Realestate.com.au Pty Ltd v Hardingham & Ors; RP Data Pty Limited v Hardingham & Ors

[2022] HCATrans 165

[2022] HCATrans 165

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S57 of 2022

B e t w e e n -

REALESTATE.COM.AU PTY LTD

Appellant

and

JAMES KELLAND HARDINGHAM

First Respondent

REAL ESTATE MARKETING AUSTRALIA PTY LTD

Second Respondent

RP DATA PTY LIMITED

Third Respondent

Office of the Registry
  Sydney  No S58 of 2022

B e t w e e n -

RP DATA PTY LIMITED

Appellant

and

JAMES KELLAND HARDINGHAM

First Respondent

REAL ESTATE MARKETING AUSTRALIA PTY LTD

Second Respondent

REALESTATE.COM.AU PTY LTD

Third Respondent

KIEFEL CJ
GAGELER J
GORDON J
EDELMAN J
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 11 OCTOBER 2022, AT 10.00 AM

Copyright in the High Court of Australia

____________________

MR A.J.L. BANNON, SC:   May it please the Court.  I appear with my learned friend MR H.P.T. BEVAN, SC for Realestate.com.au for each of those matters; the appellant in S57/2022 and the third respondent in S58/2022.  (instructed by King & Wood Mallesons)

MR R. COBDEN, SC:   May it please the Court.   I appear with my learned friends MR J. SLEIGHT and MS G.R. RUBAGOTTI for the first and second respondent in each appeal.  (instructed by Neville Hourn and Borg Legal)

MR M.D. MARTIN, KC:   May it please the Court.  I appear with MR A.F. MESSINA for the third respondent in S57/2022 and for the appellant in S58/2022.  (instructed by Mills Oakley)

KIEFEL CJ:   Thank you.  Yes, Mr Bannon.

MR BANNON:   Thank you, your Honour.  Your Honours, the significance of a finding of a licence being implied or inferred in the individual agreements between Hardingham respondents and the estate agencies is informed by the provisions of the Copyright Act, which we have set out in summary in the outline of argument.

If I could perhaps just proceed through those.  Looking at paragraph 2 of our outline of argument, each of the photographs and drawings – in the case of drawings – or artistic works – and, as a result, pursuant to section 31(1)(b)(i) and (ii), the owner of a copyright in an artistic work has the exclusive right to:

reproduce the work in a material form –

and to:

communicate the work –

which is defined as:

make available online or electronically transmit –

and authorise the doing of each of those acts pursuant to section 13(2).  An act comprised in the copyright of a work is an act the owner of the copyright as the exclusive right to do and copyright is infringed by a person who does – or authorises another – to do an act comprised under copyright without the licence of the owner of the copyright – the key element here.

The second respondent, REMA, was the exclusive licensee of Hardingham’s rights, within the definition of exclusive licence, thus, absent Hardingham’s licence via REMA, copyright infringing acts relevant to this proceeding would include:  reproduction of the works by loading the photographs or drawings onto the REA website, communicating the works by making them available online so that they could be viewed by visitors to the site, authorising the reproduction of the works by visitors to the site – for example, by permitting any website visitor to download a page or a photograph, or screenshot a page, or print out pages – as is commonly done.

We have given a reference there to the book of further materials, pages 5 to 50, which I do not need to go to, but they are examples of printouts from our web pages which were put into evidence as examples of how such a reproduction could be made by any visitor to site.  Those pages include highlighted ones of photographs of houses – in particular, ones which were sold – to demonstrate that they stayed online on our website for a long time, or indefinitely, after conclusion of any marketing campaign.  Finally, in that list, on paragraph 4, authorising RP Data to reproduce and make the works available online would also be an act that would infringe absent a relevant licence.

It is perhaps important to emphasise that the respondents accepted at first instance and on appeal that each agency agreement did include a term as to a licence and a right to grant a sub‑licence of the copyright to enable the works to be loaded onto the REA website.  They did not descend or ascend to specifying whether that was an implied term or an inferred term, or indeed did not identify what they claimed was the precise scope of that licence; in particular, the precise scope of what it permitted.  So understood, we respectfully submit, any licence they conceded must be either an inferred or implied licence.

KIEFEL CJ:   Well, it is more likely to be the former, is it not?  Because they are talking about actuality.  They are talking about actual terms, if that the concession probably goes that far – does it not?

MR BANNON:   They had pleading in reply, which I perhaps will not refer to your Honour to, but it is simply said in response to the pleading of an implied term that there was such a licence, but they did not actually say one way or another.  But your Honour’s inference or comment is certainly – may be the more likely, it may be open – but either way it does not ‑ ‑ ‑

EDELMAN J:   There is a bit of difficulty of language here, is there not, Mr Bannon, that strictly – and Sir Isaac Isaacs said this a number of times –an implication is already there in the instrument, or in the conduct, or in the words that are spoken in all of their context, and that is recognised by a process of inference.  They are not really two different categories.

MR BANNON:   Yes.  Well, that has certainly been commented in a couple of passages.  I think it was Justice Deane in one of the cases, or Justice Dawson, but certainly, the fine line between inference and implication.  Obviously, as your Honours appreciate, with respect, what is an interesting issue about the sort of contract clarity as to whether or not business efficacy is required or there is a separate test, but also to the extent one deals first with inference as the cases say one must – in other words, must work out what the contract is before one works out whether you need to imply a term – you have to deal with inference and in dealing with inference is ‑ ‑ ‑

KIEFEL CJ:   Does that point out the distinction, a possible distinction, being as to whether or not the parties have turned their mind – at some point to whether or not the content of the term ‑ ‑ ‑

MR BANNON:   Yes.

KIEFEL CJ:   ‑ ‑ ‑ because an implication is imputed to them and usually on the basis that they have not, but if they had it would be something that they – it would go without saying that they would agree with or it was necessary to the business efficacy of the agreement.  But if there is a course of conduct and the evidence – and one is drawing from the evidence what the parties – the basis upon which the parties have actually acted, they are more likely to have turned their mind to it even if momentarily and not in terms of – you know, not in detailed terms.

MR BANNON:   Yes, and that would be a case of, we submit, inference, potentially.

KIEFEL CJ:   Just drawn from the evidence.

MR BANNON:   Very often the evidence.

GORDON J:   It may be nothing more than the normal fact-finding exercise undertaken by a judge.

MR BANNON:   Yes.

GORDON J:   What are the objective facts giving rise to what might be described as the bargain here.

MR BANNON:   Yes. Well, both the primary judge and Justice Jackson, whose reasons we commend to the Court, found – in particular, the primary judge said the term is either there as a matter of inference or implication and he logically dealt with it by way of inference first, as did Justice Jackson, but they both relied effectively on the same set of circumstances to infer that what the parties must inferentially have agreed – and perhaps this raises the question which is potentially important, namely that to the extent that Justice Greenwood found – agreed Justice Rares – that you could not infer that agreement in those terms.  That is, the giving of an authority to give the requisite authority required under the standard term of the REA standard terms.

I will remind you of his Honour’s reasons, it was focusing on actual subjective intention and the question that rises in the context where, whatever debates have flowed over the years, this Court has absolutely made it clear all contracts are to be dealt with on the basis of what reasonable persons in the positions of the parties would have intended by express words.

When it comes to implied terms, it is what the reasonable parties must be imputed to have done but, when it comes to inferred terms as well, we would say consistently, one must adopt it from the approach of reasonable parties.  It would odd to have a variation which is based on subjective intention.

EDELMAN J:   Were there any terms of this agreement, the agreement with the agencies, that were fully expressed?

MR BANNON:   No, not really, not based on the conversations.

EDELMAN J:   So, every term that we are talking about in the contract is one that needs to be ascertained by inference.

MR BANNON:   Yes, I think that is – to be more precise, based on the conversations, the person was asked to go, would he take a photograph of a particular site and they said yes, or okay, I think was the effect of the conversation.  So, therefore he had a property identified and I think words were added for a marketing campaign.  The fact that – the finding that it was for the purpose – the mutual purpose was to be loaded on the REA website, probably comes from either experience or the reference to marketing campaign.  In other words, having regard to the commercial environment, nobody would consider a marketing campaign which did not at least include loading onto the REA website.  So even that has to be inferred.  But thereafter, and another term of the agreement is that he provide digitised copies.  Again, I am not sure that is the subject of any specific evidence other than the fact that he always did.

GORDON J:   But that is evidence.  My point earlier to you, that is objective fact.

MR BANNON:   Yes.

GORDON J:   That is a fact that is adduced before the trial judge for the trial judge to make findings by reference to conduct, and that is what happened.

MR BANNON:   Yes.

GORDON J:   Just to say it is inferred is – I do not know what is being inferred.  The question is, what is objective?  And the objective facts are, as I understand it, not in dispute here.

MR BANNON:   No, and just on the digitised point, our argument is to say, well, the inference which his Honour drew, the trial judges drew, as to the terms, was based on those circumstances, including the provision of digitised images.  In other words, the object of the transaction was for the respondents to provide photographs and drawings which could be put on, amongst other things, the website.  They had to be physically suitable to do that, hence digitised images.  But, secondly, the agency had to be empowered, sufficiently empowered, with incorporeal rights in order to fulfil that bargain, and those rights were the granting of such rights as the agency needed in order to comply with the standard term.

Now, in circumstances where both parties knew there were standard terms, the primary judge found standard terms which they knew that REA would impose, they were freely available, where Justice Greenwood said you could not find that there was a term in the terms found by the primary judges, because we had not proven that the Hardingham had actually read those terms.  We say that is ‑ ‑ ‑

KIEFEL CJ:   Mr Bannon, forgive me for interrupting, but we are hearing you very loudly.  It is not your fault, I think it is the equipment, and it is almost feeding back a little bit because it is so loud, I think it is because it was probably set up for the Bench when we were spread out a bit further ‑ ‑ ‑

MR BANNON:   Yes.  And I am trying to slow down, too, uncharacteristic but ‑ ‑ ‑

KIEFEL CJ:   If you do not mind, then I think we might adjourn briefly while we have our IT people look into whether or not they can reduce – otherwise, we will not actually be able to concentrate on what you are saying.

MR BANNON:   I will not take it personally.

KIEFEL CJ:   Thank you.  The Court will adjourn shortly.

AT 10.14 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.18 AM:

KIEFEL CJ:   Yes, Mr Bannon.

MR BANNON:   Thank you, your Honour.  So, against that background – and I appreciate the significance of what has fallen from your Honours, namely, that potentially the better analysis of this is how the primary judge primarily found it mainly an inferred agreement, and one perhaps does not need to get into implied term ‑ ‑ ‑ 

KIEFEL CJ:   Yes, of course.

MR BANNON:   ‑ ‑ ‑ but I will address the matters as concisely as I can, having regard to – I will not say an indication, but at least that sentiment.

STEWARD J:   Just before you go on, can I ask you, was there any evidence about how the fees were set?  For instance, did the company that Mr Hardingham used have a price list, or was it negotiated on a case‑by‑case basis or what?

MR BANNON:   His invoices were in evidence but I am given to understand there was no evidence of a price list and the invoices, based on as I again understand, did not seem to vary – at least there seemed to be a standard fee, including after a time when he had written a letter, or his solicitors had written a letter, not to RE.com and not to the estate agencies, but to the down line user of RP Data, they continued to – which is one of the points his Honour makes in paragraph 65, I think it is, that there was no evidence that they ever complained or sought to impose a licence – a restriction on any licence in dealing with the estate agencies, including after the letter sent to RP Data, which is a stranger to the relevant relationship, so the fees stay the same throughout.

One of the points his Honour also made is that what he charged was a price for loading onto the website.com – this is referred to in paragraph 6(g) of the outline, the references, so he charged that fee and presumably he could have charged whatever the market would bear for that service.  I am told the only variation was based on the number of photos taken.

GORDON J:   Can I just ask, at paragraph 68 and 69 of Justice Thawley’s judgment at appeal book 27 his Honour sets out, as far as I understand it, the findings he made in relation to fees.  They were not subject to challenge, were they?

MR BANNON:   No.

GORDON J:   Thank you.

MR BANNON:   Yes, in particular 69, second sentence and the last sentence.  So, in other words, in the knowledge – certainly after the letter was written, his Honour found that he knew at all relevant times that these images were being loaded up on the RE website and left there indefinitely.  He must have known that people had the potential to download them, which is authorising people to copy them.

EDELMAN J:   Strictly, Mr Bannon, it would not be his knowledge, it would be the knowledge of a reasonable person in his position, would it not?

MR BANNON:   Yes.

GORDON J:   And the reasonable person in his position in this industry.

MR BANNON:   In this industry, yes.  And the objective evidence ‑ ‑ ‑

GORDON J:   Industry, using that in a sort of general sense to describe the set of arrangements, and relationships, really between the parties.

MR BANNON:   Yes, and in an industry where realestate.com, i.e. my client, had a business which was a flagship business in the sense that you effectively had to be on their – wherever else you may be on, you effectively had to be on it, so that, certainly, it was a matter of interest in his business to have his photographs acquired by somebody for reward, and that is an important objective fact.

We have set out both in our written submissions and again in this oral outline – and I will not trawl through all of the references – but paragraph 6(b), the principal mutual purpose obviously is a critical one and that was not the subject of challenge.  But perhaps paragraph 79 of his Honour’s judgment, at page 29 of the appeal book, the second sentence:

The purpose of uploading the works to the realestate.com.au platform was central to the objective sought to be achieved by the parties.

That is a key finding which was not overturned – could not be overturned.  Once that finding is made – plus the fact that it is a standard term, which is available to everybody, so there are not idiosyncratic terms which may be negotiated on a case‑by‑case basis ‑ ‑ ‑

KIEFEL CJ:   Do you place any reliance on Beck v Montana?

MR BANNON:   No, your Honour, we do not.  There are certainly specific instance copyright cases involving architect plans and the like.

KIEFEL CJ:   But it is restricted to more standard terms case.

MR BANNON:   More standard terms case and ‑ ‑ ‑

KIEFEL CJ:   It is an implication of law.

MR BANNON:   And particular relationships like architects’ is a recurring theme ‑ ‑ ‑

KIEFEL CJ:   Yes.

MR BANNON:   ‑ ‑ ‑ usually related to whether or not somebody has paid, been paid, or whether or not it flows through to the third parties.  So, it does not fall within an established class of case and so it was – it is Australia ordinary contract interpretational ‑ ‑ ‑

GORDON J:   Mr Bannon, you might be coming to this, but could I just ask you whether or not you propose to, in effect, take us through Justice Thawley’s analysis from paragraph 59 onwards?  I say that for this reason:  I read 59 and 60 as being matters of findings about, in a sense, what the objective facts for – you might describe it as the industry, I might describe it as common ground about what was, in effect, the context for the relationships.

MR BANNON:   Yes.

GORDON J:   Especially 60, which talks about:

as a result of their course of dealing and experience in the industry –

following through ultimately to get into the finding to 79.  Am I reading that judgment correctly in that way?

MR BANNON:   Yes, absolutely, your Honour.  So, paragraphs 59 through to 62 – in particular, 59’s third bullet point, which really flows from the first two:

one of the principal purposes for which the agencies commissioned photographs . . . was to . . . upload –

onto the site.  The fourth bullet point:

whilst theoretically possible, at a practical level agencies are not able to negotiate out of the usual terms –

That was an objective fact.  Just pausing at 67 ‑ ‑ ‑

GORDON J:   Well, paragraph 60 is the one that I was most interested in.  This is to pick up the question that Justice Edelman just asked you.  We are talking about objective theory of contract and we are talking about trying to identify what the objective facts are.  Is that not what Justice Thawley is addressing in 59 and then in 60?

MR BANNON:   Yes.  At 60 was:

their course of dealing and experience in the industry –

over a very long period of time, and:

they were made available in relation to historical sale and lease transactions.  It would be unrealistic to suggest otherwise.

And then ‑ ‑ ‑

KIEFEL CJ:   Estoppel by convention was never pleaded in this case.

MR BANNON:   No, no.  Paragraph 61 – I may run into issues about whether you can resile from it, but ‑ ‑ ‑

KIEFEL CJ:   It does not matter.

MR BANNON:   No.  Paragraph 61 refers to:

after a property sale completed, the photographs and floorplans continued to be available on the “sold” section . . . which existed from 2003.

Bearing in mind that the relevant dealings here were 2014 onwards:

That has been the position over the entire course of dealing between the applicants and the agencies.

The applicants did not suggest that there was a single example of any photograph of floor plan, of which the applicants were the copyright owner or exclusive licensee, ever being removed from either platform.  There were said to be many thousands of such works.

in these dealings. 

So, that is all‑powerful background, we respectfully submit.  For each of these findings, one can substitute a reasonable person in the position of these parties would have had this knowledge so that actual knowledge can inform unless it is idiosyncratic.  Actual knowledge can inform what a reasonable person in the position of these parties would have understood mutually and, hence, would have informed what may be interpreted to be – or found to be – the inferred agreement or, if necessary, implied – 65, I am referring to.  Paragraph 67:

The applicants must have known that the works they had been commissioned to prepare had been and were being uploaded in accordance with terms and conditions imposed by REA.

Again, that is actual knowledge but, equally, it would apply to reasonable persons in the position of these parties.  Knowing what we do know in this world about the internet, et cetera, and the ability to get onto sites, everybody knows that – it may be said, but particularly in the industry and with this finding, that you have to comply with certain terms and conditions to get on, or subscribe, or do things, and:

These were freely available on the realestate.com.au website. 

So, a reasonable person – the parties here – would know that there would be terms which had to be satisfied.  They would know they would be terms – whether or not the person has copyright knowledge, they would know there would be terms which would be related to the fact that the images would be loaded, would be accessible, would be downloadable, would be sub‑licensable to other parties, and would continue indefinitely.  In fact, there was such a term related to that. 

Now, whether or not the person actually read it does not prevent an actual knowledge – it is not required to infer that he agreed – the company agreed – to arm, inferentially, the estate agencies not only with relevant physical copies to serve the purpose but, also, the relevant rights to serve the purpose – which was a right to fulfil the terms of any licence required in accordance with the standard terms of the REA site – and that is what his Honour found.  Then, 68, we emphasise and 69 we have referred to.  Paragraph 70, his Honour says:

Objectively viewed . . . the applicants and agencies conducted themselves on the basis that the agencies had the right, so far as concerned the applicants, to upload the works to the . . . platform in accordance with terms and conditions between REA and the agencies which the applicants and agencies either knew or must have assumed contemplated that REA was permitted to make the works available after marketing campaigns had ended and after completion of relevant sale and lease transactions and which permitted the works to be provided by REA to RP Data.

