FEDERAL COURT OF AUSTRALIA Henley Arch Pty Ltd v Lucky Homes Pty Ltd [2016] FCA 1217 File number: VID 360 of 2015 Judge: BEACH J Date of judgment: 13 October 2016 Catchwords: COPYRIGHT – infringement – artistic work – project home floorplan – whether alleged infringing work objectively similar – whether alleged infringing work reproduced a substantial part – three-dimensional form derived from two-dimensional work – defence of innocent infringement – Copyright Act 1968 (Cth) s 115(3) – loss of opportunity damages – loss of profits – additional damages – Copyright Act 1968 (Cth) s 115(4) – claims upheld – cross-claim under contractual indemnity – cross-claim for misleading or deceptive conduct Legislation: Copyright Act 1968 (Cth) ss 10, 13, 14, 21, 31, 32, 35, 115 Wrongs Act 1958 (Vic) ss 24AE, 24AF, 24AI Cases cited: Barrett Property Group Pty Ltd v Carlisle Homes Pty Ltd [2008] FCA 375 Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd (1999) 46 IPR 309; [1999] FCA 1371 Coles v Dormer (No 2) (2016) 330 ALR 151; [2016] QSC 28 Dart Industries Inc v Decor Corporation Pty Ltd (1993) 179 CLR 101 Dynamic Supplies Pty Ltd v Tonnex International Pty Ltd (No 3) (2014) 312 ALR 705; [2014] FCA 909 Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1999) 87 FCR 415 Facton Ltd v Rifai Fashions Pty Ltd (2012) 287 ALR 199; [2012] FCAFC 9 Flags 2000 Pty Ltd v Smith (2003) 59 IPR 191; [2003] FCA 1067 Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) (2008) 76 IPR 763; [2008] FCA 746 Golden Editions Pty Ltd v Polygram Pty Ltd (1996) 61 FCR 479 IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458 Luxottica Retail Australia Pty Ltd v Grant (2009) 81 IPR 26; [2009] NSWSC 126 Milwell Pty Ltd v Olympic Amusements Pty Ltd (1999) 85 FCR 436 Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42 Ron Englehart Pty Ltd v Enterprise Constructions (Aust) Pty Ltd (2012) 95 IPR 64; [2012] FCAFC 4 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd (2014) 110 IPR 82; [2014] FCA 1366 SW Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 Tamawood Ltd v Habitare Developments Pty Ltd (2015) 112 IPR 439; [2015] FCAFC 65 Tamawood Ltd v Henley Arch Pty Ltd (2004) 61 IPR 378; [2004] FCAFC 78 Tolmark Homes Pty Ltd v Paul (1999) 46 IPR 321; [1999] FCA 1355 Dates of hearing: 29, 30, 31 August, 1, 2, 8 September 2016 Date of last submissions: 27 September 2016 Registry: Victoria Division: General Division National Practice Area: Intellectual Property Sub-area: Copyright and Industrial Designs Category: Catchwords Number of paragraphs: 295 Counsel for the Applicant: Mr E J C Heerey QC with Mr T D Cordiner Solicitors for the Applicant: Ashurst Australia Counsel for the First and Second Respondents: Mr A W Sandbach RFD Solicitors for the First and Second Respondents: Goldsmiths Lawyers Counsel for the Third and Fourth Respondents: Mr D L Epstein Solicitors for the Third and Fourth Respondents: Legoll Legal ORDERS VID 360 of 2015 BETWEEN: HENLEY ARCH PTY LTD (ACN 007 316 930) Applicant AND: LUCKY HOMES PTY LTD (ACN 151 129 618) First Respondent MUHAMMED MOHSIN SHAFIQ Second Respondent ABHISHEK MISTRY Third Respondent PRIYANKA MISTRY Fourth Respondent AND BETWEEN: LUCKY HOMES PTY LTD (ACN 151 129 618) First Cross-Claimant MUHAMMED MOHSIN SHAFIQ Second Cross-Claimant AND: ABHISHEK MISTRY First Cross-Respondent PRIYANKA MISTRY Second Cross-Respondent AND BETWEEN: ABHISHEK MISTRY First Cross-Claimant PRIYANKA MISTRY Second Cross-Claimant AND: LUCKY HOMES PTY LTD (ACN 151 129 618) First Cross-Respondent MUHAMMED MOHSIN SHAFIQ Second Cross-Respondent JUDGE: BEACH J DATE OF ORDER: 13 OCTOBER 2016 THE COURT ORDERS THAT: 1. The respondents pay compensatory damages to the applicant in the sum of $34,400. 2. The first and second respondents pay, collectively, additional damages to the applicant in the sum of $25,000. 3. The third respondent pay additional damages to the applicant in the sum of $10,000. 4. The first and second respondents' cross-claim against the third and fourth respondents be dismissed. 5. On the third and fourth respondents' cross-claim against the first and second respondents, the first and second respondents pay damages to the third and fourth respondents quantified in such sum as the third and fourth respondents are liable to pay and do pay to the applicant under order 1 and to pay to the third respondent damages quantified in such sum as to one-half of his liability to the applicant that he pays under order 3. 6. Within 14 days of the date hereof, the applicant file and serve submissions (limited to five pages) on the question of the costs of its originating application and on any pre-judgment interest, if any, allowable. 7. Within 14 days of the receipt of the applicant's submissions, the respondents file and serve submissions (limited to five pages for the first and second respondents and limited to five pages for the third and fourth respondents) on the topics referred to in order 6 and on the costs of the cross-claims. 8. Within 14 days of the receipt of any respondent's submission on the costs of any cross-claim, any other respondent may file and serve submissions (limited to three pages) in response. 9. Liberty to apply on reasonable notice. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BEACH J: 1 The applicant (Henley Arch) operates a home building business throughout Australia, trading under various business names. One of these divisions trades under the name of "MainVue Homes", which markets and constructs homes according to a series of project home designs including the "Amalfi" series. 2 The first respondent (Lucky Homes) also operates a home building business in Victoria, but of a lesser scale to Henley Arch's Victorian operations. The second respondent (Mr Shafiq) is the managing director and sole shareholder of Lucky Homes. The third and fourth respondents are husband and wife (the Mistrys) and the registered proprietors of Lot 828, Circus Avenue, Point Cook, Victoria (the Circus Avenue property). 3 Henley Arch has contended that it owns the copyright subsisting in an original house design (specifically a floorplan) called the "Amalfi AM532" with the "Avenue" façade applied to the house (the Amalfi Avenue floorplan). The Amalfi Avenue floorplan is said to be an original artistic work. 4 Henley Arch claims that the respondents infringed or authorised the infringement of copyright in the Amalfi Avenue floorplan by preparing or authorising the preparation of a floorplan which involved copying a substantial part of the Amalfi Avenue floorplan and which was objectively similar to the copyright work. It is also said that there has been infringement by the three-dimensional reproduction of the two-dimensional Amalfi Avenue floorplan, ie by the construction of the Mistrys' residential dwelling on the Circus Avenue property. 5 Henley Arch has sought a declaration that the conduct of the respondents constituted copyright infringement, injunctions against the respondents restraining further infringing conduct, delivery up of the infringing plans, damages and additional damages. 6 Before trial, the Mistrys denied any copyright infringement and claimed that they had an implied licence to use the copyright in the designs. However, those assertions were not pressed at trial. But they contend that they can rely on the defence of innocent infringement under section 115(3) of the Copyright Act 1968 (Cth) (the Act), and are therefore not liable to Henley Arch. Lucky Homes and Mr Shafiq have denied infringement. They assert that there has been no reproduction of a substantial part of the Amalfi Avenue floorplan, whether in two dimensions or three dimensions. But in contrast to the Mistrys' defence, they do not rely upon any defence of innocent infringement. 7 By way of a cross-claim against the Mistrys, Lucky Homes and Mr Shafiq have sought to rely on an express term in the building contract executed between Lucky Homes and the Mistrys under which the Mistrys warranted that any building plans (and the copyright therein) provided to Lucky Homes by the Mistrys were owned by the Mistrys. Lucky Homes and Mr Shafiq have contended that the Mistrys breached the relevant warranty and are obliged to indemnify them for any losses suffered if they were found to have engaged in copyright infringement at the suit of Henley Arch. 8 By way of a cross-claim against Lucky Homes and Mr Shafiq, the Mistrys have asserted that if they were found to have engaged in non-innocent copyright infringement, then they were the victims of misleading or deceptive conduct on the part of Lucky Homes and Mr Shafiq. The Mistrys have also asserted that if they were found liable for copyright infringement and I find that Lucky Homes and Mr Shafiq were also engaged in copyright infringement, then they are concurrent wrongdoers under section 24AI of the Wrongs Act 1958 (Vic), and their liability should be proportionately limited as to the loss or damage suffered by Henley Arch, having regard to the extent of their responsibility and Lucky Homes' and Mr Shafiq's responsibility for that loss or damage. This concurrent wrongdoers contention is misconceived as I will later explain. 9 For the following reasons, Henley Arch's claims for copyright infringement succeed against all respondents. I reject the principal defence of Lucky Homes and Mr Shafiq of no reproduction of a substantial part. I also reject the principal defence of the Mistrys of innocent infringement. In my view, as against the respondents, Henley Arch is entitled to an award of compensatory damages in the amount of $34,400. Further, I will award additional damages of $25,000 collectively against Lucky Homes and Mr Shafiq and additional damages of $10,000 against Mr Mistry only. Henley Arch has also sought declarations and injunctions, but in my view there is no utility in granting such relief. My reasons adequately set out the principal findings and the basis for those findings. As to injunctions, there is no real prospect of further infringement. As far as the Mistrys are concerned, their home has been built. So far as Lucky Homes and Mr Shafiq are concerned, I am satisfied that their infringement of copyright was a once off occasion. Their normal business practice has been to prepare or use house designs designed or procured by themselves (with or without the use of a subcontractor) rather than to use or modify the designs of their competitors. As to each of the cross-claims, I propose to dismiss the cross-claim of Lucky Homes and Mr Shafiq but to allow the cross-claim of the Mistrys for reasons that I will later explain. FACTUAL BACKGROUND 10 It is convenient to first set out the background of what transpired. Development of the Amalfi floorplans 11 Jeff Bugeja is an Australian citizen and had been employed by Henley Arch as a national design manager since December 2009. Mr Bugeja's duties at Henley Arch consisted of designing new project homes for the Henley Properties Group, which involved drafting floorplans and elevation plans for project homes under the "MainVue" brand, as well as other brand names. Mr Bugeja also oversaw the construction of display homes built in accordance with his designs. 12 Mr Bugeja had been instructed from time to time to prepare a smaller version of a project home, which was based on a certain design, to enable Henley Arch to market and sell a smaller version of the same project home for a smaller lot size and at a lower retail price. Henley Arch generally only builds the larger version for use as a display home. 13 In early April 2010, Lizzie Kind, the chief operating officer of Henley Arch instructed Mr Bugeja to design a new single storey project home for the MainVue brand, which was to be displayed at the Saltwater development in Point Cook. The MainVue brand was to be what Henley Arch described as a "luxury brand". The design was to be a new concept and not a variation of any earlier Henley Arch project home. 14 In April 2010, Mr Bugeja drew the first sketches of the Amalfi AM632 floorplan. During the course of April to September 2010, Mr Bugeja drew various iterations of the Amalfi AM632 floorplan. Those iterations showed different sizes of the Amalfi AM632 floorplan, with various rooms being differently located. There was a similar design concept between all of these iterations and they became part of the "Amalfi" series of homes. 15 In September 2010, Mr Bugeja produced the Amalfi AM628 floorplan. Further, in January 2011, the Amalfi AM528 floorplan was finalised. The Amalfi AM528 floorplan was based on the AM628 floorplan. Further, during December 2010 to January 2011, Mr Bugeja developed the Amalfi AM532 floorplan. The Amalfi AM532 floorplan was based on the Amalfi AM528 floorplan. The Amalfi AM532 floorplan differed from the Amalfi AM528 floorplan in that an additional bedroom was included at the back of the house. On 19 February 2011, Henley Arch published the Amalfi AM532 floorplan in a brochure which was made available to the public. 16 Henley Arch's master plans team produced master drawings of the Amalfi AM532 floorplan. The difference between each of the master drawings of the Amalfi AM532 floorplan was the façade of the house. For example, the AM532 Avenue floorplan applied the "Avenue" façade to the Amalfi AM532 floorplan. A copy of the Amalfi AM532 floorplan with the "Avenue" façade is annexure A to my reasons. Similarly, the AM532 Eclipse floorplan applied the "Eclipse" façade to the Amalfi AM532 floorplan. A copy of the Amalfi AM532 floorplan with the "Eclipse" façade is annexure B to my reasons. The Avenue façade was a more expensive option than the Eclipse façade. The Eclipse façade was offered by Henley Arch as the default or standard option. There were also render options such as "part" or "front" render options, which were available for each of the façade options and involved additional cost to the prospective homeowner. Dealings between the Mistrys and Henley Arch 17 In 2010 to 2011, the Mistrys purchased and constructed their first house under a house and land package from Henley Arch. According to the evidence led before me, the Mistrys were well contented with Henley Arch's design and construction work on their first house. 18 On 19 March 2013, the Mistrys entered into a contract of sale to purchase the Circus Avenue property, ie the land only for $279,000; the land was part of a subdivision development known as Stage 8, "Kingsford", Point Cook. Settlement was to be 10 days after registration of the relevant plan of subdivision and the issue of title. This did not occur until the end of September 2013. 19 On 5 April 2013, the Mistrys visited the MainVue display homes at Saltwater Coast in Point Cook. At this time, the Mistrys expressed interest in having Henley Arch construct a project home for the Circus Avenue property. During that visit to the display homes at Saltwater Coast, the Mistrys paid Henley Arch a deposit of $800. 20 At some stage, although this was denied by Mr Mistry, Henley Arch's step by step guide was provided to the Mistrys which set out the process involved from the initial consultation with Henley Arch through to the commencement of construction. The guide provided as follows: (a) Under Step 1, what was contemplated was an initial consultation with a Henley Arch consultant which involved an inspection of a display home of the client's desired MainVue house. The client then paid Henley Arch a fully-refundable $850 deposit to secure the base house price and for Henley Arch to provide an initial quotation based on the client's selection of the house, façade and other inclusions including the electrical layout of the chosen home; I note that the Mistrys though only paid $800. Once the client had confirmed their various options to customise their chosen home, Henley Arch issued a final quotation which reflected those selected options. The client then paid Henley Arch a second deposit of $650 prior to signing the final quotation. The payment of the total deposit of $1500 ($850 initial deposit and $650 second deposit) then triggered the creation of a tender document based on the client's desired options. The $1500 deposit was not refundable once a soil test and site survey had been ordered. (b) Step 2 involved the client making arrangements to finance the new house. Henley Arch required the client to obtain finance pre-approval. At this stage, Henley Arch confirmed whether the desired house was able to physically fit on the client's land. (c) Step 3 involved a colour styling consultation with an interior designer. The purpose of the consultation was to confirm internal and external colour selections. (d) Step 4 involved Henley Arch issuing the client a tender document which incorporated the client's choice of façade, catalogue options (such as render options) and an accompanying site plan for the house. Once the client accepted the tender, they were required to pay Henley Arch a further $1650, which was non-refundable, in order for Henley Arch to prepare the working drawings for the construction of the house. (e) Step 5 involved Henley Arch providing the client with a HIA New Homes Building Contract for review and, if appropriate, execution. Henley Arch arranged with the client an appointment to sign the contract at a MainVue sales office. Once the client signed the contract, they were required to pay a further deposit, being the balance of 3% of the tendered price less the amount of the deposit already paid. The client also needed to provide proof that they had obtained the appropriate finance to meet the value of the contract. (f) Step 6 involved Henley Arch submitting applications for building permits and finalising the construction drawings. Once the client provided confirmation from the client's financier that the funds could be released for payments to be progressively made to Henley Arch, construction then commenced. 21 On 30 April 2013, Henley Arch sent the Mistrys a provisional sales quotation which included a proposed siting plan for an Amalfi house (AM532) with an Eclipse façade applied. The provisional sales quotation explained that the proposed Eclipse façade could have a "part render" option which would cost an additional $900 over the base price. 22 In early May 2013, the Mistrys visited the MainVue office of Henley Arch at Williams Landing. It appears that at this time the Mistrys may have obtained a copy of the Amalfi Avenue floorplan during this visit. 23 On 10 May 2013, Henley Arch provided the Mistrys a further provisional sales quotation and proposed siting plan for an Amalfi AM532 design with an Avenue façade. The quote stated that applying the Avenue façade would cost an additional $10,400 over the base price. 24 On 21 May 2013, Mr Mistry signed a Henley Arch "sales siting document". That document showed the word "Avenue" crossed out by hand and replaced with the word "Eclipse". One can infer that from this time the Mistrys no longer wanted a house with the Avenue façade, but instead one with the "Eclipse" façade. I am also able to infer that one of the reasons that the Mistrys wanted to proceed with the $900 Eclipse façade instead of the $10,400 Avenue façade was due to budgetary constraints in relation to their finances at this time. 25 On 23 May 2013, Henley Arch sent the Mistrys a provisional sales quotation, which was identified as "Version 4", of $193,900 for the Amalfi AM532 design with the Eclipse façade "part render" option and included a number of amendments (including to price) as required by the Mistrys and the physical parameters of the site itself. 26 Page 10 of the Version 4 sales quotation contained the following text: I/we acknowledge that information contained or embodied in this sales quotation document and any and all documents (whether in material or electronic form) disclosed ("Information") to you by or on behalf of Henley Property Group ("Henley") is and remains at all times confidential to and the exclusive property of Henley. I/we undertake to use all reasonable endeavours to keep Information secure against unauthorised loss, use or disclosure. I/we also undertake that such Information will be kept confidential and shall be used for the sole purpose for which it was disclosed to you. 27 On 29 May 2013, Henley Arch provided the Mistrys with a further provisional sales quotation (identified as "Version 5") for the Amalfi AM532 design but with an Eclipse façade "front render" option which cost an additional $3000 above the base price. The quotation also contained various other additional anticipated costs that reflected the Mistrys' instructions. This document was signed by the Mistrys. The text on page 10 of the Version 5 provisional sales quotation was identical to page 10 of the Version 4 provisional sales quotation. The Mistrys' signatures appeared immediately below these acknowledgements and undertaking. So, at this time at the latest, the Mistrys knew or, at the least, ought to have known of Henley Arch's apparent ownership of its various designs and that they were not free to use the floorplans given to them or obtained by them as they saw fit. The Mistrys gave evidence before me, which I will discuss later, that they never read these acknowledgements. This is surprising. But in any event they agreed that if they had read them, they would have understood their general tenor. 28 In June 2013, the Mistrys and Henley Arch had various discussions about the colour scheme to be applied to the proposed house to be built on the Circus Avenue property. 29 On 22 July 2013, Michael Charlesworth, a sales consultant for Henley Arch, emailed the Mistrys a proposed site plan and a floorplan of the Amalfi AM532 with the Eclipse façade "part render" applied. A copy of this floorplan (the Mistrys specific floorplan) is annexure C to my reasons. This floorplan had been prepared by Rosalyn Carter, Henley Arch's employee, who had used the Amalfi AM532 Eclipse floorplan but incorporated the various amendments requested by the Mistrys and the smaller size required by the site. However, not all of the Mistrys' requested changes to the base Amalfi AM532 floorplan were included in this floorplan. Usually at this point in the process, Henley Arch did not develop full plans where there was a chance that the client might decide not to proceed to construction or because soil and survey reports were not completed or the land had not yet been "titled". Henley Arch's Step by Step Guide under the heading "Step 4 – Tender Agreement" stated that site plans were provided at the tender stage and not working drawings. 