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High Court of New Zealand Decisions |
Last Updated: 12 April 2019
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
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CIV-2016-404-2256
[2018] NZHC 3186 |
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BETWEEN
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SEALEGS INTERNATIONAL LIMITED
Plaintiff
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AND
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YUN ZHANG
First Defendant
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AND
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ORION LIMITED AND ORION MARINE LIMITED
Second Defendants
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AND
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SMUGGLER MARINE LIMITED
Third Defendant
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AND
Cont...
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DARREN LEYBOURNE
Fourth Defendant
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Hearing:
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On the papers
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Appearances:
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B P Henry & C S L Foster for Plaintiff
J G Miles QC, P J K Spring & A K Hyde for First, Second, Third, Fourth,
Sixth and Ninth Defendants
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Judgment:
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5 December 2018
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JUDGMENT OF PAUL DAVISON J
[Re: Application to recall judgment]
This judgment was delivered by me on 5 December 2018 at 4:00 pm
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Solicitors:
Colin Woodroffe, Auckland Keegan Alexander, Auckland
SEALEGS INTERNATIONAL LIMITED v YUN ZHANG [2018] NZHC 3186 [5 December 2018]
Cont...
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AND
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VLADAN ZUBCIC
Sixth Defendant
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AND
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WARREN FARR
Seventh Defendant
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AND
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PAUL HOOD
Eighth Defendant
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AND
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DAVID PRINGLE AND PAULINE PRINGLE
Ninth Defendants
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AND
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STRYDA MARINE LIMITED
Tenth Defendant
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Introduction
[1] The plaintiff, Sealegs International Ltd, alleged that the defendants had infringed its copyright by copying the amphibious leg assemblies that Sealegs designed and manufactured for installation on small boats. On 12 July 2018, I gave judgment for Sealegs against the first, second, third, fourth, sixth, ninth1 and tenth defendants.2
[2] On 9 August 2018, the defendants filed an application seeking recall of my judgment. In particular, they sought amendment of the paragraphs granting relief to the plaintiff. Mr Miles QC for the defendants submits that the wording of the injunctions does not reflect the findings made in my judgment. The plaintiff opposes the application for recall, saying that the wording is appropriate and in any event the final terms of the injunction are to be settled following a further hearing as to relief.
The defendants’ submissions
[3] The defendants seek amendment of paragraphs [474]–[475] of my judgment, which presently read:
[474] I make an order by way of an injunction restraining the first to ninth defendants (excepting the seventh defendant and the ninth defendant (Pauline Pringle)) from infringing the plaintiff’s copyright and from manufacturing, displaying, offering for sale or selling copies of the plaintiff’s copyright works as particularised in paragraph [17] of the fifth amended statement of claim, whether for sale in New Zealand or any other country including China.
[475] I make an order restraining the first, second, third, fourth, sixth, ninth (Mr Pringle only) and tenth defendants from manufacturing, displaying, offering for sale, or selling copies of, or completing the sale of, the Orion S25- 4WD and/or the Orion S25-3WD either as a separate kit or installed on the hull of a craft.
[4] At [477], I further noted:
The duration of injunctive relief comprised in the orders is to be determined by reference to the expiry date of the plaintiff’s copyright. That expiry date is to be determined following the receipt of further evidence and submissions by the parties on that issue, which will be heard together with the plaintiff’s
2 Sealegs International Ltd v Zhang [2018] NZHC 1724.
application for an inquiry as to damages. In the meantime, the interim injunction order made by Peters J on 19 December 2016 shall remain in force.
[5] Mr Miles says that the relief granted in paragraphs [474]–[475] is too broad and does not reflect the findings in my judgment. He makes the following points:
(a) He says that the injunctions should refer specifically to the external amphibious assemblies, rather than the infringing works (Orion S25- 4WD and Orion S25-3WD) as a whole. Mr Miles says that the injunctions in their present form prohibit the defendants from dealing with parts of their system located inside the hull, for example the hydraulic power pack and computer controls.
(b) Mr Miles further notes that paragraph [474] grants relief in respect of the copyright works pleaded in paragraph [17] of the plaintiff’s fifth amended statement of claim. However, Mr Miles notes that I focused on only three of the plaintiff’s pleaded copyright works in my judgment, namely Boat 1, Boat 136 and IKA11. I concluded that copyright in a pattern or arrangement of features found in each of those works had been infringed. Mr Miles therefore says I should have focused the wording of the injunction on the pattern or arrangement of features as found in the external amphibious assemblies of those three works.
