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

[2023] HCATrans 13

[2023] HCATrans 013

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney  No S110 of 2022

B e t w e e n -

REAL ESTATE TOOL BOX PTY LTD ACN 614 827 379

First Applicant

BIGGIN & SCOTT PTY LTD ACN 072 450 689

Second Applicant

DREAM DESK PTY LTD ACN 604 719 735

Third Applicant

JONATHAN MICHAEL MEISSNER

Fourth Applicant

PAUL GEOFFREY STONER

Fifth Applicant

MICHELLE BARTELS

Sixth Applicant

and

CAMPAIGNTRACK PTY LTD ACN 142 537 988

First Respondent

DAVID SEMMENS

Second Respondent

Application for special leave to appeal

GAGELER J
EDELMAN J
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 17 FEBRUARY 2023, AT 10.30 AM

Copyright in the High Court of Australia

____________________

GAGELER J:   In accordance with the Court’s protocol when sitting remotely, I will announce the appearances for the parties.

MR B.W. WALKER, SC appears with MR H.P.T. BEVAN, SC and MS J.E. McKENZIE for the applicants.  (instructed by Mills Oakley)

MR M. GREEN, SC appears with MR W.H. WU for the first respondent.  (instructed by McLean & Associates)

GAGELER J:   There is no appearance for the second respondent.  Mr Walker.

MR WALKER:   May it please the Court.  Your Honours, a majority in the Full Court reversed the relevant outcome concerning authorisation of infringement within the meaning of section 36 without disturbing what were unchallenged primary findings of fact.  It was a case of characterisation.  As such, we accept that so much is obvious in such a case that the outcome depended upon a close analysis and consideration of the primary facts in the whole of the appropriate context.

We accept, in that sense, it is fact‑rich.  We have two responses in relation to special leave in those circumstances.  The first is the interests of justice in the particular case for the reasons we have sought to develop in writing and to which I will shortly come, that is, that the outcome should be regarded as so doubtful in its correctness as to the reversal by the majority of the Court of Appeal of what we submit were careful and, relevantly, unchallenged findings of fact by the trial judge.

In an approach by the trial judge – cogently vindicated, we respectfully submit, by the minority judge Justice Cheeseman, in her reasons, to which in particular we turn in paragraphs 45 of 47 of our application.

EDELMAN J:   Mr Walker, it ultimately comes down to whether, in all of the circumstances, one could – a reasonable person would conclude that there had been implied authorisation, does it not?

MR WALKER:   Yes.  Yes, it does come down to that, together with the, if I may say so, canonical paraphrase of “sanction, countenance or approve”, which the sequence of legislation and case law seems now to have cemented.  That is why we draw to attention, in particular, in paragraph 43 of our application, the book 300, to the surely evergreen observation there made on its own particular facts, by Justices Gummow and Hayne.  That is in Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42 at paragraph 125.

That warning by their Honours does pick up what Justice Edelman has asked me to address, namely, the nature of the appellate task which we ask this Court to undertake.  Because if one takes what has been described as the “most remote” of those three suggested possible paraphrases – countenance – and one adds what has become, almost in the same canonical way, a paraphrase of that, to include a sufficient “indifference” – see, for example, Mr Justice Gibbs in Moorhouse – we are plainly facing, we accept, a case where on the facts as found we challenge the overall conclusion.  It is a qualitative conclusion; it is a characterisation, with all the challenges that may have, both at trial and then on an appeal.

However, what has occurred in this case, in our submission, is remarkable both in a counterintuitive sense in the majority reasoning and also, overall, is wholly unsatisfactory so far as concerns the reasonableness of the characterisation given to misconduct by way of authorising.

GAGELER J:   So, Mr Walker, you have the interests of justice in the particular case, you have got the question of principle, or at least approach,

arising from Roadshow Films and you have got a two-two split in the Federal Court.

MR WALKER:   Yes, that it is exactly what I do have.  I have as well, of course, with respect to prospects, the matters that we have tried to address within the relevant limits of space on pages 298 and following of the application book in our argument.  In particular, we draw to attention the oddity that – bearing in mind the significance of power to prevent in such an inquiry – the oddity of the authorising being held against us by reason of a letter which already made fairly clear the overall sense that there was an infringement.

Second, the seeking of undertakings, presumably to advance the concerns of the person sending that letter, the giving of those undertakings being held by the majority in the Full Court somehow to inform authorisation, because it had not been preceded by, and presumably conditional upon, the satisfactory outcome of inquiries by us to the alleged infringer.

Now, the primary facts included a rejection of any suggestion – none of this was challenged on appeal – that our clients knew of the infringement.  There had been repeated and clear stipulations, contractual and what might be called, by way of repeated discouragement, to any such conduct.  This was not a case that was run on the basis that we were imitating Horatio Nelson.  There was no wilful blindness case at all.

GAGELER J:   Mr Walker, at this stage we might call on Mr Green.

MR WALKER:   If it please your Honour.

GAGELER J:   Mr Green.

