Real Estate Tool Box Pty Ltd & Ors v Campaigntrack Pty Ltd & Anor

[2023] HCATrans 96

[2023] HCATrans 096

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S16 of 2023

B e t w e e n -

REAL ESTATE TOOL BOX PTY LTD ACN 614 827 379

First Appellant

BIGGIN & SCOTT PTY LTD ACN 072 450 689

Second Appellant

DREAM DESK PTY LTD ACN 604 719 735

Third Appellant

JONATHAN MICHAEL MEISSNER

Fourth Appellant

PAUL GEOFFREY STONER

Fifth Appellant

MICHELLE BARTELS

Sixth Appellant

and

CAMPAIGNTRACK PTY LTD ACN 142 537 988

First Respondent

DAVID SEMMENS

Second Respondent

GAGELER J
GORDON J
EDELMAN J
STEWARD J
JAGOT J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 1 AUGUST 2023, AT 10.00 AM

Copyright in the High Court of Australia

____________________

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friends MR H.P.T. BEVAN, SC and MS J.E. McKENZIE for the appellants.  (instructed by Mills Oakley)

MR M. GREEN, SC:   If the Court please, I appear with MR W.H. WU for the first respondent.  (instructed by McLean & Associates Solicitors)

GAGELER J:   I note that there is no appearance for the second respondent.  Mr Walker, you have, I think, an application to amend your notice of appeal, which I believe is not opposed.

MR WALKER:   Yes, your Honour.

MR GREEN:   It is not opposed, your Honour.

GAGELER J:   You have the orders that you seek in that application.

MR WALKER:   If it please the Court.  Your Honours, the absent second respondent, Mr Semmens, a contractor to Real Estate Tool Box, the first appellant, which is under the control of Mr Meissner, the fourth appellant, had infringed – excuse me, your Honours.

GORDON J:   I do not think it is RETB, I think it is DDPL.

MR WALKER:   I am sorry.  Yes.  So, RETB comes in later.  I am going to come to DreamDesk.  DreamDesk, under the control of Mr Meissner, had repeatedly infringed, it turns out, by findings which are not challenged on the appeal below or here, in carrying out work to produce a rival to the DreamDesk application available to real estate franchisees and had done so, in particular, by infringing use of a third‑party work in which there was copyright in such a way as to produce a concerted response by our clients as and when the occasion arose to make it appropriate so as to prohibit him from doing that in any future task for which he was engaged.

As the facts – to which I am about to turn, in summary – show, his engagement in the midst of the commercial context to which I am about to come concerning the commercialisation of software to assist real estate agents in their publicity efforts involved, it eventually turns out, again repeated infringements.  By the time that occurred in the way which I am about to summarise, the respondents were those entitled to feel aggrieved and legally to assert the rights flowing from those infringements.

Up until what now turns out by, we submit, artificial re‑engineering of the claim in the Full Court, up until the witching hour of 29 September 2016, there was no case of authorisation according to all the judgments below.  That has implications, we submit, for the finding which we suffered by majority in the Full Court which said that from 29 September until there was ceased to be used the Toolbox application – almost 18 months later – there was authorisation by us of those infringements.  In our submission, the effect of that finding by majority, which does not depart from any of the primary facts to which I am about to come, is one which has completely unmoored the notion of authorisation required by section 36 liability.

EDELMAN J:   Unmoored it from what?

MR WALKER:   The central meaning – the core concept of authorising ‑ ‑ ‑

EDELMAN J:   Part of the difficulty is that the core concept of authority is a primary liability.  It is an attribution of acts to somebody, because they are so sufficiently associated that the acts become their own.  It has never been moored to that.  I mean, very early in the development of the concept it developed also into a parallel doctrine which is, effectively, derivative liability.

MR WALKER:   Yes.  It is a species of derivative liability without question.  I accept that entirely.  It is, in particular, not a form of principle agent relation, let alone with a third party who makes a claim.  I entirely accept all of that.  However, authorisation for the purposes of that specific form of statutory derivative liability has, as this Court said, in our submission, emphatically, in iiNet, a core meaning, which has not been departed from – from the partial and case‑by‑case explanations by way of forms of paraphrase – of that core concept.

We submit at the outset that which throws up likely basal error of a kind that we sought to identify in the majority starts with the fact, historically, between these parties that the people now held by majority to have authorised are those who, among them, in their dealings with the wrongdoer, Mr Semmens, forbad him to do any such thing, and not insincerely, who repeated that, and not by any conspiratorial obfuscation of the truth.  That is why, in our submission, as we have suggested with great respect, Justice Cheeseman, in exercising the appellate jurisdiction below, correctly proceeded on the basis of facts which the majority did, of course, accept, but which, in our submission, they wrongly treated as not concluding the issue in favour of us below in the same way, or at least with the same outcome, as the learned trial judge had produced.

GORDON J:   Justice Cheeseman, in her judgement, addressed primarily two aspects which I would be grateful for your views on.  The first is that which you have just identified, and the second is really a procedural question, and that is where one seeks to attribute knowledge or ought to have known sufficient to give rise to an inference being drawn of authorisation – which is really the way in which the legal analysis goes – her Honour expressed disquiet in the way in which that conclusion had been drawn, given that none of the matters post‑29 September had been put directly to either of Stoner, Bartels, Meissner.

MR WALKER:   Yes.  Apprehending, in particular, that failure to point to sufficient confrontation is what your Honour means by a procedural matter.  Can I take that up immediately?  It is true, as we have peppered throughout our written submission, and as all three judges in the Full Court below – but particularly Justice Cheeseman, in support of her conclusion – point out, there were omissions, or at least absences in the confrontation of the important party witnesses – to whom reference has been made – of elements of both their alleged state of mind at critical times and also, in particular, their degree of knowledge and their genuineness of trust with respect to Mr Semmens after the event, plainly accepted delinquencies.

In our submission, for the reasons that can be shown by an examination of Justice McElwaine’s reasoning, there is error measured against what is called for by the statutory concept of authorisation in treating the conduct of those persons who, up until 29 September, were not authorising – were not within a bull’s roar of authorising – of treating what happened thereafter as capable of altering that when – not just especially when, but when there was no forensic exploration including what fairness required by way of confrontation of those persons concerning what are said to be implications coming from the so‑called “undertakings correspondence” which commenced on 29 September.

As your Honours know, the majority criticised the trial judge for not dealing with that matter.  In a nutshell, we say, of course he dealt with that matter according to the way in which the case was presented before him, mostly, as your Honours know, unsuccessfully, and mostly in ways – very serious grave ways in terms of the allegations against our clients – which were not revived with any success in the Full Court.  So, in our submission, that which must be called for in order that the conduct be authorisation within the meaning of the statute, keeping a core or central notion live as an informing criterion of liability, in our submission, the failure to pursue those matters, even to raise most of them with witnesses in cross‑examination, precluded the re‑engineering of the case which occurred in the majority reasoning.

GAGELER J:   Mr Walker, is this really a Browne v Dunn point or is it really a broader point; that it is saying that the authorisation case upon which issue was joined before the trial judge did not distinguish between pre‑29 September and post‑29 September?  Is that what is being said?

MR WALKER:   It is certainly the latter.  Of course, there is an element of Browne v Dunn, but this is, if I may use the language, no mere Browne v Dunn point.  As to be fair, the majority made clear there is no demur in the majority to the effect that the forensic course below and the acceptance by his Honour of various vital pieces of evidence from our side, under cross‑examination in particular, there was no demur by the majority that led to a plain, not borderline, state of no authorisation up to 29 September, so that 29 September is, as I say, the witching hour; it making a difference.  Which difference is not discernible in the way in which the case was put below.  The way in which the case put below in particular – below at trial ‑ ‑ ‑

GORDON J:   Do you mean before the trial judge?

MR WALKER:   At trial.

GORDON J:   Thank you.

MR WALKER:   I am so sorry.

GORDON J:   That is all right.

MR WALKER:   Everything is below here, your Honours.

GORDON J:   That is why I am asking.

MR WALKER:   I mean, at first instance, when findings of fact are being made, and then when courts can evaluate – judges, trial judges, can evaluate how people respond to testing suggestions that they have been dishonest, corrupt, et cetera.

GORDON J:   Were there submissions put about post‑29 September conduct giving rise to authorisation before the trial judge?

MR WALKER:   In general terms, yes, of course, because there was a sweep of a narrative – what milestones there were in that course and where they were said to be critical, that is transformed in the way the case is now attempted to be vindicated here compared to how it was done at trial.  In particular, what failed at trial, signally, we submit, for how it should have been dealt with, à la Justice Cheeseman’s approach in the Full Court below, significantly there was an allegation of out‑and‑out corrupt dissimulation concerning an attempt to get out from under the commercial power that the DreamDesk new proprietor was wielding, or was feared to be wielding, against the Biggin & Scott franchise operation and, in particular, the cost of the advertising application.

It comes about in this fashion.  At first instance, 29 September was, of course – given the way in which that unsuccessful case was pressed – was not treated as the turning point, was not treated as a time and circumstances which altered lack of authorisation to authorisation.  Of course, we are all familiar with alternatives and fallbacks and cases which can properly – in an appeal by way of rehearing – be cobbled together from the rubble of one’s first instance failure.  So long as the usual matters are observed, justice can be done – the real issues can be decided in an appeal by way of rehearing from, as I say, other components.  We have no difficulty with that as a matter of judicial method.  We are not complaining about a failure to entertain an amendment application, for example, in the Full Court below.

Rather, we say as a matter of the factual findings, and always with a view to what authorisation means and properly understood, there was, in our submission, no such effect as the majority – particularly of Justice McElwaine, agreed in by Justice Greenwood – ascribe to the events starting on September 29.  Now, could I, at that point, particularly given Justice Gageler’s question to me, point this out, that the conclusion in the Full Court is that authorisation commences on – and indeed, the judges used the expression:

on and from 29 September –

Now, we are not quibbling about a day or so for receipt and consideration of a letter.  Treating for convenience, 29 September, the notion is that there is a period of authorisation with the consequential liability by franchisees, uses, et cetera, from 29 September.  There is, as your Honours know, absolutely no exploration, not least because there was no construction of this, factually, by our friends at trial.  There was no counterfactual, as it were, ever essayed by the Full Court.  This falls within the notion of the areas unavailable for exploration in an appeal by way of rehearing, given the findings of fact which were not disturbed, as explained by Justice Cheeseman, to which I will come back.

EDELMAN J:   It is a little odd to talk of counterfactuals in the context of derivative liability.

MR WALKER:   Can I explain what I mean?  If one is talking about reasonable steps, if one is talking about knowledge, then one of the ways in which to test both of those is to ask what should have been done to be reasonable where what was done was not, and what possible difference could that have made, because that informs objectively a reasonableness understanding.

GORDON J:   Is that a Coulton v Holcombe point?

MR WALKER:   In a sense the whole of this case with respect to what we submit is the artificial re-engineering of a case to hinge on 29 September, is a Coulton v Holcombe point, but only rhetorically, your Honour.  We have not framed in that fashion; we do not challenge that very plain observation by Justice Greenwood at the outset of his reasons, which records that all three members of the Full Court below considered – after this was argued below – that the case that they entertained was open to be entertained in an appeal by way of rehearing.

GORDON J:   One of the things that I also would like your views on is related to this.  In the respondent’s submissions they say that when one is looking at this question of acts, and when one is looking to determine what the things are that might constitute the facts giving rise to the inference of authorisation, it is both an objective and subjective inquiry.  It is repeated, I think, in your outline of oral argument at paragraph 3.  And that, in effect, is really one of the first questions:  what is it that we are actually looking for, and why?

MR WALKER:   Respectfully, that is a question not just at the heart of the matter, but it encompasses, really, the whole of the matter – and so, my answer crosses a number of different steps in my reasoning.  I am happy to deal with it right now.

GORDON J:   Please come to it when you come to it but, really, it does inform the things that you can look at and also this question about the way in which the case was conducted and what was put and not put.

MR WALKER:   Yes.  We do not understand that the argument against us that is in this Court by enlisting the epithet “objective” is said to render of no moment, and certainly of no assistance to us, the undisturbed findings of actual trust and actual ignorance at least up to 29 September upon which our position depended.  And I do not suggest that 29 September had any particular significance at trial, it did not.

But certainly, with respect to the way in which the case was reframed in the Full Court, emphatically those are findings in our favour.  We do not understand the argument against us to say they are immaterial; they do not matter; why did the majority bother to say – of course, we accept that up to 29 September, there is no authorisation on the basis of matters which are plainly subjective in the sense that they were actual trust, legal trusts, a rejection of the conspiratorial allegation of fraudulent dissimulation of such a state of affairs, energetically put at trial and utterly failed and not revived.

Secondly, subjectively, not knowing of the breaches which were, alas, being committed by Mr Semmens and in such a way as not immediately to be obvious.  I will come back later, of course, to what is imported objectively by the fact that we know historically it took at least two occasions of cooperative access by an expert in order for matters to be thrown up over a course of months, which would require proper forensic investigation in order to know one way or another whether there had been the delinquencies which later have been clearly found to have been committed by Mr Semmens.

When I was talking earlier about a counterfactual and pursuing this, we submit, irrelevant observation about subjective and objective, we make this point, that there is simply no basis factually and certainly no adequate confrontation of our witnesses concerning what they were meant to have done – they having recently and emphatically instructed Mr Semmens in the limits of lawful conduct he was to observe, what were they to do themselves so as to find out matters which we know took a long time for experts to establish?

It is not suggested, to be flippant, that they were there to administer truth serums.  It is not suggested that objectively – that is, regardless of the actual state of affairs – they should have been, themselves, do-it-yourself experts.  Semmens was a contractor hired because he knew more about this than the others.  He was the expert.  And, subjectively, there is, as I say, nothing in the record to show that there was an appropriate challenge permitting a court to make findings to the discredit of those witnesses about their subjective ignorance and trust changing, to their understanding of things, after and by reason of the events starting on 29 September.

That is why – yes, of course it is, as Justice Gageler asked me – ours is a complaint concerning a contrast between the way in which a differently chosen, or at least relevantly unbroken period, was used at trial, unsuccessfully, and then restructured so as to bring to light something which, as Justice Cheeseman, with great respect, cogently explains, the trial judge did not need to deal with in the way in which it was later advanced in the Full Court.

GAGELER J:   For all of that, Mr Walker, I understand your argument to be that one can take the findings of fact of the primary judge, but one cannot reason legitimately in the way that the Full Court reasoned from those primary findings to the conclusion of authorisation.

MR WALKER:   That is correct.

GAGELER J:   So, you really are criticising a central aspect of the inference process undertaken ‑ ‑ ‑

MR WALKER:   Yes, I am, that is exactly right.

GAGELER J:   ‑ ‑ ‑ and just one aspect of that is the failure to conduct a counterfactual analysis, either in that reasoning process or as a background to that reasoning process in the trial record.

MR WALKER:   Yes, and that is informed by a failure of that to have been examined, including with appropriate confrontation, in the evidence of the relevant witnesses, but they are all part of the same complaint about the error, yes.

EDELMAN J:   Suppose that the sixth appellant, the fifth appellant, and maybe even the fourth appellant had at 29 September actual knowledge, or they had something that was very close to actual knowledge – I realise that is not the finding – but would it make a difference if, counterfactually, there was nothing that they could then do to prevent any further exploitation by DreamDesk?

MR WALKER:   My answer to your Honour’s question has to start with observing, well, it rather depends upon the way in which authorisation in such a circumstance would have been put.  So far at least – and I do not think this case one way or the other would affect this – the law has not said that those who believe that another person has infringed a third party’s rights is thereby to be held to have authorised.  Many people have over the years, and in public forums, formed views and expressed them pungently concerning breaches of copyright by other people.

No one would dream of suggesting authorisation accordingly, hence the earnest attempts to gloss what is involved in authorisation with consideration now, partly at least, enacted in subsection 36(1A), with which your Honours are familiar.  But questions of knowledge and power et cetera, there is also an over‑arching question of reasonableness, reminding one of the rather colourful and no doubt dated reference by Justice Higgins to burning the house down in order to roast the pork.

Those are all matters which, in our submission, add so greatly to any putative case of authorisation.  But what Justice Edelman has put to me could not possibly stop at the idea you now know, or think you know, that there has been a delinquency – question:  how does that alter the matter about authorisation?  It really just says there is a constellation of other matters that need to be explored and findings made in order to add up to authorisation as opposed to simply the shared knowledge, of you and anybody else, of something wrong having happened.

EDELMAN J:   So, is that really then to say – perhaps similar to the way Justices Gummow and Hayne put it in Roadshow ‑ ‑ ‑

MR WALKER:   Yes.

EDELMAN J:   ‑ ‑ ‑ that there is a divide between acts and omissions or that mere knowledge or belief without any further action taken might not, by itself, be enough to amount to authorisation?

MR WALKER:   The short answer is, yes.  Their Honours, of course, do not set out to be definitive, and it must be as tentative and case specific, as Justice Edelman’s question frames it, but, yes, our argument does partake of the notion that one will not be able, as it were, to take components of the factual reasoning in previous cases or, for that matter, a worldly reading of section 36 and say, here is knowledge – tick – that is a contribution of 25 per cent of what is needed for authorisation.  It does not work that way at all.

EDELMAN J:   But what is the core that we are looking for?  Is the core the idea of sufficient involvement in the breach so that it can be said that the derivative party becomes responsible?  What is the motivating idea if we go beyond authorisation, strictly so‑called.

MR WALKER:   The case law shows that one immediately, in the familiar and always in an exact way, uses synonyms by way of explanation or paraphrase – a highly challenging technique, not just in this case, with respect.  So, the famous one with which your Honours have to grapple – I do not suggest that you do not have to construe it and you certainly should not be involved in an exegesis of non‑statutory words – the famous paraphrase by way of – they are not actually synonyms – mere synonyms – is “sanction, approve, countenance”.  You are reminded of people throwing knives at somebody pinned to a target.  How close can you get without ruining things?  Authorisation does not, in ordinary English or in this part of the law, mean, in the sense of is exhaustively to be understood as conveying “sanction, approve, countenance”, but that is the phrase that trips off the tongue.

One can approve some misdeed about which you read in the newspaper.  The notion that you thereby authorise it is just absurd.  “Sanction” is a bit more difficult because it conveys notions of what I am going to call a “legal” or “quasi‑legal” endorsement of a state of affairs and, obviously, includes another word used in other provisions:  “permit”.  So, to sanction something might be to permit it.  “Approving” may or may not permitting.

“Countenance” is, if I may say so, even less satisfactory as what might be called a hard‑edged assistance to your Honours, because one may countenance something either actively, by encouraging or directing it.  Of course, it goes without saying that if I direct somebody to do something, I countenance that they will, but it is a relatively unhelpful choice in that case.  To countenance something might also include the entirely passive notion of shrug your shoulders, I am going to leave that to the owner of the right, I am not going to do anything about this; it is not my business.  So, it might be said that purely passive refusal to be engaged might fit within countenancing, but only if one took to a degree which is, in our submission, dangerously extreme the notion that I am my brother’s keeper, particularly when it comes to my brother’s property.

