Parry v Aristocrat Technologies Australia Pty Limited & Ors [2007] HCATrans 483 (31 August 2007)

Last Updated: 13 September 2007

[2007] HCATrans 483

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S193 of 2007

B e t w e e n -

DAVID ALLAN PARRY

Applicant

and

ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LIMITED

First Respondent

ARISTOCRAT INTERNATIONAL PTY LIMITED

Second Respondent

D.A.P SERVICES (KEMPSEY) PTY LIMITED (IN LIQUIDATION)

Third Respondent

RHONDA DENISE PARRY

Fourth Respondent

Application for special leave to appeal

GLEESON CJ
GUMMOW J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 31 AUGUST 2007, AT 10.51 AM

Copyright in the High Court of Australia

__________________

MR J.M. IRELAND, QC: May it please the Court, I appear with my learned friend, MR J. COOKE, on behalf of the applicant. (instructed by Golottas)

MR R. COBDEN, SC: May it please the Court, I appear on behalf of the first and second respondents with my learned friend, MR N.R. MURRAY. (instructed by Baker & McKenzie)

GLEESON CJ: Mr Cobden, there is a note from the Deputy Registrar that she has been informed by the liquidator of the third respondent that the third respondent will not be actively participating in these proceedings. Yes, Mr Ireland.

MR IRELAND: Your Honours, section 115 of the Copyright Act empowers a court to grant various remedies for infringement of copyright and this case raises as a matter of general principle for the first time in this Court the construction of that section. In intellectual property cases there has been for many years an established dichotomy between the pecuniary remedies available. This is now entrenched in section 115(2) of the Act.

A plaintiff may seek either an account of profits as a result of infringing conduct or damages, but in pursuing those remedies there is a fork in the road. The plaintiff may either have damages or an account at its election and there may be some postponement of that election, as recent cases in the Federal Court have demonstrated, until the plaintiff is fully informed to evaluate those choices, but the remedies are not cumulative.

However, in this case the Full Court of the Federal Court of Australia granted what was in substance an account of profits as a component of the damages which it awarded. The case concerned copyright owned by the respondents in components used in the manufacture of poker machines. These were the Perspex panels containing artwork for particular games and the computer chips embodied in them which were called EPROMs.

The present applicant, Mr Parry, was one of two directors of the third respondent, that is the company in liquidation, which is referred to in the judgment as Vidtech, and that company was in the business of purchasing second-hand poker machines here in Australia, reconditioning them and selling them overseas.

Justice Wilcox, the trial judge, found that the company and its two directors, that is Mr and Mrs Parry, were liable for infringement of copyright and he awarded compensatory damages of $80,000 plus additional damages pursuant to section 115(4) of the Act against the company and Mr Parry, the present applicant. No additional damages were ordered against the other director, Mrs Parry.

The respondents had maintained at trial a very large claim for damages. This is recorded by the trial judge at application book 26 in paragraph 102 where his Honour said:

There is an enormous difference between the parties as to the appropriate level of compensatory damages. The applicants led evidence from a chartered accountant, Stuart Robertson, calculating total losses at $6,350,145. By contrast, counsel for the respondents submitted that the applicants’ maximum damages were $30,750.

The trial judge wholly rejected the basis upon which the respondents’ claim for damages was made and his Honour said at application book 30 at paragraph 118 in the third line:

But I lack the evidence necessary for me to calculate the value of Aristocrat’s lost overseas sales (if any) of conversion kits and used EGMs.

EGM is another word for Electronic Gaming Machines, which is the poker machines:

So I do not think it is possible for me to compute damages by reference to Aristocrat’s loss. The only feasible course is to adopt an accounting for profit approach; to estimate the amount of Vidtech’s net gain from its infringing conduct.

GUMMOW J: Your complaint is that there had already been an election?

MR IRELAND: Yes. Your Honours, section 115 of the Act is reproduced in the materials furnished by both sides to the Court. It started off in a little way in 1968 when first enacted and the second has been expanded. Can I ask your Honours to look at the current section.

GUMMOW J: The Full Court agreed with you, did it not, in that respect?

MR IRELAND: Yes, your Honour.

