Building Corporation WA Pty Ltd v Marshall - [2021] WASC 242

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   BUILDING CORPORATION WA PTY LTD -v- MARSHALL [2021] WASC 242
CORAM:   TOTTLE J
HEARD:   20 JULY 2021
DELIVERED          :   28 JULY 2021
FILE NO/S:   CIV 2186 of 2020
BETWEEN:   BUILDING CORPORATION WA PTY LTD
Plaintiff
AND
ARTHUR PATRICK MARSHALL
JEANETTE ELLEN MARSHALL
First Defendants
MARK FREDERICK RIETVELD
Second Defendant
RIETVELD ARCHITECTS PTY LTD
Third Defendant
MERCEDES GROUP PTY LTD
Fourth Defendant
ILIADIS & ASSOCIATES PTY LTD
Third Party

Catchwords:

Practice and procedure – Application for a trial of a preliminary issue – Considerations of utility, economy and fairness favour a hearing of the proposed preliminary issue – Turns on own facts – Application granted

Legislation:

Copyright Act 1968 (Cth), s 10(1), s 32(1), s 35(6), s 36(1)
Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B, O 19 r 8, O 32 r 4

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff	:	Mr M C Hotchkin
First Defendants	:	Mr W C J Zappia
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Third Party	:	No appearance

Solicitors:

Plaintiff	:	Hotchkin Hanly
First Defendants	:	Bennett + Co
Second Defendant	:	DLA Piper Australia - Perth
Third Defendant	:	DLA Piper Australia - Perth
Fourth Defendant	:	Jackson McDonald
Third Party	:	Barry Nilsson Lawyers

Cases referred to in decision:

Agricultural & Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570
Australian National Industries Ltd v Spedley Securities Ltd (1992) 26 NSWLR 441
Bass v Permanent Trustee Company Limited [1999] HCA 9; (1999) 198 CLR 334
Beck v Montana Constructions Pty Ltd (1963) 5 FLR 298
Bindaree Beef Pty Ltd v Raymoon Pty Ltd [2006] NSWCA 35
Blair v Osborne & Tomkins [1971] 2 QB 78
Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47
City of Swan v Lehman Bros Australia Ltd [2009] FCA 784; (2009) 73 ACSR 86
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55; (2006) 229 CLR 577
Fazio v Fazio [2012] WASCA 72
Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd [2005] FCA 1521; (2005) 225 ALR 57
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29
Hardingham v RP Data Pty Ltd [2019] FCA 2075
Jacobson v Ross & Jacobson [1995] 1 VR 337
James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583
Landsdale Pty Ltd v Moore [2009] WASCA 176
Regional Power Corporation v Pacific Hydro Group Two Pty Ltd [2013] WASC 46
Robin Ray v Classic FM Plc (1998) 41 IPR 235; [1998] FSR 622
Stovin‑Bradford v Volpoint Properties Ltd [1971] 3 All ER 570
The Administration of the Territory of Papua and New Guinea v Guba [1973] HCA 59; (1973) 130 CLR 353

TOTTLE J:

Introduction

In this action the primary issue is whether the defendants have infringed the copyright in design concept plans and related drawings (embodying 'the Giorgi Design') prepared by the plaintiff in respect of a home to be built on a property owned by the first defendants.
The plaintiff claims the Giorgi Design is an artistic work and it owns the copyright.[1] One of the defences raised by the first defendants is that, if there is copyright in the Giorgi Design and the copyright is owned by the plaintiff, the agreement between the plaintiff and the first defendants contained an implied non-exclusive licence to use the Giorgi Design for certain purposes which, by reason of the operation of s 36(1) of the Copyright Act 1968 (Cth), negates the possibility of any infringement.
[1] Copyright Act 1968 (Cth), s 10(1), s 32(1), s 35(6).
The first defendants have applied to have the issue of whether such a licence was granted determined as a preliminary issue ('the licence issue').[2] The plaintiff opposes the application. The fourth defendant and the third party consent to the application and the second and third defendants neither consent nor oppose the application.
[2] The application is brought by a minute of proposed orders filed by the first defendants on 20 April 2021.
The first defendants' application is supported by an affidavit affirmed by Mr Charles Dallimore on 3 May 2021. Mr Dallimore is one of the first defendants' solicitors. In his affidavit he explains the basis upon which various cost estimates to which I refer later in these reasons were prepared. Mr Dallimore attaches to his affidavit a copy of the documents said to constitute the written agreement between the plaintiff and the first defendants.

