RP Data Pty Limited v Hardingham & Ors; Realestate.com.au Pty Ltd v Hardingham & Ors [2022] HCATrans 64 (12 April 2022)

Last Updated: 19 April 2022

[2022] HCATrans 064

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S133 of 2021

B e t w e e n -

RP DATA PTY LIMITED

Applicant

and

JAMES KELLAND HARDINGHAM

First Respondent

REAL ESTATE MARKETING AUSTRALIA PTY LTD

Second Respondent

REALESTATE.COM.AU PTY LTD

Third Respondent

Office of the Registry
Sydney No S164 of 2021

B e t w e e n -

REALESTATE.COM.AU PTY LTD

Applicant

and

JAMES KELLAND HARDINGHAM

First Respondent

REAL ESTATE MARKETING AUSTRALIA PTY LTD

Second Respondent

RP DATA PTY LTD

Third Respondent

Applications for special leave to appeal

KEANE J
STEWARD J
GLEESON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON TUESDAY, 12 APRIL 2022, AT 12.30 PM

Copyright in the High Court of Australia

____________________

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

MR M.D. MARTIN, QC appears with MR A.F. MESSINA for the applicant in the first matter and the third respondent in the second matter. (instructed by Mills Oakley)

MR R. COBDEN, SC appears with MR J. SLEIGHT for the first and second respondents in both matters. (instructed by Neville Hourn + Borg Legal)

MR A.J.L. BANNON, SC appears with MR H.P.T. BEVAN, SC for the applicant in the second matter and the third respondent in the first matter. (instructed by King & Wood Mallesons)

KEANE J: Mr Bannon, I understand that you are going first.

MR BANNON: Yes, if that is convenient to the Court.

KEANE J: It is. Please proceed.

MR BANNON: Thank you, your Honour. Your Honours, the contract issue on any appeal would be whether it was an inferred or implied term of the agreement between the estate agencies and the respondents that the respondents agree that the agencies were authorised by way of licence from the respondents to grant realestate.com.au a licence in relation to the relevant photographs and floor plans in the form required by realestate.com.au and contained in their usual terms and conditions.

The primary judge encapsulated the finding and the implied term which we would contend, if granted leave, at page 29 of the application book, at paragraph 78, between 10 and 20. His Honour’s finding was that such a term could be inferred or implied and the body of the term appears from lines 20 to about 25 in the book.

The effect of that would be in terms of the content of that licence based on the usual terms – the content may be found at page 11 of the application book, in paragraphs 11 and 12 of the primary judge’s judgment where his Honour refers in paragraph 11 that the list on the realestate.com.au – there must be a subscription agreement in terms, looking at the indented quote, contained on the website, and the relevant terms for present purposes appears at about point 20 of the application book “Your acknowledgements” and, in particular (a), it is an:

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

and that is the content of the debate. The primary judge found such an implied or inferred term. Justice Jackson did so as well. If that term was to be found or has been found, then RP Data’s use of those same images – using a term to capture both photographs and any floor plans – would have been authorised by REA by sublicence and, therefore, no copyright infringement would ensue.

A fresh term of each of the agreements between the respondents and an estate agency was that the respondents agreed for reward to attend the property identified by the agency and take photographs and sometimes make floor plans for use in a marketing plan. It may be observed immediately that the photographs and floor plans would not exist without the arrangement. The respondents would have had no occasion to take such photographs or make such floor plans. They would have neither knowledge of the relevant property nor access to a property – in particular internal access – to undertake that work.

The primary judge found that one of the principal purposes of each of the agreements was the creation of photographs and floor plans so that they could be loaded on to the realestate.com.au website as part of a marketing campaign. That was a finding not disturbed on appeal, and the significance of it, we say, is that was a purpose that must be a shared purpose. It is a purpose of the agreement so that both contracting parties agree that that was the object or one of the objects to be achieved by the contract.

Next, the mutually known objective fact found by the primary judge and not disturbed on an appeal, was that loading photographs for a marketing campaign on the realestate.com.au website meant that the photographs remained accessible to all under the sold section without limitation as to time for the purpose of understanding past sales and values and also assessing current values.

Those findings appear – if I could take your Honours to that - at page 25 of the application book, at paragraph 60 about point 30 on the page, and then an example is given at paragraph 61. At paragraph 63, his Honour goes on to explain that those historical photographs are used for – both on the realestate.com.au website by estate agents to get an understanding of the value of the property by reference to photographs or floor plans at the time, which might have changed, of course, and also to assess current value. RP Data uses the same images for the same purpose, supplied by my client.

