Gaunt v Hille

24 Further, the evidence was that Mr Roger Gaunt had signed a power of attorney in favour of his brother Richard, that authorised Mr Richard Gaunt to contract with third parties on his behalf; and that Richard, in reliance on that power of attorney had, on behalf of his brother, entered into the preparation of plans agreement with Beaumonde dated 9 May 2001, and the undated construction agreement with Beaumonde. 25 Also, in his evidence‑in‑chief Mr Roger Gaunt said that he had a conversation with Mr Bill Marcolina, the Managing Director of Atrium, during which he told Mr Marcolina that he intended to terminate his relationship with Atrium. He then said at 282 of the appeal book: So, I rang my brother Richard and I said to him, "Right. We're finished with Bill. We are not going to do any more work with Bill. Sign on another builder." So then Beaumonde came into it then. 26 Further, in re‑examination Mr Roger Gaunt said at 345 of the appeal book: So would your brothers have your authority to commence arrangements with another builder without speaking to you?---Yes. They was acting on my behalf, they were. Whatever they did I accept. 27 In cross‑examination of Mr Roger Gaunt by counsel for Beaumonde, Mr Gaunt said at 347 of the appeal book: Just to clarify that last answer, you were referring to Richard Gaunt - - ?---Yes.

• • not Richard Marzec?---Doing - - but Richard Gaunt was acting on my behalf talking to Richard Marzec. That's right. Yes?---Yeah. And you were saying you accept the consequences of your brother acting on your authority?---Yes. Yes. 28 In my view, the position of Mr Richard Gaunt was one of an agent, "properly so called" ‑ in the sense that he was a person who was authorised by Mr Roger Gaunt to enter into contractual relations, on Mr Roger Gaunt's behalf, with a third party builder. The scope of the authority was to engage a builder to prepare plans and construct a residence at the site at The Vines in accordance with those plans. It was in the course of executing that agency that Mr Richard Gaunt colluded with Beaumonde in the copying of the Atrium Gaunt plans. 29 In my view, the observations referred to by counsel for Mr Roger Gaunt from the case of Moon v Towers, have no application to the facts in this case. The Magistrate's decision was not based on the fact that there was a close family relationship between Mr Roger Gaunt and Mr Richard Gaunt. The decision was based on the fact that Mr Richard Gaunt was the agent "properly so called" to contract with, on behalf of his brother, a third party builder to prepare plans, and construct a residence at the site at The Vines in accordance with those plans. 30 I now deal with the submission that it was not open to the Magistrate to reach the decision he did, because the "agency" case (referred to during argument as the "vicarious liability" case) was not before the court below. 31 In my view, by reason of the matters referred to at [22] to [23] above, it was open on the pleadings alone for the Magistrate to find that Mr Roger Gaunt was liable for the tort of Mr Richard Gaunt. However, even if that was not the case, it is apparent that the case was conducted on the basis that it was not in dispute that Mr Roger Gaunt had authorised Mr Richard Gaunt to negotiate and contract with Beaumonde in relation to the construction of the house at The Vines and that he was responsible for Mr Richard Gaunt's actions. The Local Court of Western Australia is not a court of pleadings. However, even if it was, by reason of the parties having conducted the case on the basis that Mr Richard Gaunt was authorised by Mr Roger Gaunt to find and contract with a third party builder on his behalf, it was open to the Magistrate to find that Mr Roger Gaunt was liable for the conduct of Mr Richard Gaunt in relation to the infringement of the copyright in respect of the Atrium Gaunt plans (Dare v Pulham (1982) 148 CLR 658). However, even if I was wrong in this respect, the factual foundation on which the trial was conducted, would permit the Court on appeal to uphold the Magistrate's decision (Ravinder Rohini Pty Ltd v Krizaic (1991) 30 FCR 300 at 314‑315). 32 Because of these findings, it is not necessary for me to decide whether leave should be given to Atrium and Mr Hille to amend their notice of contention to contend that the Magistrate's decision should be upheld on the alternative basis that Mr Roger Gaunt had ratified the tortious conduct of Mr Richard Gaunt and Beaumonde. Had it been necessary to do so, I would have allowed the amendment to the notice of contention, and upheld the contention. The basis of Atrium's claim to copyright in the Atrium Gaunt plans 33 The next issue arises from grounds 4 to 8 of Mr Roger Gaunt's grounds of appeal, and grounds 1 to 5 of Beaumonde's grounds of appeal. 34 Atrium and Mr Hille pleaded that Mr Hille had granted Atrium an exclusive licence in the modified Lakeview design pursuant to a written agreement dated 10 June 1996. There was no alternative claim pleaded that Atrium was the owner of copyright in the modified Lakeview design or Atrium Gaunt plans, in its own right by reason of the scope of the modifications that it made to the original Lakeview design. 35 The Magistrate found that Atrium had carried out a "significant amount of work" in relation to the drafting of the Atrium Gaunt plans. The Magistrate referred to the case of Ladbroke (Football) v William Hill (Football) Ltd [1964] 1 WLR 273 at 289 and concluded that, by reason of the original work undertaken by Atrium in relation to the Atrium Gaunt plans, it had copyright in those plans. The Magistrate also found that the Atrium Gaunt plans were derived from the Lakeview design plans, in which Mr Hille owned the copyright, and that the copyright of Mr Hille in the Lakeview design plans had also been infringed by the copying of the Atrium Gaunt plans. 