Volunteer Eco Students Abroad Pty Limited v Reach Out Volunteers Pty Limited

[2013] FCA 731

FEDERAL COURT OF AUSTRALIA

Volunteer Eco Students Abroad Pty Limited v Reach Out Volunteers Pty Limited [2013] FCA 731

Citation:

Volunteer Eco Students Abroad Pty Limited v Reach Out Volunteers Pty Limited [2013] FCA 731

Parties:

VOLUNTEER ECO STUDENTS ABROAD PTY LIMITED AS TRUSTEE FOR THE VOLUNTEER ECO STUDENTS ABROAD UNIT TRUST (ACN 135 012 341) v REACH OUT VOLUNTEERS PTY LIMITED (ACN 146 005 316), TOM JOWETT, PETER JOWETT and BEN JOWETT

File number:

NSD 380 of 2011

Judge:

GRIFFITHS J

Date of judgment:

26 July 2013

Catchwords:

COPYRIGHT – whether applicant the author of relevant works – whether each work constitutes an “original work” within the meaning of s 32 of the Copyright Act 1968 (Cth) – whether certain works too trivial to constitute literary works – relevance of certain alleged infringements occurring outside Australia – whether infringements authorised – availability of remedies

INDUSTRIAL LAW – whether contracts of employment breached – whether first contract of employment discharged – which terms and conditions constituted second contract of employment – fourth category of Masters v Cameron (1954) 91 CLR 353 – whether any further issues remained to be negotiated – whether offer was accepted – whether obligation to give reasonable notice varied by subsequent oral agreement – whether breach of contractual or fiduciary obligations to employer by employee taking preparatory steps to set up a rival business – whether employee breached obligation of good faith and fidelity and fiduciary duties by failing to disclose relevant information whilst employed

CONTRACT – breach of confidence by retaining and/or using documents acquired during the course of employment

EQUITY – breach of confidence by retaining and/or using documents acquired during the course of employment

TRADE PRACTICES – alleged misleading and deceptive conduct – representations concerning business experience–testimonials – representations concerning the charitable status of the first respondent – representations made using search engine results –  whether certain representations mere puffery – accessorial liability – relevance of conduct occurring outside Australia – availability of remedies

PRACTICE AND PROCEDURE – proposed amendments to second further amended statement of claim – discussion of relevant principles – whether prejudice to respondents if amendments allowed

Legislation:

Australian Consumer Law ss 18, 29, 232, 237, 238
Competition and Consumer Act 2010 (Cth) ss 5, 80, 87
Copyright Act 1968 (Cth) ss 10, 14, 32, 35, 36, 43, 75B 104, 115, 196
Trade Practices Act 1974 (Cth) ss 52, 53 75B, 80, 82

Cases cited:

Acorn Computers Ltd v MCS Micro Computer System Pty Ltd (1984) 6 FCR 277
Alamdo Holdings Pty Ltd v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWSC 1073
Allam v Aristocrat Technologies Australia Pty Limited (2012) 95 IPR 242
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Aristocrat Technologies Australia Pty Ltd v D.A.P Services (Kempsey) Pty Ltd (2007) 157 FCR 564
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300
Australian Competition and Consumer Commission v Advanced Medical Institute Pty Ltd (No 3) (2006) 69 IPR 462
Australian Competition and Consumer Commission v Chen [2003] FCA 897
Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) (2007) 161 FCR 513
Australian Competition and Consumer Commission v Google Inc (2012) 201 FCR 503
Australian Competition and Consumer Commission v Henry Kaye and National Investment Institute Pty Ltd [2004] FCA 1363
Australian Competition and Consumer Commission v Lovelock Luke Pty Ltd (1997) 79 FCR 63
Australian Competition and Consumer Commission v Unilever Australia Ltd (1997) 40 IPR 354
Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480
Baulkham Hills Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622
Ballas v Theophilos(No 2) (1957) 98 CLR 193
Baxter v British Airways PLC (1988) 82 ALR 298
Benchmark Certification Pty Ltd v Standards Australia International Ltd (2004) 212 ALR 464
Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Breen v Williams (1996) 186 CLR 71
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Budget Eyewear Australia Pty Ltd v Specsavers Pty Ltd (2010) 86 IPR 479
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304
Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45
CBS Songs Ltd v Amstrad Consumer Electronics plc [1988] AC 1013
Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261
Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1986) 12 FCR 375
Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd (1999) 46 IPR 309
Codelfa Construction Pty Limited v State Rail Authority of New South Wales (1982) 149 CLR 337
Cooper v Universal Music Australia Pty Ltd (2006) 156 FCR 380
Crawford Fitting Co v Sydney Valve and Fittings Pty Ltd (1988) 14 NSWLR 438
Dais Studio Pty Ltd v Bullet Creative Pty Ltd (2007) 165 FCR 92
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Digital Pulse Pty Ltd v Harris [2002] 166 FLR 421
Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575
Dye v Commonwealth Securities Limited (No 2) [2010] FCAFC 118
Equity Access Pty Limited v Westpac Banking Corporation (1989) 16 IPR 431
Facton Ltd v Rifai Fashions Pty Ltd [2012] FCAFC 9
Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd (2010) 189 FCR 109
Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) (2008) 76 IPR 763
G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
General Newspapers Pty Ltd v Telstra Corporation Ltd (1993) 45 FCR 164
George Hudson Holdings Ltd v Rudder (1973) 128 CLR 387
Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82
Google Inc v Australian Competition and Consumer Commission (2013) 294 ALR 404
Graham Evans Pty Ltd v Stencraft Pty Ltd [1999] FCA 1670
Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 171 FCR 579
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Pty Ltd (1978) 140 CLR 216
IceTV Pty Limited v Nine Network Australia Pty Limited (2009) 239 CLR 458
ICI Australia Operations Pty Limited v Trade Practice Commission (1992) 38 FCR 248
Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348
International Writing Institute Inc v Rimila Pty Ltd (1994) 30 IPR 250
Jainran Pty Ltd v Boyana [2008] NSWSC 468
Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (2008) 78 IPR 262
Labelmakers Group Pty Ltd v LL Force Pty Ltd [2012] FCA 512
Lego Australia Pty Limited v Paul’s (Merchants) Pty Ltd (1992) 60 FLR 465
Masters v Cameron (1941) 91 CLR 253
McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Ltd (1980) 49 FLR 455
Newspaper Licensing Agency Ltd v Meltwater Holding BV [2010] EWHC 3099
Newspaper Licensing Agency Ltd v Meltwater Holding BV (2012) 93 IPR 341
O’Shea v Sullivan (1994) ATPR 46-124
Pacific Gaming Pty Ltd v Aristocrat Leisure Industries Pty Ltd (2001) 116 FCR 448
Pappas v Soulac Pty Ltd (1983) 50 ALR 231
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Parker v South Eastern Railway Co (1877) 2 CPD 416
Photo Production Ltd v Securicor Transport Ltd [1980] AC 827
Prime Creative Media Pty Ltd v Vranjkovic [2009] FCA 1030
Procter & Gamble Australia Pty Ltd v Energizer Australia Pty Ltd [2011] FCA 1347
Purcell v Tullett Prebon [2010] NSWCA 150
Quinn v Jack Chia (Australia) Pty Ltd [1992] 1 VR 567
Rafferty v Madgwicks (2012) 203 FCR 1
Rhone-Poulenc Agrochimie AS v UIM Chemical Services Pty Ltd (1986) 12 FCR 477
Rural Press Limited v Australian Competition and Consumer Commission (2002) 188 FCR 236
Secretary, Department of Community Services & Health (1990) 22 FCR 73
Sinanide v La Maison Kosmeo (1928) 139 LT 365
Smith Kline & French Laboratories (Australia) Ltd v Sullivan v FNH Investment Pty Ltd t/as Palm Bay Hideaway (2003) 57 IPR 63
Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177
Trade Practices Commission v Mobil Oil Australia Ltd (1985) 4 FCR 296
Tritech Technology Pty Ltd v Gordon (2000) 48 IPR 52
Tullett Prebon v Simon Purcell [2008] NSWSC 852
University of Western Australia v Gray (2009) 179 FCR 346
Victoria University of Technology v Wilson (2004) 60 IPR 392
Yorke v Lucas (1985) 158 CLR 661

Date of hearing:

28-31 May 2012, 4-7 June 2012, 17-19 October 2012, 26 October 2012

Date of last submissions:

9 November 2012

Place:

Sydney

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

588

Counsel for the Applicant:

Ms S.T. Chrysanthou and Ms B. Styles

Solicitor for the Applicant:

Benjamin & McInnes Lawyers

Counsel for the Respondents:

Mr R.C. Gration

Solicitor for the Respondents:

Mackenzie Thomas Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 380 of 2011

BETWEEN:

VOLUNTEER ECO STUDENTS ABROAD PTY LIMITED AS TRUSTEE FOR THE VOLUNTEER ECO STUDENTS ABROAD UNIT TRUST (ACN 135 012 341)
Applicant

AND:

REACH OUT VOLUNTEERS PTY LIMITED (ACN 146 005 316)
First Respondent

TOM JOWETT
Second Respondent

PETER JOWETT
Third Respondent

BEN JOWETT
Fourth Respondent

JUDGE:	GRIFFITHS J
DATE OF ORDER:	26 JULY 2013
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The parties are to seek to agree upon and file proposed orders which give effect to these reasons for judgment on or before 4:30 pm on 16 August 2013. If the parties cannot reach agreement, they shall each file and serve proposed orders on or before 4:30 pm on 16 August 2013, together with a written outline of submissions of no more than 10 pages in length in support of their respective proposed orders.

2.The matter be listed for mention and further directions at 9:30 am on Tuesday, 20 August 2013.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 380 of 2011

BETWEEN:

VOLUNTEER ECO STUDENTS ABROAD PTY LIMITED AS TRUSTEE FOR THE VOLUNTEER ECO STUDENTS ABROAD UNIT TRUST (ACN 135 012 341)
Applicant

AND:

REACH OUT VOLUNTEERS PTY LIMITED (ACN 146 005 316)
First Respondent

TOM JOWETT
Second Respondent

PETER JOWETT
Third Respondent

BEN JOWETT
Fourth Respondent

JUDGE:	GRIFFITHS J
DATE:	26 JULY 2013
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

1  The applicant, Volunteer Eco Students Abroad Pty Ltd (VESA), operates a business of organising, marketing and conducting “eco tours” to overseas countries.  Participants spend approximately half of their time participating in community based volunteer work and the remainder of the tour is spent engaging in adventure tourism activities.  VESA’s target market is primarily university students. 

2  The first respondent, Reach Out Volunteers Pty Ltd (ROV), also operates a business of organising, marketing and conducting “eco tours”.  It is a competitor of VESA.  ROV was set up in August 2010.  It operates from the Jowett family home in Cremorne.  The driving force behind ROV is Tom Jowett.  The three directors and shareholders of ROV are Tom Jowett, his father Peter Jowett and his brother Ben Jowett.  Tom Jowett was previously employed by VESA in various positions between August 2009 and August 2010.  He resigned from his employment with VESA on 10 August 2010 and left on 13 August 2010.  It is around this time that he decided to set up ROV as a rival eco tour business to VESA. 

