Home > News > The picture of implied terms: Hardingham v RP Data Pty Ltd [2022] HCA 39

The picture of implied terms: Hardingham v RP Data Pty Ltd [2022] HCA 39

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By Lee Filkin, Lawyer, MST Lawyers 

The recent High Court decision in Hardingham v RP Data Pty Ltd dealt with an important legal question: what terms are included in an agreement when they are not explicitly stated?  

The matter arose from a dispute between a photographer and a data company over the use of images and floorplans created for real estate advertising. The main question to be considered was whether the photographer had granted a licence to the data company to use the images for an unlimited time. 

The case illustrates the issues that can arise when parties enter into contracts without clearly specifying all the terms of the agreement.  

Background 

As the sole director and employee of Real Estate Marketing Australia Pty Ltd (REMA), Mr Hardingham worked as a photographer taking photos of residential properties and creating floor plans.  

REMA entered into agreements with various real estate agencies (Agencies) for the provision of floorplans and photographs. The agreements in question were concluded verbally between Mr Hardingham and the Agencies on various dates between September 2014 and June 2018.    

After receiving photos and floorplans supplied by REMA (Works), the Agencies uploaded the Works to the realestate.com.au website owned by Realestate.com.au Pty Ltd (REA), which operates the website as a platform for advertising real estate properties.  

The website’s terms and conditions allowed REA to use the Works for an unlimited time and to sub-license them to third parties, including a data company called RP Data Pty Limited (RP Data).  

RP Data accessed the Works through the REA website and used them to create a database of property information that it sold to subscribers. In doing so, the Works remained on RP Data’s website after their use on REA’s website had concluded. 

Mr Hardingham and REMA claimed that RP Data had infringed their copyright in the Works and had breached the agreements between the parties by using the Works without permission.  

Issues 

The case turned on the interpretation of the oral agreements between Mr Hardingham and the Agencies, to which neither REA nor RP Data were parties. It was not disputed that the Works supplied to the Agencies were original artistic works under the Copyright Act 1968 (Cth).  

It was also common ground that the agreements allowed the Agencies to sub-licence the reproduction of the Works. That is, the Agencies were permitted to allow other entities such as REA and RP Data to reproduce the Works supplied by REMA and Mr Hardingham.  

The issue in dispute was how broad the terms of the licences and sub-licences were. REMA and Mr Hardingham’s position was that the licence was restricted to only allow the Works to be used while the sale or lease of the property was being marketed, with the licence (and subsequent sub-licence) ending when the property was sold or leased. 

The REA website’s terms and conditions (which must be accepted by the Agencies in order to use the platform) provided that a licence was granted to REA to use the Works and sub-licence use of the Works to RP Data. Restricting the licence granted to the duration of a property’s marketing campaign would therefore prevent the Agencies from accepting the REA website’s terms.  

First instance and appeal decisions 

At first instance, Justice Thawley of the Federal Court found in favour of RP Data and REA, that a term was included in the agreements between REMA / Hardingham and the Agencies that sub-licences were granted to REA on the terms and conditions on REA’s website.  

As the agreements were made for the purpose of using the Works for marketing on REA’s website, Justice Thawley’s decision was made on the basis that this purpose could not be achieved without the REA website’s terms (including the sub-licence granted to REA and RP Data) being accepted by the Agencies.  

His Honour therefore held that the sub-licence term should be inferred from the conduct of REMA / Mr Hardingham and the Agencies or implied in the agreements in order to provide business efficacy to the arrangement between the parties.  

However, on appeal to the Full Court of the Federal Court, a majority decision of Justices Greenwood and Rares (with Justice Jackson dissenting) reversed the primary judge’s decision and held in favour of REMA / Mr Hardingham.  

Their Honours held that the licence was limited to use for the sale or lease of the specific property, with the licence ending when that process concluded.  

High Court decision 

On appeal to the High Court of Australia, Chief Justice Kiefel and Justices Gageler, Gordon, Edelman and Steward (by way of three separate judgments) held that RP Data did not infringe copyright in the Works. 

It was held that a reasonable person in the position of REMA / Mr Hardingham and the Agencies would have known that: 

  • one of the purposes of REMA / Mr Hardingham providing the Works to the Agencies was for the Agencies to use the Works on REA’s website; and 
  • the Agencies therefore had no choice but to accept the terms of the REA’s website, including the requirement that the Agencies provide a licence to REA to use the Works indefinitely and to sub-licence their use to RP Data. 

It was confirmed that an objective approach must be taken in considering the construction of the agreements where the terms of a contract are not clearly articulated.  

This means that the subjective intentions of REMA and Mr Hardingham were not taken into account, with the Court identifying the express terms of the contract and only considering what a “reasonable person” would have known, having reference to the parties’ conduct and surrounding circumstances. After this has been considered by the Court, implied terms can then be considered.  

Their Honours held that the conduct between REMA / Mr Hardingham and the Agencies would not lead a reasonable person to consider that a restricted licence had been agreed. In making this decision, reference was had to the fact that Mr Hardingham / REMA and the Agencies were aware that the Works uploaded to REA’s platform were also uploaded to RP Data’s website and remained there after the sale or lease of a property.  

In light of this, a licence allowing REA and RP Data’s use for an indefinite period was held to be an implied term of the agreement between Mr Hardingham / REMA and the Agencies.  

Key takeaways 

It is essential for parties entering into a contract to be aware of the importance of clarity and completeness in the language they use, in order to ensure that the contract reflects the true intentions of the parties and minimise the risk of disputes arising in the future. 

Where a dispute has arisen regarding the terms of an agreement, parties should consider whether any terms could be inferred or implied in order to assess their position in the dispute.  

If you have any questions regarding this decision or any matters raised by it, please feel free to get in contact with Mark Skermer or Lee Filkin of the MST Dispute Resolution and Litigation team on 8540 0200 or by email at mark.skermer@mst.com.au or lee.filkin@mst.com.au.