Sankey v Bollig

Case •

[2021] FCCA 1096

•

21 May 2021

FEDERAL CIRCUIT COURT OF AUSTRALIA

Sankey v Bollig [2021] FCCA 1096

File number(s): PEG 198 of 2019
Judgment of: JUDGE LUCEV
Date of judgment: 21 May 2021
Catchwords:

PRACTICE AND PROCEDURE – whether leave to file further affidavit – whether proceedings to be adjourned

INTELLECTUAL PROPERTY – architects drawings – whether infringement of copyright – whether infringement of moral rights – whether licence to use – whether statutory presumptions apply – whether misleading and deceptive conduct

Legislation:

Competition and Consumer Act 2010 (Cth) sch 2, s 18

Copyright Act 1968 (Cth) ss 115, 126A, 126B and 127

Federal Circuit Court of Australia Act 1999 (Cth) ss 3 and 42

Federal Circuit Court Rules 2001 (Cth) r 1.03
Cases cited:

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; 83 ALJR 951; 258 ALR 14

Beck v Montana Constructions (1963) 5 FLR 298; [1964-5] NSWR 229

Fair Work Ombudsman v Kentwood Industries Pty Ltd [2010] FCA 98

Myers v Myers [1969] WAR 19

MZZZL v Minister for Immigration & Anor [2014] FCCA 1309
Number of paragraphs: 27
Date of last submission/s: 17 May 2021
Date of hearing: 17 May 2021
Place: Perth
Counsel for the Applicant: Mr R J Price
Solicitor for the Applicant: Provan Legal
Counsel for the Respondents: Mr D B Cox ad Mr R Edwards
Solicitor for the Applicant: DLA Piper Australia

ORDERS

PEG 198 of 2019
BETWEEN:

WAYNE MAURICE SANKEY

Applicant
AND:

EDWIN MICHAEL BOLLIG

First Respondent

BOLLIG DESIGN GROUP PTY LTD

Second Respondent

ORDER MADE BY:

JUDGE LUCEV

DATE OF ORDER:

17 MAY 2021

THE COURT ORDERS THAT:

1.The Applicant have leave to further amend the Amended Application and Amended Statement of Claim as set out in the minute attached to the Applicant’s Minute of Proposed Orders dated 14 May 2021.

2.Counsel and solicitor for the Applicant be released from the Confidentiality Undertaking given by each of them, on 26 March 2021 and 18 March 2021 respectively, in relation to the documents identified therein, and to the extent it is necessary the Court will publish its reasons for this order in the final judgment.

3.The matter be adjourned part-heard:

(a)to a directions hearing on 21 May 2021 at 10.00am;

(b)otherwise for hearing on 30 and 31 August, and 1, 2, 3 September 2021.

4.Reasons for judgment made in relation to the adjournment be published from Chambers at a later date.

5.Costs of the adjournment be reserved

REASONS FOR JUDGMENT

JUDGE LUCEV

INTRODUCTION

  1. This judgment relates to an order made on 17 May 2021 adjourning the hearing of this matter to a further hearing commencing 30 August 2021 (“Adjournment Order”).

  2. In these proceedings the applicant, Mr Wayne Sankey (“Mr Sankey”), claims against the respondents, Edwin Michael Bollig and Bollig Design Group Pty Ltd (collectively “Bollig”), in broad terms, in relation to infringement of copyright under the Copyright Act 1968 (Cth) (“Copyright Act”) infringement of moral rights under the Copyright Act, and misleading conduct under the Competition and Consumer Act 2010 (Cth) s 18 of Sch 2, being the Australian Consumer Law (“ACL”). Mr Sankey seeks damages, an injunction, a declaration that Bollig infringed copyright in the Sankey Drawings, and a public apology.

  3. The dispute arises in relation to drawings purportedly authored by Mr Sankey (as principal of WS Architects) in 2010 (“Sankey Drawings”) in relation to the proposed development of a marina in Rockingham (“Port Rockingham Marina Project”). The Sankey Drawings are alleged by Mr Sankey to have, in essence, been reproduced and published by Bollig in drawings dating from 2017-2018 (“Infringing Drawings”).

