Bills Digest no. 74 2008–09
Resale Royalty Right for Visual Artists Bill
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Contact officer & copyright details
Date introduced: 27 November 2008
House: House of Representatives
Environment, Heritage and the
Sections 1 and 2 and Part
3 on the day of Royal Assent; all other provisions on 1 July
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
The purpose of the Bill is to
create a resale royalty rights scheme so that visual artists will
be able to claim a share of the proceeds of each successive
commercial resale of the original of their artwork during the
course of the artist’s life; and that their heirs will have a
similar right for a period of 70 years after the death of the
A ‘resale royalty right’ is the right of an artist
to claim a share of the proceeds of each successive resale of the
original of a work. It is often referred to as
‘droit de suite’ which literally translates as
the ‘right of follow up’. The resale royalty right was first
introduced in France in 1920 as a response to a growing public
awareness of the plight of impoverished artists in France whose
works greatly increased in value to the benefit of dealers and
collectors without any corresponding benefit to the artist.
Despite this history, and although the resale royalty right
debate often involves a discussion of the financial hardship of
practising artists, the right appears not to have been intended
originally as a means of assisting needy artists. Rather, it
is a means of countering what some saw as discrimination against
artists in the system of copyright.
Artists are entitled, as copyright owners, to receive payment
for reproductions of their work, in the same way that authors
receive royalties for books sold, and composers receive payment for
records sold and performances of their work. However, for
many artists, the principal purpose of their work is the original
work itself, rather than reproductions of it. The resale
royalty right has the effect of redressing this imbalance in
practice by giving artists whose work is not created to be
reproduced, the right to share in another’s exploitation of
their work– that is, resale of the original.
The possible introduction of a resale royalty right that returns
to artists a percentage of the sale price has been the subject of
debate in Australia for more than 20 years.
In 1988 the Australian Copyright
Council was commissioned by the Australia Council to examine
whether a resale royalty rights scheme was appropriate for
Australia and what the shape of such a scheme might be. The
resulting report of February 1989 entitled, The Art Resale
Royalty and its Implications for Australia,
amendment to the Copyright Act 1968 (Copyright Act) to
create a resale royalty scheme characterised by:
- imposition of a royalty on public sales (such as auctions or
commercial venues such as galleries)
- a fixed percentage royalty calculated on the full sale price
above a specified threshold
- a right, operative over the full term of the copyright,
inalienable and effective in relation to sales from the time of the
legislation irrespective of the date of creation of the work of
- royalty collection and distribution operated through a visual
artists’ collective rights administration body
- civil remedies available to the artists regarding
non-observance of the scheme, and
- coverage of Australian citizens and residents, with foreign
nationals covered on the basis of reciprocity.
These recommendations were not
Over time, subsequent reports
addressed the same issues, for example:
In 2004, the Australian Government issued a discussion paper
entitled Proposed Resale Royalty Arrangement through the then
Department of Communications, Information Technology and the Arts.
Again, the issues were whether a resale royalty right should
be introduced, and if so, in what form? The discussion paper
sought public submissions in relation to, amongst other things, the
- whether resale royalties should be directed towards those
artists whose works are sold, in keeping with the principle that
the right is a form of copyright owned by the artists, or whether
they should be spread among many artists through a fund similar to
the Australian Indigenous Art Trade Association’s one,
offering a form of targeted income support
- whether the scheme should direct a portion of money to both the
heirs of the creator of the work and to other artists
- if the royalty is to be directed only towards the individual
artist, whether the recipient base should be very broad by making
the sale threshold price very low, and
- whether the royalty should be collected by a central agency, by
Viscopy, or by a new statutory body.
In response, the Access Economics report entitled
Evaluating the impact of an Australian resale royalty on
eligible visual artists, produced for Viscopy in October
2004, concluded that:
The impact of [a Resale Royalty Right] on the Australian art
market is difficult to determine because of a paucity of relevant
empirical data about relevant behavioural responses to its
introduction. While the size and distribution of [Resale Royalty
Right] payments can be estimated, the critical question of who
bears the actual economic cost of the royalty, and, most
importantly whether eligible artists would be net beneficiaries of
such an arrangement is not at all clear.
In May 2006, the Australian
Government decided against a right of resale for Australian
Resale Royalties, they argued, ‘would not provide a
meaningful source of income for the majority of Australia's
artists’. Instead, they argued, ‘research shows
that resale royalty schemes bring most benefit to successful late
career artists and the estates of deceased artists’.
Such a scheme, they said, ‘would also adversely affect
commercial galleries, art dealers, auction houses and
investors’, and ‘would not end disadvantage for
On 20 June 2007, the Standing Committee on Environment,
Communications, Information Technology and the Arts (the Committee)
published its report entitled
‘Indigenous Art: Securing the Future Australia’s
Indigenous visual arts and craft sector’.
