Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd & Anor [2006] HCATrans 315 (15 June 2006)

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Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd & Anor [2006] HCATrans 315 (15 June 2006)

Last Updated: 16 June 2006

[2006] HCATrans 315

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S54 of 2006

B e t w e e n -

CONCRETE PTY LIMITED

Appellant

and

PARRAMATTA DESIGN & DEVELOPMENTS PTY LIMITED

First Respondent

GHASSAN FARES

Second Respondent

GUMMOW ACJ
KIRBY J
HAYNE J
CALLINAN J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 15 JUNE 2006, AT 10.09 AM

Copyright in the High Court of Australia

MR B.W. RAYMENT, QC: May it please your Honours, I appear with my learned friends, MR A.J. SULLIVAN, QC and MR D.T. KELL, for the appellant. (instructed by Costa & Associates)

MR C.R. BIRCH, SC: May it please your Honours, I appear with my learned friend, MR J-J.T. LOOFS, for the respondents. (instructed by Hal Lawyers)

GUMMOW ACJ: Yes, Mr Rayment.

MR RAYMENT: Your Honours, the question of copyright in the case may be stated as being whether, within the meaning of section 36(1) of the Copyright Act there was a licence from the owner of the copyright in favour of the appellant to do an act which would otherwise be an infringement of the copyright within section 31(1)(b)(i), that is, the reproduction in material form of an artistic work. By longstanding authority, the licence is assimilated to a consent or permission.

Our primary submission in the case is that this Court, with respect, ought to adopt as part of the law of Australia the matters held by the English Court of Appeal in Blair v Osborne & Tomkins [1971] 2 QB 78 which establishes in England that in a case like the present, according to the findings of fact which were made by the learned trial judge, we submit, there would be a licence implied in the case of the architect’s client to use the plans which were prepared for the purpose of building a building in substantial accordance with them which would extend so as to avail the purchaser of the relevant land.

GUMMOW ACJ: Could you just go back to section 36 for a minute? What would be the relevant infringement that needed the licence?

MR RAYMENT: It would be an infringement, in our submission, within section 31(1)(b)(i).

KIRBY J: Could it ever be as widely stated as that, that is to say, the holding in Blair, would it not always depend on the particular facts and circumstances of the case?

MR RAYMENT: Yes, I did intend to catch up in what I put - - -

KIRBY J: Here you have that reservation - - -

MR RAYMENT: This was on the basis of the facts as found by the learned trial judge which were quite detailed. But once you have findings such as that, in our respectful submission, there would be no reason, if this case were being heard in England or for that matter Canada, as I am about to come to, why Blair would not be applicable and, in our submission, the principles are stated appropriately for adoption as part of the law of this country. Really, what happens in the Full Court, although not very expressly, is that Blair is not followed, in our submission.

KIRBY J: Is that quite right or - - -

MR RAYMENT: I think so.

KIRBY J: - - - is what happened in the Full Court that the Full Court attacked the foundation of the findings of the primary judge on the basis of ostensible bias and therefore, in effect, set those findings aside and felt itself able to make its own findings on the facts?

MR RAYMENT: Well, that might be, with respect. It is not very clear what they did about it.

KIRBY J: It is not clear, I accept that, but otherwise why would they go on about Justice Conti’s suggested ostensible bias? The only reason for touching and dealing with it would be if it is relevant and the only way it can be relevant is in order to undermine the acceptability of his Honour’s findings of fact.

MR RAYMENT: Yes. What I had in mind, if I may, your Honours, in addressing this appeal was to take, first of all, the copyright issues, and I must necessarily proceed on the basis of the trial judge’s findings of fact, then I wish to address second in this appeal, if I may, the findings, if they were that, made in the Full Court on the question of bias. We submit that it is all wrong, with great respect, both as to copyright and as to apprehended bias and that really - - -

KIRBY J: Could we deal with the matter on the basis that you establish that the Full Court made a mistake on copyright, but that leaves hanging the statements in the Full Court about the question of ostensible bias? I do not see how we can avoid the latter, palatable though that might be.

MR RAYMENT: When I come to it, we wish to draw attention to some uncertainties about what the Full Court had done, but it may be that what their Honours intended to do was this. It may be that having disposed of the case, as they say, on the copyright issues, they then made findings that there was apprehended bias in the case such as would have led them to allow the appeal but chose, because of the way they dealt with the copyright issues, to make orders which allowed the appeal generally rather than order a new trial. I do not know, to tell you the truth, your Honour, whether that is how one is to understand it and when we come to it I - - -

GUMMOW ACJ: What do you say about paragraphs 68 and 69 of your opponent’s outline which centre upon this conundrum which Justice Kirby has spoken of?

MR RAYMENT: Your Honours, what we - - -

GUMMOW ACJ: Because the remedies are quite different - - -

MR RAYMENT: They are.

GUMMOW ACJ: - - - if you succeed on, as it were, the legal merits on copyright law.

MR RAYMENT: One does not understand why a court which would say there was apprehended bias did not order a new trial and how the findings of fact that appear to underlie even the way they deal with the copyright case were able to be made or assumed but - - -

GUMMOW ACJ: In a way you are approbating and reprobating, I think.

MR RAYMENT: Well, your Honour, so far as we are concerned, with respect, there was, in our respectful submission, nothing wrong with the way in which the learned judge dealt with this case. There is no reasonable ground for apprehension of bias. We would submit that this Court might review everything that was said in the Full Court about this matter and, if it agrees with us on that matter, dispose of the copyright issues on the basis of all of the findings of fact made by Justice Conti. I wish to, as it were, provisionally assume that your Honours would deal with the matter that way in addressing the copyright issues and come back to seek to make it good when we come to bias.

GUMMOW ACJ: We have to start somewhere, so we might as well do so.

MR RAYMENT: Yes. So, your Honours, in England you might have a question as between the Blair Case and Stovin-Bradford. In Stovin-Bradford - - -

KIRBY J: It was only a very short time after Blair, was it not?

MR RAYMENT: Yes. Now, in Stovin-Bradford it was found that what the architect had sent by way of fee was a nominal fee. That is explained in Copinger as follows and it is explained, actually, in Lord Justice Salmon’s judgment in Stovin-Bradford. Perhaps if I may hand up, because I am about to come to it, the passages from Copinger that we had in mind to refer your Honours, the current edition of Copinger.

What is explained about nominal fees is this. Under the Royal Institute of Architect’s scale you charge quite a substantial fee amounting to one-sixth of the total expenditure on the project for the preparation of plans for planning permission, and that might be quite a substantial sum of money, but it might be wasted because the local council might refuse the plans. So some architects in England charged what was called a nominal fee which was a small sum to just, as it were, answer in part the expenditure involved in preparing the plans on the basis that they would then charge a full fee and be remunerated in full as the project went ahead, if the council gave approval.

So you had, as it were, a practice in England apparently of charging a very small sum in some cases before the grant of planning permission, and that was the finding of fact that was made on the facts in Stovin-Bradford that the fee was nominal and it was, indeed, stated to be nominal by the architect. So that the architect in that case was able to say to the client, “I gave you no licence to do any more than put a plan in to the local council, and if you went ahead and sought to build a building you would need to pay me a proper fee for the use of my copyright if you went ahead with the project without me”.

KIRBY J: Why is not your case analogous to that case in the sense that you were on notice of this fight and the position was reserved in the sale of the property and, therefore, if we are looking for analogy, that this is closer to the second than to Blair, than to the second case?

MR RAYMENT: Yes, your Honour, I was seeking to take, first of all, the position as between the clients and the architects and come separately to any question of notice of any matter in the contract of sale. I do wish to address that matter, but we submit that, as it were, logically one takes the matter as between the joint venturers who were the clients of the architect and the architect himself to consider the Stovin-Bradford point.

Stovin-Bradford arose as between the architect who was the plaintiff and the appellant and the client, even though somebody had been later authorised to do work, but the only person who was sued was the original person who retained the architect. Whereas in Blair the case went on between the original architect and a later owner of the land and – or, rather, persons he employed to work on the plans and the building.

GUMMOW ACJ: Now, what was the situation in Beck v Montana?

MR RAYMENT: In Beck v Montana it was more the latter in that there was originally an arrangement between the architect and the client. The client then sold the land and the question was whether the purchaser who also took the plans from the architect’s client had a licence within corresponding provisions in this Act – had a licence to infringe the architect’s copyright. So, as it were, it was more like Blair in terms of the parties, but an important to note about Beck is that there was no development consent.

GUMMOW ACJ: No?

MR RAYMENT: Development consent. Nothing which passed with the land. What happened in Beck was that the architect was engaged to prepare sketch plans to obtain approval in principle from the local council, and that would be something that might produce estoppels as between the person asking the council’s opinion and the council which would not go with the land in any way. There was nothing, which in accordance with Ryde Homes and the whole line of country about development approvals passing with the land in this country, nothing like that applicable to Beck’s Case.

KIRBY J: It is interesting for the second point in this case that Justice Jacobs says in his opening words that:

If I thought that by taking time to consider my decision I would be likely to alter my conclusion, which I have already expressed in the course of argument, I would take that time - - -

MR RAYMENT: Yes. Your Honours, what we are going to say in due course is that if you have a look at paragraph 22 of the Full Court’s judgment and compare it with Blair, it is very hard to see that the Full Court has done any more than simply not followed Blair. They have expressed puzzlement about why the judge was looking at the question of direct licence, but that is the very thing which Blair, as Copinger says in the passages I have just handed up and as is apparent, in our submission, from the report, the very thing which Blair decided.

Your Honours, I was just going by way of introduction to refer to the Canadian position too, if I may. We put on the list of authorities a case of ADI v Destein (1982) 141 DLR (3d) 370. At page 373 of the report it is sufficient to go to, the judge, Justice Stevenson, referred to the passages which appear in Lord Denning’s judgment, with whom the other members of the Court of Appeal agreed in Blair, and which hold that the licence extends to later owners –at the very top of page 373 that passage is set out – and then his Lordship refers to the fact that the Supreme Court of Canada had referred with approval to Blair and Beck, which it did in Netupsky, although not in a matter raising this issue with which we are concerned directly. Then at the foot of page 373, applying Blair to the facts, Justice Stevenson said:

In my view the implied licence arising out of the engagement between an owner and an architect or design engineer includes licence or permission for the owner, his successor in title - - -

we stress –

and their contractors to use the material for any legitimate repair or renovation of the building.

GUMMOW ACJ: What is the nature of this licence they are speaking about? It cannot be a contractual licence because there is no contract in the architect - - -

MR RAYMENT: No, it is not. It is the same licence that is mentioned, in our submission, in section 36; it is the consent or permission. It is the creation of a defence to an action for infringement.

GUMMOW ACJ: Does anything said in Time-Life bear on this in this Court?

MR RAYMENT: We submit not. Time-Life dealt with - - -

GUMMOW ACJ: It is 138?

MR RAYMENT: It is, 138 CLR. There was a lot said in Time-Life about the inability to use the patent cases. That is.....and the like.

GUMMOW ACJ: Yes, well, the patent cases - - -

MR RAYMENT: They are rather out of fashion, anyway, in England these days.

GUMMOW ACJ: Do not worry about the English, but the patent licence is interesting because it does run with the goods. Now, this licence somehow runs with the land, does it?

MR RAYMENT: Yes, but it is not because of any - - -

GUMMOW ACJ: How, conceptually, does that happen?

MR RAYMENT: How does the licence run with the land?

GUMMOW ACJ: Yes.

MR RAYMENT: The purpose, in our submission, of the engagement of the architect is to bring into existence a state of affairs which by local government law will extend so as to benefit later owners of the land. That is why you sell land, of course, as one knows, with the benefit of development approval.

GUMMOW ACJ: Why is it any different with the book in Time-Life?

MR RAYMENT: It is different from the book - - -

GUMMOW ACJ: Why do we have some special rule about architects’ plans?

MR RAYMENT: Books do not carry with them, as the Court held in Time-Life, as a matter of ordinary implication any power of importation. What the Copyright Act required was a positive licence to import under sections 37 and 38; you do not get it from the mere fact that nothing is said, said the Court in Time-Life, at the time of sale either to Little Brown, Boston or from Little Brown to Ipec. We just happen to have with architects, as the passages I have handed up from Copinger would show, we submit - - -

GUMMOW ACJ: Yes, I know but - - -

MR RAYMENT: - - - a right which traditionally later owners will be intended to have the benefit of. Lord Denning said in - - -

GUMMOW ACJ: Does the licence spring from some perception as to what the ordinary understanding and course of events is taken to be?

MR RAYMENT: Yes. We submit, yes. Lord Denning says that in the ordinary course of things the payment of £70, I think it was, to whomever the clients were in Blair, covered a licence not only for those persons but also for the later owners of the land. It is important to know about Blair that planning permission in the United Kingdom, as here, passes with the land. So, the architect would be taken to know - - -

GUMMOW ACJ: Yes, but he might not. Assume the planning commission legislation was repealed tomorrow. All this collapses, does it? It is odd to have the Copyright Act operate by reference to some other State statutory system. This is the federal law.

CRENNAN J: Was not Lord Denning assuming the size of the fee gave some indication about the terms of the retainer?

MR RAYMENT: Yes, but the later owner is only relevant because he is the person who uses the planning permission on the facts of the case. What happened was two people subdivided their blocks so as to create a third block in between them and they sold it and that person employed builders and surveyors but then - - -

HAYNE J: If you are to hook the argument onto anything it has to be hooked, does it not, onto the proposition that the plan is a plan to do something on the specific land?

MR RAYMENT: Yes.

HAYNE J: Whether there is planning permission to do it, or not, seems to me at the moment to be interesting but not pressingly relevant. If there is a hook for this argument it is that the plan is for this land, regardless of who owns it.

MR RAYMENT: Yes. Architects do not really care who owns the land.

HAYNE J: I do not know about that, Mr Rayment.

MR RAYMENT: They are doing something which is for the building of a building on a block of land.

GUMMOW ACJ: The relationship between architect and client can be highly personal.

MR RAYMENT: It can be. Of course, it can be.

CRENNAN J: It is often for the building of a building for this particular client.

MR RAYMENT: Yes. On this block, though.

CRENNAN J: Yes. I mean the real difference between Blair v Tomkins and Stovin-Bradford is to do with the terms of the different retainers.

MR RAYMENT: I do not think there is a finding in – certainly Stovin-Bradford only arose as between client and architect and the court was required in Blair to look beyond the parties to the contract to third parties who might acquire the land and the question is were they intended to have the same licence as the clients to utilise the development approval for the planning commission.

HAYNE J: Let us come back to this question of land. Assume an architect has copyright in a set of plans for a kit home and makes an arrangement with a particular owner, well knowing that the owner is going to put it up at 1 Smith St, Smithfield.

MR RAYMENT: Yes.

HAYNE J: That case may be radically different from the architect who, having regard to the particular site where the building is to go, designs a bespoke set of plans for that site. Thus the generality of the proposition you advance is one which seems at first blush to try to embrace too much.

MR RAYMENT: The licence that we contend for is a licence only to build on this land during the subsistence of this development approval.

GUMMOW ACJ: And it is irrevocable? There is no consideration provided by the third party. It is not contractual. Is it irrevocable?

MR RAYMENT: Well, we submit it is irrevocable.

GUMMOW ACJ: Why?

MR RAYMENT: But you do not have such an issue in this case, with great respect.

GUMMOW ACJ: I know that, but we have to consider the concepts.

MR RAYMENT: Well, it is moot in this case because that was never run at the trial, whether there was any question of irrevocability.

GUMMOW ACJ: There is a whole body of case law about licences that are revocable and irrevocable.

MR RAYMENT: Yes, yes.

GUMMOW ACJ: Injunctions in Cowell v Rosehill and so on and so forth.

MR RAYMENT: And it is often difficult to work out whether it has been revoked on the facts and the like.

HAYNE J: But then does it not come to a very specific analysis of the particular relationship between this client, this architect with respect of this land in all the circumstances, rather than a general proposition if an architect designs plans for a particular site, there is inevitably, usually, sometimes an implied permission to whoever should be the owner from time to time of the land to use the plans?

MR RAYMENT: Well, your Honour, we do seek to put the matter generally in the way your Honour has just indicated, but it certainly is not necessary on the issues propounded in this case to do so, because you have detailed findings of fact made by the trial judge which show, first of all, that the case is nothing like the Stovin-Bradford Case which the other side are relying upon. There was no question of this being a nominal fee which was insufficient remuneration. That was rejected on the facts any such question. Secondly, as the learned judge rightly said, in our submission, if you look at paragraph 115 of his judgment, this is the trial judge, it must have been present the minds of the joint venturers, or indeed objectively, they should be taken to have in their minds, but - - -

GUMMOW ACJ: This is volume 6, is it?

MR RAYMENT: Yes, volume 6, 2673.

GUMMOW ACJ: Thank you.

MR RAYMENT: What his Honour points out there is that the parties must be taken to appreciate that while they intended, no doubt, their joint venture to go ahead to conclusion, that they might fall out and that the land might need to be sold either compulsorily or by agreement between the parties and then a buyer would be likely, as it were, to pay more for it with the benefit of a development approval than without. Let me take the case of revocation. An architect who purported to revoke the licence might do something entirely foreign to the contemplation of the parties at the time of his engagement - - -

GUMMOW ACJ: This tripartite arrangement, as it seems to be, does that not require the presence of all the parties?

MR RAYMENT: I am sorry, your Honour means a licence in favour of a third party?

GUMMOW ACJ: That is what is involved here, is it not? It is a tripartite arrangement. There is the architect, the original client and a party who obtains the land and there is the controversy.

MR RAYMENT: The question is actually not contract or arrangement; it is permission or consent.

GUMMOW ACJ: At large?

MR RAYMENT: At large in the Copyright Act, yes. It is not necessary, for example, to say that here is a third party right under a contract.

GUMMOW ACJ: At large and perpetual and irrevocable?

MR RAYMENT: Trident’s Case or anything like that, before you can conclude that the effect of the engagement with the architect is not only that his licence that he gives as a necessary consequence of the engagement will go to the client but also it will go to third parties.

GUMMOW ACJ: It is at large. It is perpetual for the term of the copyright in that sense

MR RAYMENT: Well, no, for the term of the development approval, with respect, because it would only - - -

GUMMOW ACJ: For the development approval?

MR RAYMENT: Which is five years in this case.

HAYNE J: Why? I know the development approval is five years, but why is it only for that term? Why, if fresh application is made to construct like building on the - - -

MR RAYMENT: Quite, I accept that.

HAYNE J: So it is for the life of the copyright, is it not?

MR RAYMENT: Potentially, but in a very rare case would it go beyond the next few years.

GUMMOW ACJ: The building might be burnt down, who knows?

MR RAYMENT: Yes, but reconstruction would not involve any infringement.

GUMMOW ACJ: Why? It would be a fresh reproduction in material form, would it not?

MR RAYMENT: A fresh reproduction, I see, yes. Your Honours, what is drawn attention to in paragraph 115 is that the parties must be taken to appreciate at the time of engagement that they might fall out and that third parties might wish to avail themselves of the right, and one knows that development sites may become much more valuable once development consent is granted, and the whole purpose, really, of the engagement is to enable this to occur, the whole set of consequences to follow including the - - -

GUMMOW ACJ: Are there particular findings of fact succinctly expressed on which you rely as to the nature of this licence?

MR RAYMENT: There were particular findings of fact about the contract and one really needs to then draw inferences about the licence from those facts. There were no findings as to the inferences in direct terms I think it would be right to say. The case which the judge was asked to deal with was one where the defence suggested that no one had a licence. The client had no licence and no one who bought the land later had a licence. That was how the matter was pleaded at the trial by my learned friend’s clients.

They said neither the trustees for sale nor any predecessor in title had any licence at any time to exploit the copyright in these plans, and it was said on the basis that he was supposed to be builder and had not been remunerated. The findings, as your Honours know, were that he was never to be the builder and that the building was intended to be let out for tender for another builder to be engaged. Your Honours, we submit, having handed up those paragraphs from Copinger - - -

GUMMOW ACJ: Is there any treatment of this subject in Laddie, Prescott and Vitoria, their work on copyright? It is rather more intellectually agile than Copinger. It tends to become a bit sclerotic, I think.

MR RAYMENT: I will just need a moment to answer that question.

GUMMOW ACJ: You can come back to it if you have something there.

MR RAYMENT: We have not copied this for the Court. The reference is to paragraph 24.24 at page 917 in the third edition. The author says:

In the Blair case it was conceded that the licence was transferable to a purchaser of the property together with the benefit of planning permission. This must be right. The owner, having commissioned the plans for the purpose of putting up a building on the site, should have the right to transfer the right to use them to the new owner of the land. Whether the licence has actually been assigned must be determined from the contract of sale and the surrounding circumstances [of the right].

CRENNAN J: That highlights the fact that there are two licences at work in these situations. One is to reproduce the plans for the purposes of obtaining development permission and another is to reproduce the plans for the purposes of building the building.

MR RAYMENT: Yes, the architect actually lodged the plans here and it is the plans – my client’s case really depends on – it is not the former licence which we need to establish in this case; it is the latter.

CRENNAN J: Yes.

MR RAYMENT: Normally it would be either – the applicant for development approval, as it happens in this case, was the architect himself, not the client, who simply consented to the lodgement of the application by the architect.

