Case: Australasian Performing Right Association Ltd v Ceridale Pty Ltd (1990) 97 ALR 497
Outcome: considered
A number of submissions were made the respondent in relation to these claims. In particular: 1. The respondent's proposal to withdraw the Excluded Data from the Collected Data supplied to licensees does not prevent real estate agents from engaging in direct marketing. The proposal merely prevents persons, including real estate agents, from using data collected by the Department being used for purposes other than those contemplated by ss 77(3) and (3A) VL Act . There is no deterrence on real estate agents and others direct marketing by, for example, newsletter drops, newsletters and so on. 2. Evidence of witnesses of the respondent was that the purpose of the respondent was to try and stop direct marketing using the Department's data-sets rather than stop direct marketing activities of real estate agents per se . So, for example, at the hearing, evidence of Mr Rush was as follows: "And specifically, you wanted to stop direct marketing by real estate agents?--- I wanted to stop direct marketing using government sourced information." Similarly, Mr Fry gave evidence as follows: (TS p 200 ll 19-23) "But how do you know that it's going to stop direct marketing by simply taking it out of the hands of the six licensees who you've licensed to obtain bulk data --- We're not saying we are trying to stop direct marketing in total. We are saying we are trying to stop direct marketing using this data set from our Department." (TS p 334 l 25) 3. On the evidence there appears to be no prohibition on anyone using information obtained directly from either the respondent or a third party (for example, local government authorities) in direct marketing activities. The effect of the prohibition is that a person cannot use for direct marketing purposes information obtained through a distributor such as the applicant. 4. A distinction needs to be made between the purpose of the proposal of the respondent and the effect of it if implemented. The sole purpose of the Department is the prevention of the misuse of the Excluded Data and the protection of privacy of individuals and businesses that have provided, compulsorily, information to the respondent. The proposal, if implemented, may have the effect of preventing or deterring certain competitive conduct such as direct marketing, by closing off one source of names and addresses, but that the proposal might have that effect is irrelevant if the purpose for its implementation was not to deter or prevent competition, which is the case here. 5. This case is no different to that encountered by the Full Court in Australasian Performing Right Association Ltd v Ceridale Pty Ltd (1990) 97 ALR 497. 6. The respondent supplies a product, the QVAS database, which is compiled for purposes which do not include direct marketing. The respondent is entitled to prevent the misuse of its information for a purpose for which the information was not collected. 7. The licence agreement emphasises that data supplied may only be used for certain purposes. Clause 1.1 of the 2003 Licence states: "It's a non-exclusive, non-transferable licence to use the licence data for the purposes specified in the agreement, subject to the terms and conditions." Further, cl 4.1.1 provides: "The agreement does not confer on the licensee any rights of ownership in the licensed data, and all intellectual property rights, including copyright in the licensed data, are unaffected by this agreement." 170 No evidence was produced at the trial demonstrating that real estate agents who are customers of the applicant and who engage in direct marketing activities utilise data sourced from the respondent. Indeed it would be difficult to produce such evidence it is clear from the terms of the 2003 Licence Agreement that the applicant is contractually obliged to ensure that its customers (including real estate agents) do not use the information for such purposes, and presumably any direct marketing activity engaged in by real estate agents who are customers of the applicant would be in breach of their own agreement with the applicant. 171 In my view the following issues are clear. 175 Third, while in the absence of evidence to the contrary I accept that the most likely persons affected in their direct marketing activities by the withdrawal of the Excluded Data would be real estate agents, I accept the respondent's submission that this is an effect rather than the purpose of the respondent's conduct. I also consider that principles articulated by the Full Court in Ceridale 97 ALR 497 are relevant here. 176 In Ceridale 97 ALR 497, the Australasian Performing Right Association Ltd ("APRA") owned copyright of public performances in nearly all current popular copyright music, and the respondents were all persons associated with premises within which the subject works had been performed without the licence of APRA. APRA would grant, inter alia , licences in respect of premises to play recorded music, the use of a background music system, and live performances with respect to works over which APRA held copyright. The respondents were persons associated with premises within which works over which APRA held copyright had been performed. The licence held by the first respondent was terminated by APRA on account of non-payment of outstanding licence fees. Further dispute between the parties led to APRA filing a notice of motion seeking summary judgment with injunctive relief. In relation to s 46 , his Honour said that APRA had the monopoly control over the market concerning the supply of the performing rights of music played to patrons in nightclubs and discotheques, and the refusal to grant a customer such as the defendants a licence which would enable the customer to obtain that commodity was plainly an exercise of market power (at 508-509). His Honour also found that it was no answer to a complaint of a contravention of s 46 that the corporation was only taking advantage of a legal right (at 509) and in this case the proper characterisation of APRA's actions was that it was taking advantage of its powers in the market to prevent the defendants from engaging in competitive conduct in another market simply in order to collect a disputed debt (at 509). The trial judge refused to grant an injunction, the object and effect of which was to force a business to pay a debt which was subject to a genuine dispute. 