Keller v LED Technologies Pty Ltd

The Designs Claims 3 LED Technologies is registered under the Designs Act 2003 (Cth) (the Designs Act) as the owner of Design No. 302359 (the Dual Lens Design) and Design No. 302360 (the Triple Lens Design). Representations of the Dual Lens Design and the Triple Lens Design (together the Designs) are set out in the Schedule to these reasons. 4 LED Technologies claimed injunctions and damages against Elecspess, AAA, Ren and Olsen (together the Corporate Respondents) for infringement of its monopoly in the Designs. The Corporate Respondents denied that the importation, sale or distribution of the Condor products infringes the Designs. Further, they cross-claimed for orders revoking the registration of the Designs.

The Trade Practices Claims 5 Section 7(1) of the Motor Vehicle Standards Act 1989 (Cth) (the Standards Act) provides for the determination of vehicle standards. The title of each vehicle standard determined under s 7 includes a reference to an Australian Design Rule (ADR). The Condor products were marketed in packaging that bore one or more of a number of captions as follows: · Complies with ADR1. · Complies with ADR6. · Complies with ADR49. · ADR Approved. LED Technologies says that to market the Condor products with such captions involves the making of representations that the Condor products comply with one or other of the vehicle standards and that it was misleading or deceptive to do so, in contravention of s 52 and s 53 of the Trade Practices Act 1974 (Cth) (the Trade Practices Act), because the Condor products do not comply with the relevant vehicle standard. 6 Section 65C(1)(a) of the Trade Practices Act provides that a corporation must not supply goods that are intended to be used, or are of a kind likely to be used, by a consumer if the goods are of a kind in respect of which there is a prescribed consumer product safety standard and which do not comply with that standard. Section 41 of the Standards Act provides that, for the purposes of s 65C of the Trade Practices Act, a vehicle standard determined under the Standards Act is to be taken to be a prescribed consumer product safety standard. LED Technologies alleged that the supply of certain of the Condor products contravened s 65C, because they do not comply with the relevant vehicle standard. 7 LED Technologies claimed declarations that conduct of the Corporate Respondents contravened ss 52, 53 and 65C of the Trade Practices Act. It also claimed damages pursuant to s 82 of the Trade Practices Act for the loss that it says it has suffered by that conduct of the Corporate Respondents.

Claims against the Individuals 8 LED Technologies also alleged that Messrs Peter Morrison, Anthony Keller and Lawrence Armstrong, who were directors of Ren and Olsen, were personally liable, as joint tortfeasors, for the infringement of its monopoly in the Designs. LED Technologies also claimed damages against Messrs Morrison, Keller and Armstrong, on the basis that they were involved in the contraventions of the Trade Practices Act by the Corporate Respondents. That claim was based on s 75B of the Trade Practices Act. 9 While LED Technologies pressed its claims against Messrs Keller and Armstrong (together the Directors), it subsequently abandoned its claims for relief against Mr Morrison. However, a question arises as to Mr Morrison's costs.

The Conclusions of the Primary Judge 10 The primary judge concluded as follows: · There is no basis for revocation of either of the Designs. · The Corporate Respondents infringed LED Technologies' monopoly in the Designs. · The Corporate Respondents contravened ss 52 and 53 of the Trade Practices Act. · The Corporate Respondents did not contravene s 65C of the Trade Practices Act. · The Directors authorised, directed and procured the conduct of Ren and Olsen in relation to the infringement of LED Technologies' monopoly so as to be liable as joint tortfeasors for the infringement. · The Directors were not knowingly concerned in the contraventions of ss 52 and 53 of the Trade Practices Act. · LED Technologies is entitled to recover damages for the infringement. · LED Technologies is not entitled to additional damages for contravention of ss 52 and 53 of the Trade Practices Act. · Declarations that the Corporate Respondents had contravened ss 52 and 53 of the Trade Practices Act should not be made. On 24 February 2009, the primary judge made orders in accordance with those conclusions. Her Honour also made orders for costs as follows: · LED Technologies pay Mr Morrison's costs of its claims against him incurred after 10 April 2008. · The Corporate Respondents and the Directors pay LED Technologies' costs of the claims in relation to the Designs. · LED Technologies pay the costs of the Trade Practices Act claims against the Corporate Respondents and the Directors. 11 On 16 March 2009, Messrs Keller, Armstrong and Morrison filed a notice of appeal from some of her Honour's orders. LED Technologies filed a notice of cross-appeal in that proceeding. Messrs Keller, Armstrong and Morrison filed a notice of contention in relation to the cross-appeal. 12 On 17 March 2009, the Corporate Respondents filed a notice of appeal from other orders made by the primary judge. LED Technologies filed a notice of cross-appeal in that proceeding. The Corporate Respondents filed a notice of contention in relation to that cross-appeal. 13 Proceeding VID 167 of 2009 is the Appeal by Messrs Morrison, Keller and Armstrong and the cross-appeal by LED Technologies. Proceeding VID 168 of 2009 is the appeal by the Corporate Respondents and the cross appeal by LED Technologies. The Corporate Respondents, on the one hand, and the directors, on the other, were separately represented on the hearing of the appeals and cross-appeals. However, both groups put the same submissions and counsel for the Corporate Respondents adopted the submissions made by counsel for the Directors.

THE ISSUES IN THE APPEALS AND CROSS APPEALS 14 Several issues arise in the appeals, the cross-appeals and the notices of contention and some issues are common. The issues that arise for the Full Court relate to the following:

• Validity of the Designs:
• Infringement of the Designs.
• Secondary liability of the Directors for infringement as joint tortfeasors:
• Mr Morrison's costs.
• Contravention of s 65C of the Trade Practices Act.
• Relief against the Corporate Respondents for contravention of the Trade Practices Act:
  1. Whether loss established;
  2. Whether declarations should be made;
  3. Costs; and
  4. Quantum of damages under s 82 of Trade Practices Act.
• Involvement of the Directors in contraventions of the Trade Practices Act. It is convenient to deal with those issues separately. However, there may be some factual overlap in their treatment. 15 I have read in draft the reasons of Besanko J and of Jessup J. In relation to the issues under the Designs Act, other than the question of the liability of the Directors as joint tortfeasors, I agree with the conclusions of Besanko J. In relation to the issues concerning Mr Morrison's costs and liability under s 65C of the Trade Practices Act, I agree with the conclusions of Jessup J. In preparing these reasons I have drawn heavily on their Honours' full and complete treatment of those issues.

THE ISSUES UNDER THE DESIGNS ACT 16 On 24 February 2009 the primary judge made declarations as follows: 1. The Condor product with the code number TL80RA offered for sale and sold by each of the [Corporate] Respondents infringes the [Dual Lens Design]. 2. Each of the Condor products with the code numbers: (a) TL80RRA / TL80ARR; (b) TL80ARW; (c) TL100ARR; (d) TL100RAA; (e) TL100ARW; (f) TL125AAR / TL125RRA; and (g) TL125ARW, offered for sale and sold by each of the [Corporate] Respondents infringes the [Triple Lens Design]. Her Honour also made orders that the Corporate Respondents and the Directors be restrained from infringing LED Technologies' monopoly in the Designs and ordered that the Corporate Respondents and the Directors pay to LED Technologies damages in the sum of $200,000 for infringement of LED Technologies' monopoly in the Designs. 17 The figures in the descriptions of the Condor products mentioned to in the orders refer to the three sizes offered for sale and sold by the Corporate Respondent, being 80 mm, 100 mm and 125 mm. The letters at the end of the description of the Condor products denote the colour of the lights, being red, amber or white. 18 There are three issues arising under the Designs Act as follows: · Whether the Designs were invalid on the ground that the representations in the Register were unclear and the monopoly lacked certainty. · Whether the Designs were invalid on the ground that they were not new and distinctive but were substantially similar in overall impression to a design that formed part of the prior art base. · Whether the Condor Products infringed the Designs. Before dealing with those issues it is desirable to say something about the relevant provisions of the Designs Act and the applications made for the Designs.

Relevant Provisions of the Designs Act 19 Under s 5 of the Designs Act, design, in relation to a product, means the overall appearance of the product resulting from one or more visual features of the product and representation means a drawing, tracing or specimen of a product embodying a design or a photograph of such a drawing, tracing or specimen. Section 7 provides that visual feature,in relation to a product, includes the shape, configuration, pattern and ornamentation of the product. Section 8 provides that a reference to a design is a reference to a design in relation to a product. 20 Section 10 of the Designs Act sets out the exclusive rights that the registered owner of a registered design has during the term of registration of the design. Those rights include the exclusive right to make, or offer to make, a product, in relation to which the design is registered, which embodies the design. Sections 15, 16 and 19 of the Designs Act deal with the features that a design must exhibit before it can be registered. 21 Under s 15(1), a design is a registrable design if the design is new and distinctive when compared with the prior art base for the design as it existed before the priority date of the design. Under s 15(2), the prior art base for a design (the designated design) consists of: (a) designs publicly used in Australia; and (b) designs published in a document within or outside Australia; and (c) designs in relation to which each of the following criteria is satisfied: (i) the design is disclosed in a design application; (ii) the design has an earlier priority date than the designated design; (iii) the first time documents disclosing the design are made available for public inspection under section 60 is on or after the priority date of the designated design. 22 Section 16 provides that a design is new unless it is identical to a design that forms part of the prior art base for the design. A design is distinctive unless it is substantially similar in overall impression to a design that forms part of the prior art base for the design. The newness or distinctiveness of a design is not affected by the mere publication or public use of the design in Australia on or after the priority date of the design, or by the registration of another design with the same or a later priority date. 23 Section 19 deals with factors to be considered in assessing substantial similarity in overall impression. Under s 19, if the Court is required to decide whether a design is substantially similar in overall impression to another design, the Court is to give more weight to similarities between the designs than to differences between them. The Court must also: (a) have regard to the state of development of the prior art base for the design; and (b) if the design application in which the design was disclosed included a statement (a statement of newness and distinctiveness) identifying particular visual features of the design as new and distinctive: (i) have particular regard to those features; and (ii) if those features relate to only part of the design - have particular regard to that part of the design, but in the context of the design as a whole; and

(c) if only part of the design is substantially similar to another design, have regard to the amount, quality and importance of that part in the context of the design as a whole; and (d) have regard to the freedom of the creator of the design to innovate. If the design application in which the design was disclosed did not include a statement of newness and distinctiveness in respect of particular visual features of the design, the Court must have regard to the appearance of the design as a whole. The Court must apply the standard of a person who is familiar with the product to which the design relates, or products similar to the product to which the design relates (the standard of the informed user). 24 Section 71 defines the acts that constitute infringement of a registered design. It relevantly provides that a person infringes a registered design if, during the term of registration of the design, and without the licence or authority of the registered owner of the design, the person makes or offers to make a product, in relation to which the design is registered, which embodies a design that is identical to, or substantially similar in overall impression to, the registered design. In determining whether an allegedly infringing design is substantially similar in overall impression to the registered design, the Court is to consider the factors specified in section 19. 25 Several sections of the Designs Act are potentially relevant to the issue of whether the Designs are invalid because the representations are unclear and the monopoly lacks certainty. Under s 111 of the Designs Act, the Registrar must keep at the Designs Office a Register of Designs. Various particulars must be entered in the Register in respect of a registered design and those particulars include representations of the design. Under s 112, the Register may be kept wholly or partly by use of a computer. 26 Under s 21 of the Designs Act, a person may file an application in respect of a design. The application must comply with what are defined in s 21(2) as minimum filing requirements. The minimum filing requirements relate, inter alia, to the representations of the designs. Regulation 3.01 of the Design Regulations 2004 (Cth) (the Regulations) provides that, as part of the minimum filing requirements, the application must include a representation, or information that appears to be a representation, of each design. Under s 39 of the Designs Act, the Registrar must register the design if the Registrar is satisfied, inter alia, that the design application satisfies the formalities check specified in the Regulations. Regulation 4.04 provides that part of the formalities check is confirmation by the Registrar that the design application includes five copies of each representation of the design. 27 Section 93 of the Designs Act relevantly provides that a person may apply to the Federal Court for an order revoking the registration of a design. The grounds on which the Court may revoke the registration of the design include the ground that the design is not a registrable design. That refers to s 15. In s 93, original registered owner, in relation to a design, means each person entered in the Register as the registered owner at the time the design was first registered. 28 The Designs Act also contains provision for the rectification of the Register. Section 120 of the Designs Act relevantly provides that a person aggrieved by: · the omission of an entry from the Register; or · an entry wrongly made in the Register; or · an error or defect in an entry in the Register; or · an entry wrongly existing in the Register; may apply to the Federal Court for an order to rectify the Register. On hearing such an application, the Court may decide any question that it is necessary or expedient to decide in connection with the rectification of the Register and make any order it thinks fit for the rectification of the Register.

The Designs 29 In June 2004, LED Technologies lodged applications in respect of the Designs. With each application there was a set of drawings (the Greyscale Drawings). The Greyscale Drawings were prepared using dark ink and various parts of the product were shown in dark ink. The Greyscale Drawings were kept on physical files maintained by IP Australia in an envelope endorsed with the word "Informals". 30 LED Technologies' applications did not satisfy the formalities check specified in the Designs Act and the Regulations because each application did not include five copies of each representation of each design, as required by s 39 and reg 4.04. In November 2004, LED Technologies received a notice from IP Australia stating that the applications for registration did not satisfy the formal requirements for registration because only one set of drawings had been provided with each application. The notice said that, if the deficiency was not remedied within two months, the applications might lapse. When Mr Ottobre, a director of LED Technologies, came to attend to the matter, he had only pink ink available to him and further copies of the drawings were printed using pink ink (the Pink Drawings). The Pink Drawings show representations of the products in pink ink, which is quite faint. The Greyscale Drawings were not faint. LED Technologies provided the Pink Drawings to IP Australia. The representations attached to the certificates of registration for each design are the Pink Drawings. 31 As contemplated by the Designs Act, the Registrar keeps the Register, or part of the Register, by use of a computer. IP Australia operates a website and part of the Register can be accessed through the website. The Pink Drawings are the representations of the Designs on the website. The representations set out in the Schedule to these reasons are paper copies of what is shown on the website. 32 The product in respect of which the Dual Lens Design is registered is described in the relevant certificate of registration as "rear combination lights". The priority date is 22 June 2004. The certificate of registration refers to a statement of newness and distinctiveness (the Newness Statement) in the following terms: Seperate (sic) clip in lenses. Base to take a variety of 2, 3 or 4 combination lenses for stop, tail, indicator, reverse LED lenses, no visible screws. 33 Five pages of representations are attached to the certificate of registration, as set out in the Schedule to these reasons. The product shown in the representation consists of two combination lenses and a base. The products are attached to vehicles to indicate when the vehicle is stopping, turning or reversing, as the case may be. 34 The certificate of registration for the Triple Lens Design records much the same information as the certificate of registration for the Dual Lens Design. Five relevant pages of representations are attached to the certificate of registration. The Triple Lens Design is for a product consisting of three combination lenses and a base.

Clarity of the Designs 35 In order to be valid, a registered design must be reasonably clear and succinct. That is to say, the design must appear with reasonable clarity, and without necessity for unreasonably prolonged or complicated series of deductions, from the registered representation. A design may be valid for any form that is new, subject to the requirement that it be distinct and present an appearance that strikes the eye as being different from any previously existing shape. The design is addressed to a person of some skill, who might be called a person skilled in the art. However, a person skilled in the art is not necessarily familiar with particular methods of manufacture per se. Such a person knows the prior art articles and the prior art registered designs and knows as much about manufacture as such a person would reasonably be expected to deduce from a study of those designs and articles, but not necessarily any more. If a design, depicted by reference to an article to which it has been applied, appears difficult to construe, evidence is admissible from persons familiar with such articles and with methods of applying designs to them, at all events where the design is confined to configuration (see LJ Fisher & Company Ltd v Fabtile Industries Pty Ltd (1978) 1A IPR 565, 571-72 (LJ Fisher & Company Case)). 36 It is for the Court to determine the meaning of a design in a proceeding under the Designs Act, whether the central question be the meaning of the design, novelty or infringement. While some designs are simple, such that the Court needs no expert evidence to interpret them, other designs are complex, such that the Court may require technical assistance in order to understand them. Such evidence is plainly admissible. However, ultimately, it is for the Court to rule on the meaning of a design. Similarly, prior art may be a fairly simple matter in a particular case, requiring little or no technical evidence. On the other hand, the understanding and interpretation of prior art may call for expert assistance to be provided to the Court for similar reasons. There is no objection in an appropriate case to evidence being received from persons in the relevant trade or industry or members of the public directed to the question of infringement. Nevertheless, it is for the Court to determine that question, with or without such evidence (see Firmagroup Australia Pty Ltd v Byrne & Davidson Doors (Vic) Pty Ltd (1986) 6 IPR 377 at 385-6). 37 Section 19 of the Designs Act introduced the standard of the informed user. It is clear that it is for the Court to make up its own mind as to the meaning of the Designs, applying the standard of the informed user. The issue is the clarity of the Designs. It was not suggested that the Designs are so complex that the Court requires technical assistance in order to understand them. 38 The Corporate Respondents and the Directors contended that, in the case of the Dual Lens Design, it is unclear whether the lenses are square or rectangular. In that respect, the Court was referred to the first page of the relevant representations. However, the representations must be considered as a whole and, when that is done, it is quite clear that the lenses are square. The Corporate Respondents and the Directors also contended that the representations are unclear as to the cut-out on the left hand side of the base, as shown on the first page of both sets of representations. There is no uncertainty about the fact that the designs show a cut-out on the two short sides of the base. Next, they contended that the representations of the rear or underside of the product in both sets of representations are unclear because it is unclear as to what is represented by the pink colouring. Clearly enough, the pink area is the back of the lenses, with a gap between each lens. The pink area indicates a cavity or void and is to be contrasted with the open back plate. The feature of the design to which those matters are relevant is the shape and configuration of the open back plate. That feature is shown sufficiently clearly in the representations. 39 The relevant test is whether the Designs are reasonably clear and succinct. The Designs Act requires representations embodying the relevant design. A design is the overall appearance of a product resulting from one or more visual features of a product. No assessment of distinctiveness for the purposes of validity, or for the purposes of infringement, can be made without knowledge of the overall appearance of a product resulting from one or more visual features of the product. In the present case, there is no written description of the overall appearance and visual features of the relevant product, other than the brief statement of newness and distinctiveness. 40 At the hearing before the primary judge, the parties called witnesses who gave evidence on the issues of the clarity of the Designs and distinctiveness for the purposes of validity and infringement. Each witness was put forward as a person who could give evidence relevant to the standard of the informed user referred to in s 19 of the Designs Act. The Corporate Respondents and the Directors called Mr Trevor Garrard, who was a consultant to the automotive electrical industry. LED Technologies called Mr Glenn Ransom, who operated an auto electrical wholesale business. 41 Mr Garrard looked at the Pink Drawings. He said that he had difficulty in understanding features of the Designs such as the side profile of the base and the degree of rounding of the lens. However, in cross-examination, he acknowledged that he was able to discern features of the Designs except for the curved ends. Other witnesses gave evidence about the Pink Drawings and what they could and could not discern from them. The primary judge conducted her own examination of the representations and concluded that it was possible to discern from the Pink Drawings the visual features of the Designs, including the two matters to which Mr Garrard had drawn special attention. 42 The primary judge went on to note that it was possible, within limits, to reproduce the representations at greater magnification than may first be displayed on the computer screen. Her Honour considered that, when the five different views of each of the Designs were displayed at high magnifications, the details and specifications of each of the Designs appear not just with reasonable clarity, but with great clarity. The Corporate Respondents and the Directors pointed out that there was no evidence that the representations on the IP Australia website could be or were in fact magnified by any witness, and contended that a member of the public seeking information as to a registered design would not be expected to magnify the online representations electronically. Her Honour concluded that, since there was a presumption implicit in the Designs Act, which was accepted by the parties, that a person will be able to access an image on the website, it must be expected that such a person could and would magnify the image without prompting. Her Honour considered that that provided separate support for her conclusion that the visual features of the Designs are sufficiently clear. 43 The primary judge considered that the Pink Drawings are not perfect and that they could be better or clearer. Nevertheless, her Honour concluded that they were reasonably clear and succinct. Her Honour made no error in concluding that the representations were reasonably clear and succinct.