In relation to the matter of a resale royalty right, the
Committee noted the comments of the Myer report which found that
the case for a resale royalty scheme was particularly strong for
Indigenous artists. The benefits that would flow to
Indigenous artists, according to the Myer Report included:
- providing additional income to some artists
- empowering and nurturing artists
- recognising the ongoing relationship between the artist and the
artist’s community with the work and the owner
- providing means for artists to meet community obligations
- minimising exploitation, and
- reducing profiteering and promoting transparency in the
In addition the Committee noted that the Myer Report cited some
concerns regarding perceived risks to the Indigenous art market,
collectors and artists including:
- potential negative impact on the Indigenous market
- possibility of sales in Indigenous art moving off-shore
- possibility that a resale royalty would constitute a
disincentive to collectors
- risk of sales becoming more private to avoid payment of the
- possible impact of the measure on galleries and collectors
- potential disadvantages to emerging artists
- the possibility that only successful artists will benefit,
- possible creation of an elite market.
The Committee noted that resale royalty schemes have been
introduced in many European and other countries and provide a
number of benefits to artists. The Committee acknowledged
that there is also widespread support for such an arrangement
amongst groups representing Indigenous interests in the
However, whilst the Committee was sympathetic to policy changes
that will improve the circumstances of all artists, including
Indigenous ones, it did not want to endorse changes that might have
administrative costs but few benefits. The majority of the
committee reluctantly concluded there was no clear benefit to
pursuing a resale royalty scheme at that time.
In April 2008, the Australian Government was reported as
receiving a private report from Access Economics that warned a
non-retrospective scheme might not collect enough money to cover
administrative costs (collecting only about $3.4 million in the
first five years, rising to $11.7 million in the first decade and
$38.5 million after 20 years—with about 20 per cent of income
going on administration.
The Australian Labor Party (ALP) has supported the concept of a
resale royalty rights scheme for some time, having included
reference to such a scheme in its Arts Policy Discussion Paper of
announcing the scheme in May 2008, the Minister said that it
‘would reflect the particular characteristics of the
Australian art market and maximise the benefits to
He anticipated that an open tender process would be conducted
in the second half of 2008 to select an organisation to set up a
collecting agency to administer the scheme.
A debate on the Government’s proposed scheme held at
Sydney’s Danks Street arts complex on 18 November 2008
revealed misgivings from both opponents and supporters of a resale
royalty. According to a media report, opponents accused copyright
collecting agency Viscopy of ‘empire-building’. However, Michael
Keighery, president of Viscopy emphasised the fact that the royalty
would only pertain to works bought after the scheme is introduced
and only on subsequent resale. There was concern about the
costs of the scheme and whether these might be in excess of 15 per
cent. In that case there might not be enough money to make it
worth doing and could mean that no organization would tender for
the contract to run it. Further there was concern that the
scheme would not activate reciprocal rights with overseas
Viscopy and the Government advanced conflicting legal opinions
on the constitutionality of making the scheme retrospective.
If the Government were to attempt to make the scheme retrospective,
it was noted that the auction houses might mount a High Court
challenge that would delay the scheme’s planned 1 July 2009
introduction. When the Government’s Bill was introduced
on 27 November 2008, it became apparent that the planned scheme
would not be retrospective.
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More than 30 countries have resale royalty schemes which vary in such
- what artwork is covered
- the royalty rate
- the minimum threshold sale price at which the royalty applies,
- the calculation of the sale price (inclusive or exclusive of
All these factors have an impact on transaction costs and who
benefits from the resale royalty right. Most of the schemes
provide purely individual direct benefits, but some (such as that
operating in Norway since 1948) provide for collective form of
resale royalty paid to an artists’ mutual aid fund which is
used to help aged artists or to provide grants to young artists.
Some such as in Germany divide the money collected between
individual payments and collective benefit.
In 2002, a World Intellectual Property Organisation (WIPO) paper
on the collective management of copyright and related rights (the
WIPO Paper) outlined the German, Hungarian and French
collection systems, and described the latter as a simple,
‘easy and cost-effective’ procedure.