3  VESA brings claims for breach of contract, breach of fiduciary duty, copyright infringement and misuse of confidential information against Tom Jowett connected with the termination of his employment with VESA and the setting up of ROV as a rival operation.  VESA also brings claims against all respondents concerning the business activities of ROV.  These claims primarily involve allegations of misleading or deceptive conduct and copyright infringement.  Claims of passing off were not pressed. 

4These reasons are structured as follows:

PART A: BACKGROUND FACTUAL MATTERS........ ........ ........ ........ ........ ........ ..	[5]
(a)      VESA........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[6]
(b)      Proceedings brought by ISV in the USA........ ........ ........ ........ ........ ........ .....	[12]
(c)      VESA documents........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[14]
(i)       VESA application forms........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[15]
(ii)      VESA frequently asked questions........ ........ ........ ........ ........ ........ ........ ......	[19]
(iii)     VESA’s email to professors........ ........ ........ ........ ........ ........ ........ ........ ........	[20]
(d)      Tom Jowett’s employment with VESA as a recruitment coordinator......	[21]
(e)      Tom Jowett’s employment with VESA as associate marketing director..	[25]
(f)      VESA’s working arrangements........ ........ ........ ........ ........ ........ ........ ........ .....	[31]
(g)      Tom Jowett engages Fizzbuzz Pty Ltd........ ........ ........ ........ ........ ........ ........ .	[37]
(h)      Tom Jowett’s emails to his father........ ........ ........ ........ ........ ........ ........ ........ .	[58]
(i)       Virginia Little and Tom Jowett’s working relationship........ ........ ........ .....	[60]
(j)       VESA and Tom Jowett’s contract negotiations........ ........ ........ ........ ........ ..	[62]
(k)      ROV........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[78]
(l)       The ROV “dry run” in South Africa........ ........ ........ ........ ........ ........ ........ ...	[83]
(m)     Recruiting in the USA........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[87]
(n)      Engagement of Roger Allsopp........ ........ ........ ........ ........ ........ ........ ........ ......	[88]
PART B: DISPUTED FACTS AND SOME ISSUES OF CREDIT........ ........ ........ ..	[89]
(a)       Summary of VESA’s submissions........ ........ ........ ........ ........ ........ ........ .......	[89]
(i)        Issues concerning production of documents........ ........ ........ ........ ........ ....	[90]
(ii)      Tom Jowett........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[94]
(iii)     Roger Allsopp........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[101]
(b)      Summary of respondents’ submissions........ ........ ........ ........ ........ ........ ........	[103]
(c)      Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[109]
(i)        Issues concerning production of documents........ ........ ........ ........ ........ ....	[110]
(ii)        Tom Jowett........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[113]
(iii)      Roger Allsopp........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[126]
(iv)      Shona Luciani........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[127]
(v)        Thomas Constable-McDowell........ ........ ........ ........ ........ ........ ........ ........ ....	[129]
PART C: CONTRACT CLAIMS........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[131]
(a)     Terms and conditions of the first and second contracts of employment...	[133]
(i)       First contract of employment........ ........ ........ ........ ........ ........ ........ ........ ......	[133]
(ii)      Second contract of employment........ ........ ........ ........ ........ ........ ........ ........ .	[141]
(iii)     Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[153]
(b)      Alleged breaches of contract........ ........ ........ ........ ........ ........ ........ ........ ........ .	[161]
(i)        Notice........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[162]
(ii)       Taking steps to set up a rival business while employed by VESA........ ....	[173]
PART D: BREACH OF CONFIDENCE AND RETAINED MATERIALS........ ....	[217]
(a)      VESA’s case as pleaded and presented........ ........ ........ ........ ........ ........ ........	[221]
(b)      Summary of respondents’ case........ ........ ........ ........ ........ ........ ........ ........ .....	[230]
(c)       Summary of legal principles........ ........ ........ ........ ........ ........ ........ ........ ........ .	[234]
(d)      VESA’s claims of actual misuse of some of its confidential information..	[239]
(i)       The taglines........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[240]
(ii)      The lists of universities........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[245]
(iii)     The hand logos........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[246]
(c)       VESA’s broader claims concerning confidentiality........ ........ ........ ........ ...	[253]
(d)      VESA’s claims concerning some of the retained materials........ ........ .......	[257]

PART E: COPYRIGHT........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[270]
(a)       Rulings on VESA’s proposed amendments........ ........ ........ ........ ........ ........	[272]
(i)       Ocelot photograph........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[280]
(ii)      Second stage hand logo and taglines........ ........ ........ ........ ........ ........ ........ .	[285]
(b)      Summary of relevant copyright issues........ ........ ........ ........ ........ ........ ........ .	[292]
(i)       Online application form........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[294]
(ii)       Paper application form........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[300]
(iii)      Online FAQs........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[320]
(iv)      Second stage hand logo........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[337]
(v)       Taglines........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[351]
(vi)      Email to professors........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[367]
(vii)      Ocelot photograph........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[373]
PART F: MISLEADING OR DECEPTIVE CONDUCT........ ........ ........ ........ ........ ..	[378]
(a)      Overview........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[378]
(b)      Outline of relevant legal principles........ ........ ........ ........ ........ ........ ........ ......	[381]
(c)       The conduct complained of by VESA........ ........ ........ ........ ........ ........ ........ ..	[385]
(d)       Representations concerning experience........ ........ ........ ........ ........ ........ ......	[388]
(i)        Experience representations on the promotional video........ ........ ........ .....	[389]
(ii)      Other individual experience representations........ ........ ........ ........ ........ .....	[394]
(e)      The testimonials........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[455]
(f)       The charity representations........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[471]
(i)     The parties’ submissions summarised........ ........ ........ ........ ........ ........ ........ ..	[472]
ROV website pages, Mosman Daily article, GlobaLove advertisement........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[472]
(ii)      Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[487]
ROV website pages........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[488]
Mosman Daily article........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[496]
GlobaLove Facebook page advertisement........ ........ ........ ........ ........ ......	[497]
(g)      Meta-tags and Google advertising words representations........ ........ ........ .	[499]
(i)       Summary of parties’ submissions........ ........ ........ ........ ........ ........ ........ .......	[499]
(ii)      Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[509]
Meta-tags........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[510]
Google ad words........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[513]
PART G: ACCESSORIAL LIABILITY........ ........ ........ ........ ........ ........ ........ ........ .....	[522]
(a)      Copyright........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[524]
(b)      Misleading and deceptive conduct........ ........ ........ ........ ........ ........ ........ .......	[537]
PART H: REMEDIES........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[549]
(a)      Copyright........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[550]
(b)       Misleading or deceptive conduct........ ........ ........ ........ ........ ........ ........ ........ .	[564]
(c)       Relief generally........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[580]

PART A: BACKGROUND FACTUAL MATTERS

5  It is convenient to set out relevant background factual matters which, I believe, are substantially uncontroversial.  I will deal separately with some relevant disputed factual matters and issues of credit.

(a)      VESA

6  At the time these proceedings were heard, VESA had the following three full-time employees:

1.Mr Thomas Constable-McDowell, who is the managing director of VESA;

2.Ms Shona Luciani, who is the wife of Mr Constable-McDowell and is also a current director of VESA; and

3.Ms Virginia Little, who is the mother of Mr Constable-McDowell and is employed as the ‘participant coordinator’ for VESA.

7  Ms Luciani and Mr Constable-McDowell met in Uruguay in January 2006.  They married in October 2010.  Ms Luciani and Mr Constable-McDowell first discussed setting up a business running volunteer eco tours on New Year’s Eve 2008, when they were holidaying in Crescent Head in NSW.  As a result of those discussions VESA was incorporated on 20 January 2009.  The VESA unit trust structure was established on 1 August 2009.  The beneficiaries of the VESA unit trust are the Constable-McDowell Family Trust and the Shona Luciani Family Trust. 

8  On incorporation, Mr Constable-McDowell was recorded as the sole director and shareholder of VESA.  Ms Luciani was added to the ASIC register as a director of VESA on 17 May 2012 (i.e. about two weeks before the hearing of these proceedings began).  Although Ms Luciani was not registered as a director with ASIC until 2012, she has been deeply involved in the management of the VESA business, together with Mr Constable-McDowell. 

9  Mr Constable-McDowell, although having travelled extensively, had never worked in the volunteer eco tourism industry prior to establishing VESA.  Ms Luciani had previously worked in that industry, having been employed by International Student Volunteers, Inc (ISV) as an ‘international recruitment coordinator’ between August 2006 and October 2008.  ISV is based in the USA.  It also runs travel programs involving volunteer work.  It is one of VESA’s main competitors.  Ms Luciani worked for ISV both in the USA and in Australia.  Her role as international recruitment coordinator for ISV involved organising the university recruitment schedule, and organising travel and accommodation for the recruiters. 

10                   Ms Luciani terminated her employment with ISV in September 2008 and worked out her 4 weeks’ notice period.  Upon leaving her employment with ISV she purchased for $300 the laptop which she had used during her employment there.  The day before Ms Luciani left ISV, ISV apparently took the laptop for 24 hours and removed some material from it before returning it to Ms Luciani. 

11                   Various ISV related documents were left on the laptop, including an ISV “recruiting schedule”, a “campus summary sheet” and a paper application form.

(b)      Proceedings brought by ISV in the USA

12                   Shortly after leaving ISV, Ms Luciani travelled to Ecuador in October 2008 and assisted a friend, Mr Sam Bailey, set up a business with the business name “Eco Surf Volunteers”.  Eco Surf Volunteers organised tours of approximately two weeks to Ecuador, where participants spent half the time surfing and the other half as volunteer teachers in a nearby local school. 

13                   On 20 October 2009, ISV filed proceedings in the Orange County Court in California against VESA, Ms Luciani, Mr Constable-McDowell, Mr Bailey and Eco Surf Volunteers alleging unfair business practices, unfair competition, intentional interference with prospective economic relations and misappropriation of trade secrets.  ISV ultimately discontinued the proceedings. 

(c)       VESA documents

14                   The following documents are used by VESA in its business operations.  These documents are the subject of VESA’s copyright claims (in addition to the copyright claims made in respect of logos and taglines discussed below) and some also figure in its claims of breach of confidence. 

(i)       VESA application forms

15                   VESA uses both online and paper application forms to recruit participants for its programs. 

16                   The paper application form used by VESA is said to have been created by Mr Constable-McDowell.  Mr Constable-McDowell gave evidence that he created the application form using a “blank cell document” which was created by Mr Bailey, into which Mr Constable-McDowell added the relevant content. 

17                   The respondents highlight that there are many similarities between VESA’s application form and the application form used by ISV.  The respondents allege that the VESA application form was copied from the ISV application form, which it says was retained on Ms Luciani’s computer after it was returned from ISV. 

