Carlisle County Homes Pty Ltd v Brown
[1999] QDC 284
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- Carlisle County Homes Pty Ltd v Brown[1999] QDC 284
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Carlisle County Homes Pty Ltd v Brown[1999] QDC 284
Carlisle County Homes Pty Ltd v Brown[1999] QDC 284
DISTRICT COURT | No 118 of 1996 |
CIVIL JURISDICTION | |
JUDGE McGILL SC | |
CARLISLE COUNTY HOMES PTY LTD | Plaintiff |
and | |
WAYNE KEITH BROWN | First Defendant |
and | |
RESIDENTIAL DEVELOPMENTS MACKAY PTY LTD | Second Defendant |
BRISBANE | |
DATE 12/11/99 |
JUDGMENT
HIS HONOUR: In this matter I give judgment the first defendant pay the plaintiff the sum of $10. I publish my reasons.
...
HIS HONOUR: I adjourn the question of costs and I will deal with that after I have heard full argument on it.
MR COLLINS: Can today's costs be reserved until then as well, Your Honour?
HIS HONOUR: Yes.
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DISTRICT COURT OF QUEENSLAND
REGISTRY: MACKAY
PLAINT NUMBER: 118 of 1996
CARLISLE COUNTY HOMES PTY LTD | Plaintiff: |
and | |
WAYNE KEITH BROWN | First Defendant: |
and | |
RESIDENTIAL DEVELOPMENTS MACKAY PTY LTD | Second Defendant: |
JUDGMENT - McGILL D.C.J.
Date of Judgment: 12 November 1999
Catchwords: | COPYRIGHT – Infringement – plan of house – whether reproduction – damages – measure of – effect of settlement with other defendant – Copyright Act 1968 s. 115 S.W. Hart & Co Pty Ltd v. Edwards Hot Water Systems (1985) 159 CLR 466 - applied Ownit Homes Pty Ltd v. F. & F. Mancuso Investments Pty Ltd (1988) AIPC 90-488 - followed Eagle Homes Pty Ltd v. Austec Homes Pty Ltd (1999) 43 IPR 1 - not followed New England Country Homes Pty Ltd v. Moore (Federal Court NG 342/95, 9.4.98, unreported) - followed |
Counsel for the plaintiff | I.R. Molloy: |
Counsel for the first defendant: | A.P.J. Collins |
Solicitors for the plaintiff: | Wallace & Wallace |
Solicitors for the first defendant: | McKays |
Hearing Date: | 17 June 1999 |
DISTRICT COURT OF QUEENSLAND
REGISTRY: MACKAY
PLAINT NUMBER: 118 of 1996
CARLISLE COUNTYHOMES PTY LTD | Plaintiff: |
AND | |
WAYNE KEITH BROWN | First Defendant: |
AND | |
RESIDENTIAL DEVELOPMENTS MACKAY PTY LTD | Second Defendant: |
REASONS FOR JUDGMENT - McGILL D.C.J.
Delivered the 12th day of November 1999
This is an action for infringement of copyright. The plaintiff is a building company which offered to build on a customer's land a three bedroom brick veneer house in accordance with a design called “The Lawrence” illustrated by a display home constructed by it (p. 14), and a plan and front elevation shown in brochures which it produced (p. 16); an example is Exhibit 5. The plan shown in that brochure is a simplified version of the plan drawing from a set of drawings from which the display home was constructed: Exhibit 3. The plan within that Exhibit was based on a transparency (Exhibit 2) which in turn was based on an A4 drawing, a copy of which is Exhibit 1: p. 12.
Jurisdiction
The Copyright Act 1968 (‘the Act”) expressly confers jurisdiction on the Federal Court with respect to actions under Part 5: s. 131C. Section 131A contains a provision dealing with the jurisdiction of the Supreme Court of a State in an action under that Part and s. 131B dealing with appeals speaks of a decision of a court of a State. The Act however does not expressly confer jurisdiction on the District Court to deal with an action for breach of copyright. However, s. 39(2) of the Judiciary Act 1903 confers jurisdiction on the several courts of the States within the limits of their several jurisdictions whether as to locality, subject matter or otherwise, in all matters in which the High Court has or can have original jurisdiction, except as provided in s. 38 which does not apply. It seems to be generally accepted that the effect of this provision is that a court such as the District Court can entertain an action for breach of copyright, at least when the only relief sought is payment of damages: see Halsbury's Laws of Australia “Copyright”, para. 240-3100; Lahore “Copyright and Designs” vol. 1, para. 36455. In these circumstances I accept that I have jurisdiction to entertain the action.
Facts
The original of Exhibit 1 was drawn by the managing director of the plaintiff company, Mr. O'Keefe, in 1993: p. 11. He was an Australian citizen (p. 20), and an employee of the plaintiff company, and prepared the plan in the course of his employment. The fact of the employment was at one stage contentious, but he gave evidence which I accept that he was an employee and receiving a salary from which PAYE tax was deducted at the relevant time: p. 10. A plan is capable of being an artistic work for the purposes of the Act (Manfal Pty Ltd v. Longuet (1986) 8 IPR 410 at 420), and I accept Mr. O'Keefe's evidence that he worked out this plan himself, rather than copying it from any other plan: p. 12. I find that Exhibit 1 and Exhibit 2 are artistic works in which the plaintiff obtained copyright, and the plaintiff was the owner of that copyright: s. 35. There was no suggestion that the plaintiff's copyright in those plans had ever been lost. Subsequently, Mr. O'Keefe prepared the working drawings, Exhibit 3, which incorporate that plan (p. 14); those working drawings are also an artistic work, and for similar reasons the plaintiff is the owner of the copyright in them: Ownit Homes Pty Ltd v. D & F Mancuso Investments Pty Ltd (1988) AIPC # 90-488 at 38,239. The display home was constructed in accordance with those working drawings: p. 14. The brochure, Exhibit 5, was prepared by the plaintiff from the other plans (p. 16) and it follows that the plaintiff is the owner of the copyright in Exhibit 5.
In early March 1995 the first defendant called at the display home with his father (p. 93), and spoke to Mr. O'Keefe, expressing some interest in the possibility of having a home like the “Lawrence” constructed, but with a number of changes which he discussed with Mr. O'Keefe: p. 17-18, 104-5. Notes about these were made by Mr. O'Keefe and his wife on a copy of the brochure: p. 18, Exhibit 6. Mr. O'Keefe was willing to incorporate the various changes sought, one of which was that an area of about six metres square at the back of the house be turned into a covered and partly enclosed patio, although he thought it would be better covered by a flat roof rather than by extending the main roof of the house over the area: p. 49. Mr. O'Keefe prepared a quotation which was given to the first defendant or his father on or about 13 March 1995: p. 21, Exhibit 7.
The first defendant had been to see a number of different builders offering this kind of service in Mackay (p. 93, p. 104) including the second defendant which was at the relevant time the building company with the largest volume of work in the domestic residential market in the Mackay area (p. 41) and a competitor of the plaintiff: p. 23. After obtaining the quote, he went with his father to the second defendant, saw its display home and perhaps some other plans it had on display, and then pointed out to the saleswoman that he was attracted by the plaintiff's design in Exhibit 5: p. 106. He fetched a copy of the plan from his car, and he and his father then asked the saleswoman whether there would be any problem about breaching the plaintiff's copyright in the plan: p. 94, 108. The saleswoman replied to the effect that there would not be a problem because they would change the footings and change some other things to prevent it from being a breach of copyright. There was some further discussion on that day but apparently nothing definite was arranged: p. 108. The plaintiff's brochure was left with the second defendant: p. 118.
