Concrete Pty Ltd v Parramatta Design & Develpments Pty Ltd & Anor

[2006] HCATrans 315

[2006] HCATrans 315

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S54 of 2006

B e t w e e n -

CONCRETE PTY LIMITED

Appellant

and

PARRAMATTA DESIGN & DEVELOPMENTS PTY LIMITED

First Respondent

GHASSAN FARES

Second Respondent

GUMMOW ACJ
KIRBY J
HAYNE J
CALLINAN J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 15 JUNE 2006, AT 10.09 AM

Copyright in the High Court of Australia

MR B.W. RAYMENT, QC:   May it please your Honours, I appear with my learned friends, MR A.J. SULLIVAN, QC and MR D.T. KELL, for the appellant.  (instructed by Costa & Associates)

MR C.R. BIRCH, SC:   May it please your Honours, I appear with my learned friend, MR J-J.T. LOOFS, for the respondents.  (instructed by Hal Lawyers)

GUMMOW ACJ:   Yes, Mr Rayment.

MR RAYMENT: Your Honours, the question of copyright in the case may be stated as being whether, within the meaning of section 36(1) of the Copyright Act there was a licence from the owner of the copyright in favour of the appellant to do an act which would otherwise be an infringement of the copyright within section 31(1)(b)(i), that is, the reproduction in material form of an artistic work.  By longstanding authority, the licence is assimilated to a consent or permission.

Our primary submission in the case is that this Court, with respect, ought to adopt as part of the law of Australia the matters held by the English Court of Appeal in Blair v Osborne & Tomkins [1971] 2 QB 78 which establishes in England that in a case like the present, according to the findings of fact which were made by the learned trial judge, we submit, there would be a licence implied in the case of the architect’s client to use the plans which were prepared for the purpose of building a building in substantial accordance with them which would extend so as to avail the purchaser of the relevant land.

GUMMOW ACJ:   Could you just go back to section 36 for a minute?  What would be the relevant infringement that needed the licence?

MR RAYMENT:   It would be an infringement, in our submission, within section 31(1)(b)(i).

KIRBY J:   Could it ever be as widely stated as that, that is to say, the holding in Blair, would it not always depend on the particular facts and circumstances of the case?

MR RAYMENT:   Yes, I did intend to catch up in what I put ‑ ‑ ‑

KIRBY J:   Here you have that reservation ‑ ‑ ‑

MR RAYMENT:   This was on the basis of the facts as found by the learned trial judge which were quite detailed.  But once you have findings such as that, in our respectful submission, there would be no reason, if this case were being heard in England or for that matter Canada, as I am about to come to, why Blair would not be applicable and, in our submission, the principles are stated appropriately for adoption as part of the law of this country.  Really, what happens in the Full Court, although not very expressly, is that Blair is not followed, in our submission.

KIRBY J:   Is that quite right or ‑ ‑ ‑

MR RAYMENT:   I think so.

KIRBY J:    ‑ ‑ ‑ is what happened in the Full Court that the Full Court attacked the foundation of the findings of the primary judge on the basis of ostensible bias and therefore, in effect, set those findings aside and felt itself able to make its own findings on the facts?

MR RAYMENT:   Well, that might be, with respect.  It is not very clear what they did about it.

KIRBY J:   It is not clear, I accept that, but otherwise why would they go on about Justice Conti’s suggested ostensible bias?  The only reason for touching and dealing with it would be if it is relevant and the only way it can be relevant is in order to undermine the acceptability of his Honour’s findings of fact.

MR RAYMENT:   Yes.  What I had in mind, if I may, your Honours, in addressing this appeal was to take, first of all, the copyright issues, and I must necessarily proceed on the basis of the trial judge’s findings of fact, then I wish to address second in this appeal, if I may, the findings, if they were that, made in the Full Court on the question of bias.  We submit that it is all wrong, with great respect, both as to copyright and as to apprehended bias and that really ‑ ‑ ‑

KIRBY J:   Could we deal with the matter on the basis that you establish that the Full Court made a mistake on copyright, but that leaves hanging the statements in the Full Court about the question of ostensible bias?  I do not see how we can avoid the latter, palatable though that might be.

MR RAYMENT:   When I come to it, we wish to draw attention to some uncertainties about what the Full Court had done, but it may be that what their Honours intended to do was this.  It may be that having disposed of the case, as they say, on the copyright issues, they then made findings that there was apprehended bias in the case such as would have led them to allow the appeal but chose, because of the way they dealt with the copyright issues, to make orders which allowed the appeal generally rather than order a new trial.  I do not know, to tell you the truth, your Honour, whether that is how one is to understand it and when we come to it I ‑ ‑ ‑

GUMMOW ACJ:   What do you say about paragraphs 68 and 69 of your opponent’s outline which centre upon this conundrum which Justice Kirby has spoken of?

MR RAYMENT:   Your Honours, what we ‑ ‑ ‑

GUMMOW ACJ:   Because the remedies are quite different ‑ ‑ ‑

MR RAYMENT:   They are.

GUMMOW ACJ:   ‑ ‑ ‑ if you succeed on, as it were, the legal merits on copyright law.

MR RAYMENT:   One does not understand why a court which would say there was apprehended bias did not order a new trial and how the findings of fact that appear to underlie even the way they deal with the copyright case were able to be made or assumed but ‑ ‑ ‑

GUMMOW ACJ:   In a way you are approbating and reprobating, I think.

MR RAYMENT:   Well, your Honour, so far as we are concerned, with respect, there was, in our respectful submission, nothing wrong with the way in which the learned judge dealt with this case.  There is no reasonable ground for apprehension of bias.  We would submit that this Court might review everything that was said in the Full Court about this matter and, if it agrees with us on that matter, dispose of the copyright issues on the basis of all of the findings of fact made by Justice Conti.  I wish to, as it were, provisionally assume that your Honours would deal with the matter that way in addressing the copyright issues and come back to seek to make it good when we come to bias.

GUMMOW ACJ:   We have to start somewhere, so we might as well do so.

MR RAYMENT:   Yes.  So, your Honours, in England you might have a question as between the Blair Case and Stovin-Bradford.  In Stovin‑Bradford ‑ ‑ ‑

KIRBY J:   It was only a very short time after Blair, was it not?

MR RAYMENT:   Yes.  Now, in Stovin-Bradford it was found that what the architect had sent by way of fee was a nominal fee.  That is explained in Copinger as follows and it is explained, actually, in Lord Justice Salmon’s judgment in Stovin‑Bradford.  Perhaps if I may hand up, because I am about to come to it, the passages from Copinger that we had in mind to refer your Honours, the current edition of Copinger.

What is explained about nominal fees is this.  Under the Royal Institute of Architect’s scale you charge quite a substantial fee amounting to one‑sixth of the total expenditure on the project for the preparation of plans for planning permission, and that might be quite a substantial sum of money, but it might be wasted because the local council might refuse the plans.  So some architects in England charged what was called a nominal fee which was a small sum to just, as it were, answer in part the expenditure involved in preparing the plans on the basis that they would then charge a full fee and be remunerated in full as the project went ahead, if the council gave approval. 

So you had, as it were, a practice in England apparently of charging a very small sum in some cases before the grant of planning permission, and that was the finding of fact that was made on the facts in Stovin‑Bradford that the fee was nominal and it was, indeed, stated to be nominal by the architect.  So that the architect in that case was able to say to the client, “I gave you no licence to do any more than put a plan in to the local council, and if you went ahead and sought to build a building you would need to pay me a proper fee for the use of my copyright if you went ahead with the project without me”.

KIRBY J:   Why is not your case analogous to that case in the sense that you were on notice of this fight and the position was reserved in the sale of the property and, therefore, if we are looking for analogy, that this is closer to the second than to Blair, than to the second case?

MR RAYMENT:   Yes, your Honour, I was seeking to take, first of all, the position as between the clients and the architects and come separately to any question of notice of any matter in the contract of sale.  I do wish to address that matter, but we submit that, as it were, logically one takes the matter as between the joint venturers who were the clients of the architect and the architect himself to consider the Stovin‑Bradford point.