36 The appellants contended that because Atrium did not plead that it had copyright in the Atrium Gaunt plans by reason of the original work that it had undertaken, it was not open to the Magistrate to come to that finding. It was said that the Magistrate's finding was "manifestly unfair" because it was not the case run by Atrium and Mr Hille at the trial. Beaumonde contended that it was denied procedural fairness because the basis upon which the Magistrate found that Atrium owned the copyright was not "fully ventilated and tested" at trial. Beaumonde submitted that it was prejudiced because it did not cross‑examine Mr Marcolina as to the substantiality of the modification in the Atrium Gaunt plans, it did not explore the question of the employment status of the draftsman of the modifications and it did not make a Jones v Dunkel submission at trial in relation to the failure to call the draftsman of the modifications. Mr Roger Gaunt supported Beaumonde's submissions. 37 In support of its submissions Beaumonde relied, in particular, upon the case of Garden City Wallpaper and Curtain Centre Pty Ltd v Barenfar Pty Ltd (unreported, Full Court, Supreme Court of Western Australia, Kennedy, Franklyn and Walsh JJ, 18 September 1998) (Garden City). 38 At trial, in his written opening submissions, counsel for Atrium and Mr Hille, referred to the "original work" contention in respect of the Atrium Gaunt plans. Paragraph 6 of the relevant submissions which were submitted at the commencement of the trial in September 2004 was to the following effect: The fact that the Atrium Gaunt derives in part from earlier drawings does not prevent the Atrium Gaunt being a separate original artistic work attracting copyright protection. Sufficient labour, skill and expertise was expended in the production of the Atrium Gaunt and accordingly it is afforded its own copyright protection: LB (Plastics) Ltd v Swish Products Ltd [1979] RPC 551 at 569. 39 During closing submissions counsel for Atrium and Mr Hille said: Your worship pleases. Let me firstly deal with the law, then I'll move to the evidence and the facts and then address you on damages. Your Worship has submissions by the plaintiffs that were submitted in September 2004 at the commencement of the trial, and in particular I draw your attention to paragraph 6, where we say the fact that Atrium/Gaunt derives in part from earlier drawings does not prevent the Atrium/Gaunt being a separate original artistic work attracting copyright protection. Sufficient labour, skill and expertise was extended in the production of the Atrium/Gaunt and, accordingly, it's afforded its own copyright protection. And we quote the case of LD Plastics v Swish Products as our authority for that. In response to the proposition that the plaintiffs do not have a claim, the claim of the first plaintiff cannot be denied under any circumstances because in his own right, Mr Greg Hille has a right to claim. He has also said that he was the author of the Vanessa and the Lakeview, and that's not been contradicted, and we've heard evidence that the Atrium/Gaunt was a derivative of the Lakeview. So there's no question about Greg Hille having a pathway to his claim. The pathway of Atrium via exhibit 16, which your Worship has had attention drawn to, and also, as I have just indicated, via its own independent claim to the original artistic work that occurs in the Atrium/Gaunt which is the Exhibit 17. 40 At the trial of the matter before the Magistrate, each party was represented by counsel. Neither counsel for Beaumonde, nor counsel for Mr Roger Gaunt objected, at the commencement of the trial that the written opening submissions of counsel for Atrium and Mr Hille were beyond the scope of the pleaded case. Nor did either counsel seek an adjournment to permit such arrangements to be made as may be necessary to meet the case referred to in the written opening submissions. 41 Further, neither counsel for Beaumonde, nor counsel for Mr Roger Gaunt objected, when counsel for Atrium and Mr Hille made the closing submissions referred to in [39] above, that he or she was taken by surprise or that the case being advanced was beyond the scope of the pleadings. Nor did either counsel apply for leave to re‑open their respective cases, or for any witnesses to be recalled, or to call other witnesses. 42 As previously mentioned, the Local Court was not a court of pleadings (s 41 of the Local Court Act 1904 (WA)). However, ordinary principles of procedural fairness required that each of the parties be aware of the case that it had to meet. In the case of Re R H Burton; Ex parte Steven Burns t/as Burns Corporation, (unreported, Full Court, Supreme Court of Western Australia, Malcolm CJ, Pidgeon and Steytler JJ, 6 February 1998), Malcolm CJ (Pidgeon and Steytler JJ agreeing) referred to the requirement to advise the other party of the case to be met, in circumstances where pleadings were not required. Malcolm CJ observed at 18‑19: The requirement that a respondent be given notice of the case against him or her does not need to be satisfied by way of pleadings or where there is a hearing, by way of an opening of the case. The necessary notice of the case may be given by the application itself, by the written material submitted in support of the application or orally at the hearing. 43 In my view, the appellants were sufficiently advised by the opening submissions and the closing submissions of the case being advanced to satisfy the requirements of natural justice. Each of the appellants was legally represented and it was open to each of the appellants to make an application for an adjournment in the event that they were unable to meet the case referred to in the opening and closing submissions, or were otherwise taken by surprise.