STEWARD J:   Does that mean that authorisation in this statutory context really must involve a legal capacity to prevent or stop?  I mean, I might write to you and say, I authorise Mr Walker to receive this brief – but it is of no great moment because I have nothing to do with it.

MR WALKER:   No.  Your Honour is right, in all the respects.  Your Honour asked about legal, and ‑ ‑ ‑

STEWARD J:   Or practical capacity.  Practical or legal.

MR WALKER:   If you will forgive me, I do not wish to be evasive, but this is an area that requires consideration case‑by‑case.  Obviously enough, there must be some sufficient relation to legalities as not to involve or envisage the law appearing to require violent self‑help.  So, helping yourself to somebody’s laptop in order that they can no longer use something that you suspect to be stolen from another person.  There will have to be, as it were, a ground law of lawfulness in what is done within the posited power.

It goes without saying – but perhaps in this area it needs to be laboriously spelt out – and you do actually have to practically – that is, concretely and actually – be able to do something.  That lies behind what we refer to when we talk about there is no counterfactual.  It is not explored.  How would you test what was reasonable and what should have been done?  Because, as your Honours know, when an expedient is said to be that which is lacking from a defendant’s conduct so as to make it negligent or bad‑faith, et cetera, it is always, A, identified, and, B, then capable of being described in terms of what, had it been carried out, would have been the different and beneficial outcome.  That is what I mean by the counterfactual.

STEWARD J:   But that invites attention to an area which is a little bit opaque on the facts here, which is the particulars of the structure that the setup for the development and exploitation of Toolbox.  We know there is a company that is incorporated, there is a proposal to issue shares, and there is a unit trust about which we know nothing.  For example, I do not know whether Mr Meissner or DDPL were going to be unitholders in that trust.  How were they going to profit from this, if at all?  Or was it the case that they had nothing to do with it?

MR WALKER:   Those are all gaps which, in our submission, go to illustrate how what has been held against us in the Full Court did not have a forensic or factual basis from the way in which the case was run at trial and could not be cobbled together successfully.  I do not mean the attempt was out of court.  I have accepted that it was available to be argued, but it could not be successfully argued, not least because there is not an identification in the majority reasoning of what it was that should have been done.

In particular, the practical demonstration of how artificial this new case was – I stress, a case of authorisation on and from 29 September – that when one looks at the exiguous discussion of matters thereafter, including what might have been done, it emerges by implication but never by finding in the majority reasoning that it must have been sometime considerably after 29 September before one could possibly have fairly said, well, these people are authorisers.

GORDON J:   In that context, can I ask you another question?  Is it one counterfactual or two?  And I say that for this reason:  the case pleaded against DDPL and Meissner was different to that which was pleaded against Biggin & Scott. 

MR WALKER:   It is two, though there is a lot of overlap.

GORDON J:   Right.  We do not find that distinction drawn in the Full Court. 

MR WALKER:   No.  Justice, you find no distinction between 29 September and whatever other date – and, given what Justice Gordon has said, dates – might be appropriate factually with respect to each of the two groups of appellants with respect to subsequent conduct.  Take, for example, that which is held against us; namely, the eventual cessation of cooperation in technical investigation.  Eventually, we, as it were, took the risk of who was going to be right about infringement.

If that is of any relevance to authorisation, that is a long way down the track after 29 September and, obviously enough, presents the great risk in terms of weakness of reasoning for the respondents that it would appear to say that one authorises by not admitting a claim that somebody else has infringed and that simply, with respect, needs only to be stated to be rejected, bearing in mind the abusive evasion of groundless claim that would be opened up by such an approach.  It would be absurd to suppose that somebody whose only role concerns a failure to admit that there has been an infringement by somebody else is thereby an authoriser.  Justice Steward, in the appellant’s book of further materials at its page 18, the transcript page 597, between lines 25 and 33, there is ‑ ‑ ‑

GORDON J:   Sorry, what was that page, Mr Walker?

MR WALKER:   It is page 18 of the book.

GORDON J:   Thank you.

MR WALKER:   Page 597 of the transcript, and lines 25 to 33.  There is – what shall I say – not particularly informative evidence about what your Honour was raising, not altering the state of affairs much from what your Honour supposed it to be.

STEWARD J:   The reason I raise it is because in that case about the milk bar and the jukebox ‑ ‑ ‑

MR WALKER:   Yes.

STEWARD J:   ‑ ‑ ‑ Chief Justice Herring’s decision, there was detailed filings about the structure and how people were going to get money out of the exploitation of this intellectual property.

MR WALKER:   An interest – or, if I can put it more vulgarly, a motive – to, as it were, turn the Nelsonian eye, for example.  Yes.  There is none of that here ‑ ‑ ‑

STEWARD J:   I mean, I have no idea what Mr Meissner had to do with this new arrangement between Biggin & Scott and Mr Semmens ‑ ‑ ‑

MR WALKER:   If I may say so, that may very much reflect his position, bearing in mind that he had sold out.

STEWARD J:   Yes.

MR WALKER:   Yes.

STEWARD J:   Thank you for the references.

MR WALKER:   Could I just very briefly then draw together some strings from our propositions 1 and following.  Your Honours, I do not think, in light of what has fallen out over the last half‑hour, need to develop them much.  Your Honours know that the third party – aggrieved party – Process 55, its software had been, as a matter of history, misused, to use a euphemism, by Mr Semmens in putting together what was then to become DreamDesk.  Attempts to doubt the genuineness – subjective, if we really must use that dichotomy, that when both required covers the field – state of mind of Mr Meissner is gone.  Mr Meissner was sincerely shocked.  So sincerely that, as it were, steps were taken of, commercially, the utmost import.  DreamDesk, with its – what I will call – infringing Process 55 contamination could be dealt with either by all and any aggrieved owners being bought out by us or the converse, and it is the converse that happened.

So, DreamDesk was sold to Campaigntrack.  That is the familiar object that your Honours have seen time and time again of buying out the competitor:  two competing products, buy the second, tell the market you can take ours.  That was, as it were, commercially compelled because the Process 55 – that is, the aggrieved owner of rights – had been separately bought by Campaigntrack, thereby rendering Mr Meissner’s commercial decision inevitable.  They were serious steps taken importing a desire to act lawfully and to have others act lawfully with respect to copyright concerning this kind of marketing application.  They were a large part of the history upon the basis of which the findings of fact were made, to which we next come.

Proposition 2(b) in our outline puts, rather boldly, that which your Honours know is a body of evidence producing findings that are now not able to be undercut by suggestions, either direct or by innuendo, that there was insincerity, obfuscation or plain pretence involved in any of those dealings.  The trial judge saw and heard the witnesses, found to the contrary, wholly accepted as to these matters at the time they occurred by everyone in the Full Court.  So, Mr Stoner for Biggin & Scott gives clear and repeated instructions not to do what had happened before.

Now, I interpolate one would not need to belong to any of the great religions to appreciate that the notion of repentance is plainly to be taken into account when people are dealing with each other about infringements of legal rights; that is, it cannot be that you are going to be, in it some ancillary or derivative way, liable for the wrongs of somebody, who promises you they will not do it again, when you believe their promise.  In our submission, far from weakening our position or giving rise to, as it were, a situation ripe for reversal of the conclusion of no authorisation on 29 September, those findings of fact concerning the states of mind, and the righteousness of those states of mind – trust and ignorance, relevantly – made at trial, accepted in the Full Court, are such as to prevent, then, the reasonings to which I am about to come.

That all turns, of course, on the letter which was first sent just to Mr Meissner and DDPL.  Your Honours are familiar with the letter; I do not need to dwell on its details.  You know, in particular, that it does not say that what was being developed – Toolbox – was being developed by use illegally of material in which copyright was held by the respondents.

Rather, there was an assertion, in entirely general terms, of improper access and duplication of code which, of course, described entirely accurately what had happened – to our knowledge – with respect to DreamDesk and which had produced the commercial unravelling and re‑organisation to which I have referred.  The undertaking was asked for in consideration of something as temporary, transient, as a weak law had been asked for – but all that was on offer was a week of extension of permitted access – permitted use – of DreamDesk to allow what might be called, a run‑off and transition.

The details do not matter because the findings plainly show that what was happening at the time was the Campaigntrack ambition that Biggin & Scott would come back to them was obviously not totally dispelled.  Although they understood – that is, Campaigntrack understood – that Biggin & Scott were going to Toolbox – that is, going to a rival offering – there would be, in return for undertakings, a run‑off to enable that to happen in what I will call an “orderly fashion”.  That needs to be spelled out as to what it meant so far as the – if I can use the expression – objective and subjective message conveyed by those who authorise that letter of demand to go.

After that week, you may no longer use DreamDesk.  By implication, following that week, you are own your own – you will have to make your own arrangements for whatever your franchisees’ marketing requires – not a letter that says, you may not do so, not a letter that says you cannot take up any rival offering from Campaigntrack, and not a letter that says, we assert that that which we understand you have in train as that which will, after the undertaking purchased moratorium, be your only resort, that that, itself, has been made nefariously.

So, this letter – which is said to pivot from no authorisation to authorisation – is, in our submission, quite incapable of doing so – and when one looks at the sequelae over the next month or so – plainly enough, was not understood at the time as being an assertion that there was occurring, there and then, matters which were in breach of the express prohibitions which had been repeatedly and sincerely expressed to Mr Semmens.

Now, far from there being notification of any such impossibility of there being a lawful rival offering, there was the acceptance, it would appear, at least at first, of Mr Meissner giving the undertakings.  Later, that is described as Mr Meissner failing to procure Mr Semmens’ giving of the undertaking, but that, we think, was never intended to be a suggestion that he had ever agreed in binding fashion to do so, that would be for Mr Semmens.

Then, copied into this exercise Mr Stoner and Ms Bartels, and for Biggin & Scott and the relevant corporations, there is again the giving of the undertaking.  As we submit, it cannot be said that there was an awareness on the part of the Biggin & Scott camp of anything sinister, let alone detailed, in relation to Mr Semmens not giving the undertaking.  That is significant, bearing in mind the reasons which I will come to in the Full Court.

Now, if one has to turn to subsequent events, the most important subsequent events are the request for and arrangements to permit the so‑called independent expert, Mr Geri, to inspect Toolbox to see whether there had been breaches with respect to its construction.  Mr Geri’s preliminary report does not arrive until January the next year.  There is no explanation of any kind in the majority reasoning as to how the period between 29 September and sometime – presumably a reasonable time – after receipt of the report in January 2017 that can or should be regarded to be authorisation.

Given that the premise of the findings, to the discredit of our witnesses, by the majority in the Full Court very much turns upon a supposed significance in their failure to set about to get to the bottom of things, but to get to the bottom of things is never explained by any counterfactual or any evidence, let alone any confrontation, as a matter which would be a matter of hours or a very few days – and why do I use such ridiculously short intervals?  It is because this was all a negotiation for the consideration to be provided in return for a one‑week extension, admittedly, a one‑week extension from 3 October.

GORDON J:   One of the things relied upon – just to test that proposition – is the day after the letter comes on 29 September – on the 30th, Mr Meissner responds by email.  I put this because I think this is, in a sense, the way in which the Full Court has built up the picture, and whether this is right or wrong is a different question, but factually he responds by saying:

The IP purchased by your client is being used solely by Dream Desk contractors (no one else) for its original function only, and Biggin only has login to enter campaign related material.

MR WALKER:   That is right.

GORDON J:   So, there is a positive assertion of ‑ ‑ ‑ ‑ 

MR WALKER:   What was believed to be true.

GORDON J:   Yes.  So, I think ‑ ‑ ‑ 

MR WALKER:   No finding ever that that was negligent, deceitful – none at all.

GORDON J:   Does this go to your counterfactual point?

MR WALKER:   Somebody who believed that there was compliance with the requirement to keep to the straight and narrow – someone who believes that, says that is what I what I believe to be true – and that is the import of what your Honour has quoted to me from the immediate response.  Why would he believe that?  Because he and Mr Stoner have discussed it, and it was plain, on the findings, which are not challenged, that Mr Semmens had been instructed accordingly.

It is now accepted, after an energetic forensic attempt to the contrary, that that was not pretence, fiction or ploy; that it was all genuine.  So, what we say in relation to what Justice Gordon has drawn to attention, is that that cannot contribute, even as a building block, to an edifice of authorisation.  To be wrong about whether something has occurred by way of infringement cannot possibly, in our submission – and I mean honestly wrong – cannot possibly contribute to a finding of you having authorised it by a state of affairs in which that is a material contribution.

You do not have to know something is an infringement in order to authorise it if it is the acts in question, but in that context it is even more obvious that the fact that after the event, your confident assertion of no infringement turns out to be wrong cannot possibly, with respect, contribute to a finding of authorisation anteriorly.

EDELMAN J:   It may be putting it a bit too high to say that there is no finding that the 30 September 2016 response even involved any form of negligence.  There was a finding, was there not, at paragraph 331 that the reference in the 30 September 2016 response ‑ ‑ ‑ 

MR WALKER:   I am going to come to that, your Honour.  That is the paragraph, that, with respect, also includes the adverb “disingenuously”.  None of this is the subject of appropriate cross‑examination, and I do have to deal with the supposed failure of reasonableness with respect to that assertion, and more to the point, the giving of the undertakings – it really comes to ground with the giving of the undertakings, which is perverse, for reasons I will come to.

That is certainly not a finding of what I might call negligence, that is, falling short of a reasonable standard in cleaving to your sincere belief that there was not a wrongdoing.  That would need to be explored much more.  These are, after all, people who, as we have said, had been made aware of their contractors’ delinquency in the past.  Had sincerely, and without any concoction or fraud, required him to proceed in the future specifically without doing that again, and specifically – as it happens – with a view to those others, including the respondents, interested as rivals in the market.

There had, after all, been that very significant commercial reorganisation to which I have already referred.  People in that state of affairs who repeated what they believe to be the case would need to be confronted with what are the relevant standards, or what is the relevant state of affairs to their knowledge, which makes it negligent – that is, careless to a degree about which the law would care – in repeating what you believe to be true.  The menace that this has for people who get it wrong but in good faith in commercial dealings about states of affairs, factual or legal or mixed, is, in our submission, evident and a reason why the law simply does not proceed to castigate someone as being careless and negligent simply because they turn out to be wrong.

GORDON J:   Can I just test that?  A few days later, on the 5th, in response to the undertaking’s request, Meissner writes back again by email and says, in relation to Mr Semmens, that he:

never owned the IP, and never has used it unless under Dream Desk authority.

The Dream Desk IP was sold –

as you said:

to CT and as such no part can, or ever was used, by others.

As of the cutoff time no part of the IP has been used, copied etc in any other process.

So, both the statement on the 30th and the 5th are positive statements.

MR WALKER:   Sure.

GORDON J:   Does that alter the analysis?  In relation to – we are dealing just with Meissner at the moment.

MR WALKER:   No.  Had that ever been explored – and it was not – but had it ever been explored, what would have been raised is, perhaps you just should have said: who knows?  After there has been a forensic examination, experts exchange reports, and a judge has determined, then we will know.  In other words, should you say – when you have a belief, should you say: look, but I may be wrong?  I do not know.  Why that would contribute to authorisation is a complete puzzle, because that would be elaborative, you say to the owner of the right, this is yours to protect, I do not believe that your right has been infringed upon.

In our submission, that position does not alter in its remoteness from authorisation by the fact that later that turns out to have been incorrect, and neither does authorisation involve the notion that unless you enlist yourself in the interests of the person who draws to attention their view that something has been infringed; then you will authorise.  Unless the law went that far, nothing that comes out from that correspondence to which Justice Gordon draws attention could possibly contribute towards a finding of authorisation.

GORDON J:   On a different set of facts, it may be that you would have a number of statements like that that would give rise to, on the assumption that – I put two premises – and there had been cross-examination about it, that in a sense you put your head in the sand.

MR WALKER:   Yes.

GORDON J:   Giving rise to indifference, giving rise to you ought to have known.

MR WALKER:   Yes.

GORDON J:   Giving rise to an authorisation inference being drawn.

MR WALKER:   There would have to be some confrontation along the lines of, look, you simply did not care whether something wrong was going on, and you certainly were not going to put yourself out at all to – et cetera, et cetera.  There would have to be proper confrontation so as to, as I say, move somebody from a circle that does not have a priori obligations to assist in the investigation of infringement, to somebody who, by failure to admit, apparently, infringement, even before investigation, is held to have authorised everything thereafter.  And I stress, this is a finding that says there is authorisation on and from 29 September.  Now, could I take your Honours in particular to the way in which, in the reasons of Justice McElwaine, he deals with the matter.

JAGOT J:   In doing that, could you – a mystery to me is just the statement at 117 about “blunt statements of protection or insurance” in the 3 August letter, and that must be a statement of Justice McElwaine’s, I assume.  I just cannot find those blunt statements in the three.

MR WALKER:   I am sorry, that is a reference of ours, is it, your Honour?

JAGOT J:   No, it is in the the first respondent’s submissions at paragraph 8, and the last sentence refers to:

This led to “the blunt statements of protection or insurance” in the 3 Aug letter against “the possible conduct of Mr Semmens –

Et cetera.  And there is a reference to paragraph 117.  It is obviously a quote from the judgment.

MR WALKER:   I am obliged to my friend.  If I could take ‑ ‑ ‑ 

JAGOT J:   I cannot find them, the “blunt statements”.  That is all.

MR WALKER:   I will take you to – my friend suggests I should take you to page 200 of the book.

JAGOT J:   Okay.  I am on page 200.  That is the quote.

MR WALKER:   And my friend suggests, and he is authorising me to say this, I think, at the foot of that page.

JAGOT J:   Yes, I can see the quote, this “has led”, but I am then looking at the letter of 3 August, which is fully quoted in the primary judge’s judgment at a paragraph I cannot find.

GORDON J:   Paragraph 38.

MR WALKER:   That is right.

JAGOT J:   And I just must be missing something in there.  I am looking for these blunt statements and I do not see blunt statements.  Maybe that is just me – something about insurance in there?

MR WALKER:   I do not know whether insurance – I think it is insurance not assurance that was intended by the judge.

JAGOT J:   And “protection or insurance”.  I just do not – I can see the paragraph, in simple terms:

we do not want any thing.

Is that it?

MR WALKER:   No.

JAGOT J:   No?

MR WALKER:   That is the opposite of protection or insurance.  That is saying do not do something.

JAGOT J:   That is what I mean ‑ ‑ ‑

MR WALKER:   Which is scarcely saying, and if something happens you are hereby protected or insured.  No, I was going to come briefly to 3 August ‑ ‑ ‑

JAGOT J:   Okay, look, whenever you get to it.

