Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd

Environmental Planning and Assessment Regulations 1994 (NSW) Environment Planning and Assessment (Building Code of Australia) Regulation 1999 (NSW) Environment Planning and Assessment Regulations 2000 (NSW)

Concrete Pty Limited v Parramatta Design & Developments Pty Limited [2004] FCA 169 referred to Concrete Pty Limited v Parramatta Design & Developments Pty Limited [2004] FCA 293 referred to Concrete Pty Limited v Parramatta Design & Developments Pty Limited [2004] FCA 483 referred to Avel Pty Limited v Multicoin Amusements Pty Ltd (1990) 171 CLR 88 cited Cowan v Abel (1995) 58 FCR 157 cited Australian Consulting & Training Pty Ltd v Tiltform Pty Ltd [2001] FCA 1072 applied U & I Global Trading (Australia) Pty Ltd v Tasman-Warajay Pty Ltd (1995) 32 IPR 494 applied Lido Manufacturing Co Pty Ltd v Meyers & Leslie Pty Ltd (1964) 5 FLR 443 applied Attorney General of Gambia v N'Jia [1961] AC 617 cited Ealing Borough Council v Jones [1959] 1 QB 384 cited Tensing (t/as Apple House Music) v Mucider (1993) 28 IPR 111 cited Maatsechappij Voor Fondsenbezit v Shell Transport & Trading Co [1923] 2 KB 166 applied Amalgamated Mining Services Pty Ltd v Warman International Ltd (1988) 19 FCR 324 applied Beck v Montana Constructions Pty Ltd (1963) 5 FLR 298 applied Ryde Municipal Council v The Royal Ryde Homes (1970) WN 440 referred to Auburn Municipal Council v Szabo (1971) 67 LGRA 427 referred to Eaton & Sons Pty Ltd v Warringah Shire Council (1972) 129 CLR 270 referred to Parramatta City Council v Shell Co of Australia Ltd (1972) 2 NSWLR 632 referred to Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1 referred to House of Pearce Pty Limited v Bankstown City Council [2000] NSWCA 44 referred to Chanrich Properties Pty Ltd v Baulkham Hills Shire Council [2001] NSWSC 229 referred to Winn v Director-General of National Parks and Wildlife [2001] NSWCA 17 referred to Liverpool City Council v Irwin [1977] AC 239 cited Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] 149 CLR 337 cited Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 referred to Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 referred to Byrne v Australian Airlines Ltd (1995) 185 CLR 410 applied Ng v Clyde Securities Ltd [1976] 1 NSWLR 443 applied Blair v Osborne & Tomkins [1971] 2 QB 78 applied Acohs Pty Ltd v R A Bashford Consulting Pty Ltd and Others [1997] 144 ALR 528 applied Bialkower v Acohns Pty Ltd and Others [1998] 41 IPR 33 referred to Solar Thomson Engineering Co Ltd v Barton [1977] RPC 537 applied Bourke v Filmways Australasian Distributors Pty Ltd unreported, SCNSW, 9 October 1979 applied Devefi Pty Ltd v Mateffy Perl Nagy Pty Ltd (1993) 37 IPR 477 applied Gruzman Pty Ltd v Percy Marks Pty Ltd (1989) 99 FLR 116 applied Torpey Vander Have Pty Ltd v Mass Constructions Pty Ltd [2002] 55 IPR 542 applied

J McKeough, A Stewart and P Griffith, Intellectual Property in Australia,3rd edn, LexisNexis Butterworths, Sydney, 2004 CONCRETE PTY LIMITED v PARRAMATTA DESIGN & DEVELOPMENTS PTY LIMITED AND GHASSAN FARES N 1509 OF 2003 CONTI J 13 OCTOBER 2004 SYDNEY

AND: PARRAMATTA DESIGN & DEVELOPMENTS PTY LTD

1 - 5 1 - 9 History and outline of proceedings

5 - 15 10 - 29 Outline of the principal transactions and events involved in the proceedings

15 - 28 30 - 54 The threshold issue as to whether PDD and/or Mr Fares threatened Concrete with proceedings for infringement of copyright

28 - 33 55 - 63 Whether the applicant Concrete is authorised by the general law of copyright to use the plans and drawings approved by Port Stephens Council for the construction of the fourteen home unit building the subject of that approval - the case propounded by Concrete in outline

33 - 46 64 - 88 Concrete's first main basis for rejection of the case for breach of copyright in the subject plans and drawings - an implied licence to use the plans the subject of the development consent may operation in personam in favour of a successor in title Page Paragraphs Headings

46 - 50 89 - 96 Concrete's second main basis for rejection of the case for breach of copyright in the subject plans and drawings - s 66G of the Conveyancing Act and architect's involvement in joint venture provide strong reasons for implication of the Beck-type licence

50 - 55 97 - 107 Concrete's third main basis for rejection of the case for breach of copyright in the subject plans and drawings - architect's clients/principals had implied licence of copyright that was transferred to Concrete

55 - 70 108 - 128 The case propounded by PDD and Mr Fares in response

70 - 81 129 - 150 Conclusions on the first two propositions of legal significance formulated by Concrete and my reasons in summary

81 - 82 151 - 152 Resolution of the factual issues arising: the steps taken to put those issues before the Court for resolution

82 - 90 153 - 166 The terms of appointment of PDD as architect to the joint venture and whether that appointment extended to or included appointment of PDD as builder under a design and build contract - an overview of the relevant facts and circumstances

90 - 98 167 - 182 The testimony of Ms Jeanette Haviland

98 - 105 183 - 203 The testimony of Mr Kevin Rix

105 - 108 204 - 210 The testimony of Mr David Rix

108 - 110 211 - 212 The expert testimony of Mr Peter Brooks (architect)

110 - 132 213 - 249 The testimony of Mr Ghassan Fares

132 - 141 250 - 265 The testimony of Mr Benjamin Barrak

141 - 144 266 - 271 The expert testimony of Mr Brendan Farrugia (quantity surveyor)

144 - 149 272 - 283 The factual issue arising in the context of my determination of Concrete's third main basis for rejection of the case for breach of copyright of the subject plans drawings - whether there was an agreement made between the parties whereby PDD (and/or Mr Fares) was to be the builder of the fourteen home unit development, whereby PDD (and/or Mr Fares) was to be rewarded for its work by periodic draw downs of up to ten per centum of the construction costs during the construction process

149 - 156 284 - 296 Findings in relation to the payment of $27,000.00 made to PDD on 19 April 1999

156 - 158 297 - 303 Conclusion on the third proposition of legal significance formulated by Concrete

AND: PARRAMATTA DESIGN & DEVELOPMENTS PTY LTD

THE COURT DECLARES THAT: 1. The respondents' threats, or either of them (as contained in the letters dated 9 September and 1 October 2003 from Barrak Lawyers and further defined in the Statement of Claim), are unjustifiable within the meaning of s 202 of the Copyright Act 1968 (Cth).

THE COURT ORDERS THAT: 2. Each of the respondents by itself, himself and its or his servants or agents be restrained from making any further threat in the form substantially of the respondents' threats. 3. There be an enquiry into the quantum of damages sustained by the applicant by reason of the respondents' threats. 4. The amended cross-claim of the cross-claimant be dismissed. 5. The costs of the proceedings to date be reserved pending: (i) the receipt of written submissions of the applicant/cross-respondent on the issue of costs, and against whom such orders should be made, within three working days; and (ii) the receipt of written submissions of the respondents/cross-claimant in reply, on the issue of costs, and against whom such orders should be made, within three working days thereafter. 6. Liberty to apply as to the making of orders as to costs, including as to default in complying with directions as to costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

History and outline of the proceedings 1 These proceedings were commenced by application of Concrete Pty Limited ('Concrete') filed on 7 October 2003 against Parramatta Design & Developments Pty Limited ('PDD') and Ghassan Fares ('Mr Fares'). Mr Fares is a qualified architect and the sole director and shareholder of PDD. The application seeks the following relief: 'A. A declaration that the Respondents' Threats (as contained in the letter dated 9 September 2003 and 1 October 2003 from Barrak Lawyers and further defined in the Statement of Claim) are unjustifiable within the meaning of s 202 of the Copyright Act 1968 (Cth). B. An order restraining each of the Respondents by itself, himself and its or his servants or agents, from making any further threat in the form substantially of the Respondents' Threats. C. An order for an enquiry into the quantum of damages sustained by the Applicant by reason of the Respondents' Threats. D. Interest. E. Costs.' 2 Those pleaded threats of PDD and Mr Fares were said by Concrete to be for their enforcement of copyright in respect of certain architectural plans and drawings relating to a fourteen home unit building proposed to be constructed on property situated in Nelson Bay in the State of New South Wales ('the property' or 'the Nelson Bay land'), for which development consent had been earlier granted, on the application of PDD, by Port Stephens Council on 10 May 2000 (DA No. 16-2000-103-1). Prior to that time on 7 March 1999, development approval had been sought, and on 24 September 1999 granted, to an eight unit development. At the time of grant of the consent to both prospective developments, the co-owners of the property as tenants in common were Landmark Building Developments Pty Limited ('Landmark') and Toyama Pty Limited ('Toyama'), as to two thirds and one third respectively. Concrete is an arms length successor in title to the property for value, pursuant to its purchase from trustees for sale of the property appointed by the Supreme Court of New South Wales made on the application of Toyama as one of those co-owners. 3 By amended defence of the respondents PDD and Mr Fares and cross-claim of PDD alone filed on 17 March 2004, it was asserted (inter alia) that by reason of Landmark and Toyama failing to perform their financial obligations in favour of PDD for architectural design work involved in the compilation of those plans and drawings relating to the fourteen unit development, there does not exist any entitlement under copyright law on the part of Concrete, as present successor in title to Landmark and Toyama, whether by way of implied licence or otherwise, to use the same for the purpose of constructing the home unit building the subject thereof on the property. Other matters are pleaded by the amended defence and cross-claim, but what I have just outlined is probably the principal complaint of the defence and cross-claim, PDD asserting an absence of payment for the preparation of those plans and drawings. 4 Certain interlocutory applications were made prior to the final hearing by PDD and Mr Fares, in relation to which I provided reasons for judgment. Each application was unsuccessful, and I will briefly summarise the same. Before doing so, I should record that Mr Fares and a Sydney solicitor Benjamin Barrak ('Mr Barrak') have been at all times associated together in a business sense, in that they are equal shareholders of Landmark, of course a private company. In addition, according to ASIC official records, both were directors of PDD until Mr Barrak resigned that office on 15 May 2000, for reasons apparently unexplained, but inferentially in no way by reason of any change to the proximity of their business relationship. 5 The first interlocutory application in point of time sought orders for the cross-vesting of the present proceedings to the Supreme Court of New South Wales, in order that the same would become consolidated with proceedings, apparently of a commercial nature, which are yet to be heard and determined. Prior to the hearing of that cross-vesting motion on 11 February 2004, the proceedings commenced in this Court had been already set down for final hearing on 1, 2 and 8 April 2004. Concrete opposed the motion for cross-vesting and I dismissed the same, for the reasons appearing in my judgment of 1 March 2004 (Concrete Pty Limited v Parramatta Design & Developments Pty Limited [2004] FCA 169). Costs were reserved. 6 The second interlocutory application in point of time sought an order pursuant to Order 29 Rule 2 of the Federal Court Rules that certain separate questions be determined in advance of the final hearing of the present proceedings, and in addition an order for security for costs. It was submitted on behalf of PDD and Mr Fares that succinct legal questions could be distilled from the pleadings which would dispose of the litigation, or substantially so, in favour of PDD and Mr Fares. That application was also dismissed, for the reasons appearing in my judgment of 5 March 2004, and PDD and Mr Fares were ordered to pay the costs of the application (Concrete Pty Limited v Parramatta Design & Developments Pty Limited [2004] FCA 293). 7 The third interlocutory application was made to the Court at the commencement of the third day of the substantive hearing of the proceedings, that is, on 8 April 2004, without prior notice to Concrete or to the Court, whether formal or informal. At that stage of the proceedings, Mr Fares had apparently completed his evidence in chief (inclusive of cross-examination), and Mr Barrak had completed his evidence in chief and had been under cross-examination for some hours on the previous day (subsequently Mr Fares made a further affidavit and was further cross-examined). The application sought my disqualification from further hearing of the proceedings on the ground of apprehended bias. A substantial body of written submissions, referring to an abundance of authority, was presented to the Court on behalf of PDD and Mr Fares, and the hearing took up almost a full day. I dismissed the application upon the close of the submissions of the parties, for the reasons subsequently appearing in written form, and reserved the making of orders as to costs (Concrete Pty Limited v Parramatta Design & Developments Pty Limited [2004] FCA 483). Mr D.H. Murr of senior counsel, who had been leading Mr T.A. Hall of counsel since the commencement of the final hearing, ceased to appear for PDD and Mr Fares on the application for my disqualification, the same being conducted by Mr Hall alone. After the application for my dismissal had been determined, Mr B.H.K. Donovan of senior counsel replaced Mr Murr as Mr Hall's leader. 8 On 21 April 2004, Mr Donovan QC sent to my Chambers fifteen pages of written submissions, plus a bundle of annexures, under cover of a letter reading as follows: 'Myself and Mr Hall have been instructed to put material before your Honour in relation to the disqualification. We are both aware that your Honour has ruled on this and put forward the enclosed material with no disrespect whatever to your Honour. The material is put forward as a supplement to that of 8th April 2004, for your Honour to consider and if appropriate grant leave to reopen the Application. No further oral submissions will be sought to be made in relation to the material and if leave were granted the only material and submissions would be the enclosed. Again no oral submission would be made.' My response was to the effect that it would not be appropriate for me to take that course. No application was made by the respondents for leave to appeal against my refusal of disqualification. 9 The hearing of the proceedings recommenced on 23 April 2004, despite initially being set down for three days only, and continued on 27, 28 and 29 April 2004, and further on 13 and 17 May and 3 June 2004, inclusive of oral addresses made largely by reference to extensive written submissions. The written submissions provided by the parties were very comprehensive, as appears from the number of pages involved described below: Concrete - 10 May 2004 - 68 pages; PDD/Fares - 12 May 2004 - 106 pages (these replaced earlier lengthy written submissions which had been lacking transcript page references); PDD/Fares - 28 May 2004 (24 pages); PDD/Fares - 7 July 2004 (103 pages); and Concrete - 27 July 2004 (25 pages). In an endeavour to keep these reasons within appropriate and hopefully comprehensible limits, I have not recited every submission made by the parties, nor referred to every authority cited. In particular I should record that the 103 page submission in purported reply was almost wholly foreign to any legitimate notion to reply, and understandably Concrete submitted that I should not receive the same. Since however it is evident that to do so would doubtless alone assist to provoke the indefinite prosecution of this litigation by PDD and Mr Fares, being a course on their part which is more than evident from the events which I have set out in these reasons, I have taken that material into account, to the limited extent if at all which has not already been propounded. In any event, I have sought to confine these reasons to what I have appraised to be material events and matters of at least potential materiality or significance to the issues arising on the pleadings.

Outline of the principal transactions and events involved in the proceedings 10 In about late September or early October 1998, a joint venture agreement was orally formed for the purchase of the property at Nelson Bay for the purpose of home unit development, and the subsequent resale of at least a material number of the home units. It was made between: (i) Mr Barrak as to a one-third interest in the joint venture, he being (as above stated) a solicitor who conducts a legal practice under the name of Barrak Lawyers; (ii) Mr Fares as to a further one-third interest, he being (as above stated) a qualified architect; and (iii) Jeanette Haviland ('Ms Haviland'), a solicitor and Kevin Rix ('Mr Rix'), her former husband, jointly as to the remaining one-third interest. Apparently Mr Barrak and Mr Fares had been earlier associated together in property development in the Hurstville and Parramatta districts of the metropolitan area of Sydney. Ms Haviland was engaged as a solicitor in her own practice, though not apparently to any major extent. Before each of Mr Barrak and Ms Haviland entered separate private legal practice, each apparently as sole practitioners, they had become acquainted as employed solicitors engaged in the State Crown Solicitor's Office in Sydney. 11 The oral arrangements for this tripartite association engaged in the subject property development were formalised to the extent that the respective proposed one third interests of each of Mr Barrak and Mr Fares were taken up together in the name of Landmark, and the remaining one third interest of Ms Haviland and Mr Rix became taken up together in the name of Toyama. No other property venture had previously been undertaken by all four of these persons together. In the events which happened, the Nelson Bay project never advanced to the stage of commencement of construction. It was part of the oral arrangements between the parties that Mr Fares and/or PDD would perform the architectural services for the joint venture. No written retainer of either Mr Fares or PDD appears to have been brought into existence. The co-ownership or joint venture arrangements were never reduced to writing in the form of a joint venture or syndicate agreement. 12 The Nelson Bay property was purchased for the price of $560,000 pursuant to contract for sale entered into on 2 October 1998, and completion of the purchase took place shortly thereafter. In order to assist the funding of the purchase of the property, the joint venture vehicles Landmark and Toyama, being also the registered proprietors as two thirds and one third respectively as tenants in common, borrowed $448.000 from National Australia Bank ('the Bank' or 'NAB'), the loan being made to Mr Fares, Mr Barrak and Ms Haviland as debtors. The balance of the purchase price of $112,000 and the associated costs of purchase were contributed, as to two-thirds by what may be broadly described as the Landmark/Fares/ Barrak interests, and as to one-third by what may be broadly described as the Toyama/Haviland/Rix interests. Mr Barrak acted as the solicitor for the joint venture, until the parties fell into dispute. Mr Fares and Mr Barrak sided together in the dispute, and in the ensuing litigation, as did Ms Haviland and Mr Rix together. Each of those four persons gave evidence in the proceedings. 13 Although the Port Stephens Council granted development approval on 10 May 2000 for the construction of fourteen (14) home units and associated infrastructure on the Nelson Bay property, upon the terms and conditions outlined in a certain letter and attached schedules addressed to PDD, construction of the development, as I have already observed, was never subsequently commenced. Thereafter the relationship between the four individual persons involved appeared to deteriorate. During June 2002, in the context of verbal discussions between Messrs Barrak and Fares and Ms Haviland, the Nelson Bay land was advertised for sale. Verbal offers were received, and ultimately a written offer dated 27 June 2002 was received from a company Tangate Pty Ltd ('Tangate') for the purchase of the land for $1.8 million. Writing on a Landmark letterhead, Mr Barrak wrote on 10 July 2002 to Tangate, stating inter alia as follows: 'We refer to your offer to purchase the above property and confirm that the owners accept your offer. We put you on notice that we are relying on your offer and the acceptance of such offer by the owners, in the making of certain commercial decisions. The full size copy of the approved plans as requested… in your letter may be collected from our office. Please telephone the writer… in order to arrange a mutually convenient time for collection of the copy… … The contract will be prepared and sent to your shortly. We would prefer an expeditions exchange with payment of the standard 10% deposit and settlement to be effected within 14 days of exchange… …' The reference above to 'the approved plans' was to the plans for the fourteen home unit development the subject of the development consent granted on 10 May 2000. Toyama communicated its individual acceptance of Tangate's offer direct to Tangate by letter of 11 July 2002, and requested that an independent solicitor be instructed to act for Landmark and Toyama in relation to the conveyancing work involved in relation to the sale. Though Tangate renewed its purchase offer in writing, the sale was called off by Tangate on 15 July 2002, in circumstances according to what was alleged in Tangate's letter of 15 July 2002 to have been unfortunate professional behaviour on Mr Barrak's part. 14 On the same day (10 July 2002), Mr Barrak also wrote on a Landmark letterhead to Toyama, marked to the attention of Ms Haviland, stating inter alia as follows: '… We attach a copy of our letter to Tangate Pty Ltd dated today being acceptance of the offer. We suggest that it would be expedient for Toyama Pty Ltd to also write to Tangate Pty Ltd by way of confirmation of the acceptance of the offer prior to the expiration of the 14-day period referred to at point 5 of the offer. As requested by you, we nominate your choice of any one of the following solicitors to conduct the conveyance on behalf of the owners: …' 15 In the context of continuing disputes between the parties, in the course of which Messrs Barrak and Fares became ultimately aligned together against Ms Haviland, two senior Sydney solicitors were appointed by the Supreme Court of New South Wales Equity Division as trustees for the sale of the Nelson Bay land on 12 December 2002, pursuant to the application of Toyama made under s 66G of the Conveyancing Act 1919 (NSW) ('the Conveyancing Act'), and those trustees for sale were authorised to pay out of the net proceeds of sale two thirds thereof to Landmark and one third thereof to Toyama. In the events which happened, Landmark received its two thirds share of those proceeds, but according to Mr Barrak's evidence, upon the application apparently of Mr Fares and Mr Barrak, a Mareva injunction was apparently granted by the Supreme Court which prevented, and continues to prevent, Toyama from obtaining access to its one third share indirectly for the benefit of Ms Haviland and Mr Rix. 16 Soon after the appointment of the statutory trustees for sale, PDD moved to at least inhibit the trustees in relation to the disposition of the Nelson Bay land. On 13 January 2003, Mr Fares wrote on PDD letterhead to the solicitors for the trustees for sale, Cornwall Stodart, inter alia as follows: '… we are the designers and owners of the copyright of an approved DA for the above property. We put you on notice that we do not consent to the utilisation of our copyright, design or plans in the marketing and/or sale of the above property. We also put you on notice that we will not grant a licence for the use of our copyright or our plans. We demand that your marketing material will not breach our above wishes and that all potential purchasers will be advised of the above situation.' 17 Thereafter on 20 February 2003, Barrak Lawyers wrote on behalf of PDD and/or Mr Fares to Cornwall Stodart inter alia as follows: '…our client was not engaged to design the development for payment and our client has not been paid any moneys whatsoever for its substantial work on the approved DA. Furthermore, our client's preparation of the plans is conditional on our client building the project as part of the "design and constructions" formula. Therefore, in the absence of our client building the project itself, there can be no implied licence to use the plans by anyone other than our client. … Our client is adamant that under no circumstances will it relinquish its legal rights in regard to use of its plans and will vigorously pursue anyone who breaches our client's copyright. We request that you inform your clients that any use of our client's plans in any advertising or sale campaign will result in vigorous legal action being taken against the Trustees in damages for breach of copyright. Given the value of the Development Approval, we anticipate that the damages will be substantial. … We trust that you will immediately advise your client's of the contents of this letter to ensure that no attempt is made to obtain copies of our client's plans and that no reference is made to the DA plans in any promotional material. We stress once again that if this letter is not complied with, vigorous legal action will ensue against the Trustees.' 18 For a brief time, there was a change of legal representation on behalf of PDD and/or Mr Fares, and Mark Rahme & Associates wrote on 18 March 2003 to Cornwall Stodart asserting the absence of any implied licence to use its copyright, and making thereafter the following threats: '…We stress in the strongest terms that if your client makes any reference to our client's plans, development consent or shows our client's plans to anyone, legal action will be taken against the Trustees in damages that we anticipate will be quite substantial. We demand a statement in writing from your clients that they will not make any reference whatsoever to the plans and that a suitable special condition be inserted into the contract, which must be approved by us in advance, to the effect that the property is sold "as is" with no warranties whatsoever by the Vendor about any development. …We await hearing from you as a matter of urgency.' 19 A further letter was sent by Mark Rahme & Associates on 14 April 2003 to Cornwall Stodart, again asserting the absence of an implied licence, and making the following further threat of legal action: 'Your clients should now comply with the Orders of the Supreme Court. The Trustees should proceed with the sale as per the Orders of the Supreme Court without any reference to the existence of our client's plans and with an appropriate special condition being placed in the contract as per our previous correspondence. Given the repeated notices about our client's copyright that have been given by your clients, we respectfully submit that failure by your clients to adequately address the copyright issue by a suitable special condition will leave your clients open to being sued for damages.' The reference to 'Orders of the Supreme Court' are of course to those appointing the trustees for sale on 12 December 2002. 20 As a result of this and other correspondence on behalf of Toyama, the trustees for sale understandably sought judicial advice from the Supreme Court and in the result, Young CJ in Eq responded on 22 May 2003 as follows: 'On the motion by the trustee, I advise the trustee by order under s 63 of the Trustee Act that they would be justified in selling the property, 5 Laman Street, Nelsons Bay, as expeditiously as circumstances allow, on the basis that the contract of sale would disclose the existence of the development approval issued by the local council but specifically giving no warranty as to the availability of or ability to use the plans in relation to that development approval.' 21 By contract for sale dated 7 August 2003, Concrete purchased the Nelson Bay land at public auction from the trustees for sale for the sum of $2,760,000, and completion of the purchase took place shortly thereafter. I observe in passing that the increase in purchase price from that of $560,000 originally paid by Landmark and Toyama for what was then, and presently remains, vacant land, may inferentially be attributable largely to the grant in the meantime of the development approval of Port Stephens Council on 10 May 2000 for the erection of the fourteen home units development. Doubtless by reason of the judicial advice of the Chief Judge in Equity the Contract for Sale of the Nelson Bay land contained the following special condition 7: '7. DEVELOPMENT CONSENTS 7.1 Annexed and marked with the letters indicated are copies of the following: "A" Front page of Notice of Determination of Development Application 24 September 1999 from the Port Stephens Council excluding all conditions ("the First Development Consent"). "B" Letter from Port Stephens Council to Parramatta Design & Development ("the Council letter"). "C" Notice of Determination of Development Application 10 May 2000 from the Port Stephens Council ("the Second Development Consent"). 7.2 The vendors are unable to provide copies of the plans and designs which accompanied the First and Second Development Consents. 7.3 The vendors disclose that a dispute exists in relation to the right to use the plans and designs which accompanied the Development Applications, including as to the existence of any licence to make use of the copyright in those plans and designs. The vendors further disclose that legal action has been foreshadowed in respect of any future use of those plans and designs. 7.4 The vendors give no warranty as to the availability or the right to use the plans and designs which accompanied the First and Second development Consents. 7.5 The purchaser acknowledges that it has satisfied itself in respect of all matters referred in or arising out of the First and Second Development Consents and will not raise any objection, requisition or claim for compensation in respect of any of the matters arising out of the First and Second Development Consents.' 22 It may therefore be seen that Messrs Barrak and Fares took steps to at least inhibit any prospective purchaser of this development site from the trustees for sale from obtaining and using the plans and designs the subject of at least the fourteen home unit development consents, by reason of the copyright claims of PDD being advanced in relation thereto. The reference in special condition 7.1 of the Contract for Sale to the Council's earlier notice of determination of 24 September 1999 was to that superseded approval of the Council to the earlier proposed eight home unit development for the same site. I should add that by its amended defence and cross-claim filed on 17 March 2004, PDD pleaded inter alia that Concrete purchased the Nelson Bay land with '… full knowledge and/or acceptance of [PDD's] subsisting interest in the copyright', purportedly referring thereby to the Contract for Sale of 7 August 2003 partly extracted above. That pleaded assertion overstated the purport and effect of the special conditions of the Contract for Sale of 7 August 2003. Pursuant to Order 11 Rule 1B, Mr Barrak, as solicitor on record for PDD and Mr Fares at that relevant time, was required to, and did in fact, certify at the foot of the amended defence and cross-claim as to the existence of a proper basis for each allegation in the pleading of the cross-claim, and para 3 of the amended cross-claim purported to affirm 'the matters set out in the… defence'. 23 Completion of the contract of purchase of the Nelson Bay land was effected by Concrete on 15 September 2003 by payment of the balance of the total purchase price of $2,760,000 to the trustees for sale appointed by the Supreme Court, Concrete having earlier paid a deposit on the signing of the contract. On completion, the trustees for sale as transferors delivered to Concrete as transferee an instrument of transfer of the land, together with relevant muniments of title, and consequently Concrete became, and remains, the registered proprietor in fee simple under the provisions of the Real Property Act 1900 (NSW) in respect of the Nelson Bay land. As already indicated, that purchase price was distributed by the trustees for sale, after repayment of the mortgage debt of Landmark and Toyama to the Bank, as to two thirds thereof to Landmark as representative of the Barrak and Fares interests corporately, but the remaining one third has not yet been paid to the Haviland and Rix interests corporately represented by Toyama. 24 There is no dispute that the development consent of Port Stephens Council granted on 10 May 2000, and addressed to PDD, remains currently in force, the same being effective until 10 May 2005. Apparently there would be no or little prospect of renewal to the same scope or extent of development approval. Section 95 of the Environmental Planning and Assessment Act 1979 (NSW) ('EPA Act') provides, so far as is presently material, that 'a development lapses… 5 years after the date from which it operates…', subject to the provisions of sub-section (4) reading as follows: 'Development consent for: (a) the erection of a building, … does not lapse if building, engineering or construction work relating to the building… is physically commenced on the land to which the consent applies before the date on which the consent would otherwise lapse under this section.' The notion of 'substantial commencement of construction' has been of course the subject of many reported cases. 25 Though a development consent 'enable(s) the erection of a building', any such erection cannot commence until a construction certificate is issued by the relevant consent authority, being here of course Port Stephens Council : see subss 81A(1) and (2) of the EPA Act. Full sized copies of the plans for the 14 unit approval of the Council each bear the following notation: 'PORT STEPHENS COUNCIL This plan relates to Development Application No 103.00 and is subject to conditions as shown on that consent.' 26 By the terms of the EPA Act at least then prevailing, it is provided by s 78A(1) thereof that '[a] person may, subject to the regulations, apply to a consent authority for consent to carry out development', and further by s 81A(1) thereof that '[a] development consent that enables the erection of a building is sufficient to authorise the use of the building when erected for the purpose for which it was erected if that purpose is specified in the development application…'. Moreover by s 105(1) of the EPA Act, it is further provided that '… the regulations may make provision for or with respect to… (d) the form of development applications… (e) the documents and information required to accompany development applications…'. 27 Clause 46A of the Environmental Planning and Assessment Regulations 1994 (NSW) ('EPA 1994 Regulations') provided at all material times that a development application '(a) must be in Form 1', and '(b) must be accompanied by the information required by Form 1'. That form is regulated by Schedule 1 to the Environment Planning and Assessment (Building Code of Australia) Regulation 1999 (NSW), which stipulated at all material times that where the proposed development is or includes the 'erection of a building', the applicant for approval must provide to the Council '3 copies of plans/drawings of proposed development…', and a further copy of the plans and drawings for purposes of clause 48B of the EPA 1994 Regulations. That clause 48B, which relates to 'Extracts of development applications to be publicly available', stipulates that the same should include, in the case of the erection of a building, 'a plan of the building that indicates its height and external configuration, as erected, in relation to the site on which it is to be erected'. 28 The Form 1 requirements for the plans and drawings, published in the New South Wales Government Gazette No 144 of 24 December 1999 at pages 12217-12221, are set out in notes 6 and 7 thereto, reading as follows: 'Note 6 Plans or drawings describing the proposed development must indicate (where relevant): (a) the location of proposed new buildings or works (including extensions or additions to existing buildings or works) in relation to the land's boundaries and adjoining development (b) floor plans of proposed buildings showing layout, partitioning, room sizes and intended uses of each part of the building (c) elevations and sections showing proposed external finishes and heights (d) proposed finished levels of the land in relation to buildings and roads (e) building perspectives, where necessary to illustrate the proposed building (f) proposed parking arrangements, entry and exit points for vehicles, and provisions for movement of vehicles within the site (including dimensions where appropriate) (g) proposed landscaping and treatment of the land (indicating plant types and their heights and maturity) (h) proposed methods of draining the land. Note 7 Where relevant an A4 plan of the building that indicates its heights and external configuration, as erected, in relation to the site on which it is to be erected.' The subsequent Environment Planning and Assessment Regulations 2000 (NSW) ('EPA Regulations') did not commence in operation until 1 January 2001, and thus the EPA 1994 Regulations are those here relevant and applicable to the issues arising in the proceedings. 29 As appears from the statutory and regulatory provisions I have already identified, development plans and drawings represent in two-dimensional form the subject matter of a development consent given by a so-called responsible authority, that authority here involved being of course Port Stephens Council. Without the graphic illustrations and exemplifications of those plans and drawings, here of course prepared by PDD and/or Mr Fares, the nature and scope of the development consent or approval would lack definition and illustration. The conceivable relevance of a development consent, purportedly granted according to local government law, provides a controversial bearing upon the operation of the law of copyright in the context of these proceedings.

