Carlisle Homes Pty Ltd v Barrett Property Group Pty Ltd [2009] FCAFC 31 (19 March 2009)

PRACTICE AND PROCEDURE – reasons for judgment – obligation to give reasons – whether failure to address important evidence – evidence given of events at conference between directors of appellant company and two solicitors – primary judge found that directors had colluded in giving consciously untrue evidence – five matters raised by evidence of one of solicitors said to conflict with that finding

Held: leave to appeal granted but appeal dismissed – obligation to give reasons complied with in circumstances and no error identified in primary judge’s reasons.

Copyright Act 1968 (Cth) s 14, s 31

Barrett Property Group Pty Ltd v Carlisle Homes Pty Ltd [2008] FCA 375 affirmed
Barrett Property Group Pty Ltd v Metricon Homes Pty Ltd [2007] FCA 1509; (2007) 74 IPR 52 referred to
Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 discussed
Bourke v Beneficial Finance Corp Ltd (1993) 47 FCR 264 discussed
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 referred to
Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (No 2) [2002] VSCA 189; (2002) 6 VR 1 discussed
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 referred to
Hunter v Transport Accident Commission (2005) 43 MVR 130 discussed
Metricon Homes Pty Ltd v Barrett Property Group Pty Ltd [2008] FCAFC 46; (2008) 248 ALR 364 referred to
Mifsud v Campbell [1991] 21 NSWLR 725 discussed
Palmer v Clarke (1989) 19 NSWLR 158 discussed
Pettitt v Dunkley [1971] 1 NSWLR 376 discussed
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 discussed
Sun Alliance Insurance Ltd v Massoud [1989] VR 8 discussed
Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816; 221 ALR 402 referred to

CARLISLE HOMES PTY LTD (ACN 106 263 209) v BARRETT PROPERTY GROUP PTY LTD (ACN 088 015 267) and SRS PROPERTY HOLDINGS PTY LTD (ACN 096 513 218)
VID 346 of 2008

TAMBERLIN, SUNDBERG AND BESANKO JJ
19 MARCH 2009
MELBOURNE

3. The appellant pay the costs of and incidental to the application for leave to appeal and the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

1 This is an application for leave to appeal from orders made by a judge of this Court on 28 April 2008 (see Barrett Property Group Pty Ltd v Carlisle Homes Pty Ltd [2008] FCA 375). The primary judge made a declaration that the applicant’s Provence house plan and houses built in accordance with that plan infringed the second respondent’s copyright in the Seattle 31 house plan and the first respondent’s copyright in houses built in accordance with the Seattle plan. The primary judge also granted an injunction against the applicant and he made an order for disclosure by affidavit by the applicant of details of houses built and amounts received and expended by the applicant. He also made other orders, the details of which it is unnecessary to set out.

2 At the trial, the respondents alleged that the applicant infringed their copyright by reproducing in the applicant’s Provence house a "substantial part" of the respondents’ copyright works: Copyright Act 1968 (Cth) ("Copyright Act") s 14(1) and s 31(1)(b)(i). The substantial part alleged to have been reproduced was an "al fresco quadrant", which part comprised a combination of the rumpus, family, kitchen and meals area around an open courtyard enclosed on three sides, all under a single roof line.

3 At the trial, there were four issues before the primary judge. For reasons which will become clear, it is not necessary to discuss three of the issues in any detail. Nor will it be necessary in these reasons to distinguish between the respective positions of the first and second respondents.

4 The first issue was whether copyright in the respondents’ plans and buildings subsisted. The applicant alleged that the al fresco quadrant was an obvious, logical and simple addition of an existing design, being a design created by Henley Properties Pty Ltd, a major home builder ("Henley Properties"), and called the Rochester. The applicant alleged that the skill and effort in creation was so trivial that it did not confer originality. The primary judge noted that the principals of both the applicant and the first respondent were formerly employees of Henley Properties. The second issue was whether the applicant used the respondents’ design in creating the Provence. The applicant accepted that it had access to the respondents’ design, but denied that it developed its design from the respondents’ design. It alleged that it developed its design from the Rochester. The third issue was whether the al fresco quadrant was a substantial part of the respondents’ works. The fourth issue was whether there was sufficient similarity between the relevant part of the applicant’s works and the al fresco quadrant in the respondents’ works.

5 The primary judge decided all four issues in favour of the respondents and against the applicant.

6 The applicant’s application for leave to appeal from the declaration and orders made by the primary judge on 28 April 2008 has been referred to this Court to be heard with any appeal. The respondents do not oppose an order granting the applicant leave to appeal and it is an appropriate case for leave to appeal to be granted. The draft notice of appeal contains 25 grounds of appeal. Grounds 1, 2, 3, 21, 22, 23, 24 and 25 are not pressed. Those grounds relate to the first, third and fourth issues, and the primary judge’s findings with respect to those issues. The grounds of appeal which are pressed all relate to the second issue, namely, the issue of copying.

7 We attach to these reasons the respondents’ Seattle plan (Schedule A) and the appellant’s Provence plan (Schedule B). Both show an al fresco area.