[6] In their most recent memorandum dated 6 November 2018, the defendants propose that paragraphs [474]–[475] of my judgment be replaced with the following orders:
(a) The first to fourth, sixth, ninth (Mr Pringle only) and tenth defendants are restrained from infringing the plaintiff’s copyright in the pattern or arrangement of features outlined in paragraphs 193-196 of the judgment, as contained in the external amphibious assemblies on the prototypes known as Boat 1, Boat 136 and IKA11.
(b) In particular, the first to fourth, sixth, ninth (Mr Pringle only) and tenth defendants are restrained from manufacturing, displaying, offering for sale, or selling copies of, or completing the sale of, the external amphibious assemblies of the Orion S25-4WD and/or the external amphibious assemblies of the Orion S25-3WD either as a separate kit or installed on the hull of a craft.
(c) The duration of orders (a) and (b) above is to be determined following a hearing to ascertain the duration of the plaintiff’s copyright.
[7] Paragraphs [193]–[196] of my judgment, referred to in the defendants’ draft orders, itemise the copyright pattern of features with reference to Boat 1, Boat 136 and IKA11.
[8] The defendants also seek an order that the interim injunction made by Peters J in December 2016 be lifted, saying that the interim injunction gives wider protection to the plaintiff than is justified from the judgment.3
The plaintiff’s opposition to recall
[9] Mr Henry for the plaintiff submits that the orders sought by Mr Miles are too vague. The purpose of an injunction, he says, is to clearly define the acts that the defendant is restrained from doing in detailed terms.
[10] The plaintiff seeks to maintain the reference to each of its pleaded copyright works and to Orion’s S25-3WD and S25-4WD as a whole. Mr Henry submits that it is normal to prohibit the sale of the entirety of the infringing product, in this case Orion’s S25-3WD and S25-4WD. Such an injunction does not prohibit sale of aspects of the product, such as components located inside the hull, but restrains the sale of the whole product.
[11] Mr Henry further says that the injunctions at paragraphs [474] and [475] are simply a basis on which to draft the terms of a comprehensive injunction the terms of which will be finally settled at a later stage.
[12] The plaintiff says that the discharge of the interim injunction before the terms of the injunction are settled and the orders sealed, in particular the expiry date, would result in the defendants immediately being able to sell their systems without restraint. The plaintiff therefore seeks that the interim injunction remain in place.
3 Sealegs International Ltd v Zhang [2016] NZHC 3143.
[13] The plaintiff proposes alternative draft orders which expressly itemise each of the pleaded copyright words in its fifth amended statement of claim. The plaintiff would also introduce the words “substantial copies” into paragraph [475] so that the defendants are restrained from selling substantial copies of the Orion S25-3WD and S25-4WD.
Discussion
[14] Rule 11.9 of the High Court Rules 2016 provides that a Judge may recall a judgment at any time before it is sealed. It is common ground that the judgment has not yet been sealed, although the defendants have filed a notice of appeal.
[15] As Wild CJ noted in Horowhenua Country v Nash (No 2):4
Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled - first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.
[16] Mr Miles submits that the present case falls into the third category, and cites two cases in which recall applications were granted because the Judge’s orders did not reflect the Judge’s findings. He refers to Works Civil Construction Ltd v Does Not Compute Corp Ltd, where a judgment was recalled because the Judge had dealt with only one of the causes of action.5 He also refers to Spencer v Ministry of Health, in which a judgment was recalled because it had failed to include pre-judgment interest in the schedule dealing with relief.6 It was noted that Ms Spencer had claimed compensation for pecuniary loss, with interest, and the Court held that she was to be compensated for her opportunity costs. The failure to include pre-judgment interest in the schedule therefore did not reflect the judgment, and that was held to be a valid ground for recall.
6 Spencer v Ministry of Health [2017] NZHC 291, (2017) 11 HRNZ 158.
[17] The discretion to recall must be exercised with circumspection, and must not be seen as a substitute for an appeal.7 I accept that the present application is not an attempt to re-open substantive matters already decided.8 Rather, the defendants maintain that the relief granted does not reflect the findings in the judgment, which is prima facie a valid ground for recall. The plaintiff points out that the final terms of the orders made at paragraphs [474] to [475] of my judgment – in particular their duration – were to be settled following a further hearing as to relief. However, the orders made in my judgment nevertheless have full force and effect pending any further orders of the Court. It is therefore important that their terms accurately reflect the conclusions reached in the judgment. I note that the defendants say the terms of the orders are having a significant effect on their business activities.