Stovin‑Bradford arose as between the architect who was the plaintiff and the appellant and the client, even though somebody had been later authorised to do work, but the only person who was sued was the original person who retained the architect.  Whereas in Blair the case went on between the original architect and a later owner of the land and – or, rather, persons he employed to work on the plans and the building.

GUMMOW ACJ:   Now, what was the situation in Beck v Montana?

MR RAYMENT:   In Beck v Montana it was more the latter in that there was originally an arrangement between the architect and the client.  The client then sold the land and the question was whether the purchaser who also took the plans from the architect’s client had a licence within corresponding provisions in this Act – had a licence to infringe the architect’s copyright.  So, as it were, it was more like Blair in terms of the parties, but an important to note about Beck is that there was no development consent.

GUMMOW ACJ:   No?

MR RAYMENT:   Development consent.  Nothing which passed with the land.  What happened in Beck was that the architect was engaged to prepare sketch plans to obtain approval in principle from the local council, and that would be something that might produce estoppels as between the person asking the council’s opinion and the council which would not go with the land in any way.  There was nothing, which in accordance with Ryde Homes and the whole line of country about development approvals passing with the land in this country, nothing like that applicable to Beck’s Case.

KIRBY J:   It is interesting for the second point in this case that Justice Jacobs says in his opening words that:

If I thought that by taking time to consider my decision I would be likely to alter my conclusion, which I have already expressed in the course of argument, I would take that time ‑ ‑ ‑

MR RAYMENT:   Yes.  Your Honours, what we are going to say in due course is that if you have a look at paragraph 22 of the Full Court’s judgment and compare it with Blair, it is very hard to see that the Full Court has done any more than simply not followed Blair.  They have expressed puzzlement about why the judge was looking at the question of direct licence, but that is the very thing which Blair, as Copinger says in the passages I have just handed up and as is apparent, in our submission, from the report, the very thing which Blair decided.

Your Honours, I was just going by way of introduction to refer to the Canadian position too, if I may.  We put on the list of authorities a case of ADIv Destein (1982) 141 DLR (3d) 370. At page 373 of the report it is sufficient to go to, the judge, Justice Stevenson, referred to the passages which appear in Lord Denning’s judgment, with whom the other members of the Court of Appeal agreed in Blair, and which hold that the licence extends to later owners –at the very top of page 373 that passage is set out – and then his Lordship refers to the fact that the Supreme Court of Canada had referred with approval to Blair and Beck, which it did in Netupsky, although not in a matter raising this issue with which we are concerned directly.  Then at the foot of page 373, applying Blair to the facts, Justice Stevenson said:

In my view the implied licence arising out of the engagement between an owner and an architect or design engineer includes licence or permission for the owner, his successor in title ‑ ‑ ‑

we stress –

and their contractors to use the material for any legitimate repair or renovation of the building.

GUMMOW ACJ:   What is the nature of this licence they are speaking about?  It cannot be a contractual licence because there is no contract in the architect ‑ ‑ ‑

MR RAYMENT:   No, it is not.  It is the same licence that is mentioned, in our submission, in section 36; it is the consent or permission.  It is the creation of a defence to an action for infringement.

GUMMOW ACJ:   Does anything said in Time-Life bear on this in this Court?

MR RAYMENT:   We submit not.  Time‑Life dealt with ‑ ‑ ‑

GUMMOW ACJ:   It is 138?

MR RAYMENT:   It is, 138 CLR.  There was a lot said in Time-Life about the inability to use the patent cases.  That is…..and the like.

GUMMOW ACJ:   Yes, well, the patent cases ‑ ‑ ‑

MR RAYMENT:   They are rather out of fashion, anyway, in England these days. 

GUMMOW ACJ:   Do not worry about the English, but the patent licence is interesting because it does run with the goods.  Now, this licence somehow runs with the land, does it?

MR RAYMENT:   Yes, but it is not because of any ‑ ‑ ‑

GUMMOW ACJ:   How, conceptually, does that happen?

MR RAYMENT:   How does the licence run with the land?

GUMMOW ACJ:   Yes.

MR RAYMENT:   The purpose, in our submission, of the engagement of the architect is to bring into existence a state of affairs which by local government law will extend so as to benefit later owners of the land.  That is why you sell land, of course, as one knows, with the benefit of development approval.

GUMMOW ACJ:   Why is it any different with the book in Time-Life?

MR RAYMENT:   It is different from the book ‑ ‑ ‑

GUMMOW ACJ:   Why do we have some special rule about architects’ plans?

MR RAYMENT:   Books do not carry with them, as the Court held in Time-Life, as a matter of ordinary implication any power of importation.  What the Copyright Act required was a positive licence to import under sections 37 and 38; you do not get it from the mere fact that nothing is said, said the Court in Time-Life, at the time of sale either to Little Brown, Boston or from Little Brown to Ipec.  We just happen to have with architects, as the passages I have handed up from Copinger would show, we submit ‑ ‑ ‑

GUMMOW ACJ:   Yes, I know but ‑ ‑ ‑

MR RAYMENT:    ‑ ‑ ‑ a right which traditionally later owners will be intended to have the benefit of.  Lord Denning said in ‑ ‑ ‑

GUMMOW ACJ:   Does the licence spring from some perception as to what the ordinary understanding and course of events is taken to be?

MR RAYMENT:   Yes.  We submit, yes.  Lord Denning says that in the ordinary course of things the payment of £70, I think it was, to whomever the clients were in Blair, covered a licence not only for those persons but also for the later owners of the land.  It is important to know about Blair that planning permission in the United Kingdom, as here, passes with the land.  So, the architect would be taken to know ‑ ‑ ‑

GUMMOW ACJ:   Yes, but he might not.  Assume the planning commission legislation was repealed tomorrow.  All this collapses, does it?  It is odd to have the Copyright Act operate by reference to some other State statutory system.  This is the federal law.

CRENNAN J:   Was not Lord Denning assuming the size of the fee gave some indication about the terms of the retainer?

MR RAYMENT:   Yes, but the later owner is only relevant because he is the person who uses the planning permission on the facts of the case.  What happened was two people subdivided their blocks so as to create a third block in between them and they sold it and that person employed builders and surveyors but then ‑ ‑ ‑

HAYNE J:   If you are to hook the argument onto anything it has to be hooked, does it not, onto the proposition that the plan is a plan to do something on the specific land?

MR RAYMENT:   Yes.

HAYNE J:   Whether there is planning permission to do it, or not, seems to me at the moment to be interesting but not pressingly relevant.  If there is a hook for this argument it is that the plan is for this land, regardless of who owns it.

MR RAYMENT:   Yes.  Architects do not really care who owns the land.

HAYNE J:   I do not know about that, Mr Rayment.

MR RAYMENT:   They are doing something which is for the building of a building on a block of land.

GUMMOW ACJ:   The relationship between architect and client can be highly personal.

MR RAYMENT:   It can be.  Of course, it can be.

CRENNAN J:   It is often for the building of a building for this particular client.

MR RAYMENT:   Yes.  On this block, though.

CRENNAN J:   Yes.  I mean the real difference between Blair v Tomkins and Stovin-Bradford is to do with the terms of the different retainers.

MR RAYMENT:   I do not think there is a finding in – certainly Stovin‑Bradford only arose as between client and architect and the court was required in Blair to look beyond the parties to the contract to third parties who might acquire the land and the question is were they intended to have the same licence as the clients to utilise the development approval for the planning commission.

HAYNE J:   Let us come back to this question of land.  Assume an architect has copyright in a set of plans for a kit home and makes an arrangement with a particular owner, well knowing that the owner is going to put it up at 1 Smith St, Smithfield.

MR RAYMENT:   Yes.

HAYNE J:   That case may be radically different from the architect who, having regard to the particular site where the building is to go, designs a bespoke set of plans for that site.  Thus the generality of the proposition you advance is one which seems at first blush to try to embrace too much.

MR RAYMENT:   The licence that we contend for is a licence only to build on this land during the subsistence of this development approval.

GUMMOW ACJ:   And it is irrevocable?  There is no consideration provided by the third party.  It is not contractual.  Is it irrevocable?

MR RAYMENT:   Well, we submit it is irrevocable.

