Plantagenet Press Pty Ltd v Advance Press Pty Ltd - [2002] WADC 16

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: PLANTAGENET PRESS PTY LTD -v- ADVANCE PRESS PTY LTD [2002] WADC 16

CORAM: GROVES DCJ

HEARD: 23-24 JANUARY 2002

DELIVERED : 1 FEBRUARY 2002

FILE NO/S: CIV 2540 of 2000

BETWEEN: PLANTAGENET PRESS PTY LTD (ACN 059 074 887)
Plaintiff
AND
ADVANCE PRESS PTY LTD
Defendant

Catchwords:

Negligence - Film negatives for publication of books delivered to printer - Duty of care to look after negatives - Failure by printer to return negatives - Negatives lost - Damages for cost of replacement - Turns on own facts

Legislation:

Nil

Result:

Judgment for plaintiff

Representation:

Counsel:

Plaintiff: Mr RW Richardson
Defendant: Ms PE Cahill

Solicitors:

Plaintiff: Mallesons Stephen Jaques
Defendant: Basile Hawkins

Case(s) referred to in judgment(s):

Roman Catholic Archbishop of Perth & Anor v Bishop & Anor, unreported FCt SCt of WA; Library No 950470; delivered 7 September 1995

Case(s) also cited:

Ashby v Tolhurst [1937] 2 KB 242
Brambles Security Services Ltd v Bi-Lo Pty Ltd (1992) A Tort Rep 81-161
David v Pearce Parking Stations Pty Ltd (1954) 91 CLR 642
Fankhauser v Mark Dykes Pty Ltd [1960] VR 376
Joseph Travers & Sons Ltd v Cooper [1915] 1 KB 73
Levison v Patent Steam Carpet Cleaning Co Ltd [1978] QB 69
Liesbosch (Dredger) v SS Edison [1933] AC 449
Moorhouse v Angus & Roberson (1) Pty Ltd [1981] 1 NSWLR 700
Port Swettenham Authority v TW Wu & Co (M) Sdn Bhd [1979] AC 580
S Davis & Co Ltd, In re [1945] Ch 402
Sydney City Council v West (1965) 114 CLR 481

