Raidstudio Pty Ltd v McNeill
[2022] VMC 4
•23 February 2022
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
Case No. L10202683
| RAIDSTUDIO PTY LTD (ACN 139 153 496) | Plaintiff |
| v | |
| RICHARD McNEILL | Defendant |
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MAGISTRATE: | Magistrate T.W. Greenway |
WHERE HELD: | Melbourne (Online Magistrates’ Court) |
DATE OF HEARING: | 14-15 February 2022 |
DATE OF DECISION: | 23 February 2022 |
CASE MAY BE CITED AS: | Raidstudio Pty Ltd v McNeill |
MEDIUM NEUTRAL CITATION: | [2022] VMC 4 |
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BREACH OF CONTRACT – Right of architect to reasonable access to photograph project – Equitable damages.
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APPEARANCES: | COUNSEL | SOLICITORS |
| For the Plaintiff | Mr T. Sowden | Taurus Legal Management |
| For the Defendant | Mr G. Mukherji | Media Arts Lawyers |
HIS HONOUR:
Introduction
The Plaintiff, Raidstudio Pty Ltd (Raidstudio), conducts an architecture business.
The Defendant, Mr Richard McNeill (McNeill), is the owner of 108 St Georges Road, Toorak, Victoria 3142 (Property).
By agreement[1], McNeill retained Raidstudio to provide architectural and project management services for the renovation and construction of a house located on the Property (Agreement).
[1]Dated 31 January 2014; Exhibit P3.
The existence of the Agreement and its terms are common ground. Relevantly, McNeill was the Client and Raidstudio[2] the Architect. The project was defined:
The project scope, its location and the extent of work which requires architectural services are as follows:
108 St Georges Road, Toorak, Victoria, 3142. Alterations & additions to existing dwelling & associated site & landscaping[3].
[2]Raidstudio’s former name was Ruljancich Architecture & Interior Design Pty Ltd.
[3]Exhibit P3, page 1.
McNeill moved into the house on the Property on or around 21 June 2019. Practical completion of the building works was achieved on or around 1 August 2019.
There is no dispute between the parties regarding the architectural services provided by Raidstudio. Rather, the controversy relates to a clause granting an obligation on McNeill to provide reasonable access to Raidstudio to photograph or otherwise record the project before or after its completion.
Between September 2019 and January 2020, Raidstudio made several written requests for McNeill to provide access to the Property to conduct a photoshoot. Raidstudio relies on the following clauses of the Agreement to assert its right of access to take photographs:
I.Client Obligations
The Client must
(a) allow the architect reasonable access to photograph or otherwise record the project before or after completion (clause I(g)); and
(b) allow the architect to publicise the project for marketing purposes unless agreed otherwise (clause I(h)).
On Raidstudio’s case, McNeill did not provide reasonable access.
In response, McNeill submits that the parties entered a second agreement in or around May 2016, where Raidstudio agreed to the following:
(a) the copyright in any photographs of the Property, taken during its construction, or after completion, would be assigned to McNeill; and
(b) McNeill would licence the use of any photographs of the Property to Mr Nicholas Ruljancich (Ruljancich), director of Raidstudio, for use on his business website and for his business’ marketing and promotional purposes.
(Copyright Agreement[4])
[4]Amended Defence dated 24 April 2020 at paragraph 4A.
The Copyright Agreement was said to have been agreed in conversations between McNeill and Ruljancich in May 2016.
McNeill says he has not denied access under clause I(g), as he has no objection to grant access to Raidstudio to take photographs on the terms of the Copyright Agreement[5]. McNeill does not object to photographs of the Property being used to market Raidstudio’s business.
[5]Defendant’s Outline of closing submissions at paragraph [6].
Alternatively, if the Copyright Agreement was not established, McNeill submitted that the question was whether it was reasonable (under cl I(g)) for McNeill to require assignment of the copyright of any photographs taken of his house by a third-party photographer, as a condition to granting access to the property to take photographs[6].
[6]Ibid at paragraph [9].
Raidstudio denies the Copyright Agreement. It says further that the conversations alleged by McNeill in May 2016 do not amount to a concluded agreement[7].
[7]Plaintiff’s Outline of Submissions at [4].
Raidstudio also submits that, as a matter of construction, clause I(g) permits it to engage a photographer as its agent and does not require copyright in any photographs taken to be transferred/assigned to McNeill.
By its Amended Complaint dated 29 March 2021, Raidstudio alleges that McNeill is in breach of clause I(g) of the Agreement by failing to provide reasonable access.
At paragraph [18] of the Amended Complaint, Raidstudio initially sought an order for specific performance of clause I(g). However, in its closing submissions, Raidstudio pointed to difficulties with an order for specific performance. First, such an order would require some degree of continued cooperation between the parties and/or court supervision. Secondly, it was unclear how any such order would be framed with sufficient clarity to avoid further disputes in the future.
