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Primary Health Care Limited v Commissioner of Taxation [2010] FCA 419 (4 May 2010)
Last Updated: 18 May 2010
FEDERAL COURT OF AUSTRALIA
Primary Health Care Limited v
Commissioner of Taxation [2010] FCA 419
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Citation:
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Parties:
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PRIMARY HEALTH CARE LIMITED v COMMISSIONER OF
TAXATION
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File number(s):
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Judge:
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STONE J
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Date of judgment:
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Catchwords:
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TAXATION – determination of preliminary questions arising in
the context of appeals against objection decisions of the respondent –
whether applicant entitled to claim deductions in relation to copyright –
whether copyright subsists in patient medical records
– whether interests
in copyright were transferred to the applicant – whether the applicant
used copyright interests for
the purpose of producing assessable income –
whether monetary consideration was paid for copyright interests
TAXATION – appeals against objection decisions – onus of
proof – applicant failed to discharge onus of proving all facts
upon which
it sought to rely to establish that assessments were excessive
CONTRACT – construction – whether property in patient
medical and dental records passed to applicant – whether copyright
interests in patient medical and dental records were transferred to the
applicant
CONTRACT – implied terms – whether terms should be
implied that copyright interests were transferred – whether transfer of
copyright interests necessary for business efficacy
INTELLECTUAL PROPERTY – copyright – patient medical and
dental records – consultation notes – referral letters –
prescriptions
– whether copyright subsists in patient medical and dental
records acquired by the applicant
INTELLECTUAL PROPERTY –
copyright – original literary work – requirement that the work be
identified with precision – whether patient
medical and dental records
acquired by the applicant are original literary works – whether authors
expended independent intellectual
effort directed towards expression
INTELLECTUAL PROPERTY – copyright – centrality of
authorship – requirement that author of work be identified – works
of joint authorship
– compilations
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Legislation:
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Cases cited:
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Date of hearing:
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3, 4, 5, 9-12 June 2009
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Place:
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Sydney
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Division:
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GENERAL DIVISION
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Category:
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Catchwords
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Number of paragraphs:
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258
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Counsel for the Applicant: |
J W de Wijn QC with C Catt and J S Cooke |
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Solicitor for the Applicant:
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Minter Ellison Lawyers
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Solicitor for the Respondent:
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Australian Government Solicitor
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Counsel for the Respondent:
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M Moshinksy SC with G Robinson and K Beattie
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IN THE FEDERAL COURT OF AUSTRALIA
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NEW SOUTH WALES DISTRICT REGISTRY
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PRIMARY HEALTH CARE
LIMITEDApplicant
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AND:
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COMMISSIONER OF
TAXATIONRespondent
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DATE OF ORDER:
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WHERE MADE:
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THE COURT ORDERS THAT:
- Pursuant
to order made on 7 August 2007 the preliminary questions in this proceeding be
decided as follows:
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Peter Umberto di Michiel dated 16 September
1996;
(ii) Sale of Practice agreement between Idameneo and Joseph Leonard Galati
and Reyima Pty Ltd dated 13 August 1998,
did Idameneo hold rights as the owner of copyright comprising an item or
items of intellectual property within the meaning of s 373-15
of the
Income Tax Assessment Act 1997?
Answer: No.
Question:
(b) If yes to any part or parts of question (a), in respect of each such item
of intellectual property was Idameneo entitled to a
deduction in the year of
income ended 30 June 1999 under s 373-10(1) of the Income Tax Assessment
Act 1997?
Answer: Not necessary to answer.
2. The applicant pay the respondent’s costs of the proceeding including
reserved costs
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 Federal Law
Search on the Court’s website.
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IN THE FEDERAL COURT OF AUSTRALIA
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NEW SOUTH WALES DISTRICT REGISTRY
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GENERAL DIVISION
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NSD 1790 of 2005
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BETWEEN:
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PRIMARY HEALTH CARE LIMITED
Applicant
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AND:
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COMMISSIONER OF TAXATION
Respondent
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JUDGE:
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STONE J
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DATE OF ORDER:
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4 MAY 2010
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WHERE MADE:
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SYDNEY
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THE COURT ORDERS THAT:
- Pursuant
to order made on 7 August 2007 the preliminary questions in this proceeding be
decided as follows:
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Ronald Stephen Fitch dated 5 May 2000;
(ii) Sale of Practice agreement between Idameneo and Duraid Salem Haddad
dated 17 May 2000;
(iii) Sale of Practice agreement between Idameneo and Victor Robert Goleby
Critoph and V R Critoph Pty Ltd dated 30 March 2000;
(iv) Sale of Practice agreement between Idameneo, Ton Kuawn Lee, Siam Nai
Tang and Lee & Tang Pty Ltd dated 24 February 2000;
(v) Sale of Practice agreement between Idameneo and Michael Roy Wunsh and M R
Wunsh Pty Ltd dated 20 June 2000;
(vi) Sale of Practice agreement between Idameneo and Peter William Urquhart,
Peter W Urquhart Pty Ltd and Moremint Pty Ltd dated 19
October 1999;
(vii) Sale of Practice agreement between Idameneo and Jeremy Kai Sing Lee and
Jeremy Lee Pty Ltd dated 29 November 1999,
did Idameneo hold rights as the owner of copyright comprising an item or
items of intellectual property within the meaning of s 373-15
of the
Income Tax Assessment Act 1997?
Answer: No, except in relation to the Sale of Practice agreement
between Idameneo and Peter William Urquhart, Peter W Urquhart Pty Ltd and
Moremint Pty Ltd dated 19 October 1999.
Question:
(b) If yes to any part or parts of question (a), in respect of each such item
of intellectual property was Idameneo entitled to a
deduction in the year of
income ended 30 June 2000 under s 373-10(1) of the Income Tax Assessment
Act 1997?
Answer: No.
2. The applicant pay the respondent’s costs of the proceeding
including reserved costs.
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 Federal Law
Search on the Court’s website
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IN THE FEDERAL COURT OF AUSTRALIA
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NEW SOUTH WALES DISTRICT REGISTRY
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GENERAL DIVISION
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NSD 2169 of 2005
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BETWEEN:
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PRIMARY HEALTH CARE LIMITED
Applicant
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AND:
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COMMISSIONER OF TAXATION
Respondent
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JUDGE:
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STONE J
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DATE OF ORDER:
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4 MAY 2010
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WHERE MADE:
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SYDNEY
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THE COURT ORDERS THAT:
- Pursuant
to order made on 7 August 2007 the preliminary questions in this proceeding be
decided as follows:
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and John Parissis dated 30 June 2000;
(ii) Sale of Practice agreement between Idameneo and George Abouyanni dated
28 June 2001;
(iii) Sale of Practice agreement between Idameneo and Kieran
O’Shannessy and Dr Kieran O’Shannessy Pty Ltd dated 2 August
2000;
(iv) Sale of Practice agreement between Idameneo and John Frank Perica dated
30 May 2001,
did Idameneo hold rights as the owner of copyright comprising an item or
items of intellectual property within the meaning of s 373-15
of the
Income Tax Assessment Act 1997?
Answer: No.
Question:
(b) If yes to any part or parts of question (a), in respect of each such item
of intellectual property was Idameneo entitled to a
deduction in the year of
income ended 30 June 2001 under s 373-10(1) of the Income Tax Assessment
Act 1997?
Answer: Not necessary to answer.
Question:
(c) In consequence of the Agreement between Sydney Diagnostic Services (NSW)
Pty Ltd (the “SDS Trustee”) and Liu &
Krausz dated 7 April 2001,
did the SDS Trustee hold rights as the owner of copyright comprising an item or
items of intellectual
property within the meaning of s 373-15 of the
Income Tax Assessment Act 1997?
Answer: No.
Question:
(d) If yes to any part or parts of question (c), in respect of each such item
of intellectual property was the SDS Trustee entitled
to a deduction in the year
of income ended 30 June 2001 under s 373-10(1) of the Income Tax
Assessment Act 1997?
Answer: Not necessary to answer
2. The applicant pay the respondent’s costs of the proceeding
including reserved costs.
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 Federal Law
Search on the Court’s website
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IN THE FEDERAL COURT OF AUSTRALIA
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NEW SOUTH WALES DISTRICT REGISTRY
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GENERAL DIVISION
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NSD 2467 of 2005
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BETWEEN:
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PRIMARY HEALTH CARE LIMITED
Applicant
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AND:
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COMMISSIONER OF TAXATION
Respondent
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JUDGE:
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STONE J
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DATE OF ORDER:
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4 MAY 2010
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WHERE MADE:
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SYDNEY
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THE COURT ORDERS THAT:
- Pursuant
to order made on 7 August 2007 the preliminary questions in this proceeding be
decided as follows:
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Dr AC Ginnane dated 11 January 2002;
(ii) Sale of Practice agreement between Idameneo and Mukteshwar Prasad Singh
dated 28 September 2001;
(iii) Sale of Practice agreement between Idameneo and Dr Kheang Chheang Heang
dated 25 June 2002;
(iv) Sale of Practice agreement between Idameneo and Emerlita Merlie Gallardo
and JM Gallardo Pty Ltd dated 11 April 2001,
did Idameneo hold copyright which constituted a depreciating asset or
depreciating assets within the meaning of s 40-30(2) of
the Income Tax
Assessment Act 1997?
Answer: No.
Question:
(b) If yes to any part or parts of question (a), in respect of each such
depreciating asset was Idameneo entitled to a deduction in
the year of income
ended 30 June 2002 under s 40-25(1) of Income Tax Assessment Act
1997?
Answer: Not necessary to answer.
2. The applicant pay the respondent’s costs of the proceeding
including reserved costs.
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 Federal Law
Search on the Court’s website
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IN THE FEDERAL COURT OF AUSTRALIA
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NEW SOUTH WALES DISTRICT REGISTRY
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GENERAL DIVISION
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NSD 193 of 2006
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BETWEEN:
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PRIMARY HEALTH CARE LIMITED
Applicant
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AND:
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COMMISSIONER OF TAXATION
Respondent
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JUDGE:
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STONE J
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DATE OF ORDER:
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4 MAY 2010
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WHERE MADE:
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SYDNEY
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THE COURT ORDERS THAT:
- Pursuant
to order made on 7 August 2007 the preliminary questions in this proceeding be
decided as follows:
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Juan Sabag dated 27 October 2003;
(ii) Sale of Practice agreement between Idameneo and Dr Anilkumar Manjunath
Mundkur dated 12 February 2004;
did Idameneo hold copyright which constituted a depreciating asset or
depreciating assets within the meaning of s 40-30(2) of
the Income Tax
Assessment Act 1997?
Answer: No.
Question:
(b) If yes to any part or parts of question (a), in respect of each such
depreciating asset was Idameneo entitled to a deduction in
the year of income
ended 30 June 2004 under s 40-25(1) of the Income Tax Assessment Act
1997?
Answer: Not necessary to answer.
2. The applicant pay the respondent’s costs of the proceeding
including reserved costs.
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 Federal Law Search on the Court’s website
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IN THE FEDERAL COURT OF AUSTRALIA
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NEW SOUTH WALES DISTRICT REGISTRY
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GENERAL DIVISION
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NSD 195 of 2006
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BETWEEN:
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PRIMARY HEALTH CARE LIMITED
Applicant
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AND:
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COMMISSIONER OF TAXATION
Respondent
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JUDGE:
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STONE J
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DATE OF ORDER:
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4 MAY 2010
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WHERE MADE:
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SYDNEY
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THE COURT ORDERS THAT:
- Pursuant
to order made on 7 August 2007 the preliminary questions in this proceeding be
decided as follows:
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Dr James Lyons dated 7 November 2002;
(ii) Sale of Practice agreement between Idameneo and Dr Promila Singh Panwar
dated 15 July 2002;
did Idameneo hold copyright which constituted a depreciating asset or
depreciating assets within the meaning of s 40-30(2) of
the Income Tax
Assessment Act 1997?
Answer: No.
(b) If yes to any part or parts of question (a), in respect of each such
depreciating asset was Idameneo entitled to a deduction in
the year of income
ended 30 June 2003 under s 40-25(1) of the Income Tax Assessment Act
1997?
Answer: Unnecessary to answer.
2. The applicant pay the
respondent’s costs of the proceeding including reserved costs.
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 Federal Law
Search on the Court’s website
IN THE FEDERAL COURT OF AUSTRALIA
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NEW SOUTH WALES DISTRICT REGISTRY
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GENERAL DIVISION
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BETWEEN:
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PRIMARY HEALTH CARE LIMITED
Applicant
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AND:
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COMMISSIONER OF TAXATION
Respondent
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JUDGE:
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STONE J
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DATE:
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4 MAY 2010
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PLACE:
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SYDNEY
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REASONS FOR JUDGMENT
INTRODUCTION
- These
reasons concern six separate applications appealing under Part IVC of the
Taxation Administration Act 1953 (Cth) (Administration Act) in
respect of objection decisions made by the respondent, the Commissioner of
Taxation. The Commissioner disallowed the objections
of the applicant, Primary
Health Care Limited made in respect to income tax assessments deemed to have
been made by the Commissioner
for the years of income ending 30 June 1999
through to 30 June 2004.
- Primary
Health Care Limited (PHC) is a public company whose shares are listed on the
Australian Securities Exchange (ASX). At all
material times it was the sole
beneficial owner of all issued units in the Artlu Unit Trust (Trust) of which
Idameneo (No 123) Pty
Ltd was the trustee. The issues in the present
applications arise out of the purchase by Idameneo of certain medical and dental
practices and concern whether it is entitled to claim income tax deductions
arising from its acquisition of copyright interests as
part of its purchase of
the practices. If these deductions were to be allowed the net income of the
Trust would be reduced and therefore
the assessable income of PHC.
- Because
of the substantial similarity in the fundamental issues for determination in
each of the applications made by PHC, the six
proceedings have been consolidated
and were heard together. The brief summary of each proceeding given below is
taken from the Commissioner’s
outline of submissions.
Proceeding VID 911 of 2005
PHC lodged its return for the 1999 income year on 24 January 2000. It included
in its assessable income the amount of $7,929,138,
being distributions of the
Artlu Trust. By a notice of objection dated 19 December 2003, PHC objected
against the assessment deemed
to have been made on 24 January 2000, claiming
that its taxable income should be reduced.
Proceeding NSD 1790 of 2005
PHC lodged its return for the 2000 income year on 6 February 2001. It included
in its assessable income the amount of $8,675,111,
being distributions of the
Artlu Trust in the amount of $7,787,690, and distributions of the Sydney
Diagnostic Services Unit Trust
(“SDS Trust”) in the amount of
$887,471. By a notice of objection dated 13 July 2004, PHC objected against the
assessment
deemed to have been made on 6 February 2001, claiming that its
taxable income should be reduced in respect of the distributions of
the Artlu
Trust and the SDS Trust.
Proceeding NSD 2169 of 2005
PHC lodged its return for the 2001 income year on 14 June 2002. It included in
its assessable income the amount of $13,574,609, being
distributions of the
Artlu Trust in the amount of $9,122,065, and distributions of the SDS Trust in
the amount of $4,452,544. By
notice of objection dated 13 July 2004, PHC
objected against the assessment deemed to have been made on 14 June 2002,
claiming that
its taxable income should be reduced in respect of the
distributions of the Artlu Trust and the SDS Trust.
Proceeding NSD 2467 of 2005
PHC lodged its return for the 2002 income year on 13 December 2002. It included
in its assessable income the amount of $18,333,563,
being distributions of the
Artlu Trust in the amount of $12,516,956, and distributions of the SDS Trust in
the amount of $5,816,607.
By a notice of objection dated 13 July 2004, PHC
objected against the assessment deemed to have been made on 13 December 2002,
claiming
that its taxable income should be reduced in respect of the
distributions of the Artlu Trust and the SDS Trust.
Proceeding NSD 195 of 2006
PHC made a choice to form a consolidated group for income tax purposes under
Pt 390 of the Income Tax Assessment Act 1997 ... with effect from 1
July 2002. From that date, the Artlu Trust and the SDS Trust became subsidiary
members of PHC's corporate
group. PHC lodged its return for the 2003 income
year on 31 March 2004. It included in its taxable income the amount of
$26,619,671
an amount which it now claims to have been incorrectly included as
taxable income. By a notice of objection dated 13 July 2004,
PHC objected
against the assessment deemed to have been made on 31 March 2004, claiming that
its taxable income should be reduced.
Proceeding NSD 193 of 2006
PHC lodged its return for the 2004 income year on 11 January 2005. It included
in its taxable income the amount of $38,169,081 an
amount which it now claims to
have been incorrectly included as taxable income. By notice of objection dated
15 April 2005, PHC
objected against the assessment deemed to have been made on
11 January 2005, claiming that its taxable income should be
reduced.
- Pursuant
to O 29 r2 of the Federal Court Rules the Court has ordered that certain
preliminary questions be separately tried and decided before the remaining
issues arising under
the applications. The applications involve contracts for
the sale of approximately 300 medical practices. In the course of pre-trial
preparation the parties agreed and, on 7 August 2007, the Court ordered, that
the preliminary questions be determined in relation
to a representative sample
of the contracts in issue, pursuant to which Idameneo acquired the practices of
identified general medical
practitioners and one dental practitioner. In broad
terms the preliminary questions concern issues pertaining to whether the
applicant
is entitled to claim deductions with respect to intellectual property
rights, namely copyright in patient records, allegedly acquired
by it. The
preliminary questions do not address the trust issues and the consolidation
issues.
FACTUAL BACKGROUND
- By
way of background it is necessary to understand something of the nature of
PHC’s business and its development. The following
overview is drawn from
the applicant's amended outline of submissions filed on 22 May 2009 supported by
the affidavit evidence (uncontested
on these issues) of PHC’s managing
director, Dr Edmund Bateman and its chief technology officer, Mr Matthew John
Bardsley.
- Before
PHC listed on the ASX in 1998, it had opened a number of medical centres in New
South Wales. Within the years of income relevant
to the determination of the
preliminary questions it opened additional medical centres in New South Wales,
including in Campsie,
Castle Hill, Fairfield, Leichhardt, Mount Druitt,
Wentworthville and Wyoming. At the beginning of 2009, PHC had approximately 43
large-scale medical centres and 45 smaller medical centres in all States and
Territories with the exception of Tasmania and the Northern
Territory.
- Initially,
PHC’s medical centres offered mainly general practitioner services.
Subsequently, additional medical and ancillary
services were offered including
dentistry, pharmacy, radiology, physiotherapy, podiatry and multiple specialist
services. A feature
of the PHC centres is that patients cannot make
appointments. If they wish to see a particular doctor they can wait until that
doctor
is available. Otherwise they are seen by whichever doctor is available
at the relevant time. Under this arrangement it is necessary
for each doctor at
the medical centre to have access to all the patient records held at the centre.
In addition, certain of PHC’s
management, information technology and
archive personnel have access to the patient records held in every PHC medical
centre.
- At
first PHC established a standardised hard-copy (paper) system of patient records
throughout its medical centres. In 2000 it introduced
a computerised
record-keeping system known as the “Medtech computer system” which,
by 2002, was in all PHC medical centres.
The Medtech system was used to store
patient records electronically so that they could be easily accessed and
reproduced by different
doctors at any one centre and by PHC management. There
were apparently, some differences in respect of dental records but it is
not
necessary to consider those differences at this point.
- Part
of PHC’s business strategy is to purchase, through the Trust, established
medical practices in the areas in which, or
near which, it intends to open a
medical centre. In addition to entering into a sale agreement Idameneo also
entered into a contract
with the relevant general practitioner (practitioner
contract) or, if that practitioner had incorporated his or her medical practice,
with the relevant practice company. It is clear from the evidence that both the
sale agreement and the practitioner contract were
integral to the arrangement
for the acquisition of a practice by PHC. Dr Bateman was quite clear that PHC
would not have entered
into one without the other.
- The
practitioner contract obliged Idameneo to provide services and facilities
necessary for the practitioner to practise medicine
from the relevant PHC
centre. It obliged the doctor to render medical services (or the practice
company to ensure that the doctor
rendered the medical services) from that
centre for a specified period. In each case, either the practitioner contract
or the sale
agreement stipulated that the doctor was not an employee of PHC. In
the four cases where the practitioner had incorporated the medical
practice the
practitioner contract was with the practice company. In two of those cases
there was also a Performance Guarantee whereby
the doctor guaranteed that the
practice company would carry out its obligations under the practitioner
contract. On or about the
time of completion of the sale the sample doctor
commenced work in a PHC medical centre and the patient records from the sample
practice
were taken in some form or other to the PHC centre and were used in
that centre.
REFINING OF ISSUES AT THE HEARING
- The
Court orders referred to at [4] above applied to the contracts for the sale of
23 practices (being 22 medical practices and one
dental practice) however, in
its written submissions, PHC stated that it would not be pressing any claim that
copyright or copyright
of any material value was acquired in respect of the
acquisition of the medical practices of the following general
practitioners:
(i) Dr Duraid Salem Haddad;
(ii) Dr Victor Robert Goleby Critoph and VR Critoph Pty Ltd;
(iii) Dr Michael Roy Wunsh and MR Wunsh Pty Ltd;
(iv) Dr Jeremy Kai Sing Lee and Jeremy Lee Pty Ltd;
(v) Dr George Abouyani;
(vi) Dr John Frank Perica;
(vii) Dr Mukteshwar Prasad Singh;
(viii) Dr Kheang Chheang Heang;
(ix) Dr Emerlita Merlie Gallardo and JM Gallardo Pty Ltd; and
(x) Dr Umesh Chandra Kamkolkar and UC Kamkolkar Pty
Ltd
- PHC
also elected not to press any claim that copyright or copyright of any material
value was acquired in respect of the acquisition
by Sydney Diagnostic Services
(NSW) Pty Ltd of any medical practices. The effect of these decisions is that
in respect of the acquisitions
from the doctors listed in [11] and the
acquisitions by Sydney Diagnostic Services (NSW) Pty Ltd, there is no effective
challenge
to the Commissioner’s objection decisions. It follows that the
preliminary questions in respect of these acquisitions should
be answered as
proposed by the Commissioner.
- The
preliminary questions in proceeding NSD 195 of 2006 (in respect of the 2003 tax
year) were amended to remove any reference to
Dr Thakur Niranjan Panwar and
those in proceeding NSD 193 of 2006 to remove any reference to Dr Bharati
Anilkumar Mundkur. Furthermore
the preliminary questions in all six proceedings
were amended to remove the reference to the amount of each deduction claimed in
accordance with the agreement of the parties that the valuation issues were not
be dealt with at the hearing of the preliminary questions
but were to be
postponed for later consideration.
- PHC's
decision not to press some of the claims made in the individual applications
left for consideration the sale of 12 practices
(the sample practices). One of
the sample practices, that of Dr O’Shannessy, was a dental practice, the
other eleven were
medical practices. Unless otherwise indicated, in these
reasons, reference to the sample practices includes the dental practice.
The
table in Schedule 1 to these reasons identifies for each sample practice, the
relevant proceeding and year of income, the parties
(other than Idameneo) to the
sale agreement, the date of the sale agreement and the date on which each doctor
(sample doctor) commenced
working in a PHC Medical Centre. The table in
Schedule 2 sets out the key features of the agreements for the sale of the
sample
practice. These are discussed in more detail later in these
reasons.
THE LEGISLATION
- The
legislative provisions relevant to PHC’s claims are:
- Division
373 of the 1997 Act in relation to the income years ending 30
June 1999, 2000 and 2001. This provision applies in relation to copyright
acquired on the
purchase of the practices of Sample Doctors di Michiel, Galati,
Urquhart, Tang, Fitch, Parissis and O’Shannessy.
- Division
40 of the 1997 Act in relation to the income years ending 30
June 2002, 2003 and 2004. This provision applies in relation to copyright
acquired on the
purchase of the practices of Sample Doctors Ginnane, Panwar,
Lyons, Sabag and Mundkur.
At a general level Division 373
and Division 40 both permit a deduction for depreciating or writing off an
interest in copyright that
was acquired and used or available for use, in the
course of carrying on a business and producing assessable income. In relation
to any copyright acquired on the purchase of Dr di Michiel’s practice, the
provisions of Division 10B of the Income Tax Assessment Act 1936 (Cth)
(1936 Act) must also be considered because that practice was acquired in
1996. This was before Division 373 commenced, however, the transitional
provisions of the Income Tax (Transitional Provisions) Act 1997 (Cth)
(Transitional Act) apply to bring the acquisition under Division 373.