A further mutually‑known objective fact found by the primary judge and not disturbed on appeal was that the images were and would be loaded – I am sorry, could I just go back to the previous point I made? The effect of the mutually‑known fact that these images and floor plans would stay on the realestate.com.au website was that they were accessible in perpetuity by any person anywhere in the world with nothing to suggest any limitation on the persons to whom realestate.com.au could provide those images.

Now, another further mutually‑known objective fact found by the primary judge and not disturbed on appeal was that the images were and would be loaded onto the REA website in accordance with terms imposed by REA, whether or not either the agency or the respondents were aware of the particular terms. That appears from paragraph 67 of the judgment at page 27 of the book, where his Honour says:

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

which were available on the website. Then at paragraph 97 of Justice Greenwood’s reasons, at the book at page 84, his Honour did not disturb that finding, relevantly. At about line 31 on page 84, there is a statement:

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

and then his Honour goes on to say it does not amount to an inferred term, but nevertheless, none of the judges on appeal disturbed that finding that, in other words, parties to the arrangement knew and understood that the images would have to be loaded in accordance with terms imposed by realestate.com and that those were terms which were, at all relevant times, freely available to all parties and accessible on the website.

The primary judge also found as an objective fact that a real estate agency had no practical ability to negotiate different terms to the standard terms and, again, that was not disturbed on appeal, and then the result, a key finding of the primary judge was at paragraph 79 of that judgment at page 29, if I could go to that, where his Honour made a similar comment in relation to, or finding in relation to paragraph 7, but 79 captures it, on page 29:

The agreement between the applicants and agencies would have failed to deliver what was objectively intended to be acquired by the agencies in commissioning the works if such a term were not inferred or implied. The purpose of uploading the works to the realestate.com.au platform was central to the objective sought to be achieved by the parties.

That is both parties.

That objective could not have been achieved unless the agencies granted the licence contained in REA’s terms and conditions. The agencies could not lawfully grant the licence in REA’s usual terms and conditions unless the applicants authorised them to grant a licence of that scope.

Now, the underlying elements of that finding were not disturbed on appeal ‑ ‑ ‑

STEWARD J: Mr Bannon, in the light of all of that, where do you say Justice Greenwood erred? Where is the error, as you see it?

MR BANNON: Perhaps I will just complete – briefly on the findings, the primary judge found that it was a term to be necessary to be implied or inferred. When one comes to – and Justice Jackson agreed – when one comes to the majority, firstly Justice Rares who agreed with Justice Jackson – Justice Greenwood – firstly found that such a term was not necessary for business efficacy. Now, that was not a finding that we would say Justice Greenwood agreed in. That requires some disentangling, which I will come to in a moment. If I could take your Honour to page 89 of the application book. At the very top, at paragraph 111, Justice Rares says:

The factual scenario of the appellants’ dealings with the agencies negates that there was any necessity to imply the licence contended for –

and the reason his Honour gives, at about line 12 – between 10 and 20 – his Honour says:

It was not necessarily the case that every agency with which the appellants might deal did advertise on REA’s website.

Now, there is an error there, because that finding fails to take account of the fact that whatever other dealings the respondents may have had with other agencies, with these agencies, the undisturbed factual finding was the purpose was – a key purpose was – to advertise on the REA website and to do that you had to agree with the terms. So that, we say, is clear error, with respect. Then if one comes down to Justice Greenwood’s reasoning, Justice Greenwood at page 86 finds, in relation to an implied term, at 103:

The proposed scope of the authority, said to support an implied term, is a term significantly against the interests of the appellants. It is not at all clear that in the context of this particular informal agreement, the Court can conclude that the scope of the proposed authority was so obvious that it would go without saying. That conclusion cannot be postulated here and thus an important aspect of the criteria in B.P. Refinery is not made out. Thus, implying the proposed term in order give business efficacy . . . is not made out.

So, therefore, his Honour said if you do not imply the obviousness to include – or it goes without saying – therefore, it does not satisfy business efficacy. We say that is an error of principle. They are separate requirements.

STEWARD J: Do you say, Mr Bannon, that it was obvious here or, alternatively, it did not need to be obvious?

MR BANNON: We say – and this is a point of principle – it did not need to be obvious. Business efficacy suffices. But if one needed to find it, then it was obvious. I will explain that briefly why. Neither Justice Rares nor Justice Greenwood addressed the logic about paragraph 79 – which I referred to – as to how it could be that it was not necessary for business efficacy.

We say that – and it is worth noting that our learned friend’s submissions in response at paragraph 20, at application book 143, accept that the determinative reason why we failed in the Full Court was because we failed the obviousness test according to Justice Greenwood. That raises the issue – we say of principle – as to whether obviousness is required to be satisfied as well as business efficacy in an informal case such as this.

