FEDERAL COURT OF AUSTRALIA COPYRIGHT – architectural plans for project home – whether copyright subsists in the plans and in the home – whether respondent's project home, and architectural plans and brochures relating to that home, an infringement of applicant's copyright – discussion of relevant principles – liability of director of respondent company for infringing conduct – "authorisation" under s 36 of Copyright Act – liability as a tortfeasor Copyright Act 1968 (Cth) s 21(3), 35(2), 36(1) and 129(1)(a) Ancher, Mortlock, Murray & Woolley Pty Ltd v Hooker Homes Pty Ltd [1971] 2 NSWLR 278 cited LED Builders Pty Ltd v Masterton Homes (NSW) Pty Ltd (1994) 30 IPR 447 cited LED Builders Pty Ltd v Eagle Homes Pty Ltd (1996) 35 IPR 215 cited Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1997) 39 IPR 565 considered and applied Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 applied Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 applied Browne v Dunn (1893) 6 R 67 distinguished Raben Footwear Pty Ltd v Polygram Records Inc (1997) 75 FCR 88 cited ACCC v J McPhee & Son (Australia) Pty Ltd (Federal Court of Australia, 26 February 1998, unreported) considered Francis Day & Hunter Ltd v Bron [1963] Ch 587 cited S W Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 applied Dixon Investments Pty Ltd v Hall (1990) 18 IPR 481 applied Beck v Montana Constructions Pty Ltd [1964-1965] NSWR 229 cited Australasian Performing Right Association Limited v Jain (1990) 26 FCR 53 applied The Corporation of the City of Adelaide v Australasian Performing Right Association Ltd (1928) 40 CLR 481 cited University of New South Wales v Moorhouse (1975) 133 CLR 1 cited Microsoft Corporation v Auschina Polaris Pty Ltd (1996) 71 FCR 231 considered HENLEY ARCH PTY LTD AND ANOTHER v CLARENDON HOMES (AUST) PTY LTD AND ANOTHER VG 895 of 1995 JUDGE: MERKEL J DATE: 24 JULY 1998 PLACE: MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 895 of 1995 BETWEEN: HENLEY ARCH PTY LTD aCn 007 316 930 First Applicant and HENLEY PROPERTIES (NSW) PTY LTD ACN 062 854 246 Second Applicant AND: CLARENDON HOMES (aust) pty ltd ACN 002 937 206 First Respondent AND PETER DAVID CAMPBELL Second Respondent and between: clarendon homes (aust) pty ltd cross claimant and: shane rogers first cross-respondent henley arch pty ltd second cross-respondent henley properties (nsw) pty Ltd third cross-respondent john edward harvey fourth cross-respondent robert evan bowen fifth cross-respondent peter hayes sixth cross-respondent robert andrew grant seventh cross-respondent JUDGE: MERKEL J DATE OF ORDER: 24 july 1998 WHERE MADE: MELBOURNE MINUTES OF ORDERS 1. The Court declares that Henley Arch Pty Ltd is the owner of copyright which subsists in the home known as the Oakridge ("the Oakridge") and the plans, including the floor plans, of the Oakridge ("the Oakridge plans"). 2. The Court declares that in making, and authorising the making of, the Carrington home and plans, including the floor plans, of the Carrington home the respondents have infringed copyright by reproducing in a material form, and authorising the reproduction in a material form of, the Oakridge and the Oakridge plans. 3. The Court declares that in respect of the said infringements of copyright the applicants are entitled to damages and interest thereon, including additional damages under s 115(4) of the Copyright Act, or, at the applicants' election, an account of the profits made by the respondents and each of them by reason of the said infringements and payment of the amount found to be due on the taking of such account and interest thereon. 4. The Court orders that within twenty-one days the respondents file and serve an affidavit setting forth the number of Carrington homes sold by the respondents or either of them, the location of each such home, the sums received or receivable in respect of those sales, an approximate estimate of the cost of those sales, and particulars as to how that estimate was made. 5. The Court orders that the respondents and each of them be restrained from, whether by its or his servants or agents or howsoever otherwise, making, or authorising, procuring or causing the making of, any Carrington home other than a Carrington home: (a) which the respondents or either of them have, prior to the date of the making of these orders, contracted with a purchaser to construct for valuable consideration; or (b) which the respondents or either of them have a licence, from the first applicant, to make. 6. The Court orders that the claims of the applicants for breaches of the Trade Practices Act 1974 (Cth) and of the Fair Trading Act 1987 (NSW) and for infringement of copyright in the photograph referred to in paragraph 19 of the Further Amended Statement of Claim be dismissed. 7. The Court orders that the cross claim be dismissed. 8. The Court orders that the respondents and cross claimant pay the applicants' and cross respondents' costs to date of the claim and of the cross claim, such costs to be taxed and paid forthwith. 9. Reserve to the applicants liberty to apply for limited discovery to assist in the making of the election referred to in paragraph 3 hereof. 10. Reserve liberty to the parties to apply in respect of the foregoing orders and declarations and any order for destruction of infringing copies of the Oakridge or the Oakridge plans which may be sought by the applicants. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 895 of 1995 BETWEEN: HENLEY ARCH PTY LTD aCn 007 316 930 First Applicant AND HENLEY PROPERTIES (NSW) PTY LTD aCn 062 854 246 Second Applicant AND: CLARENDON HOMES (AUST) PTY LTD aCn 002 937 206 First Respondent AND PETER DAVID CAMPBELL Second Respondent and between: clarendon homes (aust) pty ltd cross claimant and: shane rogers FIRST cross-respondent HENLEY ARCH PTY LTD SECOND CROSS-RESPONDENT HENLEY PROPERTIES (NSW) PTY LTD THIRD CROSS-RESPONDENT JOHN EDWARD HARVEY FOURTH CROSS-RESPONDENT ROBERT EVAN BOWEN FIFTH CROSS-RESPONDENT PETER HAYES SIXTH CROSS-RESPONDENT ROBERT ANDREW GRANT SEVENTH CROSS-RESPONDENT MERKEL J JUDGE: DATE: 24 july 1998 PLACE: MELBOURNE REASONS FOR JUDGMENT Introduction The first applicant ("Henley Arch") and the second applicant ("Henley Properties") are project home building companies which share common directors. Henley Arch carries on business mainly in Victoria and Henley Properties carries on business in New South Wales. The first respondent ("Clarendon") is also a large project home building company which carries on the major part of its business in New South Wales. The second respondent ("Campbell") is the managing director of Clarendon. Henley Arch engaged its design consultant John Polglase ("Polglase") to design a project home which became known as "the Oakridge". The first Oakridge display home, which was constructed by Henley Arch, was placed on display to the public in Rowville in Victoria in May 1995. Henley Arch granted an exclusive licence to Henley Properties to construct and market the home in New South Wales. During 1995, pursuant to the licence, Henley Properties constructed and commenced marketing an Oakridge display home in Quakers Hill on the outskirts of Sydney. Clarendon became concerned at the competition posed by the Oakridge. Late in July or early in August 1995 it instructed its architect, Tara Shrestha ("Shrestha") to design a home, which became known as the Carrington, to compete with the Oakridge. Clarendon acquired a site as near as possible to the Oakridge site at Quakers Hill for the construction of its Carrington display home which was open for inspection to the public by late November 1995. By October 1995 Henley Arch suspected that Clarendon was copying the Oakridge. On 3 October 1995 a letter of demand was sent by the solicitors for Henley Arch to Clarendon claiming, inter alia, that the production, marketing and sale of the Carrington by Clarendon infringed Henley Arch's copyright in the Oakridge and in the architectural plans and drawings for the Oakridge. On 22 November 1995 Henley Arch and Henley Properties issued proceedings in the Court against Clarendon and Campbell claiming, inter alia, infringement of copyright in relation to the Oakridge and a photograph of the Oakridge which appeared in the Herald Sun Home Magazine. Henley Arch and Henley Properties also claimed that the marketing by Clarendon of the Carrington constituted, inter alia, misleading conduct. Clarendon claimed that its design of the Carrington had been developed independently of the Oakridge and it denied that it had copied or used the Oakridge design. Clarendon also disputed the subsistence of copyright in the Oakridge contending that the Oakridge itself had been copied from a home, known as the Glengrand, marketed and sold in Victoria in the late 1980s by Glenvill Homes Pty Ltd ("Glenvill"). In August 1996 Clarendon obtained an assignment of the copyright in the Glengrand. A letter of demand was then sent by Clarendon to Henley Arch claiming that the Oakridge infringed the copyright, now held by Clarendon, in the Glengrand. On 21 November 1996 Clarendon issued a cross claim in the proceedings claiming that the Oakridge infringed its copyright in the Glengrand. The hearing of the proceedings proceeded over ten days and included views of the three homes. The parties filed voluminous evidence in support of their respective claims. Each party also called an expert witness in relation to the similarities and differences between the Oakridge, the Carrington and the Glengrand. The parties were in dispute over most issues, many of which involved questions of credit. In these circumstances it is appropriate that, at the outset, I set out my findings on certain