Federal Court of Australia

Campaigntrack Pty Ltd v Real Estate Tool Box Pty Ltd [2021] FCA 809

ORDERS

THE COURT ORDERS THAT:

1.    The parties confer with a view to providing within 14 days agreed orders giving effect to these reasons for judgment and for the further case management of the proceedings.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THAWLEY J:

A OVERVIEW

1    The applicant, Campaigntrack Pty Ltd, provides online marketing and sales services to the real estate industry using an online software system known as “Campaigntrack”. Campaigntrack brought these proceedings against the respondents, alleging, amongst other things, infringement of Campaigntrack’s copyright in the source code of the “DreamDesk” software system. DreamDesk was a cloud-based real estate marketing system originally created by the third respondent, Mr David Semmens, an experienced software developer. DreamDesk was in direct competition with Campaigntrack. Campaigntrack and New Litho Pty Ltd purchased the intellectual property rights in DreamDesk in order to shut down the software and persuade real estate agencies that were using DreamDesk to move to Campaigntrack’s system.

2    After DreamDesk was sold to Campaigntrack and New Litho, Mr Semmens created another real estate marketing software system called “Real Estate Tool Box” (Toolbox). Campaigntrack alleged that the Toolbox software reproduced parts of the source code of DreamDesk, thereby infringing Campaigntrack’s copyright.

3    Mr Semmens was represented when these proceedings were first commenced. However, during the course of the proceedings, and well before the commencement of the hearing, he continued unrepresented. The remaining respondents were represented by one legal team. The respondents other than Mr Semmens are referred to in these reasons collectively as the “represented respondents”:

(a)    The first respondent, Real Estate Tool Box Pty Ltd (RETB), was incorporated approximately one month before the Toolbox software went “live”, and was the registrant of the domain name realestatetoolbox.com.au.

(b)    The second respondent, Biggin & Scott Corporate Pty Ltd, was the franchisor of the “Biggin & Scott” group of real estate agencies operating in Victoria. Biggin & Scott used the DreamDesk software before the software was sold to Campaigntrack and New Litho. Biggin & Scott was also involved in the creation of Toolbox.

(c)    The fourth respondent, Dream Desk Pty Ltd (DDPL), owned the intellectual property rights in the DreamDesk software before the software was sold to Campaigntrack and New Litho.

(d)    The fifth respondent, Mr Jonathan Meissner, was the sole director and shareholder in DDPL and ran an advertising business, JGM Advertising Pty Ltd.

(e)    The sixth respondent, Mr Paul Stoner, was the sole director of RETB and a director of Biggin & Scott.

(f)    The seventh respondent, Ms Michelle Bartels (née Page), was the company secretary of RETB and a director of Biggin & Scott.

4    In addition to asserting infringement of copyright, Campaigntrack made claims for breach of contract against DDPL and Mr Meissner, breach of undertakings given to Campaigntrack by some of the represented respondents and, in equity, for breach of confidence. Campaigntrack’s claims have been made out against Mr Semmens to the extent indicated below. In particular, Campaigntrack’s claim for infringement of copyright has been accepted in most respects as against Mr Semmens. Campaigntrack’s various claims against the remaining respondents have not been made out.

5    It is necessary to set out the facts in some detail. Certain legal issues have been determined when addressing the facts given the relevance of these issues to the claims made and the defences to those claims.

B THE FACTS

B.1 The DreamDesk system and relevant terminology

6    Before setting out the relevant events in the order they occurred, it is useful to know something about the DreamDesk system. The DreamDesk system was comprised of two principal components relevant for present purposes:

(1)    A “web application”: a software application provided to users over the internet, using a computer program or programs executed on a remote server to deliver functionality. The remote server of the DreamDesk system was a virtual server hosted by Amazon Web Services (AWS).

(2)    A “relational database”: a database comprised of tables of data (or records) arranged in columns (or fields) and rows, which included means for “relating” or associating records within the database. The relational database was also stored on the remote server.

7    The DreamDesk web application allowed real estate agents to quote, manage, invoice and market real estate campaigns, generate print/online-ready PDF artwork and create email marketing.

8    The DreamDesk relational database contained the tables of data used by the web application to deliver the functionality to which reference has just been made. Each database comprised a number of tables. Each DDPL client, including Biggin & Scott, had its own database. The DreamDesk relational database was replicated each time an installation was made for a client.

9    DDPL clients had access to the user-facing interface of the web application, sometimes inelegantly referred to as the “front end”. Clients did not have access to the underlying source code or to the structure of the relational database. The source code and the database, stored on the remote server, were protected by a password or key.

10    It is also useful to explain some terminology. “Git” is an open-source distributed version control system for source code. Git allows multiple software developers to work together on a software development project, while maintaining version control of the source code. Version control is maintained through a “Git repository”. Multiple software developers, working on the one project, might use a Git repository to coordinate their work in the following manner:

•    the developer “clones” a copy of the Git repository on his or her local computer;

•    the developer then makes changes to the source code on his or her local computer;

•    the developer then “commits” the changes to the local copy of the Git repository;

•    to share the committed changes, the developer “pushes (up)” the (modified) local copy of the Git repository to the “origin copy” of the Git repository hosted by a Git repository service. This push merges the developer’s “commits” with the origin copy;

•    a developer may update his or her local copy of a Git repository by “pulling (down)” commits that have been made to the origin copy since the developer’s local copy was last made.

11    A Git repository contains the complete history of every change made in the development of the relevant source code or code base. In addition, information about the migration, creation and deletion of files as well as edits to contents of files is stored. Mr Semmens used Atlassian’s hosted Git repository offering, which is named “Bitbucket”. Bitbucket allows a developer to review the history of commits and the history of changes to each file.

12    In addition to its use as a verb, the word “commit” is also used as a noun, meaning the list of changes made to files and source code created, for example, when a developer commits their changes to their local copy of the Git repository. A “commit log” is a log summarising the history of commits. A commit log can be generated from the Git repository.

B.2 November 2014 to March 2015: Establishment of the DreamDesk venture

13    In November 2014, Mr Meissner met with Mr Semmens and his business partner, Mr Ewart. During the meeting, Mr Semmens and Mr Ewart proposed creating a new cloud-based real estate marketing system and sought investment by Mr Meissner to develop the system. Mr Meissner agreed to fund the venture (the DreamDesk venture).

14    On 11 March 2015, Mr Semmens, Mr Ewart and Mr Meissner agreed to form a company, DDPL, to pursue the DreamDesk venture. Mr Meissner was to be the sole director and shareholder. They also agreed that the shareholding would be divided 40%-40%-20% between Mr Semmens, Mr Ewart and Mr Meissner respectively, once Mr Meissner had recouped his initial investment. Because of subsequent events, that division of shares never eventuated.

15    DDPL was incorporated on 12 March 2015 with Mr Meissner as its sole director and shareholder. The domain name dreamdesk.com.au was transferred from Mr Semmens to DDPL five days later. Mr Semmens worked on the technical and software development of DreamDesk from about February 2015 and received ongoing payments for his work from DDPL. Campaigntrack characterised these payments as “salary”, whilst the represented respondents characterised Mr Semmens as being a “contractor” to DDPL. I do not accept that Mr Semmens was an employee of DDPL. He was an independent contractor. There was no suggestion that DDPL withheld tax from the payments made to Mr Semmens, which it would have had to have done if he were an employee. There was no suggestion that DDPL made contributions to superannuation which, likewise, would have been required if Mr Semmens were an employee. Mr Semmens issued invoices to DDPL in respect of his work as one would expect of a contractor. Whether or not Mr Semmens complied with relevant GST requirements is not determinative. The relationship between the parties, assessed objectively as a whole, is one of principal and contractor, not one of employer and employee. Although certain documents referred to Mr Semmens as being “employed” by DDPL, this reflects an ordinary use of language even if it is a use of language which might tend to be avoided by lawyers if trying to describe a relationship with precision. That was not the context.

B.3 March to August 2015: Biggin & Scott move to DreamDesk

16    At the beginning of 2015, Biggin & Scott was using the Campaigntrack software in its businesses. Biggin & Scott had used the Campaigntrack software between 2006 and 2009. It changed to a different advertising platform called “Advenda Pro” in 2009, and then returned to Campaigntrack in 2013 after it had been incorrectly informed that the company behind Advenda Pro was in perilous financial circumstances.

17    Between March and May 2015, Mr Stoner was approached by Mr Ewart. Mr Ewart suggested that Biggin & Scott should consider moving to DreamDesk. Agreement was ultimately reached for Biggin & Scott to move to the DreamDesk platform.

18    On 20 May 2015, an agreement entitled “Agreement between Biggin & Scott Corporate Pty Ltd and Dream Desk” (Biggin & Scott – DDPL Agreement) was signed by Mr Stoner (on behalf of Biggin & Scott) and by Mr Meissner (on behalf of DDPL). The agreement provided:

Biggin & Scott Corporate Pty Ltd agrees to become a client of Dream Desk under the understanding that at all times any templates or data relating to properties and staff put into Dream Desk remains the property of Biggin & Scott Corporate Pty Ltd and or the office that has built an advertisement.

Should Biggin & Scott decide at any stage to cease being a client (leave) Dream Desk all steps available to Dream Desk will be made available to Migrate Biggin & Scott’s templates and property related data to whatever system Biggin & Scott nominates.

Should Dream Desk for whatever reason chose to cease doing business with Biggin & Scott as a group, Migration of all templates and property related data [is] to [be] made available to whomever Biggin & Scott instructs.

Notice period for each company is a minimum of 3 months with all accounts being settled within 4 months from given date.

Biggin & Scott agrees [to] share ideas with Dream Desk that maybe [sic] onsold to other agents or groups under the understanding that they are always available to Biggin & Scott offices.

All price increases must be tabled and discussed 3 months prior to being implemented, Understanding that offices are working 3 months ahead.

19    Biggin & Scott went “live” with the DreamDesk platform on 17 August 2015.

B.4 May 2016: Admission of infringement of Process 55’s intellectual property

20    As described further below, on 26 May 2016, Mr Semmens stated that he had copied an earlier system, “Process 55”, when he developed the DreamDesk system. Process 55 was a web-based real estate marketing system. Mr Semmens was involved in the development of Process 55 during his employment with Digital Hive Pty Ltd from 2001 to 2006.

21    The Digital Hive business, including its intellectual property (which included Process 55), was sold in September 2013 by Digital Hive to The Digital Group Pty Ltd, a company founded by Mr Semmens and his brother-in-law, Mr Farrugia. Mr Semmens was a director of Digital Hive from 21 January 2005 to 7 April 2006. Mr Farrugia was also a director. Mr Stewart joined the venture after it as founded and became a director. Mr Farrugia and Mr Stewart held the view that Mr Semmens had stolen the intellectual property of Digital Group in the development of the DreamDesk system.

22    On 26 May 2016, Mr Semmens signed two documents, which both included the following:

I, David Semmens of [redacted address] state that:

(1) I am an officer of Dream Desk Pty Ltd which is a commercial competitor of The Digital Group Pty Ltd and Campaign Track.

(2) Whilst an officer of Dream Desk Pty Ltd, I have deliberately gained access to the private email accounts of Ashley Farrugia CEO The Digital Group and Gavan Stewart Exec Chairman of The Digital Group

(3) Whilst an officer of Dream Desk Pty Ltd, I have deliberately used confidential information and trade secrets and other intellectual property (including but not limited to the ‘Process 55’ system) being the property of TDG and Campaign Track so as to develop the business of Dream Desk Pty Ltd.

(4) Mr Martin Ewart, a person associated with Dream Desk Pty Ltd, is and was at all material times aware of the conduct I have engaged in as described above.

23    One version of the document also included an extra paragraph which stated:

I acknowledge that the actions admitted above prevent me from continuing any further employment with Dreamdesk Pty Ltd henceforth.

24    On 28 May 2016, Mr Semmens and Mr Ewart told Mr Meissner that they had been informed that the Digital Group’s intellectual property was being used in the DreamDesk software. Two days later, Mr Farrugia and Mr Stewart told Mr Meissner that they considered Mr Semmens had used Digital Group’s intellectual property in the development of DreamDesk without authorisation. Mr Farrugia told Mr Meissner that the intellectual property which was alleged to have been stolen related to the “PDF Distiller”, which Mr Meissner understood enabled the DreamDesk system to produce and edit PDF images, being the images used in real estate marketing campaigns by DreamDesk clients such as Biggin & Scott.

25    Understandably, Mr Meissner did not want to operate using intellectual property he or DDPL was not authorised or licensed to use. He decided either to negotiate to buy Process 55 or to sell DreamDesk.

26    Mr Meissner and Mr Farrugia discussed DDPL buying the intellectual property in the Process 55 system or a joint venture between DDPL and Digital Group. Those discussions were overtaken by Campaigntrack and New Litho’s negotiations with Digital Group, described next.

B.5 Late May to July 2016: Negotiations to purchase Process 55; sale of DreamDesk

27    In May and June 2016, Campaigntrack and New Litho had a number of discussions with Digital Group regarding the possible purchase of the intellectual property rights in the Process 55 system. These arose because Campaigntrack wished to purchase the rights in both Process 55 and DreamDesk in order to acquire control of the DreamDesk system, to shut it down and to attempt to persuade DDPL clients to move or return to Campaigntrack. It was ultimately agreed in principle that Campaigntrack and New Litho would purchase the intellectual property rights in Process 55 for $300,000.

28    Starting with a meeting on 15 June 2016, Mr Meissner and representatives from Campaigntrack and New Litho began to negotiate the sale of DreamDesk. The question whether DreamDesk’s clients had any rights in respect of data stored in the DreamDesk relational database was not raised at the meeting on 15 June 2016.

29    From early July 2016, Mr Meissner, Campaigntrack and New Litho negotiated the terms of the agreement for the sale of DreamDesk. It was eventually agreed that all intellectual property of DDPL relating to the operation of DreamDesk was to be sold to Campaigntrack for $50,000 and there was to be a separate incentive-based arrangement whereby payments would be made to Mr Meissner for securing DreamDesk clients to transition to Campaigntrack.

30    On 13 July 2016, Mr Meissner and DDPL’s solicitor had a conversation with Campaigntrack’s solicitor regarding a licence to use the intellectual property in the “Dashboard”. The “Dashboard” was a reference to the homepage or intranet page of the user-facing “front-end” of the DreamDesk system. This displayed key information to the user. Campaigntrack’s solicitor summarised the conversation in an email sent to Campaigntrack and New Litho (emphasis in original):

Dear All

I have just spoken to the other side in this matter.

They are happy with the issue of Process 55. Apart from the finer details, there appears to be one final issue. It involves the licence back of th[e] IP [intellectual property] to operate the ‘Dashboard’.

Apparently, Dream Desk want a licence to use the IP needed for the Dashboard so that they can develop it further and commercialise it. They want:

1. An exclusive and irrevocable licence for the Dashboard IP; and

2. For the Dashboard licence to not be conditional on RT [Edgar] and [Biggin & Scott] signing up. i.e. they want to be able to commercialise the Dashboard regardless of whether RT Edgar and B&S sign a deal to use CampaignTRACK.

Basically, they want to keep on trading as if the Dashboard was theirs. You would have to give consideration as to whether you would like to licence the Dashboard to third parties in the future but in any case, the licence will have to be on the basis that CT will also use the technology and provide the Dashboard to whoever wants it.

