Assignment of copyright under the contract
184 As already noted, only the sale agreement in respect of the Urquhart sample practice specifically provides for the assignment of copyright, and that assignment is quite minimal; see [147] above. None of the other sale agreements make any mention of copyright.
185 It is beyond contention that the sale of a business may transfer an interest in copyright without there being an express mention of copyright in the contract. Both Murray v King and Greenfield Products, among others,attest to that. It is trite law, however, that each case and each contract must be considered in the context of its own facts. As previously mentioned the distinction between the two approaches to filling a perceived gap in a contract, described above at [153], may not be clear and they may often overlap. For example, the concept of the business efficacy requirement referred to in BP Refinery is not only an essential precondition to the implication of contractual terms but may also be a relevant consideration in the construction of the actual terms of the contract. As with all questions of construction and the implication of terms principles articulated at a high level of generality cannot substitute for a careful examination of the contracts in issue.
186 PHC submits that both the di Michiel and the Ginnane agreements, in stating that the "practice" is the subject of the sale refer to the business of the sample doctor's practice and that, properly understood, the practice includes copyright or, in the alternative, that inclusion should be implied into the contract. PHC also submits that the specific references in the di Michiel and the Ginnane agreements support this construction and indicate that copyright is included in the sale. In relation to the di Michiel agreements they are:
(a) the express inclusion in the sale of the patient records and the patient lists;
(b) the express inclusion in the sale of "any other assets or benefits agreed to be sold or vested in the Purchaser" under the agreement;
(c) the fact that consideration was required to be paid and was paid;
(d) the provision that on completion of the sale "title to and property in, the practice and all the assets included in the sale" vests in the purchaser;
(e) the requirement for delivery of documents relating to the practice to the purchaser and for their retention by the purchaser as well as a similar provision in the practitioner contracts;
(f) the expression of the fundamental objective to ensure that the patients of the sample practice transfer to the new PHC practice;
(g) the sale of the sample practice as a going concern which, the applicant submits, requires that PHC be able to copy the patient records lawfully;
(h) the fact that express exclusions in the sale do not include copyright; and
(i) the fact that the vendor gives a warranty of title to the property included in the sale.
187 In relation to the Ginnane agreements PHC made similar submissions although there were fewer express provisions to which it could point in support of its position. The provisions mentioned in (a), (b), (e) and (f) above do not appear in the Ginnane agreements.
188 PHC submits, in relation to the di Michiel and the Ginnane agreements that the implication of a term for the passing of an interest in copyright would not contradict any express term of the contract. Moreover it submits that if the sample doctors were to retain copyright they would be in a position to undermine the operation of the PHC clinics by denying PHC and the other doctors in the clinic the right to reproduce important parts of the patient records. This, it submitted, would lead to an absurdity.
189 In opposing PHC's position the respondent in its written submissions made the following points the factual aspects of which find some support in the evidence, in particular that of Dr Bateman, PHC's managing director:
(a) there was no discussion of copyright in the [patient] records in the negotiations between Dr Bateman or [Dr] Monk and the vendor doctors;
(b) Idameneo did not inspect any of the [patient] records before the transactions;
(c) Idameneo did not carry out any assessment of the quality of the [patient] records before any of the transactions;
(d) Because the doctor would have access to the [patient] records at the new premises, and therefore access to the information contained in the [patient] records, there was not need to assign copyright in the [patient] records;
(e) If there was a need for the doctor to copy from his or her own notes at the new premises, he or she could do so if he or she continued to own copyright;
(f) the Practitioner Agreement did not require Idameneo to provide the [patient] records nor did it require Idameneo to provide a licence of copyright in the [patient] records;
(g) in none of the cases did Idameneo carry on the previous medical practice as a going concern - Idameneo did not carry on the practice.
190 In so far as the applicant's submissions rely on the express inclusion in the sale agreements of the patient records and lists, they add nothing to the enquiry whether the sale included the copyright as well as the physical records. Similarly it does not advance the argument to refer to the vendor's obligation to "documents"; the warranty of title to the property included in the sale or the provision of that title to that which is included in the sale vests on completion. For reasons given by the High Court in Toll (FGCT) Pty Limited v Alphapharm Pty Limited (at [154] above) evidence of what the parties subjectively understood to be the effect of their contract is also not helpful.