It was accepted view of that.  Then, 77, I, perhaps, can jump to on page 28:

Just as the agencies could not, in a practical sense, negotiate out of REA’s term and conditions, neither was commercially realistic for the agreement between the applicants and the agencies to be such that the agencies could not give to REA the licence which the applicants knew the agencies had to give to REA in order to upload the works which had been commissioned from the applicants for that very purpose.

This is the key finding:

The objective circumstances in relation to the twenty transactions the subject of the separate question . . . are such that:

(1)it is to be inferred from the conduct of the applicants and the agencies, including their course of dealings –

Pausing there and going to the tail of that paragraph:

that the applicants agreed that the agencies were authorised, by way of licence from the applicants, to upload the photographs and floor plans to the realestate.com.au platform and grant to REA a licence in the form required by REA and contained in REA’s usual terms and conditions.

That is a matter of inference, his Honour found.  His Honour found in subparagraph (2):

(2)alternatively, it should be implied into the agreements . . . to give business efficacy –

In particular, in paragraph 79:

The agreement between the applicants and agencies would have failed to deliver what was objectively intended to be acquired . . . if such a term were not inferred or implied . . . That objective could not have been achieved unless the agencies granted the licence contained in REA’s terms and conditions.

GORDON J:   Can I ask one more question and then I will be quiet.  Am I right to read that as being consistent with what then follows in 80, that what is a term of the contract either as part of the initial contract or implied on the alternative analysis, not actual knowledge of what was in REA’s terms and conditions, but a term which would permit it to be granted consistent with those terms and conditions?

MR BANNON:   That is right.

GORDON J:   Thank you.

MR BANNON:   That is how his Honour frames it there in 78 and 79.  The particular relevant rights which he had to give – or that he and his company had to give – were rights when enable clause 5(a) to be fulfilled, which is back at paragraph 12 of the judgment at page 11:

You acknowledge and agree that at all times during the Term of this Agreement:

(a) in consideration for us granting a right to upload listings to the Platform and the other services we provide, you grant us an irrevocable, perpetual, world‑wide, royalty free licence to publish, copy, licence to other persons, use and adapt for any purpose related to our business any content you provide to us during the Term, and this licence survives termination ‑ ‑ ‑

Now, much as Justice Greenwood and Justice Rares would suggest that is something remarkable or grave, to get onto the site – which is the commercial purpose – this is what had to be agreed to.  In the sense of “irrevocable, perpetual, world‑wide”, once anything is on a website, anybody from anywhere in the world can visit it, can see it, can download it.  The objective evidence demonstrated it was there indefinitely.  “Royalty free” – well, obviously it had to be royalty free.  “Licence to other persons” to use or download – plainly any visitor to the site needed a licence, because if they downloaded it, they would be infringing unless there was a flow‑through licence.

So, not only was this not dramatic at all, but it just reflected a commercial reality which REA had to have, to have its website perform sensibly and, in any event,, this is the not negotiable term which had to be satisfied by the estate agencies and they could only do so if it was afforded those rights in turn by Hardingham.

That term was a standard term throughout and that point is made in Justice Greenwood’s reasons, this is referring to point (e) on paragraph 6 of our outline, page 81 of the book, within paragraph 84, Justice Greenwood refers to some evidence in the middle of that paragraph of a Ms Agrita Cliff and then an affidavit of Mr Rechtman, both of which could refer to the agreement, looking at the last sentence which is clause 5(a) which is the clause I have just taken your Honours to.

Then at page 82, at the bottom of the page in paragraph 89, in the third sentence:

That follows because both respondents assert in the proceedings before the primary judge by affidavits that the relevant terms and conditions are contained in clause 5(a) of the document in evidence.

And then at page 83 in paragraph 93 his Honour said:

The terms and conditions contained in the exhibits to the affidavits must be accepted as the terms and conditions of the licence REA purported to acquire from the agencies when engaging with them under the subscription arrangements –

I only refer to that because your Honours will have seen in our learned friends’ submissions, much is made of suggestions of varied versions of their claimed implied term.  The fact of the matter is, the evidence as to what the relevant term was, was consistent from the very beginning through the trial.  The primary judge was under no illusion as to what we were saying was the relevant term, which was 5(a).

There is a detour, courtesy of a letter sent in response by RP Data which referred to the wrong term.  It is not a major league difference in substance, but it was the wrong term, but that is a letter coming from somebody who is not a party to the relationship between the agencies and REA.  It is not a letter REA had anything to do with.  It is not a letter the agency had anything to do with.  So, it was a distraction and to suggest, as our learned friends say, that there was some sort of relevant bouncing around, at least on our part, as to what the term was, is wrong.

GAGELER J:   Mr Bannon, where do we find the clearest expression of the term?  Is it paragraph 80 of the primary judge’s judgment or somewhere else?

MR BANNON:   Yes.

GAGELER J:   Thank you.

MR BANNON:   Is it perhaps inferentially contained in 78 and 79, but his Honours extracts it out in that way.

GAGELER J:   The crisp statement of it.

MR BANNON:   Yes.

EDELMAN J:   The slightly crisper version is your written submissions at 35, is it not, which is consistent with paragraph 80 of the primary judge?

MR BANNON:   Yes.

GAGELER J:   Well, that seems to be reasoning rather than the conclusion.  Perhaps 36 is ‑ ‑ ‑ 

MR BANNON:   Yes, your Honour – partway, they were “authorised, by way of licence” to upload, and grant a REA licence.

GAGELER J:   Thank you.

EDELMAN J:   So, it is not strictly the terms of clause 5(a), it is whatever might have happened to have been in clause 5(a).

MR BANNON:   Yes, it is empowering for them to grant the licence in the terms of clause 5(a).

GORDON J:   Just so I am clear, as I put to you before – and I think you accepted – we are not concerned with the precise language of the terms and conditions of the REA’s – you do not need it.

MR BANNON:   We do not need to, but it was the implied terms that they would give such rights in relation to the photographs and the drawings as the estate agency needed to upload them on the REA website, which included a right to grant the licence, which happened to be in the terms of clause 5(a).

GORDON J:   It is not quite right, is it?  That is why 80 is quite useful, because what it says is that there would be a sub‑licence to REA:

which permitted the agencies to grant the licence contained in REA’s usual terms and conditions, which included authorising REA to grant a sub-licence.

That is what you need.  That is what is said in the first sentence of paragraph 80.

MR BANNON:   Yes, which – yes, quite so, your Honour, but the licence – the terms ‑ ‑ ‑ 

GORDON J:   That is the term you need.

MR BANNON:   It permitted the agencies to grant the licence.

GORDON J:   No, and then you need the bit that which follows, which included authorising REA to grant a sub-licence. 

MR BANNON:   Quite.  But 5(a) captures both.

GORDON J:   You just do not need it, because it –  we are not attributing knowledge; we are trying to work out an objective fact – what it was were the terms of the arrangement, and that is why 80 is in that form it is in, and does not include reference to clause 5(a).

MR BANNON:   But the effect of its operation will be ‑ ‑ ‑ 

GORDON J:   Different question.  I am not talking about construction, we are talking about what are the terms.

GAGELER J:   Perhaps another way of asking the question, Mr Bannon, would be would your case be any worse off if there was a full stop after the word “conditions”?

MR BANNON:   No.  At least conditions which related to the licence.

EDELMAN J:   It would have to be a little bit more than that.  It would have to be the usual terms and conditions upon which the agencies had previously been proceeding ‑ ‑ ‑

MR BANNON:   Yes.

EDELMAN J:   ‑ ‑ ‑ because if there were some particular unusual term and condition, or some very expansive aspect of a licence that the parties were not aware of, or could reasonably be taken to be aware of, that may raise different issues.

MR BANNON:   I accept that, your Honour, and that is why one of the important objective facts is the fact that they were standard conditions.  Whether or not there was a power to vary, they had not in fact varied, and objectively speaking both parties knew that such conditions existed, whether or not they had read them.  The effect of the implied term was to permit the grant of a licence in accordance with a standard term, not some idiosyncratic term which no one could be familiar with necessarily.

So that assists in finding the relevant inference or implication, but it also – the very fact there was a standard term applicable to everybody in the industry, and had been that way for many years, is also a relevant factor which would give comfort to a court, including that the parties objectively were prepared to agree to the relevant inferred or implied term.

Then, similar reasoning of Justice Jackson, which we support, which starts at 111 through to 113.  At 111 – Justice Jackson refers at 189 to “key findings” which track the primary judge’s findings, and then in paragraph 190 under “Inferred term”:

it follows from these findings that if the agreements . . . had not authorised the agencies . . . the agencies would not have been able to use the images for one of the principle purposes . . . That is sufficient to infer that, objectively, the appellants . . . intended that the agencies could upload the images in accordance with REA’s standard conditions.  That was a licence to the agencies to use the images for the purpose for which it was contemplated between the parties that it would be used.

That is maybe another broader way of putting it as well:

In the circumstances of each case, that was the only way they could upload them, and take the benefit of the agreements in the way that the parties must be taken to have intended.  If a licence in those terms had not been part of the agreements, it would have failed to deliver to the agencies that which it was objectively intended to give them:  the right to use the images to market the properties on realestate.com.au.

At 192 and 193 his Honour addresses other arguments framed by the respondents, and each paragraph concluding relevantly at 192 at page 113:

Once that it is appreciated, it follows that the agreements between the appellants . . . had to authorise the agencies to upload the images . . . no other explanation can be inferred.

And then the last couple of sentences of 193 to similar effect, apart from perhaps the relatively simple proposition that there is no reason to disturb the finding of the primary judge, properly reasoned, and well justified on the evidence.

When one looks at the Full Court’s judgment in relation to inferred term, we see at paragraph 199 of the Full Court judgment, which is 84 of the court book, that starts at paragraph 97, where his Honour says about the middle of the paragraph:

The recognition by the appellants that the oral arrangement comprehended an authority in the agencies to engage with REA and upload works to REA’s platform in circumstances where, objectively viewed, the parties understood that terms and conditions in some form or other would likely need to be accepted in order to enable the agencies to realise their expectation of uploading –

Just pausing there, it is not “in some form or other”, it is in accordance with standard terms which had not varied at any relevant time:

is not a sufficient basis for inferring a term that the appellants and the agencies agreed that an authority was to be conferred on the agencies to grant a licence to REA on any terms of any kind whatsoever as might usually be published by REA and as might be amended unilaterally by REA at any time.

Again, we say, that is not reasoning which is correct:

Such a term is sufficiently expansive that it may have enabled REA in practical terms to virtually expropriate the ownership of the copyright –

Speculating as to what may have happened is neither here nor there.  It did not happen.  This was a broad licence but, again, one has to deal with the reality as found by the primary judge – namely, that there was a term which, relevantly, had not changed.  Then, 99, his Honour says:

The contended entitlement conferred on REA said to necessarily fall within the authority conferred on the agencies was perpetual (that is –

His Honour repeats the words.  At the top of the next page:

It seems to me, in the context of the findings of fact relating to the surrounding circumstances, that a clause of this gravity –

His Honour does not expand as to what the gravity is, and then says:

is not to be “inferred” lightly as part of the actual intention of the parties simply on the footing of a course of dealings –

His Honour goes on:

unless the evidence of all the surrounding circumstances demonstrates that both the appellants and the agencies were actively aware of, and held common knowledge of, the precise scope –

We say that is not well‑founded in principle and does not logically arise, and if one considers these circumstances where the point of the arrangement – as we keep saying – was to arm then, relevantly, with the rights to fulfil the terms of the standard conditions which had not changed and available to anybody – and available to Mr Hardingham if he ever cared to look.  Whether he looked or not, he knew – a reasonable party would know – his images would be continually shown – be available for an indefinite period of time and made available – e.g. to RP Data.  Then, paragraph 100 does not really alter the reasoning process, and Justice Rares agreed.

We say in our written submissions that paragraph 99 may, possibly, suffer from a view that the actual intention of the parties is relevant.  We would submit that Justice Jackson, at paragraph 170 of his Honour’s reasons ‑ ‑ ‑

KIEFEL CJ:   Is that where his Honour says that it misapprehends the findings of the primary judge?

MR BANNON:   I am sorry, your Honour.  At 170, page 106 of the core book, his Honour says:

Consistently with the acceptance in Australia of an objective theory of contract, these references to ‘actual intention’ ‑ ‑ ‑

in determining the inferred terms, is:

determined objectively ‑ ‑ ‑

and we submit that is correct and consistent with what this Court has said on several occasions – obviously in ‑ ‑ ‑

KIEFEL CJ:   I was thinking of what his Honour said at paragraph 188 about a misunderstanding about the primary judge’s findings ‑ ‑ ‑

MR BANNON:   Yes.

KIEFEL CJ:    ‑ ‑ ‑that it was not of actual knowledge.

MR BANNON:   No.  There was at paragraph 79 of his Honour the primary judge’s reasons which – it will not contest my thought about his Honour’s finding they had actually read the terms – properly understood, his Honour was not saying that, and his ultimate reasons did not depend on that.  Justice Jackson explains that that was not the case, and that is why he goes on to say at 189 that the key findings remain untrammelled, and they support the conclusion.

The references – for convenience, at page 75 of the book – included part of Justice Greenwood’s assessment in the well‑known reference to Electricity Generation, Rinehart and Mount Bruce as to objective theory of contract.

Then, perhaps to draw all those threads together, we say in circumstances where the parties agree that the photo should be created for the essential objective of loading on the website of REA, in the knowledge that REA has standard terms which will be imposed, relating to the image so loaded and inferentially Hardingham agrees to provide the agency both the physical ability to do so – the digitised images – and the legal ability to do so – i.e. providing such rights as are needed by the agency to satisfy those standard terms – they are not idiosyncratic, and freely available – a finding of his Honour was not only open on the evidence but the better view as to inferred agreement.

Could I then address the question of implied terms, and the primary judge said if needed then it was implied as a case of business necessity.  Justice Jackson found at 180 after review of the cases – this is page 109 of the book – that obviousness:

‘so obvious that it goes without saying’ –

at least in an informal contract such as this is not a necessary requirement.

EDELMAN J:   It is not really a separate category, though, is it?  You have just done the exercise in relation to whether you call it implied terms or an inferred term.

MR BANNON:   Yes.

EDELMAN J:   Terms are either expressed or they are implied.

MR BANNON:   Yes.

EDELMAN J:   Here there has been some expression of terms, but possibly no expression of a complete term, and the rest is inferred by conduct.

MR BANNON:   Yes.  It is harder to sensibly draw a distinction, which is perhaps why it is the primary judge and Justice Jackson adopted the same approach, so we accept that.  But to the extent your Honours may be entertained briefly by whether or not one should – this Court should say something about whether or not the “so obvious” test is separate, an additional requirement to business necessity, could I make some brief submissions in that regard, because we submit that Justice Greenwood’s analysis was correct, at least on implied contracts, there is no need to do so.

EDELMAN J:   Part of the difficulty may be in treating these five criteria as if they rigidly apply in the same way in all contracts that are formal, as opposed to contracts that are, so‑called, informal.  There is a spectrum of contracts.  At the one end you might have extremely formal contracts that are drafted over weeks by professionally‑instructed lawyers, and at the other end you may have a so‑called formal contract that is drafted on a napkin informally by two lay people.

MR BANNON:   Yes.  We submit this Court does not have to overrule anything to say so, but to say that there are strict five criteria defined in implied in any sort of contract is an overstatement and an over‑analysis of Codelfa and BP Refinery v Hastings, but certainly an informal contract – and part of the problem is the way in which there have been statements as to what the wording of “so obvious that it goes without saying” actually means.

Could I trouble your Honours just to go back to The Moorcock firstly, which is in the bundle at tab 32 at 1201, and to just remind your Honours briefly, it was a dispute between a boat owner, a vessel owner and a wharfinger and the position was that in order to unload the vessel at the wharf which was rented by the wharfinger on the Thames, inevitably during the tides the boat would bottom out and it turned out when a boat did bottom out there was some problem there and the vessel was damaged and at first instance, looking at 1202, or 65 of the judgment, the learned primary judge held, at about point 3 of the page:

as the use of the wharfinger’s premises by the owner of the Moorcock required that the vessel should take the ground when moored alongside the jetty, there was an implied representation by the wharfinger that he had taken reasonable care to ascertain that the bottom of the river at the jetty was in such a condition as not to endanger the vessel.

Against that background, at 1205 Lord Justice Bowen said, about the middle of the page:

The implication which the law draws from what must obviously have been the intention of the parties, the law draws with the object of giving efficacy to the transaction and preventing such a failure of consideration as cannot have been within the contemplation of either side –

So, you have the use of the word “obviously” there, but in the context of it is obvious to give business efficacy to this contract, you need to imply this term.  Then his Honour goes on to deal with presumed intention.  At the bottom of the page, a few lines from the bottom:

Both parties knew that this jetty was let out for hire, and knew that it could only be used under the contract by the ship taking the ground.

At the top of page 69:

they must have known, both of them, that unless the ground was safe the ship would be simply buying an opportunity of danger . . . The parties also knew that with regard to the safety of the ground outside the jetty the shipowner could know nothing at all, and the jetty owner might with reasonable care know everything.

And then, the middle of the page:

Now the question is how much of the peril of the safety of this berth is it necessary to assume that the shipowner and the jetty owner intended respectively to bear – in order that a minimum of efficacy should be secured –

And, at 1207 – page 70 – towards the bottom of the page, about point 7:

The question is what inference is to be drawn where the parties are dealing with each other on the assumption that the negotiations are to have some fruit, and where they say nothing about the burden of this kind of unseen peril, leaving the law to raise such inferences as are reasonable from the very nature of the transaction.

So that is very much focused on the commercial purpose of the transaction.  The next case in the series is Reigate, which is behind tab 30, and the brief passage is at page 1173 or 605.  And, if I may say so, this may be where part of where the problem starts, because at about point 3, Lord Justice Scrutton says ‑ ‑ ‑

KIEFEL CJ:   I am sorry, which page are you at?

