Reasoning and Findings on Derivation of the Prada 35
191 It is relevant firstly that Metricon's employees had access to the Seattle 31 display home and floor plan. From late 1999 up until early 2002, several employees from Metricon had inspected Barrett's display homes, including the Seattle 31. There is evidence of at least four visits that I have outlined in the judgment. These visits evidence Metricon's keen interest in the Seattle 31 design. To use Mr Popple words, Studdert "had done a good job". Ms Frazer, whose evidence in this respect I accept, was more emphatic. She said that when she and Popple visited the Seattle 31 home that their initial reaction in their discussions was "wow, this is sensational". She said that they were also very impressed by the positioning and functionality of the covered alfresco dining area.
192 Metricon was, as a matter of corporate culture, clearly prepared to visit competitors' display homes, to view and, through Biasin at least, collect floor plans of these display homes in order to see what could and should be incorporated into its own designs. The Perth trip stands as testimony to that fact. I find it extraordinary that Popple and Palazzesi in particular were prepared to proclaim the virtues of the alfresco as seen in Perth, but to assert disinterest in such a feature found in the Seattle 31, in Melbourne.
193 I accept Frazer's evidence that during the period she was employed by Metricon, she regularly overheard Palazzesi direct staff at Metricon to work up concepts for house designs based on other builders' designs. While she was referring there to a period several years before the alleged infringing conduct, it is nonetheless consistent with what had occurred just before the alleged conduct when Palazzesi directed that a design be produced which had the "look and feel" of the Pavillion, a competitor's design.
194 Furthermore, Biasin, referring to Frazer's affidavit evidence in this respect, said that he was present when Palazzesi and others discussed concepts and trends being used by competitors, as well as about improving the Metricon product range by designing certain concepts or features or producing developments meeting certain trends.
195 I also accept the evidence of Frazer that when she visited Barrett's display it was a feature that captured Popple's attention as having a "wow factor" and that he said to her "Wow. This is sensational." Popple denied that he had said this. The view conducted by me, following the opening of the parties' respective cases, led me to the view that the covered alfresco arrangement within the alfresco quadrant under a single roof-line, the alfresco having an interior type ceiling, was a very striking and distinctive feature as a matter of impression.
196 I accept Frazer's evidence that on the Monday following the visit to the Seattle 31 display home with Popple, they both discussed what they had seen with other colleagues, including Palazzesi and Biasin.
197 I also accept her evidence that Popple collected information from other builders, such as brochures and floor plans, as well as taking photographs of display homes. Popple said that he had taken photographs of homes visited during the Perth trip and then loaded these onto Frazer's computer. If Popple was prepared to visit and photograph display homes built by competitors both in Victoria and Western Australia, I cannot think that he would not also assist his market intelligence by taking brochures and floor plans if they were available, or, in the case of the Seattle 31 home, referring to the brochure with its floor plan, which Biasin admittedly had and which he kept in his office.
198 I am not prepared to find however, that Seattle 31 brochures were available at the Beaconsfield display home at the time of their visit. Nonetheless, I have no hesitation in finding that Popple would have had access to the floor plan in the brochure of the Seattle 31 home which Biasin had, and that he in fact obtained access to it at least shortly before Prototype 20B was produced, which enabled him to direct Bugeja as to the design. Palazzesi said that his sales managers showed him competitors' brochures, referring to brochures of their homes including floor plans. Biasin, as I have said, also collected competitors' brochures. It is inconceivable, in my view, that this knowledge and information was not shared as Popple appears to suggest, when he said that "we", which I take to mean the design development personnel, did not interact with sales staff. There was certainly interaction involving Biasin, the sales manager, whose opinion on design matters were sought, from time to time, and who had participated in the market research trip to Perth.
199 I do not accept the evidence of Ms Frazer that she saw Popple drawing and designing a home plan that went to the market as the Prada 35. The house plan she saw, was, she said, called the 'Cumberland'. According to Popple, and this was not challenged, the Cumberland was marketed as the 'Panorama'. I have concluded that she was mistaken about this.
200 I do not accept that Popple said to Frazer during their visit to the Seattle 31 display home, that the Seattle 31 combined the back half of the Eldridge and the front half of the 'Henley Rochester'. In cross-examination, the Eldridge comment was not put to her and she denied that Popple had mentioned the 'Henley Rochester' at all. I accept her evidence. I regard Popple's evidence as just another attempt by him to reinforce his version of an independent design evolution in respect of the Prada 35 and the other plans/houses constituting the Alleged Infringing Works constructed as it is on the alleged application, by Bugeja on the instruction of Popple, of the Eldridge design to the back half of Prototype 20A.