191 I also do not accept that failure to find that PHC had acquired an interest in any copyright in the patient records would lead to an absurdity. The question of whether there was copying to the extent of infringing copyright unless PHC had some interest in the copyright is discussed below in the context of the claimed use of the copyright. Assuming for the moment that there was such copying, it is not for the Court to imply the transfer of an interest in copyright in order for PHC to resist a claim of infringement. In any event, there is no evidence even to suggest that any claim for infringement has been made and I make no finding on this point. It may be that, assuming (contrary to my view) that there is any relevant copyright, that authorisation (express or implied) has been given for such copying outside the terms of the sale agreements and the practitioner contacts.
192 I do not see the relevance of the respondent's point that Idameneo did not carry on the sample practice as a going concern. Whether Idameneo in fact carried on the practice as a going concern is quite separate from and independent of the obligation of the vendor to convey title to a going concern. That obligation was not conditional on the practice being continued as a going concern whether by Idameneo or anyone else. The parties are entitled, if they wish, to agree to such a term.
193 I also do not give any weight to the evidence to which the respondent referred as to PHC's lack of interest in the quality of the patient records. It is not unlikely that PHC took the view that it wanted whatever patient records and lists that the sample doctor had and, as long as it achieved that, it had all the information that was available and that was sufficient. In fact a reasonable person considering the terms of the contract in the context of the whole of the arrangements and agreements made in respect of PHC's acquisition of the sample practices might well come to the conclusion that the strong emphasis on the title to and delivery of documents indicates that copyright was not important to the purchaser. In any event I am not persuaded that the contract properly construed makes any provision for the transfer of an interest in copyright.
194 Similarly, nothing in the evidence leads me to the view that assignment of copyright or the acquisition of any interest in copyright was necessary for the continued operation of the practice acquired by PHC or to give business efficacy to the contract. PHC does not claim to have acquired copyright in the documents created by third parties such as specialist reports or radiology and pathology reports. There is no evidence that it has been unable to use those reports by reason of not having copyright. It has not argued that the transfer of copyright in those documents is necessary to give business efficacy to the sale agreements. It has not argued that the vendors under the sale agreements were obliged to transfer copyright in those documents in order to meet the obligation to transfer the sample practices as going concerns. I see no reason why the position with regard to consultation notes, medical summaries, prescriptions and referral letters are any different.
195 It is also relevant that the sale agreements are formal agreements drawn up by PHC's solicitors and executed by Idameneo, each sample doctor and the relevant corporate entities. In the negotiation of these agreements many of the sample doctors were legally represented. Only one of the sample doctors, Dr Lyons, said that he had not been legally represented although he added that his wife is a lawyer and that she read the contract. Drs Urquhart, Ginnane, O'Shannessy, Mundkur, Panwar and Sabag all agreed in cross-examination that they were legally represented. There was no evidence either way in relation to Drs Galati, Parissis, di Michiel, Fitch and Tang.
196 There is no evidence of any relevant difficulties between the parties or in the operation of the new PHC practices. This may of course be because all parties believed that copyright had passed. The impression I have from the evidence of all the doctors is that the issue was just not important to them either before or after they sold their practices to PHC. Moreover the evidence is that the issue is only of comparatively recent concern to PHC and, so far as there is any dispute, it is not between the parties to the sale agreements or the practitioner contracts. The dispute is of an entirely different nature; it is a dispute between PHC and the Commissioner of Taxation.
197 As indicated above, I accept that it is necessary for PHC to be able to draw on the information in the patient records and, indeed, on the information in the third party documents in respect of which there is no claim for copyright. In so far as it was necessary for PHC to have control of the records it achieved that by its ownership of the physical records. It is not necessary for PHC to have copyright in the patient records for it to be able to carry on its business.
198 I am confirmed in my view by the evidence discussed below as to the alleged use of copyright in the patient records after completion of the sale agreements; see below at 207 et seq. That evidence shows that little if any use was made of copyright as opposed to use of the physical patient records and the information contained in them. Given that the patient records were acquired by PHC and taken to the PHC centres it would hardly have been open to any of the sample doctors to try to prevent any copying of those records. It does not follow from this that any copyright the sample doctor owned had been assigned under the contract. It is equally consistent with the doctor giving, expressly or by implication and independent of the sale agreement, gratuitous permission (a licence) for the copying.
199 All the indications are that at the time of the sale the parties did not consider the use of copyright as opposed to the use of the physical records. Parties who are contemplating working together may prefer to rely on a measure of trust and goodwill between them to work out any difficulties that may arise in their relationship rather than to poison it at the outset by trying to provide contractual certainty for every issue. Whether or not that is the case here, I am nevertheless satisfied that only in the case of Dr Urquhart's sample practice would any copyright owned by the vendor have passed to PHC under the sale agreement.