In September 2001, the European Union adopted the
European Council Directive (2001/84/EC) on the resale right for
the benefit of the author of an original work of art. It obliged
all member states to introduce the right by 1 January 2006 for
living artists, and by 1 January 2012 for the benefit of heirs and
estates of artists who have died within the previous 70
years. Key provisions to be implemented were inalienability,
a sliding scale starting at four per cent for works over
€3,000 to 0.25 per cent for works over €500,000, and
a maximum resale royalty of €12,500 payable on any one
sale. The Directive allowed for some discretion with
respect to such matters as:
- lowering the minimum sale threshold of €3,000
- increasing the minimum royalty from 4 per cent to 5 per
cent on sales in the lowest band, up to €50,000, and
- an optional exemption for works acquired from the artist less
than three years before the sale and sold for a price not exceeding
A report for the Arts Council of England, Implementing
Droit de Suite (artists’ resale right) in England
(the ACE Report) provided an overview of the resale royalty schemes
operating in Belgium, Denmark, Finland, France, and Germany as well
as the scheme in California, although many of the statistics are
In enacting regulations to adhere to the EU Directive the United
Kingdom adopted The
Artist’s Resale Right Regulations 2006 (the UK
Regulations). Subregulation 3(1) provides that:
(1) The author of a work in
which copyright subsists shall, in accordance with these
Regulations, have a right (‘resale right’) to a royalty
on any sale of the work which is a resale subsequent to the first
transfer of ownership by the author (‘resale
Further, subregulation 12(4) provides that:
(4) The sale of a work
is not to be regarded as a resale if—
seller previously acquired the work directly from the author less
than three years before the sale; and
(b) the sale price does not exceed 10,000
The UK Regulations did not establish an artists’ fund or
collection by one main agency. This was one of the options
envisaged in the ACE Report and is a feature of the German model,
much admired by the ACE Report as ‘most efficient’ in
its ability to monitor auction sales and keep collecting costs
Germany is the EU’s largest art market behind the UK and
France, and the system running there since 1965 includes an
inalienable right transferable to heirs and continuing for 70 years
after the artist’s death. The system has effected a broad
payment recipient reach in the following ways:
- an artist is entitled to 5 per cent of the sale price
- gross sale price includes commission fees and taxes
- the minimum sale threshold price is set at just
- the scheme applies to public and private sales (although in
practice is only enforced on public sales)
- the artists’ collecting society, Bild-Kunst
(BK), has the right to request sales information of art dealers and
auction houses, and payment collection is co-ordinated by an
independent, Ausgleichsvereinigung Kunst, and then
transferred to the BK, and
- part of the money collected goes to a Sozialwerk
scheme for ‘artists in need’ (for example, ‘in
emergency cases, occupational disability or old age’), where
those artists do not qualify for an official pension from the
Künstlersozialversicherungsgesetz (a government
social security scheme for artists), and
- part of the money goes to a Kulturwerk (cultural work)
scheme which fosters and supports contemporary fine art through,
for example, competitions. 
In April 2007, the New Zealand Government released its
Resale Royalty Right for Visual Artists: Discussion
Paper and in May 2008, the
Government introduced the Copyright (Artists’ Resale
Right) Amendment Bill 2008 (the NZ Bill). The purpose of the Bill
is to amend the Copyright Act 1994 (NZ) in order to
establish a royalty payment scheme for artworks resold on the
secondary art market. The NZ Bill provides for a resale right that:
- applies to artists who are residents or citizens of New
Zealand, or who are nationals of reciprocating countries that offer
a similar right to nationals of New Zealand
- entitles an artist to receive a resale royalty payment each
time an original artistic work is resold on the secondary art
- will apply only where ownership in a work is transferred by
sale after the first transfer of ownership of that work by the
artist. It will not apply to the first sale or transfer of an
artistic work, and it will not apply to sales between private
- will apply to an artistic work in which copyright exists,
including limited editions made by the artist or made under the
artist’s authority, but excluding works of architecture
(being a building or a model of a building)
- is inalienable and cannot be waived, assigned, or charged
- can be transmitted only on the death of the holder of the
- will be an additional percentage of the resale price (excluding
tax charged under section 8 or 11 of the Goods and Services Tax
Act 1985 (NZ))
- will apply only to sales that are above a specified minimum
threshold in value to be set, along with the rate, by
- will engender royalties payable to those entitled under a
deceased artist’s will (or their successors), for the same
duration as copyright in a work, being 50 years after the death of
- will engender a resale royalty when an artistic work is sold on
the secondary art market through any auction house, gallery,
dealer, or other intermediary or professional involved in the
business of dealing in works of art, with the seller, together with
the art-market intermediary or professional involved in the sale,
jointly and severally liable for payment of a resale royalty (or,
if there are no agents, the seller and the buyer, as long as they
are acting in the course of the business of dealing in artistic
- will involve the collection of royalties through a compulsory
collection system by the sole collecting agency on behalf of
artists, whether or not they are members of that agency.
The NZ Bill was referred to the Government Administration
Committee (the Select Committee) and has not yet been
enacted. The Select Committee’s report is not due until
30 June 2009.
The principal arguments for a resale royalty scheme are that it
is broadly supportive of Australia’s international treaty
obligations and that it would assist artists in recovering resale
royalties from overseas.
Australia is a party to a number of international copyright
treaties and conventions including:
International copyright protection is achieved under these
treaties and conventions through the principle of ‘national
treatment’. Essentially, each convention member country gives
the same rights to the nationals of other convention countries as
it gives to its own nationals under its own law. The laws of
members of the conventions or treaties must conform with the
minimum rights specified in the conventions or treaties.
An artist or his or her family is thus entitled to royalties for
the sale of work after the first sale, but the right is subject to
the conditions imposed by the laws of individual contracting
members. A principle of ‘reciprocity’ is also at play so
that an author can claim a resale royalty, as provided in the
convention, when in a foreign country to the same extent as home
nationals but only if the author’s home state also recognises
the ‘droit de suite’.
Consistent with the Berne Convention, the sale of an Australian
work will usually only attract a resale royalty in a country if a
reciprocal right exists in Australia for artists of that
country. If Australia does not have a scheme then Australian
artists whose work is sold abroad could be missing out on payments
that would otherwise be due. This will become more
significant as more Indigenous art attracts sales.