18                   The online application form is said by VESA to have been created by Mr Sean St-Quentin of Culture Byte Pty Limited.  VESA engaged Mr St-Quentin in February 2009 to set up its website. 

(ii)      VESA frequently asked questions

19                   The VESA frequently asked questions (FAQs), which appear on the VESA website, are said to have been created by Ms Luciani whilst in Canada in February 2009.  Ms Luciani sought advice from her mother (who lectures in marketing and business management at a Canadian university) while drafting this document. 

(iii)     VESA’s email to professors

20                   VESA promotes its programs at universities through presentation sessions held on campus.  To organise such sessions, VESA’s practice is to approach a university contact person and ask that an email be sent to the student body giving information about VESA and advertising the time and location for a presentation session.  VESA uses a template email for this purpose which includes the email to the contact person, as well as the email for students (collectively, the email to professors).  The template is modified for use as appropriate.  Mr Constable-McDowell is said to have created the template for VESA in February 2009. 

(d)      Tom Jowett’s employment with VESA as a recruitment coordinator

21                   Tom Jowett graduated from La Trobe University with a Bachelor of Business degree, majoring in business management and marketing in mid-2009, aged 21. 

22                   Ms Luciani met Tom Jowett at the Hotel Mosman in November 2008, where they were both then working as bartenders.  At Ms Luciani’s 30^th birthday party, held at the Hotel Mosman in early July 2009, Ms Luciani introduced Tom Jowett to her then boyfriend Mr Constable-McDowell. 

23                   In mid-July 2009, Ms Luciani became aware that Tom Jowett intended to travel to Canada in August 2009.  After several discussions, Ms Luciani offered Tom Jowett some paid work as a contract recruiter for VESA.  This role involved promoting VESA’s tours at various Canadian universities.  Tom Jowett accepted that offer and on 16 August 2009 entered into an agreement with VESA entitled “VESA International Recruitment Coordinator Agreement”.  Clause 6 of that agreement provided that the duration of the contract was (subject to the start date being confirmed) from 9 to 25 September 2009.  Tom Jowett was to be paid $100 for every student he recruited from the designated university campuses he visited. 

24                   Ms Luciani provided Tom Jowett with “scripts” which he could use in making announcements at universities or adapt to suit his style if he wished.  There was both a short announcement to be made at the start of a lecture, as well as a script for longer presentation sessions.  Although the agreement specified that Tom Jowett would work between 9 and 25 September 2009, Tom Jowett ultimately undertook approximately 27 days of recruiting work at various Canadian universities from September to November 2009.  Tom Jowett was a very successful recruiter for VESA. 

(e)       Tom Jowett’s employment with VESA as associate marketing director

25                   Tom Jowett returned to Australia in February 2010.  In late March/early April 2010, Mr Constable-McDowell met with Tom Jowett at the Mosman Hotel and offered him full time employment as VESA’s associate marketing director.  Tom Jowett accepted that offer and commenced his employment with VESA on or about 12 April 2010, being paid from 10 April 2010. 

26                   As at April 2010, Tom Jowett’s employment contract consisted of oral discussions and emails.  In an email dated 6 April 2010 (the full terms of which are set out in [149] below), Mr Constable-McDowell stated that Tom Jowett would be paid a salary of $60 000 per annum plus superannuation and that VESA would provide a laptop and pay certain phone, internet and car expenses.  In that email, Mr Constable-McDowell also stated that “we will need a clause that says we have a mutual termination agreement within the first 3 months…” and that “we can work out a sales (increased sales) bonus commission structure also”.  It is evident that Tom Jowett was expecting VESA to provide him with a proposed written contract of employment.  In an email dated 9 May 2010 to him from Ms Luciani, she said that he would get an agreement as soon as things “settle down”, which is a reference to Ms Luciani being overseas at the time.  She told Tom Jowett that she would get an agreement to him the following week.  That did not occur.  Another email dated 24 June 2010 from Mr Constable-McDowell to Tom Jowett acknowledged that Tom Jowett had not been provided with a written contract or a job description, despite repeated requests. 

27                   After taking up the full-time position as associate marketing director, Tom Jowett also continued to undertake recruiting work for VESA at some Australian university campuses.  He recruited for VESA at the University of Notre Dame (Broadway campus) on Tuesday 13 April 2010.   In May 2010, he gave some presentations at the University of Queensland, along with Ms Rachel Ballantyne. 

28                   Ms Ballantyne had attended a VESA tour in January 2010 to the Amazon.  She was subsequently hired in May 2010 by VESA as recruitment coordinator.  Ms Ballantyne undertook recruiting work for VESA in Canada and the United Kingdom from August to November 2010.  In November 2010, Ms Ballantyne was appointed as a junior tour leader and accompanied Ms Luciani on a tour to Fiji. 

29                   Tom Jowett was also expected to undertake recruiting work for VESA in Canada from August to November 2010.  On or about 12 July 2010, an airline ticket to Canada was purchased for Tom Jowett, departing on 17 August 2010 and returning to Sydney on 15 November 2010.

30                   In mid-July 2010, Tom Jowett engaged a friend of his, Mr Joshua Stone, to create a spreadsheet for VESA on which could be recorded information taken from VESA application forms submitted in Canada.  The purpose was to compile a database which could be used for future marketing purposes by VESA.  On 12 August 2010, Mr Stone issued an invoice to VESA for his work.  He met with Ms Little on 19 August 2010 and gave her the spreadsheet on a USB stick.  He was paid in cash for his work. 

(f)      VESA’s working arrangements

31                   Tom Jowett worked from his family home in Cremorne in the same home office where both his father (Peter Jowett) and his brother (Ben Jowett) also worked.  In that office Ben Jowett had two Apple Macintosh desktop computers which he used for his financial services business, whose email address included the words “income guard”.  That was the name of Ben Jowett’s financial services business.  One computer had a 17-inch screen and the other a 21-inch screen.  There was also a large laser printer.  The two computers and the laser printer were connected to the same wi-fi network to which Tom Jowett connected when he was working for VESA at the home office. 

32                   VESA initially provided Tom Jowett with a Toshiba laptop with a Microsoft operating system.  Tom Jowett had asked for a Macintosh laptop, however, this request was refused as Ms Luciani and Mr Constable-McDowell wanted him to work on a PC with a Microsoft operating system.  Ms Luciani and Mr Constable-McDowell both worked on such PCs and they were concerned about compatibility issues between Macintosh and Microsoft computers.  Tom Jowett chose a Toshiba laptop with an 11-inch screen, selecting that size so that it would be convenient when travelling and undertaking recruiting work. 

33                   In April 2010, Ms Luciani met Tom Jowett at his family home to deliver some VESA materials and property which Tom Jowett would need to undertake his work while she was overseas.  Amongst other things, Ms Luciani dropped off a VESA-supplied printer, which was a small ink-jet printer.  The small ink-jet printer was not connected to the wi-fi network used at the Jowett’s home office. 

34                   In July 2010, Ms Luciani lost her laptop while she was travelling in Ecuador.  Ms Luciani said that she would take Tom Jowett’s Toshiba laptop in place of the one that she lost.  Mr Constable-McDowell brought the laptop to Ms Luciani when he met her in Africa in July 2010.  Ms Luciani then authorised Tom Jowett to purchase an Apple Macintosh laptop. 

35                   Ms Little also worked for VESA from her own home office.  She was assisted by a part-time administrative assistant, Ms Emma Fulton.  Ms Fulton worked two to three days per week and provided assistance, including answering phones, filing and sending out documents.  Ms Fulton also worked from Ms Little’s home office.  Ms Little worked as the participant coordinator for VESA and was the primary contact with customers.  A large part of her role was to send out booking forms to participants and to ensure that participants had fully booked and paid for their tours.  She also assisted Ms Luciani and Mr Constable-McDowell to monitor the general information email account. 

36                   When Ms Luciani and Mr Constable-McDowell were in Sydney, they worked from their residence in Cremorne.  As can be seen, VESA is essentially a small family-run business. 

(g)      Tom Jowett engages Fizzbuzz Pty Ltd

37                   In May 2010, Tom Jowett contacted Mr Roger Allsopp of Fizzbuzz Pty Ltd (Fizzbuzz), a company specialising in marketing communications, including advertising, graphic design, website design and marketing strategy.  VESA was seeking assistance with developing a uniform ‘look and feel’ for the VESA brand, marketing material and communications strategies with universities and university students. 

38                   On either 9 or 10 May 2010, Fizzbuzz emailed a proposal document and some quotations dated 7 May 2010 to VESA. 

39                   On 18 May 2010, Tom Jowett sent to his father a “project document” which set out information about VESA and its programs, with a view to developing a brand statement. 

40                   On 21 May 2010, Fizzbuzz emailed some further ideas for developing a logo, ‘tagline’ and an interim HTML email template.  In that email, Mr Allsopp stated that Fizzbuzz always treated client information with “100% confidentiality” and that the intellectual property in any of its work would “pass to our clients once the project has been paid for in full”. 

41                   On 23 May 2010, Tom Jowett, on behalf of VESA, accepted the Fizzbuzz proposal and asked for the work to proceed.  Tom Jowett sought Mr Constable-McDowell’s and Ms Luciani’s input into a ‘market position statement’ that had been requested by Fizzbuzz.  Ms Luciani and Mr Constable-McDowell each provided a market position statement. 

42                   On 6 July 2010, Mr Allsopp emailed Tom Jowett to say that he had considered the position statements and had come up with a simplified version of a position statement, along with the following eight ‘brand statement options’ or ‘taglines’:

Change your life by changing someone else’s.

Change your life with an adventure.

Have a life-changing adventure.

Adventure can change your life / can change lives.

Travel like there’s a tomorrow.

You can change the world with travel.

One adventure could change the world. 

43                   On 7 July 2010, Mr Allsopp on behalf of Fizzbuzz emailed 10 logo concepts to Tom Jowett and asked for feedback on them.  The third of these logo concepts was a hand silhouette with spirals on it (first stage hand logo). 

First stage hand logo

44                   The first stage hand logo concept also included the tagline “Change the world, one adventure at a time” printed under it, which was not one of the taglines put forward by Fizzbuzz the previous day. 

45                   On 8 July 2010, Tom Jowett forwarded by email to his father a copy of Ms Luciani and Mr Constable-McDowell’s market position statements, a copy of Fizzbuzz’s simplified position statement and the eight taglines, and a draft “mission statement” for VESA which he had prepared.  He later discussed with his father how to draft a mission statement and further refined this document (see [49] to [51] below). 

46                   Also on 8 July 2010, shortly after sending the documents to his father, Tom Jowett sent an email to Mr Allsopp and provided positive feedback on four of the logo concepts, including the first stage hand logo pictured above.  However he raised with Mr Allsopp his concerns that, in respect of the hand logo, “with all the swirls and darkness in it… you would lose the sense of the swirls… and the hand itself” when the logo was printed in low quality on flyers. 

