D'ANNUNZIO v Willunga Projects Pty Ltd - [2021] SADC 36

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
D'ANNUNZIO v WILLUNGA PROJECTS PTY LTD
[2021] SADC 36
Judgment of her Honour Judge Davison
29 March 2021
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - MOTIONS, INTERLOCUTORY APPLICATIONS AND OTHER PRE-TRIAL MATTERS
INTELLECTUAL PROPERTY - COPYRIGHT - INFRINGEMENT - ARTISTIC WORKS
Copyright Act 1968 (Cth) ss 10, 31, 32, 36, 115, 126, 127, 196, referred to.
Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd (2001) 279 ALR 12; S W Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466; Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1999) 87 FCR 415; Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; Robert J Zupanovich Pty Ltd v B & N Beale Nominees Pty Ltd (1995) 59 FCR 49, applied.

D'ANNUNZIO v WILLUNGA PROJECTS PTY LTD
[2021] SADC 36

Introduction

On 1 March 2021, the applicant Nic D’Annunzio (‘the applicant’) filed a claim seeking an account of profits in the sum of $2,000,000 pursuant to s 115 of the Copyright Act 1968 (Cth) (‘the Act’), as a result of the alleged infringement by the respondent, Willunga Projects Pty Ltd (‘the respondent’), of the copyright held by the applicant in certain drawings that detailed a plan of subdivision for some land at Willunga.
By interlocutory application dated 1 March 2021, the applicant has sought orders, by way of an injunction, that the respondent:
1.pay into court the proceeds of the sale of the allotments deducting the expenses incurred in respect of the purchase, subdivision and sale of the subject land, and the payment of the amount outstanding under the mortgage (the Net Proceeds of Sale);
2.be restrained until further order from disposing of or otherwise dealing with its interest in the subject land other than pursuant to a contract with an arms-length purchaser for value in the ordinary course of the business;
3.be restrained until further order from dealing, other than in accordance with the order sought in paragraph (1) above, with the proceeds of sale from the subject land.
Background to the application for the injunction
For the purposes only of the interlocutory application, I am prepared to proceed on the following facts which are deposed to in the affidavit of the applicant.
On 24 April 2015, the applicant entered into a contract to purchase land from the then registered proprietor, Graeme Edward Inkley, being three vacant allotments, situated at Willunga in the State of South Australia comprising in Certificate of Title Register Book Volume 5800 Folio 162 and Volume 5606 Folio 992 and Volume 5793 Folio 937 (‘the Willunga land’). The applicant planned to develop a subdivision comprising 35 vacant allotments of the Willunga land. The applicant then retained Mr Andrew Davidson of Andrew Davidson Property Development Consultants (ADRD) to survey the Willunga land and to prepare plans for the subdivision. The plans for subdivision included a number of matters including the size of the allotments, the location and layout of an internal roadway and storm water drainage
The applicant and Mr Davidson are the joint authors of the draft plans and subsequent plans created by them or either of them in respect of the subdivision of the Willunga land. Mr Davidson orally agreed with the applicant that the applicant would own the copyright in the draft plans and then subsequent plans created by them or either of them in respect of the subdivision of the Willunga land.
The applicant met with officers of the City of Onkaparinga to discuss the subdivision and details of the drawing for the subdivision. From time to time the applicant instructed Mr Davidson as to changes to make to the drawing so as to address matters discussed between the applicant and officers of the City of Onkaparinga. The final drawing prepared by the applicant and Mr Davidson was a drawing entitled ‘Land Division Concept Plan’ dated 1 June 2018 (‘the 2018 Plan’) and was lodged with the City of Onkaparinga.
The applicant was unable to settle on the contract to purchase the Willunga land. By notice dated 21 August 2019, Mr Inkley terminated the 2015 contract.
On or about 10 August 2020, Mr Inkley transferred the Willunga land to the respondent.
The applicant has only recently become aware that the respondent purchased the Willunga land and caused it to be subdivided, and had placed residential allotments resulting from the subdivision on the market.
Claims of the applicant
The applicant claims to own the copyright of the 2018 plan as an artistic work or in the alternative a literary work, and have exclusive rights under s 31 of the Act to reproduce that plan.