As to whether or not the obviousness test was satisfied, the key reason Justice Greenwood gave was the term “significantly against the interests of the respondents” and at page 86, his Honour referred to the fact that it was – at about line 40 – a “partisan” operation because it is a “perpetual irrevocable licence”.

We say there a couple of problems with that. Firstly, that reason takes no account of the fact that the website loading was a mutual purpose. The photographer did not get the job unless he could satisfy – or the respondents could satisfy the purpose of the agency, namely, of a realestate.com loading. Secondly, this is not a case like Codelfa. Codelfa – the Court found that the proposed implied term satisfied business efficacy, but the problem was, you could not say what the term was.

In that case, it was about the Eastern Suburbs railway – it was a building contract which proceeded on the basis that the tunnelling can go on around the clock. An unforeseen event occurred, namely, injunctions restraining that, and the New South Wales Court of Appeal found that implied terms - that in those circumstances if an unforeseen event like that happened it was an implied term that the proprietor would allow more time for the contract to be completed and pay any increased costs.

The High Court said that a term needed to be implied for business efficacy, but one could not come to any conclusion as to what that term would be. There is a whole range of possible terms. That issue does not arise here. There is no doubt as to the necessary term. The necessary term is as per the published terms and conditions. Thirdly, his Honour at ‑ ‑ ‑

STEWARD J: Mr Bannon – sorry, I beg your pardon, do you go so far as to say, in relation to that finding about partisan, that having regard to the findings Justice Thawley made about the way this market works, that it was not partisan because if he had insisted on his intellectual property rights he would have been out of business?

MR BANNON: Exactly, exactly. Then, thirdly, your Honour, if one looks at page 86 at line 38 – between 30 and 32, there is a sentence there:

Whilst the agencies would, no doubt, have been willing to agree to an authority being conferred upon them to grant a licence to REA in the proposed terms and conditions, the appellants might well have taken a different view.

That is another error of principle there. It is not what the appellants would have done, it is what persons, objectively considered, would have done. That is, reasonable parties in that situation. You do not look at the individual appellants, you look at what reasonable parties would do in that situation, and that involves error. Fourthly, the emphasis on the grant of a perpetual and worldwide licence overlooks the fact that, on any view.....historical imaging was going to be there forever, and his Honour paid no regard to that either.

The question arises, is it enough to satisfy one of business efficacy and obviousness? Justice Greenwood said you have to do both. Justice Jackson found on the authorities you did not have to do both. We say that is an issue which has not been fairly identified, and if one runs through the cases which Justice Greenwood identifies in the High Court, what is clear is that the cases starting with Justice Deane in Hospital Products recognise that the strictness of the B.P. Refinery v Hastings test do not have to be satisfied in informal agreements like this, and that there are a number of statements, which Justice Greenwood records, and Justice Jackson records, which indicate business efficacy is enough. That is consistent with Marks & Spencer - could I briefly take your Honours to Marks & Spencer?

GLEESON J: Mr Bannon, why is it a matter of business efficacy? Is it not a matter of your client obtaining legal rights that it agrees with RP Data, but really – I mean, the facts here demonstrate that your client was able to perform its part of the bargain. Is that not the case?

MR BANNON: The business efficacy is – no, because we gave a warranty that we had the right – we gave a warranty to RP Data that we had a right to grant them to use these images and that was based on the view that we got that licence from the estate agencies, which in turn is based on what we say is the implied term, namely that the respondents gave that authority to the estate agencies to give to us which we could then give to RP Data. The relevant business efficacy is the one of the arrangements between the estate agencies and the respondents, and the business efficacy has to be the business relative to the particular business between those parties, which includes the purpose which they enjoined in, which is the purpose of loading onto our site.

Very briefly, if I may, your Honours, if I could take your Honours to Marks & Spencer [2015] UKSC 72; [2016] AC 742. At page 754 there is a discussion as to the BP Refinery test. There is a sentence starting, “First”:

Lord Steyn rightly observed that the implication of a term was “not critically dependent on proof of an actual intention of the parties” . . . If one approaches the question by reference to what the parties would have agreed, one is not strictly concerned with the hypothetical answer of the actual parties, but with that of notional reasonable people in the position of the parties at the time at which they were contracting.

Your Honour, is there any way I could trade off some time from Mr Martin if I have five more minutes?

KEANE J: Yes, you can go ahead, Mr Bannon.