201 Popple said that he could not recall whether he had mentioned his visit to the Seattle 31 home to Bugeja on the Monday following. However, I consider it highly likely that the Seattle 31 design was discussed in detail between Popple and Bugeja, at least before Prototype 20B was drawn, and probably well before then. There was clearly an awareness of the Seattle 31 display home among those who went on the Perth trip. Biasin said that he saw the façade of a home in Perth known as the Richmond. He thought it looked almost the same as the Seattle 31 façade. Popple recalls Biasin saying as much to the whole group in Perth,which included Bugeja. Popple at first denied but then agreed that the Seattle 31 home was mentioned by Biasin to the group. Palazzesi recalled Biasin talking about how Studdert had "copied" a Perth façade. The above conversation was confirmed in cross-examination by Biasin who said that when he was withBugeja, Popple andPalazzesi in Perth he saw the Richmond façade and said to the others - "I didn't realise that Porter Davis were building in Perth because there is Seattle over there". He said that "it looked exactly like the Seattle that I had seen in Beaconsfield, exactly the same" and that was what he said to the group.
202 Accordingly, the Seattle 31 home was raised in Bugeja's presence before the design of the Prada 35 commenced. I find that it was likely, despite Popple's denial, that it was the subject of further discussion, in the light of Biasin's comments. None of the witnesses raised any suggestion that Bugeja had queried what the reference to the Seattle 31 home or Porter Davis was about. I do not accept the evidence of Bugeja when he said, in his affidavit, that he could not recall any mention of Porter Davis display homes, prior to the commencement of the litigation other than the display centres in Berwick and Caroline Springs. I find that Bugeja was present when Biasin made these comments about the Seattle 31 façade.
203 I also consider it highly likely that Bugeja, again, despite his denial, was shown a copy of the Seattle 31 floor plan by Biasin, or Popple or both. Biasin, as I have found, was involved in the design process generally. I find that Popple made reference to the Seattle 31 floor plan together with Bugeja in producing Prototype 20B, which is substantially identical to the Prada 35. He had access both to a copy of the brochure as well as to the Barrett website, where the Seattle 31 floor plan was reproduced.
204 In his affidavit of 18 April 2006, Biasin detailed his sources of obtaining information concerning competitors, including floor plans and specifications, in order to keep abreast of new concepts design trends and features, amongst other things, that would assist in the further development of Metricon's business and whether Metricon should be adopting any such developments or techniques in building, promotion and marketing. The only way that this could be achieved would be by Biasin sharing with the design team, Palazzesi, Popple and Bugeja the information which he had obtained. He later deposed as follows, concerning events which led to the Perth trip:
31. During general discussions with other employees at Metricon and particularly Palazzesi we agreed that the marketing intelligence we had been receiving from various sources strongly suggested that we should undertake a study tour of housing developments in Perth. We decided to go in November 2001 and the study tour group was composed of myself, Palazzesi, Bugeja and Popple.
205 I infer that Popple and Bugeja were party to these general discussions which again indicate clearly the sharing of information concerning competitors' products within Metricon and relevantly, between Palazzesi, Popple, Bugeja and Biasin. It would be extraordinary, in my opinion, were it otherwise.
206 Given this evidence, as well as what I consider to be the obvious probability in the circumstances, I conclude that whatever information Biasin had in relation to such matters, including brochures and floor plans, would have been shared with and discussed between him and members of the design team, Palazzesi, Popple and Bugeja. I do not accept his evidence to the contrary. The similarities between the Seattle 31 home and Prototype 20B/Prada 35 as to the alfresco quadrant are striking, too striking in my opinion, to be the product merely of a good memory on the part of Popple although I consider that he would have drawn to some extent on his recollections of inspecting the Seattle 31 display home. An overlay of the relevant plans above shows the same combination with respect to the alfresco quadrant in substantially the same dimensions.
