Fire Nymph Products Ltd v Jalco Products (WA) Pty Ltd

IN THE FEDERAL COURT )

AUSTRALIA

)

Nos. WAG 1 of 1 9 8 2

WESTERN

AUSTRALIA

)

WAG 11 of

1 9 8 2

DISTRICT

REGISTRY

)

GENERAL

DIVISION

B E T W E E N :

FIRE NYMPH PRODUCTS	LIMITED and
ALPEN HOLDINGS PTY.	LTD.

Appllcants

and

JALCO PRODUCTS (W.A.) PTY. LTD.

Respondent

KENT HEATING LTD. and

ALPEN HOLDINGS PTY. LTD.

Applicants

and

JALCO PRODUCTS (W.A.) PTY. LTD.

Respondent

CORAM: TOOHEY J.

17 June

1 9 8 3

SUPPLEMENTARY REASONS FOR JUDGMENT

On 5 May 1 9 8 3 I delivered reasons for

~udgment

respect of these two applicatlons whlch, by consent, had

been heard together. At pages 74-75 of those reasons I

summarised my flndings and concluslons

In thls way

I , 1'

In manufacturlng and selling

the Jalco freestandlng unlt

there was a breach of copyrlght

in the drawings and other

material relating to the Kent

tlle fire.

2. Otherwise there was no breach

of copyrlght in respect of

elther the Kent or Fire Nymph

drawmgs and other material.

3 .

Jalco dld not contravene

s.52

of the Trade Practlces Act in

respect of the manufacture and

sale of Its Nordess, Nordanse,

or its home fire freestanding

and inbuilt unlts.

4. There was no passing off of the

Jalco units

as those of Fire

Nymph or Kent.

I ordered that each application stand for ludgment

and that the partles exchange minutes of the

~udgments

thought appropriate. Counsel have now made submissions

as to the form of

~udgment

that should be entered in each

application to give effect to my reasons.

As a number of

matters were canvassed during these submlssions it is approprlate to publlsh supplementary reasons indlcatlng why I direct entry of ludgment in accordance wlth the

minutes attached to these reasons.

In No. WAG

1 of 1982, Flre Nymph Products Limited

and Alpen Holdlngs Pty. Ltd. v. Jalco Products (W.A.) Pty.

Ltd., it was common ground that the applicatlon must stand

dismissed. The only issue between the parties was

as to

the appropriate order for costs; this cannot be divorced from a consideration of costs in the other application.

In No. WAG 11 of 1982, Kent Heatlng Ltd. and Alpen

Holdlngs Pty. Ltd. v.

Jalco Products (W.A.) Pty. Ltd.,

Kent seeks a judgment granting relief by way

of ~n]unctlon,

damages and costs	m respect of its home fire freestanding
model.

In llght of the reasons for ludgment, Jalco does

not question the grantlng of

an injunctlon. But it

challenges an ~n~unctlon

that restrams not only the

respondent by its receiver and manager, directors, officers,

servants, contractors or agents from manufacturing,

dlstributing, advertising, selling or otherwlse dealing

with the heaters manufactured by it and marketed under the

name "Home Fire Freestandlng Model" or any other heater

similar to or substantlally similar to such heater

manufactured by the applicant,but also includes "any

asslgnee, transferee or successor of the Respondent".

Where a company is enlolned

It has become common

practice to order that the defendant or respondent by its

directors, officers, servants or agents be restrained;

though It is sufficient to refer only to the company Itself.

Marengo v. Dally Sketch and Sunday Graphlc, Ltd. (1948)

1 ALL E.R.

406, Bentley v. Nelson (1963) W.A.R. 89

at p.95,

Colbem Palmer Ltd. v. Stock Affiliates Pty. Ltd. (1968-69) 42 ALJR 209 at p.218. The objection to an order purporting to bind the servants and agents of a company rather than

binding the company by its servants and agents

1s that the

servants and agents are ordinarily not before the court. Although I was not referred by counsel to any

authorlty on the point, It seems to me that an

in~unction

restraining not only the respondent but "any assignee,

transferee or successor of the Respondent" and "contractors"

1s also open to oblection the ground that It purports

to bind someone who 1s not before the court. It

1s open

to further

ob~ection

on the ground that It lacks precision and

is likely to create uncertainty. I am therefore not prepared

to grant an injunction in the wider terms sought by Kent.

Jalco does not oppose an order for delivery up of

heaters, dles, ]lgs, components, brochures, advertising

materials and drawings in its custody or power infringing

Kent's copyright, except to the extent that the order

purports to blnd "any assignee, transferee

or successor

of the Respondent". For reasons already given,

I am of the

opinion that the order should not extend that far.