Division 10B of the 1936 Act and the Transitional Act
- Section
124L(1) of Division 10B provides that the Division applies to the “owner
of a unit of industrial property” who
incurred capital expenditure on the
purchase of that unit and has used the unit (or the subject matter to which it
relates) for the
purpose of producing assessable income in the year of income or
a previous year of income. The definition of a “unit of industrial
property” in s 124K includes the rights under Australian law of the
owner or licensee of copyright and equitable rights
in respect of copyright. An
owner to whom the Division applies is entitled to deduct an amount equal to the
residual value of the
unit divided by the number of whole years in the effective
life of the item.
- Section
124S(1) of Division 10B provides for the determination of the residual value of
a unit of industrial property as follows:
Subject to this section, the residual value of a unit of industrial property at
any time in relation to the owner of the unit shall,
for the purposes of this
Division, be ascertained by deducting from the cost of the unit to the owner the
sum of:
(a) any deductions allowed or allowable under this Division in respect of the
unit in assessments in respect of income of the owner
of a year or years of
income which ended prior to that time; and
(b) the consideration receivable by the owner in respect of any disposal by him
of the unit in part prior to that time.
- Depreciation
of the capital investment in intellectual property begun under Division 10B may
be continued under Division 373 pursuant
to the provisions of the
Transitional Act. The provisions of Division 10B and the Transitional
Act are relevant to PHC’s claim for a deduction in the 1999 year of
income arising out of the acquisition of the medical practice
of Dr di Michiel
in 1996. At the end of the 1998 year of income (that is after allowing for any
deduction for that year) the residual
value of any copyright acquired on the
acquisition of Dr di Michiel’s practice becomes the unrecouped
expenditure on that
copyright for the 1999 year of income; Transitional
Act s 373-10.
Division 373 of the 1997 Act
- Division
373 is entitled ‘Intellectual property’. For present purposes,
there is no material difference between the
definition of a “unit of
industrial property” under Division 10B and an “item of intellectual
property” under
Division 373; s 373-15. The Division applies to
assessments for the year ending 30 June 1999 and later years. The guide to
Division 373 states:
This Division creates a capital allowance for expenditure on an item of
intellectual property that you use (or have used) for the
purpose of producing
assessable income.
- To
obtain a deduction under Division 373 for expenditure on an item of intellectual
property, an entity must have used the item or
“the invention, design,
work or other subject matter to which the item relates” for the purpose of
producing assessable
income; s 373-10(1). The deductible amount is equal
to the “unrecouped expenditure on the item at the end of the
current year divided by the number of income years from the start of the
current year to the end of the item’s effective life”;
s 373-20.
Division 40 of the 1997 Act
- Division
40 applies to income years ending 30 June 2002 and later. The definition of
intellectual property in s 995.1 is the
same as in s 373-15. Section
40-15 includes the following as objects of Division
40:
(a) to allow you to deduct the cost of a depreciating asset; and
(b) to spread the deduction over a period that reflects the time for which the
asset can be used to obtain benefits ...
- Subject
to exceptions not presently relevant, a depreciating asset is an asset
“that has a limited effective life and can reasonably
be expected to
decline in value over the time it is used”; s 40-30(1). Items of
intellectual property are specifically
included as depreciating assets;
s 40-30(2)(c).
- The
amount of a deduction is determined with respect to the decline in value of a
depreciating asset for the relevant income year;
s 40-25. The section
provides for a reduction in the amount of the deduction where the asset is used
other than for a taxable
purpose. A taxable purpose includes the purpose of
producing assessable income; s 40-25(7). The Division provides for the
determination of the amount that the owner is taken to have paid “to hold
a depreciating asset”. Given the scope of
the revised preliminary
questions, which are set out below, it is not necessary to consider those
provisions at this stage.
THE PRELIMINARY QUESTIONS
- The
preliminary questions all take the form of asking in respect of each sale of
practice agreement (a) whether in consequence of
the sale of practice agreement,
Idameneo holds rights as the owner of copyright comprising an item or items of
intellectual property
within the relevant legislation; and (b) if so, whether
Idameneo was entitled to a deduction in the relevant year of income under
s 373-10(1) of the 1997 Act?
- The
result of the decision not to press some claims is that there remain for
decision 12 separate two-part questions. Omitting reference
to the amount of
any deduction, I have adopted the applicant’s summary of the
questions:
(a) In consequence of each of the following agreements, did Idameneo hold rights
as the owner of copyright comprising an item or
items of intellectual property
within the meaning of s 373-15 of the 1997
Act:
- Sale
of Practice Agreement dated 16 September 1996 between Idameneo and Peter Umberto
di Michiel;
- Sale
of Practice Agreement dated 13 August 1998 between Idameneo and Joseph Galati
and Reyima Pty Limited;
- Sale
of Practice Agreement dated 5 May 2000 between Idameneo and Ronald Stephen
Fitch;
- Sale
of Practice Agreement dated 24 February 2000 between Idameneo and Ton Kuawn Lee,
Siam Nai Tang and Lee & Tang Pty Ltd;
- Sale
of Practice Agreement dated 19 October 1999 between Idameneo and Peter William
Urquhart Pty Ltd and Moremint Pty Ltd;
- Sale
of Practice Agreement dated 30 June 2000 between Idameneo and John
Parissis;
- Sale
of Practice Agreement dated 2 August 2000 between Idameneo and Kieran O'
Shannessy and Dr Kieran O'Shannessy Pty
Limited.
(b) If yes to question (a), in respect of each such item of intellectual
property was Idameneo entitled to a deduction under s 373-10(1)
of the 1997
Act ...:
- in
respect of (a)(1) and (2) for the year of income ended 30 June 1999;
- in
respect of (a)(3) to (5) for the year of income ended 30 June 2000;
- in
respect of (a)(6) and (7) for the year of income ended 30 June
2001.
(c) In consequence of each of the following agreements, did Idameneo hold
copyright which constituted a depreciating asset or depreciating
assets within
the meaning of s 40-30(2) of the 1997 Act:
- Sale
of Practice Agreement dated 11 January 2000 to between Idameneo and AC
Ginnane;
- Sale
of Practice Agreement dated 7 November 2002 between Idameneo and James
Lyons;
- Sale
of Practice Agreement dated 15 July 2002 between Idameneo and Promila Singh
Panwar;
- Sale
of Practice Agreement dated 27 October 2003 between Idameneo and Juan
Sabag;
- Sale
of Practice Agreement dated 12 February 2004 between Idameneo and Anilkumar
Manjunath Mundkur.
(d) If yes to question (c), in respect of each such depreciating asset was
Idameneo entitled to a deduction under s 40-25(1) of the
1997 Act ...:
- in
respect of (c)(1) for the year of income ended 30 June 2002;
- in
respect of (c)(2) and (3) for the year of income ended 30 June 2003;
- in
respect of (c)(4) and (5) for the year of income ended 30 June
2004.
ONUS OF PROOF
- Pursuant
to s 14ZZO of the Taxation Administration Act 1953 (Cth), the
Commissioner expressly puts PHC to proof of all facts upon which it seeks to
rely to establish that the assessments which are
the subject of these
proceedings, are excessive; see McCormack v Federal Commissioner of Taxation
[1979] HCA 18; (1979) 143 CLR 284 per Jacobs J at 314 and Gibbs J at 303.
- In
Gauci v Federal Commissioner of Taxation [1975] HCA 54; (1975) 135 CLR 81 at 89, Mason J
(dissenting) expressed the view that there was no statutory requirement for the
Commissioner to provide evidentiary
support for his assessment. In Federal
Commissioner of Taxation v Dalco [1990] HCA 3; (1990) 168 CLR 614 at 624-5, Brennan J,
(with whom Mason CJ, Deane, Dawson, Gaudron and McHugh JJ agreed) accepted the
view that Mason CJ had expressed
in Gauci. In contrast, however, the
taxpayer is required to establish the facts relied upon to displace the
Commissioner's assessment especially
since the facts concerning the
taxpayer’s income are peculiarly within the taxpayer’s knowledge:
Trautwein v Federal Commissioner of Taxation [1936] HCA 77; (1936) 56 CLR 63 at 87 per
Latham CJ.
ISSUES
- The
issues raised by the preliminary questions are:
- Whether
copyright subsists in the patient records or any part of the patient records of
the sample practices acquired by Idameneo
and, if so, who owned the copyright
prior to the sale.
- Whether
Idameneo, pursuant to a contract between it and the vendor, acquired ownership
(legal or equitable) of any such copyright,
or a licence to use any such
copyright. This issue involves the construction of the relevant sale agreement
including whether the
agreement is subject to an implied term. It may also
involve construction of the relevant practitioner contract.
- Whether
Idameneo gave any consideration for any acquisition of copyright from a vendor
and whether any such consideration was monetary.
- How,
if at all, was any such copyright used or available for use by Idameneo for the
purpose of producing assessable income; and whether
any works in which such
copyright subsisted were used for that purpose? This involves a distinction
between the use of copyright,
the use of a work in which copyright subsists and
the use of information in a work in which copyright is
claimed.
SOME GENERAL PRINCIPLES
- Copyright
subsists in original literary and artistic works pursuant to Part III of the
Copyright Act 1968 (Cth). Relevantly, s 32(1) provides that the
work must be “an original literary ... work that is unpublished and of
which the author was a qualified person”.
A qualified person is an
Australian citizen or a person who is protected or resident in Australia;
s 32(4). Section 35 of the Copyright Act provides that, subject to
exceptions provided in the section, the author of the work in which copyright
subsists is the owner of
the copyright. For present purposes only the exception
in s 35(6) is relevant. It 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 in the owner of any
copyright subsisting in the work by virtue of this
Part.
- Section
10(1) of the Act defines “literary work” as including: “(a) a
table, or compilation, expressed in words, figures or symbols;
and (b) a
computer program or compilation of computer programs”. This broad
definition expands the meaning of a “literary
work”; it does not
provide the basic or core meaning. For that, it is necessary to look to the
long line of authorities in
which this issue has been considered; see for
instance Exxon Corporation v Exxon Insurance Consultants International Ltd
[1982] Ch 119, RPC 69; University of London Press Limited v University
Tutorial Press Limited [1916] 2 Ch 601; O’Brien v Komesaroff
[1982] HCA 33; (1982) 41 ALR 255, Kalamazoo (Aust) Pty Ltd v Compact Business Systems Pty
Ltd (1985) 84 FLR 101.
- It
is clear that the use of the word “literary” is not a reference to
high-quality or style but rather to the fact that
the work is expressed in print
or writing; University of London Press at 608 per Peterson J. The
protection of copyright law is given to “the particular form of expression
in which an author convey[s]
ideas or information to the world”;
Hollinrake v Truswell [1894] 3 Ch 420 at 424 per Lord Herschell LC,
quoted with approval in IceTV Pty Ltd v Nine Network Australia Pty Ltd
[2009] HCA 14; (2009) 239 CLR 458 at [26] per French CJ, Crennan and Kiefel JJ. Their
Honours emphasised at [28] that copyright protection focuses on the form of
expression:
Copyright does not protect facts or information. Copyright protects the
particular form of expression of the information, namely
the words, figures and
symbols in which the pieces of information are expressed, and the selection and
arrangement of that information.
That facts are not protected is a crucial part
of the balancing of competing policy considerations in copyright legislation.
The
information/expression dichotomy, in copyright law, is rooted in
considerations of social utility. Copyright, being an exception
to the law's
general abhorrence of monopolies, does not confer a monopoly on facts or
information because to do so would impede the
reading public's access to and use
of facts and information. Copyright is not given to reward work distinct from
the production
of a particular form of expression.
- Copyright
arises when a work is made. For the purposes of the Copyright Act the
work is “made” when it is “first reduced to writing or takes
some material form”; s 22(1). Material form includes any forms of
storage of a work, whether or not that form is visible and whether or not it can
be reproduced;
s 10(1). Paragraph 28 of the explanatory memorandum to the
Copyright Amendment Act 1984 (Cth) supports the view that storage in a
computer memory by direct keying into the computer is sufficient to
“make”
a work within the meaning of s 22(1).
- In
IceTV the subsistence of copyright in the weekly schedule of television
programs supplied by the Nine Network Australia Pty Ltd had been
conceded by
IceTV. Despite this concession the case has much to say of relevance to
the questions of subsistence of copyright that arise in this proceeding.
Indeed, in their joint judgment, Gummow, Hayne and Heydon JJ commented, at
[95], that the concession made by IceTV appeared to have distracted
attention from two fundamental principles of copyright law namely, authorship
and material form. In particular
their Honours remarked that the authors of the
work in question had not been identified although there was no dispute that they
were
qualified persons. Their Honours emphasised, at [105], the importance of
identifying the authors:
The exclusive rights comprised in the copyright in an original work subsist by
reason of the relevant fixation of the original work
of the author in a material
form. To proceed without identifying the work in suit and without informing the
enquiry by identifying
the author and the relevant time of making or first
publication, may cause the formulation of the issues presented to the court to
go awry.
- In
Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010]
FCA 44 Gordon J emphasised the centrality of authorship at
[35]:
[A]uthorship is central to the determination of whether copyright subsists.
To suggest that copyright does not require the
identification of authors
where a work is sufficiently original (howsoever that question of originality is
to be answered) puts the
cart before the horse. It ignores the fact that
it is the original work of an author or authors who contribute to the particular
form of expression of the work and reduce the work to a material form that is
the act giving rise to the statutory protection of
copyright.
The Applicants’ approach appears to relegate the role of an author or
authors in determining subsistence of
copyright to some minor variable, useful
only in “[showing] that an author is a qualified person” where the
work is unpublished,
establishing “the duration of exclusive rights
comprised in the copyright” of “old works” “where
competing
claims of ownership are made” or where “doubt exists as to
the identity of the work”. Such a contention is
surprising and
untenable. It is contrary to the express words of the Copyright Act and
the copyright regime described by all judges of the High Court in IceTV
[2009] HCA 14; 254 ALR 386.
- Authorship
and originality rank together as essential elements of copyright; it is
necessary to prove both. The nexus between originality
and authorship was
clearly stated by French CJ, Crennan and Kiefel JJ in IceTV at
[33]:
Originality ... requires that the literary work in question originated
with the author and that it was not merely copied from another work. It is
the author or joint authors who bring into existence the
work protected by the
Act. In that context, originality means that the creation ... of the work
required some independent intellectual
effort, but neither literary merit nor
novelty or inventiveness as required in patent law.
- The
Full Court of the Federal Court succinctly explained the concept of originality
in Milwell Pty Ltd v Olympic Amusements Pty Ltd [1999] FCA 63; (1999) 85 FCR 436 at
[17], saying that the requirement was “directed not to originality of
ideas but to their expression”. As Latham CJ observed
in Victoria Park
Racing & Recreation Grounds Company Limited v Taylor [1937] HCA 45; (1937) 58 CLR 479
at 498, it also does not give a person “an exclusive right to state or to
describe particular facts”. The comments of
the Full Federal Court and
Latham CJ are consistent with further observations made by French CJ, Crennan
and Kiefel JJ in IceTV where, in the course of a discussion about
standards of originality and creativity, their Honours commented at
[48]:
It may be that too much has been made, in the context of subsistence, of the
kind of skill and labour which must be expended by an
author for a work to be an
“original” work. The requirement of the Act is only that the work
originates with an author
or joint authors from some independent intellectual
effort.
- As
these comments indicate, it is not sufficient, and in many cases it is probably
not possible, to establish that a work is an original
product of independent
intellectual effort without identifying the author. The Copyright Act
does not define “author” but it is accepted that the author is the
person who brings the copyright into existence in
its material form. This
definition has its limitations especially where the products of relational
databases are concerned; see
Telstra Corporation Limited v Phone Directories
Company Pty Ltd at [29]-[30].
- One
further point must be made about the requirement of independent intellectual
effort. Given that copyright protects the expression
of an idea not the idea
itself, it is necessary to bear in mind that the independent intellectual effort
that is required to produce
an original literary work must be effort directed to
the expression of the idea. In the case of patient records, even the
barest statement of a medical diagnosis, say “hypertension” or
“urticaria”, will have behind it considerable skill and expertise in
reaching that diagnosis. Similarly the decision
to prescribe certain medication
is an exercise of the professional expertise of the doctor, however, merely
writing the name of the
medication, for instance “Amoxil” or
“Adalat”, in the patient record does not involve any effort directed
to the expression of an idea. The medical expertise lies behind the formulation
of the idea; it is not, however, directed to the
expression of the idea.
Compilations
- As
already mentioned, the definition of a literary work included a compilation. A
compilation may be an original literary work but
only if it has been created
through the exercise of skill and judgment; IceTV. An example of such a
compilation is to be found in Ladbroke (Football) Ltd v William Hill
(Football) Ltd [1964] 1 All ER 465. The House of Lords found that a coupon
designed to record football wagers was an original literary compilation
involving considerable
skill, judgment, experience and labour reflected in the
way the coupon expressed and presented the chosen wagers for the eye of the
customer; see Lord Reid at 470; Lord Evershed at 472; Lord Hodson at 477; Lord
Pearce at 481. PHC has not contended that the patient
records or any part of
them are original literary compilations. This may be, as the respondent
suggests, because a compilation of
facts would not constitute an original work.
In any event it is not necessary for me to consider further the question of
compilations.
Works of joint authorship
- The
Copyright Act recognises the possibility of joint authorship. Section
10(1) provides that a “work of joint authorship”
is:
A work that has been produced by the collaboration of two or more authors and in
which the contribution of each author is not separate
from the contribution of
the other author or the contributions of the other
authors.
- Works
of joint authorship are dealt with in Division 9 of Part 3 of the Copyright
Act. It provides in s 78 that a reference in the Act to the author of
a work shall, in the case of a work of joint authorship be a reference to all
the authors
of the work. Thus s 35(2) when applied to a work of joint
authorship provides that the joint authors own any copyright subsisting in the
joint work. Where,
however, one or more (but not all) of the joint authors is
an unqualified person s 35(2) applies “as if the author or authors,
other than unqualified persons, had alone been the author or authors, as the
case may
be, of the work”; s 82(1).
- The
applicant did not make any submission that the patient records or any parts of
them are works of joint authorship. Presumably
the applicant accepted that the
patient records did not have the qualities required by the definition above,
however, for completeness
it is appropriate to make some comment on this issue;
see below at [121]-[122].
COPYRIGHT IN THE SAMPLE DOCTORS’ PATIENT RECORDS
- The
question of copyright in the sample doctors’ patient records is the first
of the issues identified at [28] above. PHC
must show that copyright subsisted
in part or all of the patient records of each sample practice and that the
vendor was the owner
of that copyright or had a transferable interest in that
copyright. The general principles relating to the subsistence and ownership
of
copyright are brought into sharp focus in IceTV. The elements that,
following IceTV, it is necessary for PHC to establish were formulated by
the respondent in its written submission as being
to:
(a) identify with precision the work or works in which it says copyright
subsists (“alleged copyright work”) and the author of the
alleged copyright work;
(b) establish that the author of the alleged copyright work was a
‘qualified person’ for the purpose of the Act;
(c) establish that the alleged copyright work is a ‘work’ for the
purpose of the Act;
(d) establish that the alleged is an ‘original’ work; and
(e) prove the foundation of the vendor’s claim to own that work (eg as an
employer of the author).
- In
Breen v Williams (1996) 186 CLR 71 at 127, Gummow J commented that the
composition of the medical records under consideration by the defendant, Dr
Williams,
may have involved the authorship by him of what, whilst not of literary quality,
were nevertheless literary works for the purposes
of copyright
law.
It was not necessary in Breen v Williams
for his Honour to decide the point and his Honour did not purport to do so.
However his Honour’s comments have been relied
on by PHC as authority for
the proposition that a medical (or dental) practitioner may have copyright in
material authored by the
practitioner and forming part of the
practitioner’s patient records.
- As
a statement of principle the proposition is, with respect, clearly correct
however, whether copyright subsists in particular medical
records can only be
determined after careful examination of the records in question. As the
extracts from the medical records tendered
by the sample doctors show, there is
considerable variety of style and content in the records in evidence in these
proceedings.
In this regard it is helpful to note the context in which Gummow J
made the comment quoted above, namely Dr Williams’ approach
to record
keeping which his Honour described at 117, as
follows:
It is the practice of the respondent to maintain a file with respect to each
patient. Usually this will include handwritten notes
containing a variety of
information bearing upon such matters as the description provided by the patient
of the patient's medical
condition, the circumstances in which the patient was
referred to the respondent, the respondent's notes of his observations upon
examination of the patient and conclusions in relation thereto (including what
the respondent called his “medical musings”
about the patient's
condition), and communications with other practitioners treating the patient and
with the family and friends
of the patient. Further, where the respondent has
reason to believe or suspect that there may be criticism of his treatment or
advice,
he keeps short notes of any information or developments which may bear
upon any such future dispute. All of these notes are written
in an abbreviated
fashion which conveys meaning to the respondent but which might be difficult for
others to follow.
- The
Commissioner has not conceded that copyright subsists in the patient records of
the sample doctors and it is therefore necessary
to consider the records of each
sample practice. For PHC to show that copyright subsisted in the patient
records of the sample practices
it must not only identify the works in which it
says copyright exists but must also show that those works were original literary
works of identified authors who are qualified persons. These questions of
subsistence and ownership of copyright in the patient
records under
consideration here must be addressed in respect of the records of each sample
practice. The fact that the same principles
apply in respect of each practice
does not necessarily yield the same answer in each case. The individual
circumstances pertaining
to each practice must be considered.
Composition of the patient records in respect of which copyright is claimed
- The
documents kept on file in the sample practices for each patient include not only
records created in that practice but also documents
created by third parties and
sent to the practice such as reports from specialist practitioners as well as
procedural and test reports
such as radiology and pathology reports. PHC does
not assert its claims in respect of these third party reports.
- According
to the written submissions of PHC the patient records in respect of which it
claims copyright include, in respect of all
the sample doctors other than Dr
O’Shannessy, “a health summary sheet (“summary sheet”),
consultation notes
(including prescriptions for medicines) (collectively,
“consultation notes”) and specialist referral and other letters
written in respect of the patient (“referral letters”)”. In
some cases those records were paper records, generally
handwritten. In some,
the records were electronic, deploying software known as “Medical
Director” and used mainly for
prescriptions. In others they were a
mixture of electronic and handwritten records. Given that PHC does not claim
copyright in
the documents referred to in [47], subsequent reference to patient
records in these reasons refers only to the records in respect
of which PHC
claims copyright and not to the third party reports described above. PHC puts
its claim in the strongest terms. In
its written submissions it states in
respect of both the medical and the dental records that the subsistence of
copyright in these
records is “uncontroversial”.
- PHC
submits that, within the meaning of the Copyright Act, each referral
letter is an original literary work. In relation to the summary sheets and
consultation notes, its primary submission
is that for each patient they
comprise one original literary work however, in the alternative, it submits that
they consist of separate
original literary works. In relation to the patient
records from Dr O’Shannessy’s sample practice, PHC submits that
the
dental charts for each patient are original and/or literary works and the
clinical treatment notes for each patient are original
literary works.
- PHC
also submitted that copyright subsisted in the patient lists of each sample
practice. Patient lists are mentioned only in PHC’s
written submissions.
They are not referred to in PHC’s Statement of Facts, Issues and
Contentions or in the respondent’s
Appeal Statement. The
respondent’s Note of Issues in Dispute lists the question of whether the
patient lists are original
literary works as one of the issues. The respondent
notes however that PHC had not produced any lists. At the hearing when I
questioned
senior counsel for PHC, Mr J W de Wijn QC, about his client’s
position on the point he said that PHC does claim copyright in
the patient lists
and was not abandoning that claim however
... as a matter of substance the value lies in the patient records because ...
the efficiencies that are gained through the Primary
Health model are gained
through computerising the patient records and we would say that’s where
the real value lies.
- Be
that as it may, the fact is that PHC did not produce any examples of such lists,
there was no evidence on the point and it was
not addressed in submissions. As
I have already pointed out the definition of a literary work includes a table or
compilation which
would seem, in principle, to cover patient lists, however
without further evidence as to whether the other requirements for copyright
have
been met I am not in a position to make any finding on the issue.
PATIENT RECORDS FROM SAMPLE PRACTICES – THE EVIDENCE
- As
previously mentioned, it is necessary to consider individually the evidence
relating to the records of each of the sample practices
in order to assess the
claim that copyright subsists in those records and to determine the ownership of
any copyright. Because many
of the records, in particular the handwritten
consultation notes, are difficult to decipher the transcriptions in the
following summaries
may not be entirely accurate, nevertheless in most cases the
overall sense is sufficiently clear for present purposes. The following
summaries relate to the consultation notes and health summaries for the sample
practices. Prescriptions and referral letters are
discussed separately below at
[135] and [136] respectively.