The applicant claims that the respondent caused to be created a plan of division in respect of the Willunga land, which plan was the basis upon which the respondent obtained regulatory approval for the subdivision of the Willunga land. Further, he claims that the respondent infringed his copyright over the 2018 plan as the respondent’s plan is a reproduction of the 2018 plan or a substantial part of it. He claims that when viewed as a whole, the respondent’s plan is the same or substantially the same as the applicant’s 2018 plan, and that this was caused by the respondent copying the 2018 plan. He claims that the fact of the actual copying is to be inferred from the extent of the similarities between the plans.
The applicant submitted and gave evidence that in his experience, it would have been impossible for the respondent to have settled upon the purchase of the Willunga land in August 2020, and then successfully had the new titles issued in January 2021 in a manner that looks virtually identical to the layout of the 2018 plan without having actually copied it.
The applicant claims pursuant to s 115 of the Act an account of profits made by the respondent by reason of the infringement of the copyright.
The respondent’s position
The respondent opposes the application for an injunction and also denies that it has committed an infringement of any copyright (if it exists) in the 2018 plan. The respondent has produced and relied upon affidavits of Mr David Gray, its sole director, and Mr Sam Carragher, its lawyer.
On 26 February 2019, Mr Gray, the sole director of the respondent, entered into a contract with Mr Inkley for the sale and purchase of the Willunga land. The contract had numerous condition precedents to settlement, including obtaining approval from the City of Onkaparinga Council for a plan of division. The evidence from Mr Gray was that the contract was entered into with the purpose of developing and dividing the Willunga land into allotments for sale to the public. It was intended at the time of the contract that a company would be incorporated to become the nominated proprietor of the Willunga land at settlement of the contract. Willunga Projects was subsequently incorporated for that purpose on 27 July 2020.
Following the signing of the contract, Mr Gray has given evidence that Weber Frankiw Surveyors Pty Ltd (WFK), which operates a business as licensed surveyors and land division consultants, were engaged to prepare and draft the plan of division to be submitted to the City of Onkaparinga Council.
The plan of division was first submitted for approval on or about 1 October 2019. That plan was drafted and authored by Mr Scott Vasey of WFK. An amended plan was submitted on 15 October 2019 and on 6 August 2020, after further amendments, the final plan was ultimately approved by the Council (‘the approved plan’). The plans, including the approved plan, were drafted and authored by Mr Vasey in consultation with Mr Gray and required, according to the evidence given by Mr Gray, a lengthy consultation process with Council, in addition to civil engineers.
Mr Gray gave evidence that prior to service with these proceedings, he had never obtained or had possession of a copy or original of the applicant’s plan, nor did he ever provide a copy or original of that plan to Mr Vasey. However, in or about mid-2019, he went to the City of Onkaparinga Council as he wanted to enquire in relation to the land and any restrictions with the subdivision. During that meeting, an officer of Council put on the table a plan that he was told had been submitted by the applicant. However, he says that he cannot say whether it was the applicant’s plan, as it was only on the table for a couple of minutes before it was folded up again by the Council’s officer. He was told that it had not been approved by Council as it was not compliant, and that a copy could not be provided to him. He asserts that when working with Mr Vasey, he did not speak to him about that plan, nor did he seek to reproduce the plan either visually or conceptually in words with Mr Vasey.
Mr Gray submitted and gave evidence that there are general similarities between the approved plan of the respondent’s and the applicant’s plan, but says that that is a product of the distinct shape of the land, the strict regulatory requirements imposed by Council as part of the overall process, as well as the ordinary development and commercial considerations for a subdivision of this type. He however says that there are material differences, including the number of allotments, the drainage basin and the placement of the allotments on the northern side of the subdivision.
Mr Gray has given evidence that the subdivision involves 30 allotments being developed in two stages. Stage 1 comprises nine allotments and Stage 2, the balance. Stage 1 has been completed and at this time the respondent has settled six of the nine blocks at a sale price of approximately $250,000 after GST per allotment. Currently, the respondent is in the process of developing Stage 2 and it is expected that civil works will be completed within approximately two months, and settlement of those allotments will occur by the end of May/June 2021. He asserts that if the orders sought by the applicant are made, there will be insufficient funds to complete Stage 2, as the proceeds of Stage 1 are used to fund the Stage 2 works, and there is a risk of causing substantial loss and damage to the respondent.