The threshold issue as to whether PDD and/or Mr Fares threatened Concrete with proceedings for infringement of copyright 30 Concrete seeks in the context of the present proceedings effectively to establish and maintain in its favour title to the copyright inherent in the relevant Port Stephens Council approved plans and drawings as an 'artistic work', in the nature of a 'drawing', within the respective definitions of those two expressions contained in s 10 of the Copyright Act 1968 (Cth) ('the Copyright Act'), and hence for the purposes of the reproduction provisions of subs 21(1) of the Copyright Act. Thus by the mechanism of its application to the Court, reproduced in full at the commencement of these reasons, Concrete seeks declaratory relief based upon the unjustifiable threats provisions of s 202 of the Copyright Act, and consequential restraint upon the respondents from the making of further threats, and thereby to compel PDD and/or Mr Fares as respondents to establish any copyright of either or both of them allegedly held in those plans and drawings, pursuant to Division 2 of Part III of the Copyright Act, and s 37 thereof in particular (see generally in that regard Avel Pty Limited v Multicoin Amusements Pty Ltd (1990) 171 CLR 88 at 94-95 (Mason CJ, Deane and Gaudron JJ) and at 105 (Dawson J) as to the purport and operation of s 202). Concrete contends that in the events which happened, comprising the grant of development consent for the construction of the fourteen home unit building by Port Stephens Council on 10 May 2000 in respect of the Nelson Bay property in favour of Landmark and Toyama, and Concrete's subsequent acquisition of that property by purchase from the trustees for sale appointed by the New South Wales Supreme Court on the application of Toyama, it acquired by implied licence whatever copyright existed and continues to exist in those plans and drawings. 31 PDD and Mr Fares as respondents in the proceedings (PDD being also of course the cross-claimant) deny any entitlement of Concrete to copyright in relation to the plans and drawings the subject of the Council's development consent to the fourteen unit building granted on 10 May 2000, and maintain that copyright has at all material times resided, and continues to reside, in PDD, though it was further stated, not in Mr Fares personally, notwithstanding that Mr Fares alone has architectural qualification to practice in Australia. They asserted that Concrete purchased the property with full knowledge and/or acceptance of inter alia the inability of the trustees for sale to provide copies of those plans and drawings, and of PDD's copyright in respect thereof, and denied any right of Concrete to any present or future use of those plans and drawings. PDD and Mr Fares further denied that the trustees for the sale of the subject property appointed by the Supreme Court were ever authorised to sell any right or licence to use the copyright in those plans and drawings. They maintained that PDD was at all times and remains the owner of the copyright in the plans and drawings, pursuant to s 35 of the Copyright Act, and further that Concrete has no implied licence, or any other form of licence, to use the copyright in those plans and drawings. Of course PDD and Mr Fares made similar claims in respect of the plans and drawings for the eight home unit building earlier approved by the Council, but those previous plans and drawings were not directly the subject of the issues arising in the proceedings. 32 Moreover PDD and Mr Fares pointed to the special conditions of the Contract for Sale of the Nelson Bay land made between the trustees for sale as vendors and Concrete as purchaser (which I have earlier extracted), whereby Concrete was said to have been put on notice, and to have at least implicitly accepted, that there was no licence conferred on Concrete to use PDD's copyright. As I have already observed, the special conditions do not have that asserted scope of meaning; the fact that the trustees for sale eschewed the giving of any warranty, as to the right in a prospective purchaser to use 'the plans and designs', plainly did not constitute any acknowledgment, explicitly or implicitly on Concrete's part, of the absence of conferral of any such right arising by implication of law upon Concrete (or for that matter upon any future successors in title to Concrete to the Nelson Bay land). Understandably the trustees for sale had merely sought to stand apart from the copyright disputes of the warring former registered proprietors of the Nelson Bay land. 33 The respondents PDD and Mr Fares thus in effect asserted at the threshold that certain letters sent by Barrak Lawyers (the designation of Mr Barrak's legal practice conducted by him apparently as a sole practitioner) on their behalf to Concrete's legal representative, after the purchase by Concrete of the Nelson Bay land, constituted 'mere notifications of the existence of copyright' within ss 202(2) of the Copyright Act, and 'did not constitute a threat of an action within the meaning of Section 202(1)', though the apparent interpretation of the trustees for sale of that correspondence was that legal action had been foreshadowed in respect of any future use of the plans and designs, being legal action at the instance of the author(s) or designer(s). Further, the respondents submitted that those letters sent by Barrak Lawyers 'merely comply with the special condition 7.3 of the Contract for Sale of Land dated 7 August 2003, wherein the trustees for sale, as Vendors, disclose to the Applicant that legal action has been foreshadowed in respect of any future use of the plans and designs'. For ease of reference, it is appropriate to reproduce ss 202(1) and (2) of the Copyright Act below, which provides: '(1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding in respect of an infringement of copyright, then, whether the person making the threats is or is not the owner of the copyright or an exclusive licensee, a person aggrieved may bring an action against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats, and may recover such damages (if any) as he or she has sustained, unless the first-mentioned person satisfies the court that the acts in respect of which the action or proceeding was threatened constituted, or, if done, would constitute, an infringement of copyright. (2) The mere notification of the existence of a copyright does not constitute a threat of an action or proceeding within the meaning of this section.' 34 In my opinion, the respondents misstated the purport and content of the documentary material falling explicitly and implicitly within the scope of their submissions just outlined. For one matter, special condition 7.3 of the Contract for Sale was inserted by the trustees for sale obviously because of the numerous letters written by or on behalf of PDD and/or Mr Fares, which purported to threaten, if not harass, the trustees for sale as to the scope of what they might at least implicitly seek to sell. Commencing with the letter of 20 February 2003 from Barrak Lawyers to the trustees for sale's solicitors Cornwall Stodart, PDD and/or Mr Fares warned, inter alia, '[o]ur client is adamant that under no circumstances will it relinquish its legal rights in regard to use of its plans and will vigorously pursue anyone who breaches our client's copyright'. Special condition 7.3 of the Contract for Sale merely involved disclosures on the part of the independent trustees for sale appointed by the Supreme Court as to prior contentious events, and contained no stipulations constituting any acknowledgement of title to copyright in favour of PDD or Mr Fares as original author of any relevant plans or drawings for a development of the subject land. The absence of any threat having been made on the part of the respondents within s202(2) is fanciful, and should never have been advanced. It denies the reality of what occurred. So much is readily evident from the circumstances I will now further record. 35 By letter dated 4 September 2003, the solicitors acting for Concrete on its purchase of the Nelson Bay property, Costa & Associates, wrote to Mr Fares as follows: 'By contract executed on 7th August 2003, our client purchased the subject property which included a development approval for the construction of 14 residential units. We note that clause 7.3 of the Special Conditions of the contract discloses the existence of a dispute relating to copyright over the plans and designs which accompany the development application. Our client is very anxious to proceed with the development of the site and would invite you as a matter of urgency to indicate upon what basis such a dispute is founded. Our enquiries with your former business partners have disclosed that you paid yourself for all design work by writing and endorsing a cash cheque in the amount of $27,000.00 dated 19th April 1999 from a National Bank account held in the name of J. Haviland, B. Barrack and yourself and bearing the number 000010 at the bottom of the cheque butt. This cheque was presented and the funds withdrawn from the said account. Should we not hear from you within the next seven (7) days we will assume that all professional fees due to you in relation to the architectural services rendered have been settled in full and we will hence proceed with the development of the site in accordance with the development application and plans. If our assumption in this regard is incorrect would you please advise us as to your position within the same time frame, including but not limited to, the nature and quantum of any outstanding debts you claim to be due.' The reference to 'your former business partners' was obviously to Ms Haviland and Mr Rix. As will be later discussed, the circumstances whereby Mr Fares obtained payment of architectural fees in relation to design work on 19 April 1999 were extraordinary, and understandably attracted intense cross-examination of Mr Fares on the part of senior counsel for Concrete. 36 By letter dated 9 September 2003, Barrak Lawyers replied to Costa & Associates as follows (again omitting formal parts): 'We refer to your letter of 4 September 2003 in which you indicate that in default of hearing from us within 7 days, your client purchaser of the above property will proceed with construction in breach of our client's copyright. We claim the copyright on the basis that the service rendered by our client in respect of the drawings and works subject of the development application were never paid for. Accordingly there is no implied licence for anyone to use our client's plans and copyright. Such copyright vests in our client to the extent that the terms of the contract as to production of the works were not complied with. We note your advice that our client's "former business partners" have disclosed to you that our client has been paid "for all design work". Such representation is not true. Our client considers that this statement constitutes misleading and deceptive conduct and is actionable by your client against the maker of such representation. We inform you that the issue of our client's copyright has been the subject of Supreme Court proceedings and special condition 7 of the Contract has been inserted into the contract in accordance with directions of the Supreme Court. This special condition puts all prospective purchasers on notice of our client's interest so that such purchasers may act with full knowledge. Special Condition 7.2 states that the "… Vendors are unable to provide copies of the plans and designs…". We suggest that the reason for this is that any such provision would constitute a breach of our client's copyright. Special condition 7.3 puts you on notice that "legal action is foreshadowed in respect of any future use of those plans and designs". Special condition 7.4 puts you on notice that the vendors "give no warranty as to the availability or the right to use the plans and designs". Therefore, when your client purchased the subject property, it did so with full knowledge of our client's interest. Our client never contracted with your client to prepare the drawings. We say that our client owns the drawings, the copyright subsisting in them and any re-production. The Supreme Court of New South Wales agrees with us. If your client proceeds to build in breach of our copyright, it does so at its own risk. Your letter indicates that your client is in possession of certain documents and information. We request that you provide us with the following within 7 days: 1. A copy of the cheque butt and other documents in your possession which you claim substantiate your assertion that our client has been paid "for all design work"; 2. Return all documents that pertain to our client's copyright, including plans, sketches and drawings to our office. 3. Advise us of the manner in which you obtained the documents referred to in (1) and (2) above. 4. Identify by name the persons you describe as our client's "former business partners" and the representations that such persons made. Should we not hear from you within the next 7 days in relation to points 1 - 4 above, we will assume that you accept our within assertions about copyright. We trust that the above clarifies the situation as it relates to copyright. If you have any further query, please do not hesitate to contact us.' 37 The letter was perhaps unclear as to whether it was purportedly referable solely to the earlier eight unit plans and drawings, or the subsequent fourteen unit plans and drawings, or both. Be that as it may, it is common ground between the parties that no payment was made of architectural fees for the subsequent fourteen unit drawings and plans, but on Concrete's case for particular reasons. Moreover no indication was given in Mr Barrak's above letter as to when and by what means 'The Supreme Court… agrees with us', in fact in my opinion an untenable assertion. By subsequent letter of 15 August 2003, Concrete's solicitors asked in effect for an explanation of that assertion, the purported response of which will shortly be extracted. In any event, the stance taken in the above letter of Barrak Lawyers might be thought to be at least commercially enigmatic, leaving aside the copyright issues sought to be advanced. Through his one third indirect interest in the Nelson Bay property (ie as one-half owner, indirectly, of Landmark's issued capital), PDD and/or Mr Fares would by then have derived beneficially albeit indirectly, one third of the substantial profit arising on the sale of the Nelson Bay land by the trustees for sale to Concrete for the price of $2,760,000, being a sum very substantially in excess of the purchase price of $560,000 originally outlaid about five years earlier by Landmark and Toyama as purchasers. Moreover as alleged in the foregoing letter of Concrete's solicitors of 4 September 2003, Mr Fares had been paid the sum of $27,000.00, nearly five months earlier, out of the joint venture bank account, for what Concrete's solicitors were asserting in any event to be for 'all design work', yet that alleged payment was not adequately addressed or explained in Mr Barrak's letter of response. Be all that as it may be, the issues in the proceedings are all about the existence or otherwise of implied licence of copyright, being issues of complexity of law and fact. 38 By further letter dated 1 October 2003 (and in purported response to Concrete's earlier letter of 15 August 2003), Barrak Lawyers notified Concrete's solicitors Costa & Associates as follows (inter alia): 'We refer to our letter of 9 September 2003 which requires that you provide us with the following within 7 days: 1. A copy of the cheque butt and other documents in your possession which you claim substantiate your assertion that our client has been paid "for all design work"; 2. Return all documents that pertain to our client's copyright including plans, sketches and drawings to our office. 3. Advise us of the manner in which you obtained the documents referred to in (1) and (2) above. 4. Identity by name the persons you describe as our client's "former business partners" and the representations that such persons made. Our letter notes that should we not hear from you within the said 7 days in relation to points 1 - 4 above, we will assume that you accept our assertions about copyright. We note you letter of 15 August 2003 states that you are seeking your client's instructions in relation to points 1 - 4 above. You have had ample opportunity to obtain such instructions and we remind you that we are yet to hear from you in relation to the above. We again press for your response. We again put you on notice that if your client breaches our client's copyright it does so at its own risk.' The above concluding paragraph is directly material to the s 202 issue raised by the respondents as to an alleged absence of threat on the part of PDD and/or Mr Fares of an action or proceeding against Concrete for breach of copyright in respect of the plans and drawings for the fourteen home unit building. 39 Concrete's solicitors responded by letter of 3 October 2003 as follows: 'We refer to your letter dated 1 October 2003. We assume that you act for Parramatta Design and Developments Pty Ltd as well as Mr Gus Fares. Please let us know if this is not the case. Our client does not accept that it has no implied licence to use the plans and drawings that accompanied the development applications lodged in respect of 5 Laman Street, Nelson Bay. In your letter dated 9 September, 2003 you indicated that the basis on which your clients claim copyright was that the service rendered by your client in respect of the drawings and works the subject of the development applications were never paid for. By our letter dated 4 September, 2003 we requested that your clients advise what amount is claimed to be outstanding in respect of the fees for the preparation of the plans and drawings. In order to try and avoid any dispute with your clients, and without in any way conceding that our client is obliged to do so, our client is prepared to consider paying a reasonable sum, comparable to a reasonable industry rate, in respect of any unpaid fees claimed by your clients. Accordingly, please let us know what sum is claimed as outstanding by your clients and provide copies of the relevant invoices and, if applicable, statements recording part-payments. Please also provide your clients' confirmation that should our client decide to agree to pay such sum (or such other amount as the parties agree), your client will consent to our client utilising the plans and drawings for the proposed development on the land.' 40 No response, or at least no response understandably satisfactory to Concrete, was made to that last letter, despite what might well be objectively thought to reflect a reasonable basis for meeting claims of outstanding fees for professional architectural work, if the same were susceptible to objective substantiation. Thereafter Concrete moved promptly, and on 7 October 2003, commenced the present proceedings by filing the application for declaratory relief in terms of s 202 of the Copyright Act, and for an injunction to restrain the respondents PDD and Mr Fares from making further threats of breach of copyright, in the terms earlier set out at the commencement of these reasons. 41 The basis of Concrete's invocation of s 202 of the Copyright Act, as pleaded, and extracted at the commencement of these reasons, is based explicitly upon the following correspondence, apart from and irrespective of the circumstances surrounding that correspondence which conveyed at least the implication of threats of alleged breach of copyright: (i) letter dated 9 September 2003 from Barrak Lawyers to Costa & Associates, and in particular the sentence '[i]f your client proceeds to build in breach of our copyright, it does so at its own risk'; and (ii) further letter dated 1 October 2003 from Barrak Lawyers to Costa & Associates, and in particular, the concluding sentence '[w]e again put you on notice that if your clients breaches our client's copyright it does so at its own risk'. The unspecific 'risk' was implicitly in context at least of proceedings for breach of the respondent's alleged copyright. 42 As I have earlier outlined, the respondents submitted that Concrete should fail from the outset on its application and statement of claim, upon the basis that the effect of the foregoing letters written on their behalf constituted '[t]he mere notification of the existence of copyright…' within s 202(2) of the Copyright Act, and not so-called 'self-help' measures of the nature referred to by Wilcox J in Cowan v Abel (1995) 58 FCR 157 at 163. Further the respondents asserted that the prior correspondence '… does not give rise to any logical inference of a threat of proceedings of any form at all', that correspondence being characterised by the respondents as 'simply [the reinstatement of] the position generally that persons that embark or engage upon a certain course of conduct in any aspect of commercial or other life do so at their own risk', and as being akin to a landowner merely erecting a sign 'Beware of the dogs. Enter at your own risk' or a car park owner erecting a sign 'Park your vehicle at your own risk'. In substance and reality, both of those analogies are plainly as inappropriate as they are inadequate. 43 Concrete drew my attention for its part to the authoritative dictum of Mansfield J in Australian Consulting & Training Pty Ltd v Tiltform Pty Ltd [2001] FCA 1072, made in the context of the analogous provisions of the Australian patents legislation, and also of Cooper J in U & I Global Trading (Australia) Pty Ltd v Tasman-Warajay Pty Ltd (1995) 32 IPR 494, albeit again in the context of the same analogous provisions. In Australian Consulting & Training, his Honour said at [9]: 'That decision [whether conduct constituted a threat] must be made in the light of the circumstances in which the impugned conduct took place… and from the perspective of a reasonable recipient of the communication in those circumstances… It may not be necessary for there to be an explicit reference to enforcement proceedings.' Further, in I & U Global, his Honour said at 500-501: 'The test is whether the language would convey to any reasonable person that the author of the letter in the present case intended to bring proceedings for infringement against the person said to be threatened. It is not necessary that there be direct words that action would be taken… It is a threat to sue for infringement if the Respondent is so minded on a future occasion. It is no less a threat that the Respondent may not be so minded… .' 44 It is readily apparent that PDD's and/or Mr Fares' submissions on this point do not accord with the reality of either the content of the abovementioned letters of Barrak Lawyers or the context in which the same were written, or the perspective of a reasonable recipient. Those letters individually and cumulatively can fairly be read and understood as notice to Concrete to the effect of PDD and/or Mr Fares being prepared to exercise their legal rights of enforcement in relation to the subject matter of their claims to copyright subsequently advanced in present proceedings. To suggest otherwise is to defy reality as well as rationality. As was also observed by McClelland CJ in Eq in Lido Manufacturing Co Pty Ltd v Meyers & Leslie Pty Ltd (1964) 5 FLR 443 at 450-451: '… the absence of direct words by Mr Meyers, saying that he would take action, does not involve in my view that no threat within the meaning of s 121(1) was made…' Those letters of Barrak Lawyers of 9 September 2003 and 1 October 2003 did not comprise even merely indirect threats of legal proceedings, but went further. 45 PDD and/or Mr Fares raised a further s 202 submission of no intrinsic merit, which must nevertheless be addressed. The submission was that Concrete was not a 'person aggrieved' within s 202(2) of the Copyright Act. It was said that the tender by Concrete of the Transfer of the title to the Nelson Bay land (Exhibit A20), and the correspondence referred to and extracted above (Exhibit A21), did not establish the ownership of the Nelson Bay land by Concrete, nor did such documents establish that Concrete was a 'person aggrieved'. The respondents further submitted that '[e]ven if the court accepts the contract exhibited at pages 151-157 of the Affidavit of Mr Barrak sworn 24 March 2004 in these proceedings, this is evidence of nothing more than a base purchase by Concrete but nothing more', and further that '[n]othing is known about whether the purchase proceeded to settlement and whether Concrete became the registered proprietor of the property 5 Laman Street, Nelson Bay. The certificate of title is not in evidence. It is submitted that as an evidentiary point, this is fatal to the applicant's case'. It was yet further submitted that '[i]f this Honourable Court accepts Concrete Pty Ltd as being the registered proprietor, nothing is known about what Concrete believed or hoped for or intends to do with the property'. 46 Senior counsel for PDD and Mr Fares referred me to three authorities which have spoken of the notion 'aggrieved'. The first was Cowan, where in addition to what I have already recorded, Wilcox J said at 163-164 as follows: 'The term "person aggrieved" is not separately defined. It is plainly intended to include any person adversely affected by the threat or threats. The supplier to the recipient of a threatening letter of the goods the subject of the threat, who loses sales or potential sales as a result of the letter, falls within the concept of a "person aggrieved". The second was Attorney General of Gambia v N'Jia [1961] AC 617, where at 634, the Privy Council said that the words include a person who has a genuine grievance as distinct from a mere busybody who is interfering in things which do not concern him. 47 The third was Ealing Borough Council v Jones [1959] 1 QB 384 at 392 where the following appears: '…if one came to the expression without reference to judicial decision one would say that the words "person aggrieved by a decision" mean no more than a person who had had the decision given against him; but the courts have decided that the words mean more than that, and have held that the word "aggrieved" is not synonymous in this context with the word "dissatisfied".' 48 It was further submitted by PDD and/or Mr Fares that '[Concrete] is a sole director company under the directorship of a Mr Hafez Alameddine. Mr Alameddine has sworn an affidavit on 7 October 2003 in these proceedings and his affidavit has not been read. We submit your Honour should draw the obvious inferences'. It was further submitted that '[t]he person who speaks the corporate mind of this company is a Mr Hafez Alameddine who, although [he] has sworn an Affidavit of 7 October 2003 which affidavit is on the record in these proceedings, Mr Alameddine was intentionally not called to give evidence and his Affidavit was not read although it has been utilised in two (2) sets of interlocutory proceedings (being for cross-vesting and for determination of a separate issue) where Mr Alameddine could not be cross-examined. It is submitted that your Honour should draw the appropriate inferences from the absence of Mr Hafez Alameddine. Mr Brooks, for the Applicant, gave evidence to the effect that he has never known nor heard of him'. Why the decision was taken on behalf of Concrete not to read Mr Alamaddine's affidavit does not appear. 49 The respondents PDD and/or Mr Fares did not seemingly state with precision or even at all what those 'obvious inferences' were supposed to be. Their submissions continued nevertheless over a further eight pages, referring to one authority involving personal injury proceedings and another involving s 60 of the Evidence Act 1995 (Cth), that section relating to an exception to the hearsay rule, and s 135 relating to the discretion to exclude or limit the use of evidence. In any event it was submitted that '[p]roof of the fact that a person is 'aggrieved' is a matter calling for specific evidence of the corporate mind in precisely the same way as a party to a contract must prove damages - that is - that damages must be definitively proven'. 50 The submissions of PDD and/or Mr Fares demonstrate in my opinion confusion of thought. Damage is not of the gist of a cause of action for breach of copyright; in any even Concrete has sought an enquiry into damages, being an enquiry yet to be undertaken after the Court has resolved the complex issues of breach of copyright tendered by Concrete. In my further opinion, there is an abundance of evidentiary material demonstrative of aggrievement on the part of Concrete. It suffices to demonstrate or establish that element of s 202 of the Copyright Act simply by reference to the inferences flowing from the development consent of Port Stephen Council given on 10 May 2000 for the erection of fourteen units on the Nelson Bay land, the Contract for Sale bearing date 7 August 2003 made between the trustees for sale as vendors and Concrete as purchaser relating to the Nelson Bay land, the instrument of transfer dated 15 September 2003, whereby the trustees acknowledged receipt of the sum purchase price of $2,760,000 outlaid by Concrete for the acquisition of title to the Nelson Bay land. That development consent remains available for the Nelson Bay land in favour of Concrete pursuant to the general law of local government, as will shortly be established. Whether of course Concrete is able to make use of those plans and drawings the subject of the development consent, pursuant to an implied licence of copyright operating upon the events which have happened is the central issue in the proceedings that remains to be resolved. To the extent, if at all, those exhibited documents require to be placed in further evidentiary contexts, any such contexts are readily provided by the affidavits of Benjamin Barrak sworn 29 August 2003 and Ghassan Fares sworn 22 October 2003, neither of which were read by the respondents in the proceedings, but both of which were tendered into evidence by Concrete as exhibits A11 and A23 respectively. 51 Plainly in my opinion, the s 202 point raised by the respondents therefore has no substance or merit. As counsel for Concrete submitted, Concrete has inter alia sought declaratory relief as to non-infringement of the respondents' alleged copyright, plainly an appropriate course in the event of any doubt as to the crystallisation of the operation of s 202 in favour of a party invoking the operation thereof in its favour: see for instance Tensing (t/as Apple House Music) v Mucider (1993) 28 IPR 111. 52 Moreover I would put matters somewhat further than I have already ventured above. I think that the correspondence to which I have identified already serves to sufficiently demonstrate that PDD and/or Mr Fares adopted, in the circumstances of the pre-litigation correspondence, the role of 'the attackers', and Concrete the role of 'the defender', to cite the description of Scrutton LJ in Maatsechappij Voor Fondsenbezit v Shell Transport & Trading Co [1923] 2 KB 166 at 176-178 which was adopted by Wilcox J in Amalgamated Mining Services Pty Ltd v Warman International Ltd (1988) 19 FCR 324 at 325, in the context of his Honour's consideration of the operation of s 202 of the Copyright Act. I do so particularly in the light of the description which Wilcox J coined to the effect that '… in a practical sense the present applicant has been forced to take legal action'. Given the position adopted by PDD and/or Mr Fares, and also by Mr Barrak, not just as their legal representative formally in the name of Barrak Lawyers (indeed at all material times he was seemingly the sole principal of the practice using that firm name), but also indirectly as a one third joint venturer, together with Mr Fares as to a further one third joint venturer, per medium of their respective equal shareholdings in Landmark, PDD and/or Mr Fares adopted in reality at the material times I have above reviewed the role of an 'attacker', and Concrete conversely that of a 'defender', in the context of copyright claims being advanced by PDD and/or Mr Fares. Concrete found itself placed in the position of being forced to commence the legal action which it thereupon undertook, in order to preserve its very substantial investment of capital constituted by its acquisition of the Nelson Bay land on the basis at least of the development consent granted on 10 May 2000 for the erection of a fourteen unit building. 53 It follows that Concrete has clearly and unequivocally established its locus standi to maintain the present proceedings against PDD and Mr Fares for at least the declaratory and injunctive relief it seeks, within and pursuant to the scope of operation of s 202 of the Copyright Act. I should perhaps add for completeness that it can scarcely be doubted that when writing his letters of 9 September 2003 and 1 October 2003, Mr Barrak was speaking on instructions from PDD, whereof he had been a director according to the general law definition at all material times, irrespective of what have been the more limited period of entry appearing in official records (20/10/99 - 15/05/00), as well as on instructions from Mr Fares, who was also of course his co-director of and equal shareholder directly or indirectly in Landmark. The respondents PDD and Mr Fares have of course maintained and affirmed the s 202(1) threat by continuing to assert in the proceedings their denial of the implied licence pleaded by Concrete in the proceedings, and it can scarcely be doubted that such conduct on their part represented their intention and position ab initio. This is particularly evident in a subsequent letter of 15 October 2003 to Concrete's solicitors, where Barrak Lawyers stated in the concluding paragraph '[w]e put you on notice that if your client breaches our client's copyright, vigorous legal action will be taken against your client.' The fact that this letter was headed 'Private & Confidential save as to costs' is immaterial for present purposes. 54 Incidentally and merely for completeness, Mr Barrak acted thereafter as solicitor on the record for each of the respondents PDD and Mr Fares until 24 March 2004, at which time a change of legal representative in favour of Proctor & Associates took place in the context of certain discovery controversies which occurred in interlocutory proceedings before me. Furthermore Mr Barrak continued to attend the Court hearings until the conclusion of the hearing of the proceedings, and gave extensive evidence in the proceedings as a witness in the case for PDD and Mr Fares, both on affidavit and viva voce.

Whether the applicant Concrete is authorised by the general law of copyright to use the plans and drawings approved by Port Stephens Council for the construction of the fourteen home unit building the subject of that approval - the case propounded by Concrete in outline 55 Following upon completion of its contract for purchase of the subject land from the trustees for sale appointed by the Supreme Court, Concrete became the registered proprietor in fee simple under the provisions of the Real Property Act 1900 (NSW) in respect of the subject land at Nelson Bay. By reason of those circumstances, Concrete became entitled, as successor in title to ownership of the land, by operation or implication of the general law of local government, to the benefit of the currently prevailing development consent granted by Port Stephens Council on 10 May 2000, being a consent given under the authority of the EPA Act, and as a consequence became entitled in principle, pursuant to the general law of local government, to develop the subject land at Nelson Bay by erecting the fourteen home unit building in conformity with the terms of that consent. Given however that the development approval was granted upon the basis of the plans and drawings prepared by Mr Fares and/or PDD, and that the author (whether according to law that was Mr Fares or PDD) has withheld and continues to withhold consent as the architectural designer of those plans and drawings to the use thereof by Concrete, the issue arises as to whether Concrete is nevertheless entitled to proceed with the construction of that fourteen unit building in accordance with those plans and drawings, without thereby breaching the asserted copyright of PDD and/or Mr Fares in respect thereof. 56 Concrete framed the following three bases, in the alternative though to an extent overlapping, for establishing its implied copyright authority or entitlement in personam to use the plans and drawings for the construction of the fourteen home unit building the subject of Port Stephens Council's development consent: (i) first, in circumstance where Mr Fares (or PDD) prepared those plans and drawings for use in the development application the subject of that consent, and in the further circumstance where, as a principle of the general law of local government, a development approval runs with the land, and thus in favour and for the benefit of successors in title, PDD (or Mr Fares) may be taken to have implicitly licensed all persons in personam, who might for the time being own the land during the subsistence of the development approval, to use those plans and drawings to the extent necessary to erect the improvements the subject of that development approval; (ii) secondly, the circumstance that an implied licence 'typically arises', as between an architect and his or her client (as recognised by the landmark case of Beck v Montana Constructions Pty Ltd (1963) 5 FLR 298), which may extend in favour of a subsequent purchaser in personam of the property upon and for which the building the subject of the architectural plans is designed; that principle was said by Concrete to be here operational, given the existence of a joint venture reflected in the tenancy in common structure involving first, Messrs Barrak and Fares as corporators of Landmark, and secondly involving Ms Haviland and Mr Rix as corporators together of Toyama, and further given the possibility from the outset of a dispute between the parties leading to an enforced sale of the property having the benefit of a viable development consent relating to architectural material, being an enforced sale by trustees for that purpose appointed pursuant to s 66G of the Conveyancing Act; and (iii) thirdly, the implication that for at least the statutory/regulatory five years duration of the development consent of Port Stephens Council granted on 10 May 2000 to Landmark and Toyama as then owners of the Nelson Bay land, PDD or Mr Fares licensed the joint venturers Landmark and Toyama, and any entity to whom Landmark and Toyama (or any subsequent transferees in turn from them and so on) might transfer that land, in each case in personam, to use those architectural plans for the purpose of utilising or giving effect to that development consent. In the context of framing the above third basis of authorisation, Concrete acknowledged that it was required to make good its denial of the allegations of the respondents PDD and Mr Fares that there was an agreement made by which PDD was to be the builder of the development, and in addition, that PDD and/or Mr Fares was to be rewarded for the architectural work involved in preparing the plans and drawings for the building, by way of periodic draw-downs of up to ten per centum of the construction costs incurred during the construction process. Generally in relation to all three propositions, as already made explicitly clear, Concrete did not conflate the in rem nature of a development which 'runs with the land' with the in personam nature of an implied licence of copyright. 57 As to the first of the above three propositions, Concrete submitted that if the same was made good, it should succeed in the proceedings, irrespective of the outcome of the Court's determination of the factual controversy as to the terms and conditions of the joint venture arrangement made between Landmark and Toyama or their respective corporators Messrs Fares and Barrak on the one hand and Ms Haviland and Mr Rix on the other hand, including the controversy as to whether it was mutually agreed that PDD was to be the builder of the fourteen unit development, and on the financial basis in its favour above stated. The submission was said to hold good irrespective of the implications of the terms of the Supreme Court orders (infra) following the break-down of the joint venture. 58 As to the second of the above three propositions framed by Concrete, it was further submitted by Concrete that the operation of s 66G of the Conveyancing Act upon the tenancy in common structure of ownership upon the Nelson Bay land, the identity of the two corporations involved in that ownership structure, and the existence of the underlying joint venture arrangements, whereby Mr Fares or PDD as the architect of the development was effectively or 'closely tied' to Mr Barrak as one of the other joint venturers (by 'joint venturers' I refer of course to the two-thirds interest taken up between Mr Fares and Mr Barrak and the remaining one-third interest taken up between Ms Haviland and Mr Rix senior), provided powerful reasons why an implied licence of the kind addressed in Beck had not been negated in the circumstances of the case. Again, as with the first proposition, Concrete submitted that if this argument was accepted, the factual controversy alluded to above would not need to be determined (though I will determine the same in any event). 59 Further to the second of the above three propositions, it was emphasised by Concrete that PDD and Mr Fares did not allege, and it was submitted could not have alleged upon the basis of the evidence, the existence of any explicit or express contractual reservation of copyright, or any explicit or express prohibition against the assignment or licensing of their alleged copyright; the respondents' case was described by Concrete to be rather to the effect that any 'Beck-type' implied licence was negated, upon the footing that it had been mutually envisaged by the parties that PDD would be the builder of the development, under and pursuant to a design and build contract. The response of Concrete to that second proposition was that even if true, which was denied, so much did not operate to negate the imputation otherwise of the Beck-type implied licence for which it contended. 60 In the immediate context of submissions upon the second proposition, Mr Fares was described by Concrete as the 'architect principal', and effectively a party to the joint venture of Landmark as one of the two registered proprietors of the Nelson Bay land, the remaining party of course being Toyama as the other registered proprietor. In the events which happened, the always present contingency that disputation might occur between the co-owners was in fact of course realised. In that circumstance of course, either joint venturer had the statutory right to seek and obtain an order from the Supreme Court for the sale by trustees appointed by the Court, pursuant to s 66G of the Conveyancing Act, being a right which was of course duly invoked in the events which happened. If the Nelson Bay land had not been capable of being sold and transferred by trustees for sale at least implicitly with the benefit of an existing and current development consent, that land would have been inherently less valuable, and perceived by each co-owner to be so, and the expected financial returns to the co-owners would consequently have reduced in financial terms. Put another way by Concrete, any effective denial to a co-owner of the right to use the plans the subject of a current development consent, at least in circumstances such as the present, would operate to decrease the value of the jointly owned land, and consequently the available proceeds of sale for each of the co-owners in dispute referrable. It was further submitted by Concrete that for one co-owner effectively to inhibit the sale at full value of land held in co-ownership would be equivalent to committal of fraud upon the other, and the general law would not countenance the negation of the operation of 'the Beck-type licence' in any such circumstances. 61 As to the third of the three principal propositions framed by Concrete, it was submitted by Concrete that it was not enough for the respondents PDD and Mr Fares to establish that there was an agreement allegedly made, in or about September 1998, that PDD would be the builder. It was submitted by Concrete that the respondents were further required to establish that the agreed remuneration for the architectural preparation of the plans for the development application was to be to the extent alleged by the respondents. Concrete's case was that there was no such agreement, whether made in late September 1998 or at all, as pleaded by Mr Fares and PDD, or indeed at any other time, to the effect that PDD would be the builder, whether under a design and build agreement, or otherwise. In any event, Concrete contended that if any such agreement was to be established, it would nevertheless remain open for the Court to conclude that PDD and Mr Fares agreed to prepare the relevant plans for no charge, consistently with Mr Barrak not having made at the time any charge of professional fees in relation to his legal services for acting for Landmark and Toyama on the purchase of the Nelson Bay land earlier in September and October 1998. 62 In the context of Concrete's third proposition, Concrete submitted that the implied licence of copyright upon which it relied was transmissible, and that by virtue of the execution (and registration) of the transfer of the title to the Nelson Bay land by the trustees for sale, the same had been 'transmitted' to Concrete, and further that there was nothing contained in the terms of the Contract for Sale, explicitly or implicitly made between the trustees for sale as vendors and Concrete as purchaser, which operated to negate the existence of any implied licence which might have been transferred to Concrete. I have earlier reproduced the special conditions of that contract for sale material to that submission. I agree with that submission of Concrete as to the operation of those special conditions, and reject the submission of the respondents to the contrary. Though those special conditions reflect the absence of any explicit warranty relevantly in favour of Concrete as purchaser, an affirmative or positive warranty of title is not of course required in circumstances where the law implies the requisite licence of copyright. 63 Moreover Concrete pointed out, once again correctly, that the Court is entitled to pay regard to the relatively limited nature of the implied licence in issue in the proceedings, which is not to use the subject development plans in respect of any property (my emphasis), but rather to use the same solely for the purpose of any development of the Nelson Bay land, pursuant to the development consent of the Port Stephens Council granted on 10 May 2000 for the erection of a fourteen home unit building, being of course a development consent current at the time of Concrete's purchase of that land, and which remains current until 10 May 2005. It should be again emphasised that in the framing of its three propositions, Concrete did not purport to conflate the in rem nature of a development consent with the in personam nature of am implied licence to use the plans and drawings the subject of any such development consent.