GROVES DCJ: At the close of the plaintiff's case the defendant conceded on the issue of liability. That was not surprising as will become apparent from the facts. The conduct of the defendant by its denial of liability on the pleadings and the manner in which the defence case was presented leaves much to be desired so far as the proper conduct of an action is concerned and the utilisation of the court processes and resources. The defendant did not lead evidence. The issues for determination are whether the plaintiff is entitled to damages and if so the quantum of those damages. The following are the facts as I find them to be.
Trish Ainslie and Roger Garwood are professional photographers. At all material times they together with another were directors of the plaintiff. In or about 1995 they conceived the idea for the publication of a series of books, to be known as the Nomad series. The publications would be directed to the tourist market. The books would contain photographs taken by Ainslie and Garwood, supplemented where necessary by the photographs of others, and approximately 1,500 words of text commissioned from two writers. The first four books in the Nomad series were to be on the Kimberley, Broome, Cape Country (Margaret River region) and Perth and Fremantle. Further books in the Nomad series were planned to follow.
The photographs and text for each book were taken to Rick Lambert, a graphic designer, to design the layout. The layout was then provided to Quadrascan where the process of colour separations which produced film negatives from which the books could be printed was undertaken. Lambert recommended to the plaintiff that the defendant be engaged to print the books. Garwood had previous contact with the defendant in the late 1970's and early 1980's so he proceeded to make contact and obtained a written quotation for printing of the books. Receipt of the quotation was followed by a meeting in about mid September 1995 when Ainslie and Garwood went to the defendant's premises at Bassendean and there met with the defendant's manager, Ken Bagley. They discussed production of the books with Bagley and delivery dates and informed him that Lambert would oversee production of the books. They were optimistic about the books and believed that the series would sell well and that in the future they would be looking to publish re‑prints. They enquired of Bagley whether the film negatives from which the books were to be printed could be stored with the defendant pending re‑prints. Bagley advised that there was a new storage facility on the premises and that the negatives could be there safely stored. Bagley invited them to tour the printing facility during the course of which they were shown the storage area. Bagley was instructed by Garwood to proceed with production of 4,000 copies of each of the four books.
The books were duly printed. Copies of each were tendered (Exhibit 1). They are each 15 cm x 15 cm comprising 64 pages of gloss paper with a cover jacket being of similar design for each book thereby readily identifying them as being of a series. The photographs are of high quality and they and the text have a timelessness about them such that the content would not become outdated. Each book contains approximately 45 photographs.
For reasons unrelated the plaintiff ran into financial difficulties and was not immediately able to pay the defendant's printing charges. However within 12 months full payment had been made. The film negatives were retained by the defendant.
In about June 1999 the plaintiff decided to re‑print the four Nomad series books. Ainslie contacted the defendant and was referred to one, Kerry Harford. Harford was aware that the defendant had previously printed the Nomad series. Ainslie requested a quote for a range of quantities of each of the books and she informed Harford that the film negatives for the books were still with the defendant. Harford indicated that he would prepare a quotation and look into the whereabouts of the film negatives. Ainslie subsequently received a telephone call from Harford and was told that he had not been able to locate the negatives. There then followed a number of telephone conversations and an exchange of correspondence during the course of which, inter alia, Ainslie was informed that the film negatives had been lost and that the "defendant's insurance company are prepared to cover the replacement of the missing film" (Exhibit 24). In response to the latter statement Ainslie, as requested, provided details of the estimated costs (Exhibit 23). Nothing further eventuated. The issue of the writ of summons commencing these proceedings then followed.
The statement of claim alleges that the defendant was in breach of a duty of care and was thereby negligent in failing to look after the film negatives. It claims that:
"9.As a result of the defendant's refusal to deliver the said negatives or wrongly converting the same to its own use and/or the defendant's negligence the plaintiff has suffered loss and damage."
That loss was particularised as being what would be the cost to the plaintiff of replacing that which had been lost. By its defence the defendant denied that the film negatives had been lost and further claimed a general lien over the goods and a right to dispose of the goods and also claimed that the plaintiff had transferred ownership of the negatives to the defendant. The latter claim was abandoned at the commencement of trial. As previously mentioned at the close of the plaintiff's case the defendant admitted liability conceding that it had lost the film negatives.
The cost of replacing the film negatives so that the books can be reprinted has not yet been incurred by the plaintiff. The evidence was that the plaintiff is not in a position financially to incur that cost. Nor is it just a simple matter of sending the original photographs and text back to Quadrascan to reproduce the film negatives. Once Quadrascan had undertaken the colour separations and created the film negatives the layout comprising the photographs and text were returned to the plaintiff. The transparencies which had been obtained from other photographers were returned to them. Because Ainslie and Garwood had no further use for a number of their own photographs they were forwarded to various photographic libraries around the world for which they received a payment and/or royalties when they are reproduced. On the evidence of Garwood and Ainslie it is totally impractical to attempt to recover these images from the photographic libraries. Their cataloguing does not easily facilitate identification of transparencies submitted and inestimable time and cost would be incurred in attempting the exercise. Over the years Ainslie and Garwood have sent transparencies to eight photographic libraries world wide once they have no further use for the photographs. This is not the main part of their photographic work and so they have not maintained any record as to which photographs were sent to which library. They have no need to maintain such records. Their evidence as to the impracticality of recovering transparencies from film libraries was uncontradicted. Nor did they make or retain dupes (duplicates) of the transparencies for the reason that they had no further use for the photographs and that in any event it is the case that duplicates from originals inevitably suffer from a loss of quality which would render them less suitable for use for reproduction of high quality photographic works. Ainslie has undertaken an audit of the photographs which were used in the four books. She identified those photographs which she and Garwood still hold and which can be reused. Of the six photographers from whom photographs were originally obtained Ainslie has contacted three of them and endeavoured to contact another. The photographs of two are available for re‑use and those of the third are now lost. Another photographer cannot be contacted. As to the photographs of the other two photographers it was Ainslie's evidence that it would be less expensive to re‑shoot those photographs, whilst shooting those photographs of their own which are not now available, than to pay them the royalty for re‑use of those photographs. Ainslie's summary of non‑availability of Nomad pictures (Exhibit 27) indicates that for the Kimberley book 24 photographs are no longer available, Broome 15, Cape Country 29 and Perth and Fremantle 31. The fact that these photographs are not now available and/or cannot be obtained will require Ainslie and Garwood to attend in the various locations at different times and over a period of time to re‑shoot images similar to those photographs which are not available. It has to be accepted that the unavailable photographs cannot be exactly reproduced and in some instances Ainslie and Garwood would not be able to reproduce the content of others, for example because an event has long since passed, particular buildings may no longer be standing and permits may not be available to enter particular areas. Nevertheless the intention as stated by Ainslie is to take photographs similar and as near in content as those which are now unavailable. That is to replace so far as is possible with like images. The cost of this exercise is particularised and dealt with later in these reasons.
