Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd - [2002] FCA 1210

FEDERAL COURT OF AUSTRALIA
Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd [2002] FCA 1210
CHECKED-OUT PTY LTD v EAGLE EYE INSPECTIONS PTY LTD
N169 OF 1999
EMMETT J
19 SEPTEMBER 2002
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 169 OF 1999

BETWEEN:

CHECKED-OUT PTY LTD (ACN 071 965 798)

FIRST APPLICANT

PHILIP JULIAN HARDCASTLE

SECOND APPLICANT

AND:

EAGLE EYE INSPECTIONS PTY LTD (ACN 084 722 234)
FIRST RESPONDENT

JOSEPH WILLIAMS
SECOND RESPONDENT

WAYNE THOMAS COOK
THIRD RESPONDENT

TIMOTHY BOLLINS
FOURTH RESPONDENT

DEBORAH JEAN WILLIAMS
FIFTH RESPONDENT

PETER ADAMS trading as PETER ADAMS, SOLICITORS & ATTORNEYS
SIXTH RESPONDENT

KATARINA MUC trading as G.H. HEALEY & CO. BLACKTOWN and BRUCE McCANN trading as B.E. McCANN & CO., SOLICITORS
SEVENTH RESPONDENT

MARK KELADA trading as
MARK KELADA SOLICITORS
EIGHTH RESPONDENT

MICHAEL QUINN trading as QUINNS SOLICITORS
NINTH RESPONDENT

JOHN MICHAEL NOYCE and GREGORY LAURENCE MARTIN trading as NOYCE LAWYERS
TENTH RESPONDENT

HENRY GRECH trading as GRECH PARTNERS SOLICITORS
ELEVENTH RESPONDENT

GREGORY PETER GUY trading as GUY & ASSOCIATES SOLICITORS
TWELTH RESPONDENT

JUDGE:

EMMETT J

DATE OF ORDER:

19 SEPTEMBER 2002

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1. the applicant be given leave to file a further amended statement of claim amended substantially to the effect set out in the Schedule to these orders;
2. the applicant pay the costs thrown away by any amendment referred to in order 1;
3. upon the filing of such a further amended statement of claim, the notices of motion of the 6th to 11th respondents filed on 7 December 2001 and of the 12th respondent, filed on and 21 November 2001 be dismissed with costs;
4. the notices of motion referred to in order 3 be adjourned to 28 November 2002 at 9.30am before Emmett J.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

SCHEDULE TO THE ORDERS OF EMMETT J MADE 19 SEPTEMBER 2002
CHECKED-OUT PTY LIMITED v EAGLE EYE INSPECTIONS PTY LIMITED
AMENDMENTS TO STATEMENT OF CLAIM
10.At all times while they were employed by the First Applicant, Williams, Cook and Bollens owed contractual and fiduciary duties to the First Applicant:
(a)not to conceal from the First Applicant or divert to themselves or to any other person, requests and contracts to conduct building inspections and to supply reports in relation thereto and not to receive profits therefrom and thereby deprive the First Applicant of the opportunity to derive profits from such requests and contracts;
(b)not to pursue or exploit their contacts and working relationships with any of the Sixth to Twelfth Respondents, or other associations derived from their positions as officers and/or employees of the First Applicant to the detriment of the First Applicant, with a view to obtaining contracts, profits, opportunities and benefits from those associations without the consent of the First Applicant, which would otherwise be received by the First Applicant;
(c)not to exploit their contacts and working relationships with any of the Sixth to Twelfth Respondents, or other associations derived from their positions of officers and/or employees of the first applicant, to establish and carry on a business substantially similar to, derived from and competing with that carried on by the First Applicant;
(d)not to receive monies, contracts or opportunities or other benefits from or by reason of their association with any of the Sixth to Twelfth Respondents or other associations derived from their positions as officers and employees of the First Applicant, which monies, contracts, opportunities and benefits would otherwise be received by the First Applicant.

