Court adjourns iiNet, AFACT financial fall-out

ISP and movie studios swabble over golden egg

iiNet and an entourage of movie studios must wait for the verdict on who will foot the bill for their much-publicised legal stoush following an adjournment in the Federal Court of Australia today.

The defendant and Australia’s fourth largest Internet service provider (ISP) fended-off a string of copyright-infringement allegations following a two-year case that has cost each party more than $5 million at the cessation of the February ruling.

The Australian Federation Against Copyright Theft (AFACT), which represents 34 studios and the Seven Network, applied to recoup 60 per cent of legal costs on grounds which iiNet had lost.

The cases provided by each party’s legal representatives were so “complete”, said Federal Court Judge Dennis Cowdroy, that the court will need to look over the initial findings to ascertain financial liability.

To borrow the words of iiNet barrister Richard Cobdon, the court will have to “unscramble the egg”.

It was a decision that is understood to have been expected, given the amount of evidence submitted, dozen case referrals, and rebukes and rebuffs from both parties.

The case for AFACT to recoup legal costs is built on four tenets of the case, with a focus on Section 112E of the Copyright Act.

AFACT barrister John Hennessy said of iiNet’s defeated claim for safeharbour under the Section that it must have “known it was bound to fail”, and should pay for the respective court costs. He said the studios could expect to receive between 40 to 80 per cent of legal costs, according to existing case examples and advise provided to the organisation.

He said iiNet’s victory is “overstated” and that costs should follow individual grounds. Hennessy also called for the reimbursement of legal cost during the cross-examination of managing director Michael Malone, which was challenged by Justice Cowdroy: “Malone consumed three days of the court's time — so what? How does this seek to assist [AFACT]?”

Cobdon pounced on the figures, arguing the number should be backed by “a proportional amount of time dedicated” to each disputed ground. He said the case was exceptional and, contrary to Hennessy, should not be influenced by the cited legal cases.

“[The cases] are the most exceptional circumstances… it is something that removes it from the ordinary in which costs follow the event,” Cobdon said.

Hennessy accused iiNet of hindering its investigator from collecting evidence from its data centre because “[it] was in procession of the very information that [AFACT] sought to discover”.

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