Roadshow Films Pty Ltd v iiNet Ltd [2012] HCA 16
Today the High Court dismissed an appeal by a number of film and television companies from a decision of the Full Court of the Federal Court of Australia. The High Court held that the respondent, an internet service provider, had not authorised the infringement by its customers of the appellants’ copyright in commercially released films and television programs.
The appellants, thirty-four Australian and United States companies, either own or exclusively license the copyright in thousands of commercially released films and television programs (“the appellants’ films”). The respondent, iiNet, provides internet services to its customers under an agreement which requires that the services not be used to infringe others’ rights or for illegal purposes. Users of internet services provided by iiNet infringed copyright in the appellants’ films by making the appellants’ films available online using the BitTorrent peer-to-peer file sharing system. The Australian Federation Against Copyright Theft, on behalf of the appellants, served notices on iiNet (“the AFACT notices”) alleging that iiNet’s customers had infringed copyright in the appellants’ films, and requiring iiNet to take action to prevent the infringements from continuing. iiNet took no action in response to the AFACT notices.
In the Federal Court at first instance, the trial judge held that iiNet had not authorised the infringement by its customers of copyright in the appellants’ films. The appellants appealed to the Full Court of the Federal Court. The Full Court, by majority, dismissed the appeal.
The appellants were granted special leave to appeal to the High Court, where they argued that the majority of the Full Court had not correctly applied ss 101(1) and 101(1A) of the Copyright Act 1968 (Cth). Those provisions make authorising an act comprised in a copyright (without the licence of the owner of the copyright) an infringement of the copyright. They also set out matters which must be taken into account in determining whether a person has authorised such an act. The appellants contended that iiNet had the power to prevent its customers from infringing copyright in the appellants’ films by issuing warnings and suspending or terminating customer accounts. The appellants argued that the AFACT notices provided credible information of past infringements by iiNet’s customers sufficient to raise a reasonable suspicion that acts of infringement were continuing, and that, once iiNet had received this information, its failure to take action amounted to authorisation of its customers’ infringements.
The High Court unanimously dismissed the appeal. The Court observed that iiNet had no direct technical power to prevent its customers from using the BitTorrent system to infringe copyright in the appellants’ films. Rather, the extent of iiNet’s power to prevent its customers from infringing the appellants’ copyright was limited to an indirect power to terminate its contractual relationship with its customers. Further, the Court held that the information contained in the AFACT notices, as and when they were served, did not provide iiNet with a reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers’ accounts. For these reasons, the Court held that it could not be inferred from iiNet’s inactivity after receiving the AFACT notices that iiNet had authorised any act of infringement of copyright in the appellants’ films by its customers.
Yusuf Aytugrul v The Queen [2012] HCA 15
Today the High Court dismissed an appeal by the appellant, Yusuf Aytugrul, against his conviction for murder. The Court held unanimously that evidence given at the appellant’s trial which expressed results of DNA testing as an exclusion percentage was admissible when accompanied by an equivalent frequency ratio and an explanation of the relationship between the two.
The appellant was tried for and convicted of murder in the Supreme Court of New South Wales. In addition to other circumstantial evidence, the prosecution relied on evidence from an expert witness who had conducted a DNA analysis on a hair found on the deceased’s thumbnail. The results of that analysis showed first, that the appellant could have been the donor of the hair, and second, how common the DNA profile found in the hair was in the community. In relation to the second aspect of the results, the expert gave evidence to the effect that one in 1,600 people in the general population would be expected to share the DNA profile that was found in the hair (“the frequency ratio”) and that 99.9 per cent of people would not be expected to have a DNA profile matching that of the hair (“the exclusion percentage”).
The appellant appealed to the New South Wales Court of Criminal Appeal on grounds that included the ground that “a miscarriage of justice occurred because of the prejudicial way in which DNA evidence was expressed to the jury”. The Court of Criminal Appeal, by majority, dismissed the appeal.
The appellant then appealed by special leave to the High Court, alleging that the Court of Criminal Appeal should have held that the trial judge had erred “in admitting statistical evidence expressed in exclusion percentage terms”. Section 137 of the Evidence Act 1995 (NSW) (“the Act”) requires a court in a criminal proceeding to refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant. Section 135 of the Act relevantly gives a court discretion to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party or be misleading or confusing. The appellant submitted that, in effect, s 137 required exclusion of evidence which expressed the results of the DNA testing as an exclusion percentage. The appellant further submitted that, if that were not so, the only proper exercise of the general discretion given by s 135 would have seen the evidence excluded.
