Lift Shop Pty Ltd v Next Level Elevators Pty Ltd (No 4)
[2024] FedCFamC2G 554
•26 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Lift Shop Pty Ltd v Next Level Elevators Pty Ltd (No 4) [2024] FedCFamC2G 554
File number(s): SYG 1318 of 2020 Judgment of: JUDGE BAIRD Date of judgment: 26 June 2024 Catchwords: INTELLECTUAL PROPERTY – COPYRIGHT – Applicant complaint of copyright infringement in template quotation document for residential lift – admitted infringement by first respondent company and fourth and fifth respondent directors by reproducing and distributing quotation documents between December 2019 and April 2020 – by earlier order by consent hearing limited to issues of liability and non-pecuniary relief, quantum of pecuniary relief to be addressed separately – whether second and third respondent companies also infringed copyright – held no infringement of copyright by second or third respondents – consideration of parties submissions whether additional damages pursuant to s115(4) Copyright Act 1968 (Cth) are appropriate – factors considered – additional damages not appropriate
BREACH OF CONFIDENCE - Applicant alleges breach of confidential information – whether applicant’s claim for breach of confidence was sufficiently pleaded – whether respondents obtained applicant’s copyright material and claimed confidential information from sixth respondent ex employee of applicant, now employee of first respondent – whether material was in fact confidential – claims against ex employee not made out – held no breach of confidential information
AUSTRALIAN CONSUMER LAW (ACL) – Both parties allege against the other contraventions of the ACL arising from sales materials for their respective residential lift products – allegations of issues of non compliance with voluntary industry standards – parties agree the Court is not to assume itself the role of an industry regulator – parties each seek declaratory relief and damages – some conflict of evidence of parties’ experts – Court not persuaded that declarations appropriate in any event – neither party establishes misleading or deceptive conduct by the other in contravention of the ACL
PRACTICE AND PROCEDURE – Applicant’s application in a proceeding pursuant to ss 138 and 135 of Evidence Act 1995 (Cth) to exclude disputed documents allegedly improperly obtained by one of respondents’ solicitors from applicant’s website, and strike from the record transcript certain oral evidence – held documents not improperly obtained, are directly relevant to issues before the Court, and not precluded by s 138 of the Evidence Act – alternatively, pursuant to s 135(a) of the Evidence Act held that probative value of documents outweighs any prejudice – held that cross examination of witness not unfair – discretion of the Court exercised to admit documents – interlocutory application dismissed
Legislation: Competition and Consumer Act 2010 (Cth) ss 2, 18, 29, Schedule 2
Copyright Act 1968 (Cth) s 115
Evidence Act 1995 (Cth) ss 135, 136, 138
Cases cited: Aussie Airlines Pty Ltd v Australia Airlines Inc [1996] FCA 813, (1996) 68 FCR 406
Camm v Link Nominees Pty Ltd (No 3) [2012] FCA 1133
Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8) [2022] FCA 1404
Duma v Fairfax Media Publications Ptd Ltd (No 2) [2021] FCA 1299
Geneva Laboratories Ltd v Prestige Premium Deals Pty Ltd (No 5) [2017] FCA 63; [2017] 122 IPR 279
Lift Shop Pty Ltd v Next Level Elevators Pty Ltd (No 2) [2023] FedCFamC2G 268
Lift Shop Pty Ltd v Next Level Elevators Pty Ltd (No 3) [2023] FedCFamC2G 394
NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838
Parker v Controller General of Customs [2009] HCA 7; 83 ALJR 492
Redbubble Ltd v Hells Angels Motorcycle Corporation (Australia) Pty Limited [2024] FCAFC 15
Streetscape Projects (Australia) Pty Ltd v City of Sydney [2013] NSWCA 2; (2013) 295 ALR 760
Unions NSW v New South Wales [2023] HCA 4
Universal Music Publishing Pty Ltd v Palmer (No 2) [2021] FCA 434; 158 IPR 421
Wright v Gasweld Pty Ltd (1999) 22 NSWLR 317
Division: Division 2 General Federal Law Number of paragraphs: 281 Date of last submission/s: 15 March 2024 Date of hearing: 5-8 July 2022
10‑11 November 2022
22 November 2022
6 February 2023
29‑30 March 2023Place: Sydney Counsel for the Applicant: Mr J Hennessy SC with Mr M Fleming Solicitor for the Applicant: Gilbert + Tobin Counsel for the Respondents: Mr N Murray SC with Ms F St John Solicitor for the Respondents: Allens ORDERS
SYG 1318 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: LIFT SHOP PTY LTD ACN 109 724 647
Applicant
AND: NEXT LEVEL ELEVATORS PTY LTD ACN 161 047 016
First Respondent
COMPACT LIFTS PTY LTD ACN 609 124 405
Second Respondent
NEXT LEVEL COMPACT LIFTS PTY LTD ACN 625 302 007
Third Respondent
(and others named in the Schedule)
ORDER MADE BY:
JUDGE BAIRD
DATE OF ORDER:
26 JUNE 2024
BY CONSENT, THE COURT:
1.NOTES that at hearing the respondents do not press the tender of Tabs 8 and 9, 15, 21, 23, 25 to 27, 32 and 33, and 41 to 48 of the bundle marked MFI‑4.
2.ORDERS that the transcript of oral evidence of Mr Leslie Saul Katz given on 7 July 2022 at T243.10 to 244.13, T261.17 (starting from the words “At tab”) to 272.8, and T273.30 to 274.22 be struck from the record.
3.GRANTS the applicant leave to file, serve and rely on a further amended interlocutory application in the form served on the respondents on 16 May 2023.
THE COURT:
4.DISMISSES the further amended interlocutory application.
5.ADMITS into evidence on final hearing the documents comprised in Tabs 28, 29, 30 and 31 of the bundle marked MFI‑4, and accords them Exhibit F, retaining their sub‑tab designations.
6.DISMISSES the applicant’s claims for contravention of the Australian Consumer Law, Schedule 2 to the Competition and Consumer Act 2010 (Cth), paragraph 3 of the Second Further Amended Application.
7.DISMISSES the Amended Cross‑Claim.
8.DIRECTS the parties to confer and, if possible, provide a draft short minute to give effect to these reasons by 3 July 2024, or such other date as I direct after consultation with the parties.
9.STANDS OVER the proceeding to 3 July 2024, or such other date to be fixed after consultation with the parties, for the making of the declaration and orders to give effect to these reasons, for any argument on costs, and directions for the future conduct of the outstanding issues of quantum of pecuniary relief in the proceeding.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE BAIRD:
Introduction
It is convenient to first identify the parties. They are the applicant, Lift Shop Pty Ltd, and 6 respondents: three related companies - the first, second and third respondents, respectively, Next Level Elevators Pty Ltd (NLE), Compact Lifts Pty Ltd, and Next Level Compact Lifts Pty Ltd (NLCL) (and collectively, the NL Entities), two of their directors, the fourth respondent, Mr Daniel Mawson and the fifth respondent, Mr Damien Boyle, and the sixth respondent, Mr Edward John Hume, a project manager employed by NLE, and a former employee of Lift Shop. The corporate parties are aggressive competitors in the Australian residential lift market.
This matter has been fiercely contested. It has two principal components. The first arises from circumstances which may be briefly described as follows.
In mid‑September 2019, an employee of NLE obtained and gave to Mr Mawson a copy of a quotation issued by Lift Shop to one of its customers, a school in Doncaster, Victoria.
Mr Mawson proceeded to adapt the existing quotation template used by NLE, but not as I find those of Compact Lifts and NLCL, by adopting portions of that Lift Shop quotation. Thereafter, from about December 2019, NLE used that revised quotation document until about 30 April 2020, when it is common cause that it stopped[1]. During that relatively brief period, which included the run up to Christmas, the Christmas and New Year public holidays, the January period during which most of Australia goes on holiday, and the COVID‑19 restrictions and then lockdowns that were introduced in March 2020, the infringing conduct took place. It is immediately apparent that this was not a very lengthy period of time, and it is commonplace that the Australian summer holiday period is traditionally a quiet time for the building and construction industries.
[1]Whilst Lift Shop makes submissions about Mr Boyle’s redrafting of NLE’s documentation, I am not persuaded that any use was made of the infringing quotation after 30 April 2020
Both sides have submitted that the matters in issue remaining for the Court’s determination are on one view within a relatively narrow compass, so far as this aspect of the case is concerned, and I agree. Notwithstanding their protestations, the parties have filed considerable amounts of material, including final closing submissions totalling hundreds of pages[2]. Notwithstanding the admitted energy and diligence expended in the presentation of their respective cases, I think the issues in dispute can be dealt with in a reasonably economical way because, when one steps back from the heat of battle, much of the factual narrative is in fact remarkably straightforward.
[2]As the respondents counsel count in a short submission dated 15 March 2024, the Court has before it three rounds of submissions in each of the claim and cross‑claim, amounting to some 366 pages
The second component of the dispute relates to claims and cross‑claims as to whether lifts marketed by each of the parties have been the subject of misleading and deceptive representations in contravention of the Australian Consumer Law, Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL). In respect of these areas of the dispute, again the parties have filed substantial amounts of written materials and evidence from experts together with copious written submissions. In the ultimate, and for reasons which I will set out later in these reasons, I have decided to grant neither side any relief in respect of these complaints.
It will be noted that this matter has been in the Court system for a considerable while, and that oral evidence concluded quite some time ago. Delay has been occasioned throughout the proceeding, including for difficulties experienced during the COVID-lockdowns, by the parties’ inadequate time estimate, and then by problems associated with the availability of counsel, together with the parties requiring considerable amounts of time to put on the written submissions to which I have referred[3].
[3]During the final hearing, as noted on transcript on 10 November 2022, the parties agreed that following the conclusion of the hearing of the evidence they would provide detailed written closing submissions, and that if, having reviewed the submissions I would be assisted by hearing from Counsel the matter could be relisted at the Court’s convenience. Subsequently, orders I made on 25 September 2023 recorded that position. The rounds of written submissions concluded with reply submissions on both the claim and cross‑claim filed on 12 March 2024, and a further one page submission dated 15 March 2024
I emphasise that these observations are not intended to be critical in any way of the parties’ legal representatives, but it does explain the lapse of time between the witnesses giving evidence and this judgment. I mention this purely to note that notwithstanding this delay I have a keen and vivid recollection of the witnesses in the witness box and the way in which they gave their evidence, in other words, their demeanour. With the benefit of my notes taken at the time and transcript I am quite confident that my recollection is sufficient to ground the conclusions that I express.
Given the way the case has run, the Court’s first task is to rule on the application made by Lift Shop, pursuant to ss 138 and 135(a) of the Evidence Act 1995 (Cth) to exclude documents, and strike from the record transcript that flowed from those documents, when Mr Leslie Katz, the primary witness for Lift Shop, gave evidence.
The section 138 Application
As ultimately pressed at the conclusion of interlocutory hearing on 29-30 March 2023, Lift Shop’s amended application in a proceeding filed 10 November 2022 (as I recount in the following paragraph, subsequently updated by a proposed Further Amended Application in a Proceeding served 16 May 2023) sought orders pursuant to s 138 of the Evidence Act that tabs 28, 29, 30 and 31 of the bundle marked MFI‑4 not be admitted into evidence, and further or in the alternative, that the same be excluded pursuant to s 135(a) of the Evidence Act (s 138 Application). In that s 138 Application, Lift Shop also sought a further order that transcript of certain oral evidence of Mr Katz which dealt with those documents be struck from the record.