47                   On 9 July 2010, Mr Allsopp prepared the second stage hand logo himself using an internet image of a hand silhouette and superimposing a spiral design (the second stage hand logo).  Mr Allsopp said in his email that the hand logo was “intended to resemble indigenous art applied to the hand silhouette, so I have simplified the drawing style to help communicate this”.  There were four second stage logos provided in total.  Mr Allsopp gave evidence that he created the second stage logo for VESA pursuant to a quote to “completely redesign a brand logo”. 

Second stage hand logo

48                   On 11 July 2010, Tom Jowett sought assistance from his father to develop a document which compiled the logos provided by Mr Allsopp in one table so that he could show it to Mr Constable-McDowell and seek feedback. 

49                   Also on 11 July 2010, Tom Jowett revised his draft mission statement for VESA, sending the revised copy to his father.  The last line of that mission statement read:

VESA is changing the world, one village at a time.

50                   On 12 July 2010, Tom Jowett forwarded that further revised version of the mission statement to his father.

51                   Tom Jowett further revised the mission statement on 13 July 2010, after discussing it with his father.  The amendments included slightly amending the last line of the statement to read:

VESA.  Changing the world, one village at a time.

52                   Around 13 July 2010, Mr Constable-McDowell met with Tom Jowett in Neutral Bay to discuss VESA’s branding, the logos and taglines.  They came up with a shortlist of three tagline options derived from what Mr Allsopp had suggested.  Tom Jowett emailed that shortlist to Ms Luciani and Mr Constable-McDowell on 13 July 2010 for them to discuss and get back to him.  That shortlist was as follows, noting that the second and third taglines were not included in Mr Allsopp’s original list of taglines described above:

Change your life by changing someone else’s.

Change the world, one community at a time.

Have an adventure.  Change the world, one village at a time.

53                   An email discussion then ensued between Ms Luciani (who was overseas), Mr Constable-McDowell and Tom Jowett over the next three days, culminating in Ms Luciani saying (on 16 July 2010) that she preferred the tagline ‘Change your life by changing someone else’s’, which is the tagline that VESA continued to use at the time of the proceedings. 

54                   On Friday 16 July 2010, Tom Jowett and Mr Constable-McDowell met at the New Orleans Café in Crows Nest to discuss the proposed logos.  Tom Jowett showed Mr Constable-McDowell a document he had prepared displaying the logos in one table.  From those, Mr Constable-McDowell selected the logos that he liked.  Tom Jowett says that he told Mr Constable-McDowell at this meeting that he was being assisted in his work for VESA by his father.  Mr Constable-McDowell denies that part of their conversation.  I will deal with that matter in the section dealing with disputed facts. 

55                   On 18 July 2010, Tom Jowett sent an email to his father which contained a draft of an email which was later sent to Ms Luciani and Mr Constable-McDowell.  The email set out the reasons why he thought the VESA logo should be changed, and attached the four logos which Mr Constable-McDowell had chosen at the meeting at Crows Nest.  None of these logos was the second stage hand logo.  Tom Jowett sent the email attaching the logos to Ms Luciani and Mr Constable-McDowell on the following day, 19 July 2010. 

56                   Mr Constable-McDowell responded to Tom Jowett on the same day and said that both he and Ms Luciani were not in favour of changing the VESA logo and that he should not spend any more time on the logo rebranding.  Ms Luciani confirmed that instruction by a further email on 24 July 2010. 

57                   After 19 July 2010, no further work was done on the logo project.  Fizzbuzz did not issue VESA with an invoice for payment for the work it had done until 3 November 2010, when Fizzbuzz was contacted by VESA’s solicitors who offered to purchase the intellectual property rights in certain artistic works comprising logos that were set out in a letter and schedule prepared by the solicitors.  Fizzbuzz issued an invoice for $330 dated 3 November 2010 and was paid accordingly.  The description of the work provided on the invoice was: “Present ideas for new VESA logo designs”. 

(h)      Tom Jowett’s emails to his father

58                   Throughout his role as associate marketing director, Tom Jowett emailed various documents to his father, Peter Jowett, usually at the email address “[email protected]. au” (which was the email address for Ben Jowett’s business).  Tom Jowett gave evidence that he emailed these documents to his father for a variety of reasons, including seeking assistance on the substantive content of documents he was preparing, as well as proofreading. 

59                   In addition to the documents sent to his father in connection with the rebranding work described above, Tom Jowett sent the following documents by email to his father during the course of his role as associate marketing director at VESA:

·a business plan created by Tom McDowell in February 2010 which included plans for VESA’s future growth such as tours in South Africa and Laos;

·a strategy paper which Tom Jowett drafted himself and also sent to Ms Luciani and Mr Constable-McDowell, which included projected sales figures and a recruiting schedule;

·a marketing strategy flow diagram;

·a strategic document setting out potential locations for VESA tours to South Africa, including St Lucia;

·a contact list of students who applied to participate and/or did participate in VESA tours; and

·VESA’s presentation speech scripts, which had been provided to him on 19 August 2009 and 15 March 2010.

(i)        Virginia Little and Tom Jowett’s working relationship

60                   Between May and August 2010, Ms Little and Tom Jowett had some difficulty working together.  There was a dispute in late June 2010 relating to who should have the final say on documents which were sent out to participants.  In particular, there was a dispute concerning a group flight booking form.  Tom Jowett had amended the form consistently with his marketing strategy.  Ms Little took the view that Tom Jowett’s form might be misleading to the participants and she amended the form accordingly, sending the form out to participants without further consultation with Tom Jowett. 

61                   In the months following this dispute, some steps were taken by Mr Constable-McDowell and Ms Luciani to provide Tom Jowett and Ms Little with position descriptions describing their respective roles with VESA.  During this period Tom Jowett also initiated steps to formalise a contract of employment with VESA.

(j)       VESA and Tom Jowett’s contract negotiations

62                   On 20 July 2010, Tom Jowett prepared a draft contract of employment which he sent by email to Ms Luciani and Mr Constable-McDowell for review (the 20 July draft).  The 20 July draft was prepared using Ms Luciani’s previous contract of employment with ISV.  Tom Jowett’s position description was described as follows:

While employed as Associate Director Marketing, the Employee’s job description and duties are as follows: Responsibility for the development and implementation  of all aspects of the marketing program including but not limited to brand design and development, communication strategy, website development and oversight, implementation of the strategic direction of the company via the marketing program.  In addition the Employee will be expected to act as the senior responsible officer of the company for all decision making during any period in which Shona Luciani and Thomas Constable-McDowell are not both located in Australia or are otherwise not contactable.  (Emphasis added).

63                   In the 20 July draft contract, Tom Jowett requested a $50 daily allowance for additional expenses for each day spent away from home, that the standard of accommodation be 3 star (and up to 4 star where there was no suitable 3 star alternative), and that a $2.00 commission be paid for each contract form received at the VESA office. 

64                   This draft contract underwent various revisions between 1 August and 7 August 2010, particularly regarding the terms dealing with travel allowances.  On 1 August 2010 Ms Luciani and Mr Constable-McDowell sent Tom Jowett a revised contract (the 1 August version).  In that version, the standard of accommodation was to be 2 star (and up to 3 star where there was no suitable 2 star alternative) and there was no provision for any daily travel allowance.  There was a commission of $10 for each “contract form” received at the VESA office which was the “direct result” of Tom Jowett recruiting at a university.  The 1 August version also added a sick leave clause and the intellectual property ownership clause was redrafted. 

65The 1 August version also altered the position description as follows:

While employed as Associate Director Marketing, the Employee’s job description and duties are as follows:

Responsibility for the development and implementation of all aspects of the marketing program including but not limited to brand design and development, communication strategy, website development and oversight, implementation of the strategic direction of the company via the marketing program.  In addition the Employee will be expected to act as the delegate of Thomas Constable-McDowell when he is not contactable and the situation is such that a decision should be made.  (Emphasis added).

66                   On 1 August 2010, Ms Luciani also sent Tom Jowett a separate document entitled “position statement”.  That position statement included the following statements:

Knowledge, Skills and Abilities

…

·     Work collaboratively and efficiently as a team member.

·     Work collaboratively with participant coordinator on any documents that will be sent out to potential existing or past participants.

·     Send through all final copies of documents for final approval to a VESA director.  (Emphasis added). 

67                   In response to the 1 August version of the proposed contract of employment, Tom Jowett sent an email to Mr Constable-McDowell dated 3 August 2010 stating that he was willing to forego the commission in favour of a daily food allowance while travelling.  He also said that he believed that they had agreed that he would be able to seek out accommodation up to 4-star if there was no other suitable accommodation of a lower standard. 

68                   On 4 August 2010, Mr Constable-McDowell sent Tom Jowett a further revision of the proposed contract (the 4 August version).  The 4 August version added a food allowance of $30 per day Monday to Friday, removed the commission and added to the accommodation clause a statement that “if from time to time the Employee is without a satisfactory accommodation option they are entitled to seek an appropriate alternative at their discretion”.  The job description clause remained unchanged.  Tom Jowett was asked to sign and return the amended contract by close of business on 6 August 2010. 

69                   In response to the 4 August 2010 version, Tom Jowett sent an email at 5:34 pm on 6  August 2010 to Mr Constable-McDowell stating:

I have read through everything you have had to say with the follow-up email and contract.  This is my position, I could negotiate $40, then you would come back to me with a reduced figure than $30 for the entire week.  And we would cause frustration between the both of us before we achieve a final result. 

I will compromise with $30 for the entire 7 days per week.  I will not budge on this.

I can have the contract signed tonight, but that is my position.

70                   The final iteration of the proposed contract was sent by email from Mr Constable-McDowell to Tom Jowett on 7 August 2010 (the 7 August version).  The food allowance was changed to $30 per day seven days per week.  The accommodation and job description clauses were unchanged.  Tom Jowett was asked to print the attached revised version of the proposed employment contract, and to sign and return it via email.  Mr Constable-McDowell said that he would do the same when he had access to technology.  

71The 7 August version was never signed by either party. 

72                   All the draft versions of the proposed contract stated that Tom Jowett was required to provide 4 weeks’ notice to terminate his employment.  All draft versions also included provisions regarding the use and protection of confidential information and ownership of intellectual property. 

73                   On 10 August 2010, Tom Jowett gave notice of his resignation from VESA by email to both Mr Constable-McDowell and Ms Luciani.  His email included the following statements:

As I have mentioned in the past, I cannot work under the current conditions.  I was offered the job with the responsibility over marketing and, in essence, to give you guys a hand in setting up the marketing side of the business.  Given the current structure of the business I cannot continue to work for VESA.

I have spoken to you both about the current reporting structure of the business.  I made it very clear in my last email on this topic that I could not and would not work in this situation.  Your response has been to assure me that it will be OK, however it only seems to get worse.  I have read my new Position Description and I see that I now have another individual in the marketing process that does not report to me.  I made it clear that this does not work.  It is clear that this is how you want it to be.  So be it. 

You should understand that another opportunity has arose (sic) and that I have taken it.  This is not personal, I need a professional working environment and the current structure is not what I had imagined. 