207 I find that Exhibit JMB 28 was misleading, and deliberately so, as to what occurred in the design sequence of the Prada 35. This, as I have identified, had been prepared by Popple, delineating in red the alleged amendments made to the Gallery 32 plan, in order to produce the Prada 35 plan. This was acknowledged by Bugeja to be arguably misleading at the start of his evidence. Popple, belatedly, conceded in cross-examination that para [66] of his affidavit which purports to authenticate what Bugeja had said in his affidavit concerning JMB 28, was misleading. This was after several ineffectual attempts on his part to explain away the exhibit as not being misleading. It had however, been relied upon by Bugeja in his sworn affidavit as a statement of the changes which "were made" to the Gallery 32 to make the Prada 32 (35), although disavowed at trial without explanation. Whilst amended, the fact that this evidence was given at all, displays that Bugeja and Popple were engaged in advancing on oath misleading versions of the derivation of the Prada 35 plan.
208 Neither Popple nor Bugeja in any of their affidavits, sought to explain the derivation of Prototype 20A by any direct reference to the Pavillion. Bugeja's only mention of the Pavillion, in the context of the design of the Prada 35, was in his affidavit of 22 February 2007 when he sought to note an "omission" in paras [94] and [95] of his affidavit of 11 April 2006. He said that in addition to what he had said in those paragraphs, that he also recalled discussing with Popple that the floor plan of sketch 20A was very close to the floor plan of the Pavillion. Even this belated recollection of a matter which was central to the derivation case, was less than forthright. It did not seek to explain how the "very close" similarity had occurred. It did not extend to the fact, elicited only at trial in cross-examination, that he had made actual reference to the Pavillion when producing Prototype 20A. Nor did it seek to explain why, when deposing in great detail to discussions purportedly had between him and Popple at paras [94]-[95], this vital evidence was omitted or what caused him, a year later, to recall it.
209 I accept the evidence of Palazzesi that he told Bugeja and Popple to design a home with the "look and feel" of the Pavillion. I do so, despite the denials of each of Bugeja and Popple that they were given this instruction. Other considerations aside, Prototype 20A is virtually a copy of the Pavillion design.
210 I do not accept the evidence of Popple or Bugeja that Prototype 20A was derived by modifying the Gallery 32 design. I find that, as a whole, it was substantially a copy of the Pavillion. This is so, despite some obvious differences, such as the extended location of bedrooms three and four, the design of the master bedroom, WIR and ensuite. The similarities, however, particularly in relation to alfresco, rumpus/games, dining, kitchen, family, lounge, living, gallery, entry and courtyard off the master bedroom, are striking as between Prototype 20A and Pavillion. The Gallery 32 had no rumpus or alfresco. The kitchen was differently located. The dining and living areas were differently located. It had no courtyard outside the master bedroom, nor any study. Its entrance and hallway leading off it were differently located.
211 I do not accept Bugeja's evidence to the effect that he did not, consciously, copy the back half of the Pavillion design, and that the close similarity only dawned on him when it was pointed out to him by Popple upon reviewing Prototype 20A together on 26 February 2007. I do not accept that the Gallery 32 was used in any way to produce Prototype 20A.
212 When Prototype 20A and the Pavillion designs are compared, the similarities are striking. On the other hand, on a comparison between the floor plan of Prototype 20A with the Gallery 32, there are clear dissimilarities. This result is consistent with Palazzesi's instructions to produce a sketch that had the "look and feel" of the Pavillion. Popple indicated, however, that because the similarities were "too close" between the Pavillion and Prototype 20A, that design was not used. Thus, the modification of 20A to become 20B was sought to be portrayed by the respondents as a virtue demonstrating that, upon realising that copying had occurred (whether consciously or subconsciously by Bugeja), immediate steps were taken to rectify the situation. What this ignores, of course, is that Prototype 20A, as a whole, is almost identical to the Pavillion. Popple and Bugeja conceded as much in cross-examination. It also ignores that all that Bugeja and Popple were prepared to do was to modify the back half of Prototype 20A.
213 As I have already said, the explanations as to derivation of the Prada 35 given by Popple, Bugeja and Palazzesi, point in a detailed way to its design being the product of independent creation by Metricon. However, neither Popple nor Bugeja (until his affidavit of 22 February 2007), deposed to this most important discussion, apparently had between them, concerning the close similarity between the Prototype 20A and the Pavillion leading to the alterations to produce Prototype 20B. Popple's evidence at trial, which I have set out above, leads me to conclude that both he and Bugeja were less than forthright when each swore their first affidavit concerning the derivation of the Prada 35. This lack of candour was again displayed by Bugeja with his limited disclosure concerning the discussion about the Pavillion in his later affidavit. I think it unlikely that either would have forgotten such a conversation concerning the similarity between Prototype 20A and the Pavillion. Indeed Popple did not suggest that he had forgotten to mention it in his affidavit. He proffered no explanation when asked.