In those circumstances, Raidstudio submitted that it was entitled to damages in lieu of specific performance pursuant to s 38 of the Supreme Court Act 1986 (Vic). The damages claimed were $66,742.50, being the cost of obtaining computer generated, photo-realistic visual representations of the Project for marketing purposes.
Accordingly, the parties submitted the following issues for determination:
(a)Did the alleged conversation as pleaded in paragraph 4A of the Amended Notice of Defence between Ruljancich of Raidstudio and McNeill (Alleged Conversation) occur;
(b)Is the Alleged Conversation capable of giving rise to the Copyright Agreement alleged in paragraph 4A of the Amended Defence;
(c)Whether McNeill is in breach of clause I(g) of the Agreement by not providing Raidstudio reasonable access to photograph or otherwise record the project before or after completion; and
(d)If so, is Raidstudio entitled to damages in the sum of $66,742.50 for breach of clause I(g) of the Agreement.
Did the Alleged Conversation occur?
Events leading up to the Alleged Conversation
McNeill first met Ruljancich approximately 17 years ago and they became friends. In 2009, McNeill retained Ruljancich for the design of a property in Myrtleford. The job took about 12 months to complete, and McNeill was happy with the renovation.
As the Myrtleford renovation went well, McNeill decided to use Ruljancich again for the renovation of his house in Toorak.
On or about 20 April 2015, McNeill received a call from Ruljancich asking if he could take pictures of the Myrtleford property. McNeill responded that would not be a problem. Copyright was not mentioned.
McNeill’s evidence was that he regularly had dealings with photographers as part of his live music promotion business. In his business, McNeill always arranges the copyright in photographs taken to be assigned to the relevant artist or his business[8].
[8]Exhibit D10 at paragraph [16]-[17].
Based on his experience, McNeill assumed that when photographs would be taken of the Myrtleford property, he would be given the copyright to those photographs.
Having not heard back from Ruljancich about the Myrtleford photographs, McNeill asked his partner to follow up and ascertain whether they could obtain some photographs.
On 29 March 2016, Ms Amy Grevis-James, employee of Raidstudio, wrote an email[9] to McNeill and his partner advising that Country Style was interested in featuring the Myrtleford property. Regarding the Myrtleford photographs, Ms Grevis-James went on to advise that:
Unfortunately, you are not able to use the photographs by Peter Bennetts that RAIDSTUDIO had taken as a contract was signed with Peter Bennetts Studio that they would only be used for the RAIDSTUDIO website and award entries etc.
[9]Exhibit D3.
Ms Grevis-James provided an email update on 18 May 2016[10]. Amongst other things, the 18 May 2016 email stated:
Also, I’ve spoken with the photographer Peter Bennetts’ studio and they’ve told us that the arrangement was that the photos were taken under a licence agreement for RAIDSTUDIO’s website and award submission entries. Unfortunately we are not legally able to give the photos out. Peter has told us that his studio doesn’t supply photos on a secondary license basis in order to protect his artistic integrity and value of his work.
[10]Exhibit D1.
The 18 May 2016 email also advised that the Myrtleford photographs taken by Peter Bennetts’ studio had been published in the Australian Design Review magazine.
At around this time, McNeill found out that the copyright in the Myrtleford photographs was retained by the photographer. McNeill was unhappy about this because he did not want a third-party photographer having the rights to photographs of his property.
McNeill did not want a similar thing to happen in relation to photographs of the Property.
It was in this context that the Alleged Conversation was said to take place.
Events after the Alleged Conversation
The parties also relied on events occurring after the alleged formation of the Copyright Agreement.
Reference was made to Minutes of Site Meeting 18[11] between the builder, McNeill and Ruljancich. Those minutes refer to a request for photos by Mr McCurdy, landscaper with SML. The minutes recorded that McNeill would speak with SML.
[11]Exhibit D4.
By email dated 31 July 2017[12] to SML and copied to Ruljancich, McNeill advised that he did not wish to have photos taken of his house by third parties, or photos published, for privacy reasons.
[12]Exhibit D5.
It was put to Ruljancich in cross-examination that McNeill had told him the Toorak property was different, because he wanted to maintain privacy over his family home. In those circumstances, it was said that McNeill had told Ruljancich that he wanted copyright over any photos of the Toorak property because of this privacy concern.
Ruljancich’s evidence was that he was aware of McNeill’s privacy concern but that there was no discussion as to McNeill obtaining copyright in any photographs. All that McNeill requested were copies of any photographs.
In June 2019, Ruljancich engaged Mr Peter Berzanskis (Berzanskis), photographer, to take photographs inside the Toorak house. On the morning of 20 June 2019, Ruljancich and Berzanskis attended at the house, met McNeill’s partner and started to set up a photoshoot.