44 In any event, even if the Local Court was a court of pleadings, it would not now be open to the appellants to complain that the case advanced by Atrium was outside the scope of the pleadings. This is because the case was conducted, without objection by the appellants, on the basis advanced by counsel for Atrium and Mr Hille in his opening and closing submissions. 45 In my view, the following observations of the High Court in the case of Laws Holdings Pty Ltd v Short (1972) 46 ALJR 563 at 572 (Laws) are apposite to this case. In that case, the question of estoppel was first raised by the trial judge during the closing address of counsel for the appellant. Counsel for the appellant did not raise any objection that the respondents' pleading might not be adequate to raise a plea of estoppel. Nor did counsel seek an adjournment or seek to re‑open the case. On appeal, it was contended that the trial judge should not have given effect to a finding of estoppel because the question of estoppel was not raised by the pleadings. At 572 Gibbs J observed: However, when the question of estoppel was raised counsel for the appellant made no effort to re‑open the case. In my opinion the appellant cannot now complain that the facts were not fully explored when, knowing that estoppel was in issue, it's counsel made no attempt at the trial to obtain further evidence. If the appellant's counsel had then requested an opportunity to recall any of the witnesses, or to call further witnesses, I would have viewed the matter in a different light. However, in the circumstances, it seems to me that the appellant ought not now be allowed to complain of the defect in the pleadings. 46 In this case, there were two opportunities for counsel for each of the appellants to complain or object to the case being put in opening and closing on a basis which was not pleaded. However, counsel did not avail themselves of that opportunity. As Gibbs J said in Laws, the circumstances may have been different had counsel made a complaint at the trial. 47 The Garden City case relied upon by the appellants is distinguishable. 48 First, the Garden City case involved a trial in the Supreme Court of Western Australia deciding a case alleging a contravention of s 52 of the Trade Practices Act 1974 (Cth) on the basis of misleading or deceptive conduct which had not been pleaded. The Supreme Court of Western Australia is a court of pleadings. 49 Secondly, in Garden City the trial judge decided the case on a basis which had not been advanced by either party. 50 At 10, Franklyn J observed: As I understand it, neither party was alerted to His Honour's decision to rely upon the unpleaded case, that becoming apparent only when his reasons for decision were published. 51 At 15, Franklyn J, after having referred to a passage in the judgement of the trial judge, said: In my view the quoted passage again demonstrates that the unpleaded case was not clearly before the court and specifically not apparent to the parties during the course of the trial. 52 Further, Franklyn J said at 17 that: The case identified by His Honour, either as the "unpleaded case" or the alternative to which I have referred, was not so identified by respondent's counsel at trial. 53 In this case, in contrast to Garden City, both in opening and closing submissions, counsel for Atrium identified a claim to copyright in the Atrium Gaunt plans, based on original work by modification made to the original Lakeview design plans. 54 Further, there are contentions in the grounds of appeal that Mr Hille had not granted an exclusive licence to Atrium. It was said that the agreement relied upon by Atrium and Mr Hille fell short of being an exclusive licence. It was, so the appellants said, no more than an "unexercised option". Submissions in support of, and opposing, these contentions were also made by counsel for the appellants and the respondents respectively. However, I accept counsel for Beaumonde's submission that the Magistrate did not base his decision on any findings in relation to the claim founded on the grant of an exclusive licence. Accordingly, in my view, the contentions in the grounds of appeal and the submissions addressing these contentions were misdirected, and irrelevant. 55 For the reasons set out above, I dismiss grounds 1 to 5 of Beaumonde's grounds of appeal and grounds 4 to 8 of Mr Roger Gaunt's grounds of appeal. 56 In ground 6 of Beaumonde's grounds of appeal, Beaumonde contended that the Magistrate erred in fact and in law in finding that Atrium was the owner of the copyright in the Atrium Gaunt plans when there was no evidence that the draftsman of the plans was an employee of Atrium. 57 In my view, it was open to the Magistrate to conclude that Atrium was the owner of the copyright by reason of the original work undertaken by Atrium. 