Microsoft Corp v CT Group (Australia) Pty Ltd

[1997] FCA 750

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	)   NG 304 of 1996
)
GENERAL DIVISION	)

BETWEEN:             

MICROSOFT CORPORATION
First Applicant

MICROSOFT PTY LIMITED
Second Applicant

  AND:  

CT GROUP (AUSTRALIA) PTY LIMITED
First Respondent

TONY POLCINO
Second Respondent

JUDGE:	BURCHETT
PLACE:	SYDNEY
DATED:	5 AUGUST 1997

REASONS FOR JUDGMENT

BURCHETT J

In this matter the first respondent was represented by a solicitor at one stage, but during the course of the preliminary matters going to the preparation of the case for hearing, a notice of ceasing to act was filed by that solicitor; and although notified of directions the first respondent has not since taken any step to comply with them.  A notice to admit essential facts was served at its registered office, and was not responded to.

The applicant now moves for relief, relying on Order 10 rule 7, the rule providing for failure to comply with an order directing that a party take a step.  In accordance with the authorities, the applicant has accepted the burden of making out a case by appropriate evidence.  I am satisfied, having regard to that evidence, that a case has been established for conversion damages for infringement of copyright, the damages to be calculated in accordance with the principles which I recently discussed in Autodesk Inc v Yee (1996) 139 ALR 735, and with which Lockhart J dealt in an unreported decision delivered 30 July 1997 in Polygram Pty Limited v Golden Editions Pty Limited.

In the latter case, Lockhart J considered the position regarding an award of interest in respect of damages calculated on the conversion basis for breach of copyright.  He held that interest should be awarded to the extent that such damages are compensatory, but not otherwise, and he accepted that the assessment, to use his words, is “arbitrary to some extent.”  I accept his view in both respects.  The arbitrariness of endeavouring to make an assessment of this kind has given me some pause, and I think a court should be careful not to exceed the proper range of the power to award interest which has been conferred on it.  Where the award has to be a somewhat arbitrary assessment, the Court should take care that this assessment does not err on the high side.

I have decided, in this case, to award approximately one third of the amount which would be awarded if interest were calculated on the full amount. Accordingly, I propose to enter judgment for the amount of $1,941,101.20 by way of conversion damages, together with an amount of $120,000 interest.  The calculation on which the conversion damages are based was made in United States dollars, the Australian dollar equivalent being calculated at the exchange rate at a particular date.   I have been informed that an application of the current exchange rate would not reduce the figures, and that the applicant is content to accept the figures already calculated.  Accordingly, judgment will be entered in accordance with the short minutes, as altered by the variation of the amount of interest, and as further altered by the deletion of paragraph 5.  I initial the minutes for identification, and also initial each page of the schedule.

I certify that this and the preceding one (1) page are a true copy of the Reasons for Judgment herein of the Honourable Justice Burchett

Associate:

Dated:            12 August 1997

Counsel for the Applicants:	Mr J V Nicholas
Solicitors for the Applicants:	Mallesons Stephen Jaques
Date of Hearing:	5 August 1997