GUMMOW ACJ: I think we had better be supplied with those paragraphs from Laddie in due course.

MR RAYMENT: Yes, certainly. Your Honours, the only direct Australian authority relevant to the position of architects before these proceedings was Beck’s Case (1963) 5 FLR 298. At page 304 Justice Jacobs discerned in the arrangements in that case, which again were for the preparation of sketch plans to obtain approval in principle – it is at page 304 towards the foot of the page in the paragraph beginning, “The question raised”. What his Honour finds is, picking up the matter about 10 lines down:

that the engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission or consent or licence in the person making the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement.

It is that matter which was picked up - - -

GUMMOW ACJ: What are those cases that Mr Hutley referred to about, do you know, Cooper v Stephens and Marshall? Are they copyright - - -

MR RAYMENT: I do not know that they are, with respect. I think they are not. We will check it over - - -

GUMMOW ACJ: That is right. Anyhow, that can be checked, yes.

MR RAYMENT: It is a little time since I looked at them, but I do not think so.

GUMMOW ACJ: Well, maybe they were. Look at 305:

I do not think that this conclusion is contrary to . . . Cooper v. Stephens or W. Marshall - - -

MR RAYMENT: Yes.

KIRBY J: The difficulty I have with the way your argument is advancing is the difficulty that Justice Gummow and Justice Hayne have both mentioned and that is that you want to gloss the statute with (licences by architects) amending Act and that just is not conceptual. You have to grapple with the issue of a general concept and it must apply for engineers and for all sorts of people who are dealing with parties in the nature of their dealing which is going to enure later to the benefit of a third party.

MR RAYMENT: Yes, we would accept that what we are putting would extend to engineers who do work in connection with the obtaining of development approval as often occurs and whose plans might themselves become embodied in the development consent. It would follow that an engineer would be in precisely the same position, we submit.

KIRBY J: Therefore the analysis has to be on what the same position is rather than on a subcategory such as Copinger has of architects.

MR RAYMENT: Yes. It so happens that there are a series of cases which look directly at the position of architects. They happen to be relevant here. We do not submit it is limited to architects and we do not – it is necessary to look closely at the facts in every architects case to make sure that they are applicable. In our submission, when you do in this case you find no reason to think they are not.

GUMMOW ACJ: There are some terms implied in contracts as a matter of law and other terms implied for the circumstances of the particular case. I think you are trying to get into the first analogy which is rather a long bow, I would have thought, for architects. You just find an architect, plans. This follows unless it is negatived in some way.

MR RAYMENT: The whole understanding, in our respectful submission, the purpose for which the architect was engaged in this case was to prepare something which, when obtained, would be, as a matter of law, longstanding law - - -

KIRBY J: I thought there was a lot of point in what Justice Crennan said, that it is not just the purpose, it is the fact that you look at the money that has been paid and you look at all the circumstances, which includes the fee, and if the fee is such that it is not just a tadpole but appears to indicate that it is contemplated that it will run with the land, then the relationship between the parties on the facts is such that this particular adviser must be taken to have agreed that it goes with the land to the benefit of third parties. That is a more conceptual way of looking at the matter.

MR RAYMENT: If that is, with respect, what is necessary to be found, it is present here, we submit, as a matter of fact.

KIRBY J: Yes, I realise that but see you are not – you just want to have a - - -

MR RAYMENT: Well, I am not seeking to eschew it. Please do not take me as doing that in any way. Your Honours, what actually the findings of fact were in this case were a little more complicated than directly what your Honour puts to me, but they amount to the same thing when you look at them. This architect - - -

HAYNE J: Can I understand the legal framework within which we are working? Is it a framework in which there are two steps: one, the person engaging an architect obtains under the contract with the architect a licence to reproduce in material form - - -

MR RAYMENT: Yes, your Honour.

HAYNE J: At least in most cases. The case of nominal fee may stand apart.

MR RAYMENT: Yes.

HAYNE J: But step one is there is a licence - - -

MR RAYMENT: For the client.

HAYNE J: - - - to reproduce.

MR RAYMENT: Yes, your Honour.

HAYNE J: Is the second step in the framework, the second element of the framework, assignment of that contractual licence to the subsequent purchaser?

MR RAYMENT: Only in the alternative and at the end of my argument and our primary submission not necessary.

HAYNE J: If it is not framed in the way of licence for value followed by assignment, at the moment I am at sea to know what realm of legal discourse we are in. It is the assertion of result rather than the identification of the path by which you get to result.

KIRBY J: Do you not have to say there is an agreed implied assignment?

MR RAYMENT: Yes, there is agreed implied assignment or it extends of its own force and we submit that it is the latter which is the more appropriate way of looking at it.

KIRBY J: It runs into the specific notice that you had that there was no agreement.

MR RAYMENT: No, not quite that, but I will come to it.

KIRBY J: I will try to restrain my enthusiasm for that point.

MR RAYMENT: I will come to it. Your Honours, there is no reason to think - - -

KIRBY J: What is the answer to Justice Hayne’s question?

MR RAYMENT: Well, I am just seeking to do it. There is no reason to think, in our submission, that if you worked out the full terms of the contract, all of the implied terms and the express terms of the contract between the architect and the client in this case, that the licence which is given to the client to reproduce the plans, inter alia, by building the building on this block would not be one which was directly in favour of such persons who may later own the land at any rate during the subsistence of the development approval or by renewal of it.

GUMMOW ACJ: And was irrevocable?

MR RAYMENT: And was irrevocable, because to revoke it would potentially damage, significantly, the interests of the client in that the land that he - - -

GUMMOW ACJ: Do you get any support or otherwise from section 73 of the Act which is a special provision dealing with reconstruction? I think your opponent says 73 would not have been necessary if you are correct.

MR RAYMENT: It is not enacted against the background of a denial of Blair v Osborne, in our respectful submission.

GUMMOW ACJ: Well, it precedes it. It is 1968.

MR RAYMENT: Yes, we put in paragraph - - -

GUMMOW ACJ: I do not think these problems first burst on the world in Beck v Montana.

MR RAYMENT: No, no, we put in paragraph 9 of our submissions in reply that, if anything, section 73 assists the appellant, in our submission. Section 73(2) simply makes it – I am sorry, we put this earlier. Section 73(2) simply makes it clear that where a building had been constructed in accordance with architectural plans in which copyright subsists and has been so constructed with the licence of the copyright owner, the copyright is not infringed by a later reconstruction of the building by reference to those plans, and that is objective in form and not limited to the architect’s client. In our submission, it is entirely consistent with the submission we are putting forward.

GUMMOW ACJ: Is there any treatment of this subject in the report that led to the 1968 Act for why this section went in, the Spicer Committee Report? That should be looked at.

MR RAYMENT: I will have to return to that question, your Honour. We will seek to attend to it over the lunch hour, your Honour.

GUMMOW ACJ: Sir Nigel Bowen was Attorney with the carriage of this Act and he knew what he was doing, I suspect.

MR RAYMENT: Yes, indeed, but clearly the only provision of this Act which directly applies, in our submission, is the reference to a licence in section 36 which copies the earlier Act’s reference to a licence in section 2 of the 1911 Act. Your Honours, what the English Court of - - -

KIRBY J: This would also apply to lawyers, would it not? Lawyers give advice and is there then an implied right in the third party to get the benefit of that advice and the detailed memoranda and counsel’s opinions and all the other things that come with it without fee?

MR RAYMENT: The example that occurred to us more directly, with respect, was one of legal precedent, where you publish a book of legal precedent. You certainly could not complain about the use of that precedent by anybody who read the book or who was in contact with someone who had read the book. On the other hand, of course, one licence that is not given by publishing a book of legal precedents is to a competitive work by longstanding authority, but leave that aside - - -

KIRBY J: It is when we apply these things to our own profession that we are tested.

MR RAYMENT: Your Honours, in our submission, what the English Court of Appeal did in Blair was to take the essential finding of Justice Jacobs and reach a conclusion which was highly consistent with it which applied directly to third parties, and we submit it is striking that the planning consent in England ran with the land just as it does here, and we have given references in our written submissions to the English law about that.

KIRBY J: Can I say – and it is relevant to what has already been said – that the difficulty with that is that since then there have been two developments of enlightenment in the way we go about problems. Number one is, if a statute is involved we start with a statute, and therefore we have to, as it were, understand very clearly the framework and the structure of the statute into which this case law has to be set, and number two is, we are not quite as enthusiastic as we were back in Lord Denning’s day to just solve the particular case, although he was not a great offender in that respect, but you have to deal with the matter not just on a category, the subcategory of architects. You have to deal with it as a concept that fits comfortably to the statute, so that is the problem of picking up Justice Jacobs and Justice Denning in the second case.

MR RAYMENT: There were two essential elements to the chain of reasoning in Blair, both of which are correct, in our submission. One was that if the position was otherwise, that is, if there was no such licence, the architect could, in effect, stultify the very development that he was engaged to promote. Secondly, attention was directed to the whole purpose of the engagement of the architect being to bring into existence a plan which would be used to build a building on this site and this site alone under the planning permission.

Those two matters led the Court to conclude that the circumstances were that, as between architect and client, the payment of the sum of money covered not only the client’s licence but also the licence in favour of a later buyer of the land and, indeed, workmen and builders and architects who might be engaged by either the client or by the later owner. In other words, what was necessary to be done to enable the primary object of the engagement of the architect to be put into effect included a licence which extended beyond the client and went to those third parties.

What I was about to say in relation to the facts of this case, which makes a slight difference but not in the ultimate, in our submission, was this. The architect in the case was found to have been paid a substantial sum of money, $27,000, for the preparation of an eight-unit development plan, a plan which was lodged with the council and indeed approved for the construction of eight units on the same block of land. He was part of the joint venture company which was in joint venture with Ms Haviland and Mr Rix. He was both the architect using Parramatta Design & Development or his own name for the purpose and he was a shareholder in one of the joint venture vehicles which was involved in the development of the land. He was, in effect, one third of the project.

When the next-door proprietor obtained a development consent for a larger number of units than the eights units which had been included in his development approval, he as joint venturer or as architect or as both, went to the joint venture partners and obtained their agreement that although the expenditure on the first plan of $27,000, which was substantial, could, in effect, be wasted in that they would be not proceeding with it and although there would be further delay in obtaining a fresh approval and further expense in engaging engineers and the like at the joint expense of the joint venture partners, he recommended that that occur and offered, for the purposes of that as architect, not to charge an additional fee, in effect, to treat, I suppose you might say, the earlier payment as if it were a payment for the later plans.

We called evidence in this case that the right fee for the preparation of plans, assuming the development went ahead, was about $30,000 in the case of the 14-unit development and there was no evidence called against us about the matter on that issue. There was evidence from an architect or a surveyor on the other side about what would be reasonable if the architect was also the builder but nothing to answer the evidence which we called from an architect about the $30,000 figure.

So if you analyse it, as the trial judge did at the end of the day, this architect was as much remunerated as the £70 remunerated the architect in Blair, in our respectful submission.

KIRBY J: Could you just help me on this? I do not know as much about this Act as other members of the Court. You start with the provision of the copyright. That is section 31, is it not, and there is no dispute that this was an original work that would ordinarily attract copyright. So the respondents are up in front at that stage.

MR RAYMENT: Yes.

KIRBY J: Then where is the licence section of the Act that takes - - -

MR RAYMENT: Section 36.

KIRBY J: Section 36. So then you take it away if you fall into the 36 - - -

MR RAYMENT: If there is a licence within the meaning of section 36 - - -

GUMMOW ACJ: You have to go to 13 first, do you not?

MR RAYMENT: Yes, you do, 13(2) and 36 - - -

GUMMOW ACJ: Section 13(2) says:

the exclusive right . . . includes the exclusive right to authorize a person - - -

MR RAYMENT: Yes.

GUMMOW ACJ: Then you go to section 36.

KIRBY J: So you have to say this is a case where the architects, though they had the copyright, had thereby the exclusive right to authorise a person and have authorised not only the persons with whom they contractually dealt, but persons down the chain because (a) of the amount of money they got – or rather (a) the very nature of the - - -

MR RAYMENT: Of the engagement.

KIRBY J: - - - engagement which was for particular land, no benefit for other land and (b) the fact that it was designed to go and get development consent and did get development consent on the basis of it; (c) that it was therefore in the possession of third parties, the local government authority; and (d) the amount of money that had to be paid to the owner of the copyright, and if you put all of those things together, that is enough to indicate that there has been authorisation down the chain, not just the contract, immediate contract.

MR RAYMENT: It is true it is a matter of State law, but it is longstanding State law, well-recognised by the solicitors who are on both sides of this joint venture. Mrs Haviland and Mr Barrak were both solicitors – well known to all that development consent ran with the land, just as it did in England.

KIRBY J: Are there any other factual elements apart from those four that I mentioned? Is the fact that there was a joint - - -

MR RAYMENT: I think not. It is primarily the purpose of the engagement, but it is supplemented by the other matters to which your Honour has referred.

KIRBY J: I am just trying to analyse it in terms of the Act, because that is what one normally does.

MR RAYMENT: In terms of the Act, the licence that is mentioned in section 36 is certainly not, as it were, a written licence. Justice Jacobs decided that in Beck, for example. Looking at the 1911 Act, Justice Jacobs identified that - - -

GUMMOW ACJ: What is Justice Jacobs doing in Beck? He seems to be saying at page 304, in the paragraph at point 6:

The question raised is quite a broad one because it applies not only to architects but would apply for instance to artists . . . written material - - -

MR RAYMENT: With an intention that it “be used in a particular manner”. It is not books. I do not think, with respect, this could be taken to be in any way - - -

GUMMOW ACJ: That seems to be a proposition of law – the engagement implies a permission.

MR RAYMENT: Well, at any rate, it is a common problem, as his Honour points out, which will affect lots of works.

GUMMOW ACJ: Then he says it is “a principle of general application”.

MR RAYMENT: Of general application, yes.

CRENNAN J: He also says on page 305 at about point 3 that the:

implications would not follow if the architect could be regarded as reserving a right to himself in the contract to continue with the subsequent stages - - -

MR RAYMENT: Yes, that would be the kind of Stovin-Bradford line of country to later on in the next decade but that also was agreed in. But what I was just about to draw attention to in relation to what is said about the licence, it is really - - -

CRENNAN J: Was there any evidence here about those aspects of the engagement of the architect; that is to say, was there any explicit evidence about any reservation the architect made or any arrangements the architect made - - -

MR RAYMENT: He put a copyright symbol on the plans. It would be on the - - -

CRENNAN J: Yes, but was there evidence about what was contemplated in respect of his role once it went beyond the planning stage?

MR RAYMENT: Well, he said he was going to be the builder. The judge rejected it and found that he was going to be the architect, full stop, and he had been paid when he was paid $27,000, which he said was for disbursements. The judge, in effect, said he was paid the proper fee for the original plans and then procured an agreement to the later plans on the basis that I have referred to.

To answer the question about the licence it is perhaps necessary to take the Court to, for example, Sir Nigel Bowen’s discussion of the matter in Time-Life at first instance in a judgment which was agreed in later by this Court.

GUMMOW ACJ: I am not sure we have Time-Life at first instance.

MR RAYMENT: No.

GUMMOW ACJ: What is the citation?

MR RAYMENT: It is [1905] ArgusLawRp 145; 12 ALR 1. It is a very short passage. I can certainly copy it if your Honours would wish me to, or just read it.

GUMMOW ACJ: No, we can locate it, but read it onto the transcript I think, Mr Rayment.

MR RAYMENT: At the foot of page 9 his Honour said:

Counsel for Angus & Robertson submitted that the reference in ss 36, 37 and 38 to “the licence of the owner of the copyright” was simply a reference to his “consent” or “permission” or “licence”.

Sections 37 and 38 in particular dealt with importation, but it is the same word that is used in our section 36. Of course, 36 is there mentioned:

These words, it was said, were used in this context interchangeably –

Reference was made back to what Justice Jacobs said in Beck to there being consent or permission and to Pacific Film in this Court [1970] HCA 36; 121 CLR 154 at 163, 169 and 175:

It was argued that although the Copyright Act 1911 (Imp), in force by virtue of the Copyright Act 1912, used the word “consent” in s 2(1) the change of wording in the Copyright Act 1968 where the word “licence” is used was not intended to produce any change in the law in this respect (Copinger & Skone James on Copyright 11th ed, p 173, par 404). I find myself in general agreement with these submissions.

That really was assumed, at any rate, to be the case when the matter came here in Time-Life.

GUMMOW ACJ: That is authority that licence need not be contractual?

MR RAYMENT: Need not be contractual and indeed - - -

GUMMOW ACJ: But if it is not contractual, you then run into the problems of - - -

KIRBY J: The word in the Act is “authorize” which, in my mind, connotes it has to be authorised. Now, that connotes a more positive thing than simply consent. “Authorize” tends, to my mind, to conjure up the idea of some affirmative provision of agreement. I am thinking of section 13(2).

MR RAYMENT: Yes, but section 36 is perhaps the most directly relevant provision which uses just the word “licence”, not “authority”. Your Honours, reference was made back by Sir Nigel to what was said in Beck and we have Beck here on the list. It is at page 303 where Mr Justice Jacobs looked at this matter in relation to the 1911 Act which used similar words. Justice Jacobs said, page 303 of 5 FLR, towards the foot of the page, last main paragraph:

Now, the permission or consent or licence must arise by implication. I do not think that it is one of the kind which is referred to in s. 5(2) of the Copyright Act –

and that was, in effect, a written licence described there –

but that rather it is a question of consent which prevents an infringement within the terms of s. 2(1) of the Act; that is to say, once the consent of the owner of the copyright is given, then there will not be an infringement by acting within that consent.

It just comes back to all of that and that will be, in our submission - - -

KIRBY J: So that there would be consent in your submission for the use of the copyright plans for your client but if, for example, your clients wanted to reproduce and replicate a hundred buildings of a similar kind that would be a different kind of breach of the copyright.

MR RAYMENT: Right outside the licence.

KIRBY J: There would be no licence.

MR RAYMENT: It has to be on this land. It has to be in substantial accordance with this plan. Just before I leave the question of generality could I give a reference - - -

GUMMOW ACJ: Returning to section 13(2) for a moment, Mr Rayment, the use of the concept of assignment has a bit of a wrinkle to it, does it not? The act of assignment by the client, if that is the way you look at it, would itself be something that, without permission, fell within 13(2), would it not, because it is the exclusive right of the copyright owner to authorise anybody?

MR RAYMENT: Yes. Justice Jacobs, who did analyse the case that way, found that there was an implied right to assign also conferred by the copyright owner. Justice Merkel had a look at some of these more general questions - - -

HAYNE J: Well, again, just before you come to that, does it come to the proposition that the agreement between client and architect is to be understood as containing a provision, “I, the architect, consent to you and to any subsequent owner of the land, reproducing the plans in material form” - Part I; Part II – “and I, the Architect, authorise you, the client, to” – I am not sure whether it is assign, give the benefit of, authorise - - -

MR RAYMENT: Sub-licence, perhaps?

HAYNE J: - - - “pass on this permission to any subsequent owner of the land”. Is that the proposition?

MR RAYMENT: Yes. The primary proposition I am addressing is the first of those two. I am seeking to suggest that the architect gave third parties permission as a performance of his engagement or as a necessary consequence of his acceptance of the engagement to do the – a later owner who wished to avail himself of the development consent to do so and for that purpose to use his plans on this block only of course, and during the term of a valid development consent obtained by reference to those plans.

HAYNE J: Questions of revocability of that arrangement may require a different answer according to whether the client complains of revocation or the subsequent purchaser complains of revocation.

MR RAYMENT: Yes, perhaps, in an appropriate case, but if you look at the matter in terms of the engagement, why would you assume any right of revocation, with respect? You would really deny it, we would submit, if you look at them. If you find that the purpose of the engagement is to enable a development consent to be obtained, which must mean something with respect to the value of the land potentially being increased, would you then be significantly, perhaps, affecting, if you allowed a power of revocation.

Of course, you must – in the usual case there will be land sold with the benefit of development consent which would commit once a person bought it at auction that person to paying a great deal of money by reference to the development consent. So we submit if you look at the matter as between architect and client, it is sufficient to say there that there would not be a power of revocation in those circumstances, and as Lord Denning said in Blair the payment of the money would cover the use not only by the client but by a later owner of the block.

KIRBY J: I suppose it can be said that if the very point of the engagement is to get the development consent and it would therefore go to the local government authority and get the development consent on that basis and would be retained by the local government authority to ensure that the consent to development which the local authority has given under its statute is not departed from, and that it must therefore be there as a matter of public record tied into the local government or planning law, and by inference always available to be checked against for that purpose - including down the track if any change of use - that it is therefore not just some private inter partes document but it acquires a new additional statutory colour by reason of its very nature and purpose.

MR RAYMENT: Yes, the relevant law is not in contest between these parties. It was fully stated in the judgment of the learned trial judge, paragraphs 66 to 70, reference was there given to authority in this Court and elsewhere about the fact that it passes with the land and why.

Your Honours, there is no particular reason, in our submission, to think of a power of revocation because the architect has a full power to control the use of the fruits of his labour when he makes his original contract. He has a client before him to whom he can resort if any protection is needed with respect to his copyright. If he wants to be sure he is going to be paid he can take security, or refuse to do the work or require payment in advance or the like, and make inquiries about the bona fides of the client, and once he is paid he would not, we submit, be seen to have a legitimate complaint about later use of the land by a person who bought this with the benefit of this development consent that he obtained.