The pleaded cases

So far as is relevant to this application the parties' pleaded cases may be summarised as follows.
The plaintiff contends it is a multidisciplinary company that designs and builds luxury residential dwellings in and around Perth trading under the name of 'Giorgi Architects & Builders'.
The first defendants are the registered proprietors of a property located in Mosman Park, Western Australia.
The plaintiff alleges that in 2014 the first defendants, through their daughter Ms Colleen Hurst, acting as their agent, contacted the plaintiff to see whether it would be able to assist them with the design and construction of a new home.[3] The plaintiff supports this plea by reference to five emails exchanged between Ms Hurst and a member of the plaintiff's staff, Ms Ford, between 1 April and 6 May 2014. The first defendants do not admit this allegation but say that Ms Hurst met Ms Ford 'in or around March 2014' and 'verbally discussed' preparing a concept design for a residential building on the first defendants' property.[4] The plaintiff alleges that in April 2014 the first defendants entered into an agreement with the plaintiff for the design and construction of 'a luxury residential dwelling' on the first defendants' property (the Giorgi Design Agreement).[5] On the pleadings it is not in dispute that the Giorgi Design Agreement was in writing. The writing took the form of a printed pro‑forma document produced by the plaintiff and entitled 'Design Agreement'.[6] The plaintiff alleges that the Giorgi Design Agreement contained express terms that:
[3] Statement of claim dated 1 December 2020 [11].
[4] First defendants' amended defence and re‑amended cross‑claim filed 15 June 2021 [11].
[5] Statement of claim dated 1 December 2020 [12].
[6] Annexure 'CMD‑1' to Mr Dallimore's affidavit.
(a)the plaintiff would perform the following work:
(i) site inspection;
(ii) site survey;
(iii) design concept plan;
(iv) 3D image; and
(v) full specification and fixed price proposal,
(b)copyright of the designs would remain the property of the plaintiff; and
(c)the design fee would be credited against the building contract.
The first defendants admit that they entered into the Giorgi Design Agreement but deny the agreement provided for the construction by the plaintiff of a residence.[7] They point to the absence of any obligation on the part of the first defendants to enter into a building contract with the plaintiff. The first defendants allege that the agreement contained an implied non‑exclusive licence (implied in law, alternatively implied as necessary to give business efficacy), in effect, permitting the first defendants:[8]
(a)to construct a building on their property in accordance with any designs prepared pursuant to the agreement; and
(b)employ a builder or another architect to enable them to make copies of or otherwise reproduce any substantial part of any designs prepared pursuant to the agreement and use them for constructing a residence on the property.
[7] First defendants' amended defence and re‑amended cross‑claim filed 15 June 2021 [12].
[8] First defendants' amended defence and re‑amended cross‑claim filed 15 June 2021 [13].
In the alternative, the first defendants contend that given that they paid the plaintiff $5,000 in accordance with the Giorgi Design Agreement, and that there was no binding obligation arising from that agreement to retain or engage Giorgi to undertake and design any development beyond the concept design phase, they acquired an irrevocable non‑exclusive licence in the terms for which they contend.[9]
[9] First defendants' amended defence and re‑amended cross‑claim filed 15 June 2021 [33].
The plaintiff denies that such a licence can be implied into the Giorgi Design Agreement because:[10]
[10] Plaintiff's outline of submissions in opposition to the first defendants' application for a trial of preliminary issues filed 25 June 2021 [6] and reply [3(c) ‑ (e)].
(a)the terms of the licence are inconsistent with the express terms of the Giorgi Design Agreement;
(b)its terms exceed any term implied by law;
(c)the factual basis for implication is not met, because:
(i)the design fee of $5,000 paid by the first defendants to the plaintiff pursuant to the Giorgi Design Agreement on or about 2 April 2014 was a 'nominal' fee, and the amount charged by the plaintiff did not reflect the actual cost of preparing the Giorgi Design; and
(ii)entry into the Giorgi Design Agreement was the first part of a staged and co‑operative process between the first defendants and the plaintiff where the parties would work together to:
(A)agree a design;
(B)agree a fixed price proposal for the plaintiff to construct a residence on the first defendants' property;
(C)proceed to enter into a preparation of plans agreement to allow working drawings to be prepared for the purposes of obtaining development approval and a building permit; and
(D)enter into a fixed price construction contract together, for construction by the plaintiff of a residence on the property.
(d)there is no factual basis for establishing that the licence is necessary to give business efficacy to the Giorgi Design Agreement.
The plaintiffs allege that following entry into the Giorgi Design Agreement:
(a)the plaintiff provided Ms Colleen Hurst (the first defendants' daughter) on behalf of the first defendants, with the concept plans that embodied the Giorgi Design;[11]
(b)the first defendants made a decision not to proceed with the project with the plaintiff;
(c)the first defendants entered into an agreement with the fourth defendant (another 'luxury residential home builder' which trades as 'Zorzi Builders'), pursuant to which the fourth defendant, in conjunction with the second defendant and the third defendant, agreed to prepare plans, elevations and working drawings for a residence to be constructed on the first defendants' property;[12]
(d)the fourth defendant, alternatively the second defendant, alternatively the third defendant, prepared plans and elevations for a proposed residence on the property for the purpose of obtaining planning approval for construction of a residence on the property in accordance with those plans (Zorzi Design).[13]
[11] Statement of claim dated 1 December 2020 [14].
[12] Statement of claim dated 1 December 2020 [28].
[13] Statement of claim dated 1 December 2020 [30].
The plaintiffs allege the Zorzi Design reproduced a substantial part of the Giorgi Design,[14] and the plaintiff did not provide any consent or any licence to the defendants to reproduce the Giorgi Design, or a substantial part of the Giorgi Design.[15]
[14] Statement of claim dated 1 December 2020 [32].
[15] Statement of claim dated 1 December 2020 [33].
On that basis the plaintiff alleges:[16]
(a)the fourth defendant, second defendant and third defendant infringed the plaintiff's copyright in the Giorgi Design; and
(b)the first defendants authorised the second to fourth defendant's infringement of the Giorgi Design and thereby the first defendants also infringed the plaintiff's copyright in the Giorgi Design.
[16] Statement of claim dated 1 December 2020 [35].
Further, the plaintiff alleges that on a date currently unknown to it, the first defendants entered into a contract with the fourth defendant pursuant to which the fourth defendant constructed a residence on their property. That residence was constructed in accordance with the Zorzi Design and reproduced a substantial part of the Giorgi Design.[17]
[17] Statement of claim dated 1 December 2020 [37] ‑ [40].
Accordingly the plaintiff alleges:[18]
(a)the fourth defendant infringed copyright in the Giorgi Design; and
(b)the first defendants authorised the fourth defendant's infringement and thereby the first defendants also infringed the plaintiff's copyright in the Giorgi Design.
[18] Statement of claim dated 1 December 2020 [41].
The first defendants (relevantly, for the purpose of this application) deny any infringement and rely on the existence of a licence of the nature for which they contend.[19]
[19] First defendants' amended defence and re‑amended cross‑claim filed 15 June 2021 [33.1].
The plaintiff claims that by reason of the infringement of the copyright in the Giorgi Design it has been deprived of the opportunity to earn a gross profit of $1,347,942 from a building contract between it and the first defendants for the construction of a new house on the first defendants' property.
The plaintiff's claim against the second defendant is based on an allegation that he was employed by the plaintiff as an architect and, in that capacity owed the plaintiff various contractual and fiduciary duties which he breached by providing the first defendants or the fourth defendant with the Giorgi Design.[20]
[20] Statement of claim dated 1 December 2020 [8] ‑ [10], [45] ‑ [48].
The first defendants have attached to their defence a 'cross claim' against the fourth defendant by which they claim damages from the fourth defendant for alleged misleading or deceptive conduct. The relevant alleged misleading conduct being constituted by a representation by the fourth defendant to the effect that copyright in the Zorzi Design subsisted entirely in the fourth defendant. By its third party proceedings, the fourth defendant seeks an indemnity or contribution from the third party.
Before leaving the pleadings I observe that the first defendants have 'not admitted' many matters pleaded by the plaintiff that are not obviously controversial. For example, the first defendants have not admitted that the plaintiff is a building service contractor registered under the Building Services (Registration) Act 2011 (WA). My impression is that there is considerable room for the first defendants to narrow the issues to a much greater extent than is apparent from the current version of their defence.