GUMMOW ACJ:   Why?

MR RAYMENT:   But you do not have such an issue in this case, with great respect.

GUMMOW ACJ:   I know that, but we have to consider the concepts.

MR RAYMENT:   Well, it is moot in this case because that was never run at the trial, whether there was any question of irrevocability.

GUMMOW ACJ:   There is a whole body of case law about licences that are revocable and irrevocable.

MR RAYMENT:   Yes, yes.

GUMMOW ACJ:   Injunctions in Cowell v Rosehill and so on and so forth.

MR RAYMENT:   And it is often difficult to work out whether it has been revoked on the facts and the like.

HAYNE J:   But then does it not come to a very specific analysis of the particular relationship between this client, this architect with respect of this land in all the circumstances, rather than a general proposition if an architect designs plans for a particular site, there is inevitably, usually, sometimes an implied permission to whoever should be the owner from time to time of the land to use the plans?

MR RAYMENT:   Well, your Honour, we do seek to put the matter generally in the way your Honour has just indicated, but it certainly is not necessary on the issues propounded in this case to do so, because you have detailed findings of fact made by the trial judge which show, first of all, that the case is nothing like the Stovin-Bradford Case which the other side are relying upon.  There was no question of this being a nominal fee which was insufficient remuneration.  That was rejected on the facts any such question.  Secondly, as the learned judge rightly said, in our submission, if you look at paragraph 115 of his judgment, this is the trial judge, it must have been present the minds of the joint venturers, or indeed objectively, they should be taken to have in their minds, but ‑ ‑ ‑

GUMMOW ACJ:   This is volume 6, is it?

MR RAYMENT:   Yes, volume 6, 2673.

GUMMOW ACJ:   Thank you.

MR RAYMENT:   What his Honour points out there is that the parties must be taken to appreciate that while they intended, no doubt, their joint venture to go ahead to conclusion, that they might fall out and that the land might need to be sold either compulsorily or by agreement between the parties and then a buyer would be likely, as it were, to pay more for it with the benefit of a development approval than without.  Let me take the case of revocation.  An architect who purported to revoke the licence might do something entirely foreign to the contemplation of the parties at the time of his engagement ‑ ‑ ‑

GUMMOW ACJ:   This tripartite arrangement, as it seems to be, does that not require the presence of all the parties?

MR RAYMENT:   I am sorry, your Honour means a licence in favour of a third party?

GUMMOW ACJ:   That is what is involved here, is it not?  It is a tripartite arrangement.  There is the architect, the original client and a party who obtains the land and there is the controversy.

MR RAYMENT:   The question is actually not contract or arrangement; it is permission or consent.

GUMMOW ACJ:   At large?

MR RAYMENT:   At large in the Copyright Act, yes.  It is not necessary, for example, to say that here is a third party right under a contract.

GUMMOW ACJ:   At large and perpetual and irrevocable?

MR RAYMENT:   Trident’s Case or anything like that, before you can conclude that the effect of the engagement with the architect is not only that his licence that he gives as a necessary consequence of the engagement will go to the client but also it will go to third parties.

GUMMOW ACJ:   It is at large.  It is perpetual for the term of the copyright in that sense

MR RAYMENT:   Well, no, for the term of the development approval, with respect, because it would only ‑ ‑ ‑

GUMMOW ACJ:   For the development approval?

MR RAYMENT:   Which is five years in this case.

HAYNE J:   Why?  I know the development approval is five years, but why is it only for that term?  Why, if fresh application is made to construct like building on the ‑ ‑ ‑

MR RAYMENT:   Quite, I accept that.

HAYNE J:   So it is for the life of the copyright, is it not?

MR RAYMENT:   Potentially, but in a very rare case would it go beyond the next few years.

GUMMOW ACJ:   The building might be burnt down, who knows?

MR RAYMENT:   Yes, but reconstruction would not involve any infringement.

GUMMOW ACJ:   Why?  It would be a fresh reproduction in material form, would it not?

MR RAYMENT:   A fresh reproduction, I see, yes.  Your Honours, what is drawn attention to in paragraph 115 is that the parties must be taken to appreciate at the time of engagement that they might fall out and that third parties might wish to avail themselves of the right, and one knows that development sites may become much more valuable once development consent is granted, and the whole purpose, really, of the engagement is to enable this to occur, the whole set of consequences to follow including the ‑ ‑ ‑

GUMMOW ACJ:   Are there particular findings of fact succinctly expressed on which you rely as to the nature of this licence?

MR RAYMENT:   There were particular findings of fact about the contract and one really needs to then draw inferences about the licence from those facts.  There were no findings as to the inferences in direct terms I think it would be right to say.  The case which the judge was asked to deal with was one where the defence suggested that no one had a licence.  The client had no licence and no one who bought the land later had a licence.  That was how the matter was pleaded at the trial by my learned friend’s clients.

They said neither the trustees for sale nor any predecessor in title had any licence at any time to exploit the copyright in these plans, and it was said on the basis that he was supposed to be builder and had not been remunerated.  The findings, as your Honours know, were that he was never to be the builder and that the building was intended to be let out for tender for another builder to be engaged.  Your Honours, we submit, having handed up those paragraphs from Copinger ‑ ‑ ‑

GUMMOW ACJ:   Is there any treatment of this subject in Laddie, Prescott and Vitoria, their work on copyright?  It is rather more intellectually agile than Copinger.  It tends to become a bit sclerotic, I think.

MR RAYMENT:   I will just need a moment to answer that question.

GUMMOW ACJ:   You can come back to it if you have something there.

MR RAYMENT:   We have not copied this for the Court.  The reference is to paragraph 24.24 at page 917 in the third edition.  The author says:

In the Blair case it was conceded that the licence was transferable to a purchaser of the property together with the benefit of planning permission.  This must be right.  The owner, having commissioned the plans for the purpose of putting up a building on the site, should have the right to transfer the right to use them to the new owner of the land.  Whether the licence has actually been assigned must be determined from the contract of sale and the surrounding circumstances [of the right].

CRENNAN J:   That highlights the fact that there are two licences at work in these situations.  One is to reproduce the plans for the purposes of obtaining development permission and another is to reproduce the plans for the purposes of building the building.

MR RAYMENT:   Yes, the architect actually lodged the plans here and it is the plans – my client’s case really depends on – it is not the former licence which we need to establish in this case; it is the latter.

CRENNAN J:   Yes.

MR RAYMENT:   Normally it would be either – the applicant for development approval, as it happens in this case, was the architect himself, not the client, who simply consented to the lodgement of the application by the architect.

GUMMOW ACJ:   I think we had better be supplied with those paragraphs from Laddie in due course.

MR RAYMENT:   Yes, certainly.  Your Honours, the only direct Australian authority relevant to the position of architects before these proceedings was Beck’s Case (1963) 5 FLR 298. At page 304 Justice Jacobs discerned in the arrangements in that case, which again were for the preparation of sketch plans to obtain approval in principle – it is at page 304 towards the foot of the page in the paragraph beginning, “The question raised”. What his Honour finds is, picking up the matter about 10 lines down:

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 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 is that matter which was picked up ‑ ‑ ‑

GUMMOW ACJ:   What are those cases that Mr Hutley referred to about, do you know, Cooper v Stephens and Marshall?  Are they copyright ‑ ‑ ‑

MR RAYMENT:   I do not know that they are, with respect.  I think they are not.  We will check it over ‑ ‑ ‑

GUMMOW ACJ:   That is right.  Anyhow, that can be checked, yes.

MR RAYMENT:   It is a little time since I looked at them, but I do not think so.

GUMMOW ACJ:   Well, maybe they were.  Look at 305:

I do not think that this conclusion is contrary to . . . Cooper v. Stephens or W. Marshall ‑ ‑ ‑

MR RAYMENT:   Yes.

KIRBY J:   The difficulty I have with the way your argument is advancing is the difficulty that Justice Gummow and Justice Hayne have both mentioned and that is that you want to gloss the statute with (licences by architects) amending Act and that just is not conceptual.  You have to grapple with the issue of a general concept and it must apply for engineers and for all sorts of people who are dealing with parties in the nature of their dealing which is going to enure later to the benefit of a third party.