The High Court unanimously dismissed the appeal. The evidence of the exclusion percentage was accompanied by both reference to the relevant frequency ratio and an explanation of how the exclusion percentage was derived from the frequency ratio. The evidence given was clear. The appellant’s submissions accepted that evidence expressed in the form of an exclusion percentage had, of itself, some probative value. Given that the exclusion percentage and the frequency ratio were different ways of expressing the same statistical statement, the probative value of the exclusion percentage was necessarily the same as that of the frequency ratio. Although the evidence was adverse to the appellant it was in no sense unfairly prejudicial, or misleading or confusing. Consequently, the majority of the Court of Appeal was right to conclude that neither s 137 nor s 135 of the Act was engaged. There was neither a wrong decision on any question of law nor a miscarriage of justice on any other ground.
Baiada Poultry Pty Ltd v The Queen [2012] HCA 14
Today the High Court allowed an appeal from the Court of Appeal of the Supreme Court of Victoria, which had upheld the conviction of Baiada Poultry Pty Ltd (“the appellant”) under the Occupational Health and Safety Act 2004 (Vic) (“the OHS Act”). Despite the trial judge failing to properly direct the jury, the Court of Appeal, by majority, had upheld the appellant’s conviction on the ground that, pursuant to the “proviso” in s 568(1) of the Crimes Act 1958 (Vic) (“the Crimes Act”), “no substantial miscarriage of justice [had] actually occurred”.
The appellant operated a business processing broiler chickens. It had engaged independent contractors to round up the chickens, load them into crates, stack the crates into a series of steel modules, and then use a forklift truck to load the modules of filled crates onto a trailer (“the chicken catchers”). Other independent contractors were engaged to drive the trailer to the appellant’s processing plant (“the transporters”). On 4 December 2005, a chicken catcher who was not licensed to drive a forklift was, without supervision, using a forklift to shift a module on the trailer when another module fell on and killed a transporter. The appellant was charged under s 21(1) of the OHS Act, for failing as an employer “so far as is reasonably practicable, [to] provide and maintain for employees … a working environment that is safe and without risks to health”.
At trial, and despite the submissions made by the appellant’s counsel, the trial judge did not direct the jury that the prosecution needed to prove beyond reasonable doubt that by engaging apparently skilled subcontractors, the appellant did not discharge its statutory obligation to provide and maintain a safe working environment so far as was reasonably practicable. The jury found the appellant guilty, and the appellant appealed.
The Court of Appeal agreed that the trial judge had made an error and that there was either a “wrong decision of a question of law” or “a miscarriage of justice” within the meaning of the Crimes Act. However, a majority of the Court of Appeal held that “no substantial miscarriage of justice” had actually occurred, and pursuant to the proviso in s 568(1) of the Crimes Act, dismissed the appeal. The appellant appealed, by special leave, to the High Court of Australia.
The High Court allowed the appeal, with the result that the matter will be remitted to the County Court for a new trial. The High Court held that it was not open to the Court of Appeal to conclude, from the record of the trial, that the charge laid against the appellant was proved beyond reasonable doubt. The Court of Appeal could not therefore be satisfied that no substantial miscarriage of justice had actually occurred, and the proviso could not have been engaged.
Sportsbet Pty Ltd v New South Wales [2012] HCA 13
Today the High Court dismissed an appeal from the Full Court of the Federal Court of Australia, which had held that approvals given to Sportsbet Pty Ltd (“the appellant”) by Racing New South Wales and Harness Racing New South Wales (“the respondents”) to use race field information for wagers, but only upon payment of fees to the respondents, were validly granted under the Racing 
Administration Act 1998 (NSW) (“the Racing Act”). The High Court heard this appeal concurrently with that in Betfair Pty Limited v Racing New South Wales [2012] HCA 12.
The appellant holds a sports bookmaking licence, which authorises it to accept wagers by telephone and over the internet. From its principal place of business in the Northern Territory, the appellant receives wagers from anywhere in Australia on races, sporting and other events, including horse races held in New South Wales. Section 33 of the Racing Act makes it an offence for a wagering operator to use information regarding horse races held in New South Wales, unless approval has been granted and the operator complies with conditions to which the approval is subject. Pursuant to s 33A of the Racing Act, each of the respondents (as a “racing control body” within the meaning of that provision) granted the appellant approval to use such information, subject to the condition that it pay certain fees. Under Pt 3 of the Racing Administration Regulation 2005 (NSW) (“the Regulations”), the fees were calculated by reference to the appellant’s wagering turnover. If the appellant’s wagering turnover was below a certain threshold, the appellant would not have been liable to pay a fee; however, the appellant’s wagering turnover exceeded that threshold amount.