Relevant rules and guiding principles

Order 32 r 4 of the Rules of the Supreme Court1971 (WA) provides:
4.Time of trial of questions or issues
The Court may order that any question or issue arising in a cause or matter whether of law or fact or partly of law and partly of fact, and whether raised by the pleadings or by agreement of the parties or otherwise be tried separately from any other question or issue whether before at or after the trial or further trial of the proceedings, and may direct that a case and the question or issue for decision be stated.
In Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd McKechnie J referred to a number of authorities from which he distilled the following principles relevant to making an order for a trial of a preliminary issue:[21]
[21] Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47 [4] (McKechnie J); see also the summary of the relevant principles by Rares J in City of Swan v Lehman Bros Australia Ltd [2009] FCA 784; (2009) 73 ACSR 86.
(a)A separate trial of issues is only appropriate in clear and simple cases.
(b)Separate trials of issues should only be embarked upon when the utility, economy and fairness are beyond question.
(c)The fact that the resolution of a separate trial may determine the litigation is relevant.
(d)Separate trials of issues may be appropriate where it is likely to save expense and inconvenience.
(e)There is a focus in the Rules of the Supreme Court on the expedition of determination of matters before the Court and separate trials of issues may advance the expedition.
(f)A possibility that the determination of issues tried separately may lead to settlement should be taken into account even though the issues may not finally dispose of the action.
(g)In many cases the formulation of specific questions to be tried separately, from and in advance of other issues, will assist in the resolution of the matters in issue if the questions are capable of final answer in accordance with the judicial process.
(h)Separate trials are inappropriate where the result depends on complex issues of fact or when a preliminary question is one of mixed fact and law.
(i)The procedure should be confined generally to cases where facts are complicated and the legal issues short, otherwise it can be a treacherous shortcut.
(j)Separate trials may be productive of delay, extra expense and uncertainty of outcome, which they are intended to avoid. Saving some time is often illusory when the parties have the necessity of making full preparation and factual matters relevant to one issue are relevant to others which overlap.
(k)There is potential for further appeals.
In Landsdale Pty Ltd v Moore,[22] in the context of an interlocutory appeal from the making of an order for a split trial, Newnes JA, with whom Buss JA (as his Honour then was) agreed acknowledged the requirement that the court should ensure that litigation is run efficiently in a manner reflecting the provisions of O 1 r 4A and r 4B of the Rules of the Supreme Court. While noting this may require a more flexible approach to applications for separate trials than that applied in the past his Honour made the following cautionary observations:[23]
... There is no doubt that at a time when the time and cost involved in litigation is a matter of legitimate public concern, it behoves the court to approach each case which comes before it with the object of eliminating any unnecessary delay or cost, and ensuring the efficient and timely resolution of the case, consistent with doing justice to both sides. That is reflected in O 1 r 4A and r 4B of the Rules of the Supreme Court 1971 (WA). But while that will often require a more flexible approach than might have been taken in the past, at the same time it is important that the lessons of the past are not forgotten, and that the court and the parties do not succumb to the immediate attraction of apparently more efficient but less conventional procedures without careful regard to past experience with such procedures.
In relation to the present case, experience has shown that the attraction of the separate trial of issues is often illusory; it is a course that often causes the very delay, additional expense and uncertainty of outcome it was intended to avoid. It is self‑evident that generally a trial on liability alone will be shorter and less costly than a trial on both liability and damages. But it is equally self‑evident that separate trials will not necessarily lead to the overall action being resolved sooner or at a lesser cost. If the plaintiff is successful on liability and it is necessary to have a further trial on the issue of damages, the contrary may well be the case. Separate trials also raise the prospect of separate appeals on the findings on liability and quantum, which, if it occurs, will increase the time and expense involved in the overall action. The vagaries of litigation are such that its course often does not run smoothly, or predictably. An application for the separation of issues is therefore to be approached with some caution. See generally Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1, 55.
The starting point is that ordinarily the trial of an action should include all issues arising in the action. The determination of an application for separate trials requires a careful balancing of the prospective advantages and disadvantages involved in separating the issues, bearing in mind the uncertainties inherent in litigation, and that, once embarked upon, it is a course from which it may be difficult and even impossible to retreat. It should only be embarked upon where its utility, economy and fairness to the parties is clearly made out: Tepko (55).
[22] Landsdale Pty Ltd v Moore [2009] WASCA 176.
[23] Landsdale Pty Ltd v Moore [19] ‑ [21].

