FEDERAL COURT OF AUSTRALIA

TRADE PRACTICES ‑ Misleading or deceptive conduct ‑ Publication of false claim that court had upheld contravenor’s assertion of copyright infringement ‑ Damages for loss of reputation and goodwill ‑ Person involved in contravention ‑ Contribution among respondents ‑ Source of power to make contribution order.

COPYRIGHT ‑ Infringement ‑ Material safety data sheets‑ Some sheets prepared by claimant’s employees and others by independent contractors ‑ Onus on claimant to establish ownership of copyright in particular sheets.

Trade Practices Act 1974 s 52, 75B, 82, 87

Wrongs Act 1958 (Vict) s 23B

Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 5(1)

Yorke v Lucas (1985) 158 CLR 661 mentioned

Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 considered

Jones v Mortgage Acceptance Nominees Ltd (1996) 142 ALR 561 considered

Re La Rosa; Ex parte Norgard v Rodpat Nominees Pty Ltd (1991) 104 ALR 237 considered

Smith v Cook [1911] AC 317 mentioned

Australia and New Zealand Banking Group Ltd v Turnbull & Partners Ltd (1991) 106 ALR 115 considered

Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535 considered

Trade Practices Commission v Manfal Pty Ltd [No 3] (1991) 33 FCR 382 considered

Dorrough v Bank of Melbourne Ltd (1995) ATPR (Digest) 46‑152 considered

Austotel Management Pty Ltd v Jamieson (1996) ATPR 41‑454 considered

Employers Corporate Investments Pty Ltd v Cameron (1977) 3 ACLR 120 mentioned

Henderson v Amadio Pty Ltd (1995) 140 ALR 391 approved

Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 mentioned

Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 mentioned

Cumming v Lewis (1993) 41 FCR 559 mentioned

Dering v Lord Winchelsea (1787) 1 Cox Eq Cas 318 applied

Street v Retravision (NSW) Pty Ltd (1995) 135 ALR 168 mentioned

Ellesmere Brewery Co v Cooper [1896] 1 QB 75 mentioned

Nella v Kinzia Pty Ltd (1986) ATPR 40‑723 mentioned

Commonwealth of Australia v Oceantalk Australia Pty Ltd (1998) 151 ALR 567 mentioned

BERNIE BIALKOWER v ACOHS PTY LTD, R A BASHFORD CONSULTING PTY LTD and RISK MANAGEMENT CONCEPTS PTY LTD

VG 242 of 1997

JUDGES:       BEAUMONT, HILL AND SUNDBERG JJ

PLACE:          MELBOURNE

DATE:            4 MAY 1998

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.             The appeal be dismissed.

2.             The appellant pay the first respondent’s costs of the appeal.

3.             There be no order as to the second or third respondents’ costs of the appeal.

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

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

THE COURT:

By its amended statement of claim, the first respondent, Acohs Pty Ltd (“Acohs”), sued the second respondent, R A Bashford Consulting Pty Ltd (“Bashford”), the third respondent, Risk Management Concepts Pty Ltd (“RMC”) and the appellant, Bernie Bialkower, under the provisions of Part V of the Trade Practices Act 1974 (“the Act”).  Acohs provided computerised chemical information management services using a database management system known as “Infosafe”.  Infosafe utilised software developed from Acohs’ database of some 50,000 product information sheets.  Infosafe software enabled ready access to current material safety data sheets (“MSDSs”) (which contained information about hazardous substances) via the computer database as an alternative to paper or microfiche copies of the MSDSs.  Bashford and RMC carried on business together under the name “Risk Management Solutions” (“RMS”).  Dr Bialkower, who carried on business under the name “Chemwatch”, was a major competitor of Acohs in providing computerised chemical information services.  RMS acted as an agent for Chemwatch in some parts of New South Wales.

In its statement of claim, Acohs claimed that Bashford and RMC and/or Dr Bialkower published an “Infax” newsletter in which it was stated, inter alia -

“CHEMWATCH WINS COPYRIGHT CASE

The Chemwatch company of Victoria successfully challenged in court two companies which used MSDSs on a database for a breach of copyright.  The court found that the companies had been using Data Sheets written and compiled by Chemwatch and that this unlawful act was in total disregard of copyright legislation.”

Acohs claimed that these statements were false in that there had been no finding by any court that any copyright of Chemwatch had been infringed by Acohs, or otherwise.

Acohs contended that the conduct of Bashford and RMC was likely to mislead and deceive, in contravention of s 52 of the Act;  and that Dr Bialkower was “involved” in the contravention (within the meaning of s 75B(1) of the Act).  Acohs further contended that it had thereby suffered loss and damage in that its continuing business had been jeopardised and it had lost commercial opportunities in the form of two contracts.  In its application, Acohs claimed, inter alia, damages.

By his cross-claim Dr Bialkower sued Acohs, claiming that he was the owner of the copyright in forty three MSDSs and that Acohs had infringed his copyright by reproducing or adapting the sheets.  Dr Bialkower claimed, inter alia, damages.