GUMMOW J: In other words, that it was wrong for the primary judge to have adopted the so-called profits approach?

MR IRELAND: Yes, and indeed the respondents here and the appellants in that court - - -

GUMMOW J: They do not dispute that, I think.

MR IRELAND: - - - do not dispute that error.

GUMMOW J: So what are we now agitated about?

MR IRELAND: Your Honour, the election having been made, in this case there was introduced as a clear and dominant element of the additional damages the very account of profits which had been not pursued. I had not quite come to the result in the Full Court on the facts, your Honour, but the trial judge awards $80,000 for compensatory damages, which is acknowledged on all sides to be wrong in principle. The Full Court then re-embarks on the task, accepts the submission that there are no compensatory damages established, gives $1.00 for nominal damages on the compensatory limb of the claim and then embarks upon a consideration of the additional damages claimed under section 115(4) of the Act and gives us the greatest component of those additional damages, the very account for $80,000 plus appropriate interest which has been rejected.

GUMMOW J: But you seem to seek in your draft notice of appeal remission to the Full Court to have another attempt at 115(4).

MR IRELAND: Your Honour, that is an alternative, your Honour. We ask it to be knocked out completely, but in the event that the Full Court was incorrect in including in the additional damages this component of $80,000 with its interest added, total $105,000, your Honour, we say that the matter could either be dealt with by this Court by simply eliminating that component if the other aspects of additional damages were - - -

GUMMOW J: Was there any finding in the Full Court as to flagrancy, for example?

MR IRELAND: Yes, there was, your Honour, but the important point here is that that component I have identified of the additional damages is not assigned to flagrancy. There is another $95,000 added for that. So, your Honour, I will come to make that good in a second.

GUMMOW J: It is then used for benefit, is it?

MR IRELAND: It comes to the question of what is benefit in section 115(4)(b)(ii). Do your Honours have that? It does not matter which version of the Act you have, and the latest one is in the materials that have been sent up. It is legitimate according to the Act, it has been since its first introduction, notwithstanding the other changes, that a court may:

(a) an infringement of copyright is established; and

(b) the court is satisfied that it is proper to do so, having regard to –

inter alia –

(iii) any benefit shown to have accrued to the defendant by reason of the infringement –

then it can go on to make an award of what are called, I remind your Honours, “additional damages as it considers appropriate”.

GUMMOW J: Section 115(4) seems to depart from the ordinary idea that you cannot get both damages and profits.

MR IRELAND: We say that that is not so. That is certainly arguable and that is the approach that the Full Court has taken but we say, your Honour, that the fork in the road is in 115(2). Once you are into 115(4) you are in the area of damages and you have abjured your claim for profits. It is an extraordinary outcome that one can reintroduce by, as it were, a side road, something that - - -

GUMMOW J: What work do you give to paragraph (2)?

MR IRELAND: Well, your Honour, there are only two pieces of dicta that we can usefully find.

GUMMOW J: Forget about the dicta. What do you say it works?

MR IRELAND: Your Honour, we would say that it refers to benefits other than profits, your Honour, and that is supported by what the House of Lords said in - - -

GUMMOW J: What sort of benefit? Do not worry about the House of Lords.

MR IRELAND: I rarely do, your Honour, and this Court increasingly - - -

GUMMOW J: You are not going to get intimidated by anybody else. We need to know what you say though.

MR IRELAND: Your Honour, I am only respectfully adopting in answer to your Honour’s question - - -

GUMMOW J: What did they say?

MR IRELAND: - - - what Lord Clyde had to say, and that is Redrow v Bett Bros [1998] UKHL 2; [1999] 1 AC 197 which was concerned with the very question whether aggregated damages could be given in aid of an account. Lord Clyde says at 209, in connection with the English counterpart provision which is also there.

GUMMOW J: Yes, but through eyes of Scotland.

MR IRELAND: And none the worse for that, your Honour.

GUMMOW J: Yes, maybe.

