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JR Consulting & Drafting Pty Ltd v Cummings

JR Consulting & Drafting Pty Ltd v Cummings

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Case Copied 12 September 2014 85 min read

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Supreme Court

New South Wales

Medium Neutral Citation: JR Consulting & Drafting Pty Ltd & Anor v Cummings & Ors [2014] NSWSC 1252
Hearing dates: 2 - 6 and 10 - 11 June 2014
Decision date: 12 September 2014
Jurisdiction: Equity Division
Before: Black J
Decision:
Parties to be heard as to orders that ought to be made to give effect to findings in the judgment.

Catchwords:
CONTRACTS - construction - where parties entered into contract for sale of non-exclusive "interest" in software - nature of "interest" acquired by first plaintiff - whether interest was limited to software which existed at relevant date - whether first defendant owned copyright in software to exclusion of second defendant - whether first plaintiff was limited to licensing software to particular customer - whether first defendant had express or implied obligation to provide first plaintiff with source code and updates for, and modifications and developments to, software - whether initial contract was abandoned by parties.

CONTRACTS - construction - where relevant parties entered into subsequent contract in respect of software - scope of licence granted under contract - whether licence was limited to specified period - whether second plaintiff was permitted to grant licences to new customers after that period - effectiveness of assignment - whether second defendant required to provide updates to second plaintiff to ensure software compatibility with other software.

CONTRACTS - breach - whether parties had breached obligation to deposit source code with escrow agent - whether conditions of agreement for release of software from escrow were satisfied - whether second defendant breached obligations to provide development services, information and assistance - confidentiality - whether second defendant had received and disclosed confidential information - good faith and cooperation - whether there was a breach of obligation of good faith.

CONTRACTS - termination - whether second defendant had properly terminated agreement - whether established that second plaintiff breached contract by non-payment of licence fees - whether second defendant had abandoned rights to termination - whether notice of termination of agreement was effectively served - whether there was a failure by second defendant to comply with dispute resolution clauses - whether termination was invalidated by non-compliance with dispute resolution clauses.

CONTRACTS - existence of contract - whether established that entity was granting licences under previous agreement - where person is director of two associated companies - whether sub-licence was created by decision of common director.

TORTS - tort of conspiracy - harm by unlawful means - where second and third defendants had entered into purchase agreement - where defendants had terminated earlier agreement - whether established that conduct constituted a tort of conspiracy - whether conduct was unlawful - whether established that a purpose of conduct was to harm second plaintiff - whether established that second plaintiff has suffered loss or damage caused by conduct.

TORTS - tort of inducing breach of contract - whether conduct constituted breach of earlier agreement - whether third defendant induced or procured second defendant to engage in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NSWSC 1252
Decision Date: 12 September 2014

CaseChat Overview and Summary

JR Consulting & Drafting Pty Ltd and JR Consulting & Drafting (NSW) Pty Ltd (collectively, the plaintiffs) brought an action against Cummings, Axiom Software Pty Ltd, and JBR Corporation Pty Ltd (collectively, the defendants) in the Federal Court of Australia. The plaintiffs sought various forms of relief relating to contracts, torts, trade practices, intellectual property, and equity. The case involved disputes about the nature and extent of software licences, alleged breaches of contract, claims of misleading and deceptive conduct, and intellectual property rights.

The court was required to determine the precise nature of the "interest" acquired by the first plaintiff in the software, whether the first defendant owned the copyright to the exclusion of the second defendant, and whether the first plaintiff was limited to licensing the software to a particular customer. The court also had to decide whether the first defendant had an obligation to provide the first plaintiff with source code and updates for, and modifications and developments to, the software, and whether the initial contract was abandoned by the parties. Further, the court needed to assess whether the second defendant properly terminated the agreement and if there was a breach of the obligation of good faith. The court also considered whether the second and third defendants engaged in the tort of conspiracy and whether the third defendant induced a breach of contract.

The court found that the first plaintiff had acquired a non-exclusive "interest" in the software, but this interest was limited to the software that existed at the relevant date. The court held that the first defendant did not own the copyright in the software to the exclusion of the second defendant, and the first plaintiff was not limited to licensing the software to a particular customer. The court determined that the first defendant did not have an express or implied obligation to provide the first plaintiff with source code and updates, and modifications and developments to the software. The court concluded that the initial contract was not abandoned by the parties. Regarding the termination of the agreement, the court found that the second defendant had not properly terminated the agreement, and there was a breach of the obligation of good faith. The court also found that the second and third defendants had not engaged in the tort of conspiracy or induced a breach of contract. The court rejected claims under the Australian Consumer Law and found no breaches of confidentiality or intellectual property rights.

The court ordered that the first defendant was not required to provide updates to the second plaintiff to ensure software compatibility with other software, and the second defendant was not liable for additional damages under the Copyright Act 1968 (Cth). The court also dismissed claims for breach of confidentiality and trade mark infringement. The plaintiffs' claims were largely unsuccessful, and the court did not award significant relief to the plaintiffs.

Orders