Roadshow Films Pty Ltd & Ors v iiNet Limited [2011] HCATrans 325 (2 December 2011)

Last Updated: 2 December 2011

[2011] HCATrans 325

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S288 of 2011

B e t w e e n -

ROADSHOW FILMS PTY LTD (ACN 100 746 870)

First Appellant

UNIVERSAL CITY STUDIOS LLLP

Second Appellant

PARAMOUNT PICTURES CORPORATION

Third Appellant

WARNER BROS. ENTERTAINMENT INC

Fourth Appellant

INC DISNEY ENTERPRISES

Fifth Appellant

INC COLUMBIA PICTURES INDUSTRIES

Sixth Appellant

TWENTIETH CENTURY FOX FILM CORPORATION

Seventh Appellant

PARAMOUNT HOME ENTERTAINMENT (AUSTRALASIA) PTY LTD ACN 003 914 609

Eighth Appellant

BUENA VISTA HOME ENTERTAINMENT

Ninth Appellant

TWENTIETH CENTURY FOX FILM CORP (AUSTRALIA) PTY LTD ACN 000 007 036

Tenth Appellant

UNIVERSAL PICTURES (AUSTRALASIA) PTY LTD ACN 087 513 620

Eleventh Appellant

VILLAGE ROADSHOW FILMS (BVI) LTD

Twelfth Appellant

UNIVERSAL PICTURES INTERNATIONAL

Thirteenth Appellant

UNIVERSAL CITY STUDIOS PRODUCTIONS LLLP

Fourteenth Appellant

RINGERIKE GMBH & CO KG

Fifteenth Appellant

INTERNATIONALE FILMPRODUKTION BLACKBIRD VIERTE GMBH & CO KG

Sixteenth Appellant

MDBF ZWEITE FILMGESELLSCHAFT MBH & CO KG

Seventeenth Appellant

INTERNATIONALE FILMPRODUKTION RICHTER GMBH & CO KG

Eighteenth Appellant

INC NBC STUDIOS

Nineteenth Appellant

DREAMWORKS FILMS LLC

Twentieth Appellant

WARNER BROS INTERNATIONAL TELEVISION DISTRIBUTION INC

Twenty First Appellant

%TWENTIETH CENTURY FOX HOME ENTERTAINMENT INTERNATIONAL CORPORATION%

Twenty Second Appellant

WARNER HOME VIDEO PTY LTD% ACN 002 939 808

Twenty Third Appellant

PATALEX III PRODUCTIONS LTD

Twenty Fourth Appellant

LONELY FILM PRODUCTIONS GMBH & CO KG%

Twenty Fifth Appellant

SONY PICTURES ANIMATION INC%

Twenty Sixth Appellant

UNIVERSAL STUDIOS INTERNATIONAL B.V.

Twenty Seventh Appellant

SONY PICTURES HOME ENTERTAINMENT PTY LTD ACN 002 489 554

Twenty Eighth Appellant

GH ONE LLC

Twenty Ninth Appellant

GH THREE LLC

Thirtieth Appellant

BEVERLY BLVD LLC

Thirty First Appellant

WARNER BROS ENTERTAINMENT AUSTRALIA PTY LTD ACN 003 773 411

Thirty Second Appellant

TWENTIETH CENTURY FOX HOME ENTERTAINMENT LLC

Thirty Third Appellant

SEVEN NETWORK (OPERATIONS) LTD ACN 052 845 262

Thirty Fourth Appellant

and

IINET LIMITED (ACN 068 628 937)

Respondent

FRENCH CJ
GUMMOW J
HAYNE J
CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 2 DECEMBER 2011, AT 10.02 AM

(Continued from 1/12/11)

Copyright in the High Court of Australia

____________________

FRENCH CJ: Yes, Mr Bannon.

MR BANNON: Thank you, your Honour. Could I address first the issue raised by our learned friends in relation to section 112E. That section does not operate to remove as a relevant factor for the purposes of 101(1A) and, in particular, (1A)(a) “power to prevent” the control or power afforded by the ISP’s provision of facilities. It simply means that that factor on its own is not sufficient. Indeed, the use of the word “merely” serves to underscore the relevance of the provision of such facilities to the question of authorisation. Section 112E proceeds on the legislative assumption that the provision of the facilities is relevant to the question of authorisation, but if that is all there is, it will not amount to authorisation.

That was the approach taken by the Full Court in Cooper where the control or power to prevent afforded by the control of the facilities of the ISP E-Talk was treated as a relevant factor in considering the factors in 101A, which the court did and appropriately so. Could I take your Honours briefly to paragraphs 61 to 65 in Cooper in the judgment of Justice Branson. The matters between 61 to 65 make it clear that those matters related to the power to control the facilities were relevant to the 101(1A) consideration. One can note in paragraph 64, the second sentence:

Rather than withdrawing hosting of Mr Cooper’s website, or otherwise placing pressure on Mr Cooper to stop his website –

is an example of the use of the power to prevent in a way which is not - - -

GUMMOW J: What does her Honour mean by placing pressure?

MR BANNON: I am sorry, your Honour?

GUMMOW J: What does her Honour mean, do you think, by the phrase “placing pressure”? Making a threat of some sort?

MR BANNON: Well, to say that if it continues, we will withdraw the hosting facilities. In other words, the ultimate sanction of simply switching off does not need to be used in order to control. Similar sentiments in paragraph 155 of Justice Kenny’s judgment which, in particular, emphasises in the second sentence the “connection services”. Without going to it, can I just give your Honours a reference to the Sharman decision, paragraph [403], where consistently Justice Wilcox simply said that the power to control the facilities was a relevant factor and 112E did not preclude it.

GUMMOW J: What paragraph?

MR BANNON: Paragraph [403]. In the present case that was the approach taken, correctly we submit, by all members of the Full Court; for example, Justice Nicholas, paragraphs 630 and 631, Justice Emmett, 222 and 223. Looked at more generally as a matter of construction, if the ISP’s provision of facilities was excluded as a relevant factor, it is hard to imagine the circumstances in which an ISP would ever be an authoriser of infringing activity via the internet because the analysis under 101 and, in particular, 101(1A) would require one to exclude from one’s mind in consideration the fact that the ISP was providing the service. If that was right, it would have no control and it is almost inconceivable to imagine how the ISP would ever be caught, yet it is plain – so that the construction for which we contend is supported by the wording of 112E and where it sits in the legislative scheme, but if one goes to the explanatory memorandum and considers the way in which the matter was introduced, it is absolutely clear that the ISPs were squarely in the mind of the legislature in relation to the introduction of this communication right for the purposes of 101(1A).