MR IRELAND:

Finally, I accept that, as counsel for the appellant explained, a distinction can be drawn between a “benefit accruing to the defendant” such as is referred to in section 97(2) and the net profits which the defender might earn by the infringement. The latter would be caught by an action for accounting, but the former could extend to such matters as the acquisition of an enhanced position in the market which would not be included in a calculation of the net profits. But this additional content for the word “benefit” does not seem to me to justify the conclusion that an award under section 97(2) was intended to be available.

GLEESON CJ: Do you then construe the words “any benefit shown to have accrued” as meaning any benefit other than profits?

MR IRELAND: Yes, other than profits.

GLEESON CJ: Any benefit other than profits?

MR IRELAND: Yes, because, as I have tried to say, one is past the point of being able to claim profits in this framework of the Act. This is not new, as your Honours are well aware, this dichotomy between account on the one hand and damages on the other.

GUMMOW J: Benefit being commercial advantage of some sort?

MR IRELAND: Yes. Can I also encapsulate a clear error in the Full Court. They said, well, Mr Parry, that is the present applicant, should suffer these profits too but, of course, Mr Parry was not the trading entity. The profits were not themselves recoverable from him, in any event. He was one of two directors, on the evidence. There was no proof as to the shareholding. But assuming that he and his wife were the two shareholders, it is a long march from the company making profits in a business undertaking which may or may not ultimately produce dollars at the other end by way of some sort of dividend or otherwise.

So that factually the court got it wrong in terms of this applicant but, more importantly, for the purposes of today there is a general principle here which needs some attention as to the limits of this subsection, which has been around for 40 years nearly and has not been construed. But, your Honours, there is one other piece of dicta that I should perhaps refer to perhaps because of the identity of the judge who was learned in these areas. It is a decision of Justice Lockhart in Polygram v Golden Editions (1997) 76 FCR 565 at 576, if I could just read it out. Justice Lockhart says, and this is in the Australian section:

The notion of “benefit” accrued to the defendant by reason of the infringement, suggests that the defendant has reaped a pecuniary reward or advantage in excess of the damages he would otherwise have to pay –

Then there is reference to the New Zealand provision, and he says:

but . . . is not necessarily limited to pecuniary advantages.

Then referring to the New Zealand case:

In that case it appears that the benefit which would have accrued to the defendant by reason of the infringement was increased circulation of the defendant’s newspaper, even though no tangible financial benefit was in fact established.

So this is a section tailored to deal with a situation where there may be damages, which are low, but advantages to a particular defendant, we say not Mr Parry in this case, which ought to be reflected in an additional award. There are two short subsidiary points, your Honour. That is the key point to the case.

GUMMOW J: Wait a minute. Do you say there was no such benefit in this case?

MR IRELAND: Not to Mr Parry, no.

GUMMOW J: That subsection (4) applied to the facts of this case would reveal no benefit on the evidence?

MR IRELAND: No, there is not. There are two references in the Full Court’s decision which I need to point out which are of the most general type, and not very convincing, if I may say so. There are two judgments in the Full Court, one is the joint judgment of Chief Justice Black with Justice Jacobson and at appeal book 63 at the foot of the page, in paragraph 47, those judges say:

The primary judge determined that Vidtech –

that is the company –

had obtained a pecuniary benefit of at least $80,000. His Honour found at [113] that there were significant unexplained cash transactions and that money had been directed to places such as the Isle of Man –

that was in the general business operations of the company –

He also found that money had been muddled between Vidtech’s corporate accounts and personal accounts –

and then this statement, which is the only statement in point to your Honour Justice Gummow’s remark –

It would therefore seem likely that Mr and Mrs Parry received substantial pecuniary benefits.

But not from these infringements. That is a statement about the general relationship between the Parrys and the company, not these transactions. Then the other reference is on page 81 in the separate judgment of Justice Rares. In paragraph 105 his Honour says:

One of the purposes of an award of additional damages under s 115(4)(b)(ia) of the Act is to deter similar infringements of copyright. In assessing additional damages, the Court may have regard to any benefit shown to have accrued to the defendant by reason of the infringement.

Then this sentence, which is significant for present purposes:

In this case it is clear that Vidtech and Mr Parry obtained considerable benefit from the infringing conduct and sales activity which his Honour found had occurred.