10AIn breach of the duties pleaded in paragraph 10 and without the consent of the First Applicant, Williams, Cook and Bollens during the term of their employment have unlawfully:
(a)concealed from the First Applicant and diverted to themselves and/or to Eagle Eye, various requests and contracts to conduct building inspections and to supply reports in relation thereto, and have received the profits there from, and thereby deprived the First Applicant of the opportunity to derive profits from such requests and contracts;
(b)pursued and exploited their contacts and working relationships with each of the Sixth to Twelfth Respondents, and other associations derived from their positions as officers and/or employees of the First Applicant, to the detriment of the First Applicant, with a view to obtaining contracts, profits, opportunities and benefits from those associations without the consent of the First Applicant, which would otherwise have been received by the First Applicant;
(c)exploited their contacts and working relationships with each of the Sixth to Twelfth Respondents, and other associations derived from their positions as officers and/or employees of the First Applicant, to establish and carry on the business of the First Respondent (“the Respondents’ business”) being a business substantially similar to, derived from and competing with that carried on by the First Applicant;
(d)received moneys, contacts, opportunities and other benefits from, and/or by reason of their association with, each of the Sixth to Twelfth Respondents, and other associations derived from their positions as officers and/or employees of the First Applicant, which moneys, contracts, opportunities and benefits would otherwise have been received by the First Applicant.

11At all times while they were employed by the First Applicant and after their employment by the First Applicant had terminated Williams Cook and Bollens owed contractual and fiduciary duties to the First Applicant not to exploit the Checked-Out Concept for the benefit of themselves or any other person to the detriment of the First Applicant and the business of the First Applicant.
11AIn breach of their duties to the First Applicant pleaded in paragraph 11 above and without the consent of the First Applicant, Williams Cook and Bollens during and subsequent to their employment have unlawfully exploited the Checked-Out Concept for the benefit of themselves and Eagle Eye and Eagle Eye’s business and to the detriment of the First Applicant and the business of the First Applicant.

24Each of the Second to Fifth Respondents has:
(a)aided, abetted, counselled or procured;
(b)induced;
(c)been directly or indirectly knowingly concerned in or party to, and/or
(d)conspired with each other of the First and Second to Fifth Respondents to effect each of the contraventions of the TPA and the FTA pleaded above.

Particulars
The Applicants repeat the particulars to paragraphs 12, 19 and 37 herein.

37Each of the Sixth to Twelfth Respondents has, without the license of the First Applicant:
37.1reproduced the First Applicant’s pro forma building inspection report in a material form by providing to their clients copies of building inspection reports prepared and provided by the First to Fifth Respondents;
37.2authorised the reproduction of the First Applicant’s pro forma building inspection report by requesting the First to Fifth Respondents to prepare and provide building inspection reports that reproduced the Applicant’s pro forma building inspection report in a material form, knowing that any such building inspection report prepared by the First to Fifth Respondents would be in a form that reproduced the First Applicant’s pro forma building inspection report in a material form.

42On each reproduction, publication, sale, letting for hire and offering for sale or hire of the Respondent’s documents, the First Respondent represented and warranted to the person acquiring the article that it has the right to reproduce, publish, sell or hire it and that the acquirer will enjoy acquired possession of it.

43By reason of the matters aforesaid, such representations and warranties were false.

42ABy recommending to their clients that the First Respondent be requested to prepare and provide building inspections reports and by providing to their clients the originals or copies of building inspection reports prepared and provided by the First to Fifth Respondents displaying the name of the First Respondent, each of the Sixth to Twelfth Respondents represented and warranted to such client that the First Respondent had the right to reproduce and publish such building inspection report and would enjoy quiet possession of such report.

42BBy reason of the matters aforesaid such representations and warranties were false.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 169 OF 1999

BETWEEN:

CHECKED-OUT PTY LTD
APPLICANT

PHILIP JULIAN HARDCASTLE
SECOND APPLICANT

AND:

EAGLE EYE INSPECTIONS PTY LTD (ACN 084 722 234)
FIRST RESPONDENT

JOSEPH WILLIAMS
SECOND RESPONDENT

WAYNE THOMAS COOK
THIRD RESPONDENT

TIMOTHY BOLLINS
FOURTH RESPONDENT

DEBORAH JEAN WILLIAMS
FIFTH RESPONDENT

PETER ADAMS trading as PETER ADAMS, SOLICITORS & ATTORNEYS
SIXTH RESPONDENT

KATARINA MUC trading as G.H. HEALEY & CO. BLACKTOWN and BRUCE McCANN trading as B.E. McCANN & CO., SOLICITORS
SEVENTH RESPONDENT