The first defendant returned a few days later with his then girlfriend who also inquired about the issue of copyright in the plaintiff's plan, and was also told that they would make changes and copyright would not be a problem: p. 108. The first defendant, and perhaps the girlfriend, then told the saleswoman what they required by way of changes. These were marked on the plaintiff's plan (p. 119), a sketch was prepared, a quotation given and accepted (p. 109), working drawings which incorporated the plan and elevations prepared, council approval obtained (Exhibit 8) and the second defendant proceeded to construct the house in accordance with the plans in Exhibit 8 on the first defendant's land.
There had been, of course, no further indication to the plaintiff of willingness to proceed, and either because of this or possibly because of some follow-up inquiry, Mr. O'Keefe was left with the impression that nothing further was being done: p. 22. Subsequently he heard that a house was being built on the first defendant's land, and when he saw it, either because he had gone to see it or by chance, he thought it looked similar to his design: p. 23. He subsequently went there at a time when there was no one else about, by which stage the slab had been laid and the frame was up, and he was able to tell by looking at the frame that it was quite similar to his plan: p. 23. There was an exchange of correspondence between solicitors for the plaintiff and solicitors for the defendant (Exhibit 9). The house was completed and these proceedings were commenced.
Issues In The Action
Originally the action was brought against both the first and second defendants, but prior to the commencement of the trial the action as between the plaintiff and the second defendant was compromised, on the basis that the second defendant agreed to pay the plaintiff $5,000 and some amount by way of costs: p. 43, 47. The first defendant was not party to that settlement, but he subsequently abandoned a claim for contribution or indemnity against the second defendant. The matter went to trial as between the plaintiff and the first defendant only.
There were a number of issues at the trial, apart from the plaintiff's being put to proof as to its copyright in the relevant plans. These were:
- (a) were the defendant's plans or the house built in accordance with them or both, a copy of the plaintiff's plan?
- (b) was it or were they the product of copying; that is, was there some relevant causal link between the plaintiff's plan and the defendant's plan or house or both?
- (c) has the first defendant a defence under s. 115(3) of the Act?
- (d) what is the measure of the plaintiff's damages?
- (e) was the plaintiff entitled to additional damages under s. 115(4) of the Act?
- (f) what was the effect of the settlement with the second defendant?
The easiest of these issues to resolve, in my view, is the second: in circumstances where a plan is produced which is based on another plan with a number of changes introduced specifically with a view to producing something which is sufficiently different not to be a copy of the earlier plan, it seems to me inevitable that if that objective is not met and the second plan is found to be a copy of the first, it was produced by a process of copying. Where the second plan is produced as a variation of the first plan, the necessary causal element is present.
Was There A Copy: Approach
The next issue is whether the defendant's plan is a copy of the plaintiff's plan. Is there a sufficient degree of objective similarity between the two plans: S.W. Hart & Co Pty Ltd v. Edwards Hot Water Systems (1985) 159 CLR 466 at 472? There have been a number of cases involving similar issues, where house plans have been copied with some degree of variation, so that in a sense I am following a well beaten path. This provides guidance in the form of some principles as to the correct approach, as well as illustrations of the sort of things that other judges have regarded as making, or not making, enough difference to prevent the second plan from being a copy of the first. However, the ultimate issue in each case is different, because it depends essentially on a comparison of the two plans, and the sets of plans are always different.
The authorities also indicate that ultimately the decision whether or not the defendant's plan is a copy of the plaintiff's plan is a matter for the court, although evidence including expert evidence may be given which involves drawing attention to particular similarities or particular differences: Ancher, Martlock, Murray and Wooley Pty Ltd v. Hooker Homes Pty Ltd [1971] 2 NSWLR 278 per Street J. In the present case some evidence of these matters was given by Mr. O'Keefe, who is not an architect but who has some experience in designing houses and has some experience as a draftsman (p. 9), by the first defendant and by Mr. Shelley, the managing director of the second defendant (p. 73), who was called as a witness on behalf of the first defendant. Some of this evidence was of assistance in drawing my attention to features which I might otherwise have missed, but to be frank most of the similarities and differences are fairly obvious to me simply from an inspection of the two plans, and by taking advantage of the fact that Exhibit 2 (which is generally but not entirely the same as Exhibit 5) is a transparency so that I can place it over the plan in Exhibit 8, which I have done. Besides, none could be described as an independent expert.
One of the principles which is established by authority is that when comparing something like house plans the more common place and straight forward the plan the more precisely the supposed copy has to adhere to the original before it can properly be found to be a copy of the original (Dixon Investments Pty Ltd v. Hall (1990) 18 IPR 481 at 483, 490 at 496); conversely, where there is an unusual or special feature of the original, reproduction of that feature will strengthen the argument that the supposed copy is in fact a copy. There is also the consideration that it is sufficient for the purposes of the Act if the defendant's plan is a copy of a substantial part of the plaintiff's plan. Although the claim alleges copying by both the plan and the defendant's house, the evidence is to the effect that the defendant's house was constructed in accordance with the plan, and the photographs of it (Exhibit 12) reveal only one minor difference which I can see, as to the placing of some appliances in the kitchen. For practical purposes, therefore if the defendant's plan is a copy of the plaintiff's plan then so is the defendant's house. A house can be a copy of a plan: Copyright Act s. 21(3); Lend Lease Homes Pty Ltd v. Warrigal Homes Pty Ltd [1970] 3 NSWR 265
Another general proposition which appears from the cases is that minor changes in dimensions which do not effect the general layout of the rooms or greatly affect the overall proportions of the house are not of any real significance. Such matters are not uncommonly dismissed by other judges in a few words. A careful examination of the two plans reveals numerous such minor differences (and see p. 32), but in view of this approach I shall not deal with them separately.
I think there is another significant point about the comparison of the two plans; although they are not works of art, the fact that they are treated as “artistic works” for the purposes of the Act emphasises the basic proposition that what is protected by copyright is not an idea but the particular embodiment of that idea. Accordingly, I think that a general visual comparison of two plans is likely to be of greater significance than a minute examination of detail, and the unusual or significant features which, if reproduced, are particularly likely to stamp the reproduction as a copy should be the features which are of unusual or striking visual significance rather than functional significance. One of the matters that Mr. O'Keefe said was unusual about his plan was that there were two doors into the bathroom, one leading directly into the main bedroom and one leading into an area which acted as a common entrance to the bathroom, toilet and laundry. This is certainly a feature which is unusual in a functional sense, but its omission from the defendant's plan makes very little visual difference to the plan and it is not a feature which when present is of particular visual significance.
Comparison Of The Plans
For ease in comparing the two plans I shall assume that the top of the page is north, so that the garage doors face south in each plan. The plaintiff's plan, of course, could be built on any alignment, and I do not know whether this happens to correspond with the alignment of the defendant's house, but it will make it easier for me to describe particular features.
Visually, the most obvious difference between the two plans is the effect of enclosing and covering the space to the north of the kitchen and living room. This changes what is essentially a symmetrical T-design lying on its side into an upright P design. The roof of the main part of the house is extended over this open area, so that there is something rather like a square roof coming almost to a point, with an extension at one side at the front, to cover the garage. This does not affect the appearance of the plan very much, but changed the roof line of the elevations, and the appearance of the finished house, to some extent.
The plaintiff's design involved extending parts of the east and west walls of bedrooms 2 and 3, the laundry and bathroom out to the eave line, a distance of 600 millimetres. On the defendant's plan, the eastern wall beside the family room and what is there described as bedroom 3 is straight, but parts of the western wall are extended out to the eave line, being the parts adjacent to bedroom 1, the bathroom, toilet and about two thirds of the side of bedroom 2. There is therefore some extending out to the eaves but it is laid out differently in the defendant's house.