Certainly 101(1A) applies beyond ISPs as well, but that they were squarely involved is absolutely clear, and I have taken your Honours to this before, but page 10 of the explanatory memorandum identified the introduction of the (1A) section as identifying steps they – that is, the ISPs – needed to take to avoid liability for authorising infringements. As your Honours will recall, option (a) was to do nothing, which the copyright owner said, according to the EM, was okay, but it was the ISPs who wanted clarity for the purpose of clarity in avoiding infringement for authorisation in the context of the introduction of the communication right. So to have an operation of that constellation of sections which excludes their role in providing facilities from the equation in 101(1A) would be to subvert the intention of the words of the legislation read together and subvert the stated intention by reference to the explanatory memorandum.

GUMMOW J: While we are looking at 101(1A), I think perhaps the import of Mr Flynn’s submission was that when you look at (a), (b) and (c) it would be better understood if (b) was (a). So you look first at the nature of the relationship, then you asked yourself was there power to prevent, and that the two, as it were, are not really discrete considerations. On any way of looking at it, it is awkward.

MR BANNON: Yes, but the starting point, we say, however one looks at it in relation to cases generally, is you ask, is there a primary act of infringement, and here the primary acts of infringement are the continuing acts after notice and you ask, what is the nature of the act?

GUMMOW J: I am sorry, just say that again. You ask yourself what?

MR BANNON: What is the act?

GUMMOW J: Yes, and what is it?

MR BANNON: In the present case, it is the making available online, in particular, after iiNet had been notified of the specific act that had occurred and was going to continue to occur.

GUMMOW J: The phrase “the act concerned” is the primary act of infringement, is it not?

MR BANNON: Yes, quite.

GUMMOW J: What is the primary act of infringement?

MR BANNON: In the present case?

GUMMOW J: Yes.

MR BANNON: It is the continuing making available online of particular films.

CRENNAN J: After notice?

MR BANNON: After notice.

CRENNAN J: There would be an argument, would there not, prior to notice that an ISP would not have any power to prevent the doing of the act concerned? You would argue, would you not, that you empower them by the giving of the notice? Is that not how the argument works?

MR BANNON: We change the circumstance.

FRENCH CJ: Notice is not relevant to the act concerned. The act concerned is the infringement by the user of the ISP service.

MR BANNON: Yes.

FRENCH CJ: That does not depend on notice and its timing does not depend on notice.

MR BANNON: No.

FRENCH CJ: That goes to authorisation in your - - -

MR BANNON: That is right, but the starting point is what is the act and what is the nature of the act and then having identified that, and the present case is, the continuing making available online by users - - -

GUMMOW J: The primary infringement is the contravention of the communication right, is that not so?

MR BANNON: Yes, that is so, and the particular aspect of it is the continuing making available online by a user on a particular account. So that is the starting point.

FRENCH CJ: That starts immediately that the user has downloaded the film on BitTorrent and from the point in time in which it is available for upload into the swarm.

MR BANNON: Yes.

FRENCH CJ: So that really starts from the point of download, does it not?

MR BANNON: That is right, and one accepts that that starts before notice is given to the ISP. So that the particular act which is authorised is the continuing act or repetition of the acts of making available online after notice. One asks then for the purposes of authorisation, what is the nature of the act, and the nature is making available online, that is a critical element of it, and it is the making available online of a particular unauthorised copy of a film. Then one asks, how did it happen? It happened and was continuing to happen by reason of the fact that the user was connected to the internet. How was it connected to the internet? You answer that question, via iiNet’s service. What was the nature of the relationship? The answer was, the use of that account was controlled by a contractual agreement which obliged the account holder to ensure that it was not used for copyright infringing purposes. What else do we have in the equation?

GUMMOW J: Not just contractual right, the power to shut it off.

MR BANNON: And the power to shut it off, so that the contractual right was reinforced - - -

GUMMOW J: It is the power to shut it off which is conditioned by the contract.

MR BANNON: Power to shut it off and power to continue to provide the service.

GUMMOW J: Yes.

MR BANNON: Then the next factor which is added - - -

GUMMOW J: That is what confuses me, this notion that the power is the contract. The power is much more physical control. It is conditioned by a contract to permit or to withdraw permission.

MR BANNON: Yes. It is the relationship between the two. Then one poses the question, how do the acts of making available online continue to happen? We say, continued to happen in circumstances we gave the person who was directly involved in the doing of the act – namely, iiNet because it continued to provide the service – we gave them specific notice that that account was being used to commit a continuing act of infringement. We gave them a specific notice and so they knew that their account was being used for a continuing act in breach of the terms in which they had provided it and their decision in those circumstances was to do nothing.

GUMMOW J: What should they have done?

MR BANNON: They should have warned and sought to enforce their contract.

GUMMOW J: You cannot get into questions of reasonableness without considering should.

MR BANNON: But in circumstances - - -

GUMMOW J: Let us just think about law of negligence, for example.

MR BANNON: Well, it does impose in a - - -

GUMMOW J: So, what should they do? What should they have done?

MR BANNON: They should have notified.

GUMMOW J: Notified whom?

MR BANNON: The account holder.

GUMMOW J: Yes, and?

CRENNAN J: But then you would normally say that in the absence – we give you seven days to tell us you have a defence to this or you have removed the film X from your file.

MR BANNON: Yes, or some period of time, whether it be seven days or some - - -

CRENNAN J: Or otherwise we shall take some steps pursuant to our contract. It is conceivable seven days later you send another to say well, we have not heard from you, we are telling you again. You explain the law and so on. We are going to shape your account. Another seven days, we are going to suspend it, and so on. You would have to factor in a proper opportunity to respond to the warning.

MR BANNON: Undoubtedly. But when one comes back to – as your Honour the Chief Justice - - -

GUMMOW J: Just a minute. Questions of reasonableness, does cost enter into this?

MR BANNON: It can.

GUMMOW J: Who is ultimately to bear the cost of all this activity? That is what this litigation seems to be about at one level.

MR BANNON: The legislative hook for addressing the question of cost must come in under the word “reasonable” in terms of reasonable steps because it is plain, we would respectfully submit, when one looks at the section and the nature of the communication right, that the exposure of an ISP upon notice to the authorisation claim is obvious. But the protection this legislature afforded the ISP was the use of the words “reasonable steps” and, one must add importantly, “industry codes of practice”. They are very important words which do not appear from Moorhouse, of course, and were part of this legislative scheme.

HAYNE J: But was there any exploration at trial of what a notice regime of the kind you have just postulated would entail as to cost, both direct cost and indirect cost? Because on the face of it, what have you got? A thousand in the first Excel spreadsheet, 900 accounts, is it?

MR BANNON: Something like that.

HAYNE J: And that is a week’s worth?

MR BANNON: Yes. A week’s worth, yes.

HAYNE J: There was mention by Mr Flynn of $NZ25, I think, per ISP address?