questions of fact. The Facts The person largely responsible for the success of Henley Arch's business was its managing director Peter Hayes ("Hayes"). Hayes had worked with Polglase in the mid 1980s at Glenvill. During the 1990s Hayes had engaged Polglase to design homes for Henley Arch on numerous occasions. In 1993 Polglase was involved in designing Hayes' home at 14 Cosham Street, Brighton ("the Brighton home"). Not long after Polglase's involvement in the Brighton home, Hayes requested him to commence working on the Oakridge. Polglase, in a memorandum, described his design criteria for the Oakridge as follows: "Peter's basic idea was to produce a design which reflected many of the better selling features of the Lodge. The main point being an open plan entry foyer which flowed into the den, lounge and dining and also became part of these areas as well as the stairwell as well as providing direct access into the informal living areas, columns and double doors being the method adopted. The result being a columned gallery with two tiered ceiling bulkheads incorporating low voltage lighting and a tiled floor with the pattern reflecting the ceiling treatment. Another major point was to design the house with the ability to reposition rooms to suit client requirements and site restrictions with a minimum structural change and without upsetting the fundamentals of the home. The multi-functional upstairs living area was to be designed so as the passage and stair area appeared as an extension of this area. The void forming a connection between the two living areas as well as defining the formal entry from the rest of the gallery. Other major features were to be a luxury master bedroom suite to easily accommodate a King size bed as well as a bay window type sitting area...". During 1994 Polglase worked on the design drawings and plans for the Oakridge. Later in 1994 another designer engaged by Henley Arch, Shane Rogers ("Rogers"), was requested to assist Polglase with various aspects of the Oakridge. Rogers worked with Polglase on the Oakridge although, ultimately, the aspects suggested by Rogers were not of significance. By late 1994 Polglase, who had completed his design and sketches for the Oakridge, sent them to an engineering firm for the production of detailed plans by computer aided design. The first version of the plans for the Oakridge was produced by 15 November 1994. Construction of the Oakridge display home at Rowville commenced late in 1994 and was completed by May 1995. A number of minor changes were made to the Oakridge design in the course of construction and, as a consequence, the detailed plans were amended to reflect the Oakridge as built. In April 1995 a brochure containing a floor plan for the Oakridge display home was produced by Henley Arch. The Oakridge display home was open for public inspection and Oakridge brochures were handed out to the public from about mid May 1995. In June 1995, a site was selected at Quakers Hill in New South Wales for the construction of an Oakridge display home and construction of that home was commenced. During June 1995 the Oakridge was advertised in the Melbourne Herald Sun Home Magazine which also featured an article containing photographs of the Oakridge. Initially Clarendon's case, as set out in its statement of facts and contentions filed shortly prior to the hearing, was that the Carrington was designed by Roger Douglas Porter ("Porter"), a director of Clarendon. In support of that contention reliance was placed on Porter's affidavit sworn on 20 February 1996. In the affidavit, which was filed in Court, Porter claimed that he was the designer of the Carrington home which he commenced working on in March 1995. Porter said that he had finalised the Carrington design by late April/early May 1995. He also said that in developing his design of the Carrington he did not in any way copy or refer to the Oakridge design or display home which he first saw in mid July 1995. After the applicants called evidence from two former employees of Clarendon, senior counsel for the respondents did not read or rely upon Porter's affidavit. However, parts of Porter's affidavit were tendered by the applicants. They disclose that, inter alia, Porter visited the Oakridge at Rowville on 19 July 1995 and took a number of photographs of the design of the home. The first of the two former employees called to give evidence was Paul Brandalise ("Brandalise") who was a finance manager employed by Clarendon during the relevant period. Brandalise's evidence, which I accept, was as follows. The genesis of the Carrington was a visit to Melbourne by Brandalise with Peter Brown ("Brown"), the sales and marketing manager of Clarendon, in early July 1995 to inspect display homes being offered by Henley Arch. Brown had in his possession the Herald Sun Home Magazine article and advertisement in respect of the Oakridge, which he showed to Brandalise. Brown and Brandalise visited a number of Henley Arch display homes including the Oakridge display home in Rowville. They were both very impressed by the Oakridge. Brandalise took photographs of the upstairs areas of the home which he subsequently provided to Porter. After inspecting the Oakridge Brown telephoned Porter and indicated that he regarded it as stunning and said to Porter that he should look at it. Brandalise provided a memorandum to Campbell in which he stated that he and Brown had seen the Oakridge design and that Clarendon should get a similar design as soon as possible. Campbell subsequently informed Brandalise that Porter was working on the design. Porter visited and took photographs of the Oakridge at Rowville shortly after Brandalise's memorandum to Campbell. After Porter became aware that a Henley company was building the Oakridge at Quakers Hill he arranged for Clarendon to obtain a block of land as near as possible to Henley's Oakridge site for the construction of a Carrington display home. Campbell informed Brandalise that he wanted to have the Carrington open at the same time as the Oakridge so that it could compete with it. Campbell, Porter and Brown regarded Henley Arch as posing the most serious competitive threat to Clarendon of all the project home builders against which Clarendon was competing. In order to compete more effectively with Henley Arch, Clarendon designed and constructed the Carrington at Quakers Hill. Campbell, as managing director of Clarendon, was involved in the final decision made for all new Clarendon designs. It is quite clear from Brandalise's evidence that the design of the Carrington only commenced after the visit of Brandalise and Brown to the Oakridge in Melbourne. The second of the former employees to give evidence was Shrestha who was an honest and reliable witness whose evidence was not seriously disputed. Shrestha's evidence was as follows. The product development group, which included Porter, Caroline Piggot (an interior designer) and Shrestha, was responsible for the development of new Clarendon designs. At the relevant time Shrestha was employed as Clarendon's architect. Typically he would receive his instructions on new designs from Porter and would proceed to develop those designs in consultation with Porter and the other members of the group. When the design concept was finalised it would then be considered by senior management, including Brown, Campbell and Porter, who were responsible for the final decision in respect of all new designs. Late in July or early in August 1995, Shrestha was briefed by Porter to prepare a design to compete with the Oakridge. Porter gave to Shrestha an oral description of the Oakridge, a brochure of the Oakridge design (which included the floor plan) and a number of photographs of the Oakridge including the photographs Porter had taken of the interior of the Oakridge display home. Shrestha considered a number of features of the Oakridge design to be distinctive. In particular, he regarded the void over the entry at the front door, the circular staircase and the strong link between the meals and kitchen area to be particularly distinctive features which he wished to avoid using in preparing his design concept. Shrestha described his wish to avoid those features as "a purely professional sort of a decision" on his part. In my view Shrestha regarded the use of these features in the design concept as unprofessional as he considered that it would amount to copying of the more significant features of the Oakridge. In accordance with his brief Shrestha prepared reasonably detailed design sketches (which he called "Option 1") for a house he called the "Oakdale". In Option 1 Shrestha avoided the three distinctive features although he incorporated other features that made the design similar to the Oakridge. Shrestha was uneasy about the Oakdale design in Option 1. As a consequence he also prepared an alternative design (which he called "Option 2") which departed significantly from the Oakridge concept. Shrestha sent the two designs to Porter with the following note: "Roger Re: Oakdale Pls find two sketches of the proposals for above. Option 1 is similar to Clendonvale & different to be different from their plan/s. Option 2 seems more promising but the idea "dawned" on me only this weekend while doodling in my backyard..." Clendonvale was the business name of Henley Properties. Although the content of the note was not fully explored in evidence Shrestha's description of Option 1 clearly indicates the extent to which he was conscious of the need to incorporate some differences to avoid copying or being seen to be copying. Shrestha's affidavit gave the following details as to what occurred thereafter: "24. Some days later I had a meeting with Roger Porter and Caroline [sic] Piggott and discussed the two Options. I said at this meeting words to the effect: 'I am excited about Option 2 and think it is the concept we should use'. I was, however, instructed by Roger Porter and Caroline [sic] Piggott to pursue Option 1. I recall Carolyn Piggott doing a freehand drawing on a copy of Option 1 indicating that the void must be introduced over the entry at the front. I was also instructed to move the dining room from its position on the left hand side of the central corridor in Option 1 to a position on the right hand side (looking from the front door) behind the staircase and between the living room and the kitchen. 