Has this been discussed, what are your thoughts?

31    Campaigntrack submitted that Mr Semmens’, Mr Meissner’s and DDPL’s intention to develop the Dashboard further, evidenced by this email, was later put into action by Mr Semmens’ development of the Toolbox system. Campaigntrack correctly observed that Mr Meissner occasionally referred to the DreamDesk system as a whole as “Dashboard” and that the Toolbox system, whilst under development, was sometimes referred to as “Dashboard” or “Dash”.

32    On 18 July 2016, Mr Meissner signed the following agreements:

(1)    an agreement entitled “Agreement for the Sale of Assets” between, on the one hand, DDPL and him and, on the other, Campaigntrack and New Litho (the DreamDesk sale agreement); and

(2)    a “Binding Heads of Agreement” between himself and Campaigntrack and New Litho.

33    The DreamDesk sale agreement provided for the sale of intellectual property associated with the operation of DreamDesk to Campaigntrack and New Litho. Clauses 1.1 to 1.4 of the DreamDesk sale agreement provided :

1.     Sale of intellectual property and business assets

1.1.     Dream Desk agrees that it will sell to Campaigntrack and New Litho (the “Purchasers”) the DreamDesk Platform and all intellectual property associated with the operation of the DreamDesk Business, including copyright (including any rights to source code), design, patents and trademarks and all rights to the business name of the DreamDesk Business and all domain names registered by Dream Desk, including dreamdesk.com.au (the [“]Intellectual Property”).

1.2.     The parties acknowledge that the sale of the Intellectual Property does not include Process 55 as that is owned by Digital Group Pty Ltd. The sale does include any intellectual property that Dream Desk may have that is derived from Process 55 or that is separate but used in conjunction with Process 55 for the operation of the DreamDesk Business.

1.3.     In consideration for the Purchasers purchase of the Intellectual Property the Purchasers will pay to Dream Desk an amount of $50,000.00 (the “Purchase Price”) within 7 days of the date that this agreement becomes binding under clause 5.

1.4.     All rights, entitlement and interest in and title to the Intellectual Property will pass to the Purchasers on payment of the Purchase Price.

34    Clauses 2.1 and 2.3 of the DreamDesk sale agreement provided for DDPL to have a licence of the intellectual property for a limited period ending on 3 October 2016:

2.     Licence of intellectual property

2.1.     The Purchasers agree that on payment of the Purchase Price and the transfer of title to the Intellectual Property as anticipated by this agreement they will grant to Dream Desk an exclusive Australia wide licence to use the Intellectual Property for the restricted purpose of operating the DreamDesk Business and for the limited period commencing on the date the licence is given until 3 October 2016, unless extended by agreement between the Purchasers and Dream Desk (the “Transition Period”). The Purchasers agree that the licence period will be extended to 1 January 2017 if at least one client of Dream Desk known as RT Edgar and Biggin & Scott enter into agreements on or before 2 September 2016 with Campaigntrack or any entity associated with Campaigntrack for the use of the CampaignTRACK Platform.

…

2.3.     In addition to the above, the parties agree that if either RT Edgar or Biggin & Scott enter into agreements on or before 2 September 2016 with Campaigntrack or any entity associated with Campaigntrack for the use of the CampaignTRACK Platform, the Purchasers will grant a limited, Australia wide licence to use the Intellectual Property for the restricted purpose of supplying the product currently provided by Dream Desk known as the Dashboard to clients of Dream Desk who are not engaged or associated with the real estate Industry on the following conditions:

2.3.1.     The Intellectual Property licenced will be only that Intellectual Property that is required for the operation and supply of the Dashboard, including only that source code relating to the Dashboard. Dream Desk will have no licence to use, and no rights to any of the Intellectual Property that is not required for the operation and provision of the Dashboard.

2.3.2.     The licence will commence on the expiry of the general licence under clause 2.1 on 1 January 2017.

2.3.3.     If only one of RT Edgar or Biggin & Scott enters into the agreement contemplated by clause 2.3 the licence will be an exclusive licence for a period of five years from the date that such an agreement is entered into and any renewal of the licence will be on terms that it will be a non-exclusive licence. After the expiry of the exclusive licence period the Purchasers will be free to licence the same Intellectual Property to third parties. If both RT Edgar and Biggin & Scott enter into the agreements contemplated by clause 2.3 the licence will be an exclusive licence for a period of five years from the date that the first such agreement is entered into and any renewal of the licence will be on terms that it will be an exclusive licence.

2.3.4.     The initial term of the licence will be five years. The licence will be renewed on the expiration of the initial term under the same terms if mutually agreed to by the parties. The licence renewal will not be unreasonably withheld by the Purchasers.

2.3.5.     The licence granted to Dream Desk cannot be used for any existing client of Dream Desk unless agreed to by the Purchasers.

2.3.6.     The licence will immediately terminate if the business structure or makeup of Dream Desk changes in a material way from the date of these Heads of Agreement or if Dream Desk breaches the terms of the licence.

2.3.7.     The terms of the licence agreement will not restrict the Purchasers from supplying products and services of the same kind as the Dashboard using the same Intellectual Property that is licenced. The term ‘exclusive’ as referred to in this clause is to be taken to mean that the Purchasers will not grant the same licence to a third party but it does not restrict the Purchasers from exploiting any Intellectual Property in any way.

2.3.8.     Dream Desk will not be permitted to transfer, assign, sub-licence or otherwise grant rights to third parties to the licenced Intellectual Property unless the Purchasers approve in writing.

35    On 26 July 2016, Ms Kylie Neal (a consultant to DDPL), gave a presentation via video conference to Campaigntrack staff members. Ms Neal’s presentation provided a comprehensive demonstration of the DreamDesk system. Mr Meissner also attended the presentation.

B.6 30 July to Mid-August 2016: Origins of Toolbox

36    On 30 July 2016, Mr Semmens made an enquiry with the online software company, Aleyant Systems, LLC, which owned eDocBuilder, a web-based online design, personalisation and variable data publishing system that was designed to be integrated into web to print and other e-commerce systems. The online enquiry was in the following terms:

37    On 2 August 2016, Mr Semmens discussed his eDocBuilder enquiry with an Aleyant representative, Mr Jeffrey Protheroe, through an online demonstration/conference. I infer, including from events described later, that the point of the enquiry was to determine whether eDocBuilder might be used in a new system intended to have the same essential functionality as DreamDesk. As will become apparent, I also conclude that the new system (Toolbox) was developed by first copying substantial parts, probably the whole, of the source code of DreamDesk.

38    On 3 August 2016, Mr Semmens met with Mr Stoner at Biggin & Scott’s head office. Mr Semmens told Mr Stoner that he could create a system with similar functionality to DreamDesk and Campaigntrack and asked whether Mr Stoner would be interested in him developing the system. At the meeting, Mr Stoner (the CEO of Biggin & Scott) showed Mr Semmens a letter dated 3 August 2016, on Biggin & Scott letterhead. The letter, which had been written and signed by Mr Stoner, provided (errors in original):

David Semmens

You are instructed to build a web to print delivery system that does not breach any other companies IP or ownership, in particular Dream Desk or Campaign Track.

All products used should be off the shelf products owed by 3rd parties with a licence agreement or able to be used through open code or any other industry standard that classes the use as open (can not be claimed)

All fields should match industry standard so as to be delivered as per their specs and able to match our CRM’s in particular Box & Dice.

In simple terms we do not want any thing used that can be claimed as owned by the 2 companies above.

We are happy with E-DOC being used as the PDF delivery system as long as it can deliver our finished adds as per Biggin & Scott style guide. Please continue with the building of these templates.

With regards to property data that offices are loading into the Dream Desk system please arrange to migration scripts of this data to be loaded into the New E-doc templates to minimise as much disruption as possible.

We have an agreement in place with Jon Meisner regarding office and property data to which Jon assures me our clients and offices data is and always will be ours and is not part of his deal.

39    Mr Stoner had handwritten his and Mr Semmens’ name at the foot of the letter. Mr Stoner signed the letter above his name. Mr Semmens did not sign the letter. In cross-examination, Mr Semmens accepted that he discussed the letter with Mr Stoner. He could not recall whether he was provided with a signed copy of the letter during the meeting.

40    I infer from the terms of the letter, and the fact that Mr Semmens was looking into eDocBuilder, that the development of a new system (ultimately Toolbox) was already underway at the time Mr Stoner wrote the letter. It is also clear from the terms of the letter that Mr Stoner knew that it was proposed that the new system would use eDocBuilder.

41    Mr Stoner gave the following evidence in cross-examination:

So you say that this was the instruction that you gave Mr Semmens on 3 August 2016, to build a Web to Print delivery system that does not breach any other company’s IP or ownership, in particular, Dream Desk or Campaigntrack?---Yes.

And you say that you did that without knowledge of what I have taken you to in relation to Process 55?---Yes.

Other than what Mr Ewart said to you about a “problem”?---So on this date, I knew that Dream Desk was – had been, well, I’m not sure if it had been purchased or was being purchased.

You didn’t know or you did know?---I’m not sure. Well, I’m not sure if it had been purchased by then. But on that date, I knew that, who had bought it or was buying it and what the future looked like.

…

Why include “Breach any other company’s IP” if the only knowledge you had was that of the Dream Desk sale?---Well, that’s what their issue was, that they had breached Process 55’s IP.

Well, I think, the evidence you gave us, was you were only aware, very broadly, of what Mr Ewart had told you?---That’s in May, this is August.

So you – the evidence you give is that you became more familiar with the situation relating to Mr Semmens from May to August 2016. Is that correct?---Absolutely.

…

You knew there was a problem with Process 55 and the use of Process 55 by Dream Desk, did you not?----At that stage, yes. On 3 August.

…

You appreciated that there was real risk that Mr Semmens might infringe another company’s IP?---No. I would have to say, “No”. I trust David.

Well, why would you put in – you instructed to:

Build a Web to Print delivery system that does not breach any other company’s IP or ownership, in particular, Dream Desk or Campaigntrack.

?---Just to make it clear, I don’t want any crossovers with anything.

…

And the only basis for putting in an instruction, Mr Stoner, is that you were concerned about the possibility that he would use code belonging to Dream Desk or Campaigntrack? — It’s possible. But I don’t think that’s my meaning.

42    Campaigntrack submitted that “Mr Stoner knew there was a real risk that, in developing the new system, Mr Semmens might infringe the intellectual property rights of DDPL or Campaigntrack”. Campaigntrack also submitted that “Mr Stoner’s denials that he did not appreciate the risk of infringement, and that he was not seeking to address that risk by the instructions in [his letter], are simply not credible in light of his answers in cross-examination, and should be rejected”.

43    In the context of the events which had occurred, including the fact that – to Mr Stoner’s knowledge – Mr Semmens had admitted to using Process 55 in developing DreamDesk, it was hardly surprising that Mr Stoner would seek an assurance from Mr Semmens that he would not infringe the intellectual property rights of others in building a web to print delivery system. I am satisfied that Mr Stoner trusted Mr Semmens not to infringe the intellectual property rights of DDPL or Campaigntrack in developing the new system. I conclude that Mr Stoner did not want Mr Semmens to misuse intellectual property belonging to others in developing the new system.

44    Ms Bartels did not see the instruction letter. However, she was informed of the substance of it by Mr Stoner. Ms Bartels left it to Mr Semmens to determine the specifications of the new system. Campaigntrack referred to the following evidence given in Ms Bartels’ affidavit (Campaigntrack’s emphasis):

In August 2016, I was informed by Paul Stoner that he had been approached by David Semmens in relation to the development of a new online advertising system that did not have any software or information in it that it should not have … I trusted David enough that he would not make a mistake in terms of using material in the new system that should not be used.

45    Campaigntrack submitted that “[t]he deontic words — ‘should not have’, ‘mistake’ and ‘should not be used’ — show that Ms Bartels was aware that Mr Semmens had been accused of misusing the intellectual property in the Process 55 system, and that she was aware of the risk of infringement in the development of the new system” and that “[t]he word ‘enough’ shows that her trust in him was not unqualified; that she had some reservations about him”. I accept that Ms Bartels is likely to have known that Mr Semmens had admitted to using Process 55 in DreamDesk and that this had caused problems. I conclude that Ms Bartels did not want Mr Semmens to misuse intellectual property belonging to others in developing the new system.

46    As things stood at 3 August 2016, Mr Semmens had until 3 October 2016 to develop the new system. This was because the licence to use the DreamDesk system, granted by Campaigntrack to DDPL under the DreamDesk sale agreement, would end on 3 October 2016. Campaigntrack observed that the evidence suggested that the DreamDesk system was created over a period longer than 2 months, namely beginning in February 2015 and going live for Biggin & Scott on 17 August 2015.

47    On 5 August 2016, Mr Semmens received an email confirming the creation of an eDocBuilder account. Two similar versions of a welcome email from eDocBuilder were in evidence. The version of this email placed into evidence by Mr Semmens was in the following form:

From: “Aleyant Systems Support” <support@aleyant.com>

Subject: [140-1F367834-0A49] Welcome to eDocBuilder, JGM Advertising!

Date: 5 August, 2016 6:03:32 am GMT+8

To: david@jgmadvertising.com.au

Cc: jprotheroe@aleyant.com

Reply-To: “Aleyant Systems Support” <support@aleyant.com>

WELCOME!

Thank you for your order! Your account has been set up. Below you will find important information to access the system, and to take advantage of the services available to you. Please keep this email for future reference and share it with all staff that will be working in eDocBuilder!

The following is a summary of your order:

eDocBuilder Professional

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EDOCBUILDER ADMIN

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eDocBuilder Admin: http://creator-sg.edocbuilder.com

Your master login info:

User: ********

Password: *******

GETTING STARTED

…

48    Another version of this email was provided on 24 November 2016 by Mr Stoner to his solicitor, who provided a copy of the email to Campaigntrack’s solicitors. This version of the email indicated it was sent at the same time and included almost identical content to the email placed into evidence by Mr Semmens. The only difference was that Mr Semmens’ JGM Advertising email address was not in the “To” field, which instead included Mr Stoner’s Biggin & Scott email address. The User and Password fields were also different in that they referred to Mr Stoner’s Biggin & Scott email address, and the password “JlbMSTea”:

From: “Aleyant Systems Support” <support@aleyant.com>

Subject: [140-1F367834-0A49] Welcome to eDocBuilder, JGM Advertising!

Date: 5 August, 2016 6:03:32 am GMT+8

To: pstoner@bigginscott.com.au

Cc: jprotheroe@aleyant.com

Reply-To: “Aleyant Systems Support” <support@aleyant.com>

WELCOME!

Thank you for your order! Your account has been set up. Below you will find important information to access the system, and to take advantage of the services available to you. Please keep this email for future reference and share it with all staff that will be working in eDocBuilder!

The following is a summary of your order:

eDocBuilder Professional

----------------------------------------------------------------------

EDOCBUILDER ADMIN

----------------------------------------------------------------------

eDocBuilder Admin: http://creator-sg.edocbuilder.com

Your master login info:

User: pstoner@bigginscott.com.au

Password: JlbMSTea

GETTING STARTED

…

49    Campaigntrack also put into evidence a document printed from the Toolbox Git repository which indicated that the username and password for the template for eDocBuilder was “david@jgmadvertsing.com.au” and “JlbMSTea”.