Distinctiveness of the Designs 44 Not every shape is a design. There must be sufficient individuality of appearance to distinguish it from the fundamental form of an article. The existence of that sort of individuality is to be determined by the eye and not by measuring dimensions. It follows that a design need not have the precision of a working drawing. Rather, it concerns the shape or configuration of an article, as it appears to the eye. If a design applied by another has the features that are characteristic of the registered design and are so arranged that to the eye the resulting shape is substantially the same, there is infringement. However, if the same features are arranged so that to the eye the resulting shape is different, there is, in the absence of fraudulent imitation, no infringement. In deciding one way or the other, the proportions of common features may be of the utmost importance (see Malleys Ltd v JW Tomlin Pty Ltd (Malleys Case) (1961) 1a IPR 559 at 560). 45 Nevertheless, that does not involve deciding that, to be registrable, the representation of the design must be such that its proportions can be accurately calculated. It is sufficient if the representation of the design shows a shape with enough individuality of appearance to distinguish it and to enable one to determine, by visual comparison, whether the shape of an article is either the same as, or nothing more than an imitation of, that disclosed by the registered design (see Malleys Case at 560). 46 Questions of infringement and novelty or originality are connected. One may be able to take into account the state of knowledge at the time of registration, and in what respects the design was new or original, when considering whether any variations from the registered design that appear in the alleged infringement are substantial or immaterial. Where novelty or originality is discovered in slight variations, there cannot be infringement without a very close resemblance between the registered design and the article alleged to be an infringement of the design. The Court should have regard to what was known at the priority date and if the particular features that provide a novel conception have not been reproduced in the alleged infringement, the similarity of appearance between the article complained of and the registered design, if present, must necessarily reside in the common possession of characteristics that are free to everybody to employ. Small differences between the registered design and the prior art will generally lead to a finding of no infringement, if there are equally small differences between the registered design and the alleged infringing article. On the other hand, the greater the advance in the registered design over the prior art, the more likely that the Court will find common features between the design and the alleged infringing article to support a finding of infringement (see Dart Industries Inc v Décor Corporation Pty Ltd (1989) 15 IPR 403 at 409): 47 The Corporate Respondents and the Directors contended that the Designs were not registrable designs because they were not distinctive when compared with the prior art base. It was accepted that the Designs were not identical to a particular design that formed part of the prior art base for the design. Rather, the Corporate Respondents and the Directors placed specific reliance upon several prior art base products. However, they accepted that several distinctions existed between the prior art base and the Designs. The distinctions were as follows: · the absence of visible screws in the case of the Designs; · the different visual features of the rear or base views of the Designs; · the "cut-out" or "recess" at the end of a lamp; and · the sloping, rounded mounting brackets surrounding the lenses.

48 Those four features were of considerable significance to the primary judge's consideration of the issue of distinctiveness and of infringement. Her Honour formulated the question as being whether an informed user would consider a design with those distinct features was substantially similar in overall impression to a design that forms part of the prior art base for the design. Her Honour considered that an informed user would not consider either of the Designs to be substantially similar in overall impression to any design that forms part of the prior art base. 49 The primary judge then had regard to the state of development of the prior art base. Her Honour considered that each of the Designs and features described in the statement of newness and distinctiveness was a distinct advance over the prior art base, in the sense that it combined various existing features in a way that had not been done before. She considered that the advances recorded in the Designs over the prior art base were substantial. In particular, her Honour referred to Mr Garrard's acknowledgement that each of the four features described above was quite arbitrary, from a design point of view. That is to say, the features were the product of a conscious design choice, rather than compelled by industry-wide standards or technological constraints. 50 The primary judge found that the designs and products that comprised the prior art base had some of the features found in each of the Designs. However, her Honour concluded that no product in the prior art base incorporated all, or most, of the four features in one product. Her Honour said that she did not consider that a person familiar with the product to which the Designs relate, or products similar to the product to which the Designs relate, would consider either of the Designs as substantially similar in overall impression to any of the designs that formed part of the prior art base. 51 The Corporate Respondents and the Directors contended that, in determining the question of distinctiveness, the primary judge made two errors as follows: · First, her Honour did not have regard to the state of development of the prior art base for the Designs, as she was required to do by s 19(2)(a) of the Designs Act. Alternatively, her Honour erred because she treated that matter as a secondary consideration. · Secondly, her Honour did not place any weight, or any sufficient weight, on the statement of newness and distinctiveness in the design applications, as she was required to do so by s 19 of the Designs Act. In relation to the first contention, they said that one of the purposes of the test of newness and distinctiveness under the Designs Act was to make it harder to obtain registration, not easier to obtain registration. To confine the provisions of the Designs Act to a design by design comparison would, they contended, make it easier to qualify for registration. In those circumstances, the Designs Act should be read as requiring a close examination of the prior art base as a whole. 52 By reason of s 19(2)(b)(i), the Court is required to have particular regard to the visual features identified in the statement of newness and distinctiveness. The Corporate Respondents and the Directors say that the only visual feature of the Designs identified as new and distinctive is the absence of visible screws. They say that consideration should be confined to that matter and that there are other designs forming part of the prior art base that have no visible screws. 53 The task of the Court is to compare each of the Designs with each relevant piece of prior art. Section 19 does not refer simply to the prior art base, but to the state of development of the prior art base. The primary judge observed, albeit in the context of infringement, that the extent of difference required to make a design distinctive will depend on the state of development of the relevant prior art base. A more developed prior art base will mean that smaller differences will be sufficient to result in a finding that there is no substantial similarity (see par 5.23 of Australian Law Reform Commission Report No 74, Designs (1995)). 54 Section 19(1) is a mandatory direction to the Court. Under s 19(2), the state of development of the prior art base is a mandatory consideration but the direction is different from that in s 19(1), in that the Court is to have regard, or particular regard, to the various matters mentioned. There is no reason to think that the primary judge did not have regard to the state of development of the prior art base, or that her Honour in some way relegated it to a secondary consideration. The first contention of the Corporate Respondents and the Directors must be rejected. 55 The second contention of the Corporate Respondents and the Directors must also be rejected. The primary judge did not err in the weight that her Honour placed on the statement of newness and distinctiveness. Her Honour was aware of the need to have particular regard to the particular visual features of the design identified in the statement of newness and distinctiveness as new and distinctive. Her Honour was correct to conclude that each of the Designs was new and distinctive.

Infringement 56 The trial was conducted on the basis that the result on infringement should be the same with respect to each of the Condor products. That is to say, the Corporate Respondents and the Directors did not seek to distinguish between the various Condor products. 57 The primary judge compared with the Triple Lens Design a three lens Condor product. Her Honour first considered the top view of the three lens Condor product and compared it with the first, second, third and fourth pages of the representations of the Triple Lens Design. She noted that the Condor product had a continuous base and a flat strip or landing between each lens. Her Honour also noted that the sides of the base of each of the Designs and of the Condor product comprised a sloping, rounded mounting bracket surrounding the lenses. 58 The primary judge then considered the question of the presence or absence of visible screws. Her Honour noted that the Condor product contained visible screws, while the statement of newness and distinctiveness accompanying the Designs emphasised that the Designs had no visible screws. However, Her Honour concluded that the two screws in each flat strip or landing between each lens in the case of the Condor product, was not a feature that substantially distinguished the Condor product from the Triple Lens Design. Her Honour said that the presence of the screws did not create a different visual appeal, observing that the screws in the Condor product were the same colour as the flat strip or landing between each lens and sat low in the socket. She observed that they were not "visual" screws, as one would describe the screws in some of the prior art, where the screws are chrome in colour and protruding. 59 The primary judge then turned to the rear or underside view of the Condor product and the fifth and sixth pages of the representations of the Triple Lens Design. Her Honour considered that a visual comparison led to the conclusion that the Condor product was "substantially similar in overall impression" to the Triple Lens Design. She noted that there was one base with rounded corners, an opening for each lens of similar shapes, with the shapes in the same configuration and the same number of mounting holes for the screws. Her Honour also noted that the holes were in the same position. Her Honour observed that Mr Garrard had properly conceded in cross-examination that the Condor products were much closer to the Designs than they were to LED Technologies' own single-lens LED lamp, which formed part of the prior art base. 60 The primary judge stated the relevant principles correctly and referred in detail to the various matters in s 19 of the Designs Act. Her Honour referred to the fact that a more developed prior art base will mean that smaller differences will be sufficient to result in a finding that there is no substantial similarity. Her Honour also referred to the need to consider, through the eyes of an informed user, the state of development of the relevant prior art base. In that context, her Honour observed that one measure was whether the difference in distinctiveness between the registered design and any previously known design was greater than the difference between the registered design and the design of the alleged infringing article. 61 When applying the principles to the facts, the primary judge considered three of the four features that distinguished the Designs from the prior art base. Her Honour also considered a fifth feature, namely, the continuous base and the flat strip or landing between each lens. Her Honour did not err in doing so. However, her Honour appears to have failed to consider one of the four features, namely, the "cut-out" or "recess" at the end of a lamp, which distinguished the Triple Lens Design from the prior art base. In the present circumstances, it is open to the Full Court to determine the issue of whether the Condor products embody a design that is substantially similar in overall impression to the Designs. The issue does not turn on questions of credit or findings of fact that have been found to be erroneous. The question is one for the Court. 62 The Corporate Respondents and Directors contended that the relevant Condor product is not substantially similar in overall impression to the Triple Lens Designs because two of the four features that distinguished the Designs from the prior art base, the absence of visible screws (a feature emphasised in the statement of newness and distinctiveness) and the "cut-out" or "recess" at the end of a lamp, are not present in the Condor product. Furthermore, they said, the shape of the backing plate (that is, the visual features of the rear or underside views of the Designs) is different as between the Condor product and the Designs. 63 The screws in the Condor product are the same colour as the flat strip or landing between each lens and sit low in the socket. They do not create a different "visual appeal" from that created by the Designs. The cut-out or recess at the end of a lamp is a visual feature present in the Designs but not in the Condor products. It is not a prominent or particularly significant feature. As to the visual features of the rear or underside views of the Designs, the conclusions of the primary judge, which are set out above, are unexceptionable. 64 I agree with Besanko J that, on balance, the Condor products embody a design that is substantially similar in overall impression to each of the Designs. In the circumstances, the challenge to the primary judge's conclusion that the Condor products infringe the monopoly in the Designs must be rejected.

Conclusion as to the Designs Act Issues 65 It follows that there was no error on the part of the primary judge in the conclusions that her Honour reached in relation to the issues arising under the Designs Act. That is to say, the Designs are valid and there was infringement of the monopoly of LED Technologies in the Designs. Her Honour's order that the Corporate Respondents pay damages to LED Technologies for the infringement must stand. However, it is necessary to consider the question of the liability of the Directors for the infringement.