74                   After a telephone conversation later that day between Tom Jowett and Mr Constable-McDowell (who was in South Africa with Ms Luciani at the time), it was agreed that Tom Jowett would continue his employment with VESA until the end of the current pay cycle, namely until Friday 13 August 2010. 

75                   On 10 August 2010, Tom Jowett also emailed Mr Allsopp to inform him of his resignation and to provide the email addresses of Ms Luciani and Mr Constable-McDowell for future correspondence with VESA.  Tom Jowett’s email included the following statement:

I have really appreciated the work that you have designed, and am currently in the process of starting my own business.  I would like you to help with designing the marketing materials for that.  It will also be in the ecotourism market so conflict issues will arise and I am aware that you may not be able to accept work from me.  However, if your situation changes in the future please make contact with me as I will be on the look out for a good marketer to assist in growing my business. 

76                   Tom Jowett returned VESA’s property and merchandise to Ms Little on 13 August 2010, including his VESA-supplied laptop.  After resigning from VESA, but prior to returning his VESA laptop to Ms Little, Tom Jowett copied the contents of his VESA email account (his inbox and sent items folder, including some attachments) onto a USB stick, which he retained.  The parties are in dispute as to Tom Jowett’s reasons for copying those documents. 

77                   Tom Jowett did not travel to Canada on 17 August 2010 on the ticket which VESA had purchased for him.  No refund was ever obtained for the ticket, either by Tom Jowett or VESA. 

(k)      ROV

78As noted above, ROV was incorporated on 26 August 2010 by Ben Jowett. 

79                   The internet domain name “rovolunteers.com” was registered by Ben Jowett on 17 August 2010 and the ROV website went live (using that domain name) in mid-September 2010.  ROV uses the tagline: “Reach Out Volunteers: Changing the world, one village at a time” on its promotional material and its website, and has done so since the website was launched in September 2010.  It also uses a hand logo as a marketing tool which is substantially similar to the second stage hand logo (see [339] below). 

80                   ROV usually conducts programs in two parts.  Both parts consist of volunteer work.  The first part, which takes place during the first week of a two week program, involves community development work.  The second week of such a program, at least in South Africa, involves wildlife conservation work.  There is no adventure activity component as in the VESA programs.  ROV uses local contractors for both components of its programs.  For example, in South Africa, the ROV wildlife conservation program is conducted by Wildlife ACT. 

81                   On Monday 16 August 2010, Tom Jowett booked a flight to South Africa and the USA.  He departed on 18 August 2010 for South Africa with the purpose of establishing a ROV tour there, including looking for suitable activities and accommodation.  He had previously travelled to South Africa in around June 2010 on behalf of VESA with a view to establishing a South African program for VESA.  His visit then included travelling to St Lucia and gathering information about various potential activities, including at the St Lucia Game Reserve.  The evidence is unclear as to whether Tom Jowett had any contact with Wildlife ACT during his visit on behalf of VESA, as opposed to his subsequent visit on behalf of ROV. 

82                   Returning now to Tom Jowett’s subsequent visit to South Africa on behalf of ROV in August 2010, on 2 September 2010, he left South Africa and travelled to the USA to undertake recruiting work for ROV.  He returned to Australia on 11 December 2010. 

(l)        The ROV “dry run” in South Africa

83                   Tom Jowett was in South Africa between 18 August 2010 and 2 September 2010.  He met with a friend from high school, Ms Victoria Doyle, who had been living in St Lucia.  Ms Doyle was involved in running a horse riding business.  

84                   Ms Doyle introduced Tom Jowett to Mr Chris Viviers who ran the “Bibs Backpackers” Hostel in St Lucia.  Mr Viviers was providing accommodation to VESA.  Mr Viviers told Tom Jowett that he could not do business with him because he was working for VESA.  He said that VESA had put a specific clause in his contract that he should not talk with Tom Jowett. Mr Viviers provided to Tom Jowett the name of a guide whom he could contact. 

85                   Shortly after arriving in St Lucia, Tom Jowett was joined by his friend, Mr Scott Barros and his brother Ben Jowett.  While in South Africa, Tom Jowett also met Ms Jo Aylett.  Tom Jowett, Mr Barros and Ms Aylett (and possibly Ben Jowett) undertook various activities with a view to establishing locations and programs for future ROV tours (“the dry run”).  Such activities included participating in a game drive at the St Lucia Game Reserve, horse riding (with Ms Doyle’s business), snorkelling and going on a “barge cruise”.  They also visited and undertook volunteer work in a local community school in the area surrounding St Lucia.  Some of these activities were subsequently used on ROV tours, including activities relating to wildlife conservation.  It appears that the game drive at the St Lucia Game Reserve was organised by Wildlife ACT, the company which ROV subsequently engaged to conduct that component of its own program in South Africa.  While he was in South Africa in August 2010, Tom Jowett met with Mr Simon Morgan and Mr Johan Maree of Wildlife ACT.

86                   Mr Barros and Ms Aylett were not employees of ROV while undertaking the trial activities in August 2010.  They both later became employees of ROV and acted as team leaders on ROV tours.  Mr Barros was first employed to undertake recruiting work in September 2010.  Ms Aylett was first employed to lead tours for ROV between 9 and 23 July 2011. 

(m)     Recruiting in the USA

87                   As noted above, on 2 September 2010, Tom Jowett left South Africa and travelled to the USA.  There, he promoted ROV’s activities and programs at universities.  Ben Jowett did not accompany Tom Jowett to the USA.  While recruiting in the USA, Tom Jowett used paper application forms.  He admitted to copying the VESA application form for this purpose.  Tom Jowett said that from late January-early February 2011, ROV did not use paper application forms, rather it used only an online form.  The effect of this evidence is that ROV only used the VESA-copied application form for a limited time and only in the United States. 

(n)      Engagement of Roger Allsopp

88                   In August 2010, Ben Jowett on behalf of ROV contacted Mr Allsopp of Fizzbuzz to design a website and create logos for ROV.  Tom Jowett gave evidence that Ben Jowett negotiated the design of the logos with Mr Allsopp and that he had no involvement in choosing the logo.  As noted above the logo ultimately chosen for ROV was substantially similar to the second stage hand logo designed for VESA.  

PART B: DISPUTED FACTS AND SOME ISSUES OF CREDIT

(a)       Summary of VESA’s submissions

89                   Ms Chrysanthou (who appeared together with Ms Styles on behalf of VESA) submits that, in large measure, the documents tendered in the proceedings are sufficient to establish its various causes of action.  In those circumstances, VESA submits that the credit of witnesses plays only a “limited role” in the matter.  Nevertheless, VESA submits that credit findings may need to be made in respect of witnesses concerning the following issues:

(a)the conversation between Mr Constable-McDowell and Tom Jowett on 7 April 2010 concerning his terms of employment;

(b)whether or not, after July 2010, VESA authorised Tom Jowett to send the retained materials to his father or brother;

(c)the creation of some of the works in which copyright is claimed;

(d)the conversation between Ms Little and Mr Stone in August 2010 concerning Tom Jowett’s possession of the database created by Mr Stone on behalf of VESA;

(e)the conversations which Tom Jowett claims he had with Ms Luciani and Mr Constable-McDowell in March and early April 2010 concerning the difficulties of his working relationship with Ms Little; and

(f)Tom Jowett’s denials that he has concocted reasons for why he sent documents to the email address of his brother, Ben Jowett.

(i)        Issues concerning production of documents

90                   Another issue which VESA says goes to the credit of the respondents generally and to the question of remedies (including flagrancy damages and the Court’s discretion to grant or withhold injunctive relief), relates to the alleged failure of the respondents to meet their discovery obligations.  In particular, VESA places emphasis on the practice adopted by the respondents of “saving over” previous versions of electronic documents notwithstanding that they must have been aware of the threatened proceedings in August 2010.  They also allege that the practice continued after the proceedings commenced in March 2011.  VESA says that this practice has resulted in the respondents not being able to discover earlier versions of the ROV website which contained many of the misrepresentations and testimonials complained of.  They also point to the respondents’ failure to produce management accounts, BAS statements etc. 

91On the subject of document production, VESA also draws attention to the following matters:

(a)Mr Allsopp was unable to produce documents under subpoena because of a computer failure; and

(b)he wrote over and amended documents forming part of the ROV website in circumstances where ROV had never asked him to do otherwise, even though the proceedings were either threatened or had commenced. 

92                   While VESA acknowledges that the respondents have put forward several reasons for their failure to produce documents, it urges the Court to draw adverse inferences against the respondents in respect of these matters.  

93                   VESA invites the Court to make adverse findings on the credibility of both Tom Jowett and, to a lesser extent, Mr Allsopp.  I will summarise VESA’s submissions concerning the credit of both those witnesses. 

(ii)      Tom Jowett

94                   VESA makes strong submissions in respect of the credibility of Tom Jowett.  It submits that he is a person “who is willing and capable of lying when it suits him”.  VESA strongly criticises Tom Jowett’s credit by reference to the statements he made when he announced his resignation from VESA.  His statement to Mr Constable-McDowell at that time to the effect that he had been offered a job somewhere else is described as “a complete fabrication”.  VESA also draws attention to the fact that, less than an hour after Tom Jowett sent his resignation email on 10 August 2010 to Mr Constable-McDowell, Tom Jowett informed Mr Allsopp by email that he was “currently in the process of starting my own business… it will also be in the eco tourism market… conflicts will arise and I am aware that you may not be able to accept work from me”.  Furthermore, VESA attacks Tom Jowett’s oral evidence in cross-examination about these matters, when he denied that he had decided at that time to start up his own business.  VESA says that Tom Jowett’s claim that he did not decide to establish ROV until over the course of the weekend of 14 and 15 August 2010 (i.e. following his last day with VESA on 13 August 2010), is inconsistent with the fact that he prepared a spreadsheet with costings for his proposed business at about 11:00 am on 11 August 2010. 

95                   VESA further challenges Tom Jowett’s credibility by reference to the representations he made concerning ROV’s experience in conducting tours, which is said to illustrate his dishonesty and propensity to make false representations. 

96                   VESA also urges the Court not to accept Tom Jowett’s explanation as to why he sent VESA documents to the email address of his brother, Ben Jowett.  VESA submits that his explanation to the effect that he did not purchase any software with his original laptop in order to save VESA additional expense should not be accepted because the evidence demonstrated that he had in fact spent an additional $179 on a software program “Microsoft Office Home and Student”, which was said to be an adequate alternative to the “iWorks” program he preferred to use by accessing his brother’s computer.  VESA complains that, despite Tom Jowett’s earlier evidence that the two programs were “very similar” and that he preferred iWorks, when budgeting for the purchase of a new computer for his new business ROV, he selected Microsoft Office, not iWorks.  VESA also says that the Court should not accept Tom Jowett’s explanation that he forwarded VESA documents to Ben Jowett’s email address in order to take advantage of his brother’s superior printer, compared with that which he had been issued by VESA.  All that evidence is said by VESA to be “totally irrelevant” because it says that other evidence demonstrated that Tom Jowett did not need to email documents to Ben Jowett’s email address in order to print them on the larger printer. 

