Realestate.com.au Pty Ltd v Hardingham; RP Data Pty Ltd v Hardingham

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: Kiefel CJ,Gageler J.,Gordon J.,Edelman,Steward JJ
• Judgment Date: 14 December 2022
• Neutral Citation: [2022] HCA 39
• Docket Number: S57/2022 & S58/2022

[2022] HCA 39

HIGH COURT OF AUSTRALIA

Kiefel CJ, Gageler, Gordon, Edelman and Steward JJ

S57/2022 & S58/2022

Realestate.com.au Pty Ltd

Appellant

and

James Kelland Hardingham & Ors

Respondents

RP Data Pty Limited

Appellant

and

James Kelland Hardingham & Ors

Respondents

Representation

A J L Bannon SC with H P T Bevan SC for the appellant in S57/2022 and the third respondent in S58/2022 (instructed by King & Wood Mallesons)

R Cobden SC with J Sleight and G R Rubagotti for the first and second respondents in each matter (instructed by Neville Hourn and Borg Legal)

M D Martin KC with A F Messina for the appellant in S58/2022 and the third respondent in S57/2022 (instructed by Mills Oakley)

Contract — Informal agreements — Implied term — Inferred term — Copyright — Where real estate agencies informally commissioned professional photographer and his company to take photographs and prepare floor plans of properties for use on platforms concerning marketing of properties for sale or lease — Where photographs and floor plans provided to each agency were uploaded to platform operated by Realestate.com.au Pty Ltd (“REA”) — Where REA's terms and conditions provided that agency granted licence to REA to use and sub-license copyright in photographs and floor plans — Where REA sub-licensed copyright in photographs and floor plans to RP Data Pty Ltd (“RP Data”) — Where RP Data kept photographs and floor plans from historical sales on subscription website — Whether agencies' licence and right to grant sub-licence limited to period of marketing campaign for sale or lease of property.

Words and phrases — “all the circumstances”, “business efficacy”, “copyright”, “implied term”, “inferred term”, “informal contract”, “intention”, “licence”, “mutual understanding”, “objective theory of contract”, “reasonable person”, “words and conduct

ORDER

Matter No S57/2022

• 1. Appeal allowed in part.

• 2. Set aside the orders of the Full Court of the Federal Court of Australia made on 8 September 2021, 13 September 2021, and 1 October 2021 and, in their place, order that the appeal and cross-appeal be dismissed with costs.

• 3. The first and second respondents pay the appellant's costs.

Matter No S58/2022

• 1. Appeal allowed.

• 2. Set aside the orders of the Full Court of the Federal Court of Australia made on 8 September 2021, 13 September 2021, and 1 October 2021 and, in their place, order that the appeal and cross-appeal be dismissed with costs.

• 3. The first and second respondents pay the appellant's costs.

On appeal from the Federal Court of Australia

1 Kiefel CJ and Gageler J. Mr Hardingham is a professional photographer and the sole director of Real Estate Marketing Australia Pty Ltd (“REMA”). REMA's business has been the supply of photographs taken and floor plans made of residential properties by Mr Hardingham in an editable digital form to real estate agencies for use in the marketing of those properties for sale or lease.

2 Upon receipt of the photographs and floor plans the commissioning agencies used the images in their marketing in various ways such as in brochures. One of those ways was by uploading them to the realestate.com.au platform operated by Realestate.com.au Pty Ltd (“REA”). The platform of REA is used by a majority of real estate agencies in Australia. REA then provided the images to RP Data Pty Limited, which operates a website and provides a service, RP Data Professional, to which real estate agencies subscribe.

3 The images provided by REMA to the agencies would appear on RP Data Professional within a few days of upload. The images would remain on REA's platform and RP Data Professional after the completion of the sale or lease of the property the subject of the images. They remained as part of the historical information about completed transactions presumably for purposes such as the assessment of price for future sales.

4 In proceedings brought in the Federal Court, Mr Hardingham and REMA claimed that RP Data had infringed and continued to infringe the copyright in a large number of the photographs and floor plans. The claims involved a substantial number of such works. With the consent of the parties the Court ordered that questions of liability for infringement of the copyright in the works relating to twenty properties, chosen by Mr Hardingham and REMA, be heard and determined separately from and before the determination of questions of infringement of the copyright in other works and questions of relief.

