Burden v ESR Group (NZ) Limited - [2016] NZHC 1537

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-002456 [2016] NZHC 1537

BETWEEN
IAN JAMES BURDEN

First Plaintiff

AND

PLANTATION GROWN TIMBERS (INTERNATIONAL) LIMITED Second Plaintiff

PLANTATION GROWN TIMBERS (VIETNAM) LIMITED

Third Plaintiff

ESR GROUP (NZ) LIMITED First Defendant

MORROW MARKETING MANAGEMENT LIMITED Second Defendant

CRAIG MORROW Third Defendant

GALAXY HOME (VIETNAM) LIMITED

Fourth Defendant

CHIEF EXECUTIVE OF NEW ZEALAND CUSTOMS

Fifth Defendant

Hearing:
7-11, 14-16, 18, 21-24, 28 September 2015

Further submissions filed 6, 7 & 8 October 2015

Counsel:

G Hazel, S Rosanowski & R Stone for the Plaintiffs
A J Pietras for the First Defendant

Judgment:

1 June 2016

Reasons:

7 July 2016

BURDEN v ESR GROUP & ORS [2016] NZHC 1537 [1 June 2016]

REASONS JUDGMENT OF DUFFY J

[1] In a result ruling dated 25 September 2015 I refused to allow the first defendant to amend its affirmative defence. The first defendant wanted to include a defence that the works in which the plaintiffs claim copyright are in fact owned by a third party by reason of s 21(3) of the Copyright Act 1994 (the Act).1 My reasons for this ruling now follow.

[2] The relevant rules for amendment of pleadings are to be found in rr 1.9 and 7.7 of the High Court Rules. Rule 1.9 gives the Court a broad discretion to permit the amendment of a pleading. This rule is subject to r 7.7 which prohibits any amendment of pleadings without leave of the Court after the close of pleadings date.

[3] An application to amend a pleading that is made towards the end of a trial is necessarily made well after the close of pleadings date. The principles for when an amendment will be permitted in such circumstances are well settled, and were accepted by the parties. The Court should consider: (a) whether permitting the amendment would be in the interests of justice; (b) if allowed, whether the amendment would cause significant prejudice to other parties; and (c) whether
allowing the amendment would cause significant delay.2 Those factors are to be

weighed against the principle that the parties should have every opportunity to ensure the real controversy goes to trial so as to secure the just determination of the proceeding.3

[4] The plaintiffs claim copyright in the original artistic works (the subject

works) from which a collection of furniture known as the “Irish Coast Collection” is

produced.

1      Section 21(3) provides as a default position that copyright in commissioned works is owned by the commissioning party.
2      Elders Pastoral v Marr (1987) 2 PRNZ 383 (CA).
3      Shanton Apparel Ltd v Thornton Hall Manufacturing Ltd [1989] 3 NZLR 304 (CA).

[5] It was clear from the outset of the trial that the first defendant was raising an affirmative defence based upon the allegation that the Irish Coast Collection was in fact a copy of the Attic Heirlooms range of Broyhill Furniture.

[6] At a time when the plaintiffs had closed their case, and the first defendant was in the process…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NZHC 1537
Decision Date: 1 June 2016

CaseChat Overview and Summary

In the case of Burden v ESR Group (NZ) Limited, the plaintiff, Ian James Burden, along with two other plaintiffs, sued the first defendant, ESR Group (NZ) Limited, and three other defendants for copyright infringement. The plaintiffs claimed copyright in the original artistic works from which a collection of furniture known as the "Irish Coast Collection" was produced. The first defendant sought to amend its statement of defence to include a commissioning defence, alleging that the works were commissioned by a third party, Hillsdale Furniture, and therefore the copyright ownership vested in Hillsdale. The Court was required to decide whether the first defendant should be allowed to amend its pleading to include this new defence. The Court found that the proposed amendment was an entirely new and distinct defence, which went well beyond an amendment for the purpose of clarifying issues that were already in dispute. The Court was satisfied that the first defendant had only alluded to a potential commissioning defence in its opening address, and the first time the first defendant sought to rely on a commissioning defence was in its closing address. The Court found that the interests of justice strongly favoured refusing to allow the amendment, and that to do otherwise would cause significant prejudice to the plaintiffs and significantly delay the resolution of the proceeding. The Court also found that the proposed commissioning defence was so new and distinct that it lay outside the bounds of the existing controversy. Finally, the Court found the apparent case for this defence to be weak. Hence, the Court decided to refuse to allow the amendment of the first defendant's pleading.

Orders