97                   In further challenging Tom Jowett’s credibility, VESA draws attention to what are said to be other inconsistencies in his evidence (which was given over the course of almost four hearing days, the bulk of which was taken up by cross-examination).  VESA points to the following matters:

(a)while saying that he had had his first conversation with Mr Allsopp about the latter working for ROV in August 2010, he later said that he did not speak directly with Mr Allsopp in August 2010 about the logo; and

(b)while claiming that his brother, Ben, was in charge of designing the hand logos and that Tom Jowett did not make any suggestions, this was inconsistent with his earlier evidence that his brother Ben was simply the “conduit” through which he passed information to Mr Allsopp. 

98                   VESA urges the Court to prefer the evidence of Ms Luciani and/or Mr Constable-McDowell to that of Tom Jowett on the following matters:

(a)whether or not Tom Jowett told Mr Constable-McDowell that Peter Jowett was helping his son with his work for VESA;

(b)Tom Jowett’s insistence that he was to be the person in control of VESA while Ms Luciani and Mr Constable-McDowell were both away; and

(c)while Tom Jowett claimed that he had raised this matter with both Ms Luciani and Mr Constable-McDowell in March and April 2010, he did not produce any emails to support that claim.  VESA says that if this matter was so important to him it would have been recorded in a contemporaneous email. 

99                   VESA says that Tom Jowett’s credibility is further undermined by his admission that he copied ISV documents from Ms Luciani’s former ISV laptop and used that material to create a recruiting schedule for VESA, in circumstances where Ms Luciani specifically denied authorising Tom Jowett to use that material.  Tom Jowett accepted in cross-examination that the only document he was ever authorised to use from Ms Luciani’s former ISV laptop was her old ISV employment contract. 

100                  Finally, VESA submits that, because neither Peter nor Ben Jowett was called to give evidence, the Court should infer that their evidence would not have assisted the respondents’ case. 

(iii)     Roger Allsopp

101                  While submitting that Mr Allsopp was, for the most part, an honest witness, VESA contends that he was not forthright in his evidence concerning his dealings with VESA in that:

(a)he dealt with ROV despite being aware of the conflict of interest which that created for him vis-à-vis VESA;

(b)as the sole director of Fizzbuzz, he promised VESA that he would not do work for Tom Jowett in eco tourism for one year from 23 August 2010, yet he clearly broke that promise and failed to disclose to VESA that he was working for ROV;

(c)the Court should not accept his attempts to explain his association with ROV by drawing the distinction which he advanced between promises made by him on behalf of the corporate entity Fizzbuzz, as opposed to him acting in his personal capacity for ROV.  In this respect, attention is drawn to the fact that, in his email dated 30 August 2010, he provided quotations to ROV as Fizzbuzz, and also that he consistently used the Fizzbuzz email address when dealing with ROV; and

(d)he purported to create a hand logo for ROV, when the copyright in that logo was VESA’s and in circumstances where, given the feedback he had received, he must have known that VESA was particularly interested in the hand logo.

102                  Accordingly, in the light of these matters, VESA submits that, where Mr Allsopp’s evidence is contradicted by any document, preference should be given to the documentary evidence. 

(b)      Summary of respondents’ submissions

103                  Mr Gration, who appeared on behalf of the respondents, agreed that most of the issues in dispute between the parties were capable of being resolved by reference to documents.  He submitted, however, that the Court should make adverse findings in respect of some of Ms Luciani’s evidence, particularly her evidence relating to the use of ISV documents which were retained on her ISV laptop, as well as her conduct in assuming the pseudonym of “Sandra Moore” for the purpose of extracting information from ROV.  

104                  There are two particular disputed matters in respect of which the respondents also say that the evidence of Tom Jowett is to be preferred to that of either Mr Constable-McDowell or Ms Luciani.  The first relates to the issue whether Tom Jowett told Mr Constable-McDowell that he was sending VESA materials to his father for his advice and assistance.  Tom Jowett gave evidence to the effect that he informed Mr Constable-McDowell of these matters at a meeting between them at the New Orleans Café in Crows Nest on 16 July 2010 before Mr Constable-McDowell flew out to South Africa.  He said that at that meeting he showed Mr Constable-McDowell a flow chart, as well as the proposed hand logos.  He said that Mr Constable-McDowell was impressed with the flow chart which Tom Jowett had prepared, at which point Tom Jowett says he said words to the following effect:

My father helps me with these works, because he has got so much experience in the area.  He did years of marketing and was a solicitor, and so he helped me produce this. 

105                  In cross-examination, Tom Jowett agreed that Mr Constable-McDowell had not granted him permission to enlist his father’s help.  But when asked under re-examination how Mr Constable-McDowell responded when he was told that Tom Jowett was getting help from his father, Tom Jowett said:

There was no, “that’s great”, but there was no, “I have got no problems with that”.  Just conversation just kind of rolled on.

106                  It was directly put to Mr Constable-McDowell in cross-examination that Tom Jowett had told him, shortly before Mr Constable-McDowell flew to South Africa, that his father had been helping him with some of his work.  Mr Constable-McDowell’s response was to say “that’s absolutely false”.  When it was put to him that it must have been obvious that a person of Tom Jowett’s age, fresh out of university and with no practical experience in marketing could not have produced work of the quality that he did without outside help, Mr Constable-McDowell said that it was a “complete and utter falsehood” to suggest that this was obvious to him. 

107                  The second matter relates to whether or not Ms Luciani was aware of the office arrangements at the Jowett family home in Cremorne whereby Tom Jowett worked in close proximity in the same room to both his father Peter and his brother Ben.  Ms Luciani denied any knowledge of those arrangements.  Tom Jowett gave evidence to the effect that Ms Luciani had visited his family home in Cremorne and had been shown the office set-up.  He says that he introduced her to Ben in the room used as an office. 

108                  For reasons which are given below at [117] and [119], I prefer and accept Tom Jowett’s evidence on both those matters. 

(c)      Consideration

109                  In my view, it is unnecessary to make findings on credit in relation to all the matters raised by VESA.  I will now deal, however, with the matters of some potential significance. 

(i)        Issues concerning production of documents

110                  I do not accept VESA’s contention that adverse findings should be made in relation to the respondents’ credit because of their failure to produce some documents which VESA says were properly discoverable.  VESA’s primary complaint is directed to ROV’s practice, which was introduced around September 2010, of saving over earlier documents rather than creating new and separate documents, which had the effect of automatically deleting earlier versions of a document.  VESA complains that this practice, which it describes as a “document destruction policy”, resulted in the deletion of potentially relevant documents, such as other testimonials or other representations which it claims may have been misleading or deceptive. 

111                  Tom Jowett gave evidence, which I accept, that the practice of saving over earlier documents was introduced and maintained in order to reduce space on ROV’s “cloud” electronic storage system.  I do not consider that the practice warrants any adverse finding for the credit of Tom Jowett or any of the other respondents.  Nor do I accept VESA’s argument that the practice ought to have changed after Tom Jowett was put on notice by a letter dated 26 August 2010 from VESA’s solicitors, which raised the prospect of litigation.  That letter contained some intemperate language.  It also wrongly asserted that VESA was entitled to set-off the lost value of Tom Jowett’s air ticket to Canada from his unpaid VESA wages.  In my view, nothing in that letter should have caused Tom Jowett or ROV to adopt a different storage practice.  The practice was not implemented or maintained with the intention of depriving VESA of potentially relevant documents.  Ideally, the practice ought to have been reviewed after the proceedings were commenced in March 2011, but the failure to do this does not, of itself, warrant the serious adverse findings sought by VESA. 

112                  Nor do I accept VESA’s submission, which was only faintly put, that an adverse inference should be drawn against Mr Allsopp because of his inability to produce certain documents in response to a subpoena.  I unreservedly accept Mr Allsopp’s explanation that that inability resulted from a major computer failure which was beyond his control.  The comments above concerning ROV’s practice of saving over documents apply equally to Mr Allsopp’s similar practice while working on ROV’s website. 

(ii)        Tom Jowett

113                  It is appropriate if I now make some findings and general observations regarding Tom Jowett’s evidence. 

114                  Tom Jowett was about 22 years old when the relevant events occurred in 2010.  Over the course of him giving evidence over almost four days, he came across as being an intelligent and honest man.  He showed that he had a good memory of events.  Nevertheless, when he had any difficulty recollecting a particular event he did not hesitate to say so or seek to reconstruct events.  He tried to tell the truth.  He was not evasive.  He did not take opportunities to advance his own case.  Several times in cross-examination, he made admissions and concessions even though it was clear that they harmed his case.  He candidly acknowledged that some of his actions had been wrong, such as copying and using VESA’s paper application form in the early stages of ROV’s operations in North America, and also the inaccuracies in some of the representations made in ROV’s marketing materials about its experience.  Tom Jowett also candidly admitted that ROV’s e-mail to professors was written by him using VESA’s document as a precedent. 

115                  It is apparent that, while he worked with VESA, he relied heavily on his father not only to check his work, but also to provide creative input and to make his work look better than would have been if he had done it alone. 

116                  As will emerge throughout these reasons for judgment, I do not accept that the matters raised by VESA warrant an adverse finding concerning Tom Jowett’s credit.  On the contrary, he impressed me as a witness of truth.  Many of the matters raised by VESA in attacking his credit are not borne out by a close examination of the evidence.  For example, the alleged inconsistencies in Tom Jowett’s evidence relied on by VESA (see [97] above), are either without foundation or are seriously overstated.  In my view, there is no inconsistency in his evidence regarding his dealings with Mr Allsopp.  It is entirely plausible that he spoke at a general level with Mr Allsopp in August 2010 about Mr Allsopp working for ROV (as raised in Tom Jowett’s email dated 10 August 2010), while not speaking with Mr Allsopp about the specific topic of logos.  And as to the claimed inconsistency in Tom Jowett’s evidence that his brother Ben was in charge of designing the logos and Tom Jowett’s earlier evidence that Ben was merely a “conduit” through which Tom Jowett passed information to Mr Allsopp, the following points should be noted:

(a)his evidence that Ben Jowett was in charge of developing the logos was given in the express context of “the period of August of 2010”;

(b)his evidence concerning Tom Jowett being a “conduit” (incidentally, a word which was put to him by the cross-examiner and accepted by him) related to the subsequent period when Tom Jowett had gone to the USA and Ben Jowett had returned from South Africa to Australia;

(c)furthermore, the specific context of his evidence relating to this latter period was not the logos as such, but more generally the development of flyers, posters and banners; and

(d)in any event, the alleged inconsistency was never directly put to Tom Jowett for comment. 

117                  Turning now to deal with some of the important disputed issues of fact, I accept Tom Jowett’s evidence that Ms Luciani visited him at his home and, at her request, he showed her the office arrangements which indicated that he worked there in close proximity to his father Peter and his brother Ben.  I do not accept Ms Luciani’s claim that she was unaware of those arrangements.  