One of the grounds of opposition to the proposed trial of a preliminary issue identified in the plaintiff's written submissions was that the first defendants had not proposed a statement of the facts upon which the preliminary issue should be determined. In written reply submissions the first defendants proposed that certain facts be assumed as true for the purpose of determing the preliminary issue. In oral submissions the plaintiff's counsel argued that it was not permissible to assume facts for the purpose of a preliminary issue and for a party to be permitted to dispute those facts at a later trial if it did not succeed on the preliminary issue. The plaintiff's counsel contended the approach of assuming facts was inconsistent with the principle of finality in litigation,[24] and cited the decision of the High Court in Bass v Permanent Trustee Company Limited,[25] as support for that proposition. The first defendant's counsel argued that it was permissible to assume facts for the purposes of determining a preliminary issue and pointed to the decision of Kenneth Martin J in Regional Power Corporation v Pacific Hydro Group Two Pty Ltd,[26] as supporting that approach.
[24] ts 20 July 2021, 42.
[25] Bass v Permanent Trustee Company Limited [1999] HCA 9; (1999) 198 CLR 334.
[26] Regional Power Corporation v Pacific Hydro Group Two Pty Ltd [2013] WASC 46 [41].
A very helpful starting point for guidance on the approach to the facts upon which a preliminary issue is to be determined is the judgment of Brooking J in Jacobson v Ross & Jacobson.[27] Jacobson involved an appeal from a decision on a preliminary issue of mixed fact and law. The primary judge had determined whether there should be a trial of the preliminary issue and had determined the preliminary issue at one hearing. There was uncertainty as to the facts upon which the issue had been determined. In the course of his judgment Brooking J made a number of observations about the approach to be adopted to identifying the facts upon which a preliminary issue should be determined. Most relevantly, his Honour said:
It may be that a question of law can be determined in a preliminary way without regard to the facts. . . . But where the preliminary question cannot be properly answered without reference to the facts of the case (and this will be so with any question of mixed law and fact), the order for the preliminary trial of the question should show how the relevant facts are to be identified for the purposes of that preliminary trial and whether the relevant facts are merely to be taken as assumed for the purposes of the determination of the preliminary question or on the other hand are either to be mutually admitted or proved. Where the preliminary issue to be determined is one of law or of mixed law and fact and there are relevant facts which are in dispute, the court may in its discretion make an order for the trial of the preliminary issue on the footing that relevant disputed questions of fact will be resolved by the court in the course of detennining the preliminary issue, as was done in George Wimpey & Co Ltd v Territory Enterprises Pty Ltd [1966] VR 312 (evidence of surrounding circumstances as bearing on construction of contract).
...
Care must be taken to ensure that, in one way or another, all the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable as a result of the order for the preliminary detennination, as facts ascertainable as a result of the order for the preliminary determination, as facts assumed to be correct for the purposes of the preliminary determination, or as facts which both sides accept as correct, or as facts which are to be judicially determined. Failure to do this, and in particular failure to perceive that the facts alleged in a pleading are some only of the facts relevant to the determination of the preliminary question, may make the order for preliminary determination unfruitful.
...
Care must be taken to distinguish between cases in which the relevant facts, once identified, are to be mutually admitted or are to be judicially determined on the one hand and, on the other hand, cases in which the relevant facts are merely assumed by one party to be correct for the purposes of the preliminary determination. In the latter case, one party is in effect demurring or taking an objection in point of law. He says: 'Let it be assumed that the facts are as alleged by my opponent. Still they give rise to no cause of action (or defence, or as the case may be).' This approach is possible only where the question to be determined is one of law, not one of mixed law and fact. In such a case the party objecting in point of law remains free to dispute the facts concerned at the trial.
[27] Jacobson v Ross & Jacobson [1995] 1 VR 337.
Bass v Permanent Trustee Company Limited involved an appeal from a decision of the Full Court of the Federal Court which had determined six questions formulated by the primary judge. The questions concerned the application of certain provisions of the Trade Practices Act 1974 (Cth) to the involvement of the State of New South Wales in a scheme to assist persons, who might otherwise not be able to do so, to purchase their own homes. The Full Court was asked to determine the questions by reference to 'the matters pleaded in the amended statement of claim and the material contained in the agreed bundle of documents'. There was no agreed statement of facts and no findings of fact had been made. In answering two of the questions, the Full Court made observations on the facts. The majority in the High Court (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) were critical of the approach taken by the Full Court on the ground that because the answers given by the Full Court were not based on facts, found or agreed, they were purely hypothetical. The majority said:[28]
It cannot be doubted that in many cases the formulation of specific questions to be tried separately from and in advance of other issues will assist in the more efficient resolution of the matters in issue. However, that will be so only if the questions are capable of final answer and are capable of being answered in accordance with the judicial process.
Preliminary questions may be questions of law, questions of mixed law and fact or questions of fact. Some questions of law can be decided without any reference to the facts. Others may proceed by reference to assumed facts, as on demurrer or some other challenge to the pleadings. In those cases, the judicial process is brought to bear to give a final answer on the question of law involved. Findings of fact are made later, if that is necessary. Where a preliminary question is a pure question of fact that, too, can be answered finally in accordance with the judicial process if the parties are given an opportunity to present their evidence and, also, to challenge the evidence led against them.
Special problems can arise where the preliminary question is one of mixed fact and law. As Brooking J pointed out in Jacobson v Ross, it is necessary in that situation that there be precision both in formulating the question and in specifying the facts upon which it is to be decided …
Judicial power involves the application of the relevant law to facts as found in proceedings conducted in accordance with the judicial process. And that requires that the parties be given an opportunity to present their evidence and to challenge the evidence led against them. It is contrary to the judicial process and no part of judicial power to effect a determination of rights by applying the law to facts which are neither agreed nor determined by reference to the evidence in the case. However, that is what happened in this case. To revoke special leave to appeal would be to sanction departure from the judicial process – a course that should not be taken even if the appellants acquiesced in the formulation of questions 2 and 3 and in the procedures which led to the answers given and the consequential orders made by the Full Court. (footnotes omitted)
[28] Bass v Permanent Trustee Company Limited [51] ‑ [53], [56].
In Regional Power Corporation v Pacific Hydro Group Two Pty Ltd, the defendants proposed a preliminary trial of four questions of law relying on O 31 r 2. The issues involved the construction of an agreement between the parties. The plaintiff agreed that the first three questions were suitable to be determined on a preliminary basis but argued that the fourth question should not be tried on a preliminary basis for two reasons: first, because it would only be necessary to answer the fourth question if the first three questions were answered in a certain way (an argument the judge characterised as 'a conditional feature'), thus the fourth question might never arise for determination and, secondly, because the fourth question required factual disputes to be resolved and was thus not an issue of law. Kenneth Martin J did not accept the first argument and, applying Brooking J's observations in Jacobson ordered the fourth question to be determined on the basis of the assumed correctness of the facts alleged in statement of claim as it then stood.

