Burden v Debonaire Furniture Limited
[2016] NZHC 312
•29 February 2016
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2014-485-11179 [2016] NZHC 312
BETWEEN IAN JAMES BURDEN
First Plaintiff
AND
PLANTATION GROWN TIMBERS (INTERNATIONAL) LIMITED Second Plaintiff
AND
PLANTATION GROWN TIMBERS (VIETNAM LIMITED)
Third Plaintiff
AND
DEBONAIRE FURNITURE LIMITED First Defendant
AND
BURDEN FURNITURE (INTERNATIONAL) LIMITED Second Defendant
AND
BURDEN FURNITURE CO LIMITED Third Defendant
AND
LINDSAY JOHN BURDEN Fourth Defendant
AND
JEREMY DAVID SMITH Fifth Defendant
AND
ROBERT WAYNE SMITH Sixth Defendant
Hearing: 29 February 2016 Counsel:
B P Cain for Plaintiffs
G F Arthur for First, Fifth and Sixth DefendantsJudgment:
29 February 2016
JUDGMENT OF BROWN J
BURDEN v PLANTATION GROWN TIMBERS (INTL) LTD [2016] NZHC 312 [29 February 2016]
Introduction
[1] This conference was convened in response to a request in a joint memorandum of the plaintiffs and the first, fifth and sixth defendants (the defendants) dated 28 January 2016 advising that the parties had been unable to resolve the following six issues:
(a) the plaintiffs’ request that the defendants better plead the allegation in
relation to industrial application;
(b) the defendants’ request that the plaintiffs provide discovery of
documents relating to the industrial application of the artistic works;
(c) the plaintiffs’ request that the defendants withdraw or replead the
second counterclaim;
(d)the defendants’ request that the plaintiffs provide discovery of documents from the Burden v ESR Group Ltd trial, including briefs of evidence and the transcript;
(e) the plaintiffs’ request that the defendants provide details for documents discovered by the defendants in compliance with the listing and exchange protocol in Schedule 9, Part 2 of the High Court Rules;
(f) an appropriate timetable in light of the slippage to date.
[2] In accordance with the direction in para [2] of my Minute of 5 February 2016 both sides filed both support and reply memoranda addressing each of the issues and proposing revised timetables to trial.
Plaintiffs’ request for particulars of industrial application defence
[3] The close of pleadings date was extended to 4 December 2015 in my Minute [4] of 2 November 2015. On 3 December 2015 the defendants filed an amended statement of defence and amended counterclaim dated 2 December 2015. That defence added a further sentence at para 23 as follows:
They further say that they deny infringement on the grounds that the alleged artistic works were industrially applied more than 16 years before the alleged infringements were made.
That pleading invoked the special exception in s 75 of the Copyright Act 1994 in respect of artistic works that have been industrially applied.
[4] The plaintiffs’ position was that the defendants had failed to comply with r 5.48 of the High Court Rules and that further particulars were required, such as details of which works were said to have been industrially applied more than
16 years ago and when and where such application occurred. Having regard to the creation dates of the copyright works listed in the third amended statement of claim dated 4 December 2015, the plaintiffs had difficulty in comprehending how s 75 could have any application in this case.
[5] Mr Arthur submitted that s 75 is not in the nature of a defence but rather is a matter which a plaintiff is obligated to address. His starting point was that there was no need for the defendants to plead or particularise the issue but that they had done so in order to avoid any question of surprise at trial. He maintained that the information which the plaintiffs claim should be provided as “particulars” was information within the plaintiffs’ own knowledge.
[6] The commentary in McGechan on Procedure1 notes that orders have been made that particulars need not be supplied where they are within the knowledge of the requesting party. It is suggested that rather than order particulars a better approach may be to decline an order for particulars until after discovery has been
given.
1 At HCR 5.21.06.
[7] In the present case I consider that the way in which the issue has been raised in the defence should be sufficient for the plaintiffs’ purposes provided there is no uncertainty as to the reference in para 23 to “the alleged artistic works”. Mr Arthur accepted that that phrase was intended to refer only to the copyright works specifically noted in paras 15, 29 and 32 of the third amended statement of claim. Subject to the para 23 being amended to specifically refer to those copyright works, I do not consider that further particularity is required to be provided in the circumstances.
Defendants’ request for discovery of industrially applied works
[8] Provided that the allegation is properly pleaded Mr Cain accepted that the plaintiffs could not resist discovery on the issue of industrial application.
[9] However he submitted that the plaintiffs have complied with their discovery obligations, including with reference to the issue of industrial application. He made the point that the plaintiffs cannot produce documents which no longer exist and noted that the plaintiffs keep their business records for a period of approximately seven years after which they dispose of them.
[10] He further stated (and said the evidence will confirm) that a previous employee, Mr Craig Morrow, a defendant in the Burden v ESR proceeding, misappropriated many of the plaintiffs’ documents relating to among other things the industrial application of the plaintiffs’ copyright works when he left the business in
2005.