50    Mr Stoner gave evidence that the reason for the two similar emails was that he wanted his own login to the eDocBuilder:

Is the evidence you give his Honour that this email was received by you from Aleyant system support, or was this email changed before you sent it on to Mr Maletic?---I think in memory of all this, the original one that I was sent was a login called “David” and I wanted my own login.

…

Well, was that you? Did you make that change?---No. I wanted – I remember with this very clearly I wanted to send Mr Maletic a login with my name on it, and my password - - -

…

MR GREEN: You can’t explain any reason why those details now appear in an email that has an identical time, can you?---As I said before, when David sent me the original one, I wanted my own.

So did you change the – did you change the details of the user and the password from the asterisked version?---I didn’t change anything.

Did you communicate with anyone asking for a change?---No.

…

… Because, as I said, the first one that I was sent had David who is the login. I called David straightway and said, “I need an email with me as the login and I need my own password, login and password.”

51    Campaigntrack submitted that the last statement “should be understood as an instruction by Mr Stoner to Mr Semmens to edit the [eDocBuilder] Welcome Email”, noting that Mr Stoner forwarded the edited email to Mr Maletic of Mills Oakley (who acted for Biggin & Scott) for the purpose of providing the document to an independent expert. The independent expert was engaged in November 2016 to determine whether there was any potential copying from the DreamDesk system. Campaigntrack submitted that the Court should find that Mr Stoner, Biggin & Scott and RETB wanted to convey a false impression that Mr Stoner and Biggin & Scott had registered to use eDocBuilder, independently of DreamDesk and JGM Advertising.

52    The first email set out at [47] above does not identify a username and password at all. It is unlikely this was the form of the email sent to Mr Semmens. The original email to Mr Semmens would have identified the username and password. I do not accept that the email as received by Mr Semmens was in the form identified at [47] above. I conclude that the original email referred to the username and password as “david@jgmadvertsing.com.au” and “JlbMSTea” respectively. It is possible that two emails (or more) were sent by Aleyant at precisely the same time to different email addresses providing different usernames and passwords. However, this was not Mr Stoner’s explanation or Mr Semmens’ explanation. On balance, I conclude that Mr Semmens changed the content of the email he had received from Aleyant.

53    I do not conclude that Mr Stoner instructed Mr Semmens to alter the 5 August 2016 email as such. However, the events do reflect adversely on Mr Stoner’s credibility. Mr Stoner did not give evidence that he was sent an email from Aleyant on 5 August 2016. There was no evidence to suggest that Mr Stoner considered he had been given his own username and password on or around 5 August 2016. No evidence or reason was given why Mr Stoner would want or require his own username and password. Mr Stoner gave evidence that he might have tried his (purported) login details once, but that he could not recall whether they worked. Mr Stoner denied that he provided the second version of the email to “hide Mr Semmens’ involvement in Real Estate Tool Box”. It is likely that Mr Stoner wanted his own login details to be created in order to provide those details to Campaigntrack’s solicitor so as not to provide them a document which indicated the involvement of Mr Semmens in the relevant events.

54    Mr Semmens most likely started to develop the Toolbox system on his local computer on about 9 August 2016. The first commit to the Toolbox Git repository (the Dashboard Vault1 Repository) was made by Mr Semmens on 26 August 2016. The time stamp of the files in the first commit showed that the first file was created on a local computer on 9 August 2016. Mr Semmens kept source code on his local computer whilst initially developing the code and used Bitbucket once he was to be assisted by other developers (Mr Gallagher and Mr Zhang) so they could share code between themselves.

55    It is likely that Mr Semmens started to develop the Toolbox system on his local computer at DreamDesk/JGM Advertising’s offices. The local computer on which initial development occurred has not been able to be located. In cross-examination, Mr Semmens said he discarded, overwrote or gave away old computers.

56    From 16 August 2016 to 19 September 2016, Mr Semmens ran a number of “migration scripts” in respect of the DreamDesk database. This was the subject of unchallenged evidence given by Mr Allen, a software developer who had previously been employed by Campaigntrack and who was engaged by Campaigntrack’s solicitors to provide technical assistance for the present proceedings. The migration scripts did not copy source code; they only copied data from one database to another database. The first migration script, run on 16 August 2016, was unsuccessful but, at least by 30 August 2016, some had been successfully run. The migration scripts copied database records from DreamDesk to a database at the domain “dash.vault1.net”. I infer that “dash.vault1.net” was the database for the Toolbox system. I draw that inference because: a login page to the Toolbox system was available when “dash.vault1.net” was entered into an internet browser; the Toolbox repository was named “Dashboard Vault1”; and “Dashboard” or “Dash” was the project name for the Toolbox system.

57    Migration scripts (not all of which were successful) were run in respect of the DreamDesk database for:

(1)    Biggin & Scott: on 16 and 23 August and 2, 8, 12, 17 and 19 September 2016;

(2)    RT Edgar: on 16 and 17 August 2016; and

(3)    Jellis Craig: on 17 to 19 and 26 to 30 August 2016.

58    Mr Semmens accepted that he ran the migration scripts. In cross-examination, Mr Semmens stated that Mr Meissner had instructed him to “export the client’s data out” or give the client their data, but later clarified:

Was it Mr Meissner?---He would have just said give the client their data, I’m not sure. I don’t think he would have said synchronise their data.

59    Mr Semmens stated Ms Bartels may have told him to keep the client data up to date. He did not think any instruction was given to him by Mr Stoner in relation to client data.

60    I infer from the events which had occurred to this point, including the development of Toolbox and the running of the migration scripts, that Biggin & Scott was not intending to remain with Campaigntrack if at all possible, but was progressing its objective of setting up its own system.

61    It is important to appreciate, as Mr Semmens emphasised in submissions, that the running of migration scripts only transferred a client’s data from one database to another. The data so transferred was not the intellectual property of Campaigntrack.

62    Campaigntrack initially submitted that the running of the migration scripts “meant that there was a reproduction of the structure, the database structure, in the program itself” and that the running of the scripts necessarily copied the structure of the underlying database and contained the data structures. It was submitted that the “migration scripts are a way in which one can create the data structures through programmatic means, through running a program”. Campaigntrack submitted:

HIS HONOUR: So, but – and what does that mean, though? Doesn’t that mean – doesn’t running the migration scripts mean that you’re taking the data for Biggin & Scott? No.

MR GREEN: Yes, you’re copying the data structures.

HIS HONOUR: For Biggin & Scott’s - - -

MR GREEN: Well, you’re copying the databases.

…

HIS HONOUR: Are migration scripts always data?

MR GREEN: Migration scripts – the migration scripts always include the reproduction of the databases – the reproduction of the structure into which the migration – the data is then put.

63    Eventually, however, it became clear that the running of migration scripts does not necessarily involve a reproduction of the database structure. After asking what evidence supported these submissions and observing that the evidence the Court was then taken to did not appear to support the submissions, it became apparent that all that could be put was that the migration scripts showed that the databases into which the data was copied were structurally the same (or very similar). This might indicate that Mr Semmens modelled the Toolbox database structure from the DreamDesk database structure, but the running of the migration scripts was not a means by which the database structures themselves were copied.

64    Mr Semmens submitted, and I accept, that the migration scripts simply transferred the client’s data that the client owned. The running of the migration scripts did not, of itself, copy any intellectual property of Campaigntrack.

65    In cross-examination, Mr Semmens was asked about why he ran migration scripts in respect of Jellis Craig, when Jellis Craig was not involved in the Real Estate Tool Box venture:

And then you ran further migration scripts in respect of Jellis Craig on 17 and 19 August. Again, they were still with Dream Desk, weren’t they?---They were, yes.

And there was no basis for doing that on your - - -?---Yes.

- - - asserted basis that you were trying to move client data?---Yes, I can’t recall why I did Jellis Craig, there was actually no need to do Jellis Craig at all.

There was absolutely no need to do Jellis Craig?---No, no.

Except for the fact that you were building a replica system of Dream Desk, weren’t you?---Well, if you call Tool Box – I was building Tool Box, yes.

66    The applicant submitted that the inclusion of Jellis Craig in the migration scripts demonstrated that the respondents’ true objective was to maximise the prospects that existing DreamDesk clients would move to Toolbox after DreamDesk was shutdown.

67    In light of Mr Stoner’s instruction letter at [38] above, which stated “please arrange to migration scripts of this data to be loaded into the New E-doc templates to minimise as much disruption as possible”, I accept that Mr Stoner knew about the migration scripts in respect of Biggin & Scott data. It is likely that Ms Bartels also knew.

68    Mr Semmens gave evidence that he did not tell Ms Bartels or Mr Stoner that he ran the migration scripts on the RT Edgar and Jellis Craig data:

So, is the evidence you give now that you had conversations with each of Mr Meissner and Ms Stoner and possibly – sorry, Ms Bartels and possibly Mr Stoner about what should be done with the RT Edgar and Jellis Craig data. Is that right?---No. No, I wouldn’t have discussed RT Edgar and Jellis Craig data with them.

69    I accept that Mr Semmens copied the RT Edgar and Jellis Craig data in order to maximise the prospect of obtaining RT Edgar and Jellis Craig as clients of Toolbox should the opportunity later arise. I am not satisfied that Mr Stoner or Ms Bartels knew that Mr Semmens had run migration scripts to copy the data of RT Edgar or Jellis Craig.

B.7 Mid to Late-August: Biggin & Scott consider software providers; sale of Process 55

70    Mr Stoner gave evidence that, in about mid-August 2016, he decided that, if the Toolbox venture were to go ahead it should be done through “a separate and different company” to Biggin & Scott.

71    On about 18 August 2016, Ms Keys of Campaigntrack met with Ms Bartels to discuss whether Biggin & Scott would transition to Campaigntrack. Ms Keys gave an account of the conversation in which she stated she recalled Ms Bartels as having said that Biggin & Scott was “happy to agree terms with you but [we] just don’t want our business disturbed” in the context of stating that Biggin & Scott did not want DreamDesk shut down whilst they were entering spring, Biggin & Scott’s busiest time of the year. I accept that Ms Bartels sought to convey that Biggin & Scott were considering moving to Campaigntrack, whilst at the same time seeking to develop the new Toolbox system.

72    From 18 August 2016 until 6 September 2016, Biggin & Scott made enquiries with, and received offers from, other providers of online advertising systems, including Excel (Australasia) Pty Ltd and RealHub. Presentations were made to Biggin & Scott by both Excel (on 19 and 26 August 2016) and RealHub (on 5 September 2016). Mr Stoner gave evidence that these proposals were made in the course of Biggin & Scott exploring other options for online advertising systems. Campaigntrack submitted that Biggin & Scott’s interest in other systems was not a “bona fide interest”, but rather was done to: (a) obtain pricing information in order to price the Toolbox system competitively; and (b) feign interest in Campaigntrack so that Campaigntrack would keep the DreamDesk system operational. It is probable that there were a number of reasons for the enquiries. The likelihood is that Mr Stoner’s preference was that the new system would be operational by 3 October 2016 (when the “licence-back” granted by Campaigntrack to DDPL was due to end), but that – if it was not – another service provider might be required. The likelihood is that Mr Stoner’s least preferred option was to use Campaigntrack.

73    No doubt the enquiries with Excel and RealHub also provided pricing information and insights into the functionality of the Excel and RealHub software which might have been relevant and useful if the new system, Toolbox, was commercialised. I doubt that the enquiries were made with the object of “feigning interest in Campaigntrack”, although I accept that, at this time, Biggin & Scott conveyed to Campaigntrack that it was actively considering using Campaigntrack’s system when that was its least preferred option.

74    In August 2016, Digital Group, Campaigntrack, New Litho and their respective directors executed an agreement entitled “Agreement for the Sale of ‘Process 55’” (Process 55 sale agreement). From the date of completion of the agreement, being 25 August 2016, Campaigntrack and New Litho became owners of “the whole of Process 55”, including its source code and intellectual property rights.

B.8 26 August to Early September 2016: Early development of Toolbox

75    As noted earlier, the first commit to the Toolbox Git repository (the Dashboard Vault1 repository) was made by Mr Semmens on 26 August 2016. A total of eight commits to the Toolbox repository were made on this day. As also noted earlier, migration scripts for Jellis Craig were run on 26 August 2016.

76    On 1 September 2016, Ms Neal wrote an email (from “kylie@askthephantom.com.au”) to Ms Bartels, Ms Melissa Fato of RT Edgar and “accountservices9999@yahoo.com”, an email address being used by Mr Meissner. The email stated (emphasis in original, paragraph numbering added):

[1] Morning Ladies, (cc: Jon)

[2] This is my business email, best to use this for non-DD-related matters.

[3] Just some updates for you:

•    [3.1] Jon has not received details of extension; he will forward when he does and advise CT to deal direct from here on in.

•    [3.2] Reviewing Jon’s agreement, it appears the worst possible shutoff date is 3/10/16 - TBC by Jon’s solicitor.

•    [3.3] It also appears that the extension to 1/1/17 is contingent upon ‘one of the DD clients known as RT Edgar or Biggin & Scott’ signing with CT. For me that’s pretty vague and could be a single office/entity. TBC by Jon’s solicitor.

•    [3.4] Today I’m working on:

•    [3.4.1] some alternate business continuity plans

•    [3.4.2] reallocating resource from DD to work on new platform (which will mean minimising non-essential changes and putting them right into the new platform)

•    [3.4.3] project plan for new platform

[3.5] The first hurdle is to register the business/domain - are we any closer from your perspective? What’s the next action on this?

[3.6] Call if you need me.

[3.7] K

[3.8] Kylie Neal

[3.9] M: [redacted mobile number]

77    RT Edgar’s involvement in Toolbox ceased a short time after this email.

78    I accept the submission advanced by Campaigntrack that it is likely that Mr Meissner was aware of the development of the Toolbox system by DDPL and JGM Advertising staff – see: [1] “(cc: Jon)”. Mr Meissner denied that he controlled the email address “accountservices9999@yahoo.com”. Whether or not Mr Meissner controlled the email address, I accept that he was using it at the relevant time.

79    Campaigntrack observed in submissions that Mr Meissner had agreed to use his “best endeavours” to persuade Biggin & Scott and RT Edgar to return to Campaigntrack’s system, as contemplated by cl 2.7 of the Binding Heads of Agreement. Campaigntrack submitted that the 1 September 2016 email showed that Mr Meissner (and Ms Neal, DDPL and JGM Advertising) were attempting to advance Biggin & Scott’s and RT Edgar’s interests in the Toolbox venture, by:

(1)    seeking to extend the licence to use the DreamDesk system beyond the original 3 October 2016 deadline, so as to maximise the available time for development of the Toolbox system: at [3.1]-[3.3];

(2)    actively developing a project plan for the Toolbox system: at [3.4.1], [3.4.3]; and

(3)    allocating resources away from the development of the DreamDesk system to the development of the Toolbox system: at [3.4.2].

80    Campaigntrack also observed that, although the respondents appear to have created a detailed project plan for the development of the Toolbox system, none of the respondents put the Toolbox project plan into evidence or discovered any such plan.