8 The respondents previously brought a proceeding seeking to protect their copyright in that part of the Seattle house plan and the Memphis house plan comprising the al fresco quadrant. The principal respondent to that proceeding was Metricon Homes Pty Ltd ("Metricon"). Metricon designed, built and sold residential project homes in Victoria, and one of its house plans and houses was called the Streeton. The Streeton is referred to later in these reasons. The respondents were successful before Gilmour J and an appeal to the Full Court of this Court was dismissed: Barrett Property Group Pty Ltd v Metricon Homes Pty Ltd [2007] FCA 1509; (2007) 74 IPR 52; Metricon Homes Pty Ltd v Barrett Property Group Pty Ltd [2008] FCAFC 46; (2008) 248 ALR 364.

9 The summary of the primary judge’s reasons which follows, focuses on that part of his Honour’s reasons which relates to the issue of copying.

10 The two principals of the first respondent were Mr Daniel Stutterd and Mr Anthony Roberts. Both these men had previously worked for Henley Properties in managerial positions. They formed the first respondent in 1999, and engaged various designers to design "single storey homes with double storey luxury". Eventually, in September 1999, the first respondent approved the Seattle 31 plan. The first respondent began marketing, building and selling houses in accordance with the Seattle plan and it was available in 22, 26 or 31 square versions. The Seattle design proved to be popular and it sold well. Subsequently, the first respondent developed the Memphis design which was a 33 square variation of the Seattle. In about 2003, the first respondent developed the Aberdeen design which incorporated changes for energy requirements.

11 The primary judge found that the first display version of the Seattle was erected at Beaconsfield and that it was open for public inspection in January 2000. He found that the Memphis was erected at Rowville and that it was open for public inspection in November 2001. He found that by June 2003 the Seattle design and its Memphis variation had been in the public domain in the Melbourne metropolitan area for some years. The primary judge found that the Aberdeen was built at a display village in Berwick and that it was open for public inspection in or about December 2003.

12 The primary judge found that the work which led to the development of the appellant’s Provence design began in June 2003. The appellant company was established in January 2004 and the directors of the company were Mr John Doulgeridis, Mr David Taylor and Mr Dean Morrison. The primary judge found that Mr Doulgeridis was responsible for design, Mr Taylor for administration and finance and Mr Morrison for sales and marketing.

13 The primary judge found that Mr Doulgeridis was the person principally responsible for the design of the Provence. Mr Doulgeridis obtained the degree of Bachelor of Planning and Design from the University of Melbourne. He was employed by Henley Properties in a number of capacities, including building supervisor and estimator from August 1993 to January 2004. From December 1999, he ran a subsidiary of Henley Properties, Northbridge Homes, and he was involved in all aspects of the residential homes business.

14 In addition to the findings in [11] above, the primary judge made further findings about the access Messrs Doulgeridis and Morrison had to the Seattle and Memphis designs before commencing work on the Provence design. None of the findings are challenged. They are as follows:

1. Mr Doulgeridis was familiar with the Seattle design in late 2000 or early 2001, and he saw the Seattle display home at about that time. He saw the Memphis display home in about November 2001 or early 2002. He knew a key feature of the Seattle and Memphis designs was the al fresco concept. He knew in June 2003 before he left Henley Properties that the Memphis had been a successful product. He knew of the al fresco quadrant and had done at least two inspections, if not more.

2. Mr Morrison had seen the floor plan of the Seattle before June 2003 and could possibly have seen it in 2000. He also was previously employed by Henley Properties and his duties involved him inspecting a large number of display homes, including those of the respondents and Metricon. He was familiar with the Memphis and Aberdeen and he would have seen the Memphis display home in about 2001. Mr Morrison was aware that the al fresco quadrant was in the marketplace and that "it was wanted by the market".

Both Mr Doulgeridis and Mr Morrison were aware of Metricon’s Streeton design before they left the employ of Henley Properties.

15 The primary judge found that the appellant had general access to the Seattle and Memphis designs and that the opportunity to inspect the Seattle had existed for three and a half years. He also found that:

16 The primary judge said that it was not contested that the appellant had access to the Seattle and Memphis designs and the opportunity to use the al fresco quadrant when it produced the Provence design. The main issue in the case was whether the appellant had availed itself of the opportunity to use the al fresco quadrant when it produced the Provence design.

17 The primary judge reached the conclusion that the appellant deliberately copied the Seattle design in preparing the Provence design. There were a number of steps in his Honour’s reasoning and it is convenient to set them out at this point:

1. The appellant’s case at trial was that the Rochester design was a source of inspiration for, or the key influence on, the development of the Provence design by the appellant. As the primary judge put the matter, the Rochester design "was right at the forefront of the defence which Carlisle mounted at trial against Barrett’s infringement claim".

2. Messrs Doulgeridis, Morrison and Taylor colluded in giving untruthful evidence to the Court that the Rochester design was mentioned at a conference between them and their solicitors on 11 July 2005.

3. The fact that Messrs Doulgeridis, Morrison and Taylor invented an untrue source for the Provence design (that is, the Rochester design) led to the conclusion that the Seattle design was the most likely source.

18 The appellant’s submissions on the appeal focused on the second step in the primary judge’s reasoning. It was submitted that the primary judge did not give sufficient reasons for his conclusion and that he overlooked or did not take into account evidence relevant to the issue. In order to examine the submission, it is necessary to examine in detail the primary judge’s reasons concerning the conference which took place on 11 July 2005 and certain events which occurred after it.