By their amended cross-claim Bashford and RMC sued Dr Bialkower, claiming to be indemnified by him for any amount that may be found to be due from them to Acohs.  Bashford and RMC claimed that the information in their newsletter was supplied to them by Dr Bialkower who knew, or ought to have known, that it was false.

A Judge of the Court (Merkel J) held that Bashford and RMC had contravened s 52 and that Dr Bialkower was a person “involved” in the contravention.  His Honour ordered that Bashford, RMC and Dr Bialkower pay Acohs damages in the sum of $20,000.  Merkel J dismissed Dr Bialkower’s cross-claim against Acohs.  His Honour further ordered that Dr Bialkower indemnify Bashford and RMC in an amount equal to 75 per cent of the damages and costs ordered to be paid by them.  The case is now reported:  see Acohs v R A Bashford (1997) 144 ALR 528.

Dr Bialkower now appeals from this judgment. 

A number of questions arise in the appeal.  It will be convenient to deal with them in turn by reference to the two main topics addressed by counsel.

A.        TRADE PRACTICES ISSUES

1.         The findings of the primary Judge with respect to the publication of the newsletter

His Honour made findings with respect to the publication of the newsletter as follows:

·      Prior to November 1993, Dr Bialkower had claimed that use of Chemwatch MSDSs by Acohs infringed his copyright (at 533).

·      In late October or early November 1993, Dr Bialkower informed Phillip McCann, the employee of RMC responsible for the Infax newsletter, that he, Dr Bialkower, had been successful in upholding his copyright claims for Chemwatch MSDSs in relation to companies using the Infosafe system.  Dr Bialkower suggested that Mr McCann might use that information as a selling point.  Mr McCann assumed that the success, to which Dr Bialkower referred, was in relation to litigation by Chemwatch against the proprietors of Infosafe (at 534).  But at the time of publication on 2 December 1993, there had not been any court case in relation to Chemwatch’s MSDSs;  nor had there been a successful court challenge to Infosafe’s, or any other company’s, use of MSDSs of Chemwatch (at 531).

·      The newsletter was sent to thirty nine customers in early December 1993, before its falsity was drawn to RMC’s attention.  Twelve days later, RMC sent a retraction to each of them (at 531).

·      In early December 1993, Mr McCann prepared a draft of the Chemwatch news item for inclusion in the newsletter.  He sent the draft to Dr Bialkower with a note asking whether it was “o.k. to send”.  Dr Bialkower responded informing Mr McCann that it was dangerous to refer to Infosafe, and that there was no need to state in the article that Infosafe was the system in question.  However, RMC staff agreed that, as they believed that the information was accurate, there was no need to delete all reference to Infosafe.  Accordingly, the newsletter was distributed without the deletion suggested by Dr Bialkower (at 534).

·      Although Dr Bialkower disputed Mr McCann’s version of these events, Dr Bialkower’s evidence on this issue should not be accepted.  It is likely that Mr McCann may have misunderstood Dr Bialkower’s initial statement by assuming that the success to which Dr Bialkower referred was in litigation.  However, Dr Bialkower was prepared to take the benefit of the misunderstanding when he did not prevent the publication of the Chemwatch news item (at 535).

2.         The conclusions of the trial Judge on whether the publication of the newsletter by RMS and RMC contravened s 52

His Honour concluded (at 536) that -

·      The information in the newsletter was misleading and deceptive.

·      The facts that RMS and RMC (a) did not intend to publish misleading information;  and (b) were not the original sources of the published information, were no defence to a claim under s 52:  it is sufficient that they adopted the information as accurate and caused it to be published (at 536).

3.         His Honour’s conclusions on whether Dr Bialkower was a person “involved” in the contravention of s 52

The learned primary Judge held that Dr Bialkower was the source of the misleading information published by RMC and also authorised the publication, although he suggested, but did not require, deletion of the reference to Infosafe.  In these circumstances, Dr Bialkower was “involved” in the contravention (at 536).

4.         The findings at first instance on whether Acohs suffered any loss by reason of the contravention

His Honour found that many of the 39 businesses to which the newsletter was sent were potential customers of Acohs;  two were actual customers.  The “seriously misleading” statements caused harm to Acohs’ repute and goodwill and that harm is likely to have led to some loss of business or custom (at 538).

The primary Judge awarded damages in the sum of $20,000 “for vindication of commercial reputation, loss of goodwill and consequential loss of custom” (at 538).

5.         Dr Bialkower’s arguments on the appeal of trade practices liability issues

On behalf of Dr Bialkower, the following submissions were made on these issues:

·      The newsletter was produced by RMC, not by Dr Bialkower.  It was written by Mr McCann, an employee of RMC, who had apparently misunderstood something that Dr Bialkower said.