So we would respectfully submit that the way in which the consent issue was viewed in Blair, adopted as it has been in Canada, has very good sense attaching to it and the reasons for it, we submit, are equally present in the law of this country as they were in Blair, and otherwise an architect would be able to hold a client – hold perhaps to hold a later owner to ransom and might significantly detract from the benefit that the client obtains from his original engagement with respect to the owning of the land. We suggest, with respect, that the bare analysis is appropriate in Australia as it is in the United Kingdom and Canada.

GUMMOW ACJ: What about the United States?

MR RAYMENT: It is entirely different, it would seem, your Honour. We have not sought to – the considerations are not expressed in the same terms. I will give your Honour a reference to our research but, we submit, it just does not assist.

KIRBY J: There is nothing in the Trident line of territory, is there?

MR RAYMENT: No, not really. This is not a third party right in that sense, in our submission, because it is not a right at all. It is merely a consent or permission or it need not be a right.

GUMMOW ACJ: It is an immunity, really.

MR RAYMENT: It is an immunity.

KIRBY J: There is nothing said in Trident that by analogy to an understanding of implied licences under this Act that - - -

MR RAYMENT: No, I do not think so. We will check, but I do not think so, with respect, your Honour.

GUMMOW ACJ: The Full Court at this case expressly said that whatever this creature was, it was not a contractual implication of the variety in Liverpool City Council v Irwin. You accept that, do you not?

MR RAYMENT: We say it really does not matter what it is, with respect. Where it is on the spectrum between Liverpool City Council and Codelfa - - -

GUMMOW ACJ: It does matter, does it not, because Liverpool City Council v Irwin applies in certain factual situations unless shown to be excluded? It is not that sort of implication. It is very much tied up with specific circumstances.

MR RAYMENT: Tied up with the facts but the facts are very common. They are very common, that there will be a purpose of - - -

GUMMOW ACJ: We have to know where you stand because Justice Jacobs was, it seems to me, speaking of a principle of general application at page 304.

MR RAYMENT: Yes, 304.

GUMMOW ACJ: If you are putting your case on that footing or on an alternative footing, we have to know.

MR RAYMENT: We seek to put it in the alternative. We seek to put either that it is a Codelfa term which is sufficient for our purposes and would apply here, by which I mean be the Westernport term, or, more generally, as Justice Jacobs did. But it does not matter as between those two for any purpose in the case, we respectfully submit.

GUMMOW ACJ: It might, might it not, because on the second footing, you would need some findings of fact about this case?

MR RAYMENT: There are primary findings of fact about the contract and anything else is really a matter of inference in this regard. There is no, as it were - - -

GUMMOW ACJ: Primary finding of an inference. One way of looking at it, it does not seem that the primary judgment engages with this debate, really, at the necessary level of considering the legal structure.

MR RAYMENT: We submit his Honour was really right to conclude that the licence described in Blair applied in this case as between all parties, as between the client and as between later owners. We submit he was right to so conclude and indeed I think his Honour expressly did it in agreement with - - -

GUMMOW ACJ: Whereabouts do we find that?

MR RAYMENT: Justice Merkel that it was - - -

GUMMOW ACJ: In the primary judge’s judgment.

MR RAYMENT: There is a discussion of this matter of the kind of implication in the reasons. It is paragraph 134, I believe, your Honours, it is put in the alternative by the learned judge as we - - -

GUMMOW ACJ: Just a minute, paragraph 134?

MR RAYMENT: Paragraph 134 at 2683.

GUMMOW ACJ: Thank you.

MR RAYMENT: That is rather where the conclusion is expressed. So it is really put as a matter of law alternatively as a matter of - - -

GUMMOW ACJ: I understand (i) and (ii). What is (iii)? What is the legal description of (iii)? I understand his Honour is only repeating what the submission was.

MR RAYMENT: Yes, his Honour is. His Honour is really describing the direct licence point which may not depend on either (i) or (ii) in paragraph (iii). Your Honours, if I could go to the Full Court decision - - -

KIRBY J: Could I just ask you, was any point made in argument or was any finding made that it is inherent in the planning law that the licence should pass with the land, at least to the point that it is inherent in the granting of the development consent?

MR RAYMENT: Yes. In paragraph 66 in the trial judge’s judgment - - -

GUMMOW ACJ: Paragraph 66?

MR RAYMENT: Yes.

GUMMOW ACJ: You took us to that.

MR RAYMENT: I gave reference to this.

GUMMOW ACJ: These are the authorities on planning consents?

MR RAYMENT: These are the authorities on Ryde Homes and the like dealing with - - -

KIRBY J: That would explain why what seems to a layperson – I do not know – to be quite a substantial fee was paid. It may be that in comparison to the fees that lawyers charge it pales into utter insignificance, but in architects terms I would have thought this fee is quite a substantial fee.

GUMMOW ACJ: You would need evidence about that.

MR RAYMENT: Evidence about?

GUMMOW ACJ: About the fee, the rates of fees, why it is charged at a particular level.

MR RAYMENT: Yes, and we put it forward. We put forward what the usual fees were. His Honour refers to it in relation to the evidence of the architect who was called by the appellant. Paragraph 106 records the submission and then there was detailed evidence called about the usual scale of fees for obtaining development approval being in effect a proportion of the total. It is summarised in 105 but it is also referred to elsewhere. The last sentence of 105 summarises it:

Hence with an estimated project cost of $2.8 million to $3 million, based on an expected unit construction cost of $200,000 per unit, Mr Brooks calculated that a reasonable fee for preparing the plans for the development application, ‘including all necessary attendances with client and council officers through to the granting of development consent would be in the range of $28,000 to $30,000’.

The detail is in paragraph 211 of his affidavit and, as I say, there was no equal and opposite evidence from some other expert - - -

GUMMOW ACJ: What is the appeal book reference to 211?

MR RAYMENT: It is at 2720, volume 6.

KIRBY J: I begin to see his Honour’s reference to his anxiety about the business and moral objection to taking the money and their not being willing to take the consequences.

MR RAYMENT: Page 211 sets out Mr Brooks’ affidavit about this matter. Your Honours, I was about to go to the Full Court judgment, if I may, which is to be found at the end of volume 6. If one goes to page 2811, paragraph 22, having disposed of the question of an implied transferable licence being granted and whether it was assigned, their Honours then say in paragraph 23 that, in effect, it was difficult to know how the judge was able to reach the conclusion that he reached. That really enunciates the proposition that stands in contrast to what the Court of Appeal said in Blair, in our submission, without even mentioning Blair.

What was puzzling their Honours was what the English Court of Appeal had actually held in Blair, which is fully described in Copinger in the passage we have handed up, so understood. In paragraphs 23 and 24 their Honours come to the question of revocability – and I previously said something about that – but there was no issue raised before the judge of revocation. Nothing was pleaded. No point was taken . No suggestion of revocation was made at the trial.

Insofar as we are concerned with the contract between architect and client, there is no reason to assume that a power of revocation would not have been rejected out of hand by the client there and then you really have a question of whether the revocation was communicated and to whom. If it was communicated to my clients, were the trustees for sale said to be the agents of the architect for that purpose, they might have been surprised to be told that. Then you might get a question of whether my clients so understood it, upon which evidence would have been admissible.

GUMMOW ACJ: There was no case of conventional estoppel, was there?

MR RAYMENT: No.

KIRBY J: But if a person has a statutory right, a copyright, and if the person gives the licence to another person by contract at a fee which is the normal market fee, why cannot the person subsequently say, “Well, I did that because that was to them and I had an arrangement with them and they were agreeable, but I am effectively telling you that I now have a dispute and I am not going to give it to you, and this is my right. This is my right by statute. That overcomes any common law entitlements and I am not going to allow that to pass to you and you are on notice of that”? What is wrong with that? Why is that not a form of revocation of whatever arrangements it had with the contractual party?

MR RAYMENT: If there was a power of revocation, then it would need to be exercised and there would need to be proof that it was communicated. If it was done so indirectly, the understandings of the parties would be capable of being proved. Whether there was a power of revocation would have involved examination of the parties to the contract who were all called before the trial judge because of the defences that were raised in the case. Their evidence would have been admissible about the background facts known to them and the question of whether there should be a power of revocation and the like.

CRENNAN J: One relevant consideration would be, would it not, there was no consideration passing from your client?

MR RAYMENT: Well, except that the consideration in a way is provided by the payment of a very large sum of money which is far in excess of the land value that had just been recently paid by the joint venturers for the land prior to the auction sale.

CALLINAN J: What was the evidence of the value and a dissection of the price?

MR RAYMENT: There was none of that, but there was the fact that the land had been bought for some $500,000-odd in – it is in our chronology, I think – 1998 and then was sold after the development consent for 2.8 million in 2000.

CALLINAN J: It is not a necessary inference?

MR RAYMENT: No, not a necessary inference, but it is, in our respectful submission - - -

CALLINAN J: People outside New South Wales look in wonderment at the huge increases in prices that occur in Sydney booms, or New South Wales booms, particularly – this was coastal land, was it?

MR RAYMENT: Yes.

CRENNAN J: It was auctioned, was it not, on the basis that there was no warranty about the ability to use the architect’s plans?

MR RAYMENT: It was auctioned with a contract for sale which made it clear that there was a dispute about the matter and there was no warranty given by the trustees for sale themselves that there was - - -

GUMMOW ACJ: Where do we see that provision, Mr Rayment, in the record?

CALLINAN J: It followed exactly the advice of Justice Young, did it not?

MR RAYMENT: Yes, it was done because of judicial advice obtained in the Supreme Court. It is set out in the judgment of the learned trial judge, paragraph 21 at page 2622. There really are two matters that will become relevant to, as it were, the alternative way we put this case on the question whether – assuming the trustees had this licence vested in them in some way or available to them, whether they passed it on. The first is this matter, that the contract of sale said what we see here at 2622. We submit that negates liability on the part of the vendors for absence of a licence but is not inconsistent with its assignment if it is present. Indeed, it may well be thought to proceed on that basis because, if the trustees have the licence, the notion that they kept the licence and did not move it on, assuming there was only an assignable licence in this matter, is a very strange one. There is no reason at all why the trustees would not provide to the purchaser such right as they had to exploit the development concerned.

The second matter we would have to refer to in this regard is – just to answer the question. It was advertised for sale with the benefit of development approval, your Honours, but the contract made this clear when you obtained the contract or when you signed it.

CALLINAN J: But the fact of a development approval itself would enhance the value of the land without reference in any way to the specific approval because at least you would know that the council was not opposed to a substantial development and, indeed, one of 14 apartments on the land. It did not have to be that development, and that at least would have made it almost impossible, one would have thought, for the council to reject any like development or any development of that size. So that probably accounts for the enhancement of the value, or it arguably could anyway.

MR RAYMENT: It really is not impossible to reject a later development, with respect. It would depend very much on - - -

CALLINAN J: Yes, but very, very difficult for the council to justify a rejection of a development of about the same size and footprint – the same sort of footprint.

MR RAYMENT: I do not do much land environment work, but we submit it is well and truly understood that council do change their mind about these matters.

CALLINAN J: I did a lot, and I can tell you, Mr Rayment, that the councils almost always lost. Certainly they did take that attitude on occasions and that would put an applicant to more expense, but there needs to be a substantial change in circumstances for the council to be able to - - -

MR RAYMENT: But there can be policies which change too.

CALLINAN J: Yes, but usually there is some protection for approvals that have already been given, as you know, under transitional legislation.

MR RAYMENT: Yes. I think there were zoning changes here, your Honour, which are important. I will give a reference to it, if I may, a little later. Your Honours, the second matter I need to refer to – yes, at the foot of 2653 in paragraph 84.

CALLINAN J: Which volume is that, Mr Rayment?

MR RAYMENT: Volume 6, your Honour. We had to turn the soil under the approval by 10 May 2005 otherwise a new regime of regulatory planning changes applied and that would bring it back to an eight unit development.

CALLINAN J: That did make the specific development a real prize then, did it not?

MR RAYMENT: Yes. The second matter I need to deal with on this question of assignment by the trustees, apart from the contract of sale, is the terms of some correspondence which your Honours will find in volume 4 of the appeal book at 1907. The appellant wrote after contracts to the trustees - - -

KIRBY J: I am sorry, I did not get the page. What page?

MR RAYMENT: I am sorry, 1907, your Honour, in volume 4. This is a letter to the solicitors for the trustees for sale, Bartier Perry, from the appellant’s solicitors, and they enclose there a deed of assignment asking for it to be signed and available on settlement. If you read the deed, by clause 1 of it, page 1909, the trustees were asked, “For the avoidance of doubt and to the extent not otherwise previously assigned to, or enjoyed by, the Assignee” to expressly assign it and they failed to do so.

Now, that again, in our submission, we seek to deal with by saying that a refusal to confirm an express assignment is not to refuse a state of affairs which might amount to an implied assignment. We recognise that there are those two matters that need to be referred to.

Your Honours, can I just seek to address more squarely the alternative way we put the case on a Beck-type licence. Question one there is this. Upon the making of section 66G order in favour of the trustees for sale, was there moved over in some way to the trustees any Beck-type licence invested in the joint venturers? We wanted to hand up, if we may, reference to a Queensland case about caveatable interests which - - -

KIRBY J: What is the proposition you are putting?

MR RAYMENT: The proposition is that upon the making of a 66G order the right of the joint venturers to an interest in land ceases and determines by the force of section 66G itself. It is converted into an interest in the proceeds of sale. So they have no longer any interest in land. Therefore, if they had a licence of a Beck type prior to the making of the order, upon the termination of their interest in the land and their becoming interested only in the proceeds of sale, it would seem, the Beck licence, if it did not move to the trustees, would disappear, it would lapse. That, in our respectful submission, is a conclusion that would be not arrived at lightly. Just in the same way, as we respectfully submit, that if the licence was vested in the trustees, to think of it stopping there and not going over by implication to the buyer of the block, is also contrary to one’s general expectations, commercial expectations.

It so happens that section 66G which provides for a conversion by one of its subsections upon the making of the order is also the same position in Queensland, and that became important to the decision which I have just handed up of Della-Franca’s Caveat. So that is how we would seek to put the alternative case based upon the Beck-type licence, but in our primary submission we do not reach that question. Then, your Honours, I want to turn, if I may, to the part of the judgment dealing with apprehended bias.

CALLINAN J: Mr Rayment, could I just ask you question about that before you go to it? Was this a case that was on his Honour’s docket? Was there a docket system operating?

MR RAYMENT: Yes.

CALLINAN J: What acquaintance then did the trial judge have with the case before the actual trial?

MR RAYMENT: He heard several interlocutory applications made by my learned friend or his predecessors, so the case came - - -

GUMMOW ACJ: What was the general nature of those interlocutory applications, injunctive relief or – it started off as an action for threats, did it not?

MR RAYMENT: Yes, we proceeded for threats under section 202.

GUMMOW ACJ: Unjustified threats and infringement you were complaining about?

MR RAYMENT: Yes, your Honour. That matter came before the judge. We did not ask for any interlocutory relief of any kind, we asked for an urgent final hearing, and that came before his Honour as the docket judge immediately, but the next step was that the other side asked for this case to be cross-vested to the Supreme Court to be dealt together with proceedings that they were having, or that one of the joint venturers was having with the other, and that was refused.

So that his Honour dealt with the application to cross-vest and refused it. Then, my learned friend, Dr Birch, moved for a preliminary point to be heard in the case about the Beck-type licence; that is to say, upon the basis that there was no other licence possible than the Beck-type licence.

GUMMOW ACJ: There was a cross-claim on by this stage. There was a cross-claim on of infringement.

MR RAYMENT: Yes, there was. That was refused by the judge and at the same time my learned friend applied for security for costs and that was refused on the basis that he was really the attacking party and we were really the defendant in the case.

CALLINAN J: Mr Rayment, frankly, I have been waiting for a case of this kind to occur - the docket system, a number of applications before trial, extensive written material filed before the trial actually starts. It is almost inevitable that a trial judge will form some provisional views, and I put provisional views, at least, and it may be that there is a real problem about the docket system for that reason and about this intensive education of a judge before the case starts. Of course, the judge will have some provisional views about it and it is not - in the nature of human affairs it is very likely the judge may express them. Again, I put provisional views about the case.

I am not a bit surprised that there are applications based on apprehended bias in this sort of situation. I will just finish by saying, I do not know why the interlocutory proceedings would not be better undertaken by some other judge and the matter tried; it is a personal opinion but the matter tried by a different judge. I see it as a real mischief in the docket system.

MR RAYMENT: We do not have in the Supreme Court of New South Wales any firm position to that effect at all. On the contrary, actually, a lot of - - -

CALLINAN J: I know of the Commercial Court – Commercial Division, it is done there and it is done to some extent in the Equity Division. That does not mean that it is done elsewhere or that it is perceived to be a great success elsewhere, I can tell you, Mr Rayment.

MR RAYMENT: There was a little reluctance to have trial judges who heard contested proceedings for interlocutory injunction dealing with the trial at one time; I do not know whether that is current or not, frankly. But apart from that, it was not thought and, we would respectfully submit, should not be thought, that dealing with a matter of practice and procedure in the case would preclude a judge from hearing the trial.

CALLINAN J: It always extends beyond practice and procedure. The trial judge inevitably learns something about the parties’ cases, the parties’ attitudes and sometimes forms opinions, whether right or wrong, about obduracy or otherwise on the part of one party.

MR RAYMENT: Obduracy, did your Honour say?

CALLINAN J: Obduracy.

KIRBY J: The argument on the other side is that otherwise you get to judges - they have got to read it all up and get up to speed in the case and you lack a judge who is forming a view right along of all the little bits and pieces of the case within the confines of his or her mind. That is just the docket system; so long as the assignment of the docket is random and the litigant has no control over it, it seems to me – I can understand the argument that this is a way of making sure that you do not exhaust people by litigation before separate judges without the benefit of having the full background in case.

CALLINAN J: It saved nothing here because both the trial judge and the Full Court were highly critical of a great deal of irrelevancy that was introduced in the written and other material.

KIRBY J: Ten days of trial, apparently.

CALLINAN J: Very, very critical, so that is the other aspect of it. I seriously doubt whether it saves any costs; in fact, I suspect it increases them. But, anyway, it is just a relevant background and I have spoken in terms of provisional views, that is all.

KIRBY J: This is neutral to the parties, is it not because it is then Federal Court system - - -

MR RAYMENT: It is and it may be affected by budgetary considerations, what your Honour refers to. I do not know. I suspect it is, in certain courts.

CALLINAN J: Well, if it really does save costs and I do not think it does. I doubt whether it does. Anyway, it is neutral to you because I have used the expression “provision” advisedly but it may create impressions in the minds of people other than say counsel, reasonably minded parties and others at the back of the Court. But I think it is neutral from your point of view, Mr Rayment, what.....to be neutral from your point of view.

MR RAYMENT: Yes, thank you. Now, there does not appear to be any difference between the parties to this appeal on the question of the applicable principles. If your Honours look at paragraph 35 - - -

GUMMOW ACJ: The trouble is the applicable principles of necessity are expressed in fairly broad terms.

MR RAYMENT: Yes. But at any rate, at that level there does not appear to be disagreement between us if one looks at paragraph 35 of my learned friend’s submissions.

GUMMOW ACJ: Yes.

MR RAYMENT: Now, if you look at what the Full Court said about this matter, in our submission, it is not clear what paragraph 34 of their judgment means. They begin by saying that my learned friend’s factual appeal, he had a factual appeal to the Full Court, is not necessary to be dealt with and the factual appeal related to the very findings that we have just relied upon, really, in relation to the copyright and perhaps they were not pressed seriously on the court except to the extent that there was a bias question. But at paragraph 39 they had said that – in one of the earlier paragraphs, rather, paragraph 32. They begin to deal with disqualification. Paragraph 31 they say we do not need to deal with the findings of fact at all. Why they needed to deal on that view with the bias questions is hard to understand, with respect.

KIRBY J: Well, they say “lest the matter go further”. It was a ground of appeal. I checked that.

MR RAYMENT: Yes. It was a ground of appeal.

KIRBY J: It was therefore a ground of appeal before the Full Court and this Court, I think, has said, certainly in criminal appeals, that where there is a possibility of an alternative way to come to the conclusion, intermediate courts should deal with them.

MR RAYMENT: But so were the findings of fact in the same category and their Honours felt that they did not need to deal with those, so if the facts did not matter why did bias matter? That is really what we first of all say about paragraph 34. They say that some difference exists with respect to the bias point on the one hand and the factual findings on the other. We do not know why. They say:

Our conclusions render it strictly unnecessary to determine whether or not the judge failed to maintain the appearance of impartiality demanded by the rules of natural justice. However, lest the matter go further, it is necessary –

which sounds like it is not.....obiter –

for us to express our view on this issue, albeit succinctly.

The words “albeit succinctly” suggest that it is not going to be part of the reasoning which leads to the conclusion, perhaps. It is not after all a dissent of any kind.