81    Campaigntrack submitted that Ms Neal’s use of alternative email addresses (she did not use her DreamDesk email and she contacted Mr Meissner at the “acountservices9999” address) suggested that Mr Meissner, Ms Neal, DDPL and JGM Advertising “wished to act surreptitiously in their involvement in the development of the Toolbox system”. I accept that Ms Neal wanted to use different email addresses for work on the Toolbox system.

B.9 5-7 September 2016: Variation of DreamDesk agreements; payment of purchase price

82    The DreamDesk sale agreement and the Binding Heads of Agreement were varied on 5 September 2016, in respect to the mechanism for incentive-based arrangement for securing DreamDesk clients to transition to Campaigntrack.

83    On 6 or 7 September 2016, Campaigntrack and New Litho paid the purchase price of $50,000 under the DreamDesk sale agreement. On 7 September 2016, the CEO of New Litho, Mr Watts, sent an email to Mr Meissner and Ms Keys attaching the remittance advices for the payments to DDPL, and asking for the passwords that were to be provided as part of the handover of DreamDesk:

Jon,

Please find attached the remittances for the $50,000. $25000 from each party.

Now that payment is finalised, can you please instruct David Semmens to provide the following information to us via email as per clause 1.6:

1. Amazon webservices password

2. Administrator password to Dream Desk platform

3. Management passwords

4. Client logins for all clients

5. Any passwords for day to day operation of dream desk

6. Passwords and access details required for management and configuration of Dream Desk;

If you could CC me in on the request to David, I’m happy to chat with him if he has any questions. I’d like to sit down with him for a few hours and go through how the system is set up and managed as well.

Is Ewart out of the office?

B.10 Mid-September 2016: Ongoing development of Toolbox; relationship between Biggin & Scott and Campaigntrack deteriorates

84    On 8 September 2016, a number of emails were exchanged between Ms Neal and Ms Bartels (copied to Mr Semmens and Mr Stoner) regarding the media vendor integration (MVI) of data between the real estate agency’s customer relationship management system supplied by “Box+Dice” and the agency’s advertising system (eg DreamDesk or Toolbox). The emails refer to “the new system”, which I infer was a reference to the Toolbox system. The email chain included:

From: Kylie Neal [mailto:kylie@dreamdesk.com.au]

Sent: Thursday, 8 September 2016 4:12 PM

To: Michelle Page <mpage@bigginscott.com.au>

Cc: David Semmens <david@dreamdesk.com.au>; Paul Stoner <pstoner@bigginscott.com.au>

Subject: Re: MVI (Box & Dice)

When offices have MVI turned on (in its current incarnation) OFIs [open for inspections] are entered into B+D and they sync to DD.

--------------------------------------------------------------------------------

On Thursday, September 8, 2016, Michelle Page <mpage@bigginscott.com.au> wrote:

OK – is that being set up in the new system?

--------------------------------------------------------------------------------

From: Kylie Neal [mailto:kylie@dreamdesk.com.au]

Sent: Thursday, 8 September 2016 4:19 PM

To: Michelle Page <mpage@bigginscott.com.au>

Cc: David Semmens <david@dreamdesk.com.au>; Paul Stoner <pstoner@bigginscott.com.au>

Subject: Re: MVI (Box & Dice)

Yes, but the first priority is to have offices able to place ads/orders. MVI is not guaranteed for day 1 but is a very early priority - Dave [I infer, Semmens] advises that it won’t be arduous to recreate, but the basics need to be available first. Happy to go through the plan/priorities if you wish.

85    On 9 September 2016, Mr Stoner sent an email to unnamed parties (although the recipients are likely to have included Mr Neil Pearson of Printco), with the subject line “structure”. Printco was a printing business that printed display boards for Biggin & Scott. It is likely that other recipients of the email were ABC (a display board company) and Mr Semmens. The email included (paragraph numbering added):

[1] Hi Guys

[2] Proposed structure for new co

[3] Name AGENT TOOL BOX Biggin & Scott Printco ABC To own 70% At a costs of $35,000 each

[4] David Seamans [sic] and partners 30% At a costs of $30,000

[5] I think we need to be open to JV’s with larger groups along the lines of white labelling the system on a 50/50 basis And also prepared to take on other investors should the need arise.

[6] We are currently sourcing a longer term for the platform 10 years at this stage so to be confirmed

[7] Where the team will sit is an issue as we cannot have one company being able to be see another’s pricing. We need to agree on this and quick. David may have a solution.

[8] Our objective is to get the system finished with Biggin & Scott using it by not later than October 3rd 2016 stage one As B&S are bringing in revenue this helps on a few levels but obviously part of start-up few is to help run the team until we pick up A few new clients.

[9] Biggin & Scott are happy for others to see how their work flow is happening.

[10] Reasoning behind Printco and ABC being partners is two fold Both have strong relationships with clients whilst at the same time can elevate some ongoing cost by introducing a system Which covers full web to print capabilities, Boards, brochures, stationary, papers, edm’s, intranet.

[11] First year each partner of the 70% must bring in at least the equivalent of what Biggin & Scott brings in production fee wise.

[12] Obviously if close not a problem but I think we need a taking the piss rule. Should this not happen under p[er]forming partner must offer shares back.

[13] Printco and ABC get full access of the system to offer to their clients obviously.

[14] Paul Stoner and Michelle page [Bartels] available to help get deals across the line should it be needed.

[15] If in agreement let’s get this set up with the rules as above and go for it.

[16] Dave will have a system presentation ready for us next week.

[17] Cheers Paul Stoner Chief Executive Officer

[Biggin & Scott signature block]

86    Campaigntrack emphasised the following matters about the email, which I accept as accurate:

(1)    First, Mr Stoner was writing in his capacity as CEO of Biggin & Scott and as one of the prospective venturers: at [3], [17].

(2)    Secondly, Biggin & Scott and its partners (Printco and ABC) were to take a controlling 70% interest in the venture, while Mr Semmens and his partners were to take a minority 30% interest: at [3]-[4].

(3)    Thirdly, Mr Stoner’s and Biggin & Scott’s “objective” was to finish the Toolbox system and to have Biggin & Scott offices on the system by 3 October 2016 (at [8]), being the end-date of the “licence-back” to DDPL to use the DreamDesk system under the DreamDesk sale agreement.

(4)    Fourthly, Mr Stoner, Ms Bartels and Biggin & Scott were taking an active role to ensure the success of the Toolbox venture by: bringing in production fee revenue from Biggin & Scott offices (at [8], [11]); sharing information about usage of the Toolbox system by Biggin & Scott offices (at [9]); and Mr Stoner and Ms Bartels being available to persuade customers to move to the Toolbox system: at [14].

87    On 12 to 13 September 2016, Mr Wentao Zhang and Mr David Gallagher made their first commits to the Toolbox Git repository. Mr Zhang is a software developer who was employed by Mr Meissner’s company, JGM Advertising, from 1 July 2016 to 6 October 2016. His “team leader” was Mr Gallagher, a DDPL consultant, who also worked on the development of the Toolbox system. Mr Zhang produced documents under subpoena. According to time sheets which he produced, by at least 8 September 2016, Mr Zhang was working on the development of the Toolbox System which was referred to as “Dashboard”. He continued working on the development of Toolbox until at least 3 February 2017. Whilst Mr Gallagher and Mr Zhang helped develop the software, Mr Semmens described himself as the “main developer” of the Toolbox system.

88    On 14 September 2016, Ms Bartels met with Ms Keys and Mr Dean of Campaigntrack in South Yarra. Ms Bartels showed Ms Keys and Mr Dean various functions and features of the DreamDesk system which she considered valuable, in particular the Electronic Data Management (EDM) function which was not a part of the Campaigntrack system. In her affidavit, Ms Bartels stated she did this “in the hope that [Campaigntrack] would keep [DreamDesk] alive for Biggin & Scott so we did not ultimately have to go down the track of launching a new system”. Ms Bartels asked Ms Keys not to shut down DreamDesk and stated that she recalled Ms Keys stating that Campaigntrack did not “want to interrupt your business but we will shut DreamDesk down”. I think it unlikely that, by this time, Ms Bartels did not want to launch the Toolbox system which was in the process of being developed.

89    According to Ms Keys, Ms Bartels said words to the following effect at the meeting:

Everything is pretty much set for Biggin and Scott to come back to Campaigntrack. The only issue is whether Campaigntrack could accommodate having an intranet feature? … I just need some time to go over the contract. I think that, at this point, it is just a matter of going through the contract and finalising the pricing. I also need reassurance that we keep the intranet page. … You have been great for not shutting [DreamDesk] down immediately.

90    I prefer Ms Keys account of the meeting. It is more likely in the context of the established surrounding circumstances.

91    RETB was incorporated on 15 September 2016. Mr Stoner became its sole director and 95% shareholder. Ms Bartels became its sole company secretary and 5% shareholder.

92    The Toolbox venture was operated by a trust (RETB Unit Trust), for which RETB was the corporate trustee. The RETB Unit Trust was established on 1 October 2016.

93    Mr Stoner confirmed that Mr Pearson or Printco made a $35,000 investment into the Toolbox venture. It is likely that Biggin & Scott and ABC also invested in the Toolbox venture.

94    By mid-September 2016, Campaigntrack had not yet received the passwords it needed to operate the DreamDesk software. Those had been requested on 7 September 2016 – see [83] above. Mr Meissner was on a cruise ship in Alaska from 6 to 19 September 2016 and Campaigntrack had difficulty getting in contact with him. On 16 September 2016, Ms Neal from DDPL sent the following email to Ms Keys regarding Mr Meissner’s whereabouts:

Hi Therese,

Just an update regarding Jon’s whereabouts.

Dave said that you are anxiously awaiting contact from Jon. He’s on a cruise ship in Alaska at the moment, and incommunicado.

He’ll be back on dry land Sunday/Monday [18/19 September 2016] if you email him I’m sure he will be in touch then.

If I can assist with anything in the meantime please let me know.

95    Mr Meissner gave evidence that before he left on his trip, he left Ms Neal and Mr Semmens in charge of turning the DreamDesk system off and giving it to Campaigntrack and negotiating the terms of any extension of the licence to use DreamDesk. Campaigntrack submitted that it should be inferred that Mr Meissner, Ms Neal and Mr Semmens deliberately delayed the handover process for two weeks, for the purpose of maximising the time to develop the Toolbox system and to seek to remove traces of the DreamDesk system from the Toolbox system.

96    Ms Neal’s email of 16 September 2016 to Ms Keys is odd. As noted earlier, on 1 September 2016, Ms Neal had sent an email saying she was “cc[-ing]: Jon” and the cc-ed email address was “accountservices9999@yahoo.com”. On 16 September 2016, Mr Meissner sent an email received by Mr Watts from the email address “accountservices9999@yahoo.com” saying he was sending the email from the account of “an Aussie resident of the US” whom he had met on the cruise and that it was not his email address. The email stated:

Sorry everyone

Since sept 6 I have been off the air ie phone and Internet wise

What they told me about ships was incorrect nothing works

I am back in Chicago on Monday and hopefully will be able to respond to any emails messages I have received

I am lucky to have met an Aussie resident of the US who has let me send this email on her account

Do not respond as it obviously is not my email address

Jon

97    I accept that Mr Meissner had difficulties being contacted whilst overseas. However, I conclude that Mr Meissner could have been contacted on 16 September 2016 by email.

98    On 21 September 2016, Mr Stoner emailed Ms Keys (Campaigntrack), copying Mr Meissner and Ms Bartels, stating that he was concerned that DreamDesk would be shut off (paragraph numbering added, typographical errors in original):

[1] Dear Therese [Keys], Tim [Dean] and Jon [Meissner]

[2] I am writing this email in the hope that we can all sort something out with regards to the Biggin & Scott group and the current situation we find our selves in after CT and Active pipe taking over or selling Dream Desk which as of today I am not [too] sure which it is.

[3] A conversation had on Monday of this week [19 September] with Tim and Therese has made me extremely nervous and concerned that either the system will be turned off or Dream Desk staff will be no longer after the 3rd of October 2016.

[4] I feel that I need to put forward my situation as simply a client using a system that has been taken over or in the process of being taken over.

[5] To date we have been happy to have conversations with respect to considering CT as our web to print solution but am extremely worried about the level of increased charges. Currently we are able to achieve through Dream Desk a level of production fees that we and our offices believe are fair for us and our suppliers, should we move forward with CT on current increases

$12 per page delivery fee for print of our ABODE magazine that does not currently exist

$15 per board order file delivery that does not currently exist

10% or $20 per print file delivery that does not currently exist

Which ever way I look at it the CT (campaign track) contract will increase our productions fees per property or across the board by 50-70% once the cost are passed on.

[6] During our meeting at RT EDGAR it was mentioned that you would handle this matter as good corporate citizens which as mentioned earlier in the week I have relied on.

[7] We also discussed the delicate timing being during our busiest time of the year which is extremely concerning to me. All rumours put forward to date are in accurate but again I ask you to understand how big a deal this is to have 34 offices change during the busiest time of the year-- this I am struggling with personally.

[8] When I consider the above increases it causes me a great deal of stress, as to position these cost with our offices would take time which we simply do not have and to say no results in Dream desk being turned off leaving Biggin & Scott with out a web to print system at the busiest time of the year with little to no warning or time to make other arrangements.

[9] At this stage we are very seriously considering going manual with suppliers help and a Mac operator in our office as we simply do not have the time or feel that we will be given time to work this out.

[10] I ask in good faith that we be given some normal or standard terms to exit Dream Desk maybe as per CT contract terms 90 days.

[11] In simple terms we are a customer of a system that has been bought by CT to close down to protect its position and I feel we need to be given some time. We are not your enemy just realestate agents using a system.

[12] As you will see above I have copied in our solicitors Mills Oakley whom are aware of the contracts and will be involved should Biggin & Scott fall victim to any thing that may damage our business through no fault of ours.

99    The applicant emphasised the following aspects of this communication:

(1)    First, Mr Stoner was seeking to convey the impression that Campaigntrack was putting Biggin & Scott in a difficult position commercially and that, if Campaigntrack turned the system off on 3 October 2016, Biggin & Scott had little option but to “go manual”: at [7]-[9].

(2)    Secondly, Mr Stoner did not refer to the 3-month contractual notice period under the Biggin & Scott – DDPL Agreement dated 20 May 2015: cf [10]. Instead, Mr Stoner sought to exit on Campaigntrack’s terms: at [10]. This was despite Mills Oakley, who were “aware of the contracts”, being copied to the email: at [12]. Mr Stoner’s failure to refer to the Biggin &Scott – DDPL Agreement was submitted to be inconsistent with the reliance in these proceedings by the represented respondents on that agreement as justifying the migration of the data from DreamDesk.

(3)    Thirdly, Mr Stoner was seeking to convey the impression that he was a mere customer of the DreamDesk system, not a key venturer in the development of a competing system: at [11].

100    As to these matters:

(1)    I accept that Mr Stoner sought to convey the impression contended and that this was not accurate because Mr Stoner considered that he would likely have available a competing system which, even if not fully functional, would be sufficiently operational to avoid “going manual”.

(2)    I do not regard the failure to mention the Biggin & Scott – DDPL Agreement as significant. That agreement provided for a notice of period of 3 months if either party wished to bring the contractual arrangement between them to an end. It also provided that, if DDPL chose to cease to do business with Biggin & Scott as a group, migration of all templates and property related data was to be made available to whomever Biggin & Scott instructed. There was no express time limit with respect to migration of data. I do not regard it is as surprising that Mr Stoner did not rely on the term about 3 months’ notice with respect to use of the system as a whole, which is different to DDPL permitting migration of data.