Concrete's first main basis for rejection of the case for breach of copyright in the subject plans and drawings - an implied licence to use the plans the subject of the development consent may operate in personam in favour of a successor in title 64 In support of Concrete's first submission, summarised already to the effect that an implied licence to use the plans the subject of the development approval granted by Port Stephens Council on 10 May 2000 may operate in favour of Concrete as successor in title to the Nelson Bay land, it was contended that where an architect prepares plans for use in a development application made to a local Council, the architect should be taken to have impliedly licensed all persons in personam, who might become future owners of the land, at least during the currency of the development approval of that Council, to use those plans to the extent necessary to develop the land in accordance with that development approval. 65 In support of that proposition, Concrete submitted that the plans and drawings prepared for Landmark and Toyama were mutually intended to be, and were in fact, used for the purpose of the development application approved by Port Stephens Council on 10 May 2000. Moreover it was submitted that PDD and Mr Fares knew that those plans were to be, and were in fact, so prepared and used for the purpose of that development application. So much is clearly correct. Moreover the evidence establishes at least the clear inference that the development consent granted by the Council related to those plans. 66 Given the aspect of the first proposition above as to the imputation of implied licence, namely the principle of the general law of local government that development consents 'run with the land' the subject thereof, and therefore operate in that sense in rem, the convenient starting point for consideration of the first proposition is the dictum of Else-Mitchell J, then of the Supreme Court of New South Wales,in Ryde Municipal Council v The Royal Ryde Homes (1970) WN 440, appearing in the context of his Honour's discussion of the nature and incidents of a town planning development consent. His Honour stated at 443: 'It must not be overlooked that a consent to the development of land under a prescribed planning scheme is not personal to the applicant but enures for the benefit of subsequent owners and occupiers, and in some respects a consent is equivalent to a document of title.' That dictum is predicated implicitly on a land development consent being defined in a meaningful and definitive form, and upon the footing that a development involves a building or some other form of improvement, which is defined by the plans or drawings submitted to a local government instrumentality in conformity with the requirements of a local government regulatory scheme (such as here, the EPA Act and Regulations). It is appropriate to trace the evolution of that principle of the general law of local government in Australia subsequent to Ryde Council, in order to demonstrate how firmly the same is entrenched. 67 In Auburn Municipal Council v Szabo (1971) 67 LGRA 427, after referring to the above dictum in Royal Ryde Homes, and also to United Kingdom authority to similar effect, Hope J (as he then was) observed at 433-434 as follows: '… It is apparent from these decisions that in determining what a council has approved, one primarily looks at the document constituting the approval, and construes it. The necessity to do this arises, inter alia, from the fact that a development approval does not enure only for the benefit of the applicant. It enures for the benefit of all future owners or occupiers, and it would create a confusing and difficult, if not impossible, position if in order to determine what a council had approved one had to go to a whole series of documents and try to determine which of the documents and which part of any particular document the council intended to incorporate in its approval. The terms of another document may be incorporated in a development approval either expressly or by necessary implication, but I do not think that it is possible otherwise to go to documents outside the formal approval in order to determine what has been approved. In particular, it is not possible to go to the form of application for approval unless in some way that document has in whole or in part, expressly or by necessary implication, been incorporated in the consent. On some occasions no doubt there is such an incorporation. Thus, if an application were made and a council did no more than approve the application, it seems to me that by necessary implication the terms of the application must be incorporate.' I would draw attention to his Honour's reference to documents 'incorporated in a development approval', in order to determine what a council has thereby approved '… expressly or by necessary implication'. 68 Counsel for Concrete then identified the judicial pronouncement of Stephen J (with whom McTiernan J agreed) in Eaton & Sons Pty Ltd v Warringah Shire Council (1972) 129 CLR 270 at 293, albeit in the context of what was a minority judgment on the principal issue arising on the appeal, in order to demonstrate how strongly this principle of the general law of local government is entrenched. There, his Honour expressed the following opinion on the implications of a local government or town planning development consent: '… although a consent will no doubt result from an application by an individual it is essentially impersonal in the sense that it does not concern itself with and is not limited to the applicant but is a consent to the world at large in relation to the land which is its subject. Once granted it makes lawful, in a town planning context, what would otherwise be unlawful but does so by reference to the acts done and not to the identity of the actor; I would think that a mere trespasser could justify his use of land in terms of town planning controls by reference to some prior consent successfully applied for by a prior lawful occupier.' The majority of the High Court in Eaton (Barwick CJ and Walsh and Gibbs JJ) did not find it necessary to address the implications of the development consent in the context of that case. The above obiter dictum of Stephen J has never since been doubted in principle. Reference may be made to the distinction thus drawn by Stephen J between the 'acts done' and the 'identity of the actor', and to his Honour's above description 'consent to the world at large in relation to the land which is its subject'. 69 More specifically as to the construction of a development consent, with emphasis relevantly upon the scope of its operation, Hope JA (with whom Jacobs and Manning JJA agreed) in Parramatta City Council v Shell Co of Australia Ltd (1972) 2 NSWLR 632 at 637spoke of the operation of a development consent in the general law of local government as follows: 'As has been held, it is not permissible, in order to determine what development has been approved, to construe the document constituting the approval in the same way as if it evidenced some inter parties transaction, for development approvals operate, as it were, in rem and may be availed of by subsequent owners and other occupiers of the land.' His Honour's dictum as to development approvals operating in rem, and being availed of by subsequent owners and occupiers according to the nature and extent of the 'approved development plans' incorporated (explicitly or implicitly) into those approvals, may be observed. 70 In more recent times, the foregoing juridical principles, which I have cited, have been given further scope of operation in the context of the general law of local government. Concrete referred next in chronological sequence to Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1 at 21 (Sheller JA with whom Mason P agreed) and House of Pearce Pty Limited v Bankstown City Council [2000] NSWCA 44 at [22]-[23] (Mason P with whom Stein and Giles JJA agreed). In the latter case, Mason P emphasised that '… the use as distinct from the person using the land reminds that a consent operates in rem'. Subsequently in Chanrich Properties Pty Ltd v Baulkham Hills Shire Council [2001] NSWSC 229, Hodgson CJ in Eq (as he then was) said at [68] 'The authorities… establish that a development consent operates in relation to the land rather than the applicant, in the sense that a consent does not concern itself with, and is not limited to the applicant, but rather operates with respect to the world at large in relation to the land which is its subject…' The reference to 'the world at large' may be observed. 71 About the same time in Winn v Director-General of National Parks and Wildlife [2001] NSWCA 17, Spigelman CJ said at [4]: 'A public document, such as a development consent, constitutes a unilateral act on the part of the consent authority expressed in a formal manner, required and intended to operate in accordance with its own terms. It has… an inherent quality that it will be used to the benefit of subsequent owners and occupiers. It is also a document intended to be relied upon by many persons dealing with the original grantee, or assignees of the grantee, in such contexts as the provision of security. In some respects it is equivalent to a document of title. It must be construed in accordance with its enduring functions.' The expressions 'inherent quality', 'equivalent to a document of title', and 'enduring functions', may be observed. 72 Authority thus serves to unequivocally establish that the development consent, granted by Port Stephens Council on 10 May 2000, for a '14 Unit Development & Associated Structure' on the Nelson Bay land, operates in favour of Concrete, as successor in title to Landmark and Toyama per medium of the trustees for sale, until that consent expires by effluxion of time on 10 May 2005, unless of course further extended in the meantime (which on the evidence appears to be out of the question by reason of Port Stephens Council town planning changes), or alternatively in the absence of substantial commencement, prior to the expiration of the consent, of the construction of the fourteen unit development falling within the scope of that consent. Does it follow nevertheless, as the respondents contend, that Concrete would infringe the copyright of PDD subsisting in the plans or drawings, in relation to which the subject development consent for 14 home units was granted, by constructing (and substantially commencing to construct) improvements in accordance with those plans and drawings, given the case pursued by PDD on its cross-claim? It is of course a stance implicitly supported by Landmark, being a company equally owned and controlled by Messrs Fares and Barrak, directly or indirectly, Landmark being the previous two-thirds' owner as tenant in common of the Nelson Bay land, the previous one-third owner being Toyama equally owned and controlled by Ms Haviland and Mr Rix. 73 Furthermore by necessary as well as reasonable implication, the expressions of principle cited from the foregoing authorities operate in relation, not just to the terms of a development consent, but also to the plans and drawings the subject of that consent, if there is to be effective implementation of the consent 'in accordance with its [approved] terms', being the description used in the dicta in Shell which I have earlier cited. Consequently there is something to be said for the logic of the notion that the architect of those plans and drawings should be taken to have impliedly licensed any person, for the time being the owner of the land, during the currency of operation of that development consent, to use those plans and drawings for the purpose of implementing by construction what falls within the scope of that consent. The question for resolution therefore is whether that view accords with the general law as to implied licensing of architectural copyright. 74 One conceivable issue arising in relation to Concrete's first proposition, and framed comprehensively in another way, is as follows: in the circumstances where PDD (or its principal Mr Fares) had prepared the fourteen unit architectural plans for the purpose of obtaining development consent in relation to the Nelson Bay land, and did so immediately before or during the time when Landmark and Toyama were the co-owners thereof in fee simple, should the architectural author of the plans be taken by implication of copyright law to have authorised successors in title for the time being to Landmark and Toyama, or at least Concrete as the initial successor in title by purchase from the trustees for sale of Landmark and Toyama, to use those plans? Any such use would of course be limited to construction of a building on the land so purchased during the operation of the existing development approval, and perhaps also during any subsequent extension thereof. Any such use would necessarily need to reflect a purpose of utilising and acting upon the development consent by way of constructing, or at least substantially commencing the construction of, the improvements the subject of those approved plans, and in conformity therewith. Of course a building application (termed a 'construction certificate' in some modern usages) would subsequently be required to be approved by the local council within the scope of the preceding development consent, prior to commencement of construction, and more detailed building plans, together with specifications, would be required by the local council for that further purpose in conformity with local government legislation and subordinate legislation. In any event, to postulate the contrary of the proposition, such as PDD and/or Mr Fares contended, would be not only to sterilise the use of the Nelson Bay vacant land in accordance with a prevailing development approval, but would also tend to defeat the statutory policy of s 66G of the Conveyancing Act. 75 It may be observed, for the purpose of present discussion, that PDD and/or Mr Fares prepared and lodged, or caused to be lodged, the subject plans and drawings with Port Stephens Council for development consent, on behalf of Landmark and Toyama as their then principals and in any event as the then owners of the Nelson Bay land. So much is apparent from Council's written material in evidence. At that particular time, those co-owners (registered proprietors) had not fallen into dispute. No agreement in writing for the engagement of PDD and/or Mr Fares as architect (or for that matter as builder) appears to have been put in place in favour of PDD and/or Mr Fares by Landmark and Toyama, or the trustees for sale, or by Concrete as purchaser from the trustees for sale, much less for the payment of architectural fees to PDD and/or Mr Fares, Mr Fares being himself of course indirectly a one-half beneficial owner and/or controller of Landmark. 76 Concrete further framed its case for an implied licence of copyright to use the subject Council approved plans and drawings, as a successor in title to Landmark and Toyama per medium of the trustees for sale, as an implied term of the contractual retainer of PDD and Mr Fares by or on behalf of Landmark and Toyama, that is to say, as implied by operation of the general law of contract. Concrete pointed out that an implied term may be juridically recognised as referrable, not necessarily only to business efficacy, but to the inherent nature of a contractual arrangement, and the relationship thereby established, whereby an architect is commissioned by a developer to prepare plans for a development application. That implied term was described as 'a legal incident of this kind of contract': see Liverpool City Council v Irwin [1977] AC 239 at 254-5 (Lord Wilberforce), at 266-268 (Lord Edmund Davies) and at 270 (Lord Tullybelton). Concrete further pointed to the distinction between terms implied by operation of law and terms implied as a matter of fact (for instance for reasons of business efficacy), as discussed by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] 149 CLR 337, especially at 345-346 per Mason J (as he then was), the former notion being characterised as based on more general considerations than those applicable to the implication of a term that is necessary to give business efficacy to a contract. 77 It was further contended by Concrete that the implied licence it postulated, as here applicable, gave expression to the further principle of the general law as enunciated by Lord Wilberforce in Liverpool City Council at 253 that '… where there is an apparently complete bargain, the courts are willing to add a term on the ground that without it the contract will not work'. The 'bargain' here involved was said by Concrete to comprise the retainer of PDD and/or Mr Fares by the co-owners Landmark and Toyama (Mr Fares being of course one of the two corporators of Landmark). The consequences of their dispute led to the ultimate sale at arms length, by trustees appointed by the Supreme Court for that purpose, to Concrete as a third party purchaser for undisputedly full value. 78 In that context, reference was further made by Concrete to more recent dicta of the NSW Court of Appeal in Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 at 123 (Mason P, Beazley and Stein JJA), as follows: 'At the end of the day, it is to be remembered that terms implied at law do not depend upon the intention of the parties.' their Honours applying Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 at 348 (Samuels JA), as follows: '…The imposition of terms as a matter of law amounts to no more than the imposition of legal duties in cases where the law thinks that policy requires it.' 79 To similar effect is the dicta of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 449, cited by Concrete as reflective of the modern restatement of the principles as to implied contractual terms: 'However, the more modern and better view is that these rules of construction are not rules of law so much as terms implied, in the sense of attributed to the contractual intent of the parties, unless the contrary appears on a proper construction of their bargain. There is force in the suggestion that what now would be classified as terms implied by law in particular classes of case had their origin as implications based on the intention of the parties, but thereafter became so much a part of the common understanding as to be imported into all transactions of the particular description…'. 80 Concrete contended that the operation of the foregoing restatements of principle required that the notion of implied permission of an architect in favour of subsequent owners of land should be imputed in principle in their favour, at least for the currency of a development consent incorporating the plans and drawings the subject thereof, and to be so imputed from the conduct of an architect in preparing plans intended to accompany a development application in respect of that land. It therefore followed, so the submissions of Concrete continued, since the benefit of a development consent 'runs with the land the subject of the consent', and has no effective meaning or operation otherwise than by reference to those plans and drawings, an implied licence in personam by the architect to use plans etc in favour of a successor in title to the client of an architect (in this case Concrete being a successor in title to PDD's and/or Mr Fares' clients Landmark and Toyama per medium of the trustees for sale) should be duly recognised and imputed according to the law of copyright. 81 Concrete's submission next addressed the implications as to absence of payment, or in any event of full payment, of an architect's fees, in the kind of circumstances here involved. It was emphasised that Concrete's submission as to implied licence did not involve any deprivation of the architect of entitlement of remuneration from his or her client (in the present case the clients being at least Landmark and Toyama as joint venturers and owners at the material times of the Nelson Bay land). 82 I was referred by Concrete in this context to the decision of the Supreme Court of New South Wales (Wootten J) in Ng v Clyde Securities Ltd [1976] 1 NSWLR 443, where a firm of architects failed to obtain the Court's restraint by injunction of a mortgagee from using plans and specifications prepared by those architects on the instructions of the mortgagor who subsequently became insolvent, being an ongoing use required by the mortgagee to enable completion to be effected of the mortgagor's originally conceived project. That denial of relief to the architect prevailed, notwithstanding in particular the non-payment of that architect's professional fees by the insolvent mortgagor. Although in that case, his Honour had found that the purpose, for which it was contemplated that the plans would be used at the time of preparation thereof, was for the entire construction of the mortgaged building, and not for any more limited purpose, his Honour concluded at 446 as follows: '…But is that licence a consent given once and for all in return for a promise of payment, or is it given conditionally upon actual payment being made in terms of the contract, so that it may be revoked if payment is not forthcoming or, as in this case, forthcoming only in part? There is nothing in the terms of the particular contract in this case that casts any light on the problem, so that it is a matter of considering, in a quite general way, what is the term that may reasonably be implied between an architect and his client in a contract such as the present one. In my view, it is not reasonable to imply a term that the licence, once granted and acted upon, may be revoked in the event of subsequent non-payment. This is particularly so when, as here, a licence for immediate use of the copyright is granted in return for promises of payments at the dates of future events contingent on its use. The withdrawal of the licence would not merely affect the future activities of the licensee, but, by preventing the completion of a building, would render valueless what might be an enormous past investment in the building.' In the present circumstances, it was stated to the Court by counsel for Concrete that in the collateral proceedings pending in the Supreme Court of New South Wales, PDD makes claim (inter alia) for unpaid architect's fees, though as may be anticipated, from what I have already recorded, a similar claim falls to be here resolved apparently as well, at the instance of the respondents/cross-claimant PDD/Mr Fares. 83 Concrete next addressed the circumstances of purchasers of realty, where the vendors have employed an architect to undertake professional work in respect of building work relating to that realty. Concrete referred first to the circumstance involved in the Court of Appeal's decision in Blair v Osborne & Tomkins [1971] 2 QB 78, where the architect had been paid his fees for preparation of plans by the outgoing vendor, and was excluded from further work on the project by the purchaser, being circumstances said by Concrete to be not unlike those here involved. At 85, Lord Denning MR said as follows: 'Those illustrations show, to my mind, that when the owner of a building plot employs an architect to prepare plans for a house on that site, the architect impliedly promises that, in return for his fee, he will give a licence to the owner to use the plans for the building on that site. The copyright remains in the architect, so that he can stop anyone else copying his plans, or making a house from them; but he cannot stop the owner, who employed him, from doing work on that very site in accordance with the plans. If the owner employs a builder or another architect, the implied licence extends so as to enable them to make copies of the plans and to use them for that very building on that site: but for no other purpose. If the owner should sell the site, the implied licence extends so as to avail the purchaser also.' 84 His Lordship's reference to 'in return for his fee' does not make entirely clear whether what is meant is 'in consideration for his fee', or 'upon payment of his fee'. The present case may be thought to illustrate the need for clarification of any significance between those alternatives. An architect would presumably have a possessory lien in respect of his plans and drawings until payment of his fees, but once he has parted with possession thereof, what remains is a chose in action for recovery of his fees. If the implied licence does not operate until actual payment has occurred, the potential for inconvenience, if not substantial disruption, to an owner's building operations is evident. Indeed irretrievable loss and damage might be inflicted by an architect, pending what may turn out to be a protracted delay in resolution of a dispute of that kind. The present case provides a further example of inconvenience, indeed very significant inconvenience, since if Concrete is not able to substantially commence development of the fourteen unit building by 10 May 2005, regulatory planning changes subsequently introduced by Port Stephens Council, albeit before Concrete's contractual commitment to the site culminating in payment of the purchase money in full, will have the apparent consequence of confinement to a maximum eight unit development consent. Moreover there is always a possibility that market changes may hereafter adversely affect, or may conceivably have already adversely affected, any financial outcome to Concrete's proposed fourteen unit development. 85 In formulating the principle in Blair, Denning MR, with whose reasons Widgery LJ and Megaw LJ agreed, adopted the following passage appearing in the reasons for judgment of Jacobs J in Beck, at 85 (appearing below that which I have earlier extracted from his Honour's reasons): '… the payment for sketch plans includes a permission or consent to use those sketch plans for the purpose for which they were brought into existence, namely, for the purpose of building a building in substantial accordance with them and for the purpose of preparing any necessary drawings as part of the task of building the building.' His Lordship thereafter continued (at 85 of his reasons for judgment): 'Applying this principle, it seems to me that the payment of Ł70 to Mr. Blair [the architect] covered the use of the drawings, not only by Mr. Underwood and Mr. Norris [the clients] themselves, but also by the people to whom they sold the plot, and by the surveyors and workmen of the purchasers, so that they might make copies of them and otherwise use them in the accustomed way for building a house on this site.' His Lordship's reference to 'the people to whom they sold the plot' may be duly observed. 86 The principles in Beck were applied by Merkel J of this Court in Acohs Pty Ltd v R A Bashford Consulting Pty Ltd and Others [1997] 144 ALR 528. That case concerned the viability and extent of operation of an implied licence to use chemical information data sheets, in respect of which the third respondent (Dr Bialkower) claimed to be the copyright owner. After referring to Beck, his Honour said at 547-548 as follows: 'In my view, the licence considered in Beck is one which is implied by law to a particular class of contract. Jacobs J clearly regarded the licence he implied as falling within that category. In Beck at 1581 his Honour said that the question raised was quite a broad one which applied not only to architects but to artists and to persons who prepared written material with the intention that it should be used in a particular manner. Jacobs J concluded that the principle enunciated by him must be regarded as a principle of general application. In doing so his Honour decided that the licence was to be implied by law for the particular class of contract with which he was concerned, ie where copyright material is commissioned for a particular purpose. It is important to define with precision the particular purpose (his Honour's emphasis), which is to be determined by reference to the circumstances of the particular case. If the purpose includes use of the material by persons other than the person commissioning the copyright material, then use by those other persons to carry out that purpose will fall within the licence implied by law. If the particular purpose does not involve use of the material by others, as seems to have been the case in Beck, then the issue of an implied right to transfer the implied licence will arise by reference to the circumstances and terms of the particular contract.' His Honour proceeded to hold that the implied licence to use the chemical data sheets extended to '… manufacturers, importers, suppliers, retailers, employers, and to any other person requiring [a chemical information data sheet] for the safety related purposes for which it was prepared' (550). A Full Federal Court comprising Beaumont, Hill and Sundberg JJ dismissed an appeal from that decision (Bialkower v Acohns Pty Ltd and Others [1998] 41 IPR 33), upon the sole basis that the appellant had not discharged the onus of establishing ownership of copyright, and therefore found it unnecessary to determine any other copyright issues, but gave no indication that it disagreed in principle with the approach to principle of the primary judge upon the implied licence issue. 87 In the present case of course, Concrete contended that the particular purpose of Mr Fares and/or his company PDD, in preparing the subject plans and drawings for the fourteen unit development of the Nelson Bay land, the subject of course of the Port Stephens Council's approval of 10 May 2000, was for the use and benefit of the Landmark/Toyama joint venture in relation to that building development site, and further that any successor in title to that site fell within the scope of that purpose by implication of principle of the law of copyright, irrespective of the circumstancethat the successor in title might derive its ownership as a consequence of the disposition of the Nelson Bay property by trustees for sale appointed in consequence of prospective disputation between the freehold owners (Landmark and Toyama), for whom Mr Fares and/or PDD originally prepared those plans and drawings. Moreover Mr Fares was indirectly one of those joint venturers, per medium of his beneficial and/or control in reality of one half of the issued capital of Landmark on the part of himself and/or his private company PDD, Landmark being of course the registered proprietor as to a two thirds' share of the Nelson Bay land as tenant in common. What Mr Fares and/or his company PDD was at all material times engaged in, in commercial substance and reality, related to a one third share or interest in the development of the subject Nelson Bay land, in relation to which development, depending on future circumstances, there remained the prospect of disposition of that land by trustees for sale appointed by the Court, should the relationship in particular between the corporators of Landmark and Toyama fall into irreconcilable dispute. 88 I was lastly referred by Concrete, by way of further illustration of judicial precedent, to the decision of the Court of Appeal in England in Solar Thomson Engineering Co Ltd v Barton [1977] RPC 537, which related to patented pulley wheels supporting a conveyor system which had been sold to a company identified as BSC. Some years subsequently, BSC utilised the services of the respondent to the appeal in order to replace worn rubber rings, the respondent thereby allegedly infringing the appellant's copyright in the working drawings of the pulleys. It was held that in accordance with what were described as established principles of patent law, there existed an implied licence conferred by the law of patents to repair the pulleys by replacing worn rings. It was further held that there was necessarily to be implied a licence to use the appellant's copyright in the drawings to the extent necessary to undertake those repairs. At 560-561, Buckley LJ, with whom Goff and Orr LLJ agreed, said as follows: 'It is of course necessary to bear in mind the express reservation of the plaintiffs' copyright in all drawings. Mr Drysdale has contended that this was only intended to operate in transactions which involved handing over drawings in which copyright existed. I do not feel able to take this view, which does not seem to me to be supported by the language of the reservation. The reservation must, however, operate subject to any licence to make use of or reproduce any copyright drawings which the plaintiffs have granted either expressly or impliedly. No doubt, in the face of an express reservation such as exists in this case, a licence would be less readily implied than if there were no such express provision, but the existence of the express reservation is not, in my opinion, necessarily inconsistent with an implied licence. If I am right in the view I have expressed about the existence here of an implied licence under the patent to repair pulleys by replacing worn rubber rings, it must, I think, follow that purchasers of Polyrim pulleys are also impliedly licensed to infringe the plaintiffs' copyright in their drawings to the extent necessary to enable such repairs to be carried out. To hold otherwise would be to allow the copyright to stultify the implied licence under the patent. It seems to me that considerations of business efficacy strongly support the view that this should not be the case. If it were, any purchaser of a patented article might find himself deprived of his ostensible right to repair that article by the existence of a copyright of which he would probably be ignorant when he made the purchase. It might be argued, although this has not been so in the present case, that the express reservation of copyright should be taken to negative any implication of a licence under the patent to repair the patented article in any way which would infringe the copyright. As at present advised, I do not think that this would be right. Assuming that it is legitimate for a patentee to stipulate for the sole right of repairing his patented product and that such a stipulation would not conflict with the Patents Act 1949, section 57, or be bad on any other ground, I would be inclined to hold that it would be a term of a kind which should be clearly and explicitly agreed and should not rest upon implication or constructive notice….' Emphasis may be placed in particular upon the foregoing dictum '… also impliedly licensed to infringe the plaintiffs' copyright in their drawings to the extent necessary…'. The contention of Concrete is in effect that no different result in principle should follow here to that which somewhat analogously occurred in Solar, because it was a purchaser of the Nelson Bay land, not from the original principals Landmark and Toyama, but from the trustees for sale of that syndicated real estate appointed by the Supreme Court, by reason of the disputation between the ultimate two principals/corporators of Landmark, whereof Mr Fares was one, and the two principals/corporators of Toyama. There is force in that submission.

Concrete's second main basis for rejection of the case for breach of copyright in the subject plans and drawings - s 66G of the Conveyancing Act and architect's involvement in joint venture provide strong reasons for implication of the Beck-type licence 89 This second main basis advanced by Concrete for rejection of PDD's case for breach of copyright in the subject plans and drawings, as earlier foreshadowed in the alternative to resolution of the first issue in its favour, may be restated to the effect that the operation of the remedial provisions of s 66G of the Conveyancing Act, and the circumstances here of a joint venture arrangement whereby the architect (whether PDD or Mr Fares) is effectively, or at the very least closely 'tied' to, one of the two legal owners of the Nelson Bay land, provides compelling reasons why the implied licence arising between an architect and his or her client, as recognised and explained in Beck, should not be negated in the circumstances. 90 The doctrine of implied licence in copyright is conveniently summarised in Intellectual Property in Australia (3rd ed) by McKeough Stewart and Griffith (LexisNexis Butterworths 2004) at par 7.14, in the following terms: 'A licence may be implied from the circumstances in which the owner deals with the work or subject matter. For example, a person who accesses material on a website can usually infer from its availability that it may at the very least be downloaded, subject to any directions to the contrary… A licence will only be implied, however, where "business efficacy" demands it… Perhaps the most common situation in which a licence will be implied is where copyright material is specifically commissioned. In his "landmark judgment" in Beck v Montana Constructions Pty Ltd (1963) 5 FLR 298 at 304, Jacobs J, expressed the principle thus: "The engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission or consent or licence in the person giving the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement." The "purpose" in question is to be determined objectively, by reference both to the parties' contract and the circumstances in which it is made…' 91 The following dictum of Jacobs J in Beck thereafter follows at 304-305: 'I think it is a principle which can be found to be applied in a number of cases. It relates to permission or consent to what must have been within the contemplation of the parties at the time of the engagement. After all it must be borne in mind that it is the engagement which bring the copyright material into existence. … There then remains the question whether there should be any implied right to transfer it and here I think that it must inevitably be implied that the owner, having commissioned the sketch plan and having obtained the right to use it for the purpose of erecting on that site a building in substantial accordance with it, should have the right to transfer that right to a new owner of the land.' Elsewhere in the reasons of Jacobs J, his Honour referred to an agreement to be implied, collaterally to the sale of land, whereby a vendor may grant to a purchaser such right as the vendor has to the use of architectural plans for a building to be erected on land which is in the course of sale. It was submitted by Concrete that the absence of any contrary provision in an agreement, such as for the sale of land, to the effect that the copyright owner prohibits the grant or the assignment of a licence to use his or her copyright, generally supports the conclusion in favour of a Beck-type licence, in circumstances where the copyright owner is engaged to prepare the copyright work with the knowledge that it is to be used for a particular purpose. 92 In support of that submission, Concrete referred me to Bourke v Filmways Australasian Distributors Pty Ltd, an unreported decision of Powell J of the Supreme Court of New South Wales made on 9 October 1979. His Honour reached the following conclusion upon the footing of Beck, Blair and Ng: 'It seems to me that, as the evidence now stands, it is difficult, indeed, to avoid the conclusion that, from the very outset of his involvement in the production, the Plaintiff appreciated to the full that the end product of his efforts, be those efforts directed towards writing the whole or part of the script the direction of the film, or the editing of the film, was the production of a film which was to be distributed generally and publicly screened. If this be so, then it seems to me that, unless, at the time of entering upon the project in April 1978, the Plaintiff stipulated that the film was not to be distributed or screened unless and until he had been paid all the monies payable to him under the arrangements then made, there ought to be implied, as a term of those arrangements, a licence in favour of those by whom he was engaged, to incorporate into the film any script of which he might be the owner of the copyright and to distribute or authorise the distribution of, and publicly to screen or to authorise the public screening of, the film produced in consequences of the use of the script; for unless some such licence were to be implied into the arrangements, the whole purpose of those arrangements, that is, the production of a film to be distributed commercially, would be frustrated if the Plaintiff was free to prevent the exploitation of the film which he was engaged to bring into being.' 93 In the present case, so Concrete contended, the respondents PDD and Mr Fares had not submitted, nor could they have submitted, that there was any express contractual reservation of copyright or any express prohibition against assignment or licensing of copyright; instead, so the evidence stood, the oral agreement(s) propounded by the respondents was (or were) silent on the question of copyright, and the respondents were in effect compelled to adopt what Concrete described as a limited yet extreme position, namely that a Beck-type implied licence should be negated, for the reason that it was mutually envisaged by these joint venturers that PDD would be the builder of the fourteen home unit building at Nelson Bay, pursuant to what was an alleged design and build agreement in favour of PDD orally brought into existence, albeit not subsequently performed wholly or partially. 94 Concrete submitted that the circumstances of the case pointed 'very strongly against the negation of a Beck-type licence', those circumstances in summary being described by Concrete as follows: (i) Mr Fares was 'both the architect principal and effectively a party to the joint venture (through Landmark)'; (ii) a dispute could conceivably occur between the joint venture co-owners during the currency of the joint venture (as indeed happened); (iii) section 66G is a remedial provision that facilitates a statutory sale, in circumstances where the relationship between the co-owners has broken down; in those circumstances, either joint venturer (ie Landmark or Toyama) had the right to seek orders by the Supreme Court as to the sale of the property by Court appointed trustees; (iv) the jointly owned property thus to be sold by trustees for sale would be clearly less valuable, and the expected returns to the co-owners would be less in amount, if the land could not be sold with the full benefit of a development consent for the fourteen units, and of the right to use the plans and drawings to which that consent related; (v) any effective denial of the right to use the plans and drawings that accompanied the development consent would necessarily decrease the value of the land, and thus the return to the co-owners upon realisation thereof; and (vi) it would be contrary to common sense for the general law to deny the operation of a Beck-type implied licence in such circumstances. 95 Moreover it was submitted by Concrete that to deny the Beck-type licence in the circumstances described would also undermine what was described as 'the clear remedial purpose behind s 66G of the Conveyancing Act', and indeed that for one joint venturer to be able to prevent the sale of the land at full value would be equivalent to a fraud committed upon the other joint venturer; in either case, so Concrete's submission emphasised, the law again would not countenance any negation of the operation of a Beck-type licence in such circumstances. 96 Upon the footing that the second main submission would be accepted, it was Concrete's case that it should succeed in the proceedings, irrespective of the outcome of the Court's determination of the factual controversies between the parties as to the terms and the conditions of the joint venture arrangements, and as to the consequences of the so-called 'break-up' of the joint venture.

Concrete's third main basis for rejection of the case for breach of copyright in the subject plans and drawings - architect's clients/principals had implied licence of copyright that was transferred to Concrete 97 Concrete further contended by way of a third alternative case as follows: (i) Landmark and Toyama, as clients of PDD and/or Mr Fares, and thus as principals to the relationship with PDD and/or Mr Fares, had an implied licence to use the plans and drawings the subject of the development approval for fourteen units for the benefit of that development to be constructed on the Nelson Bay land; (ii) such implied licence was transferable to a purchaser of that land; (iii) there was nothing in the circumstances the subject of evidence in the present proceedings that could serve to prevent the implied licence from being transferred to a purchaser of the land (such as Concrete); and (iv) to the contrary, 'the relevant factual and regulatory matrix' strongly supported the notion that 'the implied licence was transferred with the land for the benefit of the purchaser', that is of course, for the benefit of Concrete. 98 Concrete indicated that this third alternative submission required further consideration of the general principles regarding the implied licence that is typically enjoyed by the client of an architect, and further that the Court should also have regard to the factual submission, made emphatically by Concrete, that there was never any agreement made to the effect that PDD was to be the builder of the Nelson Bay development, whether under a design and build contract, as alleged by PDD and Mr Fares, or at all. 99 In support of this third principal basis for rejection of the case of PDD and Mr Fares for breach of copyright, Concrete referred first to the proposition, said to be established or upheld in Beck, Blair, Acohs and Bourke,to the effect that the engagement for reward of a person to produce material, being of a nature which is capable of being the subject of copyright, implies a permission or consent or licence of the person providing the engagement for the use of the material in the manner, and for the purpose, for which it was contemplated at the time of the engagement between the parties that it would be used. Comparison was made to the decision of a Full Federal Court (Northrop, Gummow and Hill JJ) in Devefi Pty Ltd v Mateffy Perl Nagy Pty Ltd (1993) 37 IPR 477, which involved a written agreement between certain parties for the preparation of engineering plans containing a prohibition upon the assignment of the benefits of certain contractual rights without consent. Concrete referred next to the proposition, emerging from Beck, Blair and Ng,to the effect that an implied licence to use plans for the purpose of erecting a building that usually arises in favour of the client, extends also to the purchaser of the property upon which the building is to be erected, and also to a mortgagee, reference being made to Ng. I interpolate to mention that in the light of the outcome of a decision of the New South Wales Court of Appeal later to be examined at length, there is principled obstacle to extending the implication in favour of a mortgagee (post). It was submitted that an implied licence would in any event extend to a purchaser that acquires property from trustees for sale appointed by a court, such as of course have occurred. 100 In the light of those principles juridically established, Concrete then submitted that there was nothing inherent or evident in the facts of the present case to displace what it described as 'the usual position that the implied licence would extend to the subsequent purchaser of the property'. Concrete submitted therefore that the fact that the 'architect principal' (ie Mr Fares) was effectively 'or at least enmeshed with', one of the joint venturers, namely of course Landmark, and by reason of the operation of s 66G of the Conveyancing Act in relation to the joint ownership of the Nelson Bay land by Landmark and Toyama, there existed 'powerful reasons' why the Court would not negate an implied licence from here arising, and thus an implied licence in favour of a subsequent purchaser from trustees for sale appointed in respect of the property the subject of the joint venture. Concrete contended in that regard that the special conditions of the Contract for Sale, made of course between the trustees of sale as vendors and Concrete as purchaser (earlier extracted in these reasons for judgment) did not operate to negate an implied licence otherwise arising in favour of a purchaser from those trustees for sale, such as here of course Concrete. Concrete rightly pointed out in that regard that those special conditions merely adopted 'cautious language' to the effect that no warranty was given as to the use of the accompanying plans and drawings, and provided notification of the existence of a disputed claim of copyright by an unnamed architect (being of course PDD or Mr Fares). All that was contended by Concrete to be insufficient to negate the existence of any implied licence of copyright, 'even if such licence be not characterised as a licence in gross'. 101 Concrete's contention was said by its counsel to be further supported by judicial authority which demonstrated that even an express reservation of copyright may not prevent an implied licence from arising, since the reservation must be taken to operate, subject to any licenses otherwise effectively granted to use the copyright material, whether expressly or by implication; I was referred in that regard in particular to the dictum I have earlier cited from Solar. In any event, as already foreshadowed, the Contract for Sale made between the trustees for sale as vendors and Concrete as purchaser did not purport to contain any reservation of copyright in favour of any alleged copyright owner, but as rightly submitted by Concrete, declared the absence of any express warranty to use the plans the subject of the development consent. So much, Concrete's submission concluded on that particular subject, did not touch upon the issue as to whether an implied licence to use the local Council approved architectural plans was implicitly transferred with the Nelson Bay land. 102 Concrete next addressed the subject as to whether an architect is competent to revoke an implied licence in circumstances where his remuneration has not been paid, that being of course an issue raised by PDD, in the context of the third basis of implied licence of copyright asserted by Concrete. Authority was cited by Concrete as to the negative of that proposition. Thus in Gruzman Pty Ltd v Percy Marks Pty Ltd (1989) 99 FLR 116 at 118, McLelland J (as he then was) said as follows: 'When an architect contracts with a building owner to produce plans for the purpose of their being used to carry out construction work at a particular site, there arises, subject to any contractual provision to the contrary, an implied licence from the architect for the use of the plans for that purpose [his Honour thereafter referring to Beck, Blair and Ng]. It was held [Ng] that once granted and acted upon by the commencement of the work, the licence was irrecoverable, notwithstanding any subsequent failure by the owner to pay the architect's fees.' 103 I have of course earlier cited in these reasons from Ng; Concrete draw attention to the following further passage from Ng at 446: 'Unless an architect expressly stipulated for such a devastating right of revocation to enforce actual payment, it is more reasonable to regard him [ie the architect] as having given the licence in return for a debt recoverable, if unpaid, by ordinary litigious processes.' 104 In any event, Concrete submitted that Mr Fares, or if relevant PDD, was not to be remunerated for the preparation of the plans and drawings the subject of the development application granted by Port Stephens Council for the fourteen home unit building, in that the evidence discloses that Mr Fares agreed to prepare the plans and drawings for no extra charge to the joint venturer, comprising as it did himself as to a one third share, Mr Barrak as to a further one third share, and Ms Haviland and Mr Rix as to the remaining one third share. That was said to be because Mr Fares was to benefit, as in fact of course he subsequently did handsomely, directly or indirectly, from his one half shareholding in Landmark as the registered proprietor in fee simple in respect of a two thirds share as tenant in common of the Nelson Bay property. I have earlier identified the purchase price paid by Landmark and Toyama for their original purchase together of the Nelson Bay land, and the sale price subsequently realised by the trustees for sale on behalf of Landmark and Toyama, from the realisation of that land at arms length to Concrete as purchaser. 105 Concrete further contended that irrespective of the circumstances recorded in the last paragraph, an implied licence of copyright crystallising at the outset in favour of Landmark and Toyama, and continuing in favour of Concrete per medium of the trustees for sale, was irreversible, and that PDD (or Mr Fares) was confined in recourse for remuneration for its (or his) architectural work to 'the client' (ie Landmark and Toyama) to the extent of the prior arrangements in that regard between the parties, such as they were, or otherwise to a quantum meruit assessment by way of a reasonable sum for its architectural work undertaken. The expert testimony of Mr Peter Brooks was to the effect that reasonable sum for the preparation of the subject plans and drawings for the purpose of the development application for the fourteen units would have been 1% of the estimated project cost. Hence with an estimated project cost of $2.8 million to $3 million, based on an expected unit construction cost of $200,000 per unit, Mr Brooks calculated that a reasonable fee for preparing the plans for the development application, 'including all necessary attendances with client and council officers through to the granting of development consent would be in the range of $28,000 to $30,000'. 106 To complete the entire picture of controversy as to the architectural fees, I should record that in relation to the earlier eight home unit development of the Nelson Bay land approved by Port Stephens Council on 24 September 1999, it is the contention of Concrete that a sum of $27,000.00, paid out of the joint bank account of the parties conducted with NAB on 19 April 1999 to PDD in controversial circumstances, constituted sufficient and adequate architectural fees for the work undertaken by PDD and/or Mr Fares in relation to that eight home unit development. It will be appropriate for me to adduce that essentially collateral evidence in due course, given the nature and extent of controversy relating thereto. 107 It will therefore be seen, by way of summary of the implications of Concrete's threefold mutually exclusive contentions for establishing its authority or entitlement under the general law of copyright to use the plans and drawings the subject of the proceedings, that in Concrete's view, each of the first two contentions may be resolved upon the basis of operation of legal principles in relation to facts and circumstances not in issue, or not seriously or essentially in issue between the parties. In the case of Concrete's third proposition, the same falls for resolution in the light of one circumstantial issue, at least of any significance, namely whether PDD (or Mr Fares additionally or alternatively) was to be the builder of the fourteen home unit building on the Nelson Bay land under and pursuant to a design and build (or construct) contract on an agreed basis of reward. It is the contention of the respondents PDD and/or Mr Fares that there was an agreement made in late September to early October 1998, and/or at some subsequent time, that PDD and/or Mr Fares were or was to be the builder of whatever home unit development was to be undertaken on the Nelson Bay land under a design and build contract, whether for any reward or otherwise. It would appear that the case of PDD and/or Mr Fares was originally to the effect that such building contract or agreement related to both the original eight, as well as the subsequent fourteen, home unit development, though the focus of the evidence, at least at the hearing, was on the latter. I will later address and resolve that factual issue, upon which a considerable body of evidence was adduced. Before doing so, it is appropriate to resolve the first two legal issues framed by Concrete for establishing its authority and entitlement to use the plans and drawings for the construction of the fourteen home unit building the subject of Port Stephens Council's development consent of 10 May 2000, to the extent that any such resolution does not involve controversial issues of fact. I will first set out in detail the case propounded by PDD and/or Mr Fares by way of amended defence and cross-claim, because of the length and complexity of that pleading, which incidentally was presented as late as 17 March 2004, that is, only two weeks prior to the commencement of the hearing on 1 April 2004.