MR RAYMENT:   Yes, we would accept that what we are putting would extend to engineers who do work in connection with the obtaining of development approval as often occurs and whose plans might themselves become embodied in the development consent.  It would follow that an engineer would be in precisely the same position, we submit.

KIRBY J:   Therefore the analysis has to be on what the same position is rather than on a subcategory such as Copinger has of architects.

MR RAYMENT:   Yes.  It so happens that there are a series of cases which look directly at the position of architects.  They happen to be relevant here.  We do not submit it is limited to architects and we do not – it is necessary to look closely at the facts in every architects case to make sure that they are applicable.  In our submission, when you do in this case you find no reason to think they are not.

GUMMOW ACJ:   There are some terms implied in contracts as a matter of law and other terms implied for the circumstances of the particular case.  I think you are trying to get into the first analogy which is rather a long bow, I would have thought, for architects.  You just find an architect, plans.  This follows unless it is negatived in some way.

MR RAYMENT:   The whole understanding, in our respectful submission, the purpose for which the architect was engaged in this case was to prepare something which, when obtained, would be, as a matter of law, longstanding law ‑ ‑ ‑

KIRBY J:   I thought there was a lot of point in what Justice Crennan said, that it is not just the purpose, it is the fact that you look at the money that has been paid and you look at all the circumstances, which includes the fee, and if the fee is such that it is not just a tadpole but appears to indicate that it is contemplated that it will run with the land, then the relationship between the parties on the facts is such that this particular adviser must be taken to have agreed that it goes with the land to the benefit of third parties.  That is a more conceptual way of looking at the matter.

MR RAYMENT:   If that is, with respect, what is necessary to be found, it is present here, we submit, as a matter of fact.

KIRBY J:   Yes, I realise that but see you are not – you just want to have a ‑ ‑ ‑

MR RAYMENT:   Well, I am not seeking to eschew it.  Please do not take me as doing that in any way.  Your Honours, what actually the findings of fact were in this case were a little more complicated than directly what your Honour puts to me, but they amount to the same thing when you look at them.  This architect ‑ ‑ ‑

HAYNE J:   Can I understand the legal framework within which we are working?  Is it a framework in which there are two steps:  one, the person engaging an architect obtains under the contract with the architect a licence to reproduce in material form ‑ ‑ ‑

MR RAYMENT:   Yes, your Honour.

HAYNE J:   At least in most cases.  The case of nominal fee may stand apart.

MR RAYMENT:   Yes.

HAYNE J:   But step one is there is a licence ‑ ‑ ‑

MR RAYMENT:   For the client.

HAYNE J:    ‑ ‑ ‑ to reproduce.

MR RAYMENT:   Yes, your Honour.

HAYNE J:   Is the second step in the framework, the second element of the framework, assignment of that contractual licence to the subsequent purchaser?

MR RAYMENT:   Only in the alternative and at the end of my argument and our primary submission not necessary.

HAYNE J:   If it is not framed in the way of licence for value followed by assignment, at the moment I am at sea to know what realm of legal discourse we are in.  It is the assertion of result rather than the identification of the path by which you get to result.

KIRBY J:   Do you not have to say there is an agreed implied assignment?

MR RAYMENT:   Yes, there is agreed implied assignment or it extends of its own force and we submit that it is the latter which is the more appropriate way of looking at it.

KIRBY J:   It runs into the specific notice that you had that there was no agreement.

MR RAYMENT:   No, not quite that, but I will come to it.

KIRBY J:   I will try to restrain my enthusiasm for that point.

MR RAYMENT:   I will come to it.  Your Honours, there is no reason to think ‑ ‑ ‑

KIRBY J:   What is the answer to Justice Hayne’s question?

MR RAYMENT:   Well, I am just seeking to do it.  There is no reason to think, in our submission, that if you worked out the full terms of the contract, all of the implied terms and the express terms of the contract between the architect and the client in this case, that the licence which is given to the client to reproduce the plans, inter alia, by building the building on this block would not be one which was directly in favour of such persons who may later own the land at any rate during the subsistence of the development approval or by renewal of it.

GUMMOW ACJ:   And was irrevocable?

MR RAYMENT:   And was irrevocable, because to revoke it would potentially damage, significantly, the interests of the client in that the land that he ‑ ‑ ‑

GUMMOW ACJ:   Do you get any support or otherwise from section 73 of the Act which is a special provision dealing with reconstruction?  I think your opponent says 73 would not have been necessary if you are correct.

MR RAYMENT:   It is not enacted against the background of a denial of Blair v Osborne, in our respectful submission.

GUMMOW ACJ:   Well, it precedes it.It is 1968.

MR RAYMENT:   Yes, we put in paragraph ‑ ‑ ‑

GUMMOW ACJ:   I do not think these problems first burst on the world in Beck v Montana.

MR RAYMENT:   No, no, we put in paragraph 9 of our submissions in reply that, if anything, section 73 assists the appellant, in our submission.  Section 73(2) simply makes it – I am sorry, we put this earlier.  Section 73(2) simply makes it clear that where a building had been constructed in accordance with architectural plans in which copyright subsists and has been so constructed with the licence of the copyright owner, the copyright is not infringed by a later reconstruction of the building by reference to those plans, and that is objective in form and not limited to the architect’s client.  In our submission, it is entirely consistent with the submission we are putting forward.

GUMMOW ACJ:   Is there any treatment of this subject in the report that led to the 1968 Act for why this section went in, the Spicer Committee Report?  That should be looked at.

MR RAYMENT:   I will have to return to that question, your Honour.  We will seek to attend to it over the lunch hour, your Honour.

GUMMOW ACJ:   Sir Nigel Bowen was Attorney with the carriage of this Act and he knew what he was doing, I suspect.

MR RAYMENT:   Yes, indeed, but clearly the only provision of this Act which directly applies, in our submission, is the reference to a licence in section 36 which copies the earlier Act’s reference to a licence in section 2 of the 1911 Act.  Your Honours, what the English Court of ‑ ‑ ‑

KIRBY J:   This would also apply to lawyers, would it not?  Lawyers give advice and is there then an implied right in the third party to get the benefit of that advice and the detailed memoranda and counsel’s opinions and all the other things that come with it without fee?

MR RAYMENT:   The example that occurred to us more directly, with respect, was one of legal precedent, where you publish a book of legal precedent.  You certainly could not complain about the use of that precedent by anybody who read the book or who was in contact with someone who had read the book.  On the other hand, of course, one licence that is not given by publishing a book of legal precedents is to a competitive work by longstanding authority, but leave that aside ‑ ‑ ‑

KIRBY J:   It is when we apply these things to our own profession that we are tested.

MR RAYMENT:   Your Honours, in our submission, what the English Court of Appeal did in Blair was to take the essential finding of Justice Jacobs and reach a conclusion which was highly consistent with it which applied directly to third parties, and we submit it is striking that the planning consent in England ran with the land just as it does here, and we have given references in our written submissions to the English law about that.

KIRBY J:   Can I say – and it is relevant to what has already been said – that the difficulty with that is that since then there have been two developments of enlightenment in the way we go about problems.  Number one is, if a statute is involved we start with a statute, and therefore we have to, as it were, understand very clearly the framework and the structure of the statute into which this case law has to be set, and number two is, we are not quite as enthusiastic as we were back in Lord Denning’s day to just solve the particular case, although he was not a great offender in that respect, but you have to deal with the matter not just on a category, the subcategory of architects.  You have to deal with it as a concept that fits comfortably to the statute, so that is the problem of picking up Justice Jacobs and Justice Denning in the second case.

MR RAYMENT:   There were two essential elements to the chain of reasoning in Blair, both of which are correct, in our submission.  One was that if the position was otherwise, that is, if there was no such licence, the architect could, in effect, stultify the very development that he was engaged to promote.  Secondly, attention was directed to the whole purpose of the engagement of the architect being to bring into existence a plan which would be used to build a building on this site and this site alone under the planning permission.