Implied licences of copyright – general principles

Before summarising the parties' contentions in respect of the application it is helpful to refer to the principles applicable to the implication of terms into agreements concerning licences to use copyright. The principles were stated by Thawley J in Hardingham v RP Data Pty Ltd.[29] For present purposes it is sufficient to refer to the four principles identified by his Honour without reference to the citation of supporting authorities. Those principles are:
(a)Ordinary contractual principles as to implication of terms apply. A licence might, for example, be implied by law as a legal incident of a particular class of contract or it might be implied because it is necessary in the particular circumstances of the case to give business efficacy to the contract.
(b)A licence of copyright will be implied only to the extent that it is necessary.
(c)The implication is to be drawn from all of the relevant circumstances existing at the time of the agreement, including what the parties then contemplated, objectively assessed. The 'purpose' for which the 'material' was to be used is determined objectively by reference to the parties' words and conduct and the circumstances in which the agreement was reached.
(d)The onus of establishing infringement lies on the copyright owner with the result that the copyright owner bears the onus of establishing the absence of an express or implied licence. That onus is to be discharged on the whole of the evidence. Where a respondent in its defence to a claim of infringement raises a positive assertion that an implied licence of a certain scope exists, it is for the respondent to make good the evidentiary foundation for their defence, including the factual matrix necessary to establish the existence and scope of the licence on which they rely.
[29] Hardingham v RP Data Pty Ltd [2019] FCA 2075 [44], [47] ‑ [50].
The starting point for any analysis of the case law is Beck v Montana Constructions Pty Ltd.[30] That was a case in which an architect had been commissioned to prepare sketch plans for a block of units for a client. The architect's fees were charged in accordance with the scale then published by the Royal Australian Institute of Architects. The architect's client later sold the land and gave the architect's plans to the purchaser, who decided to build in accordance with the plans, but not retain the architect in order to do so. Jacobs J held the payment for sketch plans includes a permission or consent to use those sketch plans for the purpose for which they were brought into existence, namely, for the purpose of erecting a building in substantial accordance with them and for the purpose of preparing any necessary construction drawings.[31] In a passage cited with approval on many occasions, Jacobs J expressed the underlying principle as follows:[32]
[T]he engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission or consent or licence in the person making the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement. It seems to me that this must be regarded as a principle of general application (citations omitted)
[30] Beck v Montana Constructions Pty Ltd (1963) 5 FLR 298.
[31] Beck v Montana Constructions Pty Ltd (305).
[32] Beck v Montana Constructions Pty Ltd (304).
In Blair v Osborne & Tomkins,[33] an architect entered into an agreement with two clients to prepare detailed plans for the purpose of obtaining planning permission to build a pair of houses on a site consisting of the end of the clients' gardens. The engagement was covered by conditions of engagement and scale of fees published by the Royal Institute of British Architects (RIBA) which provided, among other matters, that an engagement entered into between the architect and client might be determined at any time by either party on reasonable notice being given. The scale of fees was tied to progressive stages of the total work. The architect charged the full fee allowed under the scale. Lord Denning MR (with whom Widgery and Megaw LJJ agreed) cited the principle identified by Jacobs J in Beck v Montana Constructions Pty with approval.[34] In an earlier passage of the judgment his Lordship expressed this view:[35]
… when the owner of a building plot employs an architect to prepare plans for a house on that site, the architect impliedly promises that, in return for his fee, he will give a licence to the owner to use the plans for the building on that site. The copyright remains in the architect, so that he can stop anyone else copying his plans, or making a house from them; but he cannot stop the owner, who employed him, from doing work on that very site in accordance with the plans. If the owner employs a builder or another architect, the implied licence extends so as to enable them to make copies of the plans and to use them for that very building on that site: but for no other purpose. If the owner should sell the site, the implied licence extends so as to avail the purchaser also.
[33] Blair v Osborne & Tomkins [1971] 2 QB 78
[34] Blair v Osborne & Tomkins [85].
[35] Blair v Osborne & Tomkins [85]
Stovin-Bradford v Volpoint Properties Ltd,[36] was another architect case, but one in which there was no implied licence found. The plaintiff architect had agreed orally with the defendants, owners of a dilapidated factory, that in consideration of an agreed nominal fee (approximately 10% of the fee that would have been charged if the RIBA scale of fees had been applied) he would prepare drawings for the purpose of obtaining planning permission for extending and rebuilding the factory. The architect prepared plans that incorporated a distinctive design feature. The plaintiff rendered an invoice for his fee on which he endorsed the words 'The copyright of the design remains with the architect, and may not be reproduced without his prior written consent'. Planning permission was obtained. The plaintiff withdrew from the project. The defendants rebuilt the factory and incorporated the distinctive feature designed by the plaintiff. The plaintiff claimed damages for infringement of copyright. In holding there was no implied licence in favour of the client, Lord Denning referred to the decisions in Beck v Montana Constructions Pty and Blair v Osborne but distinguished those cases on the basis that the architects had charged full fees at the rates set out in the relevant scale of fees and not a nominal fee.
[36] Stovin‑Bradford v Volpoint Properties Ltd [1971] 3 All ER 570.
In his judgment Salmond LJ stated the issue in Stovin‑Bradford v Volpoint Properties Ltd as follows:[37]
This appeal raises a short point: what terms should be implied into this contract? It is trite law that it is permissible to imply a term into a contract only if such a term is necessary to give the contract ordinary business efficacy. It is plain that some term must be implied into this contract for that purpose. Since the architect admittedly owned the copyright in his drawings, it was necessarily an implied term of the contract that the architect licensed the owners to make use of the drawings for the purpose of obtaining planning permission; otherwise the whole purpose of the contract would have been stultified. The learned judge in a very clear and careful judgment came to the conclusion that it was unnecessary to imply any other term into the contract in order to give it business efficacy. I entirely agree with him.
Relying on Blair v Alan S Tomkins and Frank Osborne (trading as Osborne and Tomkins (a firm)), which was decided more than three months after the learned judge had delivered judgment in the present case, counsel for the owners contends that, by implication the contract conferred on the owners a much wider licence. He contends that Blair v Osborne and Tomkins lays down the general proposition of law that whenever an architect is engaged to prepare drawings for the purpose of obtaining planning permission the owners by necessary implication have a licence conferred on them to use the drawings not only for that purpose, but for any purpose they please, and, in particular, for the purpose of subsequently erecting the building should planning permission be granted. In my judgment, Blair v Osborne and Tomkins is not an authority for any such proposition. It may be that some of the passages cited from that case could be read as supporting counsel's contention. If they do, then in my respectful view, they go further than was necessary for the decision. (footnotes omitted)
[37] Stovin‑Bradford v Volpoint Properties Ltd (576 ‑ 577).
In Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd,[38] Crennan J cited with approval a passage from the judgment of Lightman J in Robin Ray v Classic FM Plc,[39] in which his Lordship set out the general principles governing the respective rights of contractor and client in the copyright in a work commissioned by the client. In the course of his observations his Lordship addressed the circumstance where it might be necessary to imply some grant of rights in respect of a copyright work which might be satisfied by the grant of a licence or assignment of copyright and said that if necessity required only the grant of a licence:[40]
(8)... the ambit of the licence must be the minimum which is required to secure to the client the entitlement which the parties to the contract must have intended to confer upon him. The amount of the purchase price which the client under the contract has obliged himself to pay, may be relevant to the ambit of the licence. Thus in Stovin-Bradford v Volpoint Properties Ltd [1971] 1 Ch 1007, where the client agreed to pay only a nominal fee to his architect for the preparation of plans, he was held to have a licence to use the plans for no purpose beyond the anticipated application for planning permission. By contrast in Blair v Osborne & Tompkins [1971] 21 QB 78, where the client was charged the full RIBA scale fee, his licence was held to extend to using the plans for the building itself. Guidance as to the approach to be adopted is provided in a passage in the judgment of Jacobs J in Beck v Montana Constructions Pty [1964–5] NSWR 229 at 235 cited with approval by Widgery LJ in Blair v Obsorne & Tompkins, above, at 87:
'… it seems to me that the principle involved is this; that the engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission, or consent, or licence in the person giving the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement.'
(9)the licence accordingly is to be limited to what is in the joint contemplation of the parties at the date of the contract, and does not extend to enable the client to take advantage of as new unexpected proﬁtable opportunity: consider Meikle v Maufe [1941] 3 All ER 144.
[38] Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd [2005] FCA 1521; (2005) 225 ALR 57.
[39] Robin Ray v Classic FM Plc (1998) 41 IPR 235, 247 ‑ 249; [1998] FSR 622, 640 ‑ 643.
[40] Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd [83].

In Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd,[41] Kirby and Crennan JJ (with whose reasons Gummow ACJ relevantly agreed) cited Beck v Montana Constructions Pty and Blair v Osborne with approval, and stated the principles as follows:[42]
The principles established by a series of cases concerning implied licences to use architectural drawings and plans were not in contest. Problems have frequently arisen in circumstances where the commissioner of architectural drawings and plans, a property owner (or a successor in title), wishes to assert an implied licence to use them in the absence of any express permission to do so. A non-exclusive licence to use architectural plans and drawings may be oral or implied by conduct, or may be implied, by law, to a particular class of contracts, reﬂecting a concern that otherwise rights conferred under such contracts may be undermined, or may be implied, more narrowly, as necessary to give business efficacy to a speciﬁc agreement between the parties. A term which might ordinarily be implied, by law, to a particular class of contracts may be excluded by express provision or if it is inconsistent with the terms of the contract. In some instances more than one of the bases for implication may apply.
[41] Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55; (2006) 229 CLR 577.
[42] Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [59].

An overview of the parties' contentions

Expressed most simply the parties' positions are as follows: the first defendants say that whether the licence is to be implied or not is a crisp issue of contractual construction (using the term construction to include the implication of terms), the plaintiff accepts the issue is one of contractual construction but says it is not crisp. Against that background I will identify the primary arguments made by the parties.

First defendants' contentions

The first defendants emphasise that they have admitted the Giorgi Design Agreement and that there is no uncertainty about its express terms as they are recorded in writing. On this basis they argue the evidence admissible as to the circumstances surrounding the execution of the Giorgi Design Agreement would be limited and would not extend to many of the matters to which the plaintiff refers in its submissions, in particular it would not extend to conduct which occurred after the agreement was made.
The first defendants' contend that their licence argument has a strong prospect of success and a separate trial of the licence issue presents as a dispositive 'fork in the road' which has the potential to save costs and court time by avoiding the necessity to resolve 'a multitude of legal and factual issues' concerning:
(a)copyright subsistence and ownership;
(b)whether or not there was a substantial reproduction of the relevant design;
(c)if there has been a substantial reproduction whether there is copyright infringement or any of the defences to infringement; and
(d)causation and quantum.
The first defendants estimate that a trial of all issues will take between seven and ten days and will involve lay and expert evidence, with the total cost to the first defendants being in the vicinity of $685,000.
The first defendants' estimate a trial of the preliminary issue will take no more than one hearing day because the only relevant evidence (which is unlikely to be controversial) are the two documents relied upon by the plaintiff to establish the Giorgi Design Agreement and evidence that the first defendants paid the design fee to the plaintiff in exchange for the concept drawings. The first defendants contend no issues of credit will arise on the evidence. They estimate the costs of the trial of the preliminary issue to be in the vicinity of $35,000.
The first defendants point to the fact they are elderly and thus the efficiency of determining the case against them is a matter of particular importance.
The first defendants contend, in effect, while determination of the licence issue in their favour will not resolve the 'cross‑claim' against the fourth defendant, it will make a negotiated resolution of that claim (and the other issues in the litigation) more likely.
In their reply submissions, in response to the plaintiff's criticism that they had not proposed an agreed statement of facts, the first defendants foreshadowed that they may admit that the plaintiff carries on business of a design and construction company (surprisingly a matter not admitted in the amended defence) and that the plaintiff provides in-house design, building and construction services and that they may admit, for the purposes of the preliminary issue, the communications between Ms Hurst and Ms Ford as pleaded in the statement of claim. The first defendant proposed that the following 'facts' be assumed for the purposes of determining the preliminary issue:
(a)the Giorgi Design was created by the plaintiff in accordance with, and pursuant to, the Giorgi Design Agreement;
(b)copyright in the Giorgi Design subsists in the plaintiff;
(c)the Giorgi Design was substantially reproduced in the manner alleged in the statement of claim; and
(d)the first defendants authorised the reproduction of the Giorgi Design in the manner alleged in the statement of claim.