The case propounded by PDD and Mr Fares in response 108 Some two weeks or thereabouts prior to the commencement of the hearing of the present proceedings on 1 April 2004, PDD and Mr Fares filed an amended defence and cross-claim. I have earlier outlined the principal complaints made thereby. The defence of PDD and Mr Fares is a somewhat prolix pleading, and aspects thereof tend to fall short of fulfilment of the obligation to state material facts in a consistent way, and in consistently intelligible language. The cross-claim of PDD boils down to the assertion that PDD is the author of the subject plans and drawings and that copyright in those works vests in PDD as owner pursuant to s 35 of the Copyright Act. It seeks declaratory relief, consequential restraint orders, and other traditional relief for breach of copyright. 109 A number of issues were raised by the respondents PDD and Mr Fares as to the operation of s 202 of the Copyright Act, which of course I have already resolved. Thereafter the pleading asserts that PDD is the author of the subject plans and drawings within s 35 of the Copyright Act, and is the owner of the copyright subsisting therein, and denies any entitlement of Concrete to use the subject plans and drawings for any purpose. Many issues and propositions are referred to by PDD and Mr Fares and thereupon denied. It may be safely concluded that PDD and Mr Fares purport, one way or another, to put in issue virtually any fact and any proposition that could conceivably assist Concrete to establish an entitlement to an implied licence of architectural copyright to construct the subject fourteen residential unit development upon the Nelson Bay land in conformity with the plans and drawings the subject of the development consent granted on 10 May 2000 by Port Stephens Council to Landmark and Toyama, as then owners of the Nelson Bay land. 110 The following circumstances and contentions of the respondents PDD and Mr Fares are principally pleaded in the amended defence, which may be set out or summarised as follows: (i) it was PDD, and not Mr Fares, who was engaged by the joint venture Landmark and Toyama to undertake the preparation of the relevant plans and drawings, and hence it was PDD alone which was the owner of the copyright subsisting in the plans and drawings; it is unclear as to the reason for this emphatic distinction, given that PDD is in effect Mr Fares' company; nothing appears in the evidence, so far as I have encountered, as to the assets of PDD; whether or not the emphasis as to the distinction relates to a potentially adverse costs order is not for me to presently bear in mind per se; (ii) Concrete purchased the property 'with full knowledge and/or acceptance of the fact that the [trustees for sale] are unable to provide copies of the plans and designs which accompanied the development applications', and also of the following further matters, namely PDD's 'subsisting interest in the copyright', and that the contract of purchase of the Nelson Bay land did not 'confer upon [Concrete] any licence to use the copyright in [PDD's] plans and designs', further that the trustees for sale disclosed 'that legal action has been foreshadowed in respect of any future use of the plans and designs', and further again 'that the trustees for sale gave no warranty as to the availability of the right to use the plans and designs which are owned by [PDD]'; precise particulars of such alleged 'full knowledge and/or acceptance' are not given; the trustees for sale were of course appointed by the Court because the co-owners Landmark and Toyama were in dispute, and it was not suggested by Concrete in any event that any such warranty was given; (iii) Concrete had no implied licence to use the copyright in the plans and drawings relating to the Nelson Bay land, nor had any such licence been acquired by the trustees for sale; (iv) if Landmark and Toyama did acquire an implied licence to construct the relevant home unit development in accordance with the said plans and drawings, the same was not so assigned or conveyed as to confer upon Concrete an implied licence to construct that development in accordance with those plans and drawings; (v) Concrete did not 'simply by virtue of its acquisition of the land' acquire thereby the right to construct the development in accordance with those plans and drawings; (vi) if the joint venture of Landmark and Toyama obtained an implied licence to construct the development on the Nelson Bay land in accordance with the relevant plans and drawings, being a circumstance which was elsewhere put in issue, Landmark and Toyama had not assigned or transferred that licence to Concrete (by virtue of the majority ownership of Landmark of the Nelson Bay land), and the same still resides with those former owners; and (vii) PDD and Mr Fares had not otherwise licensed Concrete to use the plans and drawings for the purpose of constructing any development on the Nelson Bay land. 111 The averments of the cross-claim of PDD, in addition or supplementary to those summarised above from the defence, raised the following matters and issues: (i) PDD is a building designer providing architectural services and is a licensed builder; (ii) '… the plans and drawings… were prepared by [PDD] on the basis of a conditional contract, including a condition for the payment of a reward'; (iii) 'those conditions were not satisfied, including a failure to pay [PDD] any reward, and hence [PDD] says that there is no implied licence for any party, including [Concrete], to use its copyright'; amongst the particulars provided in relation to that averment of the cross-claim was that PDD and Landmark 'are related companies in that they share common directors and shareholders'; (iv) Landmark and Toyama contractually agreed with PDD to provide the architectural and building services consisting of: • drafting of the architectural plans and the associated development application documentation; • submission of the development application plans and associated documentation to Port Stephens Council; • taking all necessary steps to obtain the development consent to the building the subject of those plans and associated documentation from Port Stephens Council; and • carrying out the on-site construction of the development in accordance with that development consent; (v) it was a condition of the (alleged) building contract between PDD on the one hand and Landmark and Toyama on the other that: • the architectural and building services were non-severable and cumulative; • PDD would be the builder of the development the subject of its own plans and drawings '… to ensure benefits to itself and quality and cost benefits to Landmark' (being PDD's co-called related company) being the '2/3 majority owner'; • the joint venture partners undertook the joint venture to ensure that Landmark, PDD's co-called 'related company' and 'the 2/3 majority owner', would 'benefit from the profits of the joint venture development'; and • 'as consideration for the cumulative services listed in [sub par (iv) above], PDD was to be remunerated by the joint venture partners at the rate of 10% of the construction costs by way of draw-downs, payable at various intervals throughout the period of construction in accordance with the progress of the development'; (vi) PDD 'rendered services' as listed in subpar (iv) above, save as to carrying out on-site construction, in the latter case because it was prevented from rendering those building services 'due to a breakdown of the joint venture between Landmark and its joint venture partners (sic) leading to the sale of the property pursuant to the statutory trust'; (vii) 'the joint venturers breached their contract with [PDD]', in that they: • 'Failed to proceed with the joint venture; and • Failed to pay [PDD] in accordance with the contract as to its terms'; (viii) as a result of the breakdown of the joint venture and sale of the Nelson Bay land, the following conditions of the contractual arrangements, pursuant to which PDD prepared the plans and drawings for Development Application No 16-2000-103-1 made to Port Stephens Council, were not satisfied: • PDD was prevented from carrying out the on-site construction of the development, as builder of its own plans and drawings, for the benefit of PDD and 'its related company, Landmark who is the 2/3 majority owner'; • PDD's 'related company and the 2/3 majority owner, Landmark, was prevented from benefiting from the profits of the project'; and • PDD did not receive 'any moneys whatsoever for the services provided by it and to be provided by it to the joint venture partners'; (ix) '… the only party with any licence or right to use the plans and drawings is itself' (ie PDD), and '[n]o other person or entity had or has any right or licence, whether implied or otherwise, to use [PDD's] copyright subsisting in the plans and drawings'; (x) PDD is '… the author of the plans and drawings and… copyright in those plans and drawings vests in it', and 'prepared the plans conditionally upon the plans being used only on the basis of completion of the contract [as pleaded by the cross-claim] and not otherwise'; (xi) '[a]s the payment and other conditions for the preparation of the plans and drawings have not been satisfied by the joint venture partners, there is no implied licence for the use of [PDD's] copyright'; in particular PDD 'prepared the plans and drawings primarily for the benefit of itself, its related company and the 2/3 majority owner, Landmark, and the other joint venture partners on the basis that the said joint venture partners would adhere to and at all material times participate in the joint venture project'; moreover '[t]he effect of the termination of the joint venture project was that the contract between [PDD] and the joint venturers could not proceed to its conclusion'; (xii) '[PDD] therefore maintains its copyright interest in the plans and drawings without the interference of the joint venturers or any other party having an implied licence to use such copyright'; (xiii) '[to] the extent that the contract between the joint venturers and the Applicant [sic] was breached, and the conditions associated with the preparation of the plans and drawings were not satisfied, there is no implied licence in the joint venture partners to use the plans and drawings'; (xiv) '[t]o the extent that there is no implied licence in the plans and drawings in favour of the joint venturers. [Concrete] cannot by contract receive better title or licence to the plans and drawings than that which vests in the joint venture partners, of which there is none'; and (xv) alternatively, that '… having regard to the terms of the Contract for the Sale of Land referred to in paragraphs 8 through [sic] 10 of [Concrete's] Statement of Claim and [the] defence, that the said contract specifically operates such as to imply no licence as to use of [PDD's] copyright in the plans and drawings', and '[c]onsequently there can be no implied licence in favour of [Concrete]'. 112 It is appropriate to interpolate the observation at this point that the joint venture arrangements so pleaded were not the subject of written agreement between the joint venturers. That an oral agreement could be reflective of such complexity of pleaded terms, express and/or implied, may be thought to have been a remarkable achievement; with qualified solicitors being principals respectively of the two corporate joint venturers, it is at least a matter for preliminary reaction that the virtual litany of terms so pleaded could have been the subject of some sort of comprehensive oral agreement which was never reduced to writing. Moreover, it is not readily apparent why Ms Haviland and Mr Rix, the former being a legal practitioner, and both of them having prior business and/or investment experience, would have committed themselves to such an imbalanced and open-ended joint venture arrangement in favour of Mr Fares (or PDD) in particular, or in any event, why Mr Fares would not have caused such an arrangement to be reduced to writing in order to more readily and unequivocally secure the enforcement of such open-ended arrangements in favour of PDD in particular. 113 Faced with the formidable line of authority concerning the juridical nature of implied licence of copyright upon which Concrete relied, and Concrete's process of reasoning for that reliance, it was contended by the respondents PDD and Mr Fares that 'the plans form part of the bundle of documents to be lodged with the Development Application, but the plans themselves do not form a part of the Development Approval and are a separate and distinct set of documentations', and further that '[t]he DA runs with the land but the copyright in the plans does not run to subsequent owners of land unless they are expressly (not by implication) assigned by the holder of the licence to use copyright'. Put a further way by the respondents PDD and Mr Fares in the course of their submissions, '[t]he plans do not simply form a part of the DA and run to subsequent owners of the land along with the DA'. If that case of PDD and Mr Fares is to be accepted as forensically credible, PDD and/or Mr Fares thus secured by an arrangement never formalised in writing a remarkably advantageous and financially open-ended retainer in its and/or his favour, in circumstances whereby Ms Haviland and Mr Rix had no realistic or ready security or protection for instance in relation to quantification of cost for the architectural and building work to be undertaken. In any event of course, those observations are merely of a preliminary nature. A substantial body of evidence, including conversational evidence, is yet to be resolved, to the extent of conflict upon material facts and circumstances. 114 The respondents PDD and Mr Fares thus repudiated the grounds framed by Concrete as to an implied licence of copyright in its favour, in the events which happened, including its purchase of the subject Nelson Bay vacant land at arms length for the price of $2,760,000, the respondents contending that '… the only manner in which an implied licence may be shown is on the basis that the applicant can show a chain of successive assignments from [PDD] as the author of the plans and drawings, to the joint venture parties for whom the plans were conditionally prepared, to the trustees for sale and ultimately to themselves as purchasers'. I make the preliminary observation that the legal doctrine here following for consideration is that of implied licence of copyright (my emphasis). In any event, the respondents contended they need only show one of the following: 'that [PDD] never assigned a licence to the Joint Venture, that the Joint Venture never assigned a licence to the Trustees, or that the trustees never had an implied licence to assign to [Concrete] or that if they did possess such implied licence, then they failed to assign it to [Concrete].' 115 I make the threshold observation that those submissions of PDD and Mr Fares do not appear to accord sufficient significance to the scope of the dictum of Jacobs J in Beck earlier cited, where reference is made to '… permission or consent to what must have been taken to have been within the contemplation of the parties at the time of the engagement', and prior thereto to 'with the intention that it should be used in a particular manner'. That reference is to an objective purpose which is inferentially open to be attributed by a court having regard to the particular circumstances of the case. I am unable to appreciate why it should not be taken to have been within the objective contemplation of Mr Fares and/or his company PDD that the syndicated relationship involving himself personally, Mr Barrak, Ms Haviland and Mr Rix, and as a consequence their respective corporate manifestations by way of Landmark and Toyama, might deteriorate at some future time into irreconcilable dispute, leading to the appointment of trustees for sale at the instance of at least one of those corporate vehicles, the subsequent effectuation of a sale of the syndicate owned property by those trustees for sale, and ultimately the distribution of the proceeds of sale amongst Landmark and Toyama as the two co-owners and registered proprietors in fee simple, in accordance with their respective shares as tenants in common. It is normally a predicable possibility, indeed common business experience, that members of partnerships, syndicates and joint ventures, will later fall into irreconcilable dispute during the currency of those relationships, with the consequence that the assets of those associations must be divided, or else sold or otherwise disposed of, if necessary by independently appointed third parties pursuant to enabling legal process, and the proceeds of sale or other disposition distributed amongst those members, joint venturers, associates etc according to their respective shares or proportions and otherwise in conformity with the general law. I have found difficulty in understanding which of those kinds of circumstances may fall outside the scope of the doctrine of implied licence of copyright. 116 The respondents PDD and Mr Fares sought to incorporate within the scope of their submissions the principles enunciated in the following passage appearing on p 304 of the reasons for judgment in Beck already extracted, but with the bold lettering for emphasis appearing in the same passage repeated below: 'The engagement for reward of a person to produce material of a nature capable of being the subject of copyright, in the absence of any limiting conditions, raises an implication that the person so engaged consents to the use of the material by the person engaging him, in the manner in which, and for the purpose for which, it was contemplated by the parties at the time of the engagement that it would be used… The principle relates to permission or consent to what must have been taken to have been within the contemplation of the parties at the time of the engagement. After all it must be borne in mind that it is the engagement which brings the copyright material into existence.' The words first appearing above in bold letters were inserted by the respondents in apparent furtherance of their contention, as appears from my summary of the amended defence and cross-claim, that it was a contractual condition of PDD's engagement to undertake the architectural work involved in the preparation of the plans for the fourteen unit development that PDD should also be entitled to undertake for reward in relation to that development the functions of builder and supervising architect in combination. The words secondly appearing in bold letters in those written submissions, namely 'in the absence of any limiting conditions', purportedly reflect that contention in the context of the operation of the Beck principles as to implied licence of copyright. A convenient summary of those principles, and of the implications and operation of those principles, made by the authors of Intellectual Property in Australia (supra) at par 7.14 (page 202), appears in the passage extracted below (the first two lines of which have been earlier extracted in these reasons): 'The "purpose" in question is to be determined objectively, by reference both to the parties' contract and the circumstances in which it is made. In Beck it was held that a landowner who pays for an architect to develop building plans may legitimately expect to be able to develop building plans even after the architect's engagement is terminated, and indeed may assign that license to anyone else who purchases the land. It appears that such a license may include the capacity to alter the plans to suit the licensee's purposes. However, no licence permitting use will be implied where this would contradict the express terms of the contract, or otherwise be inconsistent with the nature of the original engagement.' It is the qualifications appearing in the foregoing passage as to contradiction of, or inconsistency with, the express terms of the contract of engagement upon which the respondents PDD and Mr Fares rely. But as I have already emphasised, the difficult issues which the Court must resolve are the express terms of the contract involving any engagement of PDD or Mr Fares as an architect and/or builder of the fourteen unit development. 117 It was submitted moreover by PDD and Mr Fares with considerable emphasis, that the decision of the Supreme Court of New South Wales Court of Appeal in Torpey Vander Have Pty Ltd v Mass Constructions Pty Ltd [2002] 55 IPR 542 was 'on all fours with the present case on the principle that an implied licence for copyright must be specifically assigned to subsequent acquirers of the property in title', and further that '[a] prospective developer must show a chain of instruments or other dealings as between itself and the persons from whom it claims to have acquired a licence back to the person to whom the licence was originally given, or if not given, then back to the author and owner of the copyright'. That description of what is required for the assignment or transmission of an implied licence reflects inadequacy of the general law of copyright, and of the doctrine of implied licence of copyright in particular, postulating as it does the requirement for an implied licenceof copyright to be 'specifically assigned', and the need for the existence of 'a chain of instruments or other dealings'. The imposition of those elements as being of the essence is to postulate a test at odds with the breadth of the notion of an implied licence according to the general law of copyright. What the authors of Intellectual Property in Australia also emphasise are the circumstances in which the relevant contracts and dealings are made, and which give rise to the critical implication. In the light however of the respondents' emphatic invocation of the authority in Torpey as governing or else bearing significantly upon the resolution of this case, it is appropriate that I set out the circumstances there involved, as well as the reasons for the three judgments of the Court of Appeal. Each of the parties cited from those reasons quite extensively. 118 The appellant ('Torpey Vander Have') was a provider of architectural services, whose shareholders and directors were indirectly engaged in property development, under the designation of Citron Developments, per medium of corporations they controlled in joint venture. A development consent had been obtained on the basis of plans earlier developed by another firm of architects, but the differences between those plans and the later plans the subject of the proceedings were such as to necessitate the need for obtaining a fresh development consent. Torpey Vander Have subsequently prepared the new plans for the purpose of obtaining that new development consent. Citron Developments defaulted under the mortgage granted over the development site, and the mortgagee Farrow Mortgage Services Pty Ltd ('Farrow') sold the site, in exercise of its power of sale on default, to the respondent Mass Constructions Pty Ltd ('Mass Constructions'), which completed the building development using the later architectural plans prepared by Torpey Vander Have. Subsequently Torpey Vander Have made demand upon Mass Constructions for payment of its professional fees for the preparation of the development application and the supporting drawings and plans. Upon the footing that it owned the copyright therein, Torpey Vander Havedenied rights of usage of those documents to Mass Constructions unless payment be made of its outstanding fees. Here of course the contentions advanced by PDD and Mr Fares extend beyond mere payment of allegedly unpaid architects fees, being a claim Concrete disputes, with support from the evidence of Mr Haviland and Mr Rix; they extend to the alleged demands for monetary rewards to be derived from the provision of future building services in combination with the provision of architectural services. 119 In the first instance, Torpey Vander Have had sought payment of its outstanding fees in exchange for its permission to Mass Constructions to use the architectural plans, and it also sought its retainer for further architectural services that might be required in the course of the construction of the building development. Alternatively it had sought at first instance recovery of fees from Mass Constructions on a quantum meruit basis, by reason of the availability to Mass Constructions of those plans and certain further drawings. Torpey Vander Have later sought to amend its claim to the effect that as owner of copyright in the plans and drawings, Mass Constructions had infringed its copyright, and was therefore entitled to damages or an account of profits, but the application for amendment was disallowed by a District Court judge at first instance. The main issue arising on the unsuccessful appeal of Torpey Vander Have to the Court of Appeal was whether or not Farrow, which had exercised its power of sale as mortgagee in the meantime, had possessed an implied right or licence to use the architectural plans and drawings, being a right or licence susceptible to transfer to, or conferral otherwise upon, Mass Constructions as purchaser from Farrow exercising its power of sale in respect of the development site. 120 Each of the members of the Court of Appeal in Torpey gave separate reasons for judgment, Young CJ in Eq dissenting as to the ultimate outcome of the appeal for reasons unnecessary for present purposes to record, but agreeing to certain aspects of the reasons for judgment of Spigelman CJ material for present purposes. It is appropriate to have regard to each of the reasons for judgment of the three members of the Court of Appeal, by reason of the purportedly emphatic reliance of the respondents PDD and Mr Fares upon the same. 121 Spigelman CJ found that whether or not Farrow as mortgagee had an implied right or licence to use the architectural plans depended on whether or not any such right or licence fell within the scope of the mortgage. Since the mortgage instrument had not been tendered into evidence in the District Court proceedings, his Honour was of the view that no such entitlement could be declared by the Court, an implied licence not being something which springs (as it were) in favour of a mortgagee of property the subject of architectural plans commissioned by a mortgagor (implicitly without specific provision made for that purpose). Therefore the finding of the judge at first instance, to the effect that the implied right or licence to use the plans had been transferred to Mass Productions, as purchaser from Farrow as mortgagee exercising its power of sale, in the view of the Chief Justice, could not stand. Thus at pars 31 and 32 of the reasons for judgment of Spigelman CJ, his Honour resolved the implied licence issue as follows: 'The implied licence was established by reason of the relationship between the appellant and the Citron Developments joint venture. On the authority of Beck it would readily be concluded, as her Honour did conclude, that such a licence conferred permission to construct the dwellings in accordance with the plans and to transfer the right to do so to a purchaser of the property. The transfer in the present case was effected by means of a mortgagee sale. Whether or not a mortgagee had the right to use the plans depends on whether or not the licence fell within the property the subject of the mortgage. This is a matter that has arisen on numerous occasions with respect to various kinds of licenses relating to the conduct of businesses upon property or other aspects of the operation of the property: see the authorities referred to by Young CJ in Eq. The respondent did not tender the mortgage in this case. Accordingly it failed to prove that it had a licence. It cannot succeed on its defence in the present proceedings.' 122 In the present circumstances of course, no mortgagee is relevantly involved in the issues arising for consideration, but the respondents sought to equate a mortgagee, exercising power of sale upon a mortgagor's default, to trustees for sale appointed by the Supreme Court, in circumstances of disputing co-owners. In my opinion, the purported analogy is misconceived. Trustees for sale of realty appointed pursuant to s 66G of the Conveyancing Act are analogous, for present purposes, to administrators or receivers with exercising powers of sale of property and distributing the net proceeds between the co-owners in accordance with their respective shares. The Chief Justice considered that an implied licence to construct the buildings in accordance with the architect's drawings was established in favour of Citron Developments as the original developers, being a licence capable of transfer by them to a subsequent purchaser of the property, but that any transfer of the implied licence by way of mortgage from that purchaser in favour of Farrow could not be imputed, in the absence of provision made in that regard by the mortgage from Citron Developments in favour of Farrow. No issue as to copyright entitlement of the NAB as original mortgagee arises in the present case, and its secured indebtedness over the Nelson Bay land from Landmark and Toyama was discharged on the completion of the sale thereof by the trustees for sale as vendors in favour of Concrete as purchaser. I am unable to distil from his Honour's reasons any assistance of significance to the case propounded here by the respondents PDD and Mr Fares, being reasons which acknowledge the existence in principle of an implied licence to use architectural plans for the construction of the residential development which may be transferred to 'a purchaser of the property'. The difference in operation and effect of a mortgage or charge over property from a transfer or outright assignment of property is as significant in operation in relation to intellectual property as it is to tangible property. In my opinion, it is correct to postulate in the context of the present circumstances that the trustees for sale of property stand 'in the shoes' relevantly of the co-owners of property in dispute for purposes involving the application of the doctrine of implied licence of copyright. 123 In the course of the reasons for judgment of Young CJ in Eq, the second member of the Court of Appeal in Torpey, there appears discussion of the general law relating to implied licenses to use architectural plans, and in particular to what was described as the 'general principle', emerging from Beck, as to the implication of 'a permission, or consent, or licence in the person giving the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement'. That dictum forms part of the passage I have earlier extracted from Beck in these reasons, the same having been applied for instance in two of the authorities to which I have already referred in these reasons, namely Ng and Acohs, prior to the Court of Appeal's judgment in Torpey. Young CJ in Eq concluded in relation to the implied licence issue that '[t]he authorities show that ordinarily the licence is considered as transferable together with the land to which it relates where the particular purpose for which the licence was granted was in connection with the land which was assigned', his Honour citing for example the circumstances involved in Acohs. That latter statement of general principle does not assist the respondents PDD and Mr Fares, and if anything tends to support Concrete's case. 124 The purpose of the co-ownership venture here involved was to exploit for profit the Nelson Bay property by resale, as at least originally planned, by the construction and resale of the fourteen home units comprising the development approved by Port Stephens Council on 10 May 2000. That was a purpose which inherently and intrinsically included within its scope the sale of the land in its undeveloped or partially developed condition, had the subsequent occasion to do so arisen, for instance by reason of an unexpectedly attractive offer to buy the site in its then condition, or default under the mortgage to the Bank, or disputation leading to the appointment of trustees for sale, as well as of course the original principal objective of the sale of each of the units individually, or mainly so. There is no reason why the objectives of Landmark and Toyama as developers should be distinguished from those of developers generally. No sensible or at least usual developer forecloses upon his business options, in relation to future circumstances, to the exclusion of sale of a development site prior to subdivision or construction, or a partially completed development, in circumstances of change in the economic climate, or of taking an early profit without exposure to ongoing risks, or as in the present case, the onset of disagreement or hostility between syndicate members. In relation to property development schemes generally, experience demonstrates that developers may choose to realise a profit earlier rather than later, or indeed conversely to limit a loss rather than undergo the possibility of further deterioration in the magnitude of that risk. 125 Specifically in any event as to the mortgage copyright issue, Young CJ in Eq observed, not without significance, that '[e]ven if the mortgage had been in evidence, there would more likely than not have been an argument as to whether the licence to use the plans was so incidental to the mortgaged land that it formed part of the security'. After citing authorities provoking that observation, his Honour said that 'the key question involved was whether the plans were inseparately connected with the mortgaged land', being implicitly the key question so far as all members of the Court of Appeal were concerned. 126 As to the essence of reasons for judgment of Foster AJA, the remaining member of the Court of Appeal in Torpey, the same are summarised in the following terms at pars 131 and 132: 'The principles established in [Beck] and [Ng] require that the Citron joint venture should be held to have acquired an irrevocable licence to use the appellant's plans for the proposed development, unless the particular facts of the case demand a contrary conclusion. Such facts do not exist here. Indeed, as her Honour indicates in her judgment, there is a significant possibility that the appellant was, in fact, paid for the plans by Citron, before it became insolvent… In the result, even if the plans and the licence to use them, did not pass to the respondent, as a consequence of the mortgagee sale of the land, this question not being resolved in the evidence, their subsequent use by the respondent could not constitute a wrong to the appellant. Even if, as seems possible, there was unjust enrichment of the respondent through its use of plans to which it had no title, this could not have been at the expense of the appellant. Any right to sue, even for nominal damages, resided solely in the joint venture.' 127 On close analysis therefore, it will be seen that despite their emphatic invocation of the reasons for judgment in Torpey, the respondents do not gain assistance, at least of significance, from the reasons for judgment of the Court of Appeal in relation to their denial of implied licence of copyright in favour of Concrete. Indeed from what I have reviewed above as to those reasons, the same provide support for Concrete's case. If I may trespass upon repetition, the circumstances here involved are that the architectural plans were to be used for the proposed property development to be undertaken by the co-owners Landmark and Toyama in joint venture, whereof the architectural designer (ie PDD and/or Mr Fares) was indirectly a corporator per medium of a one half beneficial shareholding in Landmark, and thus also indirectly a beneficiary to one third of the net proceeds of any sale of the development site as a whole, whether effected after completion of, or in the course of, or even prior to commencement of construction of the development, on what may turn out to be future circumstances or contingencies visiting the joint venturers. Many a developer has realised property for instance before commencement, or at least substantial commencement of development, or thereafter prior to final completion, as I have already emphasised, by reason of a variety of exigencies arising. Those exigencies would include internal dissension between parties or shareholders. What ultimately transpired here was in the nature of a partnership or co-ownership dispute, or 'falling out' between partners or co-owners, the outcome of which led to the disposition of the jointly owned property comprising the Nelson Bay by Court appointed trustees for sale, pursuant to Toyama's invocation of the operation of s 66G of the Conveyancing Act, being longstanding general law entitlement and remedy of a co-owner in dispute with its other co-owner(s). Any complaints which PDD and/or Mr Fares might have for unpaid architect's fees, or for damages for breach of the alleged building contract, fall to be determined in accordance with the general law of contract, as exemplified by such decisions as Gruzman and Ng. The purported invocation by PDD and Mr Fares of the doctrine of implied licence of copyright as a remedy in that context is misconceived in principle. 128 I agree therefore with the submission of Concrete that the principles of copyright law enunciated in the course of the judgments in the NSW Court of Appeal in Torpey provide no assistance to PDD and/or Mr Fares in the context of their resistance to the grant of the relief sought by Concrete, or of PDD's cross-claim. The three propositions framed by Concrete as to implied licence, which I have earlier set out and discussed, are soundly conceived in principle (and in the case of the third proposition soundly based on the evidence to the extent necessary), and on the footing of established authority. I will shortly elaborate upon my reasons for those findings.

Conclusions on the first two propositions of legal significance formulated by Concrete and my reasons in summary 129 It will have been apparent from my discussion of Concrete's first two main bases or propositions for rejection of the case of the respondents/cross-claimant (PDD and/or Mr Fares) for breach of architectural copyright in the plans and drawings for the fourteen home unit development, the subject of the development approval granted by Port Stephens Council on 10 May 2000, that judicial authority weighs compellingly against the viability of the case advanced by PDD and/or Mr Fares for breach of copyright in respect of those plans and drawings. I will now set out my conclusions upon those two bases or propositions, and my reasons for those conclusions. 130 As to the first main basis or proposition propounded by Concrete for rejection of PDD's and/or Mr Fares' case for breach of copyright, one aspect or element thereof, though by no means an exclusive aspect or element, is the principle of the general law of local government to the effect that a development consent, whilst in force, runs with the land for the benefit of successors in title. Whilst not to be treated as decisive of the case for Concrete for non-infringement of copyright on its part in setting about and completing the erection of a fourteen home unit building in accordance with the plans and drawings the subject of Port Stephens development consent of 10 May 2000, that principle of law may nevertheless provide a factor of significance in relation to persons whom an architect should be taken to have impliedly licensed to use such plans and drawings. The first case or proposition framed by Concrete presently to be addressed is therefore whether in the events which have happened, inclusive of the grant of that development consent, it may be rightly postulated that PDD and/or Mr Fares by their conduct, or absence of relevant conduct, impliedly conferred upon Concrete the right to use those plans and drawings within the scope of the general law of copyright. The issue does not appear to have been directly addressed or answered in any previous authoritative dictum. The conceptual difficulty in adequately framing that case or proposition resides in the circumstance that the temporal starting point must normally or usually be the terms of engagement of the architect, and what should be implied by way of such terms. Of course in any engagement involving the provision of services on an ongoing basis, the implication of contractual terms may involve some difficulty. That is why in the present case, the doctrine as to implied terms enunciated for instance in Byrne assumes potential importance. 131 Concrete framed a principle generally to the effect that in circumstances where an architect prepares plans and drawings for use in or as a basis for an application to a responsible authority (here of course Port Stephens Council) for the development of certain property, that architect may be taken to have implicitly licensed all person and entities, who might then own, or thereafter come to own, that particular land, during the subsistence or continuation in operation of that development consent, to use those plans and drawings to the extent necessary to undertake and complete the development in conformity with the development consent. In short, or put another way, such an implied licence was said by Concrete to be necessarily or reasonably imputed in the factual circumstances underpinning the grant of development consent, and the purposes for which the plans and drawings would have been prepared in order to obtain that kind of consent. There is force in the postulation of that principle, in any event in the present case, because PDD and/or Mr Fares do not allege that they did not know, or in any event, each must reasonably be taken objectively to have not known, that the plans and drawings at all material times being preparing and brought into existence, in relation to the Nelson Bay land, were to be used (and of course were subsequently in fact used), for the purpose of the application for consent to the fourteen unit development, made to Port Stephens Council in the name and on behalf of Landmark and Toyama, and which was granted on 10 May 2000. In fact of course it was PDD and/or Mr Fares who actually lodged that application, with those accompanying plans and drawings. 132 As I have sought to demonstrate by reference to a plethora of Australian authority (Royal Ryde Homes, Eaton, Parramatta City Council, House of Peace and Avenhouse), a development consent runs with the land the subject thereof, and may be utilised or acted upon by at least the owner for the time being of that land as a principle of the general law of local government. Moreover the scope of operation of a development consent, as I have earlier exemplified by reference to the EPA Act and the EPA Regulations, is given expression, indeed scope of definition, by the plans and drawings to which the consent relates. 133 It reasonably follows that in the present circumstances, where the architect (PDD and/or Mr Fares) has prepared plans and drawings for the purpose of landowners (Landmark and Toyama) obtaining development consent in respect of their jointly owned land, and since that consent runs with the land in accordance with the principles enunciated in those local government authorities, the architect has implicitly licensed any entity (here of course Concrete) who thereafter comes to own that land, that is of course any immediate or ultimate successor in title, during the currency of the development consent, that is until 10 May 2005, to use those plans and drawings for the purpose of implementing the basis, terms and scope of that earlier consent. To hold otherwise would sterilise the land in terms of its usage, in conformity with that development consent, in the hands of successors in title, notwithstanding that the development consent would remain otherwise in force and effect vis-ŕ-vis the original grantee of that consent for the requisite statutory or regulatory period of time. 134 As I have earlier recounted, Concrete submitted, in my opinion correctly, that the requisite term may be implied in the contractual engagement of an architect, in the context for instance presently postulated, in at least three alternative ways: (i) as a legal incident of the engagement, whether expressly or by implication (see my earlier review of Liverpool City Council, Codelpha Construction, Australis Media Holdings, Simonius Visher and Byrne); (ii) by reference to the circumstances and terms of a particular contract, and the need for business efficacy in relation thereto, even if there was no identifiable purpose in particular comprised or involved in the use of the copyright material by others (see my earlier citation from Acohs); and (iii) in the event of a sale of property by the owner who commissioned the preparation of the architectural plans and drawings for that site, separately from any contractual arrangement previously entered into between the architect and commissioning owner (Blair). 135 This third alternate way by which an implied licence or permission arises in favour of a purchaser, during the currency of a development consent, would extend the dictum in Blair and Acohs but, in my opinion, would do so in a logical and coherent way. In that regard, I refer to Lord Denning's reference at 85 in Blair to '… the people to whom they sold the plot, and by the surveyors and workman of the purchasers…', and to Merkel J's reference at 547 in Acohs to '… those other persons [subsequent to the person who commissioned the copyright material] to carry out that purpose… within the licence implied by law…'. It should be observed moreover, thatPDD and/or Mr Fares do not allege, nor could they on Concrete's submissions allege, that they expressly reserved copyright or prohibited the assignment or licensing of copyright in the relevant plans and drawings, whether at the time of their engagement or prior to or at the time plans were submitted to Port Stephens Council. The question of whether an architect is deemed to have impliedly licensed a future owner of land, during the subsistence or continuation in operation of a development consent, despite any express reservation or prohibition, so as to give effect to the operation of the EPA Act and Regulations, does not stand to be determined on the facts prevailing in this litigation. I express no opinion as to the operation of any such latter proposition, other than that the law of copyright, and licensing in respect thereof, should not be seen to so subsume local government and planning law as to leave a purchaser for full value at arms length in the position of being unable to use the copyright in plans which form part of the operation of a development consent running with the land. 136 In my opinion Concrete's first proposition is as correctly based in principle as it is meritorious generally, and should be upheld as soundly conceived. It accords with general principles of copyright in all relevant respects, and incidentally, contrary to the submissions of the respondents for reasons which I have found difficulty in terms of viability, is not vitiated or weakened by any principle emerging from Torpey. For what it might matter, in this context, any claim for fees by an architect would in principle be recoverable by the architect from the principal or other client who originally retained the architect (see Ng and Gruzman). 137 Concrete's second proposition of legal significance was presented alternatively, as well as additionally, to the first proposition. In summary, it was to the effect that the existence of the remedial provisions of s 66G of the Conveyancing Act, and of the circumstances here involved of a joint venture arrangement whereby the architect is effectively, or at the very least, closely 'tied' to one or two (or more) of the joint venturer legal owners of land, provided sound reasons for the conclusion that the implied licence that would otherwise arise between an architect and client, as discussed and postulated in Beck, has not been negated. 138 It will be recalled that in Beck at 235, Jacobs J observed that '… the owner, having commissioned the sketch plan and having obtained the right to use it for the purpose of erecting on that site a building in substantial accordance with it, should have the right to transfer it to a new owner of the land'. Earlier at 234, his Honour referred to the implication of an agreement, collateral to the sale of land, whereby the vendor grants to the purchaser such right as he possesses to the use of an architectural plan. 139 Again in this regard, Concrete emphasised that the respondents have not alleged, nor could they do so on any footing in the evidence, any express contractual reservation of copyright, or any express prohibition against the assignment of licensing of copyright. The oral agreement propounded by the respondents was silent on the subject of copyright. The absence of any such express reservation or prohibition in relation to copyright by a putative copyright owner, or any express prohibition on assignment or licensing of copyright, at least without consent, was rightly contended by Concrete to support the conclusion of a Beck-type licence, in circumstances where the alleged copyright owner is engaged in the preparation of the copyright work, and where that owner knows that it is to be used for the particular purpose: see in that regard the critical passage I have earlier cited from Bourke, being dictum of Powell J postulated upon the footing of reliance upon Beck, Blair and Ng. 140 It was purportedly in the foregoing contexts of judicial dicta that PDD and/or Mr Fares adopted the attenuated position that the imputation of a Beck-type licence was be negated in the facts of this case, because it was mutually envisaged that PDD would be itself the builder under a design and construct agreement which was sought by PDD and/or Mr Fares to be established in this case. It was clearly within the contemplation of Landmark and Toyama on the one hand, and PDD and Mr Fares on the other, at the time of engagement in relation to the fourteen home unit design (as well as earlier at the time of their engagement in relation to the eight home unit design), that the home units the subject of the development would be sold, hopefully profitably, whether individually, in groups, or entirely in one line. Further, it was at least implicitly within the contemplation of the parties, within the doctrineas to implied contractual terms enunciated or restated in the various authorities I have earlier cited, concluding in point of time with Byrne, that dissension or outright disputation between those corporate owners would occur, and thus lead to invocation of the course provided for in s 66G of the Conveyancing Act, namely of course the appointment of trustees for sale, and thereby leading to the sale of the Nelson Bay land and division of the net proceeds of sale, as to two thirds in favour of Landmark and one third in favour of Toyama. 141 In those circumstances it inevitably follows, as a matter of mutually implied contractual intention and expectation, equally in the case of each of the co‑owners, that the purchaser from the trustees for sale for value would have an implied entitlement of copyright. The circumstance that one of the two co-owners (Landmark) prevailed upon the trustees for sale to withhold from any promise or assurance of copyright in favour of any prospective purchaser is not to my mind to be in point. The special conditions of the Contract for Sale did not of course eschew the existence of copyright, but in summary withheld from making any warranty or undertaking in respect thereof. The terms of an implied licence of copyright falls to be determined by and incorporated into the relationship the subject of the architect's retainer as at the time of the retainer, explicitly and/or implicitly. 142 There is therefore no good reason, in the circumstances of this case, inclusive of the grant of the development consent of 10 May 2000 by Port Stephens Council, why the doctrine of implied licence of copyright, as enunciated in the authorities, should not accommodate situations, such as here involved, which are summarised below: (i) several individuals combined together by way of joint venture to purchase realty for development in the form of a residential block of home units, and to realise that development in one line or in partitioned segments for profit; (ii) one of those individuals designed the requisite plans and drawings for the purpose of defining that development, and for the further purpose of obtaining the requisite statutory planning approvals thereto, in each case directly for the benefit of those owners (ie registered proprietors) and indirectly of their underlying corporators/ individual shareholders according to the general law; (iii) the requisite formalities of regulatory approval were subsequently obtained from the responsible authority in favour, or for the benefit, of those corporate vehicles/ registered proprietors of the property; (iv) in the context of dispute between those beneficial owners and their respective corporators, occurring prior to commencement of construction, an appointment of trustees for sale was made by a court of competent jurisdiction for the purpose of sale of the realty in one line, and the division of the net proceeds of sale between co-owners according to law; (v) the property was thereafter sold and disposed of by those court appointees, and the proceeds of sale were distributed, or at least became available for distribution, by the trustees between those beneficial owners according to law, being proceeds of sale reflecting the divisions or proportions of legal ownership; and (vi) the purchaser of the realty seeks to develop the land so acquired for value in accordance with the plans and drawings the subject of the development consent granted prior to the purchase and still current, that is to say, granted in the course of the preceding joint venture. 143 In the scenario outlined above, which broadly accommodates the nature and incidents of the situation involved in the present proceedings, there are no limiting conditions relevantly operating upon the beneficial owners, whether beneficial owners directly or indirectly involved, including that beneficial owner who designed (or who was relevantly associated with or connected to the design of) the requisite plans and drawings, a fortiori in circumstances where (as here occurred): (i) that last-mentioned beneficial owner has received, or at least has become entitled to receive, its share of the net proceeds of the land the subject of the statutory approvals and subsequent resale; and (ii) that beneficial owner enjoys rights in personam for recovery of his, her or its contractual entitlements involved in and for the preparation of the plans and drawings according to the general law, to the extent outstanding; in the present case there is no principle of misjoinder or non-joinder operating, such as to prevent PDD and/or Mr Fares exercising such rights against Landmark and Toyama. In the present circumstances, the somewhat remarkable feature is that Landmark has received its two thirds share of the proceeds, for the benefit of one of its two equal shareholders being the architect, yet Toyama has not received its share by reason of a mareva injunction, obtained in circumstances not in evidence before this Court. 144 The conclusions of principle expressed above accommodate the essence of the circumstances here prevailing in relation to the claims and propositions of PDD and/or Mr Fares; those conclusions are authorised by established principles of the general law, including the general law of copyright, which I have earlier cited or otherwise referred to or identified in the course of my examination above of Concrete's first main basis for rejection of the respondents' case for breach of copyright, that is, Concrete's reliance upon the implication of a licence of copyright in its favour (ie in personam) to use the plans and drawings the subject of the development consent as a successor in title by virtue of its purchase of the land from trustees for sale appointed to sell the land in co-ownership (the co-ownership of the original corporate vehicles Landmark and Toyama). 145 Moreover despite the emphatic contentions advanced on behalf of PDD and/or Mr Fares to the contrary, the principles I have broadly outlined and sought to apply are in my opinion not in conflict with any principle enunciated or applied in the particular circumstances which prevailed in Torpey, or for that matter in any of the other authorities which I have relied upon or to which I have otherwise referred in my reasons for judgment, but on true analysis, are consistent therewith. Thus successors in title to realty, such as Concrete, are entitled in law reasonably to expect: (i) that the unexpired development consent of a responsible authority in respect of such realty has three dimensional definition according to local government regulatory requirements; (ii) that the architectural designer of the plans giving expression to that definition is aware that development approvals at least normally run with the land for a statutory prescribed period, and that the principal for whom that designer has compiled the plans, in the event of selling the land in advance of commencement of completion of construction, would seek to maximise the resale price by providing those local government approved plans to the purchaser; and (iii) that the architectural designer will normally look to the person or entity, who or which retained and instructed him or her, for the payment of the design fees and costs according to the law of contract (see again the dictum cited from Ng and Blair). Each of those matters reflect a particular manner in which, and the purpose for which an architectural designer would expect the plans and drawings of his or her authorship to be used, having regard to the circumstances of his or her commissioning (see again my earlier extraction of the Beck test). 146 Furthermore in circumstances where the architect is one of two or more joint venturers, directly or indirectly, involved as a principal in the purchase and subsequent exploitation of realty for mutual profit, as well as the design of improvements thereto in aid of such exploitation, it would be foreign as well as enigmatic to the implicit mutual intention and objective of the joint venturers that the architect would be entitled implicitly to defeat or seriously prejudice fulfilment of the commercial objectives of the joint venture by denying to a co-venturer the capacity to effect or enjoy, to the best financial advantage of the co-venturers as a whole, the realisation of the joint venture property. The fact that at the time PDD and/or Mr Fares prepared the plans and drawings for the subject fourteen home unit development, PDD and/or Mr Fares did so indirectly as a one third syndicate member beneficially in relation to the project (albeit indirectly, as one of two equal corporators of Landmark), can have no relevant bearing in favour of the case propounded by PDD and/or Mr Fares. The asset or principal asset the subject of the joint venture and co-ownership arrangements, as in the case of syndicated project arrangements generally, is inherently subject to the normal incident of human business associations, namely that they might subsequently break down, thereby involving the usual consequence of the mutual need and corresponding obligation to maximise the proceeds of realisation of the joint venture or syndicated property the subject of co-ownership, for the benefit of all persons entitled thereto, directly or indirectly. The reasonably implicit mutual intention to be attributed to the persons thus financially involved, directly or indirectly, in the subject syndicate, namely Mr Fares himself, Mr Barrak, Ms Haviland and Mr Rix (and their respective corporations Landmark and Toyama), was that such property should be allowed to realise the maximum price reasonably obtainable for the mutual benefit of all syndicated members, both directly and indirectly. The proceeds of any such realisation would be mutually expected to be enhanced by the operation, upon the circumstances of this case, that a development consent runs with the land. Once those principles are recognised, as I think they must, there can be no sensible room for the architect involved, indirectly as a principal party to a joint venture, to sabotage the maximisation of the earnings of the joint venture by seeking to obviate the realisation of those earnings, as indeed PDD and Mr Fares, in combination with Mr Barrak, have sought to do to the detriment of Toyama and its corporators Ms Haviland and Mr Rix. As Concrete submitted, any such attempt by one, or more than one joint venturer would be equivalent to the committal of fraud upon the other or remaining joint venturer. 147 In the circumstances of course, as I have earlier recorded, PDD did not eventually frustrate the sale of the Nelson Bay land by the trustees for sale, and it can only be a matter of speculation as to whether the sale proceeds might have been larger in amount, were it not for the guarded if not discouragingly restrictive nature of the special conditions of the Contract for Sale which the trustees for sale found themselves obliged to stipulate, in the context of the threats or at least negative contentions communicated to them by Mr Barrak on behalf of himself and Mr Fares, Mr Fares' company PDD, and/or their joint venture vehicle Landmark. The point of relevance to be made however, in the present context, is the absence of a rational basis for accommodating in the present controversial circumstances the imputation of an implied licence of copyright. 148 Contrary to the submissions of the respondents PDD and Mr Fares, no material assistance is to be gained for their case from the law as to implied licence exemplified in the circumstances for instance in Beck, Ng, Blair, Acohs and Solar; indeed the reverse is the case, essentially for reasons I have already outlined. Moreover for the reasons I have also earlier indicated, Concrete gains a measure of assistance, for the purpose of operation of the doctrine of implied licence of architectural copyright in its favour, from the general law of local government as to the implications of development consents for the erection of buildings. Those general law principles provide a complimentary or indirect measure of operation to the general law of copyright as to implied licence of copyright, in the context for instance, as here, of architectural plans and drawings the subject of a development approval granted by a statutory/local government authority in favour of a predecessor in title to Concrete. Accordingly, I am of the opinion, essentially for the reasons restated above, that Concrete's submissions the subject of the second main proposition advanced to the Court should be upheld, and in consequence the case of PDD and Mr Fares for the imputation of copyright in their favour, and any threatened breach thereof, must fail. 149 I would add the further observation, not essential to my reasons already furnished, that any different conclusion to that which I have reached would have produced at best an odd, if not extraordinary outcome. The inference is reasonably open to be drawn that the purchase price outlaid by Concrete in favour of the trustees for sale represented at least arms length market value for the Nelson Bay land prevailing at the time of payment, upon the footing of the availability of a fourteen home unit development consent. That consent will no longer be available from Port Stephens Council, unless substantial commencement of construction occurs prior to 10 May 2005. Yet, as I have earlier indicated, Messrs Fares and Barrak would doubtless have had access, at least indirectly, to Landmark's two thirds share of the substantial profits derived from the resale of the Nelsons Bay land to Concrete for $2,760,000, once measured against the original acquisition price of $560,000 outlaid by Landmark and Toyama, though by reason of a Mareva injunction earlier granted for reasons not in evidence before me, and still in force, Ms Haviland and Mr Rix have been thus far denied a corresponding entitlement. 150 In the result, and strictly without the need to resolve Concrete's third proposition and the remaining issues raised by the pleading of PDD's and/or Mr Fares' defence and cross-claim, upon which submissions have been made by both parties, which I will nevertheless proceed to do, I am of the opinion that Concrete should succeed in the present proceedings upon the grounds individually, and not cumulatively, of the first two bases postulated by counsel for Concrete and obtain declaratory relief and orders substantially to the effect reproduced at the commencement of these reasons for judgment. In relation to Concrete's third proposition it now becomes necessary to resolve the same in the light of the factual matters material thereto.