MR BANNON: Thank you. So, that goes to the point of objective - what would the parties have agreed and here what would the parties have agreed would have been the only thing that would make the deal work. Then:

thirdly, it is questionable whether Lord Simon’s first requirement . . . will usually, if ever, add anything –

to the term. If one goes over the page, this is a key point at the top of the page:

Fourthly, as Lord Hoffmann I think suggested . . . although Lord Simon’s requirements are otherwise cumulative, I would accept that business necessity and obviousness . . . can be alternatives in the sense that only one of them needs to be satisfied –

We say there is support for that view ‑ ‑ ‑

KEANE J: Although, Mr Bannon, he does go on to say:

although I suspect that in practice it would be a rare case where only one of [those two requirements] needs to be satisfied ‑ ‑ ‑

MR BANNON: Quite. Codelfa it turns out is such a case because his Honour said business efficacy was satisfied but they could not work out the term, so obviousness was not satisfied. But here we say, for the reasons I have given in dealing with Justice Greenwood’s reasons, both are satisfied, but to the extent only one needs to be satisfied, and that would be an issue of principle worthy of the consideration of this Court in these sorts of contracts, whether or not both need to be satisfied.

GLEESON J: Mr Bannon, is there any authority which deals with the question of whether intellectual property rights are a matter of business efficacy – business necessity?

MR BANNON: No, not specifically, your Honour, in the sense that ‑ ‑ ‑

KEANE J: But the question here is the scope of the licence, is it not?

MR BANNON: Yes, that is right, yes. It is because of the long piece of string attached to intellectual property rights that this problem arises – because they are entitled to say they have property rights – that is accepted – you need a licence for us to do anything – they put them into the marketplace and this arrangement – which is a commercial arrangement – and they are seeking to reel it back in by this invisible intangible string – that is the reason the problem exists.

But if one approaches it from the norm – but nevertheless the arrangement has to be subject of the same issue of business advocacy and, for the reasons I have indicated, the only way to satisfy business advocacy would be to imply the term which the primary judge found.

Can I just do two more things very briefly. If one looks at page 753, paragraph 16 of Marks v Spencer identifies the same three cases that we relied upon, and the same passages in BP Refinery (Westernport) and, in that context, could I then, after referring to that, take your Honours to BP Refinery (Westernport) 180 CLR 266 to demonstrate those same three passages – they are slightly more extensive – at 283 of 180 CLR.

Lord Simon identifies the five elements and cites three cases. If one looks at those three passages, the first one is The Moorcock. It says nothing
about obviousness – it is all about business efficacy. The second one, Reigate, seems to combine the two – except they are two sides of the same coin. The third one, Shirlaw, only talks about obviousness.

That is slightly odd that we have five separate requirements out of those three passages. In any event, we have them there. But a deep historical analysis suggests, for example, if one looks at Moorcock, that is enough. Again, that is something which this Court, we submit, would consider.

Now, I think your Honours will have seen by looking through the judgments – in particular Justice Greenwood but also Justice Jackson – that Justice Deane in Hawkins v Clayton says that a term should be implied if, but only if, it satisfies business efficacy – and that has been picked up by a number of other cases, as referred to, for example, Byrne and Breen.

So, there is scope for this Court to make clear whether business efficacy is enough, and also scope to make clear what is the interrelationship between obviousness and business efficacy, particularly in a case like this, where, if you impose reasonable parties – if you ask those hypothetical reasonable parties, would you agree to this term – if the answer is, well, if it is the only way that I am going to get the deal done, the answer is yes, then that exposes that interrelationship. So, for those reasons we would submit that your Honours would grant special leave.

KEANE J: Thanks, Mr Bannon. Yes, Mr Martin.

MR MARTIN: May it please the Court. We adopt everything that Mr Bannon has said, and I do not, of course, intend to repeat any of that. But from our perspective we would say that our application – also Mr Bannon’s application – raises an important question for this Court to decide in relation to the implication of terms into completely informal commercial arrangements.

It is not simply confined to the effect it might have on copyright proceedings or copyright Acts, or obligations and rights which are attracted by that, but also in a wider operation of this country in relation to small business and commercial operations. Many small businesses operate on informal agreements, and this is an opportunity for this Court to clarify this issue about the implication of terms in informal contracts.

I only highlight that Justices McHugh and Gummow, in their joint judgment in Byrne, referred to the flexible approach in informal contracts, and the overriding factor was whether the term sought to be implied is reasonable and effective. In the same case, Justices Brennan, Dawson, Toohey, at.....made similar comments.

Justice Crennan, when her Honour was on the Federal Court in the decision of Gold Peg, which is in the bundle – I will not need to take your Honours to it, but at paragraph 79, where her Honour was referring to informal contracts, she said:

In this kind of case all that is necessary is to show that the term to be implied is necessary for the reasonable or effective operation of the contract in all of the circumstances.

So, of course we have Justice Thawley, the primary judge, making similar statements, and Justice Jackson who was in dissent in the Full Court. So, it raises, as I say, an opportunity for this Court to finally determine and make statements about that unresolved issue of law.