118                  I also accept Tom Jowett’s evidence concerning his practice of forwarding documents to his father and the purpose for which he did so.  In my view, there is no evidence to support a finding that there was a conspiracy involving Tom Jowett and members of his family to steal VESA’s materials in order to establish a rival business.  Tom Jowett’s explanation for sending VESA’s material to the income guard email account is credible.  I accept that he was either sending the material to the bigger iMac screens or to enable him or his father or both of them to work on draft documents.  It is also plausible that he would send the material to various email accounts in order to check for any problems with the presentation of documents. 

119                  I prefer Tom Jowett’s account of his meeting with Mr Constable-McDowell at the New Orleans Café in Crows Nest in July 2010.  I accept his evidence that he then told Mr Constable-McDowell that he was getting help from his father.  It was at that meeting that he showed Mr Constable-McDowell the flow chart which he and his father had prepared, together with other materials, such as some of the hand logos and taglines in which his father had had some input.  It is understandable that he would feel embarrassed that this was not all his own work and that it was an appropriate time for him to disclose to Mr Constable-McDowell that he was getting help from his father.  For reasons which I will give below, I did not always find Mr Constable-McDowell to be a sound or convincing witness. 

543                  As to the question of Tom Jowett’s accessorial liability, that matter has to be approached by reference to the individual representations which have been found to contravene the relevant legislation.  As to representation (v), which I have found was likely to mislead or deceive, the author has not been identified in the evidence.  Although the email was sent by someone acting on behalf of ROV, there is no evidence that Tom Jowett was the author or that he otherwise had actual knowledge of the contents of the email.  Accordingly, there is no evidence to support a finding that he is an accessory to ROV’s contravention. 

544                  Turning now to consider whether Tom Jowett is an accessory in respect of ROV’s contraventions concerning the three testimonials and the charity representations, the central question is whether he had actual knowledge that those testimonials and representations were false. 

545                  The evidence suggests that it was principally Peter and Ben Jowett who were actively involved in reviewing and making comments to Mr Allsopp on the ROV website shortly before it was launched and also finalising ROV’s A5 flyers.  Tom Jowett’s involvement was limited, probably because he was overseas at the time.  I am not prepared to find, on the basis of the evidence and also having regard to the seriousness of the allegation, that Tom Jowett was knowingly concerned in those contraventions. 

546 I will now deal with the question whether either Peter or Ben Jowett were persons who were “involved in” any of the contraventions. In the context of a contravention of either ss 52 and 53 of the TPA or ss 18 and 29 of the ACL, this means that it must be demonstrated that Peter and Ben Jowett had actual knowledge of, or were wilfully blind to, the falsity of the relevant representations which appeared on the ROV website and on the A5 flyers.

547                  I am not satisfied that VESA has established that either Peter or Ben Jowett actually knew that the representations were false or that they were wilfully blind to that matter.  Merely because both of them closely reviewed the ROV website shortly before its launch in mid-September 2010 does not establish that they had actual knowledge of the falsity of the relevant representations or that they were wilfully blind to that matter.  They may have been aware of the existence of the representations, but more than that is required for them to become accessories.  The same applies to the relevant A5 flyer. 

548 For these reasons, I decline to make any orders against Peter or Ben Jowett personally based on their alleged accessorial liability under the TPA or CCA.

PART H: REMEDIES

549                  In its amended application VESA included no less than 42 separate prayers for relief.  Having regard to the Court’s rejection of all VESA’s claims relating to contract and breach of confidence/retained materials, it is only necessary to deal with issues of relief in respect of those parts of VESA’s claims concerning copyright infringement and misleading or deceptive conduct which have been established.  I will deal with those matters by first summarising the parties’ respective arguments, before determining the relevant questions.

(a)      Copyright

550The relevant infringements are summarised in [524] above. 

551                  (1)       Summary of VESA’s arguments: In relation to the copyright infringements which have been established, VESA seeks declarations, injunctions, damages, additional damages and orders for the return and/or destruction of items on which the works appear. VESA makes the following submissions in respect of the remedies it seeks for the copyright infringements. First, damages under s 115(2) of the Copyright Act are compensatory (citing Aristocrat Technologies Australia Pty Ltd v D.A.P Services (Kempsey) Pty Ltd (2007) 257 FCR 564 at 568 and Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) (2008) 76 IPR 763 at [11] per Besanko J). It is open to the Court to infer, in the light of all the evidence, that the copyright owner has suffered loss and damage, but if there is no evidence at all of any damage the Court can award a nominal sum to vindicate the invasion of the owner’s proprietary right (citing, for example, Futuretronics at [16] per Besanko J)). 

552                  Secondly, merely because only a nominal sum is awarded does not prevent substantial “flagrancy” damages being awarded (citing Futuretronics at [35] per Besanko J). Additional damages are also available under s 115(4) where the conduct of the defendant is such that an award of punitive damages should be made to mark the Court’s recognition of the opprobrium attached to the defendant’s infringing conduct (citing Facton Ltd v Rifai Fashions Pty Ltd [2012] FCAFC 9 at [35]-[37] and Futuretronics at [11] per Besanko J). 

553                  Thirdly, VESA urges the Court to take into account the following matters in assessing the level of any additional damages:

(a)the steps allegedly taken by Tom Jowett to conceal the fact that he appropriated the second stage hand logo;

(b)the respondents’ failure to keep accurate financial records or to discover any adequate financial records, which makes proof of loss more difficult (citing Aristocrat Technologies at [53]);

(c)an award of additional damages under s 115(4) is not dependent upon the adequacy or inadequacy of an award of damages under s 115(2) (citing Allam v Aristocrat Technologies Australia Pty Limited (2012) 95 IPR 242 at [364] and [414]); and

(d)VESA submits that the Court can make an award of “flagrancy” damages prior to any inquiry into damages for copyright infringement. 

554                  VESA also seeks an inquiry to determine the extent of its loss and damage in respect of the copyright infringements so that it may make an election between damages or an account of profits in relation to this cause of action.

555                  (2)       Summary of respondents’ arguments:  It appears that the respondents did not make any specific submissions relating to the issue of relief for copyright infringement. 

556                  (3)       Consideration: It is convenient to set out the relevant terms of s 115 of the Copyright Act, which deals with actions for infringement:

115     Actions for infringement

(1)Subject to this Act, the owner of a copyright may bring an action for an infringement of the copyright.

(2)Subject to this Act, the relief that a court may grant in an action for an infringement of copyright includes an injunction (subject to such terms, if any, as the court thinks fit) and either damages or an account of profits.

…

(4)Where, in an action under this section:

(a)an infringement of copyright is established; and

(b)the court is satisfied that it is proper to do so, having regard to:

(i)the flagrancy of the infringement; and

(ia)the need to deter similar infringements of copyright; and

(ib)the conduct of the defendant after the act constituting the infringement or, if relevant, after the defendant was informed that the defendant had allegedly infringed the plaintiff’s copyright; and

(ii)whether the infringement involved the conversion of a work or other subject-matter from hardcopy or analog form into a digital or other electronic machine-readable form; and

(iii)any benefit shown to have accrued to the defendant by reason of the infringement; and

(iv)all other relevant matters;

the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances.

…

557 As noted above, VESA has reserved its right to make an election between damages and an account of profits in relation to any copyright infringement. It submits, however, that the Court can determine its application for additional damages under s 115(4) of the Copyright Act prior to VESA making its election.

558                  Besanko J made some helpful general observations on the subject of additional damages in Futuretronics at [17]:

In relation to the claim for additional damages under s 115(4) of the Act, it is appropriate to begin by making the following general observations. First, there is no need for me to consider if an award of additional damages can be made under s 115(4) if no damages are awarded under s 115(2) because I have awarded nominal damages under s 115(2) (Polygram Pty Ltd, Island Records Ltd & A & M Records Inc v Golden Editions Pty Ltd, Hoghton Hughes (No 2) 76 FCR 565 at 576; 148 ALR 4 at 13-14; 38 IPR 451 at 459-61 (Polygram) per Lockhart J; MJA Scientifics at 283-284 per Sundberg J). Secondly, it is not necessary that there be a proportionate relationship between the additional damages awarded under subs (4) and the damages awarded under subs (2): Flags 2000 Pty Ltd v Smith (2003) 59 IPR 191; [2003] FCA 1067 at [31]-[34] (Flags 2000) per Goldberg J. An award of additional damages under subs (4) is not dependent upon the adequacy or inadequacy of an award of damages under subs (2). Thirdly, the matters in subs (4)(b)(i)-(iv) inclusive are not preconditions to an award of additional damages. In other words, and using the flagrancy of the infringement as an example, the Court must have regard to the flagrancy of the infringement in determining whether to award additional damages, but it is not the case that additional damages can be awarded only if the breach involves a particular degree of flagrancy. Fourthly, in the recent case of Flags 2000 Goldberg J suggested that there is a distinction between conduct of a defendant after an infringement (or after being informed that he has allegedly infringed the plaintiff's copyright) and relevant to the substantive allegations against him on the one hand, and the defendant's conduct of his defence to an action for an infringement of copyright in relation to procedural matters on the other. The former matter is within the terms of s 115(4)(b)(ib) of the Act, whereas it has been suggested that the latter matter is a matter to be taken into account in determining the appropriate order as to costs. In Flags 2000 Goldberg J said(at [45]-[46]):

[45] The applicants submitted that the insertion of subparas (ia) and (ib) was declaratory of the position which had existed prior to the amendments. There is substance in that submission as can be seen from cases such as Carson v John Fairfax & Sons (1992) 178 CLR 44 at 71; 113 ALR 577 at 597 and Microsoft Corp v Goodview Electronics Pty Ltd (2000) 49 IPR 578. However, the conduct taken into account in those cases was conduct which was relevant to the substantive allegations made against the respondents. For example, in the Microsoft case the respondent filed a defence which proved to be false. Branson J took that fact into account in conjunction with other evidence which showed an intention on behalf of the respondent to conceal the identity of their suppliers to find “a deliberate pattern of conduct by the respondents in which they recognised the illegality of the enterprise they are engaged in and actively sought to conceal it”.

[46] I do not consider that the conduct of the respondent contemplated by subpara (ib) of s 115(4)(b) is referable to conduct of the defence in so far as it relates to procedural matters and matters whereby the applicants are put to the proof of their case, albeit unreasonably. I consider that these are matters more appropriately dealt with by an appropriate order for costs.”

In certain circumstances, the distinction may be a difficult one to apply and there is an obvious need to avoid double-counting. Nevertheless, I agree with the distinction identified by Goldberg J in Flags 2000.

Fifthly, an award under s 115(4) of the Act can encompass damages which at common law would be aggravated damages and exemplary damages: Bailey at FCR 113-14; ALR 238; IPR 156-7.