25. After this meeting I did further work on the design concept based on Option 1. I understood that this design was to be part of a series of designs at Clarendon Homes which we had called the Signature Series. I called the amended version of Option 1 'Signature Series 5'. 26. In the Signature Series 5 design, I had introduced, as instructed, the void over the entrance, moved the dining room to a position behind the staircase and between the living room and the kitchen, moved the kitchen and put the meals area in a central projection of the family room. In this design the stairs were not circular but I made a feature of the stairwell with a void and double height windows. I also had a wall at the end of the central corridor framing the family room, which formed the focus and which was for me an important design feature. Upstairs in Bedroom 1 I proposed a his and hers built-in wardrobe arrangement behind the bed. Now produced and shown to me marked "TS4" is a true copy of the Signature Series 5 design drawn by me. 27. I gave the Series Signature 5 design to Roger Porter and over the next few days I was instructed to make a number of changes and modifications to it. About this time, the design was considered sufficiently ready to be given to a draftsman for preparation of computer-drawn plans. 28. I commenced working on related tasks such as drawing elevations and working on some other details like stairs but all of which I do not now remember. I also co-ordinated the preparation of a promotional brochure. The brochure required perspective sketches to be prepared and I sent the plans to Jane Grealy in Brisbane to enable her to prepare the perspectives and other items for the brochure. 29. The design on which I had been working became known as the Carrington. The Carrington design has circular stairs which were introduced, at some time, after the initial Signature Series 5 drawing was done by me. 30. The Carrington design, based on the concept drawings referred to above, was approved by senior management and a project home based on the design was built." Ultimately the Carrington design had re-introduced into it the three distinctive features, which Shrestha wished to avoid, with minor differences. The evidence given by Shrestha of the development of Option 1, and in particular the re-introduction of the three features into the Carrington, constitutes strong evidentiary support for the applicants' case of copying on the part of Clarendon. Subsequently Shrestha learned that the Carrington design, which he had developed, had become the subject of legal action. Although Shrestha was, in reality, the author of the Carrington he was never informed of the precise nature of the litigation nor asked by Clarendon or its lawyers to provide any information concerning the development of the Carrington design. After Shrestha gave his evidence, senior counsel for the respondents indicated that the respondents were no longer pressing the case that Porter had independently developed the Carrington design prior to April or May 1995. The Carrington design was lodged with the local council on 25 August 1995 and the first Carrington display home was constructed and open to the public by November 1995. In August 1995 Jane Grealy and Associates Pty Ltd, design consultants, was engaged by Clarendon to prepare an artist's impression of the Carrington. Jane Grealy ("Grealy"), a director, swore an affidavit on 20 February 1997 on behalf of the respondents but was not called by them as a witness. Her affidavit was tendered by the applicants. In substance Grealy's evidence was that Clarendon provided her with certain material, which included a number of photographs of the interior of the Oakridge, being the photographs taken by John Hay (which appeared in the Herald Sun Home Magazine) and Porter's photographs, to enable her company to prepare an artist's impression of the interior perspective for Clarendon's new design which Grealy was informed was to be a home known as the Carrington. Shortly after 13 September 1995 Grealy completed an artist's impression of the Carrington which was then used by Clarendon as the cover sheet for its brochure for the Carrington. Grealy swore that she made only very limited use of the photographs. In so far as Grealy's evidence was intended to suggest that the artist's impression was not copied from the photographs or from the Oakridge design I do not accept that evidence. Not only is any such suggestion highly improbable but it is inconsistent with the artist's impression created by her which was plainly derived from the photographs sent to her, including the Herald Sun photographs and instructions she or employees of her company received for preparing the impression. Oddly, the photographs do not show the void over the entrance of the Oakridge which became a prominent feature of the artist's impression of the yet to be created Carrington home. I infer that the void became a significant aspect of the artist's impression on the instructions of Clarendon. I regard the failure of the respondents to call Grealy as a witness as significant. It enables me to infer that her evidence would not have been helpful to the respondents' case: see Jones v Dunkel (1959) 101 CLR 298 at 308, 312 and 320-321. I find that the artist's impression for the publicity brochure was intended by Clarendon to be, and was, substantially derived from the photographs of the Oakridge sent by Porter to Grealy. My findings constitute further and, in my view compelling, evidentiary support for the applicants' case of copying in respect of the Carrington. The evidence is "compelling" as it shows that the major feature chosen by Clarendon to advertise the Carrington was an artist's impression of the interior of the Oakridge. On 13 October 1995 Polglase, who had been in ill health for some time, died. Section 129(1)(a) of the Copyright Act 1968 (Cth) ("the Act") provides that where in an action for infringement of copyright under Part V of the Act in relation to, inter alia, an artistic work it is established that the author is dead the work shall be presumed to be an original work unless the contrary is established. Section 35(2) of the Act relevantly provides that the author of an artistic work is the owner of any copyright subsisting in the work. It was not in dispute that Polglase assigned any copyright subsisting in the Oakridge and the plans and drawings to Henley Arch. Although the respondents disputed Polglase's authorship of the Oakridge design and plans I am quite satisfied that the evidence, particularly the documentary evidence and that of Hayes and Rogers, clearly establishes Polglase's authorship. There is some force in the contention of the respondents that the plans adduced in evidence did not reveal the evolution of the Oakridge design as they seemed to relate mainly to its final stages. However, that fact is explicable by the evidence, which I accept, of both Hayes and Rogers that it was the usual practice for earlier sketches not to be retained. Accordingly, the onus was on the respondents to establish that the Oakridge was not an original work. Ultimately, the major issue raised by the respondents related not so much to authorship of the Oakridge but to whether its distinctive features had been copied from the Glengrand. A great deal of evidence was directed to that issue which is clearly critical to determining whether copyright subsists in the Oakridge design and plans. Does copyright subsist in the Oakridge? Section 10 of the Act defines an "artistic work" to include a drawing or a building whether it is "of artistic quality or not". Plainly the drawings of the Oakridge and the Oakridge building itself are artistic works within s 10 of the Act. In any event it is well established that architectural plans and drawings are artistic works in which copyright may subsist and be infringed: see Ancher, Mortlock, Murray & Woolley Pty Ltd v Hooker Homes Pty Ltd [1971] 2 NSWLR 278; LED Builders Pty Ltd v Masterton Homes (NSW) Pty Ltd (1994) 30 IPR 447 at 449-453 per Sheppard J; LED Builders Pty Ltd v Eagle Homes Pty Ltd (1996) 35 IPR 215 at 218 per Davies J and Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1997) 39 IPR 565 at 567-569 per Branson J. The principal submission on behalf of Clarendon was that copyright did not subsist in the plans and drawings of the Oakridge as they had been copied from the plans, drawings and design of the Glengrand. Consequently, so it was said, neither Polglase or Henley Arch was the author of the plans and drawings as they had not expended "a significant amount of their skill and labour" in developing them: see Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 379 per Gummow J (with whom Black CJ and Lockhart J agreed). As was said in Interlego AG by Gummow J at 379: "There is no doubt that the test of whether one drawing based on another attracts a separate copyright is a visual one. The question for the court is whether the later drawing is