Those two matters led the Court to conclude that the circumstances were that, as between architect and client, the payment of the sum of money covered not only the client’s licence but also the licence in favour of a later buyer of the land and, indeed, workmen and builders and architects who might be engaged by either the client or by the later owner.  In other words, what was necessary to be done to enable the primary object of the engagement of the architect to be put into effect included a licence which extended beyond the client and went to those third parties.

What I was about to say in relation to the facts of this case, which makes a slight difference but not in the ultimate, in our submission, was this.  The architect in the case was found to have been paid a substantial sum of money, $27,000, for the preparation of an eight‑unit development plan, a plan which was lodged with the council and indeed approved for the construction of eight units on the same block of land.  He was part of the joint venture company which was in joint venture with Ms Haviland and Mr Rix.  He was both the architect using Parramatta Design & Development or his own name for the purpose and he was a shareholder in one of the joint venture vehicles which was involved in the development of the land.  He was, in effect, one third of the project.

When the next-door proprietor obtained a development consent for a larger number of units than the eights units which had been included in his development approval, he as joint venturer or as architect or as both, went to the joint venture partners and obtained their agreement that although the expenditure on the first plan of $27,000, which was substantial, could, in effect, be wasted in that they would be not proceeding with it and although there would be further delay in obtaining a fresh approval and further expense in engaging engineers and the like at the joint expense of the joint venture partners, he recommended that that occur and offered, for the purposes of that as architect, not to charge an additional fee, in effect, to treat, I suppose you might say, the earlier payment as if it were a payment for the later plans. 

We called evidence in this case that the right fee for the preparation of plans, assuming the development went ahead, was about $30,000 in the case of the 14‑unit development and there was no evidence called against us about the matter on that issue.  There was evidence from an architect or a surveyor on the other side about what would be reasonable if the architect was also the builder but nothing to answer the evidence which we called from an architect about the $30,000 figure.

So if you analyse it, as the trial judge did at the end of the day, this architect was as much remunerated as the £70 remunerated the architect in Blair, in our respectful submission.

KIRBY J:   Could you just help me on this?  I do not know as much about this Act as other members of the Court.  You start with the provision of the copyright.  That is section 31, is it not, and there is no dispute that this was an original work that would ordinarily attract copyright.  So the respondents are up in front at that stage.

MR RAYMENT:   Yes.

KIRBY J:   Then where is the licence section of the Act that takes ‑ ‑ ‑

MR RAYMENT:   Section 36.

KIRBY J:   Section 36.  So then you take it away if you fall into the 36 ‑ ‑ ‑

MR RAYMENT:   If there is a licence within the meaning of section 36 ‑ ‑ ‑

GUMMOW ACJ:   You have to go to 13 first, do you not?

MR RAYMENT:   Yes, you do, 13(2) and 36 ‑ ‑ ‑

GUMMOW ACJ:   Section 13(2) says:

the exclusive right . . . includes the exclusive right to authorize a person ‑ ‑ ‑

MR RAYMENT:   Yes.

GUMMOW ACJ:   Then you go to section 36.

KIRBY J:   So you have to say this is a case where the architects, though they had the copyright, had thereby the exclusive right to authorise a person and have authorised not only the persons with whom they contractually dealt, but persons down the chain because (a) of the amount of money they got – or rather (a) the very nature of the ‑ ‑ ‑

MR RAYMENT:   Of the engagement.

KIRBY J:    ‑ ‑ ‑ engagement which was for particular land, no benefit for other land and (b) the fact that it was designed to go and get development consent and did get development consent on the basis of it; (c) that it was therefore in the possession of third parties, the local government authority; and (d) the amount of money that had to be paid to the owner of the copyright, and if you put all of those things together, that is enough to indicate that there has been authorisation down the chain, not just the contract, immediate contract.

MR RAYMENT:   It is true it is a matter of State law, but it is longstanding State law, well‑recognised by the solicitors who are on both sides of this joint venture.  Mrs Haviland and Mr Barrak were both solicitors – well known to all that development consent ran with the land, just as it did in England.

KIRBY J:   Are there any other factual elements apart from those four that I mentioned?  Is the fact that there was a joint ‑ ‑ ‑

MR RAYMENT:   I think not.  It is primarily the purpose of the engagement, but it is supplemented by the other matters to which your Honour has referred.

KIRBY J:   I am just trying to analyse it in terms of the Act, because that is what one normally does.

MR RAYMENT:   In terms of the Act, the licence that is mentioned in section 36 is certainly not, as it were, a written licence.  Justice Jacobs decided that in Beck, for example.  Looking at the 1911 Act, Justice Jacobs identified that ‑ ‑ ‑

GUMMOW ACJ:   What is Justice Jacobs doing in Beck?  He seems to be saying at page 304, in the paragraph at point 6:

The question raised is quite a broad one because it applies not only to architects but would apply for instance to artists . . . written material ‑ ‑ ‑

MR RAYMENT:   With an intention that it “be used in a particular manner”.  It is not books.  I do not think, with respect, this could be taken to be in any way ‑ ‑ ‑

GUMMOW ACJ:   That seems to be a proposition of law – the engagement implies a permission.

MR RAYMENT:   Well, at any rate, it is a common problem, as his Honour points out, which will affect lots of works.

GUMMOW ACJ:   Then he says it is “a principle of general application”.

MR RAYMENT:   Of general application, yes.

CRENNAN J:   He also says on page 305 at about point 3 that the:

implications would not follow if the architect could be regarded as reserving a right to himself in the contract to continue with the subsequent stages ‑ ‑ ‑

MR RAYMENT:   Yes, that would be the kind of Stovin‑Bradford line of country to later on in the next decade but that also was agreed in.  But what I was just about to draw attention to in relation to what is said about the licence, it is really ‑ ‑ ‑

CRENNAN J:   Was there any evidence here about those aspects of the engagement of the architect; that is to say, was there any explicit evidence about any reservation the architect made or any arrangements the architect made ‑ ‑ ‑

MR RAYMENT:   He put a copyright symbol on the plans.  It would be on the ‑ ‑ ‑

CRENNAN J:   Yes, but was there evidence about what was contemplated in respect of his role once it went beyond the planning stage?

MR RAYMENT:   Well, he said he was going to be the builder.  The judge rejected it and found that he was going to be the architect, full stop, and he had been paid when he was paid $27,000, which he said was for disbursements.  The judge, in effect, said he was paid the proper fee for the original plans and then procured an agreement to the later plans on the basis that I have referred to.

To answer the question about the licence it is perhaps necessary to take the Court to, for example, Sir Nigel Bowen’s discussion of the matter in Time‑Life at first instance in a judgment which was agreed in later by this Court. 

GUMMOW ACJ:   I am not sure we have Time‑Life at first instance.

MR RAYMENT:   No.

GUMMOW ACJ:   What is the citation?

MR RAYMENT: It is 12 ALR 1. It is a very short passage. I can certainly copy it if your Honours would wish me to, or just read it.

GUMMOW ACJ:   No, we can locate it, but read it onto the transcript I think, Mr Rayment.

MR RAYMENT:   At the foot of page 9 his Honour said:

Counsel for Angus & Robertson submitted that the reference in ss 36, 37 and 38 to “the licence of the owner of the copyright” was simply a reference to his “consent” or “permission” or “licence”.

Sections 37 and 38 in particular dealt with importation, but it is the same word that is used in our section 36.  Of course, 36 is there mentioned:

These words, it was said, were used in this context interchangeably –

Reference was made back to what Justice Jacobs said in Beck to there being consent or permission and to Pacific Film in this Court 121 CLR 154 at 163, 169 and 175:

It was argued that although the Copyright Act 1911 (Imp), in force by virtue of the Copyright Act 1912, used the word “consent” in s 2(1) the change of wording in the Copyright Act 1968 where the word “licence” is used was not intended to produce any change in the law in this respect (Copinger & Skone James on Copyright 11th ed, p 173, par 404).  I find myself in general agreement with these submissions.

That really was assumed, at any rate, to be the case when the matter came here in Time‑Life. 

GUMMOW ACJ:   That is authority that licence need not be contractual?