Ruljancich had not sought McNeill’s permission before accessing the Property, as he considered the site was in the builder’s possession and he was granted access by clause I(g) of the Agreement.
At 10:48am on 20 June 2019, Ruljancich received a telephone call from McNeill. The call lasted 7 minutes and 7 seconds[13]. McNeill said that he was not happy about the photoshoot as Ruljancich had not discussed it with him.
[13]Exhibit D7 at CB406.
McNeill gave evidence that he also told Ruljancich that he was happy for photographs to be taken but that he had to own the copyright in those photographs and know where they were to be used[14].
[14]Exhibit D10 at paragraph [36].
In cross-examination about this conversation, it was put to Ruljancich that McNeill would agree to photographs being taken but required ownership of the copyright. Ruljancich denied this and said that copyright was not discussed in the 20 June 2019 conversation.
From 10:56am, the following SMS exchange took place[15]:
[15]Exhibit P5.
McNeill: If he’s taken the pics take them but nothing published until we sinus it
“DISCUSS” it
I’m not being mean but its annoying and we didn’t chat about it and that’s not cool and I’m upset.
Ruljancich:Richie, I apologise for not consulting you first and aggregating you. We won’t publish anything without your consent. Talk later after you’ve had a chance to settle in. Nick.
McNeill: Sure
Ruljancich:Hey Richie, talking to David and he mentioned Eddie the roofer came through the other day to take photos of your house for his Instagram. I suggested David call Eddie to request your approval to do this which he has now done. Nick.
McNeill: Yep.
On 11 September 2019, Ruljancich sent an email[16] to McNeill and his partner. The email read:
Hi Lauren and Richie,
Hope you’re both well and settling into the house!
Been meaning to send you the attached contact sheet for the initial interiors photos we got taken. Let us know if you want a high-res copy/creative license. This will cost $50 (inc GST) per photo and I can send you an invoice when you let me know if you want any of the photos.
Also, we’d love to get some photos taken of the external parts of the project and some of the main internal spaces. We thought we might enter the project in the architecture awards, especially after the success of Perrett Simpson had with their concrete award! We would need to work on our award entry submission in December and wondering if maybe mid-to-late-October might be a good time for you to take the photos before you start your busy festival reasons over the summer. Is there a date / time both of you guys would be available?
Would a Saturday be a possibility – I’m teaching at Monash Uni a lot during the week these days so Saturday could be better for me if at all possible?
Thanks and talk soon
[16]Exhibit P6.
McNeill did not respond to this email.
On 17 September 2019, Ruljancich sent a follow up email[17] to McNeill. It stated:
Hi Richie and Lauren,
I write to follow up on the email regarding project photography for 108 St Georges Rd that I sent to you last Wednesday 11th September 2019.
As previously mentioned in my email, RAIDSTUDIO would like to take some photographs of the project for our records now that practical completion has been reached.
This would involve gaining access to the property one time only for approximately four hours on an agreed day during daylight hours, weather dependent. The time would be split between inside and outside. We intend to be very careful and respectful of the house and property. We can also be flexible with days between Monday to Saturday to fit in with your family’s schedule. We are also happy to only engage a photographer that can provide you with a creative license for personal use.
Could you please suggest two or three dates between late October and November that would suit yours and your family’s schedule so that we can coordinate with the availability of the photographer.
Please find reference to project photography in our agreement on page 9, under Client Obligations, Item G. Please find attached the signed copy of our agreement for your reference.
Thanks and talk soon
[17]Exhibit P7.
McNeill responded on 17 September 2019 by email[18] as follows:
Hi nick,
We haven’t finished the painters yet and it’s not ready to photograph.
Unlike last time with Myrtleford, we wont allow pics to be taken and used without our permission, and not without us receiving copies also.
And copyright in the photos must reserve with us.
I use photographers always to document and photograph our events and we always get a buyout rate and not royalty rate.
In saying that Lauren is considering a Vogue Living or some kind of magazine potentially, so we want to wait and see what happens with that, once the project is fully finished.
[18]Exhibit P8.
Following receipt of this email, Raidstudio engaged solicitors who, on 26 September 2019, wrote[19] to McNeill regarding the Agreement and to request access to photograph the project.
[19]Exhibit P9.
On 25 October 2019, McNeill responded by email[20] advising that he had been away overseas for two weeks, and he would respond next week.
[20]Exhibit D8, CB364.
On 6 November 2019, McNeill emailed[21] his response to the solicitors’ letter of 26 September 2019. It provided:
[21]Exhibit D8, CB365.
Dear all,
Sorry for the delay.
We are happy for us to share the cost of an agreed photographer for photos 50/50. They can take architectural for Nick/Melissa and general for Me/Lauren. Lauren and Mel can pre-discuss a plan so its as efficient as possible.
These will be OK for Nick to use on this website and promotional material.