MR BANNON: Yes.

HAYNE J: What are we to make of that? Were these issues explored at trial?

MR BANNON: The issue of cost, we submit, is relevant to a reasonable step inquiry and that was the protection afforded to an ISP, or part of the protection afforded to an ISP, as to what was or was not going to be the case in relation to authorisation, but what reasonable steps also encompasses is that there will be a cost burden. The proposition that they would be cost free is not something which can be discerned from the legislation and, furthermore, the EM specifically said, in words, that the ISP would bear the costs of ensuring it was not exposed to authorisation liability.

The issue at trial was Westnet was a company which was taken over by iiNet representing at the time 200,000 of its 400,000 subscribers. It had a notification system and Mr Malone was cross-examined about that and he was asked whether, and he agreed, that nobody from Westnet ever told him that there was a technical or cost problem or even a telco problem. Nobody from iiNet sought to adduce evidence as to the cost or sought to adduce evidence of any technical difficulty. Mr Malone, in one of his affidavits, made assertions which were generalised and were not admitted as evidence, but were admitted only as submissions.

The question of what it would cost and the practical difficulty of the cost of implementing a step of warning or process was at issue but in circumstances where, quintessentially, that was a matter for them to prove if it was truly a problem: in circumstances where one knew that they could communicate readily and were communicating readily with their clients on a daily basis, that RC-08 is an example, multiple communications; in circumstances where it came out in evidence in cross-examination, it has to be said, because they did not refer to it in their affidavits that they had this Westnet policy and the Westnet policy was not closed for reasons of cost or technical difficulty, it was closed for reasons of principle.

In terms of whether one calls it Blatch v Archer or evidentiary burden shifting, this Court picked it up in Thiess v Placer Developments, from memory, that Blatch v Archer quintessentially matters as to what it would cost this ISP to deal with that was a matter for them to prove and the very fact that they did not bring forward a single technical person or a single cost person to identify these issues, left the position that there is no evidentiary basis for a proposition that the cost of taking those steps was unreasonable. That was the view taken by Justice Jagot and was the view taken by Justice Nicholas. Justice Emmett imposed or sought to impose a requirement that we indemnify them from their costs, but there was no evidentiary basis for it.

That was an ex ante consideration by him and the section requires the court to come to a view, to the extent someone puts in issue the cost, as to what it is and whether it is reasonable, but their failure to address that tells one – I am sorry. The question of that cost is not something about which is to be dealt with by way of submission or by way of speculation but by way of evidence, and there just was not any, and the fact that they did not attend to it permits the very ready inference that they could not honestly say that it truly was going to be an unreasonable burden.

If the cost issue had been squarely raised by them, anybody who entered the witness box about it would have been challenged about it, but in relation to at least two matters directly on the cost issue, one of which – because it is not just the cost of dealing with the notices it is the net cost to the company, the true economic benefit or cost – one of the matters they put forward and the trial judge did not reject was their proposition that the unauthorised use on BitTorrent by clients of making available films was a use of bandwidth to such an extent - because films use a lot of bandwidth – to such an extent which was antithetical to their commercial interest.

The corollary of that proposition is, the pursuit of steps to rid their system of infringers would produce on the basis of that argument a net economic benefit. That is one factor which would have had to have been weighed into the equation if anyone had stepped into the witness box to address this issue. Another factor is, their case, one of the matters they put forward is that Freezone is something that they sought to make commercial value out of it by selling, inter alia, authorised copies of films by Apple’s iTune. So that, again, on the basis of that, one might expect or infer that the ridding, the encouragement of their users to not use authorised films but to take up Freezone for it, is again part of the equation as to what the net cost was. One can infer that the fact that they never addressed this matter by way of proper evidence is that the outcome would not have been favourable to them.

I should just give your Honour the references to some of those matters I have been referring to. The evidence of Mr Malone, sought to be admitted but rejected and only admitted as a submission, is orange 2, pages 893 to 896. I would not imagine your Honours need to go to this, but at paragraphs 12 and 15 to 19 and 10 – my friend says 11 was in evidence, that is true, but that is relating to robot notices and there is no quantification of it. Paragraph 10 was submission only, 12 submission only, 15 through to 19 submission only.

GUMMOW J: But 10 and 11 on page 893 were in evidence, were they?

MR BANNON: Paragraph 10 submission only.

GUMMOW J: Paragraph 10.

MR BANNON: Just to clarify it in case your Honours did not hear my friend, the first sentence of 10 in, the second no, 11 in.

GUMMOW J: Just say it all again.

MR BANNON: I am sorry?

GUMMOW J: The first sentence of 10 is admitted.

MR BANNON: Yes. Second sentence 10 submission only, 11 in, 12 submission, 15 to 19 inclusive submission, and 20 in.

KIEFEL J: Could I take you back to section 101(1A). Pared down, the critical feature in your approach is knowledge?

MR BANNON: Yes.

KIEFEL J: Your argument essentially is knowledge plus means and a refusal to take reasonable steps within those means equals authorisation?

MR BANNON: Yes.

KIEFEL J: Sir Harry Gibbs in Moorhouse did not say that the starting point was knowledge or did he elevate knowledge in the way that your submissions, your argument does? He referred to knowledge, I think, in the sense of there has to be something more than inaction so that it was an essential feature of authorisation but it was not elevated to the level of importance which your argument puts it.

MR BANNON: Except that in that in that case there was – his Honour set out steps which appear (a), (b) and (c) of that ilk where it was knowledge plus control because they had the control of the photocopiers.

KIEFEL J: It is more a question of weight. I am not saying that it is not a feature, it is more a question of weight. It is knowledge really that is the feature which stands apart from the approach Mr Flynn identified in his argument yesterday because it did not feature at all in what he referred to.

MR BANNON: No, quite.

KIEFEL J: His focus upon the relationship between the alleged authoriser and infringer and the copyright material was said to be derived from Moorhouse, but that might be arguable as well.

MR BANNON: Yes, that is very arguable because one can go through Moorhouse and work out the means. We say an analysis of Moorhouse in Sir Harry Gibbs’ decision, his Honour uses the library more as a basis for saying there was reason to suspect use of the means for copying, and that was a case there was no prior notice, and in relation to Justice Gibbs, the use of the library in combination with the photocopying machine – and I say the focus was on the photocopying machine, the absence of any limitation on use.

KIEFEL J: Focus on the means. Justice Jacobs’ approach on one view might have been simply that the university created a situation where it could not deny and therefore the inference was available that it had authorised. It put everything in place. It created such a situation that it stood really as an open invitation to any user of the library. It is as simple as that.

MR BANNON: That is right, and I would like to go to Moorhouse.