merely a copy of the earlier, or is a new artistic work." Clearly copyright does not subsist in a slavish copy but an artistic work which derives from an earlier work may be a work in which copyright exists, if by reason of additions or changes it is a new or original work rather than a mere copy: see Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 at 276 and Interlego AG at 378-380. The respondents' contention confronts a number of difficulties, particularly when regard is had to s 129(1)(a). I am satisfied that Polglase expended a significant amount of his skill and labour in developing the plans and drawings of the Oakridge. It is unnecessary to detail all the evidence as to that development. It is sufficient to say that I accept the evidence of Hayes, which is corroborated by the drawings of Polglase, that the development of the plans and drawings evolved over several months with constant revision and changes being made from time to time prior to the evolution of the plans into their final form. Hayes' detailed evidence as to the development of the Oakridge is inconsistent with the suggestion that the design of the Oakridge was copied from the design of the Glengrand. In addition, Hayes denied that he had seen or been aware of the Glengrand prior to Clarendon's production of the plans for the Glengrand in the course of discovery in these proceedings. Rogers, who worked with Polglase on the Oakridge design for a short period of time, also stated that nothing he heard or saw in relation to his involvement with Oakridge suggested that it had been inspired by design concepts taken from the Glengrand. Finally, there is no evidence before the Court that Polglase was aware of the Glengrand design when he designed the Oakridge. Ultimately Clarendon's case that the Oakridge was copied from the Glengrand came down to two matters. The first related to whether Hayes had admitted that the Oakridge was taken from the Glengrand. The second related to whether the similarities between the distinctive features of the Oakridge and the Glengrand were such that they justified an inference that Polglase copied the Oakridge from the Glengrand. Evidence in relation to the alleged admission was given by Hayes, Robert Andrew Grant ("Grant") (who had previously been the New South Wales state manager and a director of Henley Properties) and Benjamin Joseph Martin ("Martin") who had previously been employed as the New South Wales sales manager for Henley Properties. In substance Hayes' evidence was as follows. On or shortly after 15 March 1996 his solicitors provided him with copies of discovered documents which included a copy of the Glengrand designed by Glenvill. He observed that the Glengrand resembled the Oakridge in a number of respects and formed the view that the Glengrand plans were discovered by the respondents as they were proposing to argue that the features of the Oakridge which Henley Arch was alleging were copied by Clarendon were not original but had been copied from the Glengrand. Hayes subsequently had a telephone conversation with Grant in which Grant said that there was a rumour that the Oakridge had been copied from a Jennings plan. Hayes said to Grant that he thought that Clarendon would argue that the Oakridge had been taken from the Glengrand. To enable Grant to understand what he meant and to keep Grant informed about the dispute Hayes said he would fax a copy of the Glengrand plan but said that Grant was to destroy it as Hayes did not want copies of it left lying around a Henley office as it might add weight to any suggestions that Henley had made use of the Glengrand design. Hayes then sent a copy of the Glengrand plan to Grant. Thereafter the matter was not raised by Grant with Hayes prior to Grant departing from Henley Properties. Grant's version of the conversation was that in about March or April 1996 he heard a rumour in the industry that Henley's Oakridge design was in fact an ex Jennings design and that Jennings should be suing Henley. Some time after hearing that rumour he telephoned Hayes and informed him of the rumour and was told by Hayes that he did not know why Jennings was mentioned. Hayes was then alleged to have told Grant to go and stand by his fax and he (ie Hayes) would show Grant where the Oakridge "came from". Hayes then said that Grant should destroy the facsimile after he received it. Grant said that a few minutes later a facsimile arrived with the floor plan of the building with "Glengrand" written on it. Grant formed the view that the plan of the Glengrand was very similar to the Oakridge layout. Grant then called in his sales manager, Martin, and, after showing Martin the plan, destroyed it. Grant only had one subsequent conversation with Hayes concerning the proceedings. When he learned that Clarendon had alleged that Oakridge was a copy of the Glengrand he telephoned Hayes and asked how he was going to get over that problem. Hayes informed him that he knew the gentleman who used to own Glenvill and believed he could convince him to give evidence to say that the Oakridge is not a copy of the Glengrand. In response to a statement, contained in a later affidavit made by Hayes, that Hayes only became aware of the Glengrand plan after its discovery in the course of the proceedings Grant swore a further affidavit in which he said: "I am positive that Mr Hayes faxed to me the Glengrand plan only a short time, within about two months, of Henley commencing these proceedings. At no time in the telephone conversation referred to in paragraph 6 of the Hayes affidavit did he state that the plan of the Glenville [sic] Glengrand home was provided to him during the course of the legal discovery process." That evidence of Grant was significant. The proceedings had been commenced on 22 November 1995. If his evidence was correct and the conversation he alleged that he had with Hayes occurred before discovery it would offer strong corroboration for his version of his conversation with Hayes, as prior to the Glengrand emerging in discovery, Hayes had denied any knowledge of it. During the hearing the applicants' evidence established that the information that Grant received about the market rumour concerning Jennings was received by him during May 1996. As a consequence Grant was compelled to concede that his recollection concerning the conversation having occurred at an earlier date was wrong. I regard that concession as seriously impinging on Grant's credit. At the date Grant swore his affidavits on behalf of the respondents, he had formed a business relationship with Campbell. He had also parted with Hayes and Henley Properties on, in his view, bad terms. Thus Grant did not stand in the position of a disinterested witness. Grant's first affidavit put the conversation as having occurred in March or April 1996, a date which was consistent with Hayes' version of the conversation occurring only after discovery. Without explanation Grant, in response to Hayes' further affidavit, deposed that he was now "positive" that the conversation happened at an earlier time that happened to be before discovery. Grant sought to play down the significance of the discovery process to his evidence but I do not accept his evidence. In my view the obvious purpose of Grant's response to paragraph 6 of Hayes' affidavit was to show that Hayes was not telling the truth when he said that he only became aware of the Glengrand after discovery. I have a further difficulty with Grant's evidence. At the relevant time he was, in effect, a partner in Henley Properties and accordingly had a significant financial interest in the litigation against the respondents. I would have expected that had he been informed by Hayes that the Oakridge plans were copied from the Glengrand he would have expressed some concern to Hayes about that matter yet, even on Grant's version, he did not do so. Senior counsel for the applicants (at transcript 487-450) detailed several other criticisms, which I also regard as having substance, of Grant's evidence. In all the circumstances I regard Hayes' version of these events as more probable than, and therefore preferable to, Grant's version. It is also consistent with the other evidence, to which I have referred, that the Oakridge was not copied from the Glengrand. The matter does not rest there as the respondents also relied upon Martin's evidence to corroborate that of Grant. Martin had worked with Grant for some time and maintained his friendship with him since leaving Henley Properties. Martin says that in about late March or early April 1996 he was called into Grant's office. He said Grant was very upset and said words to the following effect: "Look at what the pricks have done to me, but keep it very quiet. Our plan was copied from Glenvill." Martin then said he was shown a fax of the Glenvill brochure and that it had handwriting on it containing words to the following effect: "Don't show this to anyone but this is the plan that the Oakridge is taken from." Martin said that he noticed the plan was similar to the ground floor plan of the Oakridge. He then said that Grant said words to the following effect: "I wish the prick had told me before I committed myself to certain statements." Martin was cross-examined as to his evidence but was confident that his recollection was accurate. I have a number of concerns about Martin's evidence. Although he was confident about his recollection, on critical aspects his recollection differed from that of Grant. For example Martin says that there was writing on the facsimile that the plan faxed was where "the Oakridge is taken from". An admission of any kind was denied by Hayes. No evidence as to a written