214 In the context of a case involving allegations of copying by Metricon of the Seattle 31 it is extraordinary that Popple omitted to mention in his April 2006 affidavit the significant discussion between him and Bugeja concerning the Prototype 20A floor plan being very close to that of the Pavillion. He was unable to explain why he did not do so, whilst acknowledging that it was "probably" a material matter to which attention should have been drawn by him. He did not suggest in his oral evidence that, at the time he swore his affidavit, he had forgotten about this matter.
215 I conclude that he deliberately omitted to include this information, because it was inconsistent with the entire thrust of his affidavit, which was that the design of the Prada 35 was created independently of any design other than prior Metricon designs.
216 Furthermore, it is an explanation for the changes made to Prototype 20A in order to produce Prototype 20B, which represents a very significant additional explanation to that first given by both Popple and Bugeja, which centred upon lengthy explanations about the back half not working, the use of angles and the need for a cost effective alfresco design.
217 I reject the explanations given in the affidavits of each, as to how Prototype 20A came into existence. I have concluded that it was substantially based on the design of the Pavillion. Both Popple and Bugeja had seen the Pavillion display home. Popple may have also seen a floor plan. Palazzesi requested that the new design have the "look and feel" of the Pavillion. The sketch plan of Prototype 20A, as I have said, bears a close and striking similarity to the floor plan of the Pavillion. Ultimately, Bugeja conceded that he had referred to the Pavillion design, and Popple admitted that copying had occurred.
218 I also find that each of the Design Chronology Mk I and Mk II were misleading, and deliberately so, in important respects. There is no reference to the Pavillion in the Design Chronology Mk II (or Mk I), which Mr Bugeja said was a correct reflection of how the Prada 35 came into existence. When pressed by counsel for the applicants as to whether the Pavillion should have been included in the document, he said: "I am not sure." In my opinion, the Pavillion design ought to have been disclosed as part of the design chronology for the Prada 35 and the plans, which in turn were based on the Prada 35. Indeed I have concluded that each of these chronologies are almost entirely misleading.
219 I do not accept that the modifications to Prototype 20A, in order to produce Prototype 20B, were in any way based upon the Eldridge design.
220 As I have said, not only did Bugeja disavow his sworn explanations in para [101] of his first affidavit concerning the application of the "rear lay out of the Eldridge" to the Gallery 32 design, upon which he said that the Prada 35 was based as well as the explanation of the covered alfresco area and the single roof-line, but he also disavowed the explanation by Popple concerning the amendments made in red to the sketch of the Gallery 32, to show what changes had been made to Gallery 32 to derive the Prada 35.
221 Nor do I accept that upon reviewing Prototype 20A, Popple suggested that this should be modified so as to create the back half of the Eldridge or as Bugeja put it "… to put the rear of the Eldridge on". The application of the Eldridge to Prototype 20A does not produce Prototype 20B. The back half of the Eldridge commencing immediately above the dividing wall between the dining and kitchen is visually, in my view, quite distinct from the back half of Prototype 20B, again, taking the line immediately above the living area extending across to kitchen and bedroom two as the commencement of the back half. In the Eldridge, the kitchen is to the left of the hallway, with a kitchen island centrally located beneath the family room, with the meals encompassed by a bay window opposite the family room. The dining area in Prototype 20B is directly opposite the kitchen. The Eldridge has no alfresco, but it does have a rumpus room that is similarly located in both designs.
222 Having said that, it was Popple's evidence that, when he talked about the Eldridge, he was referring to "the combination across the back of the bedrooms and the rumpus room." Later he said that, when he mentioned the Eldridge to Bugeja, he told Bugeja to include the rumpus, but did not mention the bedrooms. This qualified use of the Eldridge does not explain the derivation of the alfresco quadrant other than the rumpus room.
223 Ultimately therefore, the derivation of the alfresco quadrant in Prototype 20B and the Prada 35 is unexplained by either Popple or Bugeja. The explanations based on modifications to the Gallery 32 were false and that, based on the Eldridge, does not withstand scrutiny. I find that it too was a false explanation.
224 I find however, that there were probably discussions between Popple and Bugeja to the effect that a more cost effective design of the back half of Prototype 20A was desirable, and that this could be achieved by using the design of the back half of the Seattle 31 and in particular those areas which I have called the alfresco quadrant. As I have said previously the similarities between the back half of the Seattle 31 and that of Prototype 20B are striking, particularly in relation to the alfresco quadrant.