  4. Bollig provide architectural services to Aureus Commercial (“Aureus”) for the purposes of the Port Rockingham Marina Project, in relation to which it appears that the Infringing Drawings remain in use. By way of defence Bollig says that it has a licence to use the Sankey Drawings, that the statutory presumptions under ss 126A, 126B and 127(1) of the Copyright Act apply to its use of the Sankey Drawings, and that if copyright did subsist in the Sankey Drawings then any infringement was an innocent one under s 115(3) of the Copyright Act, and that there was no misleading conduct under the ACL.

    BACKGROUND

  5. The proceedings were commenced on 31 May 2019 when Mr Sankey filed an Originating Application and Statement of Claim. The Court notes that since then the matter has been the subject of ten sets of orders by Judge Baird between June 2019 and November 2020, three sets of orders by Judge Kendall between February 2021 and 5 May 2021, and two further sets of orders by Judge Lucev on 7 and 17 May 2021, and in particular that:

    (a)a Defence was to be filed and served by Bollig by 31 July 2019, and  a Reply by Mr Sankey by 14 August 2019 (Orders 2 and 3, 18 June 2019);

    (b)discovery of agreed categories of documents was to have been completed by 22 November 2019 (Order 1, 6 November 2019);

    (c)Mr Sankey was to file and serve  his evidence in chief by 20 December 2019 (Order 2, 6 November 2019);

    (d)Mr Sankey was originally to file and serve his evidence in reply by 24 April 2020 (Order 2, 29 January 2020), extended by consent to 3 June 2020 (Order 1, 5 May 2020);

    (e)Mr Sankey was to file and serve an Amended Originating Application and an Amended Statement of Claim, substantially in the form provided to the Court on 21 July 2020, and a Defence to the Amended Statement of Claim was to be filed and served by 5 August 2020, and  a Reply by 19 August 2020 (Orders 4, 6 and 7, 22 July 2020);

    (f)Mr Sankey was to file and serve any additional affidavit evidence in chief in relation to the amendments to the pleadings by 2 September 2020 (Order 9, 22 July 2020);

    (g)Bollig was to file and serve any additional affidavits in answer by 30 September 2020 (Order 10, 22 July 2020), extended to 21 October 2020 (Order 1, 22 October 2020);

    (h)Mr Sankey was to file and serve any additional affidavit evidence in reply by 14 October 2020 (Order 11, 22 July 2020), extended to 4 November 2020 (Order 2, 22 October 2020);

    (i)Mr Sankey was to file and serve a consolidated index to the proposed tender bundle of drawings and related documents by 2 September 2020, and an electronic copy of the proposed tender bundle of drawings and related documents by 9 September 2020 (Orders 14 and 15, 22 July 2020) extended to 23 and 19 October 2020 respectively (Orders 3 and 4, 22 October 2020);

    (j)on 13 November 2020 the matter was listed for hearing for four days before Judge Kendall on 17-20 May 2021 (Order 1, 13 November 2020);

    (k)Mr Sankey was to file and serve a consolidated Statement of Facts and Issues by 3 May 2021 (Order 4, 13 November 2020);

    (l)the parties were to exchange lists of affidavits filed to be relied upon by 12 April 2021 and lists of objections to affidavits by 26 April 2021 (Orders 5 and 6, 13 November 2020);

    (m)opening submissions were to be filed and served by Mr Sankey by 26 April 2021 and by Bollig by 3 May 2021 (Orders 11 and 12, 13 November 2020)

    (n)Mr Sankey was to serve a hard copy of the Principal Documents Bundle containing legible copies of each of the documents to be tendered at hearing by the parties and a list indicating which documents are admitted by consent and which are objected to, and on what grounds by 27 April 2021 (Order 5, 23 February 2021);

    (o)Mr Sankey was to serve an electronic copy of a consolidated electronic Court Book by 10 May 2021 (Order 10, 23 February 2021);

    (p)Mr Sankey was to serve a USB containing the consolidated drawings which are to be tendered at the hearing in CAD format, and a list indicating which drawings are admitted by consent and which are objected to, and on what grounds, by 10 May 2021 (Order 17, 23 February 2021)

    (q)on 5 May 2021 the hearing of the matter was re-allocated to Judge Lucev and the hearing listed for five days from 17-21 May 2021 (previously four days: see [5(j)] above) (Order 2, 5 may 2021); and

    (r)Bollig were granted leave to file and serve a Supplementary Documents Bundle by 10 May 2021 (Order 1, 7 May 2021).