admission was given by Grant. I regard it as unlikely that Hayes would make such an admission in writing. In these circumstances I am not prepared to find that Hayes made any admission in writing on the facsimile. It is significant to note, as was pointed out by senior counsel for the applicants, that Martin's evidence was not evidence as to the content of the conversation between Hayes and Grant. Rather, his evidence related to Grant's version of the conversation after it occurred, which differs from the version Grant now gives of it. In my view there is also considerable force in other criticisms made by senior counsel for the applicants (at transcript 507-512) in relation to Martin's evidence. In the final analysis my concerns about Grant's evidence have not been overcome by Martin's corroborative evidence. Martin has worked with Grant with three successive employers and appears to be a good friend of Grant. Whilst I do not find that Martin intended to give false evidence concerning his recollection of the events I am not satisfied that his recollection of the relevant events is reliable. In my view what may have occurred was that Grant, having seen the Glengrand plan, was concerned at its similarity to the Oakridge plan and concluded that there may well be some substance to Clarendon's argument that the Oakridge was not an original design. Grant had recently informed the solicitors for the applicants that he was of the view that the Oakridge was a "very unique house" and also that, in preparing the Oakridge, the Henley companies "did our own thing". In these circumstances it would not be surprising if Grant had formed the view that an allegation of copying was a matter of concern to him as a co-owner of Henley Properties. In conveying that concern to Martin it would also not be surprising if Grant conveyed the impression that the copying issue was not just a matter that was being argued by Clarendon, as was said by Hayes, but that Clarendon had a real and substantial basis for its argument. If that impression was conveyed to Martin by Grant, in my view it was not accurately based upon or conveyed in Hayes' conversation with Grant. Accordingly, for the above reasons, I find that Hayes' version of the conversation he had with Grant is to be preferred. Senior counsel for the respondents contended that as Martin's and Grant's evidence was not seriously challenged it should be accepted. It was also contended that to reject it would conflict with the rule in Browne v Dunn (1893) 6 R 67. However, as has been pointed out recently by Tamberlin J in Raben Footwear Pty Ltd v Polygram Records Inc (1997) 75 FCR 88 at 101 and by Heerey J in ACCC v J McPhee & Son (Australia) Pty Ltd (Federal Court of Australia, 26 February 1998, unreported) at 34, the rule in Browne v Dunn is ultimately one of procedural fairness. Heerey J said at 34: "An essential element of the rule - and one which was very much present in Browne v Dunn itself - is that the impugned witness has had no notice on the point on which his or her evidence is subsequently attacked." See also the judgment of the Full Court in Amadio Pty Ltd v Henderson & Ors (unreported, 14 July 1998) at 132-33. In the present case Grant and Martin were on notice that Hayes disputed their version of the relevant events. Grant and Martin had every opportunity to give such evidence as they wished in order to deal with the matters in dispute. As Heerey J said in J McPhee at 35, counsel for the applicants was not required, when cross-examining, to debate with the witness the various competing probabilities which might arise from the evidence. In my view there is no substance in the Browne v Dunn submission. The more substantive basis for the allegation that the Oakridge was a copy of the Glengrand design was based on the expert architectural evidence. Mr Permewan, the expert called by the applicants, gave the following evidence as to certain similarities between the Oakridge and the Glengrand: · both had a central hallway and entry with glazed sidelights which give access to spaces with similar functions on either side and at the end; · both hallways give the appearance of having side walls with attached columns; · both have access to the first floor by a stair commencing at the side of the hallway; · both have kitchen, meals and family areas in an open, interconnected and triangular arrangement with a five sided eating area protruding from the rectangular house plan; and · the finishes are similar. Mr Permewan identified many differences between the two homes, the most important of which were: · the Glengrand has a two storey void over the living room creating a two storey room which the Oakridge does not have; · the Oakridge has a small void over the front door which acts as a visual and light link between two separate floor levels - the Glengrand entry lacks this void; · the Glengrand entry also lacks the multi-stepped ceiling, columns and continuous arcade effect of the Oakridge; · the Glengrand entry and hallway has dropped ceilings not present in the Oakridge; · the Glengrand stair is freestanding with a two storey volume giving access to an overlooking balcony separate from other functions, while the Oakridge stair disappears through the floor and discharges within the television area; · the Glengrand has a large fireplace and tall windows consistent with a double-storey space; · the Glengrand entry hall ends with the blank wall of another area with doors to the family room, while the Oakridge has columns framing direct access to a family room; · the first floors differ in the locations and sizes of the bedrooms, and other areas including the television retreat areas; · the Glengrand lacks the first floor five sided area extending out from the bedroom in the Oakridge - the Oakridge contains a "retreat area" for the parents and the combined bedroom/retreat is considerably larger than the Glengrand master suite; · the Glengrand has an internal balcony lacking in the Oakridge; · the lounge room of the Oakridge is a conventional single storey room compared with the double storey living room of the Glengrand; and · the external elevations are different. During his examination of the homes and drawings, based on his experience, Mr Permewan identified a number of items as being important, either as individual components or as part of an assembly, with a major design role to play within the design of each house. In the Glengrand the features included: · the two storey living room containing a freestanding stair leading to an overlooking internal balcony; · the dropped ceilings in the central hallway and entry; · the two storey open stair within the living room visibly curving to the first floor open balcony from the more enclosed space of the hallway; and · the five-sided area at the rear of the home breaking down the "boxiness" of the area used by the family. In the Oakridge the features included: · the void over the entry; · the long central hallway with the unusual yet simple stepped ceiling containing low voltage lights; · the apparently open stair, visible through the living room, curving to the first floor; · a pair of freestanding columns at the end of the hallway, with bases and capitals framing the rear area used by the family; · the five-sided area at the rear of the home breaking down the "boxiness" of the area used by the family; · the first floor communal area allowing both direct and visible access to the ground floor while providing an area away from the ground floor which was not a bedroom or hallway; and · a first floor main bedroom with space and amenities beyond mere strict physical requirements and forming a self-contained parents area (often promoted as a "parents retreat"). Mr Permewan concluded that the underlying concepts of the design were very different in each house, notwithstanding certain similarities in layout or function. After viewing the Oakridge and the Glengrand, and the plans of both houses, I concluded that although there were similarities in several of the design concepts, particularly in the entrance and hallway area, the overall designs and their expression contained significant differences. I have set out Mr Permewan's evidence in some detail as the qualitative impressions I formed on viewing the houses accorded with the descriptions given by Mr Permewan. In particular it appeared to me that notwithstanding the similarities between the two houses and their plans, the different dimensions and features, and their combination, did not imply a copying of the expression of the design concepts or ideas in the Glengrand. Dr Cooke, the expert architectural witness called by the respondents, differed with Mr Permewan on his qualitative evaluation relating to the significance of the differences and similarities. Dr Cooke's conclusion in relation to the similarities in the three houses was as follows: "There are clear similarities between the Quakers Hill Carrington and the Oakridge designs. The design idea for the entry, and the general disposition of the stair and the rooms on the ground floor and their connections to the entry are very similar to those in the Wantirna Glengrand." Dr Cooke said that the three designs, the Glengrand, the Oakridge and the Carrington, have "a similar hallway and stair design, a similar meals bay on the ground floor, similar accommodation, and a similar disposition of rooms in relation to the hallway and stair". At the conclusion of his examination in chief Dr Cooke gave the following answers to questions he was asked by senior counsel for the respondents: "As an expert, from the similarities that you have been discussing and giving evidence, what conclusion would you draw in relation to the two designs?