[11] While recognising that the plaintiffs could only discover the documents still in their possession or control, Mr Arthur submitted that a supplementary list of documents should specifically state the fate of such relevant documents which had existed but which were no longer in the plaintiffs’ possession or control.
[12] As I understand that the plaintiffs do not resist either discovery of any documents which they do have or explaining the fate of those they do not, it is unnecessary for any orders to be made in relation to the second issue.
The plaintiffs’ request that the defendants withdraw or replead the second
counterclaim
[13] The defendants’ statement of defence dated 26 March 2015 to the second amended statement of claim added a counterclaim alleging unjustified proceedings under s 130 of the Copyright Act. The pleading filed on 3 December 2015 added a second counterclaim seeking orders pursuant to s 141 of the Copyright Act and compensation on the grounds that the copyright notice issued by the second plaintiff to the Customs Service was invalid on the basis that the detained furniture was not a “pirated copy”.
[14] The plaintiffs were critical of that counterclaim on a number of grounds including that it was simply a reiteration of the first counterclaim and comprised an application for relief rather than a singular claim against the plaintiffs. Indeed they made the point that the relief sought in the counterclaim is not against the plaintiffs at all but seeks release of the first defendant’s goods from Customs. It was submitted for the plaintiffs that applications for release of goods under s 141(2) are appropriately made by way of interlocutory application, not by way of counterclaim.
Reference was made to the judgment of Muir J in Burden v ESR Group (NZ) Ltd.2
[15] Mr Arthur responded that the interlocutory application in the ESR case had been dismissed because the applicants could not succeed in reaching the summary judgment threshold. He contended there was little attraction in proceeding by way of interlocutory application on which the summary judgment threshold applied. Again it was his submission that the objective of the counterclaim was to make it clear that the point was an issue so that if the defendants succeeded at trial no procedural issue could be taken about the discharge of the notice.
[16] In the light of the various alleged deficiencies the plaintiffs submitted that the second counterclaim should be struck out or, if the first defendant wished to pursue the matters within it, it should seek leave to file an amended pleading as the close of pleadings date has passed. This proceeding has a trial date commencing on
11 July 2016. A resort to still a further round of interlocutories is not to be
encouraged. While there may be some merit in the plaintiffs’ submission that the
2 Burden v ESR Group (NZ) Ltd [2015] NZHC 1649, (2015) 113 IPR 594.
second counterclaim is essentially in the nature of relief rather than a substantive cause of action, I do not consider that it is necessary or appropriate to take the step of striking out the second counterclaim.
[17] Indeed I note that in G Sucess Co Ltd v Chief Executive Officer New Zealand Customs Service,3 which concerned an analogous provision in the former Trade Marks Act 1953, Fisher J recognised the possibility that an importer might bring an interlocutory application “if there were some basis for thinking that release might be possible in advance of a full trial on the merits”. Here the defendants are content to await the trial. I do not think that they are to be criticised for ventilating the matter in the pleadings in order to ensure that the issue is on the trial agenda.
Defendants’ request for discovery of the Burden v ESR Group Ltd trial material
[18] The plaintiffs explained that they are involved and remain involved in a number of different proceedings against various parties whom they believe have infringed the plaintiffs’ intellectual property rights in relation to their furniture products. Once such proceeding which went to trial in September 2015 before Duffy J is Burden v ESR Group (NZ) Ltd.
[19] The documents from the ESR proceeding which the defendants sought appear to encompass a wide range of materials including briefs of evidence, affidavits, the transcript of evidence and submissions. The plaintiffs declined to provide that material on the basis that the ESR case is a different proceeding concerning different subject matter, save for a very limited number of items of the plaintiffs’ ranges of furniture which are common to both proceedings.4 However it appears that the plaintiffs accept that three of the Irish Coast artistic works relied on in the ESR
proceeding are also relied upon in the current proceeding.
3 G Sucess Co Ltd v Chief Executive Officer New Zealand Customs Service [2001] 1 NZLR 506 (HC).
4 Citing Prattley Enterprises Ltd v Vero Insurance New Zealand Ltd [2015] NZHC 411.
[20] It was the plaintiffs’ submission that discovery of the transcripts, briefs of evidence, affidavits and submissions would have an unfairly prejudicial effect on the present proceeding, particularly so as the ESR judgment is still reserved. They submitted that discovery of all the requested ESR proceeding documents should be declined pursuant to s 8(1)(a) of the Evidence Act 2006.
[21] However for the defendants it was contended that statements on oath by the plaintiffs and documentary exhibits about the same family of artistic works as in the present case were clearly relevant and that statements made by the plaintiffs in evidence in chief and cross-examination about the authorship and the originality of such artistic works constituted documents which could adversely affect either the plaintiffs’ or the defendants’ case. Similarly it was said that the evidence of the defendants in the ESR proceeding challenging the originality and authorship of the same family of artistic works could adversely affect either the plaintiffs’ or the defendants’ case.