Some other arguments which favour the introduction of a resale
royalty right scheme are:
- The effect of the present copyright provisions is to unfairly
prejudice visual artists. The introduction of a resale
royalty scheme would ensure that the visual artist is fairly
rewarded and is encouraged to create further works.
- It is unfair for speculators to benefit from the intrinsic
value of an art work to the exclusion of the creator of that work
and the artist should share in this recognition of the true
- A resale royalty right could provide a means of authentication
of artworks. Each artist would have to give some public
notice of his or her claim which would assist in
Arguments against a resale royalty scheme in Australia
- A resale royalty scheme does not assist those who really need
help, but those who are popular and who would be commanding high
prices for their current works.
- A resale royalty scheme is difficult to police and the
administrative costs are high. These difficulties may not be
outweighed by the benefit to the artist. Almost all the high
administrative costs would be borne by a small percentage of
- The effect of a resale royalty scheme is reduced in the modern
art market where an increasing number of works are held by single
owners for longer periods, for example corporate purchasers and
acquisitions by government.
- A resale royalty scheme is based on the belief that young
artists sell works at below their true value because of a slow
popular understanding and appreciation of the artists who are ahead
of their time. The problem with a resale royalty scheme is the
relatively brief time period over which it operates (the copyright
period of life plus 70 years) as compared with the time it takes
for popular appreciation of works to catch up.
- A resale royalty scheme runs counter to usual notions of
property ownership, that is, what a purchaser buys belongs to him,
the purchaser assuming the risk of its value decreasing and taking
the profit if its value increases.
- A resale royalty scheme will inhibit the local art market in so
far as collectors will hesitate to buy works which are still within
the copyright term. The costs of the resale royalty scheme
will be passed on to purchasers in the form of higher prices.
Higher prices will cause purchasers to buy less art and may
encourage art sales to go underground or offshore to places which
have no such scheme.
At its meeting on 4 December 2008, the Selection of Bills
Committee deferred consideration of the Bill until its next
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Funding of $1.5 million over three years to support the
implementation of a resale royalty scheme was committed by the
Government in the 2008–09 Budget.
Clause 3 of the Bill contains relevant
definitions including, but not limited to, the following:
- ‘buyer’ in relation to
the commercial resale of an artwork, means a person to whom, either
alone or together with one or more other persons, ownership of the
artwork is transferred under the commercial resale.
- ‘collecting society’
means the society appointed under section 35
- ‘seller’ in relation to
the commercial resale of an artwork, means a person who, either
alone or together with one or more other persons, transfers
ownership of the artwork under the commercial resale.
- ‘time of a commercial
resale’ is the earlier of:
- the start of the day on which ownership of the artwork is
transferred under the commercial resale, and
- the start of the day on which consideration for the commercial
resale is fully paid.
Division 1 of Part 2 sets out the basic framework for resale
Clause 6 defines a ‘resale
royalty right’ as ‘the right to receive
resale royalty on the commercial resale of an artwork’.
Subclause 7(1) defines
‘artwork’ as an original work
of graphic or plastic art that is either:
- created by the artist or artists, or
- produced under the authority of the artist or artists.
According to subclause 7(2),
‘works of graphic or plastic
art’ include ‘pictures, collages,
paintings, drawings, engravings, prints, lithographs, sculptures,
tapestries, ceramics, glassware and photographs’.
The term ‘commercial
resale’ of an artwork is defined in
subclause 8(1) as having occurred if:
- ownership of the artwork is transferred from one person to
another for monetary consideration, and
- the transfer is not the first transfer of
ownership of the artwork.
Subclause 8(2) excludes from the definition of
‘commercial resale’ those transfers which do not
involve an art market professional acting in that capacity. This means that
the scheme will not include private sales between individuals or
organisations which are not in the business of dealing in works of
Clauses 9–11 make clear that a
‘resale royalty right’ does
not exist in the following circumstances:
- for the commercial resale of a building, drawing, plan or model
for a building, a circuit layout, or for a manuscript of a
literary, dramatic or musical work: clause
- for the commercial resale of an artwork where the sale
price is less
than AUD$1 000 or its equivalent in foreign currency or a higher
amount if that amount is prescribed by regulations: clause
- for those artworks in existence at the commencement of Part 2
of the proposed Act, on the first transfer of ownership even if
that transfer is a commercial resale: clause
Division 2 of Part 2 defines who holds the resale royalty
Where the artwork is created by a single artist who is living at
the time of the resale, the resale royalty right is held by the
artist if he or she satisfies the ‘residency test’ at
the time of the commercial resale: subclause
Where the artwork was created by a single artist who is no
longer living but who satisfied the residency test immediately
before their death, the resale royalty right is held by their
successors in title as long as they satisfy the residency test
and the ‘succession test’ at the time
of the resale: subclause 12(2).
Where the artwork was created by more than one artist, each
artist who is living at the time of the commercial resale holds the
resale royalty right on the same terms as subclause 12(1).
Where an artist is no longer living at the time of the
commercial resale, the resale royalty right is held in the same
terms as subclause 12(2): subclause 12(3).