By Annexure F to Lift Shop’s written closing submissions in chief on the claim dated 7 November 2023, by consent the parties seek certain notations and orders formalising the subject matter of the s 138 Application as previously communicated, and identifying the objections withdrawn, and noting tenders not pressed, that part of the oral evidence of Mr Katz be struck from the record (part of that previously identified, and newly identified oral testimony), and that Lift Shop have leave to file and serve the attached Further Amended Application in a Proceeding. I will make the orders sought (1-3), and proceed on that basis, including treating the s 138 Application in its to be further amended form.
In the course of hearing the s 138 Application, in early 2023 I heard and determined a countering application by the respondents to set aside a notice to produce (NTP Application): see Lift Shop Pty Ltd v Next Level Elevators Pty Ltd (No 2) [2023] FedCFamC2G 268 (Lift Shop (No 2)); and Lift Shop Pty Ltd v Next Level Elevators Pty Ltd (No 3) [2023] FedCFamC2G 394 (Lift Shop (No 3)). The parties subsequently requested that I determine the s 138 Application as part of this final judgment, and on 25 September 2023 I made orders accordingly.
In Lift Shop (No 2), I set out some of the history of the s 138 Application, the material objected to, identified the deponents and some of their affidavits on that Application and the respondents’ countering NTP Application, and gave a brief description of the proceeding, which, to the extent remaining relevant, should be read with these reasons.
As I said in Lift Shop (No 2) at [32]-[33], when marked during the course of final hearing on 7 July 2022, MFI‑4 comprised 48 documents (more accurately, documents organised under 48 tabs), organised under sequentially numbered tabs, and paginated, together with an index listing the documents by tab, date, and title or description. These documents comprise various screenshots of pages of the website at the URL (Lift Shop website) and downloads, documents available on Lift Shop’s social media pages and Google Reviews pages, documents produced on discovery or particularised in the Amended Cross‑Claim[4], and includes Lift Shop brochures, each identified as such. The index/document list identifies each document by date (either date of its generation or as otherwise identified on the document), and document title or description, including file paths of screenshots and documents accessed at the Lift Shop website, and if sourced from discovery, its discovery number. The file paths are also apparent on the screenshots within MFI‑4.
[4]Further Amended Defence and Amended Cross‑Claim served 23 June 2022, filed pursuant to leave granted on 5 July 2022
Some only of the documents in MFI‑4 were objected to, and variously, documents or copies were tendered, or not pressed by the respondents (and now see the notation on the order I will make referred to in [11] above), so that, as I have said, ultimately the 4 tabs I have identified above (MFI‑4, tabs 28-31), remain in dispute. Notably, two Lift Shop brochures, titled ‘E1 User Manual’ and ‘E2 User Manual’ respectively, from another source than the Lift Shop website were admitted into evidence without objection as exhibits in the substantive hearing. The two documents under tabs 25 and 26 of MFI‑4 are copies of those two user manuals, and those tabs of MFI‑4 are not pressed (although remaining listed in the amended application as at 10 November 2022, they are omitted from the Further Amended Application in a Proceeding).
It should be noted that the MFI‑4 material that is in dispute consists of a number of internal materials of Lift Shop which show materials constituting, or arising from, material prepared by competitors of Lift Shop.
Notwithstanding that the objection pursuant to the s 138 Application was ultimately limited to 4 tabs[5], Lift Shop says that the manner in which Ms Muller obtained all the documents in MFI‑4, whether sought to be tendered or not pressed, remains relevant to the Court’s determination of the s 138 Application. As will be apparent from my conclusions, I do not consider that, whether limited to the 4 tabs, or more, this changes anything.
[5](and that transcript of part of Mr Katz’ oral evidence be struck from the record)
Section 138 of the Evidence Act relevantly provides that:
138 Discretion to exclude improperly or illegally obtained evidence
(1) Evidence that was obtained:
(a) improperly or in contravention of an Australian law; or
(b) in consequence of an impropriety or a contravention of Australian law;
is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting the evidence that has been obtained in the way in which the evidence was obtained.
Lift Shop does not suggest that the evidence was obtained in contravention of any Australian law. Rather, it is said to have been obtained improperly. In Parker v Controller General of Customs [2009] HCA 7; 83 ALJR 492, French CJ said at [29]:
The meanings to be accorded to the terms “improperly”, “impropriety” and “contravention” in s 138 were not illuminated by the Law Reform Commission report. The relevant ordinary meanings of “improper” include “not in accordance with truth, fact, reason or rule; abnormal, irregular; incorrect, inaccurate, erroneous, wrong”.
In Camm v Link Nominees Pty Ltd (No 3) [2012] FCA 1133, Tracey J said at [10]:
In Parker ( at 626-7 ) French CJ construed [improperly] in accordance with its ordinary meanings which included “abnormal”, “ irregular” and “wrong”.
I note further that in NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838 Ward CJ in Eq (as the President then was) said at [492], in respect of the Solicitors Conduct Rules applicable to New South Wales:
… [T]he Solicitors’ Conduct Rules which imposes a positive and mandatory duty on a solicitor to notify an opponent of an inadvertent disclosure by the opponent of material known or reasonably suspected to be confidential. The duty is engaged where: “material” is disclosed to the solicitor; the material is disclosed by another solicitor or some other person; the solicitor “know[s] or reasonably suspect[s]” that the material is “confidential”; and the solicitor is aware that the disclosure was inadvertent.
The material facts relevant to the obtaining by the respondents of the disputed evidence
Ms Muller
Ms Sarah Alexandra Muller is a solicitor at Allens, solicitors for the respondents. Ms Muller affirmed two affidavits in this proceeding (on the s 138 Application and NTP Application). In her first affidavit (Muller 1), Ms Muller deposed at [6]:
On various occasions between 29 March and 7 July 2022, I undertook searches of the Website [the Lift Shop website] and searches using the Google search engine as described further below.
At [11] Ms Muller deposed:
I was aware, based on my prior experience navigating and searching websites, that adding “/search/” to a URL followed by a search term can, on some websites, enable a user to search content on the Website. Prompted by the reference to “search” in the error message referred to in paragraph 10 above [namely: ‘The page you requested could not be found. Try refining your search, or use the navigation above to locate the post’], I formed the view that I might be able to search the content on the website in this manner. I found that, by entering the URL into the search bar on my internet browser followed by a specific term, I was able to conduct simple searches for content on the Website, which I described further below.
Ms Muller went on to depose that she had not sought to attempt to enter a password or otherwise circumvent protection to view any content that may have appeared behind password protected areas (Muller 1, at [18]). As I stated in Lift Shop (No 2) at [39], Ms Muller described circumstances where she clicked on a link to a webpage of the Lift Shop website which returned a webpage on which she observed text “Password Protected. To view this protected post, enter the password below”. Ms Muller further attests that none of the Library Webpages she viewed, or the materials which she downloaded from them or took screenshots of, asked her to enter a password.
In her second affidavit (Muller 2), Ms Muller deposed at [11] to [14]:
[11]My First Affidavit did not purport to provide a full and complete description of all reviews that I conducted of the Lift Shop Website in the course of working on this matter. Rather, in it I explained how I came to discover the documents available on the Library Webpages of the Website which were included in the Respondents’ Tender Bundle.
[12]As stated in paragraph 6 of my First Affidavit, I undertook searches of the Website on various occasions between 29 March and 7 July 2022. I am also aware that other lawyers and paralegals from Allens also accessed the Website.
[13]I regularly undertake searches and reviews of various websites as part of my role at Allens.
[14]I do not have any qualifications, or any special training, in computer technology.
Ms Muller was extensively cross-examined, and I have had regard to the totality of that evidence[6].
[6]The s 138 Application and the NTP Application were heard over 3 days (6 February 2023, and 29‑30 March 2023). Ms Muller’s cross‑examination took place on 29 March 2023, see T23.1‑73.18. Judgment was given on the NTP Application on 12 April 2023, see: Lift Shop (No 2), and relatedly, on the issue of costs on the NTP Application, see: Lift Shop (No 3)
I note inter alia that when senior counsel for Lift Shop, Mr Hennessy SC, asked whether she had understood she was looking at a document that was internal to Lift Shop, “I want to suggest to you that it would have been a matter of significance to you if you were looking at a document and understand that it was internal to Lift Shop?” Ms Muller responded relevantly[7]:
---I – I just don’t recall what my thinking was when I first saw this document. I just remember thinking that I navigated here via the – that second method as – as you call it, the search, and I was able to access it as a member of the public.
[7](29.3.23) T51.43‑46
When it was put to her that she had accessed a document and that such access was not authorised by Lift Shop Ms Muller responded “I don’t recall what my thinking was at the time about that sort of matter”[8].
[8](29.3.23) T54.44‑45
It was put to Ms Muller that she understood in April 2022 that the material she accessed on the Lift Shop website was confidential to Lift Shop, and she responded[9]:
To the best of my recollection, at that time I understood that I had accessed material on the website that was not subject to password protection; it was available by the search and I didn’t know what Lift Shop intended about the structure of the website. That’s – that’s my recollection.
[9](29.3.23) T64.15‑18
At T67.19‑21, senior counsel returned to the matter once again and put it to Ms Muller that there was an issue about whether the material she had accessed was confidential or otherwise internal to Lift Shop, and Ms Muller replied[10]:
Sorry, it’s – it’s very difficult to remember just in that it was a year ago and, obviously, a lot has happened since. I – I just don’t remember as at that particular point what my thinking was. It’s possible, but I just don’t recall at that point.
[10](29.3.23) T67.19‑21
On several occasions throughout her cross‑examination (see T69-70), Ms Muller reiterated that she had not sought to go behind any password protection that she came across.
At T71, when asked by senior counsel about the way she had searched the Lift Shop website, putting, “[y]ou’re not suggesting that’s a method of searching websites that you’ve learned in the course of your employment at your present firm, are you?”, Ms Muller responded: “Just in the course of my life on the Internet having grown up with the Internet”[11].
[11] (29.3.23) T71.42-45
Ms Stiel
Ms Miriam Stiel is a partner at Allens, and the respondents’ solicitor on the record. She has practised as a lawyer for over 25 years. Ms Stiel is Ms Muller’s boss. Ms Stiel swore two affidavits in the proceeding, Stiel 1 was relied on in the NTP Application. Ms Stiel’s second affidavit (Stiel 2) is read and relied on by the respondents in the s 138 Application. Ms Stiel was cross‑examined on 29 March 2023. Once again, I have had regard to all of the evidence given.
In the course of cross‑examination Mr Hennessy SC put a series of questions as to Ms Stiel’s awareness of Lift Shop’s intentions about access to its website. On 30 March 2023, through Mr Murray SC, the respondents’ senior counsel, Ms Stiel advised a correction she wished to make to an answer she had given[12]. With that correction, the cross‑examination was:
[12](29.3.23) T86.5‑6
MR HENNESSY SC: You hadn’t been aware – sorry ..... the question. Had you been aware, before this exercise undertaken by Ms Muller, of that method of searching websites?---
MS STIEL: No, I hadn’t.