KIEFEL J: Which does not suggest a relationship is essential to his Honour’s reasoning.

MR BANNON: Absolutely. In addressing this question of content, which was I think an aspect of my learned friend, Mr Flynn’s submission, one has to remember although iiNet did not provide any form of library, at the time they get the notice – and again this is important to focus, we respectfully submit, on the nature of the act, the act of his communicating a particular work and it cannot be completed unless they are connected to the internet and they are given specific notice that one of their customers on their accounts has on their system an unauthorised film and the only basis on which there is going to be an act of infringement is if you continue to provide that service.

KIEFEL J: Forgive me for interrupting you. Could I take you away from the particulars of this case, still back to the section though, to aspects of construction. One can say that paragraph (a) and (c) are clearly drawn from Sir Harry Gibbs’ judgment.

MR BANNON: Yes.

KIEFEL J: Means and reasonable exercise of – well, power and the exercise reasonably of it. Paragraph (b) does not come anywhere, arguably, in Moorhouse. So the question is, how does one read the relationship that is identified there in connection with the other integers in (a) and (c)? Is it part of the question of the power and is that the top and bottom of it?

MR BANNON: Yes, because it must be related to – it is at least in part, we respectfully submit, related to both the power (a) and to (c) because the nature of the relationship may affect what is reasonable but also the nature of the relationship may affect whether or not – and the circumstances in which one can exercise the power. To take an example to which reference has been made, namely, in circumstances where iiNet connects a customer to the internet but the actual pipes or wires being used are Telstra’s, my learned friend says, we could have given notice to Telstra and they would be liable as well. The answer to that is they would not be liable because they do not have any relationship, they do not have any control. They are bound to transmit, no doubt by contractual arrangement – it is probably actually under the legislation – to transmit material provided to them via somebody providing an ISP service such as the iiNet. They do not have any contractual relationship with the customer account. So there is an example where they have technical power. I suppose they could switch off the whole of Australia and everything, but they do not have a relationship.

KIEFEL J: A key feature which distinguishes this case from Moorhouse is that the power or the control over the means by which infringement occurs is one step removed here.

MR BANNON: Yes.

KIEFEL J: In Moorhouse the university and the library had the books and had control over the photocopier and it could to an extent control the use made of it. But here the means of primary infringement, there is no power or control over that. It is one step back.

MR BANNON: A couple of propositions in answer to that. When one analyses the precise act of infringement, the act of communication online, iiNet’s relationship with that is absolutely direct and critical. The copy sitting on the computer, the use of the BitTorrent system by the client has got nothing to do with that. It is a precondition to it, but there is no act of communication online unless and until that is sent down the internet.

What iiNet does, and this is much closer to authorisation on one view of it than Moorhouse because iiNet is told one of your customer’s accounts is being used over which you have a contractual relationship, albeit not necessarily with the user, that a contractual relation has loaded up on the system like a loaded gun to commit the act of communication which will only be committed if you continue to provide them services. You have a contractual right not to do that. You say you are interested in forcing that right. We are telling you, if you do not do that, you are pressing that button with knowledge that that act is going to continue, then you are infringing the copyright. It is like the vice-chancellor standing over the photocopy machine and there is somebody there making a hundred – says to the vice-chancellor, I am now going to make a full copy of a famous legal textbook from back to front, not for the purposes of research and he is there with the switch and he says, off you go.

KIEFEL J: But, in a way, your argument then has to be viewed in two ways. In relation to the primary infringement, the position of iiNet is that it enables the infringement to occur but it has, in a physical sense, no means of control over what the customer does in terms of downloading or the use of the software; which software they choose, what they do.

MR BANNON: Yes.

KIEFEL J: So the starting point for your case is further down the track and it starts with the notification and the aspect of knowledge and that brings us really, does it not, into an area where you are saying that we are not so much concerned with authorisation in the Moorhouse sense, we are concerned with a statutory tort which imposes an obligation upon an internet service provider to use what means it has available to it because it has some responsibility or obligation. There must be some duty that arises out of the knowledge for knowledge and means to amount to a deemed authorisation. That seems to me to be the construct of your argument.

MR BANNON: One could put it as a duty, but the relevance of knowledge is to trigger the notion of authorisation in the sense that authorise has to have a meaning which may be informed by subsection (1A) but it has to be given a meaning and what is clear from Moorhouse and, indeed, cases which Moorhouse applied in terms of sanction, approve and countenance is that you cannot – I was about to say, you cannot sanction, approve or countenance something which you do not know is going to happen. It has to be qualified by Moorhouse because there is a statement in Moorhouse which says you can authorise without knowledge. I will come to that. But certainly one aspect of the notion of authorise is the question of knowledge on the basis that you cannot countenance something which you do not know is happening or have no reason to suspect.

KIEFEL J: I think what you are going to say about Moorhouse is, you do not have to have knowledge if you set up the situation where it is obvious to anyone coming upon it that there is an invitation to use it. That is what Justice Jacobs is referring to. That is far removed from this, I think.

MR BANNON: Yes. But Justice Gibbs did not take that approach, we respectfully submit. What he said was that circumstances of knowledge or reason to suspect where you control is within countenancing and exhibits indifference. We respectfully submit, his Honour there relied on one aspect of authorisation. Justice Jacobs and Justice McTiernan relied on an invitation which was unqualified without knowledge but they also, by reference to Justice Jacobs’ part of the decision where it says, well, if the invitation is qualified but there is still knowledge that it has been ignored, then that could still be then authorisation.

If I could come back perhaps and briefly answer your Honour’s question in relation to why this is the very direct case of authorisation. Let it be assumed that the prior acts of download are not controlled by the ISP. Nevertheless, once it is all loaded, the gun is loaded without – it is not just that they are involved. That particular act of infringement – because if they go to another ISP, as Cooper said and it must be right, that is just a different act of infringement. This particular act of infringement that was about to happen happens only because the iiNet company continues to connect them to the service. It is only because they do that, and they are specifically told that if you continue to connect, you are going to be knowingly involved in an act of infringement on one of your customer accounts, the account which you control, which is the continuing making available of a specific film online and with that knowledge they continue to press the button.

We say, that is four square authorised, the knowledge informs the countenancing part, four square authorisation, and the other elements are all satisfied having regard to the nature of the act. It is fulfilling all those requirements in relation to Mr Flynn’s proposition. You do not have to worry about the library and whether you have provided the content because their system has loaded on it the content ready to go which they have been told about it and they say go ahead. Now, we say the legislature, four square is directed in the world of the communication right to activities which embrace that precise activity, and that the question then comes down to, was there nothing they can do or nothing reasonable they could do?