In fact, his Honour’s finding was that the company, Vidtech, had made $80,000 from the exercise, not that there had been considerable benefits in any way beyond that. But this is all made, in my respectful submission, more powerful when one looks precisely at how the $200,000 was comprised, and for that one needs to pass over to page 83, paragraph 111. Your Honour will see in Justice Rares’ judgment, at the foot of page 82, having endorsed the $80,000, your Honour sees:

Like the Chief Justice and Jacobson J, I am of opinion that no error has been shown in his Honour’s assessment of $80,000 profit (being AUD 200 x 400 kits). This allows for some sales which did not include EPROMs –

So that was re-endorsed as the profit of the company. Then his Honour goes on:

His Honour also added an allowance for interest.

Then his Honour updates the interest and says:

Accordingly, using that methodology, interest for 4 years at 8% per annum totals approximately $25,000. It follows that the total amount of additional damages in respect of benefit shown to have accrued to the respondents by reason of the infringement is $105,000.

So the $105,000 is not referable to other factors. In both of the judgments they go on and add $95,000 for flagrancy factors and the other - - -

GUMMOW J: Where do we see that? Where do we see the flagrancy figure?

MR IRELAND: His Honour deals with it at page 84, paragraph 116. Does your Honour see in paragraph 116 - - -

GUMMOW J: Yes, I see.

MR IRELAND: Then it is much more explicitly brought out in the joint judgment because what they say there is that you start off with a profit and then look at the other factors. Could I invite your Honours’ attention to that in the joint judgment at page 65, paragraph 53:

We agree with Rares J that the evidence before the primary judge demonstrated a cynical and flagrant exploitation of Aristocrat’s copyright by Vidtech and Mr Parry. We also agree with Rares J that $40,000, the amount awarded by the primary judge as additional damages, is not an appropriate figure to reflect the flagrancy of the infringements, the need to deter similar infringements and the need to mark the Court’s disapproval of the conduct.

Then this important sentence:

The starting point, to reflect in a broad way the benefit obtained is, as we have said, $105,000. There should be added to this sum a substantial amount for the other factors we have identified. We should also take into account the fact that Vidtech failed to keep adequate records of its financial dealings so as to make proof of loss more difficult. We consider that a further amount of $95,000 should be added to the sum of $105,000 –

So the $200,000 breaks into two clear components and it is the $105,000 that we say offends the principle here.

GUMMOW J: Thank you, Mr Ireland. Yes, Mr Cobden.

MR COBDEN: If it please the Court. My learned friends really ask that the Court, both in their written submissions and in the points that they emphasise today, in their written submissions on the question of nominal damages in section 115 and in the submissions that today have focussed in particular on section 115(4)(b)(iii), which is “any benefit shown to have accrued to the defendant”, really invite the Court not just to put a gloss on the section but to read about six different glosses on the section. They would say on the nominal damages point, which my learned friend has not addressed orally but plays a very central part in his reply submissions, that in effect section 115(2) should be read “Subject to this Act, the relief that a court may grant . . . includes” but does not include nominal damages “an injunction . . . and either damages” but not nominal damages “or an account of profits”.

The applicant then asks the Court to read section 115(4)(b)(iii), which has perfectly clear English words “any benefit shown to have accrued to the defendant by reason of the infringement”. “Any benefit”, as your Honour the Chief Justice put it “(but not profits) shown to have accrued to the defendant by reason of the infringement”. Then in the written submissions but not emphasised today in the oral submissions, the balance of the section “may, in assessing” – really the applicant wants the Court to read that as awarding damages, but not nominal damages they would interpolate – “award such additional damages as it considers appropriate in the circumstances”, but not if it awarded nominal damages under section 115(2).

That is the thrust of the applicant’s submissions to date. We submit that there is absolutely no warrant to put that gloss on the plain words of a section that is intended to be a broad remedial section, section 115(2) being inclusive, in other words, all remedies that will be available to any aggrieved party or a trespass upon its property, infringement of copyright being in effect a statutory tort, a broad remedial section, there is no warrant to read it down in the way in which our learned friends press upon this Court.