MR WALKER:   ‑ ‑ ‑ but your Honour has forestalled me.  I can complete what I want to say now.  That is not a letter which, as to its sending before 29 September or its continued significance, if any, after 29 September, was ever the subject of exploration which succeeded – that is, confrontation which produced a finding – that it was a put‑up job, that it was a fraud, a dissimulation, a mock façade, and all done with a nod and a wink, you are not to cheat but we do understand that unless you cheat you will not be able to get us something at a keen price and on a rapid timetable, for example.  No such thing.

It is for those reasons that when we refer to the undertakings given, replicating, as we have put it in our submissions, the situation on 3 August, we mean to convey that the clarity with which there was not to be by Mr Semmens infringements of a kind that already occurred – that gives it the strength of the point – that when we gave an undertaking that there would not be use in such an infringing way and that anything it infringed would be destroyed – those are the undertakings we were asked for and that we gave – does not permit, strangely, a finding that we were thereby authorising.  So, by ‑ ‑ ‑

GORDON J:   So, you accept and you adopt, I assume, the findings of the trial judge between paragraphs 39 all the way through to 46, which deals with the letter after it has been set out at 38; that is, the cross‑examination and his Honour’s analysis of that cross‑examination?

MR WALKER:   Yes, indeed so.  Paragraph 41, in particular, yes.

GORDON J:   Yes.

MR WALKER:   Yes, indeed so.  In our submission, that gives the substance to our proposition that it is perverse to regard the giving of the undertaking as making out a case of authorisation.  And when I say making it out, that is because the way in which the case is reasoned against us and orders have been made – the remedies – has the period of authorisation starting on 29 September.

Now, as I say, leaving aside quibbles concerning a few days thereafter for a reasonable time to respond, et cetera, there is simply no analysis in a way that makes sense, with respect, as to why us giving undertakings entirely consonant with what is held to be our sincere beliefs that there would not be a repetition of what had occurred in the past, why that is said to authorise the covert truth of the matter, which was that he was deceiving us as well as others.  The perversity comes with reading authorisation from conduct that overtly and sincerely says it will not happen, I have forbidden it from happening.

When one goes back and reminds oneself of the enacted Moorhouse mandatory relevant considerations in subsection (1A) of section 36, and you think with respect to reasonable steps and power and relationship, you have a contractor who is liable to being given directions and is given directions.  So, there is a relationship with Semmens:  he has given directions as a power to do so.  It is not suggested that there is any power that comes from an equal or superior expertise, let alone equal or superior access sitting on someone’s shoulder to see what cheating they may be involved in.  So, one can put all that as a matter of practicality, let alone legality, to one side.  But as to legality, you can give a contract of direction as to how the work is to be done and, in particular, how it is not to be done.

Then you come to power – same answers.  The power to direct a contractor had been exercised.  One therefore asks, well, if one laboriously went through a 36(1A)(a), (b), (c) exercise – not so much for the dealings on 3 August with Semmens, but with the dealings on the two days following 29 September, when, ultimately, the undertakings are given – if you concentrate on them and ask those questions, then, in our submission, there are unanswered questions – indeed, barely articulated questions – raised by the majority reasoning.

Given that the undertakings were given entirely consonantly with what had been forbidden to Mr Semmens, what was to be done upon the receipt of the bold and entirely general – that is, entirely unspecified – allegation of breach in the demand for the undertaking to buy one week’s run of time – that is all, one week’s run of time – it cannot possibly, sensibly be that there should have been the forensically‑conducted examination, the future conduct of which was, after all, the main recommendation in Mr Geri’s first report.  It was, after all, his first report – correctly regarded as speculative by Justice Cheeseman – that said he admittedly used words of probabilities, but then he said, but you will not know until you actually have a look properly.

STEWARD J:   Did you say the undertakings really represent the choice made by Campaigntrack as to what was reasonable to do, and no more?

MR WALKER:   Yes.  No, we do not say they ever waived their rights by that, but that is what they asked for, and now it is being thrown in our face that we gave them what they asked for.  I am so sorry, I was not watching the clock.

GAGELER J:   I noticed, Mr Walker, your original estimate was two hours.  Are we still on track for that?

MR WALKER:   I think so.

GAGELER J:   We will take our 15-minute adjournment then.

MR WALKER:   Please the Court.

AT 11.13 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.29 AM:

MR WALKER:   Can I add a couple of references in – extend an answer to Justice Steward.  You will some observations and findings concerning Real Estate Tool Box and its structure in the primary judgment, paragraph 86(2) and paragraphs 91 to 93, in the core appeal book, pages 38 to 39, and in the Full Court, Justice McElwaine – his Honour’s paragraph, 185, at the court book, 226.  I do not need to take you to take your Honours to it.

STEWARD J:   Thank you, Mr Walker. 

MR WALKER:   Your Honours, could I remind you that which is at the heart of a deal of what I have already said by way of address and which is pivotal to our argument, namely, the findings by Justice Thawley at trial,  which include, obviously, creditability‑based findings wholeheartedly accepted by everyone in the Full Court.  But, by way of, as it were, a compressed display of the propositions, could I take you to the core appeal book, pages 104 to 106, and to Justice Thawley’s summary at paragraph 304 of the way in which in the case on authorisation was put.  I cannot resist pointing out that you will not find there much of a reference to a turning point on 29 September. 

GORDON J:   That was directed at DDPL and Meissner, was it not, in that paragraph?

MR WALKER:   It was, indeed, yes.

GORDON J:   Thank you.

MR WALKER:   There is an equivalent – I suppose I can do this in parallel – for the others.  It starts in the book, page 97, and I will not dwell on the detail, but in paragraphs 291, 292, 293, and then picked‑up as to authorisation, starting in 296.  You will see that it started with the letter of 3 August – to which I have already made reference – and the summary by his Honour of Campaigntrack’s submission against those respondents, similarly, says nothing about 29 September being a turning point.  That simply was not the case put at all. 

When one then sees the way in which, in the parallel courses, his Honour dealt with those matters – you have at pages 104 to 106, in Justice Thawley’s paragraph 305, the DDPL and Mr Meissner conclusions, which parallel – that is, to be read alongside the conclusions for the others, starting at page 101 and going over to page 103, particularly paragraph 297.  I will not dwell on the detail of that because, I stress, these are matters which were taken as the foundation for the consideration of the new case concerning 29 September.

What permeates his Honours findings at trial is not only a rejection of dishonest dissimulation – so, that is gone – but also, in the so‑called objectives sphere, that the trust of Mr Semmens by the others, with respect to matters within his expertise, not theirs, explained why his Honour rejected the notion that what might be called an independent audit ought to have been conducted presumably in a more or less continuous or randomised way.  There is the acceptance, in those passages I have drawn to attention, by the trial judge the deal of the integers of what might be called the power argument; that is, the power to deal with things.  What there is not an acceptance of is that, in context, 3 October did not go a sufficiently long distance to put pay to the notion that there had been a power available which had unreasonably not been used.

All that was picked up, if I can use Justice McElwaine’s reasons in the Full Court – and can I take your Honours, first, to page 252 of the book, his Honour’s paragraph 276, where his Honour in narrative is pointing out that the authorisation case had not been made out, and cites the passages to which I have just now drawn attention, and finding:

Central to that reasoning is the finding that each trusted Mr Semmens . . . relied upon him to not misuse intellectual property . . . did not know or reasonably ought to have known –

that is, it was not that they reasonably should have known:

that copywrite works had been used in the Toolbox system; and Mr Meissner was “shocked” . . . The multiple findings of trust are significant upon this appeal as each quintessentially turns upon the assessment that the primary judge made of the evidence when given by the witnesses.

That is a cue in our argument against his Honour’s later conclusion to the inappropriateness of reasoning when there had not been the opportunity given to those same witnesses to display, as well as explain, their sincerity concerning post‑29 September, in particular, their decisions to give the undertakings that were sought.  His Honour then, having noted that they were not challenged, turns to some of the argument that was unsuccessfully put in the Full Court, and in 281 importantly says that the argument put in the Full Court included this proposition that if the primary judge had not wrongly ignored evidence, he:

should have inferred that the represented respondents “had reason to suspect that Mr Semmens might copy DreamDesk or knew there was a real risk he might do so.”

I am not quite sure what difference there is between those two propositions.  But, in our submission, it is important that that is understood to have been an argument based upon evidence in the Full Court.  Then, in 282, it is demolished.  It is not available.  There is no contention in this Court to revive any of that.  It was new, as we submit in the Full Court below – it would be not so new here, but it is not the subject of any attempt to overturn the conclusion that starts with the devastating proposition it does not identify error.  I will not dwell on that.  Your Honours will see that at the end of 282 is the worm in the apple for us.  His Honour says – and in our favour:

The trust findings cannot be reconciled with an inference of actual knowledge or reasonable grounds to suspect that the infringing acts of Mr Semmens might be done –

and then our downfall enters:

at least until the appellant made specific complaint.

I am repeating myself, but for emphasis.  If that is the letter of 29 September – for the reasons we have already put – that is not specific complaint at all.  But, in any event, his Honour says he is going to deal with this below, to which I will come.

Your Honours will then see that in 283 and following, there is a detailed and, with respect, devastating critique of the way in which that argument was put that lacked an appropriate foundation in the forensic course below.  I do not need to dwell further on that.  Paragraph 287 includes, as to aspects of that unsuccessful argument in the Full Court, the notion that it was not pleaded, as well as not being put fairly or at all in cross‑examination.  Then, his Honour refers to a further reframing in oral argument as one of wilful blindness, and that is not before your Honours either.

This shows that whatever else Justice McElwaine is doing, he is emphatically putting to one side any notion of wilful blindness from 29 September and its immediate aftermath.  Paragraph 288 and following – paragraph 288 draws those strings together, obviously rejecting what was energetically put as a reformed kind of case by the respondents here as appellants below.  Then, at paragraph 289, as your Honours know, the reasoning starts – the reading by Justice Greenwood – by which we failed and which we have challenged.  I draw to your Honours’ attention the observation in paragraph 290, quote:

Curiously, the primary judge makes no reference to this correspondence.

That, presumably, is a reference to 29 September 2016, because there are references to 3 October which, of course, refers to 29 September.  But without pursuing that detail, which we have set out in our written submissions, it is clear from what you have seen from the way in which the trial judge explained the case that the letter of 29 September simply was not a pivot point in any argument at all.  It was contrary to the whole thrust of the case presented at trial, including testing of contrary evidence by cross‑examination and confrontation.  The whole thrust was that there had been, before 29 September, authorisation.

Your Honours, during the course of that narrative explanation, could I remind you, I do not need to spend time on it, of what his Honour finds at 295.  It is not suggested there was a case apart from the obvious power not to employ, not to contract with Mr Semmens.  There was no case of authorisation that is at odds with what Mr Meissner put in that email.  If you did not believe he was doing the wrong thing and you had told him not to, there were findings accepted at the trial and treated as, therefore, beyond dispute on the appeal below, to the effect that there was nothing insincere in the profession of that trust.

Could I then take your Honours in particular over to page 267, paragraph 327, reaching what, alas for us, was merely the interim conclusion, that those respondents:

did not know and were not obliged to take reasonable steps to avoid infringement of copyright by Mr Semmens prior to 29 September 2016 for the reason that objectively there was no reason to doubt that Mr Semmens had not (or would not) comply with the direction of 3 August 2016 and nor was there any reason to doubt the truthfulness of the assurances that he gave –

Paragraph 328, with respect to Mr Meissner and DDPL, the finding by the trial judge of his “shock” at the discovery of the misuse of Process 55 – has the effect to which I have earlier referred.  Paragraph 329 – appropriate discussion of one aspect of power, but a rejection of the idea that you burn the house down:

it was not reasonable . . . for that power to be exercised –

That is, terminate the consultancy, and one thinks of the reasoning of the majority in Adelaide Corporation v Australasian Performing Right Association Ltd in that regard, because he:

did not know (and reasonably ought not to have known) –

Which means, I think, it was not true that he reasonably should have known:

of the happening of any event which called for –

a termination, and then this phrase:

at least until the question of the undertakings was raised in September –

meaning 29 September.  And then the tide turns.  We submit that this is reasoning which bespeaks its own error because there is, at no point – leaving aside the forensic course of the presentation of case before Justice Thawley, leave aside even the pleading of the case, in the appellate sense, before the Full Court below.  At this point in the reasoning in the Full Court, there is no explanation as to how or why the 29 September 2016 letter calling for undertakings as consideration for a so‑called one‑week – so, 3 to 10 October – extension of the authorised use of software, no evidence so as to permit a transition to a rival software.

There is no suggestion as to how that informed the state of affairs concerning a reasonable suspicion, let alone actual knowledge that Mr Semmens had in fact been a recidivist and was in fact still engaged in that wrongdoing.  You will recall that the  letter requesting the undertaking gives no particulars – I do not mean that in a technical sense – but it simply does not say anything to distinguish this from what had earlier been in the open as a delinquency, and, in particular, had not drawn to attention anything concerning the development of what became Toolbox by Mr Semmens as being the subject matter of the requested undertakings.

They were odd undertakings if you were concerned about Toolbox being built as a rival to DreamDesk because, obviously enough, they would have been given only for that one-week extension.  In 330 his Honour reasons that:

The correspondence from Ms McLean to Mr Meissner and DDPL of 29 September 2016 put those parties on notice (and shortly thereafter the other parties) that the appellant asserted breach –

Now pausing there, it is not the law that to fail to acknowledge the justice of an asserted breach of another person’s ownership interest is to authorise its either past or continuing breach, that could not possibly be the law.  His Honour then went on:

read with the requirement to provide certain undertakings –

the nature of which I will sufficiently explain:

reasonably should have caused each to make specific inquiries . . . in order to be satisfied that he had not copied, and was not intending to copy –

Now, that is in the face of findings that no one believed he had done so, and they had instructed him not to, and they trusted him not to.  Nothing in the letter of the 29th should have reasonably altered that state of the affairs for any of those persons.  And in particular, there could be no such finding without them being invited in cross-examination to respond to the suggestion that that letter changed everything, and you will not find that.  But rather as the recipient of the letter, Mr Meissner, making no inquiry which is said pivotally to lead to the reversal of the situation that had been true up until his receipt of it, namely, no authorisation.

GORDON J:   At its highest, it might be put against you – I think you have already addressed this, Mr Walker – that it was probably the first time that that letter, in that letter, that there had been a claim of improper access and duplication of code, in this.

MR WALKER:   Yes, that is right.  And I think I have already said how we respond to that.  The conclusion of 330, which is not the last word on it, but the conclusion of 330 is that it was not reasonable – the sentence commences:

Further, a reasonable person in the position of Mr Meissner –

Et cetera, not reasonable to give the undertaking.  Now, that is, on the face of it, odd.  The counterparty asks for the undertaking, and it is said to be not reasonable to give it; absent detailed inquiry as to whether it was appropriate to undertake.  Now, you do not need detailed inquiry into your own state of mind.  I do not believe there has been wrongdoing, but I have taken steps that I regard as appropriate, that is, a solemn contractual direction against any such wrongdoing.  In our submission, these reasons lack an explanation as to how that gap is jumped.

Paragraph 331, in our submission, particularly without appropriate confrontation, of which there was none, errs by making the disparaging comment about disingenuousness.  The fact is that the request for the undertaking in that relevant dot point is, to put it mildly, not very informative.  The judge deals with that, impliedly, by, as it were, saying a person who lacks the knowledge – now, that is a person who surely would not be disingenuous, so you do not know something is wrong that you believe to be true:

ought to have at least sought further details –

So, now we are at the point where it is unreasonable for us, in response to a pretty peremptory request for an undertaking, the commercial worth of which would expire not many days hence, it all turns around so we should be, by Socratic dialogue, finding out more about something concerning which we already have beliefs which are – beliefs which, up to 29 September, everyone says would not amount to authorisation.  Paragraph 332 deals with the other of the appellants in that regard.  Again, they are taxed with the proposition that they made:

no specific inquiries –

before advising:

that their clients would provide the undertakings.

His Honour reasons in the same way, he says that the correspondence:

ought to have more carefully and fully investigated that claim at that time before agreeing to give undertakings on 6 October 2016.

GORDON J:   Can I ask about the first sentence in 332?  Is there evidence to support that finding, that “no specific were made before Mills Oakley”?

MR WALKER:   I think the answer is yes.

GORDON J:   Thank you.

MR WALKER:   You were talking about the interval after the ‑ ‑ ‑

GORDON J:   After 29 September.

MR WALKER:   It is actually a bit later than the 29th for Biggin & Scott, et cetera, but after that, it is not – in the preceding time, of course, there had been the dealings I have already referred to.

GORDON J:   At least by 3 October, Biggin & Scott knew.

MR WALKER:   That is right.  I have read that as specific inquiries to the author of the letter requesting undertakings, and I think that is correct, there was no, as it were, to‑and‑fro interrogation.  But this conclusion is that they were clearly on notice of a claim.  Now, it is an extremely undifferentiated and generalised claim, but there is no doubt there is a plain assertion of infringing acts by someone in some respect or left unexplained.  His Honour says they:

correspondingly ought to have more carefully and fully investigated that claim –

So that, in effect, says that they are authorising because they failed to ask of somebody who made the generalised assertion, what is it you are talking about so that I may, as it were, re‑examine, scrutinise internally, my present state of belief concerning, in particular, Mr Semmens, and presumably, in particular, Toolbox.

EDELMAN J:   What could they have been talking about if it were not Real Estate Tool Box?

MR WALKER:   Your Honour, plainly enough, there is, as I said, commercially, this whole idea was there had been Toolbox and DreamDesk, and now there was going to be another.  There had been the – I will call it “autolysis” by purchase, and now there was going to be the competitor.  Of course they are talking about that.  There is nothing in that letter saying – and how could there be, in a sense – we know that in secret, there has been use and infringement.  The finding is that we did not believe that there had been.

There is no assertion of any respect in which that had happened.  It is not even the naming of the person responsible.  It is to be remembered that months later, Mr Geri’s first inconclusive report expressed its opinion about probabilities largely, if not only, on the basis that the same person had been involved, which, with respect, is a rather dramatic use of propensity evidence, and in our submission the state of affairs to which 332 speaks is one that still leaves open for questioning, what were we meant to have done in the very short time interval in question, by way of more carefully and fully investigating that claim.  It is not suggested that we were in a position to put in forensic independent experts to produce something within days that Mr Geri could not do within months.

In paragraph 333, halfway down, having repeated the notion that the appellants were fixed with knowledge, it has now been expanded to knowledge that the appellant had grounds to assert.  That, with respect, is gilding the lily.  There is knowledge of an assertion, it does not impart knowledge of grounds, it would certainly – I think reasonably – convey that the party asserting believed they had grounds, on a moderately charitable view of what counterparties are saying, but certainly not knowledge of any grounds.  Then it is said that they should have been proactive.  This is all in order not to be an authoriser.  That, in our submission, really gives the clue as to how remote this has moved from the core or central notion of authorising an infringement.