19 At some time before 7 July 2005, the respondents engaged Middletons to act for them. The appellant engaged Mallesons Stephen Jaques ("Mallesons"). Middletons wrote to the appellant on 7 July 2005 claiming that the Provence design and houses built in accordance with it infringed the respondents’ copyright in the Aberdeen design, and they demanded that the appellant take certain action to bring the infringement to an end. They referred to the al fresco dining area as a key feature of the respondents’ Aberdeen design.

20 On 11 July 2005, Messrs Doulgeridis, Morrison and Taylor attended a conference at Mallesons to discuss a response to the letter from Middletons. Two legal practitioners were present, Mr Peter Megens and Mr Daniel Feldman. At that time, Mr Megens was a partner of Mallesons, who had practised for 27 years in construction law, and Mr Feldman was an employee solicitor who had been admitted for two years. Legal professional privilege over the discussions which took place at the conference was waived by the appellant and each of those persons who was present at the conference gave evidence about the discussions which took place.

21 The primary judge noted that Messrs Doulgeridis, Morrison and Taylor all said in evidence that the fact of the Rochester having been the design source for the Provence was raised at the conference. He noted that Messrs Doulgeridis and Taylor said Messrs Megens and Feldman were shown the Rochester plan.

22 Messrs Megens and Feldman each took handwritten notes of the discussions which took place at the conference. The primary judge set out in his reasons a schedule showing the matters recorded in the handwritten notes. The primary judge said that the text copies the originals although, in the layout, spaces have been left so that the reference, or non-reference, by each note-taker to a particular topic can be seen. To understand the primary judge’s reasons, it is necessary for us to set out that schedule.

Peter Megens	Daniel Feldman
John Doulgeridis – Director also – equal share holding
Carlisle Homes Pty Ltd, Suite 18,2-14 Hallam South Road, Hallam, Vic, 3803	Carlisle Homes Pty Ltd
O/P – Barrett Property Group Pty Ltd and SRS Property Holdings Pty Ltd	Letter from Barrett Property Group Pty Ltd 7/7/05
Porter Davis Homes
HIA member
Design and build production houses. Started trading July 1 2004. Net sales was 140 houses. Operate Keysborough to Pakenham.	CH design/builds houses in SE Melbourne Started in 7/04 and has 140Ks Keysborough  Pakenham
Were employees of Henly: Dean was State Manager. David was Assistant State Manager. John was manager of Northridge Homes, a subsidiary of Henly.	Former employees of Henley Properties
We only build order houses on client’s land. Employ 13 people and a lot of subcontractors.	CH has 13 builders on staff
Company in existence December 03. Sat on it for a month.
Change name to Carlisle Homes P/L and then started selling to general public in 1/07/04.
John has done building degree at Melb Uni. John designed them all.	CH’s designs
I started Dec 03 to Jan 04. All 3 of us had input into the houses.	- Building degree held by John – he does the designs. Dec ’03  ’04 - All three CH directors had input
John was with Henly 11 years. Dean was there 8 years in total. David – 8 years with 2 years off.	(John 11, Dean 8 years, David 8 years)
We had a good idea of what works and what doesn’t work.
Henly had copyright case with Clarendon in Federal Court.
Henly had 40 designs. MD, Peter Hays, did bulk of it and they had 2 drafts people designing. We got involved – John at Northridge did general comment on designs. John used to build every display house and Peter Hays and I would walk through it, reanalyse it etc. Usually let Hays talk and then input into it. I would meet the designers on site. Draw up sketches in the office etc.	Henley/Northridge - Peter Hays (MD) designs most - 2 "designers" on staff - John also assisted with QA - Walkthroughs with half-built homes - Designers would also visit on-site - John has built 12 display homes, all of which get pulled apart during the building process.
We would build a prototype and build a house from scratch. I would have built a dozen display homes.
Hays was Hooker Corp before Henly.
Dean or David were not closely involved etc
Left Henly on reasonable terms and had no difficulty from him.	Leaving Henley - Hays was not happy. - Otherwise fairly happy departure
Barrett Property Group started about 6 or 7 years ago.	Barrett Started 6-7 years ago (May ’99)
There are 3 directors: - -Danny Studdart – former Henly GM -Anthony Roberts – former GM Henly -David Shergold – Supervisor Henly	3 directors - Danny Studdard (former GM Henly) - Anthony Roberts - David Shirgyle
May 1999 Anthony left Henly.
They started with 2 single storey houses.	Started with 2 houses
A "Memphis" and a "Bordeaux" – a double storey.	- Memphis 33 (single storey) - Bordeaux (double storey)
Memphis was a big success and has gone from strength to strength. It became the Aberdeen in about Jan 2004.	Memphis 33 became "Aberdeen" about 1/04
Barrett went across and reinvented the "Alfresco" in Melb.
It is an open covered courtyard.
That idea come out of Perth. Metricon uses it in the Prada 35, also the Streeton 34.	Idea sourced from Perth/Brisbane. Metricon also uses it – Prada 35
AV Jennings have the Coventry.	AV Jennings - Coventry
Also Montville by Wincrest Pty Ltd.	Wincrest Homes – Montville
I understand Metricon were threatened with proceedings and it didn’t go anywhere.
Development of Design  Did a sketch for a 31 to 31 sq home on a 16 1/2 metre block	Design of our house - Based on 30 -31²m has to fit on 16.5 sq block.
 Started from scratch – had visited many display homes. Would have looked at about 200 houses.
John designs to costs.
Metricon was blitzing the market with alfresco living builder. Porter Davis had alfresco house. Henly was doing this design.	- had seen the Barrett and Metricon versions
Harvan Design is our designer.
Darryl Hargraves does the final designs.	designer of CH’s homes is Daryl Hargreaves
- sizes are different	never altered basics of main rooms/al fresco configuration
- kitchen is different
Hit a hiccup in March/April 2004 for a Jennings design which was very close to our concepts. We had done 2 months worth of work.	AV Jennings has similar structure – March ‘04
We decided to keep back of the house and rework the front to differentiate it from the Jennings’ version.	To differentiate, we redesigned front part of the house. Key consumer reaction is to the front configuration, not the back part of the house
If you walk through our display and their display they feel totally different.
The master suite has a totally different feel
	David Taylor John Doulgeridis Peter Megens DRF Dean Morrison
	So were Barrett’s directors.
	A distinguishing feature of the "Aberdeen" is the al fresco
	May have seen a demand by Barrett
	- Herald-Sun pictures – al fresco living etc
	DRAFT COPYRIGHT ASSIGNMENT <- Daryl Hargreaves
	ISSUE RESPONSE Fasham Johnston v Merchant Builders