KIRBY J: If you can find those cases, I do not know that we have said it in civil cases but we have certainly said it in criminal appeals. I remember in the Court of Criminal Appeal we had to go through grounds of appeal just in case we got ticked off for not having dealt with them and it was very clear that that was our duty in the Court of Criminal Appeal and in terms of principle if you raise a ground of appeal which might be a basis of disposing of the matter I do not know that you can criticise the Full Court for dealing with it if it is a ground of appeal that is determinative of the outcome of the whole appeal as apprehended bias may be.

MR RAYMENT: But it is their different treatment of the fact finding that raises the question of what they were really doing here, and to say it is going to be succinctly dealt with may suggest that this is, in effect, some sort of advice to a future court or an indication of how they would have dealt with it if it was a matter for them. Then when you look at the conclusion - - -

GUMMOW ACJ: Conceptually, the bias should come first?

MR RAYMENT: Yes.

GUMMOW ACJ: Because if it is made out there must be an order for a new trial because there has been a nullity?

MR RAYMENT: Yes, but they do not seem to.

GUMMOW ACJ: I do not know whether they are encouraged to deal with it in the sequence they did.

KIRBY J: Dr Birch, in the special leave hearing, did not really seem to want this Court to get into this matter. He wanted to have the whole substance of the matter dealt with and in the way that the Full Court had dealt with it, but if it is before us we just have to deal with it and in a proper way.

MR RAYMENT: Well, paragraph 41 of the judgment seems to uphold - - -

GUMMOW ACJ: I am sorry, whereabouts, Mr Rayment?

MR RAYMENT: Paragraph 41 on page 2817. I am sorry, your Honour has the reprint.

GUMMOW ACJ: Yes, I have it in [2005] FCAFC 138; 144 FCR 264.

MR RAYMENT: Your Honour, it is the first sentence of paragraph 41:

After anxious consideration we have reluctantly formed the view that the ground of appeal which alleges that the trial miscarried on the ground of apprehended bias succeeds.

So that seems to uphold the submissions, and yet no new trial is ordered, as your Honour the Acting Chief Justice points out, at all, and the Full Court having seen no need to deal with the factual appeal, for some reason treated “bias” as being in a different category but that reason is hard, with respect, to understand. Perhaps the reasoning proceeds on this basis, that the findings as to apprehended bias would justify the appeal being allowed but not, because of the other findings in the case, lead to a new trial. I do not know.

KIRBY J: That might be one way. The other way might be – and I am not sure this is available – the Full Court said, “We find error on the basis of the failure to give the respondent a fair trial and therefore we enter upon the appellate court’s own separate duty, error being found, to find the relevant facts ourselves and to apply the law correctly to those facts”.

MR RAYMENT: If you were doing that you could not, for example, reject the evidence of Mr Barrak and Mr Fares as clearly the court does.

GUMMOW ACJ: You would have to really be saying we will not order a retrial because it would be futile because it is so clear what the answer has to be, and it could not be otherwise.

MR RAYMENT: My learned friend said nobody had a licence at all from joint venturer forward, and that because of an express agreement between the joint venturers and the architect, and that was rejected. He could not make that finding of fact without hearing the witnesses, we submit.

GUMMOW ACJ: Taking all that on board, Mr Rayment - - -

MR RAYMENT: Well, I just really begin by saying that.

GUMMOW ACJ: Yes.

MR RAYMENT: Paragraph 40 of the judgment of the Full Court appears to be the basis of the findings of apprehended bias.

GUMMOW ACJ: That statement there in paragraph 40, subparagraphs (a), (b) and (c), who formulated them?

MR RAYMENT: I would say the Full Court did.

GUMMOW ACJ: It does not reflect the submissions in those very precise verbal terms, does it, in some written material?

MR RAYMENT: Well, their Honours put it that that was really the submission that was made to them. Those matters that are referred to in paragraph 40 seem to require one to look not at the cross-examination of Mr Barrak, which is referred to in paragraph 41, because it is hardly touched upon there, but to the interchange between the trial judge and Mr Murr who opened the case for the respondent and read the affidavits. That would require your Honours – and I would ask your Honours to do this – to look at volume 1 of the appeal book, page 198.

KIRBY J: As Justice Callinan has pointed out, this is a trial judge who is coming to this not completely cold.

MR RAYMENT: No. Your Honours, the passage really starts - - -

GUMMOW ACJ: Would you just explain to us how this witness fitted in the litigation?

KIRBY J: Mr Murr was counsel then appearing for the - - -

MR RAYMENT: Mr Murr of Senior Counsel was appearing for the respondents at the trial.

GUMMOW ACJ: So this was only said to counsel?

MR RAYMENT: Yes, this is just an interchange between the judge and counsel when counsel were introducing the case and reading the affidavits. Essentially we tendered a few letters about the threat and the other side started in this case, and this is Mr Murr starting. The judge said, just below line 35, page 198:

It just struck me, just when I was glancing at this material when writing that last judgment of mine and again when just going over the material this morning, that there seems something enigmatic about a person who is claiming the copyright and is a co-owner who in effect profited by selling the land on the basis implicitly that there was a development consent which was obtained in respect to the land and therefore go to the land value, to then say to the purchaser, the innocent purchaser without notice of all these equities – and I’m not putting any sense of priority to them, but just trying to use the analogy as best I can – they feel something enigmatic – I would say wrong but enigmatic – about the notion of that co-owner then, and also being a copyright owner, then saying well, you might have paid for a value for this land on the basis of a development consent in respect of certain plans but you can’t use those plans and therefore you have got to go and get another development consent and some other plans to proceed. It doesn’t seem to measure up.

CALLINAN J: Mr Rayment, this is in your favour. This is all part of a long debate between his Honour and counsel which culminates at page 203, line 25. His Honour says “that has given me a useful background”.

MR RAYMENT: Yes, exactly, and I was about to draw attention to it. We would respectfully submit that although the Full Court have mentioned this paragraph, there is absolutely nothing wrong with it.

CALLINAN J: It struck me as the sort of discussion that - - -

MR RAYMENT: From the beginning of this paragraph to the end that your Honour refers to. We are concerned with 198 to 203 which is the very passage the Full Court refers to.

CALLINAN J: The sort of discussion a judge often has with counsel, “These are the matters which at first sight may raise difficulties. What are you going to say about them?”.

MR RAYMENT: Exactly, that is precisely - - -

KIRBY J: Occasionally we have – I hesitate to say this – even more robust exchanges with counsel at the Bar table. I have done so myself with you and Dr Birch.

CALLINAN J: Blood and skin flying at special leaves, sometimes.

MR RAYMENT: Yes. Now, we submit if you look carefully through that line by line - - -

KIRBY J: We said something in Antoun recently, did we not, that you should not be too sensitive about this? This has been going on for 800 years of - - -

MR RAYMENT: This is actually - - -

KIRBY J: With counsel, not with witnesses, but with counsel.

CRENNAN J: I think Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 this Court made observations to that effect.

MR RAYMENT: Yes. Well, the days when the judge sits quietly during the case are really gone, one would hope.

GUMMOW ACJ: Yes, I do not think you need to reiterate the point.

MR RAYMENT: Mr Murr, as it were, answered these questions as well as, with respect, his instructions permitted and his Honour took close note of what he said and, indeed, said again later on how impressed he was by it.

KIRBY J: I think the sting is said to be in the repeated like motive like recurrence of the matter and that his Honour would not let it go and was chewing the bone and kept coming back at it and interrupted, I think, at one stage the cross-examination of a witness and then said very similar things in his reasons for judgment. Now, that is said to be – the accumulation of it is said to be the sting.

MR RAYMENT: I have got to take it in turn and this is put forward in the Full Court. This is the most directly relevant passage of all of their passages to paragraph 40 of their judgment.

HAYNE J: The course taken in the Full Court reasons is perhaps best understood against the background provided by the notice of appeal as it came to its final form at 2795 and following where one comes to ground 20 of the grounds, being the ground alleging apprehended bias, and finds no prayer for a retrial. It may perhaps explain the way in which they dealt with it.

MR RAYMENT: Yes.

KIRBY J: Yes, but Justice Gummow’s point earlier is surely conceptually right. If you find bias and that is the matter that is complained of - - -

HAYNE J: It is ground 1 and it is a prayer for a new trial.

MR RAYMENT: Yes, but it would not if the court upheld it. It still would not stop the court from ordering a new trial, with respect.

HAYNE J: Yes, I understand that, but the path taken by the court is perhaps explained by the way in which the appellant puts it.

MR RAYMENT: Your Honours, we submit – I am sure your Honours would look at it, but we submit, if you go through those few pages which are most directly relevant to paragraph 40, there is absolutely nothing wrong with anything the judge said at any point. It is, indeed - your Honours remember that Mr Murr, who was the barrister to whom this was directed and who was the barrister appearing for the witness to whom your Honour made reference or to whom reference was made, did not himself feel able to make the application in the case. That appears at - - -

KIRBY J: We know he did not make the application. How do we know he did not feel able to make it?

MR RAYMENT: It is referred to at volume 1 of the appeal book.

CALLINAN J: It is common ground between the parties. Mr Donovan, QC, came in, did he not, to make the application?

MR RAYMENT: Page 409, Mr Hall, junior counsel, said to the judge, just before line 10 - - -

HAYNE J: It is an extraordinary thing to read in a transcript.

MR RAYMENT: Well, it is there, with respect.

KIRBY J: What page in the appeal book?

MR RAYMENT: Page 409, lines 6 to 15.

HAYNE J: Legal professional privilege may perhaps be thought to have been engaged in some relevant respect which is the client’s privilege.

CALLINAN J: At what stage did this happen, Mr Rayment?

MR RAYMENT: Mr Hall, junior counsel, was - - -

CALLINAN J: No, at what stage of the trial?

MR RAYMENT: We were in about day two, or three – schedule day three which did not proceed because it was wholly taken up with the disqualification application made without notice. Your Honours, we submit as to the questions asked by the judge of Mr Barrak in the course of his cross-examination by me those questions do not seem to go to any matter referred to in paragraph 40.

We have drawn attention in the written submissions to some remarks of the judge which we submit attenuate any impression which the Full Court suggests is given by the questioning. We add, your Honours, that after the judge’s questions of the witness, which were mainly directed to the absence of records in the case and his surprise about that fact, the other side went off and found records which they said satisfied the need for records and put them forward in the court and asked for findings that those records were correct. So that really one was in the position that, to the extent to which that matter arises, a judge having asked a witness why there are not records provoked the witness to go off and find them and they were then exhibited to an affidavit which was read the following week before the judge, said to have been found over the weekend.

Paragraph 46 of the Full Court judgment refers to something said by the trial judge at the end of paragraph 247 of his reasons in the case about Mr Fares’ tax returns. In paragraph 46 their Honours draw attention to what was said by the trial judge. If I could go back to volume 6 of the appeal book, Justice Conti’s judgment, paragraph 247 at page 2744 set out that there were some – this is an isolated remark by the judge, that tax returns of Mr Fares were tendered, that is, by Mr Fares, and they show that for the year in question, 1999, which was the year of the creation of these plans, a total income of $153,000, total expenses of $154,000, so a loss. He points out:

Included in the expenses were subscription fees of $1,025 paid to the Board of Architects, and also ‘payments to Associated Person GF’, thereby referring to Mr Fares.

So his salary came out.

PDD sustained a similar small deficit for the preceding fiscal year ended 30 June 1998 of $1,589.57. Those financial results could not be described as reflective of a thriving or substantial architectural practice then being conducted by Mr Fares, for what that might ultimately matter.

Now, it has been put into play by Mr Fares. We said, “You have no track record as a builder. There is no way that your joint venturer would have agreed to you as a builder”. One of his answers to that was, “I am a highly experienced architect and I was designing and supervising the construction of many buildings”. That is referred to by the judge just a little earlier in the judgment at paragraph 213, at 2722 to 2723. Your Honours see that at line 3 on page 2723 the judge is setting out Mr Fares’ testimony in the case:

He spoke of PDD’s ‘long history of design and construction on behalf of itself and clients’ –

There were some questions asked of him about this matter, which I will not take the Court through in detail. In volume 1, pages 284 to 287 in cross-examination he referred to his lengthy experience as an architect.

GUMMOW ACJ: What was the relevance of his experience or inexperience?

MR RAYMENT: We called Mrs Haviland, Mr Rix and Mr Rix Jnr to say that they never agreed to have him as the builder in the project and never would have done so because they knew that he had very little experience as a builder. In an attempt to answer that case he put forward what appears in paragraph 213 of the judgment that although he may have only been involved in a few building jobs, he nevertheless, or the company, had a long and detailed experience designing buildings and supervising builders and therefore would have been thought by his joint venturers to be worthwhile employing as a builder, something like that. In paragraph 214 he asserted that he told certain things to the joint venturers.

GUMMOW ACJ: Yes.

MR RAYMENT: So it was not irrelevant to the case as he put it forward to make reference to this, but in any event it was - - -

KIRBY J: You could understand it might be like the law where somebody has done all the hard work, all those boring pleadings and all those horrible terrible requests for particulars and interlocutories and then someone swans in and takes the case and the trial and there can be a feeling then that you are not getting what you really deserve. That presumably was the outlook of Mr Fares, that he did the design and expected that he would be supervising the building and getting all the profits and benefits of that, but he did not end up getting it.

MR RAYMENT: His case was he was going to derive 10 per cent of the total construction cost as the builder plus cost.

KIRBY J: But that was as investor. That was not as architect?

MR RAYMENT: No, it was not. It was as architect. He was suggesting that the architect’s involvement in the case was also to be as builder. So he was going to be builder, architect, developer. That was his contract, not just a contract for architectural services at all, and he was rejected of it. That was really the issue of fact that was resolved by Justice Conti.

KIRBY J: Have you said everything you wanted to say about the reservation of the fact that there was a dispute between them and that this, as it were, put your client on notice that this was not going to be the ordinary Blair case; this was going to be a case where you had to work out some special deal with the architect?

MR RAYMENT: I believe I have. What we sought to put, and indeed what I seek to put still, is this. We say we did not depend upon our primary case. We did not depend upon any licence granted to us by assignment. We had one which extended to us, just as the Court of Appeal held in Blair, and that was our primary case. Our secondary case was, although we were told something about disputes and the like, we were not given any detail of it, and if there was a Blair-type licence in the case we put at the alternative part of the case, we submit that on the proper construction of those contractual terms an assignment of it was not negatived.

Your Honours, that I think does fully answer the question which your Honour asked me. There are several – we were not making an estoppel case, of course, against the architect. Those contractual provisions might have been highly relevant to that. We never made an estoppel case in this matter.

CRENNAN J: Was there evidence that your client offered to pay for the drawings at some stage?

MR RAYMENT: Yes, we did.

GUMMOW ACJ: Can we have a reference to that?

MR RAYMENT: There was a letter to Mr Barrak asking to be told. We believe it said that, “You say you have not been paid for this. How much do you want because we will consider making payment of a reasonable amount?” That was right from the outset and, in effect, that drew no reply. There was then referred to in the cost judgment immediately after the commencement of the proceedings an offer to pay a reasonable sum for the licence plus costs, and we offered to pay that figure that we later proved was reasonable.

CALLINAN J: The Full Court referred to it as a modest sum.

MR RAYMENT: It was proved to be a reasonable sum. There was no evidence to the contrary.

CALLINAN J: It seemed an unusual term, I must say.

MR RAYMENT: Thank you, your Honour, but there was no evidence to the contrary. So we said, “We will pay you $30,000-odd plus costs”, and the other side responded by saying they wanted $5 million.

GUMMOW ACJ: Is this the correspondence that appears at 2786 after the cost judgment? Page 2789, line 45.

MR RAYMENT: Yes, 2786 is the Calderbank offer offering to pay $33,000 plus costs for a licence and 2789 was the response saying they wanted 5 million.

CALLINAN J: How do we know that is a reasonable sum?

MR RAYMENT: Because we called the architect to say that that was a reasonable sum for the - - -

GUMMOW ACJ: Where do we see that?

MR RAYMENT: That was the paragraphs that I gave your Honour before. It starts with, I think - - -

HAYNE J: Mr Brooks’ evidence, is it?

MR RAYMENT: Mr Brooks’ evidence, and it is referred to by the judge at paragraph 105 and later on. Paragraph 105 refers to the evidence, in effect, and later on the detail of it is given at 211. As I say, the other side did not answer Mr Brooks’ evidence with any alternative view of an expert about what an architect would charge for the plans. Instead, they sought to call evidence about what a builder would receive.

CALLINAN J: It is at page 2804 where the Full Court says “a modest sum”.

MR RAYMENT: Yes, thank you, your Honour. That, in our submission, is contrary to the material as well; indeed, contrary to the only evidence in the case. So we have submitted that to accept that there is no licence to use the plan lodged with the development application will have the effect of making the development application of no effect as the development approval refers to those plans and embodies them as part of the approval itself. My client, as it were, was drawn to the auction by an advertisement referring to that development approval.

There are some housekeeping matters that I have to attend to, but subject to those matters which I might seek to, if I may, refer to after lunch, those are our submissions.

GUMMOW ACJ: If this matter goes back and if you were to succeed here, there would still be the question of damages for threats, would there? I am looking at 2831.

MR RAYMENT: Yes, your Honour, which have never been quantified.

GUMMOW ACJ: No. Very well, thank you. Yes, Mr Birch.

MR BIRCH: Your Honours, could I adopt this approach. I would like to start by saying something about the Blair decision and the Blair licence and the nature of it. I would like to then turn and look at some of the facts and circumstances in some of the evidence. I want to put a submission that, virtually whatever view one takes of the law, we ought to win on the licence issue. That discussion of the facts and circumstances will allow me then to lead into what I wanted to say about the interaction between this issue and the bias issue and my submissions on that.

KIRBY J: You have no notice of contention before the Court and you have no cross-appeal to suggest that there ought to have been an order for a retrial in the Full Court.

MR BIRCH: Correct.

KIRBY J: So that you are seeking to sustain the way in which the Full Court dealt with the bias issue as a sort of supplementary secondary type of issue?

MR BIRCH: Yes. Well, the reason - - -

KIRBY J: Justice Gummow surely is right, that logically it comes first because it strikes at the heart of whether your client had a fair trial, and in that matter the public has an interest, not just the parties.

MR BIRCH: Your Honour is right so far as the general run of cases would be concerned. We say this was different because the court found, as a matter of law, on – and I will have to analyse the facts to make this out, but on the most favourable evidence to the appellants in this matter there was not a licence. So, in other words, it is implicit – I do not think they say this anywhere, but it is implicit, in my submission, that what they were finding was that no matter what facts could have been found, there was never going to be a licence in favour of the appellant and, therefore, a retrial would have been a futility.

GUMMOW ACJ: But you did not seek one. Ground 20 at 2798.

MR BIRCH: Your Honour is right. I looked at the notice of appeal and it is not there, so there is no doubt it was not sought in the notice - - -

GUMMOW ACJ: That being so, is Mr Rayment not right, the Full Court should simply have not got into this question?

MR BIRCH: Well, it depends - - -

GUMMOW ACJ: I have to say to you that that seems to me the obvious way the Full Court should have proceeded. It is a serious matter.

MR BIRCH: It is a serious matter, your Honour.

GUMMOW ACJ: And has to be formulated seriously and correctly. It cannot be dealt with “succinctly” with some sort of coda.

MR BIRCH: Well, your Honour, “succinctly” does not mean that it was not dealt with adequately.

GUMMOW ACJ: At all. How did it come to be dealt with at all in the absence of the proper process?

MR BIRCH: Well, the way the appeal progressed was this, that there was a number of possibilities open to the court so far as the law on the copyright issue was concerned. It might, for example, have upheld Mr Rayment’s submission regarding a Blair-type licence. If it was to uphold that submission in its most broad and general form, then it would have been the case that we would have been doomed on any retrial and there would have been - - -

GUMMOW ACJ: You had to make a hard decision, whether you were going to agitate this bias question in your notice of appeal because it is conceptually quite disparate and antecedent.

MR BIRCH: But the difficulty, your Honour, was this, that until the Full Court’s judgment comes down one does not know whether they will make a finding that on the law we are doomed and so a retrial would be futile from our perspective or we are destined to win on any view of the facts and so we do not need a retrial because we will win anyway, or whether the Full Court will - - -

HAYNE J: That is a submission that seems also to reflect on the substance of the apprehension of bias argument for it seems to be saying that there was no relevant issue of fact that might be seen to have been prejudged by the reasonable observer. Really, you are trying to straddle a barbed wire fence, are you not, Mr Birch?

MR BIRCH: Your Honour, that is not the case because I have indicated the two extremes where a retrial would be futile because one side or the other would be destined to win, but the middle position, your Honour, which was a position that was potentially open until the Full Court’s decision came down, was that they would not find a licence as broad as Mr Rayment contended. They would not find that there was no scope at all for a licence on any view of the facts. They might find that there was scope for a licence that might be implied depending upon the facts and it might, for example, have depended upon the way one characterised the $27,000 payment that was made for the eight-unit plan.

So I acknowledge what your Honour says in this sense, that we put we put our case at its highest in a fashion which, if it were accepted, entitled us, we said, to victory as a matter of law, no matter what the facts. But, on the other hand, there was a real possibility that the court would not accede to our highest submission. The court would find that the law was that there was a possibility of an implied licence, that possibility of an implied licence could depend upon some facts, and then there would be a difficulty because if we had to rely upon the facts as found by his Honour the trial judge, then our contention was that there were flaws in that factual process.