It would not be vigilante style if sufficient particulars were drawn to attention so as to render it appropriate to exercise a contractual power to say, stop doing that or you are sacked.  We are not suggesting that there is anything wrong about that kind of authorising conduct, but the authorising, obviously, would only commence after a time had elapsed in which it was reasonable to make those investigations and reach those conclusions.  It cannot sensibly be suggested that that had been instantaneously true on 29 September.  His Honour simply does not in 333, or anywhere else, lay out what might be called a sensible program of work and consideration with a timetable that would produce anything like 29 September as the time when authorising occurred.

There is a rejection of our proposition, simple and, in our submission, compelling, that the giving of the undertaking surely puts an end to anything sinister by way of authorisation spelled out from the response to the request for them, and his Honour says:

To the contrary, in my view a reasonable person . . . would not have given the comprehensive undertakings –

And then perhaps irrelevantly referring to its consequential exposure to potential liability, that is what an undertaking is:

without making specific inquiries in order to be satisfied that it was safe –

That presumably means safe as a matter of self‑interest – I do not want to give the undertaking if I think it may be called in against me – but a person who gives an undertaking is saying, I am prepared to have this enforced against me.  It is for that reason, oddly, that his Honour says it was an insufficient step.

If it is a step at all, albeit insufficient, then the reasoning is even more tangled.  If it was appropriate, ultimately, to give the undertaking, that is it was a step but it was simply insufficient, then one wonders why on Earth is it being held against us that we gave it at all.  How odd that a step is regarded as insufficient because it was accomplished too quickly in the course of a dealing.  That is what ‑ ‑ ‑

JAGOT J:   If you had – sorry, I am ‑ ‑ ‑

MR WALKER:   I am so sorry, your Honour.

JAGOT J:   No, no, I am just making the observation that if you had not given the further undertakings, the negative – I struggle to understand how doing the positive – is your point, I suppose, because if you had not given the undertakings and you had made further inquiries, then that, presumably, would have been October or whatever ‑ ‑ ‑

MR WALKER:   That is right.

JAGOT J:   ‑ ‑ ‑ and you could not, on this reasoning, have been found to authorise, at least until the point where you found something more ‑ ‑ ‑

MR WALKER:   That is right.

JAGOT J:   ‑ ‑ ‑ if you had not given the undertakings.

MR WALKER:   Maybe I was speaking in too compressed a fashion this morning.  By the counterfactual, I mean testing reasonableness by asking – and, true, from the time and circumstances of, say, 29 September, what do I suppose might happen?  Be it supposed, contrary to our argument, that it required you – reasonableness required you – not to give these undertakings.  It is unrealistic to suppose that anything could have been achieved in terms of having Mr Semmens confess in detail within the period that was relevant to the seeking of the undertakings – which was a very short period, indeed.  That is the first point.

The second point is, if you brush aside that matter as to reasonableness, one then asks, meantime, while you are doing what the judge has held is mandated by reasonableness in some kind of minimal fashion, how could it possibly be said that you are authorising, you are behaving in accordance with reasonable steps, you are not doing anything to mandate approval countenance infringement, you are finding out about it?  If you found out something, like Mr Geri, that maybe the same person is involved but more needs to be done, then, in our submission, there still could not be authorisation.  Our point is that the orders against which we appeal are orders which say authorisation is 29 September and for reasons which appear to be special to that date and the immediate aftermath.

STEWARD J:   Part of the difficulty may also be that the letter from the solicitor for Campaigntrack put a gun at the head of Biggin & Scott and DDLP to respond within a day.

MR WALKER:   Yes – respond within a day, and the commercial timetable was extremely truncated.  There had been requests for more time.  This was all ‑ ‑ ‑

STEWARD J:   DreamDesk is about to stop, and it would stop more quickly unless you provide us ‑ ‑ ‑

MR WALKER:   All is fair in love, war and commerce, I think is what it amounts to.  We have the two – or, we now have DreamDesk, it is a dodo; we have Campaigntrack, it is terrific; you used to have it; do not worry about the price rates.  So, yes, those are circumstances which are plainly relevant to adjudging what is reasonable and which, in our submission, remove entirely this notion that a failure to – sorry – that giving the undertaking shows a state of affairs which converts that which, on the eve of its receipt, did not amount to authorisation into authorisation thereafter.  Your Honours will see in 334 the characterisation of the situation from 10 October – that is, after the shutdown of DreamDesk – that we:

were content to be, at best indifferent, to the rights of the appellant, which they subjugated to the economic interests –

et cetera.  That is language which, in our submission, does not advance the analysis of an authorisation case.  If you have an economic interest of your own, there is nothing wrongful, let alone calling for expressions like “subjugation” and preferring it to somebody else’s economic interest, particularly when they represent what might be called, in a very broad sense, a rivalrous or competitive faction.  So that goes nowhere.  There is no fiduciary obligation, let alone subordinate relation, by which we were to be enlisted by our own conscious or by the statement of infringement made on behalf of Campaigntrack in finding out whether their rights had, in fact, been infringed; a failure to find out such things not being, in our submission, anything other than a peripherally relevant circumstance in an authorisation case.

Paragraph 335 looks ahead far more distantly from 29 September 2016, past 19 January 2017, to which I have already referred, and his Honour talks about that circumstance being “more compelling”.  It is not, with respect, explained as to why it is more compelling, let alone how on Earth that can inform a state of affairs that came into being on 29 September.

GORDON J:   I was going to ask about that.  Is that, in a sense, an alternative point?

MR WALKER:   I suppose it is.  They are ‑ ‑ ‑

GORDON J:   In other words, he says, I make a finding at 29 September but if, in a sense, I am wrong about that then at least from 19 January.

MR WALKER:   No.  It suggests that that might be in the air but, no, it was not part of the appellant pleading.  “More compellingly” is not a phrase which amounts to, and in any event, in case I am wrong, alternatively.  This is compelling, apparently, for the outcome to which his Honour did come, which was 29 September.  It does not work retroactively.  If what is called for is inquiry – and that is, after all, the indispensable plank in their reasoning against us – then you cannot possibly be reasonably held liable before you had a reasonable time to make the inquiry and consider its results.  That is why in 336 there is error committed by this finding of error by the trial judge in a failure to interrogate the claims through the lens of the correspondence and the conduct from 29 September.  None of that deals with the logical impossibility of imposing authorisation as a state of affairs from 29 September.

STEWARD J:   Is there a difficulty with the Geri report that, as Justice Cheeseman found at 158, the appellant did not cross‑examine any of the witnesses in any meaningful way?

MR WALKER:   Yes, your Honour anticipates me.  I was going to end with Justice Cheeseman.  It is very important.  Perhaps I can, given the time, flag – and this really is all I want to emphasise from our proposition 10 – in Justice Cheeseman’s reasons, in particular, there are two aspects upon which we respectfully adopt her reasoning.  The first is the refutation of the detection of error in the trial judge by the majority for his failure to deal with what I will call the 29 September 2016 case.  For the reasons explained by Justice Cheeseman, of course he, the trial judge, was well aware of that correspondence.  In particular, the 3 October, taking of it up is part of his reasoning. 

But no, it was “immaterial”, to use her Honour’s words, to a case which, understood by his Honour – no one said he was wrong in summarising the way the case was put – simply did not include 29 September as a turning point from no‑authorisation to authorisation.  That was an opposite possibility.  Could have been run as an alternative but was not.  The second thing in relation to Justice Cheeseman is that her Honour does elaborate, in the same vein, but more pointedly for us today, the areas where there was not the requisite confrontation or exploration through the witnesses that we called, of the theories that now inform the case of authorisation as found by the Full Court. 

If one comes to paragraphs 335, 336 in the reasoning, to which I have been referring, then an obvious question is:  what were the witnesses asked concerning there response to Mr Geri’s plain statement that he would need to do more work?  Perhaps that is unfair to him – someone of similar expertise would have to do more work in order to be able to give an answer to the question.  No one says his first report was the be‑all and end‑all and the end of it.

GORDON J:   There was no cross‑examination of any aspect of the report?

MR WALKER:   No.

GORDON J:   Including not even the further forensic inquiries that were needed to be made, but also the findings of the similarities that existed on the analysis of the materials that she had regard to?

MR WALKER:   No.  No cross‑examination to confront somebody with the fact that, did you not think that the same person had done DreamDesk and was doing Toolbox?  Did you not think that was enough to say he was probably breaching again?  If they had been asked that, one can readily understand they had said, well, hang on, we knew about that and we took steps to stipulate that was never going to happen again.  And if the new project, bearing in mind the fraught commercial and legal relations between the various entities, in particular you are not to use anything in which they have an interest.  That would have been their response, because that is what they had earlier given evidence of and were accepted – including in the Full Court on that point.

It becomes more than a mere Browne v Dunn point.  It becomes a forensic frame in which it is simply impossible, with respect, to see in a rational fashion how any adverse findings of unreasonable conduct by us can appertain to what happened in relation to the Geri report.  Paragraph 337 continues, in our submission, the fallacious reasoning.  If you look towards the last sentence:

Although the exercise of either of those powers –

which would be – they were the powers of the completely destructive kind, contract and joint venture:

might not have prevented Mr Semmens from continuing on his own account to copy –

et cetera, it:

would at the very least have significantly disrupted –

them.  Well, there are simply no findings, and no exploration anywhere of what that involves and what that means with respect to the development of Toolbox.  That was just bereft of a proper factual foundation.  Paragraph 338 includes in its closing this notion of a requirement to take steps to:

“get to the bottom of the allegations” and, if found to be substantiated, to end the contractual and commercial relationship with Mr Semmens.

There is no explanation as to, well, if that had happened, when would that have produced a state of affairs which would answer authorisation.  Certainly not 29 September.  That is impossible, surely.

GORDON J:   So, is the complaint there both temporal as well as substantive?

MR WALKER:   Yes, very much so.  All of this is a temporal matter, but the more that I push forward in time a date before which it is impossible, given the findings about previous states of mind to have been authorisation, the more it becomes obvious that the forensic course below did not permit the attribution at any later date to any accumulation of circumstance of the status of authorisation.

Your Honours, may I very briefly then note material in our propositions 11 and following.  If you will forgive me, I will call them a principle of law.  Of course, this is an area where, to a very large degree, cases are dependent on their own facts, or to put it another way, the legal tests in question are circumstantially sensitive, and neither party departs from that truism.

Where the point of departure between us really comes, in our submission, is the attempt to find authorisation against persons who enjoyed the favourable findings of fact to which I have made sufficient reference, hence our propositions 14, 15 and 16.  Your Honours have seen a deal of the written legal argument concerning this notion of indifference, which, in our submission, is an even more unhelpful near‑ or pseudo‑synonym designed to provide clues for those picking their way through the circumstances of a particular case.

Obviously and literally, a person who is indifferent to the possibility that another person’s copyright has been infringed cannot possibly be regarded as thereby, as it were, putatively an authoriser.  Indeed, actual authorisers are – if I may say so – scarcely usually could be described as people indifferent.  They are positively partisan if they are subjectively engaged in the encouragement by way of mandating and approving the infringing act.

In our submission, of course cases which lend themselves colloquially to be described as displays of indifference, may, as the recorded cases discussed – including in this Court – may amount to authorising on the facts of that case.  It will never be that mental disengagement called indifference, that is, not having a preference between one outcome and another, that is the hallmark of a person authorising in such cases.

It will always be caught in the tripartite relation between owner of the right, infringer of the right, and putative authoriser.  In those relationships, one will find the means by which a state of affairs where somebody did not bestir themselves on behalf of the owner against the infringer becomes, thereby, liable as an authoriser.  You will find that not from a so‑called indifference, but rather from a combination of relationship potential for the exercise of a power, and the reasonableness of exercising it or not – among other matters – but those are, we are told by Parliament, mandatory to be understood.  The components of a conclusion of authorisation, none of that is relevant in this case.

GAGELER J:   Mr Walker, in relation to paragraph 14, it may be a proposition that is supported by the authorities but it is a little hard to square the need to have power to prevent with the language in 36(1A)(a).

MR WALKER:   I fear your Honour is asking me a question to which the answer is – but what this Court has said about this ‑ ‑ ‑ 

GAGELER J:   I know.

EDELMAN J:   It is the language – the extent if any – the fact that it is only one of three factors – and, also, the question of every other area of derivative liability not depending upon whether or not the driver of the getaway car had the power to stop the robbery, or whether the person assisting or aiding, had the power to stop the primary infringement.

MR WALKER:   Crime is a dangerous analogy here, because what I will call “derivative liability” can be avoided by steps otherwise than stopping the whole endeavour.  So, there is the power to stop your own involvement and there is the power to inform.

GORDON J:   A more neutral way of putting it might be to say that the nature, extent, directness of the power would be a relevant ‑ ‑ ‑ 

MR WALKER:   Yes.

GORDON J:   But you do not require direct power, which is the proposition to which you put in 14.

MR WALKER:   That is true.  In answer to Justice Gageler, for the life of me, I cannot make the words, if any, stand up and dance – there they are – and it means that there can be a determination – a determination whether there is authorising that will include a case where there is no power to prevent.  That is one of the difficulties of trying to lay too much interpretative weight on ‑ ‑ ‑

STEWARD J:   It may turn on what “power” means there.

MR WALKER:   It certainly does.  I do not mean to be mischievous when I say that almost certainly involves understanding what “prevent” means.  Because with authorised infringements, there is a continuum from, as it were, the original sin to it failing – being prevented of repetition.

GAGELER J:   You do not need paragraph 14, do you?  It did not seem to feature very much in your criticism of the reasoning of Justice McElwain.

MR WALKER:   Your Honour, I am bound to say, yes, to your first question but, in self‑defence, it does seem to be that which divides the two sides of the corresponding issue in Adelaide Corporation v APRA.  Now, Mr Menzies’ argument prevailed over that of his pupil master, but it is a divided bench and there are, as it were – it would be difficult, if you erase people’s memories and switch the numbers and made the first two, three and the last three, two, as to whether it would be more or less compelling in the Commonwealth Law Reports.  They are decisions on facts, and I am very ‑ ‑ ‑

GORDON J:   Is that not the point?  If the decision on facts – and do (a) and (b) not intersect? – power and relationship have to be considered together.

MR WALKER:   But (c) encompasses anything.

GORDON J:   That is true.  Because it may be that (a) and (b), for whatever reason, have not given the significance.  So, one then has to look to other facts giving rise to what steps might have been taken.  My point is that whether you need 14 or not, I think it is also overstated.

MR WALKER:   If your Honour is referring to the epithet “direct”, well, that is the argument we put.  It will not be enough to say, I can burn the house down.  That is not the kind of power in question.

GORDON J:   That is true, but one is looking at power in relation to a prevention of an infringement of a particular Act which has been identified and particularised.  So, one is saying, what power have I got, direct or indirect – and it might be a commercial step that could have been taken – and this is why it is fact‑specific and by reference to the person who is the subject of the allegation of authorisation by ‑ ‑ ‑ 

MR WALKER:   We are intent to prevent banks, for example, being required to step credit to a trader because they have heard about, in the newspaper, they have heard about possible infringements of copyright.  So, I want you to fix up your copyright position or your overdraft is being called up.  Now, in our submission, banks ought not to be at peril of being authorisers if they do not take that kind of step.  That is what I mean by burning the house down.

So, can I win the case without 14?  Yes, I hope so.  And so, I say yes to Justice Gageler’s first question.  Would 14 be an appropriate proposition for your Honours to endorse?  Yes.  And this is an appropriate vehicle because there is, on any view of it, only an indirectness at hand here.  The majority does not explain exactly when something was to happen and what that thing was, which would bring an end to the putatively wrongful state of affairs.  Rather, they illogically say that wrongful state of affairs was 29 September.

GORDON J:   Does not sound like it is a good vehicle to us, to assert a proposition, then, in those terms.

MR WALKER:   I am sorry.  I do not think I want to add to my answer, your Honour.  But, your Honours, as to section 36(1A), and perhaps given its provenance, which is notorious, I am bound to say in further answer to Justice Gageler, the law is probably not different for it being enacted.  It would have been left to your Honours to refine the notion of mandatorily relevant considerations, but when you look at paragraphs (a), (b) and (c) – “relationship”, “power to prevent” and “reasonable steps” – they are, with respect, at such a level of generality that it is almost impossible for counsel to predict that a court would proceed on the basis that you should reject as irrelevant evidence going to any of those three in an authorisation case.

May it please your Honours.

GAGELER J:   Thank you, Mr Walker.  Mr Green.

MR GREEN:   If the Court pleases.  Our outline of written submissions engages in the first stage with the statutory test, which is, of course, now convenient, bearing in mind where my learned friend finished.  Of course, we take the position that a power can be indirect and, as my learned friend has indicated, the point of distinction in Adelaide and in iiNet, of course, are points that do turn on the nature of the power and the consideration of the power.

We accept there must be, of course, a power to prevent the infringement in question, and in the present case the infringements which her Honour ‑ ‑ ‑

EDELMAN J:   So just on the Adelaide Corporation Case, do you say that anything turns on the very different terms of the statute?

MR GREEN:   Yes, we do take issue with Mr Walker’s suggestion that the implementation of the factors in (1A) did not effect a change in the law.  Plainly, they permitted and they direct a court in evaluating whether or not authorisation has taken place to have a much wider evaluation.  One way of expressing that is that there is a trilogy that one must consider between the infringer, the alleged infringement, or the infringement, relevantly – one must prove, of course, that there is an infringement – and the putative authoriser, and the evaluation of the strands that stand between them can be reflected adequately in what is in 36(1A), namely, one evaluates the tension between those three – what I will call nodes – of a relationship to determine whether or not in the circumstances of the case authorisation is proved.

Our learned friends take issue with our resort to indifference, but plainly indifference is something which has been a way into the consideration of whether there is authorisation, and it has been for a very long period of time, and it forms part of the discourse that informs section 36(1A)(a) to (c).  So, in other words, the indifference is not an epithet, but it is a useful analytical tool.  It is not a subspecies of authorisation because that has now been subsumed by the (1A) factors, but it is a very useful way to determine questions such as actual knowledge, how actual knowledge plays with what one might infer, the behaviour of individuals after being put on notice, and what one might reason from those things.

The second point is that we do rely upon the September letter, contrary to what our learned friends put, not to reason backwards, but because the court below permissibly used after‑occurring events to infer the behaviour of individuals at an earlier point in time.  Self‑evidently, that is the approach taken by Justice McElwaine, and is plainly the approach taken by Justice Greenwood.  That is, the after‑occurring events, which were in the whole not necessary to be the subject of any contests or challenge because they came from the present appellants’ own words.  They came from the words of the appellants’ lawyer.

These were not mere triflings, there was no dispute that these communications took place, or that they were intended to have a very serious effect.  My learned friend has not referred to the actual knowledge that, for example, Mr Semmens refused to give the same undertakings, or that there was a period of seven days from the time of which the undertakings were sought until they were given.  You would be mistaken, with respect to him, to think that they were instantaneously given, or given by return, they were not.  There was a week between the time in which they were sought and the time in which they were given.