Dr P di Michiel
- Dr
di Michiel is a general medical practitioner. An extract from his passport
annexed to his affidavit of 19 December 2008, indicates
that he is an Australian
citizen and therefore at all relevant times he was a qualified person within the
meaning of s 32 of the Copyright Act.
- As
can be seen from the summary in Schedule 1 to these reasons, Dr di Michiel was
the sole vendor of the sample practice to PHC.
The sample practice was carried
on at Jacob Street, Bankstown where he was in partnership with Dr Albert Cheung.
In the period from
1977 to 1996 Dr Cheung and Dr di Michiel together employed 6
reception staff however they each had their own patients with whom they
had
individual consultations. There was no evidence of patient records authored in
whole or in part by Dr di Michiel’s former
partner Dr Cheung. There were
no other medical practitioners employed at the sample practice.
- Dr
di Michiel also was involved (with four others) in a medical practice at Rickard
Road, Bankstown where he saw patients about one
evening per week. This practice
was not the subject of the sale to PHC and is distinct from the sample practice.
- In
the sample practice Dr di Michiel kept hardcopy records on cards which were
about one-third the size of an A4 page and which were
filed alphabetically. He
instructed the reception staff that for each new patient they should record the
patient’s name, address,
Medicare number, pension number, date of birth
and marital status on a card. Dr di Michiel would add his consultation comments
to
that card. Dr di Michiel did not refer to the use of a health summary which
was separate from the consultations notes and it would
appear that the
patient’s medical history was recorded on the cards with the consultation
notes.
- Two
examples of those hardcopy records, both in the form of handwritten consultation
notes, were tendered in evidence. On cross-examination,
however, Dr di Michiel
emphatically denied that the record of di Michiel’s patient No 1 was a
record of a patient from his
sample practice. He denied that the handwriting
was his and was not able to identify the handwriting. I am satisfied
that Dr di Michiel was speaking the truth and the Commissioner did not suggest
otherwise. Consequently, no assistance
can be gained from this record.
- The
second record described as di Michiel patient No 6, was accepted by Dr di
Michiel as the record of one of his patients. The
record consisted of
consultation notes that extended over a long period. The patient first saw Dr di
Michiel one week after birth
in 1981 and the record continued to 1996, the last
entry being dated 2 September 1996. A typical series of entries commencing with
an entry made on 13 April 1982 give the sense of a developing picture of
the patient’s health and form a continuous narrative.
The entries
read:
|
13/4/82
|
frequent wheezes - a little distressed – Dr Tonk [paediatrician to
whom the patient was referred] - Ventolin 1½mls 6/24
Nuolin 6mls 6/24
|
|
30/4/82
|
URTI – cough – no rhonchi – Drixine nose drops - ...
syrup
|
|
2/8/82
|
Developed wheeze yesterday – chest ... rhonchi ...Nuolin syrup ...
Ventolin ...
|
|
31/8/82
|
Vomiting ....
|
|
6/9/82
|
Vomiting has settled – now diarrhoea ...
|
|
6/1/83
|
Cough – URTI – wheeze - ... syrup
|
|
20/1/83
|
URTI – acute wheezy bronchitis – Bactrim syrup – ventolin
syrup...
|
- The
notes appeared to be all in the same handwriting which Dr di Michiel identified
as his handwriting. He added that, despite the
patient not being named he knew
which patient it was. Although brief and succinct the entries could have been
expressed by another
doctor quite differently.
Dr J Galati
- Dr
Galati’s sample practice was in Pittwater Rd, Manly. He bought that
practice, including the medical records, in 1975 from
Dr Brian Clarke. Dr
Galati’s patient records were kept in hardcopy form on cards,
9”x4” in size, and filed in
alphabetical order under the
patient’s name. Dr Galati employed reception staff who would enter a new
patient’s details
on the card. Those details included name, address, date
of birth, Medicare number, any allergies and, in the case of elderly patients,
the name and phone number of a contact person. Dr Galati said that his custom
was to make notes on a patient’s card during
consultations.
- The
respondent tendered 2 examples of patient records from Dr Galati’s sample
practice. These records, although kept in similar
hardcopy form, were very
different from those described above for Dr di Michiel patient 6. The
handwritten record for the first
patient (Galati patient 1) consisted of what
were obviously 5 cards (or sides of cards). There were numerous date stamps
–
presumably corresponding to consultation dates. The handwriting varied
from difficult to impossible to read and I could decipher
only odd words such
as, “Rt breast abscess”; “flu vac”, “blood”,
“joint pains”, “losing
weight”. The occasional longer
entry could be read such as, “fell down steps at work” and
“well for 6 years”.
- The
handwritten record for Galati patient 5 was similar. Only two pages were
tendered. The first page showed evidence of two different
hands, one of which
Dr Galati identified as that of Dr Blatchford. The other he could not
identify but surmised that it was
probably a locum engaged when he was on
holidays. In any event it was not Dr Galati’s handwriting. On the
second page Dr Galati identified some of the handwriting as his but could
not identify the other handwriting. That page contained two entries
dated prior
to Dr Galati moving to the PHC practice with the remainder of the entries being
dated after the move which was in August
1998. The style of entry is similar
(although somewhat more legible) than that in respect of Galati patient 1.
Dr P Urquhart
- Dr
Urquhart’s sample practice, which he opened in January 1987, was at Castle
Hill. In his affidavit sworn on 19 December
2008, Dr Urquhart said that
initially he practised as a solo practitioner but at the time of the sale to PHC
he had “recruited”
ten other general practitioners to work in the
practice.
- The
respondent tendered a copy of a practice agreement dated 9 May 1997, between one
of the ten doctors, Dr Allan Mak, and Moremint
Pty Ltd, a service company that
provided services to Dr Urquhart and “other doctors”. The agreement
provides for Dr
Mak to conduct his medical practice in the same premises as the
sample practice and for Moremint to provide various services to facilitate
the
conduct of Dr Mak’s practice. Clause 9 of that agreement stated that
nothing in it should be construed as giving rise
to “an agency,
partnership or employer/employee relationship between the parties”. There
is no reference in the agreement
to the patient records created by Dr Mak or to
the copyright in those records. In cross-examination Dr Urquhart agreed that,
with
the exception of a trainee doctor, all the doctors who worked in his
practice were engaged on similar terms to those for Dr Mak.
- In
his oral evidence Dr Urquhart attempted to fill the gap in the evidence stating
that, after the sale of his sample practice to
PHC, all the patient records,
whether authored by him or by the other doctors, were transferred to PHC. He
also said that whenever
a patient requested a copy of part of their patient
record he would decide whether to provide the copy without reference to the
other
doctors.
- From
1987 to 1991 Dr Urquhart kept patient records in hardcopy form on green cards.
He described the procedure as follows:
I would instruct my receptionist to record at the top of the card a
patient’s demographic details, including his or her name,
date of birth,
address and contact phone number. Underneath this information, I would record
notes of the consultation and other
diagnostic information next to the date of
the patient’s visit. I would often record a summary of the
patient’s medical
history and any allergies and medication on the very
front card of their file and would simply add further cards as was necessary.
- In
1991 when he moved to different premises in Castle Hill, Dr Urquhart began to
use the record keeping system of the Royal Australian
College of General
Practitioners (GP System) which included a health summary sheet and consultation
notes kept in a manila folder
under the patient’s name. Dr Urquhart
described his use of the GP System as follows:
During a patient’s first visit, it was my usual practice to make notes on
the ... health summary sheet of his or her relevant
medical details including,
but not limited to, his or her previous medical history, family medical history,
any operations or any
allergies that he or she might have and his or her current
medications. I would then write the notes of the consultation, diagnosis
and
treatment on the patient’s progress notes.
These records were kept in filing cabinets with the
original “green card”, any specialist reports, pathology and
radiology
reports.
- As
an example of the patient records in Dr Urquhart’s sample practice, the
applicant tendered a record of a patient referred
to as Urquhart patient 5. The
record consisted of a summary sheet and history followed by 17 pages of
consultation notes made by
the consulting doctor (generally, but not always, Dr
Urquhart) interspersed by extracts from, or summaries of, reports from other
doctors, probably specialists, which had been copied by the clerical staff into
the record. A few short extracts will illustrate
the point. The first page of
the record has notes of 6 consultations with Dr Urquhart as follows:
PU - 9/11/88 140/90 ↓ Inderal to ¼ (100) mane
When she went off them before she got too exhausted and developed palp
PU - 18/11/88 stop Inderal and change to Renitec 10mg ½ m. Still on
Catapres ...
Aim: to stop Catapres & ...
PU - 23/11/88 160/100 ↑ increase Renitec say 10mg m to ...mg day and
↓ Catapres to tm and tn
PU - 30/11/88 160/110 HS... ↑ Renitec to 20mg (2x10mg) and stop
Catapres
PU 6/12/88 Attended W H... on Adalat 20mg bd & Tenormin x 1.
HS 160/95 11 am R Scan 12/12 and spec appointment 19/12
PU - 12/12/88 160/100 HS Π chest Π
- Dr
Urquhart confirmed that all the handwriting on this card was his. It appears
from his identification of his handwriting and that
of others that he typically
preceded his entries on the records with his initials, (PU) and that other
doctors generally adopted
a similar practice. A few pages later in the record
of the same patient there is the following:
Pu – 17.1.89 140/90 HSΠ
On Terormin ...m adalat 20 mg bd
Report: Simon Roger 22.12.88 Double atenolol to 100mg daily – If her
blood pressure does not come under control then double
her nifedipine dosage
also. Low protein diet
Pu – 9/2/89 140/90 HSΠ Tenromin x ...
Pu – 3/4/09 1 w ago severe bilat leg cramps.
140/90 HSΠ ChestΠ rev HW
Report J Stewart (Westmead Hospital) 18-4-89 – “renal scan showed
only that she had diffuse renal parenchymal disease,
slightly raised serum
calcium (2.8, 2.9 mmol/l) parathyroid hormone level, it too was slightly raised
(1.23.mg/ml normal these two
findings together do suggest primary
hyperparathyroidism, which however must be mild.”
Pu - 12/5/89 140/90 HSΠ Adalat 20 mg TAB ... bd
Tenormin ... m
- The
health summary for this patient listed “Penicillin, Lumotil,
Stemitil” under the printed heading, “allergies”.
It also
listed medications by name and dose. Under “Admissions” was
written, “Hysterectomy – ov intact,
Appx 75, Lumps L breast –
benign”. Another example of a health summary was annexed to Dr
Urquhart’s affidavit
of 19 December 2008. It has only three entries:
“hypocholesterolaemia”, “mild sleep apnoea” and
“on
Beconase”.
Dr S Tang
- Dr
Tang’s sample practice, which she and her husband purchased in 1987, was
at Nelson Street, Fairfield. At those premises
she worked as a general
practitioner in partnership with her husband, Dr Ton Kuawn Lee. In her
affidavit affirmed on 13 February
2009 she stated that “As the practice
got busier” they were joined by Dr Boon Soo Lee although she did not give
a date.
Dr Tang referred to Dr Boon Soo Lee as “an independent
contractor” however, while this may have been her understanding
of the
relationship, there is no evidence on this point and Dr Tang’s opinion
does not establish the point.
- All
doctors who worked at the sample practice adopted a standard procedure in
creating and maintaining handwritten patient records.
Those records consisted
of the cards used by the doctor from whom Dr Tang and her husband purchased the
practice, along with a consultation
card manufactured by Optiplan and the GP
system; see above at [67]. On a patient’s initial visit the reception
staff would
enter on a card the patient’s name, address, date of birth,
contact telephone number, Medicare number and pension number if
relevant. This
card was then placed at the front of the new patient’s file.
- During
the first consultation Dr Tang would note details of the patient’s
personal and family medical history, any allergies,
smoking, alcohol consumption
and medication. She would also record her diagnosis and treatment plan for that
patient. Notes of subsequent
consultations were entered in a similar manner on
the same card. Patient records were stored in alphabetical order in a filing
cabinet.
Pathology, x-ray and specialist reports were stored in a separate file
created for that purpose and marked with the patient’s
name. The records
were not filed with the cards however, Dr Tang would note results from these
reports onto the patient’s card
in red pen.
- Examples
of records from Dr Tang’s sample practice were tendered in evidence. The
first example, which was tendered by the
respondent, was Tang patient 1. The
same record, with additional pages, was annexed to Dr Tang’s affidavit.
On cross-examination,
Dr Tang stated that this patient was seen mostly by her
husband and only 10% of the time by her. The patient’s first visit
was at
age 1 month in 1992 and the last notation was in 1999. The notes over this
period consist mainly of brief notes of symptoms,
diagnoses and the medications
prescribed with the occasional more expansive comment about the patient’s
condition. For example
the notes of the patient’s first visit are:
“1/12 old - c/o URTI, fever, oral thrush, sneezing” followed by the
prescribed medication. Other typical examples from this patient’s records
are as follows:
4.5.92 7 kg - growing well. On fresh milk and vitamins
...
1.7.93 URTI - Rx Amoxil
...
15.7.93 cough and wheezing, can’t sleep at night, ronchi generalised
...
15.2.94 URTI – tonsillitis Fever 38°C - chestΠ - Rx Pen
...
25.7.94 - Fever 38° Coughing 7 1/52 off food – generally unwell ...
chestΠ ENTΠ
Rx Amoxil, Panadol
- Sample
records of a patient known as Tang patient 4 were also tendered. In
cross-examination Dr Tang said that this patient was
also not one of her
patients although the record came from her sample practice. This record
appeared to have been written in several
different hands but, in form, was
similar to that of Tang patient 1.
Dr Fitch
- Dr
Fitch’s sample practice was in Smithfield NSW where, from 1981, he was in
partnership with Dr Jack Spillane. Dr Fitch and
Dr Spillane each had their own
patients in the sample practice. After Dr Spillane retired in 1990 Dr Fitch
continued to carry on
the sample practice as a sole practitioner. The evidence
is not specific about what happened to Dr Spillane’s medical records.
The
implication is that they remained with the sample practice and, presumably for
those patients who continued to visit the sample
practice, they were added to by
Dr Fitch.
- From
time to time Dr Fitch engaged locum doctors on a sessional basis as needed.
Dr Fitch’s evidence of the locums’ terms of engagement was
vague. He could not recall whether he paid them holiday pay
or superannuation
although he said that tax was deducted from their pay. The respondent tendered
a profit and loss statement from
the sample practice for the year ended 30 June
1997. The statement showed the amounts of $31,025 as “Locums
Salary” for 1997 respectively. In a separate entry for
“Salaries” it showed the amount of $60,835 for the same year. Dr
Fitch agreed that the latter
amount related to the salaries of the secretarial
and administrative staff. The statement also showed an amount paid for
“Superannuation
contributions – employees” which the
respondent suggested was also for the secretarial and administrative staff. Dr
Fitch said he was unable to recall if this was so but volunteered that “It
was all done according to law”.
- Patient
records at the sample practice were handwritten on small paper cards. They were
created and maintained in a manner not materially
different from that described
above in respect of Dr Tang’s sample practice with the exception that Dr
Fitch said he had a
regular practice at the end of each day, of writing more
detailed notes of the consultations he had had that day. No examples of
these
more detailed notes are to be seen in the patient records that were tendered.
Patient files were stored alphabetically.
- Three
examples of patient records from the sample practice were tendered. In the
record for Fitch patient 1 the medical history
listed four conditions and one
medication. The handwritten consultation notes for this patient commence with
an entry for 8 August
1983. The first page is reasonably typical although some
parts are illegible:
8/8/83 6.57 Ear Syringe
10/8/83 - 6.35
13.8.83 - 12.22 [illegible] (? Needs audiogram ? L ear ↓
19.8.83
7.9.88 ... RTI Rx Ergenso ... R ear syringe
3.10.89 Cholesteoma [sic] L ear ? (awaiting surgery)
... [illegible] L ear ache - BP 130/88
- The
handwritten consultation notes for Fitch patient 2 had entries made by several
different hands. The handwriting is difficult
to decipher however it is
possible to discern notes of symptoms as well as of diagnoses and treatment.
While the notes read as memory
prompts rather than a narrative, they would
undoubtedly have had meaning for the doctors making the notes.
- As
with patient 2 the consultation notes in the records of Fitch patient 4 appear
to show entries made by several different hands.
The entries are, however, more
terse consisting, more often than not, of a brief note of diagnosis and
medication.
- The
consultation notes of the sample practice record for Fitch patient 6 are
similarly brief. The entries commence on 26 July 1996
and the last is dated 7
March 2000. The entries for the first 8 consultations consist almost entirely
of blood pressure measurements
and other test data. Throughout the 11 pages of
the record there is the occasional comment such as “90 minutes of extreme
vertigo” on 31 August 1998 and “mole check on back” on 28 July
1999. Overall the records consist largely of entries
data.
Dr Parissis
- In
1977 Dr Parissis commenced work as a general practitioner in two locations,
Dulwich Hill and Belmore. After six months Dr Parissis
was joined by a partner,
Dr Alan Hor and together they shared the running expenses of the practice at
these two locations but for
the most part they saw their own patients. In 1996,
the partnership was dissolved and thenceforth Dr Hor practised at Dulwich Hill
and Dr Parissis at Belmore. Dr Parissis retained all medical records of the
Belmore practice including the records of those patients
who had previously
consulted Dr Hor at Belmore. The Belmore practice (sample practice) was sold to
Idameneo in 2000. In his second
affidavit sworn on 24 May 2009, Dr Parissis
said that he recognised that some parts of the consultation notes that were
acquired
by PHC were written by his former partner, Dr Hor.
- Dr
Parissis described the method of keeping patient records in the sample practice.
From 1977 to some time in 1997 patient records
were handwritten on cards which
were approximately one third the size of an A4 page. Reception staff would
record each new patient’s
name, address, date of birth, Medicare number
and pension number on the top of a new card. During a patient’s initial
consultation
Dr Parissis would check with the patient the accuracy of the
information recorded by reception staff and also make a record of the
patient’s personal and family medical history. Consultation notes
(including the date of the consultation) were handwritten
on the cards which
were then filed in alphabetical order.
- In
1997 or 1998, Dr Parissis began using the Medical Director software to issue
prescriptions. Over a period (unspecified) in which
Dr Parissis became more
familiar with computers he increasingly used the computer to make electronic
records of diagnoses and treatment
and eventually he included the results of
patient consultations with him. At the same time he continued to use
handwritten cards.
Dr Parissis annexed a copy of a handwritten card to his
affidavit sworn on 23 December 2008. The copy is very difficult to read
because
of the quality of the copy and the handwriting. Sample records for four
patients were in evidence. An extract from the
record tendered for Parissis
patient 1 is as follows:
30/3/94 Hep B (2nd) ... vacc No complic with
1st vac
17/4/94 4/52 “Diarrhoea” – on SR no [illegible] 8/52 try
Nutramigen ... thriving well
28/4/94 [illegible]
1/6/94 Hib titre vacc – nasal cong - saline nasal tixylix [illegible] No
further diarrhoea
15/6/54 URTI S/S C° [illegible] Runny nose
16/7/94 Triple Ag/Polio; no S/S
5/8/94 Hib titre on S26 – doing ok
27/8/94 cough [illegible] (Hep B) vacc –
19/9/94 Triple Ag/polio Serum – wheezing Ventolin [illegible]
27/9/94 C° [illegible] Hib titre (3rd)
- The
above extract is typical of the entries in the sample practice patient records
in evidence for Parissis patient 1, 2, 3 and 4.
Dr O’Shannessy
- Dr
O’Shannessy’s sample practice was a dental practice that he first
opened in 1972 in Beames Avenue, Mount Druitt.
In 1973 he moved to premises in
what later became Westfield, Mount Druitt. He continued to practise in that
Centre until August
2000 when he sold the sample practice to Idameneo. Dr
O’Shannessy was a sole practitioner although he said that he occasionally
“employed” other dentists to work for him. He estimated that at the
time of the sale he had created records for approximately
20,000 patients.
- The
patient records were handwritten and kept on cards on which Dr O’Shannessy
would enter identification details and relevant
details of the patient’s
medical history. Dr O’Shannessy also recorded the date of the
consultation, diagnosis and treatment
on the card. Specialist and x-ray reports
were attached to the cards which were filed in alphabetical order.
- Dr
O’Shannessy started using computer records in about 1979. The software he
initially used was primarily to enable easy and
efficient billing of patients.
He commenced using the “ATS software system in about 1989 and said that by
the early 1990s
he was using “a sophisticated computer system to store all
patient medical and dental information” alongside his paper
card system.
In 1995 he moved to “Dental for Windows” which, he said,
“includes all my patient dental records”.
With this software Dr
O’Shannessy is able to write his own notes directly into the computer as
well as on paper cards. In
1995, or thereabouts, Dr O’Shannessy moved
many of his older paper card records to microfilm. As a result of these
changes
by 1998 Dr O’Shannessy’s patient records consisted of paper
cards, microfilm records, electronic records as well as x-ray
and specialist
reports.
- Dr
O’Shannessy annexed to his affidavit of 19 December 2008 a sample of a
paper card record and a sample of a computerised
record. The card records have
4 columns of information being, the date, the treatment, the fee and the
payment. While I have no
doubt that the treatment recorded on the card would be
meaningful to the dental expert, it is enigmatic to the lay person. What
can be
said, however, is that it consists largely of technical shorthand notations as
in the following extracts for successive dates
in
1995:
6/ MO CH
5/ DO CH FII/ LED / CAV
7/ MO CH
6/ MO CH/FLC
8/ OB CH/FLC/(...BL)
Cons re “cold sens + (?) bite high [illegible] Pt specifying “old
fill” (7) [illegible] + cold sens test →
Rx watch Rx /6 +Scapol
NV
- The
computer record is, again to the lay eye, more expansive. A short extract from
8 October 2001 is sufficient to illustrate
the style of the sample
record:
Further detailed explanation re residual infection periapical mesial root and
need for intra-radicular A/B dressings and long term
and also reassurance re
long term A/B intra-rad is not like long term I/O.
Also re obstructed/closed apical sections of canals.
Rx Appts 1-2 mths apart for several visits
38 ML rci removed ... MB; ML and pulp chamber led ...fic/c’wool ... 1
mD
- In
his second affidavit sworn on 27 May 2009 Dr O’Shannessy referred to the
records of two patients (O’Shannessy patient
2 and O’Shannessy
patient 6) that have been tendered by the applicant. He
stated:
For each patient, I recognise that parts of the records were created during the
course of my practice before it was acquired by Primary
Health Care ... and
other parts of the records were created on behalf of Primary Health Care when
the patient visited Mount Druitt
Medical and Dental Centre ...
- In
relation to those parts of the records of O’Shannessy patient 2 and
O’Shannessy patient 6 that related to his sample
practice, Dr
O’Shannessy said that some parts (not identified) were written by dentists
“employed by me on a part time
basis”. They included three named
dentists.
Dr A Ginnane
- Prior
to moving to the PHC centre, Dr Ginnane practised at Leichhardt in a practice
that he purchased from Dr Eric Barber in 1984.
All Dr Barber’s existing
medical records were included in the purchase. Initially he continued the paper
card system of record
keeping that Dr Barber had used however in 1984 he started
to use the GP system described above at [67]. In about 1999 he started
using
the Medical Director software system to provide prescriptions and letters of
referral to specialists. Dr Ginnane annexed to
his affidavit of
19 December 2008 examples from his sample practice of a health summary
sheet and 9 pages of consultation notes.
The applicant also tendered sample
patient records from three patients, Ginnane patients 1, 2 and 5. The
respondent tendered a
sample of the record of Ginnane patient 4. Dr Ginnane
explained that the computer records for each of these patients had been
destroyed
after his move to the PHC centre having been transferred onto the PHC
computer system.
- In
his affidavit sworn on 20 May 2009 Dr Ginnane said that Drs Barber, Weaver, Cox,
Martine Walker and Irene Walker were employed
by him at the sample practice
which was at Perry Street, Leichhardt. Dr Ginnane testified that these doctors
were paid wages each
week. They were paid superannuation, holiday pay and long
service leave, where appropriate. On the basis of that evidence I find
that the
doctors were employees and not independent contractors. Dr Ginnane was not sure
whether the employer was Dr Ginnane personally
or his company, A Ginnane Pty
Ltd. It appears, however, from the taxation returns of both Dr Ginnane and his
company that the doctors’
salaries were paid by the company and, on the
balance of probabilities, I find that the doctors were employed by the company.
- The
records tendered for Ginnane patient 1 extended for 256 pages and included
consultation notes, letters to and from specialist
doctors, prescriptions,
pathology reports and x-ray reports. The specialist reports were mainly
addressed to Dr Ginnane or Dr Martine
Walker. Some were addressed to Dr Cox.