CRENNAN J: Mr Flynn, I suppose, made the point that ISP is in a very different position from some other persons involved in the whole area of communication to the public in this way. For example, iiNet cannot take down that infringing material itself because it is not acting as a host in any way, so it is not like Cooper, and you could not say there is a common design, like Kazaa, for example. I think Mr Flynn’s other point was, inferentially at least, that ISP has no power to modify the BitTorrent software.

MR BANNON: Yes.

CRENNAN J: So your argument is, as you have said in responding to Justice Kiefel, this very narrow argument about continuing to provide the services armed with the knowledge of a past infringement by a particular account in respect of a particular film.

MR BANNON: Yes, but its narrowness is, we respectfully submit, we proffer for your Honours’ consideration, its strength because it is a very specific indication of an act which can only be undertaken by them at the point of time in which it is reached, their knowledge, their notice, and in answer to any diffidence about this is the powerful nature of the communication right.

HAYNE J: Can I ask you to tell me which words in the definition of “communicate” are engaged?

MR BANNON: It is the words “make available online”.

HAYNE J: So iiNet, you say, makes the film available online.

MR BANNON: Physically yes, but because of the terms of 22(6) they are not a direct infringer. The effect of subsection 22(6) - - -

GUMMOW J: We had better look at that.

MR BANNON: This informs the debate as well because 22(6) - - -

HAYNE J: The thought directs attention to the particular computer owner who has determined that that file will be available for share.

MR BANNON: Yes, for the purposes of the direct liability for making available online, so as the primary infringer. Could I trouble your Honours to go back to the explanatory memorandum because - - -

GUMMOW J: Explain to me how 22(6) fits into this, into the primary infringement.

MR BANNON: Yes. In this case, but for 22(6), as really Justice Hayne was perhaps, if I may say so, inferring, that if iiNet is one of the two essential integers to making this product, this film available online, and they are, they would be a primary infringer, but 22(6) avoids that outcome because it says that only the person who is responsible for determining the content of the communication is the person who is making available online.

HAYNE J: Thus, can I understand it in this way, that your argument is iiNet authorises the person whom I will refer to as the copier, that is, the person who has the computer that is connected to the Net through the iiNet service, iiNet authorises the copier to make available a work online to the public and thus infringe.

MR BANNON: The identity of which they have been told about.

HAYNE J: Because the copier makes it available because the copier, in terms of 22(6), determines the content of the communication by deciding that the file in which the film is kept is to be available for share.

MR BANNON: Yes. Section 22(6), we would respectfully submit, was introduced because of the recognition of the direct involvement of the ISP in the act of communicating to the public, not only direct, but essential involvement, and it is a recognition that the legislature was going to give the 86(c) communication right to copyright owners, but it was going to make sure that ISPs were not going to be responsible as a direct infringer under 86(c) because they otherwise would be, and that is why 22(6) is there, but they were not prepared to absolve ISPs from authorising conduct.

The notion of knowledge is perhaps informed again by this notion of determining the content. Although they are not a determiner of the content, once they know the content and they are an actor directly in making the infringing act happen and they have the element of relationship and control, then they are caught unless there is a reasonable step to be taken. But that dichotomy between the primary infringement, absolving of that, but leaving them exposed to authorisation conduct with protections, which they effectively asked for one infers from the EM, of the (1A) considerations, is referred to in the EM. Perhaps if I could go back to that, your Honours. This is at tab 2 of the bundle which we provided. There is a subheading in italics:

Options for the liability of carriers and carriage service providers (including ISPs)

Currently, the Act provides that copyright can be infringed in two broad ways: by (i) directly exercising a copyright right without the owner’s permission and (ii) authorising a person to infringe copyright.

It is proposed that the person who is responsible for determining the content of a communication to the public is the person who directly exercises the right over that activity. This would mean that carriers and carriage service providers (including ISPs) who are not responsible for determining the content of the transmission would not be directly liable for those transmissions.

That is the source and explanation for 22(6). Then:

Options A, B and C

In relation to liability for authorising copyright infringements, there are three options as follows –

So this comes in obviously immediately after the recognition of the direct role of ISPs in the making available online or the communication right. Then at the top of the next page:

Option A: no change to the Act, with the result that the issue of authorisation is left to be determined by case law;

Option B: codify in the Act the principles set out in the authorisation case law;

Option C: codify in the Act the principles set out in the authorisation case law and introduce a limitation on liability for authorisation for carriers and carriage service providers (including ISPs).

Under Option A the liability of carriers and carriage service providers for authorising infringements on their networks would be left to be determined by the application of authorisation case law as proposed in the Discussion Paper. This option is welcomed by owners of copyright.

ISPs and users of copyright material opposed this approach in the Discussion Paper and sought legislative certainty about the steps they needed to take to avoid liability for authorising infringements. Accordingly, under Option B the Act would be amended to provide an inclusive list of factors which would determine whether a person authorises the doing of any act comprised in the copyright. The key factors would be: the level of control that a person has to prevent the infringement with reference to the nature of the acts complained of; the relationship between the alleged “authoriser” and the actual infringer; and whether the alleged “authoriser” took reasonable steps to avoid infringing acts of copyright.

Option C builds on the proposal in Option B to amend the Act and includes a proposal to limit liability for authorisation by carriers and carriage service providers (including ISPs).

That option C, skipping a sentence after the WIPO, refers to – that is 112E “by reason only of”, and that is what happens. So there is a scheme which recognises direct involvement by ISPs in the act of communication, absolves them from the liability on direct liability, but it sets up a scheme of protections or potential protections for authorisation provided they observe them. If they merely provide the transmission and nothing more, they are okay, and knowledge is not only relevant to authorisation for the reasons I indicated, but it is informed by the terms of 22(6), the nature of determining content. They may not determine content, but if they know exactly what it is and they take no reasonable steps, then they are caught.

The introduction of the industry code of practice, because that was the opportunity for them, for them and them alone, to provide a code of practice which they could rely upon, but as we have seen, in part at least, and it was not exhaustively covered, they have not introduced one. The submission by the various ISPs to which reference was made yesterday which was only in evidence as a submission, not as – or perhaps maybe the state of mind of the author but not as evidence of fact – that does not proceed down a path of let us have an industry code. Rather, it is blanket opposition and try to get more protections, and that is the approach they have taken and that is what iiNet did in this case. iiNet says, we are not going to do anything, we are only going to act on a court order. Of course, the court order - - -

GUMMOW J: This reference to codification is rather unfortunate, is it not?

MR BANNON: Yes.

GUMMOW J: Not the least because at page 12, as the Chief Justice points out, Justice Gibbs said, in the middle of the page:

the question whether one person authorizes another to commit an infringement depends upon all the facts of the case so that a decision on a particular set of circumstances may be of no assistance in other cases.

Justice Jacobs says, at page 21:

The acts and omissions of the alleged authorizing party must be looked at in the circumstances –

et cetera. What the authors thought they were doing, I have no idea really.

