any reasonable bystander could not have formed the apprehension that the judge's views of Mr Margiotta would have prevented him from fairly considering the application before him.
70 2. If there is any general principle on amendments it is that prima facie all amendments should be allowed subject to the appropriate orders being made as to costs. However, in the real world of litigation, life is not so simple.
71 Mr Hall QC submits that Garling DCJ misapprehended the application for amendment. He says that the learned judge seemed to think that he was dealing with an application to amend after the limitation period had expired, whereas the matters of fact had already been pleaded and only a new source of liability and new type of remedy were sought to be added.
72 Mr Hall says that the judge should have borne in mind more closely the points made by Kirby J in Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146, 167-172. Moreover, he submits, the judge should have left any possible Limitation Act problems to the trial judge (vide Wardley Australia v Western Australia (1992) 175 CLR 514, 533). Again, he took into account an irrelevant consideration, namely the death of Mr Wehbe.
73 Dr Birch submits that any order for amendment would just have been a waste of time as the copyright action would have been defeated by the Limitation Act.
74 In this regard, the evidence gives some indication that the relevant building was close to completion in October 1993. Thus, an amendment made in August 2000 to take effect from that date would prima facie be of no avail. An amendment made to take effect on 13 May 1998 when the summons was originally filed would face all the problems of giving leave to amend to raise a statute barred claim.
75 However, Part 17(5) of the District Court Rules specifically permits amendments outside the limitation period which raise a new cause of action if based on the same facts as were already pleaded.
76 The basal reason for Judge Garling's refusal of the application for amendment was that the plaintiff did not satisfy him that there could be a fair trial based on the death in 1995 of Mr Wehbe.
77 The answer by the plaintiff is that the defendant faced the same problem with the original action.
78 This answer is virtually nullified because of what McHugh J said in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 555.
79 The decision to refuse the amendment was in the discretion of the judge. The judge decided the application on the basis of whether a fair trial of the additional count was likely and ruled that the applicant/plaintiff had not satisfied him on that point.
80 It is clear that this Court should only interfere with a discretionary judgment such as that under consideration when the judge below has acted on some wrong principle.
81 His Honour held that the new claim was out of time, but he did not advert to the question as to whether the extra copyright count was based on the same facts. Indeed this point does not even seem to have been argued and, indeed, its significance was only realized during argument of the appeal. Is this a sufficient error of principle to enable this Court to set aside his Honour's exercise of discretion and exercise it afresh? It is very hard to come to such a conclusion.
82 Accordingly, the appeal from Garling DCJ should be dismissed.
83 3. I turn now to the decision of Gibb DCJ. The first matter to consider is the law relating to licences to use architectural plans.
84 As was held below, the starting point for the present law is the judgment of Jacobs J in Beck v Montana Constructions Pty Ltd [1964-5] NSWR 229.
85 His Honour set out the general principle at p 235:
"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 it was contemplated between the parties that it would be used at the time of the engagement. It seems to me that this must be regarded as a principle of general application."
86 That principle has been applied in many reported decisions since, the most significant being Ng v Clyde Securities Ltd [1976] 1 NSWLR 443; Gruzman Pty Ltd v Percy Marks Pty Ltd (1989) 16 IPR 87 (M McLelland J) and Acohs Pty Ltd v R A Bashford Consulting Pty Ltd (1997) 37 IPR 542, 558-562. I applied it in connection with copyright of the labels on whisky bottles in R & A Bailey & Co Ltd v Boccaccio Pty Ltd (1986) 4 NSWLR 701, 711.
87 However, as Beaumont J said in De Garis v Neville Jeffress Pidler Pty Ltd (1990) 37 FCR 99, 112, the application of the Beck principle will depend upon the particular circumstances. I will first deal with the submission that the principle has no application at all to the present case, then with the aspect of transferability, and later, under head 6, with the remaining matters that need to be considered.
88 Plaintiff's counsel submitted on this appeal that the Beck principle did not apply as the arrangement between the plaintiff and Citron Developments was not one of "the required orthodoxy". Counsel referred to Stevens v Benning (1854) 1 K & J 168, 175; 69 ER 414, 417 in which a joint venture between an author and a publisher was held not to involve more than a personal contract. A recent example of a similar approach may be found in Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225 where the whole of the evidence showed that, rather than a proprietor commissioning a plan from an architect, there was a joint venture contract of a personal nature between the parties.
