The case of Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd; Aristocrat Technologies Australia Pty Ltd v Allam [2013] HCA 21 concerns the application of s 97 “The tendency rule” of the Evidence Act 1995 (Cth) in the context of the civil law. Though brief, the judgement does illustrate the construction given to the section, and the implications of such reasoning on the interpretation of the Evidence Act as a whole.
Facts
The respondents, Anthony Andrews and Francis Cragen, sole directors and shareholders of Global Gaming Supplies Pty Ltd (“Global”) and Impact Gaming Pty Ltd (“Impact”), contracted Riad Allam, principal of Tonita Enterprise Pty Ltd (“Tonita”) to refurbish electronic gaming machines to sell to foreign markets.
The software installed on these machines by Allam though, were pirated copies of computer programs, containing artwork and compliance plates, that were the intellectual property of Aristocrat Technologies Pty Ltd (“Aristocrat”) and others, the applicants.
The applicants brought a claim against the respondents in the Federal Court of Australia under ss 36 and 38 of the Copyright Act 1968 (Cth) (“the Act”) for infringing their intellectual property in the software.
Section 36 of the Act concerns the doing of an act that infringes the intellectual property of another. Section 38 concerns dealing with the counterfeit copies knowing, or ought reasonably knowing, that the “that the making of the article constituted an infringement of the copyright”: s 38(1)(b).
As the High Court summarised it, “The essence of the applicants' case... was that the Global and Impact respondents were in a joint venture together "to counterfeit and sell, principally in South America, second hand gaming machines assembled in Australia using pirated copies of materials in which the applicants hold the copyright."” (at [7])
Aristocrat alleged 54 transactions in which the respondents exported counterfeit gaming machines, and while the trial judge was satisfied 11 of these contained counterfeit components, it was not possible to identify which components of the gaming machines were counterfeit, and which were not: at [8].
The evidence relied upon by the applicants to link Global and Impact to the infringing acts under s 38 were a series of emails between all of the respondents and potential customers between November 2004 and November 2005.
The trial judge identified “five essential propositions” in making a finding that the respondents were liable under the Act (at [9]):
- The Tonita respondents (specifically Mr Allam) had copied the applicants' game software onto blank EPROMs (erasable programmable read only memory chips). (s 36)
- The Tonita respondents (specifically Mr Allam) manufactured counterfeit compliance plates. (s 36)
- Mr Andrews and Mr Cragen were aware that Mr Allam was copying the applicants' game software onto blank EPROMs. (s 38)
- Mr Andrews and Mr Cragen were aware that Mr Allam was manufacturing counterfeit compliance plates for export to foreign markets. (s 38)
- Mr Andrews and Mr Cragen sent, or were aware that the joint venture had sent, original and digital artwork to South America for the purpose of having it copied. (s 38)
Crucially, the emails had been admitted under s 136 of the Evidence Act 1995 (Cth) limiting their admissibility to the case against particular respondents: at [13]. But after the close of evidence and at the time for final submissions, the applicants successfully applied for a variation of that ruling to allow the email evidence to be admissible against all of the respondents: at [13]. The applicants were successful in their claim, and the respondents appealed to the Full Federal Court.
The Full Federal Court Case
The Full Federal Court examined the email evidence and concluded that at best it was admissible as tendency evidence against Global and Impact. The reason for this was that the emails were essential to the applicants establishing the requirement of knowledge under s 38 of the Act, but that “The significant emails tendered did not relate to the alleged infringing transactions. They appeared to have been tendered to discredit witnesses and/or prove the existence of a joint venture. ” (at [28]) However, the trial judge treated them as going beyond this use. As the High Court said, “The only way the primary judge could have made the necessary connection between the infringing transactions and the joint venture was to draw an inference, based on the content of the emails, that the respondents had the tendency to act in a particular way, which involved dealing with articles, the making of which infringed copyright of the applicants, with the requisite knowledge.” (at [28])
As the evidence went to tendency, s 97 of the Evidence Act 1995 (Cth) was relevant, which states that such evidence is not admissible to prove tendency unless the party seeking to adduce the evidence gave reasonable notice to the other party or parties that they intend to do so, and the court thinks it will have significant probative value, either alone or with other evidence. As the trial judge did not comply with the requirements under s 97, the evidence was inadmissible against the respondents, and therefore the connection between the emails and the infringements could not be sustained: at [32].
The Full Court went onto note that even accepting a joint venture could be proved, the applicants could not show the connection between the venture and the infringements without the use of the emails: at [32]. Given their inadmissibility, the third, fourth and fifth “essential propositions” could not be sustained. Therefore the appeal was upheld in favour of the respondents.
The High Court Decision
The High Court (French CJ, Crennan, Kiefel, Gageler and Keane JJ) unanimously dismissed the appeal, adopting in whole the reasoning of the Full Court of the Federal Court: at [33]-[36]. The crux of the court's decision rests on the fact that while the trial judge did not use the word “tendency” at any stage to describe the use to which the email evidence was put, “nor refer to s 97 of the Evidence Act his Honour, as already pointed out, used the email evidence in such a way as to justify the Full Court's view of his reasoning process.” (at [35]). In the court's view, the applications did not involve a question of law or an issue of public importance, and as the opinion the Full Court of the Federal Court took of the evidence was reasonably open to it, the application for special leave to appeal the decision was dismissed.
Conclusion
The decision, though brief, does enunciate an important rule in construing and applying the tendency evidence rule under s 97 of the Evidence Act 1995 (Cth). This is that, where evidence is adduced under a specific head, for a specific purpose, the court will nonetheless look to the substance of the way in which the evidence was actually used in order to ascertain whether or not it was done so correctly. This involves a three-stage test. The first stage is to ask “under what section of the Evidence Act was the evidence adduced?” The second stage is to look at how the evidence was used, and whether it accords with that section. If not, then determine what section it does come under and apply the rules under that section. This should alert practitioners to the need to be careful of how they use the evidence they adduce in court, even in the civil context, and that the courts will look to the substance of its use and not simply to its form.
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