Universal Music Australia Pty Ltd V Sharman Networks Ltd [2006] FCAFC 41 (23 March 2006)

Universal Music Australia Pty Ltd v Sharman Networks Ltd [2006] FCAFC 41 (23 March 2006) Last Updated: 23 March 2006 FEDERAL COURT OF AUSTRALIA Universal Music Australia Pty Ltd v Sharman Networks Ltd [2006] FCAFC 41 CONTEMPT OF COURT – question of law referred by primary judge to Full Court – question whether, ‘having regard to nature and terms of’ order alleged to have been disobeyed, a determination of contempt may be made in respect of the contraventions alleged in the statement of charge – order the subject of pending appeal – order must be obeyed until set aside – different possible meanings of ‘equivocal’ and ‘ambiguous’ in relation to orders in earlier cases on contempt – discussion of orders whose meaning is obscure as a matter of construction of their terms, and orders shown to be uncertain or ambiguous in their operation in the context of the facts proved by the evidence – referred question answered, Yes. Federal Court of Australia Act 1976 (Cth) s 25(6) Federal Court Rules O 37 r 2 Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 considered Coflexip SA v Stolt Comex Seaway MS Ltd [1999] FSR 473 cited Commodore Business Machines Pty Ltd v Trade Practices Commission (1990) 92 ALR 563 cited Commonwealth Industrial Gases Ltd v M.W.A. Holdings Pty Ltd (1970) 180 CLR 160 cited Iberian Trust Ltd v Founders Trust and Investment Co [1932] 2 KB 87 considered ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248 referred to Interlego A.G. v Toltoys Pty Ltd (1973) 130 CLR 461 cited Johnson v Walton [1990] 1 FLR 350 cited Life Insurance Company of Australia Limited v Phillips (1925) 36 CLR 60 applied Little v Lewis [1987] VR 798 cited McNair Anderson Associates Pty Ltd v Hinch [1985] VR 309 cited Microsoft Corporation v Goodview Electronics Pty Ltd (2000) 49 IPR 578 referred to Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117 considered Microsoft Corporation v Plato Technology Limited [1999] FSR 834 cited Mikasa (N.S.W.) Pty Ltd v Festival Stores (1972) 127 CLR 617 referred to NATB v Minister for Immigration & Multicultural & Indigenous Affairs (2003) 133 FCR 506 cited Raffles v Wichelhaus (1864) 2 H&C 906 referred to Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT Rep 387 considered Repatriation Commission v Nation (1995) 57 FCR 25 cited Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190 cited Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 cited Welcome Real-Time SA v Catuity Inc (No 2) (2001) AIPC 91,736 referred to Witham v Holloway (1995) 183 CLR 525 cited UNIVERSAL MUSIC AUSTRALIA PTY LIMITED AND ORS v SHARMAN NETWORKS LTD AND ORS NSD 110 of 2004 BRANSON, LINDGREN AND FINKELSTEIN JJ 23 MARCH 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 110 of 2004 BETWEEN: UNIVERSAL MUSIC AUSTRALIA PTY LIMITED FIRST APPLICANT FESTIVAL RECORDS PTY LTD AND MUSHROOM RECORDS PTY LTD TRADING AS FESTIVAL MUSHROOM RECORDS SECOND APPLICANT EMI MUSIC AUSTRALIA PTY LIMITED THIRD APPLICANT SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED FOURTH APPLICANT WARNER MUSIC AUSTRALIA PTY LIMITED FIFTH APPLICANT BMG AUSTRALIA LIMITED SIXTH APPLICANT UMG RECORDS, INC. SEVENTH APPLICANT SHADY RECORDS, INC./INTERSCOPE RECORDS EIGHTH APPLICANT AFTERMATH RECORDS NINTH APPLICANT REAL HORRORSHOW PTY LTD TENTH