MR RAYMENT:   Need not be contractual and indeed ‑ ‑ ‑

GUMMOW ACJ:   But if it is not contractual, you then run into the problems of ‑ ‑ ‑

KIRBY J:   The word in the Act is “authorize” which, in my mind, connotes it has to be authorised.  Now, that connotes a more positive thing than simply consent.  “Authorize” tends, to my mind, to conjure up the idea of some affirmative provision of agreement.  I am thinking of section 13(2).

MR RAYMENT:   Yes, but section 36 is perhaps the most directly relevant provision which uses just the word “licence”, not “authority”.  Your Honours, reference was made back by Sir Nigel to what was said in Beck and we have Beck here on the list.  It is at page 303 where Mr Justice Jacobs looked at this matter in relation to the 1911 Act which used similar words.  Justice Jacobs said, page 303 of 5 FLR, towards the foot of the page, last main paragraph:

Now, the permission or consent or licence must arise by implication. I do not think that it is one of the kind which is referred to in s. 5(2) of the Copyright Act –

and that was, in effect, a written licence described there –

but that rather it is a question of consent which prevents an infringement within the terms of s. 2(1) of the Act; that is to say, once the consent of the owner of the copyright is given, then there will not be an infringement by acting within that consent.

It just comes back to all of that and that will be, in our submission ‑ ‑ ‑

KIRBY J:   So that there would be consent in your submission for the use of the copyright plans for your client but if, for example, your clients wanted to reproduce and replicate a hundred buildings of a similar kind that would be a different kind of breach of the copyright.

MR RAYMENT:   Right outside the licence.

KIRBY J:   There would be no licence.

MR RAYMENT:   It has to be on this land.  It has to be in substantial accordance with this plan.  Just before I leave the question of generality could I give a reference ‑ ‑ ‑

GUMMOW ACJ:   Returning to section 13(2) for a moment, Mr Rayment, the use of the concept of assignment has a bit of a wrinkle to it, does it not?  The act of assignment by the client, if that is the way you look at it, would itself be something that, without permission, fell within 13(2), would it not, because it is the exclusive right of the copyright owner to authorise anybody?

MR RAYMENT:   Yes.  Justice Jacobs, who did analyse the case that way, found that there was an implied right to assign also conferred by the copyright owner.  Justice Merkel had a look at some of these more general questions ‑ ‑ ‑

HAYNE J:   Well, again, just before you come to that, does it come to the proposition that the agreement between client and architect is to be understood as containing a provision, “I, the architect, consent to you and to any subsequent owner of the land, reproducing the plans in material form” ‑ Part I; Part II – “and I, the Architect, authorise you, the client, to” – I am not sure whether it is assign, give the benefit of, authorise ‑ ‑ ‑

MR RAYMENT:   Sub-licence, perhaps?

HAYNE J:    ‑ ‑ ‑ “pass on this permission to any subsequent owner of the land”.  Is that the proposition?

MR RAYMENT:   Yes.  The primary proposition I am addressing is the first of those two.  I am seeking to suggest that the architect gave third parties permission as a performance of his engagement or as a necessary consequence of his acceptance of the engagement to do the – a later owner who wished to avail himself of the development consent to do so and for that purpose to use his plans on this block only of course, and during the term of a valid development consent obtained by reference to those plans.

HAYNE J:   Questions of revocability of that arrangement may require a different answer according to whether the client complains of revocation or the subsequent purchaser complains of revocation.

MR RAYMENT:   Yes, perhaps, in an appropriate case, but if you look at the matter in terms of the engagement, why would you assume any right of revocation, with respect?  You would really deny it, we would submit, if you look at them.  If you find that the purpose of the engagement is to enable a development consent to be obtained, which must mean something with respect to the value of the land potentially being increased, would you then be significantly, perhaps, affecting, if you allowed a power of revocation.

Of course, you must – in the usual case there will be land sold with the benefit of development consent which would commit once a person bought it at auction that person to paying a great deal of money by reference to the development consent.  So we submit if you look at the matter as between architect and client, it is sufficient to say there that there would not be a power of revocation in those circumstances, and as Lord Denning said in Blair the payment of the money would cover the use not only by the client but by a later owner of the block.

KIRBY J:   I suppose it can be said that if the very point of the engagement is to get the development consent and it would therefore go to the local government authority and get the development consent on that basis and would be retained by the local government authority to ensure that the consent to development which the local authority has given under its statute is not departed from, and that it must therefore be there as a matter of public record tied into the local government or planning law, and by inference always available to be checked against for that purpose ‑ including down the track if any change of use ‑ that it is therefore not just some private inter partes document but it acquires a new additional statutory colour by reason of its very nature and purpose.

MR RAYMENT:   Yes, the relevant law is not in contest between these parties.  It was fully stated in the judgment of the learned trial judge, paragraphs 66 to 70, reference was there given to authority in this Court and elsewhere about the fact that it passes with the land and why.

Your Honours, there is no particular reason, in our submission, to think of a power of revocation because the architect has a full power to control the use of the fruits of his labour when he makes his original contract.  He has a client before him to whom he can resort if any protection is needed with respect to his copyright.  If he wants to be sure he is going to be paid he can take security, or refuse to do the work or require payment in advance or the like, and make inquiries about the bona fides of the client, and once he is paid he would not, we submit, be seen to have a legitimate complaint about later use of the land by a person who bought this with the benefit of this development consent that he obtained.

So we would respectfully submit that the way in which the consent issue was viewed in Blair, adopted as it has been in Canada, has very good sense attaching to it and the reasons for it, we submit, are equally present in the law of this country as they were in Blair, and otherwise an architect would be able to hold a client – hold perhaps to hold a later owner to ransom and might significantly detract from the benefit that the client obtains from his original engagement with respect to the owning of the land.  We suggest, with respect, that the bare analysis is appropriate in Australia as it is in the United Kingdom and Canada.

GUMMOW ACJ:   What about the United States?

MR RAYMENT:   It is entirely different, it would seem, your Honour.  We have not sought to – the considerations are not expressed in the same terms.  I will give your Honour a reference to our research but, we submit, it just does not assist.

KIRBY J:   There is nothing in the Trident line of territory, is there?

MR RAYMENT:   No, not really.  This is not a third party right in that sense, in our submission, because it is not a right at all.  It is merely a consent or permission or it need not be a right.

GUMMOW ACJ:   It is an immunity, really.

MR RAYMENT:   It is an immunity. 

KIRBY J:   There is nothing said in Trident that by analogy to an understanding of implied licences under this Act that ‑ ‑ ‑

MR RAYMENT:   No, I do not think so.  We will check, but I do not think so, with respect, your Honour.

GUMMOW ACJ:   The Full Court at this case expressly said that whatever this creature was, it was not a contractual implication of the variety in Liverpool City Council v Irwin.  You accept that, do you not?

MR RAYMENT:   We say it really does not matter what it is, with respect.  Where it is on the spectrum between Liverpool City Council and Codelfa ‑ ‑ ‑

GUMMOW ACJ:   It does matter, does it not, because Liverpool City Council v Irwin applies in certain factual situations unless shown to be excluded?  It is not that sort of implication.  It is very much tied up with specific circumstances.

MR RAYMENT:   Tied up with the facts but the facts are very common.  They are very common, that there will be a purpose of ‑ ‑ ‑

GUMMOW ACJ:   We have to know where you stand because Justice Jacobs was, it seems to me, speaking of a principle of general application at page 304. 

MR RAYMENT:   Yes, 304.

GUMMOW ACJ:   If you are putting your case on that footing or on an alternative footing, we have to know.

MR RAYMENT:   We seek to put it in the alternative.  We seek to put either that it is a Codelfa term which is sufficient for our purposes and would apply here, by which I mean be the Westernport term, or, more generally, as Justice Jacobs did.  But it does not matter as between those two for any purpose in the case, we respectfully submit.

GUMMOW ACJ:   It might, might it not, because on the second footing, you would need some findings of fact about this case?

MR RAYMENT:   There are primary findings of fact about the contract and anything else is really a matter of inference in this regard.  There is no, as it were ‑ ‑ ‑

GUMMOW ACJ:   Primary finding of an inference.  One way of looking at it, it does not seem that the primary judgment engages with this debate, really, at the necessary level of considering the legal structure.