·      On 2 December 1993, Mr McCann sent a facsimile of the proposed newsletter to Dr Bialkower.  There is no finding that Dr Bialkower had previously seen or been aware of the proposed newsletter.  While there is a dispute between the witnesses as to what then occurred, neither witness said that Dr Bialkower consented to publication of the newsletter.  Dr Bialkower said that he telephoned Mr McCann and informed him that the item was not correct.  Mr McCann said that Dr Bialkower told him that it was dangerous to refer to Infosafe, but that RMC went ahead and published on the same day.

·      The findings of primary fact made by his Honour do not support the conclusions (at 536) first, that there was a breach of s 52 by RMS and RMC;  and, secondly, that Dr Bialkower was “involved” in it.

6.         Conclusions on trade practices liability issues

In our opinion, this aspect of the appeal must fail.  It was clearly open to the primary Judge to find that RMS and RMC engaged in misleading conduct in asserting in the newsletter, contrary to the fact, that Chemwatch had “won” a copyright case in court.  This conclusion of his Honour could not be successfully challenged.

The next question was whether, within the meaning of s 75B(1), Dr Bialkower was “a person involved in [the] contravention” by RMS and RMC.

Section 75B(1) defines such involvement so as to refer to, inter alia, a person who (a) has aided, abetted, counselled or procured the contravention;  (b) has induced the contravention;  or (c) has been in any way, directly or indirectly, knowingly concerned in, or a party to, the contravention.

As has been noted, his Honour found (at 536) first, that Dr Bialkower was the source of the misleading information;  and secondly, that Dr Bialkower authorised its publication, although he suggested, but did not require, deletion of the reference to Infosafe.

In our view, these findings, which were of primary fact, were open to the trial Judge on the evidence.  It should be noted here that his Honour preferred Mr McCann’s version of these dealings to that of Dr Bialkower.  This is a credit issue.

In Yorke v Lucas (1985) 158 CLR 661, Mason ACJ, Wilson, Deane and Dawson JJ held (at 667-8) that for para (a) of s 75B(1) to apply, it must be shown that the person intentionally aided etc.;  and that to form the necessary intent, the person must have knowledge of the essential matters which make up the contravention whether or not the person knows that these matters amount to a contravention.

In our opinion, it was open to the trial Judge, on his findings of primary fact, to conclude that para (a) applied.

In Yorke v Lucas, the Full High Court went on to hold (at 670) first, that before a person can be said to have been a party to a contravention within para (c) of s 75B(1), the person must be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention;  and secondly, that the word “knowingly” in para (c) qualifies only the words “concerned in” and not also the words “party to”.

If it were necessary to decide whether Dr Bialkower fell within para (c) as well as para (a), we would be of the view that, given his Honour’s primary findings, such a conclusion was open on the evidence.

Although the primary Judge did not, in his reasons, indicate which particular limb or limbs of s 75B(1) were applicable, he did refer (at 536) to the High Court’s decision in Yorke v Lucas.  We can discern no error in his general approach.  Not only was a conclusion open that Dr Bialkower was “involved”, but we also agree with it.

7.         The arguments of Dr Bialkower and of Bashford and RMC on the issue of damages

On the appeal, counsel for Dr Bialkower and counsel for Bashford and RMC challenged the award of damages of $20,000 for vindication of commercial reputation, loss of goodwill and consequential loss of custom.  It was submitted that there was no evidence of any loss.

In our view, there is no substance in this branch of the appeal.  Acohs was a trading concern;  and the inference was clearly open to his Honour that some commercial loss was probably suffered.  It could not be suggested that the amount awarded was beyond the range that might be ordered.

8.         Contribution

Bashford’s and RMC’s amended cross claim for indemnity by Dr Bialkower against Acohs’ claim alleged that

·               it was an implied term of the distributorship agreement between RMS and Dr Bialkower that Dr Bialkower would act with due care and skill in providing and checking information supplied by him for dissemination in promoting Chemwatch products

·               Dr Bialkower informed RMS that Chemwatch had won a copyright case against two companies in Victoria for breach of copyright

·               RMS included this information in a draft of a newsletter which was faxed to Dr Bialkower for comment

·               in a telephone conversation with Mr McCann of RMS Dr Bialkower authorised the release of the final form of the newsletter

·               in breach of the implied term the information supplied by Dr Bialkower was provided without due care and skill

·               Dr Bialkower’s conduct was misleading and deceptive or likely to mislead or deceive in contravention of s 52 of the Act and s11 of the Fair Trading Act 1985

·               Dr Bialkower owed a duty to Bashford and RMC to take care as to the accuracy of the information supplied

·               in breach of that duty Dr Bialkower supplied information when he knew or ought to have known it was false.

Bashford and RMC claimed a declaration of entitlement to indemnity, and judgment for any amount that might be found due from them to Acohs, together with any costs they may be adjudged to pay Acohs, and their own costs.