The other matter, and your Honours have this material, is all of the correspondence is before this Court in our supplementary bundle, and I will take your Honours through that material to illustrate how the matter evolved.  But one does not start, in this case – unusually, one does not start by starting at 29 September and working forwards to try to evaluate knowledge.  One may, permissibly, take the later letters written by lawyers in which there were curious things said about earlier matters, and we say that bespeaks what we have characterised as indifference, but that bespeaks something in the nature that would engage with the question of authorisation.

GORDON J:   Authorisation on the basis that they knew or ought to have known?

MR GREEN:   They had reason to suspect.  They had reason to suspect and it was unreasonable for them, having regard to having reason to suspect, that they took no steps of a kind that Justice McElwaine had identified, and of course Justice Greenwood also wrote at length the very steps.  With respect to Justice Cheeseman, her Honour in pulling up short by indicating that somehow because the case was an undifferentiated case running from the beginning to June 2018, and of course June 2018 – the relevance of that date is that it is the date on which Real Estate Tool Box was shut down.

June 2018, there is no magic about that date except that on the findings made by the primary judge, that is, that Mr Semmens infringed and those were repeated in Justice Greenwood’s decision at paragraph 117 and in Justice McElwaine’s decision at paragraph 206, those primary infringement findings continued until the shutting down of the Real Estate Tool Box system.  The question is whether or not there was authorisation in relation to that period, and to be fair to our learned friends, the case was always a continuation of conduct where the respondents, now the appellants, had been in a position, we said, to do certain things and therefore that the authorisation ought be found against them.

It is correct to say that they trusted Mr Semmens, and so the court below meticulously considered whether or not that finding of trust reposed in Mr Semmens – bearing in mind the precise content of that was not explained, either in cross‑examination or in re‑examination.  Your Honours have the cross‑examination in the bundle of materials of each of the parties.  It is not as clear‑cut as my learned friend would have you believe about the level of trust.  The trust was, as Justice McElwaine indicated, a rather nebulous one where Mr Semmens was asked, not once, to sign a document that he did not sign to, not every couple of days, but constantly.  In other words, we said both to the primary judge and, of course, to the court below, that that indicated something more nuanced than merely a reliance.  That, at best, was merely a neutral matter.

The evidence volunteered by Mr Stoner was that he – and the evidence establishes Ms Bartels relied upon Mr Stoner in her dealings with Mr Semmens.  That establishes that there was a concern.  One can infer from the continuous asking that there is a concern.  It is not a normal commercial transaction where one enters into an agreement in which someone has designed something, but Mr Stoner worked in the same office with Ms Bartels and, from time to time, with Mr Semmens, and Mr Stoner volunteered that he asked constantly.  We do not know, and the primary judge did not know, and certainly, of course, no one else knows what, in fact, was said in response to that, or what actually Mr Stoner told was a result of it.  The simple point is that it is not as rosy a position where there is a document where there was an instruction given not to infringe.  It is far more nuanced.

STEWARD J:   Is your case, Mr Green, a purely objective case, in the sense that you are not – wilful blindness cannot be put.

MR GREEN:   No.

STEWARD J:   So, what is the difference between your case of reasonable suspicion and the failure to inquire and wilful blindness?  Is wilful blindness a subjective test, and your test is objective?

MR GREEN:   Yes, your Honour.  We say that we are entitled, on the authorities, to put a case in authorisation that rests solely on a combination of what we say is undisputed actual knowledge ‑ ‑ ‑

STEWARD J:   And does it follow from an objective test that you say that the cross‑examination is really irrelevant? 

MR GREEN:   Yes, precisely.

STEWARD J:   Yes, I see.

MR GREEN:   Well, there are two answers to that.  Firstly, if one says that one must out of fairness put to the other side, then that evidence was in material file of an affidavit form filed, and it was the subject of selective response by the appellant.  So, it was not as if the appellant has completely ignored it.  The second point is that the correspondence was correspondence between lawyers – was from a lawyer to another lawyer.  Again, no waiver of privilege in relation to what was understood or said or the basis of the instructions, as one would often find in a case like this that there may be that waiver.  No inference, obviously, can be drawn on a negative basis, but, relevantly to this case, that allows for inferences to be drawn from the totality of the material.

EDELMAN J:   Does your case, as a matter of law, rise any higher than negligence?

MR GREEN:   In the sense of a duty to inquire?

EDELMAN J:   Put aside whether it is properly characterised as a duty.  The objective facts that you rely upon are essentially facts that all of the authorising parties were negligent in failing to take sufficient inquiries when they ought to have had reason to suspect that infringement was occurring.

MR GREEN:   With respect, your Honour Justice Edelman, it is probably slightly a bit more nuanced than that, but certainly that is an aspect of it.  The reason why I say it is more nuanced is because the evaluative exercise must take into account what was found as actual knowledge and then balanced against what steps were then taken or not taken, and the inferences available from the fact that, at a later point in time, the correspondence shows that if one runs about Alice in Wonderland, shows that there was a response – comment made by Ms McLean was it was “curious”.  It was curious that a position, for example – and I will take your Honours to the correspondence in full quickly, but it was curious that the response was to require what is the intellectual property which you are talking about.

Now, this is in circumstances in which these parties are given undertakings in relation to not using that material at an earlier point in time.  So, at a later – and that is why I say that one can use, in this case, a case of authorisation after‑occurring events to infer the reasonableness of earlier steps, and that is precisely, with respect, what Justice McElwaine had done, and what Justice Greenwood did in relation, particularly, to the Biggin & Scott parties which include Mr Stoner and Ms Bartels.

EDELMAN J:   At some point – it is entirely up to you in the course of your submissions – it would assist me if you could point to any authorities that come close to establishing that it would suffice to show authorisation that persons in the position of the appellants have acted negligently, even in the broad sense, which picks up all of the circumstances that are known, as well as ought to have been known to those parties.

MR GREEN:   I will take that on if I may after lunch, if that it is possible.  We have, of course, said that the indifference here refers to the authoriser’s failure to take reasonable steps, and that picks up on your Honour Justice Edelman’s question about whether negligence is useful a frame to consider what are the outer limits of that.  The other point about authorisation is not merely the prevention, but it is also the avoidance or the minimisation again.  That does pick up, I accept, a negligence analysis because of the nature of adopting a position that does not cause harm in that sense.

The question is whether subjective knowledge comes into it, but in this case it is objective knowledge, and we have identified those extracts from Adelaide, from Moorhouse, and from the statutory factors which, of course, as Justice Gordon observed in 36(1A)(c), come to play.  Again, that is the trilogy and the tension between those two elements.  Really, (1A)(c) helps regulate the position as between the parties.  Section 36(1A)(c), of course, requires an evaluation as to what the steps were to be reasonable, but again, use the language of “prevent” or avoid doing the act.

It does not, in that case, require the power or the steps to be guaranteed to succeed.  The example given, of course, from the APRA case is, of course, burning the house down, to discover pig crackling.  It is much wider, and of course it includes – but not relevant to this matter – industry codes of practice.  From that, your Honours can refer that the inquiry is a much broader inquiry than perhaps is to be found in the case law to date.

We say there was no error by the Full Court, and we say that because, having found reproductions and therefore found reproductions in both developing and using the Toolbox system – that is the use, initially, by the Biggin & Scott staff, but by others subsequently – having found those infringements, we then say in paragraph 7 of our outline that each appellant knew the following.  They knew that Mr Semmens had admitted to using Process 55 to develop DreamDesk, and that was the subject, as your Honours will see, in the judgment below, and, of course, in the Full Court of particular significance.

Campaigntrack had purchased the intellectual property rights to DreamDesk from DDPL – that is material both to that knowledge and also to the answers given, and the reasonableness of the answers given, and thus what one can infer about, objectively, whether they had reason to suspect that Mr Semmens and other of Mr Meissner’s staff – DDPL and JGM and Mr Meissner’s staff were developing Toolbox.  Mr Semmens had access to DreamDesk while he was developing Toolbox.

And from 29 September to 3 October, Campaigntrack had alleged improper access and duplication of code, and it was not immediately unparticularised – with respect – allegation.  It was an allegation that was made on the letterhead of a lawyer, made with all the trappings that one would expect of restraint, and it was a serious allegation.  It was not made in a recreational setting.  It was not made between two people playing golf on a golf course.  It was a formal commercial communication saying that there has been improper access and duplication of code.  The answer to that was not, please tell us what you mean by that, we are horrified by that.  It was, here, seven days later, are the undertakings you seek.  It was not done by return and there was a period of time.  So, 3 October, those matters in paragraph 7 of our written submissions apply. 

Then, the undertakings were given.  We talk about that in paragraph 21 of our submissions and paragraph 8 of our outline.  What we know from that is that, before giving undertakings, Mr Stoner forwarded the draft undertakings to Mr Semmens and they discussed, or probably discussed.  That was the topic of cross‑examination.  The cross‑examination is in the bundle.  It is on page 6 of the appellants’ bundle of further materials, at those lines.  I do not need to take your Honours to that except to indicate that they had properly – it was put to Mr Stoner whether he had discussed – and he gave certain evidence about that.

Then, from 5 and 6 October to 10 October, we say this is another point at which, as a result of that, further actual knowledge existed.  They each knew that Mr Semmens had been pressed to give undertakings of the same kind that the other respondents had been asked to give, and that Mr Semmens had refused, or failed, to give the undertakings.

They were on notice because of . . . . . to which I will take your Honours – that Campaigntrack considered that that refusal was suggestive of questionable activity and that Campaigntrack took seriously the refusal, not by letting things slide, but by turning off the – refusing to extend the DreamDesk licence beyond the 10 October date which, of course, was the date, coincidentally, that Real Estate Tool Box went live, but it was not the date on which the appellants sought to have Campaigntrack extend the licence.  They sought a longer extension, for reasons which were given in evidence; that they wanted to make sure that things were happening.  Ms Bartels gave evidence of that and that evidence of cross‑examination is in the appellants’ bundle of further materials as well.

The other matter which seems to have been in some dispute between the parties in their written submissions is that what Mills Oakley’s 9 October 2016 email demonstrates is that the firm was acting for all appellants, and that included Mr Meissner, it was not as if Mr Meissner, at least on 9 October 2016, was separately represented.  We say that that emerges clearly from our bundle of materials at pages 46 to 47.  We say that, with respect, our learned friend’s assertion in paragraph 4 of their reply is wrong.

Then on 10 October, the Toolbox was launched, and we say that is when the infringement – the infringement, of course, went into its commercial phase from its development phase, although we know from the cross‑examination of Ms Bartels – again, in evidence before your Honours – that the development of Toolbox continued after the launch.  So, the product, the Toolbox product, was not complete, it continued, and it continued using the same developers.  So, although it launched, Ms Bartels’ evidence is that it was sufficient to get by, it was not the system that they now have.

Mr Meissner returning from overseas is material to the knowledge that he might have been present or not, at the trial there was a debate about what Mr Meissner might know, being on a cruise.  But, in any event, we say that from 22 October he was returned from overseas and that the November 2016 agreement to have an independent computer expert is the time at which Mr Geri first became aware of Mr Semmens.

In other words, Mr Semmens was put forward as the expert, as the person to whom Mr Geri should speak and Mr Semmens gave that demonstration.  Of course, it is in his report and I will take your Honours after lunch to the report briefly to indicate that with respect to her Honour Justice Cheeseman ,the report was far more extensive than merely being in the most rudimentary terms, indicating copying it.

If that is a convenient time, I will ‑ ‑ ‑ 

GAGELER J:   It is, thank you, Mr Green.  The Court will adjourn until 2.15 pm.

AT 12.47 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

MR GREEN:   If the Court pleases.  Justice Edelman asked me a question before lunch about duty.  If I can indicate some references to make a consideration of the question of negligence and thus of question of duty.  It appears in Adelaide at CLR 487, in the joint bundle of authorities at 43, the last paragraph.

GORDON J:   Is that page 43 of the authority or of the bundle?

MR GREEN:   Of the authority, your Honour, yes, and 487 of the ‑ ‑ ‑ 

STEWARD J:   Page 43 of the bundle.

MR GREEN:   Page 43 of the bundle, yes.

STEWARD J:   Can you give the Commonwealth Law Report as well?

MR GREEN:   Thank you, sorry.

GAGELER J:   I think it is enough if you just give the CLR pages.

MR GREEN:   Thank you, I am trying to avoid confusion.

EDELMAN J:   Page 487.

MR GREEN:   Page 487, thank you.  Page 487 under E, at the very bottom of that page at point 9 where there are submissions made and there was an agreement by the Chief Justice with:

the Supreme Court. . . that indifference or omission is “permission” within the plain meaning –

And then down to:

(3) makes default in some duty of control or interference arising under the circumstances of the case, and (4) thereby fails to prevent it.

GAGELER J:   Who is the duty to, in that context?

MR GREEN:   Well, the duty, we would surmise, is, based in the context of that case, to the copyright owner, the holder of rights, whose rights are being trammelled by the action of the third party.  Or one might read more widely, a moral obligation to respect property.  The duty arises, as I have put to your Honours, using the concept of a trilogy.  The concept of duty provides tension to the tripartite arrangement, namely that the parties stand in relation to one another.  In our outline we have used the words “in proximity,” but certainly there needs to be a relevant relationship between the three limbs for there to be authorisation to exist.

That clears out the officious bystander, or the person without any duty to act in the circumstances, and might, on one view tie in to rescue cases and the like in the negligence setting, where, although obviously it is human nature to assist, there is no duty upon the person to act in those circumstances, and one can understand from iiNet, central to their Honours Justices Gummow and Hayne’s reasoning, and I will come to that in paragraphs 108 to 110, was a concept of duty and obligation.  The second reference ‑ ‑ ‑

GORDON J:   Sorry, what are we taking from 108 and 110?

MR GREEN:   Sorry, if I may just stay with Adelaide for a moment, and then I will come back ‑ ‑ ‑

GORDON J:   Thank you.

MR GREEN:   ‑ ‑ ‑ to stop confusing your Honours, for which I apologise.

GORDON J:   That is all right.

MR GREEN:   The next page reference is 501, in the decision of Justice Higgins.  The concept of obligation, pretty much the – “duty” appears at the top of the page in the fifth line, comparing a duty of a landowner at the top of page 501.  Then down to about point 8 on the page:

The defendant’s attitude was that it was not concerned to interfere; but in adopting this attitude we think that it failed to realize that there is at least some obligation to withhold countenance or support to what is commonly called ‘piracy.’  This is really the crux of the case.

And that, I think, picks up the concepts that your Honour Justice Edelman was seeking to, at least, find in the authorities.  We say that has, obviously, been overtaken by the statutory test, but it certainly comprehends there are circumstances where someone – of course, in the unique facts of this case, we do not say it was wilfully blind, we say that there is an obligation based on reasons to suspect; we say that has been triggered in this case.  On page 502 ‑ ‑ ‑

EDELMAN J:   Just before you go on, do you say that anything has changed in section 36 by the sentence following that which you quoted, which is:

We think that under the circumstances the defendant abstained from taking the reasonable step to prevent the performance of the particular work in question, although we cannot say that any protest would certainly have been effective.

MR GREEN:   Yes, we say that that – whether something is effective or not is not ‑ ‑ ‑ 

EDELMAN J:   So, there is still no need for a counterfactual that shows that the result would have been different.

MR GREEN:   Precisely.  One does not need to go so far as to prove that the best efforts – one needs to prove that there was action taken.  In other words, the test is upon the reasonableness of the action or, relevantly, inaction.  And to go back to a question asked by Justice Jagot, or an observation made by Justice Jagot about the giving of undertakings as against the refusal to give undertakings, in the evaluative exercise, both of those would be evaluated, and the failure to give undertakings may, on one view, be regarded as reasonable, but the inquiry would be as to the reasonableness of those, not to whether or not that would have prevented the ongoing infringement.

GAGELER J:   Nothing may turn on this, but this is not Justice Higgins, this is Justice Higgins quoting the Supreme Court judgment that he overturned.

MR GREEN:   I am sorry.  I should have said quoting, and then indicating his Honour’s disagreement within the following passage.  I am sorry – again, things are being passed to me, your Honours.

GAGELER J:   Well, a bit of filtering might be a good idea.

MR GREEN:   Well, I try to do that as well, but not as effectively as my learned friend does.  With all respect, the ultimate conclusion, which is really what was the essential question in this case about – the crux of the case – was a point of difference about whether or not what was thought was reasonable or not.  So, on page 502 ‑ ‑ ‑ 

GORDON J:   Did it not come down to the fact – it is what is set out about point 6, that:

The Corporation had no contractual or other relation –

and therefore no “power”:

to prevent the singing of the song –

MR GREEN:   That is – precisely.  If one looks at it in a proximity analysis, the proximity was – there was too much of a distance.  Obviously, it would have been effective if a corporation chose to deny the use of the hall, then self‑evidently, the performance would not have taken place.  But the question is whether that was reasonable or whether that would create an obligation in relation to – in this case – the plaintiff.  With respect, then his Honour says this further down:

With all respect, I deny that it was within the power of the Corporation to prevent the singing of the song, and that, even if it had any such power, it was a duty of the Corporation to exercise that power.

That shows the reasonableness analysis evaluating against the facts of whether or not there was some obligation lacking in the circumstance.

GAGELER J:   I do not really know why you are wanting to have a duty as an element ‑ ‑ ‑

MR GREEN:   No.  I do not.  I simply point out that it has been subsumed into questions of reasonableness, there is no ‑ ‑ ‑

GAGELER J:   There is no independent requirement for a duty, it is just a question of whether what is done is reasonable for the purposes of the statute.

MR GREEN:   Precisely – quite.  I was endeavouring to obligingly answer Justice Edelman, but I accept that in the facts of this case, and in fact, the correct analysis in relation to authorisation, no duty – there need be no duty.  Precisely that.  It floats without the need to be a relationship or a duty, otherwise, then, one allows the exercise of some action in circumstances where it would be unreasonable to not take that action.  I will not, then, tax your Honours with further discussion, except to observe that in iiNet, their Honours at paragraphs 108 to 110, their Honours considered the language.

Employing the concept of the special relationship, and again, that is not this case, and we say that we can make out a case without the need to get to that level of a relational analysis ‑ ‑ ‑

GORDON J:   Are you going to come back Roadshow?

MR GREEN:   Yes, yes, your Honours.

GORDON J:   Thank you.

MR GREEN:   If your Honours wish me to, of course I will.  We, of course, make extensive written submissions about it, but I will certainly take your Honours to it.

GORDON J:   One of the things that I would be interested in is that, in the passage in Justice Gummow and Hayne’s judgment at 128 and following, they talk about whether:

indifference . . . may reach a degree from which authorization . . . may be inferred.

And then talk about how that requires an assessment of all of the facts.  Then, at the end, conclude that:

The progression urged by the appellants from the evidence, to “indifference”, to “countenancing”, and so to “authorisation”, is too long a march.

At paragraph 143.  The question from me, for you, is whether your case is categorised as “indifference”

MR GREEN:   Yes.

GORDON J:   It is the way you put it.  Why is it not in the same position as that in Roadshow?  What is it about your case, on the facts, that bridges the gaps that Justices Gummow and Hayne have identified in Roadshow as not being sufficient to give rise to countenancing, and then to authorisation?

