Dreamstreet Lending Pty Ltd v Weiss (No 2)

[2023] FCA 684

FEDERAL COURT OF AUSTRALIA

Dreamstreet Lending Pty Ltd v Weiss (No 2) [2023] FCA 684 

File number(s):

VID 638 of 2020

Judgment of:

BUTTON J

Date of judgment:

23 June 2023

Catchwords:

CONTRACT – contractual interpretation – breach of contract – services agreement between consultant and mortgage broking business – where applicant claimed consultant breached notice period clause – where applicant claimed consultant breached an exclusive service obligation – where applicant claimed consultant breached confidentiality obligations – where consultant made and retained various downloads of customer-related information from the business’s customer relationship management (CRM) system – applicant waived compliance with notice period – applicant not ready and willing to perform its obligations – first respondent breached exclusive service obligation by signing employment contract with another mortgage broking business during term of services agreement – first respondent breached confidentiality obligations by making one of the downloads of confidential information from CRM system – first respondent breached confidentiality obligations by using some other customer information – no loss or damage suffered by applicant – nominal damages awarded

CONTRACT – services agreement – restraint of trade clause – where first respondent prohibited from soliciting, canvassing or approaching a client, customer or patron of the company or any group company – where first respondent prohibited from interfering directly or indirectly with the relationship between the company or any group company and its clients – whether restraint clause was reasonable – whether restraint clause was severable – whether restraint clause included leads generated by the company and the consultant – restraint clause found to be unreasonable and unenforceable

CONTRACT – where services agreement provides for clawback of commission payments made to consultant by mortgage broking business when the lender requires repayment of the corresponding commission – whether business is entitled to clawback certain commission payments – whether there was evidence that the lender in fact demanded repayment of the corresponding commission – applicant entitled to clawback in respect of some customers only

CONTRACT – contractual interpretation – cross-claim for commissions owed under a services agreement – cross-claim for repayment of improper deductions under a services agreement – whether payment of commissions under services agreement depended on amounts being agreed by parties to the contract – cross-applicant entitled to payment of some trail commissions – cross-respondent made improper deductions under services agreement

TORT – economic torts – tort of inducement or procurement of breach of contract – failure to satisfy all elements of the tort – second and third respondents not found to have had the requisite knowledge and intention to procure breach of contract – no loss or damage suffered by the applicant

COPYRIGHT – alleged infringement of copyright in compilations of records in CRM – whether copyright subsisted in the compilation of records in the CRM – whether test for originality is met – whether respondents infringed copyright – whether there was a license to use the copyright in relation to a services agreement – whether an employee’s conduct that was alleged to infringe copyright can be attributed to their employer – no copyright found to subsist in the compilations of records in the CRM – no breach of copyright by the employee – no breach of copyright attributable to the employer

Legislation:

Competition and Consumer Act 2010 (Cth) Sch 2 (Australian Consumer Law) s 23

Copyright Act 1968 (Cth) ss 10, 14, 22, 32, 36, 115

Cases cited:

Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26

Arnold v Britton [2015] AC 1619

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99

Bridge v Deacons [1984] AC 705

Butt v Long (1953) 88 CLR 476

Coloca v BP Australia Ltd [1992] 2 VR 441

Commonwealth v Chubb Security Australia Pty Ltd [2004] NSWCA 77

Daebo Shipping Company Ltd v The Ship Go Star (2012) 207 FCR 220

Dargan Financial Pty Ltd v Isaac [2017] NSWSC 1077

Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd (2002) 119 FCR 491

Dynamic Supplies Pty Ltd v Tonnex International Pty Ltd (2011) 91 IPR 488

Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd (2010) 189 FCR 109

Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473

Findex Group Ltd v McKay [2020] FCAFC 182

Foran v Wight (1989) 168 CLR 385

Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) (2008) 76 IPR 763; [2008] FCA 746

Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2007] FCA 1621

Gibb-Maitland v The Perpetual Executors Trustee & Agency Co (WA) Ltd (1947) 74 CLR 579

Global Brand Marketing Inc v Cube Footwear Pty Ltd (2005) 65 IPR 44; [2005] FCA 479

Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157

I F Asia Pty Ltd v Galbally (2003) 59 IPR 43; [2003] VSC 192

IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458

IceTV v Ross [2007] NSWSC 635

Informax International Pty Ltd v Clarius Group Ltd (2012) 207 FCR 298

Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343

Just Group Ltd v Peck (2016) 344 ALR 162; [2016] VSCA 334

Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449

LED Technologies Pty Ltd v Roadvision Pty Ltd (2012) 199 FCR 204

Lindner v Murdock’s Garage (1950) 83 CLR 628

Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (2010) 383 ALR 577; [2010] NSWCA 268

Microsoft Corporation v Business Boost Pty Ltd (2000) 49 IPR 573; [2000] FCA 1651

Milne v Sydney Corporation (1912) 14 CLR 54

OBG Ltd v Allan [2008] 1 AC 1

Polyaire Pty Ltd v K-Aire Pty Ltd [2003] SASC 41

Sealed Air Australia Pty Ltd v Aus-Lid Enterprises Pty Ltd (2020) 375 ALR 324; [2020] FCA 29

Short v City Bank of Sydney (1912) 15 CLR 148

State Street Global Advisors Trust Company v Maurice Blackburn Pty Ltd (No 2) (2021) 164 IPR 420; [2021] FCA 137

Telstra Corp Ltd v Phone Directories Co Pty Ltd (2010) 264 ALR 617; [2010] FCA 44

Telstra Corporation Ltd v Phone Directories Company Pty Ltd (2010) 194 FCR 142

Tonnex International Pty Ltd v Dynamic Supplies Pty Ltd (2012) 99 IPR 31; [2012] FCAFC 162

Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414; [2008] NSWSC 852

Victoria v Pacific Technologies (Australia) Pty Ltd (No 2) (2009) 177 FCR 61

Sir Kim Lewison and David Hughes, The Interpretation of Contracts in Australia (Lawbook Co, 2012)

Division:

General Division

Registry:

Victoria

National Practice Area:

Commercial and Corporations

Sub-area:

Commercial Contracts, Banking, Finance and Insurance

Number of paragraphs:

360

Date of hearing:

20 to 23 March 2023
4 April 2023

Counsel for the Applicant:

Mr P Wallis KC with Mr J Gray

Solicitor for the Applicant:

K&L Gates

Counsel for the First Respondent:

The First Respondent is self-represented

Counsel for the Second and Third Respondents:

Ms H A Tiplady

Solicitor for the Second and Third Respondents:

Tisher Liner FC Law

ORDERS

VID 638 of 2020

BETWEEN:

DREAMSTREET LENDING PTY LTD

Applicant

AND:

MOISHE WEISS

First Respondent

GREMARC PTY LTD (ACN 134 548 128)

Second Respondent

MARK DARREN ATTARD

Third Respondent

AND BETWEEN:

MOISHE WEISS

Cross-Claimant

AND:

DREAMSTREET LENDING PTY LTD

Cross-Respondent

ORDER MADE BY:	BUTTON J
DATE OF ORDER:	23 JUNE 2023

THE COURT ORDERS THAT:

1.By 4:00pm on 7 July 2023, the parties are to confer and provide any agreed minutes of orders giving effect to the reasons of the Court (accompanied by a note that explains the approach taken to any GST and interest), or in default of agreement, provide separate minutes of orders and file and serve short written submissions (not exceeding five pages), in which case the matter will be listed at 2:15pm on 14 July 2023 for submissions to be made on final orders.

2.By 4:00pm on 30 June 2023, the parties notify each other of their respective positions as to costs.

3.By 4:00pm on 7 July 2023, the parties each file and serve written submissions (not exceeding five pages) as to costs and advise the Court whether the party seeks to make oral submissions on costs.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

TABLE OF CONTENTS

INTRODUCTION	[1]
WITNESSES: CREDIT ISSUES	[12]
BREACH OF CONTRACT CLAIMS	[24]
Alleged breach of the notice period: cl 5(d) of the Weiss SA	[24]
Alleged breach of exclusive service obligation: cl 2(c)(i) of the Weiss SA	[43]
Alleged breach of confidentiality obligations arising from the downloads: cll 5 and 7 of the Weiss SA	[49]
The Second Download	[53]
The Third Download	[57]
The First Download	[60]
Dreamstreet’s claims and Mr Weiss’s response	[64]
Mr Weiss’s evidence about making the downloads	[75]
Relevant clauses of the Weiss SA	[85]
Making and retaining the First Download	[96]
Retaining the Second and Third Downloads after 11 June 2020	[100]
Mr Weiss emailing the Third Download to himself on 11 June 2020	[109]
Opening the Second Download on 17 September 2020	[111]
Whether Dreamstreet suffered any loss or damage	[112]
Retention and use of other customer information	[114]
Pleaded case in relation to notepads retained by Mr Weiss, and calendar invitations and a loan serviceability document saved on Mr Weiss’s Financepath computer	[119]
Alleged breach of contractual restraints: cl 13 of the Weiss SA	[123]
Clause 13 of the Weiss SA	[123]
The parties’ contentions	[132]
Principles concerning the enforceability of restraints of trade	[138]
Consideration	[147]
Proper construction of cl 13	[147]
The enforceability of cl 13	[162]
Whether Mr Weiss breached cl 13	[174]
CLAIMS AGAINST FINANCEPATH FOR INDUCING BREACH OF CONTRACT	[188]
Extent of the claims against Financepath	[188]
Elements of the tort of inducing breach of contract	[195]
Consideration	[207]
The fifth element: whether the breach caused loss or damage to Dreamstreet	[207]
First element: existence of a contract	[216]
Second element: knowledge of such a contract	[217]
Third and fourth elements: knowledge the actions would be in breach of contract, and intention to procure the breach	[218]
Knowledge and intention from the start of Mr Weiss’s employment with Financepath on 1 June 2020	[222]
Knowledge and intention from mid-July 2020	[228]
Knowledge and intention from early September 2020	[233]
Knowledge and intention from 25 September 2020	[239]
Exemplary damages claim	[243]
THE CLAWBACK CLAIMS	[245]
COPYRIGHT CLAIMS	[263]
Dreamstreet’s claims	[263]
Facts	[269]
The parties’ arguments on whether the Dreamstreet Compilations are copyright works	[278]
Consideration	[283]
Whether the Dreamstreet Compilations are copyright works	[285]
Person Records	[294]
Opportunity Records	[295]
The compilation of data in the CRM	[298]
Additional matters	[299]
Whether Mr Weiss and Financepath infringed Dreamstreet’s copyright	[302]
Mr Weiss’s conduct in making the Second and Third Downloads	[305]
Financepath’s conduct by Mr Weiss’s actions	[314]
Damages	[321]
MR WEISS’S CROSS-CLAIM	[322]
Restraint claims	[323]
Unpaid commissions and improper deductions	[325]
Unpaid upfront commissions	[326]
Unpaid trail commissions	[327]
Contractual entitlement to trail commissions	[334]
Whether there was any agreement that Mr Weiss would receive no trail commission in relation to the loans of AA and RA, CL and YL, and ML and EL	[344]
The loans of AM and BM and Mr Weiss’s conduct in relation to them	[349]
CONCLUSION	[358]

REASONS FOR JUDGMENT

BUTTON J:

INTRODUCTION

1. The first respondent (Mr Weiss) was a credit representative of the applicant (Dreamstreet) between 13 March 2018 and 11 June 2020. Mr Weiss was appointed as a consultant of Dreamstreet pursuant to a written services agreement dated 13 March 2018 (the Weiss SA) and, in that capacity, pursued leads (both self-generated and referred to him by Dreamstreet) in an effort to have customers take out loans with financiers via Dreamstreet. Dreamstreet typically earned upfront commissions, when loans were settled, and trail commissions. Under the terms of the Weiss SA, Mr Weiss was paid upfront commissions, but only earned trail commissions when the customer was a “Consultant Lead” (as opposed to a “Company Lead”), meaning that he brought the customer to Dreamstreet (“customer” is used in these reasons, noting that the parties referred to both “customers” and “clients” interchangeably).

2. Mr Weiss became dissatisfied with Dreamstreet from at least early 2020 — mostly in relation to Dreamstreet’s approach to paying commissions he considered were due to him and making some deductions against payments to him — and started exploring his options. He signed an employment contract with Financepath, being a business operated by the second and third respondents. Financepath is a competitor of Dreamstreet.