The handwritten consultation notes showed evidence of entries in several hands,
some of
which are more legible than others. In cross-examination Dr Ginnane was
questioned about the authorship of some entries. He was
able to identify his
own handwriting but, except for some instances of Dr Martine Walker’s
handwriting he was unable to identify
other handwriting with any certainty. The
handwriting in large parts of the consultation notes for this patient are
difficult to
decipher and only the odd word or phrase is legible. Doing the
best I can, however, the following extract of successive consultations
in 1994
(the rest of the date is obscured) is reasonably typical of the style of
entry for this patient and for the other Ginnane
patients:
1 Cough continues but clearing with [illegible]
Headache
Chest ears
2 loss of voice
wants to find cause of this as she gets it ea year
[illegible] feels it might be reflux
wants second opinion Luchese Five Dock → Vibramycin
3 still sick dizzy drowsy Luchese next Wed (7/9)
120/80 [illegible] Chest Stemetil ...
4 PR 80 130/80 HS Chest Rulide
Mild Laryngitits [illegible]
- Neck
pain → right arm J → L finger – winter coming on, cough,
chest, ROM neck 45° [illegible]
Dr Panwar
- In
July 2002, PHC purchased Dr Panwar’s sample practice at Wyoming, New South
Wales. Dr Panwar had acquired the practice,
including the patient records, in
1982 from another practitioner, Dr Khanna. Dr Panwar did not employ any other
doctors to work
in the sample practice however, her husband who is also a
general practitioner and had his own practice at Wamberal, New South Wales,
held
consultations two days per week at the sample practice. Similarly, Dr Panwar
practised two days per week at her husband’s
Wamberal practice, the
purpose of this arrangement being to give patients at both practices the option
of seeing a female or a male
doctor.
- For
two years after she acquired the sample practice Dr Panwar continued the system
of record keeping that Dr Khanna had used. This
entailed the use of cards on
which Dr Panwar made notes during consultations. After two years, Dr Panwar
modified the system slightly
in order to tailor it to her “specific
needs” however she did not describe the modifications.
- At
a patient’s first consultation at the sample practice the reception staff
would open a new file and record relevant personal
information on a new card.
This information included the patient’s name, contact details, date of
birth, occupation, Medicare
number, marital status, blood group and whether the
patient was privately insured, was a war veteran or a pensioner. The
patient’s
personal and family medical history was entered by Dr Panwar
during the first consultation. Reports received from specialists or
in relation
to pathology, were stapled to the record card or kept in a separate manila
folder when they became more numerous. In
1998, Dr Panwar began issuing
computer generated prescriptions using the Medical Director software however,
patient records continued
to be handwritten on cards.
- Around
2000 Dr Panwar began using the GP system for keeping patient records. This is
the same system used by Dr Urquhart and is
described above at [67]. Dr Panwar
said that she adopted a practice of highlighting medical conditions and other
important details
in different colours to assist in identifying information. In
about 1998 she began to use the software program, Medical Director,
to complete
prescriptions. She also occasionally used it to write referral letters but not
for consultation notes. Neither in her
affidavit nor in oral evidence at the
hearing, did Dr Panwar address the question of entries in the patient records
that may have
been made by her husband or by Dr Khanna. Similarly, there is no
evidence as to whether Dr Panwar ever utilised the services of
locum doctors.
- Dr
Panwar annexed to her affidavit examples of the records she kept at the sample
practice. Other examples were tendered by the
respondent. Irrespective of the
form of the record keeping, all examples of records from the sample practice
were handwritten and
difficult to decipher as well as being, generally, terse
and monosyllabic. The records of both Panwar patient 1 and Panwar patient
2
appeared to have been written in several different hands. Some cards were
almost entirely lists of data such as blood pressure
readings and medications.
The following example from the record of Panwar patient 2, with some gaps where
the writing is illegible,
illustrates the
point:
13 Feb 1981 BP 140/90 Script Inderal, Enduron
5 Mar 1981 BP 130/88 ... Enduron, Inderal, Zadine, Panamax
21 April 1981 BP 120/86 ... for Inderal , Enduron, Panamax ....
27 April [illegible]
25 May 1981 BP 120/86... for Inderal , Enduron, Panamax
25 Jun 1981 BP 140/90... for Inderal, Enduron, ... Panamax
2 Jul 1981 flu ... Amoxil, .... Panamax
[illegible]
31/8/81 BP 140/94 ... for Inderal , Enduron, Panamax
1 Sept [illegible]
[date illegible] BP 124/80 ...for Inderal, Panamax
Nov 1981 BP 132/84 ...for Inderal, Panamax
10 Dec 1981 BP 112/72 ... for Inderal, Panamax
12 Jan 1982 130/85, Doing well, Rpt Inderal, ... Enduron, Panamax, next ... ESR
... electrolytes, ... E.C.G. - ...
15 Jan 1982 Blood sent - ... for cold and headache
22 Jan 1982 Uric acid ↑ Triglyceride ↑ Rx Zyloprim 300mg x 30
12/2/82 [illegible]
- Throughout
the records there could be seen a very few instances of slightly more extended
comments recording the details of a consultation.
For instance, in the records
produced in respect of Panwar patient 1, the following comments could be
discerned:
- “Now c/o
diarrhoea – possibly antibiotic induced
- V upset about
son – in jail – alcoholic
- V upset about
son – feels fluey
- Urticaria
appears to be in control [with] antihistamines and
...
Dr Lyons
- From
1989 to 1997 Dr Lyons practised as a general practitioner in partnership with Dr
Edmund Barbour from premises in Five Dock.
Dr Lyons had purchased his share in
the partnership from Dr Roper. After Dr Barbour retired in 1997 Dr Lyons
continued in sole
practice. When Dr Lyons joined the practice patient records
were kept on cards however in 1990 the practice adopted the GP system
of record
keeping which uses a health summary sheet and separate consultation notes
sheets; see [67] above. Dr Lyons’ reception
staff would fill in a
patient’s identification details and Medicare number on the health summary
sheet. During the first consultation
Dr Lyons would record the patient’s
medical history on the health summary sheet and make notes of any diagnosis and
treatment
in the consultation notes. Specialist notes and reports would be
attached to the patients’ files which were kept in alphabetical
order in
filing cabinets. From about 1997 Dr Lyons began using Medical Director software
in conjunction with his paper records.
His receptionist was instructed to type
the patients’ demographic details including their age, date of birth and
address directly
into the computer for the purpose of preparing prescriptions.
He began to use the computer to write prescriptions from about 1998.
- The
patient records from Dr Lyons’ sample practice showed evidence of having
been written by more than one person. For instance,
Dr Lyons agreed that the
consultation notes for Lyons patient 3 had been written by 3 doctors
including himself. An example of a typical page of entries in the
consultation notes is as follows:
25/6/02 Reports nausea much improved, although still gets Taking Losec ... BD
as was getting symptoms GORD in bed and needing
to take milk in middle of
night since operation Continue Losec BD - Raise head of bed – Avoid
coffee tea ... at night - Check
LFTs
BP 146/90
Pulse 64 regular
Wt 79Kg
Abdo soft non tender no masses
7/8/02 LFTs normal, BSL 4.2
Reports no nausea last 3/52
Now on Losec ... daily
Wt 80KG Appetite normal
BP 148/94
23/9/02 Last 2/12 notices wheezy breathing if lies flat – associated with
dry irritant cough. Says doesn’t feel SOB
Pulse 80reg
BP 156/84 /palpated/44/
Chest clear
No cough if on pillows – Has reduced Losec to ... daily ... to BD –
CxR - Tritace 2.5 mg daily initially ½ daily
20/10/02 CxR Mild cardiomegaly Lungs clear
On Tritace 2.5mg daily - 80 Kg
Has stopped using salt –
BP 152/90 - Tritace to 5mg daily
No further wheezy breathing ... [illegible]
- There
were four health summary sheets annexed to Dr Lyons affidavit of
19 December 2008. In general they consisted of lists
of the
patient’s previous and existing illnesses, medications and procedures as
well as other details of the personal and family
history.
Dr Sabag
- Dr
Sabag opened his sample practice in Nelson St, Fairfield in 1980. From 1980 to
2003 he practised in Fairfield as a sole general
practitioner although
occasionally he employed locum doctors. The practice was purchased by PHC in
2003.
- Dr
Sabag recorded and stored his patient records in accordance with the GP System;
see [67] above. At the first consultation for each patient the reception
staff would enter the patient’s name, date of birth, address, phone
numbers and Medicare number on the front of the file and on the top of the
health summary sheet. During the first consultation Dr
Sabag would enter details
of the patient’s individual and family medical history and current medical
condition and current
medication in the health summary. During consultations Dr
Sabag would enter any diagnosis, recommended treatment and other relevant
details on the consultation notes sheet which was then added to the
patient’s manila folder.
- Dr
Sabag annexed examples of a health summary and consultation notes to his
affidavit. The health summary sheet contained lists
of diagnoses (eg.
tonsillitis), problems (appendix, gall bladder, prolapsed uterus, hernia etc)
and medications (sulphur, penicillin,
codeine etc). The handwritten consultation
notes showed entries made by different hands with marked difference in the
legibility
of the handwriting, some entries being entirely indecipherable. Dr
Sabag did not identify, and on cross-examination was not asked
to identify, the
different authors. Many of the entries consisted only of a reference to the
medication prescribed or data such
as a blood pressure reading. Others
listed symptoms such as the entry for 12 November 1987: “puffy eyes,
blurred vision, body ache BP 180/100”. A
small proportion of the entries
were somewhat more expansive. For instance the entry for 7 June 1980 reads
Laparoscopy → Massive adhesions
Condition explained – Advised against open surgery
Librax ... B.D. Review 6/12
Dr A Mundkur
- Dr
Mundkur’s sample practice operated from premises in Victoria Road,
Ermington. Dr Mundkur practised there as a general practitioner
from August
1973 to February 2004. He stated that he worked as a sole practitioner however
“the practice was owned and run
in partnership with my wife, who is also a
GP, and she worked part-time to assist me”. The records of the sample
practice
were paper based. On a patient’s initial visit to the sample
practice the receptionist would open a new patient file having
first asked the
patient to fill in a general information form giving details such as name, date
of birth, address, phone number,
occupation, employer and next of kin or
emergency contact details. At the first consultation Dr Mundkur would take a
personal and
family medical history and enter it and other pertinent details on
the inside cover of the file.
- Dr
Mundkur initially used 6x8 inch cards for his records but from 1995 onwards he
used consultation notes sheets. In 2000, using
the Medical Director software
program, Dr Mundkur began to keep a record of prescriptions given to patients in
electronic form.
In “later years”, in addition to keeping
consultation notes in paper form, he expanded his electronic record keeping
to
include this information. Examples of Dr Mundkur’s paper records,
including consultation notes and a medication sheet,
were annexed to Dr
Mundkur’s affidavit of 18 December 2008 however, the writing was almost
completely indecipherable. This
reflected not only the nature of the writing
itself but, in some small measure, the quality of the copy that was provided.
It was
possible to see, however, that at least two entries in the 4 pages of
consultation notes were not in the handwriting that Dr Mundkur
identified as
being his handwriting. In addition it was clear that for each consultation the
notes generally consisted of one or
two line entries in which a symptom or
diagnosis was recorded often with a note of medication prescribed. In any
event, the records
were of little assistance in supporting a claim that
copyright subsisted in the records.
- Among
the records tendered by the respondent were handwritten consultation notes in
relation to a patient, known as Mundkur patient
4. The entries covered the
period from April 1995 to late 2003. In these records although the writing was
also difficult to read,
it was possible to read parts of it. The following two
extracts from the record of this patient illustrate both
points:
Apr 1995 [illegible] pain BP 140/90 [illegible]Discussed Path Reports,
Medications, BGL level Adv regular medications & review
– Script Zocor
20mg ... nocte
Oct 1995 Discussed path reports BP 145/90 ... feeling well ... Zocor 20
mg...
Dec 1995 BP 145/90 ...[illegible] Path results satisfactory - Script
[illegible]
April 1996 BP 150/95 Pt ... feeling well →Tab Zocor 20 mg
[illegible]
April 1996 Cholesterol 5.7 Trigly 2-3 BGL fasting 7.7 pp 7.1 Counselling adv
↓ [illegible]... BP 150/85 [illegible] Counselling
re hypo management
July 1996 - URTI 1/52 Throat [illegible] Ronchi & mucus ... Tab ... 300 mg
... daily
July 1996 - Not seen
July 1996 - Feeling better Throat [illegible] ↓ BP 145/90
[illegible]...
Sept 1996 - BP 150/90 [illegible] feeling well – Scripts
Nov 1996 – c/o pain in leg [illegible] claudication type o/e no calf
tenderness → [illegible] BP 150/90 [illegible]Counselling
- ? peripheral
vascular disease Pt still smoking adv arterial scan
... 1996 - Arterial scan – extensive diffuse atheroma/narrowing throughout
common femoral, superficial femoral and popliteal
artery – counselling at
length
******
Dec 2001 (H/V)... Discussed path results HbA/C 6.6%... cholesterol 6.6 Trigl
2.2 HDL 1.3 LDL 4.3 – Counselling – pt
wishes to try diet control x
3/12 – discussed - repeat lipids/HDL in March 2002 –
6/7 hiccups: ? cause Rx [illegible] Stemetil – goes in drinks*
... 2002 .... 6/52 ... Heartburn – BP 140/80 ... epigastric tenderness
→ tab ... review
March 2002 (H/V) hiccoughs – settled [illegible] Π 140/80 [illegible]
fall 4/3/02 – abrasions (L) temporal region.
Bruising of arm –
counselling. alcohol consumption ++ discussed.
April 2002 (H/V)... good [illegible] feeling well – discussion re leg
prothesis – script
June 2002 (H/V) good 140/80 ... ref to Dr NI re prothesis – letter
–medical form completed re carer allowance.
[*the entry in italics appears to be in a different handwriting from the other
entries]
- The
applicant also tendered some examples of records from Dr Mundkur’s sample
practice being records for patients identified
as Mundkur patient 3 and Mundkur
patient 6. The records for Mundkur patient 3 appeared to have been written in
Dr Mundkur’s
handwriting however those for Mundkur patient 6 showed
evidence of a number of different hands. The entries for both patients
(including
the summary sheets) were largely one or two line entries similar in
style to those extracted above. In his affidavit of 25 May 2009,
Dr Mundkur
stated that he recognised that some parts of the patient records that were
tendered by the applicant were written by his
wife, Bharati Mundkur “or
possibly one other doctor whose handwriting I cannot recognise”. On
cross-examination by Mr
Moshinsky Dr Mundkur also identified some handwriting in
the consultation notes as being that of Dr Raja Gopal, a cardiologist, who
worked on a sessional basis in the sample practice seeing patients with
cardiology problems.
Referral letters and prescriptions
- Examples
of prescriptions from some, but not all, of the sample practices were tendered
at the hearing. All examples were similar
in style, stating, as one would
expect, only the medication, the dosage and directions for use. Two examples of
prescriptions, which
are typical of those tendered in evidence, will suffice.
The first example is from Dr Lyons and is dated 27/05/2002. It is a computer
generated prescription, presumably using the Medical Director software:
|
AUTHORITY No 00072505
|
|
|
Dr James H Lyons
|
|
|
7 Garfield Street, Five Dock 2046
|
|
|
PRES. NO - 650194
|
Ph: 9713 6363
|
[patients name obscured]
|
|
|
RENITEC 20 TABLET 20 mg
|
|
|
1 b.d. ½ nocte
|
|
|
Qty: 60
|
5 repeats
|
|
Phone Approval No: N7328WB
|
|
|
Previous Authority? [N]
|
|
|
Indication for use of item:
hypertension
|
|
- The
second example is from Dr Mundkur. It is handwritten on a standard
pharmaceutical benefits prescription pad and dated 18 February, the year being
illegible. The prescription
sheet is printed with Dr Mundkur’s name and
address. In handwriting there appears: “Rx [illegible] Havrix 1440”
followed by the signature.
Referral letters
- Examples
of referral letters written by the sample doctors and tendered in evidence came
from the practices of Drs Ginnane, Lyons,
Mundkur, Fitch, Urquhart and Panwar.
The following is the text of a letter written by Dr Lyons and dated 11
September 2002:
Dear Dr Cunningham,
Thank you for seeing [patient’s name obscured] who you saw recently whilst
he was an inpatient in RGHC following a TIA. It
was noticed in hospital at the
time that he had a mild lymphopenia. Follow up blood tests have confirmed a
continuing mild lymphopenia
but now also an anaemia. On 24/6/02 Hb was 12.5 but
by 26/7/02 it was 10.6. On 9/8/02 Hb was 10.5 with ESR 40 Ferritin 53
B12 76. RBC folate 793....
I have given him a B12 injection today.
Could you assess?
Regards
James
- Dr
Ginnane’s referral letters were on a standard form and letterhead from his
practice. The handwritten letters are difficult
to decipher but, typically,
were brief. The following is an example:
Dear Jeff,
Thank you for seeing [patient’s name obscured] with temporal atereitis.
Had headache after [illegible] (enc) →Ryde Hosp.
who noted ↑ ESR
however ESR ~ 50-70 for > 12 month (? 2° renal impairment.
VAR 6/7.5 VAL 6/12 & glasses
(c) temple [illegible] tender.
Diabetes
Hypertension
Papilloedema
Rx enc
I refer for management
having trouble organising [illegible] I shall ring Prof [illegible] tomorrow
Yours
Tony G
- An
example of a referral letter from Dr Fitch was tendered. It was also on a
standard form and letterhead from his practice and
was part printed and part
handwritten and was as follows (the handwriting is shown in italics)
:
To Dr Roxanas
Thank you for seeing [patient’s name obscured] D.O.B
..../.../...
Presenting complaints
Post traumatic stress disorder
Past history and medications
Your further assessment and management will be appreciated.
Yours Sincerely
[Signature illegible]
ANALYSIS
- The
above summary of the evidence concerning the records kept in each of the sample
practices shows that the record keeping of the
practices have much in common.
In the light of this summary it is appropriate to make some general comments.
Multiple contributors to patient records
- With
the exception only of the patient records of Dr di Michiel, all of the records
that were tendered showed input by a number of
persons. In some (all except
those of Urquhart, Ginnane and O’Shannessy) the receptionists and/or
clerical staff had some
input. That input was limited to identifying material
such as the patients’ names and addresses, Medicare numbers, date of
birth
etc however, in others (Drs Galati, Tang, and Fitch) details such as patient
allergies were noted. In the case of Dr Urquhart’s
records clerical staff
had copied extracts from specialist reports into the consultation notes. Such
entries can be seen in the
extract at [69] above.
- Except
for those of Dr di Michiel, the patient records of all the sample doctors that
were tendered in evidence had input from other
doctors. In Dr di
Michiel’s case it seems reasonable to assume that some records would have
been wholly or partially written
by Dr Cheung but no such record was in
evidence. It is clear, however, that Drs Galati, Tang, Fitch, Parissis,
Ginnane, Panwar and
Lyons continued the use of the patient records of the
doctors from whom they bought their practices or with whom they were previously
in partnership. Dr Urquhart’s records showed entries by multiple doctors
who were not identified. Although in its written
submissions PHC stated
that the patient records were created by the relevant sample doctor
“or his or her employees”, the evidence does not support
this
conclusion. With few exceptions the doctors, other than the sample doctors, who
had contributed to the patient records were
not identified. Only in the case of
Dr Ginnane is there evidence to support the claim that the doctors he had
engaged to help him
in the sample practice were, in the strict legal sense,
employees rather than independent contractors.
Works of joint authorship
- The
fact that all except one of the sample practice patient records have multiple
authors warrant some comments as to why these records
cannot be regarded as
works of joint authorship. The definition of works of joint authorship is set
out at [40] above. As the statutory
definition indicates, it is central to the
concept of joint authorship (as opposed to co-authorship) that the product of
the collaboration
between the authors is a joint work, not one in which the
individual contributions are separate.
- Although
in some cases the consultation notes and history of a patient where entries made
by more than one doctor, could be seen
as forming a continuous narrative with
the patient as its subject, the individual entries are separate and distinct
and, on the evidence,
not the result of collaboration between the doctors. The
description of the process given by the doctors both in their affidavit
evidence
and in cross-examination indicates that each entry in the consultation notes is
created by the doctor using his or her individual
expertise and intellectual
effort to form and record an opinion as to the patient’s condition and
treatment. Whether or not
the individual doctors collaborated in their care of
a patient, there is no evidence of collaboration in the production of the
patient
records.
The copyright status of individual entries in the consultation notes
- Where
there are multiple individual entries in the consultation notes issues
concerning the copyright status of the individual contributions
are raised.
They include identification of each work for which copyright is claimed, the
identity of the author, whether the author
is a qualified person and whether the
work is an original literary work.
The identification of each work
- The
applicant submitted that the summary sheet and consultation notes for each
patient comprise one (or in the alternative, two)
original literary work. It
also submits that each referral letter comprises one original literary work.
The referral letters are
considered below at [136]. The submission concerning
the consultation notes, and the alternative, must be rejected. With the
possible
exception of the records of Dr di Michiel’s sample practice there
is more than one author of the entries in the consultation
notes for all the
sample practices that are in evidence. As the patient records are not works of
joint authorship and are not compilations,
the consultation notes cannot be
regarded as one work for the purposes of copyright. It is therefore necessary
to identify each
work for which copyright is claimed; IceTV at [15] per
French CJ, Crennan and Kiefel JJ and [105] per Gummow, Hayne and Heydon JJ.
This has not been done.
The author of each work
- Assuming
for the moment that each individual entry in the consultation notes and summary
sheets is an identified work, it would be
necessary for the author of each work
to be identified. The summary of the patient records for each doctor shows that
this has not
been done. Even if it has been established that each author of
entries in the consultation notes and summary sheets was an employee
of the
sample doctor or (where relevant) the owner of the sample practice, the
statutory vesting of copyright in an employee under
s 35(6) operates only
where the relevant work “is made by the author in pursuance of the terms
of his or her employment”. For
this requirement to be met the individual
authors need to be identified.
- Furthermore,
it is also necessary to prove that each author is a qualified person. Although
the evidence establishes that each sample
doctor is an Australian citizen and
therefore a qualified person there is no such evidence in relation to the other
authors of the
medical records.
Whether the individual entries are original literary works
- The
respondent submits that the individual contributions consisting in the most part
of no more than a word or a few words naming
medical conditions are not
sufficiently substantial or original to qualify as original literary works and
therefore do not attract
copyright. The respondent’s written submissions
set out, from the records of Dr Fitch, Dr Tang and Dr Ginnane respectively,
the
following examples:
(a) Triferne 28 Microgynon 20 C&N
(b) H/T, NIDDM, Asthma
(c) Hypertension, Uterine Fibroids, Pagets D, Lumbar Disc
Deg
These notes convey information but, as French
CJ, Crennan and Kiefel JJ commented in IceTV at [45], “Not every
piece of printing or writing which conveys information will be subject to
copyright”. Many more examples
can be seen in the discussion of the
patient records tendered in respect of each sample practice.
- In
support of this submission, the respondent cited the decision in Noah v
Shuba [1991] FSR 14 where the plaintiff claimed that a short extract taken
from a publication entitled A Guide to Hygienic Skin Piercing in which he
held the copyright constituted a work in its own right. The extract was:
“Follow clinic procedure for aftercare.
If proper procedures are
followed, no risk of viral infections can occur”. As it happened, it was
not necessary for Mummery
J to decide the issue however his Honour, having heard
argument from both sides, said, at 33, that he would have rejected the
submission
that the extract was a work in its own right as “Those two
sentences on their own do not afford sufficient information, instruction
or
literary enjoyment to qualify as a work”.
- Invariably,
findings as to whether an extract such as Mummery J considered is an original
literary work will involve fine distinctions
and an obiter dictum should not be
scrutinised too carefully. Nevertheless, the case for copyright existing in the
entries put forward
as examples by the respondent is much less persuasive than
for the extract considered by his Honour.
- In
John Brodel v Telstra Corporation [2004] FCA 505, Kenny J held at [13],
that the word “Smartfax” did not constitute an original literary
work in which copyright was capable
of subsisting. A similar view was expressed
about the word, “Exxon” in Exxon Corporation v Exxon Insurance
Consultants International Ltd [1982] Ch 119. In Exxon Stephenson LJ
commented at 143, that “a literary work would be something which was
intended to afford either information and
instruction, or pleasure in the form
of literary enjoyment” and that the word, “Exxon” was neither
a work nor literary,
despite the admitted originality in its creation. Other
relevant examples referred to by Kenny J in John Brodel include
Francis Day and Hunter Ltd v Twentieth Century Fox Corporation Ltd [1940]
AC 112 where the song title “The Man who Broke the Bank at Monte
Carlo” was held not to be an original literary work and Green v
Broadcasting Corporation of New Zealand (1983) 2 IPR 191 which took the same
view of the title of a talent quest show, “Opportunity Knocks”.
