the entry of summary judgment by the respondent sought to be joined … The threshold test to be applied in relation to an application for joinder of a party is whether summary judgment could be entered by the respondent sought to be joined. The test is that stated by Barwick CJ at 128-129 in General Steel. His Honour there said thatthe claim must be "so obviously untenable that it cannot possibly succeed", or that it is "manifestly groundless" or "such that it does not admit of argument." His Honour uses a number of other similar expressions. These principles have been applied in relation to an application for removal … and in relation to an application for joinder …' (citations omitted) 19 In this case the respondents acknowledge that the applicants have shown that there is an arguable case against Ms Ong and Mr Briggs sufficient, assuming them to have been joined, to prevent the entry of summary judgment in their favour. The material before me discloses that, if that case were brought by a separate proceeding, common questions of law and fact would arise in that proceeding and this proceeding (see O 6 r 2(a)(i)). The material before me also discloses that if the joinder application succeeds, all rights to relief claimed in this proceeding will be in respect of or arise out of the same transactions or series of transactions (see O 6 r 2(a)(ii)). 20 I am not satisfied that either Ms Ong and Mr Briggs 'ought to have been joined as a party' or is a person whose joinder is 'necessary' within the meaning of O 6 r 8 of the Federal Court Rules. However, if the applicants were to institute a fresh proceeding, or fresh proceedings, against Ms Ong and Mr Briggs, they would have a strong case for an order that the proceeding or proceedings be consolidated with this proceeding (see O 29 r 5). 21 I am therefore satisfied that the joinder of Ms Ong and Mr Briggs as respondents to this proceeding is authorised by O 6 r 2 and r 4 of the Federal Court Rules. Nonetheless the power of the Court to order their joinder (or perhaps more accurately, to grant the applicants leave to join them) is a discretionary power. 22 A relationship between each of Ms Ong and Mr Briggs on the one hand and the present respondents on the other is acknowledged. Allegations concerning Ms Ong and Mr Briggs were pleaded by the applicants at an early stage of this proceeding. For these reasons I am not satisfied that the respondents, or Ms Ong and Mr Briggs or either of them, will suffer significant prejudice by reason of the joinder of Ms Ong and Mr Briggs at this relatively advanced stage of the proceeding. Nor am I satisfied that their joinder will appreciably delay the final hearing of the proceeding. 23 The relative seniority, or lack of it, of Ms Ong and Mr Briggs within the administrative structure of the first to fourth respondents seems to me to be of little weight for present purposes. In view of the concession that the applicants can show reasonable causes of action against both Ms Ong and Mr Briggs I do not consider it appropriate on this application to give further consideration to the precise nature and strength of those causes of action.

conclusion 24 For the above reasons I concluded on 24 June 2005 that the orders sought by the applicants joining Ms Ong and Mr Briggs as respondents to this proceeding should be made. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Counsel for the Applicants: A Bannon SC and J Hennessy