MR RAYMENT:   We submit his Honour was really right to conclude that the licence described in Blair applied in this case as between all parties, as between the client and as between later owners.  We submit he was right to so conclude and indeed I think his Honour expressly did it in agreement with ‑ ‑ ‑

GUMMOW ACJ:   Whereabouts do we find that?

MR RAYMENT:   Justice Merkel that it was ‑ ‑ ‑

GUMMOW ACJ:   In the primary judge’s judgment.

MR RAYMENT:   There is a discussion of this matter of the kind of implication in the reasons.  It is paragraph 134, I believe, your Honours, it is put in the alternative by the learned judge as we ‑ ‑ ‑

GUMMOW ACJ:   Just a minute, paragraph 134?

MR RAYMENT:   Paragraph 134 at 2683.

GUMMOW ACJ:   Thank you.

MR RAYMENT:   That is rather where the conclusion is expressed.  So it is really put as a matter of law alternatively as a matter of ‑ ‑ ‑

GUMMOW ACJ:   I understand (i) and (ii).  What is (iii)?  What is the legal description of (iii)?  I understand his Honour is only repeating what the submission was.

MR RAYMENT:   Yes, his Honour is.  His Honour is really describing the direct licence point which may not depend on either (i) or (ii) in paragraph (iii).  Your Honours, if I could go to the Full Court decision ‑ ‑ ‑

KIRBY J:   Could I just ask you, was any point made in argument or was any finding made that it is inherent in the planning law that the licence should pass with the land, at least to the point that it is inherent in the granting of the development consent?

MR RAYMENT:   Yes.  In paragraph 66 in the trial judge’s judgment ‑ ‑ ‑

GUMMOW ACJ:   Paragraph 66?

MR RAYMENT:     Yes.

GUMMOW ACJ:   You took us to that.

MR RAYMENT:   I gave reference to this.

GUMMOW ACJ:   These are the authorities on planning consents?

MR RAYMENT:   These are the authorities on Ryde Homes and the like dealing with ‑ ‑ ‑

KIRBY J:   That would explain why what seems to a layperson – I do not know – to be quite a substantial fee was paid.  It may be that in comparison to the fees that lawyers charge it pales into utter insignificance, but in architects terms I would have thought this fee is quite a substantial fee.

GUMMOW ACJ:   You would need evidence about that.

MR RAYMENT:   Evidence about?

GUMMOW ACJ:   About the fee, the rates of fees, why it is charged at a particular level.

MR RAYMENT:   Yes, and we put it forward.  We put forward what the usual fees were.  His Honour refers to it in relation to the evidence of the architect who was called by the appellant.  Paragraph 106 records the submission and then there was detailed evidence called about the usual scale of fees for obtaining development approval being in effect a proportion of the total.  It is summarised in 105 but it is also referred to elsewhere.  The last sentence of 105 summarises it:

Hence with an estimated project cost of $2.8 million to $3 million, based on an expected unit construction cost of $200,000 per unit, Mr Brooks calculated that a reasonable fee for preparing the plans for the development application, ‘including all necessary attendances with client and council officers through to the granting of development consent would be in the range of $28,000 to $30,000’.

KIRBY J:   It does not say “fraud” on - it said “commercially enigmatic”.

GUMMOW ACJ:   Anyhow, I think we are seized of that point, Mr Birch, I think we are seized of that passage.

MR BIRCH:   Yes.

KIRBY J:   Which you say is your best passage.  I think your best passage is the passage of exchange between his Honour and a witness where more and more things were tumbling out and the witness was not really being given a chance to answer, but senior counsel was there and I just think they have to teach young barristers that the second most important thing barristers have to show is courage.  Most judges, when the flag goes up, they back off ‑ ‑ ‑

GUMMOW ACJ:   There is a storm before the calm.

MR BIRCH:   Yes, that is perhaps true but, your Honour ‑ ‑ ‑

KIRBY J:   Courts are places of very emotional and important issue; very important to clients, very important to everyone.

MR BIRCH:   Your Honour, the difficulty is, though, that if one says the threshold is this, that Mr Murr should have jumped up at the end of that exchange, then that really imposes upon counsel the obligation of making a decision about one of the hardest things that counsel have to do in the conduct of a trial within the matter of minutes ‑ ‑ ‑

GUMMOW ACJ:   That is right.

KIRBY J:   That is why they get immunity that this Court says they still have, that is why they get it.

MR BIRCH:   Yes, but to make that judgment in literally the minutes after such an exchange is, in my submission ‑ ‑ ‑

GUMMOW ACJ:   We hear that too.

MR BIRCH:    ‑ ‑ ‑ far too difficult a burden and I think I have said all I need to say.

GUMMOW ACJ:   I will come back after we have heard Mr Rayment’s reply as to procedural steps that need to be taken with respect to the proposed application to cross-appeal.  Yes, Mr Rayment.

MR RAYMENT:   We begin with an analysis of those parts of Justice Conti’s judgment which do draw attention to the matter that Justice Hayne was referring to, in particular in questions of my learned friend and your Honour Acting Chief Justice as well. 

KIRBY J:   We cannot hear you.  You are dropping your voice.

GUMMOW ACJ:   We cannot hear you, Mr Rayment.

MR RAYMENT:   I am so sorry.  May I start with the question of the findings made by the trial judge about the interplay between the joint venture and the contract and retainer.  In particular, could I take your Honours in volume 6 to paragraph 124 at page 2678.  His Honour there found that:

The purpose of the co‑ownership venture here involved was to exploit for profit the Nelson Bay property by resale, as at least originally planned, by the construction and resale of the fourteen home units comprising the development approved by Port Stephens Council on 10 May 2000.  That was a purpose which inherently and intrinsically included within its scope the sale of the land in its undeveloped or partially developed condition, had the subsequent occasion to do so arisen, for instance by reason of an unexpectedly attractive offer to buy the site in its then condition, or default under the mortgage to the Bank, or disputation leading to the appointment of trustees for sale, as well as of course the original principal objective of the sale of each of the units individually, or mainly so.  There is no reason why the objectives of Landmark and Toyama as developers should be distinguished from those of developers generally.  No sensible or at least usual developer forecloses upon his business options, in relation to future circumstances, to the exclusion of sale of a development site prior to subdivision or construction, or a partially completed development, in circumstances of change in the economic climate, or of taking an early profit without exposure to ongoing risks, or as in the present case, the onset of disagreement or hostility between syndicate members.  In relation to property development schemes generally, experience demonstrates that developers may choose to realise a profit earlier rather than later, or indeed conversely to limit a loss rather than undergo the possibility of further deterioration in the magnitude of that risk.

That would be squarely inconsistent with the matters that my learned friend put to your Honours.

Could I just refer without reading in the same vein to paragraph 75 of the judgment which shows the open nature of the contract, paragraph 94 which draws attention to the relationship between, again, the joint venture and the retainer.

CALLINAN J:   Mr Rayment, if we are going to implied terms, we have to imply them as the circumstances were at the time of the formation of the joint venture or, at least, no later than the time at which the architect agreed to do the 14‑unit plan.

MR RAYMENT:   Yes, your Honour.

CALLINAN J:   Is that right?

MR RAYMENT:   That is correct.

CALLINAN J:   What the expectations of the parties would have been, what they would have thought then went without saying, to use The Moorcock formula.

MR RAYMENT:   Yes.  Actually, if you got to the full extent that my learned friend was submitting in this case of an unexpected eventuality here, right out of the contemplation of the parties, then as a matter of fact my learned friend would stub his toe on another principle, in our submission, which is referred to in this Court’s judgment in Bonython v Commonwealth 75 CLR where Sir Owen Dixon’s judgment in particular looks at the question of what the proper constructions of “contract” are where there is an unexpected event which occurs.  There it was the division of the currency, your Honours will remember, between England and Australia and pounds sterling no longer meant unambiguously the thing that it meant when the contract was made.  Sir Owen said, in effect, that the construction of the contract following some authorities about charter parties was that which the parties would have intended if they had, as reasonable men, directed their minds to the possibility which actually arose.