30 On 24 July 2013, Henley Arch provided the Mistrys with a document titled "Authorised Tender" and described as "Tender 2" for the house proposed to be built on the Circus Avenue property. This document was signed by the Mistrys either that day or shortly thereafter. The document showed the price for the house ($247,693) to be built in accordance with the Mistrys specific floorplan that had been sent to the Mistrys on 22 July 2013. In accordance with that tender document, the Mistrys paid Henley Arch a deposit of $1650. The tender document contained the following text, which was situated above the Mistrys' signatures: I/we acknowledge that information contained or embodied in this tender document and any and all documents (whether in material or electronic form) disclosed ("Information") to the Owner by or on behalf of the Builder is and remains at all times confidential to and the exclusive property of the Builder. I/we undertake to use all reasonable endeavours to keep Information secure against unauthorised loss, use or disclosure. I/we also undertake that such Information will be kept confidential and shall be used for the sole purpose for which it was disclosed to the Owner. 31 Between that time and September 2013, further correspondence was exchanged regarding various changes to the tender that the Mistrys wanted. One such request was to convert a particular room, which was then designated to be a powder room, to a prayer room. This was first proposed by the Mistrys at a meeting with Henley Arch on 7 August 2013. 32 On 6 September 2013, Henley Arch provided an authorised tender (Tender 6) to the Mistrys for the Amalfi AM532 with an Eclipse façade "part render" option and various variations to the base house as required by the Mistrys (the September tender). Further, the September tender showed that the "Eclipse – Feature Tiles to 2 Piers (Amalfi Series)" had a price of $2000.91. The September tender also showed that the laundry would have, instead of a standard linen cupboard, a "part broom cupboard and part linen cupboard". The total price for the house as shown in the September tender was $249,536.93. 33 Later on 6 September 2013, Mr Mistry reminded Henley Arch that he and his wife wished to change the powder room to a prayer room, and asked that the floorplan be amended accordingly. 34 On 9 and 17 September 2013, Mr Charlesworth requested that the Mistrys provide confirmation as to when the transfer of land to the Mistrys of the Circus Avenue property would occur under their land purchase contract. 35 In an email dated 16 September 2013, Mr Mistry wrote to Mr Charlesworth and referred to the September tender saying: "so far what you have given me I am happy with it. So I can sign the contract on that but as per your Step by Step procedure we need to give you 3% of the contract price and also bank letter." 36 On 17 September 2013, the September tender was signed by the Mistrys and sent to Henley Arch. The September tender contained the following text situated above the Mistrys' signatures: I/we acknowledge that information contained or embodied in this tender document and any and all documents (whether in material or electronic form) disclosed ("Information") to the Owner by or on behalf of the Builder is and remains at all times confidential to and the exclusive property of the Builder. I/we undertake to use all reasonable endeavours to keep Information secure against unauthorised loss, use or disclosure. I/we also undertake that such Information will be kept confidential and shall be used for the sole purpose for which it was disclosed to the Owner. 37 On 24 September 2013, Mr Mistry asked Mr Charlesworth "how are you coming along with Final drawings and Final Tender? Can you please reply when you get chance?" Mr Charlesworth replied that day saying "Everything is going well … your file is in drafting to make the necessary electrical amendments". 38 On 25 September 2013, title to the Circus Avenue property was transferred to the Mistrys. As such, and by reason of the position of both parties, the Mistrys could not have entered into a contract to build their home with Henley Arch until 25 September 2013 at the earliest. Henley Arch would not agree to build without the owner having title. The Mistrys could not so contract to build until they had finance in place, but such finance was to be secured by a registered mortgage which could only be given when they had title. The Mistrys did not inform Henley Arch of this title transfer until 7 October 2013. 39 On 1 October 2013, Mr Mistry requested a further update on the status of the contract to build and final drawings, noting that he wished to progress to signing the building contract with Henley Arch and hoped that construction would commence before the end of the year. Mr Charlesworth responded later that morning asking which date Mr Mistry would prefer to set for the contract signing appointment, and expressed his confidence that construction would commence before the end of the year. Mr Charlesworth also asked for confirmation that settlement of the title transfer of the Circus Avenue property had occurred. Following an exchange of emails that afternoon, Mr Charlesworth and Mr Mistry agreed that the Mistrys would sign the building contract with Xavier Pearson of Henley Arch on Saturday 19 October 2013. 40 On 7 October 2013, Mr Mistry requested that the contract signing date be brought forward a week from 19 October 2013 to Saturday 12 October 2013. Mr Charlesworth replied later that day saying that he would check with Mr Pearson as to whether this was possible. 41 On 8 October 2013, Mr Charlesworth advised Mr Mistry that the contract would have to be signed at Henley Arch's head office at Mount Waverley, and that the appointment would have to be scheduled on a weekday as Mr Charlesworth did not work on Saturdays. Mr Mistry responded by email later that day expressing his confusion; he asserted that he had been told different information by Mr Pearson and Mr Charlesworth. Mr Mistry also stated that he and Mrs Mistry could not sign on weekdays as they worked and had already taken sufficient time off work. Mr Mistry concluded by saying "We need to find some other ways?" As a result, Mr Charlesworth offered to sign after hours on a weekday. 42 On 14 October 2013, Mrs Mistry asked Mr Charlesworth whether he had finalised the "contract, time, date and place" for the signing. Mrs Mistry stated that she and her husband wanted to "have construction started ASAP as land is released and ready to build" and asked whether construction would commence before the year's end. Further, she asked "if you require anything in this regard please let us know" and signed off: "With many thanks and regards, Priyanka and Abhishek Mistry". 43 Later that day, Mr Charlesworth informed Mrs Mistry that the signing appointment could be accommodated on a Saturday. He asked whether Saturday 26 October 2013 was a convenient date for signing at either Henley Arch's head office or its Point Cook sales centre. Mrs Mistry replied that day, thanking Mr Charlesworth for his "prompt reply" and asking to sign the contract on Saturday 2 November 2013 at the Point Cook sales centre. Mrs Mistry also stated "I hope you understand why we want to have things finalised early. Rest all sound good." 44 On 15 October 2013, Mrs Mistry contacted Mr Charlesworth and indicated that she wanted a further change to the laundry by inserting a single broom cupboard. Mr Charlesworth responded that evening, requesting that the Mistrys confirm a number of matters regarding pricing. He sought confirmation that the Mistrys wanted a "front render" to the façade. Further, he advised that it would cost an additional $1010 for the proposed change to the laundry. 45 Later in the evening of 15 October 2013, Mrs Mistry expressed her confusion to Mr Charlesworth as to how the price of the façade render was calculated. Further, Mrs Mistry expressed her frustration at having her queries relating to the laundry misunderstood, and said that "we are quite upset with the things happening at this moment". She asked to postpone the signing appointment to 2 November 2013. The full text of her email is as follows: Hi Michael Thanks for your reply. Does that mean, to have full render with tiles on pillar are going to cost $3000 + $2900 = $5900 ??? As we were in impression that pillar and rest render are going to cost us $2000 + $900 = $2900, which is mentioned on tender-6. Abhishek had asked this question by mail on 15th August 2013 @ 8.22am and you replied back in that regard on 23rd August at 5.10pm saying that "the price for $900 render to front is correct and noted in your render." If the cost is going to be $5900 then we would stick with the option we chose at first which is full rendering with two different colors as per color appointment. We won't have tiling option on pillar. Laundry option-5 (HPG05060) with single broom cupboard (no charge), we asked at color appointment and it is mentioned in the picture I sent you today as well. The price you have given us is for Option-5A Abhishek had inquired about laundry option by mail on 26th August 2013 at 9.47am and you replied back on 6th September 2013 at 10:45am saying that: "laundry option-5 is in your tender document, the broom cupboard is no charge however it is an upgrade to select laundry option 5" My apology but these are the things we had already inquired and got misunderstood. We are making our dream home and we have our budget to go with. Such situations upset us. We are been blamed for delaying contract process. After having look to all emails and conversations, I hope you will understand who is delaying this process. We want to have things very clear, not asking for same things again and again and waste your and our time. We just want things clear and smooth, nothing else. We have never paid late or delayed in providing any documents. There is nothing personal. Our first home is built by Henley and we are really very happy with it. That's the reason, we are back with Henley (Mainview). We are quite upset with the things happening at this moment. I would like to post pond our appointment to 2nd November if that's alright with you. Regards Priyanka & Abhishek Mistry 46 On 16 October 2013, Mr Charlesworth emailed Mrs Mistry a copy of an authorised tender, described as "Tender 8" (the October tender). The October tender provided for the Amalfi AM532 Eclipse "part render" façade, which was the same façade and render option stipulated in the September tender. The October tender showed that the laundry option would cost $610 and that the additional broom cupboard would be free of charge. The total cost of the house under the October tender was $253,982.96. 47 Soon after Mr Charlesworth provided the October tender, Mrs Mistry responded to Mr Charlesworth explaining that she would discuss this tender with Mr Mistry and let Mr Charlesworth know about render options and a contract signing date. Mrs Mistry also noted that the October tender did not include provision for a fly screen as apparently previously requested by Mr Mistry. Mr Charlesworth responded: "I will look into this and have this item [ie the fly screen] added to your tender document. Once you have confirmed your render options I will finalise the tender for you". The Mistrys did not respond to Mr Charlesworth's email and made no contact with Henley Arch until late November 2013. 48 The Mistrys' state of mind as at 16 October 2013 was a major point of contention at trial. Henley Arch contended that at this point in time, the Mistrys showed no unwillingness to continue with Henley Arch and that the only outstanding issue was the Mistrys' selection of render options. Contrastingly, Mr Mistry contended that at this time, he and his wife had decided not to further engage with Henley Arch and explained his state of mind in the following terms: I was so disturbed at the time because the things was going on for five months and I had – like, I was – mentally, I was not prepared to talk about those things again because it was just a, like, nightmare kind of thing, like, you know, for five months, so I said – even though he's giving us everything, but I don't want to go ahead because I was so frustrated under my financial burden that I couldn't go ahead with that at all. Yes. That's what I said to [Mrs Mistry]. And like, because we building our dream home, like, you know, I was – if – I was not ready. She said, "You want to go ahead?" and then we decided we don't want to go ahead. That's it. 49 Generally, the Mistrys gave evidence before me that they were very unhappy with Henley Arch's behaviour in terms of the constant changes, delays and the failure to incorporate their changes in the various tender versions and that it was for that reason that on or around 16 October 2013 they decided not to proceed further with Henley Arch. I must say that I found their evidence concerning their state of mind and motivations at this time to be unreliable if not confected. I will elaborate on this aspect later, but I would at this stage make the following observations. 50 The Mistrys criticised Henley Arch regarding the number of tender versions created over the period of Henley Arch's engagement. In evidence, Ms Belinda Jane Findlay, General Counsel of Henley Arch, noted that the number in this instance was more than usual. The evidence of Mr Milan Veljanovski, Business Operations Estimating Leader of Henley Arch, was that a normal number of tender documents was somewhere between three and five. The final tender produced for the Mistrys was labelled version "8". Mr Veljanovski explained the process by which a new tender was produced in the following terms: So there is a tender presentation, which is based on tender document 1. That usually happens between our tender presenters and a client. From there any changes made on the day automatically goes to a tender document number 2. So tender document number 2, client signs, they pay a deposit and then it's the next stage. So from there to contract signing there is a four, six week period where a client can actually make amendments to the actual tender. So if that is the case, obviously via email, phone, whatever it may be, those additions are then added in and we have a new tender document. 51 There was evidence of many email exchanges between the Mistrys and Henley Arch regarding amendments or changes requested by the Mistrys. There were also detailed meetings between the parties. Given this evidence, the number of tender versions in this instance was unsurprising. I do not see any objective basis to support the Mistrys' criticisms of Henley Arch's conduct. 52 Let me continue with the chronology of the communications between Henley Arch and the Mistrys. On 19 November 2013, Mr Charlesworth emailed Mrs Mistry and stated: "I am yet to receive a response from you regarding your contracts, and also confirmation on your render option presented to you. Can you kindly confirm with me what you would like to do?" The Mistrys did not respond to this email. 53 On 27 November 2013, Mr Charlesworth again followed up with Mrs Mistry and said "I am yet to hear from you regarding your intentions in building with MainVue. Can you please call or respond to my email at your earliest convenience?" 54 On 28 November 2013, Mr Mistry replied to Mr Charlesworth and said "we have decided not to go ahead with MainVue for our next home". This was the first time the Mistrys had indicated to Henley Arch that they no longer wished to continue with their engagement with Henley Arch. It was also the first communication between the parties since 16 October 2013. The Mistrys' engagement of Lucky Homes 55 In mid-October 2013, a friend of Mr Mistry and a former client of Lucky Homes, Asif Iliyas, introduced Mr Shafiq to the Mistrys. On 19 October 2013, the Mistrys had a meeting with Mr Shafiq at the offices of Lucky Homes where the Mistrys apparently informed him that they were experiencing difficulties with Henley Arch. The Mistrys told Mr Shafiq that their difficulties with Henley Arch related to the payment of the deposit monies. At this meeting and unbeknown to Henley Arch, the Mistrys provided a copy of the Amalfi Avenue floorplan to Mr Shafiq. It appears that this floorplan dated 9 May 2013 was obtained by the Mistrys at their visit to the MainVue office at Williams Landing in early May 2013. The Mistrys did not provide Henley Arch's custom-designed floorplan, being the version of the Amalfi AM532 Eclipse floorplan which had been sent to the Mistrys on 22 July 2013, which I have previously referred to as the Mistrys specific floorplan. 56 What exactly occurred at the 19 October 2013 meeting is a key question as between the respondents at least. Indeed, what precisely occurred at this meeting is also relevant to aspects of Henley Arch's claims as against all respondents. 57 Some of the facts as to what occurred at the 19 October 2013 meeting are not contentious. The Mistrys provided Mr Shafiq with a hardcopy of the Amalfi Avenue floorplan. That document, which was dated 9 May 2013, included a title block which set out the design name, Amalfi AM532, made reference to "MainVue" and contained Henley Arch's copyright notice. A version of this is annexure A to these reasons. The Mistrys and Mr Shafiq sat around a table for 45 minutes to an hour and discussed amendments to the Amalfi Avenue floorplan that the Mistrys wanted. Mr Shafiq annotated the plan accordingly, including with coloured highlighting. The Mistrys instructed him to take steps preliminary to building a house on the Circus Avenue property in accordance with the Amalfi Avenue floorplan with the requested amendments they had discussed. But there were significant matters of difference as to what occurred. 58 The Mistrys said that at the 19 October 2013 meeting, they provided Mr Shafiq with an A4-sized hardcopy of the Amalfi Avenue floorplan. The Mistrys contended that the document provided to Mr Shafiq was in its "original state", and retained references to the design name (Amalfi AM532), and Henley Arch. Mr Shafiq and Lucky Homes said that at the 19 October 2013 meeting, the Mistrys had provided an A3-sized hardcopy floorplan. Mr Shafiq said that he had photocopied the A3-sized floorplan and reduced it to an A4-sized copy. He said that the Mistrys and him then sat around a table for 45 minutes to an hour and discussed amendments to the Amalfi Avenue floorplan that the Mistrys wanted. Mr Shafiq annotated the A4-sized plan accordingly, including with coloured highlighting. 59 Mr Shafiq said that after all the annotations had been made to the plan, he then photocopied it and enlarged it to A3-size, but copied in black and white. According to Mr Shafiq, he or his staff could have done the photocopying, but later accepted that it was probably more likely that he did the photocopying. 60 Mr Shafiq originally gave evidence that the floorplan provided by the Mistrys did not include a title block which set out the design name and reference to the author or any other distinguishing feature or statement indicating who had prepared that design. However, at trial, Mr Shafiq accepted that the document the Mistrys provided to him did include a title block, and that he saw the name "MainVue" and the copyright notice at the bottom of the plan. Mr Mistry gave evidence that he did not recall whether the title block was removed from the document on which annotations and coloured highlighting were being made. 61 The Mistrys said that they had instructed Mr Shafiq to use the Amalfi Avenue floorplan as an "example" to allow Lucky Homes / Mr Shafiq to prepare a new plan. Mr Shafiq said that the Mistrys had instructed him to build a house on the Circus Avenue property in accordance with that floorplan and no other design. Mr Shafiq explained that he had felt a "bit uncomfortable" that the Mistrys were pushing him to use the Amalfi Avenue floorplan but Mrs Mistry had told him that the plan had "their own ideas and stuff". The Mistrys said that they sought confirmation from Mr Shafiq that he could make the necessary alterations to the floorplan so that the Mistrys' house could be built up to a certain price. Mr Shafiq said that he could build the house for $250,000 if there were no further amendments sought after that meeting with him. Mr Shafiq asserted that the Mistrys had instructed him not to prepare a new design from scratch, but instead to engage a draftsperson to make amendments to the floorplan that they had provided to him. 62 The Mistrys said that prior to the 19 October 2013 meeting they were unaware about copyright questions arising in relation to the use of Henley Arch's floorplans. Mr Mistry said that when they gave Mr Shafiq the floorplan, Mr Shafiq "mentioned there might be a problem, and we ask him what might be the problem and he said the copyright". Mr Mistry said that he and his wife "were shocked that there might be a possibility" and that they said to Mr Shafiq that they didn't "want to go ahead if there is any problem". Lucky Homes and Mr Shafiq agree that Mr Shafiq said to the Mistrys that using the Amalfi Avenue floorplan would "not be a problem" because if they "made 15 to 20 changes" to the original design there would not be a copyright issue. But Mr Shafiq said that he told the Mistrys that the changes must be "substantial". Mr Mistry could not recall the word "substantial" being used and said that he was told the changes need only be "slight". I will return to this issue and discuss it in more detail later. 63 Mr Shafiq also said that he asked the Mistrys about the origins of the plan provided to him. He asserted that the Mistrys told him that they had "paid $3000 for these plans" and that "[t]hese are our plans". Mr Shafiq asserted that he did not consider copyright to be in issue because the Mistrys had "emphatically" stated to him that they had paid for and owned the floorplan or that they had a licence to use it. The Mistrys rejected the assertion that they had told Mr Shafiq that they had paid Henley Arch $3000, had owned the floorplan or had a licence to use it. 64 I will return to the detail of these competing versions and their resolution after I have made observations concerning the reliability or otherwise of the evidence given by the Mistrys and Mr Shafiq. 65 After Mr Shafiq made annotations to the Amalfi Avenue floorplan with the title block absent, which showed the intended variations to the floorplan of the Mistrys' house (the Shafiq modified floorplan), he required that the Mistrys pay an initial deposit of $1,000 (GST inclusive) to start the procedure for the "design of the house and stuff". Lucky Homes issued an invoice for that deposit on or around 19 October 2013. The payment was received by electronic funds transfer on 21 October 2013. Lucky Homes' engagement of BN Design 66 Lejla Izic is the sole director and shareholder of BN Developments Pty Ltd, which trades as BN Design. BN Design operates a business involved in drafting architecture plans. Ms Izic is a draftsperson at BN Design. 