MR GREEN:   Yes, your Honour.  So, the key facts are set out by their Honours at paragraph 142.

GORDON J:   No, I meant, really, in your case because, in a sense, that is the case that is put against you.  It is the same sort of argument ‑ ‑ ‑

MR GREEN:   It is.  We say that there was a – we do this in our written submissions in detail.  Perhaps I can take your Honours to my oral ‑ ‑ ‑

GORDON J:   Before lunch, you took us to paragraph 7 of your outline, and then 8 through to, really, 15.  Is that the chronological identification of the facts, both objective and subjective, upon which you primarily rely to make good the bridging?

MR GREEN:   Yes.

GORDON J:   Thank you.

MR GREEN:   Then the statutory factors, of course, then supplement that in 16 to 17, and through 18.  So, we say, the essential difference here is that this is not – iiNet was a case where an ISP – where the copyright onus was seeking to then join an ISP by way of authorisation – that is, that the ISP was liable for what, A, its users were doing on its network in relation to BitTorrent – BitTorrent not being something that iiNet, itself, created but something which passed over its network.  So, the stark difference between the present case and iiNet can be seen immediately in paragraph 142 on page 89 of the Commonwealth Law Reports:

The “key facts” as to the “indifference” of iiNet upon which the appellants relied . . . were four in number.  They were:  (i) the provision by iiNet of the internet connections, a necessary but insufficient step for the acts of primary infringement; (ii) the technical ability of iiNet to control the use of its service and its contractual ability to issue warnings . . . (iii) the evidence provided by the AFACT Notices given . . . (iv) the absence of action by iiNet in response to the AFACT Notices.

Now, there are two potential differences.  This was – iiNet was directed, of course, to many hundreds of – or millions of users that were potentially engaged in an allegation of authorisation through the giving of notices.  The primary infringements were plain and they took place, but the question then was the idea that mere indifference in that case led to countenancing, and then to authorisations, as they said, was too long a march.  There was no direct power and the only effective power in iiNet was to terminate.  The ultimate finding in the Court was that it was not reasonable for iiNet to terminate users, there being legitimate uses that could be made of the system.

If I can return to the bundle of correspondence, which I started to do before the lunch adjournment, but if I can simply indicate to your Honours some of the correspondence and how it developed to make good the point that one can use later occurring correspondence to better understand earlier steps taken – and knowledge.

The disingenuousness reference emerges from the primary judge at paragraph 78, core appeal book page 74 – I do not need to take your Honours to that – in which his Honour held Mr Meissner had some knowledge.  That was demonstrated through a 1 September email.  Then, on 30 September, Mr Meissner sent the email to Ms McLean, which is at page 11 of our supplementary bundle, in the seventh paragraph, where it says:

I do not understand your reference to another company, and your involvement statement.

Your Honours will recall that this is responding to a letter that Ms McLean sent, in which she indicated that Real Estate Tool Box was a new entity.  That, the Full Court held at 331 to be – Justice McElwaine held to be disingenuous, which was something which we have invited, that finding.  It was not the subject of any finding – this email was any finding by the primary judge.

STEWARD J:   Why is that relevant to your objective case?

MR GREEN:   It is relevant because it demonstrates a lack of bona fides in the way in which response is given in circumstances where ‑ ‑ ‑ 

STEWARD J:   But again, why is that relevant?  It might be relevant to a wilful blindness case. 

MR GREEN:   It may be, but it is also relevant to understand the context in which various answers that subsequently came took place, your Honour.

EDELMAN J:   That is just a jury point, though, is it not?

MR GREEN:   All right, I will move on.  On page 13, Mills Oakley, acting for the Biggin & Scott parties, mentions Ms McLean’s letter of 29 September 2016, but makes no reference whatsoever to the allegation to infringement; is silent.  Mentions other aspects of the letter – the letter appearing at pages 9 to 10 of the bundle, for your Honour’s convenience.

STEWARD J:   But again, why?

MR GREEN:   Because it ‑ ‑ ‑ 

STEWARD J:   Would we not possibly read this as a letter written in circumstances where the parties, other than Mr Semmens, are going to comply and give the undertakings?

MR GREEN:   Well, at this stage it is relating to the Biggin & Scott parties, and not answering that aspect of the letter, simply passing over it without any explanation, with respect, one could – and we submit on this occasion, as the majority below did – take from that there was a reason to suspect, but no action taken.  It falls through because of the question of wilful blindness, as it must.  Your Honours were previously taken to page 20 of the bundle, in which Mr Meissner agreed to giving undertakings, but makes positive statements.

GAGELER J:   What are we getting out of all of this, Mr Green?

MR GREEN:   Simply that there is a sufficient bundle of material that entitled their Honours – the majority below – that when one comes to the giving of an undertaking – the signed undertaking appears on page 31 – that the giving of an undertaking in those circumstances, in circumstances of indifference, is sufficient to take the risk and thereby to authorise the statutory test; namely, that it is unreasonable ‑ ‑ ‑

GORDON J:   One of the ways – sorry to interrupt.  One of the ways that it was put this morning by Mr Walker was to say that, in a sense, by giving the undertakings, given the commercial context of a week, and in effect that they took the risk, they took on the responsibility of whatever the downside was by giving the undertaking.

MR GREEN:   But the undertakings that they gave, which were given and forwarded through their lawyers, were very sensitive – if your Honours have page 31 – they were a promise that they will not use – this is the third line of the undertaking:

use, market, sell, copy, duplicate or in any way enable or facilitate the development of any system by making use of any of the intellectual property which comprises and/or relates to the system of Dream Desk, which is now owned –

et cetera:

for any use other than its –

purpose.  They will also deliver up.  One can draw from that that, in the circumstances of what comes to be known, they were indifferent, and the indifference reached the extent to which there was authorisation.  That is how we put the case.  Going further than that, the indifference ‑ ‑ ‑

GAGELER J:   I am sorry.  Could you just say that again?

MR GREEN:   This picks up the ‑ ‑ ‑

GAGELER J:   From the giving of the undertaking, you infer what?

MR GREEN:   The giving of the undertaking, in the circumstances, which the later correspondence reveals, gives rise to a permissible finding on the part of the Full Court.  They were indifferent to the point of which they came within the concept of authorisation for the purpose of the statutory test.  The objective circumstances being that they gave undertakings, they had knowledge that Mr Semmens had not given the undertakings they had given, and the various other matters that we have put forward in detail in our written submissions.

GORDON J:   I know you keep saying that, but I think we just need to shell out exactly what those objective facts are.

MR GREEN:   Certainly.

GORDON J:   So, if they are as I understand them, they have given undertakings – and there is also a temporal question.  There seems to be a focus about 5 October.  Is this where we are at?  So immediately – not immediately.  Some days after the letter of 29 September.

MR GREEN:   It is some days after they gave undertakings, yes.

GORDON J:   So, it was a period between, I think Mr Walker said, seven days between the request and the ultimate giving.  And the facts are:  request made, ultimately give undertakings, forward of the request to Semmens, and knew that Semmens had not given the undertaking.

MR GREEN:   Yes.

GORDON J:   What else have we got as objective fact?  And if I have not got the facts right, or they are incomplete, then you should correct it, please.

MR GREEN:   They appear in paragraph 9 of our outline of written submissions, and they appear in paragraphs 23 to 27 of our submissions.  Mr Semmens had been pressed for the undertakings.  He had failed to give them.  We had said at that stage questionable activity, and we had refused to extend the licence beyond 10 October.  That is the period stemming from 5 to 6 to 10 October.  The previous knowledge ‑ ‑ ‑

GORDON J:   Sorry, can I – I am being really pedantic ‑ ‑ ‑

MR GREEN:   Yes, your Honour.

GORDON J:   ‑ ‑ ‑ and I apologise, but I want to make sure I understand this.  Can I just take the first one.  This is that they knew – let us take (b):

each appellant knew that . . . Mr Semmens refused or failed to give the undertakings that the appellants gave –

MR GREEN:   Sorry, if I may step back, your Honour – and perhaps this is at cross‑purposes.  Prior to the giving of the undertakings, so prior to the time – it is in paragraph 7 of our outline.  That is, Mr Semmens had admitted to using Process 55 to develop DreamDesk.  They knew that Campaigntrack had purchased.  They, of course, acknowledged that in their undertaking.  They knew that Mr Semmens and other DDPL/JGM staff were developing Toolbox.  They knew that Mr Semmens had access to DreamDesk while developing Toolbox.  And from the time from 29 September, which is the day the letter, to the time which they – sorry, pardon me, the time of first response.  That is not the time they give the undertakings.  The first response by them, they knew that there had been an allegation of improper access and duplication of code, and they knew that undertakings had been sought not to use or destroy.  That is the first temporal shift in that period.

Then they gave undertakings.  Your Honours have seen one set of those.  The undertakings responded to the allegation by, of course, giving them, but before giving the undertakings, Mr Stoner had forwarded the draft undertaking to Mr Semmens, and that was the subject of evidence before the primary judge and was the subject of cross‑examination, namely, whether Mr Stoner had provided Mr Semmens the copy of the sought undertakings.  Mr Stoner’s evidence is he could not remember what Mr Semmens said, and he did not have any record of it.

STEWARD J:   That recitation of basic elements still needs to take into account a number of additional ones that are left out, namely, Semmens is told to develop intellectual property which did not breach copyright.

MR GREEN:   Yes.

STEWARD J:   They trusted him, unchallenged fact ‑ ‑ ‑

MR GREEN:   Yes.

STEWARD J:   ‑ ‑ ‑ and they made – Mr Stoner made multiple inquiries of him.

MR GREEN:   Yes, and the answer to that, your Honour, is that the – the question is whether the trust – whether the trust which Mr Stoner held of Mr Semmens, the first that I put to your Honours before lunch, that the continual questions that do not really support a finding of the kind that my friend urges upon your Honours that there was an unabiding trust relationship.  What it was, was that Mr Semmens was trusted by Mr Stoner, but the reason why he was asked on a daily basis or the like, admits of a further analysis, admits of a further position which is that he remained concerned.  In other words ‑ ‑ ‑

STEWARD J:   Or prudent, or he was being prudent.

MR GREEN:   Or prudent, unexplored in re‑examination.

STEWARD J:   That is one of the things I think you have to grapple with.  Your case of reasonableness to suspect does not fit with the open-ended, unchallenged finding of trust, together with the 3 August set of instructions.  Do you not need a finding that said at some point the trust should have broken down or become a matter of concern?

MR GREEN:   Well, that is precisely what the majority below did when they came to evaluate ‑ ‑ ‑ 

STEWARD J:   But they do not overturn the open-ended finding of trust.

MR GREEN:   No.  The open-ended finding of trust, with respect, once one properly characterises it, is not a finding of trust that, for all purposes, allowed no further action to be taken on the part of those other parties.  And that is how we put the case.  In other words, there is – because there is a finding to that effect – that Mr Stoner trusted Mr Semmens, but on the other hand he asked, constantly – every few days, or constantly as the evidence advanced – there is no exploration by counsel for the present appellants in re-examinations as to the content of that communication.

There is no explanation as to the steps taken in evidence.  So, there is no evidence before this Court as to what happened when the undertakings were sought.  And one finds in the authorities evidence of examples where parties seek to explain the reasonableness of their actions or seek to justify that they relied upon something.  There is no reference at all, in any of the later correspondence, to the assurances that Mr Stoner considered so important that he asked Mr Semmens every few days.

So, in other words, one would, as a matter of common sense, to expect to be sent, from a solicitor’s letter a statement that we rely upon, we have sought Mr Semmens’ assurances and we are sure that he does not infringe.  What one finds, and I will come to this, is open-ended questions that do not support the maintenance of fasting of the kind that ‑ ‑ ‑ 

STEWARD J:   Well, that was what you submitted before the learned primary judge, and I think Justice Thawley rejected at paragraph 297(1), so the summary of your arguments at 296(1):

Given that Mr Stoner had to ask for assurance repeatedly, it can be inferred that Mr Semmens’ responses did not abate Mr Stoner’s concerns.

And then Justice Thawley’s findings start at 297, he does not accept that.

MR GREEN:   If one reads the findings that Justice Thawley made, there is no finding as to the content of the communication.  He accepted that there were assurances given.  There was no finding about what was actually said by Mr Semmens in response to the request by Mr Stoner.

JAGOT J:   But how could it be an assurance of any kind?

MR GREEN:   That is precisely ‑ ‑ ‑

JAGOT J:   No, but if you accept it is an assurance of some kind, as a judge, does it not follow that you are accepting it was, I not infringing, as opposed – it is hardly an assurance if it is I am infringing, or I am not going to tell you, or ‑ ‑ ‑

MR GREEN:   The precise point is that he was asked every – this is how we put, of course I understand, of course, Justice Steward’s comment about it ‑ ‑ ‑

STEWARD J:   If there was a point to be made about not knowing what his answer was, was it not a matter you should have extracted in cross‑examination?

MR GREEN:   No ‑ ‑ ‑

STEWARD J:   Should I have thought that you asked about it?  We got an answer about cost of assurances ‑ ‑ ‑

MR GREEN:   Cost of assurances.  The question then was, was it the onus of the applicant, in this instance, to seek an answer where this document does not feature in any other ‑ ‑ ‑

STEWARD J:   You are the applicant.

MR GREEN:   Yes.  The onus being, however, not to necessarily to seek to prove the negative, which is precisely what the answer would have given.  But, more tellingly, and more importantly, there was an opportunity for the present appellant to ask that; to seek to close that question.  It was left ambiguous.  Firstly, if one was asking for an assurance, and was being told, do not worry, it is okay, one asks why it was necessary to ask that every few days unless the questioner had some concern about the position of Mr Semmens.

It was sufficient, for our purposes, to say that there was a fact of being asked, rather than there being, necessarily, the content of the answer.  On the other hand, for the appellant, there was a need, potentially, to understand what the content of the answer was in order to work out whether it could be said it was reasonable.  None of this was the subject of any evidence given by Mr Stoner in his own material in the trial, and your Honours have the content of the cross‑examination.

GAGELER J:   Mr Green, I think you said before, in answer to some questions by Justice Gordon, that the factors that indicate indifference, and that can be translated back to the 29 September are those that you identify in paragraph 9 of your outline.

MR GREEN:   That is right – after that point in time, your Honour.  Then, 11 – 11 being the use – in other words, on 10 October, the allegations made in relation to an infringement had not been resolved and yet the appellants launched Toolbox.  That is in the teeth of Mr Semmens refusing or failing to give undertakings.  So, that is a further fact.  So, in other words, this evolves to that point.

Then, the events that follow from the appointment of Mr Geri, in 13 of our written outline – the written report given by Mr Geri on 19 January.  Then, we take from the correspondence from that point on, the material that we can use to, we say, illuminate the earlier conduct.  If your Honours start on page 45 of the additional bundle, of the respondent’s bundle of additional materials.  Sorry, if your Honours go back to page 41, I am sorry.  Page 41 – this is the communication of 7 October, at 1.31 pm.  Ms McLean had written to Mr Maletic.  In the second line:

Mr Meissner has not yet procured one party to sign the undertaking requested.

Then, the reasons given for terminating – the importance of that undertaking is made clear later, on page 45, at 16.43:

Our client has not received an undertaking executed by David Semmins –

That is, of course, a typo.  Then, 9 October – which is before the launch of Toolbox, at Sunday, 9 October, this occurs – if your Honours read from the bottom of 46, the email starts and goes through to page 47.  There is an email from Mr Maletic on Sunday, 9 October, 10.28 am:

WITHOUT PREJUDICE  

At the second line:

Mr Meissner has brough to my attention prior correspondence with your office as well as the attached email . . .

In response to point 2 and 3 –

Now, point 1 was the requirement of the undertaking.  But points 2 and 3:

(a)      willing and able to advance payment for the licence fee . . . 

(b)      comfortable for Dream Desk to continue to operate –

And then the claim in response to that at the top of page 46, in the second substantive – the third paragraph:

In any event, what your email below does not address, and nor has Mr Meissner in any satisfactory fashion, is the request for an undertaking to be provided by Mr Semmens.  Our client is already aware of activity that has given rise to the necessity to seek the undertakings that have been requested.  If no questionable activity is anticipated then we would have expected that there would have been absolutely no resistance to what was sought.  That is not the case and accordingly, our client has made a decision –

that is the decision to terminate the licence.  In other words, the appellant’s response to the copying allegations after 10 October is to simply not engage in properly responding to Campaigntrack about its concerns.

STEWARD J:   Is there any finding or evidence under the arrangement for the development of Toolbox set out in the 3 August instruction, that Biggin & Scott or the two partners had the ability to direct Mr Semmens to direct an undertaking of the kind requested?

MR GREEN:   Not in that document, and there has been no suggestion that there is any formal arrangement.  There is evidence to suggest that Mr Semmens was an employer or a contractor.  That is shown ‑ ‑ ‑ 

STEWARD J:   Of DDPL?

MR GREEN:   Yes.

STEWARD J:   He was an independent contractor?

MR GREEN:   Well, DDPL was an independent contractor, but of Real State Toolbox, which is the relevant one.  There is an indication in Mr Geri’s report that Mr Semmens is employed ‑ ‑ ‑ 

STEWARD J:   How would he know?

MR GREEN:   Well, he had a meeting with Mr Semmens in which that was – in any event that is the ‑ ‑ ‑

STEWARD J:   All right, thank you.  Thank you.

MR GREEN:   Nothing was produced so suggest that.  On page 49 of the bundle, the heading from Michelle Page is Ms Bartels.  So, Michelle Page is Ms Bartels, and the relevant passage is the paragraph starting “Obviously”:

Obviously we have had something being done in the back ground which will be sent through to you tonight or first thing in the morning.  The new company is called Real Estate Tool Box with the same team –

That is the same team as DDPL, that can only mean that:

We have managed to get most of the information across in the new system but tomorrow will tell.

And then certain things are said about Campaigntrack and New Litho.  And then ‑ ‑ ‑ 

STEWARD J:   Who was this sent to, I am sorry?

MR GREEN:   It was sent to all directors of Biggin & Scott.

STEWARD J:   Okay, thank you.

MR GREEN:   Then over to paragraph – then, relevantly, in evidence were text messages passing between Ms Keys on behalf of Campaigntrack and Ms Bartels, and your Honours will see on page 54 there is communication on 10 October, bearing in mind that the email that I just took your Honours to was also 10 October, earlier in the evening, this is later in the evening of 10 October, page 54, your Honours will see:

Hi Michelle, we are keen as discussed to keep it running til 17th October based on us receiving the assurances –

Then over the page Therese says this:

Hi Michelle, we are keen –

This is the full part of it:

So far we have received your written confirmations but no one else’s.

Then over the page to 56, this is Ms Bartels’ response:

the person you want to sign has nothing to do with us.  Just leave us alone.