The front door of both houses is set back 600 millimetres with sides angled at 45°. This is an unusual feature of both plans and reflected similarity, although there is a window in one of the sloping walls on the defendant's design. Inside the front door the plaintiff's design has a wall on either side of the doorway only slightly longer than the door, whereas with the defendant's design there is only a wall behind where the door opens. As constructed neither are full height walls: Exhibit 12 shows a half wall with a flat top, and Exhibit 4 walls cut away at the top. There are other entrances to the house in the family room and the laundry which are in essentially the same position on both plans. The plaintiff's plan has a door into the side of the garage, so that it is necessary to come out of the garage before entering the front door, whereas the defendant's plan has a sliding door between the garage and the dining area. Again, this is of functional rather than visual significance. Apart from the window to the dining area, the layout of the windows is similar except that on the plaintiff's plan bedrooms 2 and 3 have windows to the east and west respectively, but none to the north, and there are no windows on the eastern living room wall, whereas in the defendant's plan bedrooms 2 and 3 have windows to the north, and there is a window to the east from the lounge room.
The distribution of the rooms is essentially the same, although there are some minor differenees in dimension and other details. Each kitchen has two angled walls. The proportion between width and length is slightly different, but the two kitchens are generally, I think, quite similar. Bedrooms 2 and 3 are, I think, somewhat larger in Exhibit 8, and the wardrobes are in different positions, the entrance to the laundry and toilet area is slightly different, there is in Exhibit 8 a linen cupboard facing the kitchen not incorporated in the plaintiff's plan, and the wall between bedroom 1 and the dining area is somewhat different, leading to a rather larger dining area.
Various dimensions are slightly different; the plaintiff's house is .8 of a metre longer in the overall east/west dimension, and the defendant's house is .845 of a metre longer in the north/south direction. I do not think it is helpful to dwell on these details. Finally, in terms of a comparison of the overall general appearance without looking at similarities or differences in detail, my overall impression looking quickly at the two plans is that they are quite similar; the overall impression is one of similarity rather than one of difference.
Two lists of differences between the two designs were put in evidence on behalf of the defendant, Exhibit 14 which was a type written version of a list prepared by the first defendant (p. 114) and Exhibit 11, which was a list in the form of a statement by Mr. Shelley, which he verified: p. 79. Exhibit 14 contains 45 numbered differences, although 17 of these are just differences in dimensions. The rest are mentioned in the above analysis, apart from the presence in Exhibit 5 and the absence from Exhibit 8 of the door between bedroom 1 and the bathroom, which I mentioned earlier, and item 16 which distinguishes between a sliding door which is in a wall cavity and one which slides beside the wall, which I regard as trivial. Mr. Shelley, in Exhibit 11, noted the presence on the plans, Exhibit 8, of provision for airconditioning units in bedroom 1 and the lounge, something not present in Exhibit 5, but I think this difference is also trivial, as is the difference in shape of the shower recess and the bathrooms. In other respects, the matters covered are referred to by me above.
Application Of The Test
In Dixon Investments Pty Ltd v. Hall (1990) 18 IPR 490, the full Federal Court approved an analysis by a trial judge which looked at the various parts of the house separately, and said at p. 497 that His Honour did not “apply the impermissible test of asking whether there was a substantial similarity overall between the basic plan and the respondent's house.” On the other hand, in Masterton Homes Pty Ltd v. LED Builders Pty Ltd (G914/94, Full Federal Court, 20/3/96, unreported), Lockhart J said at para. 31 that as a result of his comparison between the two drawings:
“There are obvious similarities and dissimilarities; but overall I am satisfied the conclusion of the primary judge that there are substantial similarities between the two relevant drawings is correct and should not be disturbed.”
I think the point in Dixon Investments may have arisen because of a recognition by the court on p. 495 that it was possible for there to be an infringing copy if the defendant's work bears a similarity to a substantial part of the plaintiff's work, even if it differed markedly in other ways, and that it was not necessary for there to be a substantial similarity overall between the two works, citing Bauman v. Fussell (1978) RPC 485. In that case the trial judge held that there was not an infringing copy, and the point on appeal was that His Honour was not imposing a test which was wrong because it was too high in seeking substantial similarity overall. It seems to me however that if substantial similarity overall is present, that is not a factor which it is impermissible to take into account.
Unfortunately the report in Dixon Investments does not reproduce the relevant plans; in LED Buildings Pty Ltd v. Eagle Homes Pty Ltd (1996) 35 IPR 215, the relevant plans are incorporated into the report. It seems to me that the degree of similarity and difference between those plans is instructive when considering the similarities and differences in the present case. It seems to me that if there was a reproduction of all or a substantial part of the applicant's plans in that case, then a similar approach in the present would produce the same result. The outcome was similar in Robert J. Zupanovich Pty Ltd v. B N. Beale Nominees Pty Ltd (1995) AIPC # 91-163, where there was found to be reproduction of the applicant's plans notwithstanding a significant number of differences in detail listed on pages 39,488-9.
It was said by Street J in Ancher v. Hooker Homes (supra) at p. 289 that the fact that there had been copying of the plans was relevant to whether what was produced was a reproduction of a substantial part, because it added significance to the similarities that exist and diminished the significance of dissimilarities. However, it is not unknown for a court to find that there was not a reproduction of a substantial part even where there was a deliberate copying with alternations, as shown by the decision in Eagle Homes Pty Ltd v. Austec Homes Pty Ltd (unreported, 1.12.97, noted in 14 Building and Construction Law, 368). In that case significantly there was a finding that there was no feature of marked originality in the drawings and the plan was regarded as being common place, with the similarities that were present being not unusual in low cost project homes. Other examples are Ownit Homes Pty Ltd v. D. & F. Mancuso Investments Pty Ltd (1988) AIPC 90-488 and, perhaps, Dixon Investments Pty Ltd v. Hall (1990) 18 IPR 481.
The decision in Eagle Homes however was reversed by the Full Federal Court on appeal: Eagle Homes Pty Ltd v. Austec Homes Pty Ltd (1999) 43 IPR 1. That report includes diagrams of the relevant plans, which shows a degree of similarity I think comparable to the similarity present in the LED case (supra) although the designs are broadly speaking less sophisticated than those under consideration in the LED case. As explained by Weinberg J at p. 28, the court on appeal was of the view that there was a sufficient degree of objective similarity between the two designs to warrant the conclusion that the respondent had in effect reproduced the applicant's drawing as a whole or reproduced a substantial part of it, and that the trial judge's approach disclosed an error of principle. It seems to me with respect that the former conclusion is consistent with the general approach in the other decisions which I have read, and provides some assistance to me in assessing what degree of difference is compatible with a conclusion that there has been a reproduction of the relevant plan or a substantial part of it. I must say, however, I have some difficulty with the other part of the appeal court's reasoning.
The principal judgment is of Lindgren J, who noted at p. 15 that the respondent's design did not reproduce exactly the whole of the applicant's design, but rather the case was one of resemblance between the whole of the two designs, and that this raised the question of how closely the alleged infringing design must resemble the original before it constitutes a direct infringement of copyright, an issue which raised questions as to the dividing line between ideas and their expression. It seems His Honour went on to accept at p. 19 the proposition established by early authorities such as Dixon Investments v. Hall (supra) that in the case of relatively simple plans such as project home plans there will have to be close similarity for infringement to be proved.