Resolution of the factual issues arising: the steps taken to put those issues before the Court for resolution 151 Notwithstanding the conclusions which I have reached in favour of Concrete upon the three issues in effect of implied licence of copyright, I will nevertheless review the contentious factual issues arising as to the terms of appointment of PDD (or Mr Fares) as architect of the proposed development for the Nelson Bay land and of any contractual entitlement of PDD (or Mr Fares) to be the builder of the proposed development pursuant to a design and build contract. Henceforth it will be convenient to combine reference to PDD and Mr Fares together as PDD, but it should be understood that Mr Fares is to be treated as included in any use of that expression, unless inconsistent with the context. In that regard, it was the contention of Concrete that all arrangements made for the retainer of at least the architect for the venture were made with Mr Fares in person. The absence of any written retainer of Mr Fares as architect for the joint venture, and any invoice or account for architectural fees, renders the task of precise identification of the architect (ie PDD or Mr Fares) a difficult one. 152 The issue as to whether PDD was agreed to be the builder requires primarily a consideration of the affidavit evidence. It is therefore appropriate that I first catalogue the same in the chronological sequence of filing thereof, including the initial affidavits of Messrs Fares and Barrak not read, but nevertheless tendered as exhibits by Concrete in its case against PDD: 7 October 2003 Affidavit of Hafez Alameddine sworn 7 October 2003 (filed on behalf of Concrete and ultimately not read, the same addressing (in part) the issue of threats of breach of copyright made by PDD);

22 October 2003 Affidavit of Ghassan Fares sworn 22 October 2003 (filed on behalf of the respondents/cross-claimant PDD and Mr Fares and ultimately not read and purportedly superseded by later affidavit of Mr Fares below);

3 February 2004 Affidavit of Jeannette Haviland sworn 30 January 2004 (filed on behalf of Concrete and read);

25 March 2004 Affidavit of Benjamin Barrak sworn on 24 March 2004 (filed on behalf of PDD and Mr Fares and read);

25 March 2004 Affidavit of Ghassan Fares sworn 24 March 2004 (filed on behalf of PDD and himself and read);

25 March 2004 Affidavit of Brendan Farrugia (quantity surveyor) sworn 23 March 2004 (filed on behalf of PDD and read);

30 March 2004 Affidavit of David Rix sworn 30 March 2004 (filed on behalf of Concrete and read);

31 March 2004 Affidavit of Peter William Brooks (architect) sworn 30 March 2004 (filed on behalf of Concrete and read);

23 April 2004 Affidavit of Ghassan Fares sworn 7 April 2004 (filed on behalf of PDD and himself and read);

23 April 2004 Affidavit of Ghassan Fares sworn 23 April 2004 (filed on behalf of PDD and himself and read; and

28 April 2004 Affidavit of Kevin James Rix sworn 28 April 2004 attaching and confirming earlier affidavit sworn 27 November 2003 and filed in Supreme Court proceedings (filed on behalf of Concrete and read).

The terms of appointment of PDD as architect to the joint venture and whether that appointment extended to or included appointment of PDD as builder under a design and build contract or otherwise - an overview of the relevant facts and circumstances 153 The evidence which I have reviewed to date establishes of course that PDD designed the architectural plans and drawings the subject initially of the eight home unit proposed development and thereafter the fourteen unit development. It is necessary that I now resolve the essentially factual issue as to whether PDD was the subject of an agreed appointment as builder of the development under and pursuant to a design and build contract in its favour. Any such contract would have been made between PDD on the one hand, and the joint venture represented by the corporate bodies of Landmark and Toyama on the other. The resolution of this factual issue is focused upon the nature and scope of the functions which PDD was retained to undertake on behalf of Landmark and Toyama. I should mention that PDD was incorporated on 27 October 1997, and it subsequently registered Parramatta Design and Development as a business name on 19 March 1998. 154 Concrete's principal submission upon the evidentiary credibility issues arising in the proceedings was that the Court should accept the substance of the testimonies respectively of Ms Haviland, Mr Kevin Rix, and their son David Rix, in preference to those of Messrs Barrak and Fares, as to the nature and content of the joint venture contractual arrangements, which unfortunately were never reduced to a written agreement. Concrete's case was that PDD was to be remunerated for the preparation of the architectural plans relating to the initial eight home unit structure, and that it was so remunerated fully by the controversial payment of $27,000.00, but that the subsequent arrangements were that PDD was not to be remunerated for the preparation of the architectural plans relating to the subsequent fourteen home unit development application. Concrete contended that Messrs Fares and Barrak persuaded Ms Haviland to agree to the making of that subsequent development application relating to a fourteen home unit structure, upon the footing that there would be no additional charge made by PDD for the architectural plans required for that later application. According to Concrete's case, the reward that PDD would receive for the preparation of the latter plans for the larger development would be confined to the expected or anticipated increase in Mr Fares' one third share indirectly (ie per medium of his one half shareholding in Landmark) in the anticipated profitable proceeds of sale to arise from the development and realisation of the fourteen home units, or from any earlier sale of the Nelson Bay property as a whole, given the anticipated benefit of the development consent of 10 May 2000 flowing forthwith for the increased number of fourteen units. PDD fulfilled the traditional description of a 'one man company' of Mr Fares. 155 PDD submitted that it had a sound factual answer to Concrete's claims of implied licence of copyright, upon the circumstantial or factual basis that PDD was appointed to be the builder, as well as the architect, under a design and build contract, being an appointment which was subsequently unfulfilled by PDD in the events which happened, being the events culminating in the appointment of trustees for sale, and the sale by those trustees of the Nelson Bay site to Concrete. That factual basis was said to encompass the circumstance that PDD was not remunerated for its architectural work undertaken in producing the plans for the fourteen unit development. The implication of any licence of copyright in favour of Concrete was said by PDD to be denied by virtue of each of those factual circumstances. For reasons I have already furnished, I do not think that any such propositions arise for consideration, each being nugatory in the light of the bases in law upon which I resolved the existence of an implied licence of copyright in favour of Concrete. The resolution of this remaining issue, involves a consideration mainly of the testimonial evidence of Ms Haviland, Mr Kevin Rix and Mr David Rix adduced by Concrete on the one hand, and that of Mr Fares and Mr Barrak adduced by PDD on the other hand, though in addition, certain expert evidence of an architectural nature tendered by each party also falls to be addressed. It will be necessary or expedient for me to refer to a great deal of the affidavit evidence of the parties, including documentary evidence thereby tendered. Concrete submitted that objective facts in evidence operate to demonstrate that PDD was not agreed to be the builder under a design and build contract or at all, nor was PDD agreed to be remunerated in respect of the architectural plans prepared for the fourteen unit development. 156 The first document of relevance, upon which Concrete relied, comprises the development application lodged by PDD on 8 July 1999 with Port Stephens Council for the construction of the initial eight home unit development of the Nelson Bay land, which bore Mr Fares' signature (Exhibit A4). Although according to the disputed evidence of Messrs Barrak and Fares, it had been mutually agreed from the outset of the arrangements between the parties that PDD would be the builder for the residential development of the land, that application form contained the handwritten words 'to be advised' in the spaces opposite the following printed words of the application form, namely 'Builder/Owner Builder Name' and 'Contractor Licence No. Permit No.'. 157 When questioned as to the absence of any reference to PDD as builder on that document, in the light of his immediately preceding oral testimony that PDD '… was to be the builder', Mr Fares claimed that PDD was in fact so appointed and retained by the joint venturers following upon oral discussions commencing during 1988 and occurring in 'many places', and that PDD was so appointed upon a cost plus arrangement, with no price constraint. No such alleged retainer was of course reduced to writing, something which would be normally expected in relation to such an open ended arrangement. His only explanation as to why he thus wrote 'to be advised' was that 'I always do that'. I do not think that his response was credible. In that context of his cross-examination, Mr Fares agreed that PDD did not hold a builder's licence, a further factor pointing against the credibility of his testimony. Of course since 27 October 1997, PDD had been an incorporated entity. I would digress for the moment to record that PDD submitted that the inclusion of those words 'to be advised' was explicable as an intended allowance for a variation of the identity of the builder at a later point in time; a compelling answer to that contention is that the PDD's case from the outset was that PDD was to be the builder. 158 The next document distilled by Concrete comprised the specifications for the eight unit development subsequently lodged with Port Stephens Council (Exhibit A5), which Mr Fares agreed were completed by him by about March 1999, and were so lodged at about the same time; they contained the following clause 1.04: 'Builders tendering are to visit the site and satisfy themselves as to the nature and extent of the works, the facilities available, site levels, building location, and the difficulties entailed in execution of the said works.' Clause 1.06 thereafter addressed the duties of sub-contractors. It was submitted by Concrete that at least in the light of clauses 1.04 and 1.06 of the specifications, Exhibit A5 provided strong contemporaneous confirmation that the construction was to be put out to the building industry for tender. Mr Fares' cross-examination upon those specifications was as follows: 'And when you prepared the specification for the eight unit development by then did you think it was time to tell the council who the builder would be? ---Before the construction I would, yes. But when you came to prepare the specifications for the eight unit development did you think that was the time to tell the council? --- The specifications are prepared with the plans at the beginning, not at the end. Just have a look at this document, will you. Will you confirm that this is a specification for the eight unit development prepared by you and lodged with the council? Yes this is my standard specification booklet.' The absence of timely notification by Mr Fares to the Council of his alleged appointment as builder is clearly of adverse significance to his claims, albeit that the evidence related to the earlier proposed eight unit development. 159 Concrete placed strong emphasis in any event upon the proposition, which it advanced upon the basis of detailed cross-examination of Mr Fares, that PDD had no proven 'track record' as a builder, prior to the time when Mr Fares claimed that PDD had been appointed to be the builder of the eight unit development under a design and build contract; in that regard, PDD pointed to the following objective circumstances: (i) PDD was only incorporated on 27 October 1997; (ii) his construction history in Australia disclosed by Mr Fares was that he had by then been involved in the design and commencement, but not yet the completion, of a small town house development at Auburn, being a development however which Ms Haviland had neither inspected nor had been asked to inspect in order to adjudge his capacity and competence as a builder; Mr Fares said imprecisely that the Auburn development was completed in 1998 or 1999, and agreed that it was his first building work undertaken in Australia; and (iii) moreover Mr Fares claimed to have designed, and was in the very early process of building, a block of home units at Hurstville, in relation to which however construction had not commenced until just prior to Christmas 1998, when following demolition, the footings were first poured; completion was said by Mr Fares unspecifically to have occurred 'about October' 1999, though no documentary evidence was seemingly provided in that regard. 160 Thus as at the time when this critical agreement was said to have been made between the joint venturers that PDD was to be the builder of the earlier Nelson Bay proposed development of eight units, the following context prevailed: (i) PDD had never completed a home unit development, a matter conceded by Mr Barrak under cross-examination; in the same context Mr Barrak accepted under cross-examination that Mr Fares' 'experience was limited to being a supervising architect'; (ii) from the latter part of 1999 until Christmas 2002, PDD had not entered upon the construction of any new building works; (iii) Neither PDD nor Mr Fares had any experience in undertaking building work in the Nelson Bay - Newcastle region, and thus in particular in engaging subcontractors for work in that region; and (iv) From the latter part of 1999 until Christmas 2002, PDD undertook no further building work, as Mr Fares agreed in cross-examination. Further evidence on that subject of Mr Fares' limited experience will later be identified in the course of my account of Mr Rix's evidence. 161 It was further contended on behalf of PDD that the financial basis, upon which PDD had been contractually appointed to be the builder of whatever was to comprise the development of the Nelson Bay site, had been agreed to be fixed at the rate of ten per cent of construction costs, whatever those costs might eventually turn out to be in quantification. Any such basis of appointment would obviously have been an extremely generous one by any standard of comparison, as other evidence in the proceedings assisted to demonstrate. Mr Fares indeed conceded, as I think he was obliged to do, that in relation to the implementation of any such generous appointment, there would have been no constraint upon the potential quantification of PDD's remunerative entitlement, the subject of its retainer, yet no such arrangement was ever evidenced in writing. On the contrary, Mr Rix gave evidence, which I accept, that at a joint venture meeting in Pymble on 2 July 1999, he said to Mr Fares, in the presence of the others present: 'I'm not going to give you a blank cheque to build these units'. I accept the credibility of that testimony, and reject the contradictions thereof advanced in the respective testimonies of Messrs Fares and Barrak. It defies credulity that Ms Haviland and Mr Rix, both of whom had prior business experience, would have agreed to any such gratuitously open ended arrangement with a person with whom they had limited building or architectural association. That association comprised a limited retainer given by Mr Rix in favour of Mr Fares in relation to the preparation of certain plans for a homestead renovation on Mr Rix's Wiseman's Ferry farm property, being obviously incomparable to a substantial home unit building on the foreshore of Nelson Bay. 162 Moreover it was submitted on behalf of Concrete that any acceptance of PDD's evidence on this issue would involve the finding that there was an oral agreement for a design and build contract, in contravention of the requirement for a written contract pursuant to ss 3 and 7 of the Building Act 1989 (NSW); in any event, the testimony of Mr Brooks, a very experienced and highly qualified architect, gave independent testimony that he had never encountered an underwritten design and build contract of the scope postulated by the case of PDD and Mr Fares. Moreover Mr David Rix, the construction manager of ADCO Constructions and a person of many years experience in the construction industry, albeit the son of Mr Kevin Rix and Ms Haviland, testified that at least in 1999, it was the practice of developers generally to require a fixed lump sum contract from a builder in relation to any home unit construction, and for that purpose to invite tenders from the building industry. I accept those expert testimonies of both Mr Brooks and Mr David Rix, both of whom impressed me as persons of experience and stature in the construction industry. Indeed their evidence accorded with what I would have thought to be largely common sense, at least in the case of any new building development, of any sizable dimension, such as a substantial home unit building. 163 Aside from those matters to which I have just referred, and including the emphatic denials of Ms Haviland and Mr Rix, I accept the submission of Concrete that it was inherently unlikely, notwithstanding the informality of whatever arrangements prevailed between these parties up to the time of the rupture thereof, that Ms Haviland and Mr Rix would have agreed to participate in any such open-ended arrangement whereby PDD would be remunerated at the rate of ten per cent of construction costs. As senior counsel for Concrete emphasised, so much would be akin to providing PDD with an 'open cheque book', since there would be no constraint or limitation upon what might turn out to be the quantification of its remunerative entitlement. Mr Rix (of course Ms Haviland's husband at the time) gave evidence by his affidavit of 28 April 2004 (incorporating in the present proceedings an affidavit sworn by him in certain pending Supreme Court proceedings) that he informed Mr Fares on 2 July 1999 at Ms Haviland's home in Pymble that he was 'not going to give you a blank cheque to build these units', being testimony which I would accept as both likely and credible in the circumstances then prevailing. That any person would sensibly do otherwise, whether in a partnership context or otherwise, in relation to a substantial home unit development, would be inherently unlikely. Particularly would that be so in the case of a developer of the then limited and virtually untested experience, as was the case with PDD. 164 The following cross-examination of Mr Fares provides a measure of confirmation of the objective unlikelihood of any such open-ended arrangement allegedly made in favour of PDD: 'And according to you, you picked, and they picked Parramatta Design and Developments Pty Ltd. Is that right? --- That's right. And according to you there was no doubt about whether that was going to be the builder. It was to be the builder? --- It was to be the builder. It was to be the builder. It had not signed a contract according to you. Is that right? --- There's no contract. No signed contract. No. No signed contract. And there was no lump sum price according to you? --- No, its not the lump sum price contract. No. And according to you there was simply a cost plus arrangement? --- That's correct. With you to get 10 percent of the building --- ? --- That's correct. --- costs, whatever they happened to be? --- That's correct. And no constraint upon him as to how much they would be. Is that right, according to you? --- There was no constraint, no.' I should add that Mr Fares asserted that he would have informed the Council that PDD was to be the builder '[b]efore the construction'; that assertion was made in the ensuing context of his cross-examination: 'I see. And when you prepared the specification for the eight unit development by then did you think it was time to tell the council who the builder would be? --- Before the construction I would, yes. But when you came to prepare the specifications for the eight unit development did you think that was the time to tell the council? --- The specifications are prepared with the plans at the beginning, not at the end. Just have a look at this document, will you. Will you confirm that this is a specification for the eight unit development prepared by you and lodged with the council? --- Yes this is my standard specification booklet.' The rationale for any such later notification to the Council was not given by Mr Fares, and I do not accept his purported explanation as credible. 165 Moreover Mr Fares accepted that PDD did not hold a builder's licence at the material times, though he would not accept, inexplicably, that the absence of any such licence constituted the reason why he had not disclosed to Port Stephens Council the lack of any builder's licence held by PDD. 166 Upon the basis of the material I have thus far reviewed, I think that it was inherently unlikely that Ms Haviland and Mr Rix committed Toyama to any agreement or undertaking of a legally binding character to the effect that PDD would be the builder of the fourteen unit development, (or for that matter of the earlier proposed eight home unit development at Nelson Bay), prior to the time when the relationship between Messrs Fares and Barrak on the one hand, and Ms Haviland and Mr Rix on the other hand, fell into radical, if not irreparable, dispute. Nevertheless it is first appropriate that I provide a comprehensive narrative of the other affidavit evidence tendered by the parties, given the extent of detail the subject of the written submissions, and in particular those so extensively, albeit so frequently and unnecessarily, formulated on behalf of PDD. I will say more about the credibility of Mr Fares, and of his evidence, later in these reasons.

The testimony of Ms Jeanette Haviland 167 Ms Haviland's affidavit of 30 January 2004 contained the whole of her affidavit evidence. She first testified therein as to an initial conversation with Mr Barrak, in or about September 1998, when she said he put to her the proposal for the purchase of the Nelson Bay land for $560,000, in the context of his explanation that he and Mr Fares (to whom he referred as 'Gus') had supposedly been doing work for clients in the Nelson Bay area. Mr Fares was said by Mr Barrak to be of the view that approval for the construction of eight units could be obtained for the Nelson Bay land. She said that Mr Barrak further said '[w]e can't raise the money ourselves, would you and Kevin like to come in with us as equal partners', to which Ms Haviland replied that she would discuss the proposal with her husband Mr Rix, adding that she was 'sure' the NAB, with whom she had enjoyed a longstanding banking relationship, would provide the necessary mortgage finance. Subsequently, Ms Haviland spoke of travelling to Nelson Bay with both Mr Barrak and Mr Fares, and of inspecting the subject site, and of indicating that notwithstanding that he and Mr Fares were offering her a one half interest in the development, she and her husband would prefer to confine their involvement to a one third share. 168 Ms Haviland next spoke in her affidavit of a telephone conversation with Mr Barrak, shortly prior to her admission to hospital with pneumonia in September 1998. Mr Barrak was said to have stressed the urgency for a ten day option to purchase the site being taken up, saying that '[w]e will not have time to get a shelf company', and that she responded to the effect that the parties should use their respective corporate entities to acquire the site. She said that Mr Fares subsequently visited her in hospital, and in the presence of her husband Mr Rix, and at Mr Fares' request, she signed an option to purchase presented to her by Mr Fares, and that Mr Rix thereupon handed to Mr Fares a cheque for $466, '… being Toyama's one-third share of the option fees'. She stated that '[t]here was no mention of Parramatta Design'. What she did recall Mr Fares saying to her in Mr Rix's presence, prior to her final commitment to the Nelson Bay land proposal, was as follows: 'We will have the best site in Nelson Bay and we will easily get 8 units approved. We will put it out to tender as soon as the plans are approved and have it built by reputable builders picked from the tenders. We should each make a substantial profit… [w]e should hurry up and get the plans in. I can prepare plans on behalf of the owners.' In other words, there was no suggestion that Mr Fares or PDD should be the builder of the development. What Ms Haviland recalled Mr Fares saying at the time as to what his role or function would be in the joint venture was reflected in his further statement to her at the hospital, namely '[w]e should hurry up and get the plans in. I can prepare plans on behalf of the owners'. On that occasion, Mr Fares agreed that he was accompanied by a lady whom he subsequently married. PDD did not adduce evidence from her, and Concrete submitted that a Jones v Dunkel inference should be therefore drawn in favour of Concrete as to the terms of the conversation on that occasion, to the extent of conflict. I should add that in her oral testimony, Ms Haviland adhered firmly to her evidence that the building of the units was always intended to be put out to tender. 169 At least no written co-ownership or partnership agreement was ever brought into existence, then or at any later time; nor was any written building, or design and build, agreement, or any other written agreement brought into existence, involving the remuneration of Mr Fares for architectural services, or for his employment as a building contractor, in relation to the development of the Nelson Bay land. Ms Haviland further said that she did not become aware of the circumstance that on 19 April 1999, the sum of $27,000.00 had been paid out of the joint bank account, opened in the name of Ms Haviland, Mr Fares and Mr Barrak with NAB, until some time within October to November in 1999, '… when the accountant prepared the tax returns and Mr Barrak had provided me with a list of cheques he had written for expenses'. Included in that list was '…19.4.99 Cash PDD Architectural Plans DA & CC $27,000.00'. The cheque butt entry for that payment (Exhibit A6), which appeared in Mr Barrak's handwriting, was as follows: '19.4.99 CASH FOR PARRAMATTA DESIGN DA/BA… Architecture $27,000 -' No invoice (or copy invoice) relating to that payment was tendered in evidence, nor any receipt for that payment. 170 Ms Haviland said in her affidavit that after her earlier discharge from hospital in September 1998, she arranged for NAB to provide the loan of $448,000 needed to pay the balance of the purchase price remaining, after the provision by the parties of the difference (including the deposit already paid) between that sum and the total purchase price of $560,000.00 for the Nelson Bay land. It appears not to be in dispute that the difference of $112,000 was contributed by or at the instance of Mr Barrak as to one third, Mr Fares as to one third, and Ms Haviland and Mr Rix together as to one third. 171 Ms Haviland next testified to the execution by Toyama on 24 March 1999 under its common seal of an authority to Port Stephens Council presented to her in the following terms: 'AUTHORITY Toyama Pty Ltd, being one of the registered proprietors of the property known as 5 Laman Street, Nelson Bay (the Property), hereby authorises and consents to Parramatta Design & Developments Pty Ltd T/AS Parramatta Design & Development, and also Landmark Building Developments Pty Ltd to lodge on its behalf all documentation whatsoever relating to the Property including but not limited to Development Applications, Building Applications, Construction Certificates, Plans of Subdivision, including any documentation that relates to the aforementioned Applications and Plan.' The signatories to the affixation of the seal were Ms Haviland and Mr Rix. The provision of this authority to Port Stephens Council occurred at the request of Mr Barrak. Contemporaneously, the plans for the proposed eight unit development appear to have been completed and lodged by PDD with Port Stephens Council (Exhibit R8). Those [plans] bore reference to 'Parramatta Design & Development, Building Design & Development, Building Designers and Developers', the client being disclosed as 'Landmark & Toyama'. At the top right hand corner of the plans appeared reference to PDD as 'owners of the copyright subsisting in these drawings plans designs and specifications…'. Those references to PDD etc were explained by Mr Fares to reflect the Auto Cad Template appearing automatically on architectural plans generally prepared by him. Also appearing on the plans was reference to Gus Fares M. ARCH, in conformity with what appears on his business card in evidence. 172 Ms Haviland thereafter spoke in her affidavit of attending a lunch on 4 August 1999 with Mr Rix, their son David Rix, Mr Barrak and Mr Fares, at La Grillarde Restaurant at Crows Nest, being an event convened to celebrate the anticipated development approval for eight home units on the site. One matter of discussion was described by Ms Haviland in her affidavit in the following terms: 'During that meeting, we spoke and agreed that we would put out tenders, find a building, complete the building and hopefully have the units ready for sale before the Olympic Games.' Ms Haviland denied that there was any suggestion then made that PDD would build the units. Ms Haviland's recollection, given in the course of cross-examination, was that reference was made in the course of that discussion to the desirability of retaining Newcastle Builders. As she stated under cross-examination, 'it only made sense to put it out to tender to local builders'. What Ms Haviland claimed to have thus said was at least objectively persuasive. 173 Ms Haviland said that the subject arose on that occasion, at the instance of David Rix, as to whether a feasibility study had been prepared for the development. Ms Haviland gave the following account of what she recalled having then been said between Mr David Rix and Mr Fares: 'David: How do you intend to do this project without a feasibility study? You are just flying blind. My mother and father are entitled to know. Fares: We are going to call tenders - reputable ones. Would your company be interested? David: No, it's too small a project for us. Fares: Do you know of builders we can use? David: I will give Mum a list of builders in the Newcastle area.' After the lunch, Ms Haviland said that her son gave her a list of builders which she faxed to Mr Barrak; she recalled that included on the list were 'McCloys' and 'Stephens'. As will later appear, the substance of that testimony as to obtaining the services of an independent building was supported by both Mr Rix senior and Mr Rix junior. 174 Ms Haviland next testified in her affidavit to receiving a telephone call from Mr Barrak and Mr Fares on 8 October 1999, when they were both together, which she recorded in the following terms: 'Mr Barrak: We've found out that those idiots next door have sneaked though an approval for 16 units. We will have to get together to talk about it. We should reapply for more. I said: Kevin and I just want to go with what we have; we have already invested a lot of money and time and we don't want to start all over again. Mr Fares: Yes, but we can get 14 units. 14's better than 8. I don't want any more money for doing the plans, but we will all just have to pay for fresh engineering plans and so on. I said: Well if you are satisfied to accept the $27,000.00 you have already been paid and all we (Toyama) have to pay is our share of the fresh engineering plans etc. I suppose we should try for 14 units.' 175 She said that it was subsequent to that conversation that the development application for fourteen units was lodged with Port Stephens Council by PDD. Nevertheless Ms Haviland and Mr Rix did not thereafter take any back seat; she said that she and Mr Rix '… attended council meetings, lobbied Council and did much work'; Ms Haviland obtained telephone numbers of Council members and became 'the prime mover in the discussions with Council and made telephone contact with most of the councillors', Mr Barrak having said to her in that regard: 'You are better than me. You are Anglo-Saxon. I am Lebanese. They will listen to you. I want you to come to the council meeting and talk to the Councillors.' 176 Ms Haviland next spoke in her affidavit of a meeting at her home in Pymble on 2 July 2000, attended by Mr Rix, Mr Barrak and Mr Fares. It was a volatile meeting. She recalled that the subject was raised by Mr Barrak and Mr Fares as to Mr Fares being appointed as builder of the Nelson Bay development, and as to the rejection by her and Mr Rix of that suggestion, Mr Rix saying to them: That's not what we agreed upon. Where is your feasibility study? You think we are going to give you an open cheque book. I do not think so.' She further recalled Mr Barrak thereupon becoming angry, and writing prominently on a piece of paper the word 'TRUST', and thereupon throwing the same at Mr Rix's face. That piece of paper was tendered in evidence. It will further appear, I think, that Ms Haviland's account of what was said at that meeting was essentially correct. I will say more about that subject later. It suffices to observe at once that it tends to defy credulity that Ms Haviland and Mr Rix, both of whom had some business experience, would have committed themselves on an open-ended basis financially, especially to someone with such relatively limited construction experience, and for substantial building work to be undertaken in a relatively distant locality. 177 Thereafter the relationship degenerated to the stage, according to Ms Haviland's affidavit evidence, where '… it became clear that it would be necessary to dissolve our business relationship…,' which was said by her to have deteriorated 'after it was made clear to me and Kevin (Rix) that Mr Barrak and Mr Fares did not intend putting the project out for tender'. She denied that it was ever suggested to her by Messrs Barrak and Fares 'that the project would be more profitable as a project or for Toyama by using Parramatta Design, or that it has been our earlier agreement [to do so]'; she added that 'Mr Barrak and Mr Fares had arranged to rent a property at Nelson Bay for Mr Fares to live in', and that 'Kevin and I were asked to sign a lease on behalf of Toyama, and refused to do so'. 178 Ms Haviland next referred in her affidavit to discussions which took place, at the instance of Mr Barrak, whereby Messrs Barrak and Fares offered to buy her third share in the Nelson Bay land which she held jointly with Mr Rix. Ms Haviland obtained a valuation from Dupont Fagen dated 14 February 2001 in the sum of $1,230,000.00, which she provided to Mr Barrak; Mr Fares subsequently rang her and said that an agent in Nelson Bay '… believes it is only worth $900,000 at the most'. Ms Haviland was by then experiencing ill-health, and nothing further in that regard was progressed. Ms Haviland gave further evidence of a conversation on 30 May 2002 with Mr Fares and a male person called Chris, at a Paddington restaurant, which Mr Fares apparently owned, to which conversation objection was purportedly taken on behalf of PDD. That male person was identified by Ms Haviland as the foreman 'on another development Mr Barrak was involved in at Parramatta'. The evidence was plainly admissible at least against Mr Fares and his company PDD. According to Ms Haviland, the assertion was made at the meeting by Mr Fares that he was 'unhappy with Benjamin', for reasons he and the person named Chris both explained, and that he asked her to speak to Mr Barrak 'about putting the property on the market and dissolving the joint venture'. Concrete contended that a Jones v Dunkel submission was available in its favour, in relation to that evidence, because the person 'Chris' was not called by PDD to contradict the evidence of Ms Haviland as to what was said at the meeting. On 3 June 2002, Ms Haviland met with Mr Barrak 'at his business premises and current development at 90 Sorrell Street Parramatta', at which Ms Haviland told him inter alia that 'Gus has contacted me and we would both like to put Nelson Bay on the market…'; Mr Barrak's response, according to Ms Haviland, was that he would prepare a contract and send it to her; Mr Haviland reported her conversation with Mr Barrak back to Mr Fares. 179 Ms Haviland then detailed in her affidavit subsequent events, which may be summarised as follows: (i) Mr Fares faxed to Ms Haviland a draft advertisement, to which she 'made some hand written edits', and re-faxed the same; (ii) Mr Fares rang back and said to her 'That's OK. Go ahead'. (iii) on 5 June 2002, she sent a copy of the draft advertisement for the sale of the land to Mr Barrak for approval; Mr Barrak made no changes thereto; the property was advertised, and there was said to be 'an overwhelming response'; (iv) on the same day, Mr Fares met with Ms Haviland at her home; Ms Haviland claimed that he said to her the following: 'Ben's out to rip you off. He is only waiting until he's finished the project at Sorrell Street so he is cashed up. He knows that he can squeeze you out and get your share. That leaves me in an untenable position, because he will own two-thirds of the project and I will only own one-third. Because of the changes in the home warranty insurance, even though I have a builder's licence, I will probably have difficulty getting home warranty insurance to build Nelson Bay without personal guarantees from Ben. He is determined to build it himself and for me that is ridiculous. He knows absolutely nothing about building and I don't want to be in it.' and (v) during the ensuing week, Ms Haviland had dinner with Mr Barrak, whereof she gave a lengthy account; she claimed that he suggested to her that he and she buy 'Gus's share'; I will not set out the balance of Ms Haviland's lengthy account of the conversation, except to say that she concluded as follows: 'I said: Well you have caused me quite a deal of embarrassment by agreeing to put the property on the market, without a contract being prepared for sale, and you promised you would do that when I saw you on Monday night. By the way, it's almost tax time and I don't want to be chasing you again for the documents for Ed, the accountant. Ed wants to see all the source documents, not just a list you prepare every year. When can I come over and collect them? Mr Barrak: We will have to make a time.' and (vi) up to that point in time, Ms Haviland asserted that Mr Barrak had not allowed her 'access to documents' or to 'the contract for the purchase of the property', and consequently she had 'never seen the cheque books or cheque butts… [or] the original accounts for engineers or plans, nor… the original receipts for payment thereof'. She denied any awareness on her part by even then of the payment of $27,000.00 which Mr Barrak had caused to be paid out to PDD earlier in 1999. 180 Ms Haviland denied that at least at any time prior to any pre-sale communications with either Mr Fares, Mr Barrak or Landmark, was there any issue raised concerning a copyright claim in relation to the architectural plans for which PDD asserted authorship. By arrangement with Mr Fares, she caused an advertisement, first presented to Mr Fares, to be inserted in the weekend edition (8-9 June 2002) of a Sydney newspaper as follows: 'DEVELOPMENT Site. Nelson Bay DA.CC approved 14 units, architect designed ready to start. Last chance to purchase a prime site in the heart of Nelson Bay, across the road from beach and marina. Magnificent water views to most units. 2 lge penthouses with 180 deg. water views. $125K per unit Contact Jeannette 0408… or Gus 0413… .' That course of action implicitly reflected objectively the temporary exclusion of Mr Barrak by Ms Haviland and Mr Fares from decision-making in relation to the sale of the Nelson Bay land. More significantly from Concrete's perspective, there is no evidence of mention being made in that context, on the part of Mr Fares, as to claims of copyright, and of absence of payment, for the plans and drawings for the fourteen home unit development. Subsequently of course, as earlier recorded in these reasons, Tangate made its offer of 27 June 2002, to which Mr Barrak affirmatively responded (ante). 181 Subsequently on 10 September 2002, Toyama filed an application with the Supreme Court of New South Wales for the appointment of trustees for sale; Ms Haviland concluded her affidavit evidence as follows: 'The first time that I became aware that copyright was being asserted… was on or about 19th November 2002 when Haviland Lawyers received a letter from Parramatta Design dated 18th November 2002…' As earlier indicated, the orders of the Supreme Court pursuant to s 66G of the Conveyancing Act were made on 12 December 2002. 182 I have already indicated, at the commencement of my account of Ms Haviland's testimony, my rejection of certain fanciful and unlikely remarks she allegedly made in favour of PDD's case. In all essentially or important aspects of her evidence, particularly under cross-examination, my perceptions and findings in relation to Ms Haviland were those of a truthful and essentially reliable witness. Whilst she betrayed a measure of emotion at times under cross-examination, being an emotion dominated by intense resentment as well as anguish by reason of her involvement in these proceedings at the request of Concrete, especially in the context of having been subjected at material times to illness and prolonged hospitalisation, I was left in no doubt as to her essential integrity as a witness. I make those findings albeit that she is facing the trauma of Supreme Court proceedings pending against her at the instance of Messrs Fares and Barrak or any corporate interests of those person.