3. Both Dreamstreet and Financepath are in the business of assisting individuals and businesses to obtain loans. They each pursue “leads” and assist customers to obtain loans by assessing their ability to service loans and preparing and submitting loan applications to financiers. Both Dreamstreet and Financepath receive upfront and trail commissions on loans they arrange.

4. On three occasions in May and June 2020, Mr Weiss downloaded various information from the customer relationship management (CRM) system operated by Dreamstreet. These downloads are discussed further below, but it suffices for the purposes of introducing the issues to note that the information downloaded included details of customers with whom Mr Weiss had dealt while with Dreamstreet. In addition, after a search order was executed — the search order having been obtained ex parte — it was found that Mr Weiss also had various hard copy notebooks at his home recording aspects of his work with Dreamstreet, such as notes of discussions with customers. It was also found that he had a great many files on his personal devices including copies of documents provided to him by Dreamstreet customers, such as loan application forms, and supporting documentation (such as payslips and tax returns).

5. Dreamstreet brought proceedings alleging that Mr Weiss breached the Weiss SA in various respects concerning the cessation of his role with Dreamstreet and his taking up employment with Financepath, his downloading and retention of company information, and his dealings with Dreamstreet customers after the cessation of his consultancy with Dreamstreet. Dreamstreet alleges Financepath induced some of these breaches of contract by reason of its agreement to pay commissions to Mr Weiss for securing customers who take out loans through Financepath. Dreamstreet claimed damages from Mr Weiss and Financepath, and exemplary damages against Financepath.

6. By way of summary (and using defined terms introduced later in these reasons), I have concluded that:

   (a)Mr Weiss did not breach cl 5(d) of the Weiss SA by not serving out a three month notice period, because Dreamstreet waived compliance with this provision by cutting off his access to company systems and requiring Mr Weiss to leave immediately;

   (b)Mr Weiss breached cl 2(c)(i) of the Weiss SA by taking up employment with Financepath prior to terminating his consultancy with Dreamstreet, but Dreamstreet did not suffer any loss or damage by this breach;

   (c)Mr Weiss breached cll 7(a)(ii), (a)(iv) and (c) of the Weiss SA by making the First Download on 11 June 2020, but his retention of that download did not constitute an additional breach of the Weiss SA. Dreamstreet will be awarded nominal damages of $100 for this breach;

   (d)Mr Weiss did not breach cll 5(e)(ii) and 7(a)(viii) of the Weiss SA by retaining the Second and Third Downloads after 11 June 2020, because:

   (i)first, the Weiss SA did not require Mr Weiss to delete confidential company information, but rather to “return it”; and

   (ii)secondly, the Weiss SA contemplated that such confidential information could be used in a range of circumstances that post-dated termination of the agreement;

   (e)Mr Weiss did not breach cll 5(e)(ii) or 7(a)(viii) of the Weiss SA by emailing the Third Download to himself on 11 June 2020, because that was but another way of retaining that download;

   (f)Mr Weiss did not breach cll 7(a)(ii) and (iv) of the Weiss SA by opening the Second Download on his Financepath computer on 17 September 2020, because the use he made of the download was permitted by the Weiss SA;

   (g)Mr Weiss breached cll 7(a)(ii) and 7(c) of the Weiss SA by using customer documents he had obtained through his work with Dreamstreet in order to progress loan applications for those customers with Financepath. Dreamstreet will be awarded nominal damages of $100 for this breach;

   (h)Mr Weiss did not breach cll 13(a)(ii) and (iii) of the Weiss SA, because each clause, on its proper construction, is unenforceable as an unreasonable restraint of trade; and

   (i)Dreamstreet has not made out its claim against Financepath for inducing breach of contract because:

   (i)Dreamstreet has not proven any loss or damage arising from any alleged breaches of the Weiss SA; and

   (ii)Dreamstreet has not established the knowledge and intention elements of the tort.

7. Dreamstreet also claimed that compilations of data in the CRM system (detailed further below) were copyright works pursuant to the Copyright Act 1968 (Cth) (the Copyright Act). Dreamstreet contended that its copyright was infringed by Mr Weiss by his making of, and intention to retain, the first two downloads in May 2020 (ie the Second and Third Downloads). Dreamstreet also contended that its copyright was infringed by Financepath when Mr Weiss made a further download on 11 June 2020 (ie the First Download), made a further copy of the June download on his personal computer between June and September 2020, and when Mr Weiss made a further copy of the first May download in September 2020 (ie the Second Download) when he opened the file on his Financepath-issued laptop. By its prayer for relief, Dreamstreet sought declaratory and injunctive relief, an account of profits and/or an award of damages, and an order for additional damages under s 115(4) of the Copyright Act, but it did not pursue its account of profits claim at trial.

8. By way of summary, I have concluded that:

   (a)the compilation of data in the CRM, or alternatively the compilation of Person Records in the CRM or the compilation of Opportunity Records in the CRM, are not copyright works under the Copyright Act;

   (b)even if the Dreamstreet Compilations were copyright works, they fell within the definition of “Intellectual Property” and also “Confidential Information” under the Weiss SA and Mr Weiss was licenced to make and retain the Second and Third Downloads for certain purposes under the Weiss SA;

   (c)even if the Dreamstreet Compilations were copyright works:

   (i)Mr Weiss did not infringe Dreamstreet’s copyright because there was no reproduction of a substantial part of the relevant works; and

   (ii)Financepath did not infringe Dreamstreet’s copyright because there was no reproduction of a substantial part of the relevant works, and Mr Weiss’s conduct cannot be attributed to Financepath.

1. Finally, Dreamstreet claimed the right to claw back various commissions paid to Mr Weiss under the Weiss SA. I have concluded that Dreamstreet has established its claim to a clawback in the amount of $10,008.89 (ex GST) from Mr Weiss in respect of customers MG, DC and JC (Dreamstreet customers are referred to by their initials).

2. Mr Weiss cross-claimed against Dreamstreet. Mr Weiss claimed unpaid upfront commissions totalling $3,930.85 (inc GST). Dreamstreet admitted that it owes Mr Weiss a debt in that amount. Mr Weiss also claimed unpaid trail commission in respect of eight customers’ loans. Mr Weiss is entitled to be paid trail commission on the loans and at the rates admitted by Dreamstreet, and on the ML and EL loan at the rate established in Recipient Created Tax Invoices (RCTIs) issued in June and July 2019, but not at the higher rate claimed by him. Mr Weiss is also entitled to $4,400 (ex GST) for deductions made in relation to customers AM and BM.

3. I have also rejected Mr Weiss’s claim that the three month notice clause in the Weiss SA was an unreasonable restraint of trade or an unfair term within the meaning of the Australian Consumer Law (the ACL).

   WITNESSES: CREDIT ISSUES

4. Dreamstreet’s principal witness was John Hronis. Mr Hronis is the founder and sole director of Dreamstreet. There are points at which his evidence conflicted with that of Mr Weiss, and Mr Mardegan, a witness called by Financepath. Mr Mardegan used to work for Dreamstreet but left and took up employment at Financepath. Most of those points of divergence in their evidence are not material to my consideration of the facts, but where they are, I have not accepted the evidence of Mr Hronis for the reasons which follow.

5. When being cross-examined — politely and calmly — by Mr Weiss, at a number of points Mr Hronis responded by shouting and banging the table in the witness box. When clear factual propositions were put to him, Mr Hronis was often entirely non-responsive, and answered by saying, in response to the fact he was being invited to confirm or deny, “that’s your opinion”. He also often responded, “I can’t recall”, notwithstanding that he claimed to have a good recollection of other events. When challenged by counsel for Financepath on the granular specificity of Mr Hronis’s claimed recollection of a particular phone call, Mr Hronis said, “I tell my friends I’ve got a memory like a camel”. In the context of the evidence as it was given, it was clear Mr Hronis was of the view that camels have very good memories.

6. In my assessment, when being cross-examined, Mr Hronis gave answers that variously constituted bare reconstruction in order to provide a rationale for some other answer or event, or which suited his perception of what served Dreamstreet’s interest in the moment. At times, Mr Hronis’s evidence also shifted and evolved as the cross-examination proceeded. For example, when being cross-examined in relation to facts concerning a particular customer, MG, Mr Hronis said (emphasis added), “[MG] — when I spoke to him and he said, ‘I’m leaving because the — the way my loan was set up by you were incorrectly done’ — that was the reason that he left Dreamstreet, and that’s why it was a result of the clawback.” When cross-examined on this purported call Mr Hronis said he had with MG, Mr Hronis then said it was one of his team who had the call with MG; Mr Hronis had not spoken to MG at all. Another example is Mr Hronis’s evidence in relation to the reason Dreamstreet was not paying trail commission in relation to the CL and YL loan to Mr Weiss. Mr Hronis initially said that the reason Mr Weiss was not paid trail commission was that he was receiving a higher-than-usual upfront commission. However, when shown that Mr Weiss was in fact only receiving the standard upfront commission, Mr Hronis changed his evidence and said, “[t]here must be a reason”, before going on the proffer what he thought must have happened.

7. I also am not able to accept the contents of Mr Hronis’s affidavits as necessarily correct where not supported by contemporaneous documentation or other witness evidence, given some glaring inaccuracies that were revealed during the trial. I will give two examples.

8. First, in the affidavit sworn by Mr Hronis in support of the ex parte freezing order (which affidavit was also relied on at trial), Mr Hronis said, amongst other things (emphasis added):

   Dreamstreet has already identified that it has suffered the financial loss outlined in paragraph 18 above as a result of the actions of the Respondents arising from their conduct in misusing the Confidential Information. I believe that there may be other borrowers who have terminated their loan contracts negotiated by Mr Weiss through Dreamstreet, or are in the process of negotiating new finance through Mr Weiss, who have not yet been identified by Dreamstreet.

   I believe that if the Respondents are not restrained from their conduct in misusing the Confidential Information there is a real and substantial risk that:

   (a) Dreamstreet will lose more clients and be required to repay more money to lenders such as outlined in paragraph 18 above and further loss of ongoing monthly trail commissions; …

9. In paragraph 18 of that affidavit, Mr Hronis stated that Dreamstreet had discovered that, in June 2020, customers MG and JG, and their trust entity, had paid out loans that Mr Weiss had arranged through Dreamstreet, resulting in Dreamstreet having to repay the lender the initial commission and losing trail commissions. The important fact that Mr Hronis failed to tell the Court in obtaining the ex parte order is that the finance discharge form Dreamstreet received from MG was dated 24 May 2020 (being a date before Mr Weiss took up employment with Financepath) and also that the refinance was occurring through National Australia Bank (NAB). The significance of the latter point is that Mr Hronis admitted in cross-examination by counsel for Financepath that he knew that Financepath did not source loans through NAB. While Mr Hronis sought to defend his claim in his first affidavit on the basis that a related company of Financepath might have referred the business, Mr Hronis is an experienced businessman. He did not claim to be unaware that the proceeding Dreamstreet initiated was against Financepath, and not some related entity. He did not disclose to the Court that the claims made — namely that Mr Weiss and Financepath had misused confidential information to cause MG and JG and the trust to refinance — were baseless given the refinance was through NAB, and Mr Hronis knew Financepath did not broker loans for NAB. Mr Hronis also accepted that similar claims made in his initial affidavit regarding customer MC were based on an assumption on his part that because MC was buying a property from a developer who had a relationship with Financepath, and this occurred after Mr Weiss left Dreamstreet, that the developer had taken MC to Financepath to arrange his finance. Mr Hronis said, “one and one in Greek [makes] two”. The lack of candour in the evidence on which Dreamstreet obtained an ex parte search order is deeply troubling. (No suggestion was made that counsel involved in that application had knowledge of the issues to which I have referred.)

10. Secondly, in another affidavit, Mr Hronis deposed that the customers AM and BM had refinanced their loans with Dreamstreet in an untimely manner due to poor service by Mr Weiss. That was not true. Records which emerged in the course of the trial showed the loans had not been discharged at all. Even if the claim in Mr Hronis’s affidavit was not made knowing it to be false, it shows a lack of care in the preparation of the affidavit and a willingness by Mr Hronis to swear an affidavit either without being satisfied of the truth of its contents or without taking proper care to ensure that statements of fact made by him on oath were true. Dreamstreet sought to characterise Mr Hronis’s evidence on this point as merely a mistake, suggesting that “Mr Hronis, under cross-examination by Mr Weiss, did not accept the proposition that AM and BM had refinanced away from Dreamstreet”. That rather mischaracterises Mr Hronis’s evidence. He did not refute that they had left Dreamstreet, but stated that he did not recall whether they had left Dreamstreet and refinanced quickly.