23 The primary judge observed that neither set of notes made any mention of the Rochester, "either as a source of ‘inspiration’ for the Provence or otherwise". The primary judge referred to the fact that Messrs Megens and Feldman gave evidence, but neither recalled mention of the Rochester. Mr Megens had said that he wanted to be satisfied that his clients had an independent record of derivation of copyright since the letter of demand was his main interest at that stage. His main concern was Henley Properties, given that the principals of both the appellant and the first respondent had come from what he called the "Henley school of design".

24 Before expressing his findings about whether the Rochester was mentioned at the conference, the trial judge addressed certain events which followed the conference.

25 On 12 July 2005, Mallesons wrote a letter in response to the letter from Middletons. As to the al fresco dining area, Mallesons said:

26 Mallesons went on to say that the claims in the letter from Middletons constituted groundless threats of legal proceedings within the meaning of s 202 of the Copyright Act.

27 As part of the preparation of its defence to this proceeding (which was commenced on 11 October 2005) the appellant, through Mallesons, engaged an expert in February 2006. The expert was Mr Michael Brickell. The primary judge found that Mallesons prepared a brief, but nothing was said in the instructions about the importance of the Rochester in the history of the Provence, and neither Mr Doulgeridis nor the other representatives of the appellant said anything to Mr Brickell about this.

28 The primary judge also examined the appellant’s defence, which was filed on 24 November 2005. In that defence, and in response to a plea by the respondents that the Seattle plan, the Memphis plan and the Aberdeen plan were original artistic works (paragraph 20), the appellant, in paragraph 20 of the defence, denied that the plans for the Seattle, Memphis and Aberdeen were original and said "that features similar to the features of the Memphis and Aberdeen house designs [were] well known and used in Australian home building". There were seventeen particulars to this plea and a number of them referred to particular house designs. None of the particulars mentioned the Rochester. The plea contained a statement that the appellant would add further particulars prior to trial.

29 The primary judge noted that the defence was amended on 3 February 2006 and paragraph 20 was amended to include a reference to the Seattle, but the particulars under it were not altered.

30 The defence was further amended on 2 November 2007, which was five days before the trial commenced. A further particular was added to paragraph 20 as follows:

31 The primary judge referred to statements in Mr Doulgeridis’ affidavit sworn on 27 March 2006. That affidavit was evidence at the trial. Mr Doulgeridis referred to the fact that the theme of "open living" was a major trend in the market and then said:

32 The primary judge noted that Mr Doulgeridis identified the plans to which he referred as the Rochester 30, the Rochester 26 and a Barton home, the Montrose. Mr Doulgeridis said that those designs "allowed for the insertion of an al fresco area" and that it would be cost-effective to do so. He said that those matters "inspired" his first design drawings and he identified three sketch plans, designated Sketch A, Sketch B and Sketch C, as plans he prepared in about June 2003. We attach to these reasons Sketch C (Schedule C). Mr Doulgeridis said that the three sketches were "some initial ideas reflecting the overall design theme for what was to ultimately become the ‘Provence’ house".

33 The primary judge said that he accepted that the version in Mr Doulgeridis’ affidavit was substantially consistent with the case advanced by the appellant at trial.

34 The primary judge then turned to consider whether the importance of the Rochester was mentioned during the conference at Mallesons on 11 July 2005. He said:

35 The primary judge said that he was satisfied on the balance of probabilities, while having regard to the seriousness of such a finding (Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336) ("Briginshaw v Briginshaw")), that Messrs Doulgeridis, Taylor and Morrison gave consciously untrue evidence when they said that the Rochester was mentioned at the Mallesons conference. The primary judge said that it inevitably followed that they must have colluded in so doing.