LIABILITY OF THE DIRECTORS AS JOINT TORTFEASORS 66 LED Technologies contended that Messrs Keller and Armstrong authorised, directed and procured the conduct of Ren and Olsen that constituted infringement of LED Technologies' monopoly in the Designs, such that each should be held liable for the infringement by Ren and Olsen. The primary judge accepted that contention. 67 At the time of the relevant conduct, Messrs Keller and Armstrong were directors of Ren and Olsen. Mr Keller accepted that he was the moving spirit in Ren and that he was the person principally concerned with the day to day operations of Olsen. Mr Keller said in cross-examination that he and Mr Armstrong, were "the boss" of Ren in 2006. 68 Mr Keller became aware of the Designs by an online search of the Register. He noticed that the application for registration of the Designs included the Newness Statement. Mr Keller knew that the concept of separate lenses was not new in 2004 and that it was commonplace for rear lamps to be configured in a combination of two, three or four lenses. Mr Keller was struck by the claim in the Statement that there were no visible screws. He therefore conceived the design of a new single lens lamp and also two and three lens rear lamps. 69 In conceiving the design of the proposed new rear lamps, Mr Keller gave careful consideration to the features of a number of lamps in the market, including lamps marketed by LED Technologies. He believed that LED lenses were popular to would-be thieves intending to steal lenses from large vehicles parked in open spaces at night. Mr Keller considered that it would be very difficult to make a light that was totally theft proof. However, he considered that the task of stealing a lens would be more difficult if some further effort were to be required to remove the lens, as distinct from merely prising a lens out with a screwdriver. He therefore conceived the design of a light that included a lens with a lug on opposing edges, which fits into a recessed base and is restrained by a crossover strip fastened with screws. While the screws were not regarded by him as aesthetic, they served the purpose of holding the lenses in place. 70 Mr Armstrong was retiring as a stockbroker about the time that Mr Keller was proposing to commence a new business of importing and distributing a range of products from China. In mid 2005, Mr Keller invited Mr Armstrong to contribute capital to the new business, which became Ren. Mr Armstrong invested on the basis of his confidence in Mr Keller's business and commercial abilities, of which he had become aware over the years during which he knew Mr Keller. 71 Mr Armstrong became a director of Olsen in November 2006, together with Mr Morrison. Olsen had been a separate operation from Ren, trading as a wholesaler and distributor of trailer products. The shareholders and directors had been Mr Keller and Mr Oelefsen and, after Mr Oelefsen resigned, Mr Keller invited Mr Armstrong to become an equity partner in Olsen as well. 72 From November 2006 until Mr Morrison's resignation in April 2007, the directors of Ren and Olsen were Messrs Keller, Morrison and Armstrong. Mr Armstrong's role, during the time he was a director of Ren and Olsen, was that of Chairman. In that role, he had little to do with the day to day running of the businesses. As Chairman, he attended board meetings and focussed on the direction of the companies. Although he was generally aware of the business activities of Ren and Olsen, and the products that they import and distribute, he generally had no role in the selection, acquisition or design of specific products. 73 Mr Armstrong had no involvement in Olsen prior to becoming a director, although he was generally aware of its business activities from his discussions with Mr Keller. Mr Armstrong understood that Olsen carries on the business of importing and distributing, amongst other things, trailers and trailer accessories, including couplings and jockey wheels. 74 From time to time, Mr Armstrong met representatives of Ren's and Olsen's clients. Usually, they were the larger and more important clients of Ren and Olsen and he met them in his capacity as Chairman, accompanied by sales representatives and employees who dealt with the accounts of the clients. Mr Armstrong's dealings with suppliers or manufacturers were limited. He met with visiting manufacturers or suppliers when they visited Australia, but his presence at such meetings was for the purpose of entertaining and welcoming the manufacturers or suppliers when they visited, rather than participation in active involvement in product acquisition or design. 75 Mr Armstrong was told by Mr Keller that the source of the Condor products was Asian Access in China. Asian Access was one of Ren's suppliers of a range of various products, including automotive lamps. Mr Keller told Mr Armstrong that he was interested in importing lamps from Asian Access. A sample lamp was delivered to Ren's patent attorney. Mr Armstrong attended meetings with the patent attorney with Mr Keller. As a result of that process, Mr Armstrong became aware that LED Technologies was the registered owner of the Designs. 76 Mr Armstrong was aware of the general need for automotive lamps to comply with the ADRs. He intended that Ren and Olsen should comply with all relevant regulations and standards for their products. Mr Keller told Mr Armstrong that, when contacting suppliers and manufacturers in China, Mr Keller insisted that products that were to be imported by Ren must comply with the ADRs. Mr Armstrong said that his involvement in that area of the business was limited and that he was not involved in any of the day to day work relating to the compliance of Ren's and Olsen's products with the ADRs. 77 It appears that Mr Armstrong was the individual named on behalf of Ren and Olsen in communications with the Department of Infrastructure, Transport and Regional Services (the Department), which maintains a register of components that are commonly used in new vehicles. However, Mr Armstrong said that he had no recollection of ever signing an application in that regard. 78 Mr Armstrong did not have any doubt that the Condor lamps met the ADRs. He was satisfied that appropriate steps were being taken by Mr Keller to confirm compliance, although he was aware that China Trailer was taking some time to respond to Mr Keller's request for a certificate. 79 In December 2006, Mr Keller told Mr Armstrong that a representative of Elecspess had telephoned him requesting component registration numbers for Condor products to show to his customers. Mr Keller told Mr Armstrong that he sent to Elecspess a letter from Asian Access, then called China Trailer, confirming compliance with the ADRs. 80 When a complaint was received in relation to the quality of the Condor products and China Trailer did not respond to a request to confirm compliance with the ADRs, Mr Armstrong became suspicious. Mr Armstrong and Mr Keller requested an employee of Ren to make enquiries of the Department as to whether it had received appropriate test reports. Mr Armstrong felt frustration that Ren was unable to confirm whether test reports that purported to show compliance were accurate. 81 In April 2007, the Australian Competition and Consumer Commission (the Commission) approached Elecspess in relation to the question of compliance of the Condor products with the ADRs. Mr Keller and Mr Armstrong, together with Ren's patent attorney, attended a meeting with Elecspess and the Commission in May 2007. Mr Keller informed the Commission representatives that Olsen and Ren would cooperate fully. Subsequently, some Condor products were recalled. Following the recall, Ren obtained its supply of Condor products from a new manufacturer. Mr Armstrong was aware of steps that Mr Keller took to ensure that the new lamps were being tested for compliance with the ADRs. 82 The primary judge found that Messrs Keller and Armstrong did not act only as directors of Olsen and Ren. Her Honour found that each had personal knowledge of the existence of the Designs. In the light of the evidence summarised above, her Honour concluded that each of Messrs Keller and Armstrong was personally an actor in invading the rights of LED Technologies by creating the Condor products and taking the other steps summarised above. Her Honour characterised those sequences of actions as the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement, or at least, reflected a conscious indifference to the risk of infringement. Her Honour concluded, therefore, that each of Messrs Keller and Armstrong had engaged in infringement of LED Technologies' monopoly in the Designs and that each was a tortfeasor in the infringement since each had a common design, with Ren and Olsen, to infringe LED Technologies' monopoly. Accordingly, her Honour found that each of Messrs Keller and Armstrong was jointly and severally liable to LED Technologies for the damage suffered by it as a consequence of the infringement. 83 A company cannot act other than through a natural person. In considering whether a natural person is a joint tortfeasor with a company, it is necessary to show something more than that the company acted through that person. Where a person is acting in the capacity of a director, the person will not be liable for the act of the company unless it can be shown that, in so acting, the director was doing something more than acting as a director. The person must do something that makes him or her, in addition to the company, an invader of the victim's rights (see O'Brien v Dawson (1942) 66 CLR 18 at 32-3). The mere fact that a company is small and that the director has control over its affairs is not, of itself, sufficient to make the director a joint tortfeasor with the company (see Evans Limited v Spritebrand (1985) 1 WLR 317 at 329). 84 Infringement by a principal actor, of course, is an objective matter. For a director of a company to be held to be invading the rights of a victim of the company, by reason of the actions committed in the capacity of a director, there must be some mental element involved. Thus, in circumstances where a director can be shown to be making use of a corporation or company as an instrument whereby infringement is perpetrated, such that the director can be seen to be hiding behind the corporate veil, it may be thought that that director is going beyond actions performed merely in the capacity as director. If a company is merely the alter ego of a director, such that there is no real difference between the mind of the officer and the mind of the company, there may well be circumstances where it will be appropriate to conclude that the officer is invading the rights of a victim of the company. 85 Mr Armstrong had no involvement in the day to day running and operation of Ren and Olsen and he did not act otherwise than as a director of Olsen and Ren. Certainly, the primary judge found that he was aware of the Designs. However, her Honour made no finding that Mr Armstrong was aware that there was infringement or that he set out to infringe LED Technologies' monopoly. Indeed, the evidence would not support such a conclusion. 86 It is difficult to see the justification for her Honour's conclusion that the conduct of Mr Armstrong reflected a conscious indifference to the risk of infringement. No such suggestion was put to him in cross-examination. It was not suggested in cross-examination that he knew or had any reason to believe that the sale of the Condor products constituted infringement. Whether the appropriate test is that a director has directed or procured the company's infringement or that the director had engaged in the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it, the evidence summarised above and the manner in which the case has been conducted does not support her Honour's conclusion that Mr Armstrong was a joint tortfeasor with Ren and Olsen in the infringement of LED Technologies' monopoly. 87 Mr Keller's position is not quite so clear. The primary judge found that Mr Keller had personal knowledge of the Designs and of the following facts and matters: · The fact that at the time of the conception and design of the infringing Condor products, Mr Keller was a director of Ren and Olsen and he and Mr Armstrong were "the boss" of Ren and Olsen. · Discussions with manufacturers about the manufacture of the Condor products. · The subsequent importation and sale of Condor products in Australia. · The fact that Mr Keller designed and conceived versions of the Condor products and arranged for their manufacture and importation into Australia. Her Honour concluded that Mr Keller was personally an actor invading the rights of LED Technologies by creating the Condor products and arranging for their manufacture and importation into Australia. Her Honour considered that the actions of Mr Keller were the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or, at least, reflected a conscious indifference to the risk of infringement. 88 However, while Mr Keller's involvement was greater than that of Mr Armstrong, the findings do not support the conclusion that Mr Keller intended and procured that infringement would take place or shared a common design that infringement should take place. Mr Keller was not effectively standing apart from Ren and Olsen, directing or procuring them as separate entities. The findings would not support the conclusion that Mr Keller was using Ren and Olsen as the instrument of his own conduct. What he did was done in the service of Ren and Olsen and not in his own personal capacity. There is no dimension to the role of Mr Keller that was separate from the good faith discharge of his duties to the service of Ren and Olsen. In those circumstances, he should not be held to be personally liable for the infringements of Ren and Olsen.

MR MORRISON'S COSTS 89 In its Statement of Claim, LED Technologies alleged that, at all material times until 5 April 2007, Mr Morrison was: · a director, and the company secretary, of each of Ren and Olsen; · the sole shareholder of Ren; · the owner of 25% of the shares in Olsen; · acting as servant or agent of Ren and Olsen; · in effective control of Ren's conduct; · together with Messrs Keller and Armstrong, in absolute control of the conduct of Ren and Olsen; · acting with Ren and Olsen in furtherance of a common design; · directing or procuring the conduct of Ren and Olsen; · making the conduct of Ren and Olsen his own; and · authorising the conduct of Ren and Olsen. Mr Morrison admitted that he was a director and company secretary of Ren between 29 June 2005 and 5 April 2007, that he was a director of Olsen between 15 November 2006 and 5 April 2007, and that he was a former shareholder of both companies. Otherwise, he denied each of those allegations. 90 LED Technologies also alleged that, at least until 5 April 2007, Mr Morrison: · acted in concert with each of Ren and Olsen in the infringement of LED Technologies' monopoly in the Designs, or wrongfully procured and/or induced Ren and Olsen to infringe that monopoly, thereby becoming a joint tortfeasor with them; · aided and/or abetted and/or was, directly or indirectly, knowingly concerned in, or party to, the contraventions by Ren and Olsen of ss 52, 53(a), 53(c) and 65C of the Trade Practices Act, thereby becoming liable under ss 75B, 80 and 82(1) of that Act. Mr Morrison denied those allegations. 91 Further and better particulars of LED Technologies' allegations provided on 25 February 2008 set out a number of instances in which Mr Morrison participated in meetings and other events that related to the Condor products. It was said that, by reason of those matters, Mr Morrison had knowledge of the proposed importation, promotion, sale and distribution of Condor products by Ren and he acquiesced in, approved and/or took no steps to stop or prevent the same when he was in a position to do so. 92 By a letter from LED Technologies' solicitor to Mr Morrison's solicitors of 7 February 2008, LED Technologies offered to withdraw its claims against Mr Morrison if he provided a statement regarding his involvement with Ren and Olsen and confirming that he was not involved in the decision to import and sell the infringing products. That offer was not accepted. 93 On 18 February 2008, Mr Morrison made an offer of compromise to LED Technologies under Order 23 of the Federal Court Rules. He proposed that LED Technologies discontinue its proceeding against him, that he discontinue his cross-claim against LED Technologies, and that LED Technologies pay 90% of his party/party costs of the proceeding. The offer was open for acceptance within 14 days. It was not accepted. 94 On 2 April 2008, Mr Morrison made a further offer of compromise to LED Technologies under Order 23. He proposed that LED Technologies' proceeding against him, and that his cross-claim against LED Technologies, be dismissed, with no order as to costs. Again, the offer was open for fourteen days. Again, it was not accepted. 95 On 10 April 2008, Mr Morrison filed an affidavit in which he swore that he was never involved in the acquisition of Condor products, their design or their development. In the orders made on 24 February 2009, the primary judge ordered that the claims by LED Technologies against Mr Morrison be dismissed and that LED Technologies pay Mr Morrison's costs of those claims incurred after 10 April 2008. In the course of her reasons of 18 December 2008, her Honour said that, during the course of the hearing, LED Technologies stated that it no longer sought relief against Mr Morrison. The reasons said that Mr Morrison was not given costs on an indemnity basis because the application was not actively pursued at the hearing and her Honour did not consider that Mr Morrison had established any basis for costs to be awarded on an indemnity basis. Her Honour said that the costs orders that she proposed to make, which included the order relating to Mr Morrison's costs, dealt with the issues of the costs of the claim and the costs of the cross claims in the most appropriate manner. No other reasons were given. 96 Mr Morrison appealed against the costs order made in relation to him on two bases. The first was that, since he was successful, he ought to have received his costs generally, not only those incurred after 10 April 2008. The second was that, since he had secured a result more favourable to him than that proposed in each of his offers of compromise, he should have been awarded his costs, to the extent that they were incurred subsequently, on an indemnity basis. 97 An award of costs involves the exercise of a judicial discretion, which will only be disturbed on appeal in limited circumstances. In the present case, the absence of full reasons by the primary judge for her decision to deny Mr Morrison a part of the costs to which, as a successful party, he would normally be entitled, creates some difficulty. 98 There may be circumstances in which it would be appropriate to deny costs to a party who, although ultimately successful, declined to reveal facts not reasonably available to the other party that would demonstrate such success was likely. Mr Morrison admitted his former shareholding, the offices that he had held, and the dates between which those offices had been held in the companies. Otherwise he denied the allegations made against him. His defence stated the position to which he swore on 10 April 2008, in that he denied any involvement in the infringing and unlawful conduct about which LED Technologies complained. 99 The effect of the orders made by the primary judge was to deny Mr Morrison his costs of instructing legal representatives and preparing and filing a defence. That cannot be justified by the circumstance that it was only on 10 April 2008 that Mr Morrison, for the first time, went on oath as to his lack of involvement in the matters about which LED Technologies complained. LED Technologies was squarely on notice that Mr Morrison denied any involvement in those matters. There is no evidence as to why Mr Morrison chose not to respond to the invitation given to him by LED Technologies to indicate his involvement with Ren and Olsen, and confirm that he was not involved in the decision to import and sell the Condor products. However, his failure to do so was not a sufficient basis to modify the costs order that would otherwise be made in his favour. 100 Mr Morrison should be regarded as a successful party to whom costs should be awarded in the normal course. However, in the result, he did not achieve a result more favourable to him than the one he proposed in his offer. The only compromise that he proposed was in relation to costs. In those circumstances, he is not entitled to his costs other than on the party/party basis. There is no reason to interfere with the orders made by the primary judge in relation to the cross-claim filed by Mr Morrison.