GUMMOW J: One way of reading the notion of benefit in subsection (4) is to say, well, ordinarily you cannot have both measures, but in special circumstances you can get an element for profit.

MR COBDEN: Yes, your Honour.

GUMMOW J: Including the flagrancy.

MR COBDEN: Including the flagrancy. Your Honour uses the word “flagrancy”, of course that is one of the things the Court has regard to. There is certainly authority in the Full Federal Court that flagrancy itself is not required, but the findings here were quite clear and crystal clear that there had been a cynical and flagrant exploitation, and that was perhaps copyright, thus enlivening the section generally. Our learned friend really used the expression “a fork in the road” as if somehow the presence of profit in benefit in section 115(4)(b)(iii) - - -

GUMMOW J: The general law does have a fork in the road.

MR COBDEN: It does, your Honour.

GUMMOW J: The question is, does this section change that in some fashion, and if so, how?

MR COBDEN: I accept that entirely, your Honour. And the fork in the road, as my learned friend pointed out, occurs in section 115(2). If one elects for an account of profits, then the accepted wisdom is that one then condones or accepts the infringement and it is that section 115(4) is not available. But that is no reason to say that there is not work to do if you have made the election for damages for benefit in the form of profit that is accrued to the defendant, and I will come back to the question of Mr Parry versus the company in a moment because it is a brand new point.

There are many circumstances in which one may well make the election and take the profit, then it may well be a case where there is no flagrant infringement, therefore, section 115(4) would not be available. There is not, as it were, such an overlap between allowing profit in section 115(4)(b)(iii) to include benefit as including profit to render the election in any way otiose or ineffective.

Our learned friend took the Court to the decision of the House of Lords in Redrow Homes v Bett Bros. In that case, your Honours, there had been an election for an account of profits. The account of profits had been pursued and then on top of the account of profits the plaintiff sought additional damages. The House of Lords held that that is not available, that has never been available here either because the infringement has been condoned. However, at page 209 of that same report (1999) 1 AC, in discussing the question of profits Lord Clyde said:

I accept that, as counsel for the appellant explained, a distinction can be drawn between a “benefit accruing to the defendant” such as is referred to in section 97(2) and the net profits which the defender might earn by the infringement. The latter would be caught by an action for accounting, but the former could extend to such matters as the acquisition of an enhanced position in the market –

So, in fact, the authority my learned friend took your Honours to is authority to the proposition that benefit includes profit but may extend further. What our learned friends seek to do, with great respect, we say, in their written submissions in particular, is really to reject the Australian jurisprudence, reject the Australian section 115(4) and the Australian law on additional damages, and seek to import into it the United Kingdom position. The text of the Act diverged a very long time ago and the jurisprudence diverged a very long time ago.

Varieties of damage that are available under additional damages under section 115(4) under this Act held, for example, by the Full Federal Court in Bailey v Namol, include varieties of damages that the English courts have explicitly rejected as being available under additional damages under the English section. Moreover, since the time of those decisions of the Full Federal Court and other decisions that we have referred to in our submissions adopting that position, the Parliament has revisited section 115(4).

We have referred in our outline to extrinsic materials at paragraph 20 of our outline where, in adding further provisions of section 115(4) – page 110 of the application book – the supplementary explanatory memorandum in the Senate – this was in 2003 – directed attention to many of the matters that we say go our way, particularly on the written submissions, not so much on the matters addressed this morning, that:

It is a remedy directed precisely towards infringements that have an additional element beyond simple infringement.... Both of these additional factors [(ia) and (ib)] more directly focus on the punitive aspects in the award of additional damages as appropriate.

In the passages that my learned friend took the Court to, in particular the passage of Justice Rares’ judgment which was at pages 83 to 84 of the application book, but particularly page 84, it is quite clear, we would say with respect, that his Honour was engaged in an overall evaluative task of the kind that section 115(4) confers on a court exercising the very broad jurisdiction granted by it. He took into account the benefit question calculated by way of the profit. He then said, middle of the paragraph:

In a case like the present where precision of assessment of damage or profit is impossible but substantial, deliberate and flagrant infringement has been proved, a substantial sum of additional damages should be awarded.