We will approve and send a select few to other contractors I have said we will provide for same approved use (builder, landscaper, joiner, concreter, etc…)
The copyright will remain with us, the owners of the house.
I’ve been in Concerts and Events for 28 years and we use photographers, always. We book around 100 shooting a year. The artist and show always retain copyright, not the photographer. And in this current era of mobile phones and point-and-shoot camera quality ever increasing to almost perfect picture taking for any amateur, unfortunately the value and position of a photographer has severely diminished. We’re constantly negotiating delivered cost for photographers to shoot our events/artists where we retain copyright.
Nick and I discussed this clearly after Myrtleford house and we agreed this time around it would [sic]
November is not really great for me and Lauren, and the craziest month for my business. December 4th/5th week[end] would be ideal.
I know it’s also weather-dependant so we’re semi flexible on the date.
As for social posts etc… we haven’t done anything so not sure what you are referring to in your letter.
We’re not entering the house in any magazines or competitions etc…
On 21 November 2019, Raidstudio’s solicitors sent a further letter[22] to McNeill. The letter proposed further arrangements for taking the photographs in the week commencing 16 December 2019.
[22]Exhibit P10.
On 17 December 2019, McNeill responded by email[23] to the solicitors’ letter of 21 November 2019. He wrote:
Hey Jodie,
I will need a Release signed by the photographer and Raid Studio, clearly showing retainment of copyright in the images resides with Richard McNeill and Lauren Millay. The Release also needs to clearly state the images are only to be used on Raidstudio’s website and biographical marketing usages. Any further use requires approval.
We will require a copy of all the photo for reference, regardless. This is not negotiable and I made your client aware of this after our last Myrtleford build.
We are happy to discuss with the photographer, a cost to contribute and for any further works we may require, further contribution. My past experience tells me its cheaper to get one photographer to do multiple works than we organise separate ones.
We have been busy til now with my businesses busiest time of the year end of November, early December so the earliest we could look is mid January from Mon Jan 13th 2020.
[23]Exhibit P11.
On 18 December 2019, Raidstudio’s solicitors sent a responsive letter[24] to McNeill. The letter stated, amongst other things, that Raidstudio cannot assign copyright in photographs that remain with the photographer. It otherwise requested McNeill to provide a time and date for access in the week commencing 13 January 2020.
[24]Exhibit P12.
On 14 January 2020, McNeill emailed[25] Ruljancich directly. He wrote:
[25]Exhibit P13, CB373.
Hey nick,
Happy New year! Life’s to short to argue so I hope you had a good family Xmas and give me a call re the shoot when you get a chance.
I’ll reply to your lawyer but might be quicker and save you time/money if we get it done direct.
I don’t know why on earth you thought it was necessary to send me a lawyer but anyway that’s your money and up to you. Nothing was ever too hard to organise or agree. Was it?
Anyway. A few things holding up pics:
- undercroft wood is faded badly so I’m in the middle of a full recoat myself and it’s almost finished
- garage roof is leaking so we have a few man holes cut in ceiling un-filled whilst Bicon work on a solution for it and problem solve
- I feel the kitchen planed doors in Woodform (drawers and fridges etc…) from COS need a coat also. Very light and dry. Will do that this month
- the house outside gets pretty dusty from freeway I think so will need a good pressure clean when we’re ready.
Ruljancich replied by email to McNeill on 15 January 2020 as follows:
Hi Richie,
Happy New Year to you as well! I hope you and the family are settling in well to the house.
Thanks for your email regarding photography for St Georges Rd. We would really like to press on and get the photos taken.
The photographer has availability on Tuesday 4th or Wednesday 5th February (weather depend of course). Would one of those dates suit you? The photographer will be able to provide you with a copy of the photos taken on the day at a cost. This will provide you with a creative licence to use the photographs. Any additional copies of the photos that you would like to provide to other parties (ie. Builder or Landscaping) will require an additional licence to be purchased for that particular party’s use.
Thanks for letting me know about the four areas that need some repairs. I have spoken with the photographer and they will not affect the photos. The photography studio’s post production work on the images can fix any flaws in the images.
Please let me know by Friday 17th close of business as to whether the proposed dates in February are suitable.
Finally, on 22 January 2020, McNeill emailed[26] back to Ruljancich:
Sorry Nick was in my spam.
Can you organise the dates with Lauren as I am away a bit next few weeks and she will need to be around and with school going back, would need to have her on site as I won’t be able to prolly.
The photographer will need to sign a release form. And quote costs in advance first before approval to come in.
Would also want some additional ones taken probably, outside of your architectural ones.
It’s only fair David, landscaper, Pool guys, COS Joinery, roofing guys etc... all get some pics
McNeill’s Evidence
[26]Exhibit P13, CB372.
McNeill gave evidence of the Alleged Conversation as follows.