The testimony of Mr Kevin Rix 183 Mr Kevin Rix also provided affidavit evidence to the Court, which I will next seek to summarise; he described his occupation as a retired stonemason/builder; he then held (and still currently holds) Builders Licence No. 27375. As in the case of Ms Haviland, he is a director and shareholder of Toyama. He spoke of first meeting with Mr Barrak in or about 1992, and with Mr Fares in or about 1998. 184 He recalled meeting Mr Fares in particular on or about 30 September 1998, when he was visiting Ms Haviland in hospital, who was then suffering from pneumonia, and when the option to purchase the Nelson Bay land was signed, and when he handed a cheque for $466 to Mr Fares, representing Toyama's one third share of the option fees payable to the then owner. He recalled Mr Fares saying in the course of that meeting: 'Well we will have the best site in Nelsons Bay and we will easily get 8 units approved. It is a very good price at $560,000.00. We will put it out to tender as soon as the plans are approved and have it built by reputable licensed builders picked from the tenderers. We should each make a substantial profit.' And further: 'I will draw up the plans and put the DA in on behalf of the owners. Toyama will have to pay one third share for the plans.' As in the case of Ms Haviland, Mr Rix was insistent it was a key part of the joint venture that the building work would be put out to tender. 185 Mr Rix asserted '[i]f there had been any suggestion that Mr Fares, Mr Barrak or their respective companies were to be involved in the building of the units I would not have agreed to Toyama being a party to the joint venture agreement'. One basis for that assertion was said by Mr Rix to be that Mr Rix had already undertaken demolition work for Mr Barrak in relation to a project that Mr Barrak and Mr Fares were undertaking at Hurstville in 1998. Mr Rix further said that he met on the Hurstville site Mr Barrak's father Mr Norm Barrak, who made derogatory remarks about his son's knowledge of building construction, and of Mr Fares' mistakes in relation to that construction project. A further basis for this assertion was that Mr Rix had been involved in some building work in relation to a project that had been undertaken by Mr Barrak and Mr Fares at Parramatta, in relation to which further construction deficiencies had been encountered. 186 Mr Rix testified moreover to being in the company of Mr Norm Barrak when he visited the Nelson Bay property on 21 and 22 November 1998, in the course of which Mr Norm Barrak made derogatory remarks about the construction competence of Mr Fares and of his son Benjamin Barrak, and further said that he (Mr Norm Barrak) was going to be the builder of that development. Subsequent to that latter occasion, Mr Rix said he went to Mr Fares' office in Parramatta, having first telephoned to ensure that Mr Fares would be present. He testified to the following conversation after his arrival: Mr Rix: 'You're not going to let Norm Barrak in charge of the building of the units at Nelson Bay are you?' Mr Fares: 'Definitely not Kevin. As soon as we have plans passed we will be calling for tenders. I have worked out an estimate of what I think the building should be built for and that is what we will try to achieve when we examine the tenders. I would like you to invite David's company ADCO to tender when the plans are ready.' 187 Mr Rix next spoke of the critical meeting at La Grillarde restaurant in Crows Nest on 4 August 1999, to which I have already made reference, between Messrs Fares and Barrak, himself, Ms Haviland, and his son David, and in particular of the following conversation which he recorded in his affidavit: David Rix: 'Have you done a feasibility study on the project?' Mr Barrak: 'There is no need to do that.' David Rix: 'But this is standard practice especially on a project such as Nelson Bay.' Mr Rix said that Mr Barrak became agitated and said loudly and aggressively: 'I do not believe this'. Thereupon Mr Rix said the conversation continued as follows: David Rix: 'Well if you haven't done a feasibility study how do you know the likely cost of building and selling this project.' Mr Barrak: 'There is at least a million dollars in this deal.' David Rix: 'How do you know that. You are only guessing.' Mr Barrak: 'I do not believe this. Your parents and we are friends. They trust us. This is all based on trust.' David Rix: 'You are just flying blind.' Mr Rix next recalled that Mr Barrak had by then become very angry, and Ms Haviland said to her son; 'Don't say anymore David, please'; after a strained silence, Mr Kevin Rix testified next that the following was said: Mr Fares: 'We will be calling tenders from reputable building companies shortly as we were to get on having it built as soon as possible as things will go flat after the Olympics. Would your company ADCO be interested in tendering David?' David Rix: 'No, the project is too small for us, but I will give you a list of builders in the Newcastle area.' Mr Rix said that the conversation 'ended shortly thereafter'. 188 Mr Rix's affidavit evidence next addressed the circumstance that in the following month of September 1999, information came to hand as to Port Stephens Council's development consent granted in relation to an adjoining property at Nelson Bay apparently for the creation of 16 units. In that context, discussion was said by Mr Rix to have taken place as to applying for the Council's consent to a 14 home unit development on the subject land. In the context of discussing the subject of additional costs thereby likely to be involved, Mr Rix claimed that Mr Fares said: 'I don't want any more money for the Plans, but we will have to pay for fresh engineers and hydraulic plans. I am sorry we have wasted so much money on the plans and things, but if we get the 14 units, it will be well worth the extra expense.' 189 Mr Rix's affidavit narrative continued to the effect that he, Messrs Barrak and Fares attended a meeting of the Port Stephens Council on 4 April 2000, when objections to the 14 unit development application for the subject land were recorded and discussed, the outcome being a deferral of decision-making on the Council's part for two weeks. Subsequently on 18 April 2000, Mr Rix said that he and his wife, and also Mr Barrak and Mr Fares, travelled to the subsequent Council meeting, when development approval was given to the 14 unit development. The formal approval was not of course signed and released until 10 May 2000. 190 Mr Rix next recorded in his affidavit that he and Ms Haviland met with Messrs Fares and Barrak for a buffet lunch on 21 May 2000 at the Royal Hotel in Parramatta. After the lunch, during which the Nelson Bay project was not discussed, Mr Fares said as follows, according to Mr Rix's affidavit evidence: 'I'd like to avoid tax on our project by putting the unit building into company title and for Landmark to have two thirds of the units in its own name and for Toyama to have one third of the units in its name. I only want to sell enough of Landmark's units to cover the costs and rent out the rest and use these as collateral to borrow for further developments for myself. I want to do some little development on the side myself.' A company title structure for the partition of a residential unit building had been for many years of course an alternative to strata title. 191 Mr Rix said that Mr Barrak appeared to be taken by surprise by this proposal, and that Mr Barrak said: 'I'm not in favour of renting as the returns are not near good enough, even on the real estate agents quotes of 80% occupancy which would be hard to maintain, especially in the off season.' Mr Rix's recall was that the situation subsequently became unpleasant, and that he said: 'We want nothing to do with renting units so far away. We came into this deal to build and sell, that's what we want.' 192 Mr Rix's affidavit evidence then moved to the meeting on 2 July 2000 at the Pymble family home of himself and Ms Haviland; his recall of what was said in relation to the Nelson Bay land was as follows: Mr Fares: 'Ben and I want to build the units at Nelson Bay ourselves. We will all borrow the construction funds and we will subcontract it out.' Mr Rix: 'Why is it you want to build the units at Nelson Bay yourself and not put it out to tender and have established builders build it, as was originally agreed?' 193 Mr Rix then recorded that Mr Barrak interrupted him in an aggressive and angry way, paced the floor, and appeared to lose his temper, then said: 'I don't believe this. We are friends and partners. This whole relationship is based on trust. You do not trust us. If you trusted us you'd let us build it.' 194 Mr Rix thereafter recalled in his affidavit that Mr Barrak snatched a piece of paper from him, upon which he had been making notes, and scrawled the words 'TRUST' in large letters, and while standing over him, 'shoved it in my face and said in a loud voice, "What does that read?"'. Mr Rix said that he was shocked and did not initially reply; he further said Mr Barrak pointed to the piece of paper and to each individual letter of the word 'TRUST', spelt it out, and kept shouting: 'You don't trust us. This is all built on trust. We are friends.' That piece of paper containing the word 'TRUST' in capital letters was exhibited to Mr Rix's affidavit. 195 Mr Rix recounted that he then said: 'This is not a business like way to do things, and in any event our original agreement has always been for tenders to be called for the building of the units. This is contrary to what we all agreed upon in the beginning and if I had known that this is what you had wanted to do, I wouldn't have been in it in the first place.' 196 To which he recorded Mr Fares as responding: 'If I build it I will be in charge and I will sack anyone who doesn't do the job right. We will save money on all specifications that have to be drawn up in order to put it out to tender.' 197 Mr Barrak was then said by Mr Rix to have replied: 'Look, all we have to do is borrow the money. Gus will go up to Nelson Bay and we will subcontract it out and get the best price from tradesmen. I will stay in Sydney and order the materials. If you trust us you will agree.' 198 To that statement Mr Rix said he replied: 'I'm not going to give you a blank cheque to build these units. First of all I want a feasibility study so I know what the likely costs are going to be. You can't expect me to agree to your proposal.' I have no hesitation in accepting in particular that piece of evidence of Mr Rix; as Concrete submitted rightly, an arrangement for payment of total building costs, whatever that might turn out to be, was akin to providing PDD with 'an open cheque book'. It is highly unlikely that Ms Haviland and Mr Rix would have agreed to such an open-ended arrangement, as contended by PDD's case, which would have virtually entrusted PDD with their future livelihood. 199 Mr Barrak's closing response to the meeting was said by Mr Rix to be '[t]his is a complete waste of time', and Mr Barrak and Mr Fares 'then left'. Mr Rix said that he then consulted his son David as to Mr Fares' proposal that Mr Fares be appointed as builder of the development. 200 In November 2000, Mr Rix recalled that Ms Haviland had a fall and seriously injured her left leg, leading to hospitalisation and a long period of recuperation. She was said to have been subsequently hospitalised for a further three times during 2001, and Mr Rix added that '… in addition we had other personal tragedies in our life that required our full attention.' Mr Rix further said that '[t]he matter came to a head when we obtained a valuation for the Nelson Bay property at the request of Mr Barrak', but that 'Landmark declined to purchase Toyama's one third share on the basis of that valuation.' By unanimous agreement, so Mr Rix next related, '… the Nelson Bay property was marketed for sale in June 2002'. 201 Mr Rix next narrated in his affidavit that in the last week of May 2002, whilst at his Wiseman's Ferry farm property, he received a telephone call from Mr Fares; he said that he had not heard from Mr Fares by that time for any months. The following conversation in substance was said by Mr Rix to have occurred, after formalities: Mr Fares: 'Mate, its about time we sold the Nelson Bay site. I want out. Would you sell?' Mr Rix: 'I will sell, but I will have to be in agreement with Jeannette on this, but I can tell you that she will agree but you can talk to her. What about Ben Barrak?' Mr Fares: 'I've had a falling out with him, and I haven't seen him for a good while.' Mr Rix said he thereupon rang his wife and asked her to telephone Mr Fares. 202 Mr Rix concluded his affidavit that '[n]otwithstanding the fact that the Nelson Bay property was advertised for sale, Landmark shortly thereafter refused to agree to its sale'. The Nelson Bay land was ultimately sold of course by the trustees for sale for $2,760,000, by auction held on 7 August 2003, being a substantially higher price, according to the evidence, to that previously offered by any third party, and to that the subjects of the inter-parties offers whereof I have already cited evidentiary versions. 203 I have no hesitation in accepting the thrust and essence of Mr Rix's evidentiary account of both events and themes of conversations in issue. Obviously enough, in the absence of contemporaneous notes and records, it would be impossible for Mr Rix to have recalled the precise words used in the dialogue which he has purported to record. He struck me as a straightforward and intelligent witness with a reasonably reliable recall of events. The conversational material attributed to Mr Rix by Messrs Fares and Barrak was in at least all important or material respects as fanciful as it was unlikely.

The testimony of Mr David Rix 204 Concrete adduced evidence also from the abovementioned Mr David Rix, the adult son of Ms Haviland and Mr (Kevin) Rix. At the time he made his affidavit on 30 March 2004, Mr David Rix had been involved in the building industry for more than 20 years, having been working for ADCO Constructions for the preceding 10 years, and having become the Construction Manager for New South Wales of that company. His personal involvement in developments of residential unit buildings qualified him to give evidence as an expert on issues as to practices in the building industry which he addressed. 205 Mr David Rix gave evidence of attending the La Grillarde luncheon meeting on 4 August 1999 with Mr Barrak, whom he had previously met, and with Mr Fares, whom he had not previously met, and of course also with his father Mr Rix and his mother Ms Haviland. He said he asked Mr Barrak and Mr Fares a number of questions, which caused each of them to become 'very agitated'. His 'best recollection of some of the conversation' was recalled in his affidavit as follows: Mr David Rix: 'Have you prepared a feasibility study?' Mr Barrak: 'No. I will do a feasibility study before financial institutions are approached.' Mr Fares: 'Can you provide us with a proforma feasibility study?' Mr David Rix: 'Yes. I will give it to my mother.' Mr Fares: 'Would ADCO be interested in building the units?' Mr David Rix: 'No. It is too small a job for us. I can give you some names of other builders that may be interested.' Mr David Rix: 'I think there should be regular meetings with my parents to keep them informed as to the progress of the development. Proper minutes and reports should be prepared.' Mr Barrak: 'We are all friends here. We do not need to go to that length. We trust each other. We do not need to do all this stuff.' At the close of his questioning of Mr Barrak and Mr Fares, Mr David Rix said in his affidavit that Mr Barrak became 'very angry', Mr David Rix then claimed to have said '[t]hat is an unacceptable approach in my opinion. How do you know whether you will make a profit or loose (sic) money.' 206 Mr Rix concluded in his affidavit evidence as to the luncheon meeting as follows: '… There was no suggestion at the luncheon that the building work at Laman Street, Nelson Bay would be undertaken by either Mr Barrak or Mr Fares (or any company controlled by them). In fact, Mr Fares asked me if ADCO Constructions would be interested in tendering to build the units. As indicated above, I said no. However, I did nominate two builders in the Newcastle/Port Stephens area who would be suitable, namely McCloys and Stephens Constructions.' He claimed that he subsequently provided to his mother 'a proforma feasibility study… to provide to Mr Barrak and Mr Fares'. He further said that it was not until the following year that he first heard a suggestion, relayed by his father, that Mr Barrak and Mr Fares wanted to do the building work at Nelson Bay themselves; he added '[t]his suggestion was definitely not discussed in my presence at the 1999 luncheon at La Grillarde restaurant'. 207 I would indicate at once that I found Mr David Rix to be an impressive witness, particularly during the course of careful but forceful cross-examination undertaken by Mr Murr SC, who initially represented PDD at the hearing. He testified that his mother had kept him informed of events leading to the luncheon he attended at the La Grillarde restaurant. In the course of cross-examination, Mr David Rix gave the following evidence: 'Was this a matter of concern to you, that your parents were getting involved in this development? --- It certainly was. For what reason? --- I think it stemmed from that La Grillarde meeting. It was a meeting that, quite frankly that I walked away thinking these guys are not being up-front, they haven't done their homework, and I'm talking about Fares and Barrak. They were evasive, they were aggressive, they were angry, that I'd even asked a couple of simple questions. When you say that they were angry, the only time in your affidavit that you record them being angry was in response to - Mr Barrak saying things like, and this is in relation to the proposal that there be minuted meetings and so forth, Mr Barrak saying: We're all friends here. We don't need to go to that length. We trust each other. We don't need to do all this stuff. And you were saying: That is an unacceptable approach in my opinion. How do you know whether you'll make a profit or lose money? And you say then Barrak became very angry?--- That was both - both angry and evasive. At the end of that lunch, it was a very tense lunch, they were both very aggravated, angry and evasive. They didn't want to answer any questions or talk about what they wanted to do with the development.' 208 Other matters to which Mr David Rix testified in the course of his cross-examination, were as follows: (i) he would not accept the proposition that it was appropriate in his experience for the obtaining of a feasibility study for the Nelson Bay development to have been delayed 'at least until the time that a DA was approved'; to adopt Mr David Rix's expression, '[y]ou would need to know where you stood every step of the way'; (ii) neither Mr Fares nor Mr Barrak expressed any ideas in his presence of what the likely profit on the venture would be; (iii) both Mr Fares and Mr Barrak evinced a reluctance to obtain a feasibility study; to adopt his expression under cross-examination, '[a]s soon as I asked whether they had done a feasibility [study] they were completely on the offensive'; and (iv) in response to further testing cross-examination, Mr Rix added'… they were defensive, they were agitated as though they really didn't want to tell me really what was going on or what their intentions were…'. 209 Moreover when asked in cross-examination whether '… it is the case isn't it, that at that meeting Mr Fares made it completely clear that he was intending to be the builder?', Mr David Rix emphatically responded (and did so repeatedly) 'No, definitely not, no way'. Moreover when questioned whether Mr Fares explained to him, in answer to questions from Mr David Rix, '… exactly the basis upon which he was proposing to charge', Mr David Rix responded emphatically 'Definitely not, that is completely incorrect'. It is true that Mr David Rix insisted at the luncheon meeting that there should take place regular meetings, for which proper minutes should be recorded, but it was never seemingly put to Mr David Rix in cross-examination on behalf of PDD that his reason for that recommendation was because PDD was proposed or agreed to be the builder of the Nelson Bay development. 210 I have no reservation in entirely accepting the affidavit and viva voce evidence of Mr David Rix, or at least virtually so. I thought his recall of past events was unequivocally clear, and that he did not seek to reconstruct his account of events at least to any material extent. It was readily apparent to me that he was both experienced and knowledgeable in relation to the building industry, and significantly more so than both Mr Fares and Mr Barrak (whilst a practicing solicitor, Mr Barrak was involved or had been involved in property ventures). Moreover since the occasion whereof he gave evidence was apparently the only time when he met and conversed with Mr Fares, and apparently the only time when he discussed with Mr Barrak the subject of the Nelson Bay venture, his recall thereof is inherently likely to be more accurate than the recall of others who were present.

The expert testimony of Mr Peter Brooks (architect) 211 I have earlier made reference to expert evidence adduced by Mr Brooks, a highly qualified architect in practice for about 25 years with impressive experience; since at least 1985, he has acted as 'the lead architect in numerous commercial and medium-density residential projects', a number of which he identified. His affidavit evidence contained the following opinions: '12. In my experience, it would be usual and typical practice for an architect to charge a fee for preparing plans for a Development Application (which work would include all necessary attendances with client and council officers in the prosecution of the DA) based on a figure of 1% of the total project cost (being the cost of the building contract for construction). This would typically be the case whether or not the architect was to be engaged to provide services after the development consent issues. In my experience, an architect who tenders for a project with a fee based in excess of 1% of the total project cost would be at significant risk of having his or her tender rejected. 13. I have reviewed the architectural plans prepared by Parramatta Design and Development Pty Ltd in respect of the development application lodged with Port Stephens Council in January 2000 for 14 units at 5 Laman Street, Nelson Bay. [Copies of the plans are reproduced at pp 92 to 100 of exhibit GF1 to the affidavit of Ghassan Fares sworn 24 March 2004]. In my experience, as at late 1999 to early 2000, the expected unit construction cost was about $200,000 per unit for medium-style to luxury-style apartments in medium residential developments in Sydney and regional New South Wales. In late 1999 to early 2000, the expected construction cost for the 14 units at Nelson Bay would be about $2.8 million to $3 million. In respect of the development for 14 units at Nelson Bay, in my opinion a reasonable fee for preparing the DA plans (including all necessary attendances with client and council officers through to, as in this case, granting of development consent) would be in the range of $28,000 to $30,000. This figure is based on 1% of the estimated project cost of $2.8 million to $3 million. 14. In my experience, it is usual and prudent practice in the architectural and design profession for fee agreements with clients to be in writing. It is also usual and prudent practice for fees for architectural services to be charged by the architect raising an invoice prior to payment of the fees by the client. 15. Part of my practice since at least 1990 has involved my providing advice to clients in respect of builders that should be considered for providing building work on medium-density residential (and industrial) developments. In my opinion, the principal relevant circumstances in respect of the selection of a builder for a medium-density residential development project are: a. the proven track-record of the builder, particularly in respect of similar work that the builder has completed in the previous two years; b. the financial circumstances of the builder (whether the builder relevantly had the capacity to fund the project); and c. the managerial expertise of the builder (including the work management plan and who would be the actual personnel on site).' 212 The cross-examination of Mr Brooks extended to many matters which I was unable to relate at least precisely or closely to the circumstances of the present case; perhaps however the following answers of Mr Brooks under cross-examination, which I accept without hesitation, have application to the present context: (i) his experience of design and build contracts was that the architect is contracted by the builder, and the builder undertakes to provide a building to the developer within certain budget parameters; PDD was the first building company he had encountered which had apparently not been so contracted; (ii) '… it would be impossible to finalise a lump sum until the construction certificate and construction drawings had been done'; (iii) '[a] cost plus contract normally involves a full bill of quantities with rates associated to materials and labour'; (iv) in his experience a design and build contract is one where the builder enters into a contract with the developer; (v) he had no experience with any design and build contract which was not in writing; and (vi) all the design and build contracts that he had encountered involved the builder's preparation of 'an overall budget or maximum expenditure which he would in some way warrant… to deliver the building for.'. No evidence was tendered on behalf of PDD as to its fulfilment of any such criteria or compliance with any such practices, up to the time the relationship between the parties finally concluded.