Can I also say that Justice Steward asked Mr Bannon where Justice Greenwood fell into error, and we would adopt the same approach with reference to – and I am referring to our application book, which is at page 78 – but it is paragraph 103 of the judgment of Justice Greenwood, where his Honour talks about the concept of obviousness, and therefore, if it is not obvious, it does not create business efficacy. That is where we say that his Honour was wrong in doing that. But probably the genesis of the error – if I can put that with the greatest respect – emanates at page 52 of our book, paragraphs 33 and 34. His Honour there referred to the primary judge who stated that:

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

Justice Greenwood said he disagreed with that because he said the licence was, in effect, created when Mr Hardingham and the agent had their various conversations, giving rise to the 20 instances which were the subject of the consideration of the primary judge, where Mr Hardingham was asked to prepare photographs for a particular campaign. That seemed then to permeate through the rest of the judgment that, accordingly, whatever licence was granted was limited to this campaign.

The difficulty – as we have said in our outlines – with that approach is that that is completely, and commercially, unworkable because the parties knew – and it was not challenged on appeal – that the photographs would be uploaded to the website of REA and then disseminated and used on that site in accordance with their terms and conditions. What Justice Greenwood – and also Justice Rares – do not explain in their judgment is how this arrangement, as they found it, would have worked commercially. The simple answer is, it would not have.

Of course, the way that authority in this country – both in respect of the implication of terms and also construction of commercial contracts generally – is to create a contract which is workable and has some commercial reality about it. Our submission is, the term that was proposed by Mr Hardingham and his company, that the use of these photographs would come to an end at the end of the campaign is commercially unworkable. You only have to consider what happens? These photographs are place on REA’s website and RP Data’s website and then they are somehow notified – or they are supposed to know that this campaign has come to an end and they take all the photographs down.

Also, what does it mean that the campaign has come to an end? Does that mean that they had an auction and it failed, or no one made an offer, or the vendor of the property decided that they would withdraw the property from the market but then put it back on in a couple of weeks’ time, or a couple of months’ time when the market strengthened?

So, there are all sorts of commercial difficulties associated with the term, propounded by Mr Hardingham and his company and found to be the commercial arrangement by Justices Greenwood and Rares. Other than what is in our written outline and what Mr Bannon has said – which we respectfully adopt – those are our submissions. May it please the Court.

KEANE J: Thanks, Mr Martin. Yes, Mr Cobden.

MR COBDEN: May it please the Court. I think your Honours are aware that due to technical issues, I am appearing by telephone, so I am hoping your Honours can hear me clearly.

KEANE J: Yes, we can.

MR COBDEN: Thank you. Your Honours, in our submission, the special leave questions propounded by both respondents do not arise, either they are not a matter of general importance in the way in which they are framed in the case or this is not a suitable vehicle for them, or the matter is not attended by sufficient doubt.

Your Honours, it is important, in our respectful submission, to look at what the special leave questions are that the two parties have proposed, and they are to be be found in their outlines. Very briefly, the REA party says to your Honours that the first special leave question is the question of whether the “so obvious it goes without saying” is one of several.....requirements or is an option requirement. The second one is about whether parties – where there are terms being implied – need to know the actual terms that are being implied into their contract. I think that is the effect of ground 8. Special leave question 9 is a section 15 question, which your Honours have not heard anything about really today.

Then there is a – I will not have time to go through them all – but separate leave questions proposed by RPD – but they are particular.....question 6 in their application book 116 to copyright – then there is a question about statutory interpretation of section 15, then a question of whether - the obviousness question. Then, in effect, in special leave ground 9 of RPD, a question about – or how do you go about implying terms in copyright generally and finally, in the interests of the administration of justice, because the licence that the first and second respondents granted was limited to marketing of a particular property, contrary to the facts known to the party – that is the other special leave ground.

Now, your Honours – setting aside the grounds that go to the construction of section 15 and the role that section 15 played, most of those grounds turn on the content of the form and what the term is that the majority in the Full Court.....was not, really. The written submissions.....behalf of our learned friends for both parties do accept the gravity or enormity in a sense of the term that they seek to have implied – although it really was not addressed before your Honours today.

The term that the applicants must defend in this Court – or propose to defend in this Court – is the term that ultimately Justice Thawley found, which is at his Honour’s paragraph 78 – that, looking at the facts, the background facts that his Honour has recited and Mr Bannon took your Honours through rapidly, from 66 onwards, that it was to be inferred from the conduct – and, of course, the dealings – or, alternatively, implied in the agreements for business efficacy – that my client, Mr Hardingham, and his company, agreed with each of the separate real estate agencies – of the sample of 20 – that the agencies are authorised by a licence granted for Mr Hardingham to upload the photographs of floor plans to the rea.com.au platform and grant to REA a licence in the form required by REA and contained in REA’s usual terms and conditions.

