Centrestage Management Pty Ltd v Riedle

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FEDERAL COURT OF AUSTRALIA

Centrestage Management Pty Ltd v Riedle [2008] FCA 938

COPYRIGHT – computer programs – contract for supply – implied licence in purchaser to use program without thereby infringing vendor’s copyright – whether implied term that purchaser have access to source code.

CONTRACT – implied terms – terms implied by law in contracts of a particular type independently of parties’ actual or presumed intention – terms implied to give business efficacy to a particular contract – contract for supply of computer program – implied licence in purchaser to use program without thereby infringing vendor’s copyright – whether implied term that purchaser have access to source code

Copyright Act 1968 (Cth) ss 10, 21(5), 31, 35(6), 47AB, 47D, 47E

De Garis v Neville Jeffress Pidler Pty Ltd (1990) 18 IPR 292 referred to
Beck v Montana Constructions Pty Ltd [1964‑5] NSWLR 229 considered
Pacific Software Technology Ltd v Perry Group Ltd [2004] 1 NZLR 164 cited
Computer Edge Pty Ltd v Apple Computer Inc (1986) 161 CLR 171 referred to
Data Access Corporation v Powerflex Services Pty Ltd (1999) 202 CLR 1 referred to
Codelfa Constructions Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 applied
Liverpool City Council v Irwin [1977] AC 239 applied
Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 cited
Byrne v Australian Airlines Ltd (1995) 185 CLR 410 applied
Scally v Southern Health and Social Services Board [1992] 1 AC 294 referred to
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 distinguished
Avel v Multicoin Amusements Pty Ltd (1991) 171 CLR 88 distinguished
TSB Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 72 IPR 492 distinguished
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 applied
Roy Morgan Research Centre Pty v Commissioner of State Revenue (Victoria) 37 ATR 528 referred to

Chitty on Contracts, General Principles 29th ed (2004)

CENTRESTAGE MANAGEMENT PTY LTD v TONY RIEDLE

VID 706 OF 2007

SUNDBERG J
20 JUNE 2008
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 706 OF 2007
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

CENTRESTAGE MANAGEMENT PTY LTD
Appellant

AND:

TONY RIEDLE
Respondent

JUDGE:

SUNDBERG J

DATE OF ORDER:

20 JUNE 2008

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The appellant pay the respondent’s costs of the appeal.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 706 OF 2007
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

CENTRESTAGE MANAGEMENT PTY LTD
Appellant

AND:

TONY RIEDLE
Respondent

JUDGE:

SUNDBERG J

DATE:

20 JUNE 2008

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

BACKGROUND

  1. The appellant was incorporated on 18 November 2003. It provides administration and computer consultancy services. Its directors are David Roberts and Conni Paglianiti. In 2000 Mr Roberts, as an employee of Advanced…

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Details
Case
[2008] FCA 938
Decision Date

CaseChat Overview and Summary

In Centrestage Management Pty Ltd v Riedle, the dispute centred on the ownership and transfer of source code for a computer program. The case was heard in the Supreme Court of New South Wales, with the appellant, Centrestage Management, appealing against a decision made by a Magistrate in a lower court. The appellant argued that the respondent, Riedle, should have provided the source code upon request due to his employment contract. However, the Magistrate found that the respondent was not an employee, and this finding was upheld on appeal.

The legal issues that the court had to resolve included whether the respondent was contractually bound to provide the source code on demand and whether the respondent's failure to do so constituted a breach of contract. The court also had to determine the ownership of the copyright in the program and whether the program was an adaptation of a previous version. The court found that the respondent was not an employee and, therefore, not bound by the contract to provide the source code. The court also concluded that the program was not an adaptation of a previous version, and the ownership of the copyright was with the Salvation Army.

The court's reasoning was based on the evidence presented, including expert opinions, and the terms of the contract between the parties. The court held that the respondent was not an employee and, therefore, not bound by the contract to provide the source code. The court also found that the program was not an adaptation of a previous version, and the ownership of the copyright was with the Salvation Army. The appeal was dismissed, and the appellant was ordered to pay the respondent's costs of the appeal.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

SUNDBERG J
The passages from the Second Reading Speech summarised at [42] and quoted at [55] and those from the Report sent out at [57] show that an entitlement to source code is not typically carried by an agreement to make and deliver a computer program. See also [58] and [59]. Those passages are quite inconsistent with the argument that the “definition” of computer program contained in s 21(5) of the Act somehow causes the source code to pass with the program.Conclusion on implied term Although the Magistrate did not rely on the provisions of Division 4A in refusing to imply the term sought by the appellant, no error has been shown in that refusal.ADAPTATION In its notice of appeal the appellant asserts that the Magistrate erredin failing to consider … the applicant’s argument that if neither the applicant nor the respondent owned the copyright in the 2002 Program (because the Salvation Army owned it) then the applicant should succeed in its claim for damages because the respondent was contractually bound to provide the source code to the applicant when requested.Framed in that way, the ground has to fail. The appellant has not established that the respondent was contractually bound to provide the source code on demand. As formulated in its written submissions handed up at the commencement of the hearing, the ground was put in the form of this question:Did her Honour fail to take into account the fact that, whether or not the [appellant proved it was] the owner of version 2 of the … program was irrelevant because the only matter of importance was that Riedle did not own version 3 if it was an adaptation, and if he did not own it then he was in breach of his employment not to provide the source code to the appellant when requested?In order to succeed in this claim the appellant has to establish a breach by the respondent of his contract of employment. The Magistrate held he was not an employee and the appellant’s appeal on this point has been unsuccessful. In the body of the written submissions, however, reliance on the respondent as an employee appears to have been dropped. The argument was put in this somewhat open ended, inconclusive fashion:Her Honour does not address the question – If version 3 was an adaptation of version 2, and thus Riedle was not the owner of the copyright in version 3, regardless of who was the copyright owner, should Riedle have rendered up the source code upon request?If her Honour had addressed this question, she would have needed to determine whether the program was an adaptation or not and would have concluded that there was ample evidence before her by way of two experts … to determine whether or not the program was an adaptation regardless of who owned it. The Magistrate first found that AAS was the owner of the copyright in version 2 of the program, and that if the copyright had not passed from AAS to the Salvation Army, it remained with the defunct AAS. Her Honour said:The applicant then argues that the case is actually about the respondent not having copyright in The Program. However, there can be no doubt that the respondent wrote The Program. As I have found that he did not do so as an employee, he would have copyright in The Program unless it were substantially the same as the 2002 version. Even in that case, the respondent argues, the applicant cannot bring the claim because it is not the owner of the copyright in the 2002 version. Therefore, only the Salvation Army or AAS could bring the claims predicated on ownership of copyright that are made in this proceeding. Clearly, the Salvation Army and AAS are not parties to the proceeding. In these circumstances, I consider that the applicant’s copyright claims are unsustainable.

Ratio Decidendi

Legal Principle Established

Established by: SUNDBERG J

Full text does not contain this section.