Plaintiff's contentions

The plaintiff characterises the issue of whether a term granting a licence to the first defendants should be implied into the Giorgi Design Agreement as a question of mixed and inter‑dependent questions of fact and law, that is, a question of the kind that should not ordinarily be resolved as a preliminary issue.
The plaintiff contends that the preliminary trial application is based on the false premise that an implied licence can be established without any need to prove and determine the facts upon which the licence depends. The plaintiff contends the authorities make it clear that the implication of a term requires evidence of the context of the agreement and the facts upon which the term must be implied to give the contract business efficacy.
The plaintiff contends that in the absence of a statement of agreed facts or admissions from the first defendants, extensive oral evidence of the interaction between its staff and Ms Hurst will be required. The plaintiff contends that in addition there will need to be evidence of the usual processes it follows when dealing with prospective clients in respect of concept design agreements. Further the plaintiff says it will be required to adduce evidence to establish that the $5,000 design fee was a 'nominal fee'. This will require lay evidence of the time spent preparing the various plans and expert evidence of the market rates for such architectural services.
In the course of oral submissions the plaintiff's counsel argued that the authorities permitted the plaintiff to refer to conduct subsequent to the making of a contract in order to identify its terms. Counsel relied on the observations of Murphy JA in Fazio v Fazio,[43] at [193] and to the authorities to which his Honour referred in that paragraph. In response to the proposition that the authorities cited by Murphy JA concerned informal contracts and that the contract relied on by the plaintiff was wholly in writing, with no suggestion that the document did not incorporate the agreed terms, counsel suggested that pleading of the agreement might be amended following discovery.[44]
[43] Fazio v Fazio [2012] WASCA 72.
[44] ts 29 ‑ 30.
The plaintiff contends it cannot be assumed that the evidence adduced on the preliminary issue will not give rise to credit issues. It draws attention to the potential complications adverse credit findings may create for a subsequent hearing if the first defendants fail on the preliminary issue.
The plaintiff contends that the preliminary issue will require discovery and inspection to be given.
The plaintiff argues that the preliminary issue is the issue to which much of the evidence will be directed. It estimates that a trial of the preliminary issue will take three to four days.

Consideration

It is helpful to start with some general observations:
(a)The question of whether a term may be implied as a legal incident of a particular class of contract is a question of law. This is not to say that some evidence may not be required to establish that the contract under consideration falls within the particular class.
(b)The question whether a term is to be implied in fact, rather than in law, is a question of fact. As Santow JA explained in Bindaree Beef Pty Ltd v Raymoon Pty Ltd:[45]
When a term is implied by reference to what is necessary to give business efficacy to the parties' contractual arrangement, or by reference simply to uncodified custom or usage, as here, a legal test determines whether a term may be so implied. But it is predominantly a factual question what term satisfied the test. I believe that properly explains Auld LJ's observations, agreed in by Saville and Rose LJJ, in Friends' Provident Life Office v Hillier Parker May & Rowden (1997) QB 85 at 110. He concluded that implication is a mixed question of law and fact, so that it was not appropriate to deal with that issue under rules of court for determination of issues of law. I should add that the boundary line between the content of a contract and its proper construction, the latter being a question of law, is not always clear. However, the question of the implication of a term appears to me to be clearly enough in the former category.
(c)Evidence of circumstances surrounding the making of a contract is admissible for the purposes of determining whether a term is to be implied in fact, Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd.[46]
(d)Post-contractual conduct is not to be admitted as an aid to the construction of an instrument or written agreement.[47]
(e)It will usually not be an appropriate to determine an issue as a preliminary issue where there is a commonality of witnesses and issues of credit as between the preliminary issue and other issues in the case which will or may necessitate a ruling on the credit of one or more of the common witnesses, thus possibly precluding that same judicial officer from again dealing with the matters going to the credit of the common witness.[48]
[45] Bindaree Beef Pty Ltd v Raymoon Pty Ltd [2006] NSWCA 35 at [9].
[46] Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29 [79] (McClure P, Newnes JA and Le Miere J agreeing).
[47] The Administration of the Territory of Papua and New Guinea v Guba [1973] HCA 59; (1973) 130 CLR 353, 446 per Gibbs J, citing James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583, 603; Agricultural & Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570 [35].
[48] Australian National Industries Ltd v Spedley Securities Ltd (1992) 26 NSWLR 441
In the following paragraphs I set out my provisional assessment of the ambit and nature of the evidence that will be admissible and necessary for the resolution of the proposed preliminary issue. I have placed emphasis on 'provisional' because nothing I say in these reasons should be construed as a prospective ruling on the admissibility of evidence at any later hearing.
The scope for the admission of evidence on the question of law as to whether the Giorgi Design Agreement is a class of contract into which an implied term of the nature implied in Beck v Montana, and the cases concerning architectural drawings which have followed that decision, is very limited. My assessment is that issue will falls to be resolved, largely if not exclusively, by reference to the express terms of the Giorgi Design Agreement.
Having regard to the authorities it would be open to the first defendants to adduce evidence as to pre-contractual events in support of their alternative argument that a term conferring a licence on them to use the Giorgi Design is to be implied as a matter of fact. They have disclaimed any intention to do so. If it is open to a proponent of the implication of a term as a matter of fact to adduce evidence of surrounding circumstances, by parity of reasoning it is open to the opposing party to support its opposition by adducing evidence of the nature and purpose of the contract and other relevant surrounding circumstances.
In its reply the plaintiff has identified those factual matters on which it relies to oppose the implication of the term and to which I have referred earlier. For convenience I repeat those matters:
(i)the design fee of $5,000 paid by the first defendants to the plaintiff pursuant to the Giorgi Design Agreement on or about 2 April 2014 was a 'nominal' fee, and the amount charged by the plaintiff did not reflect the actual cost of preparing the Giorgi Design; and
(ii)entry into the Giorgi Design Agreement was the first part of a staged and co‑operative process between the first defendants and the plaintiff where the parties would work together to:
(A)agree a design;
(B)agree a fixed price proposal for the plaintiff to construct a residence on the first defendants' property;
(C)proceed to enter into a preparation of plans agreement to allow working drawings to be prepared for the purposes of obtaining development approval and a building permit; and
(D)enter into a fixed price construction contract together, for construction by the plaintiff of a residence on the property.
In my view the ambit of the evidence admissible to establish that the design fee of $5,000 was a 'nominal' fee is more limited than contended for by the plaintiff in its submissions and does not extend to a detailed assessment of the actual costs incurred in the production of the Giorgi Design. Whether the fee was a nominal fee is to be assessed prospectively, that is, looking forward from the time the Giorgi Design Agreement was made, and not retrospectively in the light of the actual cost of the Giorgi Design.
On the basis that the first defendants will not be adducing any oral evidence, the evidence to be adduced on the issue of whether entry into the Giorgi Design Agreement was the 'first part of a staged and co-operative process' will be limited to evidence from Ms Ford, the plaintiff's staff member who dealt with Ms Hurst.
Having regard to the nature and scope of the evidence relevant to the licence issue I am not persuaded that there is a real possibility of adverse credit findings in respect of witnesses who give evidence in respect of that issue and who are called also to give evidence on other issues at a later trial. On the pleadings the only member of the plaintiff's staff who dealt directly with the first defendants prior to the formation of the Giorgi Design Agreement was Ms Ford and although the plaintiff pleads Ms Ford was involved in events that followed the making of the Giorgi Design Agreement those events consisted largely of the provision of plans to Ms Hurst, matters that will be established by the documents themselves. Evidence going to the cost of producing the Giorgi Design and whether the design fee of $5,000 was 'notional' or not is likely to be documentary in nature and is unlikely to give rise to credit issues.
In my assessment the evidence admissible on the preliminary issue is capable of being adduced within a hearing of one to two days.
Given that this litigation involves five separate interests, a trial of all the issues in the litigation has the capacity to occupy ten hearing days.
I turn now to the issue of what assumptions might be required for the purpose of determining the preliminary issue. The issue of whether the plaintiff owns the copyright in the Giorgi Design is an issue of mixed fact and law. It is an issue that is logically anterior to the issue of whether the Giorgi Design Agreement contains an implied term of the nature for which the plaintiff contends – the licence issue only arises if the plaintiff establishes it is the owner of the copyright in the Giorgi Design. There is no overlap between the critical facts on which the ownership of the copyright depends (pars 3, 8, 9, 19 and 21 of the statement of claim) and the critical facts on which the implied term depends (pars 1, 11, 12, 13, 14 of the statement of claim and par 2(c) and (d) of the reply). That the requirement to determine the licence issue is conditional on the plaintiff establishing it is the copyright owner is not of itself a reason not to determine the licence issue as a preliminary issue.[49]
[49] cf Kenneth Martin J's approach to the 'conditional feature' in Regional Power Corporation v Pacific Hydro Group Two Pty Ltd.
As noted earlier the first defendants have proposed that it be assumed for the purposes of the preliminary issue that, among other matters, the Giorgi Design was created by the plaintiff in accordance with and pursuant to the Giorgi Design Agreement. In my view it would be inimicable to the efficient management of this dispute if the licence issue was tried as a preliminary issue and resolved in the plaintiff's favour and thereafter the first defendants were to be permitted to contend that the Giorgi Design was not created and provided to the first defendants pursuant to the Giorgi Design Agreement.
Further, in my view it is inimicable to the efficient management of this dispute for the licence issue to be tried as a preliminary issue but for the first defendants to maintain 'non-admissions' of matters that do not appear to be controversial for the purposes either of the preliminary issue or, should the plaintiff succeed on the preliminary issue, for the purposes of any subsequent issue. The matters that appear to me to fall within this category are the matters alleged in pars 1(c) and (d) and (subject to hearing further from counsel) 7 and 11 of the statement of claim.
In my assessment the determination of the licence issue as a preliminary issue will not require discovery of a significant volume of documents.
I accept that if the first defendants are successful in establishing a licence of the nature for which they contend that will determine the plaintiff's claim against the first defendant and the fourth defendant and is likely to increase the possibility of a settlement of the remaining issues between the parties.