225 I find that Bugeja deliberately copied the alfresco quadrant from the Seattle 31, by reference to a floor plan and discussions with Popple who had the benefit of actually inspecting the Seattle 31 display home. Popple, at trial and for the very first time, said that when he saw Prototype 20B he thought that it was similar to the Seattle 31. He said that he did not say this to Bugeja or Palazzesi and he was unable to explain why he did not put this in his affidavit. It was a matter central to the case. He had obviously not forgotten about it. His observation as to similarity was well founded.
226 Popple knew that Prototype 20B was similar to Seattle 31 when he first saw it. He said he had a "good memory" for designs. He conceded in cross-examination that when he saw the revised plan on 27 February 2002, he knew that it was similar to the Seattle 31 plan. I have no doubt that he knew it was similar, because as I have found, the alfresco quadrant was deliberately copied, both to his knowledge and that of Bugeja.
227 When asked whether he was aware that the effect of instructing the changes to Prototype 20A was to create a design similar to the Seattle 31 design in connection with the alfresco quadrant, Popple did not initially deny doing so. He said that he "didn't tell him (Bugeja) how to do that. I justsuggested those - those things needed to be addressed and he addressed them." In light of my view that Popple was generally an unreliable witness, the concession of copying in respect to the Pavillion, and the striking similarity between the back half of Seattle 31 and the back half of the Prada 35, I find this evidence to be quite unconvincing.
228 The fact Popple and Bugeja were prepared to keep the front half of Prototype 20A, designed as it was by direct reference to the Pavillion, as well as to copy the back half of the Seattle 31, leads me to conclude that the primary reason for the modifications to Prototype 20A was not because of any perceived problem with similarity to the Pavillion. I find that the similarity was intended from the outset. It was not something which only occurred to Popple after it had been drawn. Rather, the Seattle 31 design, which created a covered alfresco area under a single roof-line, was seen by both as a cost effective remedy to counter the more expensive alfresco arrangement found in the Pavillion. Accordingly, the amendment to Prototype 20A to produce Prototype 20B had to do with money and not with virtue. Both were prepared to retain in Prototype 20B what was copied from the Pavillion in the front half of Prototype 20A.
229 The objective similarities between Prototype 20B and the Seattle 31 plan and display home are indicative of copying. In particular, there is a marked similarity in the features of the alfresco quadrant, the location and relationship of rooms in this part of the house design and room dimensions relative to each other, and the single roof-line in both designs. There are also some incidental features of similarity (and which were not needed for functional purposes), which indicate copying, for example:
(i) the location of the windows and fireplace in the lounge of both Prototype 20B and the Seattle 31 display home (though this feature is not shown on the Seattle 31 plan). This was a feature which Popple could recall from his visit to the Seattle 31 display home. Bugeja could not recall whether this feature in the design was discussed with Popple; and
(ii) the change in the kitchen island feature in Prototype 20B, compared with Prototype 20A, which had the island adopt a return toward the wall (which follows the direction and angle of the return in the Seattle 31 display home and plan, although the return there runs to the wall). Popple had a recollection of the kitchen feature from the Seattle 31 display home. Bugeja could not recall whether this design change was discussed with Popple. The respondents contended that the kitchen position and layout is the same as the between Prototype 20A and Prototype 20B and that, accordingly, could not have been coped from the Seattle 31. I do not accept this. Whilst the position is similar, the layout has obviously been changed and is very close to the angular design of the Seattle 31 kitchen although a walk through has been provided for in Prototype 20B. In that respect it is a colourable change to the Seattle 31 kitchen. While these incidental features might have limited utility in isolation in making the case on usage, they should be considered in combination and as reflective of an overall reference to the Seattle 31 plan and house. Popple agreed that none of his company's prior designs had these features in combination.
230 I find that there was conscious copying of the Seattle 31 design and/or display home as to the alfresco quadrant, by Metricon, in producing Prototype 20B and in turn the Prada 35.
231 In finding that the alfresco quadrant in the Prada 35 was copied from that area in the Seattle 31 I have also relied on the expert opinion evidence of Dr John Cooke, a chartered architect, to the effect that the alfresco quadrant in each design was distinctive and essentially the same. I do so despite the criticism of his evidence by the respondents. I will deal with that shortly.
232 I have also had regard to the expert opinion evidence of Mr John Permewan, a registered architect, but have afforded his opinion no weight because of the flawed assumptions which were the subject of his instructions. I will also deal with these shortly.