36 The primary judge said that the most likely explanation for the fact that Messrs Doulgeridis, Taylor and Morrison invented an untrue source of the Provence design was that they knew the source alleged by the respondents was the true one. The primary judge expressed his conclusions in the following passage:

37 At the heart of the appellant’s complaints on the appeal is the allegation that the primary judge failed to address what the appellant submits was important evidence of discussions which took place during the conference at Mallesons on 11 July 2005. The evidence which the appellant identified was evidence given by Mr Megens. The appellant submits that the primary judge’s error can be characterised in a number of ways. First, it submits that there has been such a failure by the primary judge to give adequate reasons as to amount to a denial of procedural fairness and a failure to exercise the jurisdiction the primary judge was purporting to exercise. The appellant referred to certain observations of Hayne J (with whom McHugh and Gummow JJ agreed) on the implications of a submission that a primary judge did not give adequate reasons: Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816; 221 ALR 402 ("Waterways Authority v Fitzgibbon") at 1835; 428 [129]. Secondly, the appellant submits that the primary judge erred in the process of fact-finding in that he has failed to take into account relevant evidence: Waterways Authority v Fitzgibbon at 1835; 428 [130]. Thirdly, it submits that the primary judge erred because, by failing to take into account relevant evidence, he failed to apply the approach to the evidence which he was required to take in circumstances in which he was considering whether to make findings of fraud. In the context of this submission, reference was made to the well-known case of Briginshaw v Briginshaw. Fourthly, the appellant submits that the primary judge failed to use, or palpably misused, his advantage in making findings about whether the Rochester was mentioned during the conference at Mallesons on 11 July 2005.

38 The appellant submits that, if its arguments are accepted by this Court, the appropriate order is an order for a new trial. It is not open to this Court, submits the appellant, to make findings of fact in relation to the disputed issues because those findings may turn, or turn in part, on the manner in which the relevant witnesses give their evidence: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 125-126 [23] per Gleeson CJ, Gummow and Kirby JJ; Waterways Authority v Fitzgibbon at 1836; 429 [132]-[135] per Hayne J.

39 As it is contended that the primary judge did not give adequate reasons, we start our examination of the appellant’s submissions by discussing briefly the authorities which deal with a trial judge’s obligation to give reasons for his or her decision.

40 Clearly, a trial judge is under an obligation to give reasons for his or her decision. The rationale for the obligation has been discussed in a number of cases. It is sufficient to refer to two cases. In Pettitt v Dunkley [1971] 1 NSWLR 376 ("Pettitt v Dunkley"), Moffitt JA said (at 388) that a court or judge, including an intermediate court of appeal, is under an obligation to give reasons "so far as it is necessary to enable the case properly and sufficiently to be laid before the higher appellate court". In Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 ("Soulemezis v Dudley (Holdings) Pty Ltd"), McHugh JA (as his Honour then was) said (at 279) that the giving of reasons for a judicial decision served at least three purposes: first, "it enables the parties to see the extent to which their arguments have been understood and accepted as well as the basis of the judge’s decision"; secondly, "the giving of reasons furthers judicial accountability"; and, thirdly, the giving of reasons enables practitioners, legislators and members of the public to ascertain "the basis upon which like cases will probably be decided in the future". McHugh JA went on to say (at 280-281) that the extent of the duty to give reasons was related to the function to be served by the giving of reasons, and he gave as an example of that proposition the need to give more elaborate reasons where legislation gives a right of appeal against a decision than where no appeal lies.

41 The nature and content of the duty to give reasons has been discussed in a number of cases. In Sun Alliance Insurance Ltd v Massoud [1989] VR 8, Gray J (with whom Fullagar and Tadgell JJ agreed) said (at 18) that the adequacy of reasons will depend on the circumstances of the case. The reasons of a trial judge will be inadequate if the appeal court is unable to ascertain the reasoning upon which the decision is based, or justice is not seen to have been done. In that case, Gray J said that the trial judge’s reasons were inadequate because his reasoning process was not revealed to the appeal court, such that a judgment could be made as to whether he had fallen into error. His Honour also said that the insufficiency of the reasons had the consequence that justice was not seen to be done.

42 In Mifsud v Campbell (1991) 21 NSWLR 725 ("Mifsud v Campbell") the New South Wales Court of Appeal had before it an appeal by a plaintiff in an action involving a motor vehicle accident. The trial judge had given judgment in favour of the defendant. The trial judge had made no mention of certain behaviour of the defendant at and immediately after the accident and he had said that it was unnecessary for him to make a finding about the exact location of the point of impact. The Court said that the trial judge had erred and that an order for a new trial should be made. Samuels JA (with whom Clarke JA and Hope A-JA agreed) said (at 728):

43 In Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 ("Beale v Government Insurance Office of NSW"), Meagher JA considered the content of the obligation to give reasons. He emphasised the point that there is no mechanical formula which can be applied to determine whether adequate reasons have been given. He considered that there were three fundamental elements in the obligation to give reasons. First, the court or judge should refer to relevant evidence and if there is conflicting evidence, reference should be made to both sets of evidence. Secondly, the court or judge should set out the material findings of fact and identify his or her ultimate factual conclusions. Thirdly, the court or judge should provide reasons for making his or her findings of fact and conclusions, and reasons in applying the law to the facts found.