Under clause 13, resale royalty rights will
only accrue to a living artist, or to the successors in title of an
artist who is no longer living, if the person is
‘identified’ as the artist of
the artwork at the time of the commercial resale by:
- a seller or buyer of the artwork
- an art market professional acting as agent for a buyer or
seller of the artwork
- the collecting society, or
- for an artwork which was created by more than one artist, one
of the other artists.
The ‘residency tests’ for
an individual, a corporation and an unincorporated body are
outlined in clause 14. In particular
subclause 14(1) provides that an individual
satisfies the residency test if they are an Australian citizen, or
a ‘permanent resident’ of
Australia, or a
citizen of a country prescribed as a reciprocating country.
There are four criteria to the ‘succession
test’ which is set out in clause
15. An entity satisfies the succession test by
either satisfying both criteria 1 and 2, namely:
- the entity received its interest in the resale royalty right as
an inheritance under a Will (or other testamentary disposition) or
under the rules of intestacy following the death of an individual:
subclause 15(2) and
- the entity is either an individual, charity, charitable
institution, community body or a trustee who has a beneficial
interest in the resale royalty right: subclause
or satisfying both criteria 3 and 4, namely:
- the entity received its interest in the resale royalty right
upon the winding up of a charity, charitable institution or
community body: subclause 15(4) and
- the entity is a charity, charitable institution or community
body ‘formed for substantially the same purposes as the body
that was wound up’: subclause 15(5).
Clause 16 sets out the amount of resale royalty
right payable to each artist if there is more than one creator of
the artwork. Where all of the artists are living, each artist
is entitled to an equal share of the resale royalty right unless
they have agreed to apportion the shares differently and that
agreement does not give a share of the resale royalty right to a
person other than the living artist (other than through
testamentary disposition such as a Will, or by operation of the
rules of intestacy): subclause 16(1). Where
one of the identified artists is no longer living but satisfied the
residency test immediately before their death, it is the share they
would have been entitled to if they had been alive, identified and
satisfied the residency test at the time of the resale:
Under clause 17, a mark or name appearing on an
artwork which purports to identify a person as an artist of that
artwork is prima facie evidence that the person is the artist of
Clause 18 provides that the resale royalty is
payable at the rate of five per cent (5%) of the sale price on the
commercial resale of an artwork.
Division 4 of Part 2 of the Bill deals with liability to pay
Resale royalty is a debt due to the holder or holders of the
resale royalty right: clause 19. Payment of
the resale royalty is to be made by the seller, the buyer or any
art market professional who is acting as agent for either the
seller or the buyer, all of whom are jointly and severally liable
for the debt: clause 20. This could lead to a
circumstance where one party to an agreement for the sale of an
artwork may be required to pay the resale royalty, despite having
agreed with the other party that they would pay it, and having
expected that the royalty was paid at the time of the
The liability to pay the resale royalty arises at the time of
the commercial resale of the artwork: clause
Division 5 of Part 2 of the Bill sets out the manner in which
the collecting society is to collect the resale royalty. The
process is essentially as follows:
- The seller or the seller’s agent must give the collecting
society a notice of the commercial resale in writing within 90 days
beginning at the time of the commercial resale: clause
28. Failure to give the notice in the required terms
incurs a civil penalty of 200 penalty units for individuals (an
amount of $22 000) and 1 000 penalty units for corporations (an
amount of $110 000): subclause 28(1).
- The collecting society is empowered by clause
29 to request in writing that a person whom it believes to
be a seller, buyer, agent of a seller or buyer, or an art market
professional involved in a commercial resale of an artwork, provide
it with information about the commercial resale so that it can
determine the amount of the resale royalty payable and who is
liable to make the payment.
- The information sought by the collecting society can relate to
a commercial resale which occurred up to six years prior to the
request. The information must be provided within 90 days of
the date of the request. Failure to provide information in
accordance with the notice incurs a civil penalty of 100 penalty
units for an individual (an amount of $11 000) and 500 penalty
units for corporations (an amount of $55 000): subclause
- Once the collecting society has become aware of the commercial
sale of an artwork (either by receiving a notice from the seller or
by any other means) and has formed a belief on reasonable grounds
that an entity may hold a resale royalty right, it must publish a
notice of the commercial resale on its website: clause
- The holder or holders of the resale royalty right have 21 days
from the date of that publication to notify the collecting society
that they do not require the collecting society to
collect the royalty or enforce the right on their behalf:
subclause 23(1). Unless the collecting
society has received the notice within the specified time from the
holder or all the holders of the resale royalty
right, then the collecting society is required to collect the
retail royalty on behalf of the resale royal right holder or
- At the same time, an entity which claims to hold a resale
royalty right or interest may give the
collecting society a written notice setting out, amongst other
things, the proportion of the resale royalty right to which they
claim they are entitled: clause 27. Where
the collecting society requires further information about the
entity or the relevant proportion of the resale royalty right, the
collecting society is empowered to serve a notice on the entity
requiring the information be provided within a specified time of no
less than 60 days: subclause 27(2).