[22] I accept that pleadings and evidence as to the subsistence and ownership of artistic works which are involved in both cases are at least potentially relevant and ought to be discovered. Although I do not accept that statements and evidence of the defendants in another case fall into that category, I would have made an exception in respect of the defendant Morrow who, being a former officer and employee of the plaintiffs, was likely to have relevant knowledge on the issue of the originality of particular artistic works. However it transpires that for reasons which Mr Cain explained Mr Morrow did not attend to give evidence in the ESR proceeding.
[23] In those circumstances I rule that the defendants are entitled to have discovery of the pleadings, briefs of evidence and cross-examination of the plaintiffs in the ESR proceeding to the extent that that evidence relates to the subsistence and originality of copyright in any of the artistic works which are also relied upon in the present proceeding, that is in relation to The Toscana Collection, The Irish Coast Collection and the PGT Lifestyle Additions Collection.
Plaintiffs’ request for compliance with discovery listing in exchange protocol
[24] In the course of submissions it became apparent that the plaintiffs’ criticism of the defendants’ amended affidavit of documents of 14 September 2015 was confined to the category of Miscellaneous documents which comprised only seven entries. Those documents comprised promotional material, photographs and a Google search. Consequently they were not of the nature of other documents, such as correspondence, the description of which should record the identity of the sender and recipient. The other categories of documents in the amended affidavit complied with that requirement.
[25] Although Mr Arthur indicated that the relevant information had since been provided, he accepted that the defendants should amend the affidavit of documents in order to respond to the plaintiffs’ complaint about the Miscellaneous category. He made the point however, which Mr Cain accepted, that compliance with those requirements would not disclose the source from which the various documents were obtained by the defendants.
Revised timetable
[26] The plaintiffs propose the following revised timetable for steps to trial:
(a) plaintiffs’/counterclaim plaintiffs’ written briefs including expert
evidence to be exchanged by 12 March 2016;
(b) defendants’/counterclaim defendants’ written briefs including expert
evidence to be exchanged by 12 April 2016;
(c) plaintiffs’/counterclaim plaintiffs’ briefs in reply by 12 May 2016; (d) plaintiffs’ chronology of facts by 10 June 2016;
(e) defendants’ chronology of facts in response by 24 June 2016; (f) plaintiffs’/counterclaim plaintiffs’ openings by 6 July 2016.
[27] The defendants’ principal objection to that timetable related to the period allowed for the service of the defendants’ briefs. Mr Arthur made the point that the original timetable had allowed three months for the defendants’ briefs but this was reduced to two months in a subsequent revision. The plaintiffs’ revised timetable now proposed that the defendants would have only one month to serve their briefs after receipt of the plaintiffs’ briefs.
[28] He made the point that several of the defendants’ potential witnesses are overseas and will have to review the plaintiffs’ evidence before compiling their own evidence. A one month timetable for that process was said not to be practical. Accordingly the defendants propose the following timetable:
(a) plaintiffs’ written briefs including expert evidence to be served
12 March 2016;
(b) defendants’ written briefs including expert evidence to be served
10 June 2016;
(c) plaintiffs’ reply briefs (if any) and chronology 24 June 2016; (d) common bundle 24 June 2016;
(e) defendants’ chronology 1 July 2016;
(f) Plaintiffs’ written opening 6 July 2016.
[29] Mr Arthur also suggested that there should be a pre-trial conference. A particular matter which he foreshadowed may need to be addressed at such a conference is an application for certain of the defendants’ evidence to be given from overseas by AVL.
[30] The timetable which I direct below endeavours to accommodate the interests of both sides while maintaining the proceeding on track for the 11 July 2016 fixture:
(a) plaintiffs’ written briefs including expert evidence to be served by
11 March 2016;
(b) defendants’ and counterclaim plaintiffs’ briefs including expert
evidence to be served by 20 May 2016;
(c) plaintiffs’ briefs in reply and in response to counterclaim plaintiffs’
briefs to be served by 10 June 2016;
(d) common bundle to be served by 22 June 2016;
(e) plaintiffs’ chronology of facts to be served by 22 June 2016; (f) defendants’ chronology of facts to be served by 29 June 2016;
(g) plaintiffs’ and counterclaim plaintiffs’ openings to be served by
6 July 2016.
[31] I will confer with the scheduler about the allocation of a pre-trial conference with the trial Judge to be held prior to 10 June 2016.
Orders
[32] Reflecting the discussion above I make the following orders:
(a) paragraph 23 of the amended statement of defence to be amended in the manner stated in [7] above;
(b) plaintiffs to provide discovery of the nature described in [23] above;
(c) defendants’ amended affidavit of documents to be amended as recorded in [25] above;
(d) timetable to trial in [30] above.
[33] The parties have responsibly brought these unresolved issues before the
Court promptly. Each side has had a measure of success. There will be no order for costs in connection with this conference.
Brown J
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