The primary judge found that in publishing the newsletter Bashford and RMC had contravened s 52, and that Dr Bialkower was involved in the contravention.  His Honour said that Dr Bialkower was the source of the misleading information published by RMC, that he had authorised the publication of the information, and that although he suggested deletion of the reference to Infosafe, he did not require it.  Having held that Acohs had suffered harm to its repute and goodwill, which was likely to have led to some loss of business and custom, his Honour awarded damages of $20,000 “for vindication of commercial reputation, loss of goodwill and consequent loss of custom”.  His Honour then turned to the claim for “contribution”.  He said that the Court has a wide discretion to make appropriate orders for contribution between wrongdoers to ensure that each party liable in respect of the same damage makes a just contribution by paying a proper share towards discharging the common obligation.  His Honour did not expressly identify the source of the discretion, but referred to the judgment of Kitto J in Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 at 350‑351 and that of Davies J in Jones v Mortgage Acceptance Nominees Ltd (1996) 142 ALR 561 at 563‑565.  His Honour found that Dr Bialkower was the primary, but not the sole, cause of the breach of s 52 by Bashford and RMC.  Mr McCann had misunderstood the information initially communicated by Dr Bialkower and had failed to adopt Dr Bialkower’s suggestion that Infosafe not be mentioned.  But Dr Bialkower had had the opportunity to correct Mr McCann’s misunderstanding when the proposed article was faxed to him, but had failed to do so.  In those circumstances his Honour apportioned 75% of the blame to Dr Bialkower and ordered that he contribute that percentage of the damages and costs awarded against Bashford and RMC in Acoh’s favour.  Although the cross claim sought indemnity alone, the case appears to have been conducted on the basis that it was a claim for indemnity or contribution.

9.         Source of the power to order contribution

His Honour’s reference to Albion and Jones suggests that he regarded the source of the power to order contribution to be the general law principle of contribution.  Although in Jones at 563 the source considered was s 5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), that would not have applied in the present case, and the primary judge did not mention the somewhat comparable provision in the Wrongs Act 1958 (Vict).

The source of the power has been considered in a number of cases.  The first appears to have been Re La Rosa; Ex parte Norgard v Rodpat Nominees Pty Ltd (1991) 104 ALR 237.  Two sources of power were asserted by the parties seeking indemnity and contribution: s 87(1A) of Act and the doctrine of equitable contribution.  Section 87(1A) provides in part as follows:

“... the Court may, on the application of a person who has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in ... in contravention of a provision of Part IVA or V ... make such order or orders as the Court thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention ... if the Court considers that the order or orders concerned will compensate the person who made the application ... in whole or part for the loss or damage, or will prevent or reduce the loss or damage suffered, or likely to be suffered, by such a person.”

It was argued that the words “a person who has suffered or is likely to suffer loss or damage by conduct of another person ... in contravention of a provision of Part V” extend to a person who has suffered a judgment for contravention of the Act in which contravention another person was involved.  French J rejected the contention on the ground that the Act contemplates that the applicant for relief under s 87(1A) is not the person who commits the contravention.  His Honour then considered the doctrine of contribution which, he pointed out, is part of the common law as well as finding its place in equity.  After considering Kitto J’s statement in Albion at 349‑350 that persons who are “under coordinate liabilities to make good the one loss ... must share the burden pro rata”, French J examined the meaning of “coordinate liabilities”.  He said that the expression does not embrace liabilities merely because they arise out of related transactions or similar relationships between the claimant and others.  He referred to the decision of the Privy Council in Smith v Cook [1911] AC 317 at 326 where it was said that before there can be any question of contribution “there must be a common obligation upon those who are required to contribute”.  French J then gave examples of relationships involving co‑ordinate liabilities: co‑sureties, co‑insurers under contracts of indemnity insurance, co‑contractors, parties liable to the holder of a bill of exchange, joint tenants and tenants in common.  His Honour noted the view of Goff and Jones that any obligor who owes with another the duty to a third party and is liable with that other to a common demand should be able to claim contribution: Law of Restitution 3rd ed (1992) at 272.

The matter appears next to have been considered in Australia and New Zealand Banking Group Ltd v Turnbull & Partners Ltd (1991) 106 ALR 115.  The bank and others were sued for damages for alleged breaches of s 52 of the Act.  The statement of claim alleged that misleading and deceptive information relating to the value of certain assets had been provided to the purchasers of subordinated debentures, and that the bank had been knowingly concerned in the provision of the information.  The bank brought a cross claim against Turnbull and others alleging breaches of the Act and negligence.  The cross claim alleged that certain representations relevant to the value of the assets had been made by the cross respondents on which the bank had relied, and claimed contribution or indemnity.  Sheppard J struck out the cross claim on a number of grounds.  His Honour rejected s 87 of the Act as the source of the power to order contribution.  Another suggested source of power was s 5(1) of the Law Reform (Miscellaneous Provisions) Act which provides that

“Where damage is suffered by any person as a result of a tort ... -

...

(c)           any tort‑feasor liable in respect of that damage may recover contribution from any other tort‑feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort‑feasor or otherwise ....”

His Honour assumed that s 5 was picked up by s 79 of the Judiciary Act 1903, which provides that

“The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.”