559                  For the following reasons, I do not consider that this is an appropriate case in which to award additional damages against either Tom Jowett personally or ROV.  First, dealing with flagrancy, I do not consider that Tom Jowett’s conduct in copying the relevant materials onto a USB stick constitutes flagrant conduct on his part.  As noted above, I have accepted his evidence that his purpose at that time in reproducing those materials was not to use them in setting up a rival business.  He had made no decision then to establish ROV.  His purpose in copying the materials related to his apprehension that he could end up in a legal dispute with VESA. 

560                  Nor do I consider that Peter Jowett’s conduct in copying VESA’s FAQs constitutes flagrant conduct so as to warrant additional damages against ROV in respect of that infringement.  His conduct is regrettable, but VESA pointed to no evidence establishing that his conduct occurred as part of a calculated disregard of VESA’s rights or in the cynical pursuit of a valuable benefit for ROV.  There is no evidence that his infringement was deliberate or calculated.  Flagrancy is not established merely by an inference that Peter Jowett knew that he was copying VESA’s FAQs.  More is required (see International Writing Institute Inc v Rimila Pty Ltd (1994) 30 IPR 250 at 255 per Lockhart J).

561 Secondly, nor am I satisfied that additional damages are appropriate having regard to the other matters set out in s 115(4) of the Copyright Act. I do not consider that such a remedy is necessary to deter similar copyright infringements, nor is there any conduct on the part of either Tom Jowett or ROV which has occurred subsequent to the infringements which is of such a serious nature as to warrant that relief. There is no evidence which establishes that ROV derived a significant benefit from the infringements so as to attract additional damages.

562                  Thirdly, although Tom Jowett’s actions in the USA in further infringing VESA’s copyright in the paper application form and email to professors are not actionable in Australia, I have taken those actions into account in assessing whether this is an appropriate case for additional damages.  In my view, those matters are not of a sufficiently serious nature to tilt the balance in favour of an award of additional damages.  The paper application form was used for only a matter of months.  It is also apparent that ROV’s email to professors, which was initially written by Tom Jowett based on VESA’s precedent, underwent various subsequent revisions and rewriting. 

563                  For these reasons, I consider that VESA is entitled to declaratory relief in respect of the infringements of its copyright by Tom Jowett in respect of the USB conduct and by ROV in respect of Peter Jowett’s conduct in copying the VESA FAQs.  I do not consider that there is any basis for granting injunctive relief in relation to those infringements, primarily because any risk of repetition is only minimal.  This is reflected in the steps taken by ROV in the past when confronted by allegations of copyright infringement.  If necessary, appropriate orders can be made requiring that the relevant materials be either returned or destroyed.  I have no reason to believe that ROV would continue to use materials which infringe VESA’s copyright.  Nor do I consider that this is an appropriate case in which to order additional damages.  I will make appropriate orders to enable VESA to be placed in a position where it may elect whether it wishes damages or an account of profits in respect of the two copyright infringements. 

(b)       Misleading or deceptive conduct

564 The conduct which has been found to contravene ss 52 and 53 of the TPA and/or ss 18 and 29 of the ACL is set out in [537] above.

565                  (1)       Summary of VESA’s arguments: Some of VESA’s arguments concerning relief concerning its successful claims under the TPA/ACL have been summarised in [381] above. VESA’s additional relevant submissions may be summarised as follows.

566 First, it is not necessary for a person to have relied on a false representation in order to obtain damages under s 82 of the TPA or s 238 of the CCA.

567                  Secondly, although misleading or deceptive conduct occurring overseas is not directly actionable, it can be taken into account in determining whether or not to grant injunctive relief should be granted under the relevant legislation in respect of contraventions which occur in Australia. 

568                  VESA seeks damages, declarations and injunctions in respect of the relevant misleading and deceptive conduct.  On the issue of declaratory and injunctive relief, it says that the Court should take into account such matters as:

(a)the respondents’ conduct in continuing to send out misleading emails about their experience until September 2011, after the proceedings had commenced in March 2011;

(b)their failure to alter their online testimonials on the ROV website until May or June 2011;

(c)continuing to make the charity misrepresentations on the ROV website;

(d)Tom Jowett did not take adequate steps to remedy ROV’s misleading and deceptive representations notwithstanding that he was “caught out lying” by Mr Smordin;

(e)the Court should infer that many of the misleading representations made by ROV were made in circumstances when its directors and employees knew that the representations were knowingly false;

(f)the respondents’ conduct in denying in their defence filed on 19 October 2012 that the misrepresentations were misleading or deceptive, notwithstanding that Tom Jowett gave evidence in which he admitted that some of the representations or testimonials complained of were false; and

(g)the respondents have failed to show sufficient appreciation of the significance of their wrongful conduct.  In particular, VESA says that Tom Jowett lacked “insight” as to his past conduct, which they say is reflected in his attempts at times to find excuses for it (such as family pressure to succeed), and his belated raising of the dry run. 

569                  For all these reasons, VESA says that injunctions are necessary to prevent the respondents from retaining and using VESA’s materials, infringing VESA’s copyright and misleading the public. 

570                  On the issue of damages for misleading or deceptive conduct, VESA accepts that it needs to establish that it has suffered some damage. 

571                  (2)       Summary of respondents’ arguments: On the question of remedies for ROVs contraventions of the TPA/ACL, the respondents emphasise that VESA has not established any loss or damage as a result of the misleading or deceptive conduct. On the contrary, they submit that VESA has significantly increased its profits after Tom Jowett ceased his employment with VESA.

572                  On the issue of discretionary relief, the respondents rely upon the following factors as indicating that injunctive relief should not be made:

(a)ROV is now an experienced operator of volunteer eco tourism tours and there is barely a minimal risk of any repetition of its conduct in misrepresenting its experience;

(b)likewise, the risk of any future repetition of the conduct which was likely to mislead or deceive in respect of its charitable status is unlikely to be repeated because that conduct was not intentional and the respondents now have a better understanding of their legal obligations; and

(c)the relevant overseas conduct is not of a character as to warrant injunctive relief. 

573                  (3)       Consideration:  In my view, VESA has not established that it suffered any damage as a result ROV’s contravening conduct.  Accordingly, its claim for damages must be rejected. 

574                  VESA is, however, entitled to appropriate declaratory relief in respect of the contravening conduct and I will invite the parties to see if they can agree proposed declaratory orders. 

575                  The issue of injunctive relief is more complicated.  It seems to me that the central question is whether or not such relief is appropriate and desirable because there is a risk that the contravening conduct will be repeated by ROV.  For the following reasons, however, I think that risk is minimal. 

576                  First, much of the contravening conduct involves misrepresentations concerning ROV’s experience in conducting volunteer eco tourist programs at a time when it had just commenced operations.  ROV has now been in operation for almost three years.  It has conducted programs in South Africa, Mozambique, Peru, Cambodia and Thailand (although at the time of the hearing, it no longer conducted any program in Thailand).  I accept the respondents’ submission that, in those circumstances, the risk of that type of contravening conduct being repeated is minimal.  Similar considerations apply to the risk of repetition of the testimonials, which related to the same general subject matter. 

577                  Secondly, as to the charity misrepresentations, I do not consider that there is a sufficient risk of that conduct being repeated to warrant the grant of injunctive relief.  I do not consider that the relevant misrepresentations were made deliberately by ROV with a view to misleading or deceiving relevant consumers.  On the contrary, the consequences of the relevant conduct was inadvertent.  It is reasonable to expect that ROV will take appropriate steps to remove the relevant material from its website (assuming that it has not already done so).  I have also taken into account the difficulties of an ordinary member of the relevant class accessing the particular pages. 

578                  Thirdly, I do not consider that the other matters raised by VESA provide a sound basis for concluding that injunctive relief is warranted.  Many of the matters it raises contradict my findings that Tom Jowett is an honest, credible and generally reliable person.  And in my view, in the context of the relief VESA seeks, there is no force in VESA’s criticisms of the respondents’ conduct in respect of this part of their case or their financial record keeping. 

579                  Fourthly, I do not consider that the conduct which occurred overseas is of such a nature or character as to tilt the balance in favour of granting injunctive relief.  That conduct generally related to the topic of ROV’s experience as a volunteer eco tourist operator and, for the same reasons as given above, I consider that there is no higher than a minimal risk that ROV would repeat those misrepresentations in the future. 

(c)       Relief generally

580                  The parties should seek to agree orders giving effect to these reasons for judgment.  Those orders will need to deal with at least the following matters:

(a)       proposed declaratory orders in respect of the copyright infringements, as well as:

(i)proposed directions for any inquiry prior to VESA making an election as to whether it seeks damages or an account as to profits; and

(ii)any orders for the return or destruction by ROV of any VESA copyright materials;

(b)proposed declaratory orders concerning ROV’s contraventions of ss 52 and 53 of the TPA or ss 18 and 29 of the ACL (noting, however, the issue raised above regarding VESA’s failure to seek any relief in respect of the misrepresentations concerning ROV’s charitable status); and

(c)costs.

581                  The proposed orders should also deal with an outstanding issue, which I will describe shortly, relating to whether or not some of the documents tendered by VESA are confidential and should be the subject of a non-confidentiality order.  

582                  The issue arises from the fact that, during the course of the hearing, VESA tendered various documents over which it sought confidentiality.  The documents were admitted on the basis that they were “tentatively confidential”, with VESA having the onus of establishing the documents were truly confidential.  The parties were able to agree that many of the documents were confidential (I agree with their consensus), but ten documents remained in dispute.

583The ten disputed documents relate to the following matters:

·VESA’s recruiting schedules and university contact details for 2010;

·versions of a suggested business strategy and flowchart created by Tom Jowett for VESA in mid-2010;

·copies of a business strategy written by Mr Constable-McDowell for VESA in early 2010; and

·a marketing plan prepared by Tom Jowett for VESA on 6 April 2010.

584                  In my view, it is appropriate that a non-publication order be made in respect of each of the ten contested documents.  I accept VESA’s submission that, notwithstanding the fact that the documents are more than two years old, they are commercial in confidence.  In the case of the recruiting schedules and university contact details, although much of the information in the schedules could be derived from publicly available sources, the confidentiality of those schedules relates to the fact that the information is presented on conveniently-arranged schedules which were plainly not intended to be made available to persons outside VESA and were only to be used by VESA’s staff (see Prime Creative Media Pty Ltd v Vranjkovic [2009] FCA 1030 at [15] per Ryan J).

585                  The other relevant documents relate to VESA’s internal business strategies.  I do not consider the passage of two years since they were created as sufficiently long to destroy their confidentiality. 

586                  Accordingly, I am satisfied that non-publication orders ought to be made in respect of all of the documents the subject of VESA’s confidentiality application. 

587                  The parties will have 21 days hereof to seek to agree proposed orders on all relevant matters.  If they cannot reach agreement, they should each file and serve within that 21 day period their respective proposed orders, together with a written outline of submissions in support of their respective orders.  The outline should not exceed 10 pages in length. 

588                  The matter will be listed for mention and further directions at 9:30 am on Tuesday, 27 August 2013. 

I certify that the preceding five hundred and eighty-eight (588) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths.

Associate:

Dated:       26 July 2013