CONTRAVENTION OF SECTION 65C OF THE TRADE PRACTICES ACT 101 Section 65C(1)(a) of the Trade Practices Act relevantly provides that a corporation must not, in trade or commerce, supply goods that are intended to be used, or are of a kind likely to be used, by a consumer, if the goods are of a kind in respect of which there is a prescribed consumer product safety standard and which do not comply with that standard. The question of whether the Condor products complied with the relevant ADRs was an issue before the primary judge. Her Honour found that LED Technologies had failed to connect particular lamps, having been supplied at particular times, to particular tests demonstrating non-compliance of those lamps with the ADRs. 102 LED Technologies contended that the primary judge had overlooked an affidavit sworn by Mr Ottobre on 15 July 2008 that, together with the other evidence before her Honour, justified the following findings: (a) In about November 2006, Elecspess supplied to Mr Ottobre a Condor two-lens combination light unit and a three-lens combination light unit. In each case, they were, 80 mm square. On 5 December 2006, Mr Ottobre sent the three-lens combination light to Queensland University of Technology (QUT) for testing. Tests conducted under the supervision of Assoc Prof Ian Cowling showed that the white reverse lamp did not comply with ADR-1, that the amber direction indicator did not comply with ADR-6 and that the red stop lamp did not comply with ADR-49. (b) In October 2007, Mr Geoff Lance, at the request of Mr Ottobre, purchased two Condor 80 mm three-lens light units from Olsen. Mr Ottobre forthwith sent one of them to QUT for testing. Tests conducted under the supervision of Assoc Prof Cowling showed that the white reverse lamp did not comply with ADR-1. The other two lamps complied with the ADRs that were applicable to them. (c) In February 2008, Elecspess supplied to a business called "Down Under Trailers" three three-lens combination Condor light units, sized 80 mm, 100 mm and 125 mm. They were passed on to Mr Ottobre, who forthwith arranged for them to be sent to the University of New South Wales (UNSW) for testing. Tests conducted under the supervision of Prof Stephen Dain showed that the white reverse lamp did not comply with ADR-1 in the case both of the 80 mm and of the 100 mm unit. For that reason, no further test was conducted with respect to those units. The 125 mm unit complied with the ADRs that were applicable to it. 103 The primary judge did not make findings that the lights that had been sent for testing at QUT and UNSW did not comply with the relevant ADRs. Rather, her Honour expressed the view that the task of demonstrating non-compliance would have been "tricky, if not impossible". The problem did not relate to any shortcoming in the tests conducted, or to any controversy about what might be called compliance at the substantive level. Rather, it related to the unusual structure of the ADRs, and their suitability to perform the kind of role contemplated by s 65C. It was issues of that kind that occupied the bulk of the parties' contentions in relation to s 65C. 104 ADR-6 and ADR-49 are relevantly the same as ADR-1. Accordingly, the analysis of the legal position can be confined to the terms of ADR-1. 105 ADR-1 is Vehicle Standard (Australian Design Rule 1/00-Reversing Lamps) 2005. The scope of ADR-1 is stated to be to prescribe the photometric requirements for reversing lamps which will warn pedestrians and other road users that the vehicle is about to move or is moving in the reverse direction, and which, during the hours of darkness, will aid the driver in reversing manoeuvres. Par 4.1 of ADR-1 states that devices complying with the technical requirements of Appendix A, as varied by Part 5, Exemptions and Alternative Procedures and Part 6, Supplementary General Requirements, are to be accepted as complying with ADR-1. Appendix A is the UN/ECE Regulation No. 23/00 - Uniform Provisions Concerning the Approval of Reversing Lights for Motor Vehicles and Trailers, a regulation of non-Australian origin (the Foreign Regulation). Part 5 of ADR-1 provides that certain provisions of the Foreign Regulation are not applicable. ADR-1 also provides that the requirements and procedures set out in Annex 5 and Annex 6 of the Foreign Regulation are acceptable for the purposes of demonstrating compliance with the technical requirements of ADR-1. 106 The Foreign Regulation is concerned with the approval of lamps. Section 2 of the Foreign Regulation deals with an application for approval and provides that two samples of the lamp in question must be submitted with each application. Section 3 deals with the markings that must be on the samples. Section 4 says that, if the two samples of a type of reversing lamp meet the requirements of the Foreign Regulation, approval is to be granted. It then deals with the markings, symbols and the like that must be placed on every reversing lamp conforming to a type approved. 107 Section 5 of the Foreign Regulation requires that each sample must conform to the specifications set out in Sections 6 and 8. Section 6, which is headed "Intensity of Light Emitted", provides that the intensity of the light emitted by each of the two samples must be not less than the minima and not greater than the maxima specified and must be measured in relation to the axis of reference in the directions shown, expressed in degrees of angle with the axis of reference. Clearly enough, the "two samples" referred to are the samples required under Section 2 to be submitted with the application for approval. The remaining provisions of Section 6 set out the quantitative requirements of luminous intensity required of those samples. Section 8 requires the colour emitted by the lamp to be white. Section 7 is concerned with the procedures by which testing it to be carried out. 108 Annex 5 of the Foreign Regulation, which deals with Minimum Requirements for Conformity of Production Control Procedures, provides that the conformity requirements will be considered to be satisfied, from a mechanical and geometric standpoint, if the differences do not exceed inevitable manufacturing deviations within the requirements of the Foreign Regulation. Par 1.2 of Annex 5 provides that, with respect to photometric performances, the conformity of mass-produced lamps will not be contested if, when testing photometric performances of any lamp chosen at random and equipped with a standard filament lamp, or when the lamps are equipped with non-replaceable light sources (filament lamps or other), and when all measurements are made at 6.75 V, 13.5 V or 28.0 V respectively, no measured value deviates unfavourably by more than 20% from the values prescribed in the Foreign Regulation. 109 Section 2 of Annex 5 is headed Minimum Requirements for Verification of Conformity by the Manufacturer. A manufacturer who has obtained an approval under the Foreign Regulation must carry out the tests prescribed by Section 2. Samples of lamps must be selected at random from the production of a uniform batch. The lamps so selected must be tested for photometric and colorimetric characteristics. Par 2.5 of Annex 5 provides that the manufacturer is responsible for carrying out a statistical study of the test results and for defining, in agreement with the competent authority, criteria governing the acceptability of its products in order to meet the specifications laid down for verification of conformity of products in par 9.1 of the Foreign Regulation. The criteria governing the acceptability are to be such that, with a confidence level of 95%, the minimum probability of passing a spot check, in accordance with annex 6, would be 0.95. 110 Annex 6 deals with Minimum Requirements for Sampling by an Inspector. It provides for a first sampling and for repeated sampling. The first sampling requires the selection of four lamps at random, the first two of which are referred to as sample A and the second two of which are referred to as sample B. If neither lamp in sample A deviates from the values prescribed in the Foreign Regulation by more than 20%, one goes to sample B. If neither lamp in sample B deviates from those values, the conformity of mass-produced lamps with the Foreign Regulation will not be contested. More serious deviations from the values will lead to the conformity of the mass-produced lamps with the Foreign Regulation being contested. In such a case, the manufacturer is to be requested to make his production meet the requirements of the Foreign Regulation. Even more serious deviations from the values activate provisions of the Foreign Regulation under which approval may be withdrawn. The procedures for repeated sampling apply in the case of a first sample that produces a situation in which conformity is contested and provide, in effect, for the same sampling process to be carried out again, presumably to achieve conformity with the tolerances prescribed. 111 The provisions of the Foreign Regulation down to and including Section 8 are concerned with the approval of lamps. They address matters of process and substance. Section 9 is concerned, as the heading makes clear, with Conformity of Production. It addresses the means by which, and the standards by reference to which, a manufacturer of previously-approved lamps maintains conformity with the requirements of the Foreign Regulation. It is clear enough that, once a lamp is approved, continuing compliance with the substantive standard in Section 6 and Section 8 is enforced by requiring the manufacturing process to be such that, within the scheme of Annex 5 and Annex 6, conforming lamps are produced. The failure of a single lamp to meet standard would result not in some remedy becoming available against the supplier but in an inquiry into compliance by the manufacturer with Annex 5 and Annex 6, and possibly in the withdrawal of approval for the lamp in question. 112 It is tolerably clear that ADR-1 was intended to adopt the substantive requirements of the Foreign Regulation without the procedural aspects relating to such things as the approval of lamps. In Australia, it is not necessary for combination lights to be approved before being placed on the market. Thus, withdrawal of approval is not a sanction for non-compliance. Rather, ADR-1 has in effect turned what was a regime for conformity of production into a statement of the minimum requirements of lights as such. However, ADR-1 also makes clear that compliance with Annex 5 and Annex 6 of the Foreign Regulation is to be treated as sufficient. 113 Lights were supplied by Elecspess and Olsen at the behest of LED Technologies. On the first occasion Elecspess supplied a light to Mr Ottobre at his request. On the second and third occasions, Olsen and Elecspess supplied lights ostensibly in the normal course of trade. The lights thus supplied, or at least some of them, did not comply with the substantive requirements of Section 6.1 of the Foreign Regulation. LED Technologies says that, as a consequence, they did not comply with ADR-1 and that, therefore, there had been a contravention of s 65C(1)(a) of the Trade Practices Act. 114 The Corporate Respondents contended, on the other hand, that the Foreign Regulation, and therefore, by incorporation, the ADRs, did not set up any absolute requirement of compliance for every light bought in the course of trade, or individually supplied. They said that the norms established by the Foreign Regulation were mandated and enforced by a procedure of testing and that LED Technologies had not availed itself of any such procedure. The Corporate Respondents contended that, since the regime of testing for which the Foreign Regulation provides allows for some degree of non-conformity, it cannot be open for a competitor, such as LED Technologies, to establish a breach of s 65C by obtaining a single supply on an isolated occasion and proving only that the light so obtained did not comply. They also contended that, in any event, the Foreign Regulation, and therefore ADR-1, allowed for a tolerance of 20%: a contravention of s 65C could not be established without at least demonstrating a deviation from standard of more than 20%. 115 In Australia, lamps must be manufactured so as to meet the requirements of Sections 6 and 8. Annex 5 and Annex 6 of the Foreign Regulation, as applied in Australia, provide a means by which the manufacturer may establish conformity with the Foreign Regulation, and thus with the ADRs. Any lamp made in accordance with a manufacturing process that complies with Annex 5 and Annex 6 is to be deemed compliant with the ADRs, whether or not, considered as an individual item, it does in fact comply with Sections 6 and 8 of the Foreign Regulation. 116 It would have been open to Elecspess and Olsen to show that the light combinations supplied by them had been manufactured under a regime that was compliant with Annex 5 and Annex 6 of the Foreign Regulation. They did not attempt to do so. Rather, they said that the ADRs simply did not impose any standards save by reference to the testing and sampling procedures for which those annexes provide. They contended, in effect, that LED Technologies must prove that the relevant manufacturing process was non-compliant with the requirements of those annexes. That contention must be rejected. The ADRs operate by setting up primary quantitative standards, and then by allowing the manufacturer to bring itself within those standards by reference to Annex 5 and Annex 6. That is to say, the manufacturer, or the person in whose interests it is to establish compliance with the annexes, must lead the evidence necessary for that purpose. 117 It is only in the context of conforming manufacturing processes, for which Annex 5 of the Foreign Regulation provides, that a deviation of up to 20% from standard is permissible. In circumstances where Elecspess and Olsen did not establish that the lights supplied to the representatives of LED Technologies were manufactured in accordance with Annex 5, that provision has no operation. Accordingly, in relation to the supplies referred to above, the combination lights that were found by QUT and UNSW to fail the tests carried out by those organisations did not comply with the applicable ADRs. There was, in each case, a contravention of s 65C(1)(a) of the Trade Practices Act.

RELIEF AGAINST CORPORATE RESPONDENTS FOR CONTRAVENTION OF THE TRADE PRACTICES ACT 118 The primary judge found that the Corporate Respondents had engaged in conduct in contravention of ss 52 and 53 of the Trade Practices Act by the use of the captions on the packaging for the Condor products. That finding was not challenged on appeal. However, her honour concluded that LED Technologies had failed to establish an essential element in its cause of action under s 82 in respect of the contraventions of ss 52 and 53. Her Honour was not satisfied that LED Technologies had established that it suffered loss by the contravening conduct. In addition, her Honour declined to grant declarations sought by LED Technologies to the effect that the Corporate Respondents had engaged in conduct in contravention of ss 52 and 53. Accordingly, her Honour declined to grant any relief in respect of the contraventions and ordered LED Technologies to pay the costs of the Corporate Respondents in relation to the claims of contravention of ss 52 and 53.

Loss 119 If it be established that there was a contravention of s 65C, as well as ss 52 and 53 of the Trade Practices Act, the question of recovery by LED Technologies of the amount of the loss or damage suffered by LED Technologies by that contravening conduct would also arise. Section 82(1) provides that a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of, relevantly, Part V, may recover the amount of the loss or damage. Section 65C is a provision of Part V. 120 LED Technologies' claim for damages under the Trade Practices Act involved the following reasoning: · Consumers prefer to buy and, in some cases, will only buy products that are marked as complying with applicable safety standards. · LED Technologies' products comply with the relevant safety standards. · The Condor products did not comply with the relevant safety standards. · The Corporate Respondents represented that the Condor products did comply with the relevant safety standards. · Some consumers bought Condor products in reliance upon those representations. · Those consumers would not have bought Condor products had they known that they did not comply with the relevant safety standards. · Some of those consumers would have bought LED Technologies' products instead. · Therefore, LED Technologies suffered damage in the nature of lost sales. 121 LED Technologies advanced the following rationale for its conclusion that the contravention of s 65C by the Corporate Respondents was at least a part cause of loss that it has suffered: · The Condor products did not comply with the vehicle standards. · Therefore, the Condor products could not be marketed and sold except in contravention of s 65C. · The Condor products were marketed and sold. · Since the Condor products did not comply with s 65C, they could not have been marketed and sold without contravention of s 65D. · Therefore, the sales of Condor products that were made in contravention of s 65C were sales that would not have occurred but for the contravention. · Some of those sales that were made would have been made to LED Technologies. · LED Technologies has lost the profits from the sales that would have been to LED Technologies. 122 The primary judge calculated damages arising from infringement of LED Technologies' monopoly in the Designs on the assumption that the Corporate Respondents' sales data reflected the number of units actually sold by them. Her Honour then applied a discount, which was not precisely quantifiable, based on the fact that the sales data were on the conservative side. 123 To recover damages under s 82 of the Trade Practices Act over and above the damages for infringement of the monopoly in the Designs, LED Technologies would need to satisfy the Court that the contraventions of the Trade Practices Act caused LED Technologies to lose additional sales. However, the primary judge was not satisfied that the contraventions of the Trade Practices Act caused LED Technologies to lose additional sales beyond those lost as a result of the infringement. First, her Honour found that there was no evidence as to the materiality of the misleading representations to the average consumer. Secondly, her Honour considered that the sales lost by reason of infringement would tend to be greater than the sales lost by reason of the contravention of the Trade Practices Act because, by hypothesis, the infringing product would not have been in the market. That is to say, had there been no infringement, the Corporate Respondents would not have produced the Condor products and LED Technologies would have had one less competitor. 124 On the other hand, in a hypothetical world in which the Corporate Respondents did not contravene the Trade Practices Act, the Condor products could still have been on the shelves alongside LED Technologies' products. The only difference would have been that they would not have borne the offending captions. Her Honour found it difficult to see how LED Technologies could lose more sales in a notional world where the Corporate Respondents were still allowed to sell the Condor products, albeit without the offending captions, than in a world where the Condor products did not exist at all. 125 For those reasons, her Honour was not satisfied that LED Technologies had established any additional loss arising from any one or more of the contraventions of the Trade Practices Act. Accordingly, her Honour declined to grant LED Technologies any relief in relation to those claims over and above the damages awarded in respect of the infringement. 126 LED Technologies makes clear in its contentions to the Full Court that it does not seek double recovery. It appears that the primary judge declined to order damages under s 82 of the Trade Practices Act because to do so would have involved double recovery by LED Technologies. That is to say, her Honour did not actually determine that there was no causal connection between the contravention and loss suffered by LED Technologies. Her Honour did not, in explicit terms, conclude that LED Technologies had failed to establish that it suffered damage by that conduct. Rather, it appears that her Honour was simply not satisfied that LED Technologies had established any loss arising from the contraventions over and above the damage that her Honour found was suffered by reason of the infringements. 127 The primary judge may have erred in so far as her Honour failed to make a finding as to whether there was a causal connection between loss suffered by LED Technologies and the contraventions the of Trade Practices Act that her Honour found had been committed. The appropriate course for her Honour may have been to make findings concerning the damage, if any, that LED Technologies suffered by the contravening conduct. It would then have been appropriate to make a determination as to whether that damage was occasioned by the contravening conduct and whether or not it was also occasioned by the infringement of the monopoly in the Designs. 128 To the extent that the evidence could support a finding that sales of LED Technologies products would have been made that were not made, because the non-complying Condor products were sold instead, loss was suffered by LED Technologies by the contravening conduct of the Corporate Respondents. Of course, the Corporate Respondents would not be required to pay damages in excess of the overall damage actually suffered by LED Technologies. However, in the light of the conclusion that LED Technologies' monopoly in the Designs was infringed and that LED is entitled to recover damages for the infringement, it is not necessary to consider further the question of damages for contravention of the trade Practices Act. On the other hand, the question of declarations in relation to the contraventions of the Trade Practices Act raises different issues.

Declarations 129 The Primary judge declined to make declarations because her Honour considered that the claims under the Trade Practices Act had failed. Her Honour appears to have been referring to the conclusion that LED Technologies should not be awarded damages for contravention of ss 52 and 53. However, even if no loss is established, it does not necessarily follow that declarations should not be made. 130 There would be some utility in granting declarations to the effect that the Corporate Respondents have engaged in conduct that contravened ss 52 and 53 and s 65C of the Trade Practices Act, even if no loss were occasioned. For example, declarations may be an appropriate vehicle to record the Court's disapproval of contravening conduct and serve to vindicate LED Technologies' claims that the Corporate Respondents contravened the Trade Practices Act. Further, declarations may inform consumers of the dangers arising from contravening conduct and may deter others from engaging in contravening conduct. Such altruistic intentions may or may not be fairly attributable to LED Technologies. 131 It may not matter to LED Technologies whether or not the declarations are made. The real significance of making the declarations is that it would support the claim made by LED Technologies that it was entitled to its costs of establishing contravention of ss 52 and 53 and in the light of the conclusions above, contravention of s 65C. That is to say, even if it recovered no damages, LED has been successful on the contested issue as to whether or not there had been contraventions of the Trade Practices Act. It would therefore be appropriate to make the declarations, at least to lay the foundation for consideration of the appropriate orders for costs.

Costs 132 The issues concerning infringement of the Trade Practices Act were significant issues and LED Technologies has now been found to have been successful on all of them. There is no reason why it should be deprived of its costs of establishing infringement and obtaining a declaration to that effect. The primary judge's discretion as to costs therefore appears to have miscarried in so far as her Honour ordered LED Technologies to pay the costs of the Corporate Respondents of defending the claims under Trade Practices Act, not because they were not made out, but because no loss was established over and above the loss occasioned by the infringement of the monopoly in the Designs. LED Technologies should have an order that the Corporate Respondents pay their costs of the claims under the Trade Practices Act as well as their claims under the Designs Act.

INVOLVEMENT OF DIRECTORS IN TRADE PRACTICES CONTRAVENTIONS 133 LED Technologies contends that Mr Keller was involved in the contraventions of ss 52 and 53 of the Trade Practices Act by Ren and Olsen. It also contends that both Mr Keller and Mr Armstrong were involved in the contravention of s 65C. 134 The primary judge concluded that, since LED Technologies' claims under the Trade Practices Act failed because it did not establish an essential element of the cause of action, namely, damage, it was unnecessary to consider whether Messrs Keller and Armstrong were involved in the contravention. However, her Honour went on to conclude that, even if LED Technologies had established damage, neither of Messrs Keller and Armstrong knew of the essential matters that enabled the representations made by the Corporate Respondents to be characterised as constituting contraventions. 135 The primary judge accepted that each of Messrs Keller and Armstrong knew that the Condor products were sold in a manner that might lead members of at least one class of consumer to believe that the products complied with prescribed consumer product safety standards. However, her Honour did not consider that either Messrs Keller or Armstrong knew the facts that meant that the representations were not correct. Her Honour accepted the evidence given by them as to their subjective understanding of the representations that were conveyed by the captions. 136 Her Honour considered that, while they may have been negligent or even reckless, their attitude was not such as to suggest wilful blindness or actual knowledge of how a relevant purchaser might understand the captions. Her Honour accepted their evidence that they relied upon oral and written assurances from the supplier, albeit that those assurances were not substantiated. While her Honour considered that the conduct of the Directors was less than wise and negligent and possibly even reckless, her Honour did not consider that it was sufficient to establish the actual knowledge necessary to establish accessorial liability under the Trade Practices Act. It was never put to either Mr Keller or Mr Armstrong during the course of cross-examination, that he knew such essential matters. 137 Under s 82 of the Trade Practices Act, a person who suffers loss or damage by conduct done in contravention of ss 52, 53 or 65C may recover the amount of the loss or damage by action against any person involved in the contravention. Under s 75B, a reference to a person being involved in such a contravention is to be read as a reference to a person who: · has aided, abetted, counselled or procured the contravention; · has induced the contravention; · has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or · has conspired with others to effect the contravention. Thus, the primary judge's conclusions involve negation of each of those propositions. 138 LED Technologies contended that Mr Keller had actual knowledge of the following matters: · The Australian Design Rules prescribed standards applicable to the Condor products. · The grant of a Component Registration Number confirms compliance with the Australian Design Rules. · At the time when representations were made to consumers, by marking Condor products with the captions, none of the Corporate Respondents had obtained a Component Registration Number for the Condor products. · At the time when those representations were made to consumers, none of the Corporate Respondents had obtained a test result from a certified laboratory that provided any basis for making the representations. · The Condor products were not approved by any body. · It was essential to the success of the Condor products that they were approved in accordance with the Australian Design Rules and the relevant Component Registration Numbers had been obtained. LED Technologies says that, by reason of the part played by Mr Keller in the operations of Ren and Olsen, as described above, and his knowledge of the above matters, no claim is made against Mr Armstrong. Mr Keller had actual knowledge of the essential facts constituting the contravention of ss 52 and 53 of the Trade Practices Act. 139 LED Technologies also contends that, in the light of the matters outlined above, and Mr Armstrong's involvement with the Department, both Messrs Armstrong and Keller had actual knowledge of the essential facts constituting the contravention of s 65C of the Trade Practices Act by Ren and Olsen. When Mr Keller first discussed with Asian Access the production of the Condor products, he insisted that the lamps must comply with the Australian Design Rules. He was told that compliant lamps and test certificates would be provided. Mr Keller had no reason to doubt the assurance from Asian Access that the lamps supplied would comply with the Australian Design Rules. 140 From December 2006, Mr Keller took further steps to ensure that the Condor products were compliant with the Australian Design Rules and test certificates were obtained. He arranged for further enquiries to be made of Asian Access and for independent testing to be done. He arranged for translation of Chinese test compliance reports provided by Asian Access and placed further orders with Asian Access on hold pending receipt of appropriate compliance reports and certificates. 141 Following the meeting with the Commission in May 2007, Mr Keller assured the Commission that Ren would cooperate fully with the Commission and ultimately all Condor products were recalled and Ren's ties with Asian Access were cut. When Olsen and Ren moved to a new supplier of the Condor products, Mr Keller insisted that all lamps must be retested for compliance with the Australian Design Rules before being despatched. 142 The primary judge found that Mr Keller understood that the expression "ADR Approved" was not regulated in the industry and that that caption was commonly understood to mean that a product has passed a test for compliance with the Australian Design Rules. Mr Keller was unaware at any relevant time that the Condor products did not in fact comply with the Australian Design Rules and believed at all material times that they did. His belief was based on the matters briefly described above. Not only did he have such an honest belief, but that belief was reasonable in all the circumstances. He had no actual knowledge that any labelling on the Condor product was incorrect or false. 143 The primary judge accepted Mr Keller's evidence. No basis has been advanced on which the Full Court should depart from what is essentially a finding of credit on the part of the primary judge. Her Honour did not err in concluding that Mr Keller was not involved in the contraventions of ss 52 and 53 by Ren and Olsen. A fortiori, there was no error on the part of her Honour in concluding that neither Mr Keller nor Mr Armstrong was aware of the contravention of s 65C of the Trade Practices Act. There should be no finding that either Mr Armstrong or Mr Keller was involved in the contravention of s 65C.