MARK KELADA trading as
MARK KELADA SOLICITORS
EIGHTH RESPONDENT

MICHAEL QUINN trading as QUINNS SOLICITORS
NINTH RESPONDENT

JOHN MICHAEL NOYCE and GREGORY LAURENCE MARTIN trading as NOYCE LAWYERS
TENTH RESPONDENT

HENRY GRECH trading as GRECH PARTNERS SOLICITORS
ELEVENTH RESPONDENT

GREGORY PETER GUY trading as GUY & ASSOCIATES SOLICITORS
TWELTH RESPONDENT

JUDGE:

EMMETT J

DATE:

19 SEPTEMBER 2002

PLACE:

SYDNEY

REASONS FOR JUDGMENT

The Sixth to the Eleventh Respondents and the Twelfth Respondent (“the Solicitor Respondents”) have filed notices of motion seeking summary dismissal of the proceeding pursuant to Order 20 rule 2 of the Federal Court Rules. The motions were first before me on 14 December 2001 when I made orders for the further conduct of the proceeding but stood over the motions for further hearing. I have now heard full argument on the motions.
Order 20 rule 2 provides that, where in any proceeding it appears to the Court that, in relation to the proceeding generally or in relation to any claim for relief in the proceeding:
(a)no reasonable cause of action is disclosed,
(b) the proceeding is frivolous or vexatious, or
(c) the proceeding is an abuse of the process of the Court,
the Court may order that the proceeding be stayed or dismissed generally, or in relation to any claim for relief in the proceeding. The applications are based on (a) above and the first limb of (b) above.
In the proceeding, the applicant, Checked-Out Pty Limited (“Checked-Out”), makes a number of allegations against the First to the Fifth Respondents (“the Eagle Eye Respondents”) and against the Solicitor Respondents concerning what is referred to by Checked-Out as “the Checked-Out Concept”. For present purposes it is necessary to consider only some of the allegations against the Eagle Eye Respondents.
THE CHECKED OUT CONCEPT
The Checked-Out Concept is described by Checked Out as a new method of providing and formatting building inspection reports and related documents, which involves two significant features as follows:
· using computer programs and applications software, which facilitate the rapid, efficient and economical production of building inspection reports and related documents according to a standard format;
· utilising a market strategy, which concentrates on promoting Checked-Out services to firms of solicitors and conveyancers.
The fundamental aspect of the Checked-Out Concept is said to involve the use of a standardised pro forma building report. The building report embodies a predetermined format, contents and characteristics as follows:
(i)        an outer cover sheet bearing the company name and details;
(ii)       the letterhead of my Company at the top of the first page;
(iii)      the general heading “Property Inspection Report” and containing the following items:
-   report;
-   client;
-   c/-;
-   vendor;
-   property;
-   date;
(iv)      the following sub-heading and in the following order:
Authorised Signatory
Site Conditions;
Accessibility;
Special Note;
Introduction;
Property Description;
Inspector’s Summary;
Internal Appraisal;
Bedroom 1;
Bedroom 2;
Bedroom 3;
Entry;
Hallway;
Dining/Lounge Room;
Bathroom;
Toilet;
Kitchen;
Laundry;
Internal General Comments;
Subfloor;
Roof Space;
Roof over;
External Appraisal;
Services;
Landscaping;
Special Notes;
(v)the relevant substantive observations and comments under each heading (and obviously differing for each report);
(vi)a section headed “Inspection Practices”; and
(vii)a section headed “Standard Terms and Conditions”.
The form of building inspection report produced by Checked-Out is said to have a distinct visual appearance and impact, utilising a particular form and layout and being written in a particular style of lettering and typeface. Checked-Out claims that its form of building inspection report and the method of producing it, by using purpose designed applications software, is special and has required the expenditure of much time, effort and ingenuity in order to reach the point where such a document would be brought into existence. Checked-Out claims that the secret of success for its form of building report is the need to reproduce and replicate the document, in a form appropriately modified to suit the particular requirements of each client and of each particular inspection, with consistency and reliability and with the minimum of labour and delay. Checked-Out claims that the key to its form of building report is the software that enables the report to be reproduced.
THE ALLEGATIONS
Checked-Out relevantly alleges that the Second, Third and Fourth Respondents, who were employees of Checked-Out (“the Employee Respondents”), acted in breach of contractual and fiduciary duties owed to Checked-Out by:
·    concealing from Checked-Out and diverting to themselves and to the First Respondent, Eagle Eye Inspection Pty Ltd (“Eagle Eye”), various requests and contracts to conduct building inspections and to supply reports in relation thereto;
·    pursuing and exploiting their contacts and working relationships with each of the Solicitor Respondents;
·    exploiting their contacts and working relationships with each of the Solicitor Respondents;
·    exploiting “the Checked-Out Concept” for the benefit of themselves and Eagle Eye;
·    receiving monies, contracts, opportunities and other benefits from and/or by reason of their association with each of the Solicitor Respondents.
Checked-Out also alleges that, in breach of an obligation of trust and confidence owed to Checked-Out, the Employee Respondents unlawfully made use of confidential information communicated to them by Checked-Out otherwise than for the purposes for which it was supplied to them.
Checked-Out alleges next that Eagle Eye has represented and continues to represent to the Solicitor Respondents and others that:
· Eagle Eye was and is entitled to develop and exploit the Checked-Out Concept;
· Eagle Eye was and is the owner of copyright in software and documents belonging to Checked-Out.