58 First, there was no issue on the pleadings that the Atrium Gaunt plans had been prepared by anyone other than Atrium. Thus, para 13 of Atrium's particulars of claim pleaded that, pursuant to the terms of the preparation of plans agreement and in consideration of the $5,000, Atrium "prepared drawings specifications plans and estimates". By para 2 of the particulars of amended defence, Mr Roger Gaunt admitted that plea. In my view, this was a sufficient basis for the Magistrate, once he determined that the modifications to the Lakeview design plans entailed original work, to decide that Atrium was the owner of the copyright in the modified plans. 59 Secondly, and in any event, in evidence Mr Bill Marcolina, the Managing Director of Atrium, drew a distinction between the position of Mr Hille as an external contractor, and his "in‑house drafting department" which comprised Mr Oliver Standing as the senior draftsperson and, at the relevant time, two or three other draftspersons. Mr Marcolina also deposed that he believed the modifications had been done "in‑house". As previously stated, there was no cross‑examination directed towards contesting the status of the "in‑house" draftpersons as employees. 60 Accordingly, I dismiss ground 6 of Beaumonde's grounds of appeal. Atrium's damages 61 Each of Mr Roger Gaunt (ground of appeal 12) and Beaumonde (ground of appeal 7) complained that the Magistrate erred in awarding damages to Atrium on the basis of a loss of net profit that Atrium would have made from building the house in accordance with the Atrium Gaunt plans. 62 The Magistrate said that, in awarding damages, he would follow the reasoning of her Honour Judge Kennedy in Delstrat Pty Ltd v Bond [2004] WADC 55 (Delstrat). The Magistrate observed as follows: In that case Her Honour ordered damages based on the assessment of the builder's loss of profit flowing from the owner's failure to engage the builder to construct the infringing dwelling. Her Honour considered: 1) The flagrancy of the infringement; 2) The plaintiff's artistic skills, work and expenses in preparing the initial design; 3) That the plaintiff was a builder and experienced high levels of overhead costs; 4) That by not constructing the infringing dwelling the plaintiff had lost exposure in the marketplace due to the history of featuring his work in advertising; 5) That the artistic work infringed by the defendants in that case included fully developed plans according to the contour and position of the particular block and including the elevations. In this case it is clear that the defendant gave the full working drawings of the modified Lakeview house to the third party. The third party in my view used those plans to develop the Beaumonde Gaunt. The Beaumonde Gaunt was built in exactly the same situation as the plaintiff's site plan showed and a substantial part of the Atrium Gaunt was in fact reproduced by both the defendant and the third party acting in conjunction with each other. 63 The Magistrate went on to say: In terms of damages which flows from that breach I am satisfied that amounts should be fixed at 25% of $225,000. To that sum there should be a further reduction of 10% of that sum for the overheads such as advertising costs, schedules etc. Those losses fixed at 25% of $225,000 less the overheads is said to be $25,000. In respect of the damages I am of the view that they should be fixed at 15% which is the net profit obtainable by the second plaintiff according to Mr Hans Jorgen Sphan which I estimate as 15% of $225,000 that sum being $15,450. Accordingly I make that award. I do not make any award in relation to damages for flagrancy of the breach of copyright. In respect of the claim therefore, I am satisfied that the defendant is liable for the breach of copyright. I am further satisfied that the defendant was well aware through his agents of the dangers of using plans as supplied by the second plaintiff. I am further satisfied that the defendant and third party were well aware of the dangers of breach of copyright, they having discussed it very early on in their negotiations. The plaintiff's case is therefore made out against the defendant. In respect of the indemnity sought by the defendant against the third party I am satisfied that such an indemnity should extend as to 50% of the defendant's liability. Both the defendant and third party should be liable. The third party should pay an indemnity of 50% of the damages to the second plaintiff. In regards to the first plaintiff's claim I am satisfied that he should be paid damages in the sum of $1500 for breach of copyright of his original plans. 64 Mr Roger Gaunt and Beaumonde contended that the Magistrate erred in awarding damages on the basis of a net profit that Atrium would have made had Mr Roger Gaunt engaged Atrium to construct the residence. This was because on the evidence, Mr Roger Gaunt would not have contracted with Atrium for the construction of the house at The Vines, because he had fallen out with Atrium. It followed, said the appellants, that Atrium did not lose any profits. It also followed that, insofar as damages may be awarded on the basis of the loss of opportunity to build the house and obtain exposure in the market place, the loss of opportunity ought to be assessed as very small. 