APPLICANT THE LIVING END PTY LTD ELEVENTH APPLICANT VIRGIN RECORDS AMERICA, INC TWELFTH APPLICANT EMI RECORDS LTD THIRTEENTH APPLICANT CAPITOL RECORDS, INC FOURTEENTH APPLICANT ARISTA RECORDS, LLC (FORMERLY KNOWN AS ARISTA RECORDS, INC.) FIFTEENTH APPLICANT CIRCA RECORDS LTD SIXTEENTH APPLICANT CHRYSALIS RECORDS LTD SEVENTEENTH APPLICANT SONY MUSIC (AUSTRALIA) PTY LTD EIGHTEENTH APPLICANT SONY MUSIC ENTERTAINMENT (CANADA) INC. NINETEENTH APPLICANT SONY BMG MUSIC ENTERTAINMENT TWENTIETH APPLICANT MAYER MUSIC LLC TWENTY-FIRST APPLICANT TIMOTHY JAMES FREEDMAN TWENTY-SECOND APPLICANT WARNER BROS. RECORDS, INC. TWENTY-THIRD APPLICANT ATLANTIC RECORDING CORPORATION TWENTY-FOURTH APPLICANT WARNER MUSIC UK LTD TWENTY-FIFTH APPLICANT J RUBY PRODUCTIONS, INC. DBA SLASH RECORDS TWENTY-SIXTH APPLICANT ZOMBA RECORDING LLC (FORMERLY KNOWN AS ZOMBA RECORDING CORPORATION) TWENTY-SEVENTH APPLICANT BMG MUSIC (BMG MUSIC DBA THE RCA RECORDS LABEL, A UNIT OF BMG ENTERTAINMENT) TWENTY-EIGHTH APPLICANT BMG UK & IRELAND LTD TWENTY-NINTH APPLICANT LAFACE RECORDS THIRTIETH APPLICANT AND: SHARMAN NETWORKS LTD SECOND RESPONDENT LEF INTERACTIVE PTY LTD THIRD RESPONDENT NICOLA ANNE HEMMING FOURTH RESPONDENT ALTNET INC SIXTH RESPONDENT BRILLIANT DIGITAL ENTERTAINMENT INC SEVENTH RESPONDENT KEVIN GLEN BERMEISTER NINTH RESPONDENT JUDGES: BRANSON, LINDGREN AND FINKELSTEIN JJ DATE OF ORDER: 23 MARCH 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The following question reserved for the consideration of a Full Court, namely: ‘[W]hether, having regard to the nature and terms of order 4 made on 5 September 2005, a determination of contempt of court may be made in respect of the contraventions of that order alleged in the statement of charge’ be answered ‘Yes’. 2. The costs of the referred question of law, including the costs of 30 January 2006, be reserved to the judge who hears the charge of contempt, or should the charge not be proceeded with, to the primary judge, or, should it prove inconvenient or impossible for the primary judge to rule on the appropriate costs order, to another judge of the Court. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 110 of 2004 BETWEEN: UNIVERSAL MUSIC AUSTRALIA PTY LIMITED AND ORS FESTIVAL RECORDS PTY LTD AND MUSHROOM RECORDS PTY LTD TRADING AS FESTIVAL MUSHROOM RECORDS SECOND APPLICANT EMI MUSIC AUSTRALIA PTY LIMITED THIRD APPLICANT SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED FOURTH APPLICANT WARNER MUSIC AUSTRALIA PTY LIMITED FIFTH APPLICANT BMG AUSTRALIA LIMITED SIXTH APPLICANT UMG RECORDS, INC. SEVENTH APPLICANT SHADY RECORDS, INC./INTERSCOPE RECORDS EIGHTH APPLICANT AFTERMATH RECORDS NINTH APPLICANT REAL HORRORSHOW PTY LTD TENTH APPLICANT THE LIVING END PTY LTD ELEVENTH APPLICANT VIRGIN RECORDS AMERICA, INC TWELFTH APPLICANT EMI RECORDS LTD THIRTEENTH APPLICANT CAPITOL RECORDS, INC FOURTEENTH APPLICANT ARISTA RECORDS, LLC (FORMERLY KNOWN AS ARISTA RECORDS, INC.) FIFTEENTH APPLICANT CIRCA RECORDS LTD SIXTEENTH APPLICANT CHRYSALIS RECORDS LTD SEVENTEENTH APPLICANT SONY MUSIC (AUSTRALIA) PTY LTD EIGHTEENTH APPLICANT SONY MUSIC ENTERTAINMENT (CANADA) INC. NINETEENTH APPLICANT SONY BMG MUSIC ENTERTAINMENT TWENTIETH APPLICANT MAYER MUSIC LLC TWENTY-FIRST APPLICANT TIMOTHY JAMES FREEDMAN TWENTY-SECOND APPLICANT WARNER BROS. RECORDS, INC. TWENTY-THIRD APPLICANT ATLANTIC RECORDING CORPORATION