Australian Computer Evaluation Consultants Pty Ltd & Anor v Datbury Pty Ltd & Ors [1995] FCA 41

CATCHWORDS COPYRIGHT - infringement - computer program - infringement not proved - no issue of principle involved.

TRADE PRACTICES - misleading and deceptive conduct - not proved - no issue of principle involved.

TRADE PRACTICES - passing off - not proved - no issue of principle involved. Trade Practices Act 1974 (Commonwealth) s 52, s 53(a) (c) and (d), s 55 Copyright Act 1968 (Commonwealth) s 10, s 43A AUSTRALIAN COMPUTER EVALUATION CONSULTANTS PTY LTD and COPPER SYSTEMS PTY LTD v. DATBURY PTY LTD, JOHN KEITH MARSTON, ROBERT GOW, MICHAEL T. COUGHLIN, DEREK GARDNER, HUNTLOW PTY LTD and MICHAEL EDWARD TURP VG 332 of 1992 Olney J Melbourne 10 February 1995

IN THE FEDERAL COURT OF AUSTRALIA VICTORIAN DISTRICT REGISTRY GENERAL DIVISION No VG 332 of 1992 B E T W E E N: AUSTRALIAN COMPUTER EVALUATION CONSULTANTS PTY LTD and COPPER SYSTEMS PTY LTD Applicants and DATBURY PTY LTD, JOHN KEITH MARSTON, ROBERT GOW, MICHAEL T. COUGHLIN, DEREK GARDNER, HUNTLOW PTY LTD AND MICHAEL EDWARD TURP Respondents Coram: Olney J Place: Melbourne Judgment:10 February 1995 MINUTE OF ORDERS THE COURT ORDERS THAT:

1. The application be dismissed. 2. The question of costs is adjourned to 10.00am on Friday 24 February 1995. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIAN DISTRICT REGISTRY GENERAL DIVISION No VG 332 of 1992 B E T W E E N: AUSTRALIAN COMPUTER EVALUATION CONSULTANTS PTY LTD and COPPER SYSTEMS PTY LTD Applicants and DATBURY PTY LTD, JOHN KEITH MARSTON, ROBERT GOW, MICHAEL T. COUGHLIN, DEREK GARDNER, HUNTLOW PTY LTD AND MICHAEL EDWARD TURP Respondents Coram: Olney J Place: Melbourne Judgment:10 February 1995