67 Since 2010, BN Design has worked with Lucky Homes on approximately 40 to 50 separate occasions for the design of homes which Lucky Homes had been engaged by homeowners to design and construct. Usually, BN Design prepared a design for the house, being the floorplan and the elevation. This design was usually based on one of BN Design's pre-drawn house designs and adjusted according to the homeowner's specific requirements. Ms Izic had been closely involved in and was the chief designer of many of the floorplans and elevations that Lucky Homes had published on its website. BN Design's main point of contact with Lucky Homes had been Mr Shafiq. 68 On 21 October 2013, Mr Shafiq attended the offices of BN Design. At that meeting, Mr Shafiq provided the A3-sized Shafiq modified floorplan to Ms Izic and instructed her to prepare new drawings based on that floorplan. Ms Izic recalled that the floorplan provided to her had some handwritten annotations with coloured highlighting on it. 69 Ms Izic described the Shafiq modified floorplan as a "pre-drawn, seemingly professionally drawn, floorplan". When Mr Shafiq provided the plan to Ms Izic, he said that the homeowners had paid "someone" to create the plan, but the homeowners considered that they had been charged too much so decided to find another draftsperson. According to Ms Izic, at no point did Mr Shafiq tell her who the previous draftsperson was or how much the Mistrys had paid for the floorplan. 70 Ms Izic asserted that she did not know, at the time of BN Design's engagement with Lucky Homes, the name of the owner of the Circus Avenue property. She said that Mr Shafiq did not then mention the homeowner by name. 71 Ms Izic said that she was at first sceptical of the provenance of the Shafiq modified floorplan, but accepted Mr Shafiq's assertions that the floorplan was owned by the homeowners. Ms Izic also said: I found it unusual that the floorplan Mr Shafiq brought to me had no title block. In my experience it is usual for professionally designed floorplans to have a title block as it is part of the template in standalone programs, such as ArchiCAD which I use. I did not follow through with my usual process of insisting on written proof of the ownership of copyright in the floorplan. To the best of my recollection I would have neglected to insist on this step because of the otherwise good and long working relationship I had with Mr Shafiq on previous projects. 72 Ms Izic also recalled that this was the first time that Lucky Homes had provided her with another draftsperson's plan of a home as a starting point. So far as she was aware, most of the other projects managed by Lucky Homes had been based on one of BN Design's standard designs. Otherwise BN Design would develop a bespoke design based on a set of requirements from the homeowner. 73 At the 21 October 2013 meeting, Mr Shafiq and Ms Izic discussed the changes to the Shafiq modified floorplan based on Mr Shafiq's instructions. Ms Izic made handwritten annotations to the Shafiq modified floorplan. At the conclusion of the meeting, Ms Izic (as she recalled) made a copy of the Shafiq modified floorplan she had annotated and gave the original back to Mr Shafiq. Mr Shafiq has denied that he was given or retained a copy of the Shafiq modified floorplan with her annotations (the Shafiq/Izic annotated floorplan). A copy of the Shafiq/Izic annotated floorplan is annexure D to these reasons; the Shafiq modified floorplan has been destroyed, as too the precise Amalfi Avenue floorplan that was provided by the Mistrys to Mr Shafiq on 19 October 2013. 74 Between 21 and 29 October 2013, in accordance with Mr Shafiq's instructions, BN Design drafted a new floorplan for the Mistrys' house by reference to the Shafiq/Izic annotated floorplan. 75 On 29 October 2013, BN Design sent to Mr Shafiq a draft floorplan prepared by BN Design. 76 On 19 November 2013, Mr Shafiq emailed the final floorplan prepared by BN Design to Mr Mistry (the BN Design floorplan). A copy of the BN Design floorplan is annexure E to these reasons. 77 Mr Mistry said that he first became aware that Mr Shafiq had provided the Shafiq modified floorplan to BN Design when Henley Arch's solicitors sent him the Shafiq/Izic annotated floorplan. I must say that this assertion lacks credibility. Mr Mistry must have known that it was intended that Mr Shafiq would engage a draftsperson. Moreover, Mr Mistry is likely to have also known this when he received the BN Design floorplan on 19 November 2013; it would have been self-evident. Construction of the house on the Circus Avenue property 78 On 19 November 2013, the Mistrys entered into a building contract with Lucky Homes for the construction of a house on the Circus Avenue property in accordance with the BN Design floorplan (the Building Contract). 79 Clauses 15.0 and 15.1 of the Building Contract provided as follows: Copyright 15.0 If the Builder constructs the Building Works in accordance with Plans which may incorporate designs which are: • supplied by the Owner; • prepared under instruction from the Owner; or • prepared from sketches supplied by the Owner, then: • the Owner warrants that the Owner has the right to use the design and Plans and that no breach of copyright is involved in constructing the Building Works in accordance with the Plans; and • the Owner indemnifies the Builder in relation to any claim for breach of copyright. 15.1 A claim for breach of copyright brought against the Builder is a breach of this Contract by the Owner. 80 On 28 November 2013, as I have said, the Mistrys informed Henley Arch that they no longer wanted Henley Arch to build a house on the Circus Avenue property. 81 By July 2014, Lucky Homes had completed construction of the house which presently stands on the Circus Avenue property in accordance with the Building Contract. The house was built according to the BN Design floorplan. CREDIBILITY OF WITNESSES 82 Generally, the witnesses called by Henley Arch (Ms Izic, Ms Findlay and Mr Veljanovski) gave reliable evidence and there were no substantial credit attacks, subject to one matter that I will discuss later concerning Ms Izic. Contrastingly, the evidence given by Mr Shafiq and the Mistrys was not reliable. It is appropriate at this point to make some general observations relevant to my assessment of their unreliability. 83 I did not find Mr Shafiq to be a reliable witness. There are a number of reasons for this including the following: (a) First, he attempted to have Ms Izic agree at a meeting between them on 17 March 2015 to give incorrect evidence as to the genesis of the work between them as set out in [35] of her statutory declaration and as confirmed in her evidence in chief. Ms Izic was not directly challenged on this version of events. Mr Shafiq, when he gave evidence, belatedly sought to challenge this when cross-examined, but his attempt carried little weight with me. It is worth setting out Ms Izic's version of events: Later, on or about 17 March 2015, Mr Shafiq came to see me at my office and at that meeting said words to the effect that "you need to co-operate with us otherwise you will be in big trouble". At the time, I understood Mr Shafiq's reference to "us" to be a reference to both himself and the homeowner. Mr Shafiq asked me to agree that certain hand-drawn sketches were the beginning of our conversation and relationship in relation to the project. He said words to the effect "I want you to confirm this [the sketches] was the beginning of our relationship on this project" to which I replied "no, this is the plan you brought me" while handing him a copy of the floorplan he provided to me on 21 October 2013 and as shown in annexure A. He repeated to me words to the effect that "we need to co-operate together". He said words to the effect that he "did not recall" having provided the floorplan in annexure A to me. I told him words to the effect of "please keep this copy if you like in case you have put your file in the bin". Annexed and marked C is a copy of the floorplan I handed to Mr Shafiq that day, which I signed and dated, and my staff member, Andrew Boyle, also signed and dated. I considered Mr Shafiq's behaviour to be quite "shifty", and I was shocked by his attempt to convince me to accept that the beginning of this project was the two hand drawn sketches, rather than the floorplan supplied to me and shown in annexure A. Mr Shafiq also said words to the effect that "the homeowner is prepared to backdate these sketches and to say these sketches were the start of the project". I did not retain any copies of the sketches. (b) Second, in my view Mr Shafiq removed the title block from the floorplan the Mistrys gave to him on 19 October 2013, contrary to his affidavit evidence which suggested that the Mistrys had removed the title block (see his affidavits of both 18 December 2015 and 26 February 2016). The inference that I draw is that this was done by Mr Shafiq in order to avoid questions from Ms Izic. The fact that the copying was not perfect so as to leave a faint reference to part of a name and "Amalfi AM532" down the left hand side in very small print does not substantially affect the drawing of this conclusion. All that it indicates is that Mr Shafiq was sloppy in doing the copying to remove the title block. Further, in my view it was Mr Shafiq who took the Mistrys' A4 sized copy of the floorplan and increased it to an A3 size and as part of this process removed the title block. (c) Third, I do not accept his evidence that he did not retain at least a copy of the floorplan with his handwritten notations (ie the Shafiq modified floorplan) and that his only copy was given to Ms Izic. In my view, it is likely that he destroyed this version, perhaps to conceal the full extent of his involvement. (d) Fourth, Mr Shafiq, through his lawyers, was not forthcoming or frank with a proper explanation of what occurred in his solicitors' letter of 1 July 2015 in response to Henley Arch's solicitors' letter of 9 June 2015. Further, in his solicitors' letter of 26 March 2015 in response to Henley Arch's solicitors' letter of 27 February 2015, Mr Shafiq denied any reproduction of Henley Arch's copyright works, despite the fact that Ms Izic had provided to Mr Shafiq a copy of the Shafiq/Izic annotated floorplan on 17 March 2015. (e) Fifth, many incorrect statements by way of denials were made by Mr Shafiq and Lucky Homes in their pleaded case, whether by way of defence or cross-claim. I can only assume that this was done on the instructions of Mr Shafiq. I will elaborate on this conduct later. 84 I found Mr Mistry to be an even less reliable witness: (a) First, I thought his evidence to be confected as to the Mistrys' purported reason as to why they did not proceed with Henley Arch. His assertions of substantial dissatisfaction with Henley Arch and the assertion that Henley Arch was responsible for substantial delays were not supported by the contemporaneous documentation. Mrs Mistry's reinforcement of her husband's evidence in this regard also lacked credibility. Further, Mr Mistry's evidence that he had an unstable emotional state at that time because of Henley Arch's behaviour is evidence that I treat with some caution. He does not seem to have taken time off work at the relevant time. Moreover, as I have said, Mr Mistry's assertions concerning the objective behaviour of Henley Arch at the time were not consistent with other objective and contemporaneous material. His asserted emotional state, if he had it, was not sourced to any secure foundation relating to any behaviour of Henley Arch that could be the subject of any criticism. (b) Second, Mr Mistry's apparent lack of sophistication and understanding as to the differences between the "Avenue" design and the "Eclipse" design was not credible. He clearly understood the difference. After all, he had a Diploma in Mechanical Enginering from VIT in Bangalore, India together with a Bachelor of Commerce from the University of Ballarat. Generally, I infer that the Mistrys proceeded with Lucky Homes because they thought they could get the "Avenue" design for their home (total package) but for the "Eclipse" design price (total package). (c) Third, Mr Mistry's evidence in proceedings before the Victorian Civil and Administrative Tribunal (VCAT) to recover the deposit monies paid to Henley Arch was consistently self-serving and against the objective facts. (d) Fourth, Mr Mistry was the source of instructions given to the Mistrys' lawyers to respond to Henley Arch's letters of demand. Many of the statements contained in such responses were incorrect or evasive. (e) Generally, Mr Mistry's evidence was self-serving and in most respects unreliable, even though given with apparent earnestness. 85 In relation to the evidence of Mrs Mistry, prior to trial she had not made any affidavit. During the trial, I gave leave for the Mistrys to file and to rely upon a late affidavit from her. She did little more than affirm Mr Mistry's evidence. To the extent that Mr Mistry's evidence was problematic, so too was her evidence to the extent that it adopted his evidence. I found her evidence to be no more reliable on contentious aspects than her husband's evidence. 86 As I have indicated, I found the evidence of each of Mr Shafiq, Mr Mistry and Mrs Mistry to be quite unreliable. That has not presented any serious forensic difficulty where such evidence can be compared and contrasted with the contemporaneous documents or other witnesses. But in relation to what occurred at the meeting on 19 October 2013 between these individuals, I only have their unsatisfactory and competing versions. Accordingly, each such version can only be assessed against the probable scenario to be gleaned from the context and which best rationally fits with all the evidence and the likely inferences that I can draw therefrom. 87 Finally, I should note that it was suggested by the respondents that Ms Izic's evidence was somehow tainted because she had an incentive to give evidence in favour of Henley Arch in order to avoid being the subject of proceedings for copyright infringement. The respondents went so far as to suggest that her evidence had been coerced. I reject that latter suggestion, although I do accept that she had some interest in giving evidence which assisted Henley Arch. Nevertheless in my view she gave cogent and straightforward evidence that was consistent with the contemporaneous documents and the probable scenario as to what occurred. Moreover, much of her evidence was not challenged in cross-examination, including [35] of her statutory declaration. SPECIFIC FACTUAL TOPICS (a) Meeting between the Mistrys and Mr Shafiq – 19 October 2013 88 There was a change in tone in the communications between the Mistrys and Henley Arch on 15 October 2013. Prior to that date, the Mistrys had urged for a date to sign the contract with Henley Arch. However, at this point they sought to postpone the contract signing date. The likely explanation is the following. 89 In mid-October 2013, a friend of Mr Mistry and a former client of Lucky Homes, Asif Iliyas introduced Mr Shafiq and the Mistrys. In the week prior to the meeting of 19 October 2013, Mr Shafiq and the Mistrys spoke on the phone to organise a meeting. It was around this time (ie 15 October 2013) that the Mistrys sought to postpone the contract signing date with Henley Arch. The meeting was organised for 19 October 2013. At that meeting, the Mistrys decided to proceed with Mr Shafiq. 90 At the meeting on 19 October 2013, in addition to Mr Shafiq and the Mistrys being present, Asif Iliyas also attended. Henley Arch has contended that Mr Iliyas would have been able to give evidence on what occurred at the meeting and that I should draw a Jones v Dunkel inference that his evidence would not have assisted the Mistrys (as their friend) and also Mr Shafiq and Lucky Homes (as a former client). I do not propose to draw any such inference as I am not satisfied that the basis for drawing such an inference has been made out. In any event, insofar as any contest between the respondents inter se is concerned, the drawing of any such inference would be of no forensic assistance in resolving the competing versions of what occurred as between them. 91 The Mistrys brought a copy of the Amalfi Avenue floorplan to the meeting in A4 size. Mr Shafiq, despite originally denying that the plan had the title block on it and giving evidence that it did not, changed his evidence at trial to accept that it did have the title block on it and that he had seen the name "MainVue" and the copyright notice on the bottom of the plan. 92 Mr Shafiq said that the Mistrys had told him that they had paid $3,000 for the plan they showed him and that "These are our plans". But the Mistrys reject that they had said this. They also said that they never told Mr Shafiq that the floorplan was theirs or that they had a licence to use it. In my view, the Mistrys are likely to have mentioned that they had paid a deposit of $3000 to Henley Arch, but not that they owned the Amalfi Avenue floorplan or had any licence to use it. I say this because if they had said the latter to Mr Shafiq, it is unlikely that there would have then been the need for the "15 to 20 changes" discussion as I elaborate on later. 93 Mr Shafiq said that the Mistrys made it clear that they wanted a house according to the Amalfi Avenue floorplan and no other design. Mr Shafiq said that it was Mrs Mistry who was pushing for the house to be built according to the Amalfi Avenue floorplan with "their own ideas and stuff". I accept Mr Shafiq's evidence on this aspect. Mrs Mistry liked and wanted to proceed with the Amalfi home. Contrastingly, the Mistrys said that they told Mr Shafiq that the plan was simply an example of what they wanted. But in my view this is not credible given their undoubted desire to have the Amalfi home which was their "dream home". 94 In my view, the Mistrys gave Mr Shafiq the Amalfi Avenue floorplan requesting that Mr Shafiq provide them the Amalfi AM532 house but with the more expensive Avenue façade rather than the Eclipse façade. This was denied by Mr and Mrs Mistry, but that is the most probable explanation for providing the Amalfi Avenue floorplan to Mr Shafiq rather than the Mistrys specific floorplan. If otherwise, it is odd that a plan that they were provided in May 2013 was handed over at the meeting rather than the more recent plans provided by Henley Arch on 22 July 2013. In my view, Mrs Mistry's evidence that she did not care about the front of the home is not credible. The resulting façade looked similar to the MainVue display homes they had visited, and importantly with the Avenue façade. 95 Mr Shafiq accepted that at the time he was given the Amalfi Avenue floorplan at the 19 October 2013 meeting he was aware that Henley Arch was one of Australia's largest home builders and that it was also plain to him that Henley Arch claimed copyright in the plan. He was also aware that clients often told a lot of stories and he didn't believe what they said. Moreover, even on his own version of events as to what the Mistrys told him, he accepted that he had a doubt about whether they truly owned the Amalfi Avenue floorplan. He also accepted that he could have called Henley Arch to verify any assertion of the Mistrys that such a plan was theirs and thereby avoid any copyright problems, but did not do so. He also accepted that he did not ask the Mistrys to provide a document which verified any assertion that they owned the Amalfi Avenue floorplan. He accepted that this would have been easy to do. 96 In my view, and notwithstanding Mr Shafiq's denial, it is likely that the reason Mr Shafiq did not contact Henley Arch was because he did not want Henley Arch to know that he was intending to use one of their plans. Moreover, the denial is inconsistent with his subsequent conduct in seeking to hide his use of the Amalfi Avenue floorplan. 97 Mr Shafiq said that he told the Mistrys that copyright would not be an issue if they made 15 to 20 alterations to the Amalfi Avenue floorplan. In oral evidence, he said that he had told them that the changes must be "substantial". Mr Mistry could not recall that word being used and in his affidavit said that he was told the changes need only be "slight". In my view, the addition of the word "substantial" to Mr Shafiq's evidence is a convenient addition to his evidence and I do not accept it. I will discuss this issue again later when dealing with the cross-claims. 98 The Mistrys gave evidence that prior to the meeting they were unaware about copyright issues dealing with the use of project home floorplans. Mr Mistry said that when they gave Mr Shafiq the Amalfi Avenue floorplan, Mr Shafiq "mentioned there might be a problem, and we ask him what might be the problem and he said the copyright. … We were shocked that there might be a possibility and we said, like 'We don't want to go ahead if there is any problem'". 99 Mr Mistry accepted that if he was so "shocked", it would have been reasonable to call a solicitor to check whether Mr Shafiq's advice was correct, though he said that he simply relied on Mr Shafiq's advice. Mr Mistry also accepted that it would have been easy to write to Henley Arch to check whether Henley Arch had a problem with what they proposed to do, and that it would have been reasonable to write to Henley Arch in circumstances where he was "shocked" about the copyright issue. At the least, the Mistrys were put on notice of a copyright issue. 100 As to Mr Shafiq, he was not a lawyer but had received some instruction from Victoria University about copyright applying to building plans. He understood as at October 2013 that building plans were subject to copyright and that without permission of the copyright owner one was not allowed to build a house incorporating those plans. 101 It is not credible that Mr Shafiq believed that he could overcome copyright by simply making 15 to 20 alterations to the plan. Moreover, Mr Shafiq accepted that, even with 15 to 20 "substantial changes" he should not have gone ahead without having called Henley Arch. He also accepted that he should have called a solicitor to advise him about whether the assertion by the Mistrys that they owned copyright (if it had been said at all) was correct and whether he was correct to say that making 15 to 20 changes to a plan would avoid copyright infringement. But he did not do so. 102 Mr Mistry gave evidence that the Amalfi Avenue floorplan that the Mistrys provided to Mr Shafiq on 19 October 2013 was in A4 size. Mrs Mistry provided similar evidence. Contrastingly, Mr Shafiq gave evidence that the Mistrys gave him an A3 size. 103 In my view, the Mistrys provided Mr Shafiq with an A4 sized copy of the Amalfi Avenue floorplan and Mr Shafiq photocopied the plan in A3 size, deliberately removing the title block including the identifying marks for MainVue and the copyright notice. Mr Shafiq rejects this and said that he received an A3 plan and made an A4 copy of the plan. But I do not see why the Mistrys would have taken the A4 size and copied it first to A3 size before giving it to Mr Shafiq. That seems unlikely. When asked whether he made the copy personally, Mr Shafiq said he or his staff, then accepted that it was probably more likely that he did the photocopying. It is unlikely that a staff member did this. Mr Shafiq's evidence was that he employed only one contractor who worked as a site manager on work sites. Furthermore, it is doubtful that such a person would have attended his office on a Saturday, let alone done the photocopying of the plan and then removed the title block. 