Kent seeks damages

in the sum of $229,600 m respect

of home flre freestanding model heaters sold by Jalco up

to and mcludlng July 1982.

This amount is arrived at on

the basis of

656 units sold by Jalco

at a

prlce of

$350

each.

The legal justlflcation for assessing damages in thls way

is to be found In

s.116(1) of the Copyright Act which

entitles the owner of the copyright infrlnged to the rights

and remedles, by way of an actlon for conversion, to which

he would be entitled if he were the owner of the copy

and had been the owner since the tlme

i was made.

Counsel for Jalco did not dispute that Kent

was

entitled to damages calculated

In this way. But he

submitted that there should be deducted from an amount

so calculated expenses incurred by Jalco in advertlsing

and promoting the sale of the heaters. It

was argued

that these expenses lncluded costs lncurred

by Mr. Blrd,

Jalco's managlng dlrector, in promotional visits to the eastern states and also costs incurred in advertising the infrlnging products.

In this respect Jalco faces two difficulties. The

first is to satisfy the court that it

1 s

n prlnciple

entltled to a deduction for any amounts

so expended. The

second is to demonstrate on the evldence what amount should

be deducted if the principle can be made good.

Authorlty for the prlnciple

for which Jalco contends

may be found In Caxton Publlshing Co.

v. Sutherland Publishing

Co. (1939) AC 178, in particular in the judgment of Lord

Thankerton at p.185, Lord Roche at p.194 and Lord Porter

at pp.205-206.

As to that decislon, Laddie, Prescott

and Vitorla: The Modern

Law of Copyright

para. 12.43 comment :

"It is

by no means clear from the

report of that case whether the

deduction of expenses was argued

by counsel for either party. In

any event lt must be borne in

m m d

that there are

a number of

authorlties whlch suggest that

expenses should not be deducted".

The authors refer to John Lane, The Bodley Head Ltd.

Associated Newspapers Ltd. (1936) 1 KB 715; Muddock v.

Blackwood (1898) 1 Ch 58; Bravy v. Donaldson (1926) App D

337 ( S . Afr.).

See also Lahore: Intellectual Property in

Australla - Copyright para. 1425.

It 1s unnecessary for me to attempt to reconcile the authorltles referred to. If lt is the positlon that the value of a converted artlcle may be reduced by deducting

all expenses necessarlly incurred by the defendant after

conversion, the fact 1s that In the present case it was not shown

that any such expenditure had been incurred. It was not estab-

lished that money. expended in promotional visits and advertising

was after the act of conversion, that is after the manufacture of

the offendlng unlts. There 1s nothlng in Caxton Publishing

Co. v. Sutherland Publishing Co. to suggest that it

proper to make allowance for expendlture incurred before

conversion even though it

is with a view to promoting

the

product to be manufactured thereafter. In any event

Mr. Bird's testimony does not satisfy

me that the expenditure

in question was necessarlly incurred in promotlng the sale

of the infringlng model as opposed to other unlts

manufactured and sold by Jalco.

I am not persuaded that either

in principle or on

the evldence it would be appropriate, in dlrecting the

Dlstrict Registrar to enqulre into and determine the number

of home fire freestanding model heaters sold by the respondent

l .

between 1 August 1 9 8 2 and the date of judgment, to

require hlm to have regard to any expenses necessarily

lncurred by Jalco after conversion. Indeed the evidence

of Mr. Blrd, upon which Jalco relies, relates to

expendlture lncurred before

1 August.

There remains the question

of costs. Counsel for

the partles agreed that as the two applications were heard

together it would present enormous dlfflculties if an

attempt was made to lsolate the costs referable to either

application. It was common ground that costs should be

taxed as one set of costs and that the fate of the various

causes of action should be reflected in some proportronal

adjustment. I agree that this 1 s the sensible course.

The applicants seek an order that the respondent

pay to Kent two thlrds of the applicants' costs of applications

WAG 1 of 1 9 8 2 and WAG 11 of 1 9 8 2 and that the respondent

recover from the applicants one third of

Its costs lncurred

in respect of both applications. The respondent adopts

a somewhat similar approach except that In respect

WAG 1 of 1 9 8 2 it seeks an order that Kent pay

one third of

Jalco's costs of both applications and that Alpen Holdings

pay one slxth of Jalco's costs

of those applicatlons.

It also argues that in

WAG 11 of 1 9 8 2 it should pay Kent

only one slxth of the appllcants' costs of both applications.