HAYNE J: It comes to this, Mr Birch, that your complaint was you did not have a proper trial. You joined with that a contention that you were entitled to summary judgment, for on no view could the case against you be made out. That is two very large propositions. Short of the second one, that is, “On any view of the facts I must win”, the complaint, “We didn’t get a proper trial” must take pre-eminence if it is to be made at all.

MR BIRCH: Your Honour, a litigant ought not, in my submission, however, to be placed in this situation where having looked at the judgment one perceives a legal argument which is open which would lead to a party being entitled to a finding in its favour but that legal argument not being one that can be certain and there being the reasonable possibility that a court might reject it and find the legal position is one where factual determinations are relevant. So the party has, as your Honour says, in substance a summary disposal point, if I can call it that, but on the other hand has a concern that the trial of fact was one that was impaired for the reasons that we complain of.

The litigant, in my submission, ought not to have to make a choice. It ought not to be engaged in a jeopardy where it says, “Well, I will run the legal point alone and hope that I win on my highest argument and, if I do, well, then of course well and good”. If the litigant runs that point and does not succeed on that point, the court says, “We do find the facts are relevant, we now look at the facts the judge found and we find against you”, then the party would have suffered a significant disadvantage. One could run alternatively on the defect in the trial alone, ignoring the legal issue, and then that would commit one to a retrial, no matter what the outcome. So I suppose what I am saying is that there is a dilemma for a party faced with those two grounds for attacking the verdict.

KIRBY J: Exactly. It is the dilemma that requires you to elect because it just leads to different orders because of something fundamental. If you are saying bias, that you have not had a trial, then you cannot then validate the orders and deal with them. You have to go back to square one, both for the parties and for the public, and have a retrial. You were really trying, as I read the notice of appeal, to put the complaint about the bias in as a little bit of poison in the well that would soften their Honours up in order to come at the issue of substance which you were content to argue, but that is not permissible. It is not the way a court of appeal can operate. It either strikes it down and sends it back for retrial, or it has to say there are some errors in the findings of fact, perhaps because of the way the judge approached it, and then it has to make its own findings of fact. But that is not the way the Full Court approached this case.

CRENNAN J: The logical problem for you, Dr Birch, implicit in what you have just said is this, that you are saying, “Well, so long as we have won, we have no complaint about the trial not being fair”. That is really what it comes down to.

MR BIRCH: Well, no, what we – I suppose one could characterise it that way, your Honour, but, with respect, that would not be entirely fair because the litigants’ position is that they consider that they have a legal right to a particular verdict.

KIRBY J: But they have to then face up to the fact that that leads to a setting aside of the orders and a retrial. It is just a matter of logic and principle because it is not just the parties who are affected. It is the community. They can waive it.

MR BIRCH: Your Honour, what we would say is, where one has an appellate hearing which results in a determination of legal issues and determines them in such a clear fashion that there is no longer a purpose served in a rehearing, then one does not order it. It ought not to be the case that one – I have described the dilemma and I think your Honour said to me there has to be an election. I suppose I am saying our argument is that there ought not to be such an election put and it is very difficult for a litigant who considers that they are quite justified in having a verdict entered in their favour, either as a strict matter of law on the one hand or after a trial on facts properly found on the other, to say, “Well, I am going to take the pure law path or I am going to take the facts properly found path, but I am not allowed to take both”.

HAYNE J: You can take both in the alternative, but you have to take them fully, and that means in your notice of appeal, if you are going to allege appearance of bias, you have to seek a new trial. You did not.

MR BIRCH: Your Honour, if we had put in a prayer for a new trial – let me suggest that it might well have been the case that had the Full Court formed a different view about the nature of the facts, say they had reached a point where they were unable to decide the copyright issue without an appropriate bed of factual findings, then one presumes that they would have had to bring the matter back and find out whether the parties were seeking a retrial and we would have had to grasp at that point the nettle and say that flows from the way we have presented the case.

The poison pill argument, your Honour, I would have to reject and say this, that it would be wrong to put things like that if they were not put seriously and if they were not properly pressed and properly supported. We did not make the application and then attempt to step away from it. We made the application and we fully argued it before the Full Court. We nailed our colours to - - -

KIRBY J: But did not anybody in the Full Court say that the logic of your application is, “We don’t get into the copyright issue; this is a new trial issue”. Did no one say that?

MR BIRCH: Your Honour, I am racking my brains. I do not have a recollection of it but I am always nervous of giving an assurance without having fully checked the transcript.

KIRBY J: What is the mistake in saying that that is a threshold question that should not be submitted unless it is seriously put? If seriously put, it should be dealt with and faced up to, despite all the disadvantages of a 10-day trial and so on, and that it should be dealt with at the beginning and it has different consequences than dealing with the substance of the appeal.

MR BIRCH: With respect, your Honour, it would lead to enormous difficulties. Assume that we had said at the beginning, “Your Honours must deal with our bias application as a threshold issue”, and the court might say “Okay, we will hear it and then if we accept it then there will simply be a new trial without us determining the legal issue at all”.

KIRBY J: Not at all. I do not see a difficulty. We have often seen cases coming here where bias has been alleged and then rejected and the court has gone on to deal with the other issues. So it is not unusual for that to happen.

MR BIRCH: If it had been accepted and rejected, then we would fall back on our second argument. In terms of coupling both matters in the notice of appeal, that would be unexceptional. We surely were not, we would suggest, faced with having to bring an appeal which raised the bias issue alone and forgo the opportunity of raising other arguments because - - -

GUMMOW ACJ: That is not being put to you.

MR BIRCH: No.

KIRBY J: I want to throw you a bit of a lifeline here. On the basis of what has been said so far and the written submissions, I must say I am inclined to think that though his Honour’s interventions were robust and repeated and I can sort of understand in a way that a layperson might feel that that was not right, but that applying the principles of law that this is not a case where there is bias and perhaps it is not a case where that ought to have been raised, and certainly not in the way it was, but that there may be a real issue in the copyright question and that we should therefore, as it were, reject the bias issue and get on with the real issue in the case which is the copyright question.

So you may have a point. You may be entitled to hold onto what the Full Court did. I just feel it has become a bit of a distraction and I would not want it to deflect from the proper consideration of your copyright issue. Maybe that is something – you were going to start with the copyright issue anyway and maybe that is something you could consider over lunch. I just speak for myself but - - -

MR BIRCH: It has been suggested to me that I am not behaving entirely fairly in coupling them together at all but - - -

KIRBY J: No, this is what the Full Court did. We are here dealing with the reasons and orders of the Full Court.

MR BIRCH: I will deal with the copyright issue first, but just on the procedural question, the order in which one deals with them, what I wanted to perhaps finish saying to the question that your Honour put to me was this, that had the bias issue been dealt with as a threshold issue by the Full Court, if it had been rejected, they go on and deal with the legal issues. If it had been accepted, then it would be impractical in this sense to say we do not look at the other issues. We then order a retrial forthwith because then we simply have to go back for a retrial even though we want to say the primary judge’s legal reasoning was wrong and we want that reviewed and reversed by the Full Court - - -

KIRBY J: I just wonder if the Full Court did not interpret (a) that you did not seek a new trial; (b) that you advanced extensive arguments on the copyright issue as your ultimate waiver of the complaint of apparent bias on the part of the judge, and that therefore on that footing they went on to deal with the copyright issue, indeed, dealt with it first, but felt obliged to say something at the end about your arguments of bias.

MR RAYMENT: We should draw attention, your Honours, to paragraph 39 of the Full Court’s judgment, first sentence, at page 2816 in volume 6.

GUMMOW ACJ: Paragraph 39:

The appellant now contends that, even if all other grounds of appeal fail, the orders made by the primary judge should be set aside and a new trial ordered.

MR BIRCH: I am indebted to my friends. My recollection - - -

GUMMOW ACJ: Well, “now” as distinct from “not in the notice of appeal”.

MR BIRCH: Yes.

GUMMOW ACJ: All right.

MR BIRCH: My recollection – well, let us not bother about what I recall or not recall. The submission I want to put to the Court is that what was available was a new trial if there were factual findings that were necessary in order for the proper disposal of the matter.

GUMMOW ACJ: What stage did you “now contend”? Their Honours are making a point, a temporal point.

MR BIRCH: Yes. I did not draft the notice of appeal but I prepared submissions and I addressed the court orally and I cannot say at what stage in that process I made that point. It could well have arisen in the course of oral argument when the court, as I suspect it would have, said “How are we to dispose of all this?”

GUMMOW ACJ: Well, exactly. Very well. Now, you want to deal with the licence point?

MR BIRCH: Yes. Your Honours, if I could perhaps start with Stovin-Bradford. Can I say this? Our view is that the decision in Blair is open to the interpretation that it is authority for some form of direct licence of the kind contended for by the appellants. We say that is not a proper reading of Blair, but if one goes to the Stovin-Bradford decision which was decided I think about eight months later. It was also the English Court of Appeal and Lord Denning was also the presiding judge. If one goes to page 1014 in the report, just below G close to point 9, Lord Denning said this:

The defendants argued that that case –

Blair v Osborne which he has just referred to in the previous line –

is a decisive authority against the architect. The result of it was, said the defendants, that whenever an architect prepared plans so as to get planning permission, the client could use them for the building, as he liked, without further payment, even though he did not employ the architect for the work.

Just stopping there, of course, the direct licence argued in this instance is a little narrower. It is not suggested by Mr Rayment that they can use the plans as they like, but it is getting close. His Lordship continued:

I do not think that is a correct interpretation of Blair v. Osborne & Tomkins, or of the Australian case, Beck v Montana Constructions –

and then over the page, beginning from the top, his Lordship then engages in quite a detailed analysis of the RIBA conditions that were the conditions of the architect’s contract in the Blair decision - - -

GUMMOW ACJ: Then he comes to 1016C: “in the present case Mr. Stovin-Bradford charged far less” – only100 guineas.

MR BIRCH: Yes.

KIRBY J: That is not your case?

MR BIRCH: No.

KIRBY J: You are in the big league.

MR BIRCH: Well, I will come to that evidence in a moment. Towards the bottom of 1015 he refers to the fact:

that the scale charges for partial services are so fixed that they contain a “built-in” compensation for the use of the designs and drawings right through till the completion of the work.

There was an earlier reference to the fact that under that contract either party could terminate the contract at any stage. The point is that when one looks at this it is quite clear that the court is engaging in inventing any form of new licence. It is applying the principles of Beck v Montana in a conventional fashion. It is saying that the relationship between the architect and the client in this particular case, when one looks at the sum, all of the conditions, the fee structure and the like, permits the inference that there was not permission to use the plans beyond the very limited purpose contemplated in Stovin-Bradford. It was simply dealing with obtaining council approval. Whereas with Blair v Tomkins it was possible to conclude, because of the RIBA conditions, that a more general consent was intended.

GUMMOW ACJ: The argument of Mr Michael Fysh, who is an expert in this field, now Judge Fysh, at 1011D makes the point, does it not:

As the agreement was for a feasibility study and partial services and the payment was on a quantum meruit basis the only licence that can be implied is a licence to use the plans for the purpose for which the study was made –

which is what Justice Crennan was putting earlier this morning to Mr Rayment, I think.

MR BIRCH: Yes. Your Honours, the licence that is sought by the appellant, however, is couched in terms which does not take any cognisance of the specific circumstances of the contract of retainer. The pleading that was before the trial judge in the defence to the amended cross-claim – it is at page 36 of volume 1 of the appeal books – sets out the facts of plans being prepared for obtaining developmental approval and consent having issued for the land. So those are the two facts that:

(a) the Cross-Claimant prepared the plans and drawings for use in a development application made pursuant to the Environmental Planning and Assessment Act 1979 (NSW) in respect of the land at 5 Laman Street, Nelson Bay;

(b) in accordance with the said Act any development consent issued for land in New South Wales runs with the land so that subsequent owners . . .

(c) by reason of that circumstance, the Cross-Claimant gave a licence to all persons who might become owners of the land before the expiration of the development consent –

can I then pause there and say two things. Firstly, it is to all who become owners of the land and it is expressed to be for the period before the expiration of the development consent. So it is quite plainly pleaded as a licence for a term and Mr Rayment makes clear that he intends it to be irrevocable during that term. That is the form in which he puts his argument. The circumstances from which the implication is drawn are those in (a) and (b), that is, the preparation for obtaining consent and the issue of consent.

CALLINAN J: Mr Birch, your client was rejected in relation to – I think the argument was that because he was to get 10 per cent of the construction cost that militated against any licence to anybody. Was that the argument?

MR BIRCH: Yes, that was one of the arguments, your Honour.

CALLINAN J: Really, for reasons of credibility as much as anything else, I think the trial judge rejected you on that.

MR BIRCH: Correct.

CALLINAN J: If that rejection were wrong or arguably wrong because of bias or ostensible bias, then you would say, I suppose, that the plans were not prepared merely to get a development approval but also as one step towards enabling your client to get 10 per cent of the construction costs?

MR BIRCH: Yes. The way the issue was put at the trial was that there was an oral agreement made between the architect, Mr Fares, and his company and in effect the joint venturers. He was of course interested in the joint venture. He was a 50 per cent owner of the company, Landmark.

CALLINAN J: There is a factual issue here which was resolved against you, but on a retrial for any reason you might win on that factual issue and that would tend to negative the term which is pleaded here to which you have just drawn our attention.

MR BIRCH: It would provide the strongest basis for rejecting the implication that was pleaded against us, but we say that even if one puts aside the ground on which we lost, the evidence of the appellant itself as to the way we came to produce the 14-unit plans was sufficient to reject an implication. I notice the time and I can deal with that - - -

GUMMOW ACJ: Yes, we will adjourn until 2.00 pm.

AT 12.50 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.04 PM:

GUMMOW ACJ: Yes, Mr Birch.

CALLINAN J: Mr Birch, can I just ask you about a couple of factual matters before you proceed? Justice Conti made a finding that unless substantial work was undertaken by May 2005, in effect, the 14-unit development would lapse or approval for it would lapse and you would be confined to an eight-unit development. Do you challenge that finding in any way at all?

MR BIRCH: Your Honour, I am not sure whether the evidence was unequivocally that way. There was certainly some suggestion of that. There was some evidence that I was going to briefly refer to which is at page 1855, which is in volume 4.

CALLINAN J: That finding, I think, is at paragraph 84 at 2653. I think that is the finding. Sorry, I did not mean to interrupt you, but before you - - -

MR BIRCH: No, sorry, I did not catch the reference to the judge’s - - -

CALLINAN J: I think it is at 2653, paragraph 84, a finding in fairly unequivocal terms, I think. I do not know whether I have given you the right reference. That is right.

CRENNAN J: At the bottom of the page.

CALLINAN J: Yes, “will have the apparent consequence of confinement”.

MR BIRCH: Yes, I think that is correct, your Honour.

CALLINAN J: So you do not challenge that finding?

MR BIRCH: No, I do not, your Honour.

CALLINAN J: Is there any evidence about what in fact has happened on the site? Do not tell me if there is no evidence, but is there any evidence of what in fact happened?

MR BIRCH: We were asked to give some statement from the Bar table in the Full Court as to what had happened and there was some evidence given from the Bar table. I do not think there was evidence one way or the other before Justice Conti.

GUMMOW ACJ: Was there any agreed fact?

MR BIRCH: Not that I recall. Sorry, I do not think what was said from the Bar table was disputed, but I do not think there was anything formalised and included in the record other than what was said unchallenged on the transcript.

CALLINAN J: Well, is it agreed now that we should treat that as an agreed fact?

MR BIRCH: Well, certainly - - -

KIRBY J: I think your client might be giving some instructions.

MR BIRCH: Yes, I think before I took that final step I should probably just check - - -

GUMMOW ACJ: Come back to that after Mr Rayment’s reply.

MR BIRCH: Yes, thank you, your Honours.

HAYNE J: Concerning the notice of appeal, the notice of appeal we have in the appeal book at page 2795 was marked as filed on 18 May, which is the last day of the oral hearing in the Full Court, it seems, see page 2820. Is there any subsequent notice of appeal to that which appears in the appeal book, because it leads to the question where does the Full Court come to the view, as it did, that there was an application for a new trial.

KIRBY J: Now. There was now an application.

MR BIRCH: Yes. There was an issue that arose in the course of the hearing in the Full Court about whether in fact this was interlocutory and needed leave, because there had not been a final determination on all the relief.

GUMMOW ACJ: That is right. That is what I raised with Mr Rayment.

MR BIRCH: Yes, and I think my recollection was that in the end I had to acknowledge that I needed that leave, was my recollection, and I made that application in the course of the hearing, but I do not recall ever filing or seeking leave to file any further document that would have altered the - - -

GUMMOW ACJ: The document in the appeal book is described as “AMENDED NOTICE OF APPEAL”. It is said to have been filed on 18 May.

HAYNE J: I would say the last day of oral hearing in the Full Court.

MR BIRCH: Yes, I think what happened was that there was the application for leave dealt with because it was of an interlocutory nature and then I think what happened was we produced a fresh document to file consequent upon that leave. I do not think that we sought to change any of the substantive matters such as the relief sought in that notice of appeal. I think that document was filed as a consequence of the court granting leave and having, in effect, found that whatever process had been earlier filed had not been competently filed.

In response to your Honour Justice Hayne’s question regarding where the Full Court referred to the necessity, acknowledged by me for a new trial, I suspect that that arose as a result of an exchange between bench and Bar table. Your Honours, just before the adjournment I had made some general statements about the - - -

GUMMOW ACJ: I am sorry to take you off your course. Was there any evidence as to the practice in the architect’s profession here by way of comparison to that in England and the use in England of the RIBA form?

MR BIRCH: No, I do not recall the evidence going anywhere in that direction. There was some evidence about what a usual fee might be for preparing the plans; that is as far as it went.

GUMMOW ACJ: Yes, we have seen that. That is as far as it goes?

MR BIRCH: Yes. So, your Honours, having made some general statements before the break about the nature of the implication, I wanted to refer to the evidence in the affidavits of the witnesses at the time that the agreement was made for the plans for the 14-unit development to be prepared. If I could take your Honours to volume 3 of the appeal books at page 1059 - this is an affidavit by Mrs Jeanette Haviland. You will recall that the joint venture was between two companies, Landmark, which was partly owned by Mr Fares as to half and the other half was owned by Mr Barrak.

They had a two-third interest in the venture and there was the company, Toyama, that was the corporate vehicle of Mrs Haviland and her husband, David Rix, as to the other third interest in the joint venture. At the top of page 1059 there is a brief conversation in which Mrs Haviland said she spoke with Mr Barrak initially, and then with Mr Fares, regarding the 14 units and your Honours will see, after having been told that the next-door property had got approval for 16 units, Mr Fares said:

Yes, but we can get 14 units. 14’s better than 8. I don’t want any more money for doing the plans, but we will all just have to pay for fresh engineering plans and so on.

She said:

Well, if you are satisfied to accept the $27,000.00 you have already been paid and all we (Toyama) have to pay is our share of the fresh engineering plans etc. I suppose we should try for 14 units.

I might just also refer to the same matter when it is referred to in the affidavit of Mr Fares. That is in the same volume at page 1216.

On that page in paragraph 38 Mr Fares said that he describes how the neighbours got approval for 16 units and then he got approval from Mrs Haviland and Mr Rix. He called Mrs Haviland to discuss this. She said words to the effect:

“You guys are the experts. Just do what you think - - -

GUMMOW ACJ: There are some words with square brackets around them.

MR BIRCH: I am sorry, I am not sure. I do not have that on my version.

GUMMOW ACJ: Page 1217.

MR BIRCH: If I am reading a passage that was rejected, then - - -

GUMMOW ACJ: When reading this evidence generally and we come to square brackets, does that mean it was rejected? If so, it should have been struck out from the record and we do not have these problems.

MR BIRCH: Yes. I do not have any mark on the document that I am reading from. Your Honour, I assume that had not been struck out.

GUMMOW ACJ: Look at page 1217.

MR BIRCH: Sorry, yes. Your Honour, I think that – sorry, I was only thinking of paragraph 38.

GUMMOW ACJ: Well, we need to know when we are reading the record.

MR BIRCH: Yes.

KIRBY J: You are reading 38 and there are no square brackets in 38?

MR BIRCH: Yes, there are no square brackets on the bit I am reading.

KIRBY J: So we assume that that is all right?

MR BIRCH: If this copy of the affidavit has come from the court file and those are the primary judge’s annotations, they may indicate passages that – with notes beside them indicating that he has rejected them or that they were not read.

CRENNAN J: Can I just ask you this, Dr Birch. Was the payment of 27,000 for plans in respect of eight units?

MR BIRCH: Yes, it was. There was this controversy about that payment. It was said that it represented a fair architect’s fee, if I can call it that, and putting it very compendiously, that was the case that Concrete presented to court. Mr Fares gave evidence that he had paid moneys to draftsmen to get the work done very quickly and the 27,000 was a reimbursement to him to moneys he had to pay to others to get the job done swiftly. There was a controversy about that and it was suggested that this was something that he either made up or that it just generally did not fairly represent the case.

Now, that issue was the subject of cross-examination. There is not, as we read the judgment of Justice Conti, an express finding that the 27,000 should be characterised one way or the other, but some other findings he made on general issues of credit and related issues might lead one to conclude that he was more inclined to favour Concrete’s view about that matter than the respondent’s view.