65 It was also contended that the Magistrate erred in failing to take into account when awarding damages, that Mr Roger Gaunt had paid a fee of $5,000 to Atrium under the preparation of plans agreement, that Atrium would have been liable to pay Mr Hille a fee in respect of the use of Mr Hille's copyright in the plans which were modified by Atrium, and that Atrium's copyright arose from copying and modifying the Lakeview design plans in respect of which Mr Hille held the copyright. 66 The respondent, Atrium, cross‑appealed, contending that in awarding damages to Atrium in the sum of $15,450, the Magistrate had made an arithmetical error. It was contended by Atrium that the Magistrate intended to award Atrium damages comprising 15% of $222,500. This would amount to the sum of $33,750 ‑ which would exceed the $25,000 jurisdictional limit of the Local Court. Accordingly, Atrium claims $25,000 by way of damages by way of its cross‑appeal. 67 Atrium has also filed a notice of contention, contending, as an alternative, that the actual award of $15,450 should be affirmed on the basis that the infringement by Mr Roger Gaunt caused Atrium to lose the opportunity of being engaged by Mr Roger Gaunt to construct the dwelling and earn profits there from. 68 Clause 2(a) of the preparation of plans agreement with Atrium provided that no transfer of ownership of the copyright in the Atrium Gaunt plans to Mr Roger Gaunt occurred by reason of payment of $5,000 under that agreement. 69 Further, the agreement also had provision for the parties to agree a fee which would be payable as a licence fee in the event that Mr Roger Gaunt decided not to use Atrium for the construction of the residence. However, the space for the inclusion of such a fee was left blank by the parties. 70 The agreement also provided, in effect, that if Mr Roger Gaunt proceeded to engage Atrium to construct the dwelling, then the (unspecified) copyright licence fee otherwise payable by Mr Roger Gaunt to Atrium for the use of the Atrium Gaunt plans, was deemed to be incorporated in the building contract price. 71 In Sutherland Publishing Co Ltd v Caxton Publishing Co Ltd [1936] 1 Ch 323 at 336, Lord Wright MR said that the measure of damages in a copyright case is "the depreciation caused by the infringement to the value of the copyright as a chose in action". 72 In Autodesk Australia Pty Ltd v Cheung (1990) 94 ALR 472 at 475 (Autodesk), Wilcox J observed that Lord Wright's formulation had to be ‑ "applied with caution because it is potentially misleading. It will usually be difficult, often impossible, for a copyright owner to establish that a particular unauthorised reproduction has caused a diminution in the capital value of a copyright. 73 He went on to say: No doubt, it is because of these matters that judicial warnings have sometimes been given against applying Lord Wright's test too literally. Thus in Interfirm Comparison (Australia) Pty Ltd v Law Society of New South Wales (1975) 6 ALR 445 Bowen CJ in Eq commented at 446 that it would be wrong to treat the measure of damages stated by Lord Wright as "having, in effect, the force and rigidity of statutory provision. The purpose of damages is to compensate the plaintiff for the loss which he has suffered as a result of the defendant's breach. It would, in my opinion, be wrong to regard it as the exclusive measure of damages for breach of copyright appropriate to all circumstances". 74 In my view, the Magistrate erred in his approach to the awarding of compensatory damages on the basis of the loss of profit that Atrium would have earned had it been awarded the contract by Mr Roger Gaunt to build the residence at The Vines. 75 That measure of damages failed to take account of the fact that Mr Roger Gaunt was under no obligation to engage Atrium for the construction of the house. In my view, this is a case where damages should be assessed as being at large and I should award the "amount I think right as if I were a jury". 76 In the case of Autodesk, the respondent, Mr Cheung, imported and distributed "pirate" copies of computer programs free of charge to purchasers of computer hardware sold by the respondent. The court had to determine the quantum of damages which should be awarded to the applicant copyright owners. Counsel for the respondent contended that there was no reason to believe that Mr Cheung would have acquired all of the infringing computer programs from the applicants had he been required to do so at normal cost. Accordingly, so it was contended, it could not be said that the applicants had been deprived of sales of this number of programs. Wilcox J referred to the "licence fee" approach to the assessment of damages and at 476‑477, he observed: The approach has the attraction of precision. In a case where the court may infer that, presented with a choice of paying the licence fee and not using the work, the infringer would have paid the licence fee, the approach is also a logical one. Ex hypothesi the copyright owner has been deprived of a licence fee. But, where this inference cannot be drawn, it is much more difficult to say that the damage sustained by the copyright owner is equal to a licence fee. No assumption can be made that, if forced to obtain a licence, the defendant would have copied the work or copied it to the same extent. 