11. In its closing submissions, Dreamstreet sought to rationalise Mr Hronis’s conduct in the witness box on the basis that it was an emotional response by a person unable to come to terms with being cross-examined by the very person he considered had wronged him (ie Mr Weiss). Dreamstreet sought to contrast Mr Hronis’s conduct as a witness while being cross-examined by counsel for Financepath with his conduct while being cross-examined by Mr Weiss. While the contrast was not as striking as Dreamstreet would have it, I accept that Mr Hronis is likely to have found the experience of being cross-examined by Mr Weiss upsetting. That was not, however, due to any inappropriate conduct in court by Mr Weiss. As I have said, his mode of cross-examination was calm and polite. In any event, I do not accept that the extent of the deficiencies in Mr Hronis’s evidence, which I have noted, can be dismissed as being borne of emotional stress. The deficiencies go well beyond anything that could be explained away on that basis.

12. Mr Weiss’s affidavit evidence was also not candid in some respects. I accept Dreamstreet’s submission that, in cross-examination, it became clear that his affidavit evidence on some topics did not present a full and accurate account of events, especially in relation to the customers CB and TC. I address the deficiencies in Mr Weiss’s evidence regarding those customers further below. However, the crucial difference between Mr Hronis’s evidence and that of Mr Weiss — in addition to Mr Weiss not bringing an application for an ex parte search order with the obligations of complete candour that such an application carries with it — is that Mr Weiss readily accepted in the course of cross-examination that his account of some customer interactions had not been fulsome. He accepted that selected events had been presented in a way that was not fulsome and obscured relevant matters. Dreamstreet correctly noted in its submissions that Mr Weiss was, at times, prepared to make appropriate concessions. It did not submit Mr Weiss engaged in any conscious attempt to mislead the court. In my assessment, Mr Weiss’s answers in cross-examination were candid, and he did not attempt to avoid conceding that his evidence regarding CB and TC had been selective. Further, other than in respect of CB and TC, it was not demonstrated that Mr Weiss’s affidavit evidence was wrong (although Dreamstreet cross-examined on certain aspects of it with some vigour, and submitted that I should not accept his evidence on a small number of discrete topics).

13. I accept that Mr Weiss gave truthful and honest evidence in the witness box even though, as noted, his affidavits obscured more than they revealed in some respects. I cannot say the same about Mr Hronis. Accordingly, where there is a conflict in their evidence, I prefer the evidence of Mr Weiss.

14. Dreamstreet submitted I ought not accept Mr Weiss’s evidence on two matters: his purpose in making and retaining what is referred to as the First Download; and that Mr Weiss’s first response when contacted by Dreamstreet customers was to tell them they should return to Dreamstreet. Neither of those matters is, for reasons set out below, dispositive.

15. I also prefer the evidence of Mr Mardegan where it conflicts with the evidence of Mr Hronis. Mr Mardegan had no personal stake in the litigation and I have no reason to doubt his evidence. Moreover, the source of the conflict between the evidence of Mr Mardegan and Mr Hronis arises from Mr Hronis claiming to recall details of a phone call in mid-July 2020 when, as I have already noted, Mr Hronis’s claimed memory was erratic and unreliable.

    BREACH OF CONTRACT CLAIMS

    Alleged breach of the notice period: cl 5(d) of the Weiss SA

16. Dreamstreet alleged that Mr Weiss breached cl 5(d) of the Weiss SA by terminating it immediately when he was obliged to give three months’ notice.

17. Clause 5(d) of the Weiss SA provided that:

    This Agreement may be terminated by the Company for whatever reason by providing the Consultant with not less than one month written notice and by the Consultant for whatever reason by providing the Company with not less than three months’ written notice[.] The notice does not have to specify reasons for termination.

18. I have concluded that Mr Weiss did not breach cl 5(d) of the Weiss SA by resigning without notice on 11 June 2020 on the basis that Dreamstreet waived compliance with cl 5(d).

19. It was common ground that Mr Weiss’s access to Dreamstreet’s CRM system was cut off on 11 June 2020. Dreamstreet pleaded that Mr Weiss had access to the CRM from 13 March 2018 to 11 June 2020. Mr Hronis also put 11 June 2020 as the end date of Mr Weiss’s access to the CRM in his evidence. Mr Weiss also deposed to having his access to the CRM, Dropbox and company email cut off on 11 June 2020. Although, in opening address, counsel for Dreamstreet spoke in terms of access having been cut off “soon” after 11 June 2020, I consider that Dreamstreet conceded that access to (at least) the CRM was cut off on 11 June 2020. Further, I accept Mr Weiss’s evidence as to the date his access to the CRM, email and Dropbox were cut off. Dreamstreet could have, but did not, adduce evidence that the access was cut off on some other date.

20. It was also common ground that it was on 11 June 2020 that Mr Weiss went to see Mr Hronis and advised him of his resignation. Mr Hall, also of Dreamstreet, was present at that meeting, but was not called as a witness. There was no explanation offered as to his absence.

21. Mr Weiss took the hard copy files he had at home with him to that meeting, and handed them over to Mr Hall at the meeting. Mr Weiss understood that to be standard practice given what he had observed during his time at Dreamstreet, during which there had been very high staff turnover (five roles were filled by approximately 30 individuals each year). Mr Weiss and Mr Hronis disagreed about whether Mr Weiss provided a hard copy of his resignation to Mr Hronis at the meeting, but nothing turns on this point of disagreement.

22. Mr Hronis accepted in cross-examination that a credit representative needs access to the CRM, Dropbox and email to undertake their duties for Dreamstreet. There was a dispute on the evidence regarding whether or not Mr Hronis called his assistant, Denise Vithoulkas, during the meeting and instructed her to cut off Mr Weiss’s access to company systems.

23. Given that it was clear that Mr Weiss’s access to company systems was cut off on 11 June 2020, and Ms Vithoulkas gave evidence she was instructed to cut off access immediately upon receiving the request (and not instructed to do it at some future time), I accept Mr Weiss’s evidence that the instruction was given during the meeting. Even if the instruction were given after the meeting, the fact remains that Mr Weiss’s access was cut off by Dreamstreet on 11 June 2020 and, by virtue of Dreamstreet’s actions, it was impossible for him to serve out any notice period given the nature of his duties.

24. I also accept Mr Weiss’s evidence that, as he was leaving the meeting, Mr Hronis told him to take his stuff and go, and asked another person, John Matheou to make sure Mr Weiss did not take anything. Mr Weiss was not cross-examined on his account (beyond it being suggested to him that Mr Hronis’s account, which made no mention of these matters, was correct).

25. I do not accept Dreamstreet’s contention that Mr Weiss’s resignation email terminated the Weiss SA immediately. Mr Weiss’s email did not give a specific date for concluding his role, but made reference to ensuring that “all my work is completed and/or in a position to be handed over to ensure a smooth transition period”. Mr Weiss’s email also referred to assisting with the completion of loans in train and completing any further document signings needed. Those were not matters that could be accomplished in a single day (noting Dreamstreet’s contention that the termination was effective immediately).

26. By cutting off his access to the company CRM, Dropbox and email immediately, and by directing Mr Weiss to take his stuff and go, Dreamstreet waived compliance with cl 5(d) of the Weiss SA. As Dreamstreet waived compliance with cl 5(d), it is not to the point that Mr Weiss would have had real difficulty serving out his notice period given that he had taken up employment with Financepath on 1 June 2020, and would be expected to start assisting Financepath customers once his induction with his new employer was complete.

27. In any event, even if Dreamstreet did not waive compliance with cl 5(d), it was itself not ready and willing to perform its obligations under the Weiss SA, which included providing Mr Weiss with leads and making available relevant documents in relation to customer transactions, and so was not entitled to sue for damages for that breach: Foran v Wight (1989) 168 CLR 385 at 402 (Mason CJ); Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (2010) 383 ALR 577; [2010] NSWCA 268 at [161] (Hodgson JA, with whom Allsop P and Macfarlan JA agreed).

28. In case I am wrong in my conclusion that there was no breach of cl 5(d) or that Dreamstreet is not entitled to claim damages as it was not itself ready and willing to perform, I will address the loss and damage claimed by Dreamstreet by reason of the alleged breach of the notice period. In its closing submissions, Dreamstreet claimed that it suffered the following losses by Mr Weiss’s breach of cl 5(d) of the Weiss SA:

    (a)lost upfront fees and trail commissions arising from the refinancing of the CL and YL loans by Mr Weiss through Financepath, alternatively loss of the chance to earn those fees and commissions; and

    (b)loss arising from the delay in earning upfront fees and trail commissions arising from the refinancing of the CB and TC construction loan.

29. In my view, Dreamstreet has not established on the balance of probabilities that, had Mr Weiss served out a three month notice period, Dreamstreet customers CL and YL would have refinanced through Dreamstreet, or that there was a loss of a real chance (which Dreamstreet put at a 35% chance) that this would have occurred and Dreamstreet would have earned the claimed fees and commissions. This is so for a number of reasons. First, CL and YL refinanced with Bendigo and Adelaide Bank, their existing lender. It is clear from internal bank correspondence that the bank did not pay commissions for “churned” deals. Unless Dreamstreet could have secured refinancing with a different lender, I am not satisfied that it would have earned any fees or commissions if the loan were refinanced with Bendigo and Adelaide Bank.

30. Secondly, and relatedly, CL gave evidence that he and his wife were consulting the market more broadly in connection with their refinance (which was not a standard loan refinance); they were not limiting themselves to whatever Mr Weiss could arrange. Dreamstreet’s submission that it would have been incentivised to pass on some of its commission to CL and YL in order to present them with the best available deal is entirely speculative.

31. Thirdly, and importantly, it was not in dispute commissions were paid when loans were drawn down, not when they were only approved and available to be drawn down. Part ($2.6 million) of the loan of CL and YL was refinanced through Financepath in mid-late October 2020 by Bendigo and Adelaide Bank. That was four and a half months after Mr Weiss commenced his employment with Financepath. CL had approached Mr Weiss about refinancing in June 2020. Accordingly, had Mr Weiss served out his notice period with Dreamstreet, no refinance would have been finalised, let alone drawn down, by the time Mr Weiss’s notice period expired. While they remained with Dreamstreet even after some poor interactions with Mr Hronis, which caused YL to describe Mr Hronis as an “f-wit” and Dreamstreet as “no hopers” in WhatsApp messages in November 2019, CL gave evidence and was cross-examined on his affidavit, which included his statement that, in about June 2020, he said to Mr Weiss that he and his wife wanted nothing more to do with Dreamstreet. Even assuming that, as CL and YL were personal friends of Mr Weiss, they would have been willing to deal with Dreamstreet while he remained with Dreamstreet, I am not satisfied that there is a real prospect that they would have been willing to conclude a deal with Dreamstreet once Mr Weiss left (ie after the conclusion of the notional three month notice period). In addition, given Mr Weiss and CL were friends, in my view it is inconceivable that, even if serving out a notice period, Mr Weiss would not have told CL he was leaving Dreamstreet. That would only have cemented CL and YL’s unwillingness to deal with Dreamstreet.

1. Fourthly, any trail commissions would have been payable only on the outstanding balance of the loan, and CL and YL had “very substantial” funds in their offset account. Dreamstreet has also not established the amount of any trail commissions it could (theoretically) have received.

2. In relation to CB and TC, Dreamstreet’s submissions contended that its loss is to be calculated by reference to the foregone opportunity to apply delayed commission (which, owing to a delay Dreamstreet attributed to Mr Weiss and Financepath, was received on 1 February 2021 instead of 1 January 2021) to alternative uses such as paying down its debt. Dreamstreet claimed nominal damages of $100.

3. I am satisfied that (again assuming that, contrary to my findings, Mr Weiss did breach cl 5(d) of the Weiss SA) the CB and TC loan would have been ready to be drawn down in time for Dreamstreet to receive its commission from 1 January 2021 had Mr Weiss been serving out a notice period with Dreamstreet. The upfront commission was $5,059.70. Dreamstreet did not put on evidence of the amount of its trail commissions, save to state that they began to be received from February 2021. On that hypothesis, Dreamstreet would be entitled to a nominal amount in respect of its loss of the use of those funds. While there is no uniformity in the amount awarded as nominal damages — the cases reveal examples where $1, $10, or $100 has been ordered — I consider that the amount of $100 is a reasonable figure in the circumstances of this case. That is the amount sought by Dreamstreet as nominal damages.