TWENTY-FOURTH APPLICANT WARNER MUSIC UK LTD TWENTY-FIFTH APPLICANT J RUBY PRODUCTIONS, INC. DBA SLASH RECORDS TWENTY-SIXTH APPLICANT ZOMBA RECORDING LLC (FORMERLY KNOWN AS ZOMBA RECORDING CORPORATION) TWENTY-SEVENTH APPLICANT BMG MUSIC (BMG MUSIC DBA THE RCA RECORDS LABEL, A UNIT OF BMG ENTERTAINMENT) TWENTY-EIGHTH APPLICANT BMG UK & IRELAND LTD TWENTY-NINTH APPLICANT LAFACE RECORDS THIRTIETH APPLICANT AND: SHARMAN NETWORKS LTD SECOND RESPONDENT LEF INTERACTIVE PTY LTD THIRD RESPONDENT NICOLA ANNE HEMMING FOURTH RESPONDENT ALTNET INC SIXTH RESPONDENT BRILLIANT DIGITAL ENTERTAINMENT INC SEVENTH RESPONDENT KEVIN GLEN BERMEISTER NINTH RESPONDENT JUDGES: BRANSON, LINDGREN AND FINKELSTEIN JJ DATE: 23 MARCH 2006 PLACE: SYDNEY REASONS FOR JUDGMENT BRANSON J INTRODUCTION 1 The primary judge has reserved for the consideration of this Full Court a question of law concerning a matter with respect to which an appeal would lie from a judgment of his Honour to the Full Court (see s 25(6) of the Federal Court of Australia Act 1976 (Cth) (‘the Federal Court Act’)). The matter is the controversy between the applicants on the one hand and six of the respondents on the other as to whether the six respondents have committed contempt of court by disobeying Order 4 of the orders made by the primary judge on 5 September 2005 (‘Order 4’). 2 The question of law referred for the consideration of the Court is: ‘... whether, having regard to the nature and terms of order 4 made on 5 September 2005, a determination of contempt of court may be made in respect of the contraventions of that order alleged in the statement of charge filed on 9 December 2005.’ 3 For the reasons set out below I have concluded that the question of law referred to the Court should be answered, Yes. BACKGROUND 4 The applicants claim copyright in their respective sound recordings pursuant to the Copyright Act 1968 (Cth) (‘the Act’). At trial the applicants alleged, in effect, that each of the respondents had infringed the copyright of the applicants respectively by authorising the doing in Australia by users of the Kazaa internet file sharing system (‘Kazaa’) of acts comprised in the copyright in 98 identified sound recordings. 5 After a lengthy trial, the learned primary judge made orders on 5 September 2005 which included the following orders: ‘2. It be declared that each of the six respondents named below (‘the infringing respondents’) have infringed the copyright in each of the sound recordings whose title appears in column 2 of the attached Schedule, being a copyright of the applicant (‘the relevant applicant’) whose name is set out in the same row as the title of that sound recording in column 4 of that Schedule by: (i) authorising the doing in Australia by Kazaa users of the following acts (‘the infringing acts’) in relation to the said sound recording: (a) making a copy of the sound recording; (b) communicating the recording to the public; in each case, without the licence of the relevant applicant; and (ii) entering into a common design, with each of the other infringing respondents, to carry out, procure or direct the said authorisation; The infringing respondents are Sharman Networks Ltd, LEF Interactive Pty Ltd, Nicola Anne Hemming, Altnet Inc, Brilliant Digital Entertainment Inc and Kevin Glen Bermeister.

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