MR BANNON:   I am sorry.  Page 1173 of the core book and 605 of the native, about point 3 of the way down:

The first thing is to see what the parties have expressed in the contract; and then an implied term is not to be added because the Court thinks it would have been reasonable . . . A term can only be implied if it is necessary in the business sense to give efficacy to the contract; that is, if it is such a term that it can confidently be said that if at the time the contract was being negotiated some one had said to the parties, “What will happen in such a case,” they would both have replied, “Of course, so and so will happen; we did not trouble to say that –

It is, in my submission, simply saying business efficacy, but it has got to be clearly business efficacy.  So, it is not entirely clear where the idea of an independent operation “so obvious that it goes without saying” actually derives from, but there is a meld of the two.  And then the last in the series ‑ ‑ ‑

EDELMAN J:   And what Lord Justice Scrutton is clearly saying in the context of his judgment is that one needs not to lose sight of the ultimate question, which is always:  what did a reasonable person in the position of the parties intend?

MR BANNON:   Yes.

EDELMAN J:   Although it is sometimes expressed as what did the parties actually intend.

MR BANNON:   Yes.  And then, the last in the series is Shirlaw v Southern Foundries [1939] 2 KB 206. It is behind tab 31 of the authorities. The relevant passage appears at page 227 of the report and 1197. Then, at the middle of the page or one‑third of the way down:

I recognize that the right or duty . . . to find the existence of an implied term –

And there is reference to a sentence or two from the judgment of Lord Justice Bowen.  It does not identify the sentence, but it must be referring to the ones everyone knows:

They are sentences from an extempore judgment as sound and sensible as all the utterances of that great judge; but I fancy that he would have been rather surprised if he could have foreseen that these general remarks of his would come to be a favourite citation of a supposed principle of law, and I even think that he might sympathize with the occasional impatience of his successors when The Moorcock is so often flushed for them in that guise.

Then, his Honour says:

For my part, I think that there is a test that may be at least as useful as such generalities.

And then he goes on to the “officious bystander”.  So even there, his Honour is not saying that is accumulative requirement; saying that is, perhaps, another way of looking at it.  But it is – they are the three passages which were relied on by BP Refinery to come up with the five criteria.  We have said in our submissions and we will not go back to them, but it is not entirely clear how you get five independent criteria.

Then, when one winds forward to the UK Supreme Court’s decision in Marks and Spencer – and, again, we have given the references – they rely on the same passages and say, well, there are these five criteria, but then they – paragraph 21, I think it is, of the reasons – perhaps, I will go to Marks and Spencer.

EDELMAN J:   Although, relatively, there is an interrelationship between the some of the authorities before Marks and Spencer, which is the Belize decision by Lord Hoffman ‑ ‑ ‑

MR BANNON:   Yes.  True.

EDELMAN J:   ‑ ‑ ‑ which is picked up by a majority of three judges in this Court in Commonwealth Bank v Barker.  Marks and Spencer rejects the position in Commonwealth Bank v Barker that implication is part of the exercise of construction.

MR BANNON:   Yes.  But ‑ ‑ ‑

EDELMAN J:   So, the authority in this Court, at least in the majority view that is taken – or the plurality view that is taken in Barker is that implication is part of the exercise of construction.

MR BANNON:   And we would not suggest – we accept that.  In fact, there is, I think, an expression of a continuum that has been used, and various justices – I think perhaps by your Honour Justice Edelman, at least, if not in the Lundbeck case recently, but slightly – not necessarily a different context, but . . . . . these hard and fast rules, whether one is looking at an inference or implication or interpretation is, yes, there has got to be guidance for parties and contracting parties – we do say that obviously Barker is authority in this Court – but when one looks at Marks and Spencer, assuming it is rejected – when it does reject a Belize approach, nevertheless it does say that the five criteria should not be treated as independent criteria.  Perhaps I can just go briefly to the relevant paragraph, which is at ‑ ‑ ‑

GORDON J:   Tab 27.

MR BANNON:   Thank you, your Honour.  At paragraph 16 on page 1088 or 753 recounts the three decisions I have gone to; it has been the same support relied on – BP Refinery.  Then, at paragraph 21 on page 1089 or 754, a number of comments and other members of the court agreed in this:

First, in Equitable Life Assurance Society v Hyman . . . rightly observed that the implication of a term was “not critically dependent on proof of an actual intention –

That is “reasonable people”, and that clearly accepted in this Court:

Secondly, a term should not be implied . . . merely because it appears fair –

or reasonable:

Those are necessary but not sufficient grounds for including a term . . . thirdly, it is questionable whether . . . first requirement, reasonableness and equitableness, will usually, if ever, add anything . . . Fourthly, as Lord Hoffman I think suggested in Attorney General of Belize v Belize Telecom Ltd [2009] I WLR 1988, para 27, although Lord Simon’s requirements are otherwise cumulative, I would accept that business necessity and obviousness, his second and third requirements, can be alternatives in the sense that only one of them needs to be satisfied, although . . . in practice it would be . . . rare –

And on they go.

So, firstly, to the extent one ever gets away from interpreting what must have been the arrangement on an inferred basis – or perhaps an implied basis – and one needs to imply a term of the type we suggest, then it was clearly, with respect, necessary for business efficacy grounds one does not need to pose a separate question of so obvious it goes without saying, but if one did, the way to answer – the way to pose it would be:  was it “so obvious that it goes without saying” between two reasonable parties whose mutual object was to get these images on the website that the owner of the copyright had to provide an arm, the agency, with sufficient rights to enable that to occur?  The answer is, we respectfully submit, obviously yes.

EDELMAN J:   That answer might be different if there had been a written contract that had been drafted professionally by lawyers between the agencies and REA.

MR BANNON:   Yes, because, firstly, you are always going to run into the problem of the potential for inconsistency, and there could be almost an implied inconsistency in the sense that you have gone to so much trouble to regulate the rights that it is hard to put in something which could have been covered and was not, and thirdly, just, as your Honour says, the very fulsomeness of an agreement may be antithetical to inferring or implying an additional term.

I should just mention our learned friends in their written submissions ‑ ‑ ‑

GORDON J:   Before you leave that, do you wish to say anything about paragraphs 23 to 26 of what it set out in Marks and Spencer, which is the modifications – or observations is probably the better language – to what Lord Hoffmann said in Belize leading down to the process in paragraph 26?  You may not, Mr Bannon.

MR BANNON:   Well, this is the aspect which is perhaps inconsistent with Commonwealth v Barker.

GORDON J:   Thank you.

MR BANNON:   I think whichever view one takes – and there have been statements in this Court that the line between implication and inference is almost ephemeral, and perhaps the answer is – for the purposes of this case, at least – in a case where so little has been expressly agreed, that it is hard to imagine you ever move into implication ‑ ‑ ‑

GAGELER J:   I mean, this is all in the context of a written contract and the word construction is being used, or interpretation repeatedly.  Is that even a relevant concept in this context?

MR BANNON:   No, but our learned friends try to argue that campaign had to be construed as meaning – as a temporal limitation.  That did not succeed anywhere.  Indeed, if campaign has any connotation, it is indicating that something has got to be loaded on – it is confirming that something has got to be loaded on the leading website.  The short answer, your Honour, is no.

Your Honours, without needing to obviously rely on what we said in writing and, indeed, on the oral outline which passes as containing English sentences, just lastly to deal briefly with the section 15 point, which is a residual point which would only arise at the heel of the hunt. Section 15 is set out by way of – it is in the materials; it also happens to be set out in the judgment at page 23 of the primary judge. It is unadorned, the section. It is tracked from English legislation without much indication as to what is it purpose or what it is doing. But, section 15:

For the purposes of this Act, an act shall be deemed to have been done with the licence of the owner of a copyright if the doing of the act was authorized by a licence binding the owner of the copyright.

Its potential operation here would be this: that if, based on, by either implication or inference, REA was authorised to do all the acts that it could do and those acts are, effectively, the same as RP Data is doing, then section 15 independently authorises the acts of RP Data because they are within the licence of REA. Perhaps, one has to add at least a couple of sentences to that. It is within the licence of REA, in circumstances where there is no limitation on the licence to REA of any kind against sub‑licensing, and there is no limitation, for example, to say this licence to REA is personal to REA. This is, again, a licence we find on the inferred or implied basis. That would give section 15 work to do.

We have referred, in our submissions, to a case – Concrete Constructions – in this Court.  I will not go to it but, briefly stated, there was a joint venturer between three parties – one of which included an architect who provided architectural plans for a commercial development for free, and everything went financially asunder.  Receivers, or liquidators – I cannot remember which now – were appointed – I think it was liquidators – and they sold the site to a third party.  The third party started building in accordance with the plans which were prepared.  There was no sub‑licence found to have been given by the joint venture to the purchaser.  It had not been sold by the liquidator.

The High Court, in that case, said section 15 had work to do there because the joint venturer’s acts would have been authorised in building the building in accordance with the plans that, by virtue of section 15, enabled the purchaser of the venturer and the plans to build in accordance with those plans as well. There was no finding of a sub‑licence, as your Honour, Justice Gummow refers and other judges refer to section 15. The references are in the submissions. But that would be in circumstances where there was not found to be any limitation against sub‑licensing and, indeed, it was for the very purpose of the joint venture. So, that would be an independent basis as well.

KIEFEL CJ:   I see the time.  The Court might take its morning break.

MR BANNON:   That is all I was going to ‑ ‑ ‑

KIEFEL CJ:   I was going to ask you about the cross‑appeal if you could – the orders proposed and the remitter order ‑ ‑ ‑

MR BANNON:   Yes.

KIEFEL CJ:   ‑ ‑ ‑ in relation to the cross‑appeal, to expand on that.

MR BANNON:   It will only take me one minute, your Honour.  What happened was, we were given leave to appear and argue on the separate question but we were not given our costs – albeit, we argued successfully – of the hearing.  So, RP Data got their costs of the hearing but we were not given costs.  We lodged a cross‑appeal in the Full Court saying – assuming the appeal is dismissed – his Honour should have given us our costs of that argument.  That is all it is.

KIEFEL CJ:   Why do you say remit is necessary?

MR BANNON:   In other words, your Honours could decide it – I suppose your Honours could.

KIEFEL CJ:   I am asking you for your submissions.

MR BANNON:   I am sorry, yes.  Can I use the break to make that ‑ ‑ ‑

KIEFEL CJ:   Yes.

MR BANNON:   I suspect I will say, your Honours can.

KIEFEL CJ:   Very well.

MR BANNON:   I will just think about it.

KIEFEL CJ:   The Court will adjourn for 15 minutes.

AT 11.15 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.31 AM:

KIEFEL CJ:   Yes, Mr Bannon.

MR BANNON:   Your Honour, we had threatened to seek not only a costs order, but a higher costs order based on the evidence about a pre‑trial offer, but if this Court could determine the costs question, we would not pursue that and there will be no need for remitter.

The very short point is, as his Honour identifies in paragraph 26, at page 18, we adduced evidence and made submissions pursuant to

rule 15.13(b) of the Federal Court Rules, which permit a party to a cross‑claim – so we are a cross‑claim, which was not the subject of the

determination of the separate issue, to defend the claim made in the principal proceeding – either alone or with another party.

We were given leave to do that.  As your Honour says, we made submissions on which his Honour relied, and we led evidence on which his Honour relied, and I think his Honour’s reasons on the cost judgment was simply that we were there by our choice so we did not get costs and we said that is a matter that your Honours could decide and we would not pursue any issue in relation to any higher order of costs, yes.

KIEFEL CJ:   A differential order.

MR BANNON:   Yes.  May it please the Court.

KIEFEL CJ:   Thank you.  Mr Martin.

MR MARTIN:   Your Honours, we respectfully adopt what Mr Bannon and Mr Bevan have said today by way of oral submissions, and of course we rely upon what we have put in writing to date, including our outline of oral submissions which was filed this morning.  We just wish to make some brief points in addition to those.

It should be kept firmly in mind that the proceeding at first instance involved a discrete consideration of 20 transactions – or 20 engagements between Mr Hardingham – when I say Mr Hardingham, I am including his company, REMA, in that – Mr Hardingham and the agents – and whether those engagements encompassed in effect a licence to our client, RP Data, to place the photograph it acquired from REA on its website.

Mr Hardingham conducted his case at first instance as he was required to do in accordance with his pleadings, that is, that RP Data was authorised to acquire the photographs from REA and place them on their website.  But when the marketing campaign – whatever that may mean – came to an end, RP Data then had to remove those photographs.

The alleged breach of copyright is not for placing the photographs on its website but failing to do something upon a certain indeterminate event occurring, namely the completion of the sales campaign – whether that be by way that a sale is completed – it also raises the spectre of the property not selling – there being an auction, it being passed in, or a vendor deciding to withdraw a property from the market.  These are all levels of uncertainty associated with the campaign coming to an end.

But, more importantly, his Honour Justice Thawley at first instance determined the contract between the parties – or the inferred terms – by way of a course of conduct, none of which is challenged on appeal.  Your Honours have been taken to all of those factual findings of Justice Thawley, and in particular, that the photographs which were created by Mr Hardingham and the floor plans were uploaded to the website of REA in accordance with its usual terms and conditions, not a specific term and condition that was contended for – as it transpired, clause 5(a) which is set out in the judgment was the actual term and condition, but the finding was in accordance with its usual terms and conditions, and that is what a reasonable person in the position of Mr Hardingham would have, or should have, realised in the circumstances.  I think as Justice Gordon properly observed, a person in the industry would have realised; it would have been naïve to think otherwise.

However, Mr Hardingham wishes to bring into that undisputed factual background a term of the licence that it came to an end at the conclusion of the marketing campaign, whatever that means.  The fundamental problem with imposing that sort of a term on the licence which was otherwise granted is that it does not find any factual background or footing in any of the objective facts that were found by the trial judge.  In particular – and this appears at paragraph 60 at page 25 of the record – at no stage during any of the course of dealings between Mr Hardingham and the agencies were any of the photographs that he prepared, or the floor plans that he prepared, removed from either the website of REA or RP Data after completion of a sale or lease transaction.  That never occurred.  So, if we are looking at the course of conduct between the parties, Mr Hardingham wishes to adduce a term by way of inference into this agreement which in fact has no factual background, or no factual history, whatsoever.  It in fact never occurred.

EDELMAN J:   Well, it is not really introducing a new term.  It is really just scope of what the term to be inferred is.  Is the scope of that term a perpetual licence, as you say, or is the scope of that term a licence that comes to an end at some undefined point?

MR MARTIN:   Yes.  Your Honour is quite right, but the point we make is that there had been no conduct consistent with that during any prior course of dealings or in respect of the engagement or dealings which comprised the 20 discrete transactions.

Justice Greenwood, with respect, alluded to this in his judgment by saying that in fact there was an express term that the licence was limited to the marketing campaign, and this appeared at page 60 of the record, paragraphs 31, 32 and 33.  In paragraph 31, as your Honour Justice Edelman has just identified, the issue in the proceedings is “the scope of the authority”.  Our submission is that at paragraph 32 Justice Thawley quite properly said:

the evidence did not establish an express written or oral licence.

That is undoubtedly correct, because there was simply no discussion about a licence at all.  In paragraph 33, his Honour Justice Greenwood, said that he disagreed with that conclusion and then he made reference to the rather brief conversation that occurred – in a very summary way – between Mr Hardingham and the agent each time that he was engaged, with the reference to the words “marketing campaign”.

This concept, though, of the express licence did not really follow through in the balance of his Honour’s judgment.  But that could be the only possible basis upon which Mr Hardingham contends that his licence was this limited one.  But, at the risk of repeating myself, that flies in the face of all of the unchallenged factual findings of the trial judge.

In effect, what Mr Hardingham wants to do is conduct himself in a certain way over an extended period of time – a period of four years – and then, at the end of that time, say but, notwithstanding that I said nothing and I acted in a particular way, I am invoking a term which I had never specifically asked for – I had never mentioned – and, in fact, as a matter of objective history, it had never occurred – that is, the removal of the photographs.  To put it simply, Mr Hardingham, in effect, wanted to move the goal posts away from that which he had, by his conduct, implicitly agreed during this course of time.

STEWARD J:   Mr Martin, you mentioned before that it was accepted that the licence to your client existed ‑ ‑ ‑

MR MARTIN:   Yes.

STEWARD J:    ‑ ‑ ‑ but it had a limited scope.

MR MARTIN:   Yes.

STEWARD J:    Having regard to the nature of your client’s business, would such a limited licence be of no value to it?

MR MARTIN:   Yes, it would have no value.  Of course, it also would not achieve – as we say in our submissions – the commerciality of the arrangement between Mr Hardingham and the agent – having regard to the industry in which they all practised – and, as the trial judge alluded to, if it had been the case that Mr Hardingham sought to impose such a restriction, it may well be that he would have been without any work because such a restriction would affect – defeat the purpose, the very purpose of him being engaged to produce photographs to be uploaded to websites so the property could be marketed effectively.  It simply has no commerciality whatsoever.

Can I finally say, your Honours, that Justice Greenwood – to the extent that Justice Rares agreed with him – said that the terms – the standard terms of conditions – that were imposed by REA for the uploading of photographs were of a significant nature and he used the word “gravity”.  He also found that Mr Hardingham would not have – or a reasonable person in his position – would not have been likely to have agreed to such a term because he was giving up such significant rights.

But that, with respect, overlooks the commerciality of the arrangement.  Mr Hardingham set his fees with the knowledge of all of the facts found by the trial judge, and Justice Thawley sets that out at paragraph 69 of his judgment at page 27 where he specifically says:

In setting their fees the applicants were aware of the matters set out immediately above.

This is in response to, I think, a question raised by Justice Steward about the evidence about how they set their fees.  In fact, there was no evidence about that and, as the trial judge says:

The applicants did not adduce evidence in relation to what they took into account in setting their fees.

But they set their fees against the background of facts as found by the trial judge, which are unchallenged.  That is, it was a commercial arrangement to take photographs, prepare floor plans for which they were paid a fee, and then those photographs and floor plans were then used to widely  market properties for sale with no limitation.

Whilst it, by reason of the course of argument, to some extent it has become not so relevant, but Justice Greenwood was also at lengths to point out that the letter which the solicitors for RP Data wrote in April of 2014, the text of which we see in paragraph 19 of the judgment of Justice Thawley, in particular that part of it at page 16 of the record which sets out the licence.  Justice Greenwood went to some lengths to say that that was significantly different from the clause 5(a) which was ultimately contended for at trial, but taking into account that ultimately his Honour’s findings were that the term of the licence was that Mr Hardingham agreed to whatever the term and condition was at the relevant time.