- Once the collecting society has received the resale royalty, it
must pay to each entity which has
established a resale royalty right by way of a clause 27 notice the
amount of that royalty and must also use its best endeavours to
locate any other resale royalty rights holder in order to pay that
entity its proportional share: subclause
26(1). The collecting society may deduct an
administration fee from the amount of the resale royalty payable,
but the fee must not amount to a tax: subclause
26(2). According to subclause 26(3)
the Minister may limit the amount of the administration fee to be
Where the collecting society erroneously pays resale royalty on
a commercial resale of an artwork to a person who does not actually
have a resale royalty right, then the amount wrongly paid is a debt
due by the person who received the royalty payment to the person
who is the actual holder of the royalty right: subclause
30(1). Similarly, where the collecting society
erroneously pays a person a higher proportion of resale royalty
than they were entitled to receive, then the difference between
amount paid and the person’s actual resale royalty share is a
debt due by the person to the other holder or holders of the resale
royalty right: subclause 30(2). In either of
those circumstances the holder of the resale royalty right can ask
the collecting society to collect or enforce repayment of the
amount on their behalf: subclause 30(3).
Under clause 31, where the collecting society
has received resale royalty but cannot, during a period of six
years from the time of the commercial resale, locate the holder of
the resale royalty right then it must
distribute the amount with interest earned, less the collecting
society’s administration fee:
- to the remaining resale royalty right holders who can be
- if the resale royalty rights holder cannot be located, to the
persons who paid the resale royalty, or
- if the payer cannot be located, retain the amount for use in
the collection and distribution of resale royalties and the
enforcement of resale royalty rights.
Where there is only one artist of the artwork, the resale
royalty right continues to subsist until the end of 70 years after
the end of the calendar year in which the artist dies:
paragraph 32(a). Similarly, where there is
more than one artist of the artwork, each proportion of the resale
royalty right held by each artist continues to subsist until the
end of 70 years after the end of the calendar year in which that
artist dies: paragraph 32(b).
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A body may apply to the Minister to be appointed as the collecting
society: subclause 35(1). The Minister must
decide whether to appoint the body or to refuse to appoint the body
as the collecting society: subclause 35(2).
Either of those decisions may be reviewed by the Administrative
Appeals Tribunal: paragraph 49(a).
The Minister may only appoint one body at a time:
A body cannot be appointed as the collecting society unless:
- it is a company limited by guarantee and incorporated under the
Corporations Act 2001: paragraph
- all resale royalty right holders are entitled to become its
members: paragraph 35(4)(b) and
- its rules prohibit the payment of dividends to its members:
In addition paragraph 35(4)(d) requires that
the rules of the collecting society contain provisions which may be
determined by legislative instrument by the Minister to ensure the
interests of resale royalty rights holders and their agents
- the collection of amounts of resale royalty
- distribution of amounts collected by the society
- holding on trust by the collecting society of amounts, and
- access to records of the collecting society by holders of
resale royalty rights or their agents.
Under paragraph 35(2)(a) the Minister must
not appoint a body as the collecting society for a period
longer than five years.
Clause 36 provides that the Minister may, by
notice published in the Gazette, revoke the
appointment of the collecting society in circumstances where:
- it is not functioning adequately as a collecting society:
- it is not acting in accordance with its rules or in the best
interests of its members: subparagraph
- it has altered its rules so that they do not comply with the
requirements of paragraphs 35(4)(b)–(d): subparagraph
- it has refused or failed, without reasonable excuse, to comply
with the requirements that it prepare an annual report for the
provide annual audited accounts to the Minister and send copies of any altered
rules to the Minister: subparagraph 36(1)(a)(iv).
In addition, the Minister may revoke an appointment at the
written request of the collecting society: paragraph
36(1)(b). The revocation of the appointment takes
effect on the day on which the notice is published in the Gazette,
or on a later day if specified: subclause
Clause 39 provides that the collecting society
may apply on behalf of the Commonwealth to the Federal Court or the
Federal Magistrates Court for an order that a person who has
contravened a ‘civil penalty provision’ in the proposed
Act (currently clauses 28 or 29) must pay the
Commonwealth the amount of the pecuniary penalty. The application must be
made within six years of the contravention: subclause
If the Court is satisfied the person has contravened a
‘civil penalty provision’, the Court may order the
person to pay an amount of pecuniary penalty which the Court
considers appropriate for each contravention, but not more than the
amount specified in the relevant provision: subclause
39(2). Subclause 39(3) sets out the
matters to which a Court must have regard in determining the
If the Court orders a person to pay a pecuniary penalty it is
payable to the Commonwealth and the Commonwealth may enforce the
order as if it were a judgment of the Court: clause
Under clause 44, the Federal Court or Federal
Magistrates Court must not make a pecuniary penalty order against a
person for a contravention of a civil penalty provision if the
person has been convicted (in criminal proceedings) of an offence
constituted by conduct that is substantially the same as the
conduct constituting the contravention.