   Alleged breach of exclusive service obligation: cl 2(c)(i) of the Weiss SA

4. Dreamstreet alleged Mr Weiss breached cl 2(c)(i) of the Weiss SA as his employment with Financepath commenced on 1 June 2020, prior to the termination of his consultancy with Dreamstreet on 11 June 2020.

5. Clause 2(c)(i) of the Weiss SA provided that:

   The parties acknowledge and agree that;

   (i) the Consultant will provide the Services on an exclusive basis to Customers with respect to the Company’s business under the Company’s Australian Credit License. During the currency of this Agreement the Consultant shall not be an authorised credit representative under other person’s Australian Credit Licence without the prior written approval of the Company, which the Company may withhold in its absolute discretion …

6. Mr Weiss signed his employment contract with Financepath on 19 May 2020 and commenced his employment on 1 June 2020. Mr Weiss’s engagement with Dreamstreet terminated on 11 June 2020, although, as referred to above, the parties were in dispute about aspects of how that came about.

7. Mr Weiss did not commence serving Financepath customers until at least after 12 June 2020; he was completing his induction and “shadowing” Mr Attard of Financepath for about two to three weeks and only started seeing customers in the second or third week of June 2020, according to Mr Attard, who also explained that the standard induction of one month was shortened in Mr Weiss’s case given his experience in the industry.

8. In my view, Mr Weiss breached cl 2(c)(i) of the Weiss SA by taking up a position as an employee of Financepath on 1 June 2020. Once he was an employee of Financepath, Mr Weiss was not providing services “on an exclusive basis to Customers” (as defined in the Weiss SA) with respect to Dreamstreet’s business.

9. Dreamstreet has not proved that it suffered any loss caused by this breach. As noted, Mr Weiss was not serving Financepath customers during the period between 1 and 11 June 2020. Dreamstreet has also not asserted, let alone proved, that it suffered loss by reason of Mr Weiss being busy with his Financepath induction between 1 and 11 June 2020, rather than working to secure loans on its behalf. As Mr Weiss was paid on a commission-only basis by Dreamstreet (after an initial period when he was on a repayable retainer), Dreamstreet also did not suffer any loss arising from making payments to Mr Weiss when he was otherwise busy with his Financepath induction. Dreamstreet did not seek an award of nominal damages in respect of this breach.

   Alleged breach of confidentiality obligations arising from the downloads: cll 5 and 7 of the Weiss SA

10. At this point, it is necessary to say something more about the CRM and the downloads Mr Weiss made from Dreamstreet’s CRM. Dreamstreet operated a CRM, which contained records of its customers, including those with current loans, those with past loans, and potential customers who had not yet taken out a loan but were “leads” with whom Dreamstreet had dealings. Mr Hronis said that the CRM contained records for some 35,000 customers.

11. There was evidence to the general effect that the access of consultants to parts of the CRM was determined by reference to their roles, with consultants having access to the records concerning the customers in respect of loans on which they were, or had, worked.

12. Mr Weiss made three downloads: two downloads were made on 11 May 2020, and one was made on 11 June 2020. The two downloads made on 11 May 2020 are referred to as the Second and Third Downloads, and the download made on 11 June 2020 is referred to as the First Download. The parties only discovered that in fact the First Download was made after the Second and Third Downloads after naming conventions were established. For consistency, I have retained the parties’ naming convention.

13. Mr Weiss did not dispute making the downloads from the CRM. Mr Weiss made each of the downloads before his consultancy with Dreamstreet ended (although he made one of them on 11 June 2020, the last day of his consultancy). At the time Mr Weiss made the downloads, Dreamstreet was not aware that the downloads had been made. Dreamstreet discovered that Mr Weiss had made the downloads when, on 16 September 2020, it asked Connective Broker Services Pty Ltd (Connective) (the company providing the CRM system) to interrogate whether Mr Weiss had made any downloads from the CRM. Dreamstreet discovered matters mentioned below about where the downloads were stored on Mr Weiss’s devices when an ex parte search order was executed on 25 September 2020.

    The Second Download

14. Of the two downloads Mr Weiss made from Dreamstreet’s CRM on 11 May 2020, the first was an Excel spreadsheet Mr Weiss downloaded with details for the Dreamstreet customers associated with 96 loans (ie the Second Download). The Second Download contained their contact details and loan amounts as well as the dates on which the customers’ loans settled. The customers whose details were recorded in the Second Download were all customers whose loan applications and/or loans had been managed by Mr Weiss while providing services to Dreamstreet, and which loans had settled by 11 May 2020. It did not contain details of other customers with whom Mr Weiss had had dealings while at Dreamstreet, including those whose loan applications were in train or approved, but which had not yet settled by 11 May 2020.

15. The data in the Second Download was organised by columns with the following headings: transaction name [being the customers’ names], amount, status [all settled], lender, date settled, total security, lead source, campaign [all blank], salutations, first name(s), last name(s), full name(s), email(s), mobile, mailing address, home address, advisor, admin, internal reference, status notes [almost all of which referred to meetings with Mr Weiss], next action, created on, company, transaction type [purchase, refinance, variation, top up or pre-approval], categories, interest only expiry [all blank], fixed-rate expiry [all blank], finance due date [all blank], deposit due date [all blank], supervisor [all Mr Weiss], and “days” [with a number recorded against each entry].

16. Dreamstreet pleaded, and Mr Weiss admitted, that he emailed the Second Download from his Dreamstreet email address to his personal Gmail email address on 11 May 2020. However, the copy of the 11 May 2020 email in evidence was followed by a copy of the Third Download (not the Second Download), perhaps due to an error in the compilation of the annexure to the relevant affidavit of Mr Hronis.

17. On 17 September 2020, Mr Weiss opened a copy of the Second Download on his Financepath laptop. Mr Weiss’s evidence was that he opened the file at a time when he was consulting lawyers about issuing a letter of demand to Dreamstreet in respect of unpaid commissions. A copy of the Second Download was located on Mr Weiss’s work laptop (issued by Financepath) located at his house when the ex parte search order was executed on 25 September 2020.

    The Third Download

18. The second download made on 11 May 2020 was a spreadsheet with customer information regarding Dreamstreet loans with “self-generated referral” recorded in the lead source column, and with Mr Weiss recorded in the supervisor column (ie the Third Download). Under the Weiss SA, “leads” were either “Company Lead[s]” — being leads generated or introduced by Dreamstreet to the consultant — or “Consultant Lead[s]” — being leads generated or introduced by the consultant. Consultants were entitled to upfront and trail commissions on loans settled in respect of Consultant Leads, but were only entitled to upfront commissions for loans settled in respect of Company Leads.

19. Six loans were recorded in the Third Download with information organised by the following column headings: transaction name [being the customers’ name(s)], amount, status [all “settled”], lender, date settled, total security, lead source [all “self generated referral”], campaign [all blank], salutations, first name(s), last name(s), full name(s), email(s), mobile, mailing address, home address, advisor, admin, internal reference [all blank], status notes [all of which referred to Mr Weiss], next action [all of which recorded dates between June and late August 2020], created on, company [all of which recorded Mr Weiss], transaction type [all purchase], categories, interest only expiry [all blank], fixed-rate expiry [all blank], finance due date [all blank], deposit due date [all blank], supervisor [all Mr Weiss], and “days” [with a number recorded against each entry].

20. Mr Weiss admitted that he emailed the Third Download, together with a soft copy of Dreamstreet letterhead, from his Dreamstreet email address to his personal Gmail email address on 11 June 2020.

    The First Download

21. At 11.23 am on 11 June 2020, shortly before the meeting Mr Weiss had arranged with Mr Hronis, Mr Weiss made another download from Dreamstreet’s CRM. That download comprised the “Person Records” of 459 of Dreamstreet’s customers at that date. That download represented all the Person Records within Dreamstreet’s CRM to which Mr Weiss had access. Mr Hronis’s evidence was that Mr Weiss was the relationship manager for only 35 of the listed customers and that Mr Weiss had had contact with 126 of the listed customers in the previous 12 months. Mr Hronis came to this view by reviewing the First Download (which recorded the relationship manager for some of the customers contained in the download) and (as he claimed) checking Dreamstreet’s records. Mr Hronis did not explain which records he checked in order to contend that Mr Weiss had only had contact with 126 of the listed customers. Mr Weiss’s evidence was that at least 400 of the customers were leads sent to him by the Dreamstreet call centre, or customers that he spoke with, held a meeting with, or completed an application for. Mr Weiss’s evidence was that the balance (being names he did not recall) were likely the partners of those with whom Mr Weiss had had dealings. As is clear from the documentary evidence, the CRM did record the personal details of partners. In any event, for reasons which will become clear, nothing turns on this divergence in the evidence.

22. The information recorded in the First Download was organised alphabetically by surname and contained the following columns, not all of which were completed for every customer mentioned: title, first name, last name, salutation, home phone number, mobile phone number, email, mailing address, home address, date of birth, company, occupation, job title, annual income, ABN, relationship manager, further email addresses, addresses, and a “date created” column.

23. A copy of the First Download was located on Mr Weiss’s Chromebook during the execution of the ex parte search order. Dreamstreet did not issue any company devices — laptops, tablets or mobile phones — to Mr Weiss. Mr Weiss used the Chromebook, which was his own device, for work purposes while he was with Dreamstreet. When he moved to Financepath and was issued a work laptop, Mr Weiss gave the Chromebook to his children to use for games and entertainment.

24. Mr Weiss’s evidence was that, prior to the commencement of these proceedings, he had not looked at the First Download again.

    Dreamstreet’s claims and Mr Weiss’s response

25. In its closing submissions, Dreamstreet accepted that Mr Weiss was permitted to use the information contained in the Second and Third Downloads to prepare his resignation email. Dreamstreet did not press a claim that Mr Weiss breached the Weiss SA by making the Second and Third Downloads (if a distinction is to be drawn between making those downloads and using the information contained in them).

26. However, Dreamstreet submitted in closing that Mr Weiss breached the “Weiss Confidentiality Obligations” by:

    (a)making the First Download;

    (b)retaining the First, Second and Third Downloads after 11 June 2020 (in breach of cll 5(e)(ii) and 7(a)(viii) of the Weiss SA);

    (c)emailing the Second Download from his Dreamstreet email account to his personal Gmail email account (in breach of cll 7(a)(ii) and (iv) of the Weiss SA); and

    (d)downloading and opening the Second Download on his Financepath computer on 17 September 2020 (in breach of cll 7(a)(ii) and (iv) of the Weiss SA).

27. While Dreamstreet submitted in closing that Mr Weiss emailed the Second Download to himself on 11 June 2020, its plea was that Mr Weiss emailed the Third Download on that day, together with a blank Dreamstreet letterhead. I will proceed on the basis that the reference to the Second Download in Dreamstreet’s submissions was an error, and it intended to refer to the Third Download.

28. Mr Weiss’s position (as articulated in closing submissions) was as follows. First, Mr Weiss disputed Mr Hronis’s claim that the RCTIs generated by Dreamstreet were sufficient for Mr Weiss to keep a record of his entitlements after his consultancy with Dreamstreet ended. He relied on Mr Hronis’s admission in cross-examination that the RCTIs did not reveal all the necessary information, but would have to be reviewed alongside other documentation. Mr Weiss also highlighted inaccuracies in the RCTIs. That submission was essentially responsive to a point taken by Dreamstreet through Mr Hronis’s affidavits, but not pressed by Dreamstreet in closing. As noted, Dreamstreet accepted in closing that it was within the bounds of the Weiss SA for Mr Weiss to make and use the information in the Second and Third Downloads to prepare his resignation email, which contained various financial commission-related claims.

29. The second submission Mr Weiss made in closing was that the downloads were made in accordance with cl 5(e)(iii) of the Weiss SA, which required him to issue a final tax invoice in respect of amounts owing to him for completed transactions prior to termination of the Weiss SA.

30. The third submission Mr Weiss made was that it was reasonable for him to make and retain the downloads to have a record of the loans that he had either settled or was in the process of settling, to provide clarity on his remuneration entitlements, to assist him in pursuing those entitlements, and to have a record of all such loans as he was subject to clawback for up to four years after his resignation. Mr Weiss submitted that, in order to calculate clawback rates, he would have needed the following information: loan amount, lender, lead source and date of settlement.