It is alleged that those representations were false in contravention of s 52 of the Trade Practices Act 1974 (“the Trade Practices Act”) and s 42 of the Fair Trading Act 1985 (“the Fair Trading Act”).
Finally, Checked-Out alleges that Eagle Eye has, without the licence or authority of Checked-Out, made and authorised the making of certain computer programs and applications and has, without the licence or authority of Checked-Out, made and authorised the making of various documents. Checked-Out alleges that, by doing so, Eagle Eye has infringed the copyright in certain computer programs and other documents the copyright in which resides in Checked-Out.
Checked-Out alleges against the Solicitor Respondents that:
·    they knowingly aided, abetted and participated in breaches of duty by the Employee Respondents;
·    they knowingly participated in breaches of confidence by the Employee Respondents;
· they aided, abetted, counselled or procured, induced, were directly or indirectly knowingly concerned in or conspired with other respondents to effect the contraventions of the Trade Practices Act and the Fair Trading Act alleged against Eagle Eye;
·    they reproduced, published and authorised the reproduction and publication of building inspection reports by Eagle Eye that constituted infringements of the copyright of Checked-Out in its pro forma building inspection report and, thereby, infringed Checked-Out’s copyright in its pro forma building report and other documents;
· they contravened ss 52 and 53(g) of the Trade Practices Act and ss 42 and 44(g) of the Fair Trading Act by representing and warranting to clients that Eagle Eye has the right to reproduce, publish, sell or hire building inspection reports and that the acquirer would enjoy quiet possession of such building reports, which representations and warranties were false.
I will deal with each of the various complaints made on behalf of the Solicitor Respondents separately.
BREACH OF CONTRACTUAL AND FIDUCIARY DUTIES AND BREACHES OF CONFIDENCE
Similar issues arise on the summary dismissal applications in relation to the first two causes of action alleged against the Solicitor Respondents. Both causes of action are ancillary claims in the sense that they allege aiding and abetting and participation by the Solicitor Respondents in breaches by the Employee Respondents. The particulars of aiding and abetting and knowing participation in relation to both claims are the same.
The first complaint on the part of the Solicitor Respondents is that they are alleged to have aided and abetted and participated in a breach of an alleged duty that Checked-Out will not be able to establish as a matter of law. The Second Further Amended Statement of Claim (“the Statement of Claim”) alleges, amongst other things, that, while they were employed by Checked-Out, the Employee Respondents owed contractual and fiduciary duties to Checked-Out:
“Not to obtain or retain any benefit or gain obtained or received by reason of their position or through any opportunity or knowledge resulting from it.”
It is alleged that that duty continued after the employment of the Employee Respondents by Checked-Out had terminated.
The allegation as it stands is embarrassing. It is not clear what is meant by the expression “any benefit or gain”. The thrust of the allegation in the Statement of Claim is that the Employee Respondents, during and subsequent to their employment by Checked-Out, by exploiting their contacts and working relationships with the Solicitor Respondents, they unlawfully exploited the Checked-Out Concept for the benefit of themselves and Eagle Eye to the detriment of Checked-Out. Checked-Out alleges that by doing so, the Employee Respondents were in breach of the duty mentioned above.
Merely soliciting business from clients or customers of a former employer after employment ceases is not a breach of duty. The pleading goes too far in asserting that an employee may not obtain or retain any benefit or gain in consequence of the employment. Clearly, there are benefits and gains derived from employed that, of necessity, can be retained.
Paragraphs 10(d) and 10A of the Statement of Claim are not maintainable and should be struck out. However, it does not follow that the material before me does not show that there is at least a pleadable cause of action against the Solicitor Respondents.
The second complaint by the Solicitor Respondents is that, assuming Checked-Out establishes a breach of duty by the Employee Respondents or a breach of confidence by them, the facts relied on by Checked-Out as giving rise to knowledge on the part of the Solicitor Respondents are incapable of supporting a conclusion of knowledge. Checked-Out relies on four matters as giving rise to an inference of knowledge as follows:
·    There is a striking similarity, indeed identity in some respects, between building inspection reports produced by Checked-Out and building inspection reports produced by Eagle Eye.
·    At meetings or discussions between representatives of Checked-Out and representatives of the Solicitor Respondents, Checked-Out:
oexplained the uniqueness of the Checked-Out Concept in detail;
oexplained that a vital part of the Checked-Out Concept was the use of proprietary software and the use of coding systems confidential to Checked-Out, which enabled the production of the standard format reports;
oprovided samples of the Checked-Out standard format building reports and booking sheets;
oidentified by name of the building inspectors used by Checked-Out, including the Employee Respondents.
·    On 12 February 1999, Checked-Out sent a facsimile transmission to each of the Solicitor Respondents saying:
“…the format of Eagle Eye building inspections is essentially identical to that of the Checked-Out building report, a report format and system which is the intellectual property of Checked-Out Pty Limited and for which we have given no authority for anyone else to use.”
·    This proceeding was commenced in March 1999 alleging, in general terms, the matters now complained of.