(3)    I accept that Mr Stoner’s communication did not convey that he was, together with others, developing a competing system and that his comments to Campaigntrack were intended to convey that his interests were more confined than they really were.

101    It was put to Mr Stoner that the purpose of his 21 September 2016 email was to “buy time” for Biggin & Scott until the Toolbox system became operational, a proposition which Mr Stoner denied:

… You were looking to build your own system and you were trying to buy time with Campaigntrack until you knew that the system was going to be operational?---Your opinion.

I’m putting that to you, Mr Stoner?---No.

102    Despite Mr Stoner’s evidence, it is probable that at least one of the purposes of the email was to “buy time” and it is likely that the time was being sought in order to further develop, or complete the development of, the Toolbox system.

103    Mr Meissner emailed Ms Keys and Mr Dean on 22 September 2016 stating:

I have been copied in on emails from Paul re our current predicament

Without making judgements or entering into discussions on the

Correctness of statements can I request the following

We would like an extension of 4 weeks to use the platform and would request you to indicate a fee payable now that RT Edgar is no longer using the platform and it would appear that CT has already had discussions with Jellis Craig in relation to ongoing services, which we at Dream Desk are unaware of

We initially agreed to $5000 per month when we were dealing with all clients

I await your response

Jon

104    Also on 22 September 2016, Mr Semmens provided Ms Keys with access to the cloud service on which the DreamDesk virtual server was stored. Mr Allen gave evidence that the migration scripts – which had last been run on 19 September 2016 – had been deleted from this virtual server, indicating that, at some time between 19 and 22 September 2016, Mr Semmens deleted the migration scripts from the DreamDesk system.

B.11 Campaigntrack and New Litho learn about Toolbox

105    On the evening of the 22 September 2016, Mr Watts discovered that RETB had been incorporated, that the domain realestatetoolbox.com.au was registered in RETB’s name, that the domain realestatetoolbox.com.au resolved to the IP address 54.206.72.241 and that when that IP address was entered into a browser, it resolved to a login page for the DreamDesk system. Mr Watts sent screenshots of the realestatetoobox.com.au website to Ms Keys, Mr Timm (a director and the chief technology officer of Campaigntrack) and Mr Dean.

106    On 23 September 2016, Mr Timm asked Mr Allen to investigate and work out if there was any code in the Toolbox system that had been copied from the DreamDesk system. Having discovered the “dash.vault1.net” domain in the migration scripts, Mr Allen entered dash.vault1.net into an internet browser. It resolved to a webpage for the Toolbox system. Mr Allen then confirmed that both realestatetoolbox.com.au and dash.vault1.net resolved to the same IP address (54.206.72.241). Based on these “commonalities” and his experience as a computer programmer and software developer, Mr Allen concluded that, unless a proxy re-direction server or IP load balancer was being used, on 23 September 2016, the DreamDesk system and the Toolbox system were being run on the same computer, namely, the computer at the IP address 54.206.72.241. I conclude that the DreamDesk system and the Toolbox system were being run on the same computer. I infer that the computer was Mr Semmens’ computer.

107    On 26 September 2016, Mr Stoner emailed Ms Keys and Mr Meissner, advising that Biggin & Scott would not be entering into a contract with Campaigntrack, asking for four weeks before Biggin & Scott’s access to DreamDesk was cut off, and requesting Campaigntrack’s “help with the transition”:

Dear Therese [Keys] and Jon [Meissner]

As requested we have been in discussions with Campaign Track since being notified that Campaign Track had bought Dream Desk, last week we decided that due to the increases in production fees for ourselves and our suppliers we would not be entering into a contract with Campaign Track at this stage.

Biggin & Scott wish to give 4 weeks’ notice effective from today 26th September making the 24th October 2016 our last day with Dream desk with regards to our web to print solution.

Your help with the transition would be much appreciated.

108    Mr Meissner replied to Mr Stoner, cc-ing in Ms Keys:

Paul

I understand your decision, but am sorry that it has come to this.

Unfortunately the decision, re an extension, is not ours to make, and I have already asked Campaign Track to extend our Licence of the system until the end of October ie October 27th.

I await CT decision.

I will advise ASAP when we receive notification.

Once again can I take this opportunity to sincerely apologise for the mess we have placed the Biggin & Scott network in.

109    Mr Meissner gave evidence that, on 26 September 2016, he received a phone call from Ms Keys in which she asked questions including “Why doesn’t Campaigntrack have access to the Dreamdesk system?” and “Why doesn’t Campaigntrack have access to the Biggin & Scott data?”.

110    After speaking to Ms Neal and Mr Semmens, Mr Meissner sent a text to Ms Keys saying: first, that he had “instructed Kylie and David to fix the access this morning”; and, secondly, “[o]bviously client data is not ours so cannot be shared by CT with others as agreed”.

111    On 27 September 2016, Ms Keys responded by email, deferring to their lawyers’ advice and stating that Campaigntrack still had “not received the Amazon web server”. Mr Meissner responded:

In all our emails

You have requested access to live sight

Which I arranged yesterday urgently

I did not know til now that you had not got Amazon access

I will get David to provide first thing Tommorrow [sic]

I am not playing games but as I am overseas and having to rely on others to carry out my wishes I can only assume that my wishes are carried out to the letter

I will fix this again finally in the morning.

112    On 27 September 2016, Mr Stoner repeated his request for DreamDesk to be kept live for four weeks:

Dear Therese and Jon

I am yet to hear from you with respect to the below email, but believe Jon has asked for an extension.

I was also very interested to hear from Jellis Craig today during a meeting that they will be continuing with the DREAM DESK system with no interruption.

I repeat Biggin & Scott acted in good faith during our discussions believing we could come to an agreement and have not received notice at any stage from either DREAM DESK or Campaign Track that the system will be turned off or not available.

So again we ask that we be given 4 weeks to make other arrangements. 24th October 2016.

113    On 28 September 2016, Mr Allen had a phone call with Mr Semmens, during which Mr Allen asked for the DreamDesk Git repository. Mr Semmens at first told Mr Allen that they did not have a Git repository, but eventually gave Mr Allen access to the DreamDesk Git repository (the DreakDesk Git Repository). Mr Allen gave evidence that there were certain commits and branches that had been deleted from the DreakDesk Git Repository. Mr Semmens stated that he could not remember if he had deleted the commits and branches, but that he did remember having conversations with Mr Gallagher regarding removing some of the files and passwords to which they did not want Campaigntrack to have access. I conclude that Mr Semmens did delete certain commits and branches from the DreakDesk Git Repository.

114    Mr Semmens said the reason why the commits and branches were deleted was because “there’s files in there that were irrelevant that I didn’t want [Campaigntrack] having, there’s passwords, there was scripts in there with, you know, passwords that linked to other servers I didn’t want them to have”.

115    The DreakDesk Git Repository was related to the DreamDesk system. The deleted branches in the DreakDesk Git Repository were named “live” and “Development”. I infer that the deleted branches contained commits relating to “live” and “development” versions of the DreamDesk system or the Toolbox system.

116    In cross-examination, Mr Semmens said:

You know that in these proceedings, an important question which his Honour needs to decide is when certain things occurred in terms of software development, do you agree with that proposition?---I do.

And of critical importance to that would be just – would be the use of a repository with times and timestamps on it that would tell you when certain events occurred, and certain developments took place. Do you agree with that?---Yes, I do.

… I am asking you about you agreeing with the proposition I put to you, which is – [that it] was next to impossible, very difficult or next to impossible, to work out when certain things occurred absent a reliable repository?---Yes, without it, yes, it would be difficult. Virtually impossible.

Well, it would be not just difficult, it would be next to impossible, wouldn’t it?---Yes.

117    I accept that Mr Semmens’ deletions of commits and branches from the DreakDesk Git Repository made it “virtually impossible” for Campaigntrack to prove when certain things occurred, in particular various development pathways of the DreamDesk system.

118    Campaigntrack’s case was that the DreamDesk system was copied and then progressively modified in an endeavour for it not to be possible (or for it to be difficult) to establish that the new system was one which had been created by first copying DreamDesk.

B.12 30 September to October 2016: Copying of files from DreamDesk system; preparation for DreamDesk being shut off

119    On 30 September 2016, Mr Semmens first committed a computer program named “SyncController” to the Toolbox Git repository. The SyncController facilitated the copying of records from certain tables in the DreamDesk database for Biggin & Scott to corresponding target tables in the Toolbox Git repository. Mr Semmens committed further versions of SyncController to the Toolbox Git repository on 5 October and 11 October 2016.

120    SyncController operated, in effect, like the migration scripts, except that it resided in the Toolbox system rather than in the DreamDesk system.

121    On 3 October 2016, Biggin & Scott, through its solicitors Mills Oakley, asked Campaigntrack for an extension of the DreamDesk licence until 17 October 2016. Mills Oakley stated that Biggin & Scott confirmed it was willing to provide to Campaigntrack certain undertakings.

122    On 3 October 2016, Mr Allen found evidence of RSYNC commands being run on the production server of the DreamDesk system. An RSYNC command is a command to copy files from one location to another. The production server is the server used to provide the DreamDesk system to customers.

123    On 4 October 2016, Mr Allen installed a software named “sudoreplay” on the production server of the DreamDesk system, to record and allow playback of a user’s activity on the server. The videos logged by the sudoreplay software showed:

(1)    on 5 October 2016, the running of an RSYNC command for files in a sub-folder “images”, found in a sub-folder for Whitford Property. Whitford Property was a real estate agency operating in Victoria;

(2)    on 5 October 2016, the running of an RSYNC command for files in a sub-folder for Biggin & Scott;

(3)    on 6 October 2016, the running of an RSYNC command for files in a sub-folder “images”, found in a Biggin & Scott subfolder; and

(4)    on 10 October 2016, the running of an RSYNC command for files in a sub-folder “approved”, found in a Biggin & Scott subfolder.

124    All of the above RSYNC commands copied files to an identified target folder, which included the word “toolbox”, at an identical IP address. In cross-examination, Mr Semmens stated that he ran the RSYNC commands.

125    Mr Semmens was also asked whether he had any right to copy Whitford Property’s files:

Do you accept that you didn’t have any right to transfer the files of Whitford Property at the time at which you transferred it on 5 October 2016?---That was a client of Print Co’s, which I just took a copy of so we had – if they ever asked for it, simply - - -

You accept, don’t you, that you had no entitlement from anyone to take that data?---Well, I was – again, it would have been ..... the dates of this. But once being told to synchronise all the client data or make sure it’s available for the client, I wouldn’t have thought it was an issue.

126    As to this cross-examination and as noted below, in an email to someone at Biggin & Scott on 5 October 2016, Mr Semmens wrote: “Also I will be [sic] setup whitford tonight so we can give printco access”.

127    The sudoreplay videos also captured the deletion, on 5 and 6 October 2016, of the RSYNC commands from the bash history on the production server of the DreamDesk system. The bash history stores the history of user commands entered at the command prompt. The command to access the bash history was also deleted. Mr Semmens confirmed in cross-examination that he was the one who deleted commands from the bash history.

128    Campaigntrack submitted that it should be inferred that Ms Bartels on behalf of Biggin & Scott instructed Mr Semmens to delete RSYNC commands from the DreamDesk system, so Campaigntrack would not suspect Biggin & Scott was not returning to Campaigntrack’s system. I do not draw that inference. I accept that Mr Semmens did not want Campaigntrack to know what he had done, but I do not accept that he had received any instruction in that respect from Ms Bartels.

129    On 5 October 2016, Campaigntrack’s solicitors emailed a document headed “Undertaking as to use of IP of Dream Desk” to Mr Meissner. The proposed undertaking was in the following terms:

Dream Desk, Meissner and Semmins [sic] undertake and agree that they individually or jointly with any other person or entity will not use, market, sell, copy, duplicate or in any way enable or facilitate the development of any system by making use of any of the intellectual property which comprises and/or relates to the system of Dream Desk, which is now owned by Campaigntrack Pty Ltd to the extent that they will not permit, now or at any time in the future, access by any third party to the system known as Dream Desk for any use other than its ordinary permissible use.

Dream Desk, Meissner and Semmins [sic] also undertake and agree that they will immediately cause to be returned to Campaigntract [sic] Pty Ltd, or if unable to be returned then destroyed so as to render useless, any of Dream Desks[’] intellectual property or code which has already been copied, duplicated or otherwise provided to any third party or entity of any description whatsoever.

130    Mr Meissner replied to Campaigntrack’s solicitors on the same day. Mr Meissner’s email included:

I agree to all re Meissner,

but have no authority, nor was it part of any previous discussion, in relation to David Semmins [sic].

Semmins [sic] never owned the IP, and never has used it unless under Dream Desk authority.

The Dream Desk IP was sold to CT and as such no part can, or ever was used, by others.

As of the cutoff time no part of the IP has been used, copied etc in any other process.

As discussed I am overseas and cannot print or sign any Documents and as such this email should be used as my acceptance on Meissner and Dream Desk matters.

Also I presume the $5000 fee is monthly and only a % will be payable for October

131    Later in the evening on 5 October 2016, Campaigntrack’s solicitor sent a draft undertaking to Mills Oakley. The draft undertaking was in the same form as that sent to Mr Meissner, except that it was required to be executed by Biggin & Scott, RETB, Mr Stoner and Ms Bartels. The covering email from Campaigntrack’s solicitor stated:

We are instructed to provide you with the attached undertaking for your consideration. We understand that your client has made a request to extend our clients grant of a licence to access to Dream Desk.

Firstly, we are instructed that our client is willing to afford an extension on the basis of receiving undertakings from Dream Desk Pty Ltd and associated persons as well as seeking the attached undertaking from your client and associated persons and entities. Our client has made a similar request of Dream Desk Pty Ltd. While Dream Desk Pty Ltd and Mr Meissner have agreed to the undertaking, Mr Meissner has indicated that Dream Desk Pty Ltd will cease providing access to its web to print clients from midnight on 10 October 2016. Our client has made no such stipulation. Our client has requested payment of the licence fee and the undertakings to be provided.

In the circumstances, we ask that you confirm that your clients and associated persons and entities are willing to provide undertakings in the form of the attached?

132    As outlined in the email from Campaigntrack’s solicitor, the offer of the extension of the licence was conditioned on the receipt of the undertakings from DDPL and “associated persons” and Biggin & Scott and “associated persons and entities”. The offer did not name Mr Semmens, nor any of the other contractors or employees of DDPL.

133    Mr Stoner and Ms Bartels signed the undertaking on behalf of Biggin & Scott, RETB and themselves on 6 October 2016. Mr Stoner gave evidence that he was not aware that Mr Semmens had also been asked to give an undertaking. It was Mr Stoner’s understanding that, by giving the undertaking, Biggin & Scott would be granted an extension of the licence to access DreamDesk until 17 October 2016.

134    Mr Semmens did not sign the undertaking requested of him. He gave the following evidence in cross-examination:

Were you told by anyone not to give the undertaking, Mr Semmens?---No.

You were not?---No.

That’s your truthful evidence?---Yes.