    PROCEDURAL APPLICATIONS - PRINCIPLES

  6. Any procedural application must be considered in the relevant statutory, factual and case management context. The role and mode of operation of the Court as set out in the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”) and the Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”), and as prescribed by the objects in ss 3 and 42 of the FCCA Act, and the objects in r 1.03 of the FCC Rules, provide for the Court to operate in a manner:

    (a)as informal as possible in the exercise of judicial power;

    (b)which is not protracted in its proceedings;

    (c)which resolves proceedings justly, efficiently and economically;

    (d)which uses streamlined procedures; and

    (e)that avoids undue delay, expense and technicality.

  7. The Court must also take into account the following principles when determining whether or not to grant the procedural application:

    (a)that the paramount consideration remains the doing of justice between the parties, but that a just resolution must have regard to any relevant legislative purpose or object;

    (b)modern principles of case management;

    (c)the avoidance of undue delay; and

    (d)the wastage of public resources,

    as to which see Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; 83 ALJR 951; 258 ALR 14 (“Aon Risk Services”) at [30] per French CJ and [97]-[103] per Gummow, Hayne, Crennan, Kiefel and Bell JJ, and Fair Work Ombudsman v Kentwood Industries Pty Ltd [2010] FCA 98 at [2] per McKerracher J.

  8. Similar principles apply with respect to the grant of adjournments, and the Court has a broad discretion in relation to whether or not it adjourns a hearing: Myers v Myers [1969] WAR 19 (“Myers”) at 21 per Jackson J; MZZZL v Minister for Immigration & Anor [2014] FCCA 1309 (“MZZZL”) at [9]-[10] per Judge Lucev.

    LEAVE SOUGHT TO FILE A FURTHER AFFIDAVIT

  9. The genesis of the Adjournment Order lies in an application by Mr Sankey for leave to file a further (and fourth) affidavit (“Proposed Fourth Sankey Affidavit”). Leave to file the Proposed Fourth Sankey Affidavit was opposed by Bollig, but if leave were to be granted, Bollig sought an adjournment of the hearing. The application for leave to file the Proposed Fourth Sankey Affidavit was made orally at hearing on the first day of hearing (Monday 17 May 2021), but was foreshadowed the previous Thursday in correspondence between the parties, notice being given to Bollig “at about 4.30pm” that day: Transcript, p 13 (Counsel for Mr Sankey).

  10. The Proposed Fourth Sankey Affidavit is 18 pages and 31 paragraphs in length, with 25 annexures totalling 81 pages, and two USBs containing drawings and overlay drawings.

  11. It is not inaccurate to say that Bollig had notice of one business day prior to hearing of the application for leave to file the Proposed Fourth Sankey Affidavit, and of the content thereof. It is relevant to the Court’s consideration of the application for leave to file the Proposed Fourth Sankey Affidavit that that application was made very late, with minimal time before the commencement of the hearing, and, in the context of the impending commencement of a five day hearing, and as a matter of practicality in those circumstances, little or no time available to deal with any relevant matter arising from the Proposed Fourth Sankey Affidavit, or even to properly determine if some of the matters raised might be relevant, and, if so, to what extent, and whether it is necessary to deal with such matters. That difficulty was compounded by several withdrawals of, and declarations of non-reliance upon, parts of the Proposed Fourth Sankey Affidavit made by Counsel for Mr Sankey during his submissions. In these respects there is plainly prejudice to Bollig by reason of the lateness of the notice of the application for leave to file the Proposed Fourth Sankey Affidavit.