104 In my view, it is unlikely that the title block was removed accidentally. The more likely explanation was that it was done deliberately and by Mr Shafiq. The title block could not have been accidentally removed from one side of the plan without either other parts of the plan also being cut off (eg if the reduction to A4 had been performed with the copy set at less than 100%, then the image would have been cropped equally around all sides rather than on one side alone) or the copied plan not being centred in the page (eg if the title block had been off the copier glass, the copied image would have the bottom edge of the plan much closer to the edge of the page and more white space across the top). The plausible ways that the title block could have been photocopied off the page, regardless of whether any reduction or increase in the size of the copy was made, was to mask the title block or to photocopy it twice, the first time with the page low on the photocopier to remove the title block and then photocopying the resulting page high in order to shift the plan back into a central position. The first method would involve a deliberate removal of the title block. Further, the probability that the second method was unintentional is low. Generally, no plausible explanation was put forward by Mr Shafiq to explain the removal of the title block. He had a clear motive to remove the title block, namely to reduce the chance of Henley Arch discovering that its plan had been misused or to ensure that Ms Izic did not make further enquiry or at least minimise that risk. 105 In my view, Mr Shafiq's evidence that he made an A4 copy of the plan, worked on that in colour, and then enlarged it to A3 again in black & white, is contrived to provide an explanation for how the title block could have come to be "accidentally" removed from the plan. Mr Shafiq could not produce the A4 plan with colour markings on it, and claimed that he "threw it away". In my view, the A4 plan with colour markings never existed. Only the A3 plan with colour markings existed. 106 As to how the colour markings were made, Mr Shafiq sat around the table with the Mistrys for 45 minutes or so taking instructions from the Mistrys and annotating the plan accordingly, including with colour highlighting. Moreover, Mr Mistry paid attention while Mr Shafiq was doing this to the plan. Even if the removal of the title block had been unintentional, it would not have been unknown to each of the persons sitting around the table that the title block had been removed. (b) Meeting between Mr Shafiq and Ms Izic – 21 October 2013 107 On 21 October 2013, and as I have said, Mr Shafiq met with Ms Izic of BN Design. Ms Izic had attended to approximately forty to fifty drafting jobs for Mr Shafiq and this was the first time that Mr Shafiq had brought to her to be used another draftsperson's plan of a house as a starting point. 108 In my view, Mr Shafiq brought to the meeting with Ms Izic the A3 sized Shafiq modified floorplan. Mr Shafiq initially accepted this, but then suggested it might not have been in colour, then finally said he did not remember. But he did accept that he gave Ms Izic an A3 copy. 109 Ms Izic recalled that Mr Shafiq told her that the floorplan was the homeowner's property, having paid someone money to create the design, but that the person had been charged too much. I will return to this later when discussing the cross-claims. Mr Shafiq insisted that the floorplan was what the homeowner wanted and should not be amended by her to better suit the orientation on the land. 110 Ms Izic told Mr Shafiq that he should make sure that the owner was certain that the plan was their property. Mr Shafiq gave evidence that Ms Izic knew that the plan was a MainVue plan, because he mentioned it to her. However, that proposition was not put to Ms Izic and is inconsistent with her evidence. I reject his assertion. 111 At the meeting with Mr Shafiq, Ms Izic made amendments to the Shafiq modified floorplan based on discussions with Mr Shafiq and his directions based on his annotations on the plan. I have set out the detail later in these reasons as to Mr Shafiq's annotations and Ms Izic's amendments as reflected on the Shafiq/Izic annotated floorplan. 112 At the conclusion of the meeting, Ms Izic made a copy of the Shafiq/Izic annotated floorplan and gave the original back to Mr Shafiq. Mr Shafiq denies this, but I accept Ms Izic's evidence on this point. It would be highly unusual for a builder not to retain such drawings. It is likely that Mr Shafiq destroyed the Shafiq/Izic annotated floorplan upon being notified of Henley Arch's concerns so that it could not be used as evidence against him. (c) The Mistrys' application to VCAT – mid-2014 113 The Mistrys made an application to VCAT in mid-2014 for the return of the deposit paid to Henley Arch. Henley Arch disputed the refund claim, apart from a small sum that was not the subject of fees incurred in respect of third party services. The refund claim is inconsistent with the idea that the Mistrys paid the deposit to Henley Arch as consideration for the ownership or use of the Amalfi Avenue floorplan. Had the Mistrys believed that they had purchased the floorplan, they would not have believed that they were entitled to recover the entirety of the deposit. The Mistrys at this time (ie mid-2014) asserted that they had received no valuable goods or services from Henley Arch. The Mistrys knew that they did not own and had no licence to use the Amalfi Avenue floorplan or indeed any other of Henley Arch's plans. 114 At the VCAT hearing on 9 September 2014, Mr Mistry in sworn evidence provided several different versions of when the Mistrys had first met and contracted with Lucky Homes for the construction of the Circus Avenue house. He first said that they had engaged Lucky Homes in March 2014. This was incorrect. The VCAT Member then asked, "When did you approach this builder?" To which Mr Mistry responded, "After I signed – after I cancelled…", that is, after he cancelled with Henley Arch on 28 November 2013. That evidence was also incorrect. Mr Mistry then went on to say "I just started talking with them, but I didn't sign anything until the 2014". That was also incorrect. After being reminded by the Member that the plans for the Circus Avenue house were dated November 2013, Mr Mistry again insisted that he and his wife had not started talking with Lucky Homes until November 2013. That evidence was also incorrect. After further questioning, Mr Mistry agreed that they went to see the builder a "week before" they cancelled with Henley Arch, that is, a week before 28 November 2013. That evidence was inaccurate as well. 115 At no stage at that time did Mr Mistry frankly reveal that the first contact he had with Mr Shafiq was in mid-October 2013, nor did he reveal that a building contract had been signed on 19 November 2013. When it was put to Mr Mistry at the trial before me that he had made false statements to VCAT, he was less than forthcoming, saying that he could not remember the dates. I might say that at the time of giving his VCAT evidence the relevant events were less than a year old. Moreover, all the so-called imperfections of memory were all to his advantage and self-serving. He also refused to accept that he had made any false statements at the VCAT hearing. 116 Further, at the VCAT hearing, Mr Mistry insisted that he had "never seen" Henley Arch's Step by Step Guide, despite the fact that he had referred to it in an email to Henley Arch. When this matter was put to him at trial, he continued to insist that he had not been provided with the Step by Step Guide. Contrary to this evidence given both to VCAT and myself, Mr Mistry's email dated 16 September 2013 to Mr Charlesworth demonstrated that he had received and read the Step by Step guide. He referred to the detail of its terms: "so far what you have given me I am happy with it. So I can sign the contract on that but as per your Step by Step procedure we need to give you 3% of the contract price and also bank letter." 117 Further, Mr Mistry misrepresented the nature of his dealings with Henley Arch to the Member. The Member asked, "so was a building contract ever signed?" Mr Mistry responded, "No. Because we [were] never provided any final tender documents after four months of wait". That latter evidence was untrue. The Member then asked, "Did you have no dealings with them between 16 October and 27 November?" to which Mr Mistry responded "That's correct. They didn't bother even send me or call me". That evidence was misleading. 118 In my view, Mr Mistry's evidence before VCAT was less than frank, if not false. It was entirely self-serving and unreliable. Moreover, it is inconsistent with the suggestion that the Mistrys thought they were entitled to use the relevant floorplan. Further, it in part is inconsistent with the "innocent infringement" defence and is also relevant to my consideration of the additional damages question. (d) Henley Arch's letters of demand 119 On 26 November 2014, Henley Arch's lawyers, Ashurst Australia, sent a letter of demand to the Mistrys. The Mistrys, acting together with Mr Shafiq, instructed the Mistrys' then lawyers, Saundh, Singh & Smith Lawyers (SSSL), to inform Henley Arch by letter on 14 January 2015 that no use had ever been made of the Amalfi Avenue floorplan and that the plan had not been provided to Lucky Homes or Mr Shafiq. This statement was repeated in correspondence from the same lawyers on 5 March 2015. 120 Mr Shafiq accepted that the denial in the letter of 14 January 2015 that the Mistrys had provided Henley Arch's plans to Lucky Homes, was false. However, he denied giving those instructions to SSSL. He did, however, accept that he never told any of the solicitors at that time that he had in fact been given Henley Arch's plan by the Mistrys. After it was put to him that he gave false instructions to SSSL prior to the 14 January 2015 letter, Mr Shafiq denied this occurred and then explained that his wife was sick at the time. He then said that he didn't know what he had said to SSSL because he "was not in full conscious that time". In my view, Mr Shafiq falsely instructed SSSL that he had not received any Henley Arch plans from the Mistrys. Mr Shafiq accepted that he gave instructions regarding the other detail in the letter of 14 January 2015. In my view, it is likely that he had given instructions on the other aspect as well. Indeed, Mr Shafiq accepted that he had coordinated the approach that he and the Mistrys would take in answer to the allegations made by Henley Arch and that their approach was reflected in the letter from the Mistrys' solicitors dated 14 January 2015. 121 As for Mr Mistry, during cross-examination it was put to him that the statements in the 14 January 2015 letter (and the later 5 March 2015 letter) from SSSL were false. Mr Mistry was evasive and responded with answers such as "Maybe", "It might be", and "That's what I've been advised by my solicitor." 122 Mr Mistry denied that the statements made by SSSL were made on his instructions and instead stated: [His Honour:] So the question is: did you give him those instructions? Did you provide that detail for that sentence that Mr Heerey has just referred to? --- No. He has given me the option that – like, you know, that this is the beneficial option for you. So, "You put that here or we put that here," and I was just relying on what he was saying, like, because I'm not – as I say, I'm just – I don't know anything about this. So whatever he was telling me, I was just relying on him that he's telling me the truth and he was giving me the correct advice to go through this way… 123 The implication from this evidence is that Mr Mistry informed his then solicitor of the true facts and his solicitor elected, without instructions, to provide a false account of events in the correspondence with Henley Arch's solicitors on 14 January 2015 and 5 March 2015. This is implausible. 124 In my view, the likely explanation is that the Mistrys deliberately provided false instructions to SSSL after discussing the issue with Mr Shafiq with whom they were consulting. (e) Meeting between Ms Izic and Mr Shafiq – 17 March 2015 125 On 27 February 2015, Henley Arch's solicitors wrote to Lucky Homes and Mr Shafiq making demands of them. In all likelihood this letter prompted Mr Shafiq to visit Ms Izic on 17 March 2015. 126 Mr Shafiq denied that prior to this meeting he had discussed with the Mistrys what he would say to Ms Izic. However, it would appear that he had. Ms Izic's evidence of the 17 March 2015 meeting is set out earlier. It is worth reproducing at this point: Later, on or about 17 March 2015, Mr Shafiq came to see me at my office and at that meeting said words to the effect that "you need to co-operate with us otherwise you will be in big trouble". At the time, I understood Mr Shafiq's reference to "us" to be a reference to both himself and the homeowner. Mr Shafiq asked me to agree that certain hand-drawn sketches were the beginning of our conversation and relationship in relation to the project. He said words to the effect "I want you to confirm this [the sketches] was the beginning of our relationship on this project" to which I replied "no, this is the plan you brought me" while handing him a copy of the floorplan he provided to me on 21 October 2013 and as shown in annexure A. He repeated to me words to the effect that "we need to co-operate together". He said words to the effect that he "did not recall" having provided the floorplan in annexure A to me. I told him words to the effect of "please keep this copy if you like in case you have put your file in the bin". Annexed and marked C is a copy of the floorplan I handed to Mr Shafiq that day, which I signed and dated, and my staff member, Andrew Boyle, also signed and dated. I considered Mr Shafiq's behaviour to be quite "shifty", and I was shocked by his attempt to convince me to accept that the beginning of this project was the two hand drawn sketches, rather than the floorplan supplied to me and shown in annexure A. Mr Shafiq also said words to the effect that "the homeowner is prepared to backdate these sketches and to say these sketches were the start of the project". I did not retain any copies of the sketches. 127 Counsel for the Mistrys in cross-examination asked Ms Izic to clarify whether Ms Izic's reference to "us" in [35] of Ms Izic's statutory declaration meant both Mr Shafiq and Mr and Mrs Mistry together. Ms Izic clarified that when Mr Shafiq asked her to agree that the hand drawn sketches he brought to the 17 March 2015 meeting had been the basis of that job, Mr Shafiq had expressly said "me and the client, we will sign and backdate it". Upon further questioning by counsel for the Mistrys, Ms Izic clarified the chronology of the statements made by Mr Shafiq at the meeting. She said that Mr Shafiq had begun the meeting by saying "me and client, we will sign and backdate it", which caused her to understand his subsequent statement "you should cooperate with us, because you can be in big trouble as well" to be referring to both Mr Shafiq and the Mistrys. 128 Mr Shafiq had an opportunity to deal with this evidence in an affidavit, but did not do so. Further, counsel for Lucky Homes and Mr Shafiq did not challenge Ms Izic on her evidence on this aspect. 129 Notwithstanding these omissions, Mr Shafiq under cross-examination denied that he provided Ms Izic two sketches as she described. He said: … And I said, "Lejla -" her first name is Lejla, "you have made all the changes". And I told – you know, "This is a MainVue plan." And she knew from day one. "You have made substantial changes, and now you need to prove the substantial changes is not a copyright." And I – two pieces of paper. I gave her example. I draw, like, a circle or a box, and I said – I exact say, "If these two plan, if customer give to you -", you know what I mean, "and you make substantial changes to avoid copyright -", you know what I mean, "so you have to prove it. So you have made all those changes. So you have done this one, and now you have to prove too this is not a copyright." Because she's – if you see the plan, I have only given her the instruction what Mistry asked me. Everything else she have drew it from her own handwriting. And I was surprised to see this paragraph. There was nothing like that." 130 I do not accept this evidence. (f) Other pre-litigation conduct of the respondents 131 Following Mr Shafiq's visit to Ms Izic's office on 17 March 2015, Mr Shafiq and Lucky Homes also instructed their lawyers, Goldsmiths Lawyers, to respond on 26 March 2015 to Henley Arch's solicitors' letter of demand of 27 February 2015 by denying any reproduction of Henley Arch's copyright works. This was despite the fact that Ms Izic had provided to Mr Shafiq a copy of the Shafiq/Izic annotated floorplan on 17 March 2015. 132 By letters dated 9 June 2015 from Henley Arch's solicitors, Ashurst Australia, to both SSSL and Goldsmiths Lawyers, the respondents were made aware that Henley Arch had obtained a copy of the Shafiq/Izic annotated floorplan. They were invited to respond to a number of questions about the plan and to attend a meeting with Henley Arch. 133 Lucky Homes and Mr Shafiq instructed their solicitors, Goldsmiths Lawyers, to respond to the letter of 9 June 2015 on 1 July 2015. But the letter of 1 July 2015 did not respond to any of the matters raised in the letter of 9 June 2015. It is well apparent that Mr Shafiq was in a position to answer all of the relevant questions on 1 July 2015 but chose not to do so. During cross-examination, it was put to Mr Shafiq that he did not come forward with the truth in response to the 9 June 2015 letter because he was hoping that Henley Arch would not find out. His answers were evasive. 134 Further, under cross-examination Mr Mistry first appeared to deny seeing a copy of the letter of 9 June 2015 sent to SSSL, but then confirmed that he did see it and read and understood it at the time. A follow up letter was sent to SSSL on 1 July 2015. No substantive response was given and no explanation given for why they were not properly answered. (g) Litigation conduct Lucky Homes and Mr Shafiq 135 In paragraphs [11] and [12] of Lucky Homes' and Mr Shafiq's defence, paragraphs [5] to [8] of their statement of the nature of the case, paragraph [7] of their statement of cross-claim, and paragraph [7b] of their defence to cross-claim, Lucky Homes and Mr Shafiq denied that they had been provided with a copy of the Amalfi Avenue floorplan by the Mistrys, denied removing the title block from a copy of the Amalfi Avenue floorplan, positively asserted that the Mistrys had not provided any plans to them which designated that Henley Arch was the owner of copyright in the plans, denied altering any plans given to them by the Mistrys to remove any identifying references to Henley Arch, said they had no knowledge of the alteration of any of Henley Arch's plans, and otherwise denied that any person working at Lucky Homes was involved in any alteration of any of Henley Arch's plans. The evidence led before me establishes that all these statements were false. I am entitled to find that Lucky Homes and Mr Shafiq provided false instructions to their lawyers for the purpose of concealing the true position. 136 Further, on 18 December 2015, Mr Shafiq made his first affidavit in this proceeding. Paragraph [7] of that affidavit stated that the floorplan provided to Mr Shafiq by the Mistrys "did not contain any reference to the design name and author or any other distinguishing mark". That statement was confirmed in Mr Shafiq's second affidavit made on 26 February 2016 in response to Mr Mistry's first affidavit which had stated that the Mistrys had not made any alterations to the floorplan provided to Mr Shafiq. At trial, Mr Shafiq confirmed that the statement in paragraph [7] of his first affidavit was incorrect. It was put to Mr Shafiq during cross-examination that he knew when he made his first affidavit that paragraph [7] was false. Mr Shafiq claimed that at the time he did not remember, but over time then recalled the truth. Again, this all confirms the unreliability of his evidence generally. 137 Further, at trial Mr Shafiq gave unsatisfactory evidence about the copying of the Amalfi Avenue floorplan, from A3 to A4 and back to A3, and the apparent "accidental" removal of the title block on 19 October 2013. None of this evidence was in his affidavits. He also asserted at trial that Ms Izic had been aware that the plan was a MainVue plan from the outset, that he did not provide her with a colour copy of the plan, and that her statements in paragraph [35] of her statutory declaration were false. None of his assertions were credible. The Mistrys 138 Paragraph [11] of the Mistrys' defence, paragraph [7] of their statement of cross-claim and paragraph [4] of their defence to cross-claim represented that the first meeting with Mr Shafiq occurred around 28 November 2013, and that they believed that it was reasonable to use the Amalfi Avenue floorplan because they had paid Henley Arch to design it. 139 But the first meeting with Mr Shafiq occurred on 19 October 2013. When it was put to Mr Mistry in cross-examination that he had falsely represented in his defence that the date of the first meeting was after he had terminated his dealings with Henley Arch, he denied that he had given false instructions to his lawyer. However, this false assertion is also consistent with Mr Mistry's evidence at VCAT where he attempted to conceal the real date that the Mistrys first met with Mr Shafiq. At one stage, he told the VCAT Member that they had met "after I cancelled" with Henley Arch (that is, after 28 November 2013). 