In broad terms rt may be said that Kent succeeded in

respect of its freestanding model, obtaining ludgment by

way of ln]unctlon, dellvery up and a substantial award

of damages. It falled m respect of Its inbuilt model.

Alpen Holdings falled

In both appllcations. Jalco succeeded

entlrely in respect of the Fire Nymph actlon No. WAG

of 1982. But to dlvlde the costs neatly Into one thlrds

would not be a true reflectlon of the tlme spent on

partlcular issues durlng the composlte

hearmq. In

partlcular,the tlme attrlbutable to Alpen Holdings' claim

was much less than one third of the total time spent, even

allowlng for the fact that some evidence regardlng

simllaritles and dlsslmllarltles of products bore upon that

company's clalm for passing off.

In my vlew the applicants' proposal

1 s a reasonable

one.

It gives them two thirds

of thelr costs of the

composlte proceedmgs and gives the respondent one thlrd

of Its costs. Thus In two respects the applicants are

mulcted In costs

by reason of the issues on which they

failed. That

1s the order I propose and there will be a

set off in respect

of the costs when taxed.

Attached to these reasons is a minute of the

~udgment

which I propose to enter in each appllcatlon.

I certlfy that thls and the

seven preceding pages are a true copy of the Supplementary

Reasons for Judgment

herem

of hls Honour Mr. Justlce Toohey

Associate

Dated:

17 June 1983

IN THE FEDERAL COURT )

OF AUSTFGLIA

)

WESTERN AUSTRALIA

)	No. WAG 1 of 1 9 8 2

DISTRICT

REGISTRY

GENERAL

DIVISION

B E T W E E N :

FIRE NYMPH PRODUCTS LIMITED

First Applicant

ALPEN HOLDINGS PTY. LTD.

Second Applicant

and

JALCO PRODUCTS (W.A.) PTY. LTD.

Respondent

MINUTE OF JUDGMENT

1. Thls

application

stand

dlsmlssed.

2. The applicants pay to the respondent one third

of the respondent's costs

of this application and of

application WAG 11	of 1 9 8 2 , such costs to be taxed as
one set of costs.

3 . The costs so payable by the applicants to the

respondent be set

of f against the costs payable by the

respondent to the first named

applicant in application

WAG

11 of

1 9 8 2 .

IN THE FEDERAL COURT	)
OF AUSTRALIA	1

WESTERN

AUSTRALIA

No. WAG 11 of 1982

DISTRICT

REGISTRY

)

GENERAL

DIVISION

B E T W E E N :

KENT HEATING LTD. and

ALPEN HOLDINGS PTY. LTD.

Applicants

and

JALCO PRODUCTS (W.A.) PTY. LTD.

Respondent

MINUTE OF JUDGMENT

An in-~unction

restraining the respondent by its

receiver and manager, directors, officers, servants

or agents from manufacturing distributlng advertising

selling or otherwise dealing with the heaters manufactured

by it and marketed under the name "Home Fire Free Standing

Model" or any other heater similar to or substantially

slmllar to such heater manufactured

by the appllcants.

2. The respondent within 14 days of the date hereof

deliver or cause to be dellvered up

all heaters, dies,

~igs,

components, brochures, advertising materlals and

drawmgs in its or their custody or power Infringing the

appllcants' copyrlght in the drawings set out In

paragraph 14 of the statement of claim and within

7 days

thereafter make and serve upon the applicants' solicltors

an affldavit verlfyinq that the respondent

no longer has

In its possession, custody

or power any such heaters, dies,

jlgs, components, brochures, advertising materials and

drawings and that dellvery up has been made	m ccordance
with this order.

3. (a) The respondent do pay to the first named

applicant

damages In the sum of $229,600.00 in respect of

Home Flre Free Standing Model heaters sold by the

respondent up to and includlng

July, 1982.

(b) The District Reglstrar enquire into and determine

the number of Home Fire Free Standing Model heaters

sold by the respondent between 1 August 1982 and

the date of this judgment and there be ludgment

for the first named applicant for damages in respect

of such heaters for a

sum to be calculated by

multiplying the number of such heaters sold durlng

the said period by $350.00.

to the first named applicant

damages in the sum

of $3,250.00 in respect of Home

Fire In-built Model heaters (Model A) sold by the respondent.

4. The respondent do pay to the flrst named applicant

two thlrds of the applicants' costs of this appllcatlon and

of application WAG 1 of 1982, such costs to be taxed as one

set of costs.

There be

no o rde r

for c o s t s

a g a i n s t

t h e

s e c o n d

named

a p p l i c a n t .

[1983] FCA 123

17 Jun 1983