However, His Honour then went on to conclude that the trial judge had erred by imposing too stringent a test for reproduction, on the basis that a lower level of similarity should be necessary to establish reproduction where there had been what he described as “subjective copying”, that is where the infringing article was produced by a process of copying from the applicant's article. His Honour said that where subjective copying occurs “there can be expected to be found an infringement, unless it transpires that the product is so dissimilar to the copyright work that the copyright work can no longer be seen in the work produced”. His Honour does recognise that there is a different between a situation where there is evidence of copying and where a finding of the causal connection between the copyright work and the alleged infringing work is simply based on the similarity between the two works, where it may be necessary to a show a relatively high degree of similarity in order to justify the inference of such a causal connection, but in my opinion it does not follow from that proposition that where the causal connection can be proved by some other means, that changes the standard required for degree of similarity to justify the conclusion that one is a reproduction of the other.
I think it is not without significance that Sir Harry Gibbs in Hart v. Edwards (supra) referred to the elements of a sufficient degree of objective similarity and some causal connection in that order, and in Ownit Homes (supra) the Full Federal Court noted that there was authority that the question of infringement involved a two stage inquiry, the first of which was whether objectively there was sufficient similarity in the alleged infringing work: p. 38,242. In that case, counsel for the appellant, who had been unsuccessful in establishing a breach of its copyright at the trial, argued that the trial judge had erred in not attaching significance, when assessing resemblance, to a finding of deliberate copying: p. 38,241. The court expressly concluded at the following page that “there was no positive obligation on him, as a matter of law, to adopt the approach propounded by the appellants”. It seems to me, with respect, that that is inconsistent with the approach adopted by the Full Federal Court in Eagle Homes, where the decision in Ownit Homes does not appear to be mentioned in the report of the judgment. With respect, I prefer the analysis in Ownit Homes.
It seems to me that to require a lower degree of objective similarity to constitute reproduction if there is subjective copying is an approach which must be wrong for two reasons. The first is that it fails adequately to reflect the distinction between the underlying ideas and the particular form in which they are expressed, a distinction to which Lindgren J refers to repeatedly in his judgment. Putting aside the case where the infringing copy is an exact copy of the original, what will have happened is that the “copier” will have produced something based on the original but changed in a way which is intended to make it different. If what the “copier” produces reproduces the underlying idea in a different form, treating this as a breach of copyright will be providing protection to the underlying idea, which is precisely what copyright does not do. The issue must always be whether the alleged copy reproduces the underlying idea in effectively the same form. If the form is substantially the same, that would be sufficient, but it is important not to confuse that test with the question of whether what is reproduced is a substantial part of the original work. The difference between a simple basic common place design and a more sophisticated design is that the former will have much less in the way of distinctive particular form in which the underlying idea is clothed. When looking at whether a simple basic common place design has been reproduced, it is necessary to concentrate on the extent to which a relatively small amount of “clothing” of form has been reproduced rather than the underlying idea, and it seems to me, with respect, that that situation must require a fairly high degree of similarity of the design for there to be a sufficient degree of objective similarity to amount to reproduction.
The other reason why this approach must be wrong is because, for there to be infringement, both tests must be satisfied, that is there must be both objective similarity and a causal connection. The causal connection is what Lindgren J refers to as “subjective copying”, but this is simply the alternative to coincidental production of something which is sufficiently similar to satisfy the first limb of the test. If there is not the causal connection, that is, if there is no “subjective copying”, there will be no infringement, so the approach propounded by Lindgren J in para. 86 on p. 20 is really being propounded as the test for the first limb in all cases of infringement. As such it seems to me, with respect, that it is different from earlier authority on the subject.
I think His Honour may have been led astray by the description of the second limb in terms of “copying”, because to use this expression for the second limb and to decide that question first really begs the question of whether what has been produced is a “copy”. If what has been produced is not a “copy” there cannot have been “copying”. It is therefore necessarily unhelpful and inappropriate to ask first whether there has been “copying” because this will, in practice, be an inquiry as to whether the defendant's design has been based on the plaintiff's. Where the issue is whether the defendant has sufficiently changed the plaintiff's design to prevent it from being a “copy”, it is in my view necessarily entirely unhelpful to be influenced in favour of a conclusion of what was produced was a copy by the fact that it was produced in this way. I have in fact already referred to a conclusion that, if what was produced was a copy, it was produced by copying; I mentioned this first only because it was in the circumstances of this particular case an easy and straightforward conclusion, in circumstances where it was conceded that what was done was to take the plaintiff's design and make what were intended to be sufficient changes to it to prevent the result from being a breach of the plaintiff's copyright.
Conclusion On Objective Similarity
In my opinion, overall there is a sufficient degree of similarity between the plaintiff's plan, Exhibit 5, and the defendant's plan, Exhibit 8, for the latter to be regarded as a copy of the former. The general layout and configuration of the rooms is essentially the same and the somewhat distinctive features in the form of the inset front door with angled sides, and the shape and layout of the kitchen are reproduced. They are perhaps not strikingly distinctive features, but they are at least somewhat unusual. The overall impression is one of similarity rather than difference. There are some differences, but not, I think, of any great significance; they do not strike me as any more significant than the differences between the plans shown in Eagle Homes (supra) and LED (supra) which were found in those cases to have sufficient objective similarity to amount to copies. I do not think that roofing over the area to the north east affects that; the position is rather that the defendant's plan is in substance a copy of the plaintiff's plan with this addition, but where a copy has something added to it, that part which is copied remains a copy. It was argued that the use of angled walls was not unusual, and a brochure was put in evidence, Exhibit 10, showing a number of standard house plans built by the second defendant. Although some of these involve angled walls or angles in the kitchen, none of them resembles the entrance or the kitchen in Exhibit 5 or Exhibit 8.
I am satisfied therefore that both limbs of the test of infringement have been made out, and that the plans used by the defendants constituted infringing copies. The infringement was by the first defendant, because the copies were prepared by the second defendant for and at the request of the first defendant.
It appears that in general the house that was constructed for the first defendant by the second defendant was constructed in accordance with the plans, Exhibit 8. Nine photographs of the first defendant's house were put in evidence (Exhibit 12, p. 95) and with one exception they appear to be consistent with the plans. However, the photograph of the kitchen shows that the stove and the refrigerator are not in the positions shown in Exhibit 8; the hot plates are in the angled wall in the position of the wall over in Exhibit 8, while that oven is next to it along the southern side of the kitchen, immediately next to the refrigerator, which is probably in consequence moved a little east from the position shown in Exhibit 8. This makes the layout of the kitchen in the house as constructed less like the layout of the kitchen in Exhibit 5 than was that in Exhibit 8, although the refrigerator has, I think, ended up closer to the position shown in Exhibit 5. In my opinion, the difference is not significant, and does not prevent the house as constructed from being a material reproduction of Exhibit 5. It is therefore also an infringing copy.
Defence Under Section 115(3)
The first defendant pleads in para. 11 a defence under this provision, alleging that he was not a ware and had no reasonable grounds for suspecting at the time of the infringement that the acts constituting the infringement were an infringement of the plaintiff's copyright. The effect of the subsection is that, where it applies, the plaintiff is denied a remedy in damages but may obtain an account of profits. The house was built for the first defendant to live in and in my opinion there is no question of his having made any profit, and such relief was not sought against him at the trial. In order to avoid an award of damages it is necessary to satisfy both limbs of the subsection, that he was not aware that it was an infringement of copyright, and that he had no reasonable grounds for suspecting that it was.
The first defendant's evidence was that when he showed a copy of the plaintiff's brochure, Exhibit 5, to the second defendant, he asked about copyright considering the sketches belonged to the plaintiff, and was told “That will be no problem. We've just got to change the footings and a few other things”: p. 108. A few days later he went back with his then girlfriend and asked again about copyright and was told “No problems on that” and that if certain changes were made copyright would not be a problem. The first defendant said that he accepted what he was told by the second defendant's representative because they were the biggest builders in Mackay: p. 109. He did not make any further inquiries about copyright. I am prepared to accept this evidence and that, because of what he was told, the first defendant was not actually aware that what was being done constituted an infringement of the plaintiff's copyright. That satisfies the first limb of the defence.