And then engaged in the task, as he said:

I am of opinion that having regard to the whole of the evidence, the $80,000 profit and interest already quantified, the flagrancy of Vidtech and Mr Parry and the need to deter similar conduct, additional damages should be awarded against them in a lump sum amount of $200,000.

That is precisely the sort of evaluative jury-like task that section 115(4) asks the court to engage in and that is precisely the task that his Honour is engaging in there, we would respectfully submit.

Your Honours, the points that my learned friend raised this morning about the question of Mr Parry and the benefit to Mr Parry as opposed to the company is a brand new point which is not raised at any time below and, in particular – I hope your Honours received a supplementary book which contained – the Full Court took the unusual step of recalling the parties to address the Full Court on this very question of profit. In the supplementary book at page 2 is the letter from the Chief Justice’s associate saying the Full Court was to relist the matter for two questions, the second one:

Whether the Court may have regard to the account of profits determined by the trial judge in assessing the amount of additional damages under s 115(4); if so, whether the parties accept that the amount of $80,000 determined by his Honour was a correct assessment of the profits.

We were explicitly requested to go back and address their Honours on that. Our learned friends were acting at that stage not for the company but for Mr Parry alone. The company did not appear at the appeal. Our learned friends’ submissions appear at pages 13 and 14 of this supplementary book. After some general discussion Justice Rares asks my learned friend in the middle of the page, page 13 of the supplementary book:

Mr Ireland, though to be fair, it would be unlikely that your clients were doing this as an act of charity.

“Your clients” there is Mr and Mrs Parry, no question of the company, and my learned friend at the bottom of the page said he is “content to look at the figure”. Over the page, when asked by Justice Rares about the very issue, the second question asked by the Chief Justice, my learned friend does not say either that profit is not available under section 115(4)(b)(iii), or that profit is not available against Mr Parry because of the question of it being the trading of the company.

There is perhaps a slightly cryptic answer in the second sentence but we would respectfully submit this new point about Mr Parry versus the company is simply not raised when there was an explicit opportunity given to do so at the court below should not be raised now and, in any event, the very passages that my learned friend took the court to, identifying the findings of the trial judge, not challenged and repeated by the Full Court, of the mingling of money and the type of infringing business this was, would in any event allow a perfectly proper finding that the benefit accrued to Mr Parry in the relevant way.

GLEESON CJ: If you look at page 84, line 30, as I understand it, Justice Rares did not, as it were, award $80,000, he said “having regard to the whole of the evidence” including the profit of $80,000, “then I am going to award $200,000”.

MR COBDEN: Yes, your Honour.

GLEESON CJ: That is consistent with the associate’s letter really which, as I read it, says, what, if anything, can we make of the determination of $80,000 in deciding how much to award under subsection (4).

MR COBDEN: Yes, I had another go at making the figure bigger, but my learned friend said in the supplementary book at page 14 about line 29:

I don’t want to bid for a lower figure. I think I lost that at trial, but equally, I think, Mr Cobden lost the $400 figure at trial as well.

which led me bidding for a bigger figure. But I respectfully agree with your Honour the Chief Justice, Justice Rares engaged in an overall evaluative task into which he plugged that number and into which he, as it were, plugged the answer that had been given, or not given, to the question that was posed by the Chief Justice’s letter.

There was just one minor point, I think it is perhaps there for colour more than anything else, my learned friend suggested that we maintained at trial a claim for $6 million damages and that was reflected at Justice Wilcox’s judgment at pages 28 to 29 of the application book. It is quite clear that we did not contend for that figure by the time the matter came for final submissions. That was a figure calculated on the basis that every single act of sale that we have been able to identify from incomplete records was an infringing act.

An accountant provided a ready reckoner. If you multiplied every single sale by an amount, you got to that number, but we explicitly see that it would be a lesser number at trial. I think that was really more for colour more than anything else on this point. Those are the respondent’s submissions, may it please the Court.