But, just in relation to that, if your Honours look, as I said, at page 16 of the record at the top of page 8 of the judgment, it is there set out, what the terms of the licence were.  As it turns out, that was not exactly the correct licence but, in our submission, there is no significant difference between what is set out there at the top of page 8 of the judgment, or page 16 of the record, and clause 5(a), which we see set out at paragraph 12 at page 11 of the record, keeping in mind that the important parts are that the licence was perpetual and transferrable, and that those words appear in both versions, if I can call it that, of the licence.  But importantly, the letter of April 2014 served the purpose insofar as it is necessary that Mr Hardingham or a reasonable person in his position knew that there were terms and conditions associated with the uploading of photographs to the REA website.

GORDON J:   Where are you reading that from, Mr Martin?

MR MARTIN:   I am sorry, your Honour?

GORDON J:   Where are you reading that from, or is that a submission?

MR MARTIN:   No, that is a submission.

GORDON J:   I see.  Thank you.

MR MARTIN:   My submission is that Justice Greenwood was saying that far too much emphasis at the trial was placed upon the letter of April 2014, because it did not precisely set out the nature of the clause.  And in fact, it was the wrong clause.  And our submission is, well, there is no significant difference between the actual clause and what was set out in letter of April 2014, but importantly, insofar as it is necessary, I say that the trial judge found that in fact, a reasonable person in Mr Hardingham’s position would have understood that there were terms and conditions.

GORDON J:   I put that to Mr Bannon, that is in a sense, the essential term, or the term of the contract that was found.  In other words, they were aware of – someone in the industry, consistent with course of conduct, would have been – a reasonable person in that position would have accepted that they were subject to a licence to REA, which was then able to be licensed to your client.

MR MARTIN:   Yes, quite so.  Yes.

GORDON J:   Without knowing the precise terms of it; whether it was going to be the language of clause.

MR MARTIN:   Yes, and that is with respect to, absolutely correct.  The only point that we raise is that there was no significant difference as it transpired in our submission between the clause and the letter.  That is,

clause 5(a), and the letter, and it was yet just another objective fact against which the parties contracted – we are not saying the parties, Mr Hardingham and the agencies contracted, when Mr Hardingham

performed each of the 20 engagements is subject to a separate question.  Unless there is something further, your Honour, those are our submissions.

KIEFEL CJ:   Yes, thank you.  Mr Cobden.

MR COBDEN:   May it please the Court.  Your Honours, the nature of the case and the very issue on which special leave was granted, the great issue of what is before your Honours by this appeal, have each considerably shifted, and both considerably shifted in the first hour of the case.  I am not saying that I am not going to deal with that, your Honours, but I may have some difficulty adhering to the Rules as I adhere closely to my three-page outline in dealing with the case that is now put.

The changes, we submit, first of all, to the way in which both appellants put the case – the thrust of the case – is that we have an implied term or inferred term, a term has now put forward – which is not the term that they have advanced at any time before, and is not the term that either Justice Thawley or Justice Jackson found – because the term is now some, as it were, average meaning to be obtained from a term of that sort that has appeared on the REA website from time to time, but excluding any extreme changes that might be made for it from time to time.  That might appear to be a small change, but it is a very great change, because that was not the term that was put before.

Secondly, special leave was granted, as we understood it, particularly to explore the question of what Justice Deane’s statements over time, and adopted by members of this Court over time, how they should be viewed in light of BP Refinery and Codelfa five conditions, where the contract is a less formal or informal contract.  Now, my learned friend Mr Bannon, when he approached that topic, he seemed to be saying he did not really need to say anything about that, the way the matter was developing, but then addressed your Honours by going back to the foundational cases, in effect to say, maybe BP and Codelfa have too many conditions, or wrong conditions.

These things matter, your Honour, in how one presents a case, and I, of course, will be guided by your Honours but we have prepared an argument, and delivered an argument, that says that the requirement that the term be “so obvious” as to go without saying has indeed remained part of the jurisprudence of this Court and plays a role in the informal contracts.

But also, in looking at the way Justice Deane approached informal contracts and what his Honour did over time, with carefully reasoned and very detailed reasoning from his Honour and other members of this Court, are the requirements that the term be equitable and that the term be capable of clear expression and that the term not conflict or contradict the express terms of the contract, those are matters that in the case of formal contracts are set out as being among the requirements that must be met in Codelfa and cases that have followed Codelfa on written contracts are such considerations, do they also apply in the case of informal contracts?  And we say that they do, there is nothing in the considered jurisprudence of the Court going over a series of cases where these matters have been worked out to say that they do not.

The requirement that the clause, the inferred term – may I just say “the implied term”, I will come back and of course deal with the question.  When I say the term, I will be meaning the implied or inferred term and I will come back and deal with the theoretical problems with those two terms – should be capable of clear expression, and clear expression as a contractual term that somebody can follow.  To say, with respect, that the term that is to be found, or to be implied, inferred, into these contracts between Mr Hardingham and the agencies is a term of the nature of it having all the necessary ingredients, or essential ingredients of clause 5(a) as it happens to have appeared over time, but with a change to exclude any unusual variations of it is a determinative, with great respect, I am having trouble, maybe others would not, are difficult to express.

EDELMAN J:   Are there any terms in this contract that were fully expressed in words, oral or written?

MR COBDEN:   Yes.  My learned friend, Mr Bannon, took your Honour, when your Honour asked that question, to the conversation, the oral terms, that was accepted applied to every such transaction or, typically applied to these transactions.  And that is set out in Justice Greenwood’s decision at page 53 of the Court record.  His Honour states at the bottom of page 52 that the evidence was minimal and there was nothing different for any for any of the 20.  Can I interpolate, your Honour, that the 20 were chosen because there were thousands, and a sensible approach, like as in architectural plans cases, is you choose enough to go on.  And Mr Hardingham’s company, and I do not really need to distinguish between them for any purpose in this case, was engaged to supply the floor plans and, typically, this is half-way through the paragraph at the top of page 53:

an agent on behalf of an agency would request Mr Hardingham to attend a particular property and take photographs to be “used” in a “marketing campaign”.

Generally, the marketing campaign was due to commence, that is:

Generally, Mr Hardingham would be told that a property had been listed for sale or lease and a marketing campaign was due to commence for that purpose.

And that is not denied, that is what happened:

He would be asked to visit the property and take photographs for the campaign and, where relevant, prepare a floor plan of the property for that campaign.  Mr Hardingham took the photographs.  He prepared the floor plans . . . Mr Hardingham, in his evidence, gave a typical example –

This is in affidavit evidence, he was not cross-examined, the agent says:

“Hi James, we have just listed [property address].  The campaign is due to start [date].  Can you attend this week to take the photos for the campaign?”

I think we can interpolate, or the floor plans.

EDELMAN J:   So, what is the fully expressed term that is expressed there?

MR COBDEN:   That the purpose of the taking of the photographs and the making of the floor plans is for the campaign, that is, in respect of that property, listed for sale or lease and the marketing campaign that is due to commence shortly for that purpose.

STEWARD J:   What does “campaign” mean here?  Does it mean the campaign leading to auction or does it mean the period of exclusivity between the real estate agent and the vendor, or what?

MR COBDEN:   It might sound indeterminate, your Honour.  My learned friend Mr Martin submitted that this was all very indeterminate, but in practice, it is not indeterminate in this milieu because, for example, the REA website has a section for sale, and for lease and then it has a section sold and let.   And everyone knows when the property has moved from one to the other.  So, there is no, with great respect – it is not in the indeterminate period.

STEWARD J:   You are probably right, but there will be cases where the property is not sold and so, is that the period of exclusivity?

MR COBDEN:   Well, then, your Honour, just in the broad terms in which this is being expressed, not descending to terms on when who is exclusive or not, the property cannot remain on the for sale or for lease part of the website and it does not move to the sold or let part of the website.

The evidence does not really show whether it goes somewhere else.  But there was cross-examination on this point, and I did ask the witness for REA to agree and I think he did, that they would not let a property remain on the website as being available for sale or available for lease because that would be misleading to the public, so something would be done to move it.

That puts signposts, that the campaign starts when it starts and it ends when one of those things happens, it moves to the sold or leased or is taken off.

EDELMAN J:   You say all of that is fully expressed in the findings at paragraph 6?

MR COBDEN:   No, what is fully expressed is the campaign and the rest of that takes another form of implication which is an implication from the words that are expressed.  Now, that may not be another form of implication, there is a chapter in Heydon on Contract dissecting a judgment of Justice Hodgson to say there are various forms of implication.  One of those is the category.  But if I could just say it is that sort ‑ ‑ ‑

EDELMAN J:   A linguist would call it an expliciture as opposed to an implicature, but it is all the process of inference.

MR COBDEN:   Yes, your Honour, but of a slightly different nature because you are working on a word that – the word plainly means something to the parties and in the absence of any other evidence, given the evidence that exists, one can say that there is a marketing campaign.  I do not think that is a complete answer, but it is the most complete answer I can give to that question.  So, I think that answers your Honour Justice Edelman’s question and I think it also says what we want to say about the suggestion that this is somehow indefinite.  It is not indefinite.

The way the industry has worked in recently time and possibly even longer times is that there is a beginning and end of a marketing campaign.  I refer to longer times because one of the things that is useful to bear in mind, looking at the facts of this case is that this business of putting – or this activity of putting properties that are for sale up on websites is really just the latest extension of the way in which properties have been sold in a continuous way for a long time.

STEWARD J:   Do you accept what Mr Martin said, which was that a licence limited in that way would have been of no commercial value to RP Data, given what RP Data does?

MR COBDEN:   I think that is right.  RP Data is in the business of providing – I think it is known commercially as Core Logic and I think it is quite often in the news – it is in the business of assembling vast amounts of data about properties that are sold and what prices and where they are sold and the like, and it is used as a research tool, it is clear, by real estate agents, and if there is a photo that seems to be a better way of them doing business.  I am not sure that we know sufficient about RP Data’s business to know whether they must have photographs for all purposes.  There was evidence from a witness of RP Data to say that it was very useful to have photographs.  Perhaps I could reserve the answer to the question to the extent it asks about what has the viability of RP Data’s business got to do with Mr Hardingham.

STEWARD J:   It is a fact that your client knew that the photos were posted to RP Data.

MR COBDEN:   Yes, your Honour, but many people, many copyright owners, know that their works are being misused, infringed indeed, in very largescale terms and for very long periods of time.  It was indeed such a fact that authors’ works were being infringed at a very large scale by universities that led to the Moorhouse Case in this Court.  It is the fact that movie cinemas’ works were being infringed at a very large scale by file swapping, that the iiNet Case ends up in this Court.  Often the infringements will continue until somebody brings an action to stop them.

Mr Hardingham, having noticed in 2014, or thereabouts, 2013, that his works were being infringed on a very large scale, wrote a letter of demand and was sent away with a flea in his ear – no, we have a licence, it is from REA.  Where did REA get the licence?  They get the licence from the agencies.  I did not license the agencies, Mr Hardingham thinks.  He says he did not license the agencies to keep the works up on REA’s website, or any website, forever.  The fact that they are still there does not change what Mr Hardingham might have licensed.  It may be it will be relevant to an estoppel case but he just marshalled his forces and came back and sued for the infringement.

We respectfully submit, that it does not become a fact that finds its way into implied terms that Mr Hardingham has complained about the works infringing – his copyright being on the website – and has not yet had the wherewithal to go about doing something about it.

STEWARD J:   All of that may be so, it is just that when we go back to that paragraph – the quote from the affidavit – it is what is not said at the time which may be of significance in terms of inference.

MR COBDEN:   Yes, your Honour.  Can I address that in this way?  This is answering, first of all, the points made by my learned friend, Mr Martin.  The way the case progressed is that Mr Hardingham and his company identified that RPD – if I can just abbreviate it like that – had a lot of his photographs on their website.  He had not licensed RPD.  He searched his memory, he searched his records, and he had no record of licensing RPD.  Those are the ingredients of copyright infringement.

He is the owner of the copyright, of the works in copyright and an act comprising the copyright – that is to say, communication – is the relevant one.  Communication is happening, being done by this person – RPD – I have not licensed them.  That is all that a copyright infringement suit has to say – and that is all it did say – identified the acts, and as, I think, my learned friend, Mr Bannon, identified, reproduction and communication were the key ones.

The reproduction can happen in a perfectly – someone can be authorised to reproduce a work and communicate it to the public for a week and you probably cannot sue them for that reproduction because that was licensed – unless they reproduce it again in some way, and we need not get into the form of that, because reproduction tends to happen at fixed times.  But communication – which came into the Act in 2001 – is a very new sort of right.  It is a sort of right that is infringed continuously.  This question came up in iiNet as well, and it comes up in other cases.

The two branches of communication in the statute – in the definition – are make available online an electronically transmit.  That is intended to cover the whole universe of electronic activity, really.  “Electronically transmit” means, of course, to tap something and send it on an email, et cetera.  But the important one, “make available online” has been held time and again to be infringed continuously by anybody who has something available online to a person who wants to come along and see it and they do not have a licence to do that.  So, Mr Hardingham – I am sorry, your Honour.  I am not sure if I have answered your Honour’s question with all of that.

STEWARD J:   I think you have.

MR COBDEN:   Thank you, your Honour.  If I go back to what Mr Hardingham agreed, he takes photographs and the floor plans, and then, yes, as the learned judge found, he knew that those photographs and floor plans were, as part of the marketing – which was the whole range of activities – going to end up – very likely to end up – they were not definitely going to end up, but they very likely to end up on the REA website.

The evidence about the necessity, i.e., that the agents and Mr Hardingham and people in their capacity right throughout the industry knew that it was very likely that properties would be marketed by REA, was because of the particular very strong position of REA; very likely that people would use it and therefore – and I think almost all agents have subscribed to REA.  In other words, they have signed up to the terms and conditions, although it was not necessarily clear that all agents would then use REA for marketing every property, and there are also degrees of using REA.

It was the case that the 20 in the sample had all used REA; that the photographs had all gone to REA for the selling of those properties.  But there is no identified need for the commercial purposes of the vendor of the property who, after all, is the principal of the agent, or the agent or Mr Hardingham, that the photographs would stay up on REA forever or be sent up by REA to other websites to appear forever.

The way that then the pleadings unfolded – I think I was just simply following the pleadings unfolding – Mr Hardingham pleaded an orthodox case.  REA – we said RPD, of course.  RPD came back and said various answers about equitable title and the like, but just said no, we have a licence to communicate your works continuously well beyond the end of the marketing campaign – well, continuously, forever, perpetually.  We got that from REA, REA got it by the implication – inclusion of a term into the Hardingham agency contracts, all of them, and therefore the appearance of the works on the REA website and their communication was done with your licence.

In the reply, which my learned friend, Mr Martin, referred to, we came back and said yes, we will accept that for a period that was done with our licence, so we cannot sue in respect of those.  That is an orthodox way of approaching the pleading, we confess there is a certain amount or – and says no, but there is still something to be tried.  What remains to be tried is whether you have a licence; you – RPD – have a licence that goes beyond what we are prepared to accept, and that is the licence that you advocate for which we do not advocate for at all.

With respect, as my learned friend, Mr Martin, said, we had nothing to prove about our licence.  We simply accepted that there was some activity for which we could not sue for infringement, but beyond that, that the implied term that took it beyond that was the one advocated for by RPD and then by REA when RPD brought REA into the case.  We have not heard a lot about onus this morning and I . . . . . your Honours with a great deal about it, but there is plenty of authority to say that the copyright owner does their best to say, well, I never licensed this person, and then the evidentiary burden shifts, and Mr Hardingham did that.  There is a debate about a limitation on the evidence, but the limitation on the evidence is just that Mr Hardingham’s understanding that that is – we say that is the best that an individual can do.

If it is a licensing organisation like a movie studio or APRA – the musical APRA, not the financial APRA – then they say, we searched our records, there is no record of a licence to this person and the evidentiary burden shifts.  But, in addition, the evidentiary burden ‑ ‑ ‑

EDELMAN J:   This is not really a case where evidentiary burdens can come into it, though, because the question is – even as you are posing it – simply one of what inference do you draw about the scope of the expressed or implied term.

MR COBDEN:   Yes, your Honour.  The effect of the Avel decision – I am sure everyone knows – there was a debate about whether without the licence of the owner of the copyright was an exception that fell to the defendant to prove, or an ingredient of the statutory tort fell to the plaintiff to prove – that this Court held in an unusual case, because the copyright owner was not a party – that the exclusive licensee had not made out a defence to an unjustified threats decision because the exclusive licensee could not prove that matter.  Again, it was a very odd way of the question arising but there is no question that the authority is for that proposition. 

How does work in practice in cases that are fought in the courts?  That is to say, how does the copyright owner discharge – do their best to prove that it was without their licence, as they are required to by Avel – that is where the courts – certainly the Full Federal Court has said there is an evidentiary shift to say, if somebody want to then propound a particular licence that covers their behaviour, they bear the evidentiary burden of putting that forward.

I respectfully submit that makes a fair degree of common sense because the copyright owner cannot go around disproving all possible implied – expressed licences that might arise.  There would be some practical way of doing it.  We add to that the fact that authorities say frequently that any person propounding an implied or inferred term bears the burden of making good that term.

Of course, again, we run an odd case in this case because your Honours are looking at fundamental principles of contract law, implied and inferred terms, the requirements of Codelfa and the like, in a circumstance where your Honours do not have both parties to any of these contracts before you.  That is the curiosity in the way this case arose.  Your Honours have one party to the contract, Mr Hardingham, and then these terms being propounded by an interested third party, which wants those terms to be inserted into the contract.  I am not saying that the case is incomplete for the lack of the agency, but they are not here – none of them is here to say what they would say about these contracts.

On the pleadings and on the case as it was presented to Justice Thawley, the issue was – we still say that this is the issue today – can RPD demonstrate that there is a term in its favour intruded in some way – I am trying to be neutral – intruded into the contract between Hardingham and the agencies that operate so that RPD can plead that licence in answer to us on the infringement case.

