In Parramatta Design & Developments Pty Ltd & Anor v Concrete Pty Ltd  FCAFC 138, joint venturers, including an architect, bought a site in 1998 for $560,000. The architect prepared plans for the joint venture for the development of a unit block on the site. The joint venture obtained development approval from local authority. The joint venturers fell out, resulting in trustees being appointed by a court to sell the site. It was purchased by Concrete Pty Ltd ("Concrete") at auction in 2003 for $2,760,000. The terms of sale made it clear that there was a dispute about the right to use the plans. Concrete wished to construct the development in accordance with the drawings before the approval expired. Its attempts to purchase the drawings were refused by the architect, who asserted ownership of copyright in the plans.
Under relevant planning legislation, a development approval "runs with the land", such that a purchaser of the land is entitled to develop the land in accordance with the approval. However, as the author of the plans, an architect owns and retains copyright in them, subject to any agreement between the architect and client. Usually, a client may use the plans for the purpose for which the client retains the architect. Such a permission or licence may not be assigned, unless the architect expressly or impliedly agrees.
The trial judge sought to extend this principle so that any person who becomes the owner of land carrying a development approval could "reproduce the drawings so that the subject matter of the drawings may be built".
Alternatively he found there was an implied term in an agreement between the architect and the joint venturers that the joint venturers were entitled to use the drawings. This implied licence was transferred from the joint venturers to Concrete on the sale of the land.
However, the Full Court of the Federal Court disagreed with the trial judge, and held that in this case there was no reason to imply a term that the joint venturers had an assignable licence from the architect to reproduce the drawings. For example, Concrete had not paid for the drawings nor had it relied on any representation from the architect that it could use the drawings. The Full Court rejected the principle proposed by the trial judge and upheld the appeal.
This matter went on appeal to the High Court and was heard on 15 June 2006 As judgment has been reserved, Gadens Lawyers will report the outcome in a later addition of Corporate Update.
Pending the High Court’s decision, developers negotiating for the purchase of land to be developed under an approval should ensure that they have an unfettered right to use drawings prepared for the development approval by obtaining appropriate consents or an assignment of the copyright in the plans.
For more information about architectural plans, contact Michael Owens.
t (07) 3114 0229
t (07) 3114 0146
t (07) 3114 0124
t (07) 3231 1621
t (02) 9931 4724
t (02) 9931 4994
This publication is provided to clients and correspondents for their information on a complimentary basis. It represents a brief summary of the law applicable as at the date of publication and should not be relied on as a definitive or complete statement of the relevant laws.
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