You didn’t have a discussion with Mr Stoner about giving an undertaking after he sent an email to you on 6 October 2016 at 9.43 am?---We – possibly we discussed it, but I wouldn’t have – yes, I wouldn’t have signed it because it was, you know, restricting my work. The undertaking that I read pretty much restricted me from working in the industry, so I was never going to sign it.

Which undertaking are you referring to, Mr Semmens?---The one that Therese [Keys] sent me.

When was the last time you read that undertaking, Mr Semmens?---A long time ago. Well, sorry, I should say that’s the way I interpreted it, I did not want to sign it, I didn’t want to have any restrictions.

Do you accept that if the undertaking didn’t do that then you’re mistaken in your recollection?---I’m not mistaken, my recollection is what I said.

All right. Sorry, your Honour, I just have to – we will just find the undertaking, Mr Semmens, just bear with me for a moment. And I should say for the benefit of ..... the undertaking which was sought from this witness, of course. We’re just looking for it at the moment, I will continue?---Regardless of what it said; if it was from Campaigntrack, I would not have signed it, simple as that.

And why is that, Mr Semmens?---Because they are the most deceptive, evil company I’ve ever come across in my entire life.

135    On 5 to 6 October 2016, Ms Neal and Mr Semmens exchanged emails with the subject “Re: Today”. At least one email in the chain was copied to Mr Meissner and persons at DDPL and JGM Advertising. Mr Stoner and Ms Bartels were also copied. In an email copied to Mr Meissner on 6 October 2016, Ms Neal asked Mr Semmens:

Also re endpoint, there will only be one for realestatetoolbox so does it matter that the one you’ve given is for the bs subdomain?

136    Campaigntrack submitted that this email chain, taken with the previous emails received by Mr Meissner and with the number of Mr Meissner’s staff involved in the development of Toolbox suggest that Mr Meissner was aware of, and involved in, Biggin & Scott’s transition away from DreamDesk. I accept that Mr Meissner was aware that Biggin & Scott was not intending to agree to use the system offered by Campaigntrack and that it was developing its own system.

137    The email chain “Re: Today” also included the following email sent by Mr Semmens:

On Wednesday, October 5, 2016, David Semmens <david@dreamdesk.com.au> wrote:

Great thanks

…

Working On OFIs at the moment

Wendy is just playing with it I gave her a quick run through

Also I will be setup [sic] whitford tonight so we can give printco access

new MVI endpoint api.realestatetoolbox.com.au

if B&D can change after 5pm Friday

138    Campaigntrack submitted, and I accept, that Mr Semmens’ statement that he “will … setup whitford tonight” should be understood as referring to the running of the RSYNC command for Whitford Property.

139    Campaigntrack also submitted, and I also accept, that Mr Semmens’ statement in the “Re: Today” email chain that he was “Working On OFIs [open for inspections] at the moment” should be taken as a reference to the SyncController committed to the Toolbox Git repository by Mr Semmens on the same day. Mr Semmens had added a “syncOFIs” function which, if executed, deleted all records of the “ofis” table of the Toolbox database, and copied all records of the “ofi” table in the DreamDesk database for Biggin & Scott to the “ofis” table of the Toolbox database.

140    On around 6 October 2016, Ms Bartels created artwork for different advertising materials, working from about 8pm to around 3am to 4am, because she was concerned to ensure that, if access to DreamDesk was shut off, then something could be up and running with Biggin & Scott’s artwork within minutes:

141    On 7 October 2016, Ms Bartels sent an email to Mr Semmens, copied to Mr Stoner, with the subject line “tool box”. The email stated:

Hi Dave

See you Monday (I will bring my drive and then you can show me how to allocate templates)

How did you go with brochures today?

I will put all templates onto Drop Box and share them [with] you

How did Ian go with Mail cards today?

Box & Dice will let me know Monday re: MVI

What about OFI’s?

I will let offices know Tuesday afternoon what is happening

I will let offices know Tuesday afternoon to order stationery now

I will speak with your contact re: Stationery set up

Have a great weekend

142    The “Ian” referred to in this email was Mr Ian Adams, an employee at Mr Meissner’s company JGM Advertising.

143    In cross-examination, Ms Bartels confirmed that the stationary set-up referred to in the above email referred to a printer “who was located across the road from where Real Estate Tool Box or where Dream Desk was operating in Mulgrave”. Campaigntrack submitted that according to its company search, RETB has never had a principal place of business in Mulgrave, whereas DDPL’s principal place of business has always been in Mulgrave. Campaigntrack submitted, and I accept, that I should infer from this statement together with the other facts referred to earlier that the Toolbox system was developed within DDPL’s offices in Mulgrave.

144    On 7 October 2016, Campaigntrack’s solicitor sent an email to Mills Oakley indicating there had been problems with procuring one party (namely, Mr Semmens) to sign the undertaking referred to at [129] above. The email included:

I confirm that I am presently seeking instructions from my client with regard to the extension. While an undertaking has been requested to be provided by Mr Meissner and other parties, Mr Meissner has not yet procured one party to sign the undertaking requested. Further, payment of the licence fee has been requested and at the present time, we are unaware of any payment having been received.

We will keep you informed of progress in relation to the above. In the meantime, we have been asked by our client to enquire what system your client is moving over to. The purpose of that request is in order for our client to gauge whether there would be any possible reasons for the resistance to the provision of the undertaking requested.

145    Approximately three hours later, Campaigntrack’s solicitors wrote to Mills Oakley, confirming that the DreamDesk licence would not be extended beyond 10 October 2016. The email included:

I am writing to confirm that based on our present instructions the licence for Dream Desk will not be extended beyond 10 October 2016. The reasons for this are that:

1.     Our client has not received an undertaking executed by David Semmins [sic];

2.     Our client has not received payment for the licence fee either for the full month or for any lesser period, which in any event had not been agreed; and

3.     We have not received any indication directly from Mr Meissner that he has an intention contrary to the position previously stated that is that Dream Desk would be shut down on 10 October 2016.

Our client made clear to Mr Meissner the basis upon which the extension of the licence would be granted and our clients requests have not been complied with. All of the above matters are matters which are beyond our clients control and accordingly have led to the decision set out above.

146    On 10 October 2016, Ms Neal sent an email to Mr Ben White of Bambra Press, a printing business, with the subject line “Test file”:

Hi Ben,

Michelle [Bartels] tells me that you’re up to speed with the demise of Dreamdesk and Biggin & Scott’s new W2P venture, Real Estate Toolbox.

We’re currently testing the Toolbox, with a view to cutting the offices over this week. (sssssshhh .... not everyone is aware yet)

We’re keen to make sure that the artwork we’re sending you is now print-ready, so would you mind taking a look at this - as a first example - and providing your feedback?

http://bs.realestatetoolbox.com.au//storage/8537/production/43637.pdf

Thanks very much for your help, and give me a call if you have any questions.

147    In the evening of 10 October 2016, Biggin & Scott’s access to DreamDesk was cut off. That evening, Ms Bartels sent an email to all users of the DreamDesk system at Biggin & Scott offices with the subject line “Dream Desk has been shut down by Campaign Track”. The email stated:

Hi All

All Directors have been advised by Paul Stoner and below is notification of Dream Desk Web to Print solution which has been shut down without notice tonight.

3 weeks ago we became aware that Campaign Track had aggressively tracked down the owner of a piece of IP in the Dream Desk web to print solution and bought it off them for a large sum of money. The purchase was made with one intention, to shut down Dream Desk as a competitor.

We entered into negotiations with Campaign track which have now stopped due to a major increase in productions fees, not only for us but also our suppliers. One example was we would have to pay $12 per page production fee for the magazine, at this stage we stopped our negotiations and asked for time to exit the system. Another example was 20% or $20 dollars on every print order.

Things very quickly got legal with all kinds of threats and requests that we simply cannot agree to.

As of this morning we had another 7 days on dream desk after numerous legal letters back and forth but at the very last minute this afternoon Campaign Track turned the system off without notice.

Obviously we have had something being done in the back ground which will be sent through to you tonight or first thing in the morning. The new company is called Real Estate Tool Box with the same team and their phone number is [redacted]. We have managed to get most of the information across into the new system but tomorrow will tell.

Please be aware:

Biggin & Scott will never deal with Campaign Track or New Litho and arrangements will be put in place to restrict active pipe moving forward.

This is not the perfect situation but this gives you an idea of the type of business’s these people are running.

148    The Toolbox system went live on the same day.

149    On 11 October 2016, Mr Semmens added a modified “syncOFIs” function to the Toolbox Git repository which, when executed, deleted all records of the “ofis” table of the database at jgm.dreamdesk.com.au, and copied all records of the “ofis” table of the Toolbox database to the “ofis” table of the database at jgm.dreamdesk.com.au. Campaigntrack was not previously aware of, and did not receive control of, the subdomain jgm.dreamdesk.com.au. Campaigntrack submitted that given the name of subdomain “jgm.dreamdesk.com.au”, it should be inferred that Mr Semmens was running a copy of the DreamDesk system at jgm.dreamdesk.com.au; and that given the date on which the modified “syncOFIs” function was committed to the Toolbox Git repository, the purpose of the copy of the DreamDesk system was to generate PDF artwork containing OFI details after Campaigntrack had shut down Biggin & Scott’s access to the DreamDesk system.

150    I accept that this inference should be drawn. It is supported by the fact that in the email chain on 8 September 2016 referred to at [84] above, Ms Neal wrote that, using integration with Box+Dice, OFI details are entered into the Box+Dice customer relationship management system, those details are synchronised to the DreamDesk system, and the same synchronisation was planned for the Toolbox system. In the email chain of 5 and 6 October 2016 referred to at [135] to [137] above, Ms Bartels wrote that Mr Semmens had said that the Toolbox system’s integration with Box+Dice could be done by Friday 7 October 2016. I accept that that Mr Semmens was running a copy of the DreamDesk system on 11 October 2016.

151    Campaigntrack shut the DreamDesk system down completely by the end of October 2016.

B.13 November 2016 to May 2017: Modification of DreamDesk files

152    In November 2016, the parties agreed that an independent forensic IT expert, Mr Geri, would inspect the Toolbox system and report on whether there was any potential copying from the DreamDesk system.

153    On 24 November 2016, in response to Mr Geri’s request for “[a] copy or access to the GitHub repository which is responsible for the log of all changes made to the development of Real Estate Toolbox”, Mills Oakley provided Campaigntrack’s solicitor with a commit log file, “git_commit_log.txt”. The independent court appointed expert, Mr Taylor, later identified multiple differences between the Toolbox Git repository and the commit log file, git_commit_log.txt, including:

(1)    233 instances where the author name “David S <david@dreamdesk.com.au>” had been replaced with “David S <semkins74@gmail.com>”;

(2)    54 instances where the commit descriptions had been changed; and

(3)    five commit descriptions containing the word “rename” had been replaced with different descriptions.

154    In cross-examination, Mr Stoner gave evidence that he told Mr Semmens that he did not want DreamDesk “mentioned in anything” and that he did not give instructions to tamper with the commit log file:

You’re aware, in broad terms, that Mr Allen says that the commit log subtext git_log_commit.txt file is – doesn’t correspond with the Git repository?---I’m aware of those words, yes.

Did you have a conversation with Mr Semmens in which he told you that he made changes to that document?---I – I do recall, when all of this happened, I gave clear instructions to David to remove any mention of Dream Desk. And, I think, he removed his Dream Desk credentials, is my understanding.

So the evidence you give is that you told Mr Semmens before handing over the git_committ_log.txt file to Mills Oakley to provide to Ms McLean, to make a change to his credentials, the information in that file?---No. No. That’s not it, at all. When – David was building the system, I made very clear, I didn’t want Dream Desk mentioned in anything.

…

So if the git – if the git repository had information showing Dream Desk and the git_commit_log.txt file had been changed to semmkins74@gmail.com, you – that was something that you asked David – Mr Semmens, to change?---I – I didn’t ask him to change it but he let me know that he had changed it because he had the email address in there of Dream Desk.

155    Campaigntrack submitted that the changes were made by Mr Semmens to convey a false impression that Mr Semmens worked on the development of the Toolbox system in his private capacity, unrelated to his role at DDPL (amending the author names), and that the Toolbox system was independently created, as opposed to being based on the DreamDesk system (amending the “rename” commits). Campaigntrack submitted that the Court should conclude that this was done on Mr Stoner’s, Biggin & Scott’s and RETB’s instructions. I conclude that Mr Stoner and Biggin & Scott did not want Toolbox to be based in any way on intellectual property related to DreamDesk and did not want there to be any argument that it was so related or references to DreamDesk from which such an argument could be made. It was for that reason that Mr Stoner did not want DreamDesk to be “mentioned in anything”. I conclude that Mr Semmens realised that there was mention of DreamDesk, or some similar description, in the Toolbox system which he wished to conceal. I do not conclude that he took the steps identified earlier on the instruction of any other person.

156    I accept Mr Stoner’s evidence that he did not ask Mr Semmens to change the commit file.

157    By an email on 24 November 2016, Mills Oakley also provided Mr Geri with a zip file “app.zip”, in response to Mr Geri’s request for a copy of the code responsible for “front end” functionality. The files in the “app.zip” folder were drawn from two different sources, dashboard.vault1.net and bs.realestatetoolbox.com.au. Mr Semmens gave evidence in cross-examination that this was because he had shown Mr Geri multiple versions of the Toolbox system. The applicant submitted that Mr Semmens’ motivation was in fact to “seek to create a false impression of the content” of Toolbox, and to conceal different versions of the Toolbox system in existence.

158    There was no suggestion in Mills Oakley’s covering email or covering letter that the “app.zip” file contained different versions of the Toolbox system. Neither was there any suggestion to that effect in Mr Semmens’ first affidavit where he gave evidence about the creation of “app.zip”. Nor did Mr Semmens give evidence in his first affidavit that he had shown different versions of the Toolbox system to Mr Geri during Mr Geri’s first inspection of Toolbox.

159    Between April to June 2017, Mr Semmens deleted his “semkins74@gmail.com” Bitbucket account. He did not make a copy or backup of any data held in this Bitbucket account before he deleted it. In his Expert Report, Mr Taylor stated that Mr Semmens had informed him that he had deleted the Bitbucket account in June 2017, after the commencement of the current proceedings. In cross-examination, Mr Semmens stated that he deleted his Bitbucket account in late April 2017, before the commencement of the present proceedings.

160    On 16 May 2017, Mr Semmens sent the following email to Ms Keys:

As you know I have been contracted by Active Pipe to look after Jellis Craigs EDMs using the Dream Desk platform (Jellis Craig is the only Client using this)

This letter is asking me to

•    … immediately cease use of and access to any DreamDesk intellectual property;

•    … deliver up to [Campaigntrack] all copies of substantial parts of the DreamDesk intellectual property within [Mr Semmens’] possession, custody and control ensuring that no copy or duplicate is retained;

Unless I am advised by Campaign track to disregard the attached letter by the end of business today I will be shutting down that server and deleting any files, data and backups of the platform

161    The applicant submitted that Mr Semmens did, in fact, carry out his threat of “deleting any files, data and backups of the platform”: see [164] to [168] below.

