Columbia Picture Industries Inc v Robinson
13 Much of the applicant's argument can be answered by reference to the judgment of Scott J in Columbia Picture Industries Inc v Robinson [1987] Ch 38, an important decision which was followed in this Court by Branson J in J C Techforce Pty Ltd v Pearce (1996) 138 ALR 522. In Columbia the plaintiffs complained of breach of copyright, passing off and trade mark infringement in relation to pirate videos. On 18 June 1982 the plaintiffs issued a writ and on the same day obtained an Anton Piller order and Mareva injunction ex parte. By a notice of motion dated 24 February 1984 the defendants sought dismissal of the action and the setting aside of the Anton Piller order and an enquiry, pursuant to the plaintiff's undertaking, into damages sustained by the defendants as a result of the order.
14 The action and the defendants' motion were heard together before Scott J in 1985. In a lengthy judgment his Lordship found that there was serious non-disclosure in the plaintiffs' affidavits on which the Anton Piller order was granted and that on the execution of the order the plaintiffs' solicitors took material not covered by the order. His Lordship gave judgment for the plaintiffs for the injunctions sought and ordered an enquiry as to damages for infringement of copyright. He rejected the defendant's application to set aside the Anton Piller order. The application was not made until 18 months afterwards and not dealt with until the final trial of the action. His Lordship concluded that the setting aside of the order could have no practical effect. Under the heading "Damages" his Lordship said (at 87):
"The defendants seek damages under the cross-undertaking given by the plaintiffs. In view of my findings as to the manner in which the order was obtained and executed, the defendants are, in my judgment, prima facie entitled to damages. The problem is quantum.
Damages for breach of a cross-undertaking ought, in my judgment, to be primarily compensatory. But I do not think, in the present case, that is the whole of the basis on which damages can be granted. It is well settled that an increased level of damages, sometimes described as aggravated damages, can be awarded where trespass to land or trespass to goods has been accompanied by circumstances of contumely or affront: see McGregor on Damages, 14th ed. (1980), paras. 1082 and 1127. That has been so in the present case by reason, in my judgment, of the excessive and oppressive manner in which the Anton Piller order was executed. There is not, in terms at least, any claim for exemplary damages in the present case. One of the categories of cases identified by the judgment of Lord Devlin in Rookes v. Barnard [1964] A.C. 1129 in which exemplary damages may be claimed is that of cases which involve oppressive, arbitrary or unconstitutional action by servants of the government. Solicitors who execute an Anton Piller order do so, in important part, as officers of the court. It is the court which places them in a position to do that which would, without the court authority, be a flagrant and inexcusable trespass. They are placed in a position in which their actions are likely to cause shock, distress and often outrage to those against whom the orders are executed. If, in execution of these orders, they act outside the terms of the order oppressively or excessively, I am disposed to think that Lord Devlin would have included the case in the category to which I have referred."
(Note that in Australia exemplary damages are not limited to the Rookes v Barnard categories: Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118.)
15 Scott J declined to order an enquiry as to the damages done to the defendants' businesses at the two premises where the order was executed. The compensatory element of any damages should compensate the defendants for damage to legitimate business interests. As to the first premises, although there were video tapes taken which were not the property of the plaintiffs, they were pirate videos; thus the whole business was illegal and an enquiry as to damage would in his Lordship's view be an account of an illegal enterprise like the highwayman's case (Everet v Williams (1725), discussed in (1893) 9 LQR 197).
16 The business at the second premises, although in part legitimate, continued for some time after the execution of the Anton Piller order and ceased for other reasons.
17 His Lordship nevertheless continued (at 88):
"I propose, therefore, to make an assessment here and now of the sum that the plaintiffs ought to pay the defendants under the cross-undertakings in damages. In spite of what I have said, there must be some compensatory element in the damages to be awarded. The combination of Anton Piller order and Mareva injunction made it impossible for the defendants to obtain credit. The retention by Hamlins [the plaintiffs' solicitors] of all the documents of the businesses made any continuity of business very difficult. There was a legitimate part, both of the 8, Frederick Street business and, perhaps to a very small extent, of the Mill Street shop business. The defendants' chance to continue on a small scale a legitimate business was impaired by the ex parte order being obtained and executed. In addition, this is, in my judgment, a case in which aggravated damages are justified."
18 In the event his Lordship awarded damages of £10,000.
19 Implicit in Scott J's approach are the propositions that:
(i) a plaintiffs' undertaking as to damages is an adequate legal foundation for an award of damages where the defendant has suffered loss as a result of an Anton Piller order being wrongly executed (for example, by seizure of materials not covered by the order);
(ii) success by the plaintiff on its substantive claim is not necessarily a bar to the defendant recovering damages (see also Spry, 5th ed, 656-7).
20 If I may respectfully say so, it would be most unjust if the law were otherwise. In the course of argument I was attracted to the suggestion that the respondents should be left to their remedies in the appropriate State court in trespass, conversion and detinue. However, it was only an order of the Federal Court, granted on the applicant's undertaking as to damages, which enabled the applicant to do what it did. This was an order "at the very limit of the in personam jurisdiction proper to be exercised by the courts": Columbia at 73. I do not think this Court should wash its hands and decline to adjudicate on the respondents' complaint that the applicant abused the exceptional power which the Court gave it.
21 Air Express is consistent with this conclusion. In that case a defendant who succeeded at trial failed to obtain damages on the plaintiff's undertaking given when an interlocutory injunction was granted. The trial judge (Aickin J) and the Full High Court on appeal held that the loss flowed not from the injunction but from the litigation itself. Thus the issue was one of causation. Stephen J said (at 320):
"… it will only be if damage is suffered because of the grant of the injunction, and would not have been suffered but for it, that the Court should compensate a defendant who claims damages under the undertaking. Its grant must be shown to be the causa sine qua non of the damage complained of before the defendant can be entitled to be compensated for what turns out to be the erroneous grant by the Court of the injunction against it."
22 Similarly Mason J said (at 324):
"The party seeking damages must show that he has sustained damage 'by reason of this Order'. The words connote a causal connexion between the damage and the interim injunction."
23 In my opinion those observations are equally applicable where the question is not whether the interlocutory order was wrongly obtained (in the sense discussed by Spry, supra) but whether abuses were perpetrated in the execution of the Order. If what Mr Purcell says is true, the respondents have been "adversely affected by" the Anton Piller order because had it not been for that order the applicant would not have gained access to the respondents' premises and taken away their property against their will: see the passage in Columbia cited at par 14 above.
24 That part of the final judgment which discharged the applicant from its undertakings is not to be read as an absolution of the applicant for any wrongs it may have committed to date. This is particularly so in a context where, unlike Columbia, the hearing on the substantive claim did not deal with complaints as to the execution of the Anton Piller order. As Spry said (6th ed at 657):
"It has long been established that the jurisdiction of the court to award damages pursuant to an undertaking does not come to an end merely because the proceedings of the plaintiff are finally disposed of at a subsequent hearing. Even after his action has, for example, been dismissed, the power to award damages remains, for it is a power that arises, not from the original institution of proceedings, but rather from the giving of the undertaking itself."