Lift Shop Pty Ltd v Next Level Elevators Pty Ltd (No 4)
Link copied
CaseCopied
75 min read
Full text
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
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Keep reading for free
Create a free CaseChat account to read Lift Shop Pty Ltd v Next Level Elevators Pty Ltd (No 4) and more:
Lift Shop Pty Ltd initiated proceedings against Next Level Elevators Pty Ltd, and several other parties, in the Federal Circuit and Family Court of Australia. Lift Shop alleged copyright infringement in a template quotation document for residential lifts, and also claimed breach of confidence and contravention of the Australian Consumer Law (ACL). The primary issue was whether the first respondent company and certain directors had infringed copyright by reproducing and distributing quotation documents between December 2019 and April 2020. The court found that there had been an admitted infringement by the first respondent company and the directors, but no infringement by the second and third respondents. The court also dismissed the claim of breach of confidence and found that neither party had established misleading or deceptive conduct in contravention of the ACL.
The court considered whether additional damages under section 115(4) of the Copyright Act 1968 (Cth) were appropriate, but ultimately decided against it. The court also dismissed an application by Lift Shop to exclude certain documents obtained from its website and to strike certain oral evidence from the record. The court held that the documents were not improperly obtained, were directly relevant to the issues before the court, and their probative value outweighed any prejudice. The court exercised its discretion to admit the documents.
The court made orders that the documents in question be admitted, and that certain parts of the oral evidence of Mr Katz be struck from the record. The court also noted that the parties had requested that the court determine the application as part of the final judgment, and made orders accordingly. The court found that the documents were plainly capable of being directly relevant to matters in issue between the parties, and if there was any impropriety in their obtaining, it was outweighed by their probative value. The court also noted that the respondents could have obtained the material through other court processes, and that it was difficult to see that the materials were not discoverable in any event.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
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 evidenceMs 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.
Evidence
Evidence Before The Court
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
Decision
Reasons for decision
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.