[18] I accept that paragraph [474] should be amended to better reflect the findings made earlier in the judgment, on the terms sought by the defendants. My judgment was focused on the pattern or arrangement of features which I considered were protected by copyright,9 and I drew that pattern from the features of Boat 1, Boat 136 and IKA11. I therefore accept it is more appropriate for the orders to refer specifically to the copyright pattern of features identified in the judgment at paragraphs [193]– [196], rather than the plaintiff’s list of pleaded copyright works.
[19] I do not consider that paragraph [475] strictly requires amendment, and on its own this would not warrant recall of the judgment. As Mr Henry points out, an injunction referring to the entirety of the infringing product (in this case Orion S25- 3WD and Orion S25-4WD) only prohibits the sale of the entire product – and, when read together with paragraph [474], any infringing components of that product. It does not prohibit the sale of individual non-infringing components, such as the hydraulic power pack or computer controls. However, for the sake of clarity, I am prepared to amend paragraph [475] in the terms sought by the defendants.
8 Nottingham v Real Estate Agents Authority [2017] NZCA 145 at [11].
9 See [193]–[196].
[20] I note the submission made by Mr Henry that infringement by copying may also occur where a “substantial part” of the copyright work is copied.10 I therefore amend the defendants’ proposed orders to add the word “substantial”.
[21] The final question is whether the interim injunction made by Peters J should remain in force. On 19 December 2016, Peters J ordered:
Pending further order of the Court, the First to Fourth and Sixth Defendants by themselves, their servants, agents or otherwise howsoever, are restrained from copying, issuing (whether by sale or otherwise), showing to the public or adapting the works numbered 1 to 68 inclusive annexed to the amended statement of claim dated 30 September 2016 and, in particular, from issuing (whether by sale or otherwise), showing to the public or adapting the product referred to herein as the S25-3WD or any similar product.
[22] The terms of the interim injunction made by Peters J in December 2016 have now been superseded by the findings and orders made in my judgment of 12 July 2018. The 2016 interim injunction refers to the works numbered 1 to 68 in the plaintiff’s amended statement of claim dated 30 September 2016, which was not the final version of the statement of claim on which the case later went to trial. Further, as noted above, my judgment focused on the plaintiff’s copyright in a specified pattern or arrangement of features, and it is appropriate that the terms of any injunctions also focus on that pattern of features.
[23] The plaintiff is concerned that it will not be protected from copyright infringement if the interim injunction does not remain in place, as it says that the duration of the injunctions contained in my judgment is yet to be determined and the final orders are yet to be sealed. As I noted earlier, the duration of the orders is to be determined at a later stage following a further hearing as to relief.11 However, I reiterate that the orders made in my judgment of 12 July 2018 (as recalled and reissued by the present judgment) nevertheless have full force and effect pending any further order of the Court. The effect of my judgment is therefore to put new interim orders
10 Copyright Act 1994, s 29(2)(a).
11 See Sealegs International Ltd v Zhang [2018] NZHC 1724 at [476]–[478]. The relief hearing was also to deal with the plaintiff’s application for an inquiry as to damages and the delivery up of infringing items. The further relief hearing has not yet taken place, and the defendants have made an application seeking that the hearing be put on hold pending their appeal. I will deal with that application separately.
in place, the duration and final terms of which will be determined following a further hearing as to relief.
Result
[24] I recall the judgment in this matter dated 12 July 2018.
[25] I replace paragraphs [474], [475] and [477] with the following orders:
[474] Pending further order of the Court, the first to fourth, sixth, ninth (Mr Pringle only) and tenth defendants are restrained from infringing the plaintiff’s copyright in the pattern or arrangement of features outlined in paragraphs [193]–[196] of this judgment, as contained in the external amphibious assemblies on the prototypes known as Boat 1, Boat 136 and IKA11.
[475] In particular, pending further order of the Court, the first to fourth, sixth, ninth (Mr Pringle only) and tenth defendants are restrained from manufacturing, displaying, offering for sale, or selling substantial copies of, or completing the sale of, the external amphibious assemblies of the Orion S25-4WD and/or the external amphibious assemblies of the Orion S25-3WD either as a separate kit or installed on the hull of a craft.
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[477] The duration of injunctive relief comprised in the orders at [474] and
[475] is to be determined following a hearing to ascertain the duration of the plaintiff’s copyright. I order that the interim injunction made by Peters J on 19 December 2016 is no longer in force.
[26] I reissue the judgment with these amendments.
[27] The defendants, having succeeded in their application for recall, are entitled to costs on a 2B basis and disbursements. If the parties are unable to reach agreement on the defendants’ costs, they are to file a costs memorandum (not to exceed three pages in length) within 10 working days from delivery of this judgment, and thereafter I shall determine the costs on the papers.
Paul Davison J
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