177 Wilcox, Spender and Pincus JJ allowed the appeal of APRA. In particular at 510-511 their Honours said: "There is no doubt, in the present case, that APRA enjoys a substantial degree of power amounting indeed to dominance in the market for music rights. It would seem that, in practical terms, it would be impossible for a nightclub or discotheque to survive without using music of the appellant. Accordingly, APRA is a corporation to which section 46 applies. But we are unable to agree that, upon the facts of this case, APRA has been guilty of any of the proscribed acts. The only suggested conduct was a contravention of para (c), that is that APRA had denied licences 'for the purpose of deterring or preventing a person from engaging in competitive conduct in that or any other market'; the relevant 'person' being each of the respondents and the relevant 'other market' being the nightclub or discotheque market. We agree that the granting of an injunction might have the effect of preventing the respondents from competing in those markets. But there is no basis for saying that this was APRA's purpose. APRA had nothing to gain by putting the respondents out of business. On the contrary, it was in the interests of APRA to maximise the number of users of its material, so long as they paid licence fees. APRA's purpose was merely to prevent unauthorised use of its material and the integrity of its licensing system ." (emphasis added) 178 In my view the comments of their Honours I have italicised are of particular relevance in this case before me. The evidence is overwhelming that the purpose of the respondent was to prevent misuse of its database, in circumstances where legislatively supported contractual provisions in the licence agreements appear not to have been successful in preventing that misuse. Indeed, in my view it is fair to say that as a general proposition, provided they did not misuse Departmental data, the respondent had nothing to gain by deterring or preventing the participants in the Real Estate Agents' Services Markets from engaging in competitive conduct in those markets. 179 Fourth, irrespective whether during the 1990s the Department may have had no qualms concerning its database being used for direct marketing purposes by real estate agents as claimed by Mr Catelan (TS p 46 ll 44-46) and conceded by Mr Witt (TS p 222 ll 46-48 and p 223 ll 1-3), it appears that by October 2002 the Department was concerned about misuse of the data for direct marketing as a general proposition (for example, evidence of Mr Fry TS p 195 ll 13-14). This concern is reflected in the enactment of s 77(3A) VL Act , introduced into the VL Act in May 2003, which specifically required the inclusion in any contract for the supply of information a provision allowing the chief executive of the respondent to exclude particulars of valuation roll information if satisfied, on reasonable grounds, that inclusion of the particulars may result in the particulars being inappropriately disclosed or used. The clear purpose in the conduct of the respondent has been to ensure that the respondent's database should not be misused, by anyone . While real estate agents may be the most affected group, in my view this does not mean that the purpose of the respondent is to deter real estate agents engaging in competitive conduct in the relevant market. 180 A threshold issue in these proceedings was whether the respondent was bound at all by s 46 TPA, because it is not a "corporation" as required by that section. I formed the view early in this judgment that: (a) conduct of the respondent in the Wholesale Market in supplying Collected Data to the applicants and others did constitute the carrying on of a business by the respondent for the purposes of s 2B TPA, with the result that the respondent was bound by s 46 in respect of this conduct; but (b) the supply by the respondent of data in response to individual searches in the Retail Market was not subject to s 46 TPA because, in so doing, the respondent was not "carrying on a business" as contemplated by s 2B. 181 Although the respondent clearly has a substantial degree of power in the Wholesale Market, and it did take advantage of that power, in my view it did not take advantage of that power for purposes proscribed by s 46(1) TPA. 182 Accordingly, the claim of the applicant fails, and is dismissed with costs. THE COURT ORDERS THAT: 1. The application filed 18 March 2005 is dismissed. 2. The applicant pay the respondent's costs of and incidental to the application, to be taxed if not otherwise agreed. I certify that the preceding one hundred and eighty-two (182) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. Associate: Dated: 30 October 2007 Counsel for the Applicant: D Jackson QC and M Martin Solicitor for the Applicant: ClarkeKann Counsel for the Respondent: M Hinson SC and D O'Brien Solicitor for the Respondent: Crown Law Date of Hearing: 20 October 2006 Date of Judgment: 30 October 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1639.html