His Honour rejected s 5 as the source of power on the ground that the damage alleged was not suffered by the applicants as the result of a tort.  The s 52 cause of action was entirely statutory.

Reliance was also placed on s 23B of the Victorian Wrongs Act, but his Honour put that aside on the ground that, if s 23B was procedural in nature, as he thought it was, it could have no application to a case heard in New South Wales.  If it was substantive in character, it would not be picked up by s 79, which operates only in relation to procedural matters.

The matter was again considered by Sheppard J, as a member of the Full Court, in Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535.  This was another s 52 case which involved representations about the area of leased premises.  The trial judge awarded damages to the lessee.  The lessor and its agent were made jointly liable and required to contribute in equal shares.  Sheppard J (with whom Hill J agreed) held that s 87 conferred no power to make the contribution order.  It did not empower the Court to do justice as between respondents, each of whom has been ordered to compensate an applicant for the full amount of its loss.  He said the position might have been different if each respondent had been ordered to pay half the amount in question.  His Honour then considered whether the order had been made “pursuant to the general law, particularly the equitable doctrine of contribution”: at 554.  The parties did not seek to support the order on that basis, and his Honour expressed no opinion on it “except to say that it would appear to me to be difficult to justify the order in this way”: at 554.

In Trade Practices Commission v Manfal Pty Ltd [No 3] (1991) 33 FCR 382 Lee J said that the Act does not provide directly that the Court may apportion between the several persons who have engaged in misleading conduct degrees of culpability in respect of the causing of the loss or damage suffered by another.  However, he agreed with French J in La Rosa that a court may be able to entertain proceedings seeking orders of contribution based upon rights at law or in equity arising out of a co‑ordinate liability imposed upon the parties by the Act.

In Dorrough v Bank of Melbourne Ltd (1995) ATPR (Digest) 46‑152 Cooper J accepted that s 87 does not authorise contribution or indemnity between several contraveners of s 52.  However, citing La Rosa and Manfal, he said that “contribution may arise in appropriate cases under the general law or in equity and operate where the Trade Practices Act imposes several liabilities on the part of the contraveners in respect of the same loss and damage”: at 53,185.  His Honour doubted the view of Sheppard J in Turnbull that a breach of s 52 was not a tort and was thus outside s 5 of the Law Reform (Miscellaneous Provisions) Act.  He said that Mr J C Campbell QC in “Contribution, Contributory Negligence and s 52 of the Trade Practices Act”, Australian Law Journal vol 67 (1993) at 87 had developed a substantial argument that a breach of s 52 does constitute a tort, and that the various contribution statutes of the States have a relevant operation by virtue of s 79 of the Judiciary Act.  In any event his Honour thought it clearly arguable that a right of contribution can be made out on grounds other than s 87, and that leave to cross claim should not be refused solely for the reason that the Act provides no such remedy as between several contraveners of s 52.  The question of equitable contribution was not argued before his Honour.

In Austotel Management Pty Ltd v Jamieson (1996) ATPR 41‑454 Burchett J followed Dorrough.  He also noted that in La Rosa French J had expressed the view that a co‑ordinate liability was arguable as the source of an obligation enforceable in contribution proceedings.  Like Dorrough, Austotel was an application for leave to file a cross claim seeking contribution.

The most recent examination of the topic was by Davies J in Jones v Mortgage Acceptance Nominees Ltd (1996) 142 ALR 561.  The principal judgment dealing with liability and damages is reported in (1995) 13 ACLC 1,781.  Judgment had been entered against six respondents: McDonald and Farrow ($1,497,766), King ($998,510), Bester ($998,510), Done ($499,255), and ABCOS ($998,510).  McDonald had been held liable for misleading and deceptive conduct in breach of s 42 of the Fair Trading Act, breach of duty of care and breach of fiduciary duty, Farrow for negligence and contravention of s 42, King for breach of fiduciary duty and contravention of s 42, Done for breach of fiduciary duty, Bester for negligence and breach of s 42, and ABCOS for negligence and contravention of s 52 of the Act.  Done claimed contribution from the other respondents under either s 5 of the Law Reform (Miscellaneous Provisions) Act or the principles of equitable compensation.  That is the issue the subject of the judgment reported at (1996) 142 ALR 561.  Davies J first rejected the contention of ABCOS that because Done had not been sued in tort, he was not a “tort‑feasor liable” within s 5(1).  A long line of cases in the Supreme Court of New South Wales had held that s 5(1) does not require that the ascertained liability be a liability in tort.  It requires only that the defendant be a tortfeasor.  See, for example, Employers Corporate Investments Pty Ltd v Cameron (1977) 3 ACLR 120.  In his earlier judgment Davies J had said that had Done been sued in negligence, he would have been liable.  His Honour then said that if he were wrong about Done’s entitlement to an order for contribution under s 5, he would have been entitled under the principles of common law and equity.  He said (at 564‑565):

“The principle of contribution as enunciated in Albion Insurance, requires that there be a common or coordinate obligation.  ... In the present case, such an obligation exists for all the respondents who are liable ... have been found to have contributed to the loss suffered by the applicants and for which the applicants are to receive a sum by way of damages or equitable compensation.  The common or coordinate liability is not destroyed by the fact that the applicants chose to frame their claim against Mr Done by reference to his fiduciary duty rather than by reference to his duty of care ....  Matters such as this do not affect the essential character of the obligation.