- As
Stephenson J accepted, “Smartfax” and “Exxon” being
invented words are undoubtedly original expressions,
however, that very novelty
detracted from any argument that they could inform, instruct or entertain.
Entries in medical records
even where they are limited to clinical data and
names of medications have a greater capacity to inform and instruct (if not to
entertain)
than the expressions in these examples. This, however, is not
sufficient to support a claim for copyright in those entries. The
clinical data
and names of medications are not expressions that originate with the doctor who
has recorded them.
- Even
entries that contain some comment are not sufficiently substantial to qualify as
works the product of independent intellectual
effort directed to expression.
The following examples taken from the records of Dr Tang, Dr Panwar and Dr Lyons
respectively, illustrate
the point:
- 7kg –
growing well. On fresh milk and vitamins
- Now c/o
diarrhoea – possibly antibiotic induced ...
- Last 2/12
notices wheezy breathing if lies flat - associated with dry irritant cough -
Says doesn’t feel SOB
- None
of this denies the intellectual effort and professional skill needed to form the
diagnoses, to select methods of treatment or
to understand the significance of
clinical data that is recorded, however, copyright protects a form of expression
not this underlying
expertise.
CONCLUSIONS AS TO SUBSISTENCE OF COPYRIGHT
- As
mentioned above, PHC claims copyright in the patient records of the sample
practices as described above at [48]. As the summaries
above show, in evidence
in this proceeding were examples of consultation notes for all the sample
doctors, some examples of summary
sheets and a few examples of referral letters
and prescriptions. Applying the principles identified above, and contrary to
PHC’s
submission that the subsistence of copyright in these records is
“uncontroversial”, I have found little evidence to support
a finding
that copyright subsists in them. In fact, as explained below, I find copyright
only in the referral letters and in the
consultation notes for di Michiel
patient 6. I have not found any instances of copyright in prescriptions written
in the sample
practices or in health summaries.
Prescriptions and health summaries
- The
prescriptions consisted only of the names of medications, dosage and standard
directions, such as “nocte” or “10mg
½ m”. There
were only a few examples of health summary sheets that were distinct from the
consultation notes. Often
the health summaries were merely noted at the
beginning of the consultation notes as for instance in the case of Drs di
Michiel and
Galati; see above at [56] and [60]. Those doctors who used the GP
System of record keeping (Drs Urquhart, Panwar, Lyons and Sabag)
used the
separate summary sheet that is part of that system. Irrespective of the method
of recording health summaries, however,
they generally contained only a list of
previous illnesses and procedures; see for instance the summary for Urquhart
patient 5 at
[70] above. These records were not sufficiently substantial to
qualify as original literary works embodying independent intellectual
effort
directed towards expression.
Referral letters
- While
I have seen few instances of referral letters from the sample practices written
in respect of patients of those practices,
those in evidence showed independent
intellectual effort of some (occasionally minimal) substance. I am satisfied
that copyright
would subsist in the letters which are in evidence before me and
which were written by the sample doctors. There was considerable
similarity of
style and content in those letters. As the style and content were driven by the
purpose of the letters, being to explain
to the recipient of the letter why the
patient was being referred, it is reasonable to assume that the referral letters
in general
would follow a similar pattern. It would, however, be only in the
case of those letters identified as having been written by the
sample doctors
that I can find, on the basis of evidence, that the authors were qualified
persons within the meaning of s 32(4).
Consultation notes
- The
consultations notes in respect of di Michiel patient 6, described above at [58],
were wholly written by the identified author,
Dr di Michiel, who is a qualified
person. As there was only one author it is possible to regard the accumulated
record as forming
a single work rather than having to consider individual
entries. That being so it was possible to discern a continuous narrative
showing independent intellectual effort expended in expression. While that
effort was probably minimal, taken as a whole, I find
that these notes
constitute an original literary work authored by Dr di Michiel. The notes in
respect of di Michiel patient
6 provided the only evidence in respect of
the records of this sample practice. How representative this is of the records
of this
practice as a whole is, of course, not something on which I am able to
express an opinion. I can say, however, that (in the absence
of any assignment,
of which there has been no suggestion) Dr di Michiel would not have had
copyright in the records of his former
partner, Dr Cheung and, to the extent
that any records had multiple entries by the two doctors, the problems affecting
the records
of the other practices would apply to those records.
- In
relation to the records in evidence for the other sample practices, I am not
satisfied that the consultation notes are original
literary works in which
copyright subsists. In summary, the entries in the notes are largely restricted
to notations of the names
of medical conditions and medications as well as
physiological and pathological data such as blood pressure and blood count
readings.
As such their expression does not display the independent
intellectual effort in their expression necessary for copyright protection.
- These
comments apply to entries made by the sample doctors and other doctors who had
made entries in the consultation notes. In
respect of the other doctors there
is also the obstacle that, with few exceptions, they were not identified and/or
the specific entries
they authored were not identified. Where the doctors were
identified, as for instance, the entries made by Dr Blatchford in respect
of
Galati patient 5, there was no evidence to show that the author was a qualified
person; see, for example [93] above in relation
to the dentists who worked for
Dr O’Shannessy and [75] in relation to Dr Tang’s records.
- In
the case of Dr Parissis (see [83]-[86] above) it would seem that records of
patients who attended the Belmore practice and who
had been seen by Dr Hor were
continued by Dr Parissis after the dissolution of the partnership with Dr Hor.
Although Dr Parissis
recognised some entries as having been written by Dr Hor
there was no precise identification of those entries.
- The
difficulties occasioned for PHC’s claims that copyright subsists in the
consultation notes arose in relation to the records
of all the sample practices
except for that of Dr di Michiel. This much can be seen from the summaries for
each practice.
TRANSFER OF COPYRIGHT INTERESTS TO PHC
- I
have found only very limited subsistence of copyright in the patient records of
the sample practices. Nevertheless, in case I
am wrong, I shall consider
PHC’s claim that Idameneo obtained an interest in the copyright in the
patient records of each of
the 12 sample practices on the assumption that there
was copyright, at least in part, in the patient records of each of the sample
practices. The question requires an examination of the title of the vendor in
any such copyright and raises the question whether
an interest in it passed
under the agreement for the sale of each practice. It necessarily involves a
construction of the sale agreements
into which the various vendors entered with
PHC.
- Any
discussion of the transfer of an interest in copyright must take place with full
cognisance of the nature of copyright as a proprietary
interest and the
distinction between that interest and a proprietary interest in the medium in
which the copyright subsists. Thus
it is legally possible for property in the
patient records of the sample practices to be held by PHC and any copyright in
those records
to be held by other persons; Pacific Film Laboratories Pty
Limited v The Commissioner of Taxation of the Commonwealth of Australia
[1970] HCA 36; (1970) 121 CLR 154 at 163 per Barwick CJ and 165-170 per Windeyer J. In
Breen v Williams at 127, Gummow J drew attention to this distinction
between ownership of copyright and ownership of “the material thing which
is the subject of the copyright” and referred to Pacific Film
Laboratories and also to Re Dickens [1935] Ch 267, which, Gummow J
observed, illustrated the distinction between the manuscript of an unpublished
work (bequeathed to Charles Dickens’
sister-in-law) and the copyright in
the work which was included in the residuary estate left to the author’s
children.
- In
Re Dickens the manuscript in question was of a story Charles Dickens had
written for his children but had never published. The Court of Appeal
held
that, not having been published, the manuscript was included in the
“private papers” which, on the proper construction
of the
author’s will, he had left his to his sister-in-law.
Vendors’ title to copyright
- As
can be seen from the summary in Schedule 2, four of the agreements for sale of
the sample practices (the Galati, Urquhart, Tang
and O’Shannessy
practices) had corporate vendors. In each case the corporate vendor was
described as being for the purpose
of providing superannuation to the relevant
practitioner. The corporate vendors were wholly owned either by the
practitioner (Dr
O’Shannessy) or by the practitioner and his or her spouse
(Galati, Urquhart and Tang). In no case is there any evidence as
to how
copyright in the patient records might have vested in the corporate vendor.
However, as each corporate vendor was wholly
controlled by the sample doctor or
the sample doctor and his or her spouse, for present purposes I am prepared to
assume that if,
on its proper construction, the agreement for sale purported to
assign copyright in the patient records to PHC, the corporate vendor
would have
been able to discharge that obligation.
- Except
for the four sample practices that had corporate vendors, the vendors under the
agreements for sale were the sample doctors
personally. As such, they were in a
position to assign any copyright that subsisted in the patient records.
Express provision for assignment of copyright – Dr Urquhart’s sample
practice
- The
only sale agreement that expressly provides for the assignment of copyright is
the agreement for the sale of Dr Urquhart’s
sample practice. In that
agreement the vendor is defined as Peter W Urquhart Pty Ltd and Moremint
Pty Limited “jointly
and separately”. Clause 2.1(c) of the
agreement includes among the assets that comprise the
practice:
[T]he records of patients of the practice (owned by Moremint) and to the extent
that it is owned by either Vendor, copyright in handwritten
components of those
records ...
- Clause
5.2 of the agreement provides for the delivery of all the patient records from
Dr Urquhart’s sample practice to PHC.
Clause 5.4 referred to
“assets stored electronically” however there is no evidence that Dr
Urquhart kept any electronic
patient records. As is shown in the summary of Dr
Urquhart’s record keeping practices at [63] to [70] above, health
summaries
and consultation notes of that practice were handwritten. On the
assumptions I have made as to the subsistence of copyright and
its ownership by
the vendors, that copyright would have passed to PHC under the sale agreement.
It is therefore not necessary for
me to discuss this agreement for sale
further.
Assignment or licence in the absence of express provision
- Apart
from the Urquhart contract discussed above, none of the sale agreements mentions
copyright. In its written submissions PHC
distinguished between sale agreements
entered into pre-July 2001 and those entered into post-July 2001 however it
submitted in respect
of both categories that:
[E]ach of the Sample Doctors, by virtue of an implied term in the ... agreements
and/or the surrounding circumstances assigned, in
law or in equity, or,
alternatively, licensed, the copyright subsisting in the Summary Sheets,
Consultation Notes, Referral Letters,
Dental Chart, Clinical Treatment Notes and
Patient Lists to Primary Health Care.
- I
have taken this submission to involve an invitation to the Court to construe the
relevant sale agreement taking into account for
that purpose the surrounding
circumstances and if necessary, to imply such a term into it. PHC includes in
the surrounding circumstances,
the practitioner contracts between Idameneo and
either the sample doctor or the doctor’s incorporated medical practice.
- A
legal assignment of copyright must be in writing signed by or on behalf of the
assignor; Copyright Act s 196(3). A promise to assign is not an
actual assignment and does not meet the requirements of s 196(3) however it
may give rise to an assignment in equity such that the promisee is entitled to
require the legal title to be assigned
in accordance with the statutory
provisions. While s 10(1) requires an exclusive copyright licence to be in
writing and signed by or on behalf of the owner or the prospective owner of the
copyright, a non-exclusive licence does not have to meet those requirements. An
assignment of copyright would exclude even the author
from its use whereas a
licence merely permits what would otherwise be a breach of copyright.
- PHC
does not submit that its use of the copyright in the patient records in the PHC
clinics needs to be exclusive. The statutory
definitions of a “unit of
industrial property” and an “item of intellectual property include
both equitable interests
and licences in copyright as well as ownership; see
[16]-[19] above. It is therefore sufficient for PHC’s purposes for it
to
show that either ownership or a licence passed under each sale agreement.
- In
the absence of an explicit provision, an interest in copyright could only have
passed under the agreements for sale if, (a) properly
construed, the description
of one or more of the assets subject to the sale includes an interest in
copyright; or (b) the implication
of a term to that effect is necessary to give
business efficacy to the contract. The difference between these two approaches
to
filling a perceived gap in contractual provisions is that in the former case,
on a proper construction of the words the parties have
used, it can be seen that
they actually agreed to including copyright in the sale. In the latter case it
is not a term they have
agreed upon; it is a term which it is presumed the
parties would have agreed upon had they turned their minds to it; Codelfa
Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 at 346
per Mason J. The distinction between the two approaches is often confused and
they may overlap. In many cases the question
posed could be answered by either
approach, nevertheless, analytically they are distinct.
- In
relation to the transfer of an interest in copyright, the first question is that
posed in (a) above, namely whether, properly
construed, the description of one
or more of the assets subject to the sale includes an interest in copyright.
This requires the
Court to ascertain the meaning that the agreement would convey
“to a reasonable person having all the background knowledge
which would
reasonably have been available to the parties in the situation in which they
were at the time of the contract”;
Maggbury Pty Limited v Hafele
Australia Pty Limited [2001] HCA 70; (2001) 210 CLR 181 at 188. The High Court again
emphasised the importance of the objectivity principle in Toll (FGCT) Pty
Limited v Alphapharm Pty Limited [2004] HCA 52; (2004) 219 CLR 165 at 179:
It is not the subjective beliefs or understandings of the parties about their
rights and liabilities that govern their contractual
relations. What matters is
what each party by words and conduct would have led a reasonable person in the
position of the other
party to believe. References to the common intention of
the parties to a contract are to be understood as referring to what a reasonable
person would understand by the language in which the parties have expressed
their agreement. The meaning of the terms of a contractual
document is to be
determined by what a reasonable person would have understood them to mean.
That, normally, requires consideration
not only of the text, but also of the
surrounding circumstances known to the parties, and the purpose and object of
the transaction.
- Where
commercial contracts are concerned the courts have focussed on giving the
contract a businesslike interpretation. In International Air Transport
Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151 at 160,
Gleeson CJ said (omitting footnotes):
In giving a commercial contract a businesslike interpretation, it is necessary
to consider the language used by the parties, the
circumstances addressed by the
contract, and the objects which it is intended to secure. An appreciation of
the commercial purpose
of a contract calls for an understanding of the genesis
of the transaction, the background, and the
market.
- It
is, however, necessary to remember the limits that apply to consideration of
surrounding circumstances as expressed by Mason J
in Codelfa at
352:
The true rule is that evidence of surrounding circumstances is admissible to
assist in the interpretation of the contract if the
language is ambiguous or
susceptible of more than one meaning. But it is not admissible to contradict
the language of the contract
when it has a plain meaning. Generally speaking
facts existing when the contract is made will not be receivable as part of the
surrounding
circumstances as an aid to construction, unless they were known to
both parties ...
- Consideration
of the matrix of circumstances is particularly important when it is sought to
imply “a crucial term which the
parties have not expressed”;
International Air Transport Association v Ansett Australia Holdings Ltd
[2008] HCA 3; (2008) 234 CLR 151 at 272. In BP Refinery, speaking on behalf of the
majority of the Privy Council, Lord Simon of Glaisdale at 283, also specified
the conditions which must
be satisfied for a term to be
implied:
(1) it must be reasonable and equitable; (2) it must be necessary to give
business efficacy to the contract, so that no term will
be implied if the
contract is effective without it; (3) it must be so obvious that “it goes
without saying”; (4) it must
be capable of clear expression; (5) it must
not contradict any express term of the contract.
- In
Philips Electronique Grand Public SA v British Sky Broadcasting Ltd
[1995] EMLR 472 at 481, the English Court of Appeal commented that the
passage quoted above distilled “the essence of much learning on implied
terms” but added that “its simplicity could be almost
misleading”. This comment was not a criticism of the views
expressed in
the Privy Council rather it warned that the formulation should be understood in
the context of the circumstances their
Lordships were considering and should be
applied with due consideration to the circumstances of the instant case.
- In
Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd [2005] FCA 1521; (2005)
225 ALR 57 at 78, Crennan J demonstrated a similar recognition of individual
complexity when she observed that a dispute as to the assignment
of copyright in
circumstances where no formal contract had been concluded between the parties
warranted “a more flexible approach
to the question of implying
terms” than was laid down in BP Refinery (Westernport) Pty Ltd v
Hastings Shire Council (1977) 180 CLR 266 in the passage quoted
above. The contract in question was partly in writing and partly oral. Her
Honour continued:
In this kind of case all that is necessary is to show that the term to be
implied is necessary for the reasonable or effective operation
of the contract
in all the circumstances.
- The
complexities involved in the consideration of whether terms should be implied
into a contract were the subject of a considerable
exposition in Philips
Electronique. Although lengthy, the Courts observations, at 481-482,
warrant repetition:
The courts' usual role in contractual interpretation is, by resolving
ambiguities or reconciling apparent inconsistencies, to attribute
the true
meaning to the language in which the parties themselves have expressed their
contract. The implication of contract terms
involves a different and altogether
more ambitious undertaking: the interpolation of terms to deal with matters for
which, ex hypothesi,
the parties themselves have made no provision. It is
because the implication of terms is so potentially intrusive that the law
imposes
strict constraints on the exercise of this extraordinary power.
There are of course contracts into which terms are routinely and unquestioningly
implied. If a surgeon undertakes to operate on
a patient a term will be implied
into the contract that he exercise reasonable care and skill in doing so. It is
inconceivable that
any patient would in any imaginable circumstance commit his
bodily well-being to the ministrations of a surgeon who did not undertake
that
obligation, or that a surgeon could hope to remain in practice without
professing to discharge it. Again, quite apart from
statute, the courts would
not ordinarily hesitate to imply into a contract for the sale of unseen goods
that they should be of merchantable
quality and answer to their description and
conform with sample. It is hard to imagine trade conducted, in the absence of
express
agreement, on any other terms.
But the difficulties increase the further one moves away from these paradigm
examples. In the first case, it is probably unlikely
that any terms will have
been expressly agreed, except perhaps the nature of the operation, the fee, and
the time and the place of
operation. In the second case, the need for
implication usually arises where the contract terms have not been spelled out in
detail
or by reference to written conditions. It is much more difficult to
infer with confidence what the parties must have intended when
they have entered
into a lengthy and carefully-drafted contract but have omitted to make provision
for the matter in issue. Given
the rules which restrict evidence of the
parties' intention when negotiating a contract, it may well be doubtful whether
the omission
was the result of the parties' oversight or of their deliberate
decision; if the parties appreciate that they are unlikely to agree
on what is
to happen in a certain not impossible eventuality, they may well choose to leave
the matter uncovered in their contract
in the hope that the eventuality will not
occur.
The question of whether a term should be implied, and if so what, almost
inevitably arises after a crisis has been reached in the
performance of the
contract. So the court comes to the task of implication with the benefit of
hindsight, and it is tempting for
the court then to fashion a term which will
reflect the merits of the situation as they then appear. Tempting, but wrong.
For,
as Scrutton LJ said in Reigate v Union Manufacturing Co (Ramsbottom)
Limited [1918 1 KB 592 at
605:
A term can only be implied if it is necessary in the business sense to give
efficacy to the contract; that is, if it is such a term
that it can confidently
be said that if at the time the contract was being negotiated some one had said
to the parties, "What will
happen in such a case", they would both have replied,
"Of course, so and so will happen; we did not trouble to say that; it is too
clear". Unless the Court comes to some such conclusion as that, it ought not to
imply a term which the parties themselves have not
expressed
...
In the familiar cases already mentioned there could be little room for doubt
what the parties' joint answer would have been had the
question been raised at
the outset. There would, almost literally, have been only one possible answer.
But this may not be so where
a contract is novel, known to involve more than
ordinary risk and known to be more than ordinarily uncertain in its outcome.
And
it is not enough to show that had the parties foreseen the eventuality which
in fact occurred they would have wished to make provision
for it, unless it can
also be shown either that there was only one contractual solution or that one of
several possible solutions
would without doubt have been preferred: Trollope
& Colls Limited v North West Metropolitan Regional Hospital Board [1973]
2 All ER 260; [1973] 1 WLR 601 at 609-10; 613-14.
- The
comments of the Court of Appeal as to the importance of the particular nature of
the contract under consideration are pertinent
here. There are, as PHC pointed
out, numerous cases in which the courts have held that copyright should be
included by implication
in an agreement to sell property. Many of those cases
involve the commissioning of the copyright work with no express provision
in
respect of copyright. An example is to be found in Ray v Classic FM PLC
(1998) 41 IPR 235 in which Lightman J held, at 248, that where an implied
term is necessary
“a minimalist approach is called for ... accordingly if it is necessary to
imply some grant of rights in respect of a copyright
work, and the need could be
satisfied by the grant of a licence or an assignment of the copyright, the
implication will be of the
grant of a licence only”. .
- PHC
cited Murray v King (1984) 4 FCR 1 as an example of an implied assignment
of copyright however the case is really an example of the Court finding that on
its proper
construction, the contract provided for the assignment of copyright.
The contract in question expressed the subject of the sale
as being, “all
the right title and interest of the vendor” in a business whose principal
activity was the publication
of a magazine entitled “Wot’s Happening
on the Gold Coast”. The Court held that the copyright was an asset of
the business owned by the vendor and without it the goodwill of the business,
which was specifically assigned, was virtually non-existent.
All members of the
Full Court found that copyright was assigned under the contract. As Spender J
expressed it, at 13:
[T]he wording of the agreement was effective to assign the copyright, as one of
the assets of the business, to King. He was therefore
entitled to succeed in
the action upon the basis that the copyright had been assigned to
him.
- Greenfield
Products Pty Ltd v Rover-Scott Bonnar Ltd (1990) 17 IPR 417 was a case
where, as here, the question of whether copyright passed under a contract of
sale related to a contract
between the applicant and a non-party to the
proceedings. The applicant’s claim to ownership of the copyright that the
respondent
was alleged to have breached depended upon his rights under the
contract pursuant to which it had purchased the business from a company
controlled by a Mr Reinhold. The subject of the sale, as set out at 422 of the
Court’s reasons, was all the property described
in a schedule as
follows:
The goodwill, motor vehicles, plant and equipment, patents, loose tools, trade
debtors and stock of the business conducted by the
vendor as manufacturer and
distributor of industrial mowers conducted by the vendor at 1101 Beaudesert Rd,
Archerfield.
- The
respondent submitted that the description of the property sold made no reference
to assignment of copyright, express or implied
to intellectual property other
than patents and therefore the applicant did not have title to the copyright.
Pincus J did not accept
that submission, observing, at
422:
It is absurd to suppose that the true intention was to assign the business
including goodwill and patents, but leave copyright with
the assignor. Looking
at the agreement broadly, in the way one is encouraged to construe commercial
documents, there can be no doubt
that its general intention was that all the
assets used in the business should go over; the omission particularly to mention
a certain
asset could prima facie be remedied by implying a term the omission
particularly to mention a certain asset could prima facie be
remedied by
implying a term.
- In
Greenfield Products the copyright in issue subsisted in a design for a
drive mechanism for the applicant’s mowers. Pincus J held, at 420, that
the respondent had “imitated the applicant’s design to a
considerable extent”. In fact it had adopted the design
for its
“auto drive” although it had made a number of changes. Given that
the applicant was a manufacturer of mowers
(the respondent was a competing
manufacturer) it is not surprising that his Honour held that copyright had
passed under the contract.
I note, however that his Honour commented, at 422,
that “the making of this implication must be close to the limit of the
law
concerning contractual implications”. In Gold Peg International Pty
Ltd there was a similar business imperative for an implied assignment of
copyright.
The agreements for sale
- The
table in Schedule 2 to these reasons summarises the terms of each sale agreement
that may be of particular relevance to the question
whether an interest in
copyright was assigned under the contract. As can be seen from this summary, to
a very large extent, the
sale agreements entered into by each of the sample
medical practitioners are identical. They follow what appears to be a standard
form and use standard terms. Some differences were, however, identified by
counsel and these differences provide a basis for categorisation.
For the
purposes of this analysis, the agreements for the sale will be considered in two
categories being (1) those that were entered
into before July 2001 (di
Michiel agreements); and (2) those entered into after July 2001 (Ginnane
agreements). The di Michiel agreements are those for the sample practices
of Drs di Michiel, Galati, Tang, Fitch, Parissis and O’Shannessy.
The
Urquhart sale agreement, being made before July 2001, also falls into the
category of di Michiel agreements however as
it provided specifically for
passing of copyright much of the following analysis is irrelevant to that
agreement. The Ginnane agreements
are the agreements for the sale of the
sample practices of Drs Ginnane, Panwar, Lyons, Sabag and Mundkur sample
practices.