In my reasons of 14 December 2001 I indicated that I considered that the particulars of knowledge at that stage were such as to indicate that the case against the Solicitor Respondents is a fairly weak one. However, I am not persuaded that the cause of action relied on by Checked-Out is defective in the sense that no good cause of action is displayed. Nor am I persuaded that the claim against the Solicitor Respondents is frivolous. It may be that the claim is not a strong one. However, if, for example, and I am not suggesting that this is a likely possibility, the Solicitor Respondents did not go into evidence, the inferences that are capable of being drawn from the material to which I have briefly referred would support the possibility of a finding of relevant knowledge on the part of the Solicitor Respondents.
AIDING AND ABETTING CONTRAVENTION OF TRADE PRACTICES ACT
The Statement of Claim asserts that, since October 1998, Eagle Eye has represented and continues to represent to the Solicitor Respondents and others that:
· Eagle Eye was and is entitled to develop and exploit the Checked-Out Concept;
· Eagle Eye was and is the owner of copyright in Checked-Out’s software and documents,
and that such representations were false and, accordingly, constituted a contravention of the Trade Practices Act. It alleges that each of the Solicitor Respondents participated in that conduct.
However, in so far as it is alleged that any one of the Solicitor Respondents participated in conduct that was constituted by making a false representation in circumstances, where that Solicitor Respondent was aware of the falsity of the representation, is impossible to conclude that that conduct was misleading or deceptive.
Of course, it may be that one or more of the Solicitor Respondents may have participated in conduct in contravention of the Trade Practices Act that was constituted by making the representations to other persons who were not aware of the falsity. To that extent, there is some content in the allegation in paragraph 24 of the Statement of Claim that could stand. However, paragraph 24 as it presently stands should be struck out.
COPYRIGHT INFRINGEMENT
In paragraph 37 of the Statement of Claim, Checked-Out alleges that each of the Solicitor Respondents has, without the licence of Checked-Out:
·    reproduced Checked-Out’s building inspection reports in a material form;
·    published Eagle Eye’s building inspection reports;
·    authorised the reproduction and publication of Eagle Eye’s building inspection reports.
It is alleged that each of Eagle Eye’s building inspection reports is a reproduction in a material form of the whole or a substantial part of Checked-Out’s pro forma building inspection report.
The particulars of those allegations are that the Solicitor Respondents:
·    have had in their possession numerous copies of building inspection reports prepared and provided by Eagle Eye and embodying the copyright of Eagle Eye;
·    received and reproduced numerous copies of building inspection reports prepared and provided by the Eagle Eye Respondents;
·    have provided copies of reports prepared and provided by the Eagle Eye Respondents to clients and have retained copies of such reports on their files or records.
The Solicitor Respondents make four complaints in relation to the allegation of copyright infringement made against them. First, they say that the pro forma building inspection report of Checked-Out is not something in respect of which copyright exists. They rely on G. A. Cramp & Sons Limited v Frank Smithson Limited [1944] AC 329, which concerned the reproduction of pocket diaries. In that case the House of Lords was not satisfied that copyright in the tables reproduced had been established, since the commonplace matter of the tables reproduced left no room for taste or judgment and their selection did not constitute an original literary work within the meaning of the United Kingdom Copyright Act 1911.
It may be that, on a final hearing, I will be persuaded that the material that constitutes Checked-Out’s pro forma building inspection report does not involve an original literary work. However, substantial work has been shown to have been put into the preparation of the pro forma building inspection report in its computerised form as utilised by Checked-Out. I am not persuaded that Checked-Out has failed to disclose at least an allegation capable of being tried concerning the existence of copyright in the pro forma building inspection report.
Secondly, the Solicitor Respondents say that the only reproduction alleged against them is making a copy of a report prepared by the Eagle Eye Respondents and either giving it to a client or putting the copy on the file. They say that, in those circumstances, no damage was suffered by Checked-Out and there should be no relief either by way of damages or by way of declaration or injunction in relation to any alleged reproduction, assuming any reproduction constituted an infringement of copyright.
At this stage, there has been no attempt to indicate the measure of damages that might be suffered. Nor has there been any question of election in relation to an account of profits. It may be, for example, that insofar as Eagle Eye has derived profits from infringement of copyright of Checked-Out’s documents those profits would be substantial and insofar as there has been an infringement of that copyright by the Solicitor Respondents the damages or, alternatively, an account of profits may not be purely minimal. In the circumstances I am not persuaded that the claim for relief in relation to the alleged infringement of copyright against the Solicitor Respondents is frivolous.