Now, that could only be, based upon what was said on page 49, it can only be – and there is no suggestion in the evidence it is anyone else, that was a reference to Mr Semmens.  Then at page 57 there is a preliminary report of Mr Geri.  This is the report that Justice Cheeseman said was cursory, but, with respect, it is – once one understands how it took place and what observations were made, it certainly, we say, put the appellants on notice.  So, the background is the recitals.  At paragraph 12 on page 58:

I was instructed by Ms McLean to prepare a preliminary report in respect of my inspection of the two systems . . . I have been instructed that the letter of instruction itself was approved and issued with the knowledge and consent of the solicitor for Biggin & Scott.

Paragraph 13:

I was provided with the following –

A DreamDesk System, then went and looked at the relevant Real Estate Tool Box system in 13.b.  Then page 59:

My understanding is that Mr. Semmens was a key developer of the Dream Desk System and is now employed by Biggin & Scott in a contract position responsible for the creation and ongoing development of Real Estate Toolbox.

I was provided with . . . Front End Code.

That is 15, and then he makes ‑ ‑ ‑

GORDON J:   Paragraph 14, he gets the database structure of both systems.

MR GREEN:   That is right.  Yes.

GORDON J:   That is important for the findings later on.  Paragraph 15, he gets the programming code, the front-end code for both.

MR GREEN:   Yes.  And then ‑ ‑ ‑

GORDON J:   Paragraph 16, he gets the log files relating to the development, which is critical to analysing the development of the two systems.

MR GREEN:   Yes.

GORDON J:   And then he gets various screen shots of the applications.

MR GREEN:   That is right.  And then he makes certain observations from paragraph 26 through to paragraph 30.  He reaches this in 30:

in my opinion there is a high probability that intellectual property purchased by Campaigntrack has been used in the development of Real Estate Toolbox.  The applications have been developed by the same developer who had access to both systems during the development process.

Then he says this:

To forensically confirm –

Which must mean to analyse it otherwise than on the material provided during the preliminary inspection.  He needs to look at the system using the development of Real Estate Tool Box using:

a forensic examination of the servers responsible –

The primary judge at paragraph 278(7) and (10) on appeal book pages 93 and 94 made findings that that data was deleted in June 2017.  So, at the point at which this request was made, it was not too late to look at these systems, but the delay had the effect of that data disappearing.  The answer that Ms McLean received to the report dated 19 January is less than 24 hours later, on page 62:

Dr Ms McLean,

We refer to your email below in which you are asking our client to cease using a tool that is important to its business, on the basis of a preliminary report that acknowledges that it is incomplete.

The request is made to immediately shut down – that is at the bottom of that page.  The request for clarification from the lawyers is to:

1.clarify what the “intellectual property” (“IP”) is that your client asserts that it owns;

2.provide us with proof of ownership of the IP, including any agreements, deeds, or contracts relating to any assignment of the IP to your client from Dream Desk Pty Ltd;

3.provide us with any contracts or agreements that would exclude David Semmens from maintaining any rights in the IP that your client alleges that it owns; and

4.provide details of the prejudice that your client asserts that it is suffering from the use of the system and the basis upon which you assert that damages would not be an adequate remedy if there was in fact any breach of your client’s IP (which is denied).

This is not a letter written by an uneducated or an unqualified person.  This is a letter written by a senior lawyer, presumably on instructions.  It then says this:

In addition to providing us with the above information, please set out the basis that you say your client’s IP has been breached by our client.

Upon receipt of the above information we will seek further instructions from our client and promptly respond to your demand.

Then, should you choose to do something, they will need to prove that there has been an infringement.  That letter on page 62 was not in the primary judge’s bundle, but it is considered by Justice Greenwood at paragraphs 99 to 104 and Justice McElwaine at paragraphs 204, 205, and 299.

STEWARD J:   Sorry, the email was in evidence, though?

MR GREEN:   The email was in evidence, yes.  Yes, absolutely.  Yes.  The next email, which I will call the what rights number two email, on page 64.  Again, that was in evidence, but not the subject of any consideration by a primary judge, but it was considered by Justice Greenwood at paragraph 104 and Justice McElwaine at paragraph 300.  This is:

On 19 January 2017 –

so, this is written on 2 February:

you asserted that our client had intellectual property rights in its Dream Desk System and that our client had breached your client’s intellectual property rights . . . 

Further, you demanded . . . 

On 20 January 2017, we sought evidence of your client’s intellectual property rights –

And then the next paragraph:

Due to your client’s failure to provide the requested information, we infer that your client does not have any evidence to support the serious allegations made against our client.

Accordingly, our client’s position remains as set out in previous correspondence, that is, our client denies –

So, accordingly, there is no suggestion that there are any other instructions.  That is brought to consideration by their Honours below in forming the view as to whether authorisation took place.  Ms McLean responds to that by a letter which – if your Honours go to page 67, it is page – your Honours will see it is 3 February 2017.  On page 68, that date appears as 3 January, but is common ground that that was 3 February.  Some sort of transposition problem, perhaps people were not quite ready for a new month.

That letter is not considered by the primary judge, but it is considered by Justice Greenwood extensively at paragraphs 105 to 109, and by Justice McElwaine at paragraphs 301 to 302.  It analyses the correspondence.  The second open dot point on page 68 is:

○If your client continues to assert that it has acted lawfully, then it follows that it will promptly provide to Mr Geri the following:

■        Access to the GitHub repository . . . 

■        Copies of invoices . . . 

■Access to Real Estate Toolbox so that Mr Geri may take a complete forensic copy –

And then further down, dropping into the next open dot point on page 69:

○We find it curious that your client chooses to raise this query now, after an allegation by our client that your client has copied or otherwise improperly duplicated or caused to be duplicated the intellectual property that our client purchased.  Your client acknowledged our client’s rights in relation to the intellectual property regarding the Dream Desk system so to raise that question now bespeaks an absence of bona fides.

○In any event, so as to respond as fully as it might, given your client’s refusal to do that which it promised to do –

It confirms it owns:

■Further, as a consequence of a signed confession made by Mr Semmens –

reminds of the Process 55 issue.  Then, going over the page to 70, on the top of the page, it is:

confirmed to your client by the director of Dream Desk Pty Ltd, Mr Meissner, we do not consider it to be necessary to provide you with a copy of any of the agreements which relate to the intellectual property which it now owns.

○If despite your client’s prior acknowledgement of our client’s right and its awareness of them, your client nevertheless wishes to put in issue our client’s entitlement to the IP and other rights, which your client well knows precludes it from acting in the manner about which our client complains, then there is little or no merit in now providing your client with additional material, which additionally contains our client’s confidential business dealings.

•You have asked us to provide you with any contracts or agreements that would exclude David Semmens from maintaining any rights in the IP –

The first open dot point, the last sentence:

Whatever right Mr Semmens may have previously had to the IP (which is not admitted in any event) and other rights was conveyed to our client or otherwise precluded him from activities about which our client now complains.

○With respect, if, as your client seems to assert, Mr Semmens was entitled to continue his development activities – a mater that our client manifestly disputes, and it wishes to avoid our client commencing proceedings seeking to compel it to do so with the attendant costs, then it must provide our client with the access it seeks through Mr Geri.

•You have asked us to provide –

and so on.  It then deals with “flagrant disregard” on the next page, and then, at the very bottom of the square dot points:

It is hard to conceive of a clearer case where an injunction would issue on a permanent basis, together with orders for the delivery up of all our client’s intellectual property in your client’s possession.

It then recites the correspondence, and the timing of the various events.  It then says that further demands shutting down the system at the very bottom of the page.  The answer to that was on page 75:

Dear Ms Mclean,

Thank you for your lengthy letter . . . 

Your letter demands a response within one business day, notwithstanding your delay in responding to our email dated 20 January 2017.

We are seeking instructions regarding the matters set out in your letter and will respond to your letter as soon as possible.

Then what comes is on page 77.  It makes the observation, in the first paragraph, that that was a letter dated 3 February and erroneously named.  In accusation 4:

You have now requested that Mr Gerri be provided with access to the Real Estate Toolbox for a third time.  We view this further request as an attempt to fish for evidence that may support your client’s claim.

It takes further steps:

Alleged Breach of Intellectual Property

Page 78, paragraph 13:

Your letter alleges that our client “has used the intellectual property, being the Dream Desk system without (y)our client’s license or permission.”

We are unsure on what basis you say that our client has used the “Dream Desk system”.  However, ordinarily, the course code of a computer or software program is identified as the intellectual property that someone asserts a proprietary right over.

Given that you failed to identify how our client has infringed your client’s proprietary rights, we infer from the extract of your letter referred to above, that you are alleging that your client has a proprietary interest in the source code of the “Dream Desk system” and that our client has copied and/or used this source code.

These allegations are rejected.  Our client’s system does not use the source code that is used in the “Dream Desk system”. 

Further, our client’s system does not use any other component or data that your client could possibly hold a proprietary interest in.

Given that our client’s program relies upon software and services of a third party located in the United States to perform its function, we view your client’s broad allegations that our client has breached your client’s intellectual property as unmaintainable.

Then it goes on.  That, of course, was the subject of consideration by the Court below, the Full Court, and, with respect, the conclusions to which the majority came was entirely supported upon their analysis of the objective acts contained in them.  One did not need to put that material to each witness separately from the fact that each witness had access to that material as part of the evidence that was put forward in the case.  And in any event, if the current appellants wish to bring matters forward to be exculpatory, or to explain why it was unreasonable for them to act in a particular way, or to seek to explain the relationship between themselves and Mr Semmens in the circumstances, then it was open for them to do so.

It was not a case where it was necessary, in proving the authorisation for the original applicant, namely, Campaigntrack to do any more than put forward that material seeking if there was no traversal of that by any kind of other material for the Court to draw inferences from it.  It is correct that there were findings made by the primary judge which the parties accepted.  But this is a case where, legitimately, the primary judge overlooked and, it is fair to say, did not consider in a substantive way, in the cogent way in which Justice McElwaine puts it, substantial correspondence or a substantial part of the applicant’s case. 

The applicant’s case below had numerous aspects to it including a claim for breach of undertakings.  The presence of some of the documents that were put forward by his Honour did not bespeak that his Honour was considering anything to do with the authorisation case, and the reasoning that Justice McElwaine gives is that simply, with respect, the approach taken by Justice Cheeseman in analysing matters inverts the process.

There was at all times, the majority agrees, that part of the applicant’s case that included conduct, right up until the time that DreamDesk ceased operating, and that included of course the period after the point in time in which the September letter came to be written, and it includes, importantly, the correspondence to which I have taken your Honours.

EDELMAN J:   The decision under section 36(1) is not a House v The King type decision, is it?

MR GREEN:   No.

EDELMAN J:   Does it matter whether the primary judge failed to take into account any particular considerations?  Is that a necessary matter before the Full Court, or the majority of the Full Court, could reach a different conclusion?

MR GREEN:   It was open to the Full Court to reach a different conclusion on the basis that there was appealable error, the appealable error being that his Honour had taken up the case of Lee, his Honour had failed to give proper reasons for the evaluation, or non‑evaluation, of that material.

Otherwise one works in reverse in the sense that if one was to adopt the approach taken by Justice Cheeseman in this case then one would not be able to deal with an omission in a case of this complexity by simply saying that it is not entirely convincing that because his Honour cited something without any commentary to explain the question of the authorisation case.  One can see that a very substantial part of that material was concerned with lawyer’s letters and the like.  One could make inferences from what was said in those letters without the need to interrogate parties and whether one would get any sensible answer from interrogating them is, of course, beside the point.

The other matter is that in the statutory factors the steps – we enumerated the steps that could have been taken.  If I may now just return, having – I will not belabour the statutory factors, they are in our written outline, but returning to the flaws in the appellants’ argument in paragraph 19 and following of our written submissions, bearing in mind the time.  We say that the appellants’ reply submissions in paragraph 14 misstates the authorisation test as requiring us to be able to demonstrate the transformation of subjective trust into – of no infringement into implicit endorsement of the conduct.

We say, with respect, that those two concepts can co‑exist in the analysis of reasonableness, and we say that whether the trust that was maintained in – and this is the approach taken, of course, by Justices Greenwood and McElwaine – the approach taken – taking into the calculus, or the analysis of the relevant positions, one can take into account, as their Honours did, the position of the trust that Mr Stoner opposed in Mr Semmens.

The use of the word a “fault line” or the “fault line”, indicates that something changed in September 2016, and what changed there was there was an allegation, for the first time, by a lawyer’s letter, of infringement.  One’s trust is not simply met in those circumstances.  Now, if there was any doubt about that in September, then the events that transpired, including the correspondence that transpired, is that the – whether it was reasonable in the statutory sense for the appellants to seek to cite that trust over all the other factors and the options that were available to them, which we have pointed out in our written submissions, we say is an erroneous analysis.

The way in which the appellants seek to achieve that is to focus on a very narrow period in time.  The subsequent conduct, as your Honours have seen, illuminates the majority – explains properly the majority’s reasoning that one can infer from later conduct that there was a degree of indifference sufficient to ground defining authorisation on and from the first allegation of infringement.  That is because simply nothing was done, and in relation to Mr Geri’s report – having received a result from Mr Geri’s report nothing further was done.

None of the letters calls attention to the fact that you should be talking to Mr Semmens and not us.  We have nothing to do with Mr Semmens.  There is a simple reason for that – Mr Semmens was knee‑deep, as the evidence shows, in the operations of Real Estate Tool Box and was its developer and was involved, and also was invited to be an investor.  There is a degree of artificiality about saying, in this case, that Mr Semmens stood alone as a lone wolf.  He was not.  The evidence established that Mr Semmens was integrally involved at all times, and while he may have been the only person who understood how to read code, apart from Mr Gallagher and Mr Zhang, who were also employees and capable of being asked, Mr Stoner and others sought to direct and sought to hasten the project, as the evidence demonstrated.

So, Mr Semmens – if one was to accept the appellant’s contention about authorisation, then, as a matter of practice, it would be impossible for anyone but a person able to read computer code to ever authorise infringement because, on their own case, unless they were able to ask Mr Semmens – it appears – then that would foreclose any kind of further inquiry. 

The problem with that approach, of course, is objectively what one sees in the letters.  There is no suggestion by the lawyers writing on behalf of the parties, any difficulty in denying infringement.  One did not see, in those letters, any comment to say, we cannot really tell you what the software is, because we need to ask Mr Semmens and he is not cooperating with us.  So, in other words, they went and made positive statements, positive representations about the position which tells against any kind of impediment on the part of the appellants to taking steps from that point on to investigate and to determine matters.

EDELMAN J:   What was the legal effect of the undertakings?

MR GREEN:   Well, we do not press that.  We were unsuccessful below about that, and we do not press those.  But we do say they had an important effect in being a representation that one can infer from that, as the Full Court did, that certain steps had been taken before they were given. 

EDELMAN J:   How do you make the submission that the entry into a document that potentially has legal consequences but certainly involves important representations, involves or demonstrates indifference?  Surely it demonstrates the opposite of indifference – it demonstrates a willingness to commit to a position.

MR GREEN:   Well, we put it in a more nuanced way.  We say that it is because of the knowledge that Mr Semmens did not enter into the corresponding undertaking, and that gives rise to the ‑ ‑ ‑ 

EDELMAN J:   I appreciate that, but I understood you also to say that the actual entry into the undertakings by the fifth and sixth appellants, and fourth appellant, somehow demonstrated indifference.

MR GREEN:   Well, one can try it in this way, in a slightly different context.  One is asked to sign a contract, and often, as one will have heard, someone takes the time to read it, and the counter‑party says no one has ever complained about signing a contract like this before.  Then, often, in cases, a person will say, I just signed it and never read it.  So, that is an aspect of indifference.  If one has not satisfied themselves of the circumstances of the promise, or the capability of answering a promise, then one ‑ ‑ ‑

STEWARD J:   Are there any findings to that effect here?

MR GREEN:   No.

STEWARD J:   Thank you.

MR GREEN:   It simply emerges from the question asked to me.  But the submission is the fact that there was an awareness that Mr Semmens had not given that undertaking.  There are findings about that, of course, and the circumstances of whether that bespeaks.

EDELMAN J:   Another way of looking at it may be the way Justice Higgins put it in Adelaide Corporation, which is to say that – I think to use his expression – that what was not present in that case was an assumption of responsibility.

MR GREEN:   Yes.

EDELMAN J:   Yet the entry into an undertaking – albeit far from demonstrating indifference – might be a demonstration of an assumption of responsibility for an outcome.

MR GREEN:   Yes.  We would, of course, embrace that, your Honour.  The effect of that, of course, is that it becomes part of the analysis what happens later and what is discovered.  In other words, bearing in mind that the authorisation must – the shorthand way to summarise your Honour’s point is that there is taking, assuming the risk, or just taking the risk regardless of whether or not it is correct.  Unless I can ‑ ‑ ‑

GORDON J:   I put that to you before, and I thought you rejected it, but you now embrace that in the sense that it is taking an educated risk.  Taking a risk knowing the objective facts.

MR GREEN:   Taking a risk knowing, or being able to ascertain, the objective facts.

GORDON J:   The reason why I say that is, taken at its highest, it must be that Meissner and DDLL become aware on the 30th of the allegation of “improper access and duplication of code” of their client’s IP.  That is, Campaigntrack’s.  A request for undertakings from all parties.

MR GREEN:   Yes.

GORDON J:   Positive denial of misuse on the 30th by Meissner.

MR GREEN:   Yes.

GORDON J:   Biggin & Scott becoming aware of, in a sense, the same fact by the 3rd, giving rise to a further positive denial by Meissner on the 5th, and then the giving of undertakings on the same day by the Biggin & Scott parties.  And then on the 9th, Meissner being challenged, or Mills Oakley, really, being challenged, saying, listen, you just have not addressed, and nor has Mr Meissner addressed, the request for an undertaking from Mr Semmens because our client is “already aware” of activities giving rise ‑ ‑ ‑

MR GREEN:   That is right.

GORDON J:   Et cetera.

MR GREEN:   Yes.

GORDON J:   Is that it?

MR GREEN:   At that point, and then there is accumulation on other ‑ ‑ ‑

GORDON J:   Sorry, I did not hear what you just said.

MR GREEN:   At that point, yes, your Honour.  And then there is an accumulation of other – of course, there is the earlier conduct in relation to Process 55.

GORDON J:   No, we are past all that.  We are just dealing with this.

MR GREEN:   Yes.

GORDON J:   All those facts are agreed ‑ ‑ ‑

MR GREEN:   Yes, that is right.

GORDON J:   ‑ ‑ ‑ and there are findings made about those facts.

MR GREEN:   Yes.

GORDON J:   Your case, as I understand it, is to seek to uphold the majority view’s analysis and to somehow bridge the gap identified by Justices Gummow and Hayne in Roadshow, that someone goes from indifference to countenance to authorisation.

MR GREEN:   Yes.

GORDON J:   We are trying to work out what you say are the objective facts, because the subjective facts, on one view, are against you.

MR GREEN:   Yes.