CONCLUSION 144 The appeal by Messrs Keller, Armstrong and Morrison (VID 167 of 2009) should be upheld in part. The orders that Messrs Keller and Armstrong pay damages to LED Technologies and that they pay costs of LED Technologies should be set aside. In lieu of those orders, there should be an order that the proceeding be dismissed as against them and that LED Technologies pay their costs of the proceeding at first instance. The order that LED Technologies pay Mr Morrison's costs after 10 April 2008 should be set aside. In lieu of that order, there should be an order that LED Technologies pay Mr Morrison's costs of the proceeding. 145 LED Technologies should pay the costs of the appeal of Messrs Morrison, Keller and Armstrong except in relation to the question of invalidity or infringement of the Designs Act. The cross appeal in proceeding VID 167 of 2009 should be dismissed with costs. 146 The appeal by the Corporate Respondents (VID 168 of 2009) should be dismissed with costs. The cross appeal in that proceeding should be upheld and the orders made in relation to the Trade Practices Act claims should be set aside. In lieu thereof, there should be declarations that the Corporate Respondents contravened ss 52, 53 and 65C of the Trade Practices Act in the respects claimed by LED Technologies. The Corporate Respondents should pay the costs of LED Technologies of the proceeding and of the appeal and cross appeal. 147 The parties should be directed to bring in short minutes to give effect to the reasons of the Court. If any of the parties wishes to be heard further in relation to the question of costs, in the light of the conclusions reached by the Court, directions should be given accordingly. I certify that the preceding one hundred and forty-seven (147) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

AND: LED TECHNOLOGIES PTY LTD (ACN 100 887 474)

VID 168 OF 2009 BETWEEN: ELECSPESS PTY LTD (ACN 104 535 597)

AND: LED TECHNOLOGIES PTY LTD (ACN 100 887 474)

INTRODUCTION 148 There are before the Court two appeals, two cross-appeals and two notices of contention in respect of orders made by a judge of this Court on 24 February 2009. 149 In the proceeding below, LED Technologies Pty Ltd ("LED Technologies") was the applicant and there were seven respondents. There were four corporate respondents, Elecspess Pty Ltd, Advanced Automotive Australia Pty Ltd, Ren International Pty Ltd and Olsen Industries Pty Ltd. Except where I need to refer to them individually, I will refer to these respondents as the Corporate Respondents. There were three individual respondents, Mr Peter Owen Morrison, Mr Anthony James Keller and Mr Lawrence Alfred Armstrong. The individual respondents were directors of Ren International Pty Ltd and Olsen Industries Pty Ltd at various times. At the trial, LED Technologies abandoned any claim for relief against Mr Morrison. 150 At the trial, the Corporate Respondents were represented by solicitors and counsel, and the individual respondents were separately represented by solicitors and counsel. 151 LED Technologies sells rear combination LED lights. These lights are attached to vehicles such as small and large trucks, caravans, trailers and buses, and are used to indicate when the vehicle is stopping, turning or reversing, as the case may be. There are safety standards in relation to such lights, and those standards are made under the Motor Vehicle Standards Act 1989 (Cth) and are referred to as the Australian Design Rules. By reason of s 41 of that Act, the standards or design rules are a prescribed consumer product safety standard under s 65C of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act"). 152 LED Technologies is the owner of two registered designs under the Designs Act 2003 (Cth) ("Designs Act 2003"). One registered design relates to rear combination lights consisting of two lenses and the other design relates to rear combination lights consisting of three lenses. LED Technologies also sells a single lens light. 153 The Corporate Respondents imported and sold, or sold, rear combination lights including rear combination lights consisting of two and three lenses respectively. The lights are sold as part of the Corporate Respondents' "Condor" range of products. The Corporate Respondents also sold a single lens light. 154 The lights sold by the Corporate Respondents contained, either on the packaging, or on the lights themselves, captions indicating compliance with the Australian Design Rules. 155 The relief sought by LED Technologies against the respondents at the trial can be divided into three broad categories. First, LED Technologies sought relief against the Corporate Respondents in respect of the alleged infringement by the Corporate Respondents of the registered designs. LED Technologies also sought relief against Messrs Keller and Armstrong as joint tortfeasors in respect of the infringement of the registered designs. It succeeded in relation to both these claims. Secondly, LED Technologies sought relief against the Corporate Respondents for false, or misleading or deceptive conduct, or conduct likely to mislead or deceive, in contravention of s 52 and s 53(a) and (c) of the Trade Practices Act that was said to result from the captions that appeared on, or in association with, the Corporate Respondents' Condor products. It was successful in establishing contraventions, but failed to establish an entitlement to relief. LED Technologies also sought relief against Messrs Keller and Armstrong under s 75B of the Trade Practices Act in respect of such contraventions but was unsuccessful in relation to this claim. Thirdly, LED Technologies sought relief against the Corporate Respondents in respect of contraventions of s 65C of the Trade Practices Act. It also sought relief against Messrs Keller and Armstrong under s 75B of the Trade Practices Act in respect of such contraventions. It failed in relation to these claims. 156 The primary judge made two declarations and five orders which are under challenge either by one or more of the respondents or by LED Technologies. The two declarations are as follows: 1. The Condor product with the code number TL80RA offered for sale and sold by each of the First to Fourth Respondents infringes the Applicant's registered Australian Design no. 302359. 2. Each of the Condor products with the code numbers: (a) TL80RRA / TL80ARR; (b) TL80ARW; (c) TL100ARR; (d) TL100RAA; (e) TL100ARW; (f) TL125AAR / TL125RRA; and (g) TL125ARW, offered for sale and sold by each of the First to Fourth Respondents infringes the Applicant's registered Australian Design no. 302360. The five orders made by the primary judge are as follows: 3. The First, Second, Third, Fourth, Sixth and Seventh Respondents, whether by themselves, their servants or agents or otherwise howsoever be restrained during the term of the Applicant's registered Australian Design nos. 302359 and 302360 ("the Registered Designs") from infringing the Applicant's monopoly in the Registered Designs and, in particular, from directly or indirectly making, importing, selling or offering for sale any automotive lamps to which any or all of the Registered Designs, or any design that is identical to, or substantially similar in overall impression to the Registered Designs, have been applied in infringement of the Applicant's monopoly in the Registered Designs ("the Infringing Products"). 4. The First, Second, Third, Fourth, Sixth and Seventh Respondents pay to the Applicant damages in the sum of $200,000 for infringement of the Applicant's monopoly in the Registered Designs, such payment to be made by 25 March 2009. 5. The Applicant's claims against the Fifth Respondent in its Second Further Amended Application and Fourth Amended Statement of Claim filed 5 May 2008 be dismissed and the Applicant pay the Fifth Respondent's costs of those claims incurred after 10 April 2008. 6. The First, Second, Third, Fourth, Sixth and Seventh Respondents pay the Applicant's costs of those claims under the Designs Act 2003 (Cth) in the Applicant's Second Further Amended Application and Fourth Amended Statement of Claim filed 5 May 2008. 7. The Applicant pay the First, Second, Third, Fourth, Sixth and Seventh Respondents' costs of those claims under the Trade Practices Act 1974 (Cth) in the Applicant's Second Further Amended Application and Fourth Amended Statement of Claim filed 5 May 2008. The primary judge delivered two sets of reasons. The first set of reasons deals with her principal conclusions: LED Technologies Pty Ltd v Elecspess Pty Ltd [2008] FCA 1941 ("principal reasons"). The second set of reasons deals with the orders sought by the parties: LED Technologies Pty Ltd v Elecspess Pty Ltd (No 2) [2009] FCA 141 ("final reasons"). In what follows I refer, for the most part, to the principal reasons. I will indicate when it is that I am referring to the final reasons. 157 The first appeal, VID 167/2009, is brought by Messrs Morrison, Keller and Armstrong. Messrs Keller and Armstrong appeal against the primary judge's conclusions that the designs were valid and that the Corporate Respondents had infringed the designs. They also appeal against the primary judge's conclusion that they were joint tortfeasors with respect to the infringement of the designs. Mr Morrison only appeals in relation to the costs order made in relation to him and he claims that it was not sufficiently favourable to him. 158 By cross-appeal, LED Technologies appeals against the primary judge's conclusions that Mr Keller was not liable under s 75B of the Trade Practices Act with respect to the Corporate Respondents' contraventions of s 52 and s 53(a) and (c) of the Trade Practices Act. It also appeals against the primary judge's conclusion that Messrs Keller and Armstrong were not liable under s 75B with respect to the alleged contraventions of s 65C of the Trade Practices Act. LED Technologies also appeals against the primary judge's conclusion that it should not be awarded damages for infringement of the designs for the period from June 2008 to February 2009. 159 By notice of contention in the cross-appeal, Messrs Keller and Armstrong contend that the primary judge's conclusions that relief should not be granted in relation to the contraventions of s 52 and s 53(a) and (c) of the Trade Practices Act should be upheld on the ground that her conclusion that there were no contraventions of s 65C of the Trade Practices Act also means that there were no contraventions of s 52, s 53(a) and (c) of the Trade Practices Act. They also contend that they could not be liable under s 75B with respect to the alleged contraventions of s 65C in circumstances in which the primary judge found that they were not liable under s 75B with respect to the Corporate Respondents' contraventions of s 52 and s 53(a) and (c) of the Trade Practices Act. 160 The second appeal, VID 168/2009, is brought by the Corporate Respondents against the primary judge's conclusions that the designs were valid and that they had infringed the designs. 161 By cross-appeal, LED Technologies appeals against the primary judge's conclusion not to grant relief with respect to the contraventions of s 52 and s 53(a) and (c) of the Trade Practices Act. It also appeals against the primary judge's conclusion that the Corporate Respondents had not contravened s 65C of the Trade Practices Act. It also appeals against the primary judge's conclusion that it should not be awarded damages for infringement of the registered designs for the period from June 2008 to February 2009. 162 By notice of contention in the cross-appeal, the Corporate Respondents contend that the primary judge's conclusion that relief should not be granted with respect to the contraventions of s 52 and s 53(a) and (c) of the Trade Practices Act should be upheld on the alternative ground that, in view of her Honour's conclusion that there had been no contravention of s 65C, she ought to have found that there had been no contravention of s 52 and s 53(a) and (c). 163 I will deal with the matters raised in the appeals, cross-appeals and notices of contention in the following order: 1. The claims under the Designs Act 2003 and the related claim against Messrs Keller and Armstrong. 2. The claims under the Trade Practices Act for contraventions of s 52 and s 53(a) and (c) and the claim against Mr Keller under s 75B. 3. The claims under the Trade Practices Act for contraventions of s 65C and the claims against Messrs Keller and Armstrong under s 75B. 4. LED Technologies' claim for damages for infringement of the registered designs for the period from June 2008 to February 2009. 5. The costs order made in favour of Mr Morrison.

The claims under the Designs Act 2003 AND RELATED CLAIMS 164 In relation to the claims under the Designs Act 2003 and the related claim against Messrs Keller and Armstrong, the primary judge reached three principal conclusions. First, she concluded that LED Technologies was the registered owner of two registered designs. Secondly, she concluded that those registered designs were valid. Thirdly, she concluded that the Corporate Respondents and two of the directors (Messrs Keller and Armstrong) were liable in relation to the infringement of the registered designs. The Corporate Respondents were infringers of the registered designs and Messrs Keller and Armstrong were liable as joint tortfeasors. 165 The Corporate Respondents appeal against the primary judge's conclusions that the registered designs were valid and that they were infringers of the designs. Messrs Keller and Armstrong appeal in relation to the same matters. The Corporate Respondents on the one hand, and Messrs Keller and Armstrong on the other, were separately represented on the hearing of the appeal. However, both groups put the same submissions and, in fact, counsel for the Corporate Respondents adopted the submissions made by counsel for Messrs Keller and Armstrong. In the context of those submissions, a reference to the Corporate Respondents includes a reference to Messrs Keller and Armstrong. 166 As I have said, Messrs Keller and Armstrong also appeal against the primary judge's conclusion that they were liable as joint tortfeasors. 167 The Condor products referred to in the declarations made by the primary judge were manufactured and sold in different sizes: 80 mm, 100 mm and 125 mm. The letters at the end of the description of the Condor products denote the colour of the lights, being red, amber and white. 168 LED Technologies' first registered design is Australian design no. 302359. The certificate of registration states that the designer is Mr Tony Ottobre. Mr Ottobre is a director of LED Technologies. The product in respect of which the design is registered is described as "rear combination lights" and the priority date of the registered design is 22 June 2004. The certificate of registration states that there is a "statement of newness and distinctiveness" in the following terms: Seperate (sic) clip in lenses. Base to take a variety of 2, 3 or 4 combination lenses for stop, tail, indicator, reverse LED lenses, no visible screws. 169 There are five pages of representations attached to the certificate of registration. They are part of the schedule to this Court's reasons. The numbering of the pages suggests that there should be a sixth page, but it was common ground before the primary judge that the sixth page had been filed by mistake and was not relevant. The representations show a product consisting of two combination lenses and a base. The representations show perspective views of the combination lights, a front view and a rear or underside view. 170 LED Technologies' second registered design is Australian design no. 302360. The certificate of registration records the same information as does the certificate of registration for the first registered design, save and except that the six pages of representations attached to the certificate of registration show that the second registered design relates to a product consisting of three combination lenses and a base. Again, they are part of the schedule to this Court's reasons. Again, it can be seen that the representations show perspective views of the combination lights, a front view and rear or underside views. 171 Except where it is necessary to do so, I will refer to the two registered designs as "the Designs". LED Technologies' rear combination lights were also manufactured and sold in the same three sizes as the Corporate Respondents' Condor products. LED Technologies first sold a batch of dual lens rear combination lights in Australia in September 2004 and a batch of triple lens rear combination lights in April/June 2005. 172 The Designs were registered under the Designs Act 2003, and the issues in this case are to be determined by reference to the provisions of that Act. However, it will be necessary for me to refer to the Act that it replaced, namely, the Designs Act 1906 (Cth) ("Designs Act 1906"). 173 The Designs Act 2003 contains a section dealing with the revocation of a registered design. Section 93 relevantly provides: (1) A person may apply to a prescribed court for an order revoking the registration of a design.

(3) The grounds on which a court may revoke the registration of the design are:

(a) that the design is not a registrable design; or (b) that one or more of the original registered owners was not an entitled person in relation to the design when the design was first registered; or (c) that each of the original registered owners was an entitled person in relation to the design when the design was first registered, but another person or persons were entitled persons in relation to the design at that time; or (d) that the registration of the design was obtained by fraud, false suggestion or misrepresentation; or (e) that the design is a corresponding design to an artistic work, and copyright in the artistic work has ceased.

original registered owner, in relation to a design, means each person entered in the Register as the registered owner at the time the design was first registered. 174 The Designs Act 2003 also contains a section dealing with the rectification of the Register. Section 120 of the Act relevantly provides: (1) A person aggrieved by:

(a) the omission of an entry from the Register; or (b) an entry wrongly made in the Register; or (c) an error or defect in an entry in the Register; or (d) an entry wrongly existing in the Register;

may apply to a prescribed court for an order to rectify the Register.

