Murray v King

4 FCR 1
55 ALR 559

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(Decision by: Morling J)

Between: Murray
And: King

Court:

Judges: Sheppard J

Morling JSpender J

Subject References:
Copyright

Hearing date: 31 July 1984
Judgment date: 14 September 1984 

Brisbane

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Decision by:
Morling J

This is an appeal from a decision of the Supreme Court of Queensland (Connolly J) in proceedings brought by the respondent ("King") for damages for infringement of copyright, passing off and a number of related wrongs. King's action was brought against Thomas Douglas Murray ("Murray") and his wife Kaylene Joy Murray. Other proceedings brought by Murray against King were consolidated with King's action.

The learned trial judge found for King in his action against Murray and his wife and gave judgment against them for infringement of copyright in the sum of $106,696.00, which sum included a component for interest. It is from that judgment that this appeal is brought. No findings were made by the trial judge on the other causes of action, it being unnecessary to do so.

In May 1980 Murray and King were carrying on independent businesses in the same premises. Murray conducted a business known as Advertising Design. The purpose of this business was, for the most part, to produce advertising layouts for clients. These layouts were comprised of a pictorial or graphic component together with advertising material. King's business was the production of a directory of accommodation on the Gold Coast. In May 1980 Murray and King decided upon a joint venture for the production of a magazine advertising not merely accommodation but other activities of interest to the tourist trade. The magazine was to be named "Wot's Happening on the Gold Coast". This business name was registered on 13 May 1980, Murray and King being shown as the proprietors.

The first edition of the magazine was published under the business name in December 1980. It consisted of advertisements for various businesses, some but not all of which included a pictorial component, either photographic or hand drawn in origin. In addition, the advertisements all contained textual material which set out the features of the business. The magazine included information of relevance to the tourist trade, such as lists of tourist attractions, lists of accommodation, the location of art galleries and of public boat launching ramps, bus timetables, location of churches and times of services, and the like.

The magazine had a reasonable success and was published quarterly until the end of 1981. The learned trial judge found that the history of the magazine was one of continuing improvement and profitability. He also found that the work published by the partnership was capable of being the subject of copyright, and that the copyright was part of the partnership property. No challenge was made to these findings and the appeal was argued upon the basis that they were correct.

Differences arose between King and Murray and these led to the dissolution of the partnership. It is unnecessary to refer to the nature of these differences. On 28 September 1981, when the fourth issue of the magazine was in course of distribution, Mrs Murray registered a business name, "Look] What's Happening on the Gold Coast". Her application for registration showed that the business had started operations on 3 September 1981. The application described the business as "publication of magazine". On about 25 September 1981 Murray removed himself from the partnership's premises, taking with him certain of the art work which, he contended, was his own property. On 21 October 1981 Murray gave notice of dissolution of the partnership and it was common ground between the parties that it was dissolved from that date.

The Murrays canvassed the advertisers of the partnership and they did so in a manner which suggested that the business which they were running was the old business. On a number of occasions one or other of the Murrays informed advertisers, in effect, that the new publication was replacing the old, saying words to the effect that the old publication would not be coming out again.

The first issue of Mrs Murray's magazine was published for the period December 1981 - March 1982. The magazine was published under the name "Look] Over the Gold Coast". It was different in size from the partnership magazine. The overall impression however was that there was a substantial identity, not merely a similarity, of the greater part of the material including the general information material to which reference has already been made. The learned trial judge found that the first issue of "Look] Over the Gold Coast" was a reproduction in a material form of a substantial part of the last issue of "Wot's Happening on the Gold Coast" as published by the partnership.

On 23 October 1981 Murray issued a writ in the Supreme Court against King for the winding up of the partnership. On 29 October 1981 an interim receiver was appointed and on 6 November 1981 by a further order the interim receiver was appointed receiver/manager in respect of the partnership and the partnership business, and was ordered to do all things necessary to wind up the partnership and effect a sale of the business and to receive tenders in writing from either or both partners. Both partners tendered for the business, Murray's tender being $50 and King's $62,000.

On 27 November 1981 the receiver entered into an agreement in writing for the sale to King for $62,000 of "all the right title and interest of the vendor by virtue of (the order of 6 November, 1981) in and to the business known as 'Wot's Happening' but not including any debts owed to or by the business or any moneys0 the property of the business together with the goodwill of the business and furniture and fittings".

At the trial King put his claim for damages for breach of copyright upon two alternative bases. First, it was argued that the copyright had been assigned to him by virtue of the provisions of the agreement of 27 November 1981. In the alternative, it was argued that he had acquired the copyright "by devolution by operation of law" within the meaning of sub-s. 196(1) of the Copyright Act 1968. The learned trial judge found for King on the alternative basis. He held that the effect of the order of 6 August 1981 and the consequential sale of 27 November 1981 was that the copyright devolved by operation of law upon King.

