EdSonic Pty Ltd v Cassidy

Case [2010] FCA 1008

FEDERAL COURT OF AUSTRALIA

EdSonic Pty Ltd v Cassidy [2010] FCA 1008

Citation: EdSonic Pty Ltd v Cassidy [2010] FCA 1008
Parties: EDSONIC PTY LTD (ACN 094 797 010) v BARBARA CASSIDY; BARBARA CASSIDY; EDSONIC PTY LTD (ACN 094 797 010), EDSONIC AUSTRALIA PTY LTD (ACN 101 545 206) and ROBIN LICK
File number: NSD 517 of 2009
Judge: MOORE J
Date of judgment: 17 September 2010
Catchwords: INTELLECTUAL PROPERTY – ownership of copyright – whether author was an employee – whether work made during period of employment – whether work made "in pursuance of the terms of… her employment"
Legislation: Copyright Act 1968 (Cth)
Copyright, Designs and Patents Act 1988 (UK)
Fair Trading Act 1987 (NSW)
Patents Act 1990 (Cth)
Cases cited: Antocks Lairn Ltd v I Bloohn Ltd [1972] RPC 219
Australian Air Express Pty Ltd v Langford (2005) 147 IR 240
Erica Vale Australia Pty Ltd v Thompson & Morgan (Ipswich) Ltd (1994) 29 IPR 589
Lee v Lee's Air Farming Ltd [1961] A.C. 12
Redrock Holdings Pty Ltd v Hinkley (2001) 50 IPR 565
Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52
Stephenson Jordan & Harrison Ltd. v MacDonald & Evans (1952) 69 RPC 10
Victoria University of Technology v Wilson (2004) 60 IPR 392
University of Western Australia v Gray (2009) 259 ALR 224
Date of hearing: 21, 22 & 23 June 2010
Date of last submissions: 20 July 2010
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 46
Counsel for the Applicant: The applicant was represented by Mr Robin Lick, a director of the applicant
Counsel for the Respondent: Mr N Murray
Solicitor for the Respondent: Simpsons Solicitors

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 517 of 2009
BETWEEN:

EDSONIC PTY LTD (ACN 094 797 010)
Applicant

BARBARA CASSIDY
Cross-Claimant
AND:

BARBARA CASSIDY
Respondent

EDSONIC PTY LTD (ACN 094 797 010)
First Cross-Respondent

EDSONIC AUSTRALIA PTY LTD (ACN 101 545 206)
Second Cross-Respondent

ROBIN LICK
Third Cross-Respondent

JUDGE:

MOORE J

DATE OF ORDER:

17 SEPTEMBER 2010

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The parties bring in short minutes to give effect to these reasons.

2.The matter be stood over until 9.30am on 30 September 2010.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 517 of 2009
BETWEEN:

EDSONIC PTY LTD (ACN 094 797 010)
Applicant

BARBARA CASSIDY
Cross-Claimant
AND:

BARBARA CASSIDY
Respondent

EDSONIC PTY LTD (ACN 094 797 010)
First Cross-Respondent

EDSONIC AUSTRALIA PTY LTD (ACN 101 545 206)
Second Cross-Respondent

ROBIN LICK
Third Cross-Respondent

JUDGE:

MOORE J

DATE:

17 SEPTEMBER 2010

PLACE:

SYDNEY

REASONS FOR JUDGMENT

Introduction

  1. The applicant and first cross-respondent, EdSonic Pty Ltd, has been involved in publishing self-paced education and training materials. The second cross-respondent is an associated…

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AGLC
EdSonic Pty Ltd v Cassidy [2010] FCA 1008
Case
[2010] FCA 1008
Decision Date

CaseChat Overview and Summary

EdSonic Pty Ltd and Ms Cassidy were involved in a dispute over whether Ms Cassidy was an employee or independent contractor for the purposes of her work on certain educational materials. The case was heard by the Federal Circuit Court of Australia. The central legal issue was whether Ms Cassidy was an employee of EdSonic Pty Ltd during the period in which she worked on the educational materials in question. The court had to determine whether the work Ms Cassidy did for EdSonic Pty Ltd was made by her in pursuance of the terms of her employment.

The court considered various factors to determine whether Ms Cassidy was an employee, including her payment structure, her tax obligations, and the nature of her work. The court found that while some factors indicated that Ms Cassidy was an employee, others suggested she was an independent contractor. The court concluded that Ms Cassidy was an employee of EdSonic Pty Ltd for the purposes of her work on the educational materials related to the Property Council, but not for her other work. The court reasoned that the work Ms Cassidy did for which she was paid royalties was of a different character and was not made in furtherance of her employment with EdSonic Pty Ltd.

The outcome of the case was that the court found Ms Cassidy was an employee of EdSonic Pty Ltd for the purposes of her work on the educational materials related to the Property Council, but not for her other work. This determination was based on the nature of her work and payment structure. The court's reasoning focused on whether the work was made in pursuance of the terms of her employment, and concluded that while some work was done under an employment arrangement, other work was not.