Common law and equity earlier refused relief by way of contribution in a case such as this not because of the absence of a common or coordinate obligation but because it was considered, as a matter of principle, that such relief should not be granted to wrongdoers.

...

Now that the principle enunciated ...in ... Merryweather v Nixan ... has been abrogated by statute, and the justice of an order for contribution has been recognised, there should remain no bar to the application of the general law of contribution to a case such as the present.

Thus, if there be a technical problem with the word “liable” where it first appears in s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act, and I think there is not, there is no cogent reason why equity should not aid the identification of the tortfeasors who ought to contribute and the ascertainment of what would be a just contribution.”

ABCOS’ appeal to the Full Court was dismissed: (1998) 16 ACLC 100 at 150.  The Full Court applied the decisions of the New South Wales courts on s 5(1), and did not mention any other source of liability to contribute.

Section 23B(1) of the Wrongs Act provides:

“Subject to the following provisions of this section, a person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with the first‑mentioned person or otherwise).”

Sub‑section (6) provides that

“References in this section to a person’s liability in respect of any damage are references to any such liability which has been or could be established in an action brought against that person in Victoria by or on behalf of the person who suffered the damage ....”

Section 24(2) provides that

“... in any proceedings for contribution under s 23B the amount of the contribution recoverable from any person shall be such as may be found ... to be just and equitable having regard to the extent of that person’s responsibility for the damage ....”

Section 23A(1) provides:

“For the purposes of this Part a person is liable in respect of any damage if the person who suffered that damage ... is entitled to recover compensation from the first‑mentioned person in respect of that damage whatever the legal basis of liability, whether tort, breach of contract, breach of trust or otherwise.”

In Henderson v Amadio Pty Ltd (1995) 140 ALR 391 at 577 at 577‑578 Heerey J held that s 23B was picked up by s 79 of the Judiciary Act, and that it applied to a claim for damages under s 82 of the Trade Practices Act.

10.       Conclusion on source of power

The Full Court’s decision in Lezam decides no more than that s 87 of the Act confers no power to order contribution.  Single judges have independently reached the same conclusion in La Rosa, Turnbull, Manfal, Dorrough and Austotel.  In our view those decisions are correct.  Although not bound by Lezam, we would follow it unless of the view that it is clearly wrong.  We are not of that view.

Section 5 of the Law Reform (Miscellaneous Provisions) Act is not directly relevant in the present case.  However, notwithstanding the view of Mr Campbell QC which appealed to Cooper J in Dorrough, we are inclined to the view that Sheppard J was correct when he said in Turnbull that the cause of action under s 82 for breach of s 52 of the Act is entirely statutory and is not an action in tort.  It is true that actions based on s 52 are analogous to actions in tort, and that because of this the rules for assessing damages in tort, rather than those for assessing damages in contract, are the appropriate guide for assessments under s 82: Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 6‑7, 14; Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 at 290.  But the cause of action is created by the statute.  Unlike the tort of breach of statutory duty, the common law plays no part in the creation of the cause of action.  However, since s 5 does not apply to the present case, we need not decide the point.

Section 23B of the Wrongs Act is not restricted to tortfeasors.  Because of s 23A(1) it applies “whatever the legal basis of liability”.  The provisions are of a remedial nature, designed to expand the circumstances in which contribution is available, and we see no reason to narrow the expression “whatever the legal basis of liability”, or the words “or otherwise” in the explanatory description “whether tort, breach of contract, breach of trust or otherwise”, so as to exclude a claim for damages under s 82 for breach of s 52.  Heerey J’s decision in Amadio is in our view correct on this point.

Section 23B is a procedural provision which is picked up by s 79 of the Judiciary Act: cf Turnbull at 126, 127.

The general law doctrine of contribution requires that the parties between whom it takes place be under co‑ordinate liabilities to make good the one loss.  Co‑ordinate liabilities are those which stem from a common obligation.  We agree with Davies J in Jones that joint tortfeasors were earlier refused relief by way of contribution, not because of the absence of a common or co‑ordinate obligation, but because it was thought that such relief should not be granted to wrongdoers.  We need not decide whether the principle of contribution is limited to cases where there is a common obligation or a co‑ordinate liability, or whether contribution can be ordered in any case where the circumstances give rise to an equity in favour of a person who has suffered a loss because of an act intended to benefit others.  See Cumming v Lewis (1993) 41 FCR 559 at 592‑599.