Counsel for the appellant confined their argument on the hearing of the appeal to two submissions. It was first submitted that his honour was in error in finding that the copyright devolved by operation of law upon King. Secondly, it was submitted that the copyright was not assigned to King by virtue of the agreement because, upon its proper construction, the agreement did not refer to or deal with that part of the assets of the partnership consisting of the ownership of the copyright. It was also argued that, even if it did, the agreement was not effective to effect a valid assignment of the copyright.

It is convenient to deal first with the effect of the agreement since, if it was effective to assign the copyright to King, no question of devolution by operation of law arises.

To understand the argument that the agreement was effective to assign the copyright to King it is necessary to refer to the events that preceded it. On 29 October 1981 the Master of the Supreme Court ordered that "until the Fifth day of November, 1981 or further Order that Gordon Eric Lawson be appointed Receiver to receive the debts now due and owing and other property, assets or effects belonging to the partnership...". On 6 November 1981 the Master made further orders, including orders that: 

"(i)

GORDON ERIC LAWSON be appointed as  Receiver/Manager in respect of the partnership  and the partnership business "Wot's Happening"  and do all things necessary to wind up the  said partnership and effect a sale of the  business in the manner hereinafter described.

(ii)

...

(iii)

the said GORDON ERIC LAWSON do receive tenders  in writing from either or both of the  partners, the parties to the present action,  by noon on Friday, the thirteenth day of  November, 1981 at the offices of Binder Hamlyn  & Co. 167 Eagle Street, Brisbane, in respect  of the purchase of the business, such purchase  of the business not to include the various  debts owed to or by the business or monies the  property of the business;"

The tender made by King for the purchase of the business was in the following terms: 

"I hereby offer to purchase the business "Wot's  Happening" and the assets of the business for the  amount of Sixty two thousand dollars ($62,000.00)  payable as follows:"

The agreement of 27 day of November provided, in part, as follows: 

"AGREEMENT made and entered into this 27th day of  November 1981 BETWEEN GORDON ERIC LAWSON of 167  Eagle Street, Brisbane in the State of Queensland, Chartered Accountant (the person appointed  Receiver/Manager of the partnership business known  as Wot's Happening, by order of the Supreme Court of Queensland dated the sixth day of November 1981)  (hereinafter called 'the vendor') of the first part  and MATTHEW KING of 3094 Gold Coast Highway, Surfers Paradise in the State of Queensland  (hereinafter called 'the purchaser') of the second  part WHEREBY IT IS AGREED AS FOLLOWS:-

1.

The vendor agrees to sell to the purchaser and  the purchaser agrees to purchase from the vendor  for the price of sixty-two thousand dollars ($62,000.00) all the right title and interest of  the vendor by virtue of the said court order in and  to a certain business carried on at the Gold Coast in the State of Queensland known as Wot's Happening  (hereinafter called 'the said business') but not  including any debts owed to or by the said business or any monies which are the property of the said  business together with the goodwill of the said  business and the furniture and fittings set forth in the schedule hereto.

....

10.

The vendor and the purchaser hereby agree  that the aforesaid purchase price of SIXTY-TWO  THOUSAND DOLLARS ($62,000.00) abovementioned shall  be apportioned as to

It was submitted on behalf of Mr and Mrs Murray that, upon its proper construction, the agreement did not refer to the partnership asset consisting of the ownership of the copyright. This submission founded upon the absence of any specific reference to the copyright in the agreement and, in particular, to the absence to any reference to copyright in cl. 10. I do not think this construction of the agreement is sound. It is plain that the business that the receiver sold to King was the business referred to in the order of the Supreme Court. It was pursuant to that order that King made his tender which led to the making of the agreement. It is true that the agreement between King and the receiver was not allowed to rest at the mere acceptance of King's tender, but was formalised in the agreement of 27 November. But, as a matter of construction, the reference in cl. 1 of the agreement to "all the right title and interest of the vendor by virtue of the said Court Order in and to a certain business..." must be taken to refer to all the assets of that business, except the assets which are specifically excluded by the words "not including any debts owed to or by the said business or any moneys which are the property of the said business". The only significant assets of the business were the goodwill attached to the business name and the magazine which the business produced and the copyright in the magazine. Without the copyright, the goodwill of the business was virtually non-existent.

Counsel for Mr and Mrs Murray submitted that the goodwill of the business consisted only of the prospect that customers of the magazine would continue to do business with it. But even if that were so, their willingness to do business with it depended largely, if not exclusively, upon its capacity to continue publishing the magazine. To do this, it was necessary that the business retain the copyright. It is inconceivable, therefore, that the parties to the agreement intended not to include the copyright in the assets dealt with in cl. 1 of the agreement.