His evidence was that he spoke with Ruljancich in May 2016 about the photographs to be taken of the Toorak House. He told Ruljancich he was not happy about the copyright in the Myrtleford photographs being held by a third-party. Ruljancich replied that in his experience, it was standard practice for an architectural photographer to retain the copyright in their photographs and to licence the photographs to the person who engaged them.
McNeill informed Ruljancich that his experience was different and that in his business, it was very common for copyright in photographs to be held by the artist or event organiser. McNeill further said that he did not want to have photographs taken of his house in Toorak, or for the copyright in any photographs to belong to a third party. The copyright in any photographs taken was to be assigned to him.
In response, Ruljancich said that this was unusual, but he would look into it to see if that could be arranged.
McNeill informed Ruljancich that the house in Toorak was not like the Myrtleford house as he would live in the Toorak house, whereas the Myrtleford was a holiday house. Because of this, McNeill wanted to ensure his privacy.
Finally, McNeill told Ruljancich that it was not going to work like the Myrtleford property. Ruljancich said ‘no problem’ and that it would be ‘ok’.
In cross-examination, McNeill was taken to the SMS messages of 20 to 24 June 2019[27]. It was put to McNeill that he had allowed the 20 June 2019 photoshoot without referring to the Copyright Agreement.
[27]Exhibit P5.
McNeill agreed that he had not mentioned the Copyright Agreement in the SMS messages but had mentioned it to Ruljancich in the 7:07 conversation on 20 June 2019.
It was also put that McNeill did not insist on obtaining copyright to the June 2019 photographs, in accordance with the Copyright Agreement. McNeill agreed that he never made any written demand in relation to the June 2019 photographs. However, he said he had demanded the copyright on the phone, adding not everything was on email and there were discussions at various times.
When asked whether he ever obtained the copyright to the June 2019 photographs, McNeill said he didn’t require it because he trusted Ruljancich’s SMS message that he wouldn’t publish anything without his consent.
Ruljancich
Ruljancich’s evidence regarding the Alleged Conversation was as follows.
His evidence was that the project at the Property was the largest project Raidstudio had completed, both in terms of time and fees. Construction commenced in approximately June 2015 and reached practical completion on or around 1 August 2019.
He denied that there was a conversation with McNeill in or around May 2016 where he agreed to assign copyright in the photographs of the Toorak house. He stated that when Raidstudio had engaged photographers in the past, the copyright in the photographs remained with the photographer. Raidstudio would then enter an agreement to licence the photographs from the photographer.
Given this past experience, Ruljancich believed that Raidstudio did not have the right or power to provide any copyright in photographs taken by a third-party photographer.
In cross-examination, Ruljancich denied that he had discussed the transfer and/or assignment of copyright of the photographs for the Toorak house. His evidence was that copyright was never discussed with McNeill and that the first time it was mentioned was in McNeill’s email on 17 September 2019.
His evidence was that in a later conversation around August 2017, McNeill had been interested to obtain copies of the photographs.
Determination
McNeill submits that the Court should find in favour of the Alleged Conversation taking place and that the Copyright Agreement was a concluded agreement. He submits that:
(a)based on his Myrtleford experience, McNeill was left in the position where, unbeknownst to him, a third-party photographer held all control over how the photographs were to be used and would not provide him with a copy;
(b)he was concerned about his privacy and wanted to control what use was made of the photographs taken of his family home. He explained that the photographs of the Toorak home were to be treated differently from the Myrtleford photographs;
(c)his concern for privacy was further demonstrated by his email correspondence. The Court should therefore conclude that McNeill informed Ruljancich that he required copyright of the photographs;
(d)the Court should consider the parties’ conduct after the Alleged Conversation/Copyright Agreement on the question of whether any agreement existed; and
(e)the 20 June 2019 telephone conversation, supported by the SMS messages were evidence that the parties were discussing issues such as control of photographs, permission, or what notice was to be given. They also supported Ruljancich’s acknowledgment that he had failed to comply with the requests that McNeill had previously made and were consistent with paragraph 36 of McNeill’s witness statement.
Raidstudio denied the Alleged Conversation and Copyright Agreement. It submitted that:
(a)there was no evidence that McNeill attempted to enforce the Copyright Agreement by insisting on an assignment of the copyright of the June 2019 photographs;
(b)in imposing conditions for a right of access to the premises, McNeill wrote on 6 November 2019 and 17 December 2019 that the photographer would be required to assign his or her copyright before the photographs were taken to the point of seeking a release before permission was granted;
(c)if the Copyright Agreement had been put in place, McNeill would have been obliged to grant access, allow the shoot and then insist on the assignment of copyright in the photographs;
(d)finally, McNeill sought to impose other conditions (such as the joint engagement of a photographer who would take photographs for everyone and restrictions on the right to market the images (excluding competitions and limiting use to biographical marketing)) that conflict with clause 1(h) of the agreement and have no origin in the Agreement or Copyright Agreement.
As the party advancing the Copyright Agreement, McNeill bears the onus to establish it. I accept that both parties were endeavouring to give evidence to be the best of their recollection. I note that the Alleged Conversation was said to take place approximately six (6) years ago, in May 2016.
For the following reasons, I prefer the evidence of Ruljancich and am not satisfied that the Alleged Conversation took place.
First, the timing of the conversation in May 2016 was approximately one (1) year into construction of the Toorak House. It would be unusual to have a conversation about photographs at this stage of construction. The works reached completion on 1 August 2019.
The catalyst for the Copyright Agreement was said to be the 29 March 2016 and 18 May 2016 emails from Ms Grevis-James. Both emails concern whether McNeill and his partner could obtain copies of the Myrtleford photographs. They did not refer to copyright.
The 29 March 2016 email stated that because of the terms of the contract with the photographer, the Myrtleford Photographs could not be used other than by Raidstudio.
The 18 May 2016 email advised that Raidstudio was unable to provide copies of the Myrtleford photographs to McNeill and his partner, as it was taken under a licence agreement for Raidstudio’s website and award submission entries.
Secondly, when the dispute surrounding the 20 June 2019 photographs occurred, McNeill made no reference to the Alleged Conversation or Copyright Agreement in the SMS messages.
I do not accept that copyright was discussed in the 20 June 2019 conversation. I consider the SMS messages to be more reliable evidence. The concern expressed by McNeill in the SMS messages is that there had been no prior discussion about the photographs being taken or how they would be published.
In the SMS messages, Ruljancich apologised for not consulting McNeill regarding the 20 June 2019 photographs. He advised that he would not publish anything without McNeill’s consent. Ruljancich also did not refer to copyright.
The SMS messages of 24 June 2019 record that Ruljancich wanted to ‘clear the air’ about the project photography and that he didn’t want to be ‘offside’ with McNeill. McNeill responded, ‘all good’ and ‘no hard feelings’. Had copyright been an issue, it is likely it would have been some reference to it or the Alleged Conversation in the SMS messages.
Thirdly, Ruljancich’s email of 11 September 2019 also does not refer to copyright of photographs. It was written at a time when the parties had supposedly resolved the issues of June 2019 photographs (such as copyright) and were still on good terms. Like the earlier emails in 2016, the 11 September 2019 email is about providing McNeill and his partner copies of photographs and/or a creative licence to use the photographs. I consider that had copyright been an issue, there would have been a reference to it in the 11 September 2019 email.
Fourthly, the first-time McNeill mentions copyright in writing is his email response of 17 September 2019. However, that email does not mention any prior discussion or agreement with Ruljancich regarding copyright. On the contrary, the email is expressed in the present tense:
“Unlike last time with Myrtleford, we won’t [will not] allow pics to be taken and used without our permission and not without us receiving copies also. And copyright must reserve with us.”
I find that the first time copyright of Toorak photographs was mentioned by McNeill was in the 17 September 2019 email.
Fifthly, through his email responses to Raidstudio’s solicitors, McNeill purports to change the terms of the Copyright Agreement. The email of 6 November 2019 does not simply state that McNeill and Ruljancich had agreed on the Copyright Agreement, and it should be enforced. The email refers to the following additional matters:
(a)sharing the cost of an agreed photographer;
(b)photographs would be taken for McNeill, his partner and other contractors; and
(c)that the copyright will remain with McNeill and his partner.
McNeill’s email response of 17 December 2019 also refers to a release. In that email, McNeill requires:
(a)a release signed by the photographer and Raid Studio, clearly showing retainment of copyright in the images resides with Richard McNeill and his partner; and
(b)the release must clearly state the images are only to be used on Raidstudio’s website and biographical marketing usages. Any further use requires approval.
The fact that McNeill raises these additional matters also tend against the Alleged Conversation taking place.
In all of the circumstances, I am not satisfied that the Alleged Conversation took place as alleged by McNeill.
Is the Alleged Conversation capable of giving rise to the Copyright Agreement alleged in paragraph 4A of the Amended Defence?
Although it is not strictly necessary to determine this question, as the parties made submissions on the issue I will briefly address it.
Whether a contract has been concluded depends upon the intention of the parties objectively determined from the dealings that are said to give rise to the contract.
For the following reasons, I consider that the Alleged Conversation was not capable of giving rise to a concluded agreement.
The details of the Alleged Conversation as stated by McNeill are set out above.
In response to McNeill stating that he wanted copyright in the Toorak photographs, Ruljancich said it was unusual, but he would ‘look into it’ to see if that could be arranged.
Importantly, Ruljancich’s response was inconclusive and suggested that he would make further enquiries. Objectively considered, there was no meeting of the minds on the copyright issue at this time.
When McNeill said to Ruljancich that he wanted to ensure his privacy and the Toorak photographs were not going to work like Myrtleford, Ruljancich said ‘no problem and that it would be ok’.