MR BANNON: The reference to inclusive is something, for what it is worth.

GUMMOW J: Apart from displaying an inadequacy of how the case law system works.

MR BANNON: The second element, of course, too, is that what it demonstrates that these factors are at least if not exclusively but certainly directly related to ISPs.

GUMMOW J: I think what you seek then to get out of it really, going back to what Justice Kiefel was putting to you, I think what sub silentio perhaps you were trying to achieve is the imposition on the iiNet people of some duty to take steps not to facilitate.

MR BANNON: Yes, that is the effect of it.

GUMMOW J: You then say, how is this duty broken in this case, and you say because they did not do this, that and the other, did not have a warning system and so on and so forth.

MR BANNON: Yes, in particular did nothing. Whether it is described as a duty, that may be the practical effect of it, that may be the correct approach, but certainly we take – or perhaps I take a somewhat more simplistic approach which may be wrong – so you look at the primary act, you ask, you look at the factors, how did it happen, who is involved and with accepted notions of authorise which include countenance, can you say were they countenancing something they have been told about was going to happen and only happened because they continued to connect and they connected were they countenancing it? In circumstances where they did nothing in response to that, we say it is a very simple conclusion – if I venture to say that – so that they were authorising. Things would get much more complicated if they had some system in place and the debate was to the adequacy of it.

GUMMOW J: It has some echoes of propositions put to the House of Lords in Amstrad [1988] UKHL 15; [1988] AC 1013, dealt with at 1059 under the rubric of negligence and in the argument of Sir Sydney Kentridge at 1023, 1024. Your argument may be none for the worse for it, but I suspect that is what is involved.

MR BANNON: We respectfully submit we have a very strong platform. Once one appreciates the significance and breadth of the communication right and the direct involvement of the ISPs and the congery of sections which is designed to balance interests, and we say that once they – it does come down to reasonable steps. One may accept that the safe harbour provision is grafted on later but, nevertheless, the safe harbour provision consistently has an element which says one of the conditions which precludes its application is if they determine content.

GUMMOW J: What are we to derive from the circumstances that appears to be that the safe harbour provisions are technologically out of date?

MR BANNON: One may accept that they were introduced not in the context of peer-to-peer. We have handed up a judgment of Justice Posner. It is a decision of Aimster in the Seventh Circuit of US Court of Appeals [2003] USCA7 320; 334 F.3d 643 which was an appeal to that court against – and this appears from the page numbered 3 and Justice Posner at the beginning of his Honour’s judgment – that it was an appeal against an interlocutory injunction against persons involved with the Aimster system, which is a peer-to-peer system, and the appeal was not successful, but in paragraph [9] of the judgment the court dealt with an argument that the Aimster fell within, effectively, the US equivalent of safe harbour and his Honour says, a few sentences down:

Although the Act was not passed with Napster-type services in mind –

Napster is peer to peer –

the definition of Internet service provider is broad –

In other words it captures it.

CRENNAN J: Where are you reading from?

MR BANNON: Page 11 of the photocopy and it is the left-hand column and it is paragraph [9] and it is about three sentences in. The sentence commencing “Although the Act was not passed”. I do not think this is really an issue between by learned friend and me, namely, that both the US safe harbour provisions are treated as applying to peer-to-peer and the Australian provisions are treated as applying to peer-to-peer and, of course, in this case they argued they fell within the safe harbour provisions here. We did not dispute that they had the potential to do so because the provisions did apply to them as an ISP but they did not satisfy the conditions. I think that is common ground.

The position is we have legislature which was born, one may accept, out of a different system but, nevertheless, acknowledged both in the United States and here as applying to this system and covering it. It is albeit introduced pursuant to a trade agreement obviously but, nevertheless, it is a further protection to ISPs which applies to this and it may be a part, whether or not it is a specific legislative response, but it is part of the legislature not doing anything else in the light of that. It may be inferred, although there is some danger in this, just as far as the legislature is concerned, the balance is sufficient at the present time. They have the benefit of reasonable steps and industry codes of practice. They have the benefit of the safe harbour policy. This company has taken advantage of neither and that scheme, which extends to the communication right in the way it does, absolves them from direct liability if it captures them on authorising unless they take reasonable steps, is a sensible scheme and gives effect to the background against which the sections are introduced.

It does not require, although we do not shrink from, but it does not require some inference of duty to act. It simply applies from, as was done in Cooper, namely, you look at the sections, you look at the particular primary act, infringement, you look at the circumstances and consider in the constellation of factors, can one regard this as authorising be it countenancing or otherwise, and we say - - -

FRENCH CJ: Can I just come back for a moment to – it may be that you have really exposed this in previous submissions, I just want to make sure I am clear on it. The AFACT notices – I look at the notice of 22 July 2008 – you say that those notices combined with the spreadsheets gave notice to iiNet not of the fact of particular downloads of an identified film, but of the continuing download of that identified film by a particular user?

MR BANNON: Yes, of the transmission by the user on that account of that particular film which is a continuing - - -

FRENCH CJ: A transmission from the user’s computer into the swarm, you mean?

MR BANNON: No, into the – well, across the internet.

FRENCH CJ: Yes.

MR BANNON: Because by definition, for so long as they were online they were made available online.

FRENCH CJ: The primary evidence of that, you say, is the fact that they were downloaded to that user’s computer?

MR BANNON: That they were on the user’s computer and made available online because they only way they could be detected by the AFACT people - - -

FRENCH CJ: Through the BitTorrent?

MR BANNON: Yes, it was because the user was online or the - - -

FRENCH CJ: I see, yes.

CRENNAN J: Are you talking about two direct infringements, downloading and communicating to the public?

MR BANNON: Not so far as the ISP is concerned. We do not say they authorised the downloading.

CRENNAN J: No.

GUMMOW J: Is the primary infringement disclosed by those materials?

MR BANNON: We submit, yes, because they are being made available online.

FRENCH CJ: It is the continuance of that availability online from the user’s computer?

MR BANNON: After notice, which they authorised.

FRENCH CJ: After notice.

HAYNE J: The notice might fairly be described as cast in all embracing terms at the least. See for example, 4364 at line 55:

These infringements involve –

that is a wonderful word –

involve the communication to the public of unauthorised copies –

et cetera. Is that reference? Is the reference at 4365, line 35, in the demand, “Prevent . . . from continuing to infringe”?

MR BANNON: Yes. It is the last line on 4364:

the communication to the public of unauthorised copies of the motion pictures and television shows shared with other internet users via BitTorrent.

HAYNE J: You say that is the specificity required?

MR BANNON: Yes. And the schedules include 100 per cent and the tab - - -

HAYNE J: Available.