---It seemed to me that it would have been a remarkable coincidence if the Oakridge design had been arrived at independently of the Glengrand design. That puts it negatively. Can you put it positively?---Well, yes. It seemed to me that the hallway, the features we've been talking about - the hallway, the stairway, the relationship of the stairway to the hallway - all of those aspects of the design, which to me are the most crucial and significant and unusual parts of the Glengrand design, were copied in a slightly modified form in the Oakridge." Dr Cooke's evidence was relied upon to show that the significant distinguishing features of the Oakridge, which included the main features that the applicants alleged had been copied by Clarendon, were the features which had been copied from the Glengrand. Senior counsel for the applicants cross-examined Dr Cooke in some detail about each of the items which Dr Cooke regarded as having been copied, albeit in a modified form, in the Oakridge. It is unnecessary to explore the detail of the cross-examination as I have formed the clear view that senior counsel for the applicants was correct in his submission that when Dr Cooke was using the word "copying" in connection with the Oakridge and the Glengrand he was referring to the taking of the ideas or concepts of significant aspects of the Glengrand design rather than taking the form of the expression of those ideas or concepts. In my view Dr Cooke conceded as much at 371 of the transcript. Indeed Dr Cooke referred, on a number of occasions, to the use of the same concept in both houses but conceded that that concept had been worked out in a different way in each. The staircase and entry and hallway areas are examples. As has so often been emphasised in copyright cases the originality required must pertain not to ideas but to their expression: see Interlego AG at 378 per Gummow J. Although a fine line exists between taking an idea and using one's own form of expression to achieve it, and taking of the expression of another, as was pointed out by Sheppard J in LED Builders v Masterton Homes at 454, only the latter will amount to infringement of copyright, assuming copyright subsists. Thus the "fine line" referred to is a relevant consideration to both the subsistence and infringement of copyright. Dr Cooke also made significant concessions in the course of his evidence which undermined the respondents' case that the relevant aspects of the Oakridge were copied from the Glengrand. Senior counsel for the applicants took Dr Cooke to Polglase's drawings for the Brighton home of Hayes which included many of the design concepts which were employed by Polglase in the Oakridge. In the course of that cross-examination Dr Cooke, with some reluctance, accepted that the drawings of Polglase for the Brighton home, which was quite different to the Glengrand and the Oakridge, included a number of the significant design ideas that were used by Polglase in the design of the Oakridge. The ideas included a number of the features upon which Dr Cooke relied for his evidence that the Oakridge was copied from the Glengrand. Whilst the ideas used in the Brighton home were used in a manner which was quite different to the way in which those ideas were used in the Oakridge the evidence given concerning Polglase's involvement in the design of the Brighton home suggests that the Oakridge was a further and different development of Polglase's design ideas and concepts. That conclusion further dispels the notion that Polglase was copying the Glengrand when he was developing the drawings and plans for the Oakridge. Although a comparison of the Oakridge and the Glengrand and the plans and drawings for each reveals both significant similarities and differences I am satisfied that the evidence given as to the similarities is not sufficient to overcome the evidence, which I have detailed, that indicates that Polglase expended a significant amount of skill, labour and judgment in the development of the Oakridge. In all the circumstances, quite apart from s 129(1)(a), I am satisfied that Polglase developed the plans and designs for the Oakridge as a new work and did not develop them by copying the Glengrand plans or design or any substantial part thereof. It is quite possible that Polglase or Hayes was aware of the Glengrand or its design features, and, consciously or subconsciously, may have employed some of the ideas or concepts derived from that awareness, initially in relation to the Brighton home design and then later in relation to the Oakridge design. However, I am not satisfied that there was any copying of the expression of those ideas. It follows that the respondents have not discharged the onus imposed under s 129(1)(a) to establish that the Oakridge plans and drawings are not original artistic works. For the above reasons, I do not accept the contention on behalf of the respondents that copyright does not subsist in the Oakridge plans. Ultimately the parties were agreed that no issue arises as to the assignments that vested copyright in Henley Arch in the plans of the Oakridge, if I found it subsisted. Accordingly, I find that copyright subsists in the Oakridge plans and is owned by Henley Arch. The Oakridge home which Henley Arch constructed from the Oakridge plans can also be an "artistic work" as defined in s 10(1). It was not in dispute that the home was constructed by Henley Arch. In my view the Oakridge home was a new artistic work in which copyright subsists and Henley Arch is the owner of that copyright pursuant to s 35 of the Act. Did Clarendon infringe Henley Arch's copyright? Section 31(1)(b)(i) of the Act provides, inter alia, that copyright, in relation to an artistic work, is the exclusive right to reproduce the work in a material form. Section 36(1) provides that copyright in an artistic work is infringed by a person, who not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorises the doing in Australia of, any act comprised in the copyright. Section 13(1) provides that a reference to "an act comprised in the copyright" in a work is a reference to "any act that, under [the] Act, the owner of the copyright has the exclusive right to do". Section 14(1) provides that the doing of any act in relation to a work includes a reference to the doing of that act in relation to a substantial part of the work. The applicants allege that Clarendon has reproduced a substantial part of the plans of the Oakridge and the Oakridge building by its drawings, plans and construction of the Carrington. The applicants' case is that the Clarendon has infringed copyright by reproducing a substantial part of the Oakridge plans and the Oakridge in two dimensional form (that is, the Carrington plans and drawings) and three dimensional form (that is, the Carrington home). In that regard s 21(3) of the Act provides: "For the purposes of this Act, an artistic work shall be deemed to have been reproduced: (a) in the case of a work in a two-dimensional form - if a version of the work is produced in a three-dimensional form; or (b) in the case of a work in a three-dimensional form - if a version of the work is produced in a two-dimensional form; and the version of the work so produced shall be deemed to be a reproduction of the work." The relevant principles in relation to infringement of copyright in architectural plans, which were not really in dispute, were helpfully discussed by Branson J in Eagle Homes v Austec at 570 and 573-575. For present purposes it is sufficient to summarise those principles as follows. 1. The question of reproduction for the purposes of copyright law involves the two elements of resemblance to, and actual use of, the copyright work. These elements have been described as "a sufficient degree of objective similarity between the two works" and "some causal connection between the plaintiffs' and the defendants' work": see Willmer LJ in Francis Day & Hunter Ltd v Bron [1963] Ch 587 at 614; see also S W Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 at 472 and Eagle Homes at 570. 2. There is no reproduction for the purposes of the Act where two persons produce substantially similar works through independent effort: see Ladbroke (Football) Ltd at 276; S W Hart at 472 and Eagle Homes at 570. 3. In determining whether "a substantial part of the work" has been reproduced, for the purposes of s 14(1) of the Act, greater weight must be given to the quality of what is copied than to its quantity: see S W Hart at 474 per Gibbs CJ, 481 per Wilson J and 503 per Deane J. When considering the quality of the part of the architectural drawing which is said to have been reproduced the simpler and more common place the drawing the more closely must the alleged infringer adhere to it for liability to exist: see Dixon Investments Pty Ltd v Hall (1990) 18 IPR 481 at 483 and Eagle Homes at 574. 4. A number of cases suggest that the degree of protection under copyright law of an architectural plan may be limited by reason of the significant proportion of features which are common to all plans, with the result that the remaining portion of a plan in which copyright will subsist is consequently limited : see Beck v Montana Constructions Pty Ltd [1964-1965] NSWR 229 at 232; Lend Lease Homes Pty Ltd v Warrigul Homes Pty Ltd [1970] 3 NSWR 265 at 269; Ancher, Mortlock, Murray & Woolley Pty Ltd at 283. However these authorities do not indicate that different principles should be applied to cases involving allegations of breach of copyright in architectural plans than are applied to cases involving other kinds of artistic work. The difficulties referred to in the authorities concerning architectural plans are difficulties of proof (that is, evidentiary difficulties): see Eagle Homes at 574. 