77 Wilcox J went on to say at 477: I am not convinced that the activities of Mr Cheung, in relation to the programs found in his possession at the time of search, had the effect of depriving the applicants of the particular sums of money which they claim. It is probable that his activities cost them some sales, because some customers he supplied with AutoCAD programs would otherwise have purchased programs from the applicants. But that loss relates to the supply of programs before the date of the search. It has nothing to do with the number of programs which happened to be in Mr Cheung's premises at the time of the search. Under the circumstances, it is not logical to apply the "licence fee" approach. However unsatisfactory that course may seem, the court must treat the damages as being "at large", in the words of Horridge J in Fenning Film Service Ltd v Wolverhampton, Walsall & District Cinemas Ltd [1914] 3 KB 1171 at 1174, giving "what amount I think right as if I were a jury". So approaching the matter, and bearing in mind that Autodesk Australia would have suffered a greater financial loss from foregone sales than Autodesk Inc, I allow compensatory damages of $15,000, comprising $10,000 to Autodesk Australia and $5000 to Autodesk Inc. 78 The case of Chabot v Davies [1936] 3 All ER 221, has some similarities to this case. In that case, at the request of the defendants the plaintiff, a designer and fitter of shopfronts, submitted plans to the defendants for the renovation of the front of their shop in Camden High Street. Along with the plans, the plaintiff submitted a quotation of ₤406 7s for undertaking the renovation work. However, the defendants did not engage the plaintiff to carry out the renovation work. Instead, the defendants engaged a different builder and provided him with the plaintiff's plans. The second builder renovated the shopfront in accordance with traced copies of the plans drawn up by the plaintiff. The trial judge found that there had been an infringement of the plaintiff's copyright in the plans and said that damages were at large. The trial judge came to the view that, in the circumstances, the amount that would have been payable as a licence fee under the scale of the Royal Institute of British Architects, being ₤52, was inadequate to compensate the plaintiff. The trial judge awarded damages in the sum of 100 guineas as being reasonable remuneration for the work of the plaintiff. This amount was about 25% of the quoted price for carrying out the work. 79 In the case of Meikle v Maufe [1941] 3 All ER 144 (Meikle), the defendant architect was engaged by a building owner to design renovations to its building which had originally been designed by the plaintiff architect. The defendant's design incorporated some features of the original building design. The court held that the defendant architect infringed the plaintiff architect's copyright. Prior to awarding the contract for the design of the extensions, the owner of the building had decided against engaging the plaintiff architect in favour of engaging the defendant architect. However, the fact that the owner had deliberately decided not to award the contract to the plaintiff architect, did not preclude the court from awarding the plaintiff architect damages. The court applied the observations of Horridge J in Fenning Film Service Ltd v Wolverhampton, Walsall & District Cinemas Ltd [1914] 3 KB 1171 at 1174 (referred to by Wilcox J in Autodesk at [77] above) and found that damages were at large. However, the court rejected an argument that it should award the plaintiff architect the profits it would have earned had it been appointed as architect for the carrying out of extensions to the existing building. The court said that in assessing damages, it was entitled "to take into account all the surrounding circumstances in exactly the same way as one is entitled to do in the case of the invasion of a common law right of property". 80 Like the court in Meikle and in Delstrat, I am of the view that, the fact that there was evidence that Mr Roger Gaunt would not have contracted with Atrium, does not preclude me from awarding damages at large. In assessing damages at large as a jury, I take into account the following surrounding circumstances. 81 First, the preparation of plans agreement did not provide that the Atrium Gaunt plans would be available to be used by another builder on the instruction of Mr Roger Gaunt, on the payment of a licence fee to Atrium. This is to be inferred from the fact that the parties left that part of the standard form of agreement blank. 