MR GREEN:   If the Court pleases.  The simple answer to our friend’s complaint is that what is now challenged was – the approach now challenged was one embraced in the Full Court.  The approach that one engages with a multifactorial analysis in relation to the events after 29 September 2016, being the fault line found by the majority of the Full Court as being a different circumstance to the circumstances applying at that point, was accepted as being fact‑dependent and was accepted as the indifference case required a different analysis.

That is, that one does not proceed in some kind of logical sequence where one builds a foundation upon trust, but one includes the trust findings in relation to the evaluation of what happens after 29 September 2016 through to June 2018 when the system was shut down.

EDELMAN J:   Mr Green, the notion of an implied authority is common throughout the law of agency, but is there any other case you are aware of where an implied authority has been found where the primary circumstance is one of indifference?

MR GREEN:   Perhaps, one can – the indifference was accepted as part of the discussion in Moorhouse, at page 12, where indifference is an established species of authorisation.  Perhaps the way to address your Honour Justice Edelman is that when one looks at the specific question of the statutory construction – what is the meaning of “authorisation” – to talk about agency in that context, perhaps, blurs the circumstances in which one can find authorisation, relevantly, to the purpose of the Act.  One does not need agency – one needs merely an ability to control, we accept that – and that was found.

Secondly, one looks at the totality of the circumstances – and going back to an observation made by Justice Gageler – the split was not a . . . . . . split in the sense that Justice Cheeseman did not engage with the analysis that Justices Greenwood and McElwaine engaged with – as to the after‑occurring event.  Her Honour held that the 29 September 2016 letter was irrelevant.

So, your Honours do not have the benefit – and my learned friend does not have the benefit – of saying that Justice Cheeseman’s approach to resolving the dispute between the parties transited upon how one engages in the evaluative exercise if one is, as all below agreed, one has to look at it as a difference case in relation to that later period – and accepted that that was part of the case and not part of an explicit ruling by the primary judge.

STEWARD J:   Mr Green, the Full Court found that the implied authority arose following the giving of that letter.  What do you then say was the significance of the giving of the undertakings some days later at the request of Campaigntrack on the issue of whether the implied authority continued?

MR GREEN:   The implied authority continued because of the careful elements, as found by Justice McElwaine in a more granular form, which we deal with in our response at paragraph 32(a) to (f) of that response, namely the 29 September letter made the allegation of improper access we have brought to notice.

The 29 September letter was not, despite the allegation our learned friends now say, unparticularised.  There was no suggestion that they did not understand the allegation; it was not unambiguously expressed.  Mr Meissner failed to make any inquiries, and they provided undertakings.  And after having provided undertakings to us, the findings of the Court, both by Justice Greenwood and, of course, in a more granular fashion by Justice McElwaine, were that they each knew that Mr Semmens had failed to give undertakings identical to the undertakings they gave.

The last point, and this is the point that I was developing in relation to how the appeal was conducted before the Full Court, the Full Court – our learned friends below made two points in answer, assuming that the fault line after 29 September 2016 needed to be considered.

The first argument – they never maintained that the trust which was not challenged and was reposed, we accept, was reposed in Mr Semmens, was a part of the analysis and was a bar to the consideration after occurring events.  They never made that point; they could have made that point.  They simply said they relied upon their own giving of undertakings and the appointment of Mr Geri in November 2016.  They never made the argument that the primary judge’s trust findings precluded that kind of analysis and they had joined in the need for a careful granular factual analysis of all circumstances.  Having been faced with that, the tenant issued a ‑ ‑ ‑

STEWARD J:   Mr Green.

MR GREEN:   Yes, your Honour.

STEWARD J:   I am sorry, just to press the issue just a little bit more.  What troubles me is how it can be said as a factual proposition that the appellants continued to authorise Mr Semmens impliedly when they have given undertakings which expressly acknowledge that the copyright is owned by Campaigntrack at the request of Campaigntrack’s solicitors.

MR GREEN:   Well, the question then – the answer to your Honour’s observation was that that was not the only indication, and that was a factor which was taken into account by the majority in a broad-brush approach by Justice Greenwood and in a more granular approach by Justice McElwaine, with respect to their Honours.  Justice Cheeseman did not enter into any of that debate because, of course, her Honour’s view was that the 29 September letter was a – the materiality of that was restrictive and therefore his Honour the primary judge was justified in not taking account of it.

So that one looks at the totality of the concerns, the debate – not simply in that short period but right up to the period in which they turned the system off – the steps that they could have taken, the meticulous aspects in which they could have controlled, the fact that Mr Geri’s January 2017 report contained an observation there was a higher probability of infringing conduct and other factors, all of which go into the multifactorial analysis as to whether or not there is authorisation.  With respect, it is an error to attempt to place an agency analysis upon the question of authorisation within the meaning of the Copyright Act.  I accept that authorisation in other contexts ‑ ‑ ‑

EDELMAN J:   Well, Mr Green, whether you call it an agency analysis or not, the question is one of authority, and the question of authority in cases like Moorhouse is treated in exactly the same way, whether someone is authorising someone under section 36 or someone is authorising someone to perform any other task.  At the moment, I do not really see how authority takes a different meaning in those different areas of the law.