B.14 June 2018: RETB ceases to trade; REDHQ takes its place

162    RETB ceased to trade, and ceased to use the Toolbox system, in about June 2018.

163    Biggin & Scott began to use a new system in about April 2018, called Real Estate Digital HQ Pty Ltd (REDHQ). Biggin & Scott, Ms Bartels and Mr Stoner’s family company all hold interests in REDHQ. Mr Semmens is REDHQ’s chief technology officer.

B.15 Early 2019: Mr Semmens’ failure to provide information to the independent expert

164    For the purposes of the preparation of Mr Taylor’s expert report, Mr Semmens provided Mr Taylor with a Microsoft Surface laptop, a generic desktop computer and his Amazon Web Services and “semkins74@gmail.com” gmail accounts. Mr Semmens stated that he had discarded or overwritten any further computer systems used in the development of the DreamDesk and Toolbox systems.

165    On 27 May 2019, Mr Taylor searched for and forensically preserved emails from Mr Semmens’ “semkins74@gmail.com” email account, containing certain search terms. Analysis of the preserved emails containing the word “toolbox” showed:

(1)    no emails in the period 4 May 2016 to 10 October 2016;

(2)    emails from realestatetoolbox.com.au from 11 October 2016.

166    Campaigntrack submitted that, in the circumstances, it should be inferred that Mr Semmens had deleted emails containing the word “toolbox” from his “semkins74@gmail.com” account in the period 4 May 2016 to 10 October 2016, that is, during the development of the Toolbox system. I accept that inference should be drawn.

167    During Mr Taylor’s document gathering, Mr Semmens confirmed that he had used two different gmail accounts during the development of software in relation to this proceeding, “semkins74@gmail.com” and one other that he referred to as a “DreamDesk gmail account”, in respect of which he could no longer recall the login details. At the hearing, Mr Semmens was able to access an email sent to the email account david@dreamdesk.com.au. Campaigntrack submitted that it should be inferred that Mr Semmens deliberately withheld the “david@dreamdesk.com.au” email account from Mr Taylor, in order to prevent forensic preservation of emails in that account.

168    Given the evidence as a whole, I conclude that Mr Semmens altered or purposefully deleted some files and accounts, and disposed of computers, in order to prevent access to files by Campaigntrack through compulsory processes available to Campaigntrack in the present proceedings.

C COPYRIGHT INFRINGEMENT CLAIMS

C.1    General principles

C.1.1 Infringement

169    By reason of s 36(1) of the Copyright Act, copyright in a work is infringed by a person who is not the owner of the copyright if the person does any act “comprised in the copyright” without the licence of the owner of the copyright. Section 36(1) provides:

Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.

170    Under s 13, an act comprised in the copyright in a literary work includes:

(a)    any act that the owner of the copyright has the exclusive right to do; and

(b)    the exclusive right to authorise a person to do that act.

171    Section 14(1)(a) provides that “a reference to the doing of an act in relation to a work … shall be read as including a reference to the doing of that act in relation to a substantial part of the work”.

172    Section 10 defines “literary work” as including:

(a)    a table, or compilation, expressed in words, figures or symbols; and

(b)    a computer program or compilation of computer programs.

173    A “computer program” is “a set of statements or instructions to be used directly or indirectly in a computer to bring about a certain result” – s 10(1) of the Copyright Act; see generally: Data Access Corporation v Powerflex Services Pty Ltd (1999) 202 CLR 1 at [34]-[36]; Dais Studio Pty Ltd v Bullet Creative Pty Ltd (2007) 165 FCR 92 at [36]; CA Inc v ISI Pty Ltd (2012) 201 FCR 23 at [140]-[141].

174    A literary work includes “a table, or compilation, expressed in words, figures or symbols”: s 10(1) of the Copyright Act. However, copyright does not protect mere facts, ideas or information contained in a table or compilation. As was said in IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458 at [28] (citations omitted):

Copyright does not protect facts or information. Copyright protects the particular form of expression of the information, namely the words, figures and symbols in which the pieces of information are expressed, and the selection and arrangement of that information. That facts are not protected is a crucial part of the balancing of competing policy considerations in copyright legislation. The information/expression dichotomy, in copyright law, is rooted in considerations of social utility. Copyright, being an exception to the law’s general abhorrence of monopolies, does not confer a monopoly on facts or information because to do so would impede the reading public’s access to and use of facts and information. Copyright is not given to reward work distinct from the production of a particular form of expression.

175    An “artistic work” includes, relevantly, “a painting, sculpture, drawing, engraving or photograph, whether the work is of artistic quality or not”: s 10(1) of the Copyright Act. Whether a work will be recognised as an artistic work as a drawing is highly fact-specific and the measure is whether the work has a visual rather than semiotic function: Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd (2008) 172 FCR 580 at [50]; see also [53]-[55], [57], [60]-[62] (Lindgren, Goldberg and Bennett JJ).

C.1.2 Subsistence and originality

176    Section 32 of the Copyright Act provides for when copyright subsists in an original work. It draws a distinction between unpublished and published works:

32  Original works in which copyright subsists

(1)     Subject to this Act, copyright subsists in an original literary, dramatic, musical or artistic work that is unpublished and of which the author:

  (a)     was a qualified person at the time when the work was made; or

(b)    if the making of the work extended over a period—was a qualified person for a substantial part of that period.

(2)     Subject to this Act, where an original literary, dramatic, musical or artistic work has been published:

  (a)      copyright subsists in the work; or

(b)      if copyright in the work subsisted immediately before its first publication—copyright continues to subsist in the work;

if, but only if:

   (c)      the first publication of the work took place in Australia;

(d)      the author of the work was a qualified person at the time when the work was first published; or

(e)      the author died before that time but was a qualified person immediately before his or her death.

(3)      Notwithstanding the last preceding subsection but subject to the remaining provisions of this Act, copyright subsists in:

  (a)      an original artistic work that is a building situated in Australia; or

(b)      an original artistic work that is attached to, or forms part of, such a building.

(4)      In this section, qualified person means an Australian citizen or a person resident in Australia.

177    The various matters to which s 32 direct attention are important to the determination of whether there has been infringement, notwithstanding that there might be a general admission of subsistence. As Gummow, Hayne and Heydon JJ observed in IceTV at [105]:

A generally expressed admission or concession by one party to an infringement action of subsistence of and title to copyright may not overcome the need for attention to these requirements when dealing with the issues immediately in dispute in that action. This litigation provides an example. The exclusive rights comprised in the copyright in an original work subsist by reason of the relevant fixation of the original work of the author in a material form. To proceed without identifying the work in suit and without informing the inquiry by identifying the author and the relevant time of making or first publication, may cause the formulation of the issues presented to the court to go awry.

178    Originality was explained in IceTV at [33] by French CJ, Crennan and Kiefel JJ as meaning that the work originated with an author, that it was not merely copied from another work and that its creation involved some independent intellectual effort. Their Honours said (emphasis in original, citations omitted):

… Originality for this purpose requires that the literary work in question originated with the author and that it was not merely copied from another work. It is the author or joint authors who bring into existence the work protected by the Act. In that context, originality means that the creation (ie the production) of the work required some independent intellectual effort, but neither literary merit nor novelty or inventiveness as required in patent law.

179    Gummow, Hayne and Heydon JJ noted that copyright requires that the literary or artistic work originate with a human author (IceTV at [98]); see also Telstra Corporation Ltd v Phone Directories Company Pty Ltd (2010) 194 FCR 142) and stated at [99] (citations omitted):

Where a literary work is brought into such existence by the efforts of more than one individual, it will be a question of fact and degree which one or more of them have expended sufficient effort of a literary nature to be considered an author of that work within the meaning of the Act. If the work be protected as a “compilation”, the author or authors will be those who gather or organise the collection of material and who select, order or arrange its fixation in material form.

180    The phrase “sufficient effort of a literary nature” in IceTV at [99] should not be understood differently from “some independent intellectual effort”: JR Consulting & Drafting Pty Ltd v Cummings (2016) 329 ALR 625 at [260].

181    The assessment of originality is done by reference to the whole of the identified work, and not identifiable elements within it, although there may be a separate issue as to whether identifiable elements within a larger work are themselves an “original work”: Coogi Australia Pty Ltd v Hysport International Pty Ltd (1998) 86 FCR 154 at 172.

C.1.3 The exclusive rights

182    Section 31(1)(a) of the Copyright Act 1968 (Cth) provides that copyright in relation to a “work” is the exclusive right to do certain acts in relation to that work, including the right to reproduce it in a material form and to communicate the work to the public. It includes:

31 Nature of copyright in original works

(1)    For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a work, is the exclusive right:

(a)    in the case of a literary, dramatic or musical work, to do all or any of the following acts:

(i)    to reproduce the work in a material form;

…

(iv)    to communicate the work to the public …

C.1.3.1 Reproduction

183    As noted, s 31(1) identifies the “exclusive rights” and includes the exclusive right to reproduce the work in a material form: s 31(1)(a)(i). The term “material form” includes “any form (whether visible or not) of storage of the work, or a substantial part of the work or adaptation, (whether or not the work or adaptation, or a substantial part of the work or adaptation, can be reproduced)”: s 10(1).

184    Reproduction requires a sufficient degree of objective similarity between the copyright work and the alleged infringing work and some causal connection between their forms. In SW Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 at 472, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated (some citations omitted):

The notion of reproduction, for the purposes of copyright law, involves two elements — resemblance to, and actual use of, the copyright work, or, to adopt the words which appear in the judgment of Willmer LJ in Francis Day & Hunter Ltd v Bron [[1963] Ch 587 at p 614], “a sufficient degree of objective similarity between the two works” and “some causal connection between the plaintiffs’ and the defendants’ work”. Lord Reid said in Ladbroke (Football) Ltd v William Hill (Football) Ltd:

Broadly, reproduction means copying, and does not include cases where an author or compiler produces a substantially similar result by independent work without copying. And, if he does copy, the question whether he has copied a substantial part depends much more on the quality than on the quantity of what he has taken.

(See also [1964] 1 WLR, at pp 283, 288 and 293; [1964] 1 All ER, at pp 473, 477 and 481.) In the same case, Lord Evershed said, “that what amounts in any case to substantial reproduction … cannot be defined in precise terms but must be a matter of fact and degree”.

185    As the represented respondents submitted, access to the copyright work is not to be equated with copying. Access is necessary, but not sufficient. This follows from the requirement that there be an “actual use of” the copyright work: SW Hart. Copying can be conscious or subconscious – see: Francis Day & Hunter Ltd v Bron [1963] Ch 587 at 614 (Willmer LJ), 619 (Upjohn LJ) and 625 (Diplock LJ); Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd (1999) 46 IPR 309 at [39] (Heerey, Sundberg and Finkelstein JJ). Copying may be inferred on the basis of similarities which “are so striking as to preclude the possibility of the defendant having arrived at the same result independently”: Clarendon Homes at [15].

186    If reproduction is established, the next step is to ask whether the whole work or “a substantial part” was copied: Ancher, Mortlock, Murray & Woolley Pty Ltd v Hooker Homes Pty Ltd (1971) 20 FLR 481 at 494 (Street J); Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd (2005) 225 ALR 57 at [179] (Crennan J). The statutory requirement that the part of a work taken must be substantial assumes there may be some measure of legitimate appropriation: IceTV at [157]. Reproduction of an unoriginal part of an original whole will not be an infringement: Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 All ER 465 at 481; approved in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 305 (Mason CJ, in dissent); Data Access at [83]-[84] (Gleeson CJ, McHugh, Gummow and Hayne JJ); IceTV at [37]. Whether a selection or arrangement of elements constitutes a substantial part of a work depends on the degree of originality of that selection or arrangement: IceTV at [43]; see also at [170].

187    In relation to computer programs, there may be a “need for some process of qualitative abstraction of the material features of the computer program in question”: IceTV at [158]-[159]; see also ObjectiVision at [643]-[644] (Burley J). However, that may not be necessary where one can identify copying of specific source code the functionality of which is known or established.

188    If a person does no more than reproduce “data” or “related information” which are not relevant to the statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result, the person will be unlikely to have reproduced a substantial part of the computer program: JR Consulting at [271], citing Data Access at [86].

189    The starting point for application of the provisions and a consideration of whether copyright has been infringed through reproduction is the identification of the work in which copyright subsists. In Metricon Homes Pty Ltd v Barrett Property Group Pty Ltd (2008) 248 ALR 364 at [23], the Full Court noted that the correct approach in a copyright infringement case is to:

(a)    identify the work in suit in which copyright subsists – see further: IceTV at [15] (French CJ, Crennan and Kiefel JJ);

(b)    identify in the alleged infringing work the part taken (that is, derived or copied) from the work in suit; and

(c)    determine whether the part taken constitutes a substantial part of the work in suit.

190    The relevant exclusive right is the right to reproduce the work in a material form. Difficulties in proving the precise content of the infringing work will not protect against a conclusion of infringement through reproduction so long as it is properly established that a substantial part of the relevant work was reproduced without authority of the owner of the copyright.

C.1.3.2 Communication

191    Section 31(1) also identifies the right to communicate the work to the public as an exclusive right: s 31(1)(a)(iv). Section 10(1) provides that “communicate” means “make available online or electronically transmit …”. Accordingly, communication covers two classes of acts: electronically transmitting (for example, sending or receiving over the internet); and making available online (for example, putting on a website or including in a download service). The phrase “to the public” means “to the public within or outside Australia”: s 10(1).

192    A communication, other than a “broadcast” (defined in s 10) is “taken to have been made by the person responsible for determining the content of the communication” – see: s 22(6). By s 22(6A), a person “is not responsible for determining the content of a communication merely because the person takes one or more steps for the purpose of … gaining access to what is made available online by someone else in the communication” or “receiving the electronic transmission of which the communication consists”.

C.2 The works in suit and subsistence

193    Campaigntrack sued on the copyright in the following works (which are referred to collectively as the DreamDesk Works):

    Source Code Works: the literary works comprised in the source code for the DreamDesk system;

    Database Work: the DreamDesk database as a literary work;

    Table Works: the literary works comprised in the tables in the DreamDesk database;

    Menu Work: the literary work comprised in the menu for the DreamDesk system;

    PDF Works: the literary or artistic works comprised in the PDFs in the “client_data” folder.

C.2.1 Source Code Works

194    The Source Code Works case was put on two bases:

(1)    First, Campaigntrack contended that the source code of the DreamDesk system as a whole was a “computer program” within the meaning of the Copyright Act, because it was “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result”: s 10(1).

(2)    Secondly, Campaigntrack contended that each of the following PHP files within the source code of the DreamDesk system was a “computer program” within the meaning of the Copyright Act: “src\Functions\edms.php” (EDMS PHP), “views\adhoc-edit.php” (Adhoc Edit PHP), and “views\adhoc-edit2.php” (Adhoc Edit 2 PHP), because they also were “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result”: s 10(1).

195    The “computer” was the virtual server on which the DreamDesk system ran.

196    As to the first way in which the case was put, the “certain result” was the provision of the functions of the DreamDesk system (for example: marketing real estate campaigns, generating print and online-ready PDF artwork) to the real estate agent users via the user-facing interface.