31. The fourth submission Mr Weiss made was that he would have required “the information within the downloads” to pursue other unpaid or incorrectly paid commissions, which he illustrated by pointing to inaccuracies in the RCTIs in relation to eight loans.

32. Mr Weiss did not distinguish between the three downloads in making these submissions. Accordingly, the Court asked him in oral closing submissions to explain, by reference to the evidence he had earlier given, why he needed the First Download specifically, given the information contained in the Second and Third Downloads, which recorded loans which had settled at the time he made those downloads on 11 May 2020.

33. The points Mr Weiss made were as follows: the Second Download would not have included loans that had not yet settled when the Second Download was made, whereas Mr Weiss wanted a general record of the customers he had seen in order to “fight for [his] entitlements” (which he thought extended to commissions for loans he had worked on even if they had not yet settled when he left Dreamstreet), as well as to more generally equip him to demonstrate his industriousness in dealing with customers in a dispute he anticipated with Mr Hronis. It should be noted that it was Mr Weiss’s evidence that his understanding was that consultants who had left Dreamstreet had not been paid their proper commission entitlements and so he wished to have the records constituted by the downloads, not only to frame his claims for commission (as he did in his resignation email), but also to pursue his claims.

34. In relation to his subsequent dealing with the Second Download, Mr Weiss relied on the fact (to which he had deposed) that the only time he viewed the Second Download was on 17 September 2020, when he looked at it for the purpose of having a conversation with Pivot Legal about drafting a letter of demand to Dreamstreet in respect of monies owed to him.

35. Mr Weiss’s submissions as to his purpose in making and retaining the three downloads were consistent with the evidence he gave.

    Mr Weiss’s evidence about making the downloads

36. After an initial period during which Mr Weiss was paid a refundable retainer, he was paid commissions monthly in arrears, usually around the 12^th day of the month. Once on the monthly commission-based arrangement, Mr Weiss would be sent an RCTI by Dreamstreet itemising the payments being made to him, and (in some instances) deductions made by Dreamstreet.

37. In around April 2020, Mr Weiss received a phone call from a recruiter, who told him there was an opportunity to work for Financepath. Mr Weiss’s evidence was that he was dissatisfied with the work he was doing for Dreamstreet, and that this dissatisfaction stemmed from Dreamstreet withholding commissions Mr Weiss considered he was owed and wrongly deducting money from payments made to him. When he started considering leaving Dreamstreet, Mr Weiss was concerned that he did not have a clear record of the commissions he was entitled to and the work that he had done. He understood, rightly or wrongly, that others who had left Dreamstreet did not receive the commissions they were entitled to after they told Dreamstreet they were leaving.

38. Mr Weiss was conscious that the records of the work he had done for Dreamstreet were contained in the CRM and he did not have a separate record. Mr Weiss wanted to retain a record so that he would be able to determine what amounts were owing to him. Mr Weiss noted that there was an option to “export” records in the CRM system and used that option to make the Second Download, containing records of the 96 customers with settled loans. At the time that he made the Second Download, Mr Weiss thought that he would be able to use that list, together with his recollection of the payments he had received, to determine what commissions were still outstanding. He did not want to tell Dreamstreet he was leaving until he received his May commission payment.

39. After he signed the employment agreement with Financepath, Mr Weiss took a two week break from work with Dreamstreet and did not take any new leads from Dreamstreet during that time, but continued to assist customers that had made loan applications to get to settlement.

1. In the days before and on 11 June 2020, Mr Weiss began to draft his resignation email to Dreamstreet. In the morning of 11 June 2020, Mr Weiss received his payment from Dreamstreet in respect of May 2020 and also received an RCTI for that month. Once he had received his May commission payment, Mr Weiss proceeded to finalise the draft email he had prepared to Dreamstreet advising of his resignation and detailing the monies he claimed were owed to him.

2. The Second and Third Downloads did not include loans settled in May 2020 and loans that had not yet settled. Mr Weiss said he wanted that information to prepare his resignation email, so he made the First Download on 11 June 2020. He intended to capture all customers whose loans he had worked on, which information he also wanted as he was also of the view that he might end up in a dispute with Dreamstreet about commissions owed to him and he wanted to have a record of the full list of customers he had had dealings with during his time at Dreamstreet so that he had a record of the number of appointments and work he had taken on. Mr Weiss thought he might need to rely on such records if his request for payment of his commissions was ignored.

3. In his resignation email, Mr Weiss stated that he expected to be paid his usual rates of commission for five loans that were near settlement, and one that had settled a few days prior, on 5 June 2020. These loans were not included in the Second or Third Downloads as they were not settled as at 11 May 2020. While the names of these customers appear in the First Download, the details about the loans recorded in the resignation email do not appear in the First Download, which only recorded personal details about the customers, but did not detail their loans.

4. Mr Weiss’s resignation letter also included a list of customers in respect of whom he was receiving trail commissions at the time, the amounts of those loans, the rate of trail commission and the monthly dollar amount of the trail commissions.

5. The third section of Mr Weiss’s resignation email detailed trail commissions to which Mr Weiss said he was entitled, but had not been paid. There were five loans on this list, and the email specified the customer name, the loan amount, when it was settled, the rate of trail commission claimed, the amount of trail commission due and the number of months for which it was due. Apart from the trail commission details, these details appear in the Second and Third Downloads.

6. The fourth, and final, part of Mr Weiss’s resignation email contested the deduction of $4,400 from his commissions, said to be deducted in relation to the customers AM and BM. The deductions were referred to in an RCTI, not in any of the three downloads.

   Relevant clauses of the Weiss SA

7. Mr Weiss’s justifications for making the downloads were, in summary, that he was justified in making them in order to calculate and make his final demands for payment, and to retain a record of his work in anticipation of potential future disputes with Dreamstreet.

8. Pursuant to cl 5(e) of the Weiss SA:

   (e) On termination:

   (i) the Consultant must stop acting as an authorised credit representative of the Company and must stop providing the Services;

   (ii) the Consultant must return all Confidential to the Company; and

   (iii) the Consultant must issue a final Tax Invoice with respect to amounts owing to the Consultant for completed transactions prior to termination;

   (iv) subject to Clause 5(e)(v), the Company must pay the Consultant all outstanding amounts within 20 Business Days of termination, unless the amounts are in dispute; and

   (v) If any monies were paid by the Company under clause 4 [which concerned marketing], the Consultant must immediately refund the Company any monies paid or, at the Company’s option, the Company may set off such monies, and any other monies owing by the Consultant to the Company on any account whatsoever, against any outstanding amounts owing by the Company to the Consultant.

9. Although cl 5(e)(ii) referred to the return of “Confidential”, but omitted the word “Information”, it clearly referred to the return of Confidential Information and no submission to the contrary was made. I will construe cl 5(e)(ii) on the basis that it concerned the return of Confidential Information.

10. Pursuant to cl 7 of the Weiss SA:

    (a)       The Recipient:

    (i) must keep the Confidential Information of the Discloser confidential;

    (ii) may use the Confidential Information of the Discloser but only in relation to this Agreement;

    (iii) may disclose the Confidential Information of the Discloser:

    (A) to enable it to exercise its rights or perform its obligations under this Agreement but only to its personnel to the extent that they have a need to know and who have, before disclosure, been directed and have undertaken to comply with this clause;

    (B) for the purposes of obtaining advice or professional services, on a confidential basis, from professional advisors including lawyers, accountants, auditors and others and insurers;

    (C) to the extent necessary or desirable for the purposes of mediation on a confidential basis;

    (D) to the extent necessary to enforce any determination of the mediator;

    (E) if the disclosure is compelled or required by law, provided that the Recipient:

    (1) where practicable, provides the Discloser with notice of the details of the proposed disclosure, as soon as practicable and prior to the disclosure;

    (2) provides any assistance reasonably required by the Discloser to protect the confidentiality of that information;

    (3) notifies the third person that the information is confidential information of the Discloser; and

    (4) requires the third person, where practicable, to keep the information confidential;

    (iv) must not copy the Confidential Information of the Discloser or any part of it other than as strictly necessary for the purposes of this Agreement;

    (v) must implement security practices against any unauthorised copying, use, disclosure (whether that disclosure is oral, in writing or in any other form), access, damage or destruction;

    (vi) must immediately notify the Discloser if the Recipient suspects or becomes aware of any unauthorised copying, use, or disclosure in any form of the Confidential Information of the Discloser;

    (vii) must comply with any reasonable direction of the Discloser in relation to the Confidential Information of the Discloser or personal information of the Customer; and

    (viii) return all Confidential Information of the Discloser to the Discloser on demand and on termination of this Agreement.

    (b) The Recipient’s obligations under this clause continue indefinitely in relation to Confidential Information of the Discloser and personal information of the Customers, even if that Confidential Information is returned to the Discloser or destroyed, or this Agreement expires or is terminated.

    (c) The Consultant must protect the privacy of Customers and any personal information disclosed to the Consultant as part of the Consultant providing the Services. The Consultant must not use any personal information of the Customer for any other purpose except for the purpose of providing the Services.

    (d) The Consultant must not store any personal information of the Customer on its systems except as required under this Agreement. Any information stored at the Consultant’s computer system must be protected from any unauthorised use.

11. The term “Discloser” was defined as a “person who discloses Confidential Information”, the term “Recipient” was defined as a “person who received Confidential Information”, and the “Confidential Information” was defined in a way that is apt to cover both company information and personal information of customers and prospective customers:

    “Confidential Information” means information concerning the organisation, business, finances, clients, Customer information as disclosed in the application to the Company, suppliers, employees, affairs, transactions, trade secrets, operations, Intellectual Property, processes or dealings of either party which is not in the public domain or created independently by a party not through a breach of any obligation of confidence.

12. The Weiss SA contained terms that anticipated that (at least) financial matters would not necessarily be finalised the moment the agreement terminated, and that disputes may persist beyond the termination date. For example, cl 5(e)(iv) provided that the Company must pay the final invoice to the Consultant unless amounts are in dispute. Clause 9 then prescribed a dispute resolution procedure, and cll 7(a)(iii)(B)–(D) permitted the use of Confidential Information for the purposes of obtaining legal advice or services, and for the purposes of mediation and to enforce any determination of the mediator (which clause rather overlooks the nature of mediation). Clause 7(a)(iv) also only prohibited copying the Confidential Information “other than as strictly necessary for the purposes of this Agreement”. Another part of cl 7 also recognised the potential use by Consultants of the personal information of Customers “for the purpose of providing the Services”.

13. These various clauses recognised that Mr Weiss may have needed to use Confidential Information (which may include information of Customers) after the termination of the Weiss SA, and permitted that to occur. They stood alongside other clauses, which — at least if read literally and in isolation from other clauses — apparently created more absolute obligations. In particular, cl 5(e) provided that the Consultant is to return all Confidential Information to the Company on termination, and cl 7(a)(viii) required that the Consultant “return all Confidential Information of the Discloser to the Discloser on demand and on termination of this Agreement”.

14. The tension between the clauses which authorised retention and use of Confidential Information for purposes properly connected with the Weiss SA and clauses which, on their face, appeared to require immediate return of Confidential Information reinforce, in my view, the importance of reading specific clauses in the context of the agreement as a whole.

15. The agreement as a whole provides important context. The agreement was for the provision of services by Mr Weiss in return for reward in the form of commission payments. For self-generated leads, Mr Weiss was to be entitled to trail commissions as well as upfront commissions. Mr Weiss had an interest in the information concerning settled self-generated loans that lasted for as long as the trail commissions lasted. Further, and given that Mr Weiss remained subject to “clawback” exposure for up to four years following termination of the agreement, it cannot be said that, once upfront commissions were paid, Mr Weiss had no ongoing need for information concerning settled loans that concerned his entitlements under the Weiss SA.

16. Accordingly, in my view, approached objectively, the agreement that the parties to the Weiss SA have made was one which acknowledged Dreamstreet’s interest in protecting the confidentiality of information relating to its business operations, including information about customers, but also permitted Mr Weiss, as a Consultant, to have access to, to use and to retain, Confidential Information, where that use and retention was tied to the parties’ activities and obligations that were the subject of the Weiss SA. Those activities and obligations included the payment of commissions to Mr Weiss, the resolution of disputes between Mr Weiss and Dreamstreet, and the regulation of the clawback of commissions in the three or four years following the termination of the Weiss SA.