The practice as the subject of the sale
- In
every agreement the subject of the sale is expressed to be the relevant medical
or dental practice. There is, however, one difference
between the agreements
for the sale of the sample practices of Drs Sabag and Mundkur, those of the
other Ginnane agreements and also
the di Michiel agreements which should be
considered here. The Sabag and Mundkur agreements state that the practice
includes “the goodwill of the practice and the items in Schedule
1”. In all the other agreements, the practice is described as
comprising specified assets such as the goodwill of the practice and the
items in schedule 1 of the agreement. In all agreements the items in
schedule 1
are such things as furniture and medical equipment which have no relevance to
the issues in this case and they will not
be further discussed.
- This
raises the question of whether, in the context of the sale agreements, the
difference between “includes” and “comprising”
is one of
substance. The relevant meaning of “comprise” in the New Shorter
Oxford English Dictionary is “Include,
contain; extend to, encompass;
consist of, be made up of”. In the Macquarie Dictionary it is “1.
to comprehend; include;
contain. 2. to consist of; be composed of”. The
Macquarie Dictionary also gives “comprise” as one of the meanings
of
“include”.
- In
General Clutch Corporation v Sbriggs Pty Limited (1997) 38 IPR 359
Lindgren J considered in detail the meaning of ‘comprising’ as used
in the phrase “spring clutch comprising”
occurring in claim 1 of a
patent. His Honour considered the dictionary definitions set out in [33] and
also the views of several
experts on English usage and observed, at
373:
In the absence of context and authority, I would have approached the
construction of the opening expression “[a] spring clutch
comprising” in claim 1 as meaning “a spring clutch [the
‘whole’] consisting of, made up of, composed of, or
constituted by, the following [parts] as its essential elements as a
spring clutch”. I would have done so on the basis of general linguistic
usage.
- Lindgren
J found support for his construction in Asahi Kasei Kogyo Kabushiki Kaisha v
WR Grace & Co [1991] FCA 530; (1991) 22 IPR 491 and applied that meaning in the matter
before him. In Asahi the invention was defined in claim 1 of the patent
as “a thermoplastic multi-layer packaging film comprising at least an
outer
polymer layer, an inner heat sealing layer and optionally an oxygen
barrier layer ...”. Heerey J rejected a submission that
“comprising” meant “includes” and said, at
515:
“As to the meaning of “comprise” in claim 1 ... [the
respondent] argued that the word simply meant “consists
of” and
would not cover claims in respect of an infinite number of substances which
might be added to the specified co-polymer.
I agree. That seems to me to be the
primary natural meaning of the word “comprise” and in this context
it gives a sensible
and workable meaning.
- Asahi
and General Clutch both involved the construction of patent claims.
Largely because of the monopoly conferred by patents, it is well established
that,
in construing claims the courts are cautious to ensure that the patentee
obtains protection for the invention as claimed and no more,
the function of the
claims being “to define clearly and precisely the monopoly claimed”:
Décor Corporation Pty Ltd v Dart Industries Inc (1988) 13 IPR 385
at 391 per Lockhart J. Those considerations do not apply with the same force to
the construction of a contract inter partes where,
as mentioned above, the task
is to determine the objective intention of the parties taking into account the
whole of the contract
and its context; Décor at 397 per
Sheppard J.
- As
previously mentioned, in each agreement the subject of the sale is expressed to
be, “the practice”, which term is
followed by a list of assets
varying from the longer list in the case of the di Michiel agreements to the
shorter list in the Ginnane
agreements. In my view these lists do not evidence
an intention to limit the primacy of the practice as the subject of the sale.
Given the variety of meanings that may attach to the word,
“comprising”, I do not perceive an intention to exclude the
transfer
of an asset that is a part of the practice merely by the use of
“comprising”. I would construe the word as
meaning
“include” and therefore do not regard the difference between the
Sabag and Mundkur agreements and the other agreements
as substantive and shall
include these agreements in the category of Ginnane
agreements.
Goodwill and ‘going concern’
- All
the sale agreements provide for the sale to include the goodwill of the
practice. I accept that goodwill may be an asset of
the practice however it is
not an asset that includes copyright. This much is clear from the comment of
Gaudron, McHugh, Gummow
and Hayne JJ in Commissioner of Taxation of the
Commonwealth of Australia v Murry [1998] HCA 42; (1998) 193 CLR 605 at
608-9:
Goodwill is inseparable from the conduct of a business. It may derive from
identifiable assets of a business, but it is an indivisible
item of property,
and it is an asset that is legally distinct from the sources – including
other assets of the business –
that have created the goodwill.
- All
the sale agreements also provide for the practice to be sold as a “going
concern” and require it to be conducted
as such until completion so as to
preserve the goodwill of the practice. Only one of the sale agreements, that of
Dr Ginnane, links
this provision to the goods and services tax and the A New
Tax System (Goods and Services Tax) Act 1999 (Cth) which provides, subject
to some conditions not relevant here, that the supply of a going concern is
GST-free; s 38.325(1). The supply of a going concern is defined in
s 38.325(2) as follows:
A supply of a going concern is a supply under an arrangement under
which:
(a) the supplier supplies to the recipient all of the things that are necessary
for the continued operation of an enterprise; and
(b) the supplier carries on, or will carry on, the enterprise until the day of
the supply ...
- More
generally, the term, ‘going concern’ is used to describe a viable
business or enterprise that can be expected to
continue as such; see Hope v
The Council of the City Bathurst [1980] HCA 16; (1980) 144 CLR 1 at 8-9 where Mason J
referred to “grazing activities undertaken as a commercial enterprise in
the nature of a going concern,
that is, activities engaged in for the purpose of
profit on a continuous and repetitive basis”. The Oxford English
Dictionary
Online defines a going concern as “one in actual operation; a
flourishing business; a profitable enterprise”. The CCH
Macquarie
Dictionary of Accounting describes it as “one of the fundamental
accounting assumptions underlying the preparation
of financial
statements”.
- It
was submitted that the concept of the practice being sold as a going concern
necessarily involves the supply of all that is required
for the continued
operation of the enterprise. It was further argued that the supply would
therefore have included the sale of the
patient records and the copyright. The
latter submission is discussed below. In opposing this submission, the
respondent submitted
that the practices conducted at the PHC clinics are not
continuations of the sample practice practices. In my view this is irrelevant.
The express terms of all the sale agreements link the supply of the practice as
a going concern to the obligation to conduct the
practice until completion so as
to maintain the goodwill of the practice. While that may have been in part for
GST purposes it is
also clear that the maintenance of goodwill was an integral
part of attracting patients of the sample practice to the new PHC clinics.
- The
purpose of attracting patients to the PHC clinics can be implied from the
transfer of the goodwill of each practice to PHC.
It is explicit in the
di Michiel agreements. Although, this objective is not stated in the
Ginnane agreements, it is tolerably
clear when the agreement is read in
conjunction with the relevant practitioner agreements. The practitioner
contracts form part
of the context in which the agreements for sale are to be
construed. I therefore accept that the vendor in each sale agreement was
required to transfer whatever was required for the continued operation of the
sample doctor’s practice.
Patient records and patient lists
- The
di Michiel agreements specifically list patient records and patient lists
among the assets which are included in sale of
the practice. Consequently it is
not necessary to rely on the concepts of ‘going concern’ and
‘goodwill’
to find that property in the patient records was
transferred to PHC in accordance with the contract of sale. In the case of Dr
O’Shannessy’s
sale, however, there is an inconsistency in the sale
agreement in that cl 6 of the agreement specifically excludes patient
records
from the sale. Clause 6 is also inconsistent with clause 5 of the
agreement which provides for delivery of certain assets included
in the sale to
be delivered to the PHC premises on completion and which specifically mention
patient records.
- In
his affidavit sworn on 19 December 2008, Dr O’Shannessy recalled a
conversation with Dr Bateman in which he stated that,
for ethical reasons, he
wanted to retain ownership of his patient records. He described Dr Bateman as
responding:
If you want to come on board we have to assume ownership of your dental records.
However, you will have unrestricted access to your
dental records and all
patient information will reman confidential.
- Dr
O’Shannessy does not record his reaction to this response but in
cross-examination he stated that his understanding was
that the patient records
“were to be sold to Idameneo and that actually took place”. Dr
Bateman expressed the same view
and said that PHC would not have purchased the
practice without the patient records being included. Given the views expressed
by
Dr O’Shannessy and Dr Bateman, the express inclusion of the records in
the assets to be transferred and the confirmation of
that position in clause 5,
I have concluded that the mention of the records in clause 6 is an error and
that the inconsistency should
be resolved by severing, to the extent of the
inconsistency, clause 6 from the contract.
- The
Ginnane agreements do not make any mention of patient records. Mr Moshinsky,
senior counsel for the Commissioner, submitted
that patient records did not pass
to PHC under these contracts. He attributed the failure to mention the records
to the fact that
amendments to the Privacy Act 1988 (Cth) were made in
December 2001. He submitted that those amendments applied to health
information of the kind contained in the patient records such that Idameneo
would have required
the consent of the patients concerned if the records had
been transferred to it. Mr Moshinsky referred to Idameneo’s privacy
policy to support his contention that the use it proposed to make of the
information in the records went well beyond the care of
the individual patient
and extended to business development, management and fee collection from the
patients and health services.
- Whether
or not the Commissioner’s contention as to why patient records were not
listed in the Ginnane agreements is irrelevant.
Similarly, it is not to the
point whether the agreements gave rise to arrangements that did not comply with
the Privacy Act. That is a separate issue on which it is not necessary
for me to make any finding and I do not do so. The question whether the
patient
records were transferred is to be answered by construing the contracts in
accordance with the established principles.
- I
am satisfied that the provisions concerning goodwill and the sale of the sample
practice as a going concern required the vendor
to transfer the physical patient
records and the patient lists to PHC in order for the PHC clinics to be
operated in the manner
contemplated in the agreements between the parties. The
sample doctors in their new PHC practice, and the other doctors in the PHC
clinics, needed to be able to draw on the information in the patient records to
maintain continuity of care for patients of the sample
practice who chose to
become patients at the relevant PHC clinic. The patient lists were required in
order for PHC to develop the
business of its clinics as contemplated by the sale
agreements and practitioner contracts. It does not follow however that the
transfer
of an interest in any copyright in those patient records or the patient
lists would be similarly required.
Assignment of copyright under the contract
- As
already noted, only the sale agreement in respect of the Urquhart sample
practice specifically provides for the assignment of
copyright, and that
assignment is quite minimal; see [147] above. None of the other sale agreements
make any mention of copyright.
- It
is beyond contention that the sale of a business may transfer an interest in
copyright without there being an express mention
of copyright in the contract.
Both Murray v King and Greenfield Products, among others,
attest to that. It is trite law, however, that each case and each contract
must be considered in the context of its own facts. As
previously mentioned the
distinction between the two approaches to filling a perceived gap in a contract,
described above at [153],
may not be clear and they may often overlap. For
example, the concept of the business efficacy requirement referred to in BP
Refinery is not only an essential precondition to the implication of
contractual terms but may also be a relevant consideration in the construction
of the actual terms of the contract. As with all questions of construction and
the implication of terms principles articulated at
a high level of generality
cannot substitute for a careful examination of the contracts in issue.
- PHC
submits that both the di Michiel and the Ginnane agreements, in stating that the
“practice” is the subject of the
sale refer to the business of the
sample doctor’s practice and that, properly understood, the practice
includes copyright or,
in the alternative, that inclusion should be implied into
the contract. PHC also submits that the specific references in the
di Michiel
and the Ginnane agreements support this construction and
indicate that copyright is included in the sale. In relation to the
di Michiel
agreements they are:
(a) the express inclusion in
the sale of the patient records and the patient lists;
(b) the express inclusion in the sale of “any other assets or benefits
agreed to be sold or vested in the Purchaser”
under the agreement;
(c) the fact that consideration was required to be paid and was paid;
(d) the provision that on completion of the sale “title to and
property in, the practice and all the assets included in the
sale” vests
in the purchaser;
(e) the requirement for delivery of documents relating to the practice to
the purchaser and for their retention by the purchaser
as well as a similar
provision in the practitioner contracts;
(f) the expression of the fundamental objective to ensure that the patients
of the sample practice transfer to the new PHC practice;
(g) the sale of the sample practice as a going concern which, the applicant
submits, requires that PHC be able to copy the patient
records lawfully;
(h) the fact that express exclusions in the sale do not include copyright;
and
(i) the fact that the vendor gives a warranty of title to the property
included in the sale.
- In
relation to the Ginnane agreements PHC made similar submissions although there
were fewer express provisions to which it could
point in support of its
position. The provisions mentioned in (a), (b), (e) and (f) above do not appear
in the Ginnane agreements.
- PHC
submits, in relation to the di Michiel and the Ginnane agreements that the
implication of a term for the passing of an interest
in copyright would not
contradict any express term of the contract. Moreover it submits that if the
sample doctors were to retain
copyright they would be in a position to undermine
the operation of the PHC clinics by denying PHC and the other doctors in the
clinic
the right to reproduce important parts of the patient records. This, it
submitted, would lead to an absurdity.
- In
opposing PHC’s position the respondent in its written submissions made the
following points the factual aspects of which
find some support in the evidence,
in particular that of Dr Bateman, PHC’s managing
director:
(a) there was no discussion of copyright in the [patient] records in the
negotiations between Dr Bateman or [Dr] Monk and the vendor
doctors;
(b) Idameneo did not inspect any of the [patient] records before the
transactions;
(c) Idameneo did not carry out any assessment of the quality of the [patient]
records before any of the transactions;
(d) Because the doctor would have access to the [patient] records at the new
premises, and therefore access to the information contained in the
[patient] records, there was not need to assign copyright in the
[patient] records;
(e) If there was a need for the doctor to copy from his or her own notes at the
new premises, he or she could do so if he or she
continued to own copyright;
(f) the Practitioner Agreement did not require Idameneo to provide the [patient]
records nor did it require Idameneo to provide a
licence of copyright in the
[patient] records;
(g) in none of the cases did Idameneo carry on the previous medical practice as
a going concern – Idameneo did not carry on
the
practice.
- In
so far as the applicant’s submissions rely on the express inclusion in the
sale agreements of the patient records and lists,
they add nothing to the
enquiry whether the sale included the copyright as well as the physical records.
Similarly it does not advance
the argument to refer to the vendor’s
obligation to “documents”; the warranty of title to the property
included
in the sale or the provision of that title to that which is included in
the sale vests on completion. For reasons given by the High
Court in Toll
(FGCT) Pty Limited v Alphapharm Pty Limited (at [154] above) evidence of
what the parties subjectively understood to be the effect of their contract is
also not helpful.
- I
also do not accept that failure to find that PHC had acquired an interest in any
copyright in the patient records would lead to
an absurdity. The question of
whether there was copying to the extent of infringing copyright unless PHC had
some interest in the
copyright is discussed below in the context of the claimed
use of the copyright. Assuming for the moment that there was such copying,
it
is not for the Court to imply the transfer of an interest in copyright in order
for PHC to resist a claim of infringement. In
any event, there is no evidence
even to suggest that any claim for infringement has been made and I make no
finding on this point.
It may be that, assuming (contrary to my view) that
there is any relevant copyright, that authorisation (express or implied) has
been given for such copying outside the terms of the sale agreements and the
practitioner contacts.
- I
do not see the relevance of the respondent’s point that Idameneo did not
carry on the sample practice as a going concern.
Whether Idameneo in fact
carried on the practice as a going concern is quite separate from and
independent of the obligation of
the vendor to convey title to a going concern.
That obligation was not conditional on the practice being continued as a going
concern
whether by Idameneo or anyone else. The parties are entitled, if they
wish, to agree to such a term.
- I
also do not give any weight to the evidence to which the respondent referred as
to PHC’s lack of interest in the quality
of the patient records. It is
not unlikely that PHC took the view that it wanted whatever patient records and
lists that the sample
doctor had and, as long as it achieved that, it had all
the information that was available and that was sufficient. In fact a
reasonable
person considering the terms of the contract in the context of the
whole of the arrangements and agreements made in respect of PHC’s
acquisition of the sample practices might well come to the conclusion that the
strong emphasis on the title to and delivery of documents
indicates that
copyright was not important to the purchaser. In any event I am not persuaded
that the contract properly construed
makes any provision for the transfer of an
interest in copyright.
- Similarly,
nothing in the evidence leads me to the view that assignment of copyright or the
acquisition of any interest in copyright
was necessary for the continued
operation of the practice acquired by PHC or to give business efficacy to the
contract. PHC does
not claim to have acquired copyright in the documents
created by third parties such as specialist reports or radiology and pathology
reports. There is no evidence that it has been unable to use those reports by
reason of not having copyright. It has not argued
that the transfer of
copyright in those documents is necessary to give business efficacy to the sale
agreements. It has not argued
that the vendors under the sale agreements were
obliged to transfer copyright in those documents in order to meet the obligation
to transfer the sample practices as going concerns. I see no reason why the
position with regard to consultation notes, medical
summaries, prescriptions and
referral letters are any different.
- It
is also relevant that the sale agreements are formal agreements drawn up by
PHC’s solicitors and executed by Idameneo, each
sample doctor and the
relevant corporate entities. In the negotiation of these agreements many of the
sample doctors were legally
represented. Only one of the sample doctors, Dr
Lyons, said that he had not been legally represented although he added that his
wife is a lawyer and that she read the contract. Drs Urquhart, Ginnane,
O’Shannessy, Mundkur, Panwar and Sabag all agreed
in cross-examination
that they were legally represented. There was no evidence either way in
relation to Drs Galati, Parissis, di Michiel,
Fitch and Tang.
- There
is no evidence of any relevant difficulties between the parties or in the
operation of the new PHC practices. This may of
course be because all parties
believed that copyright had passed. The impression I have from the evidence of
all the doctors is
that the issue was just not important to them either before
or after they sold their practices to PHC. Moreover the evidence is
that the
issue is only of comparatively recent concern to PHC and, so far as there is any
dispute, it is not between the parties
to the sale agreements or the
practitioner contracts. The dispute is of an entirely different nature; it is a
dispute between PHC
and the Commissioner of Taxation.
- As
indicated above, I accept that it is necessary for PHC to be able to draw on the
information in the patient records and, indeed,
on the information in the third
party documents in respect of which there is no claim for copyright. In so far
as it was necessary
for PHC to have control of the records it achieved that by
its ownership of the physical records. It is not necessary for PHC to
have
copyright in the patient records for it to be able to carry on its business.
- I
am confirmed in my view by the evidence discussed below as to the alleged use of
copyright in the patient records after completion
of the sale agreements; see
below at 207 et seq. That evidence shows that little if any use was made of
copyright as opposed to
use of the physical patient records and the information
contained in them. Given that the patient records were acquired by PHC and
taken to the PHC centres it would hardly have been open to any of the sample
doctors to try to prevent any copying of those records.
It does not follow from
this that any copyright the sample doctor owned had been assigned under the
contract. It is equally consistent
with the doctor giving, expressly or by
implication and independent of the sale agreement, gratuitous permission (a
licence) for
the copying.
- All
the indications are that at the time of the sale the parties did not consider
the use of copyright as opposed to the use of the
physical records. Parties who
are contemplating working together may prefer to rely on a measure of trust and
goodwill between them
to work out any difficulties that may arise in their
relationship rather than to poison it at the outset by trying to provide
contractual
certainty for every issue. Whether or not that is the case here, I
am nevertheless satisfied that only in the case of Dr Urquhart’s
sample
practice would any copyright owned by the vendor have passed to PHC under the
sale agreement.
CONSIDERATION
- As
I have found that copyright passed under the sale agreement only in the case of
Dr Urquhart it is only in respect of that agreement
that it is necessary to
consider this issue. Nevertheless, as Dr Urquhart’s contract is
materially the same as the other di Michiel
contracts, the reasoning and
conclusion would equally apply to those contracts.
- The
issue arises because each set of provisions applicable to the relevant years of
income requires some monetary consideration to
be paid for a deduction to be
available; see [15]-[23]. The table in schedule 1 to these reasons shows the
relevant year of income
for each sale agreement. For Dr Urquart’s sale
agreement it is the 2000 year of income to which Division 373 of the 1997
Act applies. Section 373-30 defines ‘expenditure’ and sets
out the method by which a taxpayer is to determine its expenditure.
The
respondent refers to case 5 of the table which makes provision for cases where
an item is acquired for “no consideration”.
As the
respondent’s submits:
The reference to “nil consideration” in Case 5 indicates that the
provision uses consideration in the sense of monetary
consideration. Thus, when
one turns to Case 4 in s 373-30, which applies where “you bought the
item with other property
and no separate consideration was allocated to the
item” it is apparent that this is referring tot a case where no separate
monetary consideration was allocated to the item.
- As
can be seen from the summary of Dr Urquhart’s contract in the second
schedule, the purchase price of $1,061,618 was fully
apportioned as between
goodwill and the items in Schedule 1 to the sale agreement. There is no
indication that this apportionment
is in any way a sham. The fundamental
objective of the sale is expressed to be that PHC should receive the benefit of
the goodwill
of the sample practice. The parties are entitled to allocate the
monetary consideration in that way if they chose. Support for
this proposition
can be found in Murray v King (1984) 4 FCR 1 in which cl 10 of the
contract for the sale of the business of a partnership pursuant to an order of
the Supreme Court of Queensland
provided:
The vendor and the purchaser hereby agree that the aforesaid purchase price of
sixty-two thousand dollars ($62,000) abovementioned
shall be apportioned as
to
Goodwill $61,400
Furniture and Fittings 600
$62,000
The appellants submitted that this
clause supported their claim that only goodwill and the furniture and fittings
(and not the copyright
owned by the partnership assets) were to be sold under
the contract. Sheppard J rejected this submission saying at 6-7:
“[I]t is obvious that the clause was included for revenue purposes. It
should not be allowed to control the construction of
the contract. The parties
were entitled, if they chose, to provide that the entirety of the consideration
was for the goodwill and
the furniture and fittings and that no part of the
consideration was to be assigned to the copyright or any other
asset.
- The
other members of the Full Court agreed on this point; at 12 per Morling J and at
17 per Spender J. A similar view was expressed
by Hill J in Commissioner of
Taxation v Krakos Investments Pty Ltd (1995) 61 FCR 489 at 503.
- None
of this is to say that there was no consideration for the copyright that was
expressed to be sold under the sale agreement.
That agreement was a valid
contract supported by consideration passing between the parties in accordance
with the requirements of
the law of contract. It consisted of the mutual
promises between the parties which included, for example, the purchaser’s
obligation to pay the purchase price, to enter into the practitioner contract
and to collect the vendor’s book debts. The
vendor’s obligations
include the transfer of the property agreed to be sold, delivery of patient
records, access to business
records and the warranties. Consideration in that
sense is inclusive of the promise to pay the purchase price but is distinct from
the actual purchase monies. By agreement between the parties no part of that
purchase price was allocated to aspects of the agreement
other than goodwill and
the items in schedule 1. It follows that no amount of the purchase price was
allocated to copyright. There
is no reason why the Court should interfere with
the arrangement that the parties made on entering into the contract.
- The
Ginnane agreements do not contain any provision for apportionment of the
purchase price. In those circumstances there is no
basis for excluding
copyright from the assets between which the price may be apportioned. Division
40 of the 1997 Act applies to copyright acquired pursuant to these
agreements; see Schedule 1 to these reasons. As previously noted,
s 40-30(2)(c)
includes items of intellectual property as depreciating
assets. A taxpayer may claim a deduction for an income year equal to the
decline in value of a depreciating asset held during that year; s 40-175.
The amount of the deduction is based on the cost
of the asset. The cost has two
elements; s 40-175. For present purposes it is only necessary to consider
the first element
of the cost. Section 40-180 provides a method of determining
cost by way of a table setting out the cost of a depreciating asset
in certain
circumstances none of which appear to be relevant here. Neither party has
suggested that this method should apply. Section 40-185
provides an
alternative, namely that the first element of the cost is the amount the
taxpayer is taken to have paid to hold the asset.
- Under
s 40-185(1)(b) that amount is “the sum of the applicable amounts set
out in this table in relation to holding the
asset or receiving the
benefit”. It has not been suggested that s 40-185(1)(a) applies. In
summary the amount paid for
the asset is the cost (s 40-185(b)) or, if the
amount paid is for 2 or more items that include “at least one depreciating
asset” then it is that part of the amount paid that is “reasonably
attributable” to the depreciating asset. Where
there has been no
apportionment as in the Ginnane agreements, the monetary consideration paid for
the copyright would be the amount
of the purchase price of the sample practice
that would be reasonably attributable to the copyright.