GORDON J:   And the objective facts are . . . . . a complaint that when Meissner says he has got no control over Semmens, is wrong ‑ ‑ ‑

MR GREEN:   Yes.

GORDON J:   ‑ ‑ ‑ that is never put to him.  And then the conduct in relation to the expert and the subsequent requests for information, which are not responded to.

MR GREEN:   Yes.  And, finally, what we have put at point 24 of our outline, which is if the appellant’s undertakings were replicated or built upon the stipulations in the 3 August letter, then that amplifies the failure of Mr Semmens to give the same undertakings.  So, it is an amplification of the point that your Honour Justice Gordon had noted.

I see the time.  Those are our submissions.

GAGELER J:   Thank you.  Mr Walker.

MR WALKER:   May it please the Court.  Your Honours, the course of events, including in this Court, rather draw to attention the lack of any notice of contention in this Court, but also an approach to burden of persuasion and onus of proof in the Full Court, which goes back to the way in which the matter was framed at trial.  I drew to attention in‑chief, I will not return, to his Honour the trial judge’s exposition of his understanding of the way in which the authorisation case, or cases, were put.

It is not suggested his Honour was in any sense wrong.  It is, of course, now of considerable forensic significance, having heard our friends, for us to observe that you will not find in that understanding at trial of the authorisation case any illuminating or retrospective or sinister complexion being given to the solicitor’s correspondence leading up to the commencement of litigation or, for that matter, Mr Geri’s preliminary report, to which I will come back briefly in a moment.

This afternoon our learned friend, in the course of urging vindication of the authorisation holding in the Full Court, said of our clients below, that is, at trial, that it was for them to explain why it would be unreasonable for them to have done something such as to investigate, et cetera, et cetera.  Of course, that is simply not correct in either practical or legal terms, it is for the party alleging authorisation to show, by reference, among other things, to the nature of reasonable steps that either were or were not taken, the degree to which the relationship becomes one of authorisation, not the other way around.

I do not mean that a defendant, properly advised, will not enter the lists in factual terms, including by challenging evidence on the other side, and certainly by giving evidence themselves so as to avoid anything in the nature of a Jones v Dunkel comment.  Of course, that is true, but that does not shift an onus.

In particular, in answer to Justice Edelman, my friend took up with some enthusiasm – he embraced the notion of a case which saw the giving of the undertaking – I stress, the giving of the undertaking – for good measure, I will add, let us image, by return – to use a phrase my friend has used – as being an assumption of responsibility, a phrase which, of course, has resonance, in particular, in relation to a tortious liability for negligence, particularly for non‑property loss.  That is an area utterly unexplored at trial – completely unarticulated before and in the Full Court – and one which would require a notice of contention with very considerable moment for the law of authorisation.

I am not saying I am not ready to deal with a case about assumption of responsibility, but the best way to deal with it is to say that it is not before this Court.  In particular, one can illustrate how it is a cuckoo in the nest by noting that it turns upon saying, you would have and therefore did become liable because you gave the undertaking – a step called assumption of responsibility along the way to explaining what side of the line, exemplified by these intensely factual decisions, such as in Adelaide, this case would fall.

It just is absurd, in our submission, for the respondents blithely to embrace a theory of the case which is contrary to that which was adumbrated by the majority judges in the Full Court and is totally contrary to every written word and, up to the point of answering Justice Edelman, every word and address by our friends concerning the role of the undertaking, because it was the giving of the undertaking.

Now, I noted our learned friend’s use of the expression “by return” three times, I think, before the break.  My learned friend noted that the undertaking was not given by return.  Perhaps the unarticulated proposition was that if there was no difficulty with the position being of no breach, then the undertaking could be given immediately.  That was always at odds and in tension with the way in which the respondent’s case, so far at least in this Court, has been presented.  Namely, that there should not have been the giving of an undertaking, certainly by return, or else until the date arrived, if it ever arrived, after there had been appropriate anxious scrutiny, including seeking to persuade Mr Semmens to be frank, presumably, perhaps even retaining the services of someone like Mr Geri.

And so, in our submission, there should be now no entertainment in favour of the respondents of any such theory of the case.  It may be that this is a case which has thrown up a matter which really shows how open-ended and functionally determined are questions of authorisation, because for ourselves, we would submit as a matter of principle that in the event that there was no power, legally, to compel, it may well be that nonetheless a sufficiently open, plain and effective assumption of responsibility or, more to the point, declaration of support for and endorsement of – and your Honours have seen endorsement in our articulation of the relevant principle – that would, of course, inform a case of the authorisation.  It might even be a paradigm case to point to the person who, whether they are hiding behind a curtain or not, are nonetheless saying, please do this, it will be for the good of the industry, it is high time these people asserting rights of copyright were exposed for what they are.

EDELMAN J:   Well, you would then be squarely in the field of primary responsibility.

MR WALKER:   One would imagine so, but if there is circumspect language which, in what I might call sly or tricky fashion, sought to achieve exactly that state of affairs, then one would very much be having a position of saying somebody has, by the way they have conducted themselves concerning a proposed course of action, assumed responsibility for.  So, in that respect, yes, we would without any demur see as a matter of principle that borrowing of language and, to a degree, concept from a negligence jurisprudence would have some place in another case, but not this one, bearing in mind the forensic course here.

With respect to negligence, my learned friend did not positively answer Justice Edelman’s question, is there a case that comes close to something in the nature of negligence supplying the body of an authorisation case?  My learned friend spoke about duty, but leaving aside the obvious possible relation in some context of duty and a breach of duty that is negligence, we would submit that there simply is nothing, to use familiar language, which would suggest in the case law that so‑called mere negligence, that is, acting not so carefully as either in one’s own interests or out of a concern for social benefit you might, in retrospect, have thought appropriate, you thereby become an authoriser.  In other words, the distinct substantive liability of authorisation has not been a price of falling short of perfect prudence, mercifully for all of us, no doubt.

Your Honours, in relation to questions of principle and case law, some caution of a kind that is not original for me to express needs to be nonetheless repeated with respect to Adelaide Corporation v APRA.  It is a case about permission.  There is an obvious relation between authorising and permission, but they are not the same word, and it may be that their penumbras are not exactly congruent.  The Chief Justice – in dissent – at page 487 of 40 CLR, when talking about a duty of control or interference, did not need to, or in any event, did not elaborate how one could ascertain that without committing a circularity – that is, seeing a duty where there is a conclusion of authorisation.  It does not appear to be a freestanding duty which depends on what any other area of law or any other legal doctrine.

A duty of control or interference, the very phrase bespeaks something that is not in the heartland of the common law.  Indeed, normally ‑ ‑ ‑

GORDON J:   It is really the nomenclature to describe the relationship, is it not?

MR WALKER:   A duty of control or interference sounds as if it may be someone in loco parentis, but we are certainly not talking about anything like that or coming anywhere near that in this area of what I will call commercial equals.  Whatever one says about duty of control or interference is unlikely to be a negligence context, it is probably antithetical to an ordinary negligence context.

It is true, as I explained in‑chief and as picked up by my learned friend in answer to Justice Edelman, that a so‑called counterfactual may not always be necessary.  But it must always be necessary in order to posit something as being reasonable to ask at the time you are judging whether it is reasonable, whether it will be, among other things, efficacious – or, I accept, has sufficient prospect of being efficacious as to be worth the effort – familiar calculus in any kind of reasonableness assessment.  That is why, of course, we accept what Justice Gageler has raised by way of an observation.

Almost certainly, it would be wrong to promulgate as a general notion that you always need a duty in order for there to be authorisation and it gives rise to the old chestnut familiar from what used to be called misrepresentation by silence – but what if there is a duty to speak and the next round of cases, what do you mean by a duty to speak?  Circularly, you end up by saying, an imperative to speak lest you mislead.  In our submission, we are in that kind of area and so we would respectfully accept that one does not need an analysis that formally uses the word “duty” at all.

Your Honours, there were a number of examples – I will briefly name the more egregious – where, in effect, our learned friend was seeking to row back from the clarity with which the four judges below accepted the innocent state of mind of all relevant actors on our side, up until 29 September, as to two of the judges in the majority against us below, of course.  In particular, an attempted vindication of the epithet “disingenuous” for conduct is, in our submission, of that kind.

So is the notion of a lack of bona fides in the kind of exchanges to which we are about to come, and the correspondence to which you were taken.  And, in particular, so is the notion of some juncture, never quite identified in the chronology by our friend, after which a trust – the trust in Semmens – should have been either dispelled, we think that was the extent of the argument against us or, perhaps, to use my friend’s words, in a more nuanced way, sufficiently damaged so as to no longer justify confidence; query why there would be still trust at all.

In our submission, there is – for all the reasons that we have identified and, in particular, Justice Cheeseman has articulated – these are not matters which are available now to be revisited, particularly as to do so in the face of the very clear strictures to the contrary up to 29 September by the majority judges.  Again, there is no notice of contention in this Court that would advance such a heroic task in factual terms.

GAGELER J:   To be fair to the argument put against you, Mr Green did identify 10 October as a critical point, and he lined it up, as I understood him, with the last sentence in paragraph 334 of Justice McElwaine’s judgment, and he says in the broad scheme of things if you take that point and that finding, that finding can in some way be projected back a week or so.

MR WALKER:   Yes, and as to projection back, in our submission, for the reasons we have both written and tried to explain in‑chief, to reason back by pointing to subsequent dealings, sometimes events, sometimes just words, in order to infer something which would not otherwise appear to be the case of earlier states of affairs is extremely fraught – I am not saying impossible – and it is not done in the reasoning against us below by the majority.

There is not, with great respect, to be found in the majority a case which is built upon solicitors’ correspondence or Mr Geri’s report so as to show that what fell out between – and I accept, say, between 29 September, the very earliest time, and 10 October when the turn‑off happened, the switch‑off happened, there is no articulated explanation of how what would otherwise appear to be the case from those dealings is altered so as to produce a conclusion of authorisation by reason of what comes out in January the next year.  Again, there is simply no notice of contention and this is not the kind of case which would permit this Court to entertain such a remodelled theory.

Could I briefly please go to some of the documents that my learned friend dwelled on.  In the respondent’s book of further materials, could I pick up at page 62, and remind your Honours of the exchange concerning the receipt of Mr Gerri’s report.  There has been no attempt to show, either by reasoning in the Full Court – majority against us – or in the course of the evidence – by which our witnesses were fully exposed to testing – any exploration, let alone an appropriate confrontation where the necessarily adverse matters were to be put, including adverse to their own evidence, based upon the need for them to have revisited, radically, their view of whether there had been infringements by reason of those dealings.

In particular, when one comes to the material at 68, which is the 3 February – I will call it letter before action – it is, with respect, a complete novelty in this case to suggest that that is one of the subsequent events, that is, the receipt of that letter, which says anything about the conduct and state of mind of our clients so as to support authorisation for the 29 September in the preceding year.  We do not understand, with respect, how that could sensibly be advanced in that direction.  Even more, the most recent of those subsequent events by way of correspondence – that which is at 77 and 78 of the bundle, the letter in refutation in the exchange preliminary to litigation on our behalf.

GORDON J:   I think that the 9 February letter to which you have just referred ‑ ‑ ‑ 

MR WALKER:   That is the one I am just referring to now.

GORDON J:   I think there were two aspects put against you, just to test that proposition.  One was that you had a positive assertion that Toolbox does not use the source codes that had been used DreamDesk.  You have a positive factual assertion.

MR WALKER:   Yes.

GORDON J:   And then the second aspect is that the solicitors are saying what you are asking for is fishing, they are being asked to provide the relevant material.  They are the aspects.  In other words, given – as I understand the arguments put against you, when one looks at the conduct through from 29 September up to and including the 9 February – I think probably the 9 February is the last event in that.

MR WALKER:   Boiled down, the first of those is not accepting the truth of the allegations against us, and the second is not being more cooperative than we had already been.  We had given access to an expert.  Not being more cooperative than we had already been, with respect to matters about which, plainly, were all headed to Court.  The letter we are responding to is a letter before action.  Against that context, the first thing to observe is what I started in reply.  Where was this in the case at trial, of authorisation?  Where was authorisation, in particular, as at 29 September, by reason of statements in a letter 9 February following? It is not there.

GORDON J:   When you read the trial judge’s analysis of that paragraph – core appeal book 99 to 100, this is in relation to the authorisation case against Biggin & Scott and the other respondents.

MR WALKER:   Yes.

GORDON J:   Is it right that it was in those general terms?

MR WALKER:   Yes.  Right that was in those specific terms.  That is the case.

GORDON J:   Less than specific; general.

MR WALKER:   When I say specific there, it has never been suggested that there is any material error or omission, in that carefully recorded understanding by the judge of the case we came to meet on authorisation.  My friends have not written anything to that effect, and nothing has been said to that effect.  And it was not run in the Full Court on the basis that his Honour failed to apprehend the nature of the case being put.  That is why, as Justice Cheeseman put it, it may be that in an appeal by way of rehearing, which of course this is not, but before their Honours it was an appeal by way of rehearing, it was available to run this case which brought out of obscurity 29 September.

But that does not, with respect, change the way in which a case has been put at two levels below and they do not include authorisation by the way in which you responded to these immediately pre‑litigation items of correspondence.  Not surprisingly, because on analysis it means that you are at danger of authorising if you do not accept assertions of legal wrongdoing by the putative infringer that you may be in danger of being held to have authorised.

That has not hitherto been the law and, with respect, it would seem odd to say that a person has authorised because they deny there has been an infringement.  If there was a deal else in the atmospherics, including a capacity to say that that was throwing sand in the eyes of legitimate pursuers, that is, it was, in effect, either lies or trickiness, then that would be a different kettle of fish.

We entirely accept that we have the benefit of finding which really preclude that, and we have the benefit, if it can be called that, of the way in which the case was run at trial by which there has never been the appropriate exploration or confrontation of witnesses with respect to those very adverse matters as to their sincerity or as to the unreasonableness of them continuing to abide by a state of affairs that had started out as being honest, and on the case against them must have ceased to be so.  That is very serious.  That is among the reasons why other ways in which the case was attempted to be put in the Full Court was rejected by all three judges in the Full Court.

In the same bundle, can I then take you to some of that contemporaneous correspondence?  The so‑called “disingenuous” statement that you will find at bundle, page 11, the 30 September reply by Mr Meissner at the middle of the page.  Quote:

I do not understand your reference to another company, and your involvement statement.

is a reference to that which is conveniently, on page 10, just opposite, at the top of the page, second dot item:

Our clients have become aware of improper access and duplication of code which is intellectual property now owned by our clients –

Third dot item:

Our clients are also aware of the incorporation and involvement of Real Estate Tool Box Pty Ltd.

When you put those two together and you consider the nature of the demand and Mr Meissner answering, on the basis that he is wishing to abide by the law – in a respect that I will explain in a moment – there is nothing disingenuous in saying – he is not saying, I do not know anything about Real Estate Tool Box Pty Ltd or Toolbox, he is just saying, what has that got to do with the matter?

He, of course, knew it is common ground that there was a rival offering being prepared – much to the chagrin of Campaigntrack, no doubt, but there was going to be a competitive offering.  That was exactly that about which there was the honest belief that steps had been taken to stipulate that there be nothing beyond the pale, carried out in relation to that development by the very person from whom it was reasonable to exact some such assurance, given his track record.

If one then goes to page 13, you will see, on 3 October, continued negotiation to try and make the extension somewhat longer.  I will not bore your Honours – there are throughout this multiple references to 17 October, 10 October, 24 October, et cetera. 

That bespeaks on behalf of those who are seeking extension of time a concern for legality, not an indifference to legality, because under the licence back after there had been the reparative commercial reframing so as to deal with the problems caused by Mr Semmens’ earlier unlawful conduct, there was a licence back to expire on the 3rd.  Then there was all this effort gone on our side to see whether we could get – for our own convenience, no doubt, and for the convenience of our franchisees, if we could get a further extension of the licence, because beyond the term of a licence it would be unlawful for us to use or sub-license. 

So, in our submission, when one looks, whether objectively or subjectively, just circumstantially at the state of affairs at the time the undertakings were sought and were given, then you are talking about the actions of persons who were conducting themselves punctiliously so as to be within the terms of their permission, their authority, from the owner of the rights as they understood them to be.

Now, there is nothing there that is embarrassing in light of months later, a sharp request for specification as to the rights in question, bearing in mind the amalgam of, as it were, public domain and propriety material which will be seen in many a package of software.  Hence, the supposition that source code was in question and the repetition of the belief continuing that which had been found in our favour back in September, that there had been no breach with respect to something as fundamental and tell-tale as source code.  Mr Geri had not seen it.  It is for those reasons, in our submission, that the question of authorisation by the giving of an undertaking without some unparticularised exercise in between is one which is the determinative one in this dispute in this Court between the parties on the issues appropriately joined that have survived through the cauldron of the two courts below.

It is against a background – that is, the giving of the undertaking – the assertion or allegation of breach which accompanied the request for the undertaking, which included within the same short period, 29 September to 10 October, this small tell‑tale at page 41 of the bundle, to which the primary judge made reference at his paragraph 144.  On page 41, Ms McLean, for Campaigntrack, on 7 October, replying to Biggin & Scott’s solicitor, continues or contributes to the correspondence about the negotiation for the length of time of the extension of the term of the license.  It starts with a reference to Mr Meissner not having “yet procured one party” – a coy reference to Mr Semmens; a not inappropriate reference to money; and then the next paragraph:

In the meantime, we have been asked by our client to enquire what system your client is moving over to.

Now, it is to be remembered that, as one will remember from the later fully worked‑up letter before action at page 72 of the same bundle, there had been a time where the intention of the commercial reordering would be that:

Biggin & Scott would transition over to be a client of Campaigntrack. 

That was disappointed in the upshot because they became aware that there was another product being developed.  So, as at 7 October – not 29 September, but 7 October – in this exchange to which my learned friend draws attention, this request is made:

enquire what system your client is moving over to.

That is barely suggestive of knowledge that there is a system which is being built with infringement:

The purpose of that request is in order for our client to gauge whether there would be any possible reasons for the resistance –

Now, a fair reading, we think, means a resistance by the one party who has not yet been procured design:

to the provision of the undertaking requested.

It may be that this is excessively coy.  It may be that it is even arch, but it certainly is language which does not suggest that at this time, this period, there was being asserted by somebody – obviously cautious not to make groundless claims, that it was being asserted that that which would need to be resorted to commercially, following the 10 October closedown, would be, itself, an infringement so as to provide a basis for the theory of the case

against us, which, I repeat, is said to be there was reason to suspect, presumably, an infringement in course, and it was unreasonable not to take steps, presumably, by way of investigation as to the course of auditable conduct in putting together what became Toolbox.  In our submission, against that background, there is absolutely no cause for the Full Court to have reasoned back to 29 September in the way that they did.

May it please the Court.

GAGELER J:   Thank you, Mr Walker.  The Court will reserve its decision in this matter and will adjourn until 10.00 am tomorrow.

AT 4.01 PM THE MATTER WAS ADJOURNED