And did you have cause to wonder whether this method that she had employed had somehow allowed her access to parts of the Lift Shop website that were not available to members of the public?---No.
Excuse me for one moment. When you had directed Ms Muller to undertake a review of the Lift Shop website, you had not intended for her to access parts of the website that contained information that Lift Shop might regard as confidential to it, had you?---I’m just pausing because that assumes communications that I would say would be privileged. But - - -
If that’s your concern, then I’m asking about - - -?---My - - -
- - - your intention?---Yes.
But if you think that that causes you a difficulty, then by all means claim privilege?---If – if I’m talking about my intention, I think there was a question and I think it’s clear from the – Ms Muller’s affidavit that there was a debate between my clients and Lift Shop as to what is confidential. And to the extent that part of what is properly protected by obligations of confidence is how the party asserting that confidence treats it, then to the extent there was material on the website that was contrary to their claims of confidentiality, I would consider that to have been relevant to the searches.
Even if that material was located in parts of the website that were not supposed to be available to members of the public?---I have – I’m not aware of anything in terms of what was intended or not intended to be available to members of the public.
But you do know now, don’t you, through the course of this controversy about the material obtained from the website that there were sections of the website that Lift Shop regarded as restricted in the sense of only being available to internal - - -?---Yes, I do now, but I didn’t at the time.
But is this right: you’re – I withdraw that. Did you understand as at 29 or 30 March 2002 that Lift Shop was not intending to make those documents that I’ve taken you to accessible to the public?---No, I wasn’t.
Did you even suspect that it may not be intending to make those documents accessible to the public?---
I – no, I didn’t.Yes.Mr McKemmish
Lift Shop put on material from Mr Rodney McKemmish, a computer forensic expert. I referred to Mr McKemmish’s evidence in Lift Shop (No 2), see at [51]-[54], and incorporate those paragraphs here. Mr McKemmish’s evidence can be dealt with very straightforwardly. The material in dispute was accessible to unauthorised parties at the time that Ms Muller was conducting her research as a result of a deficiency in the website itself, brought about by certain decisions that Lift Shop and its web designers took in using a particular third party plug‑in. Mr McKemmish was able to recreate Ms Muller’s search process, and to explain how and why the searches produced the results. He did not express any difficulty in so doing. In his view it required trial and error in searches. As I said in Lift Shop (No 2) at [54], Mr McKemmish was cross‑examined on the hearing of the interlocutory applications on his estimates of time. Junior counsel Ms St John’s skilled and patient cross‑examination of Mr McKemmish exposed defects and limitations of his assumptions, analysis and estimates. In short, Mr McKemmish’s time estimates should be approached with considerable scepticism.
Mr Wood
Lift Shop also read affidavits affirmed by Mr Bradley John Wood, marketing and business development coordinator at Lift Shop, who inter alia manages website design and development, SEO (search engine optimisation) strategy, and digital advertising. Mr Wood was not required for cross‑examination. Mr Wood made 4 affidavits sought to be read on the interlocutory applications, the fourth of which – affirmed 25 January 2023 (Wood 4) - I provisionally admitted, on the basis I would deal with it admission in this judgment. The respondents object to Wood 4 as irrelevant, and out of time. In Wood 4, Mr Wood describes steps he took in January 2023 to remount a back up of the Lift Shop website. The evidence is out of time. It has marginal relevance, at best. I reject Wood 4.
In his three affidavits read on the s 138 Application, Mr Wood gave evidence of the development of the Lift Shop website, Google Analytics reports on web traffic to the website, and on the steps he took on and after 7 July 2022 to limit external access to the parts of the Lift Shop website Ms Muller was able to access. Mr Wood confirmed that the Lift Shop website did not have a search bar, users were presented with menus and hyperlinks to navigate the website. Mr Wood asserted confidentiality. Parts of Mr Wood’s three affidavits were admitted subject to s 136, Evidence Act limitations.
Mr Williams
Mr Michael John Williams, partner at Gilbert + Tobin, is Lift Shop’s solicitor on the record. I have identified his evidence on the s 138 Application and the NTP Application in Lift Shop (No 2). Mr Williams was not required for cross‑examination.
Was the material improperly obtained?
In my opinion, this question can be answered shortly. Ms Muller, in accordance with what seems to be her usual practice, was tasked with reviewing materials that might be relevant to this proceeding. She got onto the Lift Shop website and using what to her were perfectly normal search techniques, she was able to access the documents in question (both the 4 tabs of MFI‑4 remaining in dispute and the other documents within the MFI‑4 bundle, including tabs 25 and 26). Those documents were open to the public in as much as the deficiency in Lift Shop’s website enabled her readily to access them.
I will return to their relevance to the proceeding when I consider the matter under s 135 of the Evidence Act; but for present purposes, it is sufficient to note that there was clearly nothing inappropriate or improper in what Ms Muller did. Both Ms Muller and Ms Stiel struck me as being entirely honest and straightforward witnesses who answered questions put to them directly, albeit not without invoking privilege where they felt it proper to do so. Ms Stiel’s concern to correct her evidence is admirable. I find them to be witnesses of truth. To the extent that anything turns on their credibility, I accept their evidence. In these circumstances the evidence was not improperly obtained. It therefore follows that the evidence is not precluded by s 138 of the Evidence Act.
In Duma v Fairfax Media Publications Ptd Ltd (No 2) [2021] FCA 1299, Katzmann J said relevantly at [24]:
… [Section] 138 does not repose in a court discretion to exclude improperly or illegally obtained evidence. To the extent that there is any discretion it is to admit evidence of this kind, not to exclude it. In truth, however, there is no discretion. Rather, what the section does is require a court to make an evaluative judgment after balancing the considerations which weigh in favour of admitting the evidence against those which weigh in favour of exclusion. The evaluative judgment is that the desirability of admitting the evidence outweighs the undesirability of the evidence obtained improperly or unlawfully as a result of an impropriety or illegality.
Here, one of the ways in which Lift Shop says that the evidence was improperly obtained is by reference to the New South Wales Solicitors Conduct Rules referred to above. The documents that Ms Muller accessed were, as I have noted, a number of internal Lift Shop documents which were available when she searched but which apparently should not have been, and two user manuals. I have already traversed Ms Muller’s evidence outlined above. In my view, while the nature of the documents might suggest that they (or some of them) were internal (including referencing competitor materials for internal use), the way in which Ms Muller accessed them in my opinion caused her to believe that they were available to any member of the public. Given that assumption, which I think was reasonable in those circumstances, I do not believe the Solicitors Conduct Rules were brought into play in the manner for which Lift Shop contends.
Even if I am wrong in this regard, however, in my opinion the documents should be admitted. This point I will consider in conjunction with the order sought pursuant to s 135(a) of the Evidence Act, to which I next turn.
Section 135 of the Evidence Act – Court may refuse to admit evidence
Section 135 of the Evidence Act relevantly provides:
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:
(a) be unfairly prejudicial to a party; or
(b) be misleading or confusing; or
(c) cause or result in undue waste of time.
In its outline of submissions in chief on the s 138 Application dated 27 January 2024 at [27], Lift Shop submits that the desirability of admitting the evidence does not outweigh the undesirability of admitting it, given the way in which the evidence was obtained. Senior counsel reiterated this point in oral submissions. I have already dealt with the way in which the material was obtained.
Lift Shop then asserts at [28] of its submissions that the disputed evidence ‘is not of significant probative value’ and go on to say why. Of the 4 tabs, relevantly, Lift Shop submits (footnotes omitted):
… (b)As to tabs 28-31 (competitor quote documents), Lift Shop did not claim it had never received any of its competitors’ quotes. Mr Katz’s oral evidence that Lift Shop has utilised competitor quotes “for the purposes of sales training” (T254.3-4; see also …[13]) or that that information “helps our sales people know approximately where the market is at” (T249.9-10). But Lift Shop’s claim is not based on mere receipt of a competitor’s quote, nor the use of that information for training purposes. Lift Shop’s claim in relation to breach of confidence is that one or more of the respondents attempted to, and gained unauthorised access to and received, Lift Shop Confidential Information in the nature of pricing and product specification information contained in quotes marked “Commercial-in-Confidence” through the use of pseudonyms in communications with Lift Shop employees and suppliers. The cross‑examination of Mr Katz in relation to the Restricted Documents did not reveal any similar practice by Lift Shop.
I observe in passing that if this material is of such limited value to the proceeding, it is surprising that so much energy has been spent contesting the issue.
[13]Lift Shop here referred to transcript now by agreement to be struck from the record. Accordingly I have not have regard to the reference
In respect of the objection pursuant to s 135(a) of the Evidence Act, at [36] of its submissions on the s 138 Application Lift Shop repeats the complaint as to the manner in which the material was obtained. At [37] and following of its submissions Lift Shop takes issue with the way in which the material was provided to Lift Shop’s solicitors, and then used in cross-examination of Mr Katz. Lift Shop asserts that the way in which the material was used with Mr Katz meant the cross-examination of him was unfair.
The respondents’ written submissions in answer on the s 138 Application unsurprisingly assert the documentation has significant probative value. At [20] of their written submissions, the respondents observe that the user manuals constituting tabs 25 and 26 relate to the ‘In‑Cabin Self-Rescue’ feature of the Lift Shop E1 and E2 products and that whether this this feature is an emergency feature is a matter in issue on the Cross‑Claim. That assertion is correct (see Cross-Claim [89] - relating to the Q1 lift, and [94] - the E1, E2, and Q1 lifts), noting that those tabs are not pressed (the user manuals having been obtained from another source, and admitted into evidence), but the manner of access remains asserted by Lift Shop to be relevant.
At [21] of their submissions on the s 138 Application, the respondents assert:
[21] Tabs 28 to 31 are documents of Lift Shop’s competitors, or documents in which Lift Shop has summarised information from its competitors. That information is of a similar nature to the information Lift Shop seeks to protect in this proceeding. The fact that it had, and used, the same type of information belonging to competitors seriously undermines its case that a reasonable person in this industry would consider such information to be confidential.
It is apparent that one of the factual issues in dispute in this case is the extent to which the material that Lift Shop seeks to protect, and for which it seeks damages for copyright infringement and relief for breach of confidence, is in truth confidential, as Lift Shop asserts, or in fact is a matter of practice available in the industry generally, as the respondents assert.
In my opinion the confidentiality or otherwise of these documents is a substantive issue in the proceeding. Accordingly, this aspect of the objection under both ss 138 and 135 of the Evidence Act is not made out.
Finally, Lift Shop asserts that the cross-examination of Mr Katz relating to this documentation was unfair, being interspersed with material that was not on any view objectionably obtained, and without notice.
First, the documentation in the bundle was provided to Lift Shop’s solicitors three days before trial. In the context of litigation on this scale, and on any basis a commercial dispute, the amount of documentation provided was not enormous. There was time for Lift Shop’s solicitors to look at it and seek instructions had they been so minded. Furthermore, Mr Katz was not in any sense put out by being cross‑examined on the documentation, although he was instantly and clearly of the view that it was material that should not have been publicly available. Counsel for the respondents assured Mr Katz that this material had been obtained properly, and in the circumstances deposed to ultimately by Ms Muller no proper criticism can be made of senior counsel for proceeding in that way.
Obviously to be confronted with documents that you thought the other party did not have access to would be confronting, but that in my opinion does not make the way in which cross‑examination was conducted unfair.