44 In Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (No 2) [2002] VSCA 189; (2002) 6 VR 1, the Victorian Court of Appeal discussed the nature and content of a trial judge’s obligation to give reasons in some detail (at 31-34 [101]-[106]). At 43 [157] the Court said:

45 In Hunter v Transport Accident Commission (2005) 43 MVR 130 ("Hunter v Transport Accident Commission"), Nettle JA considered the extent of a judge’s obligation to give reasons in the case of a decision made under s 93(4)(d) of the Transport Accident Act 1986 (Vic). With respect, his Honour’s analysis provides a helpful summary of what we think are the appropriate working principles. He said (at 136-137 [21]):

46 The consequences of a court or judge failing to provide adequate reasons have also been discussed in a number of cases. In Pettit v Dunkley, Asprey JA and Moffitt JA each referred (at 382 and 388 respectively) to a failure to give reasons as an error of law, and Moffitt JA said that such an error could vitiate the judgment even in cases where it did not appear whether or not the omission would have affected the result (see also Soulemezis v Dudley (Holdings) Pty Ltd at 281 per McHugh JA). In Palmer v Clarke (1989) 19 NSWLR 158, the New South Wales Court of Appeal set aside a trial judge’s orders because his reasons were inadequate. The Court did so even though the outcome of the case itself was not necessarily incorrect (at 163 per Kirby P (with whom Samuels JA agreed)); at 174 per Priestley JA). In Mifsud v Campbell, Samuels JA (at 728) and Hope A-JA (at 729) each reserved for further consideration the question whether a failure to give adequate reasons was an error of law or some other type of error. In Bourke v Beneficial Finance Corp Ltd (1993) 47 FCR 264, the Full Court of this Court, although it found a failure on the part of a trial judge to give adequate reasons, did not make an order for a new trial. The Court in that case was able to see for itself, quite clearly, that the same result would necessarily be reached and that there would be no point in a new trial. We refer to the observations of the Court at 284. Meagher JA, in Beale v Government Insurance Office of NSW, said (at 444) that the Court could take such an approach in an appropriate case. In Hunter v Transport Accident Commission, the Court concluded that the trial judge had not provided adequate reasons. However, the Court did not remit the matter for rehearing, but, rather, decided the matter for itself. The Court said (at 143 [37]) that, there being no credit issue, the appeal Court was in as good a position to decide the matter as the trial judge.

47 With those observations in mind, we turn to summarise the evidence that the appellant submits the primary judge failed to deal with in his reasons and overlooked or failed to take into account. As we have said, it is evidence given by Mr Megens of the discussions and events which took place at the conference at Mallesons on 11 July 2005.

1. Mr Megens said that his file note was not a complete record of the matters discussed at the conference.

2. Mr Megens said that, in considering the design history of the Provence, he had a concern that directors of the appellant and of the first respondent had all been employed by Henley Properties and had all come from what he called the "Henley School of Design".

3. Mr Megens said that at the conference the directors of the appellant took him through the derivation of the Provence design.

4. Mr Megens said at the conference that he was more concerned about an infringement of copyright of a design of Henley Properties than of a design of the first respondent. The appellant contended that the evidence of Mr Megens supported the conclusion that his concern was prompted by evidence Mr Doulgeridis brought to the conference.

5. Mr Megens said that at the conference Mr Doulgeridis had "Henley documents" with him, which caused him concern and that "[i]t could’ve been the Rochester". The appellant contended that other evidence in the case suggested that the Rochester must have been one of the Henley documents Mr Doulgeridis brought to the conference.

48 The appellant submits that this evidence of Mr Megens constituted a body of evidence before the primary judge from which it could be inferred that the Rochester was mentioned at the conference. It submits that the primary judge did not refer to this body of evidence in his reasons and overlooked it or did not take it into account.

49 The appellant further submits that the three matters which we have previously identified (at [24]-[30]) and which the primary judge found were inconsistent with the Rochester being mentioned at the conference were in fact capable of being explained in a way which was consistent with the Rochester being mentioned at the conference. As to the "failure" to mention the Rochester in the letter from Mallesons in response to the letter of demand from Middletons, that could be explained by the limited purpose of the response, that is to say, to "fend off" the letter of demand, and by the fact that the appellant did not wish to expose itself to possible litigation by Henley Properties. As to the "failure" to make reference to the Rochester in the instructions to Mr Brickell, that could be explained by a desire not to lead the expert to the conclusion his client was advancing. In any event, Mr Doulgeridis had sworn his affidavit making reference to the Rochester at about the time of the instructions to Mr Brickell. As to the "failure" to make reference to the Rochester in the early versions of the defence, that could be explained on the ground that the plea which was amended (that is, paragraph 20) was a plea dealing with originality, not copying. The appellant’s plea in response to the respondent’s plea of copying was a denial without particulars, which, it was said, was the usual plea in the circumstances.