  12. In seeking to explain why leave to file the Proposed Fourth Sankey Affidavit was being sought Mr Sankey says at [3] of the Proposed Fourth Sankey Affidavit that it “… principally corrects some errors or omissions in my earlier affidavits or provides additional explanation or clarification of certain matters including reference to additional documents.”

  13. It is fair to observe that, as Mr Sankey’s Counsel so cogently contended, much of the Proposed Fourth Sankey Affidavit is taken up with the corrections of errors and omissions. To the extent that Proposed Fourth Sankey Affidavit purely seeks to correct errors and omissions it is not of particular concern to the Court, subject to what is said hereunder.

  14. The explanation given by Mr Sankey is, however, deficient in relation to certain matters. After almost two years of the Court and the parties dealing with preliminary and interlocutory issues (including the making of 14 sets of orders prior to the first day of the scheduled five day hearing), and the filing by Mr Sankey of three prior affidavits, in circumstances where the filing of Mr Sankey’s affidavits in reply was to be completed by 4 November 2020: Order 2, 22 October 2020, and the compilation of a Court Book and a Principal Bundle of Documents, there is no real explanation, from Mr Sankey or his solicitor, as to how certain relevant matters dealt with hereunder were the subject of error or omission.

  15. There is no dispute that [17(c) and (e)] of the Proposed Fourth Sankey Affidavit is new evidence, and that:

    (a)Mr Sankey asserts that on an unknown date, but probably a few days after 15 November 2010 when he had forwarded an email to a Mr Oglvie of Aureus, seemingly the head promoter of the Port Rockingham Marina Project,  he spoke to Mr Ogilvie by telephone, and that Mr Ogilvie said to Mr Sankey “ … words to the effect that the fee proposal was accepted and to get on with it so that we could meet the submission deadline”: at [17(c)];

    (b)to put [17(c)] in context, on 1 December 2010 Mr Sankey asserts that he sent to Mr Ogilvie an email attaching three documents: a Client and Architect Agreement dated 16 November 2010,  Document W.S. QM-012 titled “Professional Services Standard Architectural” dated 16 November 2010, and a Fee Summary dated 15 November 2010 (which Mr Sankey says at [17(b)(ii) and (iii)] relates to work undertaken on the Port Rockingham Marina Project): at [17(d)]; and

    (c)that after sending the above email and documents Mr Sankey says that he spoke to Mr Ogilvie by telephone, he cannot remember when, but it was before he says he sent re-sent the Client and Architect Agreement to Mr Ogilvie on 8 December 2010, and that Mr Ogilvie said “ … words to the effect that the terms on which I was being engaged were acceptable and that I should carry on preparing the drawings … [and that] he would sign the client and Architect Agreement”: at [17(e)].

  16. The context in which the above documents are to be considered is discernible from the respective opening submissions of the parties in relation to whether or not Bollig had a licence to use, and in particular to reproduce, the Sankey Drawings. Bollig say that they had a licence to use or to reproduce the Sankey Drawings, whilst Mr Sankey says there was neither an express nor implied licence to use or to reproduce the Sankey Drawings.

  17. Mr Sankey’s Written Outline of Opening Submissions at [25(a)] (footnotes omitted) is as follows:

    By a letter dated 16 November 2010, and signed on behalf of Sankey’s client on 9 December 2010, 22 Sankey agreed to perform services described in Document WS QM-012 Professional Services (namely, documentation of planning submission for the Port Rockingham Planning Submission project, including preparation of schematic plans and elevations) for an agreed lump sum of $84,000 excluding GST and in accordance with a Fee Summary dated 15 November 2010”. The Fee Summary stated that the planning submission work would not include design development, documentation or the building interiors. The Fee Summary also provided for recover of some consumables.

  18. Bollig’s Outline of Opening Submissions at [12] and [52]-[56] (footnotes omitted) is as follows:

    12. The second period of activity (Second Period) commenced in or about 2006 with a meeting between the Applicant and Mr Ogilvie. Following the meeting, the Applicant was formally engaged to work on the Project (First Agreement).