In other words, that is the content of the agreement and there is quite some resistance to the idea that either we – or, particularly, the agents – needed to know what those terms were at a particular time because the agreement is to the concept of “or whatever REA has said those will be the terms”. So, in other words, a term.....itself into the agreements between Mr Hardingham and all the agents – that is, whatever REA said it is from time to time.

It is occasionally paraphrased or put into, for example, the pleadings but the terms of the various agreements that are in evidence – they do differ from time to time. Nothing is – sorry, it has not been identified whether it is the term that applies when the photograph is uploaded or whether it is the term that applied at the time the proceedings were brought or whether it is the term that applies whenever it is that REA changes its terms. So, we say, the business efficacy of the contract between Mr Hardingham and the agents is not – is what is being looked at here – not the business efficacy of REA’s dealings.

Either this case is about the particular circumstances of Mr Hardingham – including, as your Honours well know that there is a watershed in 2014 when he got a letter from RPD’s lawyers, or it is a case of general importance, which is what is being urged upon your Honours and which is the basis for special leave, generally speaking.

Now, if it is a case about Mr Hardingham and the fact that he was put on notice from 2014, then it is a specific case on its own facts, your Honours, and, obviously, a vehicle for special leave. But, if it is a case of general importance – and I must draw your Honours’ attention to this – that Justice Thawley said, really, that these principles applied as much to the pre‑2014 conduct of Mr Hardingham as well, so I will just address the case on that basis - then it is really saying that anybody who gives a photograph to a real estate agent for the purpose of marketing a property, that photograph will be uploaded – needs to be uploaded – to the REA website for the purposes of the marketing and.....properties cannot effectively be marketed without being uploaded to the website. The REA website appears to be most universal, ubiquitous website. Properties cannot be effectively marketed without being uploaded for that reason.

For that reason, everybody who gives a photograph to a real estate – sorry, I just have one more step in the reasoning – for that reason, agencies have to agree to REA’s terms and conditions and, therefore, anybody who supplies a photograph to an agency has to agree to them as well.

Now, setting aside Mr Hardingham’s particular position because he is a professional photographer in this area, it is perfectly clear that such photographs could be provided by the home owners themselves, they could have been taken by the home owner or a friend of the home owners or a member of the home owner’s family, they could have been taken by a different professional photographer.....commissioned quite separately by the home owner. All of those photographs, according to the REA terms and conditions, come with this attached condition, which has been implied into the contract by Justice Thawley, and Justice Jackson agreed.

Looking at the condition then in - effectively reading into what Justice Thawley said – that is to say, it has to be in the form required by REA and contained in REA’s usual terms and conditions – one would have to go to those to see what this term was, and what we can see, for example, is that there has been in the evidence consistently a term – something like in the following terms, that the grant is made by the real estate agent and therefore drawn into a real estate valuer’s dealings with everybody, such as Mr Hardingham, but everybody else as well, that the licence is irrevocable, it is perpetual worldwide, royalty‑free, and it is a licence to:

publish, copy, licence to other persons, use and adapt for any purpose . . . any content you provide ‑ ‑ ‑

STEWARD J: Mr Cobden, you may have cast that argument a little bit too far. We are talking about a business here of taking photographs and preparing floor plans for the purpose of selling that product in the circumstances where – I can summarise what Justice Thawley found – where if you want to participate in that market you have to submit to its prevailing conditions otherwise you will not sell. Is that not what we are really talking about here?

MR COBDEN: Yes, your Honour. What I am focusing on is not that position, but the question – the fact that every agent must sign up to REA’s terms and conditions and has no opportunity to change them or vary them, and therefore that condition will apply to any photograph that the agency obtains, no matter how.

So, the point made by our learned friend, Mr Bannon, for REA is the agency had no choice and could not negotiate these terms, so therefore the agent is stuck with these terms, therefore the agent must pass them on to Mr Hardingham, and Mr Hardingham accepts them. I am.....illustrating to your Honours what the logical consequence of that is, rather than saying that that is what is raised by Mr Hardingham’s own position – it is the logical consequence of the argument that my learned friends make.....logical consequence of finding that the agent cannot deal with somebody like Mr Hardingham or anybody else on terms other than the REA terms and conditions, which is an essential building block in the argument that Justice Thawley makes and that our learned friends make. Just to pick one – trying to emphasise to your Honour what the consequences of that argument would be.

Your Honours, much of what is said is to be shoehorned into the Procrustean bed – mixing my metaphors – of implied terms is really, using the language of Justice Thawley and our learned friends - really the language of estoppel that we, the applicant Hardingham, must have known these works were going to be used for this purpose – we must have known they are being uploaded because we went on dealing with the agencies and knowing that that happened, and therefore we must be stuck with these conditions.