In response to the plaintiff's claim for damages counsel for the defendant argued two issues. First that the likelihood that the costs will be incurred had not been established to the requisite standard and secondly that the requirement to re‑shoot now unavailable photographs was not foreseeable and therefore the claim for damages is too remote. The defendant also raised issue as to the reasonableness of the costs which might be incurred. I will deal with that issue when dealing with damages.
As to the first issue the defendant says that because the cost of replacing the lost film negatives has not yet been incurred it is only a prospective loss and the plaintiff has failed to discharge the onus on the balance of probabilities as to the likelihood of these costs in fact being incurred. Implicit in this submission is the proposition that it is unlikely that the plaintiff in fact will proceed to reprint the books. The basis for this argument is firstly the period of time which has elapsed since the books were first published in 1995 by reason of which they might be regarded as being out of date, secondly the financial position of the plaintiff and its inability to undertake the exercise of replacing photographs of its own accord and thirdly, as I understood the submission the financial circumstances of the plaintiff were in any event dependent upon the outcome of this action.
As to the likelihood of the plaintiff proceeding to replace the non available photographs and then proceed to reprint the books it is the fact as I find it to be that Ainslie in June 1999 then not knowing the film negatives had been lost approached the defendant for a quotation to reprint quantities of each book. That of itself is evidence so far as the plaintiff's intention to republish the books is concerned. Both Garwood and Ainslie gave evidence that it was their intention to proceed to replace the now unavailable photographs and republish the books. They reiterated that intention under cross‑examination and whilst defence counsel contended that their responses were not emphatic I am not able to conclude that that weighs against the likelihood that they will proceed. As to the period of time elapsed since publication that argument really takes the matter nowhere. 4,000 copies of each book were published on the first printing. Presumably when Ainslie sought a quotation to re‑print the books existing stocks were low. In broad terms 1,000 copies of each book had sold each year since the first printing. Since 1999 the parties have been embroiled firstly in correspondence and since November 2000 in litigation. In these circumstances the plaintiff cannot be criticised for delay in proceeding to take steps towards replacement of lost transparencies. Likewise as to the plaintiff's financial position that is not relevant so far as the likelihood or otherwise of the plaintiff proceeding towards reprinting the books is concerned. To the extent that I allowed cross‑examination of Ainslie and Garwood as to the plaintiff's financial situation there is nothing to suggest that if the plaintiff were to receive damages as a consequence of this action that those moneys would be dissipated against any current liabilities. The plaintiff overcame the financial difficulty which beset it in 1995/1996 and is still an existing legal entity. No attempt was made to compel the plaintiff to produce its financial accounts which might have been expected to provide the best evidence if the defendant truly believed that to be the situation. The financial circumstances of the plaintiff may well be dependent on the outcome of these proceedings. Given the resources by way of damages to enable the plaintiff to replace the unavailable photographs and therefore the film negatives it will be in a position to proceed with a reprint of the books. It should not be denied that opportunity simply by unsubstantiated speculation on the part of the defendant.
I am satisfied to the requisite standard that it will be necessary for the plaintiff to incur costs in replacing that which has been lost and I am likewise satisfied as to the likelihood of these costs being incurred and which will necessarily be incurred to enable the books to be reprinted.
The second argument advanced on behalf of the defendant was that the requirement to re‑shoot transparencies which are not now available was not the defendant's fault and was not foreseeable and therefore such damage is too remote to be compensated. On behalf of the defendant it was contended that it could not have been within the contemplation of the defendant at the time when the film negatives were submitted that the plaintiff would send transparencies away to stock libraries, would not keep a record of where those transparencies were sent so as to be able to recover originals if necessary and did not retain duplicates of those transparencies. First I am satisfied that from the first meeting in September 1995 there was in contemplation the possibility of requiring re‑prints of the books. No doubt by retaining the film negatives the defendant would have the expectation that if re‑prints were required that they would get the job to do the re‑prints. By reason of the nature of its business the defendant must be taken to know the process whereby the film negatives which were supplied to it and from which the books were printed were produced. That is that it involved a number of transparencies and written text which had been collated for the purpose of production of the film negatives.
The response to the defendant's contention must be that if the film negatives were lost by it that expense of whatever nature and how incurred would be needed to replace that which had been lost. Having created the film negatives from which the books could be printed and from which re‑prints could be printed there was no need for Ainslie and Garwood to retain the original transparencies against the risk that the defendant might lose the film negatives. That is, the obligation of the plaintiff insofar as retaining the original material is not extended to the point of anticipating loss. It is no answer for the defendant to contend that the plaintiff should have retained either the original or duplicate transparencies or catalogued to whom they had disposed of those transparencies. The argument of the defendant is akin to suggesting that the plaintiff was causative of its own loss and hence the requirement to incur expenditure to re‑shoot the photographs. This cannot be right and I do not accept that as a proposition.
The necessity for the non available photographs to be replaced is not too remote and the plaintiff is not disentitled from recovering the expense which it is likely to incur in replacing the non available transparencies.
Unlike the need to re‑shoot the photos the defendant did not argue that the costs for separation and design would not be foreseeable in the event that the film negatives were lost.