A more difficult question is whether he had no reasonable grounds for suspecting infringement. It has been said that this subsection has not afforded defendants much assistance in practice: Kalamazoo (Australia) Pty Ltd v. Compact Business Systems Pty Ltd [1990] 1 Qd.R. 231. Part of the reason is that it does not take much to amount to reasonable grounds for suspecting. This is different from reasonable grounds for believing, and is, I think, the equivalent of saying that there were circumstances which put the defendant on inquiry as to the possibility of an infringement. This distinction was discussed by Priestley JA in Bank of New Zealand v. Fiberi Pty Ltd (1994) 12 ACLC 48, at 60, where however the distinction does not receive the emphasis I think it deserves. Beazley J said in Polygram Pty Ltd v. Golden Editions Pty. Ltd (1995) AIPC # 91-123 at 39,165:
“Although this section does not speak of a need to make inquiries nor to satisfy its provisions, it is clear from Kalamazoo that the circumstances may be such as to put a respondent on notice, so that unless inquiries are made, the respondent may not be able to successfully assert there were no reasonable grounds to suspect that copyright subsisted in the offending items”.
The same approach in my opinion applies where the issue is whether the defendant had reasonable grounds for suspecting that the copyright was being infringed. It is clear from the defendant's own evidence that he did suspect, but his suspicions were allayed by what he was told by the representative of the second defendant. In Kalamazoo, the reasonableness of the defendant's conduct was assessed in the light of the fact that they were encouraged to believe in the legality of their actions by the conduct and statements of the plaintiff. In Polygram however, the relevant person, although well aware that copyright subsisted in the articles and that what he was doing was copying them, believed that he was not infringing the copyright because he relied on someone else whom he believed to be authorised to allow him to make copies. Her Honour went on to assess objectively the reasonableness of that reliance, and concluded that there were matters which put him on inquiry, that is to say matters which gave reasonable grounds to suspect. Since this is an objective test, it must be capable of applying even if the particular individual did not in fact suspect, as Her Honour seems to have recognised at p. 39,169, although after a consideration of the witness's credit she went on to reject his evidence that he was not aware that the respondents were infringing copyright.
There was a similar conclusion by Burchett J in New England Country Homes Pty Ltd v. Moore (NG 342/95, Federal Court, 9/4/98, unreported). In that case an owner builder was found to have copied a design which belonged to a company in the business of producing kits for the construction of homes, and His Honour rejected his evidence that he did not think that what he did amounted to an infringement, although he also found that he did not lack reasonable grounds for suspecting that what he did amounted to an infringement of copyright. It seems to me, however, that it would be possible to satisfy the first limb of the test but not the second, if the circumstances known to the plaintiff, having made such inquiries as the plaintiff had made, would have caused a reasonable person to suspect (rather than believe) that copyright was being infringed. I do not think it is a question of whether a reasonable person in the defendant's position would have come to the opposite conclusion, that is would have concluded that the plan altered to such extent as it was by the second defendant's representative was an infringement of the plaintiff's copyright; in my opinion it is a question of whether a reasonable person in the first defendant's position, knowing what he knew and having been told what he was told by the representative of the second defendant, would nevertheless still have suspected that what was being done was an infringement of copyright, that is would have thought what was being done might be an infringement of copyright.
In my opinion, a reasonable person would have taken account of the fact that the second defendant obviously had an interest in saying that what was being done was not a breach of copyright, because it was apparent that the first defendant wanted a house which was quite close to the plaintiff's design, and the second defendant obviously wanted his business. A reasonable person would at least have suspected that the second defendant might not be a reliable source of information on that subject, and a reasonable person looking at the plan which was prepared with the changes which were intended to prevent it from being a copy ought to have appreciated the general similarity between the two, and ought to have recognised the possibility that what had been produced by the second defendant was sufficiently close to the plaintiff's design to be a breach of the plaintiff's copyright, even though the reasonable person would not be aware of the legal tests involved, or the light thrown on the application of those tests in this context by the authorities. I think it is of some significance that the possibility of a problem with copyright did occur to the first defendant and in these circumstances it is, I think, helpful to consider whether it was reasonable for his concerns to have been allayed by what he was told by the second defendant's representative. In my opinion, a reasonable person in his position would have been more wary of those assurances, and would have continued to suspect that the obviously similar design remained a breach of the plaintiff's copyright. For that reason I am not satisfied that the first defendant has made out a defence under s. 115(3) of the Act.
Additional Damages Under Section 115(4)
The plaintiff claimed additional damages pursuant to s. 115(4) of the Act. This issue strictly speaking arises after the question of damages generally, but it can be conveniently dealt with first because I think it is relatively uncomplicated, and because I shall be referring in what follows to my conclusion on this point. Section 115(4) of the Act provides:
“Where, in an action under this section:
- (a) an infringement of copyright is established; and
- (b) the court is satisfied that it is proper to do so, having regard to
- (i) the flagrancy of the infringement;
- (ii) any benefits shown to have accrued to the defendant by reason of the infringement;
- (iii) all other relevant matters;
the court may, in assessment damages for the infringement, award such additional damages as it considered appropriate in the circumstances.”
Such damages must be justified by circumstances which involve more than the mere fact that there has been a breach of the plaintiff's copyright, that is more than sufficient to establish the elements of infringement. I accept that additional damages under this section are to be given on principles corresponding to those governing awards of aggravated and exemplary damages at common law: Autodesk Inc v. Yee (1996) 68 FCR 391 at 394. I note that Lockhart J in Polygram Pty Ltd v. Golden Editions Pty Ltd (No. 2) (1987) 38 IPR 451 at 461 said:
“Courts traditionally approach an award of additional damages under s. 115(4) cautiously.”
This was not a case where the breach on the part of the first defendant was flagrant, nor was there anything about his conduct which would have aggravated the harm done to the plaintiff by that infringement. In view of my acceptance of his evidence that he believed that what was occurring was not an infringement of copyright, it would not be appropriate to make an award of additional damages under this subsection.
Assessment of Damages
There are two difficulties which arise in relation to damages. The first is that the authorities do not provide a great deal of guidance as to how damages are to be assessed in a situation such as this. The best discussion I have found was that in Laddie, Prescott and Vitoria “The Modern Law of Copyright and Designs” (2nd ed., 1995) vol. 1, p. 925-6. The second is the effect on such assessment of the terms on which the plaintiff has settled with the second defendant. I should deal first with the question of assessment of damages without regard to the settlement of the claim against the second defendant.
There have been a range of cases in which damages have been awarded or assessed, and I was provided with a helpful list by counsel for the defendant. It seems to me that, where there is some discussion of the basis on which damages should be awarded in such circumstances, that discussion supports as the basis of the assessment a fair fee for the use of the plans the subject of the infringement: New England Country Homes Pty Ltd v Moore [1998] 345 FCA (9 April 1998), McGregor on Damages 16th ed., p. 1271 citing Stovin-Bradford v. Volpoint Properties Ltd [1971] Ch 1007. It was agreed during submissions that the correct basis for assessment of damages in the present case was the “notional licence fee” basis, and I am happy to act on that agreement which I think is appropriate. There was no particularly helpful evidence as to what that amount might be. Mr. O'Keefe said that he did not licence others to use the plaintiff's plan, and would not do so (p. 33, 40), but the plaintiff would charge between $3,000 and $5,000 to prepare drawings from a rough design prepared by a client, if the client wanted something built to his design rather than to one of the plaintiff's designs: p. 35. That, I think, is a different issue.