In his affidavit, Mr Carragher deposed that on 4 and 5 March 2021, he was advised by Mr Vasey that he was instructed to prepare and draft a plan of division for Mr Gray in respect of the Willunga land, and the plan of division that was ultimately approved by the City of Onkaparinga Council, as well as its earlier iterations, was computer generated by him from ‘scratch’. Further, Mr Vasey advised that he was never provided with access or had regard to any plan of division submitted in respect of any previous development for the Willunga land, including any plan prepared by the applicant or by Mr Davidson.
The legal principles
The general principles governing the grant or refusal of an interlocutory injunction are well settled.
The applicant must make out a prima facie case in the sense that if the evidence remains as it is, there is a probability that he will be entitled to relief at the trial.[1] The reference to a prima facie case does not mean that the applicant must show that it is more probable than not at trial they will succeed. It is sufficient that they show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.[2] How strong the probability needs to be depends on the nature of the rights the applicant is asserting and the practical consequences likely to flow from the orders that they seek.[3]
[1] Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57, [65].
[2] Ibid.
[3] Ibid.
The applicant must also satisfy two further requirements: namely that the balance of convenience, being the convenience or injury that he would be likely to suffer if an injunction is refused, outweighs the injury the respondent would suffer if an injunction is granted. Thirdly, the respondent must show that damages are not an adequate remedy, although in practice, issues such as irreparable injury, detriment and whether damages are an adequate remedy are subsumed under the general banner of the balance of convenience.
The onus lies on the applicant to satisfy the court of each of the matters referred to above.[4]
[4] Ibid.
Prima facie case
The applicant, in its case for breach of copyright, must establish the following matters:
1.copyright exists in the 2018 plans;
2.the applicant owned the copyright in the 2018 plans;
3.the respondent breached the copyright in the 2018 plans by reproducing those plans;
4.the applicant is entitled to an account of profits under s 115 of the Act. Although under s 115, damages or an account of profits is available as a remedy, and an election can be made at any time prior to judgment, the applicant has not, in this case, sought damages as an alternative remedy; and
5.if available, how should the account of profits be calculated.
In relation to the first of requirements, there is no contest by the respondent, at least for the purposes of this application, that there could be copyright in the 2018 plan by the author of that plan. Section 126(a) of the Act provides that copyright shall be presumed to subsist in the work or subject matter to which the action relates unless the respondent puts in issue the question of whether copyright subsists in the work.
However, there is a contest about the second requirement. The respondent submits that the author of the plan is Mr Davidson, rather than the applicant and therefore that the applicant is not the author of the literary work who could claim copyright. The respondent refers to s 127 of the Act.
127 Presumptions in relation to authorship of work
(1) Where a name purporting to be that of the author of a literary, dramatic, musical or artistic work appeared on copies of the work as published or a name purporting to be that of the author of an artistic work appeared on the work when it was made, the person whose name so appeared, if it was his or her true name or a name by which he or she was commonly known, shall, in an action brought by virtue of this Part, be presumed, unless the contrary is established, to be the author of the work and to have made the work in circumstances to which subsections 35(4), (5) and (6) do not apply.
(2) Where a work is alleged to be a work of joint authorship, the last preceding subsection applies in relation to each person alleged to be one of the authors of the work as if references in that subsection to the author were references to one of the authors.
The respondent submits that the author is Mr Davidson who has his name attached to the plan. The respondent further submits that the claim that the applicant and Mr Davidson are joint authors is not made out by the affidavit material that has been filed as it refers to an oral agreement which does not suffice pursuant to s 196(3) of the Act. Section 196(3) provides that any assignment does not have effect unless it is in writing and there is no evidence to suggest that there has been any assignment in writing.
I am satisfied that, on the affidavit material before me, that, for the purposes of this application, that the applicant is the joint author of the 2018 plan with Mr Davidson. I note that s 127 of the Act creates a presumption only that copyright exists in the person whose name appears on the drawing. The applicant provided evidence through his affidavit material about the circumstances of the making of the plan and the joint work of the applicant and Mr Davidson in this regard. There is no allegation that there has been an assignment by Mr Davidson of his interest in the plan. For these reasons, I am satisfied that the applicant has established, on a prima facie basis, that he was the joint author of the 2018 plan.