It is true that no value was attributed to the copyright in cl. 10 of the agreement but I do not think that this omission limits the operation of cl. 1. Clause 10 was plainly inserted only for stamp duty purposes and not as a catalogue of the assets passing under the agreement.

The purpose of the court's order was to ensure that all the assets of the partnership were sold and the proceeds of sale accounted for to the partners. Since the agreement was made in furtherance of the court's order (which is referred to in the agreement itself) there is no room for an argument that the agreement was not intended to dispose of the assets of the partnership including the ownership of the copyright. If there were any ambiguity in the language of the agreement, it would be permissible to refer to the circumstances surrounding the making of it including the terms of King's tender, in which he offered to purchase "the assets of the business". See Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 56 ALJR 459 per Mason J. at 462.

Counsel for Mr and Mrs Murray submitted a further argument that, even if the agreement did intend to transfer the copyright to King, it did not effectively do so because the agreement did not comply with the provisions of sub-s. 196(3) of the Copyright Act which provides as follows:

"196.(3)

An assignment of copyright (whether  total or partial) does not have effect unless it is  in writing signed by or on behalf of the assignor."

The argument proceeded upon the basis that there was no assignment because the owners of the copyright, i.e. Murray and King, had not executed any assignment of it. It was further submitted that since the assets of the partnership (including the copyright) were not vested in the receiver (see Kerr on Receivers, 15th ed, p. 136) he was unable to assign it.

But this argument does not deal with the question whether there was an effective assignment "on behalf of" the owners of the copyright within the meaning of sub-s. 196(3). When Murray and King entered into their partnership agreement they did so in the presumed knowledge that in the event of the partnership being dissolved, the court might appoint a receiver and empower him to sell the partnership assets. In my opinion the sale of the partnership assets by the receiver was a sale "on behalf of" the partners. When the receiver sold the partnership assets to King he did not sell them on his own behalf. And whilst he sold the assets under the authority of the court's order, it is not an apt use of language to say he sold them on behalf of the court. In a real sense the sale was on behalf of the partners, to whom the receiver was obliged to account for the proceeds of sale. See Kerr, op. cit.

It is true that the receiver was not the agent of the partners - see Ingham v Sutherland (1890) 63 L.T., 614 and Boreham v Goodall (1911) 1 Ch. 155. He was an officer of the court appointed for the benefit of the partners - see Davy v Scarth (1906) 1 Ch 55 at 57 and Re Newdigate Colliery Ltd, Newdigate v Newdigate Colliery Ltd (1912) 1 Ch 468. But sub-s. 196(3) does not refer to an assignment by the assignor or his agent. It refers to an assignment by or on behalf of the assignor. It has been held that the phrase "on behalf of" when used in trade practices legislation comprehends acts not necessarily falling within the concept of agency - see Commissioner of Trade Practices v Caltex Oil (Australia) Pty Ltd ((1974) 23 F.L.R. 457 and Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd (No. 2) (1980) 149 at 159. And it has been held that the phrase "on whose behalf" does not necessarily imply that a transaction was with the actual authority of the person represented. See Otzen v Beabout (1948) ALR 13. In Gillespie v City of Glasgow Bank (1879) 4 App. Cas (a case where a transfer of bank stock to partners of a firm was expressed to be "for behoof of the firm") Lord Hatherley said at p. 642: 

"I hold the expression 'for behoof of' to mean  exactly the same as if the words used had been 'on  behalf of' or 'for the benefit of...'."

In the present case the sale of the partnership assets was, in a real sense, for the benefit of the partners. In my opinion even though the receiver was not the agent for sale of the units owners of the copyright the entry by him into the agreement constituted a sale by him on behalf of the owners.

Hence, unless the form of words used in the agreement were ineffective to assign the copyright to King, it passed to him. There is much authority for the proposition that no particular form of words is necessary to effect the assignment of the copyright. See generally, Copinger and Skone James on Copyright, 12th ed., para. 405. It was faintly argued that the wording of the agreement was ineffective to constitute an assignment, but no authority was cited in support of this proposition. In my opinion, the wording of the agreement was effective to assign the copyright, as one of the assets of the business, to King. He was therefore entitled to succeed in the action upon the basis that the copyright had been assigned to him.

Had I been of the opinion that the copyright had not been assigned to King by force of the agreement, I would have been of the opinion that King was entitled to succeed in the action because the copyright had devolved upon him by operation of law. I agree with what the learned trial judge said on this matter.

In my opinion the appeal should be dismissed with costs.