Mr. O'Keefe said that on one occasion when he was working for another building company, A.V. Jennings, that company charged someone $3,000 to use one of its plans to build a house (p. 34) and he knew of a case where one builder had built to another builder's plans and the dispute had been settled for payment of $5,000 (p. 35), although this was a case of use without prior permission: p. 66. Mr. Shelley said that the cost of having a draftsman draw up a plan was about $450 (p. 80), this being a drawing based on a rough sketch: p. 87. As was pointed out by Burchett J, that is a different exercise, because it involves preparing working drawings, and because it does not involve the skill to devise and develop the plan. He understood that there was a company which would provide licences to use plans from a selection that they had for $500 to $1,000, although this involved the provision of working drawings and apparently a bill of quantities as well: p. 80, 82,90. Mr. Shelley said that the second defendant had licenced others to build to its plans on occasions, about five times in eight years, but he was not asked what the second defendant charged to do this: p. 79. I suppose neither counsel knew what the answer to that question would be, but I regret that I did not ask it. Given the circumstances under which Mr. Shelley came to give evidence, I will not draw any inference against either party because of the failure to ask this question.
In New England Country Homes (supra), Burchett J, who also had very little in the way of useful evidence, adopted a figure of $750. In Dixon Investments v. Hall, (supra) the trial judge assessed damages at $50, but that was in a situation where he found that no infringement had occurred, and rejected an assessment on the basis of a licence fee likely to be charged. On appeal, the Full Court agreed that it was not a case to award damages on the basis of a licence fee, but that the assessment should have been $500 because there was evidence that a draftsman would charge between that figure and $1,000 to produce a plan for a house of the kind in question, apparently including the creative work involved. In Manfal (supra), Thomas J at p. 421 recognised that the basis of assessing damages was “not free from difficulty” and assessed damages at $250 (to which was added an award under s. 115(4) of the Act) apparently as an assessment “in the rough”. In Zupanavich v. Beale (supra), Carr J assessed damages at $1,000, although this was done on a precautionary basis, having awarded an account of profits, but that was a claim by one building company from a competitor. The basis of the assessment there was the fee which would have been charged for the use of the plan.
Section 115(2) authorises the court to award damages in an action for infringement of copyright. There is no suggestion in any of the authorities that I have seen that, in a case where a house is built using plans in infringement of the plaintiff's copyright, the damages should be related in some way to the value of the house. The concept of “damages” ordinarily involves compensating the plaintiff for the loss suffered as a result of the defendant's act, and it is difficult to see that the plaintiff in the present case has suffered any real loss as a result of what the first defendant has done. It is certainly not the case that the plaintiff has lost the opportunity to charge the first defendant $3,000 or more for the use of the plan, since I accept the first defendant's evidence that he would not have paid that amount: p. 113. Indeed, he rejected the suggestion emphatically, and I accept that he would not have paid anything like that, even though he did like the plaintiff's design: p. 104. Indeed his father thought that the plaintiff's plans stood out from the others: p. 94. It seems unlikely in light of the first defendant's evidence that he would have gone back to the plaintiff if the second defendant (and other builders) had just refused to build something which was really in substance a copy of the plaintiff's plan. I think it much more likely that the first defendant would have either abandoned the plan completely, or have made or accepted more extensive changes which would have resulted in the production of a design which did not reproduce the plaintiff's plan. The plaintiff has not lost the profit it would have made on the project had it built the house.
There are situations where damages are awarded, not so much to compensate for actual loss, but in order to protect and vindicate the plaintiff's property right; an example is an award of damages for trespass to the plaintiff's land, where no damage is done to the land, but where the plaintiff is ordinarily recognised as being entitled to more than nominal damages: Inverugie Investments Ltd v. Hackett [1995] 1 WLR 713, at 717-8. The authorities do not treat the hypothetical licence fee test as being a clear and strict measure of damages in such circumstances, (see Chabot v. Davies (1936) 106 LJ Ch 81) and indeed it would be inappropriate to confine a statutory jurisdiction to award damages in such a way. The High Court has recently emphasised that the statutory restriction of the Trade Practices Act to award damages is to be applied flexibly and is not to be constrained by artificial rules about how it must be applied in all cases which are not found in the statute: Marks v. GIO Australia Holdings Ltd (1998) 73 ALJR 12 at 16,21. It seems to me in principle that the same must be true of the statutory jurisdiction to award damages under the Copyright Act. I do not think that the hypothetical licence fee test is ever more than a guide to an appropriate award. I think there ought to be in such damages an element of vindication of the plaintiff's property rights.
On the other hand, I think it is appropriate in all the circumstances for the award to be in a moderate sum[1], and on the basis foreshadowed earlier I would assess damages at $500.
Effect Of The Settlement Of The Claim Against The Second Defendant
There was evidence which was admitted subject to relevance that the plaintiff's claim in these proceedings against the second defendant was compromised on the basis that the second defendant agreed to pay $5,000 together with the plaintiff's costs to be assessed on the Magistrates Court's scale: p. 43, 47. There was no evidence as to whether that amount had actually been paid, but I am prepared for the purposes of considering this point to assume that it has been or it will be. Although building companies have been known to fail from time to time, I think the chance of the plaintiff's having failed to obtain its money from the second defendant under this agreement, given the amount involved and the fact that the second defendant is the largest home builder in Mackay, is quite slim, and I note that in the time since I reserved judgment there has been no application on behalf of the plaintiff to reopen for the purpose of leading evidence that the second defendant has gone into liquidation without paying.
It was submitted on behalf of the first defendant that logically only one notional licence fee was payable in a situation like this, because in a hypothetical case where a licence had been granted, only one fee would have been paid. It was also submitted that the defendants were joint tortfeasors, and that credit had to be given for any amount received in settlement from the second defendant when assessing damages payable by the first defendant. On behalf of the plaintiff, however, it was submitted that the first and second defendants were not joint tortfeasors, but several concurrent tortfeasors, and that the release of one did not bar an action against the other: Thompson v. Australian Capital Televison Pty Ltd (1996) 186 CLR 574 at 600. It was submitted that they were several tortfeasors because the second defendant was guilty of unlawful reproduction of the plaintiff's work, in preparing a plan which reproduced the work and in constructing building which reproduced the work in a different material form, and the first defendant was guilty of infringing the plaintiff's copyright by authorising the second defendant's infringements.
By s. 31(1)(b) of the Act, copyright is the exclusive right, in the case of an artistic work, to reproduce the work in a material form. By s. 36(1), “copyright in an artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorises the doing in Australia of, any act comprised in the copyright”. It follows that if A authorises B to do an act comprised in the copyright, and B does the act, if neither are the owner and neither has the licence of the owner, both A and B will infringe the copyright, both will be liable to an action for infringement of copyright, but the elements in the causes of action will be different. The action against A will have the additional element that the infringing act done by B was authorised by A. Authorisation is a different tort and therefore A and B are not joint tortfeasors: Lahore “Copyright” para. 34,095; Ash v. Hutchinson & Co Publishers Ltd [1936] Ch 489 at 506-7 per Green L.J.