89 Whilst in the present case, there is a hint of some convoluted agreement between the plaintiff and Citron Developments, the evidence was so sketchy that no such personal agreement could be established and nor did her Honour find any. Accordingly, the Beck principles will apply.
90 In Beck, Jacobs J said at 233 that the matter must be considered in two steps, viz: (1) did the person who engaged the architect obtain the right to use the plans in the manner in which they were ultimately used; (2) if so, did the transferee of the land where it was held out to him that plans were available and approved, obtain the like right.
91 His Honour then said at 234:
"Assuming the right of the owner of land to make use of sketch plans for the purpose of erecting a building substantially in accordance with that sketch I think that when he sells the land and holds out to the purchaser that plans are available and approved from all authorities and shows those plans to the purchaser, then on the sale of the land there should be implied an agreement collaterally to the sale of the land whereby the vendor grants to the purchaser such right as he has to the use of the plans."
92 The 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; see eg the Acohs case supra.
93 4. In the instant case, there was no direct transfer of any land to the defendant from Citron Developments. However, the judge accepted that the licence "was transferred by the vendor (qua the mortgagee exercising its power of sale)". Although she used these words to describe the defendant's submission, as such contract was the only agreement of sale entered into at the auction, this must have been the contract to which her Honour was referring at the foot of page 9 of her judgment.
94 It by no means follows that a mortgagee has power to transfer an implied licence to use plans. Whether it may do so depends on the terms of the mortgage. As the mortgage was never placed in evidence, it is extremely difficult for an argument to succeed that the defendant acquired a licence under the Beck principle by transfer.
95 Even 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; see eg Gay v Johnston (1936) 37 SR (NSW) 454; Burns Philp Trustee Co Ltd v Ironside Investments Pty Ltd [1984] 2 Qd R 16, 21; Daniels v Pynbland (Nos 1 & 2) (1985) 4 BPR 9716 and Fisher & Lightwood, Law of Mortgage Aust ed (Butterworths, Sydney, 1995) at para [3.28]. The key question is whether the plans were inseparably connected with the mortgaged land.
96 5. Dr Birch submitted that as the onus of proof was on the plaintiff, any evidentiary deficiency affected the plaintiff and not the defendant.
97 Where a copyright owner seeks damages for infringement of copyright and a possible licence is put in issue, the plaintiff must prove the non-existence of the licence, see Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88, 94-5. The reasons given by the High Court for this result show that they are inapplicable to the present causes of action.
98 In the present matter, the plaintiff's case was that it owned the drawings, it had licensed Citron Developments (at least to some degree) and licensed no-one else to use the drawings. The defendant clearly had made use of the plans to its benefit. It was thus for the defendant to show some title to use the drawings without payment.
99 6. It follows that that part of her Honour's judgment which relied on a Beck type assignment cannot stand.
100 However, as Dr Birch points out, although the Beck licence point occupied the main bulk of the reasons for judgment, her Honour did not accept Mr Torpey's evidence on the contract point and she considered that there was insufficient material on the question of quantum so far as the unjust enrichment and quantum meruit counts were concerned.
101 It is true that the judge's finding of fact on the contract count concludes the matter. There is no warrant for any redetermination of that point.
102 So far as unjust enrichment is concerned, the only inference that can be drawn from the material is that the plans had some value to the defendant. It is also clear that it did not pay for them. There was thus some enrichment to the defendant. However, the question must also be considered as to whether it can be said that the defendant was enriched at the plaintiff's expense.
103 In order to consider this question, I must look further at the rules governing licences to use architects' drawings or plans. Although I call them "rules", they are largely matters of implication from the contract between the parties so that, in any particular case, they may be modified or abrogated by the relevant contract.
104 Apart from the case where an architect prepares drawings or plans as agent for someone else, the architect normally has copyright in the plans he or she produces. The architect retains property in the plans despite the grant of any implied licence to utilize them.
105 Unless the architect assigns the copyright outright, as I have already noted, there is ordinarily an implied licence to use the drawings or plans for the purpose of erecting the building to which they refer.
106 There is no magic in the term "licence". The word merely denotes permission or consent to do something which might otherwise be wrongful.