MR BANNON: Yes. Just on that, I know I have been a bit too long in-chief going through the evidence on that, but once one has the “acting reasonably”, it is reasonably to the company. It is a company which is a significant internet company. It has all sorts of technical assistance. Half its traffic, it is not just worldwide, its half its traffic is BitTorrent. The proposition that within that company they do not understand exactly how BitTorrent works is a nonsense and they never proved it and the fact that you wheel forward by correspondence Mr Leroy Parkinson, who is a credit manager, Mr Dalby, who is a regulatory manager, and Mr Malone, who no doubt is a significant figure in – he is the managing director to the company, does not disprove that we acted reasonably and provided notice. Indeed.....that cross-examination even Mr Malone accepted that the information, if he had looked at it, was sufficient. So for my learned friend to say, well, the trial judge said, “I believe Mr Malone” does not overcome the reasonable step issue in circumstances where the company was given proper and fair notice of what the infringements were.

CRENNAN J: Is Mr Malone the person who used the phrase “compelling evidence” in relation to the notices?

MR BANNON: Yes. Of course, that is another issue, namely, that by December, on his Honour’s findings, he regarded it as compelling evidence and then by April 2009 - - -

CRENNAN J: This was after a better understanding of the content had developed, is it?

MR BANNON: It was before the Dtec evidence was filed in the suit. The specific evidentiary reference to this is one of my topics which I did not go to in detail on my first hand up, and then the next stage is, after the commencement of the proceedings they accept they had actual knowledge and, again, I did not go through that. The specific evidentiary references, including the references to the pleadings, why that was an issue. So even after that point they still did not act. Of course, perhaps this is about the fifth time I have said this, but they sent that letter which said they understood the allegations and how they were made.

GUMMOW J: You said that the safe harbour provisions would have been available but were not utilised?

MR BANNON: Yes, because they did not have a repeat infringer policy.

GUMMOW J: If it had been implemented, that policy would not have required monitoring?

MR BANNON: They did not have to monitor for infringing activity.

GUMMOW J: I am looking at - - -

MR BANNON: Subsection (2).

GUMMOW J: Yes.

MR BANNON: Yes. They did not have to be proactive to monitor its service or to seek facts to indicate infringing activity, but that is in the context of that section which requires a repeat infringer policy and, namely, the whole scheme envisages that they would have to act on notice they received. In other words, they did not have to be Sherlock Holmes themselves, but if they were armed with knowledge, then they were caught.

CRENNAN J: Condition 1.1 perhaps illuminates the point you are making.

MR BANNON: Yes, exactly. If one looks at the free trade agreement provision, which was in our bundle behind tab 4, there is a passage there which I did take your Honours to, but just to remind your Honours. It is about the last three pages of the bundle, it is 17-27, clause 29(a), the idea was to provide:

legal incentives for service providers to cooperate with copyright owners –

That combined with the repeat infringer policy suggests that they were advised to act on information but they would not have to be their own snoops. In the costs submissions I made reference to a couple of facts. Can I just perhaps record on the transcript that I asked Mr Malone questions, but there was not an issue about this, in relation to the Westnet which informed one of the matters I raised earlier and I will just give these references: orange 1340, line 20 and line 40; orange 348, lines 45 to 39, line 10; 332, lines 20 to 30. Justice Jagot at 410 picks that up. I made a submission as to the trial judge leaving open their proposition that the use of bandwidth was antithetical to their interests. That is his Honour’s judgment at paragraph 451.

Just on the reasonableness of the step, of course we also rely on all three members of the Full Court saying that that was a reasonable step to provide a form of warning notice. For convenience, if I could just list those references: Justice Jagot 431; Justice Nicholas 748; Justice Emmett 188. Neither Justice Nicholas nor Justice Jagot – Justice Nicholas at 749, Justice Jagot 412 to 415 – on a review of all the evidence thought that there was evidence which indicated that the step was prohibitive in a cost sense or impractical. So there was only Justice Emmett who we say did not really take that view. He just imposed that condition not by reference to any specific evidence. I think my learned friend said on that cost issue that that repeat infringer schedule had an additional cost element in it, but that was just something we did for the purposes of the proceedings to prove causal connection. That would not be something they would have to do.

In answer to the question, what does one get out of the overseas regimes under $25 from New Zealand? That is not evidence in the case and it is not evidence that is what the cost would be. We know in this country that there are negotiations which produce legislation and some interests prevail over others. One cannot exclude the possibility that that happened in New Zealand. Firstly, that $25 figure covers a range of steps which go right into, theoretically, tribunal hearings and what one does get out of those overseas regimes - - -

GUMMOW J: Is the New Zealand scheme such that there is a tribunal involvement in fixing this figure?

MR BANNON: No, not for that figure. That just appears in a regulation and it says that is the maximum they can charge.

GUMMOW J: How are the receipts then dispersed?

MR BANNON: My reading of it does not tell one.

GUMMOW J: Who gets the money.

MR BANNON: Sorry, the $25 goes to the ISP if they get a notice from the – it is like a subpoena. I think you have to tender – you tender your detection notice. You are given - - -

CRENNAN J: This is to meet the cost of the warning notices and so on, is it?

MR BANNON: Actually, no. I think that is the maximum they can charge, so there must be some sort of invoice system which is not specified. So they do not have to charge anything. They do not have to charge the $25. But one thing I can say about these overseas regimes is they seem to recognise, for what it is worth, that a warning system is the appropriate way to go. The only other thing I would say about the overseas regime, Australia does not have that legislative response.

GUMMOW J: Well, the $25 seems to be in the Copyright (Infringing File Sharing) Regulations 2011.

MR BANNON: That is right, yes.

GUMMOW J: New Zealand, regulation 7.

MR BANNON: Yes. There is a form of notice specified in regulation 4.2 which sets out the things to be set out. We tick every one of those boxes on the notices we sent. It has to be signed by somebody on behalf of the notice. It does not specify you have to identify your collection methods, which is the issue which would seem to trouble Justices Emmett and Nicholas, again, for what it is worth. I understand France has a system but there is no cost imposition on the ISP. England, there is none yet, but there may be one and the US does not have that but they have the safe harbours. So the two countries which have safe harbours do no have these other systems. We say one may get something out of that.

I need not take your Honours to that, but there was some discussion yesterday about that one could recognise that there a number of legislative responses to Moorhouse in the first instance in relation to statutory licences. Section 39A was another response to Moorhouse. We have provided your Honours the second reading speech in relation to that which squarely says that. I do not need to take your Honours to it. In other words, if the Court was to find in our favour – and which obviously we say the Court ought – then the potential for further legislative response is there. I am sorry, that was the Franki report, Justice Franki report we have handed up.