(2) On hearing an application under subsection (1), the court may:

(a) decide any question that it is necessary or expedient to decide in connection with the rectification of the Register; and (b) make an order it thinks fit for the rectification of the Register. 175 In terms of LED Technologies' claims under the Designs Act 2003 and the related claim against Messrs Keller and Armstrong, there were four issues before the primary judge. First, it was necessary for her to determine whether the Register should be rectified under s 120(1) of the Designs Act 2003 because the Designs were invalid as the representations were unclear and the monopoly lacked certainty. Secondly, it was necessary for the primary judge to determine whether the registration of the Designs should be revoked under s 93 of the Designs Act 2003 because LED Technologies was not solely entitled to registration of the Designs because another person also had a co-entitlement. Thirdly, it was necessary for the primary judge to determine whether the Register should be rectified under s 120(1) of the Designs Act 2003 because the Designs were not new and distinctive, but were substantially similar in overall impression to a design that formed part of the prior art base. Finally, it was necessary for her Honour to determine whether the Corporate Respondents' Condor products infringed the Designs and, if so, whether Messrs Keller and Armstrong were joint tortfeasors in relation to the infringing acts. 176 The primary judge decided each of these four issues in favour of LED Technologies. The Corporate Respondents challenge her conclusions with respect to the first and third issues and, so far as concerns them, the fourth issue. Messrs Keller and Armstrong challenge her conclusions with respect to the first, third and fourth issues. Neither the Corporate Respondents nor Messrs Keller and Armstrong seek to agitate her Honour's conclusion with respect to the second issue. 177 The Designs Act 2003 was intended to effect changes to the law as it was under the Designs Act 1906. 178 Under the Designs Act 1906, the issue of novelty was governed by s 17(1) which, prior to the repeal of the Act, was in the following terms: (1) Subject to this Act, a design shall not be registered unless it is a new or original design and, in particular, shall not be registered in respect of an article if the design:

(a) differs only in immaterial details or in features commonly used in the relevant trade from a design that, before the priority date in respect of the application for registration, was registered, published or used in Australia in respect of the same article; or (b) is an obvious adaptation of a design that, before the priority date in respect of the application for registration, was registered, published or used in Australia in respect of any other article. 179 The issue of infringement was governed by s 30(1) which was in the following terms: (1) A person shall be deemed to infringe the monopoly in a registered design if he, without the licence or authority of the owner of the design:

(a) applies the design or any fraudulent or obvious imitation of it to any article in respect of which the design is registered; (b) imports into Australia for sale, or for use for the purposes of any trade or business, any article in respect of which the design is registered and to which the design or any fraudulent or obvious imitation of it has been applied outside Australia without the licence or authority of the person who was the owner of the registered design at the time when the design or imitation was so applied; or (c) sells, or offers or keeps for sale, or hires, or offers or keeps for hire, any article: (i) to which the design or any fraudulent or obvious imitation of it has been applied in infringement of the monopoly in the design; or (ii) in respect of which the design is registered and to which the design or any fraudulent or obvious imitation of it has been applied outside Australia without the licence or authority of the person who was the owner of the registered design at the time when the design or imitation was so applied.

(2) If any person infringes the monopoly in a registered design, the owner of the design may bring an action or proceeding against him for infringement of the monopoly in the design. 180 In 1995, the Australian Law Reform Commission produced a report dealing with designs (Report No 74, Designs (1995)). I will refer to this report as "the ALRC Report". The ALRC Report dealt with the innovation threshold in chapter 5 of the report and the issue of infringement in chapter 6. It was critical of the existing law in a number of respects. I will return to discuss aspects of the ALRC Report later in these reasons. 181 In addition to the ALRC Report, the Court was given the Second Reading Speech in relation to the Designs Bill 2002. The Second Reading Speech makes it clear that the Bill was designed to implement a number of the recommendations in the ALRC Report. The Court was also given the Explanatory Memorandum for the Designs Bill 2002. The Explanatory Memorandum makes it clear that the Bill was the government's response to the ALRC Report. 182 Before turning to examine the issues raised on the appeals, it is convenient to identify the provisions of the Designs Act 2003 which are important to the resolution of the issues raised on the appeals. In the definition section (s 5), the Act contains the following relevant definitions: design, in relation to a product, means the overall appearance of the product resulting from one or more visual features of the product.

Note: see also s 8 representation means a drawing, tracing or specimen of a product embodying a design or a photograph of such a drawing, tracing or specimen. visual feature has the meaning given by section 7. 183 Section 7 is in the following terms: (1) In this Act:

visual feature,in relation to a product, includes the shape, configuration, pattern and ornamentation of the product.

(2) A visual feature may, but need not, serve a functional purpose.

(3) The following are not visual features of a product:

(a) the feel of the product; (b) the materials used in the product; (c) in the case of a product that has one or more indefinite dimensions: (i) the indefinite dimension; and (ii) if the product also has a pattern that repeats itself - more than one repeat of the pattern. 184 Section 8 provides that, in the Act, a reference to a design is a reference to a design in relation to a product. 185 Section 10 of the Act sets out the exclusive rights which the registered owner of a registered design has during the registration of the design and those rights include the exclusive right to make, or offer to make, a product, in relation to which the design is registered, which embodies the design. 186 Sections 15, 16 and 19 of the Act deal with the features a design must exhibit before it can be registered under the Act. Those sections relevantly provide: 15 Registrable designs

(1) A design is a registrable design if the design is new and distinctive when compared with the prior art base for the design as it existed before the priority date of the design.

(2) The prior art base for a design (the designated design) consists of:

(a) designs publicly used in Australia; and (b) designs published in a document within or outside Australia; and (c) designs in relation to which each of the following criteria is satisfied: (i) the design is disclosed in a design application; (ii) the design has an earlier priority date than the designated design; (iii) the first time documents disclosing the design are made available for public inspection under section 60 is on or after the priority date of the designated design.

Note: For document, see section 25 of the Acts Interpretation Act 1901. 16 Designs that are identical or substantially similar in overall impression

(1) A design is new unless it is identical to a design that forms part of the prior art base for the design.

(2) A design is distinctive unless it is substantially similar in overall impression to a design that forms part of the prior art base for the design (see section 19).

(3) Subject to paragraph 15(2)(c), the newness or distinctiveness of a design is not affected by the mere publication or public use of the design in Australia on or after the priority date of the design, or by the registration of another design with the same or a later priority date. … 19 Factors to be considered in assessing substantial similarity in overall impression

(1) If a person is required by this Act to decide whether a design is substantially similar in overall impression to another design, the person making the decision is to give more weight to similarities between the designs than to differences between them.

(a) have regard to the state of development of the prior art base for the design; and (b) if the design application in which the design was disclosed included a statement (a statement of newness and distinctiveness) identifying particular visual features of the design as new and distinctive: (i) have particular regard to those features; and (ii) if those features relate to only part of the design - have particular regard to that part of the design, but in the context of the design as a whole; and (c) if only part of the design is substantially similar to another design, have regard to the amount, quality and importance of that part in the context of the design as a whole; and (d) have regard to the freedom of the creator of the design to innovate. (3) If the design application in which the design was disclosed did not include a statement of newness and distinctiveness in respect of particular visual features of the design, the person must have regard to the appearance of the design as a whole.

(4) In applying subsections (1), (2) and (3), the person must apply the standard of a person who is familiar with the product to which the design relates, or products similar to the product to which the design relates (the standard of the informed user).

(5) In this section, a reference to a person includes a reference to a court. 187 Section 71 defines the acts which constitute infringement of a registered design. It relevantly provides: (1) A person infringes a registered design if, during the term of registration of the design, and without the licence or authority of the registered owner of the design, the person:

(a) makes or offers to make a product, in relation to which the design is registered, which embodies a design that is identical to, or substantially similar in overall impression to, the registered design; or (b) imports such a product into Australia for sale, or for use for the purposes of any trade or business; or (c) sells, hires or otherwise disposes of, or offers to sell, hire or otherwise dispose of, such a product; or …

(3) In determining whether an allegedly infringing design is substantially similar in overall impression to the registered design, a court is to consider the factors specified in section 19. 188 The following sections of the Designs Act 2003 are potentially relevant to the issue of whether the designs are invalid because the representations are unclear and the monopoly lacks certainty. Pursuant to s 111 of the Act, the Registrar must keep at the Designs Office a Register of Designs. Various particulars must be entered in the Register in respect of a registered design and those particulars include representations of the design. The Register may be kept wholly or partly by use of a computer (s 112). Pursuant to s 21 of the Act, a person may file an application in respect of a design and the application must comply with what are defined in s 21(2) as minimum filing requirements. The minimum filing requirements relate, inter alia, to the representations of the designs. Regulation 3.01 of the Design Regulations 2004 (Cth) ("the Regulations") provides that, as part of the minimum filing requirements, the application must include a representation, or information that appears to be a representation, of each design. Pursuant to s 39(2) of the Act, the Registrar must register the design if the Registrar is satisfied, inter alia, that the design applications satisfy the formalities check specified in the Regulations. Regulation 4.04(1)(f) provides that part of the formalities check is confirmation by the Registrar that the design application includes five copies of each representation of the design. 189 I turn now to examine the three issues raised on the appeals in relation to the claims under the Act and the related claims.

The Clarity of the Designs 190 It is convenient to begin by setting out the primary judge's findings of fact and her reasons for concluding that the representations were reasonably clear and succinct. 191 In June 2004, LED Technologies lodged two applications in respect of two designs. With each application there was one set of drawings. These drawings were prepared using dark ink and various parts of the product were shown in dark ink. The primary judge referred to these drawings as the greyscale drawings. 192 The greyscale drawings were kept on physical files maintained by IP Australia. They were kept on the relevant file in an envelope endorsed with the word, "informals". 193 LED Technologies' applications did not satisfy the formalities check specified in the Act and Regulations because each application did not include five copies of each representation of the design (s 39 Act; reg 4.04 Regulations). In November 2004, Mr Ottobre received a notice from IP Australia stating that his applications for registration did not satisfy the formal requirements for registration because he had provided only one set of drawings with each application. IP Australia advised that, if the deficiency was not remedied within two months, the applications might lapse. When Mr Ottobre came to attend to the matter, he had only pink ink available to him and further copies of the drawings were printed using pink ink. I will refer to these copies of the drawings or representations as the pink drawings or representations. The pink drawings show parts of the product in pink ink. Mr Ottobre provided the pink drawings to IP Australia. 194 The primary judge found that the greyscale drawings were not faint like the pink drawings. 195 The certificates of registration for each design were tendered in evidence at the trial. The representations attached to them are the pink drawings. 196 As I have said, the Act authorises the Registrar to keep the Register, or part of the Register, by use of a computer. IP Australia operates a website and part of the Register can be accessed through this website. The pink drawings or representations are the representations on the website. 197 The representations attached to the primary judge's reasons, and which form the Schedule to these reasons, are paper copies of what is shown on the website. 198 In the course of her reasons, the primary judge said that the pink representations were not perfect and they could be better or clearer. Nevertheless, she concluded that they were reasonably clear and succinct. In adopting that test, she had regard to the following passage from the reasons for judgment of Fullagar J in LJ Fisher & Company Ltd v Fabtile Industries Pty Ltd (1978) 1a IPR 565, 571-72 ("LJ Fisher & Company Ltd"): I am clearly of opinion that a registered design in order to be valid, must be reasonably "clear and succinct"; that is to say the design sought to be monopolised by copyright must appear with reasonable clarity, and without necessity for unreasonably prolonged or complicated series of deductions, from the registered representation of an article to which the design has been applied. In argument in Phillips v Harbro Rubber Co (1920) 37 RPC 233, Sir Duncan Kerly KC said:

A design may be valid for any form that is new, subject to this, that it must be distinctand present an appearance that strikes the eye as being different from any previously existing shape. [Emphasis added.]

… But in design law I think that the design is addressed to a person of some skill who might be called a person skilled in the art, but that a person skilled in the art is not necessarily familiar with particular methods of manufacture per se; I think he knows the prior art articles and the prior art registered designs and knows as much about manufacture as he would reasonably be expected to deduce from a study of those designs and articles, but not necessarily any more. … I do think that if a design, depicted by reference to an article to which it has been applied, appears difficult to construe, evidence is admissible from persons familiar with those articles and with methods of applying designs to them, at all events where the design is as here confined to configuration. In what follows I use the expression "person skilled in the art" as a shorthand for a person with the elementary knowledge that I have above indicated; that is to say a person in the circumstances of this case, who is familiar at least with the shape and appearance and (so far as obvious) constituents of prior art roof tiles composed wholly or chiefly of metal, as known at the priority date of the registration.

(Emphasis added.) 199 At the trial, LED Technologies and the Corporate Respondents each called a person who was proffered as an expert and who gave evidence on the issues of the clarity of the Designs and distinctiveness for the purposes of validity and infringement. Each witness was put forward as a person who could give evidence which was relevant to the standard of the informed user referred to in s 19(4) of the Act. The Corporate Respondents called a Mr Trevor Garrard, who was a consultant to the automotive electrical industry. LED Technologies called a Mr Glenn Ransom, who was an operator of an auto electrical wholesale business. 200 In considering the issue of the clarity of the Designs, the primary judge referred to Mr Garrard's evidence. She noted that he had looked at the pink drawings on the IP Australia website and attached to the certificates of registration. She referred to his evidence to the effect that he had difficulty in understanding the features of the Designs such as the side profile of the base and the degree of rounding of the lens. She noted that, in cross-examination, Mr Garrard modified that evidence to the extent that he acknowledged that he was able to discern features of the Designs except for the curved ends. The primary judge also referred to the fact that other witnesses gave evidence about the pink drawings and what they could and could not discern from them. 201 The primary judge conducted her own examination of the representations and she concluded that it was possible to discern from the printed representations the visual features of the Designs, including the two matters to which Mr Garrard had drawn special attention. 202 Her Honour went on to note that it was possible, within limits, to reproduce the representations at greater magnification than may first be displayed on the computer screen. She said that, when the five different views of each Design were displayed at high magnifications, "the details and specifications of each design appear not just with reasonable clarity, but with great clarity". She rejected two contentions made by the Corporate Respondents. The first was that there was no evidence that the representations on the IP Australia website could be or were in fact magnified by any witness, and the second was that a member of the public seeking information as to a registered design would not be expected to electronically magnify the online representations. The primary judge concluded that there was a "presumption" implicit in the Designs Act 2003 and accepted by the parties that a person will be able to access an image on the website and that it must also be "presumed or expected" that the person could magnify the image without prompting. The primary judge said that this provided separate support for her conclusion that the visual features of the Designs are sufficiently clear. 203 Having regard to her earlier conclusions, the primary judge noted that it was unnecessary for her to express a concluded view as to what comprised the Register for the purposes of determining if the representations were unclear and the monopoly lacked certainty. 204 In making their respective submissions, both LED Technologies on the one hand, and the Corporate Respondents on the other, accepted the test formulated by the primary judge, namely, whether the Designs are reasonably clear and succinct. Clearly, there must be a test of this nature. The Designs Act 2003 requires representations embodying the design and a design is the overall appearance of a product resulting from one or more visual features of the product. Furthermore, no assessment of distinctiveness for the purposes of validity, or for the purposes of infringement, can be made without knowledge of the overall appearance of a product resulting from one or more visual features of the product. In this case, for example, other than a brief statement of newness and distinctiveness, there is no written description of the overall appearance and visual features of the product. 205 In my opinion, the primary judge was correct to conclude that the Designs must be reasonably clear and succinct. In addition to the observations of Fullagar J in LJ Fisher & Company Ltd, I note the observations of the High Court in Malleys Ltd v JW Tomlin Pty Ltd (1961) 180 CLR 120 at 123-124: It was argued, however, that because an arrangement of the three sections of the design which had been described (ie the rim, dome and the annular portion between them) was not indicated with any precision, the so-called design was altogether too vague to qualify for registration. The same contention was put somewhat differently in the form of an argument that any person inspecting the certificate of registration, although shown the features of the design, could not know the extent to which a different arrangement of those features would be protected by the registration of the design. The answer to these contentions lies, we think, in the recognition of what is essential to distinguish a design from a mere shape. It is, of course, true that every shape is not a design; there must be "sufficient individuality of appearance" to distinguish it from what Russell-Clarke in Ch 2 of his book Copyright in Industrial Designs aptly describes as "the fundamental form' of an article. Furthermore, the existence of that sort of individuality is to be determined by the eye and not by measuring dimensions. It follows that a design need not have the precision of a working drawing; it concerns the shape or configuration of an article, as it appears to the eye. If a design applied by another has the features that are characteristic of the registered design and are so arranged that to the eye the resulting shape is substantially the same, there is infringement, whereas if the same features are arranged so that to the eye the resulting shape is different, there is, in the absence of fraudulent imitation, no infringement. In deciding one way or the other the proportions of common features may be of the utmost importance, but acceptance of this does not involve deciding that to be registrable the representation of the design must be represented so that its proportions can be accurately calculated; it is sufficient if it shows a shape with enough individuality of appearance to distinguish it and to enable it to be determined by visual comparison whether the shape of an article is either the same as, or nothing more than an imitation of, that disclosed by the registered design. If, for instance, a crescent were a new or original design for a light reflector, it could be registered although the representation depicted did not specify the degree of the curve, and if the question ever arose whether a reflector in the shape of a crescent but with a curve that by measurement was not the same as that represented would constitute an infringement, a comparison of the sort already indicated would then have to be made. 206 The submissions made by the Corporate Respondents concerning the clarity of the Designs raise a general question about the use by the Court of expert evidence on such an issue and, indeed, on the issues of the distinctiveness of the Designs for the purpose of validity and for the purpose of determining infringement. On the issue of clarity, the question is addressed by Fullagar J in the passage from LJ Fisher & Company which I have set out (at [198]). 207 More generally, the use and admissibility of expert evidence under the Designs Act 2003 was addressed by Lockhart J in Dart Industries Inc v Decor Corporation Pty Ltd (1989) 15 IPR 403 ("Dart Industries Inc") in the following passage (at 408-409): In Firmagroup Australia Pty Ltd v Byrne & Davidson Doors (Vic) Pty Ltd, supra, at 37-8 I discussed the cases dealing with the meaning of design and the manner in which the effect of its infringement is to be judged. I there referred to some divergence in the authorities as to whether the matters are to be judged by the eye of the court or by the eye of somebody else, such as an expert witness, or people in the trade or business which deals with the article made from or by the application of the registered design, or the eye of the ultimate consumer of the product. I stated that in my view, the law in Australia concerning that question was that it is for the court to determine the meaning of a design in proceedings under the Act, whether the central question be the meaning of the design, novelty or infringement. I observed that, while some designs are simple so that the court needs no expert evidence to interpret them, other designs are complex and judges require technical assistance in order to understand them. Such evidence is plainly admissible, but ultimately it is for the court to rule on the meaning of a design. Similarly, prior art may be a fairly simple matter in a particular case, requiring little or no technical evidence. On the other hand, the understanding and interpretation of prior art may call for expert assistance to be provided to the court for similar reasons. I see no objection in an appropriate case to evidence being received from persons in the relevant trade or industry or members of the public directed to the question of infringement; but it is for the court to determine that question with or without such evidence. However, to say that questions of infringement must be determined by reference to the eye of the consumer or of the relevant industry or trade comes perilously close to asserting that the determination of questions of infringement depends on the evidence of such persons, rather than being determined by the court itself. 208 These observations represented the law on this issue under the Designs Act 1906. 209 The Designs Act 2003 introduced the standard of the informed user in s 19(4). The meaning of the standard was discussed in the ALRC Report (at paragraphs 5.17-5.21 inclusive). The standard has been the subject of considerable discussion in the authorities (see, for example, Review 2 Pty Ltd v Redberry Enterprise Pty Ltd (2008) 173 FCR 450 at 455-457 [19]-[27] per Kenny J; the primary judge in this case at [57]-[59]). I do not need to discuss the observations made in those authorities. It is sufficient for me to say that, as a general rule, the principles as to the use and admissibility of expert evidence are the same under the Designs Act 2003 as they were under the Designs Act 1906. 210 The issue in this case is the clarity of the Designs and it is not suggested that the Designs are complex or that the primary judge required technical assistance in order to understand them. It is even clearer in a case like this that it is for the trial judge to make up his or her own mind. 211 I turn now to the particular submissions made by the Corporate Respondents. First, they submit that, in the case of the rear combination lights comprising two lenses, it is unclear whether the lenses are square or rectangular, and the Court was referred to the first page of the representations. The answer to that submission is that the representations must be viewed as a whole and, doing that, it is quite clear that the lenses are square. 212 Secondly, they submit that the representations are unclear as to the cut-out on the left hand side of the base, as shown on the first page of both sets of representations. I do not think that there is any uncertainty about the fact that the designs show a cut-out on the two short sides of the base. 213 Thirdly, they submit in relation to both sets of representations that the representations of the rear or underside of the product are unclear because it is unclear as to what is represented by the pink colouring. I reject this submission. It may be inferred that the pink area is the back of the lenses with a gap between each lens. The pink area indicates a cavity or void and is to be contrasted with the open back plate. The feature of the design to which these matters are relevant is the shape and configuration of the open back plate. I think that this feature is shown sufficiently clearly in the representations. 214 Fourthly, in their written submissions lodged before the appeals were heard, the Corporate Respondents submitted that the primary judge ignored the evidence of Messrs Garrard and Ransom and, in particular, the evidence of Mr Garrard. The written submissions contain various references to passages in the evidence of those witnesses. I have read those passages. Counsel for the Corporate Respondents did not repeat the submission during the course of his oral submissions. In fact, as I understood counsel, he accepted that he could not press the submission because the evidence on this point is confused. Counsel said that that came about because "everybody was looking at different copies of the representations". I think that, having regard to the evidence, that acknowledgment is correct. Even if part of the evidence was clear, it is not correct to say that the primary judge ignored the evidence. She referred to the evidence of Mr Garrard and others, albeit briefly. She went on to make her own mind up as to the clarity of the representations, and, as I have said, she was entitled to do that. 215 Finally, the Corporate Respondents submit that, under the Designs Act 2003, the judgments which must be made require reference to "overall impression" and that that required reference to the whole design. They submit that the primary judge did not consider the issue of clarity from this perspective. This submission must be rejected because there is simply nothing to support the suggestion that the primary judge confined her consideration to something less than the whole of the Designs. 216 The Corporate Respondents' submission that the primary judge erred in concluding that the representations were reasonably clear and succinct must be rejected.