REASONS FOR JUDGMENT THE PROCEEDINGS The applicants claim declaratory and injunctive relief and damages, as well as other related relief, against the respondents in respect of conduct which is said to have infringed the second applicant's copyright in a computer program and to have contravened sections 52, 53(a)(c) and (d) and 55 of the Trade Practices Act 1974 (Commonwealth). In the case of the sixth and seventh respondents, it also said that the conduct complained of constituted passing-off and in the case of the second, third, fourth, fifth and seventh respondents, the conduct is said to have constituted aiding and abetting, counselling or procuring and/or being directly or indirectly knowingly concerned in or party to the alleged contraventions of the Trade Practices Act by the first and sixth respondents. The trial commenced at Melbourne on 22 June 1994, it having been set down for a 3 day hearing. The evidence continued on 23 and 24 June 1994 and 18 and 19 July 1994. In order to accommodate interstate witnesses the hearing then continued at Brisbane on 20, 21 and 22 July 1994. At the conclusion of the evidence, I directed that final submissions be made in writing and that an opportunity be provided for counsel to address the Court on their submissions. This occurred on 30 September 1994 when I reserved my decision. In all, 14 witnesses were called. Much of the cross-examination was directed to testing the credit of witnesses and exploring their motives rather than to the factual issues which were relatively few in number. It became obvious that the main protagonists had a history of disputation extended back prior to the commencement of these proceedings and by the end of the trial it was clear that what the parties were really fighting over was the costs of the proceedings. Even at its highest, the applicants' case involved a triviality. At its lowest, the proceedings were a vehicle for the first applicant to achieve some form of retribution for what may have been thought to be a past injustice. Be that as it may, I have put aside the personal animosities of the parties and judged the case according to facts established by the evidence. I do not propose to canvass every issue raised during the hearing but rather will confine these reasons to a consideration of those issues which touch upon the outcome of the proceedings. In a number of places in what follows I have commented upon the credit of specific witnesses. I have done this in respect of issues which I consider to be central to the case. To the extent that these reasons contain findings of fact in respect of which I have not specifically canvassed the relevant evidence such findings are based upon either uncontested evidence or where there has been a conflict, upon the evidence which I consider to be the more credible. THE PARTIES The fourth respondent was not served and the applicants did not press any claims against him. The first respondent (ACEC) is a company incorporated in Victoria which since 1984 has been engaged in the business of selling and supporting hotel computer systems. ACEC sells stock control, accounting, payroll and front office systems. Two of the programs sold by it are the hotel manager and the payroll manager program. ACEC trades under the business name Hoteliers Information Systems a name which is commonly abbreviated to HIS. The second respondent (Copper Systems) is also a company incorporated in Victoria. It is the owner of the copyright in a computer program known as Telxon.Com which is the subject of these proceedings. The first respondent (Datbury) is a company incorporated in Queensland. It carries on a business similar to that of ACEC. It is registered in Queensland as the proprietor of the business name Australian Commercial Electronics a name which is commonly abbreviated to ACE. The second respondent (Marston) and the third respondent (Gow) have at all relevant times been directors of Datbury. The fifth respondent (Gardner) has at all relevant times been an employee of Datbury. Gardner and Marston were formerly directors of a company called BEQ, to which reference is made below. Gow was formerly an employee of BEQ. The sixth respondent (Huntlow) is a company incorporated in Queensland of which the seventh respondent (Turp) has at all relevant times been a director. It is common cause that at all material times Datbury and Huntlow were trading corporations within the meaning of the Trade Practices Act. OTHER COMPANIES AND INDIVIDUALS INVOLVED In addition to the parties to the proceedings, the following companies and individuals will be referred to in these reasons. Peter Geoffrey Summers (Summers) is the author of the hotel manager and the payroll manager programs referred to above. He is managing director of Summers Computer Software Pty Ltd (SCS). Since about 1981 he and his company have specialised in the hospitality industry which includes all matters to do with hotels, motels and restaurants. In 1985 ACEC and SCS entered into an agreement whereby ACEC was granted what is said by the applicants to be an exclusive worldwide licence to distribute Summers' hospitality industry programs. Michael Edward Grosvero (Grosvero) is the managing director of ACEC. His wife Sandra Grosvero (Mrs Grosvero) is also a director of the company. Grosvero is an accountant by profession and practised as such before setting up ACEC. Mrs Grosvero carries out clerical duties for the company. Louis Delacretaz (Delacretaz) is the managing director of Copper Systems and is the author of the computer program known as Telxon.Com. Business Electronics (Queensland) Pty Ltd (BEQ) was a Queensland company. It has been wound up. BEQ was at the material time a non-exclusive distributor of ACEC's software products in Queensland. This arrangement operated until 1989 when a dispute arose which resulted in ACEC and SCS issuing Federal Court proceedings in February 1990. BEQ ceased operations in March 1990 and was later wound up. The Billabong Group of hotels was a group of hotels owned ultimately by Mr & Mrs Laurie Beaumont. Turp joined the group in Victoria in 1979 and became its operations manager. At the end of 1983 Turp went to Queensland as the manager of Billabong Group Queensland. Mr & Mrs Beaumont were the directors and shareholders of a company known as Jofre Pty Ltd which formerly leased the Junction Hotel in Brisbane from Carlton & United Breweries Ltd. In about 1987, CUB sold the Junction Hotel to Huntlow the shareholders of which were at the time Jofre Pty Ltd and Tavern Consultancy Services Pty Ltd (TCS), a company controlled by Turp and his wife. The Junction Hotel continued to operate as a member of the Billabong Group. In the period around and after 1989 Billabong Group Queensland was in financial difficulty. Some hotel leases were lost and other hotels were sold to pay outstanding debts. The group gradually ceased to operate. In the period between about October 1990 and February 1991 Turp and his wife purchased Jofre Pty Ltd's shares in Huntlow. Doce Pty Ltd (Doce) is a subsidiary of Santos Limited and was for a period the owner of the Jindalee Hotel in suburban Brisbane. In about June 1991 Turp, through his company TCS, entered into an agreement with Doce to manage the Jindalee Hotel. The agreement was terminated in May 1992.