The appellant challenged both the respondents’ power to grant the approvals and, more broadly, the validity of ss 33 and 33A of the Racing Act and Pt 3 of the Regulations. The basis of the appellant’s challenge was that the respondents’ power, under the Racing Act and the Regulations, to grant the approvals subject to payment of the fees imposed a burden or disadvantage on trade and commerce between the Northern Territory and New South Wales, which was not imposed on intrastate trade and commerce of the same kind. The appellant contended that the legal or practical effect of the legislation was to protect New South Wales wagering operators from competition from wagering operators in the Northern Territory.
Section 49 of the Northern Territory (Self-Government) Act 1978 (Cth) (“the Self-Government Act”) provides that trade, commerce and intercourse between the Northern Territory and the Australian States “shall be absolutely free”. The primary issue arising from the appellant’s challenge was whether the respondents’ power of approval, as conferred by the Racing Act and the Regulations, must be confined to avoid inconsistency with s 49 of the Self-Government Act. Under s 109 of the Constitution, where inconsistency arises between a law of a State and a law of the Commonwealth, the latter prevails and the State law will be invalid to the extent of the inconsistency.
A single judge of the Federal Court declared that the approvals granted by the respondents were invalid, but rejected the broader contention that ss 33 and 33A of the Racing Act and Pt 3 of the Regulations were invalid. On appeal, the Full Court held that the approvals were validly granted, and upheld the validity of the impugned provisions of the Racing Act and the Regulations. The appellant appealed, by special leave, to the High Court of Australia.
The High Court dismissed the appeal, with the result that the approvals given by the respondents, conditioned upon the payment of the fees, are valid. The High Court held that the wagering turnover thresholds were not discriminatory measures of a protectionist kind. Both intrastate and out of State competitors, including the appellant, were entitled to the benefit of wagering turnover thresholds. The burden of the fees was imposed uniformly on both intrastate and out of State wagering operators. Further, and in any event, there was no necessary connection between the location from which a wagering operator conducted its business and the turnover of that business.
Betfair Pty Ltd v Racing New South Wales [2012] HCA 12
Today the High Court dismissed an appeal from the Full Court of the Federal Court of Australia, which had held that approvals given to Betfair Pty Limited (“the appellant”) by Racing New South Wales and Harness Racing New South Wales (“the respondents”) to use race field information for wagers, but only upon payment of fees to the respondents, were validly granted under the Racing Administration Act 1998 (NSW) (“the Racing Act”). The High Court heard this appeal concurrently with that in Sportsbet Pty Ltd v State of New South Wales [2012] HCA 13.
The appellant is the only betting exchange operator located in Australia. It provides wagering services in respect of various events, including horse races, by operation of a betting exchange call centre and internet server system located in Tasmania. Through its betting exchange, the appellant receives wagers from anywhere in Australia. As a betting exchange operator, the appellant only accepts a wager on an event or contingency if it can match that bet with one or more opposing wagers (that the event or contingency would not occur, also known as a “back bet”). A different form of wagering service is “totalizator” betting, by which the wagers of all punters on the same event or contingency are pooled together. By totalizator betting, when the outcome is known, the operator deducts a commission and the remainder of the pool is divided among the successful punters. In New South Wales, TAB Limited is the monopoly off-course totalizator wagering operator.
Section 33 of the Racing Act makes it an offence for a wagering operator to use information regarding horse races held in New South Wales, unless approval has been granted and the operator complies with conditions to which the approval is subject. Pursuant to s 33A of the Racing Act, each of the respondents (as a “racing control body” within the meaning of that provision) granted the appellant approval to use such information subject to the condition that it pay certain fees.
Under Pt 3 of the Racing Administration Regulation 2005 (NSW) (“the Regulations”), the fees were calculated by reference to the appellant’s “wagering turnover”. Wagering turnover was defined to mean “the total amount of wagers made on the backers side of wagering transactions made in connection with that race or class of races”.
The appellant challenged the validity of the fee conditions. The basis of the appellant’s challenge was that the fee conditions imposed a burden or disadvantage on interstate trade and commerce, contrary to s 92 of the Constitution. The appellant contended that the legal and practical effect of the fees was to protect New South Wales wagering operators, particularly TAB Limited, from competition from wagering operators in other States. This effect was said to result from the calculation of the fees as a percentage of the amounts wagered on back bets, which would have a higher financial impact on the appellant than on other wagering operators, such as TAB Limited.