Thirdly, the Solicitor Respondents say that their conduct in furnishing to their clients a copy of or the original of a building inspection report prepared by Eagle Eye does not constitute publishing within the meaning of s 31 of the Copyright Act 1968 (Cth). The concept of “publish” within s 31 of the Copyright Act means to publish for the first time - see Able Pty Limited v Multicoin Amusements Pty Limited (1990) 97 ALR 19, at 21 and 39. Publishing involves making the relevant document available to the public. I do not consider that the allegations made by Checked-Out constitute publishing of any pro forma building inspection report, the copyright of which resides in Checked-Out. The facts alleged by Checked-Out do not in my view constitute infringement by publication of material. Accordingly, to the extent that the Statement of Claim alleges publication, the allegation should be dismissed or struck out.
Fourthly, the Solicitor Respondents say that, in so far as the reproduction of the pro forma building inspection report alleged to have been authorised was the preparation of the building inspection report by Eagle Eye, there is no basis for an assertion that merely requesting a report in circumstances where they had no control over the form of the report, could constitute authorisation which requires that they be shown to have sanctioned, approved or countenanced an infringing reproduction. The Statement of Claim as it stands makes no allegation of any facts that would constitute authorising any reproduction that constituted an infringement.
The particulars alleged in paragraph 37 contain no allegation of any facts that could constitute authorisation. The particulars simply refer to:
·    have had in their possession;
·    received and reproduced;
·    have provided copies;
·    have retained copies.
Paragraph 37 should be struck out as against the Solicitor Respondents. However, there is material before me tat indicates that there is at least a pleadable cause of action against the Solicitor Respondents in relation to infringement of copyright. The claim therefore should not be dismissed in that regard.
CONTRAVENTION OF TRADE PRACTICES ACT
The Statement of Claim alleges direct contravention of the Trade Practices Act and the Fair Trading Act by the Solicitor Respondents by the making of representations and warranties. The allegation is that on each reproduction, publication, sale, letting for hire, and offering for sale or hire of Eagle Eye building inspection reports, the Solicitor Respondents made representations and warranties concerning the right to reproduce, publish, sell or hire them. It is said that such warranties and representations were false because Eagle Eye and the Solicitor Respondents did not have any licence from Checked-Out.
The complaint by the Solicitor Respondents is that mere reproduction or publication of building inspection reports prepared by Eagle Eye could not of itself constitute a representation or warranty. There is no allegation of any sale, letting for hire or offering for sale or hire on the part of the Solicitor Respondents of any building inspection report prepared by Eagle Eye.
It may be that the intention is to allege that, by providing copies of such reports to clients, the Solicitor Respondents made the representations and warranties alleged. It may be that such representations and warranties would be implied from the provision of a copy of a building inspection report having Eagle Eye’s name on it.
However, that is not the allegation as pleaded. I consider that paragraphs 42 to 45 should be struck out as against the Solicitor Respondents. Nevertheless, I am satisfied on the material before me that there is a pleadable claim against the Solicitor Respondents concerning such representations.
CONCLUSION
I consider that amendments could be made to the Statement of Claim that would result in my being satisfied that there are causes of action pleaded against the Solicitor Respondents that are sustainable. I have recently ordered that the proceedings be stayed on terms. I consider that the appropriate course is to give Checked-Out leave to file a further amended statement of claim amended substantially to the effect set out in a document that I will provide to the parties. I should make it clear I am not intending to plead the case for Checked-Out. The amendments are simply my understanding of the case that Checked-Out wishes to make out having regard to the way in which the argument has proceeded today. Upon the filing of such a further amended statement of claim, I consider that the notices of motion should be dismissed with costs.
However, Checked-Out should pay the costs thrown away by any amendment made pursuant to the leave that I propose to give. Those costs may include part of the costs of preparation for argument of the matters raised in the notices of motion. That will be a matter for the taxing officer. In the mean time, the notices of motion should be stood over to 28 November 2002, which is the date that I have fixed for further directions in the proceeding.