CRENNAN J: But what happened next? Then there were fresh plans drawn for a 14-unit development and a fresh application for development approval?

MR BIRCH: Correct. Correct, and there was no suggestion that there was any payment made in any fashion for the second set of plans. Mrs Haviland, whose evidence I read first, was a witness called by Concrete, so the evidence that she gave represented the case against us and that was that we said, “Let’s get 14 units, that is better than eight” and she said, “Well, I am, in effect, happy provided it is not going to cost any more money”. So that was the case against my client, Parramatta Design.

CALLINAN J: That is at 1059, the evidence of that conversation. Mrs Haviland, I think - culminating in her saying:

Well if you are satisfied to accept the $27,000.00 you have already been paid and all we (Toyama) have to pay is our share of the fresh engineering plans etc. I suppose we should try for 14 units.

MR BIRCH: Yes, indeed. If I can take your Honours to the Full Court judgment and the way they dealt with the matter. If one goes to the Full Court judgment to page 2806, paragraph 11 of the judgment, they note that it was not a matter of, that is, permission to use the plans was not a matter of express contract. They say:

Here it is convenient to begin with the contract between Parramatta Design and the joint venture partners. The express terms of that contract were not gone into by the judge.

They then make some other statements about implication. If I could then go ahead to page 2810 where they then bring together all these general principles. At paragraph 20, they then set it all out. They said, after the first two sentences:

It was earlier said that we know very little about the terms of the contract between Parramatta Design and the joint venture partners. Perhaps there is little to know. Parramatta Design certainly agreed to prepare the drawings and to do so for no fee. Mr Fares, its director, wanted to keep Toyama in the venture.

They are talking about the 14-unit development in that regard.

While its agreement to stay in the venture might be sufficient consideration to support the contract, the agreement could not be characterised as the payment of a full fee for Parramatta Design’s services . . . It may be accepted that in those circumstances Parramatta Design granted a licence to the joint venture partners themselves to construct a building in accordance with the drawings if planning approval were obtained. But we see no reason to imply a term that this licence could be assigned by the partners to, say, a purchaser of the Nelson Bay site. Why should it be presumed that Parramatta Design would agree to such an assignment bearing in mind that it was not going to be paid for its work? Such a result might prove unfair, unjust and is, in any event, unnecessary. Architects should not be expected to work for free for the benefit of third parties. The position does not change merely because the architect has an interest in the proceeds of sale of the land.

Could I just say in that regard, we say, in fact, that is another reason which strengthens the inference against any implied licence. There was no doubt that Mr Fares was a one-third shareholder in the joint venture, if I can put it that way, through the company, Landmark. If one goes to Mrs Haviland’s evidence that I read just a short moment ago where he said 14 units is better than eight, what he is really saying is pretty plain. “We are all in this as investors, it is better if we can get 14 units. I will do the plans for 14 units, you will not have to pay me any money for doing the plans for 14 units and then we will be able to” – implicitly, I would add, the understanding must have been, “We will generate more profit in value from our venture”.

What the Full Court was saying is that from matters that are incontestable – that there was no fee for the 14 units, that Mr Fares’ agreement for his company to do the design work without fee because he would have that indirect financial benefit - were reasons against the implication of any licence, that if the venture collapsed and the land is bought by some third party, that that third party would simply be able to use the plans.

GUMMOW ACJ: Now, there is something perhaps of a problem in the Full Court’s approach by fixing on the word “licence” rather than “consent” or “permission”, I think. There is a famous case called Mellor v Australian Broadcasting Commission [1940] AC 491 which – at least in relation to musical copyright – suggests that it is possible for the copyright owner to indicate a consent to the world at large to reproduce the work.

It is the question of consent, really. In a way, when the Full Court gets sidetracked, perhaps, in this notion that there had to be something in the contract which was then assigned - look at paragraph 21, for example, in their reasons, the licence was not in fact transferred to Concrete, whereas the English cases on one way of looking at them are saying in certain circumstances you can infer that is true from the nature of the dealings between these particular parties that there was this consent in favour of a subsequent owner of the land. I may be right, I may be wrong, but that seems to be one way of looking at it, and unless we get that legal framework right at the beginning we keep running into problems.

MR BIRCH: Yes. Your Honour, I would suggest that the Full Court were live to this issue. In paragraph 9 they refer to the fact that sections 31 and 36 refer to “licence” and that:

the former Act used the word ‘consent’ –

and they there say that:

‘permission’ is apt to cover both.

GUMMOW ACJ: As Mr Rayment points out, Sir Nigel Bowen’s view was that that was no change from consent.

MR BIRCH: Yes, I think that the word “consent” and the word “licence” have perhaps been used interchangeably possibly by the Full Court and possibly by ourselves in our own submissions. We do not suggest there was a difference, but the Full Court then goes on and says:

that permission, which may be a bare licence not supported by consideration, may be given in express terms or by implication.

We would certainly acknowledge that there can be ways in which one can give a consent which does not have to involve contract and one could imagine it being given to the whole world. I could, for example, publish a document and say on the document that I am happy for anyone to copy this as they see fit. I might publish the document on a web page or publish it in a newspaper and encourage people to reproduce it and hand it out, and obviously that would be a form of consent given to the world and if someone acted on that we do not doubt that they would have an answer to an infringement claim, but there are a number of important distinctions.

Firstly, where one has such a bare consent as that it may be that where it is offered to people in circumstances – well, firstly, it may well be revocable at will. It would usually be revocable at will. We would say it is rather like the implied consent to come onto land in certain circumstances. Someone has an implied licence to walk up my front path and knock on my front door, but then once I have revoked that licence to be on my property they have to head off quickly or they become a trespasser.

I might well have given consent by the way I have conducted myself to people to reproduce my document, but if I change my mind and I give fair notice to people then they cannot complain that I have changed my mind. There is no consideration supporting a claim by them against me revoking it, so it would be revocable at will would be our first point.

We say secondly this, that where there is a contractual relationship between the parties that the contractual relationship would usually be seen to govern the dealings between the parties and so, when one looks for a consent or a licence, one would have to look at the contractual relationship in order to know whether it existed or not. In doing that what one is in fact doing is seeking an implication in the contractual relationship. Now, that is the way it has been - - -

GUMMOW ACJ: In favour of some third party, which is an answer to a third party in an action otherwise than on the contract.

MR BIRCH: There is the decision of Justice Merkel in the Acohs Case, which seems to contemplate people who are not direct contracting parties getting a benefit. In that case, information leaflets were prepared, there was copyright held by the author of the leaflets and they were prepared for companies that were using them for health and safety reasons.

GUMMOW ACJ: That came here in one aspect, that litigation.

MR BIRCH: Yes. I do not think - - -

GUMMOW ACJ: Not on this point.

MR BIRCH: Yes, not on this point and his Honour there held that there was an implied licence on the companies to reproduce the safety manuals because that was the contemplated purpose of their production but he also held that the implied licence extended to the contractors and employees of those parties.

GUMMOW ACJ: Justice Heydon refers me to Bashford, which is the case in question[2004] HCA 5; , 218 CLR 366 at 371, paragraph 6 where this point was reserved. Bashford grew out of this very litigation.

MR BIRCH: Sorry, yes.

HAYNE J: Out of Acohs.

MR BIRCH: Yes. That is right. But at page 547 in the decision of Justice Merkel he makes plain that he is approaching it from the perspective of Justice Jacobs in Beck v Montana, that is, what is the contractual implication? He says the contractual implication there was to permit the parties and their employees and contractors reproduce the work. So that could be an example where there might even be a McNiece-type point, that the employees or contractors, if they had reproduced and were sued for infringement would be able to say the agreement that licensed our employers contained, in effect, a permission for us as well. All of that, we say, is conventional contractual implication and it does not involve the granting of a permission at large to the world. The permission at large - - -

GUMMOW ACJ: But it involves it to a specified class.

MR BIRCH: It does. That is right, yes. Furthermore, a specified class of people who were plainly in the contemplation of the parties at the time the contract was made to produce the copyright material. So it flowed from the very nature of the material that it was going to have to be used in this work context and it was going to have to be copied and handed around by employees and contractors. So there was no difficulty in saying, as Justice Merkel found, that it was the contemplated purpose at the time that it was generated that it would have that use.

Now, we say here the contemplated purpose on the evidence of the appellant was that these were prepared to allow the joint venture to proceed with the development for 14 units and it does not follow that one could say that there was no contemplation of the joint venture collapsing and third parties having access to it. There was no actual contemplation of that.

One could say people who were asked by an officious bystander might say, “Yes, we recognise that joint ventures collapse”, but that is not to say that if they recognise that it is clear what they would have said about what would happen. The architect might say, “Well, no, I don’t want anyone else but us to be able to use the plans”. The other parties might say, “Well, maybe we should have them”. But there would be no obvious answer in those circumstances, so there is no way one could say it was within the contemplated purpose of the parties that the 14-unit plans were to be used other than in a joint venture and there was no payment for those plans to the architect.

So our view is that one should apply that line of authority which treats it as a matter of contractual implication and to the response, can there not be a bare permission or licence, the answer is that there can be in some circumstances. Usually it would be revocable at will because it was not supported by consideration. But secondly, it would have to be implied from the actual conduct - it would have to be a richer body of evidence regarding conduct than merely the fact that they were prepared for development consent and the development consent was granted.

In fact, the appellant in its written submissions gives a neat example of someone who would perhaps have given consent in a non-contractual circumstance, someone who writes a letter and sends it to the editor, and one could glean from that that it was by implication intended that it could be reproduced by the newspaper without infringing the copyright. We would acknowledge that that is a non-contractual - - -

GUMMOW ACJ: It is said in Laddie at paragraph 14.12 of the 2nd edition:

It is also customary for a pupil in chambers to make use of his master’s precedents for his own purposes as that is part of the understanding between them - - -

MR BIRCH: Yes. Well, that is an interesting example, your Honour, because that might have been an understanding in regard to some practitioners at some times. One wonders whether, for example, there would not be a lot of lawyers around town at the moment that might take a far more proprietary view of their precedents, and it goes to show how it would be very difficult to argue for a licence or a permission or consent just from some very bare fact without knowing about the custom and practice of a particular profession.

KIRBY J: I have known some senior counsel to be very guarding of allowing juniors to walk out of their chambers with things.

MR BIRCH: Yes. Well, I am not wanting to suggest that - - -

KIRBY J: Horrible, they were.

MR BIRCH: - - - the Bar is pure in this regard, but I would not be surprised if law firms that have invested vast amounts of time in generating precedents take a very proprietary view of those documents.

CALLINAN J: They certainly do. They have their own libraries and firewalls and all sorts of things in relation to - - -

KIRBY J: And educators and teachers. It is quite a big business now.

MR BIRCH: Yes.

GUMMOW ACJ: The case of Cooper v Stephens [1895] 1 Ch 567 which Justice Jacobs referred to seems to be a case of the supply of moulds or plates for the purpose of allowing the purchaser to make reproductions, and that was treated as not entitling the purchaser to sub-licence, as it were, or to assign. That is the sort of territory you want to be in, is it not?

MR BIRCH: Indeed, that is right. The difficulty with an implication of the sort that the appellant proposes is that it might well cut across forms of commercial practice that are not the subject of evidence and about which one can only speculate, but it is entirely plausible that an architect could say to a client, “Well, I know that you may or may not get development consent, so I will do the plans and charge you nothing or a very small sum of money or whatever and if you get the development consent, then it will be great because I will be hired and I will get remunerated”. If, however, having made such an agreement and development consent is granted and then the owner for whatever reason changes his mind and sells the land, it seems to follow from my learned friend’s argument that the agreement is set at nought effectively. The new purchaser, who now owns land with a development consent is entitled to say, “I now have an implied licence to use those plans”.

Indeed, the licence that is being described by my learned friend, Mr Rayment, has these puzzles about it. It is unclear how, for example, the architect and the original client could contractually prevent it from arising in certain circumstances. Could the architect and the original client contract that there would be no implied licence for the benefit of any third party? It is unclear how – well, it just does not seem to follow from the outlines that the third party would be bound by that term. They would be able to ignore it presumably. I think his argument is that the architect’s remedy is to get paid by the client and procure security from the client. Once he has paid in full, then it is irrevocable and goes beyond his control. But that might not be an appropriate commercial arrangement. The architect and client might wish to have little payment up front.

KIRBY J: They do have the specific evidence here that the amount charged was apt to the designs passing with the land? You did not bring any contradictory evidence against that?

MR BIRCH: Your Honour, the facts were these, that there were plans for eight units prepared.

KIRBY J: That is right.

MR BIRCH: $27,000 was paid and there was - - -

KIRBY J: Then that got development approval.

MR BIRCH: There was development - - -

KIRBY J: Then there was the second application and that got development approval.

MR BIRCH: That got development – true. But there was no payment made for the preparation of the 14-unit plan. Now, you might say to me that maybe there was work done on the eight unit that carried over and I do not know one way or the other, but the fact was that so far as the 14-unit plan was concerned, those plans were prepared as a second job and there was no payment at all for that second job. The payment related only to the first eight-unit job.

CALLINAN J: But, Mr Birch, one of the problems about that is that Mr Donovan elicited, accidentally I think, an unfortunate answer from Ms Haviland at page 803, that Mr Fares was, in effect, only too willing to do the 14-apartment building plan development application because he should have known of the possibility of it and should have applied for it initially and drawn the plans for it initially instead of eight. Right at the top of page 803. There was an argument about it, but - - -

MR BIRCH: Sorry, I did not get the page number, sorry?

CALLINAN J: Page 803, the top of 803.

MR BIRCH: Yes.

GUMMOW ACJ: Volume 2.

CALLINAN J: It is an unfortunate answer for your client I think, but it is a possible explanation. Did your client say anything about – did Mr Fares say anything about that in his evidence, that he was not ashamed or he was perfectly justified in only going for eight instead of 14?

MR BIRCH: I think the first point – the difficulty is, and this is where I suppose facts are not entirely relevant, that was elicited in cross-examination. It was not the way in which the matter was presented in the affidavit that had originally been sworn by Mrs Haviland.

CALLINAN J: No, that is not right. As Mr Rayment pointed out that it was your Senior Counsel’s question that brought the answer out and there was not any occasion as Mr Rayment pointed out a little later for it to be included in the affidavit. It was the question that made it an issue.

MR BIRCH: Your Honour, I can only say this. The difficulty is that this became part of the controversy between the parties, so to speak, as to whether Mrs Haviland’s evidence was being tailored to cause the maximum damage to Parramatta Design and Mr Fares or whether it was truthful and there was a finding made in that regard by the trial judge which was against us so far as the respective credit of the witnesses were concerned but there was not an acceptance on the part of the respondents that that was the way in which it came out. I certainly accept that evidence is there in the transcript from a witness but a witness who was adverse to the interests of my clients.

CALLINAN J: I understand that, but it is a possible explanation why a fee would not have been charged or even been sought to have been obtained by Mr Fares.

MR BIRCH: Well, that is true, but Mrs Haviland herself gave evidence in the affidavit passage I read as to why there was no fee charged where in the passage she said – if I might go back to that. That was at 1059.

CALLINAN J: We looked at that.

MR BIRCH: Yes.

CALLINAN J: But that does not exclude the possibility of this motivation on the part of your client.

MR BIRCH: Your Honour, part of the difficulty is that once one turns to the facts then there were bitter conflicts, I suppose is a fair way of putting it, between the witnesses that were called on each side and there was quite extensive cross-examination. If one simply takes the bare fact that no money was paid and that it was done in circumstances where the architect’s firm – well, the principal of the firm was himself one of the joint venturers - and where it was being done with the contemplation that this was not a normal architect/client relationship but one where the architect was hoping to benefit from doing it because he would have an indirect interest - - -

CALLINAN J: I understand what you are saying. That gives rise to a number of possibilities. I can see that.

MR BIRCH: That is right. But we say that those bare facts are facts which entitle the respondents to win on the implied licence point. Then if one turns from that and says we have to look at the facts in a fashion which goes right into the contested evidence, we do not accept the contested matters.

CALLINAN J: Did the trial judge make any finding that might shed any light on his views about this issue?

MR BIRCH: No. This is one of the difficulties which is adverted to in the Full Court judgment, that while there are discussions about witnesses and discussions about matters, there are not any express findings of his Honour on the precise terms of the retainer or the agreement.

HAYNE J: Now, that presents an acute set of problems, I would have thought. At the moment the way that the argument has proceeded thus far we are asked to decide the case as if this were a relationship between architect and client. We have occasional reference to the architect being in joint venture with others in relation to the project. We have occasional reference to the architect hoping to act as builder in a “cost plus 10” arrangement, a hope which was never realised. But are we to decide the case on the basis that the only relevant relationship is between architect and client, or are we to decide the case paying any, and if so what, regard to what obligations, if any, emerged from what is loosely described as this joint venture arrangement?

Let me pursue it one stage further so that you know where this goes. At the moment your argument is the arrangements are such that no money passing hands for the 14-unit development. You do not imply any permission to allow others to use those plans other than those in joint venture. Now, that seems to carry with it notions of the content of the obligations between the joint venturers; that the venture is limited to the development, not the development and realisation or development or realisation of the land. What is the footing on which we are to decide the case?

MR BIRCH: Your Honours, there are a number of basic facts that form the background which were never in controversy and they are summarised in the Full Court judgment. They can also be gleaned from the primary judgment. If one turns to page 2803 of the appeal book, that is page 2 of the Full Court judgment, it sets out the background that Mr Fares was an architect - - -

HAYNE J: You have paragraph 2, I have read that. Where do you find in that or elsewhere in the proceedings below discussion of the rights and obligations of those who together were said to be in joint venture?

MR BIRCH: When your Honour says rights and obligations, obviously that is a broad subject matter. If you are looking at the issue of the plans and the obtaining of development consent, it is clear that there was Mr Fares’ architectural expertise intended to be at the disposal of the joint venture through his company, Parramatta Design, and that is a fact that there was not dispute about. There was a question as to whether, in addition to that, he and his company were also to offer building services. That was the subject of controversy. That was where there was a finding against the respondents.

HAYNE J: But one way of putting your argument is Mr Fares did this work for his joint venturers and none other. It was to go nowhere other than exploitation with the join venturers.

MR BIRCH: In truth that is the inference to draw from the findings that were ultimately made by the primary judge because in fact my clients’ case was that they were looking to enjoy benefit from being the builder as well as the architect.

GUMMOW ACJ: Exactly.

MR BIRCH: That was a matter decided against them, but there was no challenge that he was nevertheless to be the architect. His company was to provide architectural services. At the same time, of course, there is no doubt that he was through the company, Landmark, interested in a third interest in the venture. Now, it is simply a matter of putting those facts together. We put them together because they represent the ultimate findings of the primary judge, not the way we put the case ourselves in court.

CRENNAN J: But it is common enough in a joint venture for the joint venturers to bring their particular contribution to the joint venture which is very different from an architect having a retainer from a client.

MR BIRCH: That is true, although there were capital contributions made to fund the venture.

GUMMOW ACJ: But at bottom your submission, I think, may be or may have to be this architectural contribution was, in effect, a joint venture asset, if you like, perhaps not in a technical sense but perhaps in a fiduciary sense.

MR BIRCH: Yes. What I am saying, I suppose, is this, that this is plainly distinguishable from a case of a client who simply goes and procures an architect and pays whatever the standard fee might be and where the architect looks for the benefit from the relationship to the fee that they are paid. Mr Fares had an interest in the venture and he could plainly look to a benefit that would flow to him if his company provided services, and so that was a reason for him to have his company provide those services other than being paid architectural fees.

GUMMOW ACJ: For the reason for implying that the copyright would not be used other than for the purposes of the joint venture which had led to its production in the first place.

MR BIRCH: Yes. What we say is that when one approaches the question of implication, you do not start with the principle that you imply it unless there is something special about the circumstances to negative it. You ask whether the circumstances between the parties were such that it was plainly within their contemplated purpose and necessary to make sense of their relationship to imply it. Now, the relationship simply did not have those indicia to it. There is no necessity to imply the licence for the benefit of third parties in order to make sense of the relationship.

GUMMOW ACJ: It is the opposite, is it not?

MR BIRCH: Yes, that is what we say, but Justice Hayne is perhaps suggesting to me that in order to go so far as to say you would infer that what they really intended was this: am I not trenching too far into the area of fact which is closed off to me because either findings were against me or I have attacked the fact-finding process? My response to that is, no, I do not have to go that far because there are enough uncontested facts to say that there was not any basis to imply it and the test is not – it is not my onus to demonstrate that only if the parties did not want it would there be no implication. It is the other way around. You have to find some special circumstances that would merit a finding that the conduct of the parties shows that a licence or permission must have been intended, and the evidence does not get to that threshold, therefore you do not imply it.

HAYNE J: What is lurking at the back of my mind, I think, is this: the notion that on realisation of the venture assets, the venture having failed, that it was part of the original arrangement that that which had been contributed would not be realised.

MR BIRCH: Perhaps I could approach it this way. Another way of looking at that issue might be to say if, on the breakdown of the venture, the plans and the licence to use ought to have been treated as having been contributed by the venture, then the venturers would have been entitled – say they had appointed a receiver to the venture, for example – to say, “You, the receiver, must get in the plans and the licence to use them because that is part of the joint venture property and you must realise it”.