The third requirement that must be established in a breach of copyright claim is that the respondent breached the copyright of the applicant.
The following provisions of the Act are relevant to the issue of breach of copyright.
31Nature of copyright in original works
(1)     For the purposes of this Act, unless the contrary intention appears, copyright, in relation         to a work, is the exclusive right:
(a)in the case of a literary, dramatic or musical work, to do all or any of the following acts:
(i)to reproduce the work in a material form;
(ii)to publish the work;
…
32Original works in which copyright subsists
(2)     Subject to this Act, where an original literary, dramatic, musical or artistic work has been        published:
(a)copyright subsists in the work; or
…
36Infringement by doing acts comprised in the copyright
(1)     Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is                 infringed by a person who, not being the owner of the copyright, and without the licence             of the owner of the copyright, does in Australia, or authorizes the doing in Australia of,         any act comprised in the copyright.
…
10Interpretation
(1)     In this Act, unless the contrary intention appears:
…
artistic work means:
(a)a painting, sculpture, drawing, engraving or photograph, whether the work is of artistic quality or not;
(b)a building or a model of a building, whether the building or model is of artistic quality or not; or
(c)a work of artistic craftsmanship whether or not mentioned in paragraph (a) or (b);
but does not include a circuit layout within the meaning of the Circuit Layouts Act 1989.
The applicant relied upon the decision in Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd,[5] being a case about infringement of copyright in respect of building plans. The Court referred to S W Hart & Co Pty Ltd v Edwards Hot Water Systems[6] at [93], namely the remarks of Gibbs CJ at [472]
The notion of reproduction, for the purposes of copyright law, involves two elements — resemblance to, and actual use of, the copyright work, or, to adopt the words which appear in the judgment of Willmer LJ in Francis Day & Hunter Ltd v Bron [[1963] Ch 587 at 614], “a sufficient degree of objective similarity between the two works” and “some causal connection between the plaintiffs’ and the defendants’ work”.
[5] (2001) 279 ALR 12.
[6] (1985) 159 CLR 466.
The Court referred to Lindgren J with whom Finkelstein and Weinberg JJ agreed in Eagle Homes Pty Ltd v Austec Homes Pty Ltd[7] at [70]:
The word “reproduce” is not defined in the Act. It has its ordinary meaning of “make a copy, representation, duplicate, or close imitation of” (Macquarie Dictionary) or “repeat in a more or less exact copy; produce a copy or representation of” (New Shorter Oxford English Dictionary). But these definitions prompt such inquiries as how much of the copyright work must be reproduced before it can be said that that “work” has been reproduced and how similar must what is produced be to the copyright work? The effect of s 14(1) of the Act is that the reference in s 31(1)(b)(i) to reproducing an artistic work in a material form includes a reference to reproducing a substantial part of such a work in a material form. In terms, this provision acknowledges a distinction between the undifferentiated whole of a copyright work and a substantial part of it. … Copinger and Skone James on Copyright (13th ed, 1991) para 8-20 states as follows:
“It is unusual for an infringement to consist of an exact copy or use of the whole of the plaintiff's work. In some cases, the defendant's work may to a greater or lesser degree resemble the whole of the plaintiff's work, in which case the question is whether the defendant's work is a colourable imitation. [Sillitoe v McGraw-Hill Book Co (UK) Ltd [1983] FSR 545.] Alternatively, the defendant's work may have been taken from part only of the plaintiff's work. Here, the defendant's work may be an exact reproduction of that part of the plaintiff's work or it may only to a greater or lesser degree resemble that part. In this alternative class of case, the first step is to identify the part of the plaintiff's work which is alleged to have been reproduced and then decide whether it constitutes a substantial part of the plaintiff's work. If it does, but it is not an exact copy of that part, it must then be decided whether it is a reproduction or colourable imitation of that part of the plaintiff's work. [Spectravest Inc v Aperknit Ltd [1988] FSR 161.]”
(emphasis in original)
[7] (1999) 87 FCR 415.