A single judge of the Federal Court declared that the approvals granted by the respondents were valid and found that, although the fees discriminated against the appellant in favour of certain other wagering operators, the fees were not protectionist in nature, and therefore did not infringe s 92 of the Constitution. The Full Court dismissed an appeal by the appellant. The appellant appealed, by special leave, to the High Court of Australia.
The High Court dismissed the appeal, with the result that the approvals given by the respondents, conditioned upon the payment of the fees, are valid. The High Court emphasised that the focus of s 92 of the Constitution is upon the effect of a law on interstate trade, not on particular traders. The fees were imposed uniformly on both interstate and intrastate wagering operators. The High Court held that the appellant had not demonstrated that the fee conditions imposed a discriminatory burden of a protectionist kind upon interstate trade. Further, a majority of the Court held that the appellant did not demonstrate that the likely practical effect of the imposition of the fees would be loss to it of market share or profit, or to impede it from increasing that share or profit. Accordingly, the High Court rejected the contention that s 92 of the Constitution was engaged.
Commissioner of Taxation v Bargwanna [2012] HCA 11
Today the High Court allowed an appeal from the Full Court of the Federal Court of Australia. The High Court held that the respondents’ administration of the Kalos Metron Charitable Trust (“the Trust”) had not complied with the requirement for tax exemption under s 50-60 of the Income Tax Assessment Act 1997 (Cth) (“the Act”) because the fund was not “applied for the purposes for which it was established”.
The respondents, Mr and Mrs Bargwanna, were at all material times the trustees of the Trust. Between 2003 and 2007 they distributed a total of $293,914.55 to numerous charitable causes. Mr Craik is a chartered accountant and the father of Mrs Bargwanna. Mr Craik advised the respondents concerning the affairs of the Trust, performed administrative functions in that regard, and was the principal benefactor of the Trust.
In 2004 the respondents applied for an endorsement by the appellant (“the Commissioner”) of the Trust with effect from 1 July 2000 as “a fund established in Australia for public charitable purposes by … instrument of trust”. The endorsement would qualify the Trust as an entity exempt from income tax, within the operation of Div 50 of Pt 2-15 of the Act, but the exemption would only apply if “the fund is applied for the purposes for which it was established” in accordance with s 50-60. The Commissioner refused the endorsement application in January 2005. The respondents sought review of this decision, but in April 2005 the Commissioner confirmed the decision to refuse the endorsement application. The respondents’ objection to the Commissioner’s decision was disallowed in September 2005, and the respondents applied to the Administrative Appeals Tribunal (“the AAT”) for review of that decision.
Before the AAT, the Commissioner contended, among other things, that there had been various acts of maladministration of the Trust between 2002 and 2007. In particular, over this period Trust moneys were paid into Mr Craik’s Trust Account where, in breach of trust, they were mixed with moneys held by him on behalf of others. Moreover, instead of being credited to clients, the interest generated by this mixed account was credited to a separate bank account which provided Mr Craik with a means of defraying the costs of maintaining his trust account and its related requirements. Additionally, in 2004 the respondents transferred a sum representing almost half the assets of the Trust into a non-interest bearing account in consideration for a housing loan which the respondents obtained from bank in their personal capacities. Although the respondents made payments into this account from other sources, these were exceeded by the sums withdrawn, with the excess representing assets of the Trust.
The AAT set aside the disallowance decision of the Commissioner and substituted a determination that, as at 9 September 2005, the Trust was entitled to endorsement as exempt from income tax with effect from 1 July 2000. The Commissioner brought a successful “appeal” under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) to the Federal Court, which reinstated the Commissioner’s decision rejecting the endorsement application. The respondents then appealed to the Full Court of the Federal Court. The Full Court held that the primary judge had erred in finding non-compliance with s 50-60 without treating the explanations of the trustees as relevant and “without regard to the administration of the fund as a whole”, and remitted the proceedings to the AAT for determination of such further facts as it deemed necessary.
The Commissioner was granted special leave to appeal to the High Court. The primary issue on appeal was the construction and operation of Div 50 of Pt 2-15 of the Act, and in particular the meaning of “the fund is applied for the purposes for which it was established” in s 50-60. The High Court unanimously allowed the appeal. The Court considered that the relevant provisions of the Act direct attention to the terms of the instrument of trust by which the fund is established in Australia for public charitable purposes. Section 50-60 requires that the fund be “applied” for those purposes, and is not to be understood as requiring only that the fund be “substantially” or “on the whole” applied for those purposes. In the present case, the acts of maladministration relied upon by the Commissioner were not referable to the carrying out of the charitable purposes for which the Deed provided, and the Commissioner was correct to refuse the respondents’ application.