GORDON J:   Is there another way of looking at it?  I raise that in this context:  if one adopts the approach of Justice Thawley and one says, I have got a course of conduct here and I need to work out what the terms are between Mr Hardingham and the agencies – excepting that the agencies are not before the Court at the moment – and one then says, I have looked at the set of arrangements by reference to industry practice in the course of dealing between Mr Hardingham and his company and the relevant agencies – none of which is in dispute as I understand it; none of it at all – and then one says, I then look to see whether or not, having identified with precision what the terms are, to the extent you can – and we have had a debate about what those terms might be – is that not the way to look at it, rather than say, I am then seeking to propound some sort of limit on it?  In this sense, the ‑ ‑ ‑ 

MR COBDEN:   I am not trying to – I am just thinking, your Honour, it is an adversarial system in where people bear burdens and have to discharge them, and ‑ ‑ ‑

GORDON J:   Yes, I accept that.  But in a sense – I am agreeing with you in this sense that you, as the propounder of the contract between yourself and the agencies, which you accept largely – set out in Justice Thawley’s findings – is, in a sense, the starting point, rather than starting at the other end.

MR COBDEN:   I think I follow what your Honour is saying, but the question that is begged is:  does RPD, derived from REA, derived from the agencies, have a perpetual licence to – there are some facts that his Honour observes, as it were, but it is really the inferences that are drawn from them that we – there are one or two places where we quibble with what his – where his Honour really reaches which is a conclusion on what were the unvarnished facts.  I was proposing to take your Honours briefly, I hope, through Justice Thawley’s decision, just to point out where that happens; and to point out that against a background where there are repeated statements that the Court is slow to imply a term and cases say, for instance, in the copyright context, that the copyright owner is not going to happen to have licences imposed upon their statutory valuable rights, which are, of course, the original rights of authorship. 

Likely that one looks at how one is going to characterise those actual facts to see what they could possibly lead to in the imputed intention of the two parties to this agreement, who are agencies Mr Hardingham – perhaps they are not particularly sophisticated parties.  They are getting on with their business of taking photos and drawing plans and selling properties, and that, I think, places their contract along the spectrum that Justice Edelman was talking about.  At one end, there is the fully‑written contracts, and at the other end is something on the back of a napkin.  Yes, one has to somehow grapple with what this Court has said about how you go about the task of implying or inferring a term.  I hope I have answered your Honour’s question.  I think perhaps it could be answered more fully if I go to those paragraphs of Justice Thawley.

KIEFEL CJ:   Just before you do, Mr Cobden, is it your argument that the term found by his Honour at paragraph 80 was not one that was open to his Honour to infer?

MR COBDEN:   It was not a term – sorry, I do not wish to quibble, least of all with your Honour, but it seems to us that the term starts at 78 and is explained in 79 and 80, and one has to look at all three to see it.

KIEFEL CJ:   Yes, I see.

MR COBDEN:   So, at 78, his Honours refers to:

The objective circumstances –

Now, that also wraps up his Honour’s characterisation – “the objective circumstances” – which his Honour has done in some of the preceding paragraphs which are not entirely pure fact‑finding exercises but, in many places at times, his Honour characterises some aspect of the facts.  His Honour says:

each of which occurred after 9 April 2014 –

But it is clear from other aspects of his Honour’s reasoning that the 9 April 2014 letter really did not make any difference.  I am going to try and make that point good.  I am also going to try and make a point good – which I think, in a sense, emerged in the debate your Honours had with my learned friend, Mr Bannon, which is – perhaps, your Honour Justice Gordon put it – and I hope I have got it right – that these facts are facts known to the whole industry.  There is really nothing in this case particular to Mr Hardingham that imposes these terms in the transactions between him, as a real estate photographer and occasional plan‑drawer, and the agencies that would be different to anybody else who was dealing with the agencies, because these facts are said to be notorious in this industry; that, for example, REA is the dominating website, therefore you are going to do your best to get onto it, and the like.

That is where we have said – and met with a strong retort from those to my left – that this has got very many characteristics of a term to be implied from custom or by law into a particular industry.  I think there was a little debate between your Honour Justice Gordon and my learned friend, Mr Bannon, which reminded one of the aphorisms that sometimes a term by custom is one where there has been so many occasions that it has been implied in fact that it matures into one implied by custom.  But there is nothing particular to Mr Hardingham about these matters. 

Back to answering one of the Chief Justice’s questions, really 9 April 2014, when one analyses the reasons as a totality, goes away as any sort of important matter.  I interpolate my learned friend, Mr Martin, accepts the wrong condition was put in front of Mr Hardingham at that time.  There are significant differences, but we will not quibble with that. 

Those circumstances lead to both the inference and the implication – and his Honour is falling in line with some of the pronouncements in the cases of those are two separate things; things may be moving on – that the applicants agreed that the agencies were authorised, by way of a licence from the applicants – agreed with the agencies, that must be – to upload the photographs and floor plans to the realestate.com platform and grant to REA a licence in the form required by REA and contained in REA’s usual terms and conditions.

These agreements, of course, took place over many years.  That agreement was prospective on each of the occasions between 2014 and 2018 when the photographs were taken – that is the term – that Mr Hardingham was agreeing with the agencies that implied into our dealings is a term that whatever the REA licence is, from time to time, is going to be the term upon which I have licensed my copyright to you.  So, there is a rhetorical term – there is a taking of Mr Hardingham’s copyright rights that is entirely outsourced on that view to REA’s terms and conditions.

Now, they do not happen to have changed.  My learned friend, Mr Bannon, makes a lot of that, but they were capable of changing at each occasion when this term was implied into the contracts.  Some dated in 2015, a few contracts with some real estate agencies, some dated 2016, but whatever ‑ ‑ ‑

GORDON J:   Did your client’s course of conduct change in that way?

MR COBDEN:   No.  We rely on the fact that our client’s conduct did not change course and we rely on the fact that he kept on charging the same amount of money.  Could I leap into that point?  It is a particular discrete one.  If he had changed the amount of money and added 20 per cent because it stayed forever on the REA/RPD websites, then he would have been accepting that that was what was happening and he was going to take some reward for that licence.  He did not.  He marshalled his forces until he was able to sue and he sued and there is a six‑year limitation period which, of course, does not mean much in the circumstances of communication – not like it used to.

But, of course, he did not change his prices, because he wanted a super‑infringement.  He was not going to accept the infringements.  He had asserted his case and emphasised again and again, and I will not repeat it ad nauseum, but there was no claim of estoppel, laches, acquiescence, et cetera.  We are just in the realm of contract.

GAGELER J:   Mr Cobden, I may be well behind understanding your argument, but on your client’s version of the terms of the licence granted by your client to the real estate agent, did that licence contemplate REA sub‑licensing the photographs at all to RP Data?

MR COBDEN:   We would say not, your Honour.  It happened that REA did, and that is what Mr Hardingham was complaining about.  It would not have mattered – perhaps I put it this way, your Honour.  It is the agency that was licensed by Mr Hardingham to market the property as best they could on behalf of their principal, the vendor, and his Honour Justice Thawley refers to this.  That would include, of course, many other things not before the Court today, i.e. putting it in the newspapers, having the photographs printed in the supplement to the Saturday paper, printing brochures and leaflets, putting it in the window of the real estate agent.  If the agency was prepared to give it to REA and it went to RPD, I do not see how we could complain about it, your Honour.  But it is not really a sub‑licence from us; it is just saying that the agent during the term of the marketing campaign can place the material wherever it goes.  I hope that is an answer to your Honour.

GAGELER J:   I understand you, but you refer to the purpose of the campaign in a temporal sense.

MR COBDEN:   Yes.

GAGELER J:   I am finding it difficult to understand in what way it could said that the sub‑licence from REA to RP Data is for the purpose of the campaign in the way that you put it.

MR COBDEN:   It appears the RP Data website is used by Real Estate – perhaps I will put it this way, your Honour.  I do not think it particularly concerned Mr Hardingham where the photograph would turn up, photograph or plan, during the course of the campaign on the basis that no publicity is bad publicity, and if it is wherever it is that is consistent with marketing for the campaign.

It is the idea that the – the purpose that it then stayed on RP Data for is quite foreign, we say, to the marketing for the campaign, that is to say, to act as a resource for research into the future.

GAGELER J:   Well, the purpose for which it was provided by REA to RP Data in the first place is foreign to the campaign, in the way you put it.

MR COBDEN:   Well, perhaps I can – I might have to go back and look at the evidence about that, your Honour.  RP Data ‑ it seemed to go up on RP Data pretty much concurrently with when it was REA, and therefore it was available to people searching RP Data as property that was currently for sale.  I will have to go back and see whether ‑ ‑ ‑

GORDON J: Can I just ask one question about that and then I am going to be quiet. Is that analysis in a sense the application of section 15 of the Copyright Act? In other words, what you are saying is – as I understand your argument, Mr Hardingham licensed the agencies for the purposes of the campaign, that was consistent with section 15, the licence which continued along to the agencies which continued on to RP Data.

MR COBDEN: I will have to come back and address section 15.

GORDON J:   No, it is the sort of thought process, though, that 15 operates on, as I understand it.  Is that the way that you are putting it?

MR COBDEN:   No.

GORDON J:   Right.  I will be quiet.

MR COBDEN: We say section 15 has a very different role to play.

GORDON J:   I know it does, I am just talking about analogies, though, in the sense of – is that the way you see it, that the condition that is attached at the beginning continues the whole way?

MR COBDEN: Yes, yes, absolutely. I am sorry, your Honour. It is our answer to the way in which our learned friends put section 15, i.e. that section 15 will always beg the question of what was the licence to the first licensee that the sub‑licensee can then say bound the copyright owner.

GORDON J:   Thank you.

MR COBDEN: It does not dispose of that question, it simply preserves it. I will come back with section 15 ‑ ‑ ‑

EDELMAN J:   Could your case be summarised basically if one looked at paragraph 78 and replaced the words at the end of paragraph 78 which say:

a licence in the form required by REA and contained in REA’s usual terms and conditions –

with words that essentially said:  grant to REA a licence limited to the term of campaign, and that is your case, although there is no express oral statement that the licence was limited to the term of the campaign.  Your case is that the course of conduct and the inference that is drawn from the statement is limiting it to the term of the campaign.

MR COBDEN:   Yes, and the thread in copyright law to limit licences to only what is necessary – and “necessary” is a big word and begs a lot of questions – but, yes, your Honour – pardon me a moment – yes, and just for that campaign, and we say that emerges not just from the words of the campaign but also the way in which the contract occurred:  I am about to start a campaign, start next week, can you come and take the photos et cetera.

EDELMAN J:   So just to come back to Justice Gageler’s question, then, does it matter then if the photographs are provided to RP Data for some alien purpose if they are provided during the term of the campaign?

MR COBDEN:   We have not complained about that, and, no, I do not think it does matter conceptually because we have accepted that the agent can put the photos, as it were, anywhere that the agent thinks on behalf of their principal is a good way to sell the property.

But one has to keep on returning to the fact that it is a copyright right that is in question. It is a right that is not exhausted and, really, perhaps this is another way of answering your Honour Justice Gordon. In one of the extreme views our learned friend put section 15 as, as it were, that the rights exhausted as soon as it goes on REA’s website, well then, Mr Hardingham has given up his rights. I will come back to that.

I think there are a couple of other points I need to make in answer to your Honour Justice Edelman’s question.  So, can I just leave that up in the air for the moment?  I will come back to it and answer that question.

What my learned friend Mr Bannon really put to your Honours elided two questions.  He put the proposition that it is known in the industry because REA is so big and mighty and powerful and pervasive that, in order to effectively sell a property, you are probably very likely to have to put the photograph up on the REA website.  So that is a fact that is known.

The next fact, and I will deal with this when I go through Justice Thawley’s decision, is that REA has some sorts of terms and conditions for that.  But the elision or the leap is to say, in answer to a much more complex question which involves all the cases that this Court has worked this difficult question through, are those standard terms – I will develop this – which may in practical situations clearly not apply to many things that are given to REA.  Do they find themselves imported into the informal dealings between the agent and Mr Hardingham?  And that is where we say no, for various reasons that emerge in the cases.

Can I just illustrate, if your Honours have looked at – there is a difficulty in debating the case because one has to keep on going back to clause 5(a) which Justice Thawley and Justice Jackson say is not the term that they have found imported into the agency-Hardingham agreements.  But, in a practical sense, one has to engage with clause 5(a) because that is the one that is there.

I do not think I finished answering your Honour the Chief Justice’s question.  I think I was taken off my course, probably by myself.  But that is what Justice Thawley says and that is what we call the out-sourcing.

KIEFEL CJ:   Well, it is not 5(a) in all its words, it is aspects of 5(a) which are relevant to the temporal question of the sub-licence continuing and this is really the area of dispute.  It is as narrow as that.

MR COBDEN:   Yes.  But it is 5(a) as it happens has been unchanged over the years between 2014 and the date the proceeding was commenced, during which time the twenty examples took place.  But when the contract was formed, that is when the term needs to be imported – implied, inferred – it certainly could have changed, no one was to know Mr Hardingham had entered into a contract with an agency in 2015 to take a particular set of photographs and into that agreement at that date a term was imported, implied, inferred.

KIEFEL CJ:   But there is no finding of the primary judge about his actual knowledge of the terms.

MR COBDEN:   No, no.

KIEFEL CJ:   So, that is just not relevant.  The finding of the primary judge is really that the term to be inferred or implied is that the sub‑licence would be on terms as required by PRD, and that happens to be, one can see from 5(a), that it happens to be perpetual and worldwide.

MR COBDEN:   Yes.  I am conflating a couple of different points as well, I think, in answering your Honour, because the answer to the question should one infer or imply the term that is here, we say, also has to meet the requirements of it being capable of clear expression and be equitable into the agreement as between Hardingham and the agencies, and those matters – we say that if it is in the form that his Honour found, then it is either uncertain because the parties do not know what that might bring in the future – as a term of the contract.  Now, on the other hand, if one says, that is capable of clear expression, you agreed to do whatever person X tells you all day tomorrow – that is capable of clear expression.

KIEFEL CJ:   Is this it needs to be capable of clear expression to be a term implied?

MR COBDEN:   I am so sorry, your Honour?

KIEFEL CJ:   Does it need to be capable of clear expression, that is, not uncertain, to be implied?

MR COBDEN:   Yes, we say so.  We say that it is the effect of ‑ ‑ ‑

KIEFEL CJ:   Which is why there may be some importance in the distinction between implication and inference.

MR COBDEN:   Could be yes, your Honour, but we say that the case is on implication – which are the cases that run from Codelfa through to modern day.

KIEFEL CJ:   But here we are concerned with an inference from a course of conduct.  It is inference as to a term, but it is from a course of conduct.

MR COBDEN:   Yes, your Honour.

KIEFEL CJ:   It is not from surrounding circumstances of the contract itself or ‑ ‑ ‑

MR COBDEN:   Again, I might just take on notice for the moment – I think our submission is that a term, to be inferred, also needs to be capable of clear expression.  It is, after all, being articulated to be placed into a contract between two parties, and a breach of it is going to end up ‑ ‑ ‑

EDELMAN J:   But the clarity of expression will depend upon the nature of the contract.  One will expect and require a much greater clarity of expression in a term that is not expressly and fully set out in a fully drafted contract by professionals than one that is oral or by conduct.

MR COBDEN:   Yes, I accept that, your Honour, but I was proposing to take your Honours through the authorities not laboriously but to point out where we say there are passages that, even in an informal contract, this Court has said – for example, I think, in Hospital Products that – sorry, Justices McHugh and Gummow – and I think it must have been Byrne but I let your Honours know precisely – cited a decision of Justice Jenkinson in the Federal Court where the parties had agreed that the implied term involved in, as it where, outsourcing the obligation to a third party – and Justice Jenkinson with the approval – much to be said for the view – I think it is what Justices McHugh and Gummow said is that is – Justices McHugh and Gummow citing Justice Jenkinson in Gregory – and it is in Byrne.

But I will take your Honours to it – that outsourcing and saying somebody else can determine the content of our agreement is something it would be reluctant to imply or infer – parties might agree it in writing but then they have turned their minds specifically to that question and decided, we are prepared to be arbitrated or decided by a third party or a decision‑making body, but to imply it into a contract is another matter – then it runs the grave risk of being inequitable, we would say, to one party or the other – as it happens, it is Mr Hardingham.  But what his Honour then said in his Honour’s decision, your Honour the Chief Justice, at paragraph 29, then refers back to his Honour’s factual findings.

GORDON J:   I am sorry, where are you?

MR COBDEN:   I am sorry, I am back at Justice Thawley, at page 29 of the core book, your Honour.

GORDON J:   Thank you very much.

MR COBDEN:   So – I will skip over 79, because that is part of the factual discussion, it is the factual findings and the conclusions drawn from it that I wanted to address your Honours on.  But paragraph 80 says:

It follows that Mr Hardingham and REMA authorised, consented to or permitted (that is licensed) the agencies to sub-license the copyright works to REA on terms which permitted the agencies to grant the licence contained in REA’s usual terms and conditions, which included authorising REA to grant a sub-licence.

The question always is, when one is looking at these:  what sub-licence,  or licence does REA – forgetting that REA has the usual terms and conditions for the moment, licensing REA to put the images on the website, and including REA to grant a sub-licence ‑ the only source we respectfully submit of the sub-licence referred there at paragraph 80 – is in fact looking at what – the REA actual term and condition, 5(a), whereas I think, your Honour Justice Gordon was saying, is that something that emerges from the background facts.

GORDON J:   No – I may have said that, and if I did, I misled you.  I think that when you say – and I think you are right to ask the question, what is the source of that sub-licence, here I wonder whether one way of looking at it is, because we are dealing with the course of conduct case, and because Justice Thawley has, with great detail, I think from paragraphs 58 and following, set out his findings about that course of conduct, it may be put that when one gets to 80 that that conclusion about what is a term of the contract is a term which arises as a result of course of conduct, read alongside with his findings – which I think are accepted about industry practice.

MR COBDEN:   Yes, I see that.

GORDON J:   In effect, generated over – and this is a point I think you have just made quite well, really – 20 transactions.  So that we have got 20 separate – arguably, 20 separate contracts – with the same terms and conditions.

MR COBDEN:   Yes, and I think the answer to your Honour’s question, going back through what Justice Thawley said, might also be the answer to Justice Edelman’s question from here a moment ago about the sub-licensing of RPD – I will come to that first thing after the break.