I consider Ruljancich’s reply to be largely equivocal. When considered in light of Ruljancich’s comments that he would ‘look into’ the copyright, it is not clear what would be ‘no problem’ and ‘ok’.
Secondly, I consider the Copyright Agreement constitutes a variation to the Agreement that is unsupported by consideration. By clause I(g), Raidstudio was already granted a right of access to the Property to take photographs. In my opinion, McNeill has not provided any consideration to support a promise by Raidstudio that it would arrange for the transfer of any copyright in the Toorak photographs.
Whether McNeill is in breach of clause I(g) of the Agreement by not providing Raidstudio reasonable access to photograph or otherwise record the project before or after completion.
McNeill submits that clause I(g) of the Agreement should be interpreted as requiring the copyright of any photographs taken by a third-party photographer to be assigned/transferred to him.
It was submitted that clause I(g) requires reasonable access only be given to Raidstudio itself to take photographs, and that such access did not extend to a third-party photographer. However, in circumstances where a third-party photographer did take the photographs, clause I(g) required that McNeill obtain copyright in those photographs as a condition of reasonable access. This, it was submitted, was the only way that McNeill could ensure his privacy and control photographs of his home.
Raidstudio submitted that the word ‘reasonable’ qualifies the term ‘access’. To construe a right to ‘reasonable access’ as including a right to an assignment of copyright in photographs would be unreasonable. As the copyright would ordinarily reside with the photographer, it was not clear how an assignment could be achieved without rendering clause I(g) otiose.
Further, Raidstudio submitted that the right to take photographs was not constrained. As clause I(g) was a clause for the benefit of Raidstudio as architect, it should be construed with this in mind.
Finally, it was submitted that the Agreement made no reference to copyright in the photographs.
The rights and liabilities of parties under a provision of a contract are determined objectively. In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purposes or object to be secured by the contract[28].
[28]Mount Bruce v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [47].
Unless a contract intention is indicated in the contract, a Court is entitled to approach the task of giving a commercial contract an interpretation on the assumption ‘that the parties…intended to produce a commercial result’. Put another way, a commercial contract should be construed so as to avoid it ‘making commercial nonsense or working commercial inconvenience’[29].
[29]Ibid at [51].
In my opinion, the interpretation advanced by McNeill should not be accepted.
First, I do not consider that the architect’s right to access and take photographs is limited to the architect personally. A commercial interpretation of clause I(g) requires that, in the absence of an express limitation, an architect is permitted to engage a third-party photographer as its agent.
What is ‘reasonable access to photograph or otherwise record’ is plainly a matter of interpretation. The heading of clause I “Client Obligations” suggests that clause I(g) is for the architect’s benefit.
Other than granting permission, the Agreement does not directly address the issue of the photographs taken under clause I(g). There are no clauses in the Agreement concerning the ownership or copyright of the photographs. Nor does any provision of the Agreement compel the architect to transfer/assign the copyright in any photographs taken to the client.
Clause I(h) provides that the Client must allow the architect to publicise the project for marketing purposes, unless otherwise agreed. In other words, the architect is permitted by the client to attend and take photographs of the relevant project and use them as part of marketing their business.
I do not accept that the word ‘reasonable operates’ to require copyright in photographs taken by a third-party photographer to be transferred/assigned to the Client, or that a transfer of copyright operated as a condition of access. Such an interpretation reads too much into the word ‘reasonable’, where the clause itself does not deal with copyright or ownership of the photographs.
In my opinion, clause I(g) does not displace the general rule that copyright in a photograph resides with the photographer, absent agreement.
As copyright in photographs usually resides with the photographer, an architect could not compel the photographer to transfer copyright. Plainly, a third-party photographer is not bound by the Agreement. The interpretation advanced by McNeill would mandate that an architect only engage a photographer who would transfer copyright to the Client. I do not consider such a constraint operates on clause I(g).
Accordingly, I find that the condition imposed upon Raidstudio’s access by McNeill was not justified by the operation of clause I(g) and McNeill has therefore breached clause I(g).
Is Raidstudio entitled to damages in lieu of $66,742.50 for breach of clause I(g) of the Agreement
The Magistrates’ Court has jurisdiction to hear and determine any claim for damage or equitable relief if the value of the damages or the relief sought is within the jurisdictional limit of the Court[30].
[30]Section 100 of the Magistrates Court Act 1989.
As stated above, Raidstudio submitted that it was entitled to damages in lieu of specific performance pursuant to s 38 of the Supreme Court Act 1986 (Vic)[31]. Raidstudio essentially submitted that a grant of specific performance was open to the Court, but the discretionary considerations tended against the order.
[31]Applicable in the Magistrates’ Court by virtue of s 23 of the Supreme Court Act 1986.