Now, we address that issue because what we said was this. We said all that happened was that a trustee was appointed under 66G in regard to the land. If the plans and the licence to use them had been property of the venture, then it would have been possible, for example, to go up and ask to have the orders under 66G encompass the plans and the licence. Section 66G applies to property including personal property excepting chattels. So there was scope to do that.

Now, the order that was made clearly stated that the trustees were appointed to the land. The controversy had well and truly broken out by the time that the sale occurred. So it would have been possible for a venturer who took the view that the plans were part of the venture to go back to court and seek to have the 66G orders amended to make the trustees trustees of the plans and the licence, and that was not done. There is no reason, given the order that was made, to treat the trustees as trustees of anything other than the land. So our response is nobody took the course of saying, “This is property of the joint venture, you can’t keep it, or you can’t prevent it being used by whomever the trustees sell to”.

The argument that we developed that was also accepted by the Full Court was that for that further reason this appellant has to fail because whatever the relationship between the joint venturers and the architect was, because the trustees never became the holders of the licence to use the plans, never had title to the licence to use the plans, if you were using the assignment analysis, it was never conveyed by them to the appellant when it signed its contract.

We put the argument in two ways and the Full Court’s reasons accept both of those; that is, firstly, they had no title to the licence because the orders made under 66G only made them trustees of land, not of any personal property such as copyright, licences, plans or the like; secondly, even if they had been trustees of personal property, the special condition in the contract which said we give no warranty makes it difficult to say, having said we give no warranty, to then imply an assignment into the contract about the very subject matter of special condition 7.

I know that what is put by the appellant is the fact that we say we do not give a warranty does not mean that we may not have in some implied fashion nevertheless assigned it without attempting one way or the other to do so, but we say that is not a very feasible way of construing a contract when the parties have gone to the trouble of putting special condition 7 in, which puts people on notice that if they build the units they may be the subject of legal action to say nevertheless they impliedly assigned a licence at the same time.

KIRBY J: Where do we find special condition 7?

CALLINAN J: It is referred to and I think quoted at 2622 and 2804. Mr Birch, while that is being looked out – and you need not do it now, but is the development application anywhere in the material?

MR BIRCH: Yes.

CALLINAN J: Does it include the plans that were done by Mr Fares? If you could at some convenient time give me a reference to that too, please.

MR BIRCH: Yes, could I just - - -

HAYNE J: I can find the 8-unit plans but not the 14-unit plans.

MR BIRCH: There is a letter of consent from the Port Stephens Council in regard to the 14-unit plans. I am not sure if the plans are in the - - -

CALLINAN J: Do not trouble about it now but I would like to get it at some time.

MR BIRCH: Yes. Could I just, while I am on the subject of the plans, say this, that my learned friend said that the fact that council has given approval to plans means that one must be able to consult the plans and ensure, for example, that the law has been complied with and development has taken place in accordance with the plans and that that in one sense takes the plans into the public arena and out of the mere contractual relationship between the parties. So far as merely consulting the plans is concerned to ensure that there has been development in accordance with the plans, there could not be an infringement. There is no reproduction of the plans there. So we do not see the public purpose they serve as bearing upon the issue.

CALLINAN J: I do not know about that but, Mr Birch, would this be the normal position – and you correct me if I am wrong – that what you would do in order to get development approval would be the absolute bare minimum, because obviously you do not want to incur any more costs than you have to – you do not know whether you are going to get it, for example – as opposed to the detailed specifications and detailed plans that you would draw in order to undertake the construction. They would be quite different from the plans which are probably more in the nature of concept plans for a development application. Would that be right?

MR BIRCH: I am not myself a planning lawyer but my impression is these days councils require more and more detail before they give consent, partly to ensure that they do not have the wool pulled over their eyes by plans so vague that people can then put too much into them afterwards. So I think that what your Honour puts to me is right in this sense. It is perhaps a tug of war between the council wanting people to commit as much as possible and find - - -

CALLINAN J: But normally in a development like this, in order to do the building, you would need engineering plans as well and you would need an engineering contribution. You might need the contribution of other professionals.

MR BIRCH: That is true, but you would still need reasonably detailed plans to gain development approval because development approval in regard to units - - -

CALLINAN J: Well, that may be so, but I would prefer to see the plans to speaking in the abstract about this.

HAYNE J: Those unit plans are at 1252 and following of volume 3.

CALLINAN J: Well, there are no specifications, of course, are there? There are some specifications, fairly brief, but there are some.

MR BIRCH: Can I perhaps also just indicate to your Honour Justice Callinan at 1087 in the same volume is the notice of determination of the development application for the 14-unit development with the conditions attached to it. Could I just backtrack to fill in a couple of the points that I was expounding. If I can just go to the special condition in the contract which appears in the contract itself rather than in the judgment at 1487 in volume 3?

KIRBY J: I wonder how one would construe that. I wonder if it does not mean, “We are putting you on notice of the fact that there is a dispute but one side of the dispute is that there is an entitlement and that runs with the land”. I mean, it is putting them on notice of the fact that there is a dispute – there is no doubt about that – but it is not resolving where the dispute would be decided.

MR BIRCH: Well, if, for example, as a matter of law they simply had permission because a licence runs with the land in the same way that the development approval does, then obviously the existence of such an approval would be consistent with condition 7. That is a view that someone might take on legal advice. But if one was pursuing the orthodox approach, if I can call it that, from the Beck line of authority which views the matter as, firstly, an implication in the contract of retainer and then the entitlement of third parties is dependent upon an assignment of those rights, then one has to find an assignment in the contract which has to be compatible with the special condition. In our submission, that cannot be the case. When one turns to special condition 7 on 1487, special condition 7, of course, has a number of clauses, and 7.3 indicates that:

a dispute exists in relation to the right to use the plans and designs which accompanied the Development Applications, including as to the existence of any licence to make use of the copyright in those plans and designs. The vendors further disclose that legal action has been foreshadowed in respect of any future use of those plans and designs.

So the contract is saying to the purchaser, “You are on notice that if you use the plans and designs then there may be legal action”. It is a strong warning.

KIRBY J: It does not in terms say, “If a licence has been granted, we hereby revoke it”, or that the architect asserts that he has revoked it.

MR BIRCH: If I could take your Honour to 1439, that is a letter from Parramatta Design and Mr Fares to Parry Carroll Kanjian – they were the trustees – and in the third paragraph it says:

We also put you on notice that we will not grant a licence for the use of our copyright or our plans.

We demand that your marketing material will not breach our above wishes and that all potential purchasers will be advised of the above situation.

Of course, I should mention – I think it is mentioned in the Full Court judgment – that the form of special condition 7 was in fact the result of judicial advice that was given by Justice Young.

GUMMOW ACJ: Yes, we were taken to that.

MR BIRCH: I am sorry, I will just give the - - -

KIRBY J: Did the appellant ever in answer to that assert what it is now asserting, namely, “That you have no right as against us to deny us the benefits of that for which you have been paid”?

MR BIRCH: That letter was addressed to the trustees for sale prior to the contract being entered into. So it was not a matter that Mr Rayment’s client was directly privy to. At page 1480 is the transcript of the judicial advice application that was made to Justice Young. I think I have already said, in answer to a question from Justice Hayne, that the matter of the dispute was out in the open with the trustees between the joint venturers prior to the contract. So it was at least possible, had it been a contention that the plans and licence should have been disposed of by the trustees, to approach the court and have the 66G orders expanded to encompass them.

CALLINAN J: Mr Birch, I must say that at the moment I see a real problem with paragraph 20 of the Full Court’s decision at 2810, line 22, where the court rhetorically asks itself the question:

Why should it be presumed that Parramatta Design would agree to such an assignment bearing in mind that it was not going to be paid for its work?

Now, there is a ready answer to that question: in order to achieve a much better price for the sale of the land. Once the approval was attached to the land, it must have enhanced the value – perhaps we do not know by how much, but it must have enhanced the value. So it would therefore have been strongly in Mr Fares’ interest for somebody to pay more for the land and because of the existence of the development approval. I mean, there is a ready answer to that question that the Full Court posed for itself, and it just does not answer it. I think we had a similar situation in another case where the Court commented – a somewhat similar situation where the Court commented – certainly I did – that it was obvious that this sort of thing enhances the value of property.

MR BIRCH: It may give some enhancement – well, the value of the property may be enhanced by the existence of the approval without the plans for reasons that were mentioned by your Honour in discussion with Mr Rayment, namely, it indicates what council might permit to happen. It might also be the case though that the architect who was expecting to enjoy a particular benefit if the venture went through to conclusion may believe that the added value his plans will give to the land simply is not adequate recompense for their true value. In other words, the plans’ true value is greater than merely allowing them to be sold on as plans alone with the venture, but the real point - - -

CALLINAN J: What I am saying is that there is an answer to that question. It may not be a complete answer, but for the Full Court to suggest, as it does, that there is no answer at all strikes me as wrong.

MR BIRCH: Your Honour, can I suggest though that the way to look at it is this. It is not that one has to conclude as a fact exactly what the true intentions of the parties were, but if one wants to imply something one has to reach a point where the rational explanation or the only rational explanation is the one that is being put forward.

CALLINAN J: No, the one that gives business efficacy for the transaction, that is the answer, not that it is only rational answer, but it is the one that gives business efficacy.

KIRBY J: Is not the test it has to be necessary to give business efficacy?

MR BIRCH: Yes, but if I have retained an architect for a fee to design a house for me and having designed the house he says I cannot use the plans at all, then I might very well turn around and say, “Well, why did I ever go through this? Why did I hire you? It makes no sense”. But it is an entirely different question to say of Parramatta Design and Mr Fares that they having prepared plans in contemplation of this joint venture and the joint venture having fallen through and the land now being sold and he not having been paid for the 14-unit plan, only having been paid for the superseded plan, that the - - -

KIRBY J: Footnote of the passage in the transcript that Justice Callinan drew attention to, that he did that because he was ashamed that he had not thought of the 14 in the first place.

MR BIRCH: Yes, on one - - -

CALLINAN J: But on one view of it he is getting paid. He is getting paid by the increased value of the land in which he is to share.

MR BIRCH: But it is a commercial decision as to whether that is appropriate or proper recompense. It is insufficient to - - -

CALLINAN J: Every business venture has risks.

CRENNAN J: This bears on the Full Court’s observation that architects should not be expected to work for free for the benefit of third parties.

MR BIRCH: Yes.

CRENNAN J: What Justice Callinan is putting to you has a direct bearing on a central aspect of the Full Court’s findings.

GUMMOW ACJ: And the next sentence.

CRENNAN J: Yes:

The position does not change merely because the architect has an interest in the proceeds of sale of the land.

MR BIRCH: Yes. The point though that the Full Court is really making is this. The Full Court is not saying, “We can know what was indeed the particular commercial intentions of the relevant parties or that we can formulate exactly what would be the way that they would intend to remunerate themselves, but what we can say is that on facts like these there is no obvious answer that goes without saying in the way that there is in a normal implied term circumstance”.

It is not at all similar to the case where I hire the architect to design the house for me. The absence of a standard fee – the relationship between the parties is one where there cannot be an “it goes without saying” type implication. What is being put against me is that even despite these matters you could say that it would go without saying that the architect must have intended his plans could be used without paying anything. I think what the Full Court is saying - - -

KIRBY J: Well, for such a big fee. I mean, this is not a sort of warming up fee. This is the whole McCoy, or at least that is what the evidence suggests.

MR BIRCH: But, your Honour, this is a case where what architects do often is they prepare a design and then they remain the architect for the whole of the project and they get paid considerably less than half the fee for preparing the designs up to development approval and then they get paid a fee as the development goes, for supervision and things of this sort.

HAYNE J: Mr Brooks’ evidence was 1 per cent for taking it to this stage.

MR BIRCH: Yes.

CALLINAN J: Mr Birch, the council, when it issues the approval, actually issues as part of the approval the actual plans submitted, does it not? They are incorporated in and form part of the approval.

MR BIRCH: Yes, I think they are stamped and then I think they are - - -

CALLINAN J: It looks very much like or certainly a fair comparison as with a rezoning.

CRENNAN J: In fact, in the correspondence you took us to just before it was asserted that the copyright existed in the DA.

MR BIRCH: Well, that might well be the – I mean, it could well be the case. It could be a literary work.

CALLINAN J: Port Stephens Council might have a different view of that.

GUMMOW ACJ: Now, how are we going for time, Mr Birch?

MR BIRCH: Well, your Honours, if I have answered all your questions, I have virtually dealt with – I have answered them as well as I can I should say. I think I have dealt with the points I really wanted to make on that matter.

KIRBY J: I wondered if you did not really advance an argument, going back to the point that I raised earlier about the fact that this is a statutory right your client has given by Parliament and you have to have something that effectively takes it away, that the anchor of your clients’ right is a right that is given to him by an Act of Parliament and there has to be, to take it away, something convincing that he has licensed, ie, consented to it, and if there is any doubt, one might say that that should be resolved in favour of your clients’ right. Now, is that a correct approach to copyright law or is that advancing the copyright interest to a higher degree than it enjoys?

MR BIRCH: No, I think I would embrace that as perhaps saying succinctly what I was struggling to say a few moments ago, which is that even if, as the Full Court is saying, these things might not be obvious and you say to me we do not know where the truth lies, the answer is they have to be obvious in this sense. It has to obviously be the case – I am using the word “obviously” to describe the tests that are applied in the implication, but it has to be obvious to the requisite level that you have given the right away. So, yes, that is what I am suggesting.

Furthermore, what is said to be the facts which permit the inference or the implication to be drawn are those two relatively bald matters I took you to in the pleading at the beginning of my address – the preparation of the plans and the grant of the consent – and that alone is what has been said to found it. Our submission is simply this, that if you could have an implication with such bald facts, then what this really amounts to is a new section in the Copyright Act, and we rely upon something like section 73 which I think my learned friend was taken to.

KIRBY J: It is a very particular section.

MR BIRCH: It is, and given that the legislature has gone to the trouble of providing a statutory licence in those circumstances – indeed, the Act gives all sorts of statutory licences in numerous ways which I will not recount now at this time of the day, but there is a fair body of statutory licences granted under the Copyright Act for different sorts of activity where it is contemplated that it would be fair and just to impose such a licence upon the copyright owner. What is being sought here is no more or less than that, but unfortunately without the intervention of the legislature.

While Mr Rayment says that he acknowledges that the facts and circumstances matter, he has not spelled out in truth how they matter. That is our complaint, because the pleading and the submissions simply rely upon the preparation and the grant of consent. If that is alone sufficient, we say that does not fit in with the existing body of law. If it is more than that, if it is a more complex issue than that, it has just not been articulated. When one falls back on orthodoxy, we are entitled to win because you would not draw the implication and even if I fail to persuade Justice Callinan for whatever reason that you would not draw the implication, we are still entitled to win because there was not an assignment to this third party of whatever rights existed. Your Honours, I should just deal with the other issue before I use up too much time.

GUMMOW ACJ: Yes.

MR BIRCH: We have really set out in considerable detail what we wanted to say on this matter and I have already explained how I see it fitting into the case at the beginning.

KIRBY J: Are the oral submissions before the Full Court of the Federal Court recorded?

MR BIRCH: They are recorded but they have not been included in the appeal books, I am afraid.

KIRBY J: But you have access to them, do you?

MR BIRCH: I do, yes.

KIRBY J: Do they answer Justice Hayne’s question, because that is also puzzling me, that your amended notice of appeal on the third day and last day of oral argument does not seek a new trial and yet the Full Court says “now”. Perhaps you might check that and see if there is anything in that that gives an answer to the preposition “now”. Why did they say “now”? It rather suggests that between the time you prepared on the last day the amended notice of appeal and the end of the argument or in supplementary written submissions you had decided that you were seeking a new trial.

MR BIRCH: I think it came out of oral submissions towards the end of the hearing, but I will have to check.

GUMMOW ACJ: Well, you can check that and we can be informed with the necessary materials, if they exist, within 14 days.

MR BIRCH: Yes. Your Honours, we have set out in our submissions in paragraphs 35 and following the reason why the Full Court was correct in the reasons they came to. Mr Rayment took you to some passages in his Honour’s questioning of Mr Murr who was the senior counsel at the beginning of the trial. We accept that that in itself was not anything that would support an application if it stood alone.

It did give concern, and we have said why in our written submissions, and it was this chiefly, that his Honour put to Mr Murr on several occasions that the appellant was a sort of an innocent party who had paid a lot of money and had not – I am summarising, but in effect the gist of it was paid a lot of money and had not got what it fully paid for if the architect could hold back a licence to use the plans. Mr Murr referred to the contract which we submit shows that the company could not have been innocent of the risks and dangers regarding the copyright issue when it purchased the land.

CALLINAN J: It might have been imprudent if it paid too much more on the chance rather than the certainty or probability that it could use the land.

MR BIRCH: The appellant called none of its officers or directors to give any evidence about its thought processes in purchasing the land or arriving at the consideration that it did at the auction and so there was no officer of the appellant that was available to be cross-examined about what they really intended, thought or believed regarding the matter when they purchased the land. But it was a matter that his Honour kept coming back to and in the intervention in the evidence of the witness, Mr Barrak, we have set out – we have dealt with that intervention by his Honour commencing at paragraph 47 of our written submissions.

His Honour’s intervention occupies some four pages of transcript and I have to make these criticisms of it, I am afraid. It was a questioning of the witness but not a questioning that would be normally conducted by a judge or barrister in that the questions keep tumbling out without an opportunity for them to be properly answered.

On a couple of occasions the witness attempted to answer and was in fact cut off by the judge before he could complete or say anything in explanation. Then there is, finally – this is not at the end of the intervention, but then there is the passage which we have summarised in paragraph 51 in which his Honour said:

You can’t, as it were, boot strap a case by virtue of informal entries in unaudited pieces of paper and endeavour to show that somehow or other you are entitled to cause this applicant, Concrete Pty Limited, who has bought in good faith from trustees for sale, cause it to be frustrated for its utility of land which it has purchased and the proceeds of which were received by Landmark and Toyama and you are doing this on pieces of paper?---Your Honour has raised quite important points.

They are obvious, aren’t they?

Now, it is a very troubling passage and we suggest that that was the passage that most troubled the Full Court. There was not a proper opportunity given to the witness to respond to this material that was being put to him and some of these matters - - -

KIRBY J: What is the page of that passage?

MR BIRCH: It is volume 1 at page 379. The whole of the intervention is from 376 through to page 380. I am not going through it line by line, but the whole four pages need to be read in order to gain an appropriate feel for what was happening in the course of that witness’ examination. Statements such as “to show that somehow or other you are entitled to cause this applicant, Concrete Pty Limited, who has bought in good faith” – its good faith was not in issue. It had never called a witness. It had not called a witness then and it never called a witness later to say anything about how it came to buy the property or whatever. With great respect, the judge crossed the line and his terms were overly strong given that it was not an exchange with counsel but questions being asked in a rhetorical style of the witness in the middle of the cross-examination of the witness.

KIRBY J: What are we to make of the fact that even now you do not have before us a notice of contention seeking a new trial? We cannot put in our reasons “and now the respondent has asked for a new trial”. This was raised by me in the special leave application. I could not have been clearer. If it is something you have to elect for, you have not elected.

MR BIRCH: Your Honour, I will have to accept the blame for that because you certainly raised the issue.

KIRBY J: No, I am not trying to embarrass you personally, but if it leads to two different results, then even at this late stage, at 3.30 on a Thursday afternoon, we do not have your election. We do not have your opting, “If all I get is a new trial, that is what I ask the Court to give”.

MR BIRCH: Well, your Honour, what I said before the Full Court was that if it leads to the consequence that you cannot dispose of it as a matter of law other than by – you cannot dispose of it as a matter of law and you uphold the ground, then a new trial is the only appropriate remedy. That is what I said then. Now, I have to say that I do not recall there being an issue before the Full Court that I had not expressly sought a new trial in the notice of appeal, but I am trying to recollect what was in the transcript. I do not recall that being an issue there.

I have to say that while I do recall the exchange with your Honour on the special leave, perhaps I was not alert to the fact that the problem was that we had not sought by way of relief on the notice of appeal a new trial. It was my understanding that what we would do would be essentially put to this Court what we put to the Full Court, which is that if this Court forms a view of the law upon which a new trial would be a futility, then we would not urge there to be a new trial. So that, for example, if this Court was to conclude that the bias point was right but that nevertheless Mr Rayment’s argument that there is always an implied licence wherever there is a development consent exists - - -

GUMMOW ACJ: To get a new trial you need a notice of contention. There is not one.

MR BIRCH: Then, your Honour, I would have to seek leave to - - -

GUMMOW ACJ: You were put on notice of the need to do so, as Justice Kirby indicated.

MR BIRCH: Your Honour, I can only say that I misapprehended the point that was put to me.

KIRBY J: Do you seek leave to file a notice of contention seeking from this Court an order that you say was placed before the Full Court?

GUMMOW ACJ: Justice Hayne says it is a cross-appeal.

HAYNE J: It is not contention I think. You are seeking relief different.

KIRBY J: You won below, so you are seeking to maintain – but you are seeking to maintain a different order. I think Justice Hayne is right.

GUMMOW ACJ: That is right. You would need a cross-appeal.

KIRBY J: You are not asking to sustain the order that was made. You are asking in the alternative, to sustain a different order, that is that there be a retrial. So it is a cross-appeal.

