The High Price of Flagrant Conduct
Most legal practitioners have the principles of damages drilled into them as law students – damages are compensatory in nature and designed to place the aggrieved party back into the position they would be in if the breach had not occurred.
As with most rules, there are exceptions.
Section 115(4) of the Copyright Act 1968 (Cth) allows an applicant in proceedings for copyright infringement to obtain ‘additional damages’ where, inter alia, an infringement is flagrant and there is a need to deter similar infringements.
Very few people have benefited from this provision the way Australia’s music licensors, the Australian Performing Rights Association (APRA) and the Australasian Mechanical Copyright Owners Society (AMCOS), have.
In the Federal Circuit Court decision Australian Performing Rights Association v Dion & Anor  FCCA 330, APRA was awarded additional damages against Dion in the sum of $400,000, when compensatory damages had been awarded in the sum of $34,822.14.
John Dion, also known as John Denison, was the sole director of International Events Group Pty Ltd (now in administration) sought a licence from APRA in 2014 to hold the 2014 Soulfest Concert. The concert was held in Sydney, Melbourne and Brisbane. Upon considering whether to grant the licence, an officer of APRA identified that APRA had had difficulties with Mr Dion (or Denison) in the past. Having regard to this, APRA made it a condition of the 2014 licence that Mr Dion pay the licensing fee up front.
Not only did Mr Dion not pay the licensing fee prior to the 2014 Soulfest Concerts, he made representations that the licensing fee had been paid, when it had not.
The 2014 Soulfest Concerts went ahead as unauthorised performances.
In 2015, Mr Dion once again applied to APRA for a licence to hold the 2015 Soulfest Concerts. Again, Mr Dion was required to pay the licensing fee upfront. This time, APRA sought, and obtained, an injunction to restrain Mr Dion from holding the events. Mr Dion cancelled the events within around 24 hours of when they were to be held, saying that the cancellation was due to low ticket sales.
In considering whether to award additional damages, Judge Street made a number of interesting comments:
The Court finds that the false representation as to advance payment was made knowingly by the first respondent. That is scandalous and blatant conduct that adds to the gravity and flagrance of the infringement by the first respondent in the present case.
The attempted deceit as to payment shows knowledge on the part of the first respondent as to the role and importance of the licencing requirements for the conduct of the live performance. The attempted deceit also shows the first respondent was prepared to be dishonest in order to permit the applicant to be deceived into believing a payment had been made to facilitate the live performance for the first respondent to reap financial benefits.
Deceiving the applicant in relation to its licencing activities is grave and scandalous conduct that is a significant aggravating factor in respect of the need for deterrence. This conduct demands a substantial and heavy response in the assessment of additional damages to protect the interests of those who own copyright works. There is obviously a real need in the assessment to specifically deter the first respondent from such conduct. There is also a real need to deter others from similar conduct.
That dishonest conduct by the first respondent was clearly intended to prevent the applicant from enjoining the first respondent and the corporate entity from the holding of the unauthorised and unlicensed live performances…. . I find that the first respondent knew that the Court would grant injunctive relief to prevent infringement of copyright if payment in advance had not been made.
The Court finds that the first respondent falsely conveyed to the public that the cancellation was due to low ticket sales when, in fact, the cancellation was due to the failure of the first respondent and his corporate entity to be willing to pay the licence fee to the applicant for the holding of that concert. In my opinion, this blatant subsequent conduct by the first respondent is a relevant matter within s.115(4) of the Act that the Court can and has taken into account in considering the quantum of additional damages to be awarded in the present case.
The Court finds the conduct of the first respondent in the infringement that occurred in the present case was deliberate, for financial benefit and as such a flagrant disregard of the licencing requirements and the interests of copyright owners. More importantly and to the strongest disapproval of the Court the infringement conduct involved dishonesty on the part of the first respondent. This is conduct by the first respondent that must be clearly deterred by the quantum of the additional damages if copyright in Australia is to be properly protected.
Interestingly, Judge Street awarded additional damages in the amount of $400,000 when APRA’s submissions recommended damages in the amount of $300,000.
This decision should stand as a stark warning to users of music (and potentially a beacon of hope to music creators) – flagrant disregard of the licensing requirements is an exceptionally expensive decision.