Then could I just deal with very briefly a couple of other outstanding issues. One, the threats argument, a consideration of the section, it has to be a threat of copyright action. There is no threat in copyright action by providing a warning letter. What would be the indication was information that there appears to be copyright infringing material and that is in breach of your contract. One may also add that it is not a matter which is ever raised by iiNet at the time, nor at trial, nor in submissions and I think even in the very long submission to the Government, it does not get a run either. So that is a matter readily dealt with.

Fair dealing, there is no conceivable way in which there could be a fair dealing of putting 100 per cent of a film online, unauthorised copy. The proposition that there is a terrible outcome because the customers will move to another ISP, if the Court finds in our favour, and that is very fair and unjust, that involves an assumption that the other ISPs will ignore the decision of this Court. That is not an assumption which one would quietly make.

Robot notices, my friend said, we rely on what Justice Jagot said, 418 to 421. They are quite a different category. Then Telco Act, we rely on what we have said in writing. My friends do not advance any oral submissions, but it is very clear that on all of the exceptions we rely upon that it would render their inability to enforce their own agreement. That would be the effect of it and any pronouncements, their suggestion that they have got some code coming or scheme, is completely inconsistent with the Telco Act.

Can I just deal very briefly and lastly with the proposition of showing a causal connection between the authorising conduct and particular infringements. My learned friend says it has to be a connection which operates on the mind of the primary infringer. Can I briefly go to decision in Moorhouse at page 23. At about the middle of the page there is a paragraph that commences:

Brennan, then, was a user –

a couple of sentences into that, his Honour says:

In my opinion the appropriate finding in these circumstances is that the University authorized his acts. It was not necessary, as the learned trial judge thought, to find that he had studied the library guides or the notices attached to the machines or had been influenced by a lack of any supervision intended to prevent or deter breaches of copyright . . . The unqualified nature of the invitation sufficiently caused him to do the act - - -

FRENCH CJ: But he construed an implied invitation.

MR BANNON: Yes. That is why section 112E, contrary to my learned friends, you can have lack of knowledge but still an invitation. That is why that protection is there. That is apparent from the foot of page 21 of his Honour’s judgment. Knowledge would become relevant at 22 in relation to countenancing. Here we say there is a direct causal connection. I think I said that before, namely, as soon as they got the knowledge, then they connect again. If another way of looking at it is, what would happen if they sent a warning, I think, as your Honour Justice Kiefel suggested, that that would disclose they are being watched, that they are in breach of an agreement and exposed to the risk of loss of an account. The likelihood of the effect of that is one can readily draw a causal connection and, indeed, Mr Malone paragraph 30 of one of his affidavits was concerned that if he did not issue a notice, then the customer would leave. So that it is a simple matter to find a causal connection between the specific continuing infringements we identified and authorising conduct in the ways we have indicated.

FRENCH CJ: From the users’ point of view, of course, nothing is different between the situation that pertains before the AFACT notice is sent to iiNet and the situation pertains after. From the users’ point of view, he has got a service, he can google, he can access BitTorrent and he can download from it. That is all he knows really.

MR BANNON: Yes. If they had not authorised, they would have sent a notice and that would be - - -

FRENCH CJ: Then he would know something different.

MR BANNON: Absolutely different. But also the evidence is, and I gave your Honours the references to it the other day, the press release which was provided, Mr Malone agreed that was intended by him to convey to users – this is court book 2, page 383, line 5 – intended to convey to users that they were going to do nothing. So if it is a requirement that the indifference be conveyed to the users, they certainly did it. Then, just to clarify one matter, I think my learned friend – the form of injunction we propose is limited to the 20 or so repeat infringers because that is the only ones we are allowed to look to identify causal connection, and so the form of injunction would be limited to that, so it is not all of them. We asked for many more but we were not allowed it.

GUMMOW J: How do we find those 20?

MR BANNON: Reproduced in the appeal book is just one example of an RC-08, but there are others within the 20.

GUMMOW J: How do we know there are 20?

MR BANNON: Beyond me telling your Honour, I think it is referred to in the judgment and within that 20 - - -

FRENCH CJ: An agreed list, was there not, of some kind?

MR BANNON: Yes, we agreed on an account list.

GUMMOW J: Is it beyond you to draft a minute?

MR BANNON: No, not at all. I am using that in a corporate sense. If we can have leave to send that up, and we will send it to our learned friends.

GUMMOW J: Nothing like having something on paper in front of us. Can I just ask you, Mr Bannon, in 86(c), this new right, “communicate the film to the public”, that phrase “to the public” is said to take its colour from the definition of “communicate”, is it not?

MR BANNON: Yes.

GUMMOW J: Namely, it is across the internet, that is the idea, is it? That is taken as sufficient involvement of the public?

MR BANNON: Yes. This Court has considered, I think, in Telstra v APRA, and the quality of “to the public” does not mean it has to be available to every member of the public, but one’s qualification to receive it is no different to any other member of the public.

FRENCH CJ: You suggested, did you not, at one point that the “to the public” criterion virtually collapsed into the “make available online”, or was subsumed by it?

MR BANNON: Effectively, yes, for practical purposes, having regard to the internet nature. So that one is left in this case with a stark choice between the matter we put forward, the approach to the legislation and iiNet’s, which is to do nothing, and, indeed, as they say, to wait for a court

order, a court order which could only be made on the basis of authorisation, which they deny. May it please the Court.

FRENCH CJ: You will let us have your minute in the next couple of days?

MR BANNON: Yes, your Honour.

FRENCH CJ: Yes, Mr Cobden.

MR COBDEN: Your Honours, I do apologise, but there is just one matter that my learned friend mentioned which I think was for the very first time ever in this case about the industry code of practice. In 101(1A)(c) was a code that would be drafted simply by the ISPs and the ISPs have refused or failed to do it. That is not the history and there is in the evidence something about it. It has been regarded historically as being a code to be drafted between the rights holders and the ISPs, and there is a reference to that in a letter from Allens Arthur Robinson in court book 9 at page 4248. There is a reference to the history of that having happened as between the music industry and the ISPs, the process having started, then failed and there was an attempt to revive it.

GUMMOW J: It would not require legislative force, would it?

MR COBDEN: It would not require legislative force, no, but there is some evidence to show that it is not something that has been regarded as being something the ISPs should do, and if one thinks about it, the ISPs would draft a code of conduct that would say we do not have to do anything. That would be a draft code of conduct. One can see some of the absurdity of that. It has been regarded as being the code that should be co-operatively between the two sides of the coin. Thank you, your Honours.

FRENCH CJ: Thank you, Mr Cobden. The Court will reserve its decision. The Court adjourns to 10.15 am, Tuesday, 6 December 2011.

AT 11.20 AM THE MATTER WAS ADJOURNED