USE OF COPYRIGHT TO PRODUCE ASSESSABLE INCOME
- Use
of copyright must be distinguished from use of the document in which the
copyright material is embodied or the use of the information
or ideas conveyed
by that material. The concept of use of copyright is best approached from the
perspective of infringement. That
which would be infringement if not authorised
by the copyright owner, will be use of the copyright where it is done by the
copyright
owner or with the permission of the owner. Such an action will be an
“act comprised in the copyright”; see s 36(1)
and [65] in
IceTV. Section 31(1) of the Copyright Act provides that the
copyright in relation to a particular work includes the right to do certain acts
in relation to that work. In
relation to the reproduction of the work this is
to be read as a right to reproduce the whole or “a substantial part of the
work”; s 14(1). It follows that there will not be an infringement
unless there has been the reproduction of the whole of the work or a substantial
part of it. As Hill J said in Skybase Nominees Pty Ltd v Fortuity Pty Ltd
(1996) 36 IPR 529 at 531:
There is a tension in policy between the monopoly rights which are conferred
upon the owner of copyright in a literary, dramatic,
musical or artistic work on
the one hand, and the freedom to express ideas or discuss facts on the other.
While there will be an
infringement of the copyright of an owner in a literary,
dramatic, musical or artistic work where there is a reproduction of that
work or
a substantial part of it, the fact that another work deals with the same ideas
or discusses matters of fact also raised in
the work in respect of which
copyright is said to subsist will not, of itself, constitute an infringement.
Were it otherwise the
copyright laws would be an impediment to free speech,
rather than an encouragement of original expression.
- In
Autospin (Oil Seals) Ltd v Beehive Spinning [1995] RPC 683 at 700-1,
Laddie J cautioned against failing to distinguish between different kinds of
literary work when considering the question
of substantial reproduction:
“When the court has to decide whether a particular act constitutes a
substantial reproduction
of a copyright work in my view it must have regard to
the nature of the copyright work in issue. ... It should be borne in mind that
it is not enough to say that the defendant has ‘used’ the
plaintiff’s work. He must have reproduced it”.
- In
IceTV the High Court also stressed that in determining whether what has
been copied is a substantial part, it is necessary to consider
“not only
the extent of what is copied: the quality of what is copied is critical,”;
per French CJ, Crennan and Kiefel
JJ at [31]. Their Honours added at [32] that
“a factor critical to the assessment of the quality of what is copied is
the
“originality” of the part that is copied”.
- The
problems to which the High Court alludes are greater where the works in which it
claimed copyright subsists are themselves not
much more than the slivers of
information considered in IceTV. In this regard the following comment of
Gummow, Hayne and Heydon at [157] is especially
relevant:
[T]he statutory requirement that the part of a work taken must be substantial
assumes there may be some measures of legitimate appropriation
of that
investment.
Evidence as to use
- In
broad terms, to succeed in its appeal from the objections decision referred to
in [1] above, PHC must show use or availability
for use for a taxable purpose.
In relation to taxable purpose, I am satisfied that after the sample doctors
moved to the new PHC
practices any use of the patient records or any copyright
in them was directed to the conduct of the relevant PHC practice. I am
satisfied that this was use for a taxable purpose.
- In
relation to use, the requirements of Division 373 differ from those of Division
40. Division 373 applies to the di Michiel agreements
because they were entered
into prior to 1 July 2001. The deduction provided for in Division 373 only
applies if, inter alia,
the taxpayer has used the item of intellectual property
(in this case the copyright) or “the invention, design, work or other
subject matter to which the item relates”, in this case the physical
patient records. Under Division 40 a taxpayer is entitled
to a deduction in
respect of an item of intellectual property the taxpayer holds however that
deduction may be reduced if the taxpayer
used the item of intellectual property
or had it installed ready for use other than for a taxable purpose. Division 40
applies in
respect of the patient records of the sample practices acquired after
1 July 2001, that is the practices of Drs Ginnane, Panwar,
Lyons, Sabag and
Mundkur. The evidence shows that in all of these cases the physical records
were taken to the new PHC practice
and were available for use, and were used, by
the sample doctors in that practice. If PHC had acquired an interest in any
copyright
in those records then the availability of the physical records is
sufficient to show that the copyright was available (installed)
and ready for
use. For that reason in the discussion of use in relation to the records of
these doctors I have primarily discussed
the use of the copyright.
- In
assessing PHC’s claims in relation to use, the evidence as to the use of
the copyright in the patient records of each sample
practice must be considered
separately from any other sample practice and in the context of Division 373 or
Division 40 as applicable.
Dr di Michiel - Division 373
- As
previously noted only one patient record from Dr di Michiel’s sample
practice was produced in evidence, namely that of di
Michiel patient 6. That
patient continued to see Dr di Michiel after he commenced work at the PHC
practice. The first entry in
the notes of the new practice, which again are
handwritten, is dated 6 December 1996. There is no health summary and the
entries
appear to continue in chronological order in a similar manner as in the
sample practice. The last entry is dated 13 January 2002.
- The
respondent also tendered a computer-generated patient record from the Primary
Health Care practice which Dr di Michiel, after
some confusion, identified as
relating to di Michiel patient No 6. In that record there are no entries under
the headings “Patient
Family History”, “Patient Social
History”, “Patient Personal History” or “Current and
Ongoing
(Problem List)”. There are three entries under the heading
“Current and Long Term Medications” which list Ventolin,
Symbicort
and Microgynon in specified doses. While these entries may have been informed
by information in the earlier patient records
they do not indicate any copying
from those records. In cross-examination Dr di Michiel conceded that the
information had not been
transferred from the old records. He further agreed
that no information had been copied from that record to the new PHC hardcopy
record for that patient. He was also not able to point to any
information that had been copied to the new PHC electronic record. In summary,
there was no
evidence of any use of copyright in respect of Dr di
Michiel’s patient records. However, it is clear that he used the physical
patient records to retrieve information about his
patients.
Dr Galati - Division 373
- In
the case of Dr Galati all the sample practice patient records were hardcopy as
were the new PHC records. In his affidavit of
19 December 2008 Dr Galati said
that he “would write in the Primary Health Care patient folder all of the
important details
from the [sample practice] files” however no instance of
this practice was before the Court.
- In
relation to Galati patient 1 (see [61] above) there was no evidence of copying
of the consultation notes. The new PHC record
contained a list of current and
ongoing problems which Dr Galati agreed had been made in February 2008, some
years after he commenced
working with PHC. The list may have drawn on
information in the sample practice record for that patient however the fact that
a
particular disease is named in both records does not establish that copying
occurred.
- In
relation to Galati patient 5 Dr Galati pointed out that the word,
“sulphur” occurred in the old and new records although
in the new
record it was spelt “sulpha”. Similarly, the diagnosis of
“aortic stenosis” found its way into
the new PHC record as
“known aortic”. I would regard the examples given in relation to
Galati patients 1 and 5 as instances
of using the information in the sample
practice patient records but not as instances of copying. In retrieving this
information
from the patient records, Dr Galati was using the work to which the
copyright relates.
Dr Urquhart - Division 373
- In
his affidavit of 19 December 2008, Dr Urquhart stated that at a first
consultation with a sample practice patient after he moved
to PHC he would take
both the old and the new file for that patient into the consulting room and
that, during the consultation, he
would copy “a summary of the
patient’s medical history” from the old file to the new. Although
Dr Urquhart uses
the language of copying the evidence suggests that he was
“copying” only the information and not the expression of the
sample
practice record. The only evidence that allowed comparison between the new and
old records was in relation to Urquhart patient
5. The health summary for this
patient included a reference to “hysterectomy – ov intact”.
The new PHC electronic
record had no such entry. In cross-examination Dr
Urquhart agreed that it would have been appropriate to include that reference
on
the front page of the PHC electronic record if one were endeavouring to copy the
sample patient record exactly. While not sufficient
to support PHC’s
claim to have used the copyright as opposed to the physical records, the
evidence does show that Dr Urquhart
used the physical records, that is the
subject matter to which that copyright relates.
Dr Tang - Division 373
- In
her affidavit of 13 February 2009, Dr Tang gave evidence similar to that of Dr
Urquhart, about taking both the old sample practice
file and the new PHC file
into the first consultation with a sample practice patient after she moved to
PHC. She also testified
that during the consultation, she would manually
transfer “all important information” to the new file. Important
information
included the patient’s medical history both family and
personal as well as details of allergies and current medications. As
described
in the summary of Dr Tang’s record keeping practices above at [72]-[75],
there was some confusion in the records
tendered between records made by Dr Tang
and those made by others, in particular by her husband, Dr Lee. There was no
reliable evidence
as to the use made of the copyright in the sample practice
records in the new PHC practice however the evidence is clear that Dr
Tang used
the physical records, that is the subject matter to which the copyright
relates.
Dr Fitch - Division 373
- Dr
Fitch’s record keeping in the sample practice was similar to that of Dr
Tang. In his affidavits of 13 February 2009 and
25 May 2009 Dr Fitch gave
evidence of the use he made of his sample practice records in the new PHC
practice. He said that in the
new practice his sample practice records were
stored in a filing cabinet near reception and were available for him and the
other
doctors at the centre to use. Dr Fitch said that initially when he saw a
patient from the sample practice in the new PHC practice
he transferred
(manually) the whole of the sample practice file to the new PHC file. When, in
about 2002, the Medtech system of
electronic record keeping was introduced into
the new PHC practice he copied the most important parts of the health summary
from
the sample practice “by typing them directly into
‘Medications’ and ‘Classification’ tabs for the
patient”.
- As
noted above at [79]-[82] records of three patients of Dr Fitch were tendered.
Dr Fitch was cross-examined about those records
and the new PHC records for
those patients. In none of the examples of new PHC practice records for these
patients was there evidence
of copying of any substance. In relation to Fitch
patient 1, Dr Fitch explained the absence of significant information from the
front page of the new records saying that the patient had specifically requested
this “out of embarrassment”. For this patient some of
the entries in the new PHC practice health summary reflected entries in the
sample practice record however slight differences
in the wording suggested that
in compiling the new record it was the information from the sample practice
records that was used rather
than there having been direct copying. For example
“post traumatic stress” in the old record became “post
traumatic
stress syndrome” in the new. Dr Fitch confirmed that these
entries recorded the same diagnosis.
- In
relation to the records of Fitch patient 2, in cross-examination Dr Fitch was
taken to the records and it was put to him: “So
there has been no evidence
here of transfer of information from the old health summary to the new
electronic record, has there?”
to which Dr Fitch responded:
“That’s correct”. Comparison of the old and new hardcopy
records for Fitch patient
4 was similarly unhelpful. It showed some terms
appeared in both records such as “Endoscopy, ulcerative, oesophagitis.
Current
medication: Zoton”. After electronic records were introduced the
ongoing problem appeared as “reflux, oesophageal”.
- The
evidence concerning Dr Fitch’s patient records fails to show that there
was any use of copyright in records in the new
PHC practice however there was
evidence that the physical records, being the subject matter to which that
copyright relates, were
used.
Dr Parissis - Division 373
- Dr
Parissis swore two affidavits in the proceedings in which he gave evidence of
his use of the sample practice patient records in
the new PHC practice. In
first consultations with sample practice patients at the new practice Dr
Parissis would use the sample
practice patient records to review the
patient’s history and then handwrite details of the consultation on the
new file. Before
PHC started to use computers he would type details of the
consultation directly into the computer he had used at the sample practice.
He
used that computer to write prescriptions and update treatment records. He
stated that he copied information about the patient’s
medical and family
history from the sample practice file onto a summary sheet provided by PHC.
This sheet would remain in the PHC
file for use by other doctors. Once
computers were introduced at the new PHC practice Dr Parissis said that
electronic records from
his sample practice were copied to the PHC computer
system.
- The
records of the four Parissis patients (see [83]-[86] above) did not include any
health summaries or patient histories and no
hardcopy records from the new PHC
practice were produced. In comparing the records of his sample practice
patients with the electronic
records of the new PHC practice, in respect of
Parissis patients 1 and 4, Dr Parissis was unable to point to any instance of
copying
from the old records to the new electronic records.
- In
relation to Parissis patient 2, the current and ongoing problems appearing in
the sample practice patient records included items
such as “severe
COAD” (chronic obstructive airways disease), and
“hypertension” however none of these items
appeared in the new PHC
records. The section for current and ongoing problems was blank. Similarly,
for Parissis patient 3 entries
in the sample practice record relating to poor
eyesight and detached retina did not appear in the new electronic record.
- In
summary, Dr Parissis’ evidence was consistent with use being made of the
physical patient records from the sample practice
in the new PHC practice.
There was, however, no convincing evidence of copying of the records such as
would amount to use of any
copyright that may have subsisted in the sample
practice records.
- Dr
Parissis also gave evidence about the transfer of his patient files to
PHC’s computer system. He said:
When I was at the [sample practice] I created floppy disks of all the patient
information stored on my computer at the [sample practice].
I recall that I
handed these floppy disks to a persons [sic] at Primary Health Care, who [sic]
name I cannot recall, and it is my
understanding that Primary Health
Care’s IT staff copied the files from those disks directly to Primary
Health Care’s
computer software system. Once this process was completed
it was my understanding that all doctors working at Primary Health Care’s
Campsie practice had access to the computerised data that I had compiled for
each of my patients.
- I
accept PHC’s submission that this data migration from the sample practice
patient records to the PHC computer system is a
reproduction of the whole of the
records and thus, by any standard, a use of any copyright that may have existed
in the patient records.
In summary, the evidence showed that both the physical
records and any copyright in them was used in the new PHC
practice.
Dr O’Shannessy - Division 373
- Dr
O’Shannessy’s sample practice records were a mixture of hard copy
and electronic forms. In his affidavit sworn on
27 May 2009, Dr
O’Shannessy said that in 1999 he scanned a number of the older paper
records into the computer at his sample
practice. Initially, when he moved to
the new PHC practice, he continued to use the same computer and software that he
had used
in the sample practice. Some time after he moved to the new PHC
practice, he was given a new computer. He stated that PHC’s
information technology department copied all the patient records from the old
computer that he used in
the sample practice.
- On
cross-examination Dr O’Shannessy was asked about his statements in his
affidavit of 27 May 2009 that, in relation to O’Shannessy
patient 2 and 6,
“all parts of the Pre-acquisition dental records have been reproduced in
the Post-Acquisition dental records”
and that he believed “the most
important parts of my Pre-Acquisition records were copied into the
Post-Acquisition records”.
Dr O’Shannessy commented that
‘copied’ might, perhaps, “be a bad choice of words”.
Presumably this concession was made in the light of his earlier affidavit in
which he stated that when he started at the new PHC clinic
he had continued to
use the same computer and software as in the sample practice, merely adding to
the sample practice records when
a former patient came to see him in the new PHC
practice. On re-examination by Mr de Wijn he confirmed that his pre-acquisition
records were available on the PHC computer and that other dentists had access to
those records through their PHC computers.
- As
with Dr Parissis, PHC submitted that by the continued use of his old computer Dr
O’Shannessy had used the copyright in the
patient records from his sample
practice. The respondent submits that Dr O’Shannessy’s evidence
does not support that
submission and that what really happened was that Dr
O’Shannessy took his records across to the sample practice and continued
to use the electronic and paper records there, rather than making any use of
them that might be characterised as a use of copyright.
- While
this appears to have been the case initially, no doubt was cast on Dr
O’Shannessy’s evidence concerning the migration
of his old records
onto the PHC system. Rather he confirmed this on re-examination. In my view
this involved the reproduction of
the sample practice records and would have
been an infringement of any copyright that existed in the records. The evidence
therefore
shows that both the physical records and any copyright in them were
used at the PHC practice.
Dr Ginnane – Division 40
- In
his sample practice Dr Ginnane kept both hardcopy and computer records. In his
affidavit of 19 December 2008 he said that after
he had signed the sale
agreement and other contracts with PHC, an employee of PHC came to the sample
practice premises and downloaded
all the patient medical information from his
computer system. He also said that relevant information (including health
summaries)
from his hard copy patient records was scanned into the PHC computer
system. In his second affidavit affirmed on 20 May 2009, Dr
Ginnane said that
when he commenced working at the new PHC practice he “copied the most
important parts of the summary sheet
into the Front Page for the patient by copy
typing into the Medtech system”. He also copied the medication summary in
the
same way. The examples of patient records that were tendered do not confirm
this account.
- In
relation to Ginnane patient 1 the entries in the front page of the new
electronic record were said to show evidence of copying
from the hard copy
health summary in the patient records. The electronic record notes in the
current and ongoing problem list, some
conditions which, in similar form, are
noted in the sample practice patient record. The electronic medical history
shows, however
that those entries were made between October 2005 (by Dr Claire
Gabriel) and October 2007 (by Dr Margaret Bryce). That is, these
entries were
made some years after the first consultation with this patient at the PHC clinic
which was in February 2002.
- The
records for Ginnane patient 2 show a similar pattern in that most of the entries
in the front page of the PHC electronic record
were made between 2004 and 2007.
Furthermore, there were a number of conditions listed in the hard copy record of
the sample practice
that might have been expected to be in the electronic record
but which do not appear. These include chronic pyelonephritis and lumbar
spondylosis. The records for Ginnane patient 4 provided similarly
unsatisfactory evidence of copying from the sample practice hard
copy records to
the PHC electronic record. I am unable to find in the records of these three
patients evidence of copying at the
first consultation from the sample practice
records to the PHC electronic records.
- If
I assume, contrary to the conclusions I have reached, there was copyright in the
sample practice records and that copyright was
transferred under the contract of
sale, I would accept that there was some extremely limited use of that copyright
in the new PHC
practice. I also accept that any copyright that subsisted in the
patient records was available for use.
Dr Panwar – Division 40
- After
the move to the PHC clinic Dr Panwar, as well as using the computer supplied by
PHC, continued to use her sample practice computer
“to ensure that I
copied all relevant information from the [sample practice] to the Primary Health
Care computer”. She
said that she copied anything in the patient’s
medical history that she thought was important and that she thought other
doctors
should know before they treated one of her patients. She also began to
type her treatment notes directly into the PHC computer as
well as using it for
prescriptions.
- The
examples of the PHC electronic record do not support this account. For instance
the hardcopy health summary for Panwar patient
1 records a number of conditions
that do not appear in the new electronic record. In cross-examination Dr Panwar
agreed that the
entries in the current and ongoing problem list of the PHC
record were added over time, between 2003 and 2008 as the patients came
in for
consultations. The comparison between the sample practice records for Panwar
patient 2 and the new PHC record for this patient
showed a similar pattern.
- The
evidence does not support the claim that any copyright in the Panwar sample
practice records was used in the new PHC practice.
Nevertheless the
requirements of s 40-25(2) are satisfied as the availability of the patient
records at the PHC practice meant that any copyright in them was available for
use.
Dr Lyons – Division 40
- Dr
Lyons stated that before he started work at the PHC clinic a person from PHC
came to the sample practice to download all the patient
information stored on
his computer. When he moved to the PHC clinic his patient records from the
sample practice were available
to be used by him and other doctors. Similarly,
the information that had been on his sample practice computer was also
available.
I also note that in her affidavit of 6 February 2009, Vicki Fay
Whiteley, the National Operations Manager for PHC referred to examples
of
documents from Dr Lyons sample practice that were scanned into the PHC computer
system. The documents to which she refers are
a specialist report and pathology
results. As PHC is not claiming to have acquired copyright in such records that
evidence is not
relevant to its claim. Ms Whiteley also refers to referral
letters from Dr Lyons’ sample practice having been scanned.
- Dr
Lyons said that during the course of consultations at the new PHC practice he
would copy as much as possible of the patient’s
medical history from the
health summary sheets and consultation notes directly into the PHC computer.
However, the evidence does
not support this account. For example, the first
consultation in the new PHC practice for Lyons patient 3 was on 3 January 2003.
However entries in the PHC electronic record in respect of this patient that are
similar to those in the hardcopy patient records
from the sample practice, were
not entered until 7 April 2005. The position in relation to Lyons patients 1
and 5 show a similar
pattern. This suggests that entries in the electronic
record were made as and when appropriate in relation to subsequent consultations
with the relevant patient rather than as a result of copying.
- In
relation to the material transferred from Dr Lyons sample practice computer to
the PHC computer, I note the limited use that Dr
Lyons made of that computer.
Nevertheless, I am of the view that if any copyright existed in that material or
in the scanned referral
letters to which Ms Whiteley referred, then the transfer
to the PHC computer would involve use of the copyright. In relation to
any
patient records that were not scanned or otherwise transferred to the PHC
computer the availability of the patient records at
the PHC practice meant that
any copyright in them was available for use.
Dr Sabag – Division 40
- Dr
Sabag used only hardcopy records in his sample practice. Those records were
taken to the new PHC practice before he commenced
working at that practice.
When a sample practice patient first came to the new PHC practice the PHC
receptionist would create a
PHC computer file for that patient and insert the
patient’s name, address, date of birth, Medicare number and contact
details.
- Dr
Sabag said that at the PHC practice he would type his consultation notes
directly into the computer. He would also review the
sample practice patient
records and “reproduce important information such as long-term illnesses,
current medications and allergies
from that file by typing it directly into
Primary Health Care’s computer system”. He stated that, if
necessary, he would
ask for “the patient’s health summary sheet,
pathology, radiology or specialist reports or any other documentation”
from the sample practice file to be scanned into the PHC system.
- No
examples of copying to which Dr Sabag referred were produced in evidence. It is
not clear whether he actually copied from his
sample practice records or merely
made use of the information in them. Nevertheless the requirements of
s 40-25(2) are satisfied as the availability of the patient records at the
PHC practice meant that any copyright in them was available for
use.
Dr Mundkur – Division 40
- Dr
Mundkur’s patient records were in hardcopy and electronic form. Before he
started working at the PHC clinic, all his hardcopy
patient records and the
computer he had used at the sample practice were relocated to the PHC practice.
When a patient from the
sample practice came to the PHC practice, the PHC staff
would open a new PHC file for that patient.
- Initially,
Dr Mundkur used both the computer from his sample practice and the computer
supplied by PHC in the new PHC practice.
He stated that generally he would copy
information from the hardcopy sample practice records and from the sample
practice computer
by manual entry into the PHC system. Usually he did this
after the patient had attended the first consultation with him at the new
PHC
practice. The information included relevant details of the patient’s
medical history, immunisation, allergies, operations
and long term medication.
- On
cross-examination with respect to the sample patient records tendered in
evidence it became apparent that information was entered
into the
patient’s PHC record gradually and over a period of several years. It was
also apparent that some of the key information
from the sample practice patient
records was not entered at all.
- There
was some evidence, given by Ms Whiteley, that documents from Dr Mundkur’s
sample practice records had been scanned.
On cross-examination however, the
evidence was unclear. In particular Ms Whiteley was unable to confirm that the
scanned documents
exhibited to her affidavit were actually from Dr
Mundkur’s sample practice. Dr Mundkur did not identify any of his records
as having been scanned. In any event, the requirements of s 40-25(2) are
satisfied as the availability of the patient records at the PHC practice meant
that any copyright in them was available for
use.
CONCLUSION
- The
preliminary questions I am required to answer raised four main issues. The
first is whether copyright subsists in the patient
records of the sample
practices acquired by Idameneo under the sale agreements and, if so, who owned
that copyright prior to the
sale. With some very limited exceptions I have
concluded that copyright does not subsist in those records. Those exceptions
are
the record of di Michiel patient 6 and the referral letters written by
the sample doctors in respect of their patients. In
stating this conclusion I
stress that it is a conclusion based only on the evidence before me in these
proceedings and is confined
to the patient records I have examined. It does not
imply that copyright can never subsist in medical or dental records.
- In
the absence of evidence of any assignment or relationship of employment, the
owner of the copyright in patient records for di
Michiel patient 6 was Dr di
Michiel and the owner of the copyright in referral letters written by the sample
doctors, prior to the
sale, the owner was the relevant sample doctor. The
question of ownership of any copyright in the patient records is relevant to
the
capacity of the vendor under each contract of sale to transfer an interest in
that copyright to Idameneo. For the purpose of
the remaining issues I have
assumed that the vendor under each contract of sale was in a position to
discharge any obligation under
the sale agreement to transfer an interest in the
copyright.
- The
second issue was whether, pursuant to a contract between it and the
vendor of the sample practice, Idameneo acquired ownership (legal or equitable)
in any copyright
or a licence to use that copyright. I have concluded that this
question should be answered in the negative in all cases except in
relation to
handwritten referral letters written by Dr Urquhart. This is because the sale
agreement for Dr Urquhart specifically
provided for the assignment to Idameneo
of any copyright that either vendor (Dr Urquhart or Moremint Pty Limited) had in
handwritten
components of the patient records.