Can I – I see the time, but can I finish just with Justice Jackson said about what Justice Thawley found in those paragraphs that we were just looking at.  And can I take your Honours to page 110 of the court record, and where his Honour, under the heading “Consideration of the appeal” first takes – I will accept the blame – takes me to task for misconceiving what Justice Thawley had found, and that was – because we keep going back to the actual terms of clause 5(a), for example – which is not the actual terms of clause 5(a), and grappling it with by just saying that is what REA says it got.

And I agree with you, your Honour, for shaking your Honour’s head, I quite agree with your Honour that, taken to task – that is not what Justice Thawley found – but Justice Thawley’s findings, I have just submitted, has other problems with it, of scope and uncertainty and inequity.  But when one is looking, then, at what RP Data did, and we sued them, and that, is there a licence for them to do it, one inescapably has to have a look at what it is that REA says that it got, and then what it passed on to RP Data.

But can I just warn your Honours, in reading through these paragraphs, the “Disputed Term” – capital D, capital T – is the one that was in the 2014 correspondence, that is the RPD term.  If one can really put it to one side, the REA Licence – capital L – is clause 5(a), when one reads these paragraphs, and that is important just to remember.  So, at the end of 184 ‑ ‑ ‑ 

KIEFEL CJ:   I am sorry, where are you now?

MR COBDEN:   Sorry, it is on page 110, your Honour.  So, the facts are important.  Justice Jackson identified that his Honour did not find that the agents had read the standard terms; let us call that clause 5(a).  At [67] he did find that Mr Hardingham had, in fact, read the standard terms:

At [70] he found that the appellants –

that is us, Hardingham:

and the agencies conducted themselves on the basis that the agencies had the right to upload the images to realestate.com.au ‘in accordance with the terms and conditions agreed between REA and the agencies’.

We do quibble with the question of the word ‘right’, but I am going to come back to it:

The only finding his Honour made there as to what agencies (and the appellants) knew about the contents . . . was that they were terms which they ‘either knew or must have assumed contemplated that REA was permitted to make the works available after marketing campaigns had ended and after completion of relevant sale and lease transactions and which permitted the works to be provided by REA to RP Data’.

We do take issue with the idea that people looking at things on a website will draw the conclusion that they are permitted to be there by reason of a licence.  There are many, many reasons why things appear on websites and people in the position of agents would not, we say, go around drawing conclusions; that is there because they have got a licence to do it.  It might just be there because there is no rights of it.  It might be there because it infringes.  We say they would not think that, but we certainly accept that they knew that the images were up there.  Justice Jackson then makes this finding and I will finish, your Honours, for the moment.  This is at paragraph 186 at the top of 111:

So, when the primary judge came (at [78]) to express his conclusion as to the content of the term that was to be inferred, alternatively implied, it was that –

And then his Honour sets up that paragraph which is the term that his Honour finds.  Then Justice Jackson deals a little ambiguity that arose at [79].  “There may be some ambiguity” because the judge said that we had “granted the agencies a licence of the ‘scope’ of the REA Licence”.  But then he goes back at [80], as your Honour the Chief Justice has pointed out, to really restate that point:

In the context of the findings I have just described, none of this was shorthand for saying that a licence in terms equivalent to the . . . REA Licence was inferred or implied.

I skip “disputed term”.  It is irrelevant.  So, none of this was shorthand for saying a licence in terms equivalent to the REA licence was inferred or implied, yet in the paragraph of the submissions that your Honours went to, Mr Bannon – I am trying to find the curious statement by REA in this appeal of what the term was – was paragraph 36 of our learned friend’s submissions.  The learned primary judge found the licence and the phrase to upload the photographs, et cetera.  That is to say, equivalent to clause 5(a) set out above.  We say that there is a difficulty in reconciling those two propositions and it tells one that the hunt for what term is truly implied is more complicated, as we respectfully say we have discovered, your Honours.  I see the time.

EDELMAN J:   Just before we adjourn, one matter for you just perhaps to consider over lunch is just precisely what you mean by acceptance of the proposition that this is a contract that is constituted by a course of dealing.  By that, is it that the course or dealing or the conduct of the parties is just how they have acted, or are you specifically relying on passages such as that which Justice Greenwood refers to as particular things that they have said and, if it is the latter, what is the aspect of what they have said?  Is that conclusive or is there something about the conduct that one needs to add to that?

MR COBDEN:   Yes, I am hoping I am going to be able to say both, but I will consider my answer more carefully than that, your Honour.

KIEFEL CJ:   Thank you.  The Court will adjourn until 2.15 pm.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

KIEFEL CJ:   Yes, Mr Cobden.

MR COBDEN:   Thank you, your Honours.  The topic that I think I was seeking to persuade your Honours on was about a purpose of this transaction that Mr Hardingham and the agencies sent in . . . . . a series of transactions they entered into at a sequence of time.  We do submit that the purpose of that transaction was to sell or lease the property concerned.  That is taken from the immediate surrounding circumstances as recorded by Justice Greenwood.  It is a good place to look for it – which I took your Honours to earlier and I will not take your Honours to it again but I will give your Honours the references.  That was at pages 52 to 53 of the record. 

In other words, there was an agent – on behalf of an agency – would ring up and call Mr Hardingham and say, we want photographs and floor plans, in some instances, for a campaign starting very soon.  Mr Hardingham had to put on his skates and get down to the relevant property and take the photographs and draw up the floor plans.  It was to sell or lease a property.  Really, if one steps back and looks at the ordinary framework of Australian real estate property transactions, that is really the purpose of the vendor or the lessor that the agent is effectuating.

The agent, of course, has a duty to effectuate that purpose, that is their primary duty.  The agents obviously want to make their own commission, but the primary purpose of what the agent is doing is to lock in a buyer, lock in a lessee at the best dollars that they can get for their principal, the vendor or lessor.

STEWARD J:   Is the licence found by the trial judge necessarily inconsistent with that purpose if you accept that in order to market the property effectively you need to go onto realestate.com.au?

MR COBDEN:   Need to go onto ‑ ‑ ‑

STEWARD J:   That is, to have the agent put your property on realestate.com.au.

MR COBDEN:   That is consistent with the purpose, yes, I accept that, but in such a way that the images and floor plans remain forever on REA.com.au or that they are sub‑licensed to RP Data.

STEWARD J:   Well, what if you add the fact that practically the agents had to succumb to whatever terms and conditions realestate.com wanted to impose?

MR COBDEN:   That is the nub of something I need to address your Honours on, which is that his Honour’s notion that – lawfully, that the agent could only behave lawfully if one needed to attend to those terms and conditions and that was therefore by reason of that really ipso facto they found their way into the dealings between the agent, and that Mr Hardingham and the agent – and I want to come to that point and see if I can make something of it, if I may.

KIEFEL CJ:   What if within the industry it was understood that marketing extended to being able to ascertain value via historical sale prices?

MR COBDEN:   Your Honour, that is evidence given by RP Data’s witness to that effect.  But we say, your Honour, that is foreign – it is distant and foreign to the purpose that the agent wants the photographs and the floor plans for in the commission that they have given to Mr Hardingham.

GORDON J:   Can I ask, is it one purpose or is it possibly two purposes of the agents?  I can imagine that an agent would quite like to have his or her name attached to a sole property because, if I am looking to sell my house in the same area, I may look to see who had the most sales.

MR COBDEN:   Well, there is no evidence that the agents wanted that, or the agents had desire about that, your Honour.  The only explicit evidence we have is that they say to Mr Hardingham they want this for the campaign.

GORDON J:   We have evidence that everyone knew that the floor plans or in effect, the listing – let us use that in general language – remained on the sole part of the realestate.com website.

MR COBDEN:   Well, your Honour, that is a bit like saying – perhaps I am being – I am not being facetious – that the reason we are all here is not to increase the stock of information on LexisNexis’ website.  That will happen, but the reason we are here is to argue this case before your Honours.  One can postulate all sorts of extra purposes that might be nice for agents ‑ ‑ ‑

GORDON J:   If I remove it from purposes, it is an agreed fact that sold listings remained on the sold part of the website – because you opened by explaining to us that they moved.

MR COBDEN:   Yes, your Honour.  Yes, but when your Honour says it is an agreed fact, it is a fact that they stayed there, but the consequences or implications of that fact, of course, are hotly in contest.

GORDON J:   They are different, yes.

MR COBDEN:   One can dream up all sorts of – sorry, not dream up.  That is a very bad way to put it.  One can postulate all sorts of declining purposes for all sorts of things, but the question is:  there is a real estate agent and Mr Hardingham; what is their joint purpose in executing that particular commission that Mr Hardingham has been asked to do within the week and come up with the photographs and floor plans?

That is, we respectfully submit, principally the vendor’s or lessor’s purpose in getting the property let or sold.  We accept that there are many means of effectuating that purpose in that relatively short period of time during which that campaign will be conducted.  As I have submitted earlier, it is quite a definite period of time.  I do not think that any agent would be in any doubt about whether they still had a retainer to sell a property or that a vendor or lessor would be in any doubt about whether the property was still for sale or for lease.

It is a limited period of time.  It is probably fairly local as well, in the nature of things.  But, of course, once one goes on a website, one accepts that whatever the website is for, and wherever it is located, and whatever its purpose is, the image, unless you block it with a password or geoblock it in some way – but most websites are accessible from all over the world.  That does not mean that vendor’s purpose has extended to selling all over the world.  In very limited cases, it might do.

Our learned friend, Mr Bannon, made much of the fact that the photograph is supplied in a digital form.  That is just a description of the way photographs are supplied in the modern world and have been for some considerable time now.  The fact that one supplies a photograph in a digital world has advantages for creators and for users of the copyright works.  It has some downsides for creators – as have been discovered – because as soon as the item is digitised, it is open to being used by all sorts of people. 

But that does not invade the copyright right or reduce the copyright right.  Copyright has to accommodate that.  Sometimes it does it by compulsory licences and collecting societies and the like, but it does not rob from the fact that every copyright owner has their exclusive rights and if they use those exclusive rights to allow somebody to put an image up for a week, or two weeks, or whatever it might be, the fact that other people can come and infringe that copyright and take it does not dilute or take away the copyright.

You still need the licence of the owner of the copyright to exercise the copyright right, which is to make it available online.  As I have indicated, if some major policy issue arises – quite often it is killed by the legislature but not by, with respect, implied terms into the dealings of copyright creators.

The evidence that Justice Thawley – I need to make this clear as well – recorded about RPD was that at paragraph 16 of his Honour’s judgment on page 13 of the court materials.  Mr O’Donnell was for RPD.  Now, he confirmed in cross‑examination that the RPD service included properties which were currently for sale or lease and that was one of the major purposes of the service.  So, to that extent, the appearance of the images and floor plans on RPD’s website is consistent entirely with the purpose that we say drove the transaction between Hardingham and the agencies, which was the marketing campaign; the thing that is referred to in the conversation, standard conversation that was in the evidence.

GORDON J:   Can I ask just one question?  Do you propose to come to Justice Jackson’s assessment of that question?

MR COBDEN:   Yes, your Honour.

GORDON J:   In your own time.  It is really what appears at paragraph 191, where I understand he is responding to an argument I think by your clients, is that right, or by somebody else?

MR COBDEN:   I am just looking at it quickly, your Honour.

GORDON J:   He talks about “a variety of explanations” but I think he means a variety of purposes.

MR COBDEN:   That is really, in a way, central to the argument I am going to make now by going through Justice Thawley’s reasons on the question of how the agreed and uncontroversial facts fit in with the argument that we put.

Can I just – I hope I am answering your Honour Justice Edelman about the course of conduct and also the role of the conversation.   The role of the conversation supplies if one asks particulars in a contract case:  is the contract in writing or oral?  If, to the extent of oral, what conversations?  One would answer that is a conversation that supplied some content to the contract.  And it is expressed content.  One may have to infer the precise term from it, but it is expressed content. 

Your Honour, I think, asked me, is all the conduct referred to by Justice Thawley part of the course of conduct that is the background?  I was proposing to say we have submitted it is not, or it is really a conclusion by his Honour, as opposed to a simple fact.  Just pardon me a moment.  Yes, I think I can deal with all of those points as I step through.

So, if I could just take your Honours to Justice Thawley’s reasons but, as I think your Honour Justice Gordon identified, the relevant part is paragraph 54.  It is really where his Honour deals with these facts.  His Honour does, along the way, put character on the facts in certain ways.  At 54 and – well, paragraph 55 records the fact I have accepted, that the arrangement between Hardingham and the agencies contemplated that the agencies, in executing a purpose on behalf of their principal, would go to a newspaper company or a brochure – and, depending on where you live, the Wentworth Courier or the Sydney Morning Herald or some part of it.

But, of course, no one has suggested ever, in the history of the world, that giving the photograph to the Wentworth Courier to run a six‑week marketing campaign for the sale of a property meant that the Wentworth Courier could then reproduce the yearbook of sales in the Eastern Suburbs and reproduce all the photographs.  You give these items to people who effectuate the communication, or publication, of the sale for the purpose that you supply it to them for.

STEWARD J:   But realestate.com.au is not in the same position as a newspaper.

MR COBDEN:   Your Honour, it is conceptually – from the vendor’s point of view – pretty much the same thing, I would respectfully submit.  In other words, it is an avenue by which you can get the information about the sale and images about the sale out to the public.

STEWARD J:   But it is also a database for people, both agents and vendors, who want to know something about past sales in their area, for example.

MR COBDEN:  The newspapers – there is no evidence about it – I do not really want to quibble with your Honour, but newspapers function as database.  You just have to go down to the newspapers – wherever they were located and leaf through them.  As with all things with digitisation and the internet, a whole lot of things that were not achievable before have become achievable.

STEWARD J:   Except with real estate, you can also put in search items ‑ ‑ ‑

MR COBDEN:   Yes.

STEWARD J:   ‑ ‑ ‑ whereby value, and size of land, type of property ‑ ‑ ‑

MR COBDEN:   That is a business that REA, as a model, has developed as, indeed, so many other models like that.  The content comes from external third parties.  Of course, the content – the provider of such a service – wants their content to be free – they do not want to pay for the content.  We hear from the parties to my left about these occasionally mundane little photographs that nobody really cares about – they have said once or twice along the way.  But they are photographs that they want badly.  They want, really, a free input to their business model.

His Honour just talks then, at paragraph 56, about the scope of the licence and the debate between us about the word “marketing” which was before his Honour.  We would say, in paragraph 57, on page 24, at the second bullet point, if the purpose of the transaction is to market the relevant property for sale or lease in the campaign then, of course, the licence, we would say, self‑evidently, does not need to be:

“perpetual, irrevocable, world‑wide, royalty‑free and include[d] the right to sub‑license”.

His Honour then notes in passing the traditional learning about dealing with:

terms inferred from conduct –

first, and then terms:

implied into that contract.

Second – and your Honours know that many of the cases say that there is a difference in the way one looks at the state of mind of the parties – or the objective state of mind of the parties.  The cases have traditionally said that the process of inference looks at what the parties actually thought – or was actually in their minds – but “actually” has that objective character, whereas – I think your Honour the Chief Justice, may have pointed this out – that an implied term – the Court or the person implying the term – imputes knowledge or a state of mind to the parties.

Paragraph 59, your Honour, these are facts – particularly your Honour Justice Gordon asked this – yes, the overwhelming majority of Australian real estate agencies seemed to – it appeared – use the realestate.com.au platform, and, as a matter of practical reality, use it for marketing properties for sale or lease.

Yes, the property – process of selling or leasing a property is enhanced by using that platform and indeed – although it did not need to be said – for this purpose, any other platform such Domain, the same thing would happen.

Then his Honour found that one of the principal purposes – in other words, there are other principal purposes, not just other purposes – for which the agency has commissioned floor plans was to obtain . . . . . to upload to the realestate.com.au platform.  That is to say, if one is stepping back and just looking at the general desires of the parties, yes, they want to put on there, the realestate.com.au platform – that does not import necessarily of itself on whatever terms REA.com.au might prescribe.  That fact – the fact that this is a separate step – which is really the sort of step I think that might have been hidden away in paragraph 80 that your Honour was asking about – in other words, what do we get as the general desire of the industry, and what do you get from the specific term of REA?  That is the point of tension in the case.

Yes, the observation is made frequently by his Honour, that the works stayed up there and were still available – yes, they were, all of them – but that is simply the point of the case.  Mr Hardingham does not want his copyright works on the REA.com platform virtually, or on the RP Data platform effectually, and he has brought a copyright case to say that he wants them taken down – they are his exclusive rights, and they are being used.

It really does not take, we respectfully submit, the matter any further to say that they have been up there all this time if, in the absence of any pleading of licence or any case of licence or estoppel and the like ‑ ‑ ‑

STEWARD J:   I hate to ask an obvious question, but after 2014, when he knew all of this, why did he either not deal with the agents or make it clear to them ‑ ‑ ‑ 

MR COBDEN:   Your Honour, in our respectful submission, this ‑ ‑ ‑

STEWARD J:   ‑ ‑ ‑ that this is a limited licence for the campaign and no more, and you need to tell realestate.com that that is the deal?

MR COBDEN:   Because, your Honour, he does not need to do that because he has got the copyright.  You do not give up your copyright simply by somebody misusing it.

STEWARD J:   I understand that, and I am not suggesting he has abandoned it, I am just simply saying, if that was the true nature of the deal, why did he not assert it?

MR COBDEN:   Your Honour, first, I will come to how we deal with the particular condition, but I think the simple answer, your Honour, is because that is the effect of copyright law, he did not need to assert it, he does not need to say anything ‑ ‑ ‑

STEWARD J:   But in circumstance where he admits a licence all the way down to RP Data but does not assert its limited nature.

MR COBDEN:   I think my answer has to remain the same, I think, your Honour ‑ ‑ ‑

STEWARD J:   All right, thank you.

MR COBDEN:   In copyright, there are many, many, many occasions where people continue to infringe ‑ ‑ ‑

STEWARD J:   This is not a question about copyright law, this is a question about contract law.

MR COBDEN:   But it is the background to it, it is in a copyright case, your Honour.

STEWARD J:   All right.

MR COBDEN:   I accept that, your Honour.

EDELMAN J:   The background and the context, and the course of dealings, in terms of working out what is a term of a contract does not change according to whether the term has effects on the law of copyright or effects on the law of marriage or effects on some other law.