Civil proceedings for a pecuniary penalty order are stayed (or
put on hold) if criminal proceedings are started against the person
before the civil proceedings have been resolved: subclause
45(1). If the person is not ultimately convicted in
the criminal proceedings, the civil proceedings may be resumed:
If civil proceedings have been taken and completed against the
person for alleged contravention of a civil penalty provision,
regardless of the outcome of those proceedings, criminal
proceedings may still be brought against the person ‘for
conduct that is substantially the same as conduct constituting a
contravention of a civil penalty provision’: clause
46. The subsequent criminal proceedings do not
infringe the rule against double jeopardy (often expressed as
autrefois acquit or autrefois convict), being
that no person can be tried (or punished) for the same offence
Clause 48 provides that it is a criminal
offence for a person who has acquired information in the course of
carrying out their functions under the proposed Act to make a
record of, disclose or otherwise use the information. The
penalty is imprisonment for two years. A person does not
commit an offence in the following circumstances:
- where the person records, discloses or uses the information in
the course of performing their duties under the Act:
- where the person acquires the information for any other lawful
purpose: paragraph 48(2)(b) and
- where the person to whom the information relates consents to
the recording, disclosure or use of the information:
paragraph 48(2)(c). .
Clause 50 sets out the jurisdiction of the
Federal Court as follows:
- to enforce a resale royalty right on the commercial resale of
- to determine who is the holder of a resale royalty right
- to enforce the payment of a share of the resale royalty right
from the collecting society
- to recover amounts of resale royalty wrongly paid by the
- to enforce the civil penalty provisions, and
- relating to any other matters under the Act.
Clause 51 extends the same jurisdiction to the
Federal Magistrates Court.
Clause 53 sets out the authority of the
Governor-General to make regulations under the proposed Act.
As can been seen from the ‘Background’ section of
this digest there have been a number of formal inquiries into the
issue of a resale royalty right. Some have made
recommendations in favour of a resale royalty scheme such as the
one proposed by this Bill, and others, in particular the Senate
Standing Committee on Environment, Communications, Information
Technology and the Arts as recently as 2007, did not.
Furthermore, even within the art world, there are mixed views about
whether the proposed scheme will ensure that resale royalties
actually reach those to whom they should be paid.
That being the case, it would be prudent to include within the
Bill a requirement that the scheme be reviewed by Senate Committee
within three years of its commencement, to assess its overall
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Australian Copyright Council,
‘Droit de suite: the Art Resale Royalty and its
Implications for Australia’, Australian Copyright
Council, Sydney, February 1989, p. 9.
ibid., p. 10.
ibid., pp. 7–8.
At present Viscopy—
the Visual Arts Copyright Collecting Agency—licenses the
copyright in artistic works and pays the artist or copyright owner
a royalty for the reproduction.
accessed on 7 January 2009.
Contemporary_Visual_Arts_and_Craft_Inquiry.pdf, accessed on 7
accessed on 7 January 2009.
Department of Communications,
Information Technology and the Arts, ‘Proposed Resale
Royalty Arrangement: Discussion Paper’, Australian
Government, released July 2004,
Arrangement_Discussion_Paper.pdf, accessed on 7 January
Access Economics, ‘Evaluating the
impact of an Australian resale royalty on eligible visual
artists’, 2004, p. 1,
accessed on 7 January 2009.
P. Anderson, ‘Resale
royalties and new directions for the Arts’,
FUEL4ARTS.COM, March 2008, p. 1.
/2004-07/indigenous_arts/report/report.pdf, accessed on 7
ibid., p. 160.
ibid., p. 174.
ibid., p. 175.
Katrina Strickland, ‘Critics pressure
Garrett about resale plan’, Australian Financial
Review, 27 November 2008, p. 44.
Peter Garrett, MP, ‘Federal
Labor Arts Policy Discussion Paper’, Australian
Labor Party, 2006, p. 13.
The Hon P. Garrett MP, Minister for the
Environment, Heritage and the Arts,
Resale royalty rights for Australia’s visual
artists, media release, 13 May 2008,
accessed on 7 January 2009.
Katrina Strickland, ‘High
Court challenge looms over royalty scheme’,
Australian Financial Review, 20 November 2008, p. 48.
Katrina Strickland, ‘Resale
royalties may face constitutional hitch’, Australian
Financial Review, 21 August 2008, p. 7.
and Artists Copyright Society offers a list of countries which
have a resale royalty right.
Department of Communications, Information
Technology and the Arts, op. cit., p. 17.
accessed on 7 January 2009, p. 19.
The text of the Directive is available at
accessed on 7 January 2009.
Article 3, European Council Directive
Article 1(3), European Council Directive
Clare McAndrew and Lorna Dallas-Conte,
Implementing Droit de Suite (artists’ resale right) in
England, The Arts Council of England, London, 2002, pp.
See Bild-Kunst, ‘Foundation social
accessed on 7 January 2009.
S. Stern, ‘The Collecting Societies
– How is Droit de Suite exercised?’, E-zine,
vol. 16, iss. 4, April 2002. See also International
Confederation of Societies of Authors and Composers, and
artists’ resale royalties in Germany through VG
Bild-Kunst. A description of the Bild-Kunst’s
cultural fund is available at http://www.bildkunst.de/html/index_e.html,
accessed on 7 January 2009.
accessed on 18 December 2008.