The testimony of Mr Ghassan Fares 213 Mr Fares' first affidavit read in the proceedings was sworn on 24 March 2004. He had previously sworn an affidavit in the proceedings on 22 October 2003, but that affidavit evidence was not tendered. He deposed to gaining a bachelor of architecture degree in Lebanon, and to being an affiliate member of the Royal Australian Institute of Architects, and to being registered with the Board of Architects and to holding an individual current builder's licence numbered 70712C. He described himself as a director and shareholder of Landmark and PDD, and Mr Barrak as a co-director and shareholder of Landmark, and as having formerly been a director and shareholder of PDD for the period from 20 October 1999 to 15 May 2000; Mr Fares said that PDD also held a builder's licence in its own right. He spoke of PDD's 'long history of design and construction on behalf of itself and clients', commencing with the design and building of a townhouse development at Auburn, the building of a block of units in Hurstville in 1998, and the construction of two terrace houses in Alexandria; he said, somewhat unspecifically, if not vaguely, that PDD was 'in the process of organising the design and construction [of] other sites at Leichhardt and Maroubra'. Mr Fares further said that in early 1998, Ms Haviland and Mr Rix instructed him to design a sandstone house for them at Wiseman's Ferry. 214 Mr Fares asserted that in September 1998, he met with Mr Rix and Ms Haviland at their home in Pymble, and offered them a one third interest in the Nelson Bay project, saying to them inter alia: 'Kevin, as you know, Parramatta Design is a design and construction company and we have done many projects over the years. I have just finished a townhouse development at Auburn and you know that we are currently building a block of units at Hurstville.' He asserted that he then said to them: 'Parramatta Design will be the designer and builder of the project.' In response, he claimed that Ms Haviland said: 'There is no one better qualified than you Gus to design and build the project. You are the expert in this area. Kevin and I want to be silent partners and financial investors for this project and hopefully future projects. You make all the decisions about the technical stuff because that is your area of expertise.' Having seen and heard from Mr Rix and Ms Haviland in the witness box, that alleged gratuitous statement would have been entirely foreign to both their intentions and their respective business dispositions and training. 215 Mr Fares thereafter testified as to the following further conversation on this initial occasion, once more if I may say so, gratuitously: Kevin: 'Gus, what do builder's charge these days for a project such as this one?' I said: 'Kevin, there are many forms of contract but most use either "lump sum contracts" or "cost plus contracts". We can't discuss lump sum because obviously we don't have any approved plans. In this case, Parramatta Design would be using the cost plus method. The going rate for building is cost plus 10 to 20 per cent. But, because Landmark owns the bulk of the project, Parramatta Design will do the design and construction for cost plus 10%. Is this OK?' Jeannette: 'Yes Gus. That is more than OK.' Kevin: 'This is reasonable. I trust you Gus.' I make the same observations concerning the highly unlikely conversational account of those gratuitously simplistic conversational gestures. Thereafter Mr Fares narrated in his affidavit that 'our offer to purchase the property at $560,000 was accepted'. Mr Fares did not suggest that any appointment of PDD, or the making of any such contractual arrangement, was reduced to writing. 216 Mr Fares next said in his affidavit that Mr Barrak gave him the contract for purchase of the Nelson Bay land to hand deliver to Ms Haviland and Mr Rix for signature. He said he took the contract to the hospital, where Ms Haviland was at the time a patient, and that the following conversation occurred: Mr Fares: 'I have the contract for you and Kevin to sign. It is important that we exchange straight away because we don't want to keep this property in the market.' Jeanette: 'The buyer will be Toyama Pty Ltd.' Mr Fares: 'Who is Toyama Pty Ltd? It sounds like a Japanese company.' Jeanette: 'It is a shelf company. We didn't choose the name. Kevin and I are both directors and we want our share in the joint venture to be in the name of this company for tax reasons. We wanted to get another company but there was no time because I am in hospital, so we will just use this one.' 217 Mr Fares also recorded that Ms Haviland and Mr Rix visited him and Mr Barrak at PDD's Hurstville building project at various times, and that Mr Rix told him 'This is good quality work Gus', and Ms Haviland said to him at the same time 'I hope you will do work like this at Nelson Bay'. 218 Mr Fares next deposed to meeting with Ms Haviland in her home, along with Mr Barrak, when the following conversation was said to have occurred: Mr Fares: 'You know the neighbours land is already DA approved and they should be ready to start construction soon. They have asked me for a quote to build it for them, and I said no.' Jeanette: 'Will that affect us?' Mr Fares: 'Maybe.' Ben: 'They will be directly competing with us I think it would be better if we can build our project first because the views will be more open and there will be less competition in the market place.' Jeanette: 'Good idea. Gus do whatever it takes to finish the plans quickly.' Mr Fares: 'Well I will apply for a combined DA and CC and this should get us out of Council quickly. I have one person working with me now. If we need to finish quickly, I will need more staff.' Jeanette: 'Employ more staff if you have to and the joint venture will pay for it. The main thing is to do it quickly.' 219 Mr Fares next stated that PDD 'utilised the services of five draftspersons and architects to quickly complete the Development Application (DA) and Construction Certificate (CC) plans, and to co-ordinate with all consultants'. He further said that 'Mr Rix and Ms Haviland's contribution to this DA and plans was purely financial by way of payment of part of the deposit and contributions towards disbursements and expenses until the DA is approved', and further that '[i]n accordance with our joint venture agreement, the main contribution expected of Ms Haviland and Mr Rix would be to assist in raising funds for the purposes of construction'. In the result, Mr Fares said that he produced the design for eight home units for erection on the Nelson Bay land, which was subsequently approved by the Port Stephens Council. 220 Mr Fares next recounted the scope of the work he undertook in the following terms: 'The work which Parramatta Design, with Mr Barrak's help, completed is very broad and includes: liasing [sic] with professionals such as surveyor, engineers, draftspersons, attending to the architectural design, negotiating with town planners at Council, attending meetings at Council and Hunter Water Board, and with other related professionals, drafting of the SEPP 1 objection and Statement of Environmental Effects and working on the issue of the Construction Certificate. In addition, Mr Barrak and I attended to all the management of the property including payment of bills, liasing [sic] with the real estate agent about tenancies, and general maintenance of the property.' In the upshot of course, the eight unit development application was approved by Port Stephens Council on 24 September 1999. 221 In July 1999, Mr Fares spoke of a celebration dinner held at a Crows Nest restaurant attended by himself, Mr Barrak, Ms Haviland and Mr Rix, and their son Mr David Rix. That was apparently the La Grillarde Restaurant. He recounted the following conversation in his affidavit: David: 'How long will it take you to build this project?' Mr Fares: 'About 1 year.' David: 'Have you costed the project?' Ben: 'The bank will be getting a formal quantity survey as a condition of finance, and we can all rely on that. David: 'Will you give a copy to mum and dad?' Ben: 'Yes of course.' David: 'You will be charging 10% of the cost to build this project?' Mr Fares: 'Yes. Cost plus 10% and this covers both the design and the construction.' David: 'That seems reasonable. Mr Fares: 'Yes. I want to save as much money as possible because Landmark will benefit from the project, and I want to make sure that the building is at the top end of the market.' David: 'Who will be signing the cheques?' Ben: 'At present, your mother, Gus and I are signatories. But if you need counter-signatories, that would be fine.' David: 'How will you keep mum and dad informed about the project?' Mr Fares: 'You and your parents are welcome to come anytime and inspect the project.' David: 'What about the cheque books and invoices.' Mr Fares: 'You and your parents can inspect those any time you like.' David: 'How will you choose the sub-contractors.' Mr Fares: 'I will get at least 3 quotes from reputable sub-contractors and choose the best one. David: 'I think that there should be regular meetings with mum and dad to update them on the progress of the work and the expenses.' Mr Fares 'I agree.' Jeanette: 'Well Gus, you need to organise your move to Nelson Bay soon.' Mr Fares: 'Yes, I am in the process of closing down my office. Jeanette: 'Ben you should organise the finance now.' Ben: 'As you know, it looks like NAB is going to need pre-sales.' Jeanette: 'Yes. Go ahead and organise that too.' Ben: 'I am talking to Dowling Real Estate about marketing.' There was no evidence proffered by PDD of that arrangement being reduced to or confirmed in writing. Mr Fares' description of the conversations on that occasion as 'just talking casually', given in the course of his cross-examination, was not to my mind convincing, particularly given that Mr David Rix, a senior executive of what appears to have been a reasonably large building company, had been asked to attend the restaurant meeting with his parents. I prefer the evidence of Mr David Rix to that of Mr Fares and of Mr Barrak, to the extent of conflict upon the issues discussed at the meeting, and that Messrs Fares and Barrak did become agitated and aggressive in response to Mr David Rix's questions. 222 Mr Fares thereafter recounted that he prepared to move to Nelson Bay to commence to build the project, and that he 'wound down [his] building design practice… [and] advised my clients I cannot accept instructions from them and I did not replace staff as jobs were vacated', so that '[b]y the end of October 1999, my building design practice was closed, and the focus of my attention was for [PDD] to build the project at Nelson Bay.' 223 Mr Fares next proceeded to describe the work which he said he undertook 'by way of steps preliminary to commencing building [work for the eight unit residential development] in accordance with the design and build contract', by reference to the following headings, namely demolition work, application to build over sewer, off the plan marketing, long service levy, construction certificate, engineering plans and removal of wrought iron gates. 224 Mr Fares' affidavit thereafter addressed the fourteen home unit development application in respect of the Nelson Bay land. After referring to the progress of the adjoining neighbour's application for a sixteen home unit development at Nelson Bay, being a neighbour not identified by name but whom Mr Fares asserted to be clients of PDD, he recounted consultation with Ms Haviland as to steps taken to obtain development consent for the fourteen home unit development on the subject site. In the upshot, he was able to submit new plans for that development of the subject site. Whilst engaged on that project, Mr Fares said that he applied himself from September 1999 to January 2000 to work solely related to the new fourteen unit development plans for the subject site, and did so with the assistance of one draftsman, who was engaged full time in Mr Barrak's office due to the closure of his own office. He further said in his affidavit that he 'wound down [his] design practice in readiness to go to Nelson Bay to attend to the construction'. He asserted that the reason why PDD '… has not charged any money, has not issued an invoice, and has not been paid any money for the 14 units plan' was that PDD 'completed the plans over a period of many months utilising the services only of myself and one draftsperson, with the aid and instructions of Mr Barrak, such that the plans and related documents were done "in-house" for minimal cost to save on expenditure'. He further said that '[PDD] did not charge any fees as it was to be compensated via the cost plus 10% formula', and further that '[i]n accordance with the joint venture agreement, the fees for [PDD] for the design and build were to be paid at the same time as construction drawdowns at the rate of 10% of each drawdown'. In the upshot, he submitted the plans for the fourteen unit development to the Port Stephens Council on 20 January 2000, having '… attended to the following on a full time basis : Council meetings, meeting with professionals such as surveyors, engineers, attend meetings with Hunter Water Board, and drafting the Statement of Environmental Effects and the SEPP 1 objection, and attending to applications for statutory certificates'. He said further that '[d]uring this period, I had no source of income whatsoever… [having] wound down my design practice in readiness to go to Nelson Bay to attend to the construction'. 225 Mr Fares rejected the assertion made by Ms Haviland and Mr Rix in relation to the contentious sum of $27,000.00 paid over to him at the instance of Mr Barrak on 19 April 1999; he said that such sum related to disbursements for the application for the eight unit development that had been approved by the Council on 24 September 1999; he asserted that '[t]he application for the 14 units commenced in the year 2000 and hence the payment on 19 April 1999 could not possibly have any relevance to the application for 14 units…'. It is common ground that the payment of $27,000.00 related to work undertaken prior to the decision to seek a fourteen unit development approval. Mr Fares exhibited to his affidavit copies of bank account statements for the joint account of Ms Haviland, Mr Barrak and Mr Fares conducted with NAB, and said that '[p]rior to payment of the $27,000.00 on 19 April 1999, I informed Ms Haviland of the $27,000.00 fee together with other payments (including engineering) that were due...' As previously indicated, there is no evidence as to that sum of $27,000.00 being invoiced by PDD, or any receipt being given by PDD. He said further that he asked Ms Haviland to deposit $17,500 into the joint bank account 'to enable the bills to be paid', saying that 'Landmark will deposit $35,000'. He recorded that Ms Haviland did so on 1 April 1999, at his request made to her for that purpose, and Landmark deposited $35,000 correspondingly on 19 April 1999. The Council's development approval in respect of the fourteen unit development was granted of course on 10 May 2000, having been applied for on 20 January 2000. 226 Mr Fares next deposed to circumstances which thereafter occurred at a lunch meeting at the Parramatta Park Royal Hotel attended by Ms Haviland, Mr Barrak and himself, for which he did not ascribe a date or approximate date, when the following conversation was said by him to have occurred: Ms Haviland: 'How long do you think it will take to build this building?' Mr Fares: 'It should take a little over a year, weather permitting.' Ms Haviland: 'Have you prepared the costings?' Mr Fares: 'Yes. Ben and I have done a costs schedule for the bank, and I have a copy of it for you.' Mr Fares then identified an undated one and a half page document consisting of 56 items, mostly expressed in terms of precise thousand dollar sums aggregating $2,354,300; at the top of the list appears 'Professional Fees $65,000.00'. Mr Fares described the schedule as 'accurate as at the year 2000, when approval was granted'. Mr Fares continued his narration of the conversation on that occasion as follows: Mr Barrak: 'This is only our estimate. The bank will order its own quantity survey report and I will provide you with a copy of that.' Mr Fares: 'As you know, the fees for Parramatta Design will be 10% of the costs of construction.' Ms Haviland: 'Yes I know.' Mr Rix: 'Gus we want you there full time looking after this building. Mr Fares: 'I will be looking for accommodation at Nelson Bay very soon.' Ms Haviland: 'Make sure it is big enough to accommodate all of us when we visit. We will share the cost of the rent.' Mr Barrak: 'There is also the issue of construction finance. You know the NAB want pre sales.' Ms Haviland: 'Ben you organise the finance and the marketing.' Mr Fares at no time suggested that any such ten per cent fee arrangement was the subject of any quotation in writing. Moreover Mr Fares conceded under cross-examination that '[t]here was no constraint, no' upon what would have been ten per cent of the ultimate construction costs. 227 Mr Fares then spoke of his travel to Nelson Bay to find suitable accommodation for himself, and of his return to Sydney with a lease 'for signature by Landmark, and Ms Haviland or Mr Rix'. The following conversation was said by Mr Fares to have thereafter occurred at Ms Haviland's home on a date not specified: Mr Fares: 'I found a good house and I have the lease for signature.' Ms Haviland: 'Guys. Please explain to me again how your fees will be calculated.' Mr Fares: 'As we agreed before, [PDD] will be paid 10% of the cost of construction as its compensation for the plans and constructing the building. That means because you own 1/3, you will be responsible for 1/3 of the cost of construction plus 10% of that figure for Parramatta Design. Landmark will be responsible for 2/3 of the cost of construction and 10% of that figure to [PDD].' Ms Haviland: 'At what stage does this money have to be paid?' Mr Fares: 'The fees will be paid as progress payments at the same time when the bank pays construction drawdowns.' Mr Barrak: 'This is standard practice in the building industry. Your son David is a builder. Why don't you ask him?' Ms Haviland: 'Yes. I will give the plans to David to get his opinion on how much it is going to cost.' Mr Fares: 'Jeanette. We should now organise a meeting with NAB about the construction loan.' Ms Haviland: 'Yes. I will discuss it with Kevin and get back to you.' Mr Fares: 'What about the lease Jeannette. Could you please sign it for me because the agent will not hold the house for any more than a few days.' Ms Haviland: 'Can I keep the lease guys? I need to talk to Kevin before I sign it. I will also get David to have a look at the plans and to give me an estimate of the cost.' No such alleged fee arrangement was even confirmed in writing by or on behalf of PDD, Mr Fares, Mr Barrak or Landmark or otherwise. 228 Mr Fares then recorded that the lease was never returned to him, and to his knowledge, was never signed. Mr Fares said that he rang Ms Haviland to enquire about the lease papers, and was told that Mr Rix had come from his farm at Wiseman's Ferry, and that he (Mr Fares) and Mr Barrak should come for a coffee to discuss Nelson Bay. A meeting thereafter occurred at Ms Haviland's home in Pymble, on 2 July 2000, when according to Mr Fares, a conversation occurred to the following effect: Mr Rix: 'Now Gus, can you please explain to me who is going to build the Nelson Bay project.' Mr Fares: 'We have already discussed and agreed to this before we bought the house.' Mr Rix: 'Are you capable of building it Gus?' Mr Fares: 'Of course I am capable of building it.' Mr Rix: 'But I think this project needs a proper builder Gus.' Mr Fares: 'I am a licensed builder and [PDD] is also a licensed builder.' Mr Barrak 'Kevin. You are now insulting Gus and I.' Ms Haviland: 'Sorry Guys. Kevin doesn't mean that you are not a proper builder but he is worried that you can't handle the job. I believe that you can handle the job but Kevin and I are getting old and we cannot afford to take the risk of building this project. Only 7 units are allowed and we got 14, so we have already made the money. We should all sell it.' Mr Fares: 'Ben and I don't want to sell it. We have done all the work and we are ready to start building.' Ms Haviland: 'Sorry guys. Kevin and I have thought about it and we believe its in our best interests to sell. You are young and you can take a risk because if you fail, you have the energy to start again.' The clear implication of the first two lines of that conversation, according to this piece of Mr Fares' affidavit evidence, involves an inherent inconsistency with the PDD case that PDD was the subject of an agreement in its favour to be the builder of the Nelson Bay development made as early as September/October 1998. Otherwise of course, Mr Rix's question can only be explained by the unlikely implication that he had forgotten what is contended by PDD to be a radical term of the joint venture arrangement. 229 Mr Fares next proceeded by his affidavit to set out the work preliminary to construction of the fourteen unit development said to have been attended to by PDD: (i) demolition quotations: PDD obtained a quotation dated 8 June 2000 from Doug Fraser Pty Ltd addressed to Dowling Real Estate, 'to demolish and remove buildings, concrete slabs and footings at 5 Laman Street, Nelson Bay of [$10,230 (inclusive of GST)]' and a further quotation from Kurri Used Building Supplies and Demolition for $10,500 plus GST dated 13 June 2000; (ii) enquiry made by him on 16 June 2000 from Dial Before You Dig in order to ascertain the local of underground services, including Telstra, Energy Australia and AGL; (iii) a quotation was obtained from Mitchell Brandtman on 1 May 2000 in the sum of $12,500 for quantity surveying services; (iv) vehicular crossing requirements of Port Stephens Council were obtained; (v) quotations were sought from sub-contractors; one such quotation was exhibited to Mr Fares' affidavit, namely from Drew Constructions Group Pty Ltd on 31 August 2000 in relation to formwork and concreting; (vi) a schedule of unit sizes showing the living area, balcony and garage areas for marketing purposes was provided by Mr Fares to Mr Barrak, together with an artist's impression to be used for marketing purposes, no dates however of preparation of those documents being provided; (vii) rental details for available accommodation for Mr Fares as at 22 June 2000 were obtained from Dowling Real Estate; (viii) application was made for a construction certificate through a private certifier, because private certifiers 'are quicker than councils'; and (ix) services and engineering plans were obtained from Far West Consulting Engineers for the 14 unit development, comprising some 34 pages of sketch plans. 230 Mr Fares next testified in his affidavit that '[w]hen it became apparent that Ms Haviland and Mr Rix would not agree to the construction proceeding, I was suffering from a lack of income and cash flow as I had closed my office in order to reside at Nelson Bay for the entire period of construction'. Mr Fares said that he then 'sought to access the equity that Landmark had in the Nelson Bay property to enable Landmark to finance other projects so that I could work', and that Mr Barrak agreed to the proposal. Mr Fares said that he then telephoned Mr Haviland and said: 'Landmark would like to draw on the equity of the house by way of extension of the mortgage or refinance'; to which Ms Haviland was said to have replied: 'I'm sorry Gus but Kevin and I don't need to borrow any money and we will not consent to any funds being borrowed on the Nelson Bay property. I have a cross guarantee between us and I will not consent to more money being borrowed.' These discussions between himself and Ms Haviland were said by Mr Fares to have occurred from late 2000 to 2002. Mr Fares complained that Landmark's equity had been 'locked in the Nelson Bay property and… Ms Haviland and Mr Rix refuse to allow the joint venture to proceed with the development as agreed'. 231 Mr Fares summarised his complaints up to this point of his lengthy affidavit as follows: 'The matter was idle for a long time. During this time, after consultation and agreement with Ms Haviland, I went to Nelson Bay and organised the house to be rented for the time being so that it earns some money to help justify its existence. The property was rented for about $250 per week at various times. Due to the refusal of Toyama, Ms Haviland and Mr Rix to fund the building in accordance with the joint venture agreement, and their refusal to consent to Landmark accessing its equity in the Nelson Bay property, I remained without any income for a period of about 2 years.' 232 Mr Fares' principal affidavit then moved to events commencing from 3 June 2002. Ms Haviland and Mr Fares met in Sydney, according to Mr Fares, to discuss plans he had designed for the Wiseman's Ferry property of Mr Rix and Ms Haviland. In the course of a dinner in the city, Mr Fares deposed to the following conversation between them: Jeanette: 'What are we going to do with Nelson Bay?' Mr Fares: 'What do you think Jeanette? Jeanette: 'Why don't you buy it?' Mr Fares: 'You are asking at the wrong time. I am busy developing a site at Alexandria and Benjamin is building his project at Parramatta.' Jeanette: 'How about we all sell it then. Ben and you are busy and you don't really need it.' Mr Fares: 'Jeanette, Ben and I have worked so hard to achieve a good result with the plans and we want to build it with you as we agreed from the beginning. If you and Kevin don't want to build it, then this is not the right time for Ben and I to buy your share because we are busy building other projects.' Jeanette: 'But Kevin and I want to build a house at Wiseman's Ferry and we need to sell very soon. You and Ben are already building elsewhere and you don't need Nelson Bay.' Mr Fares: 'Jeanette, please talk to Ben. If Ben accepts to sell it, then I will do whatever Ben agrees to do with you. But there is one thing that is very important. Parramatta Design worked for 3 years and increased the value of the property. If we don't build this project, then Parramatta Design must be compensated.' Jeanette: 'You've done a great job Gus. Lets see what happens and we will talk about compensation later.' 233 Mr Fares then said that Ms Haviland rang him the next day and she informed him that she had spoken to Mr Barrak, and that Mr Barrak had 'agreed to sell' the Nelson Bay land. He claimed that Ms Haviland further said that she would 'put an ad in the paper at the first opportunity', and that she would 'put down your name and phone number because you are the technical person and I can't explain the technical stuff'. Why then would she have suggested that joint advertisement at all, it may be asked? As elsewhere indicated in these reasons, it was Ms Haviland's evidence that she and Mr Fares had advertised the Nelson Bay land for sale at a point in time when Mr Fares and Mr Barrak were in a situation of disengagement, and she and Mr Fares conversely were engaged in the task of endeavouring to sell the Nelson Bay land. The objective circumstances point more in favour of Ms Haviland's version of events by this time. 234 Thereafter an advertisement was placed in the Sydney Morning Herald by Ms Haviland for the sale of the Nelson Bay land, which contained reference to 'Jeanette' and 'Gus' and their respective mobile numbers, but not to 'Ben' and his mobile phone number. After the advertisement had been inserted, Mr Fares said he 'telephoned Mr Barrak because I was concerned that I had not spoken to him directly about advertising', and he deposed to the following conversation between them: Mr Fares: 'Ben did you agree with Jeanette to sell the Nelson Bay property?' Ben: 'No. Jeanette asked me last week and I told her that Landmark's share is not for sale.' Mr Fares: 'Well mate. She told me that you agreed to sell it and she has put an ad in the paper.' Ben: 'Landmark's share is not for sale. I will stop the ad right now.' 235 On the next day, according to Mr Fares, the following telephone conversation was said by him to have taken place between himself and Ms Haviland: Jeanette: 'Ben asked me to stop the advertisement. He is very angry. He said to me: "Landmark's share is not for sale. Which part of the English language don't you understand?"' Mr Fares: 'Jeanette. Are you sure Ben agreed to sell?' Jeanette: 'Do you know Gus - who has the casting vote in Landmark?' Mr Fares: 'Casting vote? Ben and I do everything together. There is no casting vote.' Jeanette: 'Do you have the Memo and Arts of the company?' Mr Fares: 'No Jeanette. Ben looks after all the paper work and I trust him.' Jeanette: 'Gus you had better take legal advice to protect yourself from Ben. He is going to rip you off.' Mr Fares: 'Jeanette, Ben is my friend and my business partner. How can you suggest that he would do anything against my best interests?' This explanation proffered by Mr Fares for the reason for the joint advertisement of the Nelson Bay land could only described at best in his favour as enigmatic. I was not persuaded as to the truth or accuracy of Mr Fares' purported explanation for the advertisement purportedly reflecting the authorisation jointly of Ms Haviland and Mr Fares. 236 Mr Fares thereafter attached exhibited to his affidavit correspondence between Ms Haviland and NAB, commencing with her letter dated 17 September 2002 to NAB requesting 'that all cheques drawn on the [bank] account be signed by all parties namely Mrs Jeanette Haviland, Benjamin Barrak and Gus Fares'. I observe that given that the relationship between the Bank account individually authorised signatories had degenerated into at least disharmony, Ms Haviland's request was entirely understandable. Subsequently on 25 November 2002, Mr Barrak wrote to the Bank in the following terms (inter alia): 'We refer to the telephone conversation with Ms Sonal Shah this afternoon. As discussed, we have obtained an internet bank statement for the above account which shows fees charged to the account that the writer and Mr Ghassan Fares have no knowledge of. We note your telephone advice that these fees are incurred due to Mrs Jeanette Haviland requesting to sight 13 cheque vouchers. We request that you provide us with the full details of all actions taken by Mrs Haviland to date on the account including which cheques she has requested to sight. Furthermore we request that no action be taken on this account, other than credit actions or actions in payment of the mortgage and clearance of cheques, without the consent of Benjamin Barrak or Mr Ghassan Fares. Please confirm when such arrangements are put into place.' 237 It will be recalled that an offer of $1.8 million was made by a company, Tangate for the Nelson Bay land on 10 May 2000, to which Mr Barrak responded on 10 July 2002. Mr Fares said that up to the time of making his principal affidavit of 24 March 2004, he had been unaware of negotiations between Toyama and Tangate relating to the Nelson Bay land. It appears that in the first week of July 2002, Toyama had offered to Tangate (an apparently arms length entity in relation to all three NAB account signatories) the sale of its one-third share in the Nelson Bay land for $625,000, conditional upon the release of Ms Haviland from her guarantee to NAB for the joint venture indebtedness. An internal Bank file note observed inter alia that any such re-structure of the Bank's loan would require, indeed understandably, fresh documentation; that note also disclosed a Dupont Valuation for the Nelson Bay land of $1.23 million, as well as reference to Tangate's apparently arms length offer of $1.8 million. Mr Fares complained in his affidavit as to not having been brought into these negotiations, but of course by this time the parties had fallen into entire dispute. On 1 October 2002, Toyama made application to the Supreme Court of New South Wales for the appointment of trustees for sale of the Nelson Bay land, and on 18 November 2002, Mr Fares wrote to Haviland Lawyers, on the PDD letterhead, inter alia, the following: '… Parramatta Design and Developments Pty Ltd and the writer do not owe your clients any contractual obligations nor are we obliged to provide your client with anything. We have not been engaged or instructed by your clients to do anything. We have not accepted any instructions from your clients to perform any architectural service relating to the above property. We have not acted for your clients. We have not rendered any bill to your clients nor have we received any payment from your clients for the work undertaken. Your allegation that we owe your clients any contractual obligation is a complete nonsense. All work conducted by us has been done purely as part and parcel of the agreement between Landmark Building Developments Pty Ltd (Landmark) and Toyama Pty Ltd for Landmark to develop the above property. For over two years your client, Toyama Pty Ltd, and its directors, Mrs Jeanette Haviland and Mr Kevin Rix, have done everything possible to sabotage the agreement for Landmark Building Developments Pty Ltd to develop the above land. Your clients now have the audacity to request from us documents, that they have absolutely no entitlement to, in order to further sabotage the development of the above land by Landmark. As Mrs Haviland and Mr Rix are aware, all the documents that you refer to came into existence without any direction, instructions, payment, or input from your clients whatsoever. As Mrs Haviland and Mr Rix are aware, the writer is a director of Landmark Building Developments Pty Ltd and the documents came into existence purely to facilitate the development of the above land by Landmark Building Developments Pty Ltd. As owners of the documents, we do not consent to your clients having access to or possession of any such documents. Furthermore, your attempt to possess our documents is a breach of our copyright and our intellectual property. …' Significantly, no reference was made in that letter to PDD being the builder, whether pursuant to a design and build agreement entered into in favour of Landmark and Toyama or otherwise. 238 Prior to the sale being effected by the Supreme Court appointed trustees for sale, it was made clear, by or on behalf of PDD, that it made claim to copyright in the plans and drawings the subject of the eight and fourteen home unit development consents of Port Stephens Council. Hence of course the special conditions contained in the Contract for Sale ultimately entered into between the trustees for sale as vendors and Concrete as purchaser. Thus on 13 January 2003, PDD wrote to the solicitors for the trustees for sale as follows: 'Please note that we are the designers and owners of the copyright of an approved DA for the above property. We put you on notice that we do not consent to the utilisation of our copyright, design, or plans in the marketing and/or sale of the above property.' No reference was therein made to the role or function of PDD as the builder of the fourteen unit development, whether pursuant to a design and build contract, or otherwise. 239 Towards the conclusion of his affidavit of 24 March 2004, Mr Fares deposed as follows: 'At no material time would have Parramatta designed plans for the 5 Laman St, Nelson Bay development otherwise than on the proviso that it could also build in accordance with those plans under the terms pursuant to its builder's licence.' That assertion as to PDD being the builder has not previously been communicated, so it would appear, by any written material in evidence, whereof Mr Fares was the author, and even then, the assertion was somewhat obliquely made. 240 In order to meet Ms Haviland's evidence that the amount of $27,000.00, disbursed out of the joint venture bank account conducted with NAB by cheque drawn on 19 April 1999 occurred without prior consultation with Ms Haviland and Mr Rix, Mr Fares made a further affidavit of 7 April 2004 ('Mr Fares second affidavit'), which was filed in Court on 23 April 2004. Earlier on 29 March 2004, notice of produce had been given by Concrete to PDD and Mr Fares in relation to 'Your income tax returns for the financial years ending June 1999; June 2000; June 2001; June 2002; June 2003'. 241 This affidavit commenced as follows: 'I am an affiliate member of the Royal Australian Institute of Architects (AFF RAIA) and [a] licensed builder working on my own account. I have a Bachelor of Architecture Degree. … 3. Over the last 5 years that I have conducted my business, I have resided at two different locations and have had a variety of accountants acting for me and my company. 4. In order to comply with the Notice to Produce, I searched my current home, my archives and my former residence. I located the documents in the roof cavity of my former home at 35 Nowland Street Seven Hills. 5. I have delivered the tax returns and business records of [PDD] and of myself, that I retrieved from my roof cavity, to my solicitors Proctor & Associates. 6. I have also inspected copies of my company files, which were also held in archives. 7. Following inspection of the records retrieved by me from my roof cavity and the records retained by me on file, I have prepared a Summary Schedule exhibited as GF2, which is attached to this my affidavit. The numerals indicated in each of the columns marked "Cross Reference to Bank St" and "Invoice" indicate the page number of the bulk of the documents attached to this my affidavit. The item numbers indicated in the column "Cross Reference to Tax" and those contained within the bundle of document marked GF 5 and relate to the "Ledger Listing" within that bundle. 8. Schedule GF 2 shows the break-up of all the fees paid to the draftspersons by [PDD] for expedition of the drafting of the plans that I designed in respect of a proposal for eight (8) units. The $27,000 is reimbursement to [PDD] for the payment of all these fees by it on behalf of the joint venture. No part of the $27,000 relates to payment by way of a reward to [PDD].' None of 'the variety of accountants' above referred to were identified. The sum of $27,000.00 is of course a reference to the amount of $27,000.00 controversially paid out to PDD on 19 April 1999 from the joint NAB bank account, to which several references have already been made. 242 Mr Fares' second affidavit thereafter identified by reference to a bank statement the deposit of PDD conducted with NAB on 19 April 1999, and the handwritten entry made on a deposit slip for that sum, namely 'J Haviland B Barrak G Fares NAB 27,000.' 243 Mr Fares also attached to his affidavit a single page showing a list of 34 entries of cheques drawn from 9 October 1998 to 25 March 1999 in favour of 'Draftsmen' for varying sums aggregating $24,695, and set opposite thereto in each case, except in relation to three entries for the respective sums of $1,500, $6,475 and $6,000 concerning 'Ng & Kavoosi', were amounts representing prescribed tax payments totalling $2,680, thus producing an aggregate sum at the right hand foot of the page of $27,375. That single page did not bear any hallmark of an accounting ledger or journal. 244 Also attached to that affidavit were 35 invoices addressed to [PDD], 32 whereof being in handwriting and the remaining 3 whereof being typed. Each of the handwritten documents contained the words 'architecture work drafting', or 'architecture drafting', some adding 'work experience' or 'work experience and study', and some with names somewhat indecipherable, though one name clearly appears as 'Zhang'. No identification was made on any of these handwritten documents of any specific task or assignment. The exceptions to the generality of that description were the following three invoices, each issued by Ng & Kavoosi Pty Ltd Consulting Civil and Structural Engineers Suite 4, Greenway Offices, Horwood Pl, Cnr Macquarie St, Parramatta NSW 2150, and addressed to PDD. They respectively contained the following entries: (i) '27 November 1998 Attn: Mr Gus Fares Re: DRAFTING SERVICES 8 UNITS DEVELOPMENT AT 5 LAMAN STREET NELSON BAY MEMO FEES: To Drafting and preparation of detailed architectural drawings as per your design From 16 November 1998 until 26 November 1998 60 hours at $25 per hour $1,500.00'; (ii) '15 January, 1999 Attn: Mr Gus Fares Re: ARCHITECTURAL DRAFTING SERVICES OF 5 LAMAN STREET NELSON BAY MEMO FEES: To Drafting and preparation of detailed architectural drawings From 27 November 1998 until 13 January 1999 259 hours at $25 per hour $6,475.00'; and (iii) '1 March, 1999 Attn Mr Gus Fares Re: DRAFTING SERVICES OF 5 LAMAN STREET NELSON BAY MEMO FEES: To Drafting of architectural drawings as per your design for the period from 14 January 1999 until 28 February 1999: 240 hours at $25 per hour $6,000.00'. 245 Only the three invoices reproduced above were word processed, and contained explicit reference to the Nelson Bay land, the number of hours spent and the period of time of engagement. The basis upon which Mr Fares was able to relate the miscellany of the other invoices, being 32 in number, to the Nelson Bay, eight home unit development, was not disclosed. In any event, the controversy concerning the payment of $27,000.00 by Mr Barrak to Mr Fares out of the joint bank account is relevant, not just to the credibility of the conduct of Messrs Barrak and Fares in relation to the joint venture and their co-joint venturers Ms Haviland and Mr Rix, but also implicitly to the factual issue yet to be resolved as to whether PDD was to be the builder of the Nelson Bay development. 246 Mr Fares' second affidavit made the following explanations of this unusually presented material: '12. I recall that in my prior evidence given in these proceedings, that I stated that I employed Hui Dang on a full-time basis. However, I now recall, since refreshing my memory from these documents, that between the period 9 October 1998 to 25 March 1999, Hui Dang was working for Parramatta Design and Developments Pty Limited, as a sub-contractor. 13. The last date on which the first Respondent prepared any architectural plans for reward was in September 1998. From October 1998 to March 1999 the only drafting jobs that I performed was for 5 Laman Street, Nelson Bay. 14. The persons named as draftspersons in the enclosed schedule are the persons retained by Parramatta Design and Developments Pty Limited as persons who worked on the drafting of the plans to expedite the preparation of the plans. The Development Application and Construction Certificate and Landscaping plans were prepared over a period from early October (after exchange of contracts), and lodged in council on 7 March 1999. The draftsmen were engaged as subcontractors. Parramatta Design and Developments Pty Limited, paid not only their fees but also the PPS (Prescribed Payment System) tax as shown on the schedule. 15. The engagement of the draftspersons was as a direct result of instructions received from Jeanette Haviland and Benjamin Barrak to expedite the drafting of the plans so as to ensure that the joint venture built the project and put it on the market before our neighbours who already had plans, drafted by me, approved by Port Stephens Council. Both Jeanette Haviland and Benjamin Barrak said to me words to the following effect: "Employ more people if you have to, and the joint venture will pay for it. The main thing is do the plans quickly". To the best of my recollection, these conversations took place at Jeanette's home at Pymble on or about October 1998 which was shortly after the exchange of contracts for the purchase of the Nelson Bay property. 16. The total amount paid by Parramatta Design to expedite the drafting of the Nelson Bay plans for eight (8) units was $27,375.00. The refunded amount was rounded down to $27,000.00. 17. My company did not charge any fees to the joint venture for items that did not relate to expedition but were to be paid during the construction of the project. These included: · design work which I personally conducted; · my personal work relating to the drafting of the plans; · transport to and from Port Stephens and visits to consultants; · photocopying; · Meetings with council, engineers, Hunter Water Board and other consultants; · Printing and Plotting plans; · Paper and stationary; · Supervising the draftsmen; · Telephones, faxes, internet expenses etc; · Public relations work with draftsmen for lunches and dinners etc; · Preparation of specifications; and · Preparation of architectural documentation such as colour schemes and finishes. 18. The financial year for which the payment of $27,000 relates is the financial year ending 1999.' 247 It will thus be seen that the amount of $27,000.00 charged by PDD related to the eight home unit development alone, the approval to which, as I have earlier indicated, was granted by Port Stephens Council in about March 1999. More will be later discussed in these reasons concerning that controversial payment. Incidentally, the PDD income tax return for the fiscal year ended 30 June 1999 disclosed total income of $153,275 and total expenses of $154,211, thus reflecting a net loss of $936. Included in the expenses were subscription fees of $1,025 paid to the Board of Architects, and also 'payments to Associated Person GF', thereby referring to Mr Fares. PDD sustained a similar small deficit for the preceding fiscal year ended 30 June 1998 of $1,589.57. Those financial results could not be described as reflective of a thriving or substantial architectural practice then being conducted by Mr Fares, for what that might ultimately matter. 248 In a subsequent affidavit made by Mr Fares on 23 April 2004, Mr Fares stated as follows (inter alia): 'This [1999 taxation return for PDD] relates to the disbursements of some $27,375.00 which has arisen as an issue in these proceedings. The disbursement amount relates to the costs of draftspersons that my company utilised at the specific request of Ms Jeanette Haviland and Mr Barrak on behalf of joint venture parties to expedite the drafting of the plans. … I now produce further a supplementary box of materials and documents to which my counsel referred to on 8 April 2000 which contains various other business records. …' 249 No invoice was apparently sent by PDD addressed to Landmark and Toyama or any individuals for architect's fees relating to either the eight or fourteen unit developments proposed for the Nelson Bay land. No financial statements, audited or otherwise of PDD, were tendered in evidence, nor any ledgers or journals.

The testimony of Mr Benjamin Barrak 250 Mr Barrak's affidavit evidence of 24 March 2004, which purportedly replaced the entirety of his preceding affidavit evidence of 22 October 2004 (which was tendered in evidence only by Concrete) commenced by affirming his professional occupation as a solicitor, and referring to his earlier involvement by himself or per medium of Landmark in property development and building and construction work, prior to Landmark's involvement in relation to the Nelson Bay land. He also disclosed his status as a director and shareholder in PDD from 20 October 1999 to 15 May 2000, and to his sole directorship and his sole shareholding in Barrak Corporation Pty Ltd. It is unclear as to the reason why Mr Barrak resigned as a director of PDD on 15 May 2000, which, incidentally, was five days after Port Stephens Council granted development consent to the erection of fourteen units of the Nelson Bay land. He recounted the establishment of his own law firm, Barrak Lawyers, upon leaving the State Crown Solicitor's Office, after which he 'developed a specialty in property development work'; he referred to Barrack Corporation as the holder of a builder's licence. He identified several property developments in which he and/or Mr Fares had been involved, apart from the Nelson Bay development. He spoke of becoming good friends with Ms Haviland whilst both of them were employed as solicitors at State Crown Solicitors, and provided practical illustrations of that friendship. 251 After a site visitation to Nelson Bay involving himself, Mr Fares and Ms Haviland, Mr Barrak testified as to a meeting at Ms Haviland's home between the three of them, together with Mr Rix, at which he said he offered Mr Rix and Ms Haviland a one third share in the subject residential unit development at Nelson Bay. He said that he told at the meeting that PDD and Landmark 'have the technical knowledge to obtain approval and to build this project', and further that PDD 'specialises in design and construction work', and had 'just completed a townhouse development at Auburn', and '[was] now building the block of units at Hurstville'. The following agreement was then said by Mr Barrak to have been reached in the following brief conversational terms: Ms Haviland: 'What would be the cost?' Mr Fares: 'The most popular types of building contracts are either "lump sum" or "cost plus". Lump sum contracts are fixed price and this doesn't apply to us because we don't have a plan yet. I suggest that the joint venture will pay Parramatta Design on the "cost plus" method. The going rate is cost plus 10 to 20 per cent. I am prepared to design and build this project at cost plus 10 per cent because Landmark will own two thirds of the project and I will be benefiting from that and from making sure that the development is to the highest standard. Is this all right?' Ms Haviland: 'Yes it is.' Mr Rix: 'I agree.' That alleged agreement was never of course formalised in writing. 252 After the offer of the parties to the owner of the Nelson Bay land had been accepted, Mr Barrak recounted that Ms Haviland said to him 'Ben, you do the conveyancing', which, he said, was 'quite normal', since he had done 'all the conveyancing work for Ms Haviland, her family and clients of her firm, and for Gus, in the past'. Contracts were exchanged on 2 October 1998, and the purchase was completed on 10 November 1998. Mr Barrak made no charge for professional fees or other out-of-pocket expenses, except for stamp duty. Mr Barrak spoke of an active role which he fulfilled, without charge for his professional time, in relation to the obtaining of the approval of Port Stephens Council to the proposed eight unit development on the Nelson Bay land. 253 On 1 April 1999, Ms Haviland made payment of $17,500 from her funds and those of Mr Rix into the joint NAB account of JE Haviland, B Barrak and G Fares, and on 19 April 1999, Mr Barrak said that he organised payment of the sum of $35,000 into the same account from his funds and those of Mr Fares. Mr Barrak testified thereafter to the effect that because NAB had told him that it required pre-sales as a condition of finance, referring thereby to construction finance, as distinct from property purchase finance, he set about advance marketing steps in relation to the eight units originally proposed for the development by the appointment of a firm of real estate agents to market units 'off the plan'. 254 Mr Barrak then spoke in his affidavit of his recall of the lunch with his co-venturers Mr David Rix at Crows Nest; he did not assign a date to that occasion; the only conversational piece which Mr Barrak attributed to Mr David Rix in relation that occasion, which would doubtless have been the La Grillarde luncheon occasion, was that Mr David Rix said '[y]ou should have regular meetings with mum and dad to ensure full accountability for the expenses and progress of the construction', allegedly after Mr Fares and Mr Barrak had stated to Mr Rix that PDD would be charging 'cost plus 10% formula'. Mr Barrak also attributed to Ms Haviland on that occasion the invitation to Mr Fares '[y]ou should find a place to live at Nelson Bay'. Mr Barrak stated in his affidavit that 'I am aware that [PDD] proceeded to close its offices at Church Street, Parramatta in about June or July of 1999 as part of arrangements for Mr Fares to move to Nelson Bay to commence construction on the job site at the property as soon as possible.' 255 Mr Barrak's affidavit narrative then moved to the fourteen home unit development proposed for the Port Stephens land, the initiative for which he ascribed to Mr Fares. He said that Ms Haviland's instructions to him (Mr Barrak) were '[y]ou boys are the experts in this area. Do what you think is best'. By this time, according to Mr Barrak, Mr Fares had closed his office at Parramatta, and was working out of Mr Barrak's solicitor's office at Parramatta. Mr Barrak said that he instructed and assisted PDD to attend to meetings at Port Stephens Council and the Hunter Water Board, and to draft the 'Statement of Environmental Effects' and the SEPP 1 objection made in relation to the adjoining home unit development. He also said that he drafted letters, in consultation with Ms Haviland, to each of the Port Stephens councillors, and that along with Ms Haviland and Mr Rix, he attended various meetings with 'certain councillors'; he said he also organised the obtaining of statutory certificates, including the 'Construction Certificate', from the Council and the Water Board. 256 After Port Stephens Council gave its development consent on 10 May 2000 to the fourteen home unit development, according to Mr Barrak's affidavit evidence, a dinner meeting occurred at the Parramatta Park Royal Hotel, in the course of which: (i) construction by [PDD] was discussed 'at length'; (ii) Mr Fares gave Ms Haviland a costs schedule that 'estimates the cost of construction, and said '[PDD's] fees will be 10% of the costs'; (iii) Mr Barrak said '[t]he Bank will be providing me with a formal quantity survey and I will give you a copy of this as soon as I get it'; (iv) Mr Rix said to Mr Fares 'You have to be at Nelson Bay full time to look after this project'; (v) Ms Haviland said: 'Gus you should find accommodation that is big enough for all of us when we visit. I will sign the lease with you'; and (vi) Ms Haviland said to Mr Barrak: '[p]lease organise the construction finance and the contracts for the pre-sales'. 257 Mr Barrak listed the following further matters which he said he attended to in relation to the Nelson Bay fourteen home unit venture: (i) embarking on a marketing campaign in order to satisfy NAB's condition of pre-sales in advance; (ii) obtaining a property market appraisal report of 10 May 2000 from Dowling Real Estate in respect of each unit; (iii) organising a draft strata plan depicting the area of each of the proposed fourteen units, and obtaining a s 149 certificate from Port Stephens Council; and (iv) assisting PDD to obtain updates of demolition quotations, 'tenders from local sub-contractors for various aspects of the construction', and 'applying for the Construction Certificate'. 258 Mr Barrak next testified in his affidavit to meeting with Ms Haviland, along with Mr Fares, in about June 2000, at Ms Haviland's Pymble home 'for the purpose of signing the lease', and of conversation between them occurring to the following effect: Mr Fares: 'I have brought the lease for you to sign.' Ms Haviland: 'How are your fees for building going to be calculated again?' Mr Fares 'The joint venture will pay for all the costs of the construction as they arise and Parramatta Design will be paid 10% of the cost of construction as its fees for preparing the DA plans and for construction. That means that you, Kevin and Toyama will pay 1/3 of the fees due to Parramatta Design. Landmark will pay the other 2/3.' Mr Barrak: 'David is a builder. Why don't you ask him to advise you about the cost because this is less than the standard practice in the industry.' Ms Haviland: 'Yes. I will ask David.' Mr Fares: 'Could you please sign the lease for me Jeanette because we don't want to lose this house?' Ms Haviland: 'I have to talk to Kevin about the lease before I sign it.' Mr Barrak: 'Jeanette, we need to meet with NAB about a construction loan very soon.' Ms Haviland: 'Kevin is at the farm. I will have to speak to him about that too.' 259 A further meeting was said by Mr Barrak to have occurred at Ms Haviland's home 'in the weeks that followed', attended by Messrs Barrak and Fares, and Ms Haviland and Mr Rix; the conversation that took place was narrated by Mr Barrak in his affidavit to the following effect: Mr Rix: 'We need a proper builder to build something like this.' Mr Fares: 'I am a licensed builder. I designed this building and I know it better than any other person. I am the best person to build this project and I don't appreciate your implication that I am not a proper builder.' Mr Barrak: 'I am sorry Kevin but you are now being insulting. We agreed from the beginning that Parramatta Design would build this project.' Ms Haviland: 'Listen guys. Mr Rix and I have changed our mind. We are too old to build and we cannot afford to take a risk. How about we all just sell the land. We have made enough money. After all, it is only zoned for 7 units and we got 14 units on it - so we have made our money anyway.' Mr Barrak: 'Mr Fares and I have spent years working on this. We have incurred great expense and we have both put our professional careers and practices on hold in order to obtain approval and to prepare to build this project. How on earth can you suddenly discover that you are too old?' Ms Haviland: 'You guys are young. If this project fails, you can always start again. But Mr Rix and I are too old and if the project fails, we cannot recover.' Mr Barrak: 'Ms Haviland we agreed from the beginning to develop this site with you and Mr Rix. We do not want to sell the property. We want to develop it as we agreed.' 260 Mr Barrak next narrated in his affidavit that on 5 June 2002, Ms Haviland came to Barrak Corporation's construction site in Sorrell Street North Parramatta; thereafter in a nearby coffee shop, the following conversation was said to have occurred: Ms Haviland: 'Ben, I spoke to Mr Fares yesterday. He desperately needs to sell the Nelson Bay property. He is having financial difficulty. Kevin and I are very old and we too would like to sell our share. I have come to ask you if you are willing to sell so that I can advertise the sale.' Ben: 'I find it very difficult to believe that Gus needs or wishes to sell the Nelson Bay site. In any case Jeanette, Landmark's share is not for sale until Gus and I decide otherwise. Gus and I are committed to building Nelson Bay.' In his affidavit evidence, Mr Barrak spoke of that construction project in the following terms: 'In 2002/2003 Barrak [Corporation Pty Ltd], as developer and builder, recently completed the construction of 17 dwellings… at 86-90 Sorrell Street North Parramatta'. 261 Mr Barrak then continued that on 12 June 2002, he 'learnt that Ms Haviland had proceeded to advertise the Nelson Bay property for sale in the Sydney Morning Herald', and that he thereupon telephoned Ms Haviland and said 'I told you Landmark's share is not for sale. Which part of the English language don't you understand'. Mr Barrak recorded in his affidavit that the advertisement '… ran on 8 June 2002, 12 June 2002 and on 14 June 2002', and that the advertisement provided the telephone numbers of Ms Haviland and Mr Fares 'as contacts', but not his telephone number. Mr Barrak appears to have thereby chosen his words carefully by referring to 'Landmark's share'. By this time, according to Ms Haviland's evidence, Mr Fares was at odds with Mr Barrak, and was taking a different position to that of Mr Barrak as to the sale of the Nelson Bay land, as exemplified by the newspaper advertisement for the sale of the Nelson Bay land containing reference to the names and telephone numbers of Ms Haviland and Mr Fares alone. 262 On 1 July 2002, Ms Haviland on behalf of Toyama Pty Ltd wrote to Mr Barrak, as secretary and director of Landmark, and on Landmark letterhead, in the following terms: 'You are hereby formally notified in writing that Toyama Pty Ltd requires the joint venture between Landmark Pty Ltd and Toyama Pty Ltd to be dissolved. As a result of verbal discussions between Mr Benjamin Barrak, Mr Gus Fares and Jeanette Haviland the abovementioned property was advertised for sale on the 8 June 2002, 12 June 2002 and 14 June 2002 in the Sydney Morning Herald. There were many enquiries and as you are aware already three verbal offers to purchase We have now received a written offer from Tangate Pty Ltd to purchase the property a copy of which is enclosed. The offer as enclosed is acceptable to Toyama Pty Ltd and we request that you confirm your acceptance in writing of the offer on behalf of Landmark Pty Ltd within 7 (seven) days from the date of this letter to enable a written acceptance to be forwarded to Tangate Pty Ltd. In addition would you kindly nominate your choice of independent solicitor to prepare the contract for sale and to conduct the conveyance on behalf of the joint venture. We look forward to your early reply.' The content of that letter is consistent with what Ms Haviland recorded in her affidavit as to the rift that had arisen between Messrs Barrak and Fares by that time, and as to steps taken by her, in consultation with Mr Fares, to advertise the Nelson Bay land for sale. Mr Barrak observed in his affidavit that '[t]he offer was for $1.8 million even though the advertised price was $1.75 million', but he proceeded to assert in his affidavit as follows: 'The offer from Tangate was conditionally accepted by Landmark, and by Toyama. Tangate subsequently withdrew its offer.' There was nothing conditional about the terms of Mr Barrak's acceptance of the Tangate offer, as indeed appears from his letter of 10 July 2002 addressed to Tangate, and his contemporaneous letter sent to Toyama, both of which have been earlier extracted, and both of which were sent on Landmark's letterhead and signed by Mr Barrak. Significantly, no claim was made by those letters as to entitlement to copyright, but rather to the contrary, specifically in the context of the former letter, Landmark informed Tangate that '[t]he full size copy of the approved plans as requested… of your letter may be collected from our office.' Together these letters serve to contradict PDD's assertions subsequently made that the plans and drawings relating to the fourteen home unit development never became available to Landmark and Toyama, whether by way of 'a licence to act pursuant to a subsisting development approval', to adopt the language of counsel for Concrete, or otherwise. 263 However as I have also earlier recorded, the Tangate offer was withdrawn on 15 July 2002, and on 23 July 2002, Mr Barrak wrote to the Solicitors then acting for Toyama (Alexander & Associates) as follows: 'We refer to your facsimile dated 22 July 2002 and received by the writer today. You were informed on 18 July 2002, both orally and in writing, of our information from Mr Freeman, solicitor for Tangate Pty Ltd, that Tangate Pty Ltd has terminated its offer to purchase and does not wish to proceed with the transaction. Accordingly the representation in your letter does not accord with our advices from Mr Freeman. In any case, you were advised on 18 July 2002 that in light of the termination of its offer by Tangate Pty Ltd, Landmark Building Developments Pty Ltd does not wish to sell its share of the above property. Furthermore, in light of your client advertising the sale of the above property without the consent of Landmark Building Development Pty Ltd, we formally place you on notice of our demand that your client is not to deal with the interests of Landmark Building Developments Pty Ltd in any way whatsoever. Given the representation about Tangate Pty Ltd in your facsimile of 22 July 2002, we are concerned to ensure that your client is adhering to our demand and your immediate confirmation of this would oblige. We also await your prompt response to our letter of 18 July 2002 relating to the manner in which your client seeks to achieve its stated objective of dissolving the joint ownership of the above property for consideration by Landmark Building Developments Pty Ltd.' 264 Mr Barrak's affidavit thereafter exhibited a great deal of contentious correspondence which passed between PDD and Barrak Lawyers on the one hand, and the solicitors acting for the trustees for sale on the other, subsequent to the appointment having been made by the Supreme Court on 12 December 2002, being correspondence which led to judicial advice given by Young CJ in Eq on 22 May 2003 as earlier extracted towards the commencement of these reasons. For completeness I should additionally record that the Chief Judge in Equity also noted the following in the context of his Honour's orders: 'It is also noted that the plaintiff is prepared to consent to an order that any licence it has to use the plans I have just referred to is to be assigned to the trustees without compensation but the defendant declines to give a similar undertaking.' 265 It is appropriate to record, at this point of the conclusion of my summary of the evidence of Messrs Fares and Barrak, that when they both effectively agreed to sell the Nelson Bay land in June-July 2002, there was an implicit recognition that the purchaser would obtain the plans and drawings the subject of the development consent of 10 May 2000, yet neither Mr Fares nor Mr Barrak (nor Ms Haviland or Mr Rix) found it necessary to agree, and did not in fact agree, on any division of the proceeds of any sale in such a way as to provide any payment to PDD or Mr Fares in recognition of PDD being deprived of any alleged opportunity to be the builder, and neither Mr Fares nor Mr Barrak address those circumstances in their respective affidavits, save that Mr Fares asserted in his affidavit certain conversations commencing from 3 June 2002, which I have extracted or summarised in my account of Mr Fares' affidavit evidence. Even then, assuming that affidavit material to be persuasive, Mr Fares merely said that there was a discussion with Ms Haviland, during which she said that the question of compensation for PDD could be discussed later.