82 Secondly, Atrium was not in the same position as an independent draftsman whose business is comprised primarily of the drawing up of plans. Instead, Atrium, like other project home builders, provided an integrated service of both drawing up plans and building houses in accordance with standard plans. The price of the house reflects this standardised approach to house design and construction. To that end, Atrium and other project home builders incur costs including the building and marketing of display homes which would not be incurred by a business comprising only a drawing office. 83 Thirdly, Mr Roger Gaunt elected to approach a project builder to build his residence. The Atrium Gaunt plans were created and transferred into the possession of Mr Richard Gaunt as agent for Mr Roger Gaunt, pursuant to a business model founded on an expectation that, the plans would be used by Mr Roger Gaunt as part of a further contractual arrangement, which would include the consideration for the use of the plans. By authorising breach of Atrium's copyright, Mr Richard Gaunt, on behalf of his brother, defeated the expectation that underlay the production and the delivery to him of the Atrium Gaunt plans. This was conduct which undermined the business model on which Atrium's business was based, and thereby, caused harm to Atrium. 84 Fourthly, I take into account the fact that Mr Roger Gaunt paid $5,000 under the preparation for plans agreement, but place little weight on this fact, because it was not intended to comprise consideration for the right to use Atrium's copyright in the Atrium Gaunt plans. There were a number of other services which Atrium had provided in the course of producing plans specifically designed for Mr Roger Gaunt's site at The Vines. 85 Fifthly, Mr Roger Gaunt was under a time constraint within which to commence building his house. Also, Mr Roger Gaunt preferred the Atrium Gaunt design to that of the San Marino design, which was the competitive design offered by Beaumonde. There was therefore, in my view, a chance that had Beaumonde not agreed to collude in the copying of the Atrium Gaunt plans, Mr Roger Gaunt would have been required to, and would have, reconsidered his decision not to proceed with Atrium. However, Atrium was deprived of this chance by the infringing conduct. 86 Sixthly, the anticipated profit of $33,370 would serve as a limit on the amount that may be awarded by way of damages at large. This is because $33,370 reflects the profit likely to be obtained on completion of the total project, with the attendant work and risk. Therefore, the amount payable by way of damages at large would be substantially less than $33,370. 87 In my view, $9,500 is an appropriate award of damages at large taking into account the surrounding circumstances referred to above. 88 Accordingly, I uphold in part the appellants' appeal on this ground. I also dismiss Atrium's cross‑appeal and contention, although in respect of the contention I have accepted that Atrium's loss of a chance is a relevant surrounding circumstance in assessing damages. The costs order 89 The Magistrate made an order that the costs of the "matter be taxed on the non‑routine scale". 90 Each of Mr Roger Gaunt (ground of appeal 13) and Beaumonde (grounds of appeal 9 and 10) complained that the Magistrate erred in making this special costs order. At the hearing, however, Beaumonde abandoned its grounds of appeal on this issue. 91 Mr Roger Gaunt submitted in support of his ground of appeal, that the trial was not sufficiently complex to warrant the making of a special costs order. The making of a special costs order was a matter within the discretion of the presiding Magistrate. In this case, the trial lasted for 13 days, each of the parties was represented by counsel and there was complex legal argument in respect of a matter, namely breach of copyright, which is not a routine matter in the Local Court of Western Australia. On the basis of these matters, it was open to the Magistrate, in the exercise of his discretion, to make an order that the costs be taxed on a non‑routine basis. 92 I, accordingly, dismiss Mr Roger Gaunt's ground of appeal 13. Whether Mr Hille was a copyright owner 93 Mr Roger Gaunt, in grounds 9 and 10 of his notice of appeal, contended that the Magistrate erred in determining that there had been an infringement of Mr Hille's copyright by the copying of the Atrium Gaunt plans because Mr Hille was not the author of the Atrium Gaunt plans. It was contended that it was not possible for both Atrium and Mr Hille to be owners of copyright in the Atrium Gaunt plans. 94 In my view, these grounds of appeal should be dismissed because they misread the finding of the Magistrate. The Magistrate has found that Mr Hille was the copyright owner of the earlier Lakeview design which was modified to produce the Atrium Gaunt plans, and that it was Mr Hille's copyright in the earlier Lakeview plans which was indirectly infringed by the copying of the Atrium Gaunt plans by Beaumonde. Whilst there is no direct composite statement by the Magistrate in these terms in the judgment, this conclusion is obvious from a number of separate findings made at different places in the judgment and by his award of damages to Mr Hille. That was a finding which was open to the Magistrate to make. He had the Lakeview plans and the Atrium Gaunt plans before him, and was able to assess the extent to which the Atrium Gaunt plans reproduced Mr Hille's Lakeview design. (See Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd (1998) 46 IPR 309 at 312‑313.) 