17. Accordingly, the question of whether or not Mr Weiss was authorised by the Weiss SA to make and retain each of the downloads turns on the content of each of the downloads, the purpose for which Mr Weiss made it, and the purpose for which it was retained.

    Making and retaining the First Download

18. The First Download essentially contained personal details of customers. The First Download did not contain details of forthcoming settlements in respect of which Mr Weiss might claim an entitlement to commissions (even if he were entitled to commissions on loans that settled after he left Dreamstreet). As I have set out above, beyond the customer names appearing (along with over 400 others), the claims made by Mr Weiss in his resignation email for commissions in respect of loans which were due to settle shortly afterwards were not contained in the First Download. Whatever Mr Weiss consulted to frame those claims, the information was not in the First Download.

19. The other justification Mr Weiss gave was a general contention that he wanted to have a record of all the customers he had worked with in anticipation of the potential for a dispute with Dreamstreet. While such a desire might be understandable given Mr Weiss’s perception of the likelihood that Dreamstreet would not pay his commissions once he left, there was nothing in the First Download that would have assisted Mr Weiss in prosecuting claims for commissions, or resisting claims for clawback. As I have already noted, the First Download was a record of customer names and personal details (including contact details, occupation and income records). Under the Weiss SA, Mr Weiss was entitled to upfront commissions for settled loans, and trail commissions for settled loans where he was the source of the lead. He had no entitlement to commissions for generally having worked hard or having seen lots of customers.

20. There is no dispute that the First Download contains Confidential Information. Mr Weiss did not make or use the Confidential Information in the First Download in relation to the Weiss SA or for purposes of providing services to the customers. It follows that Mr Weiss made the First Download in breach of cll 7(a)(ii) and 7(c). As making the First Download constituted making a copy of Confidential Information, Mr Weiss breached cl 7(a)(iv) by copying the Confidential Information contained in the First Download for purposes that were not related to the Weiss SA. The clauses just mentioned are those raised by Dreamstreet in its closing submissions, noting that its further amended statement of claim (FASOC) was unclear as to which exact clauses it contended Mr Weiss breached in relation to each download, and its submissions employed the term “Weiss Confidentiality Obligations”, which is not defined in Dreamstreet’s submissions, or adequately defined in the FASOC.

21. As I have concluded that there was no justification under the Weiss SA for Mr Weiss to make the First Download, there was no justification for Mr Weiss to retain it. However, as I set out below, in my view, the obligation to “return” Confidential Information cannot be sensibly applied to the information Mr Weiss downloaded. Accordingly, Mr Weiss’s retention of the First Download does not constitute an additional breach of the Weiss SA. If I am wrong about that, then Mr Weiss’s retention of the First Download fell outside the positive permissions granted by the Weiss SA to which I have referred, and he would additionally have breached cll 5(e)(ii) and 7(a)(viii) by retaining the First Download after his consultancy with Dreamstreet ended.

    Retaining the Second and Third Downloads after 11 June 2020

22. In my view, Mr Weiss did not breach the Weiss SA in retaining the Second and Third Downloads after 11 June 2020. As noted, Dreamstreet accepted that Mr Weiss was entitled to make and use those downloads in preparing his resignation email, which included his commission payment claims. Dreamstreet’s contention was that Mr Weiss breached cll 5(e)(ii) and 7(a)(viii) in retaining those two downloads.

23. I accept that the Second and Third Downloads also contained Confidential Information, that Dreamstreet was the Discloser of that information, and that Mr Weiss was the Recipient of that information.

24. As set out above, cll 5(e)(ii) and 7(a)(viii) imposed what, at first blush, might appear to be straightforward obligations on Mr Weiss to “return” Confidential Information after the termination of the Weiss SA.

25. The first basis upon which Dreamstreet’s claim that Mr Weiss breached cll 5(e)(ii) and 7(a)(viii) fails is that its recitation of the evidence relied on Mr Weiss’s failure to delete the downloads, when the clauses referred to the “return” of Confidential Information. Clauses 5(e)(ii) and 7(a)(viii) of the Weiss SA refer expressly to the “return” of Confidential Information in circumstances where other clauses of the Weiss SA addressed the concept of destruction separately. Clause 7(b) provided that Mr Weiss’s confidentiality obligations continue indefinitely “even if that Confidential Information is returned to the Discloser or destroyed” (emphasis added). The digital files constituting the Second and Third Downloads could be destroyed, but Dreamstreet did not articulate any basis upon which they could be “returned”, or returned without also being retained, in which case its original complaint would remain.

26. The second, and independent, basis upon which Dreamstreet’s claim fails is that I do not accept that, read in the full context of the Weiss SA, Mr Weiss was subject to an absolute obligation to return or destroy the Second and Third Downloads once he had crafted his resignation email laying out his claims. That is so even if (contrary to the above) “return” is construed to include “destroy”. As I have already detailed, in my view, on its proper construction, the Weiss SA authorised Mr Weiss to retain Confidential Information in some circumstances; the “return” obligations are not absolute or so to be read in isolation from the provisions authorising the use of Confidential Information including in circumstances which may post-date termination.

27. Clause 7(a)(ii) authorised Mr Weiss to use the Confidential Information “in relation to this Agreement”. The fundamental quid pro quo of the Weiss SA was that Dreamstreet would pay Mr Weiss commissions for settled loans. Accordingly, in my view, that positive permission extended to Mr Weiss using the Confidential Information in the Second and Third Downloads to ensure that he was paid commissions owing to him. Use “in relation to this Agreement” was a use that necessarily could extend beyond the day of termination of the Weiss SA. Other clauses of the Weiss SA also reinforce the view that that Confidential Information may be used and retained after the termination of the Weiss SA. Clause 5(e)(iv) of the Weiss SA anticipated that payment claims might not be settled on the day of termination, but might be paid some weeks later. Clause 7(a)(iii) also permitted Mr Weiss to use the Confidential Information in a wide range of circumstances which, by their nature, might post-date termination of the Weiss SA (eg, obtaining advice of lawyers, accountants and others, or for use in mediation). Both of these clauses, in my view, anticipated and acknowledged that Mr Weiss may require access to some Confidential Information which came into his possession in connection with performing his duties as a credit consultant for Dreamstreet, after the termination of the Weiss SA.

28. Accordingly, while I acknowledge that cll 5(e)(ii) and 7(a)(viii) were drafted in apparently absolute terms, and not expressly subject to any qualifications, in my view the only sensible construction of those clauses in the context of the Weiss SA as a whole is that Mr Weiss was obliged to “return” such Confidential Information as was no longer covered by any of the positive permissions granted to him to use that information “in relation to this Agreement” or in relation to the purposes specified in cl 7(a)(iii), which included enabling him to “exercise [his] rights … under this Agreement”. As I have said, those rights included the right to be paid commissions owing.

1. I should also note that, while Dreamstreet relied on the decision of Sackar J in Dargan (first instance), that decision is not of assistance as there was no analysis of how it was that the client lists were “copyright material” so as to fall within the definition of “Intellectual Property” in the contract at issue in that case. An argument that the list was not a literary work as it was computer generated was rejected on the facts. Here, it is not in dispute that the Dreamstreet Compilations were not wholly automated as they involved human data-entry. However, contrary to the tenor of Dreamstreet’s submissions, the mere fact that a compilation is not wholly automated does not mean it qualifies as a literary work protected by the Copyright Act.

2. Nor (cf Dreamstreet’s submissions) does Phone Directories at [86] assist it. All that Keane CJ said there was that his Honour rejected a submission that the respondents in that case could only prevail in the appeal if all the cases collected in Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd (2002) 119 FCR 491 (Desktop Marketing) were wrongly decided. In Phone Directories, Keane CJ rejected that submission on the basis that neither Desktop Marketing — which case was, I note, the subject of adverse treatment by the High Court in IceTV — or the cases referred to in Desktop Marketing, concerned automated processes. Chief Justice Keane’s rejection of the submission advanced does not relieve Dreamstreet of the need to establish that the Dreamstreet Compilations were literary works. I do not accept that there is any default position, established in law, that compilations of data established over many years are, ipso facto, literary works.

   Whether Mr Weiss and Financepath infringed Dreamstreet’s copyright

3. While I have concluded that none of the Dreamstreet Compilations was a literary work protected under the Copyright Act, in case I am wrong in so concluding, I will briefly address whether Mr Weiss and Financepath reproduced substantial parts of the Dreamstreet Compilations, and did so without licence.

4. Section 14 of the Copyright Act provides:

   (1)       In this Act, unless the contrary intention appears:

   (a) a reference to the doing of an act in relation to a work or other subject-matter shall be read as including a reference to the doing of that act in relation to a substantial part of the work or other subject-matter; and

   (b) a reference to a reproduction, adaptation or copy of a work shall be read as including a reference to a reproduction, adaptation or copy of a substantial part of the work, as the case may be.

   (2) This section does not affect the interpretation of any reference in sections 32, 177, 187 and 198 to the publication, or absence of publication, of a work.

5. The following principles apply in determining whether material copied is a substantial part of an original literary work:

   (a)It is necessary to consider not only the extent of what is copied, but also the quality of what is copied and the originality of the expression of the part which has been copied: IceTV at [30], [32], [37], [40] (French CJ, Crennan and Kiefel JJ), [52] (Gummow, Hayne and Heydon JJ). The more that the copyright work is simple or lacking in substantial originality, the greater the degree of taking will be needed before the substantial part test is satisfied: IceTV at [40] (French CJ, Crennan and Kiefel JJ). However, it is necessary to approach the analysis without proceeding as though the copied elements were separate literary works: IceTV at [157] (Gummow, Hayne and Heydon JJ).

   (b)The fact that that which has been copied did originate from the author does not, of itself, mean that it is a substantial part of the whole work: IceTV at [38] (French CJ, Crennan and Kiefel JJ). For example, copying “obvious or prosaic” information, or information which the authors had little choice in selecting, will not constitute the copying of material with sufficient originality to constitute the reproduction of a substantial part of a literary work: IceTV at [42], [43] (French CJ, Crennan and Kiefel JJ).

   Mr Weiss’s conduct in making the Second and Third Downloads

6. Dreamstreet has pleaded that, by making the Second and Third Downloads on 11 May 2020, Mr Weiss reproduced a substantial part of the Opportunity Records in the CRM. Dreamstreet maintained this allegation despite accepting, in its submissions on the breach of contract case, that Mr Weiss was permitted to “use the information in the Second and Third Download[s] to prepare his resignation email” as “this was a permissible use of the Confidential Information in the [Weiss SA]”, and despite not pursuing any breach of contract allegation in respect of the making of those two downloads. It was not explained why, in light of those matters, the Weiss SA did not likewise license Mr Weiss to make the Second and Third Downloads, such that the making of those downloads would not infringe Dreamstreet’s alleged copyright.

7. In its submissions, Dreamstreet relied on the fact that the downloads were made without its knowledge or (express) authorisation, and contended that the onus is on Mr Weiss to establish the evidential foundation for any asserted licence. In reference to Mr Weiss’s explanation that he made the downloads to prepare his final invoice, the only point Dreamstreet made in its closing submissions was that Mr Weiss intended to retain the downloads after he ceased working for Dreamstreet and therefore was acting outside the scope of any licence Mr Weiss may have had from Dreamstreet.

8. I do not accept Dreamstreet’s contentions for the following reasons (which of course only arise if I am wrong and Dreamstreet has established that the compilation of Opportunity Records in the CRM was a literary work protected by the Copyright Act).

9. If any of the Dreamstreet Compilations was a literary work, it fell within the definition of “Intellectual Property” and also “Confidential Information” under the Weiss SA. The Weiss SA required Mr Weiss, on termination, to issue a final Tax Invoice to Dreamstreet: cl 5(e)(iii). Mr Weiss was also permitted by cl 7(a)(ii) to “use the Confidential Information of the Discloser but only in relation to this Agreement” and by cl 7(a)(iii) to use the Confidential Information for a variety of purposes which included (to paraphrase) to enable the consultant to exercise his rights or perform his obligations under the Weiss SA. I do not consider that the contractual authority for Mr Weiss to “use” certain information was confined to Mr Weiss consulting the information in the Mercury system, without copying it by downloading an extract from the CRM. Rather, “use” in the relevant context extended to the making of a copy for the permitted purposes.