Further, even if I am incorrect in that assumption, I would be minded to admit the documentation pursuant to the Court’s discretion to do so bearing in mind the evaluative process described by Katzmann J in Duma. The documentation goes to industry practice and the propriety or otherwise of obtaining and indeed using materials from other competitors. It is instantly obvious in my opinion this material has the capacity to be of some significance and it plainly should be admitted. The evaluation of the extent of that significance self-evidently will follow at a later stage in these reasons.
Conclusion on the section 138 Application
In my view, the documents subject to Lift Shop’s challenge in the s 138 Application were not improperly obtained. In the particular circumstances in which they were obtained it was not incumbent on Ms Muller to notify the other side that she had obtained them. Even if I am wrong in both these conclusions, the documents are in my opinion plainly capable of being directly relevant to matters in issue between the parties which the Court will have to determine. If contrary to my view there was any impropriety, whether in terms of the way in which Ms Muller conducted her search or the conclusions that Lift Shop says she should have formed, it is outweighed by the probative value of the material. Although I have not been asked to determine the matter, I note that the respondents have said they could have obtained this material through other court processes. It is difficult to see that these materials were not discoverable in any event.
Having disposed of this preliminary point I turn now to the narrative in the case more generally.
Facts which are not subject to material dispute
Lift Shop markets and sells home elevators – residential lifts – in Australia. Lift Shop was founded by Mr Katz as a separate legal entity in 2004. He has been the CEO and sole director or co-director of Lift Shop since incorporation and is the sole shareholder, secretary and director of a further company which owns Lift Shop. Lift Shop is the market leader in the Australian residential lift market. Its headquarters are in Sydney, but it has showrooms in various states. Mr Katz has worked in the lift industry since 1995, before which he worked for various chartered accounting firms. He is qualified as a certified practising accountant.
From 1995 onwards, Mr Katz first worked for a subsidiary of Schindler Lifts, and then became a 50 per cent owner of another company which provided specialist lift installations and repair services to major commercial companies like Schindler Lifts. Until 2009, he was the owner and Managing Director of LK Building Services Pty Ltd, which provided further lift services, to use a broader based description.
Lift Shop commenced with a showroom and office in Sydney in 2004, established a further such premises in Melbourne in 2007, in Brisbane in 2008, and in Perth in 2009. Lift Shop employs approximately 140 full-time employees. Lift Shop provides various products and services including the Italian made E1 and E2 lift models. The only significant difference between them is that the E1 has a swing door and the E2 has a sliding door. Lift Shop also provides the Q1 model, a UK made through‑floor lift supplied by Pollock Lifts. Other models of lift sold by Lift Shop are not of any significance in this proceeding.
From confidential information in Confidential Exhibit LSK‑8 it is apparent that Lift Shop generates very substantial revenue each year from its business. It would appear its revenue is augmented by a further company set up and operating in the United States of America by Mr Katz, details of which have not been developed in any great detail.
Lift Shop has developed various template forms and generates documents from those templates. Most particularly, these include the sales quotation documents generated from a template which applies across all of the three models I have described above.
Among the competitors to Lift Shop are the 3 corporate respondents, as I have referred to them above, the NL Entities. The primary players in the operations of the NL Entities are Mr Mawson and Mr Boyle. Mr Mawson and Mr Boyle have known one another since approximately 2002 when they both lived in Leeds, in the United Kingdom. Unlike Mr Katz who has tertiary educational qualifications (as I have said, in accountancy), Messrs Mawson and Boyle are, essentially, trade‑qualified electricians: Mr Boyle was awarded a Certificate III in Electromechanical Technology/ Electromechanical Engineering Technology from Leeds College of Technology, and Mr Mawson received a qualification in electrical installations from City & Guilds, in the United Kingdom, and thereafter was employed as a qualified electrician in the UK, before moving to Australia in 2010.
In November 2012, Mr Mawson and Mr Boyle, together with Mr Robert Knoke (who does not appear in any way in this proceeding), co-founded NLE (as I have said, the first respondent). Both Mr Mawson and Mr Boyle are directors of NLE. NLE has showrooms in New South Wales and Victoria. It employs 26 staff. Although Mr Boyle and Mr Mawson shared all the responsibilities of the business when it started, over time their roles have been adjusted so that Mr Mawson is essentially responsible for sales and marketing, while Mr Boyle is responsible for operations and service, although inevitably there is some crossover.
Relevantly for the present proceeding, until sometime after the commencement of the proceeding, apparently in December 2020[14], NLE offered for sale and sold the ‘Ascent Home Lift’. The Ascent Home Lift had earlier been marketed as the ‘Atrium’ lift, and Mr Boyle had been involved in its design.
[14]Mawson 4 at [18]. At transcript 577, Mr Mawson accepts NLE ceased selling the Ascent lift after the commencement of the proceeding
In November 2015, Mr Mawson and Mr Boyle established Compact Lifts, the second respondent. Whereas the business of NLE is primarily focused on the high-end residential market, Compact Lifts is primarily focused on the reduced mobility residential lift market, its customers are primarily end‑users, and one time purchasers. It offers for sale the ‘Elegance Lift’ and ‘Elegance Plus Lift’ models.
On 29 March 2018, Mr Mawson and Mr Boyle established NLCL, the third respondent. NLCL operates only in Queensland, but offers the full range of products offered by NLE and Compact Lifts.
In or around 18 September 2019, NLE came into possession of a copy of Lift Shop’s quotation documentation. It is now admitted that Mr Mawson copied extensively from that documentation, largely its terms and conditions, and from about December 2019 used the copied material in the quotation template used in the NLE business (modified to reflect that the products sold by NLE are electric, not hydraulic). The question of loss and damage that may have arisen from this use, and any gain that NLE may have achieved, have by agreement been left for further hearing once this judgment is delivered[15]. What is very much an issue, however, is how Mr Mawson obtained the Lift Shop material.
[15]Order made 1 December 2021; and earlier order re quantum 18 August 2020
In January 2020, Mr Hume, a long-standing employee of Lift Shop (since 2007) saw an advertisement with NLE for a role as a site manager. On 30 January 2020, he was interviewed by Mr Boyle, and on 1 February 2020, he was offered the project manager position with NLE. He then resigned from Lift Shop and finished work on 6 March 2020. What Mr Hume did in the period leading up to and after his employment ceasing with Lift Shop is vividly in issue. Mr Hume is joined to the proceeding and is the sixth respondent.
These two areas of controversy should be dealt with now as they operate significantly on the overarching scope of the disputes between the parties. First, how did Mr Mawson get the Lift Shop quotation document? Secondly, what did Mr Hume do or not do?
How did Mr Mawson get the documentation?
In his fourth affidavit sworn on 13 April 2022, the only one relied upon at hearing (Mawson 4), Mr Mawson at [45] deposed that he refers from time to time to copies of competitors’ quotation documentation that he receives in various ways. Some is provided to him or employees of NLE entities by customers and potential customers. He exhibited about 100 pages of such documentation. He also deposed that he received information from publicly available sources including an entity known as EstimateOne, a publicly available tender management platform on which Australian and New Zealand commercial builders and subcontractors can find and engage with various subcontractors and suppliers on different projects. Mr Mawson exhibited over 200 pages of material showing examples of historical and current projects and the type of information that could be obtained from Estimate One.
In about June or July 2019, as he deposed, Mr Mawson became aware of online advertising material put out by Lift Shop (which started at about that time to market the Q1 model sourced from the United Kingdom through Pollock Lifts) which adopted a slogan he thought at the time was a direct attempt to target the NL Entities. Lift Shop’s advertising slogan as set out in the Lift Shop Facebook post dated 11 June 2019 in evidence, was the headline banner promoting ‘THE Q1 REVOLUTION’:
- an elegant compact lift, taking you to the next level!
Mr Mawson deposed that he recalled thinking at the time that this slogan was a direct attempt by Lift Shop to target the NL Entities, because Compact Lifts sold the Elegance range of lifts, Compact Lifts and NLCL both include the words ‘compact lifts’ in their company names, and NLE and NLCL both include the words ‘next level’ in their company names. Mr Mawson did not understand there to be any legal remedy. He deposed that this slogan frustrated and annoyed him.
Mr Mawson deposed that on 18 September 2019, Ms Talita Topui, an NLE employee, sent him an email attaching a pdf of a quote from Lift Shop dated 21 May 2019, which email and attached quote are in evidence[16]. In her cover email Ms Topui wrote:
Hey Danny,
Some competitor stuff.
The layout of their quote is way easy to navigate through versus ours.
The attached Lift Shop quotation was a quotation for ‘Doncaster Secondary College’ (Lift Shop EstimateOne Quote). It contains the material later adopted by Mr Mawson in November 2019.
[16]CB, vol 6, tab 76, sub‑tab 53, pp5869‑5880
Mr Mawson also exhibited copies of screenshots of the ‘Doncaster Secondary College: New Learning Centre’ project page on the EstimateOne website, to which the Lift Shop EstimateOne Quote related[17]. I interpose here to state that I am satisfied on the evidence of these screenshots that the Lift Shop EstimateOne Quote was available for download from that website.
[17]CB vol 6, tab 76, sub‑tab 54, pp5881-5888
Mr Mawson went on to depose that in November 2019 he decided to review the NLE template quotation documentation, and that he was still frustrated and annoyed about Lift Shop’s use of the slogan referred to earlier, and that:
… I largely adopted the terms and conditions from the EstimateOne Lift Shop Quote, but updated the content to reflect that the products sold by NLE are electric, while the products sold by Lift Shop are hydraulic… By copying part of the EstimateOne Lift Shop Quote, I acted immaturely and out of frustration and anger. I regret that conduct.
At [58] of Mawson 4, Mr Mawson deposed that he did not, nor instruct anyone else to, amend the Compact Lifts template quotation documentation to include any content from the EstimateOne Lift Shop Quote or any other Lift Shop quotation documentation. He deposed,
[a]t the time, I was not aware that Lift Shop sold any comparable products to the products sold by Compact Lifts and as such I did not consider that the EstimateOne Lift Shop Quote was relevant to the CHL [Compact Lifts] Template Quotation Documentation.
He continued (at [59]):
When I prepared the Amended NLE Template Quotation Documentation, I considered that it was likely that Lift Shop would get a copy of the NLE Quotation Documentation generated from the Amended NLE Template Quotation Documentation. …
He went on to say that at the time he thought NLE might receive a complaint from Lift Shop but did not appreciate the legal consequences of his actions.
At [67]‑[71] of Mawson 4, Mr Mawson deposed as to why he said that he did not regard the NLE Quotation Documentation as confidential. It is not necessary to set out this evidence in any detail.
Mr Mawson was of course challenged in respect of this evidence when he was cross-examined. It was put to him forcefully that the Lift Shop quote he had obtained was from a customer (as he had in fact earlier deposed) and not from EstimateOne. He said that the earlier affidavit was in error. He did however keep to his assertion made in Mawson 4 that it was downloaded from the software EstimateOne, and he denied that he was lying[18]. Mr Mawson was unshaken in his evidence that the Lift Shop quotation had come from EstimateOne. He conceded that he had received documentation marked copyright and commercial in confidence and that there would be legal consequences of copying them, and further responded “Maybe just a cease-and-desist letter and then I didn’t think anything like this would have happened”[19].