    …

    52. If, despite the above, the Court finds that copyright subsisted in the Works, the Respondents, while not admitting to reproducing any of the Works, were entitled to do so, pursuant to either:

    (a) the licence granted by C&P which is confirmed in an email from Trent Hunt of C&P to Mr Ogilvie of Aureus dated 20 June 2018; or

    (b) the licence granted by the Applicant pursuant to clause 5 of the First Agreement.

    53. As a consequence of these licences, the Applicant’s case, so far as it concerns infringement of copyright, must fail.

    54. In his Submissions the Applicant claims that no licence has been granted pursuant to the Second Agreement due to Aureus failing to pay an alleged $84,100 debt. The license that the Respondents rely on was granted under the First Agreement and not the Second Agreement.

    55. The First Agreement provides that it was for the “pre-design stage” of the Project. It was an agreement that allowed the Applicant to charge for the time he spent working on the Project. The First Agreement contained a term that allowed expansion of the scope of the services to be supplied under the agreement. At some stage on a date unknown, the scope of the First Agreement was either expanded, with the Accounts being issued in relation to that additional work, or alternatively the Applicant’s work was no longer covered by the First Agreement and a new contract was to be implied for each invoice period. Of these alternatives, the second alternative has more merit since there is nothing to suggest that the Applicant was instructed to work beyond the First Agreement scope whilst still bound by its terms. Work that the Applicant undertook beyond the First Agreement scope and prior to the Second Agreement included preparing the Revised AutoCAD Model and the Works from the Revised AutoCAD Model.

    56. On 9 December 2010, Mr Ogilvie entered into the Second Agreement with the Applicant, which provided that the contracted services “will be performed by the Architect” and that they were “Sketch design for Planning Submission”. When Mr Ogilvie entered into the Second Agreement, all of the “planning submission” or development application work leading up to the filing of the 2010 Development Application was complete. Accordingly, since the Second Agreement operates prospectively and since the Second Agreement was signed on 9 December 2010 and the 2010 Development Application was filed on the same day, the preparation of the drawings leading up to the filing of the 2010 Development Application cannot have been covered by the terms of the Second Agreement. The work can only have been, and was, covered by the First Agreement or by an alternative implied contract for any relevant invoice period.

  19. For the purposes of what follows the Court adopts Bollig’s use of the terms “First Agreement” and “Second Agreement”.

  20. Whilst the effect of the new evidence is disputed, the Court is of the view that the new evidence gives rise to the possibility of either one or two variations of the so-called First Agreement, or one or two new agreements between the First Agreement and the Second Agreement, or, but less likely, some variation or difference in the terms of the Second Agreement. Those possibilities are arguably relevant to:

    (a)the existence or otherwise of any licence; and

    (b)the terms of any licence, if a licence is found to exist.

  1. Determination of whether a licence exists, and if so, what its terms are, will depend in significant part upon the proper construction of any agreement entered into by Mr Sankey: Beck v Montana Constructions (1963) 5 FLR 298; [1964-5] NSWR 229.

  2. The nature of the evidence at [17(c) and (e)] of the Proposed Fourth Sankey Affidavit may therefore be central to issues the Court has to determine. It also gives rise to the question as to what extent Bollig’s solicitors might need to undertake further investigations into these newly asserted facts, and their possible effect or effects, and whether Bollig might need to call Mr Ogilvie as a witness to clarify or rebut the evidence at [17(c) and (e)] in the Proposed Fourth Sankey Affidavit. Where there is but one business day before the scheduled five day hearing it is self-evident that those are tasks which cannot be properly undertaken in the time prior to hearing, and which it would be difficult to properly undertake whilst the hearing was proceeding. Furthermore, such investigations might give rise to further avenues of necessary cross-examination of Mr Sankey, and might therefore disrupt the normal flow of the hearing (for example, by requiring the recall of Mr Sankey after his evidence is otherwise complete for further cross and re-examination), or might require further time for hearing to be scheduled (both by reason of possible further cross and re-examination of Mr Sankey, or the calling of other witnesses, for example, Mr Ogilvie). To simply grant leave on the first day of a five day hearing for Mr Sankey to be able to file and serve the Proposed Fourth Sankey Affidavit would, in all the circumstances, be prejudicial to Bollig.