Disposition

I approach the disposition of this application with the cautionary observations about the trial of separate issues to which I have referred earlier at the forefront of my mind. However, subject to the conditions to which I refer below, I have come to the conclusion that considerations of utility, economy and fairness favour holding a trial of the licence issue as a preliminary issue for the following reasons.
First, the licence issue is a discrete issue capable of being resolved within two hearing days.
Second, the resolution of the licence issue as a preliminary issue will not preclude the plaintiff from adducing all the admissible evidence it wishes to adduce on that issue.
Third, the licence issue does not require extensive pre-trial preparation.
Fourth, if the licence issue is determined in favour of the first defendants' favour it will determine the dispute between the plaintiff and the first defendants and will make a negotiated outcome of the remaining issues in the litigation more likely. If the licence issue is resolved in the plaintiff's favour it will dispose of a critical issue that is required to be determined and may, as a consequence, increase the prospects of a settlement.
Fifth, the disposition of the licence issue is unlikely to involve credit findings that will impinge adversely on the trial of the remaining issues, if such a trial is required.
Sixth, the critical facts on which the licence issue depends will be the subject of admissions, or will be found on a final basis after hearing the relevant evidence, or will be assumed. To the extent to which the facts will be assumed, the assumption of those facts will not prejudice the plaintiff's position.

The conditions to which I have referred are these. The first defendants must admit, for all purposes, that the Giorgi Design was created and provided to the first defendants pursuant to the Giorgi Design Agreement. As I have said it would be inimicable to the efficient management of this litigation if the licence issue was resolved in favour of the plaintiff and for the first defendants, at that point, to contend that the Giorgi Design was not prepared pursuant to the Giorgi Design Agreement. Second, the first defendants must admit for all purposes those matters alleged in the statement of claim about which there appears to be no controversy. Those are the matters alleged in pars 1(c) and (d), and subject to hearing further from counsel, 7 and 11.
I will hear from the parties as to the form of the order to be made. Conformably with the discussion of the approach to be adopted in Jacobson the order should not only define the issue precisely but it should specify the admitted facts, the matters as to which evidence may be adduced and the assumed matters.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AS
Associate to the Honourable Justice Tottle
28 JULY 2021