95 I dismiss grounds 9 and 10 of Mr Roger Gaunt's grounds of appeal. 96 Further, Beaumonde, in its ground of appeal 8, contended that the Magistrate erred in awarding any damages to Mr Hille as there was no finding of infringement of Mr Hille's copyright. I reject this ground for the reasons set out in [94] above. Beaumonde's letter of 25 March 2002 97 The Magistrate made orders, in the third party proceedings, that Beaumonde pay 50% of the damages and costs awarded against Mr Roger Gaunt. 98 In ground 11 of his notice of appeal, Mr Roger Gaunt contended that the Magistrate failed to consider properly his "claim against Beaumonde, in particular, the letter dated 25 March 2002 from Beaumonde to Atrium". 99 Although it is not expressly stated in the ground of appeal, I understand Mr Roger Gaunt's contention to be that the Magistrate should have found that there was a contract of indemnity between Mr Roger Gaunt, through his brother Richard, and Beaumonde, which was comprised or evidenced by a letter dated 25 March 2002 from Beaumonde to Atrium. 100 The letter dated 25 March 2002, written by Mr Greg Cowie of Beaumonde to Atrium, reads as follows: It is disappointing that you still wish to pursue the matter concerning the copyright issue against our client, Mr Gaunt. We believe Mr Gaunt had no intention of copying your display home when he approached Beaumonde Homes to design his home at No 431 Barbera Lanes, The Vines. Mr Gaunt had no definite ideas on his requirements for his new home for which Atrium Homes converted one of your display homes to suit his needs. For one reason or another, he did not proceed to build with Atrium Homes and engaged Beaumonde Homes to change one of our display homes to suit his specific needs. As this home in question was a Beaumonde Homes display with changes and thus Beaumonde Homes copyright, we have no choice but to defend the matter. If you still wish to proceed with Court action, we request that all correspondence be directed to Elio Galante, C/O Beaumonde Homes. 101 The face of the letter records that a copy was sent to "Mr Gaunt". 102 Counsel for Mr Roger Gaunt said that this claim of a contractual indemnity by Beaumonde was not pleaded but was alleged in his counsel's opening at the trial. 103 In my view, the Magistrate did not err in failing to consider a claim associated with the letter of 25 March 2002, in determining the extent to which Beaumonde should indemnify Mr Roger Gaunt. This is because there was no case run at trial based upon a separate contractual indemnity comprised by, or evidenced by, the letter of 25 March 2002. 104 First, counsel for Mr Roger Gaunt was correct in conceding that a claim based on a separate indemnity undertaking comprised by, or evidenced by, the letter of 25 March 2002 was not pleaded. However, counsel's submission that such a claim was identified in the opening of Mr Roger Gaunt's case against Beaumonde at trial cannot be accepted. In my view, counsel for Mr Roger Gaunt did not open Mr Gaunt's claim against Beaumonde on any basis which went beyond that of the pleaded case. This is apparent from the following extract of the trial transcript which records the opening of the third party case by counsel for Mr Roger Gaunt (who was not counsel in the appeal): Your Worship, the defendant's position is as stated in his amended defence and the amended statement of claim against the third parties. … [H]e claims that if he is by any chance liable to the plaintiffs then the loss and damage that has been caused to him, he claims that infringement was because of the third party and that the third party should indemnify him. 105 Secondly, although Mr Roger Gaunt and Mr Richard Gaunt gave evidence that Beaumonde had said that it would "take care of" Atrium's allegation as to copying the Atrium Gaunt plans, and that this was recorded in a letter from Beaumonde, they did not regard the letter of 25 March 2002 as containing that assurance. Rather, they referred to and relied upon a letter of 15 June 2002 which was addressed directly to Mr Richard Gaunt by Beaumonde (exhibit 44 at the trial).

106 Thirdly, and in any event, there was no consideration identified to support the contractual indemnity relied upon. 107 Accordingly, I would dismiss ground 11 of Mr Roger Gaunt's grounds of appeal. 108 I will hear the parties on costs. I certify that the preceding one hundred and eight (108) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

Counsel for the First Appellant: K G Robson

Solicitor for the First Appellant: Pinnington and Associates

Counsel for the Second Appellant: M D Cuerden

Solicitor for the Second Appellant Griffiths & Godecke

Counsel for the First and Second Respondents: J T Schoombee

Solicitor for the First and Second Respondents: G V Lawyers

Date of Hearing: 22 and 23 March 2007

Date of Judgment: 18 December 2007