The Queen v Getachew [2012] HCA 10
Today the High Court allowed an appeal from the Court of Appeal of the Supreme Court of Victoria, which had allowed an appeal by Tomas Getachew (“the accused”) against his conviction of one count of rape. The Court of Appeal had allowed the accused’s appeal on the ground that the trial judge did not direct the jury to consider the possibility that the accused believed that the complainant was consenting to intercourse, in circumstances where the accused did not lead evidence or assert that he held such a belief.
The complainant had spent the night of 29 June 2007 drinking in Melbourne with three others (of whom one was the accused). In the early hours of the next morning, the group went to a suburban house, where the complainant and the accused lay on a mattress on the floor, and the other two shared a bed in the same room. The complainant gave evidence that the accused touched the complainant twice and that she asked him to stop both times. Having fallen asleep, the complainant later awoke to find the accused lying behind her, her clothing disarranged and the accused penetrating her.
The accused was charged and tried in the County Court of Victoria. The accused’s defence was that he had not penetrated the complainant. He did not give evidence and made no assertion about his mental state.
Section 38 of the Crimes Act 1958 (Vic) (“the Act”) defines the offence of rape in Victoria. Section 38(2) relevantly provides that a person commits rape if he or she intentionally sexually penetrates another person without that person’s consent while “being aware that the person is not consenting or might not be consenting”. Section 37 of the Act provides that the judge must direct the jury on certain matters if “relevant to the facts in issue in a proceeding”, but otherwise must not direct the jury on those matters. Relevantly, s 37AA provides for directions to be given to a jury “if evidence is led or an assertion is made that the accused believed that the complainant was consenting to the sexual act”.
At trial, the trial judge directed the jury that the accused had not raised as an issue that the accused thought or believed that the complainant was consenting to penetration. The trial judge also directed the jury that they could be satisfied that the accused was aware that the complainant was not or might not be consenting if the accused was aware that the complainant was or might be asleep at the time of penetration. The accused was convicted and subsequently sentenced to four years and nine months’ imprisonment.
The accused successfully appealed. The Court of Appeal held that the trial judge should have directed the jury not to convict the accused unless persuaded beyond reasonable doubt that the prosecution had excluded the possibility that the accused may have believed that the complainant was consenting, even though he knew that she was or might be asleep. By special leave, the prosecution appealed to the High Court of Australia.
The High Court allowed the appeal, with the result that the accused’s original conviction stands. The High Court held that the trial judge was correct not to give a direction about the accused’s belief in the complainant’s consent. The accused’s belief in consent would have been relevant only if evidence was led or an assertion was made that the accused believed that the complainant had consented. Absent such an assertion or such evidence, to demonstrate that the accused knew that the complainant was or might be asleep was to demonstrate that he was aware that she might not be consenting. The High Court also emphasised that an accused’s belief in consent is only relevant insofar as it sheds light on the accused’s awareness that the complainant was not or might not be consenting, that being the mental element prescribed by s 38(2) of the Act.
BBH v The Queen [2012] HCA 9
Today the High Court unanimously granted BBH an extension of time to apply for special leave to appeal against his conviction, and also granted special leave, but a majority of the Court dismissed his appeal. The majority held that certain evidence admitted in proof of the applicant’s propensity to commit sexual offences against his daughter was relevant and admissible.
The applicant was charged with committing certain sexual offences against his daughter. Over the objection of the applicant’s counsel, the complainant’s brother, W, gave evidence at the applicant’s trial of an uncharged incident involving the applicant and complainant. W testified that he had observed an interaction between the complainant and the applicant where the complainant was bent over and unclothed from the waist down, and the applicant had his hand on her waist and his face near her bottom. During cross-examination, W accepted that the incident may have had an innocent explanation, such as that the applicant may have been looking for an ant bite or a bee sting. The complainant testified that she could not remember the incident and the applicant denied that it occurred.
On 17 May 2007, a jury convicted the applicant of one count of maintaining an unlawful sexual relationship with a child under 16 years of age, four counts of indecent dealing with a child under 16 years of age and four counts of sodomy of a person under 18 years of age. He was sentenced in the District Court of Queensland to 10 years’ imprisonment for each count, to be served concurrently. The applicant appealed against his conviction to the Court of Appeal of the Supreme Court of Queensland. He argued, among other things, that the trial judge had erred in allowing W’s evidence to be put to the jury and that the directions given to the jury were inadequate to avoid undue prejudice to the applicant. The Court of Appeal dismissed the appeal.