GLEESON CJ: Mr Ireland, suppose the facts had been slightly different, suppose that early on there had been an election for and suppose there had been a proof of damages in $10,000 and suppose included in the evidence was a letter which contained an admission that your clients had made a profit of $80,000, when, under subsection (4), the Court came to assess damages and award additional damages, that is additional to the $10,000 I have spoken of, would the admission that a profit of $80,000 had been made by your clients be relevant or irrelevant?

MR IRELAND: Irrelevant. First of all, your Honour, it would not be my clients. I did not appear at the trial for the company, it was in liquidation, I was for the directors. So this benefit by the - - -

GLEESON CJ: Delete the words “by your clients”, would - - -

MR IRELAND: The section says “benefit shown”.

GLEESON CJ: Would the admission that there had been a profit of $80,000 be irrelevant?

MR IRELAND: To a claim against the company, for example? My answer - - -

GLEESON CJ: To an - - -

MR IRELAND: I am sorry, your Honour, I did not mean to interrupt.

GUMMOW J: Just forget about the parties in this case and consider it at a level of generality, Mr Ireland.

MR IRELAND: Yes, I understand. Assume the party point goes nowhere, an admission of a profit of $80,000, would that be germane to an award of additional damages under section 115(4)? Is that the question I am asked?

GLEESON CJ: Yes.

MR IRELAND: Your Honour, the answer to that question is, it might be relevant but one would need to know a lot more because - - -

GLEESON CJ: What would be its possible relevance?

MR IRELAND: Its possible relevance would be to evaluate the circumstances in which the company – or whoever the infringer was in the more general question – had acted, because as the references have already been given, there may be benefits quite apart from strict profit which have to be taken into account and the measure of profit in your Honour’s hypothetical example in another case would need to be taken into account in saying, well, just what was gained by all of this? What was the extent of it all?

GLEESON CJ: Yes, is it not exactly the sort of thing a judge would want to know in having regard to the element of deterrence? I presume the deterrence referred to in (ia) is both general and particular.

MR IRELAND: It might be, your Honour, but that is not what happened in this case.

GLEESON CJ: No, no, I am talking about the construction of the section.

MR IRELAND: Of course, your Honour. It might be taken into account as one element in the whole of the decision, but the decision is a composite one, as your Honour looks at section 115 “the court is satisfied that it is proper to do so, having regard to” a whole range of factors, including “all other relevant matters”. So it does not direct the court into compartments of evaluation. What your Honour said in relation to Justice Rares at 84 I would like to take a little exception to, if I may, just by way of reply. I can see the light is on, your Honour, but his Honour did not say, “I am not putting $80,000 profit into the figure of $200,000” because he said at line 30 “having regard to the whole of the evidence, the $80,000 profit and interest already quantified”, so he was quantifying that money, $105,000, which was the 80 plus the applicable interest.

GLEESON CJ: “Having regard to” is the language of the statute.

MR IRELAND: Yes, but the matter is much clearer at page 65 in the joint judgment because they say:

The starting point, to reflect in a broad way the benefit obtained is, as we have said, $105,000. There should be added to this sum a substantial amount for the other factors we have identified.

So there cannot be an argument in this case that the $200,000 does not have two components, one of which is clear, namely, the profit and nothing else. So, on the facts of this case, I am in a stronger position, I respectfully say, than in the more general case where, of course, these matters may be relevant to determination but ultimately not part of an award.

Your Honour, could I just say something, I am sorry, about this concession? At page 14 of the supplementary appeal book Justice Rares asks, after 12 pages of tormenting Mr Cobden about his higher figure, Justice Rares asks me one question. He says:

I mean, I was asking you more about the $80,000. If he was approaching it and trying to work it out as to the amount of the benefit the defendant received is there an error in his approach to getting to the $80,000?

That is a quantification question. I say:

Well, it couldn’t be, because it’s the same fact. One searches for a profit and the role it plays in 115 is a matter of legal approach.

So, in my submission, there was absolutely no concession that the profit could be simply injected as a matter of principle over damages.

GLEESON CJ: In the circumstances of this case we do not consider that the applicant enjoys sufficient prospects of establishing material error in the application of section 115 of the Copyright Act to warrant a grant of special leave and the application is dismissed with costs.

AT 11.31 AM THE MATTER WAS CONCLUDED