This distinction was reflected in the amended plaint in para. 6, although that pleads against each of the defendants both “doing and/or causing or authorising the doing” of the act alleged to amount to infringement. The pleading is not fully particularised, but it must have been fairly obvious that the case was that the infringing act alleged to have been constituted by the construction of the dwelling was being alleged to have been done by the second defendant and that it was alleged that the first defendant had caused or authorised that. No doubt at the time when the plaint was prepared it was unclear whether the preparing of what was alleged to be copies of the plan had been done by the first or the second defendant. Indeed, it is probably fair to say that the plaintiff's case had opened was that either the first defendant had copied the plaintiff's plan, or the first defendant had caused or authorised the copying of it by the second defendant, because the plaintiff's case was merely that the first defendant had been provided with a copy of the plaintiff's plan by the plaintiff, and that subsequently the house built for the first defendant was built using plans which were a reproduction of the plaintiff's plan, and the house so built was a reproduction of the plaintiff's plan, and I was asked to infer either copying or causing or authorisation of copying from these facts. It is really because of the content of the defence case, and my willingness to accept the evidence of the first defendant and his father that the plaintiff's brochure was provided to the second defendant, and that it was the second defendant that produced the sketch, and subsequently the working drawings, derived from that brochure, that the case against the first defendant is properly identified as being one of causing the doing of the act by the second defendant.
It is not a case of authorisation because there was no purported conferral by the first defendant on the second defendant of authority to do what was done: CBS Songs Ltd v. Amstrad Consumer Electronics PLC [1988] 1 AC 1013 at 1054. I think this is consistent with the approach in Nationwide News Pty Ltd v. Copyright Agency Ltd (1996) 65 FCR 399 at 422, notwithstanding the “relatively broad view of the concept of “authorisation”” there adopted.
Whether the defendants are joint tortfeasors depends on whether their respective shares in the commission of the tort are done in furtherance of a common design: The Kirsch [1924] P. 140 at 146; Thompson v. ACT (supra) at p. 581. This applies also in considering the tort of infringement: CBS v. Amstrad (supra) at p. 1056-7. It is not necessary that one be the agent of the other in the usual sense: Laddie Prescott and Vitoira “The Modern Law of Copyright and Design” (2nd ed., 1995) vol 1 p. 915. In this case, the defendants had a common design, that is, the construction of a house by the second defendant to the requirements of the first defendant, the copies were produced in furtherance of it, and therefore they were joint tortfeasors. At common law the release of the second defendant would therefore have barred the action against the first, under the rule in Brinsmead v. Harrison (1872) LR 7 CA 546: see Ash (supra). But that rule has been abolished by statute, in Queensland by the Law Reform (Tortfeasors Contributions, Contributory Negligence and Division of Chattels) Act 1952 s. 6(a), now Law Reform Act 1995 s. 6(a): see Thompson v. ACT (supra) at 584.
Furthermore, different relief might have been given against the defendants. The pleadings claim in the alternative at the plaintiff's option an account of profits made by each defendant, but in view of the fact that the first defendant built the house to live in there was no question of profit by him: New England Country Homes Pty Ltd v. Moore [1998] 345 FCA (9.4.98). If he had built the house to resell at a profit, the situation may well have been different. But there is no reason to think that the second defendant was not intending to build the house for profit as part of its business, and it may well have made a profit out of doing so. In addition, there is, I think, no reason why, if damages were awarded against the second defendant, additional damages might not be awarded against it under s. 115(4) without making a like award against the first defendant. It is impossible for me to say whether an award of additional damages would have been made against the second defendant, since I have not tried that question, but so far as I can tell the case for additional damages would appear to have been stronger against the second defendant than it was against the first defendant.
It may be of some assistance to consider whether different awards can be made against joint tortfeasors at common law. Since joint tortfeasors are jointly responsible for the one loss damages which are compensatory will necessarily be the same because they will be compensating the plaintiff for the same loss. Difficulties arose at common law where there were grounds for awarding non-compensatory damages against one of two or more joint tortfeasors, for example, where an award of aggravated or exemplary damages would be appropriate against one of them. This problem is discussed by Glanville Williams in “Joint Torts and Contributory Negligence” (1951) who at p. 76 concluded that there was nothing in theory to preclude a court from awarding or withholding punitive damages according to the particular defendant who was sued. He earlier rejected two other ways of avoiding the difficulty, by not awarding punitive damages unless they were appropriate against all defendants, or by making all defendants liable for punitive damages if they were appropriate against any. Neither of these appear to be supported by authority and I would agree that both are inappropriate. He did, however, think there was a difficulty unless only one of the joint defendants was a party to the action, and this led to some discussion of procedural techniques for overcoming this difficulty without losing an award of punitive damages which might be available against the appropriate defendant. Because of later statutory reform, and the decision in Thompson (supra), these procedural difficulties are no longer of concern.
A related question is whether, when there are joint tortfeasors, the plaintiff can waive the tort as against one of them without waiving the tort against the other. Consider a case where A and B jointly commit a tort against C from which A makes a substantial profit, but B does not. Can C waive the tort against A and sue to recover the profit, while retaining the right to sue B to recover damages? Glanville Williams discusses this at p. 15-16:
“It seems that where a joint tort is waived against one tortfeasor, the liability of the latter is no longer a joint one. Thus if A and B are jointly liable for conversion and the plaintiff in an action against A elects to waive the tort and to sue in quasi contract, the measure of compensation is based upon the liability of A alone and the plaintiff cannot compel him to account for so much of the converted property or its proceeds as A has already handed over to B.”
The authority cited for this is Re: Ely ex parte The Trustee (1900) 48 WR 693. In that case however it is not clear that the tort was not waived against both joint tortfeasors.
It is also stated at p. 37n6:
“It may be that where A and B commit conversion as several concurrent tortfeasors, a waiver of tort and judgment in quasi contract against A will bar the action in conversion against B even though the judgment was not followed by satisfaction.”
This however appears to be contrary to the dicta in the House of Lords in United Australia Limited v. Barclays Bank Limited [1941] AC 1. The matter is perhaps put most clearly by Lord Porter, who at p. 50, considered what occurred if there were two separate tortfeasors who had committed separate torts in respect of the same property and the plaintiff elected to sue one in indebitatus assumpsit:
“Is he precluded from thereafter suing the other either in tort or for money had and received? ... It is plain that an action against one such separate tortfeasor for conversion is no bar to an action against another, nor indeed does the signing of judgment against the first end the matter. The plaintiff can even then proceed to judgment against the second, and his rights are not exhausted until from one or both he has obtained the full measure of his loss. If the option be an option to sue in one form or the other, prima facie an action for money had and received against one tortfeasor should be no bar to an action in the same form against another, since the plaintiff by waiving the tort in the one case, even if he be held to have waived the tort in the other case, would still have an action in contract left to him in each.”
There is, however, nothing in that case which expressly considers the position of joint tortfeasors.
The position seems to be put differently in Clark & Lindsell “Torts”, 16th ed. at para. 9-63:
“If a tort be waived by the election of one alternative remedy or an inconsistent right in respect of one of the [joint] tortfeasors, the election is binding as against the other”.
The authority cited is Buckland v. Johnson (1854) 15 CB 145. In that case the facts were effectively the same as the example I gave earlier, and the plaintiff sued B in tort and recovered judgment for £100, the value of the goods, which judgment however was not satisfied. The plaintiff then sued A for money had and received in order to recover the amount obtained by A by selling the goods, £150, but the action was unsuccessful, the earlier judgment being a bar to the claim. The difficulty with that decision is that it may be explained as an example of the proposition that judgment against one joint tortfeasor is a bar to any action against any other; this is the rule in Brinsmead v. Harrison (1872) LR 7 CP 547 which has now gone. It would follow that the first judgment would be a bar to a second action whether or not the tort had been waived.