140 At trial, the Mistrys denied telling Mr Shafiq that they had paid Henley Arch for the Amalfi Avenue floorplan. Further, the Mistrys' application to VCAT for a refund of the deposit they paid to Henley Arch was also inconsistent with any belief that they had paid for the floorplan. Why then did references to paying Henley Arch to design the plan appear in the Mistrys' pleadings? The Mistrys' defence had raised an "implied licence" defence. But this was not ultimately pressed. Perhaps these statements in the pleadings manifested an early collaboration between the Mistrys and Mr Shafiq, which subsequently dissipated. One is left to speculate. THE ISSUES 141 The principal issues for determination are the following: (a) whether copyright subsists in the Amalfi Avenue floorplan and whether that copyright is owned by Henley Arch; (b) whether the alleged infringing works, being the Shafiq modified floorplan, the Shafiq/Izic annotated floorplan and the BN Design floorplan were objectively similar to, and a reproduction of a substantial part of, the Amalfi Avenue floorplan, and further whether the house constructed on the Circus Avenue property was an infringing three dimensional reproduction of Henley Arch's copyright work (see s 21(3) of the Act); (c) whether the Mistrys were innocent infringers under section 115(3) of the Act; (d) the quantum of compensatory damages to which Henley Arch is entitled; (e) whether Henley Arch is entitled to additional damages under s 115(4) of the Act; (f) whether Lucky Homes is entitled to rely on the contractual indemnity as against the Mistrys under clauses 15.0 and 15.1 of the Building Contract; (g) whether Lucky Homes and Mr Shafiq engaged in misleading or deceptive conduct or made misrepresentations vis-à-vis the Mistrys; and (h) the rights, if any, of contribution and indemnity as between the respondents. LEGISLATIVE FRAMEWORK 142 It is appropriate to set out the relevant provisions of the Act. I should say at the outset that subsistence of copyright and ownership in the relevant "artistic work(s)", particularly the Amalfi Avenue floorplan, has not been admitted. Accordingly, these questions are still formally in issue. The statutory presumptions in Division 4 of Part V are therefore not available. Subsistence and ownership of copyright 143 Section 32 provides that copyright subsists in an original "artistic work". That section provides: Original works in which copyright subsists (1) Subject to this Act, copyright subsists in an original literary, dramatic, musical or artistic work that is unpublished and of which the author: (a) was a qualified person at the time when the work was made; or (b) if the making of the work extended over a period – was a qualified person for a substantial part of that period. (2) Subject to this Act, where an original literary, dramatic, musical or artistic work has been published: (a) copyright subsists in the work; or (b) if copyright in the work subsisted immediately before its first publication – copyright continues to subsist in the work; if, but only if: (c) the first publication of the work took place in Australia; (d) the author of the work was a qualified person at the time when the work was first published; or (e) the author died before that time but was a qualified person immediately before his or her death. (3) Notwithstanding the last preceding subsection but subject to the remaining provisions of this Act, copyright subsists in: (a) an original artistic work that is a building situated in Australia; or (b) an original artistic work that is attached to, or forms part of, such a building. (4) In this section, qualified person means an Australian citizen or a person resident in Australia. 144 Section 10(1) defines "artistic work" to mean: (a) a painting, sculpture, drawing, engraving or photograph, whether the work is of artistic quality or not; (b) a building or a model of a building, whether the building or model is of artistic quality or not; or (c) a work of artistic craftsmanship whether or not mentioned in paragraph (a) or (b) 145 Accordingly, irrespective of their artistic quality, copyright can subsist in house plans and houses as "artistic works". 146 For copyright to subsist in a work, only a minimal degree of creativity need be demonstrated. What is required is "some independent intellectual effort", but not "novelty or inventiveness as required in patent law" (IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458 at [33] per French CJ, Crennan and Kiefel JJ). 147 As to ownership, section 35(2) provides that: …[T]he author of a literary, dramatic, musical or artistic work is the owner of any copyright subsisting in the work … 148 Further, section 35(6) further provides: Where a literary, dramatic or artistic work to which neither of the last two preceding subsections applies, or a musical work, is made by the author in pursuance of the terms of his or her employment by another person under a contract of service or apprenticeship, that other person is the owner of any copyright subsisting in the work by virtue of this Part. 149 As such, if a person acting within the ordinary course of their employment creates original house plans, that person's employer will be the owner of copyright in those plans within the meaning of the Act. As I have set out earlier, there is little doubt that employees of Henley Arch acting in such capacity, particularly Mr Bugeja, created the various floorplans. Moreover, Ms Rosalyn Carter, draftsperson (in her capacity as such an employee) prepared relevant site specific working drawings with respect to the Mistrys' project. Infringement 150 Section 115(1) of the Act provides that "the owner of a copyright may bring an action for an infringement of the copyright". I will discuss ss 115(3) and 115(4) later. 151 An act of infringement of copyright involves the doing of an "act comprised in the copyright" of a work. The only aspect of Division 2 Part III that is of relevance to the present case is section 36(1) which provides: Subject to this Act, the copyright in a … 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 authorizes the doing in Australia of, any act comprised in the copyright. 152 Section 13(1) provides: A reference in this Act to an act comprised in the copyright in a work or other subject-matter shall be read as a reference to any act that, under this Act, the owner of the copyright has the exclusive right to do. 153 Section 14(1) provides: (1) In this Act, unless the contrary intention appears: (a) a reference to the doing of an act in relation to a work or other subject-matter shall be read as including a reference to the doing of that act in relation to a substantial part of the work or other subject-matter; and (b) a reference to a reproduction, adaptation or copy of a work shall be read as including a reference to a reproduction, adaptation or copy of a substantial part of the work, as the case may be. 154 Section 31 relevantly sets out the exclusive rights of a copyright owner: (1) For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a work, is the exclusive right: […] (b) in the case of an artistic work, to do all or any of the following acts: (i) to reproduce the work in a material form; (ii) to publish the work; (iii) to communicate the work to the public… 155 Section 10(1) defines "material form" to mean: in relation to a work or an adaptation of a work, includes any form (whether visible or not) of storage of the work or adaptation, or a substantial part of the work or adaptation, (whether or not the work or adaptation, or a substantial part of the work or adaptation, can be reproduced). 156 Section 21(3)(a) provides: (3) 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 … 157 In relation to what is meant by the imprecise criterion of a "substantial part", the following general principles are applicable. 158 First, the relevant assessment is a qualitative assessment rather than a quantitative assessment. Indeed, it has been said that "the quality of what is copied is critical" (IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458 at [30] per French CJ, Crennan and Kiefel JJ). The question is whether there is a sufficient degree of similarity between the two works objectively assessed (Ron Englehart Pty Ltd v Enterprise Constructions (Aust) Pty Ltd (2012) 95 IPR 64; [2012] FCAFC 4 at [46] per Jacobson, Nicholas and Yates JJ and Tamawood Ltd v Habitare Developments Pty Ltd (2015) 112 IPR 439; [2015] FCAFC 65 at [19] to [35] per Greenwood J, albeit partly in dissent but not as to the relevant principles). The other dimension to reproduction, ie a causal connection between the two works (ie copying), can be put to one side for present purposes. It is not now in doubt that Henley Arch's floorplan was the starting point for the respondents' annotations, modifications, reproduction and use both in two dimensions and in three dimensions. 159 Second, merely pointing to dissimilarities between the various plans does not establish that a "substantial part" of the relevant copyright work has not been copied. 160 Third, whether there has been a reproduction including a copying of a "substantial part" involves questions of fact and degree. If similarities are identified, the question is the qualitative significance of such similarities. Reproduction does not strictly require a complete and accurate correspondence to a "substantial part" of the work (SW Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 at 482 per Wilson J). 161 Fourth, as the trial judge, I can be credited with at least some modicum of ability to read and interpret design drawings and to make relevant comparisons without relying upon expert opinion evidence in order to assess whether there has been a reproduction or the copying of a "substantial part" of an artistic work. 162 Fifth, in the case of project home plans, whether there is sufficient "objective similarity" depends on whether the allegedly infringing drawing has adopted the essential features and substance of the copyright work (Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1999) 87 FCR 415 at [91] per Lindgren J.) 163 Relatedly, the substantial part of the work that has been taken must be assessed by reference to the whole of the copyright work. That is, the question is not whether there has been infringement of a part of the work but rather whether there has been infringement of the work as a whole by the taking of a substantial part of that work (Tamawood Ltd v Henley Arch Pty Ltd (2004) 61 IPR 378; [2004] FCAFC 78 at [55] per Wilcox and Lindgren J). In Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd (1999) 46 IPR 309; [1999] FCA 1371, it was held (at [37] per Heerey, Sundberg and Finkelstein JJ) that a substantial part is taken if it is "an important or material part" of the copyright work. Another way to express the point is to ask whether "the part or parts taken represent a substantial part of the labour, skill and judgment of the author that made the whole [artistic] work 'original'" (see Tamawood Ltd v Henley Arch Pty Ltd at [55] per Wilcox and Lindgren JJ). Further, it is not necessary to show that the copy is a "perfect reproduction of a substantial part" of the copyright work. 164 Sixth, the animus furandi may be relevant to the present question. Where there is deliberate copying, this may assist to more readily conclude that there is the requisite sufficient objective similarity between the infringing and copyright works or a substantial part of the copyright work. Authorisation 165 Generally, to "authorise" is to "sanction, approve or countenance" (Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42 at [49] to [51] per French CJ, Crennan and Kiefel JJ) although one has to be careful with "countenance" as one meaning of this is to condone, which is broader than the concept of authorisation. However, a person may not be said to "authorise" unless that person has a "power to prevent" the particular conduct (Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd (2014) 110 IPR 82; [2014] FCA 1366 at [392] per Beach J). Power to prevent may arise by reason of different dimensions: for example, technical power, managerial or hierarchical power, contractual and other types of legal power. Further, power to prevent is a more precise and useful concept than "control", which is conceptually less secure. Now having "power to prevent" may be a necessary condition to "authorise", but it may not be a sufficient condition (Streetworx at [392] per Beach J). 166 If a person including a director engages in, personally participates in or personally directs the relevant acts of infringement coupled with the power to prevent, this may be sufficient to demonstrate such sanctioning, approval or countenance, although something less than that may be sufficient. I adopt the observations I made in Streetworx at [393] and [394] on this aspect: A director or other officer of a company can be considered in some circumstances to "authorise" the relevant conduct separate to that of the company. But a director of a company merely by his position alone cannot be said to authorise. It is necessary to show actions of the director that demonstrate that he sanctioned, approved or countenanced the acts. Engaging or personally participating in relevant acts of infringement coupled with the power to prevent may be sufficient to demonstrate such sanctioning, approval or countenance. Indeed, if the director personally directs the acts which constitute infringement then "authorise" may be established, although something less than that may be sufficient. For "authorise", no intention to infringe or knowledge that the relevant acts would or would be likely to infringe is necessary. More particularly, knowledge of the patentee's intellectual property rights does not need to be shown. All that may be required is knowledge of the acts that constitute infringement rather than their legal characterisation as infringing acts. (citations omitted) Innocent Infringement 167 As mentioned earlier, the Mistrys have admitted that they engaged in copyright infringement, however they assert that they can rely on the defence of innocent infringement. Lucky Homes and Mr Shafiq initially pleaded such a defence but abandoned it at trial. 168 Section 115(3) of the Act sets out the defence of innocent infringement. The provision states: Where, in an action for infringement of copyright, it is established that an infringement was committed but it is also established that, at the time of the infringement, the defendant was not aware, and had no reasonable grounds for suspecting, that the act constituting the infringement was an infringement of the copyright, the plaintiff is not entitled under this section to any damages against the defendant in respect of the infringement, but is entitled to an account of profits in respect of the infringement whether any other relief is granted under this section or not. 169 The infringer bears the onus of establishing: first, an actual lack of subjective awareness that the act constituting the infringement was an infringement of the copyright; and second, that objectively considered, the infringer had no reasonable grounds for suspecting that the act constituted an infringement (Milwell Pty Ltd v Olympic Amusements Pty Ltd (1999) 85 FCR 436 at [52] per Lee, von Doussa and Heerey JJ). The relevant focus is on the question of knowledge or suspicion as to whether the relevant conduct was an infringement of copyright, rather than on the question of knowledge or suspicion concerning the identity of the copyright owner. 170 A deliberate choice not to enquire as to ownership of, or licence to use, the copyright work may suggest a mind in which real suspicion resides (Golden Editions Pty Ltd v Polygram Pty Ltd (1996) 61 FCR 479 at 488 per Kiefel J). Furthermore, where the evidence establishes that the infringer had an awareness of a question arising as to the propriety of using the copyright owner's work, the defence will not be made out (Tolmark Homes Pty Ltd v Paul (1999) 46 IPR 321; [1999] FCA 1355 at [52] per Beaumont J). Relatedly, merely relying on assurances of another as to ownership or the existence of a licence will not "come close to establishing that [the infringer] had no reasonable grounds for suspecting that its acts would infringe", even where those assurances may in fact have been misleading or deceptive (Tamawood Ltd v Habitare Developments Pty Ltd at [181] per Jagot and Murphy JJ). 171 At this point, I should make an observation concerning the relevance of untruthful evidence given by an infringer and its impact on the innocent infringement defence and the relevant state of mind addressed in s 115(3). 172 If an infringer tells a deliberate untruth because they perceive that the truth is inconsistent with the relevant innocent state of mind in question, and the deliberate untruth relates to the relevant material issue and is explicable, on the balance of probabilities, only on the basis that the truth would implicate the infringer in an act of non-innocent copyright infringement, then the untruth can be taken as springing from what criminal lawyers like to describe in their vernacular as "consciousness of guilt" (see Barrett Property Group Pty Ltd v Carlisle Homes Pty Ltd [2008] FCA 375 at [75] and [76] per Heerey J (affirmed on appeal)). The deliberate untruth can be used as evidence that would go to negating the s 115(3) defence. The untruth could be constituted by the infringer's actual statement after the act(s) of infringement whether verbally, in correspondence or in written or oral evidence. It could also be inferred from false instructions given to lawyers which are then incorporated into correspondence or pleadings. HENLEY ARCH'S INFRINGEMENT CLAIM Copyright subsistence and ownership 173 The Mistrys now accept, although their defence does not formally admit, that copyright subsists in the Amalfi Avenue floorplan, which copyright has at all relevant times been owned by Henley Arch. Contrastingly, Lucky Homes and Mr Shafiq have not so conceded. Accordingly, as I have said, I am not able to rely upon the relevant statutory presumptions on these matters. But as the evidence of Mr Bugeja and Ms Carter was accepted without objection or challenge, the facts set out in [11] to [16] and [29] above in my view establish subsistence of copyright in the Amalfi Avenue floorplan as an original artistic work, with Henley Arch having ownership in such copyright. Two-dimensional and three-dimensional forms 174 In considering the question of reproduction and substantial similarity in two dimensions relating to residential home designs comparing the copyright work with the infringing work, it is necessary to consider aspects including the following: (a) the number of rooms; (b) the geometrical shapes of each room in two dimensions; (c) the absolute surface area and boundary measurements for each room; (d) the relative surface areas and boundary measurements for each room as compared with other rooms; (e) the position and configuration of each room on and relative to its position compared with other rooms and corridors in the overall plan; (f) the size, dimensions and position of each corridor and points and dimensions of each internal and external access point; (g) the size and position of each window; (h) markings on the plan being lines that represent indicia of three-dimensional representations, ie roof lines and pitch, stairs; (i) any external features, their position and their absolute and relative dimensions such as porches, patios, verandahs, garages and car ports. 175 It is important to focus on the two-dimensional expression of these aspects rather than the functionality or ideas underpinning these aspects. It is trite to observe that plans for project homes may incorporate commonplace concepts involving the number and type of standard types of rooms (bedrooms, bathrooms, kitchens, lounge rooms etc), their relationship with each other, traffic flow, ingress and egress and the like. And it may be said, superficially, that many residential home designs will have substantially overlapping themes dealing with such matters. That is not really to the point. What is being looked at for present purposes is rather the form of the expression of such commonplace concepts and ideas. The question of objective similarity is a comparison between forms of expression, rather than between ideas or concepts. 176 It has been said that it is often difficult to distinguish between ideas or concepts on the one hand and their form of expression on the other. That difficulty should not be overstated. Eagle Homes v Austec Homes at [96] gives an example, but this was decontextualized from a side by side comparison of two two-dimensional representations. The idea in this context is not to start with an idea at all but rather to start with the one form of two-dimensional representation and then to compare it with another. 177 It also follows from what I have said that there could be reproduction of a substantial part by only considering the elements set out at [174] without even a consideration of the functional use of each room, that is, for example, whether a particular room is a bathroom or to be used for some other purpose. But clearly, if a two-dimensional plan is notated with various markings and words, they would also form part of the artistic work and would be considered as part of the form of expression, even though the markings and words are also manifestations of underlying ideas. Further, an underlying idea can be manifested in different and many forms. But that is the point. The present context looks at a particular form of expression used and then compares it with the alleged infringing form of expression. 178 There is another matter that I would raise at this point. Counsel for Lucky Homes and Mr Shafiq contended that there were many different types of three-dimensional forms that could be made from a two-dimensional plan and that, for example, façades of three-dimensional forms could be quite different even using two-dimensional forms that are similar. That may be, but the point takes them nowhere if the two-dimensional forms nevertheless have the requisite degree of objective similarity. Infringement is established by such objective similarity in two dimensions, whatever the differences may be in three dimensions. In any event, the geometric aspect of the façade produced from or in the Amalfi Avenue floorplan is substantially similar to the façade produced from the infringing floorplan(s) or more relevantly vice versa. 