The Distinctiveness of the Designs for the Purposes of Validity 217 Before the primary judge, the Corporate Respondents contended that the Designs were not registrable designs because they were not distinctive when compared with the prior art base. There was no issue as to newness, it being accepted that the Designs were not identical to a design that formed part of the prior art base for the Designs. 218 Again, it is convenient to begin by setting out the primary judge's findings of fact and her reasons for concluding that the Designs were not invalid by reason of a lack of distinctiveness. 219 The primary judge said that the prior art in evidence was extensive. However, she noted that the Corporate Respondents placed specific reliance upon the following prior art base products: 1. the products depicted in the Narva Catalogue 2000/2001; 2. the Britax "Squircular"; 3. the products depicted in the Britax Catalogue 2000/2001; 4. the products depicted in the Narva Catalogue 2004/2005 (except those marked "new"); 5. some of the products depicted in the Hella Catalogue 2003/2004; 6. SYK Catalogue and products; and 7. LED Tech's single-lens LED lamp. 220 The primary judge said that the Corporate Respondents accepted that there were the following distinctions between the prior art base, which, she said, the Corporate Respondents incorrectly asked her to consider as a whole, and the Designs, namely, (in the case of the Designs) the absence of visible screws, the different visual features of the rear or base views of the Designs; the "cut-out" or "recess" at the end of a lamp; and the sloping, rounded mounting brackets surrounding the lens. These four features were of considerable importance to the primary judge's consideration of the present issue and of the issue of infringement. 221 Her Honour said that the question she needed to determine was whether an informed user would consider that a design with these distinct features was substantially similar in overall impression to a design that formed part of the prior art base for the design. She said that, in her opinion, an informed user would not consider either Design to be substantially similar in overall impression to a design that formed part of the prior art base for the Designs. 222 The primary judge said that the designs and products which comprised the prior art base, including LED Technologies' single-lens lamp, had some of the features found in each of the Designs, for example, a lens separate from the base and from each other, a low profile with an open base and no visible screws. However, in her opinion, none of the designs include all or most of the four features listed in [73] "being features described in the statement of newness and distinctiveness for each of the Designs". She said that, for example, LED Technologies' single-lens lamp contained none of the four features, apart from the absence of visible screws. 223 The primary judge then turned to consider the state of development of the prior art base. She said that each of the Designs and features described in the statement of newness and distinctiveness was a distinct advance over the prior art base in the sense that it combined various existing features in a way that had not been done before. She said that, on application to register each Design, the advances recorded in those Designs over the prior art base were substantial. She referred to the fact that Mr Garrard had acknowledged that each of the four features was quite arbitrary from a design point of view, that is to say, the features were the product of a conscious design choice, rather than compelled by industry-wide standards or technological constraints. Her Honour found that the product which was the subject of the Designs was different and she referred to it as "modern and streamlined with curved edges". She found that no product in the prior art base incorporated all (or most) of the four features in one product. She said that she did not consider that a person familiar with the product to which the design relates, or products similar to the product to which the design relates, would consider either Design as substantially similar in overall impression to any of the designs that formed part of the prior art base. 224 One argument which was put to the primary judge by the Corporate Respondents concerned LED Technologies' single-lens lamp. They submitted that it was necessary to consider a product comprising several of the single-lens lamps set side by side. The primary judge referred to the fact that at least one witness, Mr Carpenter, gave evidence that he had seen LED Technologies' single lens lamps installed side by side on vehicles. However, her Honour said that it was by no means clear when he saw such a configuration or what the precise configuration, as to number and composition, looked like. She said that lack of detail was "probably fatal" to the contention that each Design was substantially similar in overall impression to an arrangement of LED Technologies' single-lens lamps side by side. 225 The primary judge went on to consider the position assuming a person had "physically abutted" two or three of LED Technologies' single-lens lamps side by side before the priority date of each Design and that such a configuration constituted a design publicly used within Australia within the meaning of s 15(2) of the Act so as to make it part of the prior art base. Her Honour said that, even on that assumption, she did not consider that each Design would be substantially similar in overall impression to such a configuration. She said that, instead of one continuous base along the long axis, there would be two or three bases with no flat strip or landing between each lens. Furthermore, the sides of each base would not comprise a sloping, rounded mounting bracket surrounding a lens, but would have vertical or straight side walls surrounding each lens. The rear or underside of the bases would be different in shape, with mounting holes in different positions. 226 With respect to the relevant legal principles, the primary judge referred to the fact that the Designs Act 2003 adopted a different approach to that which had been taken in s 17(1) of the Designs Act 1906. She referred to paragraphs in the ALRC Report which discussed the advantages of introducing a test of distinctiveness. 227 The primary judge rejected a submission made by the Corporate Respondents to the effect that distinctiveness was to be assessed by comparing the design in question to the prior art base as a whole. She held that distinctiveness was to be assessed by comparing the design in question to each relevant piece of prior art. She referred to the fact that both s 16 and s 19(1) refer to "a design". She said that a design that combined various features, each of which could be found in the prior art base when considered as a whole, but not in any one piece of prior art, was capable of being distinctive. 228 The primary judge held that the judgment as to distinctiveness was an objective one and that the standard to be applied was that of the informed user. She referred to the requirements in s 19 of the Designs Act 2003 and the cases which have discussed the concept of the informed user. She set out suggested characteristics of the informed user. 229 Before this Court, the Corporate Respondents submit that, in determining the question of distinctiveness, the primary judge made two errors. 230 First, it is submitted that she did not have regard to the state of development of the prior art base for the Designs as she was required to do by s 19(2)(a) of the Designs Act 2003. Alternatively, she erred because she treated this matter as a secondary consideration. The Corporate Respondents submit that, under the Designs Act 1906, a court had regard to the prior art base in determining whether a design was new or original within s 17(1). One of the purposes of the new test of new and distinctive introduced by the Designs Act 2003 was to make it harder to obtain registration, not easier to obtain registration. To confine the provisions of the Designs Act 2003 to a design by design comparison would, it was submitted, make it easier to qualify for registration. In those circumstances, the Act should be read as requiring a close examination of the prior art base as a whole. Counsel for the Corporate Respondents gave an example of how their argument operated in the circumstances of this case. He took as the Corporate Respondents' piece of prior art, the Narva rear combination lights shown in a Narva automotive lighting and electrical brochure for the 2000/2001 year. The brochure shows a two-lens combination and a three-lens combination. The Narva lights have screws in the lights and no cut-out or recess. He submitted that, in considering whether the Designs are distinctive when compared with the Narva rear combination lights, regard should be had to the fact that rear combination lights produced by Britax, and shown in the Britax automotive equipment-product catalogue, did not have screws and rear combination lights in a design application in the name of CG Robinson & Co (Australia) Pty Ltd appeared to have a cut-out at the end of the base which is arguably similar to the cut-out or recess at the end of the lamp in the Designs. The Corporate Respondents' counsel submitted that his approach did not involve "mosaicing" or producing a hypothetical amalgam of a number of prior designs in order to defeat the registration of the Designs. He accepted that "mosaicing" was not permissible. 231 Secondly, the Corporate Respondents submit that the primary judge erred in that she did not place any weight, or any sufficient weight, on the statement of newness and distinctiveness in the Designs. They submit that, by reason of s 19(2)(b), the decision-maker is required to have particular regard to the visual features identified in such a statement as new and distinctive. The Corporate Respondents submit that the only visual feature of the Designs identified in the statements as new and distinctive is the absence of visible screws. The Corporate Respondents submit that consideration should be confined to this matter and that there are other designs forming part of the prior art base which have no visible screws. 232 The Corporate Respondents' first submission must be rejected. 233 Under s 17(1) of the Designs Act 1906, the question of novelty was determined by a comparison of the design in issue and each piece of relevant prior art: Ullrich Aluminium Pty Ltd v Dias Aluminium Products Pty Ltd (2006) 153 FCR 437 at 450-451 [50] and 454 [66] per Young J (with whom Tamberlin J agreed). In D Sebel & Co Ltd v National Art Metal Co Pty Ltd (1965) 10 FLR 224 ("D Sebel & Co Ltd"), Jacobs J said (at 227): It is also true no doubt that a mere conjunction of old features does not necessarily result in a new design. However, it may do so and it seems to me that when one is dealing with furniture design, with the obvious limitations that exist in the addition of new features, one should not be astute to deny novelty upon the ground that there is not some wholly new feature of design incorporated. Design in such a field is a subtle thing and, provided it is distinctive to the trained eye, I think that registration should not be denied in view of the element of subtlety which is involved in the combination of old features in a particular way and the manner in which they are combined. 234 In Household Articles Ltd's Registered Design [1998] FSR 676, Laddie J said (at 686): A design can be novel even if it is made up entirely by blending together a number of old designs provided the resulting combination itself has a sufficiently distinctive appearance. It is only where all the features have been used before, and used commonly (or are immaterial), that the Act deems them to be novelty-destroying. 235 None of these observations are to gainsay the proposition that a more general examination of the prior art base might not have been called for under the Designs Act 1906 where, for example, the particular case raised the issues in s 17(1)(a). Nor was the state of development of the prior art base irrelevant under the Designs Act 1906. A well developed prior art base may have meant that novelty was to be found in relatively small differences in the design in issue. In D Sebel & Co Ltd, Jacobs J said (at 226): I think that it is most important to bear in mind in relation to such an article as a chair, that one cannot and should not expect to find some startling novelty or originality. The element of novelty or originality will of necessity be likely to be within a small compass. I do not mean thereby that any difference of shape, outline, proportion or placement of components will thereby constitute novelty of design, but provided I can see a substantial difference from the fundamental form and from the development in the trade up to the time of the application for registration, then I do not think that it is sufficient to point to a number of elements of similarity to past design in order to show that the design is not new or original. 236 Under the Designs Act 1906, the development in the trade or the state of development of the prior art base was relevant to both the question of novelty or originality and the question of infringement. Lockhart J made the point in Dart Industries Inc when he said (at 409): The scope of a registered design must be determined with reference to the background of the prior art at the priority date and questions of infringement and novelty or originality are connected. In Hecla Foundry Co v Walker, Hunter & Co (1889) 14 App Cas 550 Lord Herschell said at 555 : "… one may be able to take into account the state of knowledge at the time of registration, and in what respects the design was new or original, when considering whether any variations from the registered design which appear in the alleged infringement are substantial or immaterial." Where novelty or originality is discovered in slight variations, there cannot be infringement without a very close resemblance between the registered design and the article alleged to be an infringement of the design. Lloyd-Jacob J in Rosedale Associated Manufacturers Ltd v Airfix Products Ltd [1956] RPC 360 at 364 said that the court would have regard to what was "known and old", and: "… if the particular features which provide a novel conception have not been reproduced in the alleged infringement, the similarity of appearance between the article complained of and the registered design if present must necessarily reside in the common possession of characteristics which are free to everybody to employ." See also Macrae Knitting Mills Ltd v Lowes Ltd (1936) 55 CLR 725 at 731 per Dixon J and L J Fisher & Co Ltd v Fabtite Industries Pty Ltd (1978) 49 AOJP 3611 at 3620 per Fullagar J. Small differences between the registered design and the prior art will generally lead to a finding of no infringement if there are equally small differences between the registered design and the alleged infringing article. On the other hand, the greater the advance in the registered design over the prior art, generally the more likely that a court will find common features between the design and the alleged infringing article to support a finding of infringement: Kevi A/S v Suspa-Verein UK Ltd [1982] RPC 173 per Falconer J at 179; Firmagroup v Byrne & Davidson, supra, at 38; D Sebel & Co Ltd v National Art Metal Co Pty Ltd (1965) 10 FLR 224 at 229 per Jacobs J; Russell-Clarke, Designs, 5th ed, pp. 85-7; Blanco White on Patents and Designs, 4th ed, pp 326-7; and Ricketson, The Law of Intellectual Property, p 493. 237 The principle referred to by Lockhart J in the last paragraph of the above passage was well established under the Designs Act 1906. It is clear enough that Parliament intended to embody the principle in the Designs Act 2003 (see paragraph 6.30 of the ALRC Report). That Act provides that the factors in s 19 are to be considered at both the validity stage and the infringement stage, but it may well be that s 19(2)(a) has its chief field of operation at the infringement stage. 238 There are a number of differences between the test for validity in the Designs Act 1906 and the test for validity in the Designs Act 2003. For example, the prior art base has been expanded in the Designs Act 2003 to include designs published in a document outside Australia (s 15(2)(a)). Furthermore, the test is now one of newness and distinctiveness and not, as it was in the Designs Act 1906, a question of whether the design was new or original. The particular matters identified in paragraphs (a) and (b) of s 17(1) of the Designs Act 1906 have not been included in the Designs Act 2003. There is a direction in the Designs Act 2003 to a decision-maker to give more weight to similarities between designs than to differences between them (s 19(1)). These are some examples of the changes brought about by the Designs Act 2003. Although there have been a number of changes to the test for the validity of a design, I do not think the extent to which the Court is to have regard to the state of development of the prior art base for the design is one of them. In other words, I think that the approach to the state of development of the prior art base for the design is the same or similar under the Designs Act 2003 as it was under the Designs Act 1906. 239 A consideration of the ALRC Report and other extrinsic material put before the Court supports this conclusion. In the ALRC Report, the Commission discusses the novelty required for the registration of a design and it refers to the existing state of the law and s 17(1) of the Designs Act 1906. The Commission concludes that the originality test in the Designs Act 1906 is unacceptable. The Commission concludes that the novelty test, as applied and as interpreted by the courts, is unsatisfactory. The Commission recommends that the novelty test in the Designs Act 1906 be replaced with a stricter test. The Commission concludes that the tests in paragraphs (a) and (b) of s 17(1) of the Designs Act 1906 are unsatisfactory because each requires difficult judgments and an extensive knowledge of the prior art base. It recommends that a test of newness and distinctiveness be adopted. Paragraphs 5.8 and 5.9 of the ALRC Report are in the following terms: 5.8 Meaning of distinctive. Distinctiveness is a term used by the courts to express the quality that a design must have to differentiate it sufficiently from previously published or used designs. For example the courts have said

"for a design to be protected there must be a special or distinctive appearance, something in the design which captures and appeals to the eye. To have that effect, the design must be noticeable and have some perceptible appearance of an individual character."

