Gammasonics Institute for Medical Research Pty Ltd

Gammasonic v Comrad1 demonstrates the reluctance of the courts to interpret the barter of Goods move to include computer packet d featureloads as a honorable, preferring to leave the publication up to statutory review. It primarily discusses whether a software package package delivered by online download is in effect classed as unassailables for applications programme of sale of Goods Act2 and outlines the progressive court decisions that have considered the incredulity and have begun to fill out software attached to a medium, like a cd package as a goods.It in like manner briefly addresses the pertinence of statutory warranties of fitness for exercise and salable property and supports that fitness for purpose and merchantable flavour are implied by green right swelled reference the test for implication in sit outlined in BP Refinery (Westernport) v Shire of Hastings (1977)3Background and overviewThe disputing parties are Gammasonics, a provider of services to r adiologists in NSW, and Comrad, a business that provide software and development management arrangings to radiologists in Australia and New Zealand. The dispute concerns a attempt amidst the parties for the wrangling and installation of a software package via remote cyberspace download called Comrad RIS which was to manage workflow, patient registration and appointments, online referrals and processing of Medicare claims for Gammasonics.The software was downloaded onto Gammasonics master of ceremonies and Gammasonic were purportedly responsible for computer hardware configuration and the ne some(prenominal)rk infrastructure stipulate to run the software.Comrad delivered the software via internet download and certain areas of the software did non function as required. Gammasonics claimed to terminate the contract for breach of price including tribulation to deliver a functioning software package, failure to provide goods of a merchantable quality and/or for the delivery o f a software package which was not fit for its intended purpose. 4 Comrad in turn sought an awarding for damages due to the repudiation of the contract by Gammasonic.Trial proceedingsThis end is an appeal from Local Court against orders made by Magistrate Quinn in favour of Comrad for the amount of $58,011.21. There Magistrate Quinn was not convinced the software supplied by Comrad was a good as defined in s5 of the sales event of Goods Act 19235 and held the act did not apply6. She as well as found Comrad failed in the delivery of certain components required for the software functioning however it was stated that it was Gammasonics own acts or omissions and not any(prenominal) conduct for which it had contractual responsibility that rendered the system unworkable, such that Gammasonics purported termination was a repudiation of the contract thereby entitling Comrad to treat for damages.7Material IssuesThe following are the paint issues that arise from the judgement and tak e aim the essential elements of the case which leave alone be discussed in this case note.1. Whether a software package delivered by online download is trenchantly classed as goods for application of Sale of Goods Act.82. Whether equivalent terms of fitness for purpose and merchantable quality are implied by common law.3. intermission of essential termsThe matter of whether a breach of contract is a inquire of mixed fact and law is also addressed in this case but it will not be extensively discussed deep down this case note.Whether a question of mixed fact and law arises was dealt with early in the case and Fullerton J was satisfied that the question of whether her Honour erred in holding that Comrad was not in breach of the contract, involved a question of mixed fact and law and as such leave to appeal ought be granted.Comrad also filed a notice for contention on two points one concerning the implication of terms into the contract equivalent to the statutory warranties of merc hantable quality and fitness for purpose, the an different(prenominal) on the question of breach.The Sale of Goods Act 1923The definition of goods provided in the Sale of goods Act 1923 (NSW) s5(1) isGoods include all chattels personal other than things in save and money. The term includes emblements and things attached to or forming part of the land which are concord to be severed before sale or low the contract of sale.It was submitted by Gammasonics that the software provided by Comrad was within the statutory definition of goods and they relied among other things on the implied condition as to quality or fitness in the act outlined in s19.9On appeal a crave was made to consider whether there was a Fresh Analysis of governance10 with a more modern approach to interpretation of the Act.Whether a software package delivered by online download is effectively classed as goods for application of Sale of Goods Act.11The case gives a thorough analysis and contains a comprehensive hark of authorities that include case law and secondary sources which have reviewed this question. The key area of difference noted was that the software was delivered by download onto a server. This distinguished the case from that of others including Toby Constructions Products Pty Ltd v Computa Bar (Sales) Pty Ltd12 where the software was held to be a good because it comprised both software and hardware.Gammasonics relied on a characterization from Advent Systems Ltd v Unisys Corp 13 as potentiality where an analogy was bony to musical compositions and music on cds suggesting that once the software had been downloaded to the server it became a tangible thing. However the common thread is that software provided on a disc falls within the statutory definition of a good while remote download via a license it appears currently does not.The case Fullerton J considered most analogous to the facts was St Albans City. 14 In this case the question of whether the alter of the software, without the sale of the disk would give rise to a sale of goods under the Sale of Goods Act 1979 (UK) was considered by Sir Glidewell. There the disk was likened to an instruction manual(a) however again the distinction is made between the delivery of the software via disk format and remote download a distinction that was also noted by Sir Glidewell.An Australian case that revisted the question was Re Amlink Technologies Pty Ltd and Australian Trade Commission15 this case did not follow the reasoning offered in St Albans City16 by Sir Glidewell and considered the proposition taken to the extreme would see goods being defined in areas that where never meant to be covered by the act.Secondary sources were further considered as Gammasonics highlighted what they supported to be a growing trend in Australia to have sex software as a good17 The modern Trade Practices police Journal article by Svantesson discussed the stages of development citing Toby Constructions18as the first foot step taken in recognition of software sold together with hardware as a good. The article also highlighted the decision in Amlink Technologies19 to recognize software attached to some physical medium and suggested the next lucid step for the courts was to further recognize software not attached to a physical medium.A passage from a conference paper was also considered20where the distinction is made that where a customer purchases a digitized version of an encyclopaedia it is a good however where it purchases access to the encyclopedia database it is a append of a service. The facts of this case are most like that of the first scenario and the complainant submitted that the authorities support the conclusion that the software provided by Comrad is a good under the act21 It fell however to the principals of statutory interpretation in peculiar(a) the everyday meat of goods and possession.Comrad submitted that the ordinary meaning and any interpretative words referred to things th at are tangible therefore, because lines of computer code are intangible the position contended for by Gammasonics was inconsistent.22Fullerton noted that it was preferable to give protection to consumers acquire software by digital download and noted that research suggests that this is an increase form of delivery means but stressed the need for legislative reform23 in the area not legal intervention and found that the Sale of Goods Act did not apply.Whether equivalent terms of fitness for purpose and merchantable quality are implied by common law.The case also outlines that common law terms as to fitness for purpose and merchantable quality can be implied. This is in accordance with test for implication in fact 24 from BP Refinery (Westernport) v Shire of Hastings which is1) it must be level-headed and equitable (2) it must be necessary to give business ability to the contract, so that no term will be implied if the contract is effective without it (3) it must be so obvious th at it goes without saying (4) it must be capable of clear expression (5) it must not contradict any express term of the contract.Although the test was ultimately not considered.Breach of Essential TermsWith devotion to the breach of essential terms two main areas were readdressed.The interfacing with Medicare and network incompatibility. In both cases the documentary evidence was reviewed. while the plaintiff submitted that the findings of the Local Court were in error and that Comrad was responsible for both resolving the problems of interfacing with Medicare and for creating the interfacing problems. Comrad failed to provide sufficient evidence to support these claims and Fullerton J was not satisfied that Quinn J was in error therefore the appeal was dismissed. core group on Current impartialityThis case has been referred to in a recent journal article discussing when software is a good.25 It has also been compose in the recent edition of Australian Commercial Law26 as the au thority for the principal that software delivered online does not constitute a good, within the meaning of the Sale of Goods Act27.The case highlighted the need for legislative review in regard to the status of computer software and with the introduction of new legistlation The Australian Consumer Law (ACL) it has finally been decided that for the purposes of the ACL software is now specifically included within the definition of goods 28 affording consumers protection under s54 insure as to acceptable quality29 and s55 Guarantee as to fitness for any disclosed purpose.30It also shows the courts reluctance for judicial intervention on matters that may have wider applications in the interpretation of order and illustrates the progressive nature of the courts to effect change.