CALLINAN J:   If the issue is one ‑ ‑ ‑

MR RAYMENT:   You really get back to the same principle that way, in our submission, even if my learned ‑ ‑ ‑

GUMMOW ACJ:   I am not sure about that.  I am still not sure of the extent to which what is being put forward is a term implied by law in a class of dealing.  The decision of Justice Wootten in Clyde Securities, which is a copyright case, was treated as in that category.  In Torpey (2002) 55 IPR 545 Chief Justice Spigelman went through the authorities and referred to what Justice McHugh and I had said in Byrne as to the implication of this sort of term, and in contradistinction, the Codelfa term where you run into questions of necessity and The Moorcock area.  You cannot say this was necessary.

MR RAYMENT:   If the purpose of the contract was to create a development approval which would necessarily run with the land ‑ ‑ ‑

CALLINAN J:   Might you not be able to, I am not saying this is necessarily so, but on the basis then the expectations of the party and the intentions of the parties were that what they did would be done, any of the contributions that were made would be intended to achieve would be the maximisation of profits from the land.

MR RAYMENT:   Yes.

CALLINAN J:   And the construction aspect of the joint venture having failed, then you use it to maximise the return on the land.

MR RAYMENT:   Yes, which is really what his Honour actually finds at paragraph 124 and the other paragraphs to which I wish to refer.  Your Honours, could I just complete the list of paragraphs which go to the matter that I was just referring to first - paragraphs 115, 140, 145, 166, 182 and 297.

Your Honours, still dealing with other matters, could I also - your Honour the Acting Chief Justice having been good enough to refer to the House of Lords decision about licences given to the world at large, may we add a reference to the decision of the Full Court which your Honour the Acting Chief Justice participated in when a member of that Court in Computermate Products (Aust) Pty Ltd v Ozi‑Soft Pty Ltd and Others (1988) 83 ALR 492.

Your Honour, I observe that reference was made to Sir Nigel Bowen’s comments about implied licences, permissions and consents, as well as I think to what Justice Jacobs had said about the matter in Beck.  There was a discussion also of what Time‑Life might have decided in connection with that throughout the report, but especially from pages 495 to 497 and how do you assign a permission, how do you assign a consent, we respectfully submit, and did indeed submit to the Full Court which may commend the Blair analysis rather than that which was the only way in which the matter was analysed in Beck on the principal point in the case.

Your Honours, in paragraph 182 of Justice Conti’s judgment, there is a general finding made in respect of Mrs Haviland’s evidence which has some relevance to the answer which your Honour Justice Callinan drew attention to at page 803, volume 2 of the appeal book.  His Honour found that:

In all essentially or important aspects of her evidence, particularly under cross‑examination, my perceptions and findings in relation to Ms Haviland were those of a truthful and essentially reliable witness -

which would suggest, in our submission, the answer given at 803 was acceptable.  Your Honours, it was, of course, wasted expenditure upon the eight‑unit development once they pulled up pegs and sought a 14‑unit development and it was obtained.  It meant that the $27,000 spent was no longer valuable.

A question was asked which relates to the question of onus in relation to copyright licence if there was doubt about the matter.  We have given a reference in paragraph 13 of our submissions in‑chief to the Avel decision in this Court.

GUMMOW ACJ:   Avel v Multicoin?

MR RAYMENT:   Yes, your Honour, which establishes that the onus to establish the absence of a licence rests on the respondents in this case, not upon the appellants to prove its presence.  That is note 16 in the written submissions in‑chief and other authority is referred to.  That is at least the Australian position which appears to be different from that which obtains in other jurisdictions.

Now, I wanted then next to go, if I may, please, to the question of the interventions in the evidence of Mr Barrak.  Your Honours, immediately after the passage to which my learned friend referred, which was just really – my learned friend has really fastened on a single question – at page 379, volume 1 of the appeal book, the judge on the same page hastened to add, we submit, the following.  It is really from line 25 onwards.  His Honour has drawn attention to the absence – and I mentioned this in‑chief – the absence of business records which support the case that was being made.  He said he found it “extraordinary” that they would not have business records and that led this witness to go on a search, which he said he made the next weekend and put on evidence in affidavit form, to answer his Honour’s question.

KIRBY J:   There are multiple questions there in that second question, “Well, yes”, and then when the witness tries to answer “your Honour” he gets interrupted with further questions and then he tries to answer “Your Honour” and then he is interrupted yet again.

MR RAYMENT:   There are truly two questions in there.  There is one:  where are the records and the witness really did deal with that subsequently of this by finding such records as he could.  The second one really is for counsel, that is the question of what the entitlement was to cause the present appellant to be unable to use the land for the purpose for which he had bought it.  Now that, his Honour hastens to add just below line 30, is really put forward so that he can be addressed about the matter later by counsel.  He says:

I just think I should tell you what is in my mind, because at the moment I find the whole of this evidence that’s been put on on behalf of the respondents as extraordinary ‑ ‑ ‑ ?---Your Honour ‑ ‑ ‑

‑ ‑ ‑ and I’ve been in commercial law ‑ ‑ ‑

KIRBY J:   Well it is very easy for us to be critical after the event.  We always get a look at things twice removed but if you look at it his Honour does come back on the next page, on page 335, to say:

I’m sure Mr Murr will address me –

but ‑ ‑ ‑

MR RAYMENT:   Yes.  That really is what is stressed.  His Honour says:

I’ve heard that particular evidence and I think I should say no more and I’ll leave it to Mr Rayment and Mr Murr to continue, but I think it’s only fairness to both parties I should tell you what is in my mind.  It may well be that I’ve misunderstood something ‑ ‑ ‑

GUMMOW ACJ:   Where are you reading from, Mr Rayment?

MR RAYMENT:   I am so sorry.  I am reading at the foot of 379 and top of 380:

or I haven’t yet got an appreciation of the whole of the evidence, so I’ll certainly keep an open mind but I just think you should know I’ve got very great concern about the circumstances on the basis of the material that I’ve thus far read, that this party who stands beyond the dispute –

et cetera.

KIRBY J:   Then if you look at the pages that follow, that is to say, from pages 381 to 385 or so, they look pretty orthodox questions and answers.

MR RAYMENT:   Yes, it is all gone.  It was a momentary affair.  Your Honours, at line 20 on 380, again his Honour stresses that he is:

keeping an open mind because I’ve got, if I may say so, a lot of time for the advocacy of your counsel –

that is a reference to Mr Murr –

as well as counsel of course for Concrete Pty Ltd, and I don’t want anyone to think that I’ve foreclosed in any way my decision, but I’ve been sitting here for two days and struggling with trying to perceive or identify some kind of ordinary, business management involved in the financial affairs of Parramatta Design & Developments Pty Ltd, Landmark Building Developments Pty Ltd, those two companies.  I’m struggling –

In our respectful submission, there is no ground for complaint such as was made by my learned friend in this matter before the Full Court arising from those spare remarks.  So if special leave were granted in due course, it could put on some cross‑appeal about this matter, and we submit it should be dismissed.

GUMMOW ACJ:   I do not think he would need special leave to cross‑appeal.

MR RAYMENT:   Because of the nature of the appeal.

GUMMOW ACJ:   Yes.  He would certainly need leave because he is out of time.

MR RAYMENT:   If your Honour please, I stand corrected.  In any event, we would submit that such a cross-appeal should be dismissed.  May it please your Honours, those are our submissions.

GUMMOW ACJ:   Yes, thank you, Mr Rayment.  Well, there are some loose ends.  One, within 14 days of today the parties may lodge such portions as they may be advised of the Spicer Report that may assist us and such portions of the Full Court transcript as may assist us in the light of the exchanges in the course of argument today.  Secondly, within 14 days of today the respondents will file and serve any application they wish to make for leave out of time to cross‑appeal under rule 42.08 of the High Court Rules together with any affidavits and submissions in support.  Thirdly, the appellant, within 14 days after that step is taken by the respondents, will file and serve any submissions in opposition to that application to cross‑appeal out of time.

I do not think there is anything else that needs to be dealt with other than those loose ends.  We thank counsel for their assistance and we will reserve our decision.  We will adjourn until 9.30 am tomorrow in Sydney and 9.30 am tomorrow in Melbourne.

AT 4.02 PM THE MATTER WAS ADJOURNED