50 The appellant further submits that there was other evidence which supports a conclusion that it had not copied the respondents’ designs. For example, its directors denied copying the respondents’ plans or houses at the conference at Mallesons on 11 July 2005 and they did so in circumstances in which they had no reason to think that their discussions with their solicitors would not be protected by legal professional privilege. Furthermore, the "fingerprints" of the Rochester (as the appellant put it) were evident in the Provence. There were similarities in design in areas of the house not involving the al fresco quadrant. In addition, the early designs for the Provence and, in this context, the appellant refers to Sketch C (Schedule C), show the line of the rumpus room wall protruding out from the line of the meals area wall. That was also a feature of the Rochester when it included a rumpus room.

52 The context in which the appellant’s submissions must be considered is an appropriate starting point. Two points are important. First, it is not suggested by the appellant that a judge, after a proper examination of the evidence, could not reach the conclusions which were in fact reached by the primary judge. In our opinion, a judge, after a proper examination of the evidence, clearly could reach the conclusions which were in fact reached by the primary judge. The handwritten notes of Mr Megens and of Mr Feldman make no mention of the Rochester and neither of them had any recollection of any mention of the Rochester. It is undoubtedly true to say, as the primary judge did, that, in view of the alleged importance of the Rochester to the derivation of the design, one would have expected that the legal practitioners at the conference would have made a note of it had it been mentioned. Secondly, Mr Megens gave his evidence in chief by affidavit and by way of a limited number of oral answers to questions. His affidavit referred to his handwritten notes and typed notes of the conference which notes were exhibited to his affidavit. He did not give any further evidence of his recollections of the conference in his affidavit.

53 We turn to consider the five matters identified by the appellant ([47] above). As to the first matter, Mr Megens said in his oral evidence in chief that his file note was not a complete record of all of the topics discussed at the conference. That is a matter which the primary judge referred to, and accepted (see the passage from the primary judge’s reasons set out in [34]).

54 As to the second matter identified by the appellant, we preface our comments by saying that we have read Mr Megens’ evidence a number of times and it is fair to say that he did not have a good recollection of the discussions at the conference at the time he gave evidence. That observation is not one which challenges his status as a witness of truth; he himself agreed that his attempt to recall discussions at the conference was "at best, a faltering attempt". The other point to note is that Mr Megens’ additional evidence on the discussions which took place was not given in the form of "He said, I said" or in terms of the effect of what was said. That fact gives rise to difficulties in the interpretation of his evidence. Mr Megens said that he could not remember what was said about the development of the design beyond what was in his notes, but he did say they went into some detail and "[t]hey satisfied me as to the development of the design". Another example is that it is difficult at times to discern whether a matter was a concern in Mr Megens’ mind, albeit one which led him to ask certain questions, or was a concern which he expressed to those present at the conference, or was a concern he had because of something said by one of the directors. The following two questions and answers illustrate the point:

55 This is the second matter identified by the appellant. It seems to us that the primary judge dealt with this evidence in the following way:

56 It seems from this observation of the primary judge that he treated this evidence, not as suggesting a reference to the Rochester, but rather as evidence of a more general concern by Mr Megens resulting from the employment history of the principals of the appellant and first respondent respectively. In our opinion, that was an approach the primary judge was entitled to take. Clearly, that type of employment history would have been relevant to a legal practitioner taking instructions in a potential breach of copyright case of this nature. That this approach was open to the primary judge is supported by the fact that Mr Megens went on to say that he was concerned to know if the Provence design was done while Mr Doulgeridis was employed by Henley Properties and, if so, within or outside working hours. It was open to the primary judge to take the view that the evidence indicated a discussion at a fairly general level and that it simply was not evidence conflicting with a conclusion that the directors did not mention the importance of the Rochester.

57 As to the third matter identified by the appellant, it is a matter that was not overlooked by the primary judge. It is referred to in the notes of each of Mr Megens (under the heading, "Development of Design") and Mr Feldman (under the heading, "Design of our house"), which the primary judge set out in his reasons. As we have said, Mr Megens could not remember what was said about the development of the design, other than what was set out in his notes. The primary judge referred to Mr Megens wishing to be satisfied "that his clients had an independent record of derivation of copyright since the letter of demand was his main interest at that stage".

58 As to the fourth matter identified by the appellant, we have addressed this matter, at least partly, in the context of the second matter. It was open to the primary judge to conclude that Mr Megens’ concern was a general concern about the influence of Mr Doulgeridis’ previous employment or arose because of the need to ascertain if part of Mr Doulgeridis’ design work for the Provence had been carried out while he was still employed by Henley Properties. It was open to the primary judge to conclude that Mr Megens’ evidence was simply too vague to support a conclusion that it was documents brought to the conference by Mr Doulgeridis which caused him concern.

59 As to the fifth and final matter identified by the appellant, namely, that Mr Megens said that Mr Doulgeridis had "Henley documents" with him, the relevant evidence appears to be the following questions and answers:

60 In our opinion, Mr Megens’ statement that the plans could have included the Rochester is entirely equivocal and was not a matter the primary judge was required to refer to in his reasons. At best, the above evidence is evidence that Mr Doulgeridis brought Henley documents with him to the conference, that he discussed the "history of the derivation" of the Provence design with Mr Megens and that, following that discussion, Mr Megens had a concern about the relationship between the history of the derivation and "Henley-type" concepts.