179 Let me make one other point about three-dimensional reproductions of two-dimensional forms. Section 21(3) of the Act deems a two-dimensional form of an artistic work to have been reproduced if a version of the work is produced in a three-dimensional form. So, a house which is built as a version of a two-dimensional design plan would be such a three-dimensional reproduction. That is the present case in relation to the Mistrys' house which in three dimensions reproduced the Amalfi Avenue floorplan or a substantial part thereof. Reproduction of a substantial part 180 The Shafiq modified floorplan is identical in every respect to the Amalfi Avenue floorplan except for the absence of the title block along the bottom of the plan, and Mr Shafiq's handwritten annotations and coloured highlighting to the floorplan. The handwritten annotations made by Mr Shafiq are as follows: (a) In Bedroom 4, the text "window" in the balloon and the text "L/Floor"; (b) In Bedroom 3, the text "L/Floor"; (c) In the laundry, the two rectangular boxes which appeared below the basin; (d) The shaded area with diagonal lines next to the laundry; (e) The text "Linen" below the word "Bath"; (f) The vertical line which runs through the master ensuite and the two arrows pointing right; (g) The various annotations in the second powder room ("PDR 2"), but for the text "870" in the box; (h) The various annotations in the butler's pantry; (i) The broken lines around the porch and the text "eves & timber"; (j) In the theatre, the text "L/Floor"; (k) In the family room, the text "Wall 15 wide"; (l) Directly below the family room, the text "window" and "window"; (m) In the dining room, the text "bigger window". 181 The Shafiq/Izic annotated floorplan is identical in every respect to the Shafiq modified floorplan, save for Ms Izic's handwritten annotations to the Shafiq modified floorplan. The handwritten annotations made by Ms Izic are as follows: (a) On the top left-hand corner of the document, what appears to be a hand-drawn arch with the text "timber lintel with cement sheeting" and immediately below that text, the words "brick render finish". Further, immediately below the hand-drawn arch, the text "4 x 70" and "timber slats on top". (b) The curved line extending from the laundry to the words "bench", "F Loader" and "W.H + Dryer". (c) The curved line extending from the walk-in laundry (described as "WIL") to the text "PWD + sink". (d) In Bedroom 2, the text "kitchen bench". (e) Between Bedroom 2 and the butler's pantry, the word "cupboard". (f) The two arrows from the top right-hand corner of the document with the text "tiled floor". (g) In the master ensuite, the text "1400" inside the hand drawn balloon. (h) In the bottom right-hand corner of the master ensuite, the L-shaped line. (i) In the master suite, the text "linen" and "extra in bed". (j) To the right of the master suite, the word "window" inside the hand drawn balloon, and the curved lines extending from the balloon to the master suite and the porch. (k) In the garage, the text "1020 door" inside the hand drawn balloon. (l) In the entry area, the word "tiles" inside the hand drawn balloon. (m) In the theatre room, the text "870 x 2", "1800x600", "2" and "1". (n) In the butler's pantry, the text "820" in the handwritten box. (o) In the second powder room ("PDR 2"), the text "870" in the hand drawn box. (p) Directly below the family room, the text "1.5" inside the hand drawn balloon, and below that text to the left, "Ciling [sic] 2580 H". (q) In the family room, the text "tiles" inside the hand drawn balloon and the word "wall". (r) In the dining room, the text "tiles" inside the hand drawn balloon, the text "S/D window" inside the hand drawn balloon, and the text "3panel" and "stacker door". (s) On the bottom right-hand corner of the document, the text "Lot 828 Circus Ave 8B Stage Kingsford Point Cook". To the left of that text, the hand drawn rectangle with the word "overhead" next to it. (t) On the top right-hand side of the document, the text "rais [sic] porch timber infill on top" and "brick piers + cement sheeting infill". (u) On the bottom of the document, the text "Lejla Izic" and "17/03/15". I should say that this was added later and on the date suggested as explained by Ms Izic in her statutory declaration at [35]. 182 The BN Design floorplan is objectively similar to, and constitutes the taking of a substantial part of, the Amalfi Avenue floorplan (and correspondingly the Shafiq modified floorplan and the Shafiq/Izic annotated floorplan). A comparison of the BN Design floorplan with the Amalfi Avenue floorplan shows the following: (a) The houses have virtually identical footprints, save for some minor adjustments to the size of Bedrooms 3 and 4, which cause a slight difference in the overall length of the homes. (b) The plans contain the same layout and general arrangement of the rooms. (c) The positions of hallways and doorways are virtually identical, resulting in the same traffic paths and flow throughout both houses. (d) Each house contains four bedrooms positioned along one side of the home, with Bedroom 2 separated from Bedroom 3 by a bathroom and laundry, and the master bedroom separated from Bedroom 2 by the master ensuite, with the same positions and layout and virtually identical sizes of these rooms. (e) The houses have identical positions of robes (albeit different sizes) in Bedrooms 2, 3, and 4. (f) The configuration of the bathroom, which is located between Bedroom 2 and the laundry, is identical in each house. (g) The location of the kitchen is identical in each house, and the kitchens have identical layouts and arrangements of feature appliances. (h) Each house contains a double garage, family/living room, dining/meals area and alfresco area, with an identical position, layout and virtually the same size. (i) Each house contains a theatre room located in virtually the same position, albeit the theatre room is larger in the house in the BN Design floorplan compared with the house in the Amalfi Avenue floorplan. (j) Each house has a porch which is a similar size and located in a similar position. (k) Each house has a master ensuite and master walk-in-robe located in virtually the same position, but with minor adjustments to their sizes. The configuration of the master ensuite is different; in the BN Design floorplan there are two linen cupboards, whereas in the Amalfi Avenue floorplan there is no provision for a linen cupboard. Further, the BN Design floorplan removes the bath and changes the location of the toilet. (l) The positions of the laundry are virtually identical, however the configuration is different. The laundry in the BN Design floorplan includes a bench and linen cupboard. (m) In the BN Design floorplan, the toilet extends into the area which was designated the walk-in-laundry in the Amalfi Avenue floorplan. Further, a linen cupboard is positioned in the area which formed part of the toilet in the Amalfi Avenue floorplan. (n) The BN Design floorplan provides for a prayer room in the position of the powder room of the Amalfi Avenue floorplan. (o) There are some minor changes to the window sizes and placement. 183 In my view, the substance and essential features of the Amalfi Avenue floorplan have been copied and included in the BN Design floorplan (and the predecessor Shafiq modified floorplan and the Shafiq/Izic annotated floorplan), notwithstanding the minor differences identified at [3] in the opening written submissions of Lucky Homes and Mr Shafiq. Accordingly, there is sufficient objective similarity to, or the taking of a substantial part of, the Amalfi Avenue floorplan. Moreover, as the Circus Avenue house constitutes a three dimensional reproduction of the BN Design floorplan, by reason of the above it is also a reproduction of the whole or a substantial part of the Amalfi Avenue floorplan. Moreover, the intention of the Mistrys and Mr Shafiq was to copy the Amalfi Avenue floorplan with only the changes set out above. This supports, in an indirect sense, that what was copied was a substantial part of the "artistic work" with sufficient objective similarity. 184 Accordingly, the Mistrys have infringed Henley Arch's copyright in the Amalfi Avenue floorplan by: (a) copying and reproducing the Amalfi Avenue floorplan (or a substantial part thereof); (b) authorising Lucky Homes, Mr Shafiq and ultimately BN Design to copy and reproduce the Amalfi Avenue floorplan (or a substantial part thereof), which formed the basis for the BN Design floorplan; (c) reproducing the Amalfi Avenue floorplan (or a substantial part thereof) in three dimensions with the construction of their house on the Circus Avenue property. 185 There is little doubt on the evidence that the Mistrys so authorised Lucky Homes, Mr Shafiq and BN Design. 186 Further, Lucky Homes and Mr Shafiq similarly so infringed and also authorised BN Design to so infringe. Moreover, it was not disputed that Mr Shafiq as the sole director authorised Lucky Homes to engage in the relevant infringing conduct. THE MISTRYS' DEFENCE – INNOCENT INFRINGEMENT 187 As I have indicated, the Mistrys bear the onus of establishing both: (a) an actual subjective lack of awareness that the relevant act(s) constituting the infringement was an infringement of the copyright; and (b) that they had no reasonable grounds for suspecting that the act(s) constituted an infringement. 188 A deliberate choice not to enquire as to the ownership of, or licence to use, the work may suggest a mind in which real suspicion resided. Further, where it is established that the respondent had an awareness of a question arising as to the propriety of using the applicant's house plans, the defence will not be made out. Further, merely relying upon assurances of another will "not come close to establishing" that the infringer had no reasonable grounds for suspecting that its acts would infringe, even where those assurances may have been misleading or deceptive (Tamawood v Habitare at [181] per Jagot and Murphy JJ). But such observations should not be decontextualised. It may depend upon the status of the person giving the assurances and how knowledgeable or authoritative they could reasonably be perceived to be. 189 In my view, the Mistrys have not made out this defence as to the objective limb at least. Let me explain my reasons. The objective limb 190 By the time of meeting Mr Shafiq on 19 October 2013, the Mistrys had signed the 29 May 2013 provisional sales quotation, the 24 July 2013 authorised tender document and the September tender, each of which contained text in the following form just above their signatures: I/we acknowledge that information contained or embodied in this tender document and any and all documents (whether in material or electronic form) disclosed ("Information") to the Owner by or on behalf of the Builder is and remains at all times confidential to and the exclusive property of the Builder. I/we undertake to use all reasonable endeavours to keep Information secure against unauthorised loss, use or disclosure. I/we also undertake that such Information will be kept confidential and shall be used for the sole purpose for which it was disclosed to the Owner. 191 Both of the Mistrys denied ever reading this text, but accepted that, upon reading it in Court, they understood what it meant and acknowledged that it meant they should not have provided the plans to third parties. 192 Moreover, each of the Amalfi Avenue floorplan and the Mistrys specific floorplan contained a copyright notice stating "© Henley Arch P/L". Such notices had also appeared on the plans for the project house Mr Mistry commissioned Henley Arch to build in 2010 to 2011 in respect of their first house. 193 The notice in the September tender, and the copyright notices referred to above would have placed reasonable persons in the Mistrys' position on notice that they could not provide Henley Arch's Amalfi Avenue floorplan to Mr Shafiq and Lucky Homes for them to use in the way they did, without seeking and obtaining Henley Arch's permission. Indeed, the Mistrys specific floorplan was only for the Eclipse option and not the Avenue option at all. This should have caused them even greater hesitation in giving the Amalfi Avenue floorplan to Mr Shafiq and Lucky Homes. 194 Further, in my view, the assurances given by Mr Shafiq that only 15 to 20 changes were required ought not to have been relied on by persons who were proposing to spend nearly $250,000 based on that assurance, without checking it with a lawyer, particularly in the light of the specific acknowledgements set out in the various versions of the tender documents that they had notice of. The fact that the Mistrys did rely upon Mr Shafiq's representations does not establish the objective limb of "no reasonable grounds". Moreover, to say that they relied upon Mr Shafiq's statements does not necessarily entail that they had no suspicions about whether they could use the Amalfi Avenue floorplan. In my view, whatever Mr Shafiq said, the Mistrys had reasonable grounds for suspecting that the use of that floorplan constituted an infringement. At the least, they have not discharged the onus of proving that they had no reasonable grounds for suspecting. 195 In summary, the Mistrys have failed positively to establish that, objectively assessed, they had no reasonable grounds for suspecting that their conduct infringed copyright. The subjective limb 196 As I have said earlier, Mr Mistry holds a Bachelor of Commerce and a Diploma in Mechanical Engineering, and has worked as a sales representative for both Telstra and Optus. 197 Both of the Mistrys denied reading the copyright notices referred to in the September tender and the predecessor provisional sale quotations and tender documents but did accept that, upon reading it in Court, they understood what it meant and acknowledged that it meant they should not have provided the plans to third parties. Given that there had been eleven days between the Mistrys receiving the September tender and signing it, and that a significant element of the Mistrys' case is that they were unhappy that items were continually being left out of their tender documents, it is likely that they read these paragraphs at the time. 198 Further, Mr Mistry accepted that various plans that the Mistrys had received from Henley Arch, including those that Henley Arch had used to build their house in 2010 (which the Mistrys had signed), had a copyright notice in the title block. Mr Mistry denied that he knew what the international copyright symbol was, but this is implausible given his education and work experience. 199 The Mistrys also ultimately admitted that they never held a belief that they had a licence to use Henley Arch's plans, and never thought that they had been given any rights by Henley Arch; they abandoned their implied licence defence at trial, which in any event was untenable. The Mistrys' admissions are consistent with them being aware of Henley Arch's copyright in the Amalfi Avenue floorplan or at least knowledge that they could not provide it to Mr Shafiq to use as a base for their new home. 200 The Mistrys have asserted that they told Mr Shafiq that the plan was simply an example of what they wanted. But this is not credible given their desire to have the Amalfi home which was their "dream home". 201 Further, the Mistrys' discussion with Mr Shafiq at the 19 October 2013 meeting regarding copyright, as I have referred to earlier, shows that they were at least aware of a question that they could not use the plans without the consent of Henley Arch. The Mistrys acknowledged that copyright infringement was a significant issue when Mr Shafiq "mentioned there might be a problem, and we ask him what might be the problem and he said the copyright. … We were shocked that there might be a possibility and we said, like 'We don't want to go ahead if there is any problem'". 202 Mr Mistry accepted that if he was so "shocked" by Mr Shafiq raising copyright as a problem, it would have been reasonable to call a solicitor to check whether Mr Shafiq's advice was correct. Mr Mistry also accepted that it would have been easy to contact Henley Arch to check whether it had a problem with what they proposed to do, and that it would have been reasonable to contact Henley Arch in circumstances where he was "shocked" about the copyright issue. 203 But on balance, albeit with some hesitation, I am prepared to accept that given the representations made by Mr Shafiq to the Mistrys concerning the "15 to 20 changes", which they relied upon, they lacked actual awareness that the use of the Amalfi Avenue floorplan (with the changes) and the later infringing conduct was an infringement of Henley Arch's copyright. 204 For completeness, perhaps it may be said that when the Amalfi Avenue floorplan was first copied by Mr Shafiq on 19 October 2013 before the changes were made, which copying was authorised by the Mistrys, they had actual awareness of infringement by the copying per se. But such an infringement per se is not linked sufficiently to any causally connected damage. I will put this to one side. RELIEF 205 Section 115 of the Act provides: (1) Subject to this Act, the owner of a copyright may bring an action for an infringement of the copyright. (2) Subject to this Act, the relief that a court may grant in an action for an infringement of copyright includes an injunction (subject to such terms, if any, as the court thinks fit) and either damages or an account of profits. […] (6) The court may have regard to the likelihood of the likely infringements (as well as the proved infringement) in deciding what relief to grant in the action. 206 I should note at the outset that the Mistrys have admitted to engaging in copyright infringement subject to the innocent infringement defence, and have offered to be subject to an injunction restraining them from further infringing conduct, including delivering up the infringing plan. 207 Henley Arch sought a declaration that the conduct of the respondents constituted a copyright infringement, injunctions restraining further infringing conduct, delivery up of infringing plans and damages and additional damages. No claim for an account of profits has been pursued. I do not propose to make any declarations or to grant any injunctions for reasons that I will later discuss. Let me first deal with compensatory damages and then turn to additional damages. (a) Compensatory damages 208 Henley Arch has sought compensatory damages, but not in the form of a counterfactual licence fee. It has asserted that it would not have licensed the respondents' conduct, an assertion that I accept. Further, it does not seek to calculate its loss on the basis that damages are at large. Rather, it has contended that it should have the profit that it lost by reason of the Mistrys not proceeding with Henley Arch to build in accordance with the October tender. It is said that but for the infringing conduct, the Mistrys would have continued to engage Henley Arch to complete the design of their home and build it. A number of matters may be noted. 209 It is not in doubt that an award of compensatory damages should be such sum as to put the applicant back in the same position that it would have been in absent the infringement. 210 Sometimes it has been said that an award of damages should reflect the depreciation in value of the applicant's copyright (more accurately the statutory chose(s) in action) caused by the copyright infringement conduct of the respondent. That is one method for assessing compensatory damages, but it is not the only method, particularly in a case such as the present where it is inapposite because the infringing conduct only involved the loss of one sale that would otherwise have been likely to have been made. Indeed, such a method is wholly irrelevant where the value in the copyright lies not in the owner's use thereof but rather its non-use. But in any event one must be careful with such descriptions in order not to use too narrow a lens by reason of the use of the labels "value" and "depreciation". "Value" can embrace consideration of future revenues, future cash flow streams and future profits. And "depreciation" can embrace factors which diminish or reduce the potential to earn or receive the same. 211 For an assessment of compensatory damages reflecting the more general principle set out above, one can utilise the lost profits method. In other words, what sales were lost that would have otherwise been made by the applicant absent the infringing conduct? What is the lost profit (not merely lost revenue) on such lost sales? Moreover, as in the present case, there may be only one lost sale. 212 As to the calculation of profit, there may be some debate as to its calculation. A standard method is to calculate EBIT (earnings before interest and tax); its cash flow analogue is EBITDA (earnings before interest, tax, depreciation and amortisation) although this can be put to one side for present purposes. There is a problem with EBIT when looking at the lost profit on one lost sale, where for example, an applicant (as in the present case) is asserting that it lost one incremental sale on a base of, say, 1000 sales that it made during the relevant financial year. A standard EBIT calculation would factor in both variable costs (sometimes described as direct) and fixed costs (sometimes described as indirect). But the EBIT or lost profit on one lost sale may appropriately in a particular case not deduct any element of fixed costs (or not amortise any element of fixed costs against the one lost sale) if fixed costs would not have been increased by the one lost sale (if made) such that the fixed costs on the other actual 1000 sales would have remained the same whether or not the one lost sale would have been made. 213 More generally, where one is utilising the lost profits method based upon the loss of a chance or opportunity, there are two questions to consider. The first question is whether there has been such a lost opportunity. This is determined on the balance of probabilities. The second question is what is the value of that lost opportunity. That is to be decided on the possibilities or probabilities of the case (Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355 per Mason CJ, Dawson, Toohey and Gaudron JJ and at 365 to 368 per Brennan J). But some estimation or even educated guesswork under either question may be required and is justifiable. Would the Mistrys have otherwise contracted with Henley Arch? 214 In my view, absent the infringing conduct, it is likely that the Mistrys would have contracted with Henley Arch to build their home on the Circus Avenue property in accordance with the October tender. 215 First, it may be accepted that the house that was ultimately built on the Circus Avenue property was, in substance, the Amalfi AM532 design with an Avenue façade. 216 Second, in my view the concerns that the Mistrys had about Henley Arch's process were exaggerated and implausible. As at the time the Mistrys signed the September tender they appeared content with the specifications it contained. Further, the Mistrys' asserted concerns regarding delays were without foundation given that the building contract could not have been signed until a certificate of title was issued and provided to Henley Arch on 7 October 2013. Further, the Mistrys had two further concerns addressed by 16 October 2013: first, the fly screen and second, the laundry option. Further, the only outstanding matter at that time concerned the relevant render option. Moreover, in mid-October 2013, the Mistrys had sought dates to execute a building contract with Henley Arch to build their home. Indeed they kept open this option until after they had signed with Lucky Homes. 