[18](11.11.22) T543.11‑17
[19](11.11.22) T544.15‑16
Lift Shop had much to say in submissions about the credit, or as Lift Shop would say lack of it, of Mr Mawson. It is certainly the case that in a proceeding in which no witness in the substantive hearing impressed me perhaps as being entirely satisfactory, Mr Mawson’s evidence was notably defensive. His endeavours to deny the force of his initial denial on 23 April 2020 to Mr Katz that his materials had adopted anything from Lift Shop and to blame it on his solicitor were unconvincing. While the response may well have been crafted by his former solicitors, the substantive denials contained in it can only have come on his instructions.
Lift Shop had much more to say about Mr Mawson and his alleged lack of candour and credit. I have regard to Lift Shop’s submissions, which in circumstances where Mr Mawson only ‘came clean’, so to speak, three months before hearing are perhaps understandable. Nonetheless, as to this aspect of his evidence, I believe him. Mr Mawson’s denials of the matters put to him were clear and given in a more forthright manner than the other areas of his evidence which I found unsatisfactory (as I have identified in the preceding paragraph). More particularly, it seems to me to accord with evidence that is not significantly disputed.
As I have earlier mentioned, it is quite apparent that Ms Topui found what she described as ‘some competitor stuff’ and forwarded it to Mr Mawson on 18 September 2019. The Doncaster Secondary College material (which I have referred to as the Lift Shop EstimateOne Quote) is plainly taken from the EstimateOne website. Its timing is entirely consistent with the narrative Mr Mawson puts forward. Having received this material in the second half of September, it took him until late November 2019, in conjunction with another employee of NLE having a technical role, to recast his own materials. In the context of Mr Mawson’s general participation in the NLE business, the admitted takings must have taken some time to effect.
In short, I believe Mr Mawson’s explanation as to how he obtained Lift Shop’s quotation documentation, the Lift Shop EstimateOne Quote. I also accept, because there is in fact no evidence other than Lift Shop’s assertion to support it, that he did not receive any templates from Lift Shop. He did not need them. He had the document he could use in the Doncaster Secondary College material – the Lift Shop EstimateOne Quote.
In any event, I consider there is merit in the respondents’ submission that infringement being admitted, whether the quote came from EstimateOne (as I have found), or from a customer, does not matter. It was available for download from EstimateOne. Lift Shop’s other arguments can be given short shrift; they are speculative, and must be rejected – that NLE got the document through ‘the surreptitious use of pseudonyms’ (seeking to draw an inference because NLE’s Ms Moettu said she mentioned an unidentified Lift Shop quote to a colleague, notwithstanding that no explanation – let alone any rational explanation – was proffered why Lift Shop would send her the quote it had done for Doncaster Secondary College, and that Ms Moettu expressed no interest in the terms and conditions), and its further submission that copying would be a breach of the terms and conditions of the EstimateOne website (which terms are not in evidence).
The next major critical factual dispute – what did Mr Hume do or not do?
Lift Shop pursues a number of causes of action against Mr Hume. They all have their genesis in the assertion pleaded at [53] of the Further Amended Statement of Claim. It is there pleaded that on 2 March 2020, Mr Hume accessed Lift Shop’s database 164 times, entered a communications log or note in the CRM database 11 times, and reproduced or deliberately memorised the Lift Shop confidential material (the ‘Lift Shop Client Project Information’) for the purposes of giving it to the respondents (‘using [it] for the benefit of one or more of the respondents’), and (at [54]) and that indeed he did so, (‘took … [it] to the business operated by the [NL Entities]’.
As I have averted to earlier, Mr Hume was formerly an employee of Lift Shop, initially joining the company in 2007 whilst an electrical apprentice, and progressing to become an installation supervisor, and then a site manager. Since March 2020, Mr Hume has been employed as a project manager with NLE. In his affidavit dated 12 April 2022 (Hume 4), Mr Hume replied to material put on by Lift Shop through Mr Katz and Mr Funken Lim, an IT project manager with Lift Shop, and from Mr McKemmish.
Mr Hume denied passing any confidential information to the other respondents (Hume 4, at [32]). He denied accessing 153 of the 164 entries referred to by Mr Lim. He explained accessing the remaining 11 entries. He deposed as to how and why he had set up a Lift Shop Gmail account (in terms I find convincing), and that he closed it when he left. Mr Hume also traversed the identity of somebody referred to as ‘customer X’[20]. Mr Katz had previously deposed the respondents could only become aware of the identity of customer X from Mr Hume using confidential information (but inexplicably omitted to disclose that Lift Shop had recently posted to its Instagram account publicising the name of customer X and its business, ‘Shout out to one of our long‑term clients, … who install lifts into 90% of their houses!’). At [87] of Hume 4, Mr Hume deposed to his awareness of customer X, and how he had been prompted to recall customer X, once again in terms I find utterly convincing.
[20]‘Customer X’ was the pseudonym given to the person by Mr Katz in his evidence
Under cross-examination, Mr Hume was adamant that he would only have accessed 11 links on the Lift Shop database on 2 March 2020. He was unable to explain the discrepancy with the other 153. He expressly denied that he accessed 153 projects or entries on foot before leaving to join a competitor. I note that Mr Hume was concerned to suggest that Lift Shop or Mr Lim might have altered records to suit their case but make it clear I do not accept this speculation[21].
[21](11.11.22) T590.42‑591‑7
There are two aspects of Mr Hume’s evidence, however, I consider of some significance. Mr Hume was cross‑examined about the deletion of his Gmail account (in cross‑examination also referred to as a Google account) on his device. It was put to him that his actions in deleting it meant that data and content connected to that account were deleted before he left Lift Shop and he said that was correct[22]. Mr Hume had, however, deposed at [76] of Hume 4 to being aware of past instances of ex-employees being accused by Mr Katz of stealing confidential information and providing it to another company. He deposed at the end of that paragraph:
… I understood that Lift Shop had sued him in relation to those allegations. I did not want to be accused of any wrongful conduct in relation to the Hume Gmail Account or otherwise.
[22](11.11.22) T592.7‑8
The cross-examination of Mr Hume continued[23]:
… you’re aware of instances in the past where previous Lift Shop employee had been accused of taking confidential information when they went to other lift companies. Correct? --- Correct.
Isn’t it the case that you deleted the information in your Google account because you didn’t want that information recovered by Lift Shop in the event that they had any dispute with you about you leaving and going to a competitor? --- Correct.
And you didn’t want that information used against you by Lift Shop in any dispute that might arise? --- Correct.
[23](11.11.22) T592.14‑16
Mr Hume was asked in re-examination about his access to Lift Shop’s database and the following exchange took place[24]:
During the time of your employment at Lift Shop, did you have any understanding of whether any activity you undertook on that database was tracked or monitored? --- Yes. It was always tracked.
[24](11.11.22) T594.23‑25
Mr Hume’s answer, following an objection, was “… all your information and everything you do on the database was tracked”[25]. In response to a question from me, Mr Hume said he had this knowledge from prior to leaving Lift Shop.
[25] (11.11.22) T594.40‑41
Mr Hume was skilfully and extensively cross-examined, but I found him to be a person of limited computer expertise, as he himself said. His answers to me had the clear ring of truth to them.
Given Mr Katz’s propensity to litigate, referred to in various parts of the evidence, and in this instance, more particularly, Mr Hume’s evidence about other ex‑employees, which instances he knew about whilst he was employed by Lift Shop, my view it was entirely understandable that Mr Hume was chary about being accused of misconduct because he was going to a competitor. His deletion of his Gmail account was not in any way sinister. I also accept that he accessed only 11 sites on 2 March 2020. The other 153 entries, which appear to have occurred, are simply not explained, but I heard and saw Mr Hume, and believe him. He has deposed that he was working as normal and I accept that. He has also deposed that he did not give any confidential information to the respondents. The point about customer X is fully explained. I accept Mr Hume’s evidence in this regard. I found him to be an honest, and straightforward witness. Put shortly, as I find, Mr Hulme did not supply any confidential information to the respondents. Lift Shop’s claims against Mr Hume fail.
Where does this proceeding now stand in the light of the above findings?
(a)There is no dispute now that the copying undertaken in about November 2019 by Mr Mawson of Lift Shop’s material – the Lift Shop EstimateOne Quote - was in breach of copyright. There is, however, a dispute as to whether Compact Lifts and NLCL are also liable as well as NLE.
(b)There is a question whether the material that Mr Mawson copied from had about it the quality of confidence necessary to ground the claims made arising from the said breach.
(c)The respondents further raise the question as to whether or not the material allegedly the subject of breach has been sufficiently identified and pleaded to ground the causes of action pressed in any event.
(d)There is the question of additional damages pursuant to s 115(4) of the Copyright Act 1968 (Cth), noting that this is not susceptible of final resolution pending the separate enquiry to be made as to loss and damage.
(e)There are also the parties’ competing claims in respect to the allegations of infraction of the ACL.
Does the admitted misconduct of NLE extend also to Compact Lifts and NLCL?
Compact Lifts
So far as Compact Lifts is concerned, this matter can be dealt with briefly. Although the claim against Compact Lifts of copyright infringement has been pleaded and not formally abandoned, Lift Shop relevantly asserts in its closing submissions at [143]:
As to the involvement of each of the NL Entities in the infringing conduct, the position remains that, notwithstanding the admission of copyright infringement by NLE, Mr Mawson and Mr Boyle, the other NL Entities maintain their denials of infringement. At least as far as the Third Respondent, NLCL, is concerned, that denial is inherently implausible.
Lift Shop’s submissions then turn to inferences it argues should be drawn as against NLCL.
The respondents in their written submissions correctly observe that there is no evidence to support the claim against Compact Lifts, and I will not find that they were liable for the infringement. There is no evidence. The claim against Compact Lifts of copyright infringement fails.
NLCL
The evidence given by Mr Boyle, the first of the witnesses called by the respondents in respect of whether an NLCL quotation would resemble the quotation sent by NLE was that it was a different document, accessed from a different system. When it was put to him that an NLCL quotation was the same format he said[26]:
Yes, but it’s accessed in a different place.… It’s accessed from a different place. It’s a different template.… It’s not from the same system. It’s a different – it’s the NLCL system… They’re different documents.
[26](8.7.22) T399.20‑29
Senior counsel for Lift Shop, Mr Hennessy SC, then put the matter to Mr Boyle as follows[27]:
And it was the form of quotation that Next Level Compact Lift issued to customers and potential customers in the period November to at least 24 April 2020 when it was quoting on products sold by NLE. Correct?… Not correct.
Right. Why is that not correct?… The Queensland template never adopted the new terms and conditions.
[27] (8.7.22) T404.14‑19
The cross-examination continued[28]:
And you’ve acknowledged that when it came to the example of a potential customer inquiring about a lift sold by Next Level Elevators, that Next Level Compact Lifts would adopt a form of quotation that was similar to Next Level Elevators, in the sense that it had the same terms and conditions and format. Correct? --- It didn’t have the same terms and conditions. It had never been adopted in the Queensland template.
And I want to suggest to you that’s a complete lie? --- That’s the best of my understanding. If anything is different, I do not know.
And when you say if it’s anything different, I do not know, have you made any inquiries to try and determine whether that was the case or not? --- I believe it was investigated thoroughly by Daniel and other members of staff.