It is not necessary in order that liabilities be co‑ordinate or common that parties be jointly liable.  The liability may be joint, joint and several or several: Dering v Lord Winchelsea (1787) 1 Cox Eq Cas 318; Meagher, Gummow and Lehane, Equity‑Doctrines and Remedies 3rd ed (1992) 289‑290.  It is sufficient if two people are both liable in respect of the one loss, even if they are liable on different causes of action: Street v Retravision (NSW) Pty Ltd (1995) 135 ALR 168 at 176; Jones at 564.  There is no contribution between persons each liable in respect of a distinct portion of the one obligation.  They do not share their obligation in respect of the same subject matter.  The position is otherwise where persons are liable upon the whole of an obligation but with a limitation upon the quantum recoverable.  Where the limitation in amount differs between the obligors, each is liable to contribute rateably according to his undertaking.  See Ellesmere Brewery Co v Cooper [1896] 1 QB 75 and Retravision at 177.

One difference between contribution at law and in equity was that at law an obligor could not maintain an action until he had actually paid more than his just proportion.  Equity, however, acted quia timet, and ordered contribution upon entry of a judgment against the plaintiff for the debt or liability concerned, even though the judgment was unsatisfied.  See Albion at 351.

11.       The present case

The primary judge did not purport to make the contribution order in reliance on s 87 of the Act.  His reference to Albion and Jones shows that he had in mind the general law of contribution.  The order that the respondents pay damages of $20,000 to Acohs imposed on them a common liability.  The order imposed that liability on each of them.  That is to say their liability was several and not joint.  But that does not matter.  The one series of events gave rise to the same liability.  Each was liable on the same cause of action, though that is not essential: Retravision; Jones.  Although Bashford and RMC were liable under s 82 for their contravention of s 52, while s 75B had to be called in aid in order for liability to be imposed on Dr Bialkower, all three were liable under s 82.  Section 75B was not the source of Dr Bialkower’s liability: Nella v Kinzia Pty Ltd (1986) ATPR 40‑723.  However, despite the observation of Davies J in Jones at 565 that he could see no reason why equity “should not aid ... the ascertainment of what would be a just contribution”, we doubt whether the general law of contribution authorises an apportionment such as that made by the primary judge.  Contribution is “founded on equality”: Albion at 351, though it is true that “equality” in the maxim “equity is equality” is not literal equality, but proportionate equality: Re Steel [1979] Ch 218 at 225‑226.  Equality was the basis of the doctrine of contribution between trustees liable to make good a breach of trust: Jacobs’ Law of Trusts in Australia 6th ed (1997) at 644.  If one paid more than his share he could claim contribution from the others.  In exceptional cases the rule of equal contribution was replaced by a right on the part of one trustee to obtain an indemnity from the others.  But, according to Snell, until the intervention of statute (Civil Liability (Contribution) Act 1978, ss 1(1), 6(1) and 7(3) (UK)) there was no intermediate position between these two extremes: Snell’s Equity 29th ed (1990) at 296.  And see Jacobs at 644.  The matter was not argued before us, and since the apportionment can be supported by s 23B of the Wrongs Act, we need not decide the issue, which will be a live one in jurisdictions such as New South Wales which do not have a provision such as s 23B.

The contribution order made by the primary judge, apparently under the general law of contribution, could have been made under s 23B of the Wrongs Act.  Bashford and RMC were persons liable in respect of damage suffered by Acohs.  Dr Bialkower was a person liable in respect of the same damage.  The fact that their liability was not joint does not signify ‑ “whether jointly with the first‑mentioned person or otherwise”.  Accordingly Bashford and RMC may recover contribution from Dr Bialkower.

It was plainly open to the primary judge to have apportioned responsibility under s 23B as he did.  Dr Bialkower instigated the matter when he telephoned Mr McCann and told him he had been successful in upholding his copyright claims.  He suggested that Mr McCann might use that information as a selling point.  Mr McCann quite reasonably took this to mean that Dr Bialkower had been successful in copyright litigation in relation to Chemwatch, and the newsletter was drafted accordingly.  Dr Bialkower was invited to comment on a draft, and although he suggested the deletion of the reference to Infosafe, he did not correct or suggest the correction of the reference to the successful court challenge, though he knew it was incorrect.  Some blame had to be apportioned to Mr McCann because he did not implement Dr Bialkower’s suggestion about Infosafe.  In our view the judge was entitled to find that Dr Bialkower was the primary, but not the sole, cause of the breach of s 52 by Bashford and RMC, and to apportion 75% of the blame to Dr Bialkower.

B.        COPYRIGHT ISSUES

As has been noted, Dr Bialkower cross-claimed against Acohs for infringement of copyright.  Logically, the first matter for resolution is whether Dr Bialkower had discharged the onus of establishing that, at all material times, he owned the copyright in the forty three Sheets.  It will be convenient for us to address that question now.

1.         The cross-claim:  the claim of ownership of copyright

In his cross-claim dated 2 February 1994, Dr Bialkower claimed (para 4) ownership of copyright “in certain litera[r]y and artistic works being various Material Safety Data Sheets... published by [Dr Bialkower] in Australia since 1 January 1992”.

