Napier Tool & Die Ltd v Oraka Technologies Ltd - [2016] NZCA 554

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA304/2016
[2016] NZCA 554

BETWEEN	NAPIER TOOL & DIE LIMITED First Appellant
AND	ORAKA TECHNOLOGIES LIMITED First Respondent
ORAKA GRADERS LIMITED Second Respondent
MICHAEL WILLIAM SCHWARZ Third Respondent

CA309/2016
BETWEEN	NAPIER TOOL & DIE LIMITED First Appellant
GEOSTEL VISION LIMITED Second Appellant
PAUL DAYNES AND GORDON ROBERTSON Third Appellants
AND	ORAKA TECHNOLOGIES LIMITED First Respondent
ORAKA GRADERS LIMITED Second Respondent
MICHAEL WILLIAM SCHWARZ Third Respondent

Hearing:	11 October 2016
Court:	Kós P, Harrison and French JJ
Counsel:	P G Skelton QC and C D Herbert for First Appellant K T Glover for Second and Third Appellants B P Henry for Respondents
Judgment:	28 November 2016 at 10.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed and the judgment entered by the High Court for the sum of $4.1 million is set aside.
BThe case is remitted to the High Court for the quantum of damages to be determined on the basis of a notional licence fee payable in respect of each infringing use during the period from the commencement of infringement to the expiry of the first appellant’s copyright.
CThe respondents must pay each of the two represented groups of appellants costs for a standard appeal on a band A basis together with usual disbursements. Costs in the High Court to be determined in accordance with the outcome of this appeal.

____________________________________________________________________

REASONS

Para No

Kós P and French J [1]

Harrison J [82]

KÓS P AND FRENCH J
(Given by French J)

Introduction

As a general rule, a party is only entitled to compensatory damages for losses that party has itself suffered. It cannot recover damages for loss suffered by a third party.[1]
[1]The Albazero [1977] AC 774 (HL) at 845; Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518 (HL) at 522 and 580.
The appellants[2] contend the High Court decision under appeal breaches this elementary principle in the context of a claim for breach of copyright under the Copyright Act 1994 (the Act). In the decision Hinton J awarded compensatory damages to the copyright owner for losses the appellants say, correctly analysed, were the losses of another separate legal entity.[3]

Factual background

[2]Two appeals were heard together. Geostel Vision Ltd and Messrs Daynes and Robertson did not appear at the High Court damages hearing; however, their interests broadly aligned with those of Napier Tool & Die Ltd.

[3]Oraka Technologies Ltd v Geostel Vision Ltd [2016] NZHC 1188 [HC damages decision]. Justice Hinton rejected a claim for additional damages and there has been no cross-appeal against that finding.

During the 1980s the third respondent, Mr Michael Schwarz, invented an asparagus grading machine with a unique cup assembly (the Oraka grader).[4] In March 1993 he formally assigned the copyright in the cup assembly to the first respondent, Oraka Technologies Ltd (Technologies). Mr Schwarz and his wife were the sole shareholders and directors of…

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] NZCA 554
Decision Date: 28 November 2016

CaseChat Overview and Summary

Napier Tool & Die Ltd, Geostel Vision Ltd, Messrs Daynes and Robertson (the appellants) sought leave to appeal against the decision of the High Court (Hinton J) that they were liable for copyright infringement and the amount of damages awarded. Oraka Technologies Ltd, Oraka Graders Ltd and Mr Schwarz (the respondents) cross-appealed against the amount of damages awarded. The appellants argued that the High Court had erred in awarding damages to Technologies for losses that were not its own. The respondents contended that the Judge was correct to view Graders’ loss as Technologies’ loss. The Court of Appeal allowed the appeal and set aside the High Court’s award of $4.1 million damages. The case was remitted to the High Court for the quantum of damages to be determined on the basis of a notional licence fee payable in respect of each infringing use during the period from the commencement of infringement to the expiry of the first appellant’s copyright. The respondents were ordered to pay the appellants costs for a standard appeal on a band A basis together with usual disbursements. Costs in the High Court were to be determined in accordance with the outcome of the appeal. Justice Harrison disagreed with the majority and considered that the litigation should end now.

Orders