10. I refer to, without repeating, my analysis of the proper construction of the Weiss SA in relation to whether or not Mr Weiss breached the Weiss SA by retaining the Second and Third Downloads. Consistent with that analysis, in my view, Mr Weiss was licensed by Dreamstreet to copy its Confidential Information, including its Intellectual Property, for purposes which extended to Mr Weiss setting out and pursuing claims to payments from Dreamstreet. That licence extended to making and retaining the Second and Third Downloads.

11. Further, and in any event, even if the licence were limited to reproducing Confidential Information (including Intellectual Property) for the purposes of preparing the final tax invoice, under s 36 of the Copyright Act, copyright is infringed by the doing of an act comprised in the copyright, when that act is done. If Mr Weiss was licensed to make the Second and Third Downloads when he made them, the act of reproducing the work was not done without licence. Dreamstreet did not cite any authority in support of its submission that an intention by Mr Weiss to retain the Second and Third Downloads meant that the act of reproducing the literary work was done without licence when it was done.

12. If, contrary to the foregoing, Mr Weiss’s conduct in making the Second and Third Downloads was not authorised, then the issue arises as to whether Mr Weiss reproduced a substantial part of one or more of the Dreamstreet Compilations (relevantly here the compilation of Opportunity Records).

13. The Third Download comprises the customer names and relevant details for six loans. Even accepting that six loans represented more than six individual customers, the proportion of the overall scale of the Dreamstreet CRM system, which Mr Hronis said contained records for 35,000 customers, was vanishingly small. While I accept that the question of substantial reproduction is not to be assessed purely from a quantitative viewpoint, a quantitative analysis (that is, the extent of what is copied) is still relevant (see IceTV at [30]). Further, assessing what was reproduced qualitatively, the Third Download contained data (bare facts) that were recorded in the default fields in the Mercury system with the following exceptions (where Mr Hronis oversaw the creation of drop-down options): Lead Source, Advisor and Supervisor, Admin and Status Notes. None of the information there reproduced reflected any intellectual input in expression by Mr Hronis. Further, as noted, the form and format of downloads from the CRM were determined by the Mercury system, and not by Mr Hronis. Accordingly, pursuant to IceTV, in my view the making of the Third Download did not involve reproducing a substantial part of any Dreamstreet Compilation.

14. Although the Second Download contained 96 Opportunity Records, that is again to be contrasted with Mr Hronis’s evidence that the CRM database contained 35,000 customers with Person and Opportunity Records. Again, the quantitative proportion is barely measureable. The records reproduced also contained bare data inserted into pre-determined fields for which Mr Hronis did not establish drop-down options, with the exception of the following: Lead Source, Advisor and Supervisor, Admin and Status Notes. As with the Third Download, none of the information there reproduced, or the form of its reproduction in a download, reflected any intellectual input in expression by Mr Hronis. Accordingly, pursuant to IceTV, in my view the making of the Second Download did not involve reproducing a substantial part of any Dreamstreet Compilation.

    Financepath’s conduct by Mr Weiss’s actions

15. While Mr Weiss was an employee of Financepath when he created the First Download on 11 June 2020, he was not asked to perform that download by Mr Collard, Mr Attard or anyone else at Financepath, nor did he tell anyone at Financepath that he had performed that download.

16. A version of the First Download was created on Mr Weiss’s Chromebook when he opened and viewed the First Download. The Chromebook was Mr Weiss’s personal device; it was not a device issued to him by Financepath. Mr Weiss was not asked by Mr Collard, Mr Attard or anyone else at Financepath to open or view the First Download on this device, nor did he tell Mr Collard, Mr Attard or anyone else at Financepath that he had done so.

17. A version of the Second Download was also created when Mr Weiss opened the Second Download on the computer issued to him by Financepath on 17 September 2020. He was not asked by Mr Collard, Mr Attard or anyone else at Financepath to open and view the Second Download. Nor did Mr Weiss tell anyone at Financepath that he had done so.

18. Mr Weiss did not refer to any of the First Download, the Chromebook version of the First Download or the version of the Second Download made on 17 September 2020 in the course of his work for Financepath.

19. There is, accordingly, no basis on which to attribute Mr Weiss’s actions to Financepath so as to make good the case pleaded by Dreamstreet, namely that Financepath reproduced a substantial part of the Dreamstreet Compilations and thereby infringed its copyright in the Dreamstreet Compilations pursuant to s 36 of the Copyright Act.

20. Dreamstreet contended that it was enough to render Financepath liable that Mr Weiss was an employee of Financepath at the time he undertook the actions which Dreamstreet contended constituted reproductions of a substantial part of the Dreamstreet Compilations by Financepath. Dreamstreet relied on the decision of Besanko J in Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) (2008) 76 IPR 763; [2008] FCA 746 (Futuretronics No 2) in support of its contention that employers are, as a matter of course, held liable for infringing conduct undertaken by their employees. As Financepath pointed out in its submissions, Futuretronics No 2 concerned the assessment of damages in that case. The liability decision was Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2007] FCA 1621 (Futuretronics). Futuretronics does not assist Dreamstreet. In that case, the employer in question was centrally involved in the infringing conduct of his employee; the facts are a far cry from the present case where Financepath had nothing whatsoever to do with the conduct of Mr Weiss which is said to be conduct of Financepath. Unlike Futuretronics, here the conduct in question was not used in furtherance of Mr Weiss’s employment with Financepath.

21. Finally, the First Download only reproduced Person Records. I do not accept that (even putting to one side the small proportion of the records reproduced, which was about 1.3% as calculated by Financepath), the information reproduced constituted the expression of thought, as distinct from bare matters of fact which were co-extensive with their expression. Noting the observations of the High Court in IceTV at [170] (referred to above), the First Download accordingly did not involve the reproduction of a substantial part of a literary work, even when approached qualitatively. I have also already concluded that the Second Download likewise did not constitute the reproduction of a substantial part of any of the Dreamstreet Compilations.

    Damages

22. I have concluded that Dreamstreet has not made out its copyright infringement claims on a number of bases. In the circumstances, it is not necessary to consider Dreamstreet’s claims for additional damages in the sum of $50,000 under s 115(4) of the Copyright Act.

    MR WEISS’S CROSS-CLAIM

23. By his cross-claim, Mr Weiss contended that cl 13 of the Weiss SA, and his three month notice period, constituted unlawful restraints of trade. He also pursued unpaid upfront and trail commissions and sought repayment of what he contended were improper deductions of $4,400 (ex GST) made against commissions due to him.

    Restraint claims

24. I have addressed above whether cl 13 constituted an unlawful restraint of trade. This issue was raised by Mr Weiss’s cross-claim, but has already been addressed.

25. Mr Weiss’s cross-claim also asserted that the three month notice period was an unlawful restraint of trade. It is not strictly necessary to address this as I have concluded that Mr Weiss was not in breach of the notice period in any event. Nevertheless, in case I am wrong in that conclusion, I do not consider that a three month notice period is an unlawful restraint of trade. Such a notice period constitutes a reasonable protection for Dreamstreet by enabling it to recruit and train a replacement credit consultant. Dreamstreet would also continue to be subject to its contractual obligations to provide leads and pay commissions during the notice period. While Mr Weiss contended that the three month notice period was an unfair term within the meaning of the ACL, he did not establish that the Weiss SA was a “small business contract” within the meaning of s 23(4) of the ACL. In any event, for the reasons given, I do not consider the term was unfair.

    Unpaid commissions and improper deductions

26. By his cross-claim, Mr Weiss claimed unpaid upfront commissions and unpaid trail commissions. He also claimed repayment of the sum of $4,400 (ex GST) deducted from his commissions in respect of two customers, AM and BM.

    Unpaid upfront commissions

27. Mr Weiss claimed unpaid upfront commissions totalling $3,930.85 (inc GST). Dreamstreet admitted that it owes Mr Weiss a debt in that amount, but, it appears from its Amended Defence to Cross-Claim, claims a right to set off those amounts against amounts it claims from Mr Weiss pursuant to cll 6(b), 6(c) and 6(f) of the Weiss SA.

    Unpaid trail commissions

28. Mr Weiss has also claimed unpaid trail commissions for specified loans in respect of which he brought the lead to Dreamstreet, and not vice versa. Dreamstreet has admitted Mr Weiss’s entitlement to trail commission for some, but not all, of the customers and also disputes the amounts claimed by Mr Weiss.

29. For reasons which were delivered orally at the time, I granted leave for Mr Weiss to amend the amounts of the trail commissions he claimed (by adjusting the percentages claimed) and to update the annexure to his cross-claim to incorporate more up-to-date figures (being to April 2023, while the initial version calculated trail commissions only to January 2021). Dreamstreet did not seek to depart from the admissions it previously made about trail commissions to which Mr Weiss was entitled.

30. The admitted trail commissions were as follows:

Customer	Loan Amount	Trail Commission rate excluding GST	Monthly Commission excluding GST
JM and NM	$741,335	0.06%	$37.07
SG	$784,268.54	0.08%	$52.29
BG and SS	$393,372.17	0.08%	$26.23
SH and YH	$731,007.58	0.05%	$30.46
EC and IC	$407,377.54	0.08%	$27.16
SU and LU	$745,075.04	0.03%	$18.63
RB	$284,576.40	0.08%	$18.98
KC	$336,000	0.08%	$22.40

The Court was not provided with up-to-date calculations of the quantum of these admitted unpaid trail commissions.

1. In respect of the other loans in question (being loans in respect of the customers AA and RA, CL and YL, ML and EL), Dreamstreet pleaded that Mr Weiss and Mr Hronis had agreed that, as the rate at which the loan was settled was low, no trail commission would be payable. In respect of two further customers (AM and BM), Dreamstreet alleged that Mr Weiss had provided services without due diligence, skill and care, which caused the customers to refinance in an untimely manner, and which detrimentally affected Dreamstreet’s reputation and good standing, in breach of various clauses of the Weiss SA.

2. After Mr Weiss amended his schedule of claimed trail commissions, Dreamstreet amended its defence to the cross-claim and withdrew the contention that Mr Weiss had caused the customers AM and BM to refinance, but added a claim that trail commission was only payable by Dreamstreet to Mr Weiss in respect of any loan if Dreamstreet and Mr Weiss reached agreement on the amount of trail commission to be paid in respect of the loan. It contended that Mr Weiss had not reached such an agreement with Dreamstreet in respect of the loans in question in the amounts he alleged.

3. The revised rates of commission claimed by Mr Weiss constituted 80% of the trail commission received by Dreamstreet. Before receiving details of trail commissions actually received by Dreamstreet in the context of these proceedings, Mr Weiss assumed he was receiving 80% of the trail commission being received by Dreamstreet; consultants at Dreamstreet were not provided with information about what commissions Dreamstreet was receiving. Mr Weiss learned during the proceedings that that was not the case. He also learned during the proceedings that, contrary to Dreamstreet’s pleading and Mr Hronis’s sworn affidavit, the customers AM and BM had not refinanced away from Dreamstreet at all.

4. The substantive issues that require resolution in relation to the cross-claim for trail commission are as follows. First, what was Mr Weiss’s entitlement to trail commission under the Weiss SA? Secondly, in respect of customers AA and RA, CL and YL, ML and EL, whether Mr Hronis and Mr Weiss agreed Mr Weiss was to receive no trail commission as the rate at which the loan was settled was low. Thirdly, in respect of AM and BM, whether Mr Weiss was disentitled to any trail commission by virtue of his conduct, as alleged by Dreamstreet.

   Contractual entitlement to trail commissions

1. Clauses 2.3(d)(i)–(iii) of the Services Schedule to the Weiss SA provided as follows in respect of trail commissions (emphasis added):

   (d) (i)        The Consultant acknowledges and agrees that the Consultant shall

   only be entitled to payment of a Trail Commission in respect of a Settled Loan that is from a Consultant Lead and the Consultant shall not be entitled to payment of any Trail Commission in respect of a Settled Loan that is from a Company Lead.

   (ii) The Trail Commission for a Settled Loan from a Consultant Lead is an amount equal to 80% of the trail commission that the Consultant and the Company agree upon in respect of each such Settled Loan and is dependent on the current rate we have, and depending on the product and will be paid on a monthly basis.

   (iii) (A)      No Trial [sic] Commission will accrue or is payable in respect

   of loans during any period of the loan is in default;

   (B) Once any default is rectified, Trail Commission will commence again but will not be paid for the default period.

2. “Consultant Lead[s]” were leads introduced by the consultant (cf “Company Lead[s]”, which were leads generated or introduced by Dreamstreet to consultants).