That is not, with respect, the way copyright works. The way copyright works is that one retains the rights unless there is a licence of them. We say we established that the debate between us about the burden in Avel v Multicoin, we said it was conceded, at least at trial, that we had crossed the burden of proving that Mr Hardingham said, “I did not grant a licence to these people” – then the burden shifts to the respondents, the applicants here – and they propound a term which we would respectfully submit could not be a term that commercial parties would agree to for the business efficacy of their contract and would not be a term that would be so obvious that it went without saying.

The term – and our learned friend, Mr Bannon, referred to the fact that the findings of Justice Thawley that the works were up there perpetually, but they were only there perpetually because of the term itself. They are not there, as it were, perpetually so that the term and business efficacy of the contract between the agency and Hardingham needed to reflect the fact that they were up there perpetually.

Mr Martin made the same point. He said how could it work – a different point perhaps – how could it work if the licence for which we propound, that we license it for the duration of the campaign, and that is it, how could that work and how could you take things down? Well, of course, that is the classic argument of the person who has run an enormous business, which – there is a universality of copyright works, and it turns out that they do not have the licence of the author or owner of the copyright. They only have the intermediate documents saved. That has happened many times, and there are various answers to it.

But in this case, it was quite clear what the end of the campaign was because these websites have an area to which they push work when the campaign was over called the “sold area” or the “rented area” or the “withdrawn from the market area”. So, our term that we propound, which is you have it for the duration of the campaign, we say is sufficiently..... One could have some fights at the boundary about, of course, all the time – but that does noes not render the term itself uncertain. Instead, REA says, effectively, we have done this for so long and it was so ubiquitous, everybody knew we were doing it, therefore you must have been able to do it.

There are a number of points from the argument that is put against us containing propositions such as, well, Hardingham knew that REA must be permitted to do this and so it must – Hardingham must have understood – let us, say, before 2014 – that therefore the REA terms must have included this requirement. But one would not infer from the fact that a site like REA, or YouTube, or Instagram, had millions of works on it, that there was permission granted at some point to the site owner to have all those works on it. Indeed, it may take a case such as this to show that were was no permission from the copyright owner that could be relied upon by the user in these circumstances.

Your Honours, Justice Jackson said we got the case wrong before the Full Court because we were focusing on whether the disputed term or the REA term – the one that I just read out to your Honours – is the one that is implanted into the contract and instead it was the term that whatever is in the REA’s terms and conditions from time to time was imported into our contract.

Well, then one would need to look at the term of the REA – I am not talking just about Hardingham – the REA terms and conditions that were imported into the copyright owner’s contract, and it includes rights that are the copyright owner’s important rights, including adapt the work, copy it for any purpose and license it to other persons for any purpose. So, for example, it is a ramification of the licence that Mr Hardingham was given that REA can go and make a glossy book of Mr Hardingham’s photographs of the residences of Bondi.

Now, in what way is that business efficacy of the contract between the agency and Mr Hardingham? It includes the right to publish, which is a critical right for the copyright owner, determines the length of the duration of the copyright and that, apparently, has been given irrevocably to REA to publish as a special meaning of the Copyright Act. I am not trying to take your Honours to the technical meaning of the word “publish”, I am trying to illustrate to your Honours that a term of this breadth is not one that would be imposed lightly on a copyright owner and not by a side wind.

Now, I will move on to a couple of other points, your Honours. The “so obvious that it goes without saying”.....your Honours, is not really raised by this case. It is not something Justice Thawley relied upon. Justice Jackson referred to it and referred to the debate about it, but of course his Honour then did not decide the case against us on the “so obvious it goes without saying” point. No one has said, I would have decided this case differently if the “so obvious that it goes without saying” requirement were not a requirement in the cases.

We respectfully submit that the debate.....Justice Jackson with our learned friends, particularly by reference to a UK case, does not arise on the cases, the run of cases that has been before this Court. Really one goes back to Codelfa which sets up the buyer’s requirements and that case has been consistently followed on this point, and what has been really suggested is that by reason of, for example, Clayton v Hawkins that perhaps it has been the requirement of the obviousness point as one of the five requirements under BP that be affirmed in Codelfa has been impliedly overruled by this Court.

Now, first of all, let us remember in Codelfa Justice Mason and Justice Aickin decided the case on the “so obvious it went without saying” – they said it was not so obvious it went without saying, and decided Codelfa on that basis. The suggestion that this Court would impliedly overrule Codelfa without confronting that and without confronting the four requirements this Court has frequently said would need to be met before it did overrule a case, a party would have to raise the points, they would have to seek leave to raise the points, to argue the point, the Court would explicitly.....refer to that.