MR BIRCH: Yes, I think Justice Hayne might be right. Well, I think I am duty bound to press on, however late it might be.

KIRBY J: I must say I think there is more when you take us to the exchange with the witness. I mean, it is one thing – Mr Murr is an experienced counsel whom I respect and you have to deal with the fact that he did not see it as proper to put the submission to the court, but it is a different thing to, as it were, put a lot of things to a witness and not let the witness, even a professional legal witness, to answer the thing.

MR BIRCH: Yes. Your Honours, as I keep reiterating, the four pages need to be read and I will not do it because of time.

GUMMOW ACJ: Are you now seeking leave out of time to put on a cross-appeal?

MR BIRCH: Yes.

GUMMOW ACJ: Where is the document?

MR BIRCH: Well, your Honour, I would have to have it written out and I would have to seek to file it after we have - - -

GUMMOW ACJ: You will not be able to file it without leave.

MR BIRCH: Yes.

GUMMOW ACJ: What is your attitude to this?

MR RAYMENT: We oppose it, if the Court please, and it needs special leave, in our respectful submission, as well.

GUMMOW ACJ: Say that again?

MR RAYMENT: It needs special leave, not just leave.

KIRBY J: Yes, but you have been on notice all along that there is this issue and there is a question as to how the issue has to be dealt with by this Court, and that was raised in the special leave and there has never been a
doubt that this procedural issue is in the wings, and you have in fact addressed it before us this morning.

MR RAYMENT: I have, but not in the context of any cross-appeal.

KIRBY J: You cannot really say you are prejudiced. The record is there and you have argued the matter this morning.

MR RAYMENT: That is so, your Honour.

GUMMOW ACJ: I think we should add this to the list of matters to be done within 14 days and you will have to supply the draft documents with affidavits in support, and Mr Rayment can put any submissions to the contrary, but we will come back to that. What else do you want to say on the substantive issue that is now sought to be brought before us in this fashion?

MR BIRCH: Yes. Your Honours, can I just say that we accept both sides of the coin in regard to the way the bias point interacts with the copyright point. If your Honours were to find the bias point made out but to find that there was an implied licence of the sort Mr Rayment contends for such that we would be doomed to lose, then we would recognise that we would not get our retrial in those circumstances because it would be a futility, so we do not seek to gain the benefit of a retrial in circumstances where we lose overwhelmingly on the legal issue in the same way that obviously we take the benefit if it works the other way.

KIRBY J: We have to deal with the fact that Mr Murr did not consider it proper to put the submission to the primary judge.

MR BIRCH: Your Honour, can I say this, that the application was made not that long after the intervention. It was not made by Mr Murr at the moment the intervention finished, but we say that there has to be at least some leeway for counsel to form a judgment about – counsel should make a considered judgment before they jump up and make an application to a judge.

KIRBY J: Quite.

MR BIRCH: And that often would require counsel to – they might wish to read transcript if it is available. I do not know what happened here, your Honour. I am not giving evidence about what happened here. I am just saying that this would be appropriate in a typical case, and to take instructions.

KIRBY J: But apparently there was time, and counsel went away and then junior counsel was sent to do the job because senior counsel did not consider it was a proper application to make.

MR BIRCH: Your Honour, I am not sure that it was the case that Mr Hall said that senior counsel thought it was – I think he said he thought it should not be made. I do not know whether it goes any - - -

KIRBY J: He was not there.

MR BIRCH: Sorry?

KIRBY J: He did not turn up.

MR BIRCH: No, he did not turn up but, I mean, if your Honour says that it was not a proper application, that might have a stronger nuance than what was in fact said.

KIRBY J: In the end it is a matter for us and it is not a matter for how counsel judge the issue and it is just an evidentiary question, but one does see this sometimes that senior and experienced and respected counsel just takes the view of “I am not going to put that”.

CALLINAN J: It is a very difficult position for a counsel though and Vakauta really puts counsel in an extraordinarily difficult position.

MR BIRCH: It does. We have in fact referred to it - - -

CALLINAN J: The realities are that it is an enormous burden upon counsel to have to make this submission.

MR BIRCH: Your Honour, we have referred to a passage of yourself, Justice Callinan, in Johnson v Johnson, page 517, where your Honour refers to the fact that it is often only over a period of time in the course of a trial that one can appropriately decide whether it really ought to be made or not. I mean we would say here that it was not an appropriate intervention that was made at the time but then what happened was that as the issues went on there was another intervention that was - - -

CALLINAN J: Many clients would be very surprised to learn that they had waived something because their counsel, perhaps out of delicacy or other reasons, did not make a timely application.

MR BIRCH: Yes. Then when the judgment was handed down the judgment for the passages that were referred to in the Full Court judgment and that we also adopt shows that the matters that had been agitating his Honour’s mind were still agitating his Honour’s mind so that it was not as if it had been a fleeting summer storm which had come and gone and one could forget and in those circumstances – but even so, it still was not the case that this was an application left to be made on appeal. It was a matter still made in the midst of the trial.

KIRBY J: But one can be critical of the syntax of what his Honour did but in fact he was being transparent. He was troubled by this. If you are not troubled, if you have made up your mind, you just sail on, but his Honour was obviously troubled and he was putting this and the witness was there and he had senior counsel representing. If there was a problem with what his Honour was doing one would have thought that senior counsel would have said, “Well, I suggest, with respect, your Honour, that your Honour should allow him to answer the question or a question”. I mean I think it is a good thing that judges are transparent about how they are thinking because the silent judge, in my respectful view, is a menace. It is not due process.

MR BIRCH: Your Honour, I am certainly not submitting that judges should not speak or should not intervene and I certainly agree that counsel find it an advantage, but when one reads those whole four pages it was, I could almost say, a passionate intervention by his Honour and there is grave danger when judges drop the mask, so to speak, and reveal those passions and the grave danger is that no one, no reasonable bystander watching it, can but then have a fear that the judge’s mind has been made up and that what follows - - -

GUMMOW ACJ: Well, it is a task of counsel on one view of it to quieten the judge down and it does happen.

CALLINAN J: If he can or she can.

MR BIRCH: It is, but that can create its own problems. Your Honours are probably all familiar with Galea v Galea - - -

GUMMOW ACJ: Well, it requires some skilful advocacy.

CALLINAN J: But it is very hard on counsel. Counsel is expected to behave more courageously and better than the trial judge who if he is manifesting bias is doing so. It really puts a higher duty on counsel and the court. I think there are lots of problems about Vakauta as I have really made plain in Johnson.

MR BIRCH: The other problem is also that these things often cause surprise even to counsel when they occur in the midst of hearings and one sits at the Bar table thinking, “What should I do? Do I jump up or not?”. It often takes a period of reflection before one can be sure whether one’s instinct to either do something or not do something, as the case may be, is warranted, and it is a very hard test to say if you have not responded virtually at the time of the intervention then therefore the point is waived, and that would be an extension, we would say, of any waiver principle that had been adhered to by this Court in Vakauta v Kelly.

GUMMOW ACJ: Yes. It is 20 to 4.

MR BIRCH: I had better sit down.

GUMMOW ACJ: No, I am not suggesting you sit down at all, but we just need to leave Mr Rayment some time to reply; that is all.

MR BIRCH: Yes. I have, I think, really made the points that I wanted to make. It is the intervention in the witnesses’ evidence that is crucial, but the final matter which was also important to the Full Court were the reasons expressed in his Honour’s judgment and we deal with those - - -

KIRBY J: What is the worst passage in the reasons for judgment that you say illustrates that his Honour was still going on about it?

MR BIRCH: I think at paragraph 37 - - -

GUMMOW ACJ: Page?

MR BIRCH: Paragraph 37 of his Honour’s judgment. What we say is this, that that sets out a summary of the matters – I am just looking whether that contains the - - -

KIRBY J: You seem to be very worried about the word “enigmatic”.

MR BIRCH: Yes.

KIRBY J: But I do not take that as an insulting word. Of its nature it is not conclusive.

MR BIRCH: Of its nature it is not, I accept that, your Honour, but we say that has to be read in the light of the exchange that occurred between his Honour and Mr Barrak and what we say is this, that what his Honour is suggesting by his use of words, especially in the context of that whole paragraph, is that there is something commercially improper about the architect and his company maintaining their claim.

KIRBY J: Is not that inherent in the suggestion, “You have been paid for it, you took the money and you are still coming back for more”? His Honour has just expressed it and rather gently by using “enigmatic”. I mean that is the guts of it, is it not?

MR BIRCH: What he is suggesting is that Concrete, the appellant, the third party, has, in effect, paid for it once when it bought the land and yet now someone is attempting to deprive it of what it paid for. There was simply no evidence of that at all. There was no evidence that the value of the land encapsulated the value of the plans. The contract was against a view that that value was included and no one from contract stepped into the witness box to give any evidence about what it had done. So the view that his Honour seemed to be reflecting that there was something commercially improper and that it was some sort of a fraud on the appellant was unsustainable.

KIRBY J: It does not say “fraud” on - it said “commercially enigmatic”.

GUMMOW ACJ: Anyhow, I think we are seized of that point, Mr Birch, I think we are seized of that passage.

MR BIRCH: Yes.

KIRBY J: Which you say is your best passage. I think your best passage is the passage of exchange between his Honour and a witness where more and more things were tumbling out and the witness was not really being given a chance to answer, but senior counsel was there and I just think they have to teach young barristers that the second most important thing barristers have to show is courage. Most judges, when the flag goes up, they back off - - -

GUMMOW ACJ: There is a storm before the calm.

MR BIRCH: Yes, that is perhaps true but, your Honour - - -

KIRBY J: Courts are places of very emotional and important issue; very important to clients, very important to everyone.

MR BIRCH: Your Honour, the difficulty is, though, that if one says the threshold is this, that Mr Murr should have jumped up at the end of that exchange, then that really imposes upon counsel the obligation of making a decision about one of the hardest things that counsel have to do in the conduct of a trial within the matter of minutes - - -

GUMMOW ACJ: That is right.

KIRBY J: That is why they get immunity that this Court says they still have, that is why they get it.

MR BIRCH: Yes, but to make that judgment in literally the minutes after such an exchange is, in my submission - - -

GUMMOW ACJ: We hear that too.

MR BIRCH: - - - far too difficult a burden and I think I have said all I need to say.

GUMMOW ACJ: I will come back after we have heard Mr Rayment’s reply as to procedural steps that need to be taken with respect to the proposed application to cross-appeal. Yes, Mr Rayment.

MR RAYMENT: We begin with an analysis of those parts of Justice Conti’s judgment which do draw attention to the matter that Justice Hayne was referring to, in particular in questions of my learned friend and your Honour Acting Chief Justice as well.

KIRBY J: We cannot hear you. You are dropping your voice.

GUMMOW ACJ: We cannot hear you, Mr Rayment.

MR RAYMENT: I am so sorry. May I start with the question of the findings made by the trial judge about the interplay between the joint venture and the contract and retainer. In particular, could I take your Honours in volume 6 to paragraph 124 at page 2678. His Honour there found that:

The purpose of the co-ownership venture here involved was to exploit for profit the Nelson Bay property by resale, as at least originally planned, by the construction and resale of the fourteen home units comprising the development approved by Port Stephens Council on 10 May 2000. That was a purpose which inherently and intrinsically included within its scope the sale of the land in its undeveloped or partially developed condition, had the subsequent occasion to do so arisen, for instance by reason of an unexpectedly attractive offer to buy the site in its then condition, or default under the mortgage to the Bank, or disputation leading to the appointment of trustees for sale, as well as of course the original principal objective of the sale of each of the units individually, or mainly so. There is no reason why the objectives of Landmark and Toyama as developers should be distinguished from those of developers generally. No sensible or at least usual developer forecloses upon his business options, in relation to future circumstances, to the exclusion of sale of a development site prior to subdivision or construction, or a partially completed development, in circumstances of change in the economic climate, or of taking an early profit without exposure to ongoing risks, or as in the present case, the onset of disagreement or hostility between syndicate members. In relation to property development schemes generally, experience demonstrates that developers may choose to realise a profit earlier rather than later, or indeed conversely to limit a loss rather than undergo the possibility of further deterioration in the magnitude of that risk.

That would be squarely inconsistent with the matters that my learned friend put to your Honours.

Could I just refer without reading in the same vein to paragraph 75 of the judgment which shows the open nature of the contract, paragraph 94 which draws attention to the relationship between, again, the joint venture and the retainer.

CALLINAN J: Mr Rayment, if we are going to implied terms, we have to imply them as the circumstances were at the time of the formation of the joint venture or, at least, no later than the time at which the architect agreed to do the 14-unit plan.

MR RAYMENT: Yes, your Honour.

CALLINAN J: Is that right?

MR RAYMENT: That is correct.

CALLINAN J: What the expectations of the parties would have been, what they would have thought then went without saying, to use The Moorcock formula.

MR RAYMENT: Yes. Actually, if you got to the full extent that my learned friend was submitting in this case of an unexpected eventuality here, right out of the contemplation of the parties, then as a matter of fact my learned friend would stub his toe on another principle, in our submission, which is referred to in this Court’s judgment in Bonython v Commonwealth 75 CLR where Sir Owen Dixon’s judgment in particular looks at the question of what the proper constructions of “contract” are where there is an unexpected event which occurs. There it was the division of the currency, your Honours will remember, between England and Australia and pounds sterling no longer meant unambiguously the thing that it meant when the contract was made. Sir Owen said, in effect, that the construction of the contract following some authorities about charter parties was that which the parties would have intended if they had, as reasonable men, directed their minds to the possibility which actually arose.

CALLINAN J: If the issue is one - - -

MR RAYMENT: You really get back to the same principle that way, in our submission, even if my learned - - -

GUMMOW ACJ: I am not sure about that. I am still not sure of the extent to which what is being put forward is a term implied by law in a class of dealing. The decision of Justice Wootten in Clyde Securities, which is a copyright case, was treated as in that category. In Torpey (2002) 55 IPR 545 Chief Justice Spigelman went through the authorities and referred to what Justice McHugh and I had said in Byrne as to the implication of this sort of term, and in contradistinction, the Codelfa term where you run into questions of necessity and The Moorcock area. You cannot say this was necessary.

MR RAYMENT: If the purpose of the contract was to create a development approval which would necessarily run with the land - - -

CALLINAN J: Might you not be able to, I am not saying this is necessarily so, but on the basis then the expectations of the party and the intentions of the parties were that what they did would be done, any of the contributions that were made would be intended to achieve would be the maximisation of profits from the land.

MR RAYMENT: Yes.

CALLINAN J: And the construction aspect of the joint venture having failed, then you use it to maximise the return on the land.

MR RAYMENT: Yes, which is really what his Honour actually finds at paragraph 124 and the other paragraphs to which I wish to refer. Your Honours, could I just complete the list of paragraphs which go to the matter that I was just referring to first - paragraphs 115, 140, 145, 166, 182 and 297.

Your Honours, still dealing with other matters, could I also - your Honour the Acting Chief Justice having been good enough to refer to the House of Lords decision about licences given to the world at large, may we add a reference to the decision of the Full Court which your Honour the Acting Chief Justice participated in when a member of that Court in Computermate Products (Aust) Pty Ltd v Ozi-Soft Pty Ltd and Others (1988) 83 ALR 492.

Your Honour, I observe that reference was made to Sir Nigel Bowen’s comments about implied licences, permissions and consents, as well as I think to what Justice Jacobs had said about the matter in Beck. There was a discussion also of what Time-Life might have decided in connection with that throughout the report, but especially from pages 495 to 497 and how do you assign a permission, how do you assign a consent, we respectfully submit, and did indeed submit to the Full Court which may commend the Blair analysis rather than that which was the only way in which the matter was analysed in Beck on the principal point in the case.

Your Honours, in paragraph 182 of Justice Conti’s judgment, there is a general finding made in respect of Mrs Haviland’s evidence which has some relevance to the answer which your Honour Justice Callinan drew attention to at page 803, volume 2 of the appeal book. His Honour found that:

In all essentially or important aspects of her evidence, particularly under cross-examination, my perceptions and findings in relation to Ms Haviland were those of a truthful and essentially reliable witness -

which would suggest, in our submission, the answer given at 803 was acceptable. Your Honours, it was, of course, wasted expenditure upon the eight-unit development once they pulled up pegs and sought a 14-unit development and it was obtained. It meant that the $27,000 spent was no longer valuable.

A question was asked which relates to the question of onus in relation to copyright licence if there was doubt about the matter. We have given a reference in paragraph 13 of our submissions in-chief to the Avel decision in this Court.

GUMMOW ACJ: Avel v Multicoin?

MR RAYMENT: Yes, your Honour, which establishes that the onus to establish the absence of a licence rests on the respondents in this case, not upon the appellants to prove its presence. That is note 16 in the written submissions in-chief and other authority is referred to. That is at least the Australian position which appears to be different from that which obtains in other jurisdictions.

Now, I wanted then next to go, if I may, please, to the question of the interventions in the evidence of Mr Barrak. Your Honours, immediately after the passage to which my learned friend referred, which was just really – my learned friend has really fastened on a single question – at page 379, volume 1 of the appeal book, the judge on the same page hastened to add, we submit, the following. It is really from line 25 onwards. His Honour has drawn attention to the absence – and I mentioned this in-chief – the absence of business records which support the case that was being made. He said he found it “extraordinary” that they would not have business records and that led this witness to go on a search, which he said he made the next weekend and put on evidence in affidavit form, to answer his Honour’s question.

KIRBY J: There are multiple questions there in that second question, “Well, yes”, and then when the witness tries to answer “your Honour” he gets interrupted with further questions and then he tries to answer “Your Honour” and then he is interrupted yet again.

MR RAYMENT: There are truly two questions in there. There is one: where are the records and the witness really did deal with that subsequently of this by finding such records as he could. The second one really is for counsel, that is the question of what the entitlement was to cause the present appellant to be unable to use the land for the purpose for which he had bought it. Now that, his Honour hastens to add just below line 30, is really put forward so that he can be addressed about the matter later by counsel. He says:

I just think I should tell you what is in my mind, because at the moment I find the whole of this evidence that’s been put on on behalf of the respondents as extraordinary - - - ?---Your Honour - - -

- - - and I’ve been in commercial law - - -

KIRBY J: Well it is very easy for us to be critical after the event. We always get a look at things twice removed but if you look at it his Honour does come back on the next page, on page 335, to say:

I’m sure Mr Murr will address me –

but - - -

MR RAYMENT: Yes. That really is what is stressed. His Honour says:

I’ve heard that particular evidence and I think I should say no more and I’ll leave it to Mr Rayment and Mr Murr to continue, but I think it’s only fairness to both parties I should tell you what is in my mind. It may well be that I’ve misunderstood something - - -

GUMMOW ACJ: Where are you reading from, Mr Rayment?

MR RAYMENT: I am so sorry. I am reading at the foot of 379 and top of 380:

or I haven’t yet got an appreciation of the whole of the evidence, so I’ll certainly keep an open mind but I just think you should know I’ve got very great concern about the circumstances on the basis of the material that I’ve thus far read, that this party who stands beyond the dispute –

et cetera.

KIRBY J: Then if you look at the pages that follow, that is to say, from pages 381 to 385 or so, they look pretty orthodox questions and answers.

MR RAYMENT: Yes, it is all gone. It was a momentary affair. Your Honours, at line 20 on 380, again his Honour stresses that he is:

keeping an open mind because I’ve got, if I may say so, a lot of time for the advocacy of your counsel –

that is a reference to Mr Murr –

as well as counsel of course for Concrete Pty Ltd, and I don’t want anyone to think that I’ve foreclosed in any way my decision, but I’ve been sitting here for two days and struggling with trying to perceive or identify some kind of ordinary, business management involved in the financial affairs of Parramatta Design & Developments Pty Ltd, Landmark Building Developments Pty Ltd, those two companies. I’m struggling –

In our respectful submission, there is no ground for complaint such as was made by my learned friend in this matter before the Full Court arising from those spare remarks. So if special leave were granted in due course, it could put on some cross-appeal about this matter, and we submit it should be dismissed.

GUMMOW ACJ: I do not think he would need special leave to cross-appeal.

MR RAYMENT: Because of the nature of the appeal.

GUMMOW ACJ: Yes. He would certainly need leave because he is out of time.

MR RAYMENT: If your Honour please, I stand corrected. In any event, we would submit that such a cross-appeal should be dismissed. May it please your Honours, those are our submissions.

GUMMOW ACJ: Yes, thank you, Mr Rayment. Well, there are some loose ends. One, within 14 days of today the parties may lodge such portions as they may be advised of the Spicer Report that may assist us and such portions of the Full Court transcript as may assist us in the light of the exchanges in the course of argument today. Secondly, within 14 days of today the respondents will file and serve any application they wish to make for leave out of time to cross-appeal under rule 42.08 of the High Court Rules together with any affidavits and submissions in support. Thirdly, the appellant, within 14 days after that step is taken by the respondents, will file and serve any submissions in opposition to that application to cross-appeal out of time.

I do not think there is anything else that needs to be dealt with other than those loose ends. We thank counsel for their assistance and we will reserve our decision. We will adjourn until 9.30 am tomorrow in Sydney and 9.30 am tomorrow in Melbourne.

AT 4.02 PM THE MATTER WAS ADJOURNED