Orders

Orders of the court

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Background

Background to the litigation

I should record that the applicant and the other cross-respondents were not legally represented at the hearing. I granted leave to Mr Lick to appear on behalf of the applicant at a directions hearing a few days before the hearing. Leave was given after the firm of solicitors he retained withdrew their representation shortly before the hearing. On the first day of the hearing I declined an adjournment application by Mr Lick. At the conclusion of the hearing I allowed the applicant and other cross-respondents some time to prepare responsive written submissions so they could, if they wished, obtain legal assistance in formulating them. The responsive written submissions do not, in terms, indicate they were prepared by a lawyer.Background Unless I indicate otherwise or the context suggests otherwise, the following represents findings of fact. Ms Cassidy has been involved in the Technical and Further Education (TAFE) sector since 1980. She was then offered a teaching position at the Department of TAFE and was shortly after posted to Moruya TAFE College. Since that initial posting, she has been posted to Dapto, Lithgow, Katoomba, Granville and Sydney TAFE colleges. She has also worked as a manager of various TAFE colleges and private training colleges, provided training and consultancy services to corporate training departments and private training organisations, written correspondence course materials for TAFE, developed curricula for TAFE and trained new TAFE teachers. Since 1991, Ms Cassidy has developed vocational and education training ('VET') materials, at different times for TAFE colleges, private training colleges, and her own businesses including 'The Workplace Learning Centre – The Dedicated Office' and 'WLC Online Training'. In 2000, Ms Cassidy began working as a manager at ISIS Communications Ltd. She was interviewed for her position at that company by Mr Lick, who was then employed in a more senior managerial role at the company. During the period they worked at ISIS, Mr Lick was based in Melbourne and Ms Cassidy was based in Sydney. Mr Lick incorporated the applicant company on 18 October 2000. The applicant was to be a vehicle for a business venture involving Mr Lick. On the applicant's evidence, Mr Lick said that she "could come to work for [him] to develop online VET materials for business services", that the business was not hiring, and proposed that she "put together an application anyway". Ms Cassidy contends that she sought consulting work. On her evidence, she raised the possibility of a joint venture with the applicant, saying that she had been developing her VET materials into an online format and needed "assistance with marketing the materials and raising funds so I can focus on writing storyboards and developing more online modules". This is evidence (from both) of a conversation that took place almost ten years ago. More reliable evidence is likely to be any contemporaneous document. Shortly after the conversation Ms Cassidy sent Mr Lick a document outlining a proposal for an ongoing association.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

There is no authority of which I am aware which addresses, directly, the scope of the expression "is made by the author in pursuance of the terms of his or her employment". However what the expression raises for consideration, in my opinion, is not the bare question of whether the author is employed under a contract of service at the time a work is made but whether the relevant work is made in furtherance of the contract of employment with the employer. That is, did the employee make the work because the contract of employment expressly or impliedly required or least authorised the work to be made. Approached in this way, it is an expression which comprehends notions similar to those addressed by the Full Court in Gray in the context of patent law though plainly I must ultimately focus on and give effect to the words used in the Act itself.Consideration The first question which logically arises is whether Ms Cassidy was an employee of the applicant during the period of their association. As I noted at the beginning of these reasons some evidence points to her having been an employee but other evidence points in the opposite direction. Some factors which point to her having been an employee include the following. Ms Cassidy was paid amounts from which income-tax was deducted. The amounts she was paid were directly referable to the hours she worked. Amounts were paid by the applicant towards her superannuation. The applicant effected workers compensation insurance which covered Ms Cassidy in her work. She initially sought to work as an employee. When her work with the applicant came to an end, she sought and was given a separation certificate. From time to time she described herself as an employee. (see the decision of the NSW Court of Appeal in Australian Air Express Pty Ltd v Langford (2005) 147 IR 240 at [48]-[55] and more generally see Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52 per Keane CJ, Sundberg and Kenny JJ). Against these factors must be balanced the fact that the whole arrangement concerning the Property Council might be viewed as having been nothing more than a device to relieve Ms Cassidy of the burden of action which would have been required of her were she an independent contractor. However, it seems tolerably clear to me that Ms Cassidy, if an employee, was an employee of the applicant for the purposes of the Property Council work only. If the amounts she was paid (and in respect of which tax was deducted) can properly be characterised as salary, it was salary only for the work she did under the arrangements with the Property Council. The payment of the "salary" finished at the end of February 2002 though her work with the applicant continued for almost a further two months. Other work she did when working for the applicant was remunerated on an entirely different basis. She was paid royalties. The amount she was paid as royalties was not calculated by reference to the time taken to perform the work but rather the price the applicant received for the sale of the material. No income-tax was deducted from the royalty payments. It seems to me there is little room to doubt that both Ms Cassidy and the applicant treated the work she did for which royalties were paid as being of an entirely different character to the work she did to give effect to the arrangements with the Property Council. It cannot be said, in my opinion, that the work she did in creating or developing the Works was in furtherance of her contract of employment with the applicant. That is, she did not make the Works "in pursuance of the terms of ... her employment".