Damages

The plaintiff has particularised the cost of replacing that which was lost as follows:
Out of pocket costs of producing photographs
(a)     Perth‑Fremantle Book:
(i)     Film costs:
126 rolls of film at $35.20/roll      $4,425.00
(approximately 6 rolls per day per
photographer of 10 to 11 days of
shooting – say 10.5 days).
Includes processing into slides.
(ii)     Incidentals:
Petrol, parking 80c/l $7/day               $75.00
$4,500.00     $4,500.0
(b)     Cape Country Book:
(i)     Film costs:
126 rolls of film at $35.20/roll      $4,425.00
(again based on 10.5 days of
shooting even though time taken
will be 21 days because of the
extra travelling required).
(ii)     Fuel costs:
$25.00/day for 21 days  $525.00
$1/litre
(iii)    Accommodation costs:
2 people for 3 weeks at $50.00/
person per night (caravan park)     $2,100.00
$7,050.00   $7,050.00
(c)     Broome and Kimberley Books:
(i)     Film costs:
252 rolls of film at $35.20/roll      $8,870.00
(again based on 10.5 days of actual
shooting per book).
(ii)     Fuel costs:
3 trips of approx 10,000 km          $6,120.00
per trip. Usage of 17km/100km
at $1.20/litre
(iii)    Accommodation costs:
2 people for 6 weeks at $50.00/
person per night  $4,200.00
$19,190.00 $19,190.00
(d)     Labour costs of producing photographs
(i)     1,200 hours for 2 photographers   $60,000.00
at $50.00/hour (based on a total
of 11 weeks for the 4 books at
55 hours per photographer per
week rounded down to 1,200
hours)  ________
$60,000.00 $60,000.00
Separation costs
(i) $3,325.00/book x 4 $13,300.00 $13,300.00
Design costs
(i) $2,150.00/book x 4 $8,000.00 $8,000.00
$112,550.00
In Roman Catholic Archbishop of Perth & Anor v Bishop & Anor, unreported FCt SCt of WA; Library No 950470; delivered 7 September 1995 confirmed on appeal Anderson J said:
"In the case of the damage, loss or destruction of chattels the measure of damages is usually the cost of repair or replacement by purchasing in the market. Where a lost chattel cannot be replaced by purchase in the market 'and it is reasonable to have a substitute made, the cost of the substitute may provide the measure of damages'; 12 Halsbury 3 Ed par 1163 citing J & E Hall Ltd v Barclay [1937] 3 All ER 620.
In the case of destruction of a profit earning chattel, used in the course of business, the bailor is entitled to loss of profit during the period which is reasonably required to replace it: Liesbosch (Dredger) v SS Edison [1933] AC 449. It goes without saying that the bailor cannot have both value of the chattels lost and the cost of replacing them."