The applicant submitted that there is a substantial body of material to establish that there has been an infringement of copyright by the respondent. The applicant submitted that this was established in a number of ways including by considering the plan of the applicant and that ultimately approved by the Council.
The respondent submitted that the case brought by the applicant relies entirely upon conjecture and theory without any foundation in fact. The respondent further submitted that the claim cannot succeed as it cannot be shown that the plan has been copied as opposed to having some similarity that arises due to the physical features of the land, the requirements of the Council and other constraints.
For the purposes of this application, notwithstanding that it could be expected there to be certain generic qualities to a subdivision, I am satisfied there are sufficient objective similarities between the 2018 plan and the subdivision plan to justify a finding on a prima facie basis that the respondent has infringed the copyright of the applicant by reproducing the plan.
I am therefore satisfied for the purposes of this application that the applicant has established a prima facie case in the sense that this term is used in ABC v O’Neill[8].
[8] (2006) 227 CLR 57.
Balance of convenience
An analysis of the balance of convenience must start with a consideration of how an account of profits might be determined in the circumstances of this case. The applicant has sought in its claim the whole of the net profits of the subdivision (i.e. after deduction of the expenses incurred in undertaking the subdivision and the balance of the mortgage). There have been cases where an applicant has received the whole of the net profits, but these were cases where the contravening product or drawing was the essential feature of the product or the house. Therefore, in the present case, the applicant would have to establish that the respondent could not have undertaken the subdivision without infringing the copyright in the plans of the applicant.
The applicant has adduced no evidence that the plans were such an essential feature of the subdivision. Indeed, the evidence before me suggests the contrary conclusion. That is, the subdivision could have been undertaken without using the plans of the applicant. If that is the case, the accounting of profits requires an inquiry as to what part, if any, of the profits, was attributable to the drawings of the applicant.[9] This is obviously not the whole of the net proceeds.
[9] Robert J Zupanovich Pty Ltd v B & N Beale Nominees Pty Ltd (1995) 59 FCR 49.
In my opinion, the balance of convenience must be assessed taking into account how the inquiry into an account of profits might take place.
The applicant submitted that an order sought on an interim basis would not prevent the continuation of the subdivision and that the order would prevent a shifting of the land other than at arm’s length to ensure that the profits are protected pending the outcome of the proceedings. The applicant submitted that the proceeds of sale can still be used for the purposes of continuing the subdivision and that is not the intent of the orders sought that the subdivision be prevented from continuing. The applicant also submitted that there is a real risk that unless the orders are made, the respondent will distribute or deal with the profits so that there would be no ability to account for profits and that the applicant’s only remedy would be lost.
The respondent argues that there is no urgency in this case, in that the vast preponderance of the proceeds from the sale of the land are going to be available well into the future as the allotments are not to settle until May or June of this year and assuming that no injunction would otherwise constrain the continuing development of the property. Further, the respondent denies that that the claim for an account of profits is appropriate and that the applicant could ever obtain the whole of the net profits. The applicant’s claim is a monetary claim and does not need the protection of a proprietary remedy. The respondent submitted that in effect what the applicant is seeking to do is bring a freezing order under the guise of an application for an injunction.
I am not satisfied that the balance of convenience favours the granting of an injunction with the orders sought by the applicant. I am not satisfied on the evidence before me that the risk that the applicant will succeed, but will be unable to receive the profits (because they have been disbursed) outweighs the damage and inconvenience suffered by the respondent if the injunction were to be granted. I am satisfied that if the injunction is granted, the respondent would be significantly inhibited or prevented from carrying on with the project. The project that is underway has just concluded the first stage and there is yet to be settlement in relation to those properties. It is also the case that it may be that there is no reason to think that the respondent could not satisfy any order making an account of profits. I also consider that this risk can be accommodated by an order of an urgent trial.
I note that the injunction sought by the applicant, that the respondent be restrained from dealing in the land except with an arm’s length purchaser in the ordinary course of business, falls into a different category. Although it is difficult to see how the respondent is inconvenienced by such an order, I cannot see how such an order is necessary at the present time. There is no evidence that the respondent has ever contemplated such dealing.
In my view, this matter can and should be the subject of an urgent hearing that will consider the substantive matters in issue.
I, therefore, dismiss the applicant’s interlocutory application for injunctive relief and ancillary orders.