107 There is debate as to how far the licence is revocable; see eg Gruzman at 89-90. The authorities agree, however, that such a licence becomes irrevocable or the grantor is estopped from alleging that it is revocable at least (a) where the architect has received substantial payment (Ng v Clyde Securities Ltd supra); and (b) where construction has commenced; cf Bourke v Filmways Australasian Distributors Pty Ltd (Eq 3219 of 1979) Powell J, 9.10.1979, unreported.
108 A licensee may use the drawings and plans to such extent as he or she chooses and may depart from those plans if he or she feels like doing so: Gruzman at 89-90.
109 The licence is non-exclusive. In the present case this was conceded during argument on the appeal.
110 A licence granted to a company does not cease on its winding up. However, a licence which can only be used in connection with certain real property may cease when that property no longer belongs to the licensee. This matter was not argued before us, so this proposition is stated tentatively.
111 It seems to me that the learned trial judge did not direct her mind to these matters. It may well be that counsel did not refer her to them.
112 Her Honour rejected the plaintiff's suggestion that there was only a limited licence conferred on Citron Developments to make use of the drawings and plans. It follows that that firm had what might be called a plenary licence.
113 However, with respect to my brethren who take a different view, the fact that Citron Developments may have had a plenary non-exclusive licence to make use of the relevant drawings and plans and may still have had the potential to transfer that licence to the respondent, does not affect the position that the respondent held no such licence at the time of the trial and the plaintiff still held copyright and property in the drawings.
114 The grounds were thus made out for the claim that the respondent was unjustly enriched at the expense of the plaintiff.
115 This being so, it was the judge's obligation to do the best she could to quantify the enrichment. This is always the case in awkward assessment of damages scenarios. As Dixon and McTiernan JJ said in Fink v Fink (1946) 74 CLR 127, 143:
"Where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy it provided for breach of contract, an award of damages."
116 Carter & Harland on Contract 4th ed (Butterworths, Sydney, 2002) at p 826 say in a passage adopted from a previous edition by Matheson J in Independent Grocers Co-Operative Ltd v Noble Lowndes Superannuation Consultants Ltd (1993) 60 SASR 525, 559, that there is an exception where the plaintiff puts forward no evidence of loss or damage. Accepting, without deciding, whether this is a true exception, in the instant case the plaintiff did attempt to put material before the judge as to quantum. It endeavoured to meet its obligation to put evidence before the judge; she just did not accept that material.
117 In Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221, 262 et seq, Byrne J set out the principles that are applied in this type of case to quantify the amount to be paid to the plaintiff. The aim is to determine "what is a fair and reasonable remuneration or compensation for the benefit accepted" by the defendant (ibid at 262).
118 On the evidence before the Court, the only figure that could be reached would be a nominal figure. The question might be asked, "How nominal is nominal"?
119 The answer is, not into the realm of substantial figures, and exercising caution so as not to err on the side of fixing too high a sum.
120 In Aerial Advertising Co v Batchelors Peas Ltd (Manchester) [1938] 2 All ER 788, 796, Atkinson J said as to fixing quantum in a case such as the present:
"I can only do the best I can, being very careful not to put it too high, and particularly for the reason that, although I appreciate the difficulty, I think that the defendants, if they had taken the trouble, could have given me more reliable figures."
121 7. Accordingly, the appeal should be allowed to the extent of setting aside the finding of Gibb DCJ on the unjust enrichment claim.
122 The next question is whether that part of the case should be remitted for a new trial. I consider that this would be out of proportion to the error made. The parties ran the case on meagre material. The judge should have found nominal damages. This Court is in as good a position as the trial judge to make an award of nominal damages.
123 I should note that this question was raised during argument on the appeal and Dr Birch made it clear that provided the damages were nominal enough, he would not oppose this course, though he never actually consented to it. Mr Hall wanted a new trial on all issues, but he is clearly not entitled to challenge the findings of fact made by the judge and her conclusion on the contract claim.
124 In my view, this Court should allow nominal damages to the plaintiff in the sum of $15,000.
125 The question of costs is an awkward one. My feeling is that although the plaintiff succeeded for a nominal sum, it essentially lost at first instance and that each party partially succeeded on the appeal. There should thus be no order for costs either of the trial before Gibb DCJ or in this Court. Interlocutory orders for costs in the District Court before 22 January 2001 should stand.
126 However, counsel may, at their own risk as to costs, within 14 days, make further submissions as to costs in writing, before the Court finally deals with the question of costs.
127 Accordingly, the orders I propose are: