The NSW Ombudsman has lost a claim for immunity from liability for copyright infringements alleged by a software company: see MicroFocus v NSW [2011] FCA 787.  Whilst interesting, the decision is unlikely to have widespread application because the court did not need to consider the broader question of whether the federal Copyright Act was inconsistent with the state legislation conferring immunity on a statutory officeholder. 

Many statutory officeholders are appointed on terms that confer immunity for their acts and omissions in the exercise of statutory functions.  Section 35A of the Ombudsman Act 1974 (NSW) provides that

"The Ombudsman shall not, nor shall an officer of the Ombudsman, be liable, whether on the ground of want of jurisdiction or on any other ground, to any civil or criminal proceedings in respect of any act, matter or thing done or omitted to be done for the purpose of executing this or any other Act unless the act, matter or thing was done, or omitted to be done, in bad faith."

When MicroFocus alleged that the Ombudsman had installed a computer program on computers used by about 25 personnel who were responsible for investigating allegations against the NSW Police, the Ombudsman denied liability on the basis that s 35A applied.  However, Jagot J of the Federal Court of Australia held that, on its proper construction, s 35A did not extend to acts done by the Ombudsman that were preliminary or incidental to the Ombudsman’s substantive conduct.  And, in this instance, the installation of the computer programs was preliminary to any substantive investigation of the NSW Police.

This conclusion meant that it was not necessary for the court to consider the potential inconsistency between the Copyright Act (which confers immunity of a kind under s 183) and s 35A of the Ombudsman Act.

Historically, Australian governments have rarely sought to rely on the Crown immunity provisions in the Copyright Act.  As a matter of policy, the usual position is that governments purchase software licences in the same way as any other customer does.  The decision does not shed any light on why the Ombudsman’s office did not take that approach.  And, putting policy to one side, the legal fees involved in determining the interlocutory point on immunity must have been substantial (and potentially greater than the value of the dispute).