61 We have said something about each of the five matters. We return now to the central question. We start by noting that the primary judge set out in his reasons his findings on material questions of fact and the evidence he relied on to make those findings of fact. He provided reasons for his findings and for his ultimate conclusions. Furthermore, no criticism was made of the primary judge’s reasons for applying the law to the facts as he found them to be.

62 The substance of the appellant’s submission is that the primary judge did not refer to conflicting evidence, that is, evidence which conflicted with the findings he ultimately made. The primary judge did refer to the conflicting evidence of the appellant as to the matters discussed during the conference at Mallesons on 11 July 2005, namely, the evidence of Messrs Doulgeridis, Taylor and Morrison. We do not think it is right to say that Mr Megens also gave conflicting evidence. In fact, Mr Megens’ evidence as to the notes he took was accepted by the primary judge and formed the basis for key findings of fact made by him. It is true that Mr Megens gave some other evidence which might support, in a rather indirect way, the suggestion that the Rochester was mentioned at the conference. However, in our opinion, the primary judge did not err in his treatment of that evidence, and we say that for two reasons. First, as our analysis of the five matters identified by the appellant shows, for the most part the primary judge did refer to the evidence. In some respects, he may have interpreted the evidence in a different way from that advanced by the appellant, but his reasons were not inadequate because he did not refer to the interpretation advanced by the appellant. Secondly, the one piece of evidence to which the primary judge appears not to have referred, namely, Mr Megens’ evidence about "Henley documents" at the conference was not evidence to which the primary judge was obliged to refer. It falls a long way short of conflicting evidence as that term has been used in the authorities. Even if Mr Doulgeridis brought Henley documents to the conference, and, even if, as urged by the appellant, those documents included the Rochester, that does not amount to conflicting evidence such that the primary judge had to refer to it. It must be remembered that the finding of fact under attack by the appellant is not what plans were brought to the conference, but whether the directors of the appellant mentioned the Rochester at the conference at Mallesons on 11 July 2005. We do not mean to suggest that conflicting evidence can only consist of direct evidence. Plainly, it can also include evidence from which inferences can be drawn. However, the evidence in this case does not, in our opinion, rise to this level.

63 In our respectful opinion, the primary judge’s reasons were adequate and there is no reason to think that he overlooked or failed to take into account relevant evidence. Furthermore, the primary judge was clearly alive to the need for care in making a finding that Messrs Doulgeridis, Taylor and Morrison gave consciously untrue evidence when they said that the Rochester was mentioned at the Mallesons conference and that they must have colluded in doing so, and there is nothing to suggest that he failed to apply the principles identified in Briginshaw v Briginshaw. Furthermore, he did not fail to use, or palpably misuse, his position as the trial judge.

64 The appellant challenged the primary judge’s conclusion that "the Mallesons letter, the instructions to Mr Brickell and the Carlisle pleaded defences are all inconsistent with the Rochester having been raised at the Mallesons conference". We have already set out the points made by the appellant in relation to each of these matters. It seems to us that it was open to the primary judge to conclude that the matters were inconsistent with the Rochester being mentioned at the conference, although, no doubt, views may differ as to the weight to be placed on each matter.

65 In terms of the letter from Mallesons, we do not think the primary judge erred in concluding that one would have expected to see a reference to the Rochester, in one form or another, if indeed it was the source of inspiration for the Provence design and was mentioned at the conference. Instead, the Rochester is not referred to in the letter, and the Provence is said to be "wholly original". In terms of the instructions to Mr Brickell, it seems to us that this is the most borderline of the three matters. However, we note that the instructions seek an opinion as to the originality of the Provence design and its development, and we are not persuaded that the primary judge erred in concluding that the absence of reference to the Rochester was a relevant matter to take into account.

66 In terms of the amendments to the defence, it is true that the plea which was amended to include reference to the Rochester related to whether the respondents’ designs were original artistic works. However, the fact is that the plea raises the issue of what was in the market which was similar to the Seattle, and the Rochester was, at least in the appellant’s mind, clearly relevant to that fact, as shown by its late amendment to the plea. Again, we are not persuaded that the primary judge erred in taking it into account.

67 In our opinion, the application for leave to appeal should be granted, but the appeal should be dismissed. The appellant should pay the respondents’ costs of and incidental to the application for leave to appeal and the appeal.

Counsel for the Appellant:	Mr N Hutley SC with Mr A Ryan SC and Mr S Rebikoff

Solicitor for the Appellant:	Mallesons Stephens Jaques

Counsel for the Respondents:	Mr C Golvan SC with Dr S Ricketson

Solicitor for the Respondents:	Middletons

Date of Hearing:	27 and 28 November 2008

Date of Judgment:	19 March 2009

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 346 of 2008

JUDGES:	TAMBERLIN, SUNDBERG AND BESANKO JJ
DATE OF ORDER:	19 MARCH 2009
WHERE MADE:	MELBOURNE

JUDGES:	TAMBERLIN, SUNDBERG AND BESANKO JJ
DATE:	19 MARCH 2009
PLACE:	MELBOURNE

Federal Court of Australia - Full Court

Carlisle Homes Pty Ltd v Barrett Property Group Pty Ltd [2009] FCAFC 31 (19 March 2009)