  3. The Court is also concerned about the source of at least one document referred to in the Proposed Fourth Sankey Affidavit, and the possible implications that that might have for other documents, and for whether or not further discovery (probably specific discovery) might be necessary. At [13] of the Proposed Fourth Sankey Affidavit Mr Sankey seeks to correct the date upon which he added survey contours to a drawing issues to Mr Ogilvie in 2008 and in so doing annexes copies of a screenshot as part of Annexure WMS48. Mr Sankey’s Counsel seemed to suggest that this document had been provided as part of discovery of Mr Sankey’s electronic architect’s file for the Port Rockingham Marina Project: Transcript, p 14. The screenshot does not, however, necessarily appear to be from Mr Sankey’s electronic architect’s file for the Port Rockingham Marina Project, but rather from an electronic file or folder tilted “Legal Port rockingham”, which file or folder it might be inferred post-dated the 2008 addition of survey contours to a drawing. The nature and content of that file or folder, and its similarity to Mr Sankey’s electronic architect’s file for the Port Rockingham Marina Project, is not immediately apparent, but does give rise to the possibility that discovery was incomplete, or that further specific discovery might be necessary. And if discovery was incomplete, or further specific discovery may be necessary, to simply grant leave on the first day of a five day hearing for Mr Sankey to be able to file and serve the Proposed Fourth Sankey Affidavit would be likely to be prejudicial to Bollig.

  4. Ordinarily the Court might have concluded that by reason of lateness, lack of proper explanation and prejudice, or likely prejudice, to Bollig, plus the possible disruption to the hearing, it was in the interests of justice to refuse leave to file and serve the Proposed Fourth Sankey Affidavit. A conclusion to that effect would not be inconsistent with the ordinary application of case management rules and principles. It remains the case, however, that the paramount consideration remains whether it is in the interests of justice to grant the leave sought: Aon Risk Services at [30] per French CJ and [97]-[103] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. In this case the matters the subject of evidence in, or in relation to, the nature of the agreements possibly reached between Mr Sankey and Mr Ogilvie, which go to the existence or otherwise of a licence to use the Sankey Drawings, and if such a licence exists, its terms, may be vital evidence in the ultimate disposition of this case, and warrant not the refusal of leave to file further evidence but rather, in the exercise of the Court’s broad discretion: Myers at 21 per Jackson J; MZZZL at [9]-[10] per Judge Lucev, an adjournment to allow such evidence to be properly put before the Court, by both parties if necessary. Although an adjournment will cause a delay in the hearing of the matter, the delay (to the week commencing 30 August 2021) is not so significant as to otherwise outweigh the necessity for an adjournment. Further, it is in the interests of justice that there be, at this stage, if necessary, further or specific discovery, at least in relation to documents referred to in the Proposed Fourth Sankey Affidavit.

  5. At this stage the Court, having regard to the various withdrawals of, and declarations of non-reliance upon, parts of the Proposed Fourth Sankey Affidavit will not grant leave to file and serve the Proposed Fourth Sankey Affidavit lest Mr Sankey may wish to consider whether that affidavit (either with or without reliance upon the various withdrawals of, and declarations of non-reliance upon, parts thereof), or another varied affidavit, is an appropriate affidavit in respect of which leave to file and serve might now be sought.

    CONCLUSION AND ORDERS

  6. For the above reasons the Court concluded that the hearing ought to be adjourned to a directions hearing on 21 May 2021, and that the hearing proper ought to be adjourned to the week commencing 30 August 2021, and made orders accordingly on 17 May 2021.

  7. Costs of the adjournment were reserved, and as indicated at hearing the parties will need to consider and make submissions upon the various bases upon which the Court might award costs, both of the adjournment and, ultimately, generally. In the circumstances, the determination of all costs issues are therefore best left to be made after the Court has adjudicated the primary issues in dispute.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Lucev.

Associate:

Dated:       21 May 2021

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