The following particulars were given in the cross-claim:

“Particulars

Since 1 January 1992, [Dr Bialkower] has produced a substantial number of the sheets.  The sheets contain a report collating a number of matters including identification, use, physical description - properties, health effects, first aid, precaution for use and safe handling information in respect to the chemical for which it was produced by [Dr Bialkower].”

2.         The primary Judge’s findings on the issue of ownership of copyright

His Honour noted (at 542) that Dr Bialkower was “unable to give any specific evidence as to the authorship of the 43 MSDSs”.

Having identified in the evidence several potential external sources of the information contained in the Sheets (at 542-543), the primary Judge added (at 543):

“A further problem is that, in addition to his staff, from time to time, Bialkower also employed at least four appropriately qualified ‘outside persons’ to assist in the preparation of Chemwatch MSDSs.  The evidence does not enable me to form a view as to the role, if any, these experts played in the preparation of the 43 MSDSs.  If they were the authors of the MSDSs, copyright ownership might vest in them as they did not appear to be employed as employees under a contract of service:  see s 35(2) and (6).  When this problem became apparent Bialkower gave evidence that the 43 MSDSs were in fact prepared by him and his employees.  However, I have difficulty in accepting that evidence.  It was inconsistent with his earlier evidence that Chemwatch MSDSs were prepared by a mix of Bialkower, his employers and ‘outside persons’.  Further, it does not sit comfortably with Bialkower’s lack of recollection of the circumstances in which the 43 MSDSs were prepared.  Further, my rejection of Bialkower’s evidence in relation to the Chemwatch news item has led me to approach the generality of his evidence on authorship with some caution.”

His Honour went on to express his conclusion in this area as follows (at 543):

“In all the circumstances I have had great difficulty in being satisfied that Bialkower has discharged the onus upon him to establish the authorship of and copyright in any particular MSDSs.  However, the high probability is that a number of the 43 MSDSs do fall into the category of MSDSs:

·      which constitute original literary works of Bialkower and his employees and in which copyright subsists;  and

·      which were transcribed by Acohs into the Infosafe system.”

The learned Judge then said (at 543):

“Notwithstanding the difficulty to which I have referred, obviously it is desirable for the dispute in relation to past copyright infringement to be resolved.  In view of the conclusions at which I have arrived in relation to Acohs’ defences to Bialkower’s infringement claims, that dispute is able to be resolved without it being necessary to reach a final conclusion to the question of copyright ownership in respect of particular MSDSs.  Accordingly, for the purpose of resolving these issues I am prepared to assume copyright subsists in a number of the 43 MSDSs and is owned by Bialkower.”

Having made this assumption, his Honour proceeded to hold that there would have been an infringement but for the existence of an implied licence to do the acts complained of (at 552).

3.         Dr Bialkower’s contentions on the appeal on the copyright issue

Counsel for Dr Bialkower sought to develop his submissions on the appeal by treating his Honour’s observations cited above (at 543) as tantamount to a finding of ownership in his favour.  Having made that assumption, counsel for Dr Bialkower proceeded to argue that no implication of a licence should have been made in the present circumstances.  It was submitted that his Honour, accordingly, should have made a declaration of Dr Bialkower’s ownership;  or, alternatively, a declaration that, by copying the forty three Sheets, Acohs “had infringed copyright owned by [Dr Bialkower]”.

4.         Conclusions on the appeal on the copyright ownership question

As was indicated in the course of argument, it is first necessary to consider whether the assumption made by counsel for Dr Bialkower that his Honour had made a finding of ownership of copyright in each of the forty three Sheets in favour of Dr Bialkower, was an assumption that was justified.

In our view, when his Honour’s observations in this area, which we have cited, are read as a whole, it appears that not only did the trial Judge not make that finding, or anything tantamount to it, but that his Honour found that he was not satisfied that Dr Bialkower had discharged the onus on him to establish authorship of, and thus copyright in, any particular Sheet.  The Judge’s actual words (at 543) were that he had “had great difficulty in being satisfied that Bialkower had discharged the onus...”.  Read in context, this could only mean that, ultimately, his Honour was not so satisfied.

It is true that the Judge went on, as has been seen (at 543), to express the view that “the high probability” was that “a number” (without specifying which) of the forty three Sheets constituted works of Dr Bialkower and his employees.  But this is not at all inconsistent with his Honour’s failing to be satisfied that Dr Bialkower had discharged the onus in respect of any particular Sheet.

In our opinion, this conclusion was clearly open on the evidence.  It must follow that the appeal on the copyright aspects must fail for this reason alone (cf. Commonwealth of Australia v Oceantalk Australia Pty Ltd (1998) 151 ALR 567, at 570).

In the circumstances, we need not deal with the other copyright questions which were argued before us.

C.        ORDERS

Accordingly, the appeal will be dismissed.  The appellant must pay the first respondent’s costs of the appeal.  There will be no order for the second or third respondents’ costs of the appeal.

Associate:        

Dated:              4 May 1998