MR GREEN:   Well, your Honour, just turning to Moorhouse, your Honour’s observation about Moorhouse, at page 20 of Moorhouse at point 9 on the page, Justice Jacobs in his Honour’s influential reasons said – accepted that:

authorization is wider than authority.

And we accept that.  We say this is – and Justice McElwaine, of course, agreed with that approach, namely, one – this is the fifth‑last line and then the fourth‑last line.  Plainly, looking at authority is a way into the question of authorisation, but in the present case, when one looks at indifference, the touchstone – the operative touchstone is the question of control in the circumstances and the question of what is compendiously described as a reason to suspect.

Those factors do not require there to be an encouragement or an authorisation in the sense that your Honour Justice Edelman, I think, is concerned about, it is ‑ ‑ ‑

EDELMAN J:   No, my concern is that – I mean, I appreciate Justice Jacobs says that authority may be broader than authorisation, and it may be that he is thinking there about notions of ostensible authority, but to authorise is to sanction, approve or countenance in any context.  But it seems one view of your argument is to say that mere indifference, pure indifference without anything more, could amount to authorisation.

MR GREEN:   I maintain that that is a possibility as an abstract concept, but in this case there was considerably more, combined with control.  The reason I say that and I put that submission, your Honours, is that since the Digital Agenda Act amendments, which is of course considered by this Court in iiNet, when a court comes to consider the question of authorisation, the court is required to consider each of the three factors which my friend in this case seeks to say, in relation to the third factor, cannot operate because there was a super operative question of trust.

GAGELER J:   That might suggest that the nuance of legal principle in the present case is one of considerable general importance.

MR GREEN:   Well, that is a matter, of course, for your Honours to decide.  I can say, if your Honours accept that, save maybe I will have another try, that in the present case the facts were very specific in relation to the conduct and the knowledge of the parties.  Now, it is different to simple correspondence where there is parsing between the parties or inferences to be drawn from events.  This was communication written between lawyers, representing each of the represented respondents now making an application to this Court.

As both Justice Greenwood and Justice McElwaine make clear, they were carefully considered.  They allowed for the drawing of inferences about what would have occurred prior to the issuing of that material and also the motivations underlying the making of those communications right through to the time which the – for a much longer period well into the next year, not the seven‑day period after the beginning of the first undertakings.  For that reason, this is an inappropriate vehicle, I submit, for this Court to consider the outer limits of the nuances.

It is, with respect, and with great respect to my learned friend in endeavouring to deconstruct a case in a manner to create the appearance that there is a more important point, the point is fairly straightforward, and that is that there was an abundance of material after the point that removed entirely the force of a binding finding of trust.  And when one comes to consider the calculus, as the majority of the Full Court did, in evaluating those after‑occurring steps, the fair and the only conclusion is that the after‑occurring events denuded the trust and called for an investigation.

The second point about it is – and this is the point about Mr Geri – it was plain that, when pushed, the respondents below, the special leave applicant to the present case, had resources and opportunity available not just simply to rely upon Mr Semmens.  And they were able to rely upon a third party and when they did that, they received a response.

Justice Greenwood’s approach to the question which deals with the obfuscation, and very powerfully in paragraph 129 and 134 of his Honour’s reasons, indicates that had they cooperated in a manner and acted reasonably – reasonableness being a touchstone of the factors to be considered – this issue with the represented respondents, the present applicants, would have been resolved altogether.

Because had they, what we now know is there is infringement, that is found, had they conducted themselves in the way that my clients had sought them to conduct themselves, the issue would have disappeared.  There

would not have been a question of authorisation because the system would have stopped being used and all that would have happened was Mr Semmens’ conduct would have been exposed at a much earlier time.

So, there are two points to that, the first is that were Mr Walker’s characterisation of the test of indifference to be sustainable, it would render impossible any use of the concept of indifference in relation to authorisation as a practical matter, because all that one would do would be, a priori, seek to have assurances and so those assurances continue.  It would also elevate form over substance because it would mean that parties could rely upon the contractual provisions to say that they had controlled risk or controlled their own risk position simply through contracting.

What is clear is authorisation is intended to widen the net in relation to copyright infringement so as to include liability to parties well beyond those that would be in the immediate circle of infringement.  And necessarily, an authoriser is not an infringer, so it must speak to a different relationship between the works comprised in the copyright that are infringed and the relationship of the party concerned.

What we have here are concurrent findings in relation to section 36(1A) and I accept that we have a finding, which was not challenged, that it was trust in relation to Mr Semmens, but that period is – I hear the time, your Honours.

Those are our submissions.

GAGELER J:   Thank you Mr Green.  At this point, we will adjourn to consider the course we will take.

AT 10.54 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.57 AM:

GAGELER J:   We do not need to hear you in reply, Mr Walker.  There will be a grant of special leave to appeal in this matter.  Would we be right in thinking it is a one‑day case, Mr Walker?

MR WALKER:   Yes.

GAGELER J:   Mr Green?

MR GREEN:   Yes, your Honour.

GAGELER J:   Yes, thank you.  Very well, the Court will now adjourn until 11.30 am.

AT 10.58 AM THE MATTER WAS CONCLUDED