- The
third issue was whether Idameneo gave consideration for any acquisition of
copyright and whether that consideration was monetary.
Given my conclusions in
relation to Idameneo’s acquisition of copyright it was not necessary to
answer this question except
in relation to the limited acquisition of copyright
in Dr Urquhart’s patient records. However, in case I am wrong in my
conclusions
expressed above, I considered this issue in relation to the sale
agreements of all the sample practices on the assumption that an
interest in
copyright had passed under each of the sale agreements. I concluded that there
was no monetary consideration in respect
of the di Michiel agreements (ie those
for the sample practices of Drs di Michiel, Galati, Urquhart, Tang, Fitch,
Parissis and O’Shannessy).
I concluded that there was monetary
consideration in respect of the Ginnane agreements (ie those for the sample
practices of Drs
Ginnane, Panwar, Lyons, Sabag and Mundkur).
- The
fourth issue relates to use in producing assessable income. Under Division 373
use of the copyright or the physical records
is sufficient. The use of the
physical records has been satisfied in relation to the patient records acquired
under the di Michiel
agreements. Under Division 40, the requirement that the
copyright be available for use is satisfied by the availability of the physical
records. In so far as the use of copyright is concerned I have concluded that
there is evidence of such use only in the case of
the patient records from the
sample practices of Dr Parissis, O’Shannessy, Ginnane and Lyons.
- In
summary, I have found copyright only in the consultation notes for di Michiel
patient 6 and in the referral letters written by
the sample doctors. Idameneo
acquired an interest only in the handwritten referral letters written by Dr
Urquhart. However, as
the purchase price under the sale agreement for Dr
Urquhart’s sample practice was fully apportioned between goodwill and the
items in Schedule 1 to the agreement, Idameneo did not give any monetary
consideration for the copyright. In view of these conclusions
the preliminary
questions should be answered as follows:
Proceeding VID 911 of
2005
Question:
(a) In consequence of each of the following
agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Peter Umberto di Michiel dated 16 September
1996;
(ii) Sale of Practice agreement between Idameneo and Joseph Leonard Galati
and Reyima Pty Ltd dated 13 August 1998,
did Idameneo hold rights as the owner of copyright comprising an item or
items of intellectual property within the meaning of s 373-15
of the
Income Tax Assessment Act 1997?
Answer: No.
Question:
(b) If yes to any part or parts of question (a), in respect of each such item
of intellectual property was Idameneo entitled to a
deduction in the year of
income ended 30 June 1999 under s 373-10(1) of the Income Tax Assessment
Act 1997?
Answer: Not necessary to answer.
Proceeding No NSD 1790 of 2005
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Ronald Stephen Fitch dated 5 May 2000;
(ii) Sale of Practice agreement between Idameneo and Duraid Salem Haddad
dated 17 May 2000;
(iii) Sale of Practice agreement between Idameneo and Victor Robert Goleby
Critoph and V R Critoph Pty Ltd dated 30 March 2000;
(iv) Sale of Practice agreement between Idameneo, Ton Kuawn Lee, Siam Nai
Tang and Lee & Tang Pty Ltd dated 24 February 2000;
(v) Sale of Practice agreement between Idameneo and Michael Roy Wunsh and M R
Wunsh Pty Ltd dated 20 June 2000;
(vi) Sale of Practice agreement between Idameneo and Peter William Urquhart,
Peter W Urquhart Pty Ltd and Moremint Pty Ltd dated 19
October 1999;
(vii) Sale of Practice agreement between Idameneo and Jeremy Kai Sing Lee and
Jeremy Lee Pty Ltd dated 29 November 1999,
did Idameneo hold rights as the owner of copyright comprising an item or
items of intellectual property within the meaning of s 373-15
of the
Income Tax Assessment Act 1997?
Answer: No, except in relation to the Sale of Practice agreement
between Idameneo and Peter William Urquhart, Peter W Urquhart Pty Ltd and
Moremint Pty Ltd dated 19 October 1999.
Question:
(b) If yes to any part or parts of question (a), in respect of each such item
of intellectual property was Idameneo entitled to a
deduction in the year of
income ended 30 June 2000 under s 373-10(1) of the Income Tax Assessment
Act 1997?
Answer: No.
Proceeding No. NSD 2169 of 2005
Question:
(a) In
consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and John Parissis dated 30 June 2000;
(ii) Sale of Practice agreement between Idameneo and George Abouyanni dated
28 June 2001;
(iii) Sale of Practice agreement between Idameneo and Kieran
O’Shannessy and Dr Kieran O’Shannessy Pty Ltd dated 2 August
2000;
(iv) Sale of Practice agreement between Idameneo and John Frank Perica dated
30 May 2001,
did Idameneo hold rights as the owner of copyright comprising an item or
items of intellectual property within the meaning of s 373-15
of the
Income Tax Assessment Act 1997?
Answer: No.
Question:
(b) If yes to any part or parts of question (a), in respect of each such item
of intellectual property was Idameneo entitled to a
deduction in the year of
income ended 30 June 2001 under s 373-10(1) of the Income Tax Assessment
Act 1997?
Answer: Not necessary to answer.
Question:
(c) In consequence of the Agreement between Sydney Diagnostic Services (NSW)
Pty Ltd (the “SDS Trustee”) and Liu &
Krausz dated 7 April 2001,
did the SDS Trustee hold rights as the owner of copyright comprising an item or
items of intellectual
property within the meaning of s 373-15 of the
Income Tax Assessment Act 1997?
Answer: No.
Question:
(d) If yes to any part or parts of question (c), in respect of each such item
of intellectual property was the SDS Trustee entitled
to a deduction in the year
of income ended 30 June 2001 under s 373-10(1) of the Income Tax
Assessment Act 1997?
Answer: Not necessary to answer
Proceeding No NSD 2467 of 2005
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Dr AC Ginnane dated 11 January 2002;
(ii) Sale of Practice agreement between Idameneo and Mukteshwar Prasad Singh
dated 28 September 2001;
(iii) Sale of Practice agreement between Idameneo and Dr Kheang Chheang Heang
dated 25 June 2002;
(iv) Sale of Practice agreement between Idameneo and Emerlita Merlie Gallardo
and JM Gallardo Pty Ltd dated 11 April 2001,
did Idameneo hold copyright which constituted a depreciating asset or
depreciating assets within the meaning of s 40-30(2) of
the Income Tax
Assessment Act 1997?
Answer: No.
Question:
(b) If yes to any part or parts of question (a), in respect of each such
depreciating asset was Idameneo entitled to a deduction in
the year of income
ended 30 June 2002 under s 40-25(1) of Income Tax Assessment Act
1997?
Answer: Not necessary to answer.
Proceeding No NSD 195 of 2006
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Dr James Lyons dated 7 November 2002;
(ii) Sale of Practice agreement between Idameneo and Dr Promila Singh Panwar
dated 15 July 2002;
did Idameneo hold copyright which constituted a depreciating asset or
depreciating assets within the meaning of s 40-30(2) of
the Income Tax
Assessment Act 1997?
Answer: No.
(b) If yes to any part or parts of question (a), in respect of each such
depreciating asset was Idameneo entitled to a deduction in
the year of income
ended 30 June 2003 under s 40-25(1) of the Income Tax Assessment Act
1997?
Answer: Unnecessary to answer.
Proceeding No. NSD 193 of 2006
Question:
(a) In consequence of each of the following agreements:
(i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd
(“Idameneo”) and Juan Sabag dated 27 October 2003;
(ii) Sale of Practice agreement between Idameneo and Dr Anilkumar Manjunath
Mundkur dated 12 February 2004;
did Idameneo hold copyright which constituted a depreciating asset or
depreciating assets within the meaning of s 40-30(2) of
the Income Tax
Assessment Act 1997?
Answer: No.
Question:
(b) If yes to any part or parts of question (a), in respect of each such
depreciating asset was Idameneo entitled to a deduction in
the year of income
ended 30 June 2004 under s 40-25(1) of the Income Tax Assessment Act
1997?
Answer: Not necessary to answer.
- The
applicant is to pay the respondent’s costs of the proceeding including
reserved costs.
I certify that the preceding two hundred and
fifty-eight (258) numbered paragraphs is a true copy of the Reasons for Judgment
herein
of the Honourable Justice Stone. |
Associate:
Dated: 4 May 2010
Schedule 1: The Proceedings
|
Proceeding
|
Year of Income
|
Parties
(Sample doctor name in bold)
|
sale agreement
(Date commenced at PHC)
|
|
1
|
VID 911 of 2005
|
1999
|
Dr Peter Umberto di Michiel
|
16-09-1996
(2/11/1996)
|
|
2
|
VID 911 of 2005
|
1999
|
Dr Joseph Leonard Galati & Reyima Pty Ltd
|
13-08-1998
(11/08/1998)
|
|
|
NSD 1790 of 2005
|
2000
|
Dr Peter William Urquhart, Peter W Urquhart Pty Ltd & Moremint
Pty Ltd
|
19-10-1999
(25/10/1999)
|
|
|
NSD 1790 of 2005
|
2000
|
Ton Kuawn Lee, Dr Siam Nai Tang and Lee & Tang Pty Ltd
|
24-02-2000
(13/03/2000)
|
|
|
NSD 1790 of 2005
|
2000
|
Dr Ronald Stephen Fitch
|
05-05-2000
(08/05/2000)
|
|
|
NSD 2169 of 2005
|
2001
|
Dr John Parissis
|
30-06-2000
(07/08/2000)
|
|
|
NSD 2169 of 2005
|
2001
|
Dr Kieran O’Shannessy and Dr Kieran O’Shannessy Pty
Ltd
|
02-08-2000
(09/09/2000)
|
|
|
NSD 2467 of 2005
|
2002
|
Dr AC Ginnane
|
11-01-2002
(18/02/2002)
|
|
|
NSD 195 of 2006
|
2003
|
Dr Promila Singh Panwar
|
15-07-2002
(02/12/2002)
|
|
10
|
NSD 195 of 2006
|
2003
|
Dr James Lyons
|
07-11-2002
(25/11/2002)
|
|
|
NSD 193 of 2006
|
2004
|
Dr Juan Sabag
|
27-10-2003
(20/12/2003)
|
|
|
NSD 193 of 2006
|
2004
|
Dr Anilkumar Manjunath Mundkur
|
12-02-2004
(23/03/2004)
|
Schedule 2: Sample Doctors’ sale agreements
Sample Doctor
Date of sale
|
Key contractual provisions
|
|
Dr Di Michiel
16.09.1996
|
Parties: Dr Peter Umberto di Michiel (owner); Idameneo
(purchaser)
Sale of Practice cl 2: “The Doctor’s practice
“comprising” the following assets:
(a) the goodwill of the practice
(b) patient lists;
(c) the records of patients of the practice;
(d) the chattels, plant, equipment, fixtures and fittings itemised in
Schedule 1; and
(e) any other assets or benefits agreed to be sold or vested in the
Purchaser under this Agreement”
Title cl 4.1: Title to practice and assets included in sale to pass
on completion.
Going concern cl 4.5: Until completion practice is to be conducted
as a going concern to maintain goodwill.
Apportionment cl 3.2: $10,000 of purchase price of $100,000
apportioned to items in Schedule 1.
Delivery of records cll 4.2&4.3: patient records, patient lists,
financial records and all documents relating to the patients to be delivered to
new practice and
retained by the purchaser - if stored electronically delivery
by disc and hard copy
Express exclusions from sale cl 5: the lease of the old premises;
the arrangements with suppliers of services (except telephone); obligations to
employees of the sample
doctor; and debts owing to the old practice
Practitioner contract cl 6.1: On completion Doctor to execute the
Practioner Contract.
Objective of sale cl 7: Doctor to ensure “so far as
possible” that patients of old practice transfer to PHC new
practice.
Notification of change cl 8: Procedure by which the Doctor is
to notify patients of move
Warranties cl 10.1(b): Vendor warrants that he has “absolute
title” to the property included in the sale.
|
|
Dr Galati
On or about 13 August
1998
|
Parties: Reyima Pty Ltd, a company wholly owned by Dr Joseph Leonard
Galati and his wife (as owner), Dr Galati; and Idameneo (purchaser).
Sale of practice cl 2.1: practice “comprising”
the goodwill of the practice; patient lists; the records of patients of the
practice; the chattels, plant, equipment, fixtures
and fittings itemised in
Schedule 1; all other medical goodwill of [Reyima] developed through the doctor;
and any other assets or
benefits agreed to be sold or vested in the Purchaser
under this agreement.
Title cl 5.1: Title to practice and assets included in sale to pass
on completion.
Going concern cl 5.5: Until completion practice to be
conducted as a going concern to maintain goodwill.
Apportionment cl 3.2: $199,000 of purchase price of $200,000
apportioned to “goodwill”, $1,000 to items in Schedule 1;
Delivery of records cl 5.2 & 5.3: patient records to be
delivered to new practice - if stored electronically delivery by disc and hard
copy
Express exclusions from sale cl 6: the lease of the old premises;
the arrangements with suppliers of services (except telephone); obligations to
employees of the sample
doctor; and debts owing to the old practice.
Practitioner contract cl 2.2: On entering into sale agreement,
Reyima to execute practitioner contract.
Objective of sale cl 8:– Doctor and Reyima to ensure “so
far as possible” that patients of old practice transfer to PHC new
practice..
Notification of move cl 9: procedure by which the Doctor is
to notify patients of move.
Warranties cl 12.1(b): Reyima warrants that it has absolute
title to property.
|
|
Dr Urquhart
19.10.1999
|
Parties: Peter W Urquhart Pty Ltd, a company wholly owned by Dr
Urquhart and his wife (as vendor); Moremint Pty Limited a company that provides
services to Peter W Urquhart Pty Ltd and “other medical practitioners ...
who render medical services at the Old Premises”
(as vendor); Dr Urquhart;
and Idameneo (purchaser).
Sale of practice cl 2.1: practice: “comprising”
the goodwill of the practice; patient lists; the records of patients of the
practice copyright in handwritten components of
the patient records “to
the extent that it is owned by either [Peter W Urquhart Pty Ltd or Moremint];
the chattels, plant,
equipment, fixtures and fittings itemised in Schedule 1;
all other medical goodwill of [Peter W Urquhart Pty Ltd] developed through
the
doctor; and any other assets or benefits agreed to be sold or vested in the
Purchaser under this agreement.
Going concern cl 12.3: until completion practice is to be conducted
as a going concern to maintain goodwill.
Apportionment cl 3.2: $1,061,618 of purchase price of $1,224,984 is
apportioned to the goodwill of the practice; $97,781 apportioned to the other
medical
goodwill developed through the Doctor; and $65,585 apportioned to the
items in Schedule 1.
Delivery of records cl 5.2: Patient records to be delivered to new
practice - if stored electronically delivery by disc and hard copy (cl
5.4)
Express exclusions Cl 11: the lease of the old premises; the
arrangements with suppliers of services (except telephone); obligations to
employees of the sample
doctor; and debts owing to the old practice– Sch 2
referred to but not tendered.
Practitioner contract
Objective of sale cl 15: Fundamental that PHC receive benefit of
medical goodwill developed through the Doctor; Peter W Urquhart Pty Ltd and the
Doctor to
ensure “so far as reasonably possible” that patients of
old practice transfer to PHC –
Notification of move cl 16:– procedure by which the
Doctor is to notify patients of move.
Warranties cl 19: refers to warranties in Sch 5 which was not
tendered.
|
|
Dr Tang
24.02.2000
|
Parties: Dr Ton Kuawn Lee, Dr Siam Nai Tang, Lee & Tang Pty Ltd,
(as owner); Idameneo (purchaser).
Sale of practice cl 2.1 : practice “comprising”
the goodwill of the practice; patient lists; the records of patients of the
practice; the chattels, plant, equipment, fixtures
and fittings itemised in
Schedule 1; all other medical goodwill of [Lee & Tang Pty Ltd] developed
through the doctor; and any
other assets or benefits agreed to be sold or vested
in the Purchaser under this agreement.
Going concern cl 5.5: until completion practice to be conducted as a
going concern to maintain goodwill.
Apportionment cl 3.2 - $1,690,000 of purchase price of $1,700,000 is
apportioned to the goodwill of the practice and the goodwill developed through
the Doctor;
and $10,000 apportioned to the items in Schedule 1.
Delivery of records cl 5.2 – Patient records to be delivered
to new practice - if stored electronically delivery by disc and hard copy (cl
5.3)
Express exclusions cl 6: the lease of the old premises; the
arrangements with suppliers of services (except telephone); obligations to
employees of the sample
doctor; and debts owing to the old practice..
Objective of sale cl 10: Fundamental that PHC receive benefit of
medical goodwill developed through the doctors; Lee & Tang Pty Ltd and the
doctors to
ensure “so far as reasonably possible” that patients of
old practice transfer to PHC –.
Notification of move cl 11 – procedure by which the
Doctor is to notify patients of move.
Warranties cl 14.1(d): Lee & Tang Pty Ltd warrants that it
has “absolute title” to the property included in the sale.
|
|
Dr Fitch
5.05.2000
|
Parties: Dr Ronald Stephen Fitch (owner); Idameneo (purchaser)
Sale of practice cl 2.1: practice
“comprising” the goodwill of the practice; patient lists; the
patient records; the chattels, plant, equipment, fixtures and fittings in
Schedule 1; and any other assets or benefits agreed to be sold or vested in the
Purchaser under this agreement.
Going concern cl 5.5: until completion practice to be conducted as a
going concern to maintain goodwill.
Apportionment cl 3.2: $345,000 of purchase price of $350,000 is
apportioned to the goodwill of the practice; $5,000 apportioned to the items in
Schedule
1.
Delivery of records cl 5.2 – Patient records to be delivered
to new practice - if stored electronically delivery by disc and hard copy (cl
5.3)
Express exclusions from sale cl 6.1: the lease of the old premises;
the arrangements with suppliers of services (except telephone; obligations to
employees of the sample
doctor; and debts owing to the old practice.
Objective of sale cl 8: Fundamental that PHC receive benefit of
medical goodwill; Vendor to ensure “so far as reasonably possible”
that all
patients of old practice transfer to PHC.
Notification of move cl 9: : Procedure by which the Doctor is
to notify patients of move
Warranties cl 12.1(b): Vendor warrants that he has “absolute
title” to the sale property.
|
|
Dr Parissis
30.06.2000
|
Parties: Dr John Parissis (owner); Idameneo (purchaser)
Sale of practice cl 2.1: practice “comprising”
the goodwill of the practice; patient lists; the patient records; the chattels,
plant, equipment, fixtures and fittings in
Schedule 1; and any other assets or
benefits agreed to be sold or vested in the Purchaser under this
agreement.
Going concern cl 5.5: until completion practice to be conducted as a
going concern to maintain goodwill.
Apportionment cl 3.2:$599,000 of purchase price of $600,000 is
apportioned to the goodwill of the practice; and $1,000 apportioned to the items
in Schedule
1.
Delivery of records cl 5.2 & 5.3– Patient records to be
delivered to new practice - if stored electronically delivery by disc and hard
copy.
Express exclusions from sale cl 6: the lease of the old premises;
the arrangements with suppliers of services (except telephone); and debts owing
to the old practice.
Objective of sale cl 9: PHC to receive benefit of medical goodwill
and ensure “so far as reasonably possible” that patients transfer to
new practice.
Notification of move cl 10:– Procedure by which doctor
is to notify Patients of move
Warranties cl 13.1(b): Owner warrants that he has “absolute
title” to the property included in the sale.
|
|
Dr O’Shannessy
2.08.2000
|
Parties: Dr Kieran O’Shannessy Pty Ltd (owner); Dr
O’Shannessy; and Idameneo (purchaser)
Sale of practice cl 2.1:
the dental practice comprising the following assets:
(a) the goodwill of the practice
(b) patient lists;
(c) the records of patients of the practice;
(d) the chattels, plant, equipment, fixtures & fittings in
Schedule 1;
(e) all other dental goodwill of the vendor developed through
the dentist, and
(f) any other assets or benefits agreed to be sold or vested in
the Purchaser under this Deed”
Going concern cl 3.4(b)(i): practice sold as a going concern and to
be conducted as such until completion to maintain goodwill .
Apportionment cl 3.2: $160,011 of purchase price of $200,000 is
apportioned to the goodwill of the practice; and $39,989 apportioned to the
items in Schedule
1.
Delivery of records cl 5.2 & 5.3: Patient records to be
delivered to new practice - if stored electronically delivery by disc and hard
copy.
Express exclusions from sale cl 6: the lease of the old premises;
the arrangements with suppliers of services (except telephone; and debts owing
to the old practice
and arrangements with employees. NOTE: patient lists and
records of the practice are expressly excluded– inconsistent with
clause
2.1(b) & (c).
Objective of sale cl 8: PHC to receive benefit of dental
goodwill of owner developed through the dentist; owner and dentist to ensure
“so far as reasonably
possible” that patients transfer to new
practice.
Notification of move cl 9: Procedure by which doctor is
to notify patients of move
Warranties cl 12.1(b): Owner and dentist warrants that owner has
“absolute title” to the property included in the sale.
|
|
Dr Ginnane
11.01.2002
|
Parties: Dr AC Ginnane (owner) and Idameneo (purchaser)
Sale of practice cl 2.1: the practice
“comprising” goodwill and items in Schedule 1.
Going concern cl 2.7: practice is sold as a “going
concern” and until completion in a manner is to be conducted so as to
maintain the goodwill.
Apportionment: no mention made
Delivery of records: no mention and no mention of patient records as
being included in the sale.
Express exclusions cl 3: the lease of the old premises; the
arrangements with suppliers of services & employees; and debts owing to the
old practice.
Objective of sale: no mention
Notification of move: no reference
Warranties cl 6.1(b): Vendor warrants that he has “absolute
title” to the property included in the sale.
|
|
Dr Panwar
15.07.2002
|
Parties: (1) Dr Promila Singh Panwar (owner); (2) Idameneo
(purchaser)
Sale of practice cl 2.1: practice “comprising”
the goodwill and the items in Schedule 1.
Going concern cl 2.7: practice is sold as a “going
concern” and until completion is to be conducted so as to maintain
goodwill.
Apportionment: no mention made
Delivery of records: no mention made and no mention of patient
records as being included in the sale
Express exclusions cl 3: the lease of the old premises; the
arrangements with suppliers of services & employees; and debts owing to the
old practice.
Objective of sale: no mention made
Notification of move: no mention made
Warranties cl 6.1(b): owner warrants that she has “absolute
title” to the property sold.
|
Dr Lyons
7.11.2002
|
Parties: Dr James Lyons (owner); Idameneo (purchaser)
Sale of practice cl 2.1: practice “comprising”
the goodwill and the items in Schedule 1.
Going concern cl 2.7: practice is sold as a “going
concern” and until completion is to be conducted so as to maintain
goodwill.
Apportionment: no mention made
Delivery of Records: no mention made and no mention of patient
records as being included in the sale
Express exclusions cl 3: the lease of the old premises; the
arrangements with suppliers of services & employees; and debts owing to the
old practice.
Objective of sale: no mention made
Notification of move: no mention made
Warranties cl 6.1(b): Owner warrants that he has “absolute
title” to the property sold.
|
|
Dr Sabag
27.10.2003
|
Parties: Dr Juan Sabag (owner) and Idameneo (purchaser)
Sale of practice cl 2.1: practice which
“includes” the goodwill and the items in Schedule 1.
Going concern cl 2.6: practice is sold as a “going
concern” and until completion is to be conducted so as to maintain the
goodwill.
Apportionment: no mention made
Delivery of records: no mention made and no mention of patient
records as being included in the sale
Express exclusions from sale cl 3: the lease of the old premises;
the arrangements with suppliers of services & employees; and debts owing to
the old practice.
Objective of sale: no mention made
Notification of move: no mention made
Warranties cl 6.1(b): Vendor warrants that he has “absolute
title” to the property sold.
|
|
Dr Mundkur
12.02.2004
|
Parties: Dr Anilkumar Manjunath Mundkur (owner) and Idameneo
(purchaser)
Sale of practice cl 2.1: practice which
“includes” the goodwill and items in Schedule 1.
Going concern cl 2.6: practice is sold as a “going
concern” and until completion is to be conducted so as to maintain the
goodwill.
Apportionment: no mention made
Delivery of records: no mention made and no mention of patient
records as being included in the sale
Express exclusions from sale cl 3: the lease of the old premises;
the arrangements with suppliers of services & employees; and debts owing to
the old practice.
Objective of sale: no mention made
Notification of move: no mention made
Warranties cl 6.1(b): Vendor warrants that he has “absolute
title” to the property sold.
|
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