Those matters included a degree of co-operation between the parties in organising access to the Property and taking photographs, given McNeill had been living in the house in excess of two years. In addition, Raidstudio submitted that, in the circumstances, such an order could not be expressed with sufficient certainty to inform McNeill what he was required to do.
McNeill submitted that given the election made, the question before the Court was confined to whether the damages claimed flowed from the alleged breach of clause I(g).
Should it be necessary, I consider the Court has jurisdiction to order specific performance of clause I(g) in the circumstances but accept that the discretionary considerations cited above tend against the order.
In particular, the parties have been in protracted litigation for approximately two years and have been unable to agree on the terms of access. Further, the project is McNeill’s family home and therefore privacy is an important consideration. I accept that it would be difficult to draft an order with sufficient particularity to balance McNeill’s privacy and Raidstudio’s right of access to take photographs of the project.
Equitable damages are provided by Section 38 of the Supreme Court Act 1986 (Vic):
If the Court has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to, or in substitution for, an injunction or specific performance.
Raidstudio claimed damages in the sum of $66,742.50. The damages related to the cost of obtaining computer generated, photo-realistic visual representations of the Project for marketing purposes.
McNeill submitted that the damages claimed were not relevant to Raidstudio’s pleaded case as:
(a)the visualisation costs have not been incurred so they are not a damage that has been suffered;
(b)the Agreement does not provide for McNeill to cover the cost of the photographs under clause I(g) but rather granted reasonable access to take photographs;
(c)there was no evidence before the Court which describes the cost to the plaintiff for photographs in the ordinary course. The Court should not guess at the amount to be awarded;
(d)Raidstudio would obtain the copyright of the 3-dimensional visualisations but would not have obtained copyright in photographs.
To support its damages claim, Raidstudio relied upon a quotation[32] issued by Mr Daniel Flood (Flood) director of FloodSlicer Pty Ltd. Flood describes himself as an architect who delivers visualisation of buildings in a 3 dimensional, virtual way. He uses a combination of photography and rendering, considering the plans of the building. He has been in the business of 3-dimensional modelling since 2000.
[32]Exhibit P15.
Flood described the end-product of the quotation as a photo-real outcome providing 3-dimensional modelling of six (6) exterior and six (6) internal spaces. As to the quantum of the quotation, Flood described it as average for the industry and said no follow-up quote was required.
In his experience, the only major variable on price was whether there were duplicates of same room, such that the second space would take less time to render. When asked about the ‘TBC’ next to notation IN01-IN06 Interior Render, Flood said that this was common because additional matters would require discussion and confirmation. He described these as variation costs. However, in his experience, the variations did not substantially alter the final price for the work.
McNeill submitted that the Flood visualisation costs were ill founded.
As stated above, clause I(g) provided Raidstudio with a right of access to photograph the project. The Agreement plainly intended that Raidstudio would obtain photographs for use in marketing its business.
Given the importance of the photographs to Raidstudio’s business, I am satisfied that the FloodSlicer quotation for 3-dimensional rendering is the closest method of recreating the photographs that Raidstudio has not obtained.
The purpose of an award of damages is to place the innocent party, so far as money can do so, in the same position as if the contract had been performed – if Raidstudio had been granted access to photograph to project.
Accordingly, the fact that Raidstudio has not yet incurred the FloodSlicer does not alter its right to damages.
However, McNeill was not obliged to cover the cost of obtaining the photographs under the Agreement.
I do not accept McNeill’s submission that there is no evidence of the ordinary cost of photography to Raidstudio. Ruljancich gave evidence that Raidstudio wanted to engage Peter Bennetts to take the Toorak photographs. Raidstudio would meet that cost in full[33].
[33]Exhibit P10.
Peter Bennetts’ standard terms[34] were:
(a)$4,658.50 (inc GST) for a full day architectural and interior photography shoot, producing up to 30 final images;
(b)$2,964.50 (inc GST) for a half day architectural and interior photography shoot, producing up to 15 final images; and
(c)Permission to Raidstudio to use the photographs for all their own direct purposes but not to extend that usage to a third party without referring them to the photographer to negotiate specific image licences or reproduction fees.
[34]Exhibit P13.
Peter Bennetts suggested a full day shoot[35]. However, in the 17 September 2019 Ruljancich advised McNeill that the photoshoot ‘would involve gaining access to the Property one time only for approximately four hours… the timing would be split between inside and outside’.
[35]Ibid.
In accordance with the 17 September 2019 email, I find that the cost to Raidstudio for the photographs was $2,964.50 (inc GST), being the costs of a half day photoshoot with Peter Bennetts Studio.
In the circumstances, I find the loss suffered by Raidstudio to be $63,778, being the difference between the cost of the photographs Raidstudio would have obtained and the FloodSlicer visualisation costs.
I will hear the parties on costs.
MAGISTRATE GREENWAY
23 FEBRUARY 2022
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