3. The term “Trail Commission” was defined in the Services Schedule as “payment of a fee for Settled Loans made periodically, as distinct from an upfront or lump sum payment for Settled Loans”.

4. Clauses 2.3(d)(i)–(iii) of the Services Schedule were, like many aspects of the agreement, poorly drafted. Nevertheless, it is the Court’s task to determine, approached objectively, what the parties agreed.

5. Read literally, cl 2.3(d)(ii) is, at least at first blush, peculiar as it provides that Mr Weiss would be entitled to a trail commission equal to 80% of an amount which he and the company agreed. It is impossible to discern any commercial logic in a consultant and Dreamstreet negotiating, for each loan, a particular rate of trail commission and then Mr Weiss being paid 80% of that rate. As Dreamstreet submitted, if they were to agree anything on a loan by loan basis, they would agree a single rate to be paid to Mr Weiss, not a rate of which Mr Weiss would be paid 80%.

6. Mr Weiss’s evidence was that he never discussed rates of trail commission with Mr Hronis, either generally or for any particular loan. In his closing submissions, Mr Weiss submitted that no agreements were made with Mr Hronis with respect to trail commissions. Mr Weiss’s claim to trail commissions at the rate of 80% of the trail commission received by Dreamstreet was based on an argument that the only sensible construction that could be advanced of cl 2.3(d)(ii) was that he was to receive 80% of the trail commission received by Dreamstreet.

7. I have, not without some hesitation, determined that Mr Weiss’s construction must be rejected. First, the Services Schedule to the Weiss SA uses, in other places, a defined term “Corresponding Commission”, meaning the payment by the lender to Dreamstreet in respect of a loan for which Dreamstreet was obliged to make a corresponding payment to Mr Weiss. Had it been intended that Mr Weiss would be entitled to 80% of trail commissions received by Dreamstreet, one would expect cl 2.3(d)(ii) to have used this term. However, this point is not determinative as the Weiss SA’s use of defined terms is, as I have already observed, inconsistent (if not haphazard).

8. Secondly, even if not using the defined term “Corresponding Commission”, cl 2.3(d)(ii) could simply have referred to trail commissions received by Dreamstreet if it had been intended that Mr Weiss would receive 80% of trail commissions received by the company. Thirdly, the peculiar construction referred to above as lacking any commercial logic is not the only available construction of cl 2.3(d)(ii). The reference to the “trail commission that the Consultant and the Company agree upon in respect of each such Settled Loan and is dependent on the current rate we have, and depending on the product and will be paid on a monthly basis” refers, in my view, to a notional rate of trail commission. Rather than Dreamstreet locking itself in to pay Mr Weiss a fixed rate of trail commission, or a rate which depended only on the rate of trail commission it was receiving, Dreamstreet left it open to itself to negotiate the rates of trail commission that Mr Weiss was to receive.

9. In the absence of any negotiations in fact occurring, the effect is that Mr Weiss left it to Dreamstreet to determine the rate it was going to pay him. Accordingly, he is, in my view, entitled to the rates Dreamstreet in fact paid him, as evidenced by previous RCTIs.

10. While the construction I have preferred left Mr Weiss vulnerable to not receiving meaningful trail commissions for loans relating to customers he brought to Dreamstreet, that is a function of the parties’ failure to engage in the necessary negotiation of the notional rate on which the practical operation of cl 2.3(d)(ii) depended. Neither their failure to do so, nor Mr Weiss’s assumption that he was in fact receiving 80% of the trail commissions received by Dreamstreet, is to the point; those are post-contractual matters that cannot affect the construction of the contractual term in issue.

    Whether there was any agreement that Mr Weiss would receive no trail commission in relation to the loans of AA and RA, CL and YL, and ML and EL

11. I do not accept Mr Hronis’s evidence that he and Mr Weiss expressly agreed Mr Weiss would not receive any trail commission in respect of the loans of AA and RA, CL and YL, or ML and EL. As discussed elsewhere, I do not consider that Mr Hronis was a witness of truth. Rather, his evidence was, in my assessment, constituted by whatever he considered useful to Dreamstreet’s case in the moment. I accept Mr Weiss’s evidence that there was no agreement reached for him not to receive any trail commission due to Dreamstreet receiving a low rate on these loans. However, in respect of these loans, other than in respect of the loan of ML and EL, nothing turns on my assessment of Mr Hronis’s credibility. That is because, as set out above, in the absence of an agreement as to the trail commission to be paid, Mr Weiss left it to Dreamstreet to determine the rate and Dreamstreet paid no trail commission at all on the loans of AA and RA, and CL and YL.

12. As is apparent from the RCTIs for each of the loans of AA and RA, and CL and YL, issued by Dreamstreet to Mr Weiss, no trail commission was ever paid. Accordingly, Mr Weiss has not made out his claim for unpaid trail commissions in respect of AA and RA, or CL and YL, as no rate of trail commission was ever set.

13. In respect of ML and EL, the couple took out two loans, being a loan of $636,000 which settled in December 2018, and a loan of $1.1 million, which settled on 3 May 2019. Mr Weiss’s claim for unpaid trail commission relates to the latter loan. The RCTIs in evidence show that trail commissions of $73.21 plus GST for June 2019 and $73.09 plus GST for July 2019 were paid to Mr Weiss. The RCTIs specify “0.08%” under the column headed “Rate”, but it is clear from the RCTIs that the trail commission paid was not equivalent to 0.08% of the principal of the loan. Nor was the rate paid to Mr Weiss 80% of the amount received by Dreamstreet; Dreamstreet received trail commission of $133.45 ex GST in June 2019 and $138.45 ex GST in July 2019. The rate of trail commission paid to Mr Weiss in June and July 2019 was the equivalent of 0.007% of the initial principal of the loan.

14. Mr Hronis stated that no further trail commission was paid after June and July 2019 because he and Mr Weiss discussed that the rate was too low and no trail commission would be paid. I reject Mr Hronis’s evidence. I prefer the evidence of Mr Weiss that he did not have any discussion with Mr Hronis to that effect. Mr Weiss’s evidence was that he sought and obtained Mr Hronis’s approval for the interest rate to be offered to the customers, but that he and Mr Hronis never discussed him not receiving a trail commission. Mr Weiss’s evidence is supported by the complaint he raised by email on 5 September 2019 in which he queried the failure to include trail commission for this loan. That complaint was raised shortly after Mr Weiss received the RCTI for August 2019. If Mr Weiss had, as Mr Hronis claimed, shortly before had a discussion with Mr Hronis in which he agreed that he would not be paid any further trail commissions, it would make no sense for him to have promptly issued a complaint querying the abrupt cessation of trail commission payments.

15. Accordingly, in my view, Mr Weiss has made out a claim to be paid trail commission on the ML and EL loan at the rate established by the June and July 2019 RCTIs, but not at the higher rate claimed by him.

    The loans of AM and BM and Mr Weiss’s conduct in relation to them

16. While framed as a separate element of the cross-claim, it is convenient to address Mr Weiss’s claim to repayment of the deduction of $4,400 (ex GST) made against amounts due to him, as recorded in the RCTI for June 2019, issued around 4 July 2019. That RCTI simply recorded:

    Deductions

    [BM]    ($2200.00)

    [AM]   ($2200.00)

17. In his evidence, Mr Hronis referred to notes contained in the CRM which record certain matters about which each of BM and AM were somewhat unhappy. According to the CRM notes, Dreamstreet organised a rate reduction for each of BM and AM, and (again according to the CRM notes) waived BM’s application fee of $500.

18. Mr Hronis stated, on oath, in one of his affidavits that:

    In view of the complaints made by [AM] and [BM] about Mr Weiss’ poor communication, lack [of] explanation of the mortgage manager model and lender protection fee and the interest rates being different to what Mr Weiss had advised, Dreamstreet agreed to refund $2,200 to each of [AM] and [BM] to seek to address their complaints above.

19. There is no evidence that those amounts were in fact refunded to the customers. If they had been, they would have been recorded in the CRM. I am left with no conclusion other than that Mr Hronis’s evidence was false and given (at best carelessly) to justify the deduction of $4,400 (ex GST) from Mr Weiss’s commissions.

20. Mr Hronis also stated, on oath, that the services provided by Mr Weiss caused BM and AM to refinance. In fact, neither customer refinanced. While Dreamstreet submitted that Mr Hronis merely made a mistake in his evidence, I do not accept that explanation. In any case, even on the best case for Dreamstreet, this error shows a striking lack of care by Mr Hronis in relation to reviewing and swearing up to his affidavits. The impact of this evidence on Mr Hronis’s credibility remains notwithstanding that, at the end of the trial, Dreamstreet withdrew the pleaded allegation that the customers had refinanced.

21. In my view, there was no contractual basis upon which Dreamstreet was entitled to deduct $4,400 (ex GST) from Mr Weiss’s commissions. Even if, as Dreamstreet asserted, but Mr Weiss denied, his handling of the loans left something to be desired, the customers did not refinance. Nor did Dreamstreet in fact refund the monies which it sought to recoup from Mr Weiss. I also reject Dreamstreet’s claim that Mr Weiss agreed to the deductions. I accept Mr Weiss’s evidence that he contested the deductions and that at least one of the complaints made was explained by an administrative error having been made by another person at Dreamstreet when inputting interest rates.

22. It appears from the RCTIs that Dreamstreet did not at any stage pay Mr Weiss a trail commission in respect of the loans to BM and AM (not to be confused with other customers with the same surname, JM and NM). Accordingly, for the same reasons as set out in respect of AA and RA, and CL and YL above, I consider Mr Weiss has not made out his claim to trail commissions in respect of BM or AM.

23. By its Amended Defence to Cross-Claim, Dreamstreet pleaded a contractual entitlement to set off amounts owed by it to Mr Weiss against amounts owed to it in damages, equitable compensation, an account of profits, or additional damages under s 115(4) of the Copyright Act. The pleaded claim relied on cll 6(b), 6(c) and 6(f) of the Weiss SA. However, Dreamstreet made no submissions in support of this pleaded claim or how the various amounts it claimed would fit within the terms of those provisions of the Weiss SA (as to which I note, in any event, that the clawback claims enforce a contractual entitlement to have a sum paid to Dreamstreet, and do not constitute a liability of any kind arising from a breach of the Weiss SA by Mr Weiss, or any fraud or negligence by him: cf the terms of cl 6(b)). As Dreamstreet made no submissions on the point, I do not consider it is encumbent on the court to work through the strands of a pleaded claim that was not pursued at trial. In any event, cl 6(b) concerns a contractual indemnification whereas Dreamstreet pursued its claims by way of damages for breach of contract (cf enforcement of the contractual indemnity).

24. Finally, I note that cl 6(f) refers to the withholding of money due to Mr Weiss “during any period while the Company considers that …” and goes on to refer to various circumstances. Dreamstreet did not, by its evidence, seek to justify the withholding of amounts to which Mr Weiss was entitled on the basis that Dreamstreet held the necessary state of mind.

    CONCLUSION

25. The parties are to submit a form of order that provides for declaratory relief and nominal damages in respect of the breaches of the Weiss SA that have been established, clawback in relation to the commissions associated with the MG and DC and JC loans, Mr Weiss’s entitlements to unpaid commissions, and repayment of the amounts improperly deducted in respect of AM and BM, in accordance with these reasons and which:

    (a)oblige Mr Weiss to delete any copies of the First Download from his computer devices;

    (b)oblige Mr Weiss, if requested by Dreamstreet, to make any of his computer devices containing copies of the First Download available to any third-party computer expert retained by Dreamstreet, at Dreamstreet’s cost, to forensically delete any copy of the First Download;

    (c)restrain Mr Weiss from using any copies of customer-related documentation stored on his devices in connection with assessing the ability of any such customer to service any loan, or to apply for loan finance or refinance;

    (d)address GST in relation to any payments (if necessary);

    (e)address any pre-judgment interest; and

    (f)otherwise dismisses the originating application and the cross-claim.

26. If the parties cannot agree orders, I will convene a case management hearing to resolve the orders. Any agreed form of order should be accompanied by a note that explains the approach taken to any GST and interest.

27. The parties are invited to reach a negotiated position on costs. I will otherwise permit the parties to make written submissions on costs and to indicate whether they are content for costs to be determined on the papers, or wish to make oral submissions.

I certify that the preceding three hundred and sixty (360) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Button.

Associate:

Dated:       23 June 2023