5. Whether the alleged infringing work is sufficiently similar to the work in which copyright subsists to amount to a reproduction of a substantial part of that work is for the Court to determine. However, in determining that question the Court will be assisted by expert evidence which "is of value in exposing the facets of the ultimate question to which the expert opinion evidence is directed": see Ancher, Mortlock, Murray & Woolley Pty Ltd at 286 per Street J and Eagle Homes at 575. In the context of these principles I turn to consider the evidence including that of the two expert witnesses. Mr Permewan gave evidence as to the similarities between the Oakridge and the Carrington which were particularly important either as an individual component or as part of the overall design. The similarities which he regarded as being of particular importance included: · the void over the entry; · the long central hallway with its unusual yet simple stepped ceiling containing low voltage lights; · the apparently open stair, visible through the living room as curving to the first floor; · a pair of freestanding columns at the end of the hallway, with bases and capitals framing the rear area used by the family. It is relevant to note that it was substantially these features which were copied from the photographs of the Oakridge interior for the cover of the Carrington brochure. The other features stipulated by Mr Permewan to be important were: · the five sided area at the rear of the home breaking down the "boxiness" of the area used by the family; · the first floor communal area allowing both direct and visible access to the ground floor while providing an area away from the ground floor which was not a bedroom or hallway; · a first floor main bedroom with space and amenities beyond mere strict physical requirements and forming a self contained parents' area. Other similarities which Mr Permewan regarded as less significant included: · a central hallway which gives access to spaces with the same primary functions on the sides and at the end; · both hallways have side walls stepped in and out to create shallow recesses and openings; · both hallways commence after an entry area with central door and glazed sidelights situated beneath a void in the floor of the first floor television/rumpus area above; · both hallways give direct access to a stair with a semi-circular landing and open bannisters for approximately fifty to sixty per cent of their length - the location of the stairs, together with their entry and exit features, are similar. · both stairs open into the television/rumpus area on the first floor and are contained in a similar position in relation to the television/rumpus area; · the kitchen, meals and family areas are open, interconnected and in a triangular arrangement - the internal design of the kitchens is similar; · the finishes are similar. Mr Permewan observed a number of differences between the Oakridge and the Carrington. They were: · the external elevations are different and are consistent with the facade alternatives offered by the two project home companies; · the Rowville Oakridge garage is not attached to the home; · the Quakers Hill Carrington has the dining room and powder room/laundry interchanged in comparison with the Rowville Oakridge; · the Quakers Hill Carrington has the kitchen/family area interchanged in comparison with the Rowville Oakridge; · the associated five sided meals area (and first floor main bedroom) is centred in the Quakers Hill Carrington and offset in the Rowville Oakridge; · the first floor of the Quakers Hill Carrington has interchanged the bathroom and the third bedroom in comparison with the Rowville Oakridge. Similarly, the main bedroom of the Quakers Hill Carrington has been reversed in the comparison with the Rowville Oakridge. Mr Permewan concluded that it was "highly improbable that the design of the Carrington was created without reference to the design of the earlier Oakridge" and that it was difficult to understand how each company could have independently arrived at such similar designs. My observations on a view of the Carrington and the Oakridge accord with the qualitative descriptions given by Mr Permewan in relation to the similarities between the two homes. In my view, the features relating to the design of the entrance hallway and its relationship with the living areas on either side, the meals and kitchen area and the upstairs area via the void and the staircase are central and distinctive features of each design which, in combination, are original and are not commonplace. As pointed out above, it was not a coincidence that the artist's impression of those features derived from the Oakridge was used by Clarendon on the cover of its Carrington brochure. In the context of considering the nature, extent and qualitative significance of the similarities for the purposes of copyright infringement I do not regard the differences as having significance. Dr Cooke did not dispute Mr Permewan's observations as to the similarities between the Carrington and Oakridge designs, particularly in relation to the design of the entry area and the general disposition of the stairs and the rooms on the ground floor and their connections to the entry. Rather, Dr Cooke maintained his position, which I have not accepted, that the Oakridge design was "copied" from the Glengrand. For the reasons set out above, after carefully considering the evidence, and, in particular, in comparing the plans of the Oakridge and the Carrington, the houses constructed from those plans and drawings and the oral and documentary evidence of Shrestha, I have concluded that the applicants have established: · a substantial objective similarity and resemblance of the Carrington and its architectural plans to the Oakridge and its architectural plans; and · actual use in the design of the Carrington of the Oakridge floor plans which were contained in the Oakridge brochure, and of the design of the Oakridge home (which I have found to be artistic works in which copyright subsists, which copyright is owned by Henley Arch). The similarity and use to which I have referred amount to the taking of the form of expression of significant design concepts and ideas of the Oakridge as expressed in the Oakridge plans and home and amount to a substantial reproduction of the relevant artistic works. It does not appear to have been in dispute that if I arrive at those conclusions the applicants will have established their case of infringement by Clarendon of Henley Arch's copyright subsisting in the Oakridge home and the architectural plans of the Oakridge home. Indeed Clarendon was relying upon the same process of reasoning and principles to make out its case of infringement against Henley Arch in respect of the Glengrand. The Hay Photograph Earlier in these reasons I summarised the evidence relating to Clarendon's engagement of Jane Grealy and Associates Pty Ltd to prepare an artist's impression of the Carrington based, inter alia, on photographs of the Oakridge. For the reasons there set out I was satisfied that the artist's impression, prepared by Grealy's company for Clarendon, was copied substantially from the photographs of the Oakridge sent by Clarendon to the company including a photograph taken by John Hay of the interior of the Oakridge for the Herald Sun Home Magazine. Hay assigned copyright in that photograph (which appears in the Court Book at 1008) to Henley Arch. I have had some difficulty in arriving at any conclusion in relation to the role played by each of the photographs of the interior of the Oakridge, including Hay's photograph, in the creation of the artist's impression used in the Carrington brochure. The impression appears to have been copied from a number of photographs including the photographs in respect of which Henley Arch does not own the copyright. In those circumstances I am not satisfied that the applicants have discharged the onus of establishing that there has been a copying or a substantial reproduction of Hay's photograph as alleged. Accordingly, the applicants' claims based on copyright infringement in reliance on the Hay photograph are to be dismissed. Misleading Conduct The claims in reliance on the Trade Practices Act 1974 (Cth) and its State counterpart, the Fair Trading Act 1987 (NSW), were based substantially on the similarity between the Carrington and the Oakridge. The claims were, in substance, based on an alleged representation by Clarendon that there is a connection or association between the Carrington and the applicants. The evidence establishes that the marketing and sale of the Carrington were clearly expressed to be by Clarendon. I am not satisfied that Clarendon made the representation as alleged or that its conduct was misleading or deceptive by reason of the similarities between the two homes: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191. Accordingly, this aspect of the applicants' case has not been made out. Did Campbell infringe copyright? If a company has infringed copyright a person (including a director) may also be liable if that person personally authorised the company to commit the act of infringement: see s 36(1) of the Act, Australasian Performing Right Association Limited v Jain (1990) 26 FCR 53 and Copinger and Skone James on Copyright (13th ed, 1991) at pp 310-311. Authorisation for the purpose of s 36(1) is established by evidence that the relevant person sanctioned, approved or countenanced the infringing conduct in a manner which thereby authorised it: see The