I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.
Associate:
Dated:

Counsel for the Applicant: Mr Hardcastle appeared in person with Ms Wilczak

Counsel for the 6^th – 11^th Respondents: Mr A. Fernon

Solicitor for the 6^th – 11^th Respondents: Noyce Lawyers

Counsel for the 12^thRespondent: Mr B. Morris

Solicitor for the 12^thRespondent: Benjamin & Khoury Solicitors

Date of Hearing: 19 September 2002

Date of Judgment: 19 September 2002

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 169 OF 1999

BETWEEN:	CHECKED-OUT PTY LTD (ACN 071 965 798) FIRST APPLICANT PHILIP JULIAN HARDCASTLE SECOND APPLICANT
AND:	EAGLE EYE INSPECTIONS PTY LTD (ACN 084 722 234) FIRST RESPONDENT JOSEPH WILLIAMS SECOND RESPONDENT WAYNE THOMAS COOK THIRD RESPONDENT TIMOTHY BOLLINS FOURTH RESPONDENT DEBORAH JEAN WILLIAMS FIFTH RESPONDENT PETER ADAMS trading as PETER ADAMS, SOLICITORS & ATTORNEYS SIXTH RESPONDENT KATARINA MUC trading as G.H. HEALEY & CO. BLACKTOWN and BRUCE McCANN trading as B.E. McCANN & CO., SOLICITORS SEVENTH RESPONDENT MARK KELADA trading as MARK KELADA SOLICITORS EIGHTH RESPONDENT MICHAEL QUINN trading as QUINNS SOLICITORS NINTH RESPONDENT JOHN MICHAEL NOYCE and GREGORY LAURENCE MARTIN trading as NOYCE LAWYERS TENTH RESPONDENT HENRY GRECH trading as GRECH PARTNERS SOLICITORS ELEVENTH RESPONDENT GREGORY PETER GUY trading as GUY & ASSOCIATES SOLICITORS TWELTH RESPONDENT
JUDGE:	EMMETT J
DATE OF ORDER:	19 SEPTEMBER 2002
WHERE MADE:	SYDNEY

JUDGE:	EMMETT J
DATE:	19 SEPTEMBER 2002
PLACE:	SYDNEY

Counsel for the Applicant:	Mr Hardcastle appeared in person with Ms Wilczak
Counsel for the 6^th – 11^th Respondents:	Mr A. Fernon
Solicitor for the 6^th – 11^th Respondents:	Noyce Lawyers
Counsel for the 12^thRespondent:	Mr B. Morris
Solicitor for the 12^thRespondent:	Benjamin & Khoury Solicitors
Date of Hearing:	19 September 2002
Date of Judgment:	19 September 2002