A majority of the High Court dismissed the appeal. Their Honours held that W’s testimony was relevant because it demonstrated the applicant’s sexual interest in the complainant. The majority also considered that W’s testimony satisfied the Pfennig v The Queen (1995) 182 CLR 461 test for the admissibility of propensity evidence. That is, their Honours held that, when viewed in the context of the prosecution’s case, there was no rational explanation for the incident consistent with the applicant’s innocence.
Phonographic Performance Company of Australia Limited v Commonwealth of Australia [2012] HCA 8
Today the High Court dismissed a challenge to the validity of compulsory licensing provisions under ss 109 and 152 of the Copyright Act 1968 (Cth) (“the 1968 Act”). The Court held unanimously that those provisions are not invalid by reason of s 51(xxxi) of the Constitution, which empowers the Commonwealth Parliament to make laws with respect to “the acquisition of property on just terms”.
Prior to the 1968 Act, the Copyright Act 1911 (Imp) (“the 1911 Act”) was in force in Australia, with such modifications as were made by the Copyright Act 1912 (Cth) (“the 1912 Act”), as amended from time to time. An owner of a copyright in a record protected under the 1911 Act had the exclusive right to perform the record in public, and a correlative exclusive right to license or authorise a radio broadcaster to broadcast the record. Neither the 1911 Act nor the 1912 Act provided for a compulsory license scheme under which a broadcaster could broadcast a sound recording without the consent of the owner.
The 1968 Act commenced operation on 1 May 1969. The effect of transitional provisions contained in the 1968 Act was that pre-1969 recordings which were copyright protected under the 1911 Act were taken to be sound recordings in which copyright subsisted under Pt IV of the 1968 Act.
Section 109 of the 1968 Act operates to qualify the exclusive right under the 1968 Act of an owner of copyright to communicate a published sound recording to the public. It provides that copyright in a published sound recording is not infringed by a broadcaster, even in the absence of authorisation by the “owner” of the copyright, if there is either an order by the Copyright Tribunal (“the Tribunal”) under s 152 of the 1968 Act in force, or an undertaking given to pay the owner such amounts as may be determined under that section. Section 152 imposes a “cap” on the amount that the Tribunal may require a broadcaster to pay for what is in substance a compulsory license.
The first plaintiff carries on business as a copyright collecting society. It acts in the interests of the owners and exclusive licensees and controllers of copyright in sound recordings which presently subsist under Pt IV of the 1968 Act. In these proceedings the first plaintiff acted on behalf of the second to fifth plaintiffs in respect of sound recording copyrights in published sound recordings which were made before the commencement of the 1968 Act. The sixth plaintiff is also the holder of relevant sound recording copyrights.
The plaintiffs brought proceedings in the original jurisdiction of the High Court challenging the validity of the cap created by ss 109 and 152 of the 1968 Act. The plaintiffs submitted that, by fixing a cap on the amount which the Tribunal may determine for the compulsory licence of the pre-1969 recordings, ss 109 and 152 effected an acquisition of the property in the pre-1969 recordings on other than just terms, contrary to s 51(xxxi) of the Constitution. However the plaintiffs did not assert that the 1968 Act is invalid because it brought to an end the operation of the copyright system under the 1911 Act without the provision of just terms, or that the compulsory licensing system established by the 1968 Act is wholly invalid.
The High Court held unanimously that the 1968 Act excluded further operation of the 1911 Act and denied subsistence of copyright otherwise than by virtue of the 1968 Act. Sections 109 and 152 therefore did not operate to qualify the copyright of the plaintiffs under the 1911 Act and so did not constitute an acquisition of the property in the pre-1969 recordings.
Equuscorp Pty Ltd v Haxton; Equuscorp Pty Ltd v Bassat; Equuscorp Pty Ltd v Cunningham’s Warehouse Sales Pty Ltd [2012] HCA 7
Today the High Court, by majority, dismissed five appeals from the Court of Appeal of the Supreme Court of Victoria, which had held that Ian Alexander Haxton, Robert Samuel Bassat and Cunningham’s Warehouse Sales Pty Ltd (“the respondents”) were not liable to repay funds advanced under loans held by Equuscorp Pty Ltd (“Equuscorp”). Equuscorp was not a party to the original loan agreements with the respondents, but was assigned the loan agreements as an arms length financier.
The respondents had invested in tax driven blueberry farming schemes promoted by Anthony and Francis Johnson (“the schemes”), by which members of the public could claim tax deductions for amounts invested in farming enterprises. The farming activities were conducted in north-east New South Wales. Under the schemes, each of the respondents executed a management agreement, by which Johnson Farm Management Pty Ltd, a company controlled by the Johnsons, agreed to perform the respondents’ farm maintenance and harvesting obligations for an annual fee. Fees could be prepaid in whole or in part, and it was expected that these fees were tax deductible. Each of the respondents also entered into a loan agreement with Rural Finance Pty Ltd (“Rural”), a company also controlled by the Johnsons, to finance their prepayment of the management fees.