See the New Zealand Parliament’s Bills
Digest No. 1619 at
accessed on 18 December 2008.
See ‘Select Committee Details: Government
accessed on 7 January 2009.
For further details, see the
Attorney-General’s Department website at:
accessed on 22 December 2008.
Article 14 of the Berne Convention provides
(1) The author, or after his death the persons or
institutions authorized by national legislation,
shall, with respect to original works of art and original
manuscripts of writers and composers, enjoy the inalienable right
to an interest in any sale of the work subsequent to the first
transfer by the author of the work.
(2) The protection provided by the preceding paragraph
may be claimed in a country of the Union only if legislation
in the country to which the author belongs so permits, and to the
extent permitted by the country where this protection is
Article 5, Berne Convention and the TRIPS Agreement.
Alexander Weatherall, ‘Harmonising the
Droit de Suite: a Legal and Economic Analysis of the EC Directive
and an Overview of the Recent Literature’, German Working
Papers in Law and Economics, Vol. 2003: Article 22, at
accessed on 22 December 2008.
Australian Copyright Council, op. cit., p.
ibid., p. 26.
ibid., p. 27.
ibid., p. 29.
ibid., p. 28.
ibid., p. 27.
ibid., p. 29.
Selection of Bills Committee, Report No. 17
of 2008, 4 December 2008, paragraph 4.
The Department of Environment, Water, Heritage
and the Arts,
Budget Statements 2008-09, Commonwealth of Australia,
Canberra, p. 26; and Hon. Peter Garrett, Minister for the
Environment, Heritage and the Arts, ‘Resale
Royalty Rights for Australia’s Indigenous
Artists’, media release, Canberra, 13 May 2008.
More information about the
‘collecting society’ is
contained in Part 3 of the Bill.
This provides for situations in which an artist
creates a design and directs a production team such as a bronze
foundry, or a master craftsman such as a print maker produces or
assists in producing the final artwork. See Explanatory
Memorandum, p. 4.
This is in accordance with the description in
Chapter 1, Article 2, Paragraph 1 of the EU Directive.
An ‘art market
professional’ is an auctioneer, the owner or
operator of an art gallery, the owner or operator of a museum, an
art dealer, or a person otherwise involved in the business of
dealing in artworks: subclause 8(3).
This is consistent with Paragraph 19 of the
preamble to the EU Directive.
price’ means the amount paid for the artwork by
the buyer including GST, but not including any buyer’s
premium or other tax payable on the sale: subclause
The Explanatory Memorandum provides the
following useful example:
‘A sculpture created in 1994 by a now-deceased artist and
first purchased in 1995 sells at auction for a sale price of $800
000, in August 2009, after the scheme has commenced. There
will be no resale royalty payable to the artist on this sale, as it
is the first transfer of ownership of the work following the
introduction of the resale royalty right. The same sculpture
is sold again through a dealer in July 2010 for a sale price of
$900,000. This second sale triggers a resale royalty payment
of $45 000 which would be paid to the heirs of the deceased
artist.’: p. 7.
test’ is defined in clause 14.
test’ is defined in clause 15.
The role of ‘the collecting society’
is covered in Part 3.
Clause 3 contains the
definition of ‘permanent
resident’ which means a person who is not
an Australian citizen and whose normal place of
residence is situated in Australia. In addition, their
presence in Australia is not subject to any limitation as to time
imposed by law, and they are not an unlawful non‑citizen.
Clause 53 provides for the making of regulations
prescribing matters for the purposes of the proposed Act.
several’ means ‘together and
separate’. When used in connection with the liability
of two or more persons, it means that each person is liable
together and individually. The liability may be enforced
against all, or any, or only one of the persons bound by joint and
several liability. Butterworths Concise Australian Legal
Dictionary, third edition, LexisNexis Butterworths, Australia,
2004, p. 238.
This is in line with the EU Directive which
states that it is the seller who is responsible for the resale
Applying section 19A of the Acts
Interpretation Act 1901, a reference to ‘the
Minister’ is a reference to the Minister for the Environment,
Heritage and the Arts.
Under the Legislative Instruments Act
2003, a ‘legislative instrument’ is required to be
tabled in both Houses of the Parliament and is subject to
This decision is reviewable by the
Administrative Appeals Tribunal under paragraph
Under clause 36.
Under clause 37.
Under clause 38.
The phrase ‘civil penalty provision’
is defined in clause 40.
The Model Criminal Code Officers Committee
(Commonwealth Attorney-General’s Department) issued a
discussion paper on double jeopardy in November 2003.
Following the receipt of public submissions, that Committee
released a report in March 2004, which was then considered by the
Standing Committee of Attorneys-General at its meeting on 18-19
March 2004. According to the Attorney-General’s
website: ‘This matter remains with the Standing Committee of
Attorney-Generals’. For further information on the
issue of double jeopardy in Australia, see
accessed on 7 January 2009.
Dr John Gardiner-Garden, Paula Pyburne
20 January 2009
Bills Digest Service
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2415 (John
Gardiner-Garden) or (02) 6277 2434 (Paula Pyburne).
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