Corporation of the City of Adelaide v Australasian Performing Right Association Ltd (1928) 40 CLR 481 at 489; University of New South Wales v Moorhouse (1975) 133 CLR 1 at 12-13 per Gibbs J and at 20-21 per Jacobs J (with whom McTiernan ACJ agreed), and Jain at 57-61. A person (including a director) may also be primarily liable as a joint or concurrent tortfeasor in relation to the infringement by involvement in the tortious acts which constitute the infringement: see Microsoft Corporation v Auschina Polaris Pty Ltd (1996) 71 FCR 231 at 239-246 per Lindgren J and the cases there discussed. In Microsoft Corporation Lindgren J, in discussing the nature of the involvement required on the part of a director for tortious liability in respect of the company's infringement, pointed out the need to assess closely the director's conduct and its relationship with the infringing conduct for which the company is liable. In that context his Honour (at 242-245) considered whether the appropriate test for determining whether the director participated in the infringement was whether the director: · expressly or impliedly procured or directed the infringing conduct; or · made the infringing conduct his own in the sense that the director deliberately, wilfully and knowingly pursued a course of conduct that was likely to constitute the infringing conduct or was recklessly indifferent to the risk of it. His Honour (at 245-246) preferred the "directed or procured" test to the "making the conduct the director's own" test and found, in any event, that the "directed or procured" test was supported by Australian authority which ought to be followed as it was not clearly wrong. I respectfully adopt the same approach in the present case. See also the discussion in King v Milpurrurru (1996) 66 FCR 494 at 485-486 per Lee J; cf Beazley J at 500. Senior counsel for Campbell did not dispute the law. Rather, he contended that there was no evidence that Campbell authorised or participated in the commission of any act of infringement by Clarendon. Although Campbell did not give evidence I am satisfied that the evidence adduced by the applicants establishes that: · Campbell, as managing director of Clarendon, in the past and at the time of the development of the Carrington, was responsible for the final approval of all new designs for homes to be designed, constructed and marketed by Clarendon; · Campbell was informed by Porter about, and was aware and approved of, the development of the design of the Carrington by Clarendon as a display home that was designed to be similar to and compete with the Oakridge in New South Wales; · Campbell had seen and was aware of the Oakridge design which he knew was to form the basis for the Carrington design. The evidence does not establish the precise role or state of awareness of Campbell in relation to the infringing acts of Clarendon. However, on the basis of the evidence adduced I infer that Campbell was aware of and sanctioned, approved and countenanced, and thereby authorised, the infringing acts constituted by the copying of the Oakridge design and then its reproduction, construction and sale as the Carrington. I accept Brandalise's evidence that Campbell was "the master" (which I take to mean "the controller") in the Clarendon group and conclude that it was likely that Campbell was aware of Porter's role in instructing Shrestha to develop the Carrington design based on the Oakridge and in developing what I have concluded to be a substantial reproduction of that design by the design and construction of the Carrington at Quakers Hill. I am satisfied that, in his role of controller of Clarendon, Campbell was aware of and authorised the infringing conduct complained of by the applicants in relation to the Carrington. Accordingly, Campbell is liable under s 36(1). In so far as my conclusions are based on inferences from the evidence I am more ready to draw those inferences on the basis that I infer that the evidence Campbell could give on this issue would not be helpful to his case: see Jones v Dunkel at 308, 312 and 321. If necessary I would also find that Campbell, as the controller of Clarendon, directed and procured the infringing conduct in the sense discussed by Lindgren J in Microsoft Corporation although the evidence is not as clear on this aspect. Whilst I accept that Mr Campbell's failure to give evidence does not authorise the Court to substitute suspicion for inference, it does entitle me to be more confident in drawing in favour of the applicants' case inferences open from the facts proved in evidence: see The Insurance Commissioner v Joyce (1948) 77 CLR 39 at 61 per Dixon J, and Lopes v Taylor (1970) 44 ALJR 412 at 422 per Gibbs J. See also Gibbs v Rea [1998] 3 WLR 72 at 82-84 where the majority of the Privy Council (Lord Steyn, Lord Hutton and Gault J) commented on the risk involved where a party who would be expected to give evidence on an issue declines to do so. The risk is that evidence tending to establish the other party's case might be converted by silence into evidence establishing that party's case. In the present case, although it is not necessary to do so in the light of my other findings, I am satisfied that the evidence entitles me to infer that Campbell directed and procured the infringing conduct for the reasons set out above. For the above reasons I am satisfied that the applicants have also made out their case against Campbell in relation to the Carrington. Did the applicants infringe Clarendon's copyright in the Glengrand? The respondent's case of infringement of copyright in the Glengrand against the applicants relied upon infringement as a defence and on the cross claim. It was contended by way of defence that the Court ought not grant relief in respect of a pirated or an infringing work: see the discussion of this issue by Drummond J in A-One Accessory Imports Pty Ltd v Off Road Imports Pty Ltd (1996) 66 FCR 199 at 200-202. On the cross claim Clarendon alleged infringement by the reproduction of the Glengrand in the Oakridge design. The relief sought included injunctive relief under the Act. It was essential to both aspects of Clarendon's case as to infringement that, at the least, significant features of the Oakridge design were copied or "pirated" (in the sense in which it is used in A-One Accessory Imports) from the Glengrand. For the reasons I have set out in considerable detail in relation to Henley Arch's development of the Oakridge I have concluded that Clarendon has failed to establish copying or piracy. On the basis of my findings, the highest that the infringement case of Clarendon might be put is that it is possible that in the development of the Oakridge design Polglase or Hayes might have been aware of and utilised some of the design concepts and ideas employed in the Glengrand. I do not elevate that finding to a probability nor do I find that there was any copying or taking of the expression of those concepts or ideas rather than their possible use as concepts or ideas. In my view both the requisite degree of objective similarity and causal connection, the requirements and details of which I have discussed earlier in these reasons, has not been established. Accordingly, this aspect of the respondents' and cross claimant's case, whether by way of defence or cross claim, fails. Additional damages under s 115(4) The applicants drew attention to the flagrancy of the copyright infringements and the benefits (including the proximity of the Carrington to the Oakridge at Quaker's Hill) that thereby accrued to the respondents. The applicants then contended that by reason of those matters the present case is an appropriate case for additional damages under s 115(4). In my view the applicants' contentions are amply supported by my findings and accordingly, it is appropriate to award additional damages under s 115(4). Relief The applicants have succeeded in establishing their entitlement to relief in relation to their claims of copyright infringement against the respondents in respect of the design, construction and sale of the Carrington. Clarendon, as cross claimant, has failed to establish its entitlement to relief on the cross claim which is to be dismissed with costs. The relief that is appropriate on the application is substantially that sought by the applicants. However, as some issues may arise in relation to some aspects of the orders and declarations I propose to make, I have reserved liberty to the parties to apply. An order for destruction of infringing copies was also sought by the applicants in the following terms: "[T]he respondents forthwith destroy all Carrington homes currently unsold and all drawings of the Carrington and all Clarendon brochures in the possession, power or control of them or either of them and that the respondents verify such destruction by affidavit filed and served within 60 days of the date hereof." I have concerns with the order, as well as the blanket order sought restraining further construction of the Carrington as, inter alia, the orders sought might prejudicially and unfairly affect the rights of innocent third parties. In the circumstances I have reserved liberty to apply in respect of any orders for destruction which may be sought by the applicants. I certify that this and the preceding thirty-three (33) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel Associate: Dated: Counsel for the Applicant: Dr J McL Emmerson QC with Mr A Ryan Solicitor for the Applicant: Blake Dawson Waldron Counsel for the Respondent: Mr F McAlary QC with Mr G Colyer Solicitor for the Respondent: Minter Ellison Dates of Hearing: 11-15, 18-22 and 26 May 1988 Date of Judgment: 24 July 1998