MR COBDEN:   Quite so, your Honour, but if a person who was using this to defend infringement to say I do in fact have a licence and you never said anything about it, that is tending to say that they are raising an estoppel against you or raising the delay or an acquiescence defence against you.

Or if somebody crosses your property over and over and over again for 20 years it might suddenly say, well, some custom has established a right of way, but, in our respectful submission, Mr Hardingham had made it clear that it was infringing his copyright, he did not bring a lawsuit for some time.  But we would perhaps put it this way, your Honour.  A relevant background fact to the background of the course of the conduct is not that – it is not relevant to the course of conduct, but REA, or RPD, continued to infringe Mr Hardingham’s copyright on a large scale.  That is not a relevant fact, that is who he is complaining about.

EDELMAN J:   Equally, you cannot assume that there is an infringement of copyright in order to try to work out what the scope is of the term of the licence.

MR COBDEN:   But it has a circularity about it, which is what – perhaps self‑help often ends up having a circularity, so – yes, it remains the case that not one was taken down.  But can I also indicate, your Honours, that many of these facts are, like all of the facts in 59 and, indeed, these facts about – the facts in 59 are the sorts of things that are known to people in the real estate industry generally because they all know that realestate.com.au is important.

That is another way of saying that this implied term sounds like it is – continues to sound very like it is one that is to be implied into the whole class of contracts, which is all contracts with real estate agencies and people they commission for content.

Now, paragraph 65 on page 26 is the same point that I think I have just been seeking to answer your Honour Justice Steward’s questions.  Our answer is that Mr Hardingham did not need to make those statements.  Mr Hardingham is not complaining, of course, about anything the agencies have done.  He is complaining about something that, in his view, had been appropriated further down the chain.  Then his Honour – yes, that is correct, we did not adduce any evidence to suggest that we had sought to limit the works because the limitation comes from the Copyright Act but it is the same point.

Then his Honour finds that there is no direct evidence that the agents had in fact read the terms and conditions but they knew there were terms and conditions and that they knew content uploaded by them continued to be available after the relevant sale and its transactions, yes. His Honour says in paragraph 66 at the foot of the page:

In agreeing to the terms and conditions, the agencies represented to REA that they could grant the licence set out in those terms and conditions –

Really, there was no evidence that that was what they were representing in the sense that they were thinking this is what I am saying to the REA.  What happened is that they ticked the box or signed the standard form terms and conditions, but that does not amount to an agency, as it were, making the decision to represent to REA that they were in a position to grant that licence.  That same point arises, your Honour, in paragraph 67 when his Honour says:

The applicants must have known that the works they had been commissioned to prepare had been and were being uploaded –

yes, to the REA site.  But to say that was being done:

in accordance with the terms and conditions imposed by REA.

Is really to say no more than after a point in time when the agency had signed the terms and conditions.  Whether it is in accordance with the terms and conditions or whether there is another way of reading things, they are all questions of law.  Further down – I have dealt with the question of the setting of the fees in paragraph 69.

GAGELER J:   Paragraph 68?

MR COBDEN:   I am sorry, 68.  The first fact – yes, we do not dispute these facts, your Honour.  It is the character that is put on them or the conclusions that are drawn from them.  So, yes:

photographs and floor plans were being commissioned by the agencies in part . . . to upload the works to the realestate.com.au platform –

And in part to put them onto the Wentworth Courier and in part to put them into the Sydney Morning Herald and in part to them on the Domain website, yes, that is a fact.  Whether that tail should wag the whole dog is a question that needs to be looked at in light of what terms should be implied as a result of that into contract between the agencies and Mr Hardingham.

Yes, they remained and were not removed and, yes, they went to the RP Data Professional website.  But what we say is that the move from that and say that therefore the agencies must have bargained with Mr Hardingham on the basis that they must get those rights is not correct, and I will come to that by reason of looking at the REA terms and conditions and the relationship between REA and the agencies.

GORDON J:   I must say for my part I had understood – which is where you started, quite properly, that this analysis was directed at, in effect, the scope of the dispute between the parties, which is what was set out at 54 and 56.  In other words, that there was this licence and the question was what was the scope of it, and I had understood that this factual analysis of the objective facts was directed at determining the scope by reference to the course of dealing.

MR COBDEN:   Yes.  Perhaps I am missing your Honour’s point.  I was really focusing on – because there is a lot of material in here, where are – they are things that we say are not purely objective facts but are in fact conclusions that his Honour has reached or characterisations his Honour has put on the facts.

GORDON J:   So, what I am asking is, when you took 65 and also for example took – 65 is a good example – where his Honour sets out what your client did not do.  Is not his Honour identifying in a sense the things that could have been done if there was to be some limit on the scope of this licence?

MR COBDEN:   That seems to be the way his Honour uses those facts.  Your Honour I think asked are these uncontroversial facts, are they agreed, but yes, those facts are agreed.  We did not do those things . . . . . cast any doubt about that.  Just pardon me a moment, your Honour, I am getting ‑ ‑ ‑ 

GORDON J:   Helpful notes.

MR COBDEN:   Of course, these are things, your Honour – one is looking at, here, a series of contracts which do or do not include certain terms formed at a certain point in time.  Now, his Honour is saying that there are things that happened after entering into of some of those contracts, and some of them before, but we say that one would not infer from these facts what the scope of the implied licence would be, or the inferred licence would be.  That is mainly informed by the purpose that the two parties had in coming together and reaching an informal contract.

Where this, your Honours, becomes – it takes a different dimension or complexion on, is where his Honour says these are the facts.  The photographs were taken and the floor plans were drawn.  They were delivered to the agents.  They are then put onto the REA website and they find their way onto the RPD website and nothing happens, and then they remain there for all time.  It is an important fact, matter, that his Honour then takes into account, that – such as in paragraph 70 on page 27, that Mr Hardingham conducted himself on the basis that the agencies have the right to upload the works in accordance to REA’s terms and conditions.  But that does not follow at all.

Mr Hardingham at at the REA terms – to the extent he knows them, or to the extent that RPD put up something that was very like them, and what he sees there is, no, they cannot, they do not – REA cannot get those rights because I have not given them to the agencies.  We learn that deep notion of nemo dat qui non habet probably as early as kindergarten:  you just cannot give something which is not yours to give.

STEWARD J:   You went to a sophisticated kindergarten.

MR COBDEN:   Well – you know, you cannot keep that toy, it is not yours, give it back to the person – whatever, your Honour, bad illustration.  But Mr Hardingham looks at that clause in the REA – if he is looking at it – there seems to be some doubt as to whether he looked at the actual clause, and says, they are words, I did not give those rights, so therefore the agency ‑ ‑ ‑ 

STEWARD J:   But surely, a reasonable person in Mr Hardingham’s position in that industry knows that looking at the realestate.com.au website, is a critical feature of that business.  That business is able to freely keep sole properties as part of its database.

MR COBDEN:   What somebody in the real estate – I am sorry, your Honour.

STEWARD J:   And therefore, one would infer that Real Estate would make that demand as part of its arrangement with the agents.

MR COBDEN:   First of all, your Honour, we respectfully submit that people do not think in those terms, that because something is there, it must be there – somebody is going to have a right for it to be there, particularly in the internet context.  There is stuff all over the internet that one has no idea whether it has been licensed, or just happens to be there, or it infringes.

So, we do not go through – just as a matter of an ordinary person looking at something and saying that is – it would not go through the thought process of saying that is there because permission was granted to have it there.  But also, your Honours, in these very transactions, there is no suggestion that people like Mr Hardingham are the only source of these photographs, there would be every reason to suppose that a homeowner might take their own photographs and give it to their real estate agent and put it up on the website.

How the agents then perform that lawfully, as his Honour puts it, that clause – where the photographs have been taken by the homeowner – the agent has duties to the homeowner.  They cannot just say, look, sorry, we have accidentally given away your property, and that has to be implied in the dealings between us.

There may be no connection to the owner of the intellectual property, that is to say, that photographer ‑ they might have taken those photographs for the homeowner ‑ and just, here they are, there is no relationship at all between them.  And that problem, that issue, your Honour, arises very acutely in the case of the floor plans, because Mr Hardingham – we have raised this point a number of times through the case, your Honour, that it cannot be said that that clause can operate, according to its terms, in relation to all “content”; that common knowledge just indicates is going to be supplied to the real estate agencies to market properties.

Now, the floor plans that Mr Hardingham draws are – they are in the evidence, one can see there is a little bundle of them, photographs, there is a lot of – you cannot build a building from them in the sense they have got exact measurements or drawing plans, but they are the outlines of the relevant house, of the floor of the relevant house, of the kind that one has seen in dozens, literally dozens, of architect plans cases in the courts of this country, particularly the Federal Court, the sort of outline that appears on the brochure that is given out to people when they go to the project home developments.

Now, Mr Hardingham is drawing that plan to assist the vendor, the owner of the property, to sell or lease the property, and I respectfully submit there is no doubt that Mr Hardingham – the home owner would have an implied licence sufficient to let them draw a plan of their own house for the purpose of selling it.

Mr Hardingham gets his own separate copyright in it because it involves skill and labour.  It may be what is called a thin copyright; in other words, you can only infringe it by reproducing a facsimile of that very thing, but those floor plans are part of this case, are said to be included in the ground of rights that is in the term, whatever it is.  But we can sensibly look, for example, to an illustration of the term at clause 5(a) of the REA terms and conditions, which were set out I think by Justice Thawley early in the piece, and it is at page 11 of the court book at paragraph 12, 5(a).

So, the agent, in relation to the floor plans, which are right in the milieu of what everybody understands in this industry ‑ ‑ ‑ 

EDELMAN J:   Sorry, which page was this?

MR COBDEN:   At page 11, your Honour, paragraph 12 of Justice Thawley.  Then the agent is granting REA in consideration of uploading listings to the platform:

an irrevocable, perpetual, world‑wide, royalty free licence to publish, copy, licence to other persons, use and adapt for any purpose related to our business any content –

So the floor plans, the use of which absent the limited licence that the owner may feel that they enjoy, will infringe the copyright of the architects and the draftsmen and the development companies of the real estate developers and which we know are going to be in copyright because they are all houses that were built in the last 70 years, so therefore their authors are either still alive or dead less than 70 years.

Now, in the context and milieu of this industry ‑ we have made this point previously about photographs from the owner, or photographs supplied from the owner, or things that come from a third party source – it just cannot be the case that the agency is knowingly, or in a considered fashion, granting that licence.  Indeed, if REA’s business – if they expanded their business, because it is “any purpose related to our business”, into home manufacture, home building, then on this clause REA could say to Eagle Homes, or one of the many companies that have brought cases in the Federal Court, too bad, we have got a licence from the agent to build homes:

to publish, copy, licence to other persons, use and adapt for any purpose related to our business –

It just is not what anybody sensibly would think this agreement is actually about.  The other reason we know it is not what the agreement is actually about, your Honours, is because the agreement itself, REA’s agreement itself, provides for the circumstance where REA does not get the licence that it is demanding from the real estate agency.  It is fully alert to the fact that it does not have that licence because in the terms – which, they are set out there on page 11 – first of all, there is the licence, we have got that licence, then there is an obligation – I am sorry, I should emphasise again, that is in relation to all content.  It is not a clause that is about plans and photographs.  It is all content.  Everything that is supplied, it finds its way onto the REA website.  Then, clause 6.1:

you will only upload listings to the Platform yourself or via
an authorised third party –

Then, paragraph (e):

you will ensure that any statement you make to us or any content –

There is that “content” point again:

(i)is not unlawful;

(ii)is not provided for an improper purpose;

(ii)is not misleading or deceptive –

That, of course, captures a lot more than things that would be copyright.  Then, over the page, further down:

You indemnify us –

if there are any costs incurred by reason of you, effectively, not being able to deliver that licence in relation to any material that is uploaded.  So, the agents and REA have addressed themselves to the question of what would happen if the agent is not in a position to deliver the entitlement that REA says that it wants – and that is to say that they either take it down or REA can look to the agent under the indemnity. 

If I can now go back to his Honour’s reasons, it is at the fulcrum of his Honour’s reasons and Justice Jackson’s reasons, that, in paragraph 79 – that central paragraph ‑ ‑ ‑

STEWARD J:   Sorry, which paragraph?

MR COBDEN:   Paragraph 79, of his Honour’s reasons.

STEWARD J:   Thank you.

MR COBDEN:   Page 29:

The agencies could not lawfully grant the licence in REA’s usual terms and conditions unless the applicants authorised them to grant a licence of that scope.

Reading that, we respectfully submit, begs the question of what “lawfully” means.  What REA is saying to the Court – because REA embraces that notion that the agencies have to be empowered to make sure that they were behaving lawfully – REA is, in effect, saying to the Court, the agents have bargained that they will not act unlawfully but, if they do, they will pay an indemnity.  REA says that Hardingham and the agencies – looking at an inferred licence – had an actual intention to agree to a term of the perpetual, non‑exclusive, world‑wide, irrevocable, royalty free, et cetera, or to determine that have an imputed intention to apply such a term.

But if one looks at what the agencies and REA actually agreed, they said that the agencies said that would ensure that any content and material supplied by them does not infringe intellectual property rights of third parties.  But, if it did – and if they did not ensure that – they would indemnify REA accordingly.  We do not know why an agency would agree to that – particularly in circumstances where they are feeding onto the REA website a great deal of material of which they are not the authors so they cannot be certain, in a copyright sense, that they are the ones with the rights.

It may well be that – put it this way, it does not mean that if an agency provides something to REA, it is not in total conformity with the – in condition that REA wishes to impose that the agency is behaving unlawfully – any more than it could be said if I agreed to meet my learned juniors at the Portrait Gallery for lunch at 1.00 and I stayed at the High Court, that I am in the High Court unlawfully.

What it means is that theoretically, on the text of the agreement, the agency may have exposed itself to a suit for breach of contract somewhere down the track.  But, given how many items cannot possibly, we respectfully submit – it is quite clear that they could not fit within the grant of the terms – one does not know whether that would ever eventuate.

The agents would not modify – or mould their behaviour – in the way that we respectfully submit that Justice Thawley says they would because there is a theoretical breach of a term, in standard terms and conditions – if they tick the box too, they almost certainly have not read, way down the track, that they would mould all of their anterior legal relations to fit that – indeed, in particular in circumstances where quite notoriously they could not possibly have done so.

We would say that, on the – applying the authorities which I am just going to turn to now and go through very briefly because the time is short – that one would not infer a term on the basis that the agencies would agree to it – either imputed or inferred – intention in those circumstances.

The big issue that was presented to your Honours by the notices of appeal – the first ground of the notice of appeal was, it seemed, the question of the role of the “obvious” in the jurisprudence on implied terms.  We have done more in writing but there are one or two things I wanted to say about those cases as one goes through.

The first is that – pardon me, let me see whether I can cut this a bit shortly, your Honours – I think I can just say this is an overarching proposition and perhaps give your Honours some references to where this comes for.

We know of course that the five conditions in BP (Westernport) were listed in Codelfa – and Codelfa on its face seems to indicate that those five conditions are necessary – but then the next step was – particularly Justice Deane to say, that is all very well for a fully written‑out contract, it may need a different approach for a contract that is more informal.

The first thing to observe about that is that those contracts must exist along a spectrum, from fully written to completely unwritten – on the back of a napkin, et cetera – and there is presumably not some bright line – some point at which one ditches the Westernport tests and goes with the Justice Deane test.  That is picked up by the finding that a rigid approach to the requirement is, as it were, the requirement is not to be followed.

But if one follows through the cases and looks at what Justice Deane has to say, we respectfully submit that this matters, and it appeared to be – it is a ground of appeal – it appeared to matter at one stage to the appellants, that Justice Deane would not in any way dispense with it either the rule or that it had to be so obvious it went without saying, or an approach that embraced precisely that course, by his Honour saying it must be seen that the term is necessary.

EDELMAN J:   It may not make any difference because all of the BP criteria are expressed in such broad terms and must be applied in context, such that how obvious something must be will depend upon the nature of the contract and all of the circumstances.  So, it may be that you are practically abandoning the strictness of the BP test at one end of the spectrum when you move to the other end of the spectrum.

MR COBDEN:   Yes, your Honour.  Perhaps all we wanted to say is that there is no indication in this Court and the succession of judgments that have been referred to in the submissions here that this Court, as it were, explicitly abandoned the idea of so obvious it went without saying because in, for example, in Justices McHugh and Gummow, while agreeing with Justice Deane, in the circumstances of that case, and that is in Byrne, did apply the requirement that it is so obvious that it went without saying.

EDELMAN J:   Except part of the difficulty for you is that most of this contract has gone without saying.

MR COBDEN:   Yes, and the role that an approach like “so obvious that it goes without saying”, or if you wanted to – if you read what Justice Deane says, where it can be seen that the term is necessary for the efficient operation – reasonable or efficient operation of the contract, is that such an approach puts you squarely in the position of – from the point of view of the parties themselves.

It is perhaps just a salutary reminder to be in the position of the parties themselves and not, for example, to do what sometimes tempts either those advising or those declaring the law, which is to put oneself in a superior position and say the sensible thing, or the reasonable thing, to have agreed to in this case would have been X without focusing on what would have been obvious or apparent or required in the case of the two parties contracting.

We have been criticised – Justice Greenwood is criticised for referring to the “gravity” of the term but that is entirely consistent with the authorities which say that if the term effectively expropriates the whole of somebody’s property or puts the party in a very disadvantaged position, i.e. that a quite significant intrusion into their affairs has been entertained there will be a reluctance to imply or infer such a term because, while parties might reach such an arrangement when agreeing express terms of a bargain, you can see that one of them has decided, well, I will just take the punishment that comes with that because I am getting something else in return.  But when you are putting yourself in a position of parties where there is no guidance of express terms then you do pay attention to what the effect of the implied or inferred clause is on one of the parties, which in Mr Hardingham’s case is to remove his copyright and deliver it for free to large businesses because they want an unpaid input to their business.  That is the plain effect of the implication in this case.

We have just found a very brief reference in Heydon on Contract at page 254, it is on the question of construction of terms but it cites Belize and ABC v APRA.  At the end of paragraph [8.120] it says:

It is also not legitimate for a court to rewrite a contract so as to make it conform with what the court considers to be an intention or purpose more reasonable than that which is inherent in the words.