Contrary to s 170(1) of the Companies Code (“the Code”) of each respondent’s home State, no valid prospectus in respect of the schemes had been registered when the respondents were offered what was a “prescribed interest” within the meaning of that section.
None of the respondents received any proceeds from the sales of farm produce after 1 July 1991 and no repayments were made in reduction of the loans. In 1995, Equuscorp, which had previously granted loan facilities to the group of companies controlled by the Johnsons, sold the farm land as mortgagee in possession. Rural sold the loan agreements between itself and the respondents to Equuscorp in May 1997, under an asset sale agreement. Pursuant to this agreement, Rural executed a deed assigning to Equuscorp its interests under the loan agreements and the amounts of the debts owing (“the Deed”). The Deed was expressed to include an “absolute assignment” of the legal right to debts and interests under the loan agreements and “all legal and other remedies”.
Between November 1997 and March 1998, Equuscorp commenced proceedings against investors, including the respondents, under the loan agreements. Due to the breach of s 170(1) of the Code, the primary judge held that the loan agreements were unenforceable, on account of the illegality of the investment schemes. As an alternative to claiming under the loan agreements, Equuscorp sought restitution of the funds advanced as money had and received. In relation to that claim, the primary judge held that the respondents were liable to make restitution to Rural, and that the Deed assigned to Equuscorp the benefit of the respondents’ liability to make restitution. On appeal, the Court of Appeal held that the right to claim for restitution had not been available to Rural and was therefore unavailable to Equuscorp, and, in any event, the Deed did not effectively assign such relief. Equuscorp appealed, by special leave, to the High Court of Australia. The scope of the appeals was limited to the availability of restitution; it was not disputed that the loan agreements were unenforceable for illegality.
The High Court, by majority, dismissed the appeals, with the result that the respondents are not liable to repay Equuscorp the funds advanced under the loan agreements. Equuscorp characterised its claim as arising from a “failure of consideration”, contending that Rural had advanced funds under the loans on the basis that the agreements were enforceable. As that state of affairs did not exist, it was contended that the respondents would be unjustly enriched if they did not make restitution. By majority, the High Court rejected this submission, holding that an entitlement to restitution from the respondents would stultify the policy and objects of the Code, being the protection of investors in the position of the respondents. There was therefore no cause of action available for Rural to assign to Equuscorp. The High Court held further that, if Rural had a right to restitution, such a right was capable of being assigned to Equuscorp. The decision of the Court was evenly divided on the question of whether the Deed assigned Equuscorp any right to restitution.
ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue [2012] HCA 6
Today the High Court allowed an appeal from the Court of Appeal of the Supreme Court of New South Wales, which had held that ALH Group Property Holdings Pty Limited (“ALH”) was not entitled to a refund of stamp duty under s 50(2) of the Duties Act 1997 (NSW) (“the Act”). ALH sought the refund in respect of a cancelled agreement for the purchase of a property at Frenchs Forest, New South Wales.
Oakland Glen Pty Limited (“Oakland”) was the registered owner of the property at Frenchs Forest. In 2003, a company, later known as Trust Company Fiduciary Services Limited (“Trust”), contracted to purchase the property from Oakland (“the 2003 contract”). In June 2008, Oakland, Trust and ALH executed a deed (“the Deed of Consent”) under which, in essence: Trust assigned its rights as purchaser under the 2003 contract to ALH; Oakland consented to the assignment; ALH promised Oakland that it would perform Trust’s obligations under the 2003 contract; and Oakland released and discharged Trust from liability under the 2003 contract. In October 2008, the parties entered into a further deed (“the Deed of Termination”) which, as rectified, cancelled the Deed of Consent. Oakland and ALH executed a new contract for the sale of the property. The primary issue arising from these transactions was whether the Deed of Termination cancelled an “agreement for the sale or transfer of dutiable property”, within the meaning of s 50(1) of the Act.
Under s 50(1) of the Act, agreements for the sale or transfer of dutiable property that are cancelled are not liable to duty, provided that the Chief Commissioner is satisfied of certain matters. Under s 50(2), if an application for refund is made within certain time limits, the Chief Commissioner must reassess and refund duty that has been paid on an agreement which is not liable to duty. Upon application by ALH for a refund, the Chief Commissioner assessed the Deed of Consent as being liable to duty.