Another case cited in Clark & Lindsell, Verschures Creameries Ltd v. Hull and Netherlands Steamship Co Ltd [1921] 2 KB 608 has been subsequently criticised, and may be explained on the basis of an election to ratify the unauthorised act of an agent. Also cited is Ellis v. Stenning [1932] 2 Ch. 81, but that was a case where there were two separate acts of conversion, and the plaintiff sued the defendant, not in respect of the act of conversion which was committed jointly with defendants in a previous action which had been brought to judgment (which judgment was unsatisfied), but in respect of a later conversion committed separately. It is therefore a case of separate but factually related torts, and the argument in that case really depended upon the form of judgment in the earlier action for conversion which is a different issue. That issue was whether taking the earlier judgment divested the plaintiff of his title to the goods so as to prevent him from bringing a later action in respect to the different conversion, and it was held that this did not occur unless and until the earlier judgment was satisfied: p. 97. The case however provides some support for the proposition that once the plaintiff has recovered his property or its value from one defendant he cannot enforce a judgment against another: p. 91.
United Australia Limited (supra) established that merely bringing an action did not amount to an election one way or the other, and therefore did not commit the plaintiff on the question of whether he had waived the tort. The opinion was expressed that these were different remedies rather than different rights, and that therefore there was no question of choosing between the alternative remedies until one or another claim had been brought to judgment: p. 30, per Lord Atkin. If there is one indivisible cause of action there is some logic in the proposition that once a claim on it has been brought to judgment, the plaintiff then has to elect between the two different and inconsistent remedies available in respect of the whole judgment, as against both joint tortfeasors.
The Law Reform Act has produced the result that there is no longer one indivisible cause of action against the joint tortfeasors: Thompson (supra) at p. 584. Once that position is arrived at, it follows that rules for which that is the conceptual basis must no longer apply, and in those circumstances it seems to me that there is no longer any objection in principle to waiving the tort as against only one joint tortfeasor. I think if the facts in Buckland v. Johnson (supra) arose today the decision would be different.
In any case, the point in this case is not the general question of whether different remedies can be obtained against joint tortfeasors by a selective waiver of the tort, but whether different remedies are available against different joint infringers under s. 115 of the Copyright Act. It seems to me that there is nothing in that section which requires that the same remedy apply to all joint infringers, or indeed all defendants, and it seems to me that in principle there cannot be any objection to a plaintiff recovering judgment for additional damages against only one of two joint infringers, or obtaining an account of profits against one and damages against another. No such restriction is expressed in the Act, and I think none should be implied. The only restriction is that one cannot obtain, against a particular defendant, both damages and an account of profits: s. 115(2). I think it was open therefore for the plaintiff to sue the first defendant for damages, and the second defendant for an account of profits.
It follows that it is not the case that both defendants are necessarily subject to the same remedy, so if both defendants had been sued to judgment, there might not have been judgment for the same amount against both of them. Furthermore, it is not appropriate to proceed on the basis that the amount payable under the settlement represents full value for the plaintiff's claim against the second defendant. It think it more likely that it involves an element of commercial compromise.
There is, however, a separate rule that a plaintiff cannot receive satisfaction twice in respect of the same loss. Even in the case of several tortfeasors, where it has always been accepted that there could be separate judgments against them in respect of the same loss, satisfaction of one prevented enforcement of any other, and once one judgment was satisfied, that stood as a bar to any further judgment against any other tortfeasor: Thompson v. ACT (supra) at p. 608. I think there is no reason why the same would not apply to joint tortfeasors now. Leaving aside the question of any vindication of the plaintiff's property rights, so far as the damages are compensatory the fact that the plaintiff has already received an amount of damages from another infringer should go to diminish the damages payable by the infringer sued. I do not think there is anything in the Copyright Act to suggest that damages for infringement may be recovered more than once, if they are awarded in respect of the same loss.
Does it make any difference that one tortfeasor has paid an amount which was, or could have been, payment by way of an account of profits rather than as damages? Although these are assessed on a different basis, insofar as a plaintiff has received some payment by way of an account of profits, that payment to that extent prevents the plaintiff from having suffered any loss as a result of the infringement. Damages for conversion will be reduced by the amount of any repayment or other benefit: Solloway v. McLaughlin [1938] AC 247 at 258; E.S. & A. Bank Ltd v. Beatty [1931] St.R.Qd. 291 at 303. There is also authority in the case of a breach of contract that a plaintiff should not be entitled to full damages and complete restitution in respect of the same breach: Baltic Shipping Co v. Dillon (1993) 176 CLR 344 at 359 per Mason CJ. A number of reasons were given for this approach, but all are essentially consistent with the rationale for not compensating twice in respect of the same loss. Reference was made with some approval to authorities where relief in the form of restitution of consideration and damages for breach of contract had been awarded, but with some allowance to prevent an overlap. Where a plaintiff sues for infringement and conversion of the infringing copies, damages are assessed in a way that does not involve duplication: Infabrics Ltd v. Jaytex Ltd [1985] 11 FSR 75 at 86; International Writing Institute Inc v. Rimila Pty Ltd (1994) 30 IPR 250.
I think it follows that, if damages are to be assessed in respect of a tort, the fact that the plaintiff has already received an amount by way of restitutionary remedy from a different tortfeasor in respect to the same tort should be taken into account in diminution of the damages, just as it would be if damages were being assessed in respect of the tort. I suspect that the opposite will also apply, and if a tortfeasor were being sued for an account of profits in respect of a tort where the plaintiff had already obtained not merely a judgment for damages, but actual satisfaction of the damages, the amount recoverable by way of the account of profits would be reduced by the amount of the damages, That would be consistent with the general approach in Baltic Shipping Co (supra) and in Target Holdings Ltd v. Redferns [1996] 1 AC 421, although those cases are not authority for such a proposition, and it is, I think, unnecessary for me to decide that point since in the present case the relief sought is damages.
I have not been able to find any clear guidance in the authorities dealing with this situation, but it seems to me in principle that it must be right that, in circumstances where a plaintiff such as the present sues both the individual home owner and the builder, the fact that compensation is recovered from the builder, either in the form of damages or as an account of profits, must be relevant to the assessment of damages against the home owner, because it reduces the plaintiff's need for compensation.
I think therefore that, so long as it is appropriate for me to proceed on the basis that the settlement monies have been or will be paid, as I think it is, the consequence is that that amount should be taken into account and this means that it would not be appropriate to award the amount of damages which I would otherwise think appropriate.
The next question is, what follows? The Copyright Act does no, make the suffering of loss an element of the tort of infringement, and there have been cases where nominal damages have been awarded: Infabrics Ltd v. Jaytex Ltd (supra) at 85; and see Manfal v. Longuet (supra) at p. 421. I think that the plaintiff is entitled to nominal damages, and the only question is whether the plaintiff should receive a further amount, notwithstanding the absence of loss, by way of vindication of his title to property. I suspect that it would be open in an appropriate case to make an award of more than nominal damages on this basis, but in all the circumstances I am not prepared to do so in this case. I accept that the first defendant did not believe at the relevant time that he was infringing the plaintiff's copyright because of what he was told on behalf of the second defendant. Although I do not think the first defendant makes out a defence under s. 115(3), I do have some sympathy for his position in the circumstances. The plaintiff's title to its property has, I think, been adequately vindicated by the terms of the settlement achieved as against the second defendant. As well, the plaintiff receives some vindication by the award of nominal damages. The damages will not be so low as to be derisory. I will therefore award the plaintiff damages of $10.00. I will invite submissions on the question of costs.
Counsel for the plaintiff: | I.R. Molloy |
Counsel for the first defendant: | A.P.J. Collins |
Solicitors for the plaintiff: | Wallace & Wallace |
Solicitors for the first defendant: | McKays |
Hearing Date: | 17 June 1999 |
Footnotes
[1] This is a relative term; in Fasold v. Roberts (1997) 70 FCR 489, where a diagram of the supposed remains of Noah's Ark was copied, in “a relatively minor infringement of copyright that has inflicted no significant practical loss on the” plaintiff, “modest” damages of $2,500 were awarded. I suppose some judges are more modest than others.