[28](8.7.22) T405.1‑13
Mr Boyle went on to say that this information was sourced from Mr Mawson. Mr Boyle’s answers were consistent with the division of principal responsibilities between the directors. Mr Mawson was extensively cross-examined subsequently when he gave evidence but this topic was not explored with him.
If there is one thing that the totality of the evidence makes clear it is that for whatever reason Mr Mawson and Mr Boyle decided to establish NLCL as a freestanding operation in Queensland. It had a different template. If, prior to November 2019, the templates from Compact Lifts and NLCL were the same as that of NLE (and there is no evidence to prove that this was so or not), there is certainly no evidence that Mr Mawson altered the documentation of Compact Lifts or NLCL.
The respondents submit at [57] of their closing written submissions:
… the respondents embrace the principles set out at [Lift Shop’s summary of the legal principles, Annexure A to its closing submissions, at [36] as to the drawing of inferences], taken from Directed Electronics[29]. Most particularly, as Beach J said at [298], “there must be objective facts from which the inference could be drawn, otherwise what is left is mere speculation or conjecture.” Many of the inferences Lift Shop asks the Court to draw are mere speculation or conjecture.
[29]Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8) [2022] FCA 1404, at [296]-[299]
I agree. Lift Shop urges me to speculate, and to engage in conjecture. I am not satisfied that there is evidence before me which persuades me that it is more probable than otherwise that NLCL sent out any quotations using the material in breach of copyright that Mr Mawson had used for NLE. The claim against NLCL of copyright infringement fails.
Did the material Mr Mawson copied have about it the quality of quality of confidence necessary to ground the claims made arising from the asserted breach of confidence?
As I have said above, Lift Shop’s claims against Mr Hume fail. It follows that Lift Shop’s claims arising from the asserted breaches of confidence are significantly narrowed.
The pleadings
Both parties have had much to say in final submissions about the extent to which Lift Shop has made out its pleaded case in respect of the alleged breaches of confidential information. Consideration of this issue must start with the case pleaded in the Claim.
At [26] of the Claim Lift Shop pleaded:
[26]At all material times, the documentation used in Lift Shop’s day‑to‑day business includes, and has included the following works (the Lift Shop Copyright Works):
(a) Lift Shop quotation documentation which formalises the terms and conditions of the transaction between a customer and Lift Shop, including the allocation of risk, the management of cash flow, and explaining the services and the terms on which they are provided;
(b) photographs of the Lift Shop Products;
(c) brochures of the Lift Shop Products;
(d) engineering drawings of the Lift Shop Products; and
(e) builder’s guidance documentation of the Lift Shop Products.
Under ‘Particulars’ Lift Shop said that there was a copyright notice on the Lift Shop Copyright Works, Lift Shop quotation documentation was marked ‘Commercial‑In‑Confidence’ and © LIFTSHOP, and ‘some of the photographs, brochures, engineering drawings and builder’s guidance documentation relating to the Lift Shop Products are accessible at the URL
At [27] of the Claim, Lift Shop pleaded:
[27]At all material times since 2011, Lift Shop Copyright Works have included quotation templates, from which Lift Shop quotation documents are generated (Lift Shop Template Copyright Works) …
and proceeded to refer to quotations for each of the years from 2011 to 2020 inclusive. I note that under ‘Particulars’, inter alia it was asserted that each of the Lift Shop Template Copyright Works bears a copyright notice.
At [32] of the Claim Lift Shop pleaded:
[32]At all material times, Lift Shop has possessed and created information of a confidential and valuable nature pertaining to Lift Shop’s business which is used by Lift Shop to secure and maintain commercially valuable relationships with customers, and to manage, enhance and protect Lift Shop’s business and business interests (Lift Shop Confidential Information).
At [33] Lift Shop pleaded that the Lift Shop Confidential Information ‘included, inter alia’:
(a)Lift Shop Template Copyright Works embodied in the Lift Shop 2018 Quotation, the Lift Shop 2019 Quotation and the Lift Shop 2020 Quotation which are marked with “Commercial‑In‑Confidence” on the footer of each page and contains internal quotation database codes used by Lift Shop to generate quotations for customers and potential customers;
(b)information concerning various stakeholders and customers in the residential lift purchase process including builders and architects, such as their names, relevant contacts in the company, and their upcoming project pipeline and potential requirements (the Lift Shop Client Project Information); and
(c) emails and documentation used, received and sent in the course of a Lift Shop’s employee’s day-to-day work including Lift Shop installation and servicing documentation used on‑site (the Lift Shop Installation and Servicing Documentation).
By the Particulars subjoined to Claim [33], each of the category (b) and (c) information was identified as contained in specified documents – in the case of (b) the information was defined as 164 screenshots of Lift Shop’s customer relationship management database (Lift Shop CRM database) in part of the Applicant’s Confidential Bundle, and in the case of (c) copies of documentation able to be inspected, whilst category (a) information by its defined terms referred back to the quotation templates for 2018, 2019 and 2020 listed in the Claim at [27]. In its reply submissions, Lift Shop emphasise that by reason of the prefatory wording ‘included, inter alia’ the pleaded Lift Shop Confidential Information is clearly not confined to the three sub‑paragraph of [33].
In [34] of the Claim Lift Shop pleaded:
[34]At all material times, Lift Shop Confidential Information was confidential to Lift Shop and not available without restrictions imposed on its use in that:
(a) the information, in the form it was compiled, was not known outside the business of Lift Shop
(b)considerable skill and effort over many years, was expended by the Lift Shop to collect information;
(c)the information is treated as confidential by Lift Shop;
(d) the information is highly valuable to competitors;
(e) the information cannot be easily duplicated by others;
(f) it was made known to Lift Shop employees that the information was confidential; and
(g) the usages and practices in the industry support the claim of confidentiality.
At [38] Lift Shop pleaded that the first to fifth respondents created copies of one or more of the Lift Shop Template Copyright Works from at least December 2019.
Lift Shop further pleaded that the NL Entities (as I have said, the three corporate respondents) created and distributed to customers and potential customers quotation documentation which incorporated parts of the Lift Shop Template Copyright Works.
At [39] of the Claim Lift Shop pleaded that from a date prior to March 2020 one or more of the respondents attempted to, and gained unauthorised access to and received Lift Shop Confidential Information. Particulars were expanded to include various telephone calls by Ms Louise Moettu, a call by somebody called ‘Graheme’, a call between Mr Katz and ‘Andrew’ from Compact Lifts, conversation between Mr Katz and Ms Rachel Brus and an email from Mr Mawson to Mr Wood of Lift Shop, requesting a quotation.
At [40] of the Claim, Lift Shop pleaded that the NLE Quotation Documentation referred to in [38] of the Claim was substantially similar to the format and content of Lift Shop’s quotation documentation, contained Lift Shop Confidential Information, reproduced Lift Shop unregistered trade mark ‘LIFT SHOP’, and/or reproduced at least a substantial part of one or more of the Lift Shop Template Copyright Works.
The Further Amended Defence[30] pleads that [26] of the Claim does not sufficiently or properly identify the alleged Lift Shop Copyright Works. It admits [27] of the Claim which specifies the Lift Shop quotations from 2012 to 2020. In responding to [32] of the Claim in the Defence the respondents object to pleading on the basis that ‘it does not sufficiently or properly identify the alleged Lift Shop Confidential Information’, but under cover of that objection, each respondent otherwise denies it.
[30]Further Amended Defence and Amended Cross‑Claim filed further to leave granted on 5 July 2022
The Defence denies each and every allegation made in [33] of the Claim.
By [37] of the Defence, NLE, Mr Mawson and Mr Boyle admit the allegations in [38] of the Claim (that they created copies of one or more of the quotation templates and created and distributed quotation documentation incorporating parts of one or more of the templates), and say that they ceased to do so upon receipt of an email from Mr Katz to Mr Mawson dated 24 April 2020.
By [39] of the Defence, the respondents admit telephone calls made by Ms Louise Moettu, and that she received the email referred to in sub‑paragraph (v), telephone calls and a text message took place between Mr Katz and ‘Andrew’ referred to in sub‑paragraph (iii), and the sending of the email by Mr Mawson referred to in sub‑paragraph (ix) of the Particulars but otherwise deny [39] of the Claim.
By [40]‑[41] of the Defence, the respondents admit the allegation made in [40(d)] of the Claim (namely that the NLE Quotation Documentation reproduced a substantial part of one or more of the Lift Shop Template Copyright Works) and that the first, fourth and fifth respondents reproduced and distributed it to the public, but otherwise denied the allegations. The respondents admit that Mr Mawson and Mr Boyle authorised, directed or procured the conduct of NLE, but otherwise deny the allegations in [42] of the Claim.
Lift Shop’s opening submissions
Lift Shop’s opening submissions address the confidential information issue at [33] and following. Paragraph [33] says:
Lift Shop alleges that it possesses and has created information of a confidential and valuable nature pertaining to its business, which uses to secure and maintain commercially valuable relationships with its customers (Lift Shop Confidential Information), including:
(a) information contained in the Lift Shop Template Copyright Works, (including internal quotation database codes used by Lift Shop to generate quotations for customers and potential customers); and
(b) information concerning stakeholders and customers, including builders and architects, relevant contracts, and their upcoming project pipeline and requirements, which information is stored in Lift Shop’s CRM database.
At [35] of its opening submissions, Lift Shop submitted that the respondents:
(a)admit to taking part in some telephone calls and email or text message exchanges with Lift Shop in relation to Lift Shop’s products; and
(b)admit to the use of pseudonyms for the purposes of obtaining information from Lift Shop and its supplier, Pollock Lifts, including:
(i)Mr Boyle contacting Pollock Lifts under the name ‘Paul Taylor’ to attempt to obtain information regarding one of Lift Shop’s products, the Q1 lift;
(ii)Mr Mawson sending an email to Lift Shop from his personal Gmail account under the name ‘David Gibson’ requesting a quote for a home lift; and
(iii)Ms Louise Moettu, a Scheduling Coordinator at Compact Lifts, contacting Lift Shop under the pseudonym ‘Kirsty Moettu’ with the pretext that her parents were in need of a lift to obtain a quote for a Lift Shop product.
At [40] of the opening submissions, Lift Shop asserted that:
The question is whether a reasonable person in the position of the recipient of the information – in this case, the [respondents] – would have appreciated that the information would have been obtained or imparted in circumstances identifying or importing an obligation of confidence. The evidence filed by Mr Mawson and Mr Boyle indicates that plainly they appreciated the sensitivity of the information contained within the Lift Shop quotes, such that the requisite obligation of confidence arose. That NLE does not claim confidentiality in its quotations is irrelevant.
Mr Garvey responded to the report of the NL Entities’ expert, Mr John Wilfred Tibbitts, including the references to EN 81‑41 with which Mr Garvey is very familiar, as he is with other European standards, including the BS 5900:2012, and European Machinery Directive 2006/42EC.
Thus far I have merely paraphrased uncontroversial aspects of Mr Garvey’s affidavit.
At [41]‑[42] of his affidavit, Mr Garvey said:
[41]All of Pollock’s products, including the 25 Series Lift, are compliant with the European Machinery Directive. This is sufficient compliance for sale of the products in the United Kingdom, Ireland or countries in the European Union.
[42]The 25 Series Lift is also sold in the US, has been independently assessed by Intertek Testing Services NA Inc. and has been certified as meeting [the relevant statutory requirements].