ALH objected to the Chief Commissioner’s decision, and when its objection was disallowed, appealed to the Supreme Court of New South Wales. A judge of the Supreme Court ordered the Chief Commissioner to refund the duty paid on the Deed of Consent. The Deed of Consent was held to have extinguished the 2003 contract and to have constituted a new agreement, in identical terms to the 2003 contract, between ALH and Oakland. The Court of Appeal allowed the Chief Commissioner’s subsequent appeal. It held that no new agreement arose between Oakland and ALH under the Deed of Consent, as the 2003 contract was not expressly rescinded, Oakland did not undertake any new or express obligation to transfer the property to ALH on payment of the balance of the purchase price, and the 2003 contract remained the only source of Oakland’s obligation to transfer the property to ALH. By special leave, ALH appealed to the High Court of Australia.
The High Court allowed the appeal, with the result that the Chief Commissioner must refund the duty paid by ALH on the Deed of Consent. The High Court held that, properly construed, the Deed of Consent discharged the 2003 contract and substituted a new contract between Oakland and ALH. The High Court rejected a submission that Oakland’s obligations as vendor continued to have their source in the 2003 contract, holding that it was necessarily to be implied from the Deed of Consent that Oakland would transfer the property to ALH on payment of the balance of the purchase price. By cancelling the Deed of Consent, the Deed of Termination therefore cancelled an “agreement for the sale or transfer of dutiable property” within the meaning of s 50(1) of the Act.
Strong v Woolworths Ltd [2012] HCA 5
Today the High Court allowed an appeal from the Court of Appeal of the Supreme Court of New South Wales, which had dismissed a claim in negligence by the appellant against Woolworths on the basis that the appellant had failed to prove that Woolworths’ negligence caused her injuries. The High Court held by majority that, on the balance of probabilities, Woolworths’ negligence caused the appellant’s injuries.
The appellant suffered serious spinal injury when she slipped and fell while at the Centro Taree Shopping Centre (“the Centre”). The incident occurred at around 12.30pm. At the time of her fall, the appellant had an amputated right leg and walked with the aid of crutches. The fall occurred as the result of the tip of her right crutch coming into contact with a greasy chip that was lying on the floor of a sidewalk sales area which was under the care and control of Woolworths. The crutch slipped out from under her and she fell heavily.
The appellant brought proceedings in the District Court of New South Wales claiming damages in negligence against Woolworths and CPT Manager Limited (“CPT”), which was the owner of the Centre. The appellant obtained judgment against Woolworths, and the claim against CPT was dismissed. Woolworths appealed to the New South Wales Court of Appeal.
On appeal, the primary issue was whether the appellant had proved that Woolworths’ negligence was the cause of her injury. It was not in question that Woolworths owed a duty to take reasonable care for the safety of persons coming into the sidewalk sales area, and that on the day of the appellant’s fall Woolworths did not have any system in place for the periodic inspection and cleaning of that area. Prior to the appellant’s fall, the sidewalk sales area had last been inspected at 8.00am that morning.
The principles governing the determination of causation in a claim for negligence in New South Wales are set out in s 5D of the Civil Liability Act 2002 (NSW) (“the Act”). Section 5D of the Act relevantly requires that the negligence was a necessary condition of the occurrence of the harm (“factual causation”) and that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused (“scope of liability”).
Applying the statutory test, the Court of Appeal held that the appellant had failed to prove on the balance of probabilities that Woolworths’ negligence caused her fall. The Court approached the causation question on the basis that reasonable care in the circumstances required periodic inspection and necessary cleaning of the sidewalk sales area at 15 minute intervals throughout the day. The Court found that the likelihood was that the chip had been deposited at lunchtime. On that basis, the Court considered that it could not be concluded that, had there been a dedicated cleaning of the area every 15 minutes, it was more likely than not that the appellant would not have fallen.
The Court set aside the judgement of the trial judge and dismissed the appeal. The appellant appealed by special leave to the High Court.
The primary issue on appeal to the High Court was the correctness of the Court of Appeal’s conclusion on causation. The High Court held by majority that, in the circumstances, it was an error for the Court of Appeal to hold that it could not be concluded that the chip had been on the ground for long enough to be detected and removed by the operation of a reasonable cleaning system. The evidence did not permit a finding of when, in the interval between 8.00am and 12.30pm, the chip was deposited in the sidewalk area. Given this, the probability was that it had been on the ground for more than 20 minutes prior to the appellant’s fall. On the balance of probabilities, therefore, the appellant would not have fallen but for Woolworths’ negligence.