The expert testimony of Mr Brendan Farrugia (quantity surveyor) 266 PDD sought to lead expert evidence from Mr Brendan Farrugia of BMT & Assoc Pty Ltd Quantity Surveyor ('BMT'), to which objection was raised generally on behalf of Concrete, and alternatively as to some aspects thereof. Mr Farrugia stated that he was 'familiar with and [had] read the expert witness code of conduct and [agreed] to be bound by it for the purposes of these proceedings'. My immediate concern was whether this affidavit and the annexures thereto complied with the relevant stipulations of the Federal Court Rules, but the objections of Concrete were perhaps even more fundamental. Senior counsel for Concrete thus explained that '… what we are really saying is here is a quantity surveyor who has been a project manager and he purports to say what others do … also he seems to be expressing legal views in our submission as to what is the weight of the evidence and so on'. 267 Mr Farrugia's 'executive summary', to the extent pressed by PDD, was as follows: (i) '[PDD] undertook significant amounts of work that in the opinion and experience of BMT & ASSOC Pty Ltd would normally be undertaken by an appointed builder to a development…' (ii) '[it is] not … uncommon practice to see common shareholders and directors between various entities involved in a development with a 'design and build' contract;' (iii) [a]rchitectural fees for a development of this nature generally are 6.25% of the total construction cost;' (iv) '[a] [b]uilder's [m]argin for a development of this nature and difficulty would be 10% of the hard construction costs totalling $311,489 as shown in our previous estimate; and' (v) '[BMT] believe the agreed fee of 10% of the construction cost, for the design and build contract to represent a fair, reasonable and competitive amount for the design and construction works for the 14 apartments.' 268 As to what remained of Mr Farrugia's report, after the disallowance of aspects thereof the subject of objection, Concrete submitted as follows: (i) evidence adduced by a quantity surveyor cannot, and in any event here did not, relevantly assist PDD to establish what was the nature and import of the agreement reached between the parties in late September 1998, that being of course the key issue arising in the proceedings; (ii) no defined boundary or distinction exists in the building industry between the roles or functions of a builder and a developer and an architect, a proposition with which Mr Farrugia had broadly agreed; in the present case, Mr Fares had sought to fulfil each of those roles, and all or most of the relevant communications the subject of evidence in the proceedings were explicable or comprehendible on that basis, and did not prove or assist to prove him to a builder or building contractor, at least in any usual or traditional sense; (iii) the Farrugia report largely comprised submissions and arguments, rather than opinions on propositions otherwise established by the evidence; thus for instance Mr Farrugia expressed the view that 'the weight of the evidence… is overwhelming', and that 'there is absolutely no evidence whatsoever to justify the proposition that the building works were to be put out to tender', which even if potentially relevant, clearly involved Mr Farrugia's trespass upon matters outside the scope of his function and expertise; (iv) the whole of the evidence tendered by Mr Farrugia should be rejected or accorded very little weight, in that there was no transparency in his stated conclusions, and Mr Farrugia as a quantity surveyor did not have the relevant expertise in any event to testify as to whether particular work is usually undertaken by a builder or a developer or an architect; (v) Mr Farrugia's opinion was also irrelevant to the extent that it purported to provide evidence of normal architectural fees under a design and build contract; in the present case, neither party contended that PDD was to be paid as an architect under a design and build contract according to so-called normal fees exigible under such circumstances; rather PDD's case was that it was entitled to be paid ten per centum (10%) of construction costs, whatever those costs would turn out to be in the events which happened; (vi) Mr Farrugia's assertions as to a builder's margin, and as to the reasonableness of agreed fees of 10% of the total building cost, should be rejected, or given very little weight, in that there was no supporting reasoning or analysis provided for in the context of any such asserted conclusions; and (vii) Mr Farrugia's valuation of the work undertaken by Mr Fares in the sum of $240,625 was fanciful, being based upon 6.25% (derived from the Royal Institute of Architects fees guide) of projected building costs of $3,850,000, which assumed work undertaken in contract documentation, tendering and negotiation, contract administration during the construction process, and contract administration during the post-construction process. 269 Moreover it was submitted by senior counsel for Concrete that in respect of documents in evidence upon which Mr Farrugia purportedly relied, Mr Farrugia effectively conceded, in the course of cross-examination, that instances thereof purporting to evidence work undertaken by a builder were typically documents that equally evidenced work undertaken by a developer, or at times by an architect, and that documents relied upon by Mr Farrugia were therefore essentially neutral on point; Concrete submitted moreover that at least in his capacity as a director and corporator of Landmark, Mr Fares was in substance a developer. 270 It was further submitted by Concrete that even if any of the documents relied upon by Mr Farrugia did in fact demonstrate that PDD purported to undertake any work normally performed by a builder, a proposition which Concrete in any event denied, that would only demonstrate that PDD sought to be the appointed builder, and perhaps purportedly undertook some preliminary work as a builder, and did not nor could not constitute evidence that Mr Haviland and Mr Rix agreed on behalf of Toyama that PDD would be the builder of the Nelson Bay development. 271 In my opinion, the submissions of Concrete as to an absence of, or at least shortcomings in, qualification for admissibility of Mr Farrugia's opinions, and of exaggerations, if not fanciful expressions of views on his part, were at least for the most part soundly conceived, and essentially correct. I gained the clear perception of Mr Farrugia's evidence, particularly his written material, as being largely deficient in careful analytical and objective thought. Moreover at least to the extent that Mr Farrugia's testimony was inconsistent with that of Mr Brooks, I am of the opinion that Mr Brooks' qualifications, and his objective reasoning, were such as to require that his evidence should prevail.

The factual issue arising in the context of my determination of Concrete's third main basis for rejection of the case for breach of copyright of the subject plans drawings - whether there was an agreement made between the parties whereby PDD (and/or Mr Fares) was to be the builder of the fourteen home unit development, whereby PDD (and/or Mr Fares) was to be rewarded for its work by periodic draw downs of up to ten per centum of the construction costs during the construction process 272 The resolution of this issue requires the assessment by the Court of the veracity of the testimonies, on the one hand of Messrs Fares and Barrak, and on the other hand of Ms Haviland, Mr Kevin Rix and Mr David Rix, and also of any contemporaneous documentary material bearing upon the issue as to the likelihood or otherwise of any such arrangement the subject of this issue having been made between those two groups, in the context of their evolving relationship. Again in this and the segments which follow, it is convenient to combine reference to PDD and Mr Fares together as PDD, and it should be understood that Mr Fares is to be treated as included in any use of that expression. 273 Given the length of time which each of those persons spent in the witness box, (apart from Mr David Rix, whose written and viva voce testimony, by comparison with the other four, was relatively short), I had the opportunity of assessing the credibility of their conflicting evidentiary accounts, and of gaining an insight into the integrity or otherwise whereby each of them gave answers under the pressure of cross-examination, and in particular as to whether there was maintained a genuine recollection on oath, or else a commitment to answers which might be thought to best advance their respective cases. In that regards, one major difficulty in resolving the factual issues in this litigation has been the limited availability of contemporaneous documentation, and in particular, authentic documentation, with the consequence that any witness who was prepared to be untrue to his or her oath, in order to advance his or her case, was potentially afforded ample scope for reconstruction of events. 274 I therefore found it necessary to scrutinise the demeanours and reactions of each of those persons individually, as they gave their viva voce evidence, particularly under cross-examination, as well as to endeavour to place into temporal context, in particular what each was saying, and thus to determine whether a favourable outcome to his or her case was more important than fulfilment of his or her oath to be truthful, and duty otherwise to the Court. Some time before the time the proceedings came on for hearing, Messrs Fares and Barrak on the one hand and Ms Haviland and Mr Rix on the other hand, had fallen into irreconcilable dispute, and mutual bitterness had become evident from the content of their respective affidavits. What few contemporaneous, or relative contemporaneous, documents existed were limited in scope. The parties did not keep minutes of meetings, or correspond with each other in writing, at least to any material extent. Accordingly the assessment of the probabilities has not been a simple task. 275 My assessment of the credibility of Ms Haviland's testimony must be undertaken with reservation as to her emotional reaction to what she evidently considered to have been a betrayal by Mr Barrak, in favour of his financial advancement, of a longstanding relationship somewhat akin to that of a foster parental role, borne out of a longstanding friendship commenced at the State Crown Solicitor's Office. It is evident that her now former husband Mr Kevin Rix bore a less affectionate and sympathetic attitude towards this young man, and from the outset was less confident in relation to any commitment to the business relationship with Mr Barrak, and with Mr Fares, who had been introduced to Ms Haviland and Mr Rix by Mr Barrak. Moreover both Mr Rix and Ms Haviland were understandably reluctant to become involved in and committed to significant financial risk and exposure. Messrs Fares and Barrak, being significantly younger, were evidently bent on a course of gaining wealth as early as possible in a rising property market. 276 There is evidence from which the inference may readily be drawn that Mr Barrak and Mr Fares did not have sufficient financial asset grounding to undertake this Nelson Bay development, and it was they who solicited the involvement of Ms Haviland and Mr Rix. Hence the task fell on them, particularly Mr Barrak to persuade Ms Haviland and Mr Kevin Rix to join in this venture. As I have earlier recorded, the evidence discloses that it was the relationship, at least of Ms Haviland, if not also Mr Kevin Rix, with NAB which secured the funding required to purchase the Nelson Bay land at favourable interest rates. My observation of Mr Kevin Rix was that of someone, as in the case of his now former wife Ms Haviland, who fully comprehended the fundamental importance of the implications of testimony to the court on oath, but though I have kept in mind, in my evaluation of the credibility of the testimony of each of Mr Rix and Ms Haviland to the Court, the need for reservation because of the extent of the emotional resentment which by then they harboured against Mr Barrak, and also Mr Fares. In short, both Mr Rix and Ms Haviland, being elderly in comparison with Messrs Barrak and Fares, would have readily understood, and readily eschewed, the prospect of any open-ended commitment to PDD or Mr Fares of the somewhat extraordinary nature which, with the support of Mr Barrak, they have asserted in these extraordinary proceedings. 277 I find that both Ms Haviland and Mr Kevin Rix evinced substantially more determination to be truthful in their recounting of past events than either Mr Barrak or Mr Fares. I have derived assistance in reaching that finding from the testimony of Mr David Rix, who was an impressive witness. Although I must bear in mind his filial relationship with Mr Kevin Rix and Ms Haviland as their son, he tended to be one step apart from the intensity of the emotion that visited this unfortunate saga of litigation in this Court, and apparently about to continue in the Supreme Court. He was unequivocally sure of his recollection as to what was said in the course of the crucial conversations at the La Grillarde Restaurant on 4 August 1999. His vastly greater experience in the building industry to that of Mr Fares and Mr Barrak reflected implicitly in his evidence a fundamental lack of experience and qualification in any practice sense for Mr Fares to undertake the construction of a not insubstantial development in the vicinity of Newcastle. 278 The inference clearly open to be drawn from my acceptance of Mr David Rix's evidence on that occasion was that at least up to that point in time, no suggestion had been advanced on behalf of Mr Fares and Mr Barrak that the building work at Nelson Bay would be undertaken by PDD and/or Mr Fares. By that point in time, matters had been advanced to the stage that the eight home unit development was awaiting the approval of Port Stephens Council, being an approval that was subsequently granted on 24 September 1999. Once the prospect of a fourteen unit development consent emerged, the clear inference I would draw was that neither Ms Haviland and Mr Kevin Rix committed themselves to proceeding with the building of that development, much less by PDD and/or Mr Fares. Particularly was that so in the light of the counsel received earlier from their son David. 279 As to the testimony on oath of Mr Barrak, I have the misfortune to conclude in respect of a professional person that he was prepared to say virtually anything on oath which was destructive or disparaging of the case of the applicant Concrete. It is apparent, from what was disclosed as to the issues involved in the Supreme Court proceedings, that Mr Barrak holds indirectly a financial interest in the outcome of the present litigation, in particular in relation to the evidentiary issue, and the implications of the issue, as to whether PDD or not Mr Fares was mutually agreed to be the builder of the fourteen unit development in particular. The absence of any written agreement to that effect, however informal, provides eloquent testimony alone to the absence of an agreement of such radical dimension. The case for establishing a finding in favour of the respondents requires me to prefer the oral testimony of Mr Barrak and Mr Fares to that of Ms Haviland and Mr Kevin Rix, a course which without reservation I would not take. 280 As I have earlier recounted, there is also some documentary evidence before me from which the inference may be drawn as to the absence of any such extraordinary arrangement. If any such appointment was the subject of a contractual arrangement, I would have expected that an arrangement of that inherent complexity and far reaching benefit to Mr Fares as one of the joint venturers in reality would have been reduced to writing, at the very least in the form of exchange of formal correspondence. The very open-ended nature of any such arrangement, whereby virtually all risks and exposures would pass to Landmark and Toyama, without at least the existence of an agreement in writing underpinning the arrangement giving some definition thereto, almost beggars belief as to the reality of its existence. For completeness I should add that not even any financial arrangements had been concluded for any such open-ended arrangement. 281 The evidence of Mr Kevin Rix as to the numerous reasons why he would not have entertained any arrangement of the kind postulated was as convincing as it was sensible and realistic from any business perspective. I would not accept that Ms Haviland would have come to any view inconsistently with that of Mr Kevin Rix, and a fortiori with that of her son, and thus made any commitment in line with any such inconsistency. I accept without any material reservation Mr Kevin Rix's evidence reflective of his reasons as to his absence of confidence in Mr Fares as a builder/developer generally, much less in relation to the daunting prospect of a development requiring the borrowing of substantial funds, with all the personal exposure thereby entailed, as not only essentially truthful, but furthermore as reflecting the commonsense of not proffering to a person, having no evident experience as a builder of a large development in a locality with which Mr Fares had no experience or connection. Moreover despite the fracture of their marriage, whenever that actually occurred whereof there is no evidence, the evident relationship between Mr Kevin Rix and Ms Haviland has implicitly continued on a basis of mutual communication, such as would render highly improbable that one would have made the decision to proffer Mr Fares such an open-ended financial arrangement in the absence of support of the other. 282 It is always a matter of regret to find of a person engaged in litigation that his evidence on oath on any of the contentious factual issues arising in these proceedings cannot be accepted. I gained the ultimate impression from Mr Fares' testimony, by the time of conclusion of his cross-examination, that he would literally say anything in support of the contention that he was appointed by Landmark and Toyama to be the builder of either the eight unit development or the fourteen unit development, irrespective of the truth thereof. In summary, I have the misfortune to find that Mr Fares struck me as a devious, albeit intelligent person, who was prepared to say anything in his evidence which he perceived would assist his case. I have insufficient confidence in making any finding in his favour on any critical or material issue in the proceedings, unless unequivocally supported by written material having independent force of operation. Moreover as in the case of my findings in respect of Mr Barrak, to the extent that his account of any conversations on significant or critical matters involving himself with Ms Haviland and/or Mr Rix (and also of course Mr David Rix), I would prefer without any hesitation the evidence of each of the latter. 283 I have made a number of observations, in the course of my outline of the facts and circumstances in this case, which have tended to point, or assist to point, against the likelihood, indeed the inherent unlikelihood, of any agreement as to the appointment of PDD or Mr Fares as the builder of both the eight and fourteen unit developments. I need not therefore repeat the same, except perhaps to emphasise first, that the objective circumstances (in particular those involving the joint 'for sale' advertisement, the authorship of which I have no hesitation in ascribing knowingly and intentionally to Mr Fares as well as to Ms Haviland), and secondly the absence of any written confirmation of the existence of such an unusual if not extraordinary arrangement, being oral to boot, at the centre of the radical factual controversy bearing upon and essential to Concrete's third proposition of legal significance, operate together to require my unequivocal rejection of the existence of any contractual arrangement having ever been made. I refer of course to the alleged arrangement to the effect that PDD and/or Mr Fares was to be the builder of the fourteen unit development, or for that matter of the earlier eight unit development. I will next make further findings on the controversial $27,000.00 payment made to Mr Fares on 19 April 1999, which related directly of course to the earlier proposed eight home unit development.

Findings in relation to the payment of $27,000.00 made to PDD on 19 April 1999 284 In relation to PDD's case that it was to be the builder of the earlier eight and later fourteen unit developments, which I have rejected above, a manifest inconsistency arose in relation to the payment of $27,000.00 made out of the NAB joint bank account conducted in the names of Ms Haviland, Mr Barrak and Mr Fares on 19 April 1999. That is because if such an agreement was reached for PDD to be the builder and therefore compensated for the design and building work by various draw-downs throughout the construction, it must be asked why the requirement for the joint venture to make the $27,000.00 payment upfront of commencement of construction, which in fact of course occurred. Put another way, the payment of architectural fees of $27,000.00 was inconsistent with the thrust of the PDD's and/or Mr Fares' case as to appointment of PDD and/or Mr Fares as the builder, since that supposed appointment was made on the footing of ten per centum of all construction costs, whatever they might happen to be. This payment produced a substantial amount of evidentiary attention, PDD claiming that the reason for the payment was to expedite the application for the development consent and subsequent construction certificate for the eight unit develolpment. 285 Prior to the payment of the $27,000.00 on 19 April 1999, the following sums were deposited to the credit of the joint bank account: (i) by Ms Haviland on behalf of herself and Mr Rix on 1 April 1999: $17,500; and (ii) by Messrs Fares and Barrak on 19 April 1999: $35,000. A handwritten note made by Ms Haviland in evidence as Exhibit A12 indicated that at that time, there were the following project claims or debts totalling $52,500 outstanding in respect of the eight unit development originally proposed for the Nelson Bay land: 'DA & Construction Cert $27,000 Engineering plans $10,000 Council fees $5,000 Artists impression $1,500 Interest etc $9,000' That information was said to have been given to her by Mr Barrak, which I accept. No vouchers were provided to her in respect of those sums. 286 To restate in broad summary the case propounded by PDD in the course of the hearing: (i) PDD was originally to be remunerated for preparing the design plans, and for undertaking the construction of the eight home unit residential development, by an amount equal to ten per centum (10%) of the construction cost, payable by periodic drawdowns; (ii) PDD was subsequently to be remunerated on the same basis for preparing the design plans, and for undertaking the construction of the fourteen home unit residential development, upon the same financial basis; and (iii) otherwise the three project participants (ie Mr Fares as to one third, Mr Barrak as to one third, and Ms Haviland and Mr Rix as to one third) would be partners or joint venturers together by way of their respective nominated corporate entities (albeit Mr Fares and Mr Barrak combining together in relation to a single corporate entity (ie Landmark) as to a two thirds share, and Ms Haviland and Mr Rix combining together in relation also to a single corporate entity (ie Toyama) as to a one third share), and all outgoings and income would be borne and shared (as the case may be) in those basic shares. 287 To restate in summary Concrete's essential case in outline, based as it was on the evidence of Ms Haviland and Mr Rix, PDD and/or Mr Fares were to be a one third joint venturer in relation to each of those successive projects, and Mr Barrak was to be another one third joint venturer, and Ms Haviland and Mr Rix were to comprise together the remaining one third joint venturer, upon the initial footing that PDD and/or Mr Fares would be remunerated for the architectural design work in relation to the original eight home unit development, but upon the later footing that they would not be remunerated at all for architectural design work in respect of the fourteen home unit development, other than of course by way of effective sharing of one third of the capital expected profits on resale of the Nelson Bay land. Subject thereto, the three parties or party groups were mutually intended to be, and would be effectively partners or joint venturers together in equal shares. In particular, so far as the position of Ms Haviland and Mr Rix extended, and upon which Concrete relied in the presentation of its case, neither PDD nor Mr Fares was to be the builder of either development. 288 The circumstances in which Ms Haviland and Mr Rix made payment of the sum of $27,000.00 into the joint bank account of the venturers on 19 April 1999 became the focus of attention in the course of the hearing, because of the bearing of that circumstance, at least indirectly, upon the central issue or issues in the proceedings, which I have last addressed and resolved. Those circumstances have been, at least for the most part, already identified in these reasons. 289 Concrete contended that the somewhat belated production by Mr Barrak of his informal accounting statement to Ms Haviland (Exhibit A7), containing as it did the words 'architectural plans, DA and CC', and reference to the payment of $27,000.00 made to PDD earlier in April 1999 by Mr Barrak, being a payment which, according to Ms Haviland's evidence, was dissembled from her until she received that accounting statement, constituted an implausible attempt on the part of Messrs Barrak and Fares to combat the so-called manifest inconsistency arising by way of PDD's purported reliance on an agreement, supposedly reached with Ms Haviland in late October 1998, to pay for disbursements required to expedite the application for the development approval and the issue of a construction certificate in relation to the original eight home unit development. 290 In support of that contention, Concrete pointed to the following objective circumstances: (i) no reference was made to the Council expedition agreement in PDD's pleadings; I observe that PDD's amended defence and cross-claim filed as late as 17 March 2004, which I have earlier set out in considerable detail in these reasons because of the breadth of PDD's allegations contained therein, was lengthy and complex; (ii) Mr Barrak made no reference to that alleged Council approval expedition agreement in his original affidavit sworn 24 March 2004, a matter which he was obliged to concede under cross-examination; Mr Barrak further conceded under cross-examination moreover that the alleged expedition agreement was raised for the first time when he was giving his viva voce evidence; (iii) Mr Fares made no reference to the alleged expedition agreement in his affidavit of 22 October 2003 which Mr Barrak prepared for Mr Fares in the proceedings, and which again Mr Barrak found himself obliged to concede in cross-examination; that affidavit was not read by PDD, but was tendered by Concrete as evidence in its case; sub-par 12(f) of that Fares affidavit of 22 October 2003 contained the following: '[PDD] has not received any reward for the approved architectural plans for the development of the property for 14 units. The payment of $27,000 on 19 April 1999… relates to disbursements for an application to Port Stephens Council for 8 units… Parramatta has not received any moneys or reward whatsoever in respect of the DA for 14 units which is the subject of these proceedings.' (iv) Ms Haviland was emphatic in her testimony that no such agreement as to expedition was ever made; in any event, the very notion of disbursements relating to expedition was either inconsistent with the surrounding circumstances or at least doubtful in that regard at best; the same plans for a development consent had to be prepared when it became appropriate to apply for the same, whether or not the development application was to be expedited; and (v) the description, which Mr Barrak accorded to the $27,000.00 payment in the contemporaneous documents (eg the cheque butt (Exhibit A6) and the Barrak schedule (Exhibit A7)) brought into existence in 1999, made no reference whatsoever to expedition; moreover Mr Barrak conceded his awareness of the reason why Ms Haviland required the financial information the subject of that schedule he prepared, namely to provide the same to her accountants for income tax reporting purposes. 291 I agree with the further submissions of Concrete that in the course of his cross-examination, Mr Barrak sought to avoid the inferences normally and rationally arising from the language of the documents to which I have above referred, by characterising the same as merely prepared in 'shorthand' form. The differing descriptions given by Messrs Barrak and Fares, concerning the nature and purpose of the $27,000.00 payment, did not however assist the credibility of PDD's case on that subject, or generally in terms of the credibility of Messrs Barrak; I refer to the following examples at least cumulatively: (i) '… relates to disbursements for an application to Port Stephens Council for 8 units being DA number D483/99 which was approved on 24 September 1999' (par 12(f) of Mr Fares' affidavit of 22 October 2003 prepared by Mr Barrak), that description implicitly pointed to disbursements in the nature of council fees, none of which were components of the $27,000.00 the subject of PDD's evidence; (ii) virtually the same description appears in Mr Fares' affidavit of 24 March 2004, being of course the affidavit which purported to replace his earlier affidavit of 22 October 2003, which was not read at the hearing of the proceedings; (iii) in his oral evidence given on 1 April 2004, Mr Fares said that this sum of $27,000.00 paid to him or PDD was incurred '[f]or staff, photocopying and all other expenses that my office incurred at the time of the preparation: plans, photocopying plans, printing plans…, plans, faxes…'; (iv) in his rather belated affidavit of 24 March 2004, which was his only affidavit read in the proceedings, Mr Barrak said in effect that in April 1999, he had undertaken relevant calculations for PDD (whereof he incidentally was no longer at least formally a director), and had concluded that '[w]e need funds to pay the draftsmen and other bills'); he said thereafter that he telephoned Ms Haviland and 'informed her of the… $27,000.00 outstanding for draftsmen'; and (v) however the documents purporting to evidence payments made to draftsmen suggested that draftsmen had been progressively paid within a relatively short period of time of invoices having been rendered; moreover at the time of the payment of the $27,000.00 made out of the NAB joint bank account of the joint venture parties, there were apparently no draftsmen retained by PDD and then unpaid. 292 The submissions of Concrete, relevant to the veracity of PDD's case in relation to the $27,000.00 payment, next addressed Mr Fares' evidence in more detail; I agree with the thrust of those submissions to the effect that his evidence as to the $27,000.00 payment was particularly unsatisfactory, and had changed in the course of the hearing. Those submissions were in summary as follows: (i) in his affidavit of 24 March 2004, Mr Fares said that when preparing the plans for the fourteen home unit development, he worked with '… one draftsman full time'; (ii) in his oral evidence, he said in effect that no one was employed to assist him at the time of the fourteen units; and (iii) yet he confirmed that for the purpose of producing the plans for the eight home unit development, he expended the controversial amount of $27,000.00 wholly in payment of wages of persons he employed for that purpose. 293 Mr Fares' responses in cross-examination produced inconsistencies in his account as to the purported expenditures aggregating approximately $27,000.00 in respect of the first set of plans, and in relation to the circumstances whereby the second set of plans came to be prepared; for instance in the latter case, his evidence was somewhat confusingly expressed as follows: '… I did all the work. I think I used someone on the 14 for just a little bit but he didn't continue. That's why my reference to this person, I remember now that this person he only worked in maybe very very minor minor time but he wasn't at all in charge, or he did much work on the 14'. I need go no further into the detail of what was careful and responsible cross-examination on the part of senior counsel for Concrete, and which exposed inconsistencies in PDD's case, being inconsistencies leading to the conclusion, in my opinion, that the respective testimonies of Messrs Fares and Barrak, as to the circumstances of preparation of the plans and drawings for the eight and fourteen home unit developments, and the basis for governing the remuneration of PDD and Mr Fares, were substantially contrived. 294 In my opinion, no reliance can be justifiably placed on the accuracy or reliability of any internal documents of record relating to PDD or Mr Fares which were tendered in PDD's case, unless independently verified by other evidence; by 'independently verified' I have the misfortune to conclude, in the light of his professional status, that I find myself obliged to exclude Mr Barrak as a source of verification of any critical evidentiary issue in dispute, in the absence of verification by objective circumstances, or by a witness other than Mr Fares (or for that matter Mr Barrak). As to the internal documents comprising a number of purported fee notes from draftsmen, the name bore no independent documentary verification, and co-incidentally totalled slightly more than $27,000.00, thereby purportedly demonstrating that neither PDD or Mr Fares profited at all from that payment. Only three invoices, which I have earlier reproduced, bore any purportedly adequate detail of times and dates of engagement. 295 A further principal consequence, inherent in Mr Fares' explanations, as Concrete rightly submitted, is that if the agreement of PDD was to provide architectural services as part of a design and build agreement, it would not have been to the point whether Mr Fares undertook the drafting personally, or whether PDD engaged the draftsmen. In either case, it was to be reasonably expected, on the basis of any such alleged retainer, that PDD would bear the cost of business activities to be undertaken by PDD, being a cost that PDD would necessarily have to incur in the course of earning its alleged entitlement to receive beneficially payment of ten per centum (10%) of the construction costs pursuant to the alleged design and construct contract said by PDD to have been made in its favour by or on behalf of the co-owners of the Nelson Bay land. 296 In any event, given that PDD and/or Mr Fares was to be the builder upon the basis alleged, why the requirement for payment of the $27,000.00 in the first place, Concrete submitted rhetorically, and rightly so, even if all of the supporting documentation put in evidence had been independently verified.

Conclusion on the third proposition of legal significance formulated by Concrete 297 Upon the basis of my findings that no agreement was made in September/October 1998 (or indeed at any other time) that PDD and/or Mr Fares ('PDD') would be the builder of the Nelson Bay development, whether under a design and construct contract or otherwise and that the only agreement relevantly made was for PDD to prepare architectural plans for the eight unit development, for which it was rewarded by the payment of $27,000.00, it follows that the joint venture of Landmark and Toyama received a licence, implied by the law of copyright, to use the plans of PDD for the purpose of building the fourteen unit development in accordance with the consent of Port Stephens Council granted on 10 May 2000. Moreover whilst not strictly relevant in regard to that principal issue, given my findings of fact, it may be observed that despite the denial by PDD that such a licence had passed to the joint venture, nevertheless in the letter of 10 July 2002 from Landmark to Tangate earlier extracted in these reasons, Landmark (of whom Mr Fares was and still is a director and shareholder) stated, inter alia, that '[t]he full size copy of the approved plans… may be collected from our office'. 298 It therefore further follows, on the authority of Beck, Blair, Acohs and Bourke, that a term should be implied by law in the relevant contractual relationship to the effect that PDD's said corporate clients became entitled to use the relevant architectural plans for the purpose for which they were created. Such a licence, on the authority for instance of Beck, Blair, Ng and Torpey extends in principle to any purchaser of the subject property to use the plans for the purpose of developing the land to which the same relate. As was said by Spigelman CJ in Torpey at 549, '[o]n the authority of Beck it would readily be concluded… that such a licence conferred permission to construct the dwellings in accordance with the plans and to transfer the right to do so to a purchaser of the property.' On that same point, again in Torpey, Young CJ in Eq stated '[t]he authorities show that ordinarily the licence is considered as transferable together with the land to which it relates where the particular purpose for which the licence was granted was in connection with the land which was assigned.' The circumstances that Concrete was a purchaser from trustees for sale acting beneficially on behalf of Landmark and Toyama, albeit appointed by the Supreme Court, can make no difference. 299 Despite this line of authority, the position was taken by PDD from the outset, as has been stated throughout my reasons, that even if a licence could be implied to extend to the joint venture companies, yet on the authority of Torpey, such a licence could not pass to Concrete per medium of the trustees for sale appointed pursuant to s 66G of the Conveyancing Act. It was emphatically submitted by PDD that although no mortgage is here relevantly involved, yet on the facts the present case is 'on all fours' with Torpey which, on the further submission of PDD, stands for 'the principle that an implied licence for copyright must be specifically assigned to subsequent acquirers of the property in title.' In this context, PDD thereby sought to equate a mortgagee, exercising power of sale upon a mortgagor's default, to trustees for sale appointed in circumstances of disputing co-owners of land. 300 As I have emphasised in my earlier discussion of Torpey at some length, such an analogy is misconceived. In my opinion, one cannot equate trustees for sale of realty appointed by the Supreme Court pursuant to s 66G of the Conveyancing Act with a mortgagee exercising power of sale. Trustees for sale are analogous to administrators or receivers who exercise power of sale of property pursuant to authority confined by an appropriate instrument, in order to gain proceeds of sale for distribution to creditors. Other analogies of vendors, not being beneficial owners, also come readily to mind. In effect, trustees for sale in the current context stand 'in the shoes' relevantly of the co-owners of property, being co-owners normally in dispute. 301 There is therefore no precept in law, nor any basis in fact, that operates to prevent the implied licence to use the plans and drawings for the fourteen unit development on the Nelson Bay land being transferred from the joint venture companies to Concrete (being a purchaser for value) per medium of the trustees for sale involved in the circumstances of these proceedings. As was submitted by counsel for Concrete, 'to the contrary, the relevant factual and regulatory matrix strongly support the notion that the licence be impliedly transferred with the land for the benefit of the purchaser'. 302 In my opinion Concrete's third main basis for rejection of the case for breach of copyright is therefore also well founded in the circumstances and in accord with established principles. It follows that Concrete has been impliedly licensed to use the architectural plans the subject of this litigation on each of the three basis postulated by Concrete and PDD's cross-claim must fail. At the request of Concrete, I reserve the question of costs for submissions in the light of the reasons I have provided, including the issue as to who should be the subject of costs orders. I have made directions accordingly. 303 I conclude by observing the underlying reasons for this litigation are mystifying. It is somewhat enigmatic that such expensive and protracted litigation could have occurred in circumstances where Landmark and Toyama made such a substantial capital profit from their Nelson Bay venture in such a relatively short period of time, and why the persons respectively standing behind those companies have become locked into expensive litigation in this Court and (shortly) in the Supreme Court, and why Concrete as a third party has become embroiled in such extraordinary litigation in the first place. Perhaps there is more to the circumstance of this litigation than 'meets the eye', but whatever the case may be, the Court has not been spared the task of a ten day hearing and of subsequent consideration of hundreds of pages of written submissions, and in the case of the respondents PDD and Mr Fares, containing a considerable body of material having no or no sufficient bearing upon the critical issues falling for resolution. I certify that the preceding three hundred and three (303) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Counsel for the Applicant/Cross-Respondent: BW Rayment QC with DT Kell

Solicitor for the Applicant/Cross-Respondent: Oliveri Attorneys

Counsel for the Respondents/Cross-Claimant: DH Murr SC with TA Hall (1 & 2 April 2004) TA Hall (8 April 2004) BHK Donovan QC with TA Hall (23, 27, 28 & 29 April, 13 & 17 May & 3 June 2004)

Solicitor for the Respondents/Cross-Claimant: Proctor & Associates

Dates of Hearing: 1, 2 & 8 April, 23, 27, 28 & 29 May & 3 June 2004

Date of Final Submissions 27 July 2004

Date of Judgment: 13 October 2004