217 Third, the Mistrys desired the design of the Amalfi home. Mrs Mistry liked the design, particularly the size of the master bedroom. Further, there is no probative evidence that they looked at other designs, although Mr Shafiq said that he had other designs for four bedroom homes with prayer rooms if the Mistrys had been interested, which they were not. For the Mistrys, the Amalfi was their "dream house". Moreover, they had also been very content with Henley Arch as their builder for an earlier house. 218 Fourth, the price differential between the house built by Lucky Homes compared to that quoted by Henley Arch was not said by the Mistrys to have been such as to cause the Mistrys not to go ahead with Henley Arch. Indeed, they had signed tender documents with Henley Arch to build a house at a price that was close to the price they contracted for with Lucky Homes. 219 Fifth, Mr Mistry said that in mid-October 2013 he was under stress and financial pressure and that time was of the essence. Accordingly, and if that be correct, if Lucky Homes had refused to build the home that the Mistrys wanted with the Amalfi Avenue design, it is unlikely that the Mistrys would have started over again with another builder or even Lucky Homes with a different design. Mrs Mistry wanted the Amalfi home. Her desire to have the Amalfi home, coupled with Mr Mistry's desire to avoid further stress, would have seen them in all likelihood proceed with Henley Arch. Indeed they could have done so. Up until the time they contracted with Lucky Homes, they had not terminated their dealings with Henley Arch. In my view they kept open the option of proceeding with Henley Arch so that they could go back to Henley Arch if Lucky Homes did not agree to what they wanted in terms of using the Amalfi Avenue floorplan. 220 Sixth, the Mistrys went ahead with Lucky Homes because they wanted the Amalfi AM532 with an Avenue façade, but that would have cost them almost $10,000 more than the house with an Eclipse façade if they had proceeded with Henley Arch. Lucky Homes was able to provide the house with an Avenue façade for a similar price to the house by Henley Arch with an Eclipse façade. The Mistrys denied this motivation, and denied that they paid any real attention to the choice of façade. I do not consider their denials to be credible. They were very cost conscious for the various optional items and their preferred choice of the Avenue façade made a significant difference. 221 Henley Arch has submitted that when applying the loss of opportunity approach, one must take into account the probability of the sale occurring but for the infringing conduct, except where the chance is so low as to be regarded as speculative or so high as to be practically certain. Henley Arch submitted that this is a case of practical certainty. I am not so convinced. I propose to treat the opportunity as 80% likely and to apply a 20% discount to the compensatory damages calculation to reflect some aspect of uncertainty as to whether the Mistrys would have proceeded with Henley Arch absent the infringing conduct. What is the lost profit? 222 In calculating the lost profit arising from a lost sale and taking into account the evidence of Mr Veljanovski, Henley Arch says that it would have made a total profit of $48,231.83 (ex GST). 223 Mr Veljanovski confirmed that fixed overheads had not been included in his calculations. Mr Veljanovski indicated that he did not believe that Henley Arch's fixed overheads would have been increased by the construction of the Amalfi house for the Mistrys. I accept this. The HIA Housing Guide in evidence shows that in the 2013/2014 financial year Henley Arch commenced construction of 1,128 homes in Victoria. If Henley Arch had also constructed the Mistrys' house around that time, its fixed overheads would not have increased by any appreciable amount on account of those costs already having been incurred in the course of operating its business and building over 1,000 homes in Victoria alone. Accordingly, in the present case I accept that it is not appropriate to deduct any amount for fixed overheads (cf Dart Industries Inc v Decor Corporation Pty Ltd (1993) 179 CLR 101, albeit in a different context). 224 Let me deal with some other points raised by the respondents. 225 Counsel for Lucky Homes and Mr Shafiq appeared to suggest at one point through the vehicle of cross-examination that Mr Veljanovski had erred in his treatment of GST in his profit calculation. But in my view Mr Veljanovski compared like for like. The figure used in the calculation for the sale price was a GST exclusive figure. So too, the costs figures were GST exclusive. Counsel for Lucky Homes and Mr Shafiq proposed that the correct way to calculate profit would be on a GST inclusive basis. But if GST were included in both the sale price and the costs incurred by Henley Arch, the costs would have increased by 10%, and the sale price would have increased by 10% (being the amount of the GST). The overall impact would have been to increase Henley Arch's calculated profit by 10%. But then once the included GST (one-eleventh when working backwards) was deducted from the GST inclusive figure, which it would have to have been, the profit figure would have equalled Mr Veljanovski's figure. 226 Counsel for Lucky Homes and Mr Shafiq also sought to test Mr Veljanovski's costing of the house as it would have been built for the Mistrys by Henley Arch, as it appeared in confidential annexure MV-1, by asking Mr Veljanovski to explain costs appearing in Lucky Homes' Job Transactions List. The Job Transactions List was tendered as a business record of Lucky Homes apparently showing all costs incurred by Lucky Homes in constructing the Circus Avenue house. But the Job Transactions List was not the subject of evidence from Lucky Homes and Mr Shafiq until after Mr Veljanovski was cross-examined. Mr Shafiq confirmed on the third day of the trial that the document "set out the breakdown of the actual costs incurred by [him] in building the house at 828 Circus Avenue". 227 The Job Transactions List was not explained further in evidence. I agree with Henley Arch that one can only speculate as to whether the list was complete or accurate. Further, one could only speculate from the names of the entities identified in the Job Transactions List, what goods or services were provided. For example, Mr Veljanovski's attention was drawn to items in the Job Transactions List from Mr Ibrahim Avci, who was said to be a bricklayer. But there was no direct evidence that Mr Avci was a bricklayer, and if so, whether his invoices only covered bricklaying work or also included costs for materials supplied by him. Further, on the fourth day of the trial, the Mistrys tendered a later variation to the Building Contract, which indicated that Lucky Homes received at least one additional payment from the Mistrys for $13,000 in late August 2014 that did not appear in the Job Transactions List. 228 Furthermore, counsel for Lucky Homes and Mr Shafiq asked Mr Veljanovski to compare prices paid for the construction of a house against an estimate of prices to construct the base Amalfi AM532 floorplan, without pricing the variations to that base price brought about by site requirements and requests of the owners. That is, confidential annexure MV-1 was only the first part of Mr Veljanovski's costing exercise. Moreover, he did not use the prices in that document (because they were prices as at the date of his affidavit) but instead those in confidential annexure MV-2 (being prices as at October 2013 to early 2014). He then applied the extra costs that were estimated to arise from the variations to the base price by specific site and client requirements, as set out in the October tender. None of this was effectively challenged. 229 Further, counsel for Lucky Homes and Mr Shafiq also asked Mr Veljanovski some questions about the remuneration of sales staff, and whether they were paid by commission. The cross-examination went nowhere. 230 I should mention one other matter at this point concerning a procedural fairness question before setting out my conclusions. 231 Counsel for Lucky Homes and Mr Shafiq asserted that they had been denied the opportunity to properly challenge Henley Arch's calculations because of the confidentiality regime that had been put in place. 232 On 18 May 2016, I made orders requiring that material marked as confidential and received by the Court, be kept confidential with access only to persons that signed confidentiality undertakings. In fact, before 18 May 2016, the solicitors and counsel for the Mistrys gave the undertakings and were provided with the confidential information. Surprisingly, the solicitors and counsel for Lucky Homes and Mr Shafiq refused to sign those undertakings and therefore were not provided with Mr Veljanovski's confidential annexures and confidential parts of his affidavit. They asserted that if they could not provide the material to Mr Shafiq personally and take his instructions then they would not inspect it for themselves. Their position was problematic. Mr Shafiq was a direct competitor of Henley Arch and it was inappropriate that he have this information. Further, Mr Shafiq's and Lucky Homes' solicitors and counsel could have looked at the material in the first instance to see whether it was necessary to show it to Mr Shafiq. Further, they could have engaged an independent expert witness who could have signed the undertaking. On 30 August 2016, during the second day of the trial and in order to resolve an impasse on this aspect, I made orders requiring Henley Arch to provide a copy of the relevant confidential annexures to the solicitors and counsel for those parties, subject to them being ordered not to disclose that material to their clients. On 30 August 2016, Henley Arch filed a further affidavit of Ms Findlay consenting to the disclosure of a redacted form of confidential annexure MV-6 to Mr Shafiq upon receipt of a confidentiality undertaking. On 31 August 2016, during the third day of the trial, I made orders permitting Mr Shafiq to access the redacted form of confidential annexure MV-6 but requiring him to keep the contents confidential. 233 In my view, Mr Shafiq and Lucky Homes were not denied the opportunity to consider Henley Arch's confidential evidence or to take instructions on it. At all times, the solicitors and counsel acting for Lucky Homes and Mr Shafiq were in a position to obtain access to the confidential annexures to Mr Veljanovski's affidavit upon the provision of the requested undertakings. Had they done so, they would have been able to assess the costs calculated by Henley Arch and would have been in a position to take instructions in respect of those costs by asking Mr Shafiq what costs he considered reasonable in his experience based upon Lucky Homes' costings. They could have done so quite easily without disclosing the content of the confidential annexures to Mr Shafiq. Indeed on 31 August 2016, counsel for Lucky Homes and Mr Shafiq cross-examined Mr Veljanovski on his confidential annexures without any apparent difficulty, despite not having been able to show the various confidential annexures to Mr Shafiq. That cross-examination proceeded in large part by reference to the actual costs incurred by Lucky Homes in constructing the Circus Avenue house. Such analysis could have been done at any time after 18 May 2016 if the solicitors and counsel for Lucky Homes had provided the required undertakings. Further, as I have said, those parties could have chosen to engage an independent expert. Accordingly, there was no denial of procedural fairness. 234 But in any event, Mr Shafiq was given access to redacted confidential annexure MV-6. That redacted document set out the actual profits made on various Amalfi AM532 homes built by Henley Arch with Eclipse or Avenue façades in 2013 and 2014 in the same general location as the Circus Avenue property. That evidence was not objected to nor the subject of any cross-examination. Using that document, Mr Veljanovski concluded that the total profit he had calculated was reasonable because the profit margin of the Amalfi house that would have been constructed for the Mistrys was below that of the comparable properties identified, including below that of the site which was to his mind the best comparison. He was not challenged on that conclusion. Conclusions 235 In my view, Mr Veljanovski's calculation for the lost profit of $48,231.83 (ex GST) is reasonable. But I propose to discount it by 10% for contingencies and uncertainty given the estimates used, giving a figure of $43,408.65, which I will round down to $43,000 given that a greater level of precision is inapposite in this context. 236 To the figure of $43,000, I will apply a 20% reduction on the basis, as I have said, that it was only 80% likely that absent the infringing conduct the Mistrys would have contracted with Henley Arch, giving a figure of $34,400. This amount will be the award for compensatory damages. 237 In my view, this figure should be the quantum for compensatory damages for the claim against all respondents. Further and relatedly, it is artificial to try and apportion these damages to different aspects of the infringing conduct dealing with the two-dimensional and three-dimensional reproductions. In any event, on any view, if the conduct on 19 and 21 October 2013 had not occurred, as I say, the Mistrys were likely to have then proceeded with Henley Arch in accordance with the October tender. 238 I should also note that although on the one hand Lucky Homes and Mr Shafiq were competitors of Henley Arch and on the other hand the Mistrys were not, that distinction does not in the present context provide a relevant distinguishing feature in terms of the calculation of compensatory damages. 239 Finally, there is no basis for apportioning only some part of the lost profit to the infringement of Henley Arch's copyright. It is artificial and unrealistic to assert that because the lost profit related to the entire house not built, that somehow one should apportion part of the lost profit referable only to the copyright component or design aspect. Putting to one side the artificiality of such an exercise, the fact is that because of the infringing conduct, Henley Arch lost the opportunity to earn the entirety of the lost profit. (b) Additional damages 240 Section 115(4) of the Act provides: (4) Where, in an action under this section: (a) an infringement of copyright is established; and (b) the court is satisfied that it is proper to do so, having regard to: (i) the flagrancy of the infringement; and (ia) the need to deter similar infringements of copyright; and (ib) the conduct of the defendant after the act constituting the infringement or, if relevant, after the defendant was informed that the defendant had allegedly infringed the plaintiff's copyright; and (ii) whether the infringement involved the conversion of a work or other subject-matter from hardcopy or analog form into a digital or other electronic machine-readable form; and (iii) any benefit shown to have accrued to the defendant by reason of the infringement; and (iv) all other relevant matters; the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances. 241 The principles relating to whether to award additional damages under s 115(4) have in large part been helpfully summarised in various cases (Dynamic Supplies Pty Ltd v Tonnex International Pty Ltd (No 3) (2014) 312 ALR 705; [2014] FCA 909 at [37] to [53] per Yates J and Flags 2000 Pty Ltd v Smith (2003) 59 IPR 191; [2003] FCA 1067 at [30] to [48] per Goldberg J). 242 First, principles governing awards of aggravated damages and exemplary damages at common law may inform the question as to whether additional damages should be awarded. It will be recalled that aggravated damages are more connected to a compensatory function where the harm done to an aggrieved person was aggravated by the wrongful act. Contrastingly, exemplary damages have a punitive function which acts as a specific deterrent and a general deterrent. One can appreciate that the s 115(4)(b) factors reflect some of these concepts. But having said this, it is accepted that additional damages, in one sense, can be described as sui generis. It is not limited by such common law categories. Moreover, some such common law categories may be inapposite when one is dealing with a corporate applicant (cf Luxottica Retail Australia Pty Ltd v Grant (2009) 81 IPR 26; [2009] NSWSC 126 at [39] per White J). 243 Second, the factors set out in s 115(4)(b) are matters that must be taken into account. But none of them are pre-conditions to the exercise of power. Accordingly, even if there has been no flagrant infringement, additional damages may still be awarded. But if there has been flagrant infringement, an award of additional damages may more readily be justified. 244 Third and relatedly, in this context flagrancy means more than copying. It also means more than mere mistakes or carelessness. It connotes reprehensible conduct or scandalous conduct which may be demonstrated by deliberate and calculated acts of infringement. But it is not necessary to demonstrate a consciousness of copyright infringement. A consciousness of wrongdoing may be sufficient (Dynamic Supplies at [47]; Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) (2008) 76 IPR 763; [2008] FCA 746 at [20] per Besanko J) 245 Fourth, the benefit referred to in s 115(4)(b)(iii) is not limited to a pecuniary benefit or a benefit reducible to or quantifiable at a precise monetary value. 246 Fifth, s 115(4)(b)(ib) refers to having regard to: (a) conduct of the infringer after the act constituting the infringement; and (b) conduct after the infringer was informed that the infringer had allegedly infringed the applicant's copyright. 247 This second dimension can be put to one side for present purposes. It is the first dimension that requires further discussion, including its interaction with s 115(4)(b)(iv) "all other relevant matters". 248 Textually, the matters encompassed by s 115(4)(b)(ib) do not fall within s 115(4)(b)(iv) because of the reference to "other" in s 115(4)(b)(iv). But the question is what is embraced in the first dimension of s 115(4)(b)(ib). Goldberg J in Flags 2000 Pty Ltd v Smith (2003) 59 IPR 191; [2003] FCA 1067 at [46] excluded from that first dimension, conduct relating to the infringer's defence of the infringement case "in so far as it relate[d] to procedural matters and matters whereby the applicants [were] put to the proof of their case, albeit unreasonably". His Honour also held such conduct to be excluded as a "relevant matter" under s 115(4)(b)(iv) (see at [40]). It would seem that his Honour considered that whether one was dealing with ss 115(4)(b)(ib) or 115(4)(b)(iv), what was embraced thereby was only conduct or matters relevant to the nature of the infringement and the consequences of the infringement. Matters relating to aggravating consequences or circumstances in relation to the costs of a proceeding were outside s 115(4). Besanko J in Futuretronics.com.au at [17] accepted this analysis although considered that the distinction made by Goldberg J could be difficult to apply in some cases. I too will adopt Goldberg J's distinction; accordingly, I will not follow what was said by Henry J in Coles v Dormer (No 2) (2016) 330 ALR 151; [2016] QSC 28 at [23], fifth sentence, discussing s 115(4)(b)(ib). 249 But applying Goldberg J's distinction, if during the course of a proceeding there has been deliberate and active measures taken by the infringer to conceal the infringing conduct or to confect false excuses of authorisation or entitlement, then that is embraced by ss 115(4)(b)(ib) or 115(4)(b)(iv) as Goldberg J so countenanced (see Flags 2000 Pty Ltd at [45]). A respondent's conduct after the commencement of litigation may be taken into account if it involves false denials of infringing conduct or only belatedly acknowledges wrongful conduct (see Facton Ltd v Rifai Fashions Pty Ltd (2012) 287 ALR 199; [2012] FCAFC 9 at [44] per Lander and Gordon JJ and at [114] per Gilmour J). 250 Sixth, given the aspect of specific deterrence and punishment associated with an additional damages award, it is appropriate to take into account the financial circumstances of the infringer including the respondent's capacity to pay and to tailor any award accordingly (Facton at [46] per Lander and Gordon JJ). 251 Seventh, in tailoring an appropriate award, no reduction in the additional damages should be made because of any costs order that may also be imposed. An award of additional damages and an award of costs have different functions (Facton at [108] per Gilmour J). 252 Finally, it is not necessary for there to be any proportionality between the amount of compensatory damages (s 115(2)) and the amount of additional damages awarded (s 115(4)). Indeed, an award of nominal damages under s 115(2) does not prevent substantial additional damages being awarded. Relatedly, it is debatable whether because of the reference to additional damages, some damages must be awarded under s 115(2) before additional damages can be awarded. I do not need to decide that question because in any event I have determined to make an award under s 115(2) in any event. Additional damages – Mr Shafiq and Lucky Homes 253 Henley Arch only seeks one order for additional damages ($250,000) against both Lucky Homes and Mr Shafiq. It is said that while general deterrence is required, Mr Shafiq and Lucky Homes also require specific deterrence. It is said that Mr Shafiq gave false sworn evidence and lacked any contrition. 