As I have indicated earlier, I am satisfied that it is reasonable that substitute photographs be taken so as to enable complete film negatives to be made from which the books can be printed. Thus the measure of damages is the cost to be incurred in getting to that stage.
The calculations so far as the requisite number of rolls of film and travelling and accommodation expenses were prepared by Ainslie in consultation with Garwood. It was their evidence that the estimates were conservative. An attempt was made at challenging the estimates and the associated costs but neither of the witnesses were moved from their evidence. No evidence was led on behalf of the defendant to challenge or contradict this evidence. Again as to the allowance of $50 per hour for Ainslie and Garwood's time, this again was said to be conservative. Hourly rates for professional photographers greatly exceeds this sum. Whilst they had not charged the plaintiff for the time which they had expended in taking the original transparencies they had at that time received wages from the company. Whether or not Ainslie and Garwood re‑shoot the photographs or the plaintiff engages another or other professional photographers to do so I am satisfied that the cost of doing so is a cost which will necessarily be incurred. I do not accept the defendant's contention that no labour cost at all will be incurred by the plaintiff. What is required is for a series of photographic expeditions to be undertaken which but for the negligence of the defendant would not have been required. It is no answer to say that because Ainslie and Garwood were not paid an hourly rate for their time when the original negatives were shot that they should be expected to give their time to the company to re‑shoot the photographs for nothing. That is totally unrealistic.
Defence counsel criticised the reasonableness of those costs by suggesting that the plaintiff had not adequately addressed the issue as to the necessity to re‑shoot photographs against the opportunity to either recover photographs from photographic libraries or from other photographers or indeed to obtain replacement photographs from the photographic libraries to which they had sent transparencies. I accept the evidence of Ainslie which was neither controverted nor contradicted that the most economical way of replacing the now non available photographs with others of similar content and of the requisite standard was to undertake the re‑shooting programme as proposed. I am satisfied also that as Ainslie and Garwood will be re‑shooting in each of the areas covered by the books that it is more economical that they re‑shoot photographs which will replace those of other photographers to whom a payment would otherwise have to be made if their photos were to be re‑used again. Again that evidence although criticised by defence counsel was not contradicted.
As to the claimed costs for design and processing to produce the new film negatives from which the books can be printed I heard evidence of Aldo Trinca of Pretone Graphics. In 1999 he was asked to give a quotation for the cost of reproducing the books. His quotation (Exhibit 26) for pre‑press and design totalled $21,900. Although that quotation was given in 1999 he would be prepared to hold to that figure today. It was put to Mr Trinca that the photographs and text in the book could be scanned and from that new film negatives could be produced. His response was that for a quality production that was not feasible because in scanning both photographs and text as published in the book there would be a loss of image quality which would result in a blurred or blurring of the photographs and the type. It would not enable printing or reproduction of the book of the quality of the original product. His evidence was uncontradicted and I have no hesitation in accepting his evidence that that is not a feasible option.
I am satisfied that the estimates which have been made both time and cost wise are in all respects reasonable. I accept without hesitation Ainslie's evidence that her estimate of costs was conservative.
In those circumstances the plaintiff's claim in the sum of $112,550 will be allowed in its entirety. The plaintiff's prayer for relief also claims interest on the damages at the rate of 6 per cent per annum from 1 January 2000. Given that the indication of an admission of liability had been conveyed to Ainslie in late 1999 I am satisfied that it is appropriate that in the circumstances of this case that the claim for interest on the damages should be allowed.
Accordingly there will be judgment for the plaintiff in the sum of $112,550 for claim and $14,068.75 for interest from 1 January 2000 to date of judgment.