Now, that is about construction, but it is in the same sort of area.  So, it may not matter now, the way the case has been put by our learned friends because they do not seem to rely anymore on asking this Court to not – well, asking this Court to resolve the debate that they said needed resolving; that is to say, what is the role of obviousness in informal contracts.  But we say that if one puts oneself in the shoes of the two protracting parties here – Mr Hardingham and the agencies – all that was needed for them to realise the purpose that they seemed to have in common, which was to get the property up on the REA.com.au website, does not involve importing REA’s detailed term into the contract between them.

There was an express purpose, we say, which was that it was for the campaign.  It is a short step to take, to see that purpose was for the duration of the campaign.  The REA – we certainly say, and repeat this from this morning, that the term that Justice Thawley found and Justice Jackson agreed with is not a term that would be implied or inferred.

I think I need to answer a question your Honour the Chief Justice posed to me – do we say that a term that is inferred needs to be capable of clearer expression?  We do say that, your Honour, because it is a term of a contract and it has to be expressed in some way so that parties know whether they are or are not in breach of it, and outsourcing a term in the way that is suggested was done here is, we say, is either not capable of clear expression or operates inequitably, as it has turned out to do, we respectfully submit.

KIEFEL CJ:   What would you say to a term that, from the respondent’s point of view, that the agencies could give REA the right to sub‑license RP Data to upload the works to its website and maintain them there?  Would that be certain enough?

MR COBDEN:   Put like that, your Honour, maintained forever, it is always easy to ‑ ‑ ‑

KIEFEL CJ:   That is really what follows from what his Honour finds, is it not?

MR COBDEN:   Well, not, with respect, your Honour, because one has to address the question of how long, because ‑ ‑ ‑

KIEFEL CJ:   No, and maintain them there.

MR COBDEN:   It is a certain term, your Honour, as indeed is a certain ‑ ‑ ‑

KIEFEL CJ:   It is open‑ended in temporal terms.

MR COBDEN:   But the more it has that character, the less equitable it is, and the cases do say that in implying and inferring a term, one needs to consider is it reasonable and equitable, and such a term, we respectfully submit, simply – it would be much easier to just take ‑ ‑ ‑

KIEFEL CJ:   That is why my question focussed upon whether one is drawing an inference from all the circumstances as to what the parties actually intended.  That is, the respondents and the agents.

MR COBDEN:   Well, one is in the vice, your Honour, that at the level of just divining their intention – in the moment – for the campaign, the only – what they want is for the photographs to appear on the REA.com website.  The price of getting them on the REA.com website appears to be ‑ ‑ ‑

KIEFEL CJ:   Is RP Data’s requirement ‑ ‑ ‑ 

MR COBDEN:   I am sorry ‑ ‑ ‑

KIEFEL CJ:   Is RP Data’s requirements.

MR COBDEN:   I am sorry, your Honour.  RP Data can only get as good a grant as it gets from REA.  It has never asserted that it has a ‑ ‑ ‑ 

KIEFEL CJ:   But this is why the context is industry.  Everyone knows how it all operates.  That is the importance of context.

MR COBDEN:   Yes, your Honour.  But if it has been operating with people infringing copyright, then the ‑ ‑ ‑ 

KIEFEL CJ: Well, they are not infringing the copyright if section 15 applies.

MR COBDEN:   Sorry, your Honour – I think perhaps we are at cross‑purposes, your Honour.  RP Data, who we sued, said, has only ever pleaded against us, a licence that it obtained from REA – REA having obtained a licence from the agencies, and a term of some sort having been implied or inferred into the dealings between Mr Hardingham and the agencies.  So, I am not sure if your Honour is asking me, is there a separate limb or route to the RPD licence that takes account of their position in the industry?  That has never – we have never faced that case.  And that was never pleaded and never put.  So that is why ‑ ‑ ‑ 

GORDON J:   But you do not doubt that you granted a licence to the agencies?

MR COBDEN:   I am so sorry, your Honour?

GORDON J:   You do not doubt and dispute.  You granted a licence to the agencies.

MR COBDEN: We granted a licence to the agents, yes. And then, if I can – perhaps I should turn to say something about section 15. Section 15 is not an exhaustion of rights section. It does not say that whenever you grant a licence of some sort, that means that that licence includes the right to sub‑license and that the copyright thereby escapes your control.

KIEFEL CJ: The relevance of section 15 is that here it would operate on the licence the respondents gave the agents.

MR COBDEN:   I am so sorry, your Honour, on the?

KIEFEL CJ:   On the licence that the respondents gave the agents.

MR COBDEN: Yes, it does not – section 15 does not expand any licence that is given by a party to another party.

KIEFEL CJ: No. No, it does not. But if the licence is as his Honour found it to be, section 15 operates to give effect to the binding licence in relation to a third party.

MR COBDEN: Yes, your Honour. Can I say a few things about section 15 that we have said in writing, and then I will see if I can answer your Honour’s question in that light. Section 15 is in the interpretation part of the Act, and it is because the concept of doing something with the licence of the owner of the copyright, which is what it covers, it permeates the Act in the special leave application. I think we go to 15 pages of places where that phrase appears in the Act and therefore where one would go to section 15 to see what does the phrase mean in that context.

Many of those uses, for example, are publications.  And that has an important effect on the duration of copyright.  An unpublished work keeps copyright forever until it is published and then it falls into the general rules.  But if it is – the question of whether a work is published is very important and only publications done with the licence of the owner of the copyright are good for that purpose.

What section 15 says, is that does not have to be a factual licence. Any licence that binds the owner of the copyright is such a licence, and you can use this expression in that context. So that is the primary work for section 15 to do. Then there are places in the Act such as section 36, the infringement section, where the section says you infringe if you do something:

without the licence of the owner of the copyright –

So that then raises the question, well what is the licence of the owner of the copyright? Then one is looking at section 15. That licence if one is inquiring after that, can be any licence that binds the owner of the copyright but that does not answer the question of what the content of the licence is, in our respectful submission.

The section has a very clear function, which is not to say that if a licence is granted by an owner of the copyright, then anything done binds the owner.  It is the other way around.  What sort of licence is the sort of licence that binds the owner of the copyright i.e. for infringement purposes or for any of the many other purposes that the phrase is used for throughout the Act, and, presumably, unless the answer was that that has to be a contractual licence if that was the point that someone was going to raise, this section says no, no, no, just look at the question of whether that licence binds the owner of the copyright.

But that, we respectfully submit, that entirely begs the question of what the content of the licence is. I hope I have answered your Honour’s question. In other words, that section 15 is not a standalone provision providing that, if there is a licence of the owner of the copyright, then every act is deemed to be done with that licence is always going to depend on what the licence is.

KIEFEL CJ:   Yes.  I was not suggesting to the contrary.

MR COBDEN:   I am sorry, your Honour. 

KIEFEL CJ: Section 15 operates principally with respect to sub-licences or other circumstances where there is a lack of privity between the parties. And I think that was Justice Gummow’s view in Concrete Constructions.

MR COBDEN:   That is certainly an area of its operations, your Honour, but it would also operate where ‑ ‑ ‑ 

KIEFEL CJ:  But importantly, it looks to the question, a big if, if there is a licence, if the sub-licence is to be attributed or other authorisation is to be attributed to the owner of the copyright by way of a licence that was given by the owner of the copyright.

MR COBDEN:   Yes.

KIEFEL CJ:  So, it is like a tracing exercise.

MR COBDEN:   Yes, the only circumstances that immediately come to mind, where a licence would bind the owner of the copyright, would be well, put it this way, your Honour, if one licenses someone to communicate a work, all I do is to say, here is my painting, you can put it up on the website.

KIEFEL CJ:   Well, that would not commit a sub-licence, if that is what you are going to say.

MR COBDEN:   You could communicate it.  That does not, of itself ‑ ‑ ‑ 

KIEFEL CJ:  Commit a sub-licence to use the work.

MR COBDEN:   That is right.  It might, and what our learned friends are saying here, that perhaps, even absent the term, I think they are saying, that it must include the right to sub-license.  That – it begs the question.

KIEFEL CJ:   The question for section 15 is what is the licence given by the owner of the copyright? I do not have any difficulty. Perhaps my question was not clear.

MR COBDEN: I am sorry I have taken a very roundabout way to answer that, your Honour, but we have apprehended that something much broader was being put against us on section 15.

KIEFEL CJ:   Yes, I see.

MR COBDEN:   Perhaps we were answering that.  Really, back where we started, in a sense, your Honour, what is the scope of the licence between Hardingham and the agents, and then, with the approach that Justices Thawley and Jackson have taken, does – is it necessary for the efficient operation of that state of affairs between Hardingham and the agents that the totality and the full amplitude, effectively, of something like the REA clause is imported to their dealings?

We say that, for all the reasons that we have given, it is not and if one applies the, perhaps, touchstones rather than requirements of the cases, such things as incapable of clear expression and equitable, not reasonable or equitable, will lead to the result that such a term is not implied.

KIEFEL CJ:   Mr Cobden, what do you say about the cross-appeal on the question of costs?

MR COBDEN:   Yes.  That has taken me a little by surprise because, of course, on the way it was put it would just have gone back to Justice Thawley and I did not need to say anything on that cross-appeal.  What I will say, your Honour, is that Justice Thawley was dealing with the matter, he was the trial judge, and for the reasons that he gave, his orders ought to stay.  I think I can do nothing more the run, your Honour.  I had literally had not been, in any way, expecting to argue about this matter but I think that is what I have to say.  May it please the Court.

KIEFEL CJ:  Thank you.  Any reply, Mr Bannon?

MR BANNON:   Just a few matters, briefly, your Honour.  We say that the temporal limitation of the course of the campaign is contrary to the course of dealing and known objective facts.  At court book 25, the paragraphs 60 to 62 to which reference has been made, in the trial judgment, this is referring to a course of dealing which overlaps with and necessarily precedes the relevant transactions.  Paragraph 61 talks about 2003, the company REMA was operating since 2009, and paragraph 62 refers to the “many thousands” of works not removed from the platform, that is referring there to the REA platform.

We have referred to paragraph 65 in the absence of any complaint about that.  My learned friend responds to that by informing your Honours, yes, but we do not have to complain if there are infringements, but here we are, we have come to court, and we are suing.  Well, they are not suing REA.  REA has never been sued, there has never been foreshadowed a suit and there is no evidence of any complaint about REA’s conduct for all that period of time, of having a myriad of historical images, including their images.  So, it is not correct to say that they are now suing REA.  REA is only here as a cross-respondent to the cross-appeal by RP Data.  So, this is rather idiosyncratic targeting of RP Data but not REA or the estate agents.

And, consistently with that, if one turns to page 72 of the court book, there is a reference to evidence which Mr Hardingham gave, and on which he was not cross-examined, which is paragraph 75.  But that evidence was that he had given no licence or authorised RPD.  His evidence was not that he had never authorised REA.

One might add – and we have referred to this in the materials – indeed, that evidence was expressly admitted – and this is referred to in the materials ‑ ‑ ‑

GORDON J:   What evidence?

MR BANNON:   That evidence was admitted on a limited basis.  The further materials, tab 1, of our materials, page 4.  If I can, perhaps, just read it out, Mr Cobden says, the sentence:

“I did not grant a license to, or authorise RP Data” – that is obviously reference to doing a think called granting a license –

His Honour says, those paragraphs:

I admit them as indicating that Mr Hardingham, on his understanding, hasn’t done any act which would give to RP Data a license –

et cetera.  Of course, to prove a negative – an absence of a licence in the circumstances where there is a conversation – and we know the full limits of the conversation which says nothing, simply to state, I did not think I was giving a licence, is completely meaningless.  For what it is worth, it does not shift the onus – the Avel v Multicoin onus.  It does not matter.  This case will not be decided on onus – or has not been.  But, so far as onus is concerned, onus is determined on all the facts, in any event.

But the short point is that, so far as a temporal limitation by reference to the term of the campaign, the historical course of conduct over many years prior to these transactions, was, to their knowledge, the historical information was on the REA website without complaint.

In those circumstances, the words to be used in a marketing campaign do not import a temporal limitation.  At best, they convey that the photographs are needed to be uploaded in a campaign which will include REA.com, which is only sensible if it complies with conditions which would include the antithesis of the temporal limitation – namely, the perpetual licence.  My friend says – however one frames it – it is inequitable.  It is not inequitable.  It is the nature of a commercial transaction.  They provide something for a particular purpose for reward and that is the consequence.

One might add this – my learned friend’s invitation to this Court to find a temporal limitation is a temporal limitation that the Full Court, in the majority, did not find either.  In other words, this would be the first occasion which any court would have attempted to do so.  The Full Court, at 86 of the reasons at 82, refers to the argument about a temporal limitation – and 87.  If one proceeds to the end of that judgment, all his Honour ends up doing – he says that the term which we were proposing, does not arise.

Neither Justice Greenwood, nor Justice Rares, attempted to frame what my friend says is the temporal limitation.  We say, it is virtually impossible to frame for a whole of reasons, including those mentioned by Justice Steward.  But it is contrary to the course of dealing.

Secondly, your Honour, the Court asked us what the position was as to the interest of agents in using the images for their own purposes.  Could I give these couple of references?  Firstly, in court book 10, at paragraph 10, his Honour refers to the fact that the relevant photographs:

were also published on the relevant websites of . . . agencies –

Part of our additional materials at pages 69 to 79 includes examples of that where agents promote the fact that they have sold particular properties at particular prices.  Then, at page 13, his Honour set out some evidence of Mr O’Donnell – or summarised it.  The details of that evidence appears over the page on tab 14 in paragraphs 17, including the interes of agents in this sort of material and (b), (c), (d), that evidence we refer to –

STEWARD J:   Can I ask you a quick question, I am sorry, Mr Bannon.  At paragraph 16, there is a reference to the fact that your client’s database includes current properties for sale?

MR BANNON:   Yes.

STEWARD J:   I am just trying to understand what that would add to your client’s business, given that the current properties are on realestate.com anyway.

MR BANNON:   This is RP Data’s –

STEWARD J:   Sorry, I beg your pardon.  I will ask the question of your friend.  I apologise.

MR BANNON:   I think the short answer is that it is a service which enables agents to get a sense of value, which would include ‑ ‑ ‑ 

STEWARD J:   But do they get any additional information for current properties?

MR BANNON:   No.

STEWARD J:   No.  All right.

MR BANNON:   My answer is no, I do not – if I have got that wrong, somebody will tell me.  The point – just come back briefly – I think my friend has debated with the Court the significance of paragraph 55 at page 23 of the court book.  The significance of their concession that, whatever the licence was, it necessary involved the sub-licence, is that it was at large necessarily, and it does not have to specifically refer to RP Data.

Our learned friend made much of the proposition that the term would have some significance for architects’ plans, without going to a full discourse about architects’ plans. The owner of the copyright of an architect’s plans, absent assignment, is the architect, section 21(3) of the Copyright Act, says a three‑dimensional reproduction of an artistic work – which would include plans – is a reproduction.

If someone was to derive a plan of a house using the built house, it is quite likely that would be using an indirect reproduction to copy the artistic work, and the artistic work would be copyright, and the original plans would be owned by the architect, they can sue anybody that they want to, if you were to have done that.  Nothing that Mr Hardingham does is going to deprive any architect of their copyright.

But my friend is right in saying that it authorises somebody to copy the schematic sketch plan, if they had any particular interest in doing so, but the suggestion that that is somehow or other going to be the source of building a house, we submit, is not supported by any evidence.

Penultimately, my learned friend referred to paragraph 79 of the primary judge’s reasons for the indemnity.  There is nothing in any of the findings or in logic that one could assess that the mutual purpose of the agencies, and Mr Hardingham, was to expose the agents to a claim under an indemnity from REA.  Plainly, the purpose was, as found, to enable the images to be put lawfully and appropriately on the website.

Lastly, nothing that my learned friend has submitted explains the basis of which in the circumstances where the only way one could get on with the REA website was to agree with conditions, that such a temporal limitation of the campaign could somehow or other be inferred or implied.  May it please the Court.

KIEFEL CJ:   Yes, thank you.

MR COBDEN:   Your Honours, there are just two matters that actually ‑ ‑ ‑

KIEFEL CJ:   Yes.

MR COBDEN:   I hesitate to do this.  My learned friend said ‑ ‑ ‑

KIEFEL CJ:   Do you want to hear from Mr Martin first and then respond?

MR COBDEN:   I could say them now, your Honour.  They are quite similar to my learned friend on the Avel burden.  There was a concession at trial that the Avel burden had been satisfied; the evidentiary shift had happened.  So, when my learned friend threw that to your Honours, just – that needs to be remembered, with great respect.

My learned friend said that the Full Court did not deal with the temporal licence, but impliedly they did, your Honours, because on the pleadings we accepted there was a licence for the period of the marketing campaign and that meant that there is no issue about that.  So, the Full Court when they find that there is not the term implied or inferred that the parties were seeking, that means that we have accepted there is a licence for the period of the campaign, so it was not a matter that the Full Court needed to look at, in our respectful submission.  Just on the three things.

KIEFEL CJ:   Mr Martin, do you have anything in reply?

MR MARTIN:   Yes.  It was not strictly in reply, but Justice Steward posed a question to Mr Bannon about the benefit to the photographs and floor plans being used by my client, RP Data, on its current “for sale” section of its website, and the answer to that appears at paragraph 17 at page 14 of the record where Justice Thawley sets out Mr O’Donnell’s evidence as to the use to which the photographs and floor plans are put.

KIEFEL CJ:   Is that all, Mr Martin?

MR MARTIN:   Yes.  Sorry – and there was, just in response the last point that Mr Cobden raised about the Full Court not dealing with this temporal requirement, it is clear that they did not specifically refer to it, but, more importantly, and as we make this point in our submissions, what they did not deal with was how that temporal condition, if it existed, was to work in a commercial environment such as this.  In our submission, it would not have worked.  Thank you, that is all I have.

EDELMAN J: Mr Martin, just before you sit down, is there any independent reliance that you would place on section 15 in the sense that, if Mr Bannon’s submissions are correct and there is a licence which covers RP Data, then I presume you say there is no work for section 15 to do. But if he is wrong and if the licence is limited in the way that Mr Cobden submits, is there any work that section 15 does beyond – or that could add to the licence?

MR MARTIN:   No, your Honour.  Thank you.

KIEFEL CJ:   The Court reserves its decision in this matter and adjourns to 10.00 am tomorrow.

AT 3.29 PM THE MATTER WAS ADJOURNED