5 It does not appear to have been in issue in the proceedings that the photographs and floor plans were original artistic works within the meaning of s 32(1) of the Copyright Act 1968 (Cth), or that Mr Hardingham was the author of those works and that he was the owner of the copyright in the works. It appears that Mr Hardingham granted REMA a licence to use and to sub-license the use of the works, at first informally, and then, in April 2018, by way of a formal deed of licence. It was also not in issue in the proceedings that in using the works as it did, RP Data would infringe the copyright in them if it did so without a licence referable to Mr Hardingham or REMA. Attention was necessarily directed to the terms of the licence, which it was not disputed that REMA gave to the agencies, which permitted the agencies in turn to sub-license the use of the works.

The licence issue

6 The agreements between REMA and the real estate agencies were not in writing. There was no express oral agreement for the grant of a licence by REMA to the agencies in terms which would enable them to license to REA. Nevertheless, Mr Hardingham and REMA knew that the agencies uploaded the images to the REA platform and that it was necessary that they do so. The primary judge found 1 that it was central to the objective of marketing sought to be achieved by all parties.

7 Consistently with that mutual understanding, Mr Hardingham and REMA's case was conducted on the basis that a licence was granted by REMA to the agencies and that that licence permitted the agencies to grant a sub-licence. But they contended that the licence which the agencies had was subject to a limitation. The limitation was that the images were to be used only for the purpose of marketing the property the subject of the images for a sale or lease. Once a sale or lease of the property was completed, the licence came to an end.

8 A licence subject to these limitations would not have permitted the agencies to accept the terms of the licence required by REA. The written subscription agreement which REA required the agencies to enter into included a term that, in consideration of REA granting the agency the right to upload listings to its platform, the agency “grant[s] … an irrevocable, perpetual, world-wide, royalty free licence” to do many things including to license other persons. Clearly enough a term as broad as this would have authorised REA to sub-license to RP Data on terms which included permitting RP Data to maintain the images on its RP Data Professional service after the completion of the sale or lease of the property the subject of the images.

9 The primary judge found 2 that, objectively viewed, Mr Hardingham, REMA, and the agencies conducted themselves on the basis that the agencies had the right to upload the works to REA's platform in accordance with the terms and conditions required by REA. Mr Hardingham and REMA either knew or assumed that REA was permitted to make the works available after marketing campaigns had ended and the relevant sale and lease transactions had been completed.

10 His Honour further found 3 that Mr Hardingham and REMA knew that the agencies had to grant REA a licence on REA's terms. They knew that there was an agreement between RP Data and REA by which RP Data was provided with the content which had been uploaded to the REA platform and that RP Data made those works available to its subscribers.

11 His Honour held 4 that the objective circumstances relating to the twenty transactions were such that it is either: (1) to be inferred from the conduct of the parties including their course of dealings; or (2) to be implied into the agreements between them, in order to give business efficacy to those agreements, that Mr Hardingham and REMA agreed that the agencies were authorised, by way of a licence, to upload the images to REA's platform and to grant to REA a licence in the form required by REA. As mentioned earlier, his Honour considered 5 uploading the works to REA's platform to be central to the objective sought to be achieved by the parties. That objective could not have been achieved unless the agencies could grant a licence to REA on the terms and conditions it usually required.

12 It followed, his Honour concluded 6, that Mr Hardingham and REMA authorised, consented to, or permitted (which is to say licensed 7) the agencies to sub-license the works to REA on REA's usual terms and conditions, which would include authorising REA to grant a sub-licence to RP Data. The sub-licence to RP Data did not go beyond that which was permitted by the sub-licence granted to REA by the agencies. Copyright was not infringed.

13 The majority in the Full Court (Greenwood and Rares JJ, Jackson J dissenting) allowed Mr Hardingham and REMA's appeal 8. Greenwood J 9 (Rares J agreeing) considered that any inference as to the terms upon which the agencies

could grant a sub-licence to REA required actual knowledge of the precise scope of the term. This was necessary because of the gravity of the effect of REA's usual terms and conditions. Their Honours, for reasons which differed, did not consider that the requirements for the implication of a term were satisfied

14 The Full Court made orders restraining RP Data from infringing the copyright.

Ascertainment of terms

15 In a case such as this where the terms of an agreement between the parties have not...