At [43], Mr Garvey continued:
[43]Although the 25 Series Lift is not designed to be compliant with the entirety of BS 5900:2012 and EN 81–41:2010, it has been designed by reference to certain aspects of the standards because they provide some useful guidance about certain features that can be incorporated into the lift. ….
Having traversed independent testing that has taken place on the 25 Series Lift Mr Garvey continued at [46] to [47]:
[46]I am unaware of any current European, US, Australian or UK standard that applies specifically to through-floors lifts (that is, lifts without an enclosed lift shaft or lift way enclosure) with a fully enclosed cabin (carrier), such as the 25 Series Lift. However, as discussed in paragraph 16 above, the WG8 subcommittee of BSI MHE/4 is currently developing a new standard relating to residential through-floor lifts without a shaft that cover several floors (EN 81–46).
[47]In addition, while it is convenient to refer to the 25 Series Lift as a ‘lift’, it is not a lift within the meaning of the Lift Directive (2014/33/EU) because it does not move at sufficiently high speeds nor carry a sufficiently high load. The 25 Series Lift however, falls within the meaning of the term ‘machinery’ under the European Machinery Directive which is why compliance with the European Machinery Directive is important.
At [49] of his affidavit, Mr Garvey continued:
[49]In the industry there are two categories of through-floor lifts – those with a fully enclosed cabin and those with a partially closed cabin. Through-floor lifts are characterised by the absence of a shaft and a pit (as they typically rest on the floor). Through- floor lifts are also slow-moving compared to a passenger lift used in a block of flats and have limited carrying capacity. As a result, through-floor lifts are considered to be machinery with a lower risk profile.
Having traversed the specifications and safety features of the 25 Series lift, Mr Garvey went on at [65]‑[68] to depose:
[65]The 25 Series Lift has a “full emergency operation” mode in which all safety features are overwritten and disabled. In such a situation, which may be the subject of a mechanical or electrical fault preventing normal operation, power is supplied to the motor only and not to the safety feature set out in paragraph 62 above. This “full emergency operation” mode can only be activated once the mains power is switched off by an individual outside the lift cabin, who can then lower the lift. By limiting the operation of the lift in this mode to an individual external to lift cabin, the risk of injury to an unaware party underneath the lift is reduced.
[66]The “in-cabin self-rescue” feature of the Q1 Lift offers an “intermediate” operating mode between “normal operation” (whether by mains power or by battery) and “full emergency operation” (where all safety features are disabled). In this “intermediate” operating mode, all safety features and related circuitry other than the pressure sensitive surface (bottom tray) are overwritten and disabled. An occupant in the lift can then press two buttons to lower themselves to the ground floor during which an alarm sound is played throughout the lowering process and the lift runs at half speed. As the pressure sensitive surface (bottom tray) remains operational, I consider operation of the Q1 lift in this “intermediate” operating mode to be as safe as normal operation of the lift. If the pressure sensitive surface (bottom tray) is not operable or faulty, this “intermediate” operating mode cannot be used. If the “in-cabin self-rescue” feature fails or is not available, it will be necessary to seek external assistance from outside the cabin. If an occupant is residing alone this is likely to involve some waiting time for a service team to arrive on-site.
[67]In my experience, “in-cabin self-rescue” features are not typically offered as standalone features in this type of vertical transportation due to a risk in-cabin lowering will create a crush risk underneath the cabin as the occupant is likely to have limited visibility of his or her surroundings. In the case of the Q1 lift however, the “in-cabin self-rescue” feature only operates if the pressure sensitive bottom tray is functional and no greater crush risk is posed than in normal operation.
[68]Lift Shop is the only Pollock customer which markets a through-floor lift with an “in‑cabin self‑rescue” feature, and this feature is not offered by Pollock to other customers who purchase a 25 Series lift. I am aware that other lifts supplied Lift Shop also offer an “in‑cabin self‑rescue” feature but do not know whether this is the same “in‑cabin self‑rescue” feature included in the Q1 Lift.
Mr Garvey then went on to deal with work safety applications for the Q1 lift. Mr Garvey states that he is familiar with the process of plant design registration in Victoria because he has applied on behalf of Pollock Lifts to WorkSafe Victoria for plant design of the Q1 lift on two occasions. It is uncontroversial that registration in either Victoria or New South Wales is recognised under reciprocal agreements in other States and Territories. Mr Garvey went on to explain what he did when he applied to register the Q1 lift plant design with WorkSafe Victoria.
Relevantly to these purposes at [91]-[92] of his affidavit Mr Garvey deposed:
[91]Therefore, while both WorkSafe Victoria applications specified BS 5900:2012, EN 81–41:2010 and 2006/42/EEC, in neither case did all three references appear in the final Notices of Plant Design Registration issued.
[92]Since the issue of the Notices of Plant Design Registration by WorkSafe Victoria, Pollock has supplied a significant number of the Q1 lift to Lift Shop for sale and installation in Australia without any complaint I am aware of from any customer or regulator. As at the date of this affidavit, the plant design registrations issued by WorkSafe Victoria for the Q1 lift remain valid.
Mr Garvey went on to respond to a number of the matters raised in Mr Tibbitts’ report, and I note that, consistent with that what he had already said, at [103] he said that ‘the in-cabin self‑rescue functionality [was] not designed to be used in “full emergency operation” mode … and for this reason is not an emergency control device within the meaning of clause 5.4.3 of EN 81‑41:2010’.
Mr Garvey was called as a witness and adopted his affidavit which was read. Cross‑examination was brief. Mr Garvey conceded the passenger being trapped in a lift was an emergency situation. Otherwise he was only asked questions about whether the in-cabin self-rescue feature was offered to anyone else. He confirmed that Lift Shop was the only customer who had asked for it. When asked why it was not marketed to other customers his response was[42]:
So it – it came about because – from – from our perspective, the distances and the times involved in rescuing customers in a country the size of Australia is much greater than in a country the size of Ireland, or in the UK. So that’s how we saw it, as a – as a much better feature in Australia, or a much more advantageous feature, because of the time and distances involved.
[42](6.7.22) T213.30‑35
No attack was made on Mr Garvey’s credit and there is no reason not to accept his evidence which I therefore do. While his understanding of population patterns in Australia might be thought somewhat quaint, there is no reason to doubt the truth of what he said.
The evidence of Mr Tibbitts
Mr Tibbitts has sworn two affidavits. The first annexed his expert report, but the one primarily relevant to these purposes seems to me to be the second affidavit dated 31 May 2022. On any view of the matter Mr Tibbitts is a very experienced engineer. He has over 63 years of experience in the lift industry, member of relevant committees including chairman of the Standards Australia Lift Committee, and international working group producing and maintaining the International Standard ISO 8100-32 – Part relevant to passenger lifts, and has had direct involvement in preparing some of the standards documents the subject of the argument in this case.
At [23] of his second affidavit, Mr Tibbitts deposed:
[23]Standards Australia is a non-government organisation responsible for the development and publication of standards. While it plays an important role in the development and publication of lift safety standards, Standards Australia plays no role in the enforcement of these standards. Compliance with the standards is not mandatory.
Mr Tibbitts went on to deal in detail with what the AS 1735 series of Australian standards for lifts, escalators and moving walks was about. At [26] he traversed the two European standards relevant to the matter being EN 81–41 and EN 81–21. I note that at [32] of his affidavit Mr Tibbitts deposed:
… [I]t is often difficult to say if a particular lift design complies with EN81–41 because if the lift is installed in an existing building, it may comply but if it is installed a new building then it will not apply.
He went on to depose at [34]:
… In my opinion, the European Machinery Directives could either be considered a standard or under engineering principles.
Having dealt with New South Wales Occupational Health & Safety legislation Mr Tibbitts set out at [43] of his second affidavit his conclusions:
[43]In summary, the above-mentioned Regulations require a lift to be designed and constructed to either:
(a) comply fully with the appropriate part of AS1735;
(b) comply fully with any other published technical standard;
(c) comply fully with engineering principles; or
(d) comply partly with any published technical standard and partly with engineering principles.
He went on to say at [44] and [45]:
[44]Therefore, a lift which is designed, manufactured or installed in Australia, although it may not technically be fully compliant with AS1735, will be just as compliant with the law in New South Wales, Victoria and Queensland as a lift which does comply with AS1735, if the lift was designed and constructed as described in paragraphs 43(b) to 43(d) above.
[45]In addition, a lift which is designed, manufactured or installed in Australia, although it may not technically be fully compliant with AS1735, will also be just as safe as a lift which does comply with AS 1735 if the lift was designed and constructed as described in subparagraphs 43 (b) to 43 (d) above.
At [56] of his second affidavit under the heading ‘Enforceability of AS1735’, Mr Tibbitts said:
[56]The AS1735 series is produced as a guide to best practice in the design, manufacture, installation, testing, commissioning and maintenance of lifts, escalators and moving walks. Neither Standards Australia nor the AS1735 series has authority to mandate compliance with the Standard, and, since the repeal of the NSW OHS Regulations 2001, none of the State‑based Occupational Health and Safety acts or regulations mandate compliance with AS1735. Rather, these laws allow compliance with any published technical standards, engineering principles, or a combination of both.
At [61], Mr Tibbitts said:
In my opinion, if a particular specification varies from the requirements of the relevant part of AS1735, but that variation is designed using engineering principles, as discussed above, I would still consider the lift to be compliant with the relevant part of AS1735 and I would be prepared to submit it as an application for registration.
Having considered the compliance of the Ascent lift with AS 1735.16 in detail Mr Tibbitts opined:
[75]In my opinion, there is no basis for concluding that the design of the Ascent product does not comply with AS1735.16.
[76]I cannot comment further on the claim that the Ascent product does not meet the “relevant Australian Standard” without details of what the “relevant Australian Standard” being referred to is, and the specific way in which it is alleged that this product does not meet the so-called “relevant Australian Standard”.
Mr Tibbitts went on to deal in detail with the compliance of the Elegance and Elegance Plus lifts with AS1735.15 and concluded that in his opinion (given at [92]–[94] of his second affidavit) that the Elegance and Elegance Plus lifts are safe and acceptable for use in Australia, are compliant with AS1735.15; and similarly in relation to AS1735.15:2000, as to the upper flooring ceiling height or overhead, and the maximum load capacity based on engineering principles, and that both lifts are compliant with EN81–41.
The evidence of Mr Ford
Mr Gary Andrew Ford is the Lift Shop expert. He has over 20 years’ experience in the lift industry, having worked as a lift technician, a project manager and a senior engineer in the United Kingdom and Australia since 2002. He has a number of relevant academic qualifications, which taken globally may be thought to be slightly less well-qualified than those equivalents of Mr Tibbitts.
I note that [24] of his affidavit sworn 27 May 2022, Mr Ford stated:
[24]On their own, and in isolation, Standards (whether Australian or overseas) have no particular legal status in Australia and there is no requirement for manufacturers, consumers or the general public to comply with these Standards. However, a Standard may be referred to in legislation, or written into contractual documentation to set out minimum expectations or thresholds, as a result of which it becomes part of that legislation or contract and acquires legal relevance and force.
At [40] of his affidavit, Mr Ford said:
[40]Lifts in Australia are regulated through a system of plant design registration and plant item registration with a State or Territory based work health and safety regulator such as SafeWork (in New South Wales) or WorkSafe (in Victoria). …
Mr Ford was provided with a copy of Lift Shop’s WorkCover New South Wales applications. At [74] of his affidavit, having traversed the detail of the E1 and E2 lift documentation, Mr Ford said:
[74]In my opinion, references in the E1 and E2 Lift Shop brochures and marketing material to various parts of AS 1735 referred to in paragraph 73 above mean that:
(a)The E1 lift can be configured in different ways to satisfy the requirements of of AS 1735.15, AS 1735.16 or AS 1735.18. Variables for these configurations are identified in the brochures and marketing material as ranges (e.g. “Capacity”, “Pit Depth”, “Speed”), drive system or as maximum parameters (e.g. “Max travel”); and
(b)The E2 lift can be configured in different ways to satisfy the requirements of AS 1735.16 or AS 1735.18. Variables for these configurations are identified in the brochures and marketing materials as ranges (e.g. “Capacity”, “Pit Depth”), drive system or as maximum parameters (e.g. “Speed”, “Max travel”).
Mr Ford then turned to the question of the in-cabin self-rescue. He had been to view the lifts in operation. He noted at [77] of his affidavit that the in-cabin self-rescue operates in addition to other fundamental safety functions. He went to say at [78]:
[78]The in-cabin self-rescue feature is not required by, nor described in EN 81–41: 2010, AS 1735.15, AS 1735.16 and AS 1735.18, but, in my opinion, this does not mean that it cannot be included in lifts installed in Australia. This is because it is not inconsistent with the requirements of those standards and is not prohibited by any other standards or regulations. There is no language in AS 1735 which states that such a feature cannot be used. In my opinion, the in-cabin self-rescue feature is an example of a “new technology” contemplated in clause 4 of AS 1735.1 and which I refer to in paragraph 39 above.
Having noted at [80] of his affidavit that in-cabin self-rescue is installed in addition to the mechanical emergency lowering safety measures required he went on to assert [81]:
[81]For the E1 and E2 lifts, the emergency lowering function is operated by a qualified person with access to the control cabinet of the lift (that is, a location outside the lift cabin). In my opinion, based on my observation of the E1 and E2 lifts, in operation including both hydraulic and election electric traction drive configurations, the emergency lowering function of the E1 and E2 lifts is consistent with the provisions of AS 1735.15, AS 1735.16 and AS 1735.18.
I note that at [83] of his affidavit Mr Ford said:
[83]Activation of the in-cabin self-rescue feature induces a self-rescue safety error state. In this state, the emergency lowering functionality required under AS 1735 remains operational but is not activated as the lift is not in a “mechanical fault” or “emergency state”. As a result, it is not possible for a person to enter the lift shaft or pit during in‑cabin self‑rescue because the electronic locks on the lift doors prevent access to the lift shaft. If the lift door is manually opened with an access key and a person enters the lift shaft, the safety circuit allowing the lift to move in the in‑cabin self‑rescue mode is broken and the lift can no longer be operated by the occupant of the lift. I observed this in operation.
The expert evidence given at Court
Mr Tibbitts and Mr Ford conferred before giving evidence and produced a joint report. It is sufficient for these purposes to say that this report has all the appearance of having been cobbled together under pressure of time and was not entirely satisfactory both because of its brevity but also because in oral evidence to an extent diverged from it. It is preferable to concentrate on what the witnesses actually said. For these purposes however it is sufficient to note that in a sense Mr Ford’s evidence was broadly consistent with that of Mr Garvey, namely that the in-cabin safety device was not an emergency device but rather an intermediate position whereas Mr Tibbitts saw it as an emergency control[43].
[43](22.11.22) T677.11‑16
Conclusions about the expert evidence
The first thing to be said is that both Mr Tibbitts and Mr Ford were in my view generally good witnesses. As might be expected from Mr Tibbitts’ longer experience, and possibly his marginally superior academic qualifications, he at times indicated a slightly more knowledgeable command of the field, as it could be said. Nonetheless, where they disagreed, they disagreed frankly. On any view, Mr Ford is extremely experienced in the industry, even if somewhat less so than Mr Tibbitts. I am unable to accept the respondents’ submission that I should prefer Mr Tibbitts’ evidence wherever it materially differs from that of Mr Ford.
Put shortly, it seems that whatever standards there are in relation to lifts in Australia, none of them have mandatory force. Opinions can clearly differ between experts as to whether any particular lift complies with any particular standard, be it the European-based ones or those in AS 1735. This is rendered all the more opaque by the fact that Mr Tibbitts says that compliance with all of these standards may be achieved through what he described as engineering principles, a proposition I accept. It makes sense in an largely unregulated or self‑regulated industry that if an appropriate engineering-based modification is made, the relevant statutory authority having a regulatory role may accept it. It seems common cause that the Q1 lift made by Pollock Lifts was registered by Mr Garvey and that registration remains valid. Mr Ford’s evidence is that the E1 and E2 lifts comply with both the European and Australian standards. I am not persuaded that it is more probable than otherwise that any assertion to this effect is misleading.
By the same token, I accept Mr Tibbitts’ evidence to the effect that the representations made about the Ascent and that the Elegance and Elegance Plus lifts comply with the relevant parts of AS 1735 are in fact correct.
It therefore follows that the alleged misrepresentations in this regard by the respondents are also not made out.
So far as the in-cabin self‑rescue is concerned, there is a genuine difference of opinion between Mr Tibbitts and Mr Ford. Mr Tibbitts says that it is an emergency control because it governs circumstances in an emergency and there is obvious force to that. By way of contrast, Mr Ford says that emergency means a defined set of circumstances giving rise to a complete shutdown of the lift. The in-cabin release is designed to address what Mr Garvey describes as an intermediate situation and it is easy to see that there is force in that argument also.
Lift Shop is correct to submit that a finding that advertising in this way is misleading is a serious matter. I accept that that is so, particularly since the in-cabin self-rescue feature has been available, it would appear, without incident since about 2003. Self-evidently this issue has only crystallised because of this proceeding.
I should make it clear that I reject the Lift Shop submission that the prosecution of this aspect of the case is representative of a lack of contrition on the part of the respondents (or any of them). It was Lift Shop who raised the question of misleading and deceptive conduct through advertising, and it can scarcely be surprising that the respondents have replied in kind. Indeed, in Mr Tibbitts they have an expert witness of considerable standing who supports the position for which they contended.
While the matter is more finely balanced than the other areas of representational complaint, in the end I am not persuaded that the position contended for by Mr Ford is so devoid of force that I can say it is more probable than otherwise that the material put out by Lift Shop in respect of the in-cabin feature is misleading and deceptive.
Should any remedy flow from this in any event?
I have already observed above I do not regard either of these parties as being in the slightest bit concerned by their ACL claims to protect members of the Australian public. Indeed, to be misled by the sales documentation would require a highly specialised knowledge of the non‑binding Australian standard documentation, bearing in mind that it can involve not only Australian but overseas specifications. The number of people with the expertise to be so misled would be likely to be minuscule especially since the market to which both of these enterprises sell appears by and large to be either builders or individuals, and not lift engineers. Furthermore, and for the reasons I have already indicated, I think it will be all but impossible for either side to demonstrate any real loss and damage.
As I have said earlier in these reasons, what the parties really want is tactical advantage in their business dispute. I do not think the Court should give it. The Court is not the regulator of the lift industry. That is what these applications in substance seek it to be, and I decline the invitation. Neither side should receive any relief even if the representations by any of them are ultimately found by some person more conversant with this area that I am to have been in some way inaccurate.
CONCLUSION
This case has always been about a short stupid breach of copyright. It started in November‑December 2019 and ended at the end of April 2020. As I pointed out at the beginning of these reasons, this period included the usual pre-Christmas rush, the Christmas and New Year closedown, the January holidays and the COVID‑19 restrictions that commenced in March 2020. While the breach of copyright is not to be condoned, and whilst I have rejected as a sole explanation the emphasis that Mr Mawson sought to give to his fit of pique (but accepting Mr Mawson’s explanation in part), it was not in the scheme of things anything more than a stupid endeavour to filch from Lift Shop’s materials. It was stupid because even Mr Mawson knew it would come to the attention of Mr Katz. Mr Katz’s responses had been at all times vituperative, even extreme.
The way in which this litigation has been conducted by both parties reflects the obduracy of their controlling personalities. It should never have occupied the amounts of time and resources that it has.
This judgment will cause equal chagrin to both parties. In its entirety the judgment is substantially less than the parties’ closing submissions. I have dealt as best I can with what seemed to me to be the points that are truly in issue. The fact that I have not referred in greater detail to the very skilfully drafted and greatly detailed written submissions, most particularly in relation to the technical issues to do with the alleged breaches of lift standards, does not mean that I have not had regard to them. They descend to a level of detail, however, that tends only to obscure the matters the Court needs to resolve, which as I hope I have made clear are in truth within a relatively narrow compass.
DISPOSITION
The first respondent, and the fourth and fifth respondents have admitted copyright infringement by use of the Lift Shop EstimateOne Quote, and thus the Lift Shop quotation template from which it derived, in reproduction and distribution of NLE quotation documentation in the period I have said. Senior counsel for the respondents made clear on the record at the commencement of the hearing in July 2022, that NLE, Mr Mawson and Mr Boyle consent to declarations, injunctions and delivery up orders. The quantum of the pecuniary relief that follows from their admissions is to be addressed separately. On consideration of the parties’ submissions, I have concluded that s 115(4) Copyright Act additional damages are not appropriate.
Save as aforesaid, Lift Shop’s claims otherwise have not succeeded. So too, the Cross‑Claim has not been successful.
The Court would be assisted by specific descriptions of the copyright work and the NLE quotation documentation which will be the subject of the declaration, injunction and orders for delivery up by NLE and Mr Mawson and Mr Boyle. Accordingly, I will direct the parties to confer and if possible, provide a draft short minute to give effect to these reasons by 3 July 2024, or such other date as I direct after consultation with the parties. Lift Shop’s ACL claim and the Cross‑Claim will each be dismissed.
It seems to me to follow that the costs of the ACL claims (Claim and Cross‑Claim) should lie where they fall. I appreciate that the parties wish to say something on costs on those claims, on the proceeding more generally, including any reserved costs, and that there may be letters of compromise, and issues of timing and other factors they may wish to put before the Court. They will be required to keep any submissions on costs very short. I do not envisage that there is any need for any of the parties to burden the Court with more than three pages of submissions on costs each.
There are extant undertakings and extant confidentiality orders in this proceeding. The parties should confer and inform the Court whether those undertakings and confidentiality orders continue to be relevant.
In the circumstances, the orders I will make today are those I have identified in [11] in respect of the s 138 Application, and I will dismiss that Application, and the directions I have adverted to above. I will stand over the proceeding to 3 July 2024, or such other date to be fixed after consultation with the parties, for the making of the declaration and orders to give effect to these reasons, for any argument on costs, and directions for the future conduct of the outstanding issues of quantum of pecuniary relief.
I certify that the preceding two hundred and eighty-one (281) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Baird. Associate:
Dated: 26 June 2024
SCHEDULE OF PARTIES
SYG 1318 of 2020 Respondents
Fourth Respondent:
DANIEL MAWSON
Fifth Respondent:
DAMIEN BOYLE
Sixth Respondent:
EDWARD HUME
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