All the arguments that are put before your Honours about the disappearance, or the shifting of the obviousness – the “so obvious” criterion, down to a lower rank, to the absence of the other four criteria, is really a submission to your Honours that BP, but most importantly Codelfa have been impliedly overruled by this Court in the later cases. Of course, one also knows that in Byrne, Justices McHugh and Gummow returned to the obviousness criterion several times.

Your Honours, it is inherently unlikely that that has been done. We say it has not been done. We say that this case is not – convenient, it is not an appropriate vehicle, not least, your Honours, because your Honours do not have one of the parties to the contract here. One would think that if this Court wished to rule on the important authority of Codelfa and the five rules which most practitioners would, as it were, reach for, when faced with a question of this sort, the Court would have before it the actual parties to the contract so that, for example - and an actual illustration of an actual contract, so, for example, an agent could say, well I just do not think that term that is in my contracts with REA, they would ever enforce that.

I do not think that is a realistic – to liken it to a contract with..... I do not think they would enforce it, for example, because I know and they know that 50 per cent of the works up on REA, they cannot have been given.....or something like that. We are missing an important actor in the formula, which is the agent, and what they might say about ‑ ‑ ‑

KEANE J: Mr Cobden, there has never been, so far as I can see from the record, a complaint made by your side about the absence of a necessary party.

MR COBDEN: That is not the point I am making, sorry, your Honour, I am sorry if I am being unclear. I am really only saying, is this an appropriate vehicle for special leave for that reason? I am not saying that they were a requisite party and they were absent, and we complained that
someone overlooked that, I am only looking at the question about whether this Court, looking at these principles, would do so in the absence of that party. I am just saying that this case is not an appropriate vehicle for that reason.

Now, I think that might have been the beep that I am out of time, your Honours.

KEANE J: I think it is, Mr Cobden.

MR COBDEN: Yes. Can I just say one last sentence?

KEANE J: Yes.

MR COBDEN: The section 15 point, for the reasons which loom large in the written submissions, for the reasons we have said, your Honour, it is an interpretation provision and it does not confer a separate right that, once you have granted a licence of any sort then automatically a sublicence of any kind can be granted. I think that is clear, and we have engaged on that on the written submissions. May it please the Court.

KEANE J: Thanks, Mr Cobden. Mr Bannon, anything in reply?

MR BANNON: Yes, very briefly. My learned friend seemed to suggest that the relevant term – which I took your Honours to – of the standard terms, was a changing term. The evidence does not support that – that term never changed. Secondly, my friend’s submissions overlook the mutual purpose that was the purpose of both parties to have to satisfy the commercial objective of having these photographs on realestate.com. Thirdly, my friend’s proposition that this case does not have wide significance, it has wide significance for the.....reasons and, also, for the clear error, we say, which has been named.

Whether or not such an approach would apply to other cases, the evidence is, on these particular agreements, there was a particular purpose dealing with realestate.com. What my learned friend says may well be true that there are many other photographers out there with a similar purpose who would otherwise have a similar claim unless this Court resolves this issue rather bespeaks to the wider significance on a factual basis – even beyond the legal issues we raised.

Lastly, my friend’s submission that Codelfa is applied strictly in informal contracts, is not supported by the statements of Justice Deane in Hospital Products – again, affirmed in Hawkins, and the cases of Byrne and Breen v Williams – which expose the very issue which needs resolution and on which Justice Jackson, on the one hand, and Justices Rares and
Greenwood on the other hand, could not agree, namely, as to whether or not business efficacy is sufficient, and secondly, how one applies – if obviousness is required, how one interrelates that with the business efficacy requirement. May it please the Court.

KEANE J: Thanks, Mr Bannon. Mr Martin, anything in reply.

MR MARTIN: No, your Honour, thank you.

KEANE J: Very well. The Court will adjourn for a brief moment to consider the course it will take in these matters.

AT 1.26 PM SHORT ADJOURNMENT

UPON RESUMING AT 1.30 PM:

KEANE J: There will be a grant of special leave in each of these matters. Mr Bannon, how long will the two cases take?

MR BANNON: I would estimate a day, your Honour. It may leak into the next day, but I very much doubt it.

KEANE J: Mr Cobden, what do you think?

MR COBDEN: I agree with Mr Bannon, just one day.

KEANE J: Mr Martin?

MR MARTIN: I agree it is a one‑day appeal, your Honours.

KEANE J: Very well. The parties should follow the directions of the Registrar in relation to the steps necessary to bring the matter forward to a hearing.

Adjourn the Court.

AT 1.31 PM THE MATTER WAS CONCLUDED