254 The evidence that I have recited in detail earlier in summary establishes the following: (a) Mr Shafiq is a registered builder with many years of experience constructing project homes. He is a professional operating in the building industry and as such should be held to a higher standard than lay persons. (b) In October 2013, he knew that building plans were protected by copyright and that the Amalfi Avenue floorplan was the property of Henley Arch. (c) Mr Shafiq admitted that the title block on the Amalfi Avenue floorplan was removed from the plan in his office, probably by him, but continued to maintain it was an accident. He gave unsatisfactory evidence about copying, reduction and enlargement of the Amalfi Avenue floorplan that was not credible and was not in his affidavit evidence. Indeed, he first asserted in his affidavit evidence that there was no title block on the Amalfi Avenue floorplan, claiming only to remember it was in fact there around the time of the trial. He also gave unsatisfactory evidence about informing Ms Izic that the Amalfi Avenue floorplan was originally from MainVue when he visited her in October 2013. (d) Further, after Mr Shafiq received Henley Arch's solicitors' letter of demand dated 27 February 2015, he attempted to reach agreement with Ms Izic to fabricate evidence concerning how the house on the Circus Avenue property had been designed. Mr Shafiq visited Ms Izic in person. He told her she would "be sorry" if she did not cooperate. He told her that he and the Mistrys had prepared some sketches and that he and the Mistrys would "back-date" them. There is no reason to doubt the truth of Ms Izic's evidence. (e) Further, he has continued to maintain a false position in correspondence, court documents and in his evidence as to important factual matters including the meeting with the Mistrys on 19 October 2013, his meeting with Ms Izic on 21 October 2013 and his meeting with Ms Izic on 17 March 2015. (f) Further, he via Lucky Homes, profited from the construction of the house on the Circus Avenue property on the basis of an infringing design. 255 Further, Lucky Homes is, by Mr Shafiq's conduct and control of it, equally implicated with Mr Shafiq. 256 I gave the respondents leave to file and serve, after the conclusion of the trial, evidence as to their financial capacity as it is one matter relevant to the question of additional damages. 257 In relation to Lucky Homes and Mr Shafiq, Mr Shafiq has sworn two affidavits setting out the financial position of Lucky Homes and himself. Henley Arch filed written submissions and an affidavit of Ms Kellech Smith, partner of Ashurst Australia, solicitors for Henley Arch in response to the first affidavit of Mr Shafiq on this topic suggesting that his affidavit contained "material omissions" and that Mr Shafiq had "arranged his affairs in an attempt to place assets beyond the reach of creditors". It submitted that I was unable to draw any proper conclusion as to the capacity to pay of either Lucky Homes or Mr Shafiq. Mr Shafiq's responding affidavit to some extent addressed Henley Arch's assertions. I am well satisfied that Lucky Homes and Mr Shafiq have the capacity to pay the additional damages that I propose to award and that the same will act as a specific deterrent to the extent necessary. Moreover, the award that I have fixed is adequate for general deterrence. 258 In summary, I propose to award $25,000 as additional damages collectively against Lucky Homes and Mr Shafiq. It is appropriate to make some brief observations. 259 First, I consider that Henley Arch's suggested figure is well outside the appropriate order of magnitude. Second, I was not assisted by looking at assessments in other cases. Third, there is not a great need for specific deterrence in the present case as Lucky Homes and Mr Shafiq are unlikely to repeat this conduct and the present episode can be considered a "one off". Fourth, it is appropriate that a suitable sum be awarded for general deterrence but within parameters that these respondents have the capacity to pay. Fifth, I have taken into account the benefit received by Lucky Homes under the Building Contract. Finally, I do accept that these respondents' conduct was flagrant and that their conduct was exacerbated by their post-infringement conduct including Mr Shafiq's unacceptable behaviour and unsatisfactory evidence (see at [119] to [137]) above. But I do not consider, taking into account all the circumstances, that more than $25,000 is justified. Additional damages – Mistrys 260 Henley Arch accepts that Mr and Mrs Mistry had different roles in the events surrounding the infringement of copyright in the Amalfi Avenue floorplan and subsequent conduct. It contends that the culpability of their conduct should be considered separately. It contends that an award of $75,000 in additional damages should be made against Mr Mistry. Henley Arch contends that he was solely responsible for the conduct in the VCAT proceeding and in providing false evidence in his various affidavits, designed to hide the truth of what had occurred. Further, Henley Arch says that Mrs Mistry was also involved with Mr Mistry in providing false instructions to SSSL, providing false information in their pleadings filed in this proceeding and that she adopted her husband's affidavit evidence. It contends that an award of $25,000 in additional damages is warranted against Mrs Mistry as a general deterrent. 261 The evidence that I have recited in detail earlier in summary establishes the following: (a) At the latest, the Mistrys were put on notice of the risk of copyright infringement by My Shafiq during their 19 October 2013 meeting. Rather than seeking legal advice or contacting Henley Arch to verify the various assurances given to them by Mr Shafiq, they proceeded to have their "dream home" built using Henley Arch's plan. (b) When put on notice of Henley Arch's rights by Ashurst's letter of 26 November 2014, they collaborated with Mr Shafiq to instruct their lawyers to make several false assertions on key factual issues, particularly as to whether they provided Mr Shafiq with Henley Arch's plan. (c) They were present when the title block was removed from the Amalfi Avenue floorplan, and spent 45 to 60 minutes working on the plan after that title block had been removed. (d) The Mistrys had other options open to them if they were not happy with the service they received from Henley Arch. They could have sought an alternative home design from one of many project home builders operating in Melbourne. They did not. They could have asked Lucky Homes to build one of its standard designs, or a bespoke design, for them. They did not. Instead, they chose to supply the Amalfi Avenue floorplan to Mr Shafiq and Lucky Homes, instructing Mr Shafiq to make similar changes to the design that they had already discussed with Henley Arch. (e) After construction of the home was complete or nearly complete, the Mistrys then sought to recover the entire deposit paid to Henley Arch, and yet still claimed in their pleadings that given the payment of that same deposit it was reasonable to use the Amalfi Avenue floorplan for themselves. (f) The Mistrys, and in particular Mr Mistry, engaged in the conduct set out at [113] to [140] above. 262 In relation to the Mistrys, and without going into their financial circumstances in detail, I am satisfied that Mr Mistry has the capacity to pay the modest amount of additional damages that I propose to award. Moreover, such an amount is likely to act as a sufficient specific deterrent given his financial circumstances. Moreover, given that I have to consider general deterrence, I do not consider that awarding a lesser amount than what I propose would satisfactorily address that element. 263 In summary, I propose to award $10,000 as additional damages as against Mr Mistry only. I propose to make no award against Mrs Mistry. 264 First, Henley Arch's figures are well outside the appropriate order of magnitude. Second, little award is needed for specific deterrence because the conduct is unlikely to be repeated. But I do accept that some element of general deterrence is required that is adequately satisfied by making an award against Mr Mistry only. Third, the Mistrys have little financial capacity to pay a substantial award. Fourth, although I have held that the s 115(3) defence was not available, I do not consider that there has been substantial flagrancy of infringement on the part of the Mistrys after relying upon the advice received from Mr Shafiq on 19 October 2013. Fifth, the award of additional damages against Mr Mistry is largely based upon his post-infringement conduct as set out at [113] to [140] above and his unsatisfactory and unreliable evidence seeking to conceal the true position. Finally, I have considered the benefit received by the Mistrys of obtaining the Avenue façade as part of a total package for a price that if they had contracted with Henley Arch would only have produced the Eclipse façade. In all the circumstances the appropriate award is $10,000. (c) The Mistrys' apportionment defence 265 Finally, it is convenient at this point to deal with the Mistrys' apportionment defence. The Mistrys contend that even if they are liable for copyright infringement, they should only be liable to pay a proportion of the damages and costs by operation of s 24AI of the Wrongs Act 1958 (Vic). This assertion is misconceived. 266 Section 24AI of the Wrongs Act only applies to an "apportionable claim". Section 24AE provides that an "apportionable claim" is a claim to which the Part applies. Section 24AF provides that the Part applies to a "claim for economic loss … in an action for damages (whether in tort, in contract, under statute or otherwise) arising from a failure to take reasonable care … and a claim for damages for a contravention of section 18 of the Australian Consumer Law (Victoria)". But the claim made by Henley Arch against the Mistrys is a claim for damages for infringement of copyright. That is not an "apportionable claim" because no element of the claim involves a question of lack of duty of care. While the Mistrys may have a cross-claim against Lucky Homes and Mr Shafiq, that is not the relevant claim that needs to be "apportionable" for the Mistrys' reliance on the Wrongs Act to be apposite. 267 In any event, the Copyright Act provides a regime which allows an applicant to claim and recover the whole of the amount to which it is entitled from both the primary infringer and those who authorise that conduct and relevantly "overrides" the Wrongs Act apportionment scheme. Finally, for completeness, the Mistrys raised a further apportionment question under s 87CD of the Competition and Consumer Act 2010 (Cth) which was also misconceived. INJUNCTIONS & DECLARATIONS 268 In my view, no declarations are necessary. These reasons adequately identify my findings and the basis for such findings. Further, my reasons and the award of additional damages provide the requisite general deterrence. 269 As for injunctions, these are not necessary. According to the evidence, the infringing conduct of Lucky Homes and Mr Shafiq was a one off occasion. They normally use their own designs or designs provided to them by BN Design. The present case was quite unusual in that respect. As for the Mistrys, there is little likelihood of further infringing conduct. The house at the Circus Avenue property has been built and they do not seem to have the capacity to engage in further large transactions of the type under discussion. I see no utility in the grant of injunctions. CROSS-CLAIMS (a) Preliminary 270 In order to resolve the cross-claims, it is necessary to make more precise findings as to what was said at the meeting on 19 October 2013 between the Mistrys and Mr Shafiq. 271 In his affidavit of 18 December 2015, Mr Shafiq said that he questioned the Mistrys about the origin of the plan which the Mistrys had provided to him. He said that the Mistrys identified MainVue and said "We have paid $3000 for these plans" and "These are our plans". He said that the Mistrys told him that they wanted to make alterations. He agreed that he could make such alterations. In this version of his evidence, there was no reference to any issues about copyright as such or any need to make 15 to 20 changes. This version of the evidence was to the effect that the Mistrys had given him an A3 copy of the Amalfi Avenue floorplan. He also said that the floorplan "did not contain any reference to the design name and author or any other distinguishing mark designating who had prepared [it]". 272 In his second affidavit of 26 February 2016, Mr Shafiq conceded (in response to an affidavit of Mr Mistry) that: I do recall indicating to them that, in my view, 15 to 20 alterations were required to be made to the Plans to avoid any copyright issues, notwithstanding that [the Mistrys] told me emphatically that they had paid for and owned the Plans. 273 Mr Shafiq also deposed: "… I was concerned to ensure that at least 15 to 20 alterations were made to them in case of any issues arising". He then deposed to having made "[s]ubstantial changes". 274 Under cross-examination by senior counsel for Henley Arch, he persisted with his evidence that the Mistrys told him that they had paid $3000 for the Amalfi Avenue floorplan. He also agreed that he had told the Mistrys that 15 to 20 changes were required to avoid copyright issues, but stressed that he said "substantial changes". Under cross-examination by counsel for the Mistrys, Mr Shafiq said that he had told the Mistrys that he did not want any issue of copyright and that there had to be changes made to the plan. 275 When it was pointed out to Mr Shafiq the inconsistency between his evidence that on the one hand was to the effect that the Mistrys had told him that the plan was theirs and they had paid for it, and on the other hand, the discussion about avoiding any copyright infringement by making 15 to 20 changes, he gave flimsy evidence at best along the lines that he wanted to put the matter beyond doubt. Indeed, he agreed that he had a doubt about what the Mistrys said to him about owning the floorplan. 276 A number of conclusions can be reached concerning Mr Shafiq's evidence and what was said on 19 October 2013 between Mr Shafiq and the Mistrys at their meeting. 277 First, at the time of the meeting, the Mistrys may have said that they paid $3000 to Henley Arch, but I do not accept that they said that they had paid for the Amalfi Avenue floorplan and it was theirs to use. Mr Shafiq's evidence is inconsistent with the discussion with the Mistrys about copyright. His version is inconsistent with the reality of his removal of the title block. His version is inconsistent with hiding the reality from Ms Izic. Further, his conversation with Ms Izic on 17 March 2015 demonstrates in my view a consciousness of guilt. 278 Now Ms Izic has given evidence that on 21 October 2013 she was told by Mr Shafiq that "the floorplan was the homeowner's property" and that he had been informed that "the homeowner had paid someone money to create the design". Now even accepting that Mr Shafiq had said that to her, in my view it is likely that he told her that to, in effect, put her off the scent from enquiring further. I do not treat this as a prior consistent statement corroborative of his version of what the Mistrys said to him on 19 October 2013. But in any event, if the Mistrys said to him that they owned the floorplan, it appears that he did not believe this at the time. 279 Further, on this aspect, the Mistrys have given evidence denying that they told Mr Shafiq that they owned the floorplan. I accept that evidence. It is consistent with the copyright discussion with Mr Shafiq on 19 October 2013. It is also consistent with Mr Mistry's evidence given at VCAT. I accept though that their later pleadings are not fully consistent with this aspect. 280 Second, I am satisfied that at the 19 October 2013 meeting, Mr Shafiq represented to the Mistrys or expressed the view that if 15 to 20 changes were made to the Amalfi Avenue floorplan that any copyright issue would be avoided, ie it would not be an infringement of Henley Arch's copyright to use the Amalfi Avenue floorplan with 15 to 20 changes. 281 The Mistrys gave evidence to this effect. Moreover, Mr Shafiq's evidence is supportive thereof. The only relevant difference, which was introduced by Mr Shafiq only under cross-examination, was that Mr Shafiq said that he referred to "substantial changes". I do not consider that Mr Shafiq used the word "substantial". It belatedly appeared in his evidence. Moreover, it is more likely that he considered the numerical "15 to 20" changes as themselves collectively avoiding any copyright infringement. But in any event this discrepancy in the versions may not matter. It seems to me that Mr Shafiq represented to the Mistrys that the changes in fact made, as annotated on the Shafiq modified floorplan, were sufficient to avoid any copyright question. 282 Whatever the version of the representation, it was inaccurate and not based upon reasonable grounds. Mr Shafiq did not have the requisite expertise to so opine and nor did he seek a professional opinion on the question. Indeed, in my view he sought to conceal the copyright problem from Ms Izic. His motivation for not making the proper enquiries was likely to have been the desire to get the Mistrys' engagement to build their home. (b) Cross-Claim of Lucky Homes and Mr Shafiq 283 Lucky Homes and Mr Shafiq have cross-claimed against the Mistrys asserting that they have the benefit of the contractual indemnity under clauses 15.0 and 15.1 of the Building Contract in respect of Lucky Homes' and Mr Shafiq's liability to Henley Arch. I have set these provisions out earlier at [79]. 284 I would reject this contractual indemnity claim for a number of reasons. 285 First, on its face, such a claim is not available to Mr Shafiq. He is not the "Builder" as such. Moreover, Mr Shafiq never sought to argue any Trident point or more traditionally that Lucky Homes held the benefit of the warranty and the promises inter alia on trust for Mr Shafiq. 286 Second, in my view Mr Shafiq knew, and accordingly Lucky Homes knew, that the Mistrys did not have the right to use the Amalfi Avenue floorplan and that they did not have any copyright; at the least they were recklessly indifferent as to the true position. After all, that knowledge of Mr Shafiq was the foundation of his suggestion to the Mistrys to make 15 to 20 changes. In my view such knowledge negates any reliance and severs any relevant chain of causation between any breach of clauses 15.0 and 15.1 and the damages or liability Lucky Homes may have to Henley Arch for copyright infringement. Accordingly, any claim for breach of clauses 15.0 and 15.1 would sound in nominal damages of $1 only. 287 Third, the conduct of Lucky Homes and Mr Shafiq on 19 and 21 October 2013 pre-dates the Building Contract, with such prior conduct in my view amounting to copyright infringement at the suit of Henley Arch. Clause 15.0 arguably speaks in futuro (ie to Lucky Homes' conduct after the inception of the Building Contract) rather than to protect and indemnify Lucky Homes for its infringing conduct engaged in prior to the execution of the Building Contract. In other words it does not indemnify Lucky Homes for prior liabilities to a third party for copyright infringement. The last dot point reference to "breach of copyright" in the indemnity clause refers to the preceding dot point reference to "breach of copyright". And the preceding dot point reference is contained in the phrase "no breach of copyright is involved in constructing the Building Works in accordance with the Plans", which has two aspects. It is speaking in futuro. Moreover, its context is "involved in constructing the Building Works…". On any fair reading, this language does not cover the copyright infringement conduct of 19 and 21 October 2013. Further and equally, it may be said that clause 15.1 is concerned with claims for breach of copyright brought against Lucky Homes in respect of conduct of Lucky Homes engaged in after the inception of the Building Contract. In other words, clause 15.1 is a reference to the "breach of copyright" referred to in clause 15.0. 288 Fourth, it may be doubted on any view whether the claim for additional damages against Lucky Homes is covered by the indemnity provision. There are strong arguments for reading it down to only include traditional measures such as compensatory damages or loss of profits. But in any event, it may be said that assuming that the class of additional damages was embraced by the indemnity, most of what I have awarded against Lucky Homes would not be covered. For that part of the additional damages covered by the deliberate and egregious conduct of Lucky Homes and Mr Shafiq, it would not fall within either limb of Hadley v Baxendale. But in any event, even if it did, such deliberate and egregious conduct would break the chain of causation. Alternatively expressed, there would be no established causal connection between that part of the relevant additional damages attributed to the deliberate and egregious conduct and the Mistrys' breach of the Building Contract. In one sense, the point I have made here resonates with or complements the second point that I made earlier at [286]. 289 The cross-claim of Lucky Homes and Mr Shafiq will be dismissed for these reasons alone. It is not necessary to address some of the other matters raised by counsel for the Mistrys which in any event lacked coherency. (c) Mistrys' Cross-Claim 290 The Mistrys have essentially advanced two claims against Lucky Homes and Mr Shafiq. The first claim is based upon an asserted collateral warranty. It is misconceived. All that I need say for present purposes is that it can be simply disposed of on the ground that it is inconsistent with the express warranty in clause 15 of the Building Contract. The second claim is for misleading or deceptive conduct under s 18 of the Australian Consumer Law. 291 In my view, the claim under s 18 is made out whether one treats Lucky Homes and Mr Shafiq each as a principal or Lucky Homes as the principal with Mr Shafiq having accessorial liability. The relevant conduct is as I have described at [280] to [282]. Further, the Mistrys relied upon such conduct and have accordingly been exposed to liability to Henley Arch for compensatory damages and additional damages. 292 Rather than the inapposite indemnity order sought by the Mistrys, it is appropriate that I order that Lucky Homes and Mr Shafiq compensate the Mistrys for so much of the compensatory damages that they are liable to pay and do pay to Henley Arch. 293 I will make a similar order in terms of the additional damages award against Mr Mistry but only as to one-half. I consider that much of the conduct of Mr Mistry that has justified the additional damages award was not sufficiently causally connected to the misleading or deceptive conduct of Lucky Homes and Mr Shafiq. This is a rough and ready assessment but I do not propose to linger further given the modest amounts involved. CONCLUSION 294 In summary, Henley Arch has succeeded on its claims. Further, the cross-claim of Lucky Homes and Mr Shafiq has failed, with the cross-claim of the Mistrys being partially successful. 295 I will make orders to reflect these reasons including giving the parties a sufficient opportunity to make submissions on costs and any consequential orders. I certify that the preceding two hundred and ninety-five (295) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beach. Associate: Dated: 13 October 2016 ANNEXURE A ANNEXURE B ANNEXURE C ANNEXURE D ANNEXURE E