197    As to the second way in which the case was put, the “certain result” brought about by the individual PHP files was described in Mr Taylor’s first report, as follows:

(a)    EDMS PHP: loaded a template file from storage on the host web server; searched for fields in the template file; inserted relevant information into the fields in the template file with content retrieved from the database; loaded an additional template file; and displayed information in a read-only state;

(b)    Adhoc Edit PHP: loaded a template file from storage on the host web server; located fields within the template; inserted relevant information into the template file with content retrieved from the database; auto-completed property data in a text box; displayed the information in an editable format; rendered HTML code to display agent, contact and office details from pre-populated lists; resized and rendered images; allowed the selection of two contacts for a listing; produced iframes (which displayed a page within a page); and populated agent data from a database;

(c)    Adhoc Edit 2 PHP: loaded a template file from storage on the host web server; inserted relevant information into the template file with content retrieved from a data source; auto-completed property data in a text box; displayed the information in an editable format; rendered HTML code to display agent, contact and office details from prepopulated lists; produced iframes (which displayed a page within a page); populated agent data from a database; auto-completed office names of the “select office” menu.

C.2.1.1 Source code works as a whole

198    The represented respondents accepted that copyright subsisted in the source code of the DreamDesk system as a whole, but not in relation to the three PHP files.

C.2.1.2 The three PHP files: EDMS PHP, Adhoc Edit PHP and Adhoc Edit 2 PHP

199    I accept that a subset of statements or instructions may constitute a “computer program” within the meaning of the Copyright Act, notwithstanding that the subset also forms part of a larger set of statements or instructions that, as a whole, constitute a “computer program”. I also accept that this is possible where the subset relies on other statements or instructions to bring about the “certain result”. As Bennett J said in CA Inc at [142] and [147] (emphasis in original):

[142]     The fact that the CA URT Macros require the participation of other components in order to bring about a result in the mainframe computer does not disqualify the CA URT Macros from being a “computer program” (Dais at [31], [35], [39]). ISI’s approach would, as CA contends, exclude from the definition of “computer program” a “set of statements or instructions” that require other components in order to bring about a result. It seems that this would, in effect, exclude all sets of statements or instructions written in any code other than object code because all source code requires another program to compile or assemble the source code into object code before producing any result. The definition of “computer program” does not exclude such statements or instructions, as is evident from the words “to be used … indirectly in a computer in order to bring about a certain result” (emphasis added).

..

[147]     …The fact that a larger group of statements or instructions of which the identified set of statements or instructions forms part may also bring about that result does not preclude the identified set of statements or instructions from being a “computer program”, provided that it meets all of the requirements of the definition. As Jessup J observed in Dais at [31], “[a]s a matter of ordinary language, a thing might be used to bring about a certain result notwithstanding that it is but a component in a collection or sequence of things which together bring about the result”.

200    Whether a subset of a larger set of instructions is itself a “computer program” on the particular facts includes a consideration of whether the subset “can fairly be regarded as so separable from the material with which it is collocated as itself to constitute an ‘original … work’ for the purposes of s 32 of the Act”: Coogi at 172. As the Full Court stated in Acohs Pty Ltd v Ucorp Pty Ltd (2012) 201 FCR 173 at [56]:

In the context of literary works that are computer programs, it is possible that a routine, or perhaps even an information tag, if it is original, sufficiently substantial and functionally separate from the entirety of the program of which it forms a part, might constitute a separate copyright work: see the observations in Powerflex Services Pty Ltd v Data Access Corporation (No 2) (1997) 75 FCR 108 at 127.

201    I am satisfied that the three PHP files fall within the meaning of “computer program”, notwithstanding the role of each file as a component of a larger computer program or set of instructions. I reach that conclusion having regard to the separate function each plays within the operation of the DreamDesk system as a whole, being a function of sufficient substance for each file to be regarded as itself an “original work”.

202    The represented respondents advanced lengthy submissions challenging subsistence in (and ownership of) the three PHP files as individual computer programs. The represented respondents observed that Mr Semmens was not asked about the three PHP files in cross-examination, with the result that Campaigntrack’s case “should fail in limine”. The represented respondents put forward four “main possibilities” as to when the PHP files might have been written:

(1)    while Mr Semmens was at Digital Hive;

(2)    while Mr Semmens was at Digital Group;

(3)    while Mr Semmens was at DDPL;

(4)    before Mr Semmens was at DDPL, but that they may have been modified for use by Biggin & Scott in the DreamDesk system.

203    The represented respondents submitted that there was “[n]o evidence to substantiate the premise” that Mr Semmens wrote the PHP files whilst at DDPL. It was submitted that “[i]f anything, the evidence weighs against the proposition that Mr Semmens wrote them, as original works, when he was a contractor at Dream Desk” and that “[i]f he had been working with electronic direct mail functionality from his time at Digital Hive (if not earlier), the likelihood is that he re-used what he knew”.

204    I reject the represented respondents’ submissions in this respect. Campaigntrack established what it reasonably could having regard to the information that it was able to obtain. If Mr Semmens had wanted to give evidence that the PHP files were not written whilst at DDPL or that they were “re-used” from earlier work, he could have said so – cf: Blatch v Archer (1774) 1 Cowp 63; Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389; Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345. The represented respondents could have asked questions of Mr Semmens in cross-examination; they asked none. There was no obligation on the part of Campaigntrack to cross-examine on the issue in light of the content of the evidence, in particular Mr Taylor’s report, and the silence of Mr Semmens on the issue. Mr Semmens was in the represented respondents’ camp and had provided to some of them, and been provided by some of them with, assistance throughout the proceedings. Accepting that the “main possibilities” put forward are theoretically possible, they are in the nature of conjecture and there is an insufficient evidentiary basis to draw a conclusion that any of them reflects reality. Given the evidentiary silence on the part of the represented respondents and Mr Semmens on the issue, weighed against the evidence which Campaigntrack was able to adduce, the inference I draw is that the PHP files were created as original works by Mr Semmens whilst at DDPL.

C.2.2 Database Work and Table Works

205    A database can be a “literary work” and is a “compilation” within the meaning of the Copyright Act – see: the definition of “literary work” in ss 10(1) and 10(2A)(a); IceTV at [72], [99].

206    The text form of the Database Work was in evidence. Visually, the Database Work comprised a particular database “schema” or structure. I accept that the Database Work was the product of some intellectual effort and was relevantly original.

207    The Database Work included a number of “tables”. Campaigntrack asserted that copyright subsisted in 18 tables (the “Table Works”), namely tables described in the following way: “Agents”, “Listings”, “Marketing”, “Media bookings”, “Media extras”, “Offices”, “Office groups”, “OFI”, “Properties”, “Template Items”, “Template Selections”, “Templates”, “Media Items”, “EDM Templates”, “EDM Campaigns”, “EDM dyn content”, “Marketing Items” and “Images” – see: [14A(a)] of the Further Amended Statement of Claim (FASOC); Ex 16, tab C1.

208    A “table” is capable of being a literary work – see: the definition of “literary work” in s 10(1) of the Copyright Act. A subset of the Table Works in the Database Work was represented diagrammatically, in text form and in electronic form. An example of a subset of the tables represented diagrammatically is as follows:

209    The following is a diagrammatic representation of the “agents” Table Work in the Database Work:

210    Each Table Work comprised a collection of material arranged in columns and rows (individual data records). Each Table Work included at least three characteristics: (1) the table name; (2) the column heading (“Column Names”); and (3) constraints on the formatting of data in each row (“Data Type”): “int(n)” (integers up to “n” digits in length) or “varchar(n)” (variable characters up to “n” characters in length).

211    The represented respondents challenged the subsistence of copyright in the Table Works on a number of bases.

212    First, the represented respondents challenged the subsistence of copyright in the tables as works separate from the Database Work because “they had no independent or separate existence in material form as an empty grid or Excel spreadsheet … divorced from the property-related data they contained”. As a matter of principle, there is no difficulty in a table within a database itself constituting a “literary work” in which copyright might subsist – see, by analogy [199]-[200] above. I accept that the tables were “literary works” in their own right:

(1)    Mr Semmens created the database schema on a computer (which he no longer had at a time which permitted it to be examined) before uploading it to AWS, meaning it existed separately to the DreamDesk system.

(2)    Mr Allen was able to extract selected Table Works from the database, indicating each was a separate work and not necessarily dependent on other works.

(3)    Mr Taylor had no difficulty identifying each Table Work as an individual work and each was able to be visually represented as a discrete table, as one would expect.

213    Secondly, the represented respondents submitted that there was “no evidence of originality stemming from a human author to sustain the subsistence of copyright”. It was submitted that:

(1)    Mr Semmens was not asked about any particular table in cross-examination. The submission included that, if it was going to be put that the selection, order and arrangement of each of the tables and their constituent fields was “original” in the requisite sense, it should have been put to Mr Semmens, but was not.

(2)    There was no direct evidence of the time, process, deliberation, creativity, thought or consideration by which any of these tables was brought into existence. There was no evidence of “independent intellectual effort” or “sufficient effort of a literary nature” with respect to the gathering of information, or its selection, ordering and arrangement in its fixation in material form.

(3)    The contemporaneous documents did not support a finding of originality because the commercial and factual context was of the collection, storage and use of property-related data by real estate agents for the marketing of property. In this regard, reference was made to contemporaneous communications which indicated an overlap between the content of the pleaded tables and other tables used to facilitate computer programs used in the real estate industry. Reference was made in this regard to Customer Relationship Management (CRM) systems which track and manage customers and properties for real estate agents, including photos and floor plans. Reference was also made to the fact that agencies, such as Biggin & Scott, inputted “data relating to properties” to the DreamDesk system and that those agencies retained that “property related data”.

(4)    Other documents did not support a finding of originality. Reference was made in this regard to documents for realestate.com.au (covering the period 2004 to 2014) and Domain (dated 14 June 2018 and thus not contemporaneous) which typically required property-related data which overlapped with the kinds of data contained in the tables.

(5)    Mr Timm’s evidence did not support originality. Mr Timm accepted that the data fields for the tables corresponded to the “core data” and “core functionality” in a system that “generate[s] artwork” and these tables “store property data, they store booking data”. His evidence included that the data fields referred to “common data that we would store for real-estate agents in such a system” in respect of the “Agents” table. He accepted, for example, that the tables contained data fields and entries which were:

    “all quite standard” and, in relation to the fields for social media entries, “if they weren’t essential in 2016, they’re, certainly, essential now”: see Hearing Transcript (“T”) 128.18 and T 128.43-45 re the “Offices” table;

    “nothing earth shattering” and where the “columns [were] consistent” with “the type of information that you would expect in a system developed to provide functionality of Web to Print services by reference to a database that stored client and content information relevant to the marketing and promotion of real estate”: T 129.46-47 and T 130.40-44 re the “OFI” [Open for Inspections] table;

    “common”, “central pieces of information that real estate agents have to gather and include, both, in their CRMs and for their marketing platforms”, “every day and common pieces of information that [you] would need and you would expect to see in a database of this kind”, “all fields that … would be needed to market a property” and “common data for that kind of information to be stored [in 2015 and now]”: T 132.42-44, T 133.4-7, T 133.12-14, T 134.35-39, T 136.15-21 re the “Properties” table;

(6)    To the extent the tables related to EDM (namely Electronic Direct Mail) functionality, these were not original because they were likely based on what Mr Semmens knew from his time at Digital Hive and Digital Group.

214    A common thread in the represented respondents’ submissions was the failure to cross-examine Mr Semmens and what was said to be a lack of evidence of “independent intellectual effort” or “sufficient effort of a literary nature” to support the originality of the Database Work or the Table Works. I reject these submissions for the following reasons.

215    First, Mr Semmens was the person who produced the Database Work and the Table Works. As to the tables, these required time to develop and contain at least some complexity even if many of the fields are ones which would be expected to be found in connection with a computer program, with an associated database, of the relevant functionality. As to the Database Work, this comprised over 110 tables and, it is to be inferred, took considerable time to develop. The inference is properly drawn from the nature of the Database Work and Table Works themselves that intellectual effort was required and expended. Mr Semmens could have, but did not, adduce evidence that no or insufficient intellectual effort was required.

216    Secondly, it is not to the point that various tables recorded certain kinds of information (data) that real estate agencies would have an interest in recording in the selling of real estate or even that such information was necessary to be recorded in order to provide appropriate functionality in the commercial context (for example, furnishing information necessary to take advantage of services offered by Domain or realestate.com.au). The point is that intellectual effort was required, and I infer expended by Mr Semmens, on:

(a)    the selection, arrangement and ordering of multiple tables within the Database Work and the specific relational connections between tables – see, for example: T 130.12-16, T 132.35-40);

(b)    within each Table Work, the choice of table name, the choice of column (field) name, the internal arrangement/ordering of the columns (fields), the choice of constraints on data formatting (data type) and so on; and

(c)    choices in the expression of the Table Works, as confirmed by the evidence of Mr Timm. By way of example, Mr Timm gave the following evidence at T 130.27-36 (emphasis added):

Again, common in the - - -?---Yes. We would call [the field “ofi_status” in the “OFI” table] “deleted” and store the time when it was deleted, in our database. But it’s - - -

Right?--- - - - that’s another way of doing it.

It’s just – I just want to, so is this the position in Campaigntrack you do it differently?---Yes.

And in Dream Desk, whoever came up with this structure decided to do it in this particular way?---Yes.

At T 133.18-28:

And, then, we have rows 222 and 223 [the fields “prAuctionDate” and “prAuctionTime” of the “Properties” table] for the possibility of if it’s going to be an auction?---Yes.

Again, common piece of information that you would expect to see in a - - -?---Yes. The information is common. I’m surprised to see that option, date and time, as two separate columns when it could be a date-time value as it was in the other photo, but - - -

Nothing - - -?---It doesn’t make any functional difference.

Just that you – just that you wouldn’t do it that way?---I wouldn’t do it that way.

At T 134.35-39:

… And – and again, these are all – they are all items that you would expect to see in a database designed for service to real estate agents for the online promotion of property?---Yes, these are all fields that I would – you would be needed to market a property. I would expect to see some of these maybe split out into separate tables, but I guess the required – data that’s required for marketing a property.

At T 135.11-14:

… Yes. The reason I mentioned that I expect to see some of this split out is because of the nature of, obviously, [the “properties” table] is a very long table already and there’s many different items. So for me, it makes sense to have a separate table for this kind of content. The data, itself, is needed.

217    In connection with the argument that the fields were ones which overlapped with those required by other participants in the real estate industry, and the reliance on industry documents, the represented respondents referred to the application programming interface (API) and XML documentation from PortPlus (a CRM system), realestate.com.au and Domain, which typically required certain information.

218    Campaigntrack referred in this regard to the following evidence given by Mr Timm regarding the operation of Campaigntrack’s current system (not its system in 2016 or the DreamDesk system) (emphasis added):

… [T]hese days I would say that for the majority of our customers, we have integrated with their various CRM systems to make that data flow through automatically for them.

And when you say “integrated”, is that by the use of an application programming interface of some kind?---That’s right, yes.

And does that have a – does that particular – is that a customised API for you, or is it a third party software?---The API is – it varies depending on the system. So an API – just to explain in detail – is – is the interface for a program to talk to a program in the same way the user interface is the interface in which the user talks to the program. So an API is a layer of obstruction [sic] to – to our software, or to another piece of software, that then those two pieces of software could talk to each other. So it’s something we develop as an – as an additional interface for programs to talk to us.

So it’s a way of making sure that when you move the data from one piece of software to another it gets sent to the right spot?---Correct.