Other cases have spoken of "the overall distinctive appearance" of the registered design, the ridging or grooving of a design being "sufficiently bold and distinctive in its appeal to the eye", a shape or configuration that is "distinctly different" from that in respect of which a design is registered and a design that must be "distinct and must present an appearance that strikes the eye as being different". Distinctiveness is defined in more detail later in this chapter.

5.9 Grounds for adopting the new test. The Commission favours the two tiered approach and the distinctiveness test for several reasons.

s The distinctiveness test is a design approach. It recognises the importance of design in product differentiation. It is consistent with the way in which designers work. s It will discourage the tendency to focus narrowly on "one individual specific appearance" and to count up the differences between designs. s It incorporates in a single concept many of the qualities sought in other unsatisfactory expressions such as "judged by the eye", "eye appeal", "immaterial detail", "trade variants", and "obvious adaptation". s It is a more focussed test for assessing the degree to which a design is an advance on the prior art. s It allows a different prior art base to be defined for novelty as against distinctiveness. This is useful because the aim with the novelty test is to exclude identical designs but the aim with the distinctiveness test is to recognise innovation. s It directly addresses the need for greater differentiation between designs, both for registration and infringement purposes, that was evidenced by submissions, consultations and the Commission's survey of design users.

240 The Commission discusses the informed user standard and states that the question of distinctiveness is intended to be an objective test. The Commission discusses the need for the infringement and distinctiveness tests to correspond. Paragraph 5.22 is in the following terms: 5.22 Relationship with infringement. The novelty and distinctiveness threshold are relevant to the scope of protection and therefore to the proposed infringement test outlined in chapter 6. In the Commission's view the infringement and distinctiveness tests should be the same so that an infringing design is not a distinctive design and vice versa. The LCA disagreed on the basis that wider protection for designs in terms of infringement need not be accompanied by a higher novelty test. The LCA pointed out that there was no similar correspondence in the copyright context. On the other hand the IPAA saw many advantages in the test for novelty being a "'reverse infringement" test as in patent law. 241 In discussing the distinctiveness test, the Commission states in paragraph 5.23: A more developed prior art base will mean that smaller differences will be sufficient to result in a finding that there is no substantial similarity. The footnote to that sentence reads in part as follows: Conversely where the prior art base is less developed larger differences will be required before the court will be likely to find that there is substantial similarity. The state of development of the prior art will always be relevant. 242 These passages suggest that the Commission was not recommending a change to the law as to the significance to be accorded to the state of development of the prior art base. 243 Although there are statements in the Second Reading Speech to the effect that the Designs Bill 2002 would implement a new higher threshold test for designs, there is no reference to a change in the law concerning the significance to be accorded to the state of development of the prior art base. The same may be said of the Explanatory Memorandum for the Designs Bill 2002. 244 The primary judge was correct to conclude that her task was to compare the Designs individually to each relevant piece of prior art. That follows from the words of the Act and, in particular, s 16(1) and (2), which refer to a comparison between the design in question and "a design that forms part of the prior art base," and s 19(1), which refers to a comparison between a design and "another design". The wording of s 15(1) is quite general and does not support a contrary conclusion. Section 19(2)(a) does not refer simply to the prior art base, but to the state of development of the prior art base, a concept known and understood under the Designs Act 1906. The conclusion also follows from the fact that the task was the same under the Designs Act 1906, the extrinsic material suggesting that, in this respect at least, Parliament did not intend to change the existing law. The primary judge was aware of the significance of the state of development of the prior art base. She said, albeit in the context of infringement, the following: The extent of difference required to make a design distinctive will depend on the state of development of the relevant prior art base. A more developed prior art base will mean that smaller differences will be sufficient to result in a finding that there is no substantial similarity: para 5.23. 245 I think the approach advanced by counsel for the Corporate Respondents does involve "mosaicing" or producing a hypothetical amalgam of a number of prior designs in order to defeat the registration of the design in issue and that that is impermissible under the Designs Act 2003, as indeed it was under the Designs Act 1906. 246 The primary judge dealt with the state of development of the prior art base in some detail. The matter in s 19(1) is a mandatory direction to the Court. The matters in s 19(2), including the state of development of the prior art base, are mandatory but the obligation is different from that in s 19(1) in that it is an obligation to have regard, or particular regard, to the various matters. There is no reason to think that the primary judge did not have regard to the state of development of the prior art base, or that, in some way, she relegated it to a secondary consideration. 247 I turn now to consider the Corporate Respondents' second submission. That submission must also be rejected. 248 Under the Designs Act 1906, an applicant could file a statement of monopoly or a statement of novelty, or both. The weight to be placed on a statement of novelty in the context of a challenge to validity was considered by Jessup J in the recent case of Chiropedic Bedding Pty Ltd v Radburg Pty Ltd (2009) 83 IPR 275 at 280-286 [7]-[22]. The particular problem addressed by Jessup J in that case does not arise under the Designs Act 2003 because that Act expressly states how a statement of newness and distinctiveness may be used on an application challenging the validity of a design: s 19(2)(b). Having regard to the primary judge's statements referred to in [222]-[223], I do not think that it can be said that she was unaware of the need to have particular regard to the particular visual features of the Designs identified in the statement of newness and distinctiveness as new and distinctive. 249 There is one aspect of the primary judge's approach which may not be correct. Her Honour appears to have concluded that the four features she identified (see [220]) were described in the statement of newness and distinctiveness for each of the Designs. Certainly one of the features - the absence of visible screws - is described in the statement of newness and distinctiveness. The other three features are not expressly described in the statement. There was evidence from Mr Ottobre and Mr Ransom that the separate clip-in lenses, although a functional feature, also had design implications. I have considered that evidence. I find it difficult to see how the reference to separate clip-in lenses dictates or implies, for example, the different visual features of the rear or underside view of the designs and the cut-out or recess at the end of a lamp. Although I am of the view that her Honour erred in concluding that the four features were described in the statement of newness and distinctiveness for each of the Designs, I do not think that the correct approach leads to a different conclusion from that reached by her Honour. Even if one restricts the particular visual feature identified in the statement of newness and distinctiveness to the absence of visible screws, that is one matter, and only one matter, which must be considered under s 19(1) and (2) of the Act. Assuming it is a feature which relates to only part of the Designs, it is still necessary to consider the Designs as a whole (s 19(2)(b)(ii)). I have looked carefully at the prior art products and I am of the opinion that the primary judge was correct to conclude that each of the Designs was new and distinctive. 250 The Corporate Respondents' challenge to the primary judge's conclusion that each of the Designs was new and distinctive must be rejected.

The Question of Infringement 251 The primary judge found that the Corporate Respondents' Condor products infringed the Designs. As I understand it, the trial was conducted on the basis that the same result on infringement followed with respect to each of the Corporate Respondents' products. In other words, the Corporate Respondents did not seek to distinguish between the various Condor products referred to in the evidence. 252 Again, it is convenient to begin by setting out the primary judge's findings of fact and her reasons for concluding that the Corporate Respondents' Condor products infringed the Designs. 253 Her Honour compared one of the Corporate Respondents' Condor products, comprising three lenses, with the second registered Design. She first considered the top view of the Condor product and she compared it with the first, second, third and fourth pages of the representations of the second registered Design. She noted that the Condor product had a continuous base and a flat strip or landing between each lens. She also noted that the sides of the base of both the Designs and the Condor product comprised a sloping, rounded mounting bracket surrounding the lenses. 254 Her Honour then addressed the issue of the presence or absence of visible screws. She noted that the Condor products contained visible screws whereas the statement of newness and distinctiveness accompanying the Designs emphasised the "no visible screws" feature of the Designs. However, she concluded that the two screws in each flat strip or landing between each lens in the case of the Condor product was not a feature which substantially distinguished the Condor product from the registered Design. She said that the presence of the screws did not create a different "visual appeal". She noted that the screws in the Condor product were the same colour as the flat strip or landing between each lens and sat low in the socket. She observed that they were not "visual" screws, as one would describe the screws in some of the prior art such as the Narva model 4894840 or Hella 2400 where the screws are chrome in colour and protruding. 255 The primary judge then turned to consider the rear or underside view of the Condor product and the fifth and sixth pages of the representations of the second registered Design. She considered that a visual comparison led to the conclusion that the Condor product was "substantially similar in overall impression" to the Designs. She noted that there was one base with rounded corners, an opening for each lens of similar shapes with the shapes in the same configuration and the same number of mounting holes for the screws. She also noted that the holes were in the same position. She further noted that Mr Garrard had properly conceded at trial that the Condor products were much closer to the Designs than they were to LED Technologies' single-lens LED lamp which formed part of the prior art base. 256 The effect of the primary judge's analysis was that she addressed three of the four features she had earlier identified as distinctions between the prior art base and the Designs (see [220]). She addressed the sloping rounded mounting brackets surrounding the lenses, the absence of visible screws and the different visual features of the rear or underside views of the Designs. She did not address the feature of the Designs referred to as the "cut-out" or "recess" at the end of a lamp. The Condor products did not have that feature. 257 With respect to the relevant legal principles, the primary judge noted that the test for distinctiveness for validity purposes is the same as the test for infringement and that that fact broadened the scope of protection. As I have noted earlier, the primary judge said that the extent of difference required to make a design distinctive will depend on the state of development of the relevant prior art base and that a more developed prior art base will mean that smaller differences will be sufficient to result in a finding that there is no substantial similarity. Her Honour noted that the legal principles that she had discussed in the context of distinctiveness for the purpose of validity also applied in the infringement "context". She noted that the comparison between the alleged infringing product and the Designs was to be made in the context of the whole appearance of the designs. Greater weight is given to distinctive features than to other parts of the design, although still in the context of the whole of the appearance. Her Honour noted that the same principles of assessment apply where the distinctive features relate only to part of the design. She said that, in determining whether a design is infringed, the Court must give more weight to similarities between the designs than to differences between them. The primary judge noted that the approach taken in s 19 of the Designs Act 2003 means that the courts assess infringement in the context of the whole appearance of competing designs rather than focusing on differences between them. 258 After referring to the factors set out in s 19(2), the primary judge noted that first impressions are important when comparing a registered design with an allegedly infringing product in the manner prescribed by the Act. 259 The primary judge referred to authority which suggested that one could compare a product embodying the registered design with the alleged infringing product rather than comparing the registered design with the alleged infringing product. She did not accept that authority and she said that the relevant comparison is between the registered design and the alleged infringing product. That conclusion is not challenged on the appeal and need not be noticed further. 260 The Corporate Respondents submit that the primary judge erred in failing to recognise the nature of what they called the single test in s 19 of the Designs Act 2003. They submit that her reasoning was "of the most generalised nature without regard to the prior art base from the perspective of the informed user". I reject these criticisms of the primary judge's approach. She stated the relevant principles correctly and she referred in detail to the various matters in s 19 of the Designs Act 2003. As I have said, she referred to the fact that a more developed prior art base will mean that smaller differences will be sufficient to result in a finding that there is no substantial similarity. A little later in her reasons, the primary judge referred to the need to consider, through the eyes of an informed user, the state of development of the relevant prior art base and in that context she said: As stated earlier, one measure is whether the difference in distinctiveness between the Design and any previously known design is greater than the difference between the Design and the allegedly infringing design: s 19(2)(a). 261 When the primary judge came to apply the principles to the facts, she considered three of the four features which distinguished the Designs from the prior art base. She also considered another feature (that is, not one of the four features) which was the continuous base and the flat strip or landing between each lens. She did not err in considering that other feature. However, in my respectful opinion, the primary judge did err in failing to consider one of the four features - the "cut-out" or "recess" at the end of a lamp - which distinguished the Design from the prior art base. Her Honour's failure to consider this feature cannot be dismissed as inconsequential because in fact it is not a feature of the Corporate Respondents' Condor product. It is a matter which should be taken into account. In the circumstances, there is no room for the application of the principle advanced by LED Technologies, namely, that particular respect and weight should be given to the decision of the trial judge unless some error in his or her judgment has been demonstrated (SW Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 at 478 per Gibbs J (with whom Mason J agreed); Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd (1989) 23 FCR 331 at 350. 262 I think it is open to this Court to determine the issue of whether the Corporate Respondents' Condor products embody a design which is substantially similar in overall impression to the Designs. The issue does not turn on questions of credit or findings of fact which I have found to be erroneous. The question is, as I said earlier, a question for the Court. 263 At first blush, there is a good deal to be said for the Corporate Respondents' contention that the Condor products are not substantially similar in overall impression to the Designs. Two of the four features which distinguish the Designs from the prior art base - the absence of visible screws (a feature emphasised in the statement of newness and distinctiveness) and the "cut-out" or "recess" at the end of a lamp - are not present in the Corporate Respondents' Condor products. Furthermore, the shape of the backing plate (that is, the visual features of the rear or underside views of the Designs) is different as between the Corporate Respondents' Condor products and the Designs. However, I think, on closer examination, these matters are not of great significance. 264 As to the screws in the Condor product, they are the same colour as the flat strip or landing between each lens and sit low in the socket. My view accords with that of the primary judge that they do not create a different "visual appeal" from that created by the Designs. As to the cut-out or recess at the end of a lamp, although this is a visual feature present in the Designs but not in the Corporate Respondents' Condor products, it is not, in my view, a prominent or particularly significant feature. As to the visual features of the rear or underside views of the Designs, I agree entirely with the conclusions of the primary judge which are set out above (at [255]). 265 I think on balance that the Condor products embody a design which is substantially similar in overall impression to the Designs. In the circumstances, the Corporate Respondents' challenge to the primary judge's conclusion that the Condor products infringe the Designs must be rejected.

The Liability of Messrs Keller and Armstrong as Joint Tortfeasors 266 As I understand it, the primary judge found that the Corporate Respondents infringed the Designs between December 2006 and May 2008. During that period, Messrs Keller and Armstrong were directors of Ren International Pty Ltd ("Ren") and Olsen Industries Pty Ltd ("Olsen") respectively. Mr Keller was the chief executive officer of each company and he was involved in the day to day management of each company. Mr Armstrong was the chairman of the board of directors of each company. I will examine Mr Armstrong's role in more detail later in these reasons, but, in general terms, it is fair to say that he was not involved in the day to day management of either company. Mr Morrison was the third director of each company until he resigned as a director due to illness in April 2007. As I have said, during the trial LED Technologies abandoned any claim for relief against Mr Morrison. 267 From December 2006, Messrs Keller and Armstrong were major shareholders of Ren and Olsen and, after April 2007, they were the two shareholders of each company. 268 During the relevant period, the acts of infringement of the Designs carried out by Ren and Olsen were the importation and the sale (including the act of offering for sale) of the Condor products. 269 The primary judge held that Messrs Keller and Armstrong were each joint tortfeasors with Ren and Olsen respectively in the infringement of the Designs. That conclusion is challenged on the appeal by Messrs Keller and Armstrong. 270 It is convenient to begin by examining the relevant legal principles. The infringement of a registered design is tortious and the common law principles as to the liability of joint tortfeasors apply. The authors of Law of Torts (4th ed LexisNexis Butterworths, Australia, 2009), R P Balkin and J L R Davis ("Balkin and Davis"), express the view, at 816 [29.25], that there are three categories of joint tortfeasors, namely, one who is vicariously liable for the acts of another, breach of a duty imposed jointly on two or more persons, and a case where persons take "concerted action to a common end" (The Koursk [1924] P 140 at 151-152 per Bankes L.J. quoting a passage from Clerk and Lindsell on Torts (7th ed) at page 59). The authors go on to say that directors of a company whose involvement in a tort goes beyond constitutional control of a company fall within the third category of joint tortfeasors. The authors refer to the decision of the English Court of Appeal in MCA Records Inc v Charly Records Ltd [2003] 1 BCLC 93. In that case, Chadwick LJ (with whom Simon Brown and Tuckey LJJ agreed) formulated the principle of liability by reference to a distinction between acts of a director which form part of his constitutional control of a company, and other acts. Chadwick LJ said (at 117 [50]): … there is no reason why a person who happens to be a director or controlling shareholder of a company should not be liable with the company as a joint tortfeasor if he is not exercising control through the constitutional organs of the company and the circumstances are such that he would be so liable if he were not a director or controlling shareholder. In other words, if, in relation to the wrongful acts which are the subject of complaint, the liability of the individual as a joint tortfeasor with the company arises from his participation or involvement in ways which go beyond the exercise of constitutional control, then there is no reason why the individual should escape liability because he could have procured those same acts through the exercise of constitutional control. 271 Under this approach, it is, with respect, probably correct to place a director held liable as a joint tortfeasor within the third category of joint tortfeasors identified by Balkin and Davis. A different approach to the basis upon which a director is held liable as a joint tortfeasor may lead to the conclusion that such a case does not fit neatly within the third category identified by Balkin and Davis (see WEA International Inc v Hanimex Corporation Ltd (1987) 17 FCR 274 at 283 per Gummow J). 272 Two tests of liability have been discussed in the cases. The first test of liability is that a director is liable as a joint tortfeasor where he or she has directed or procured the infringing acts by the company. It is the company which performs the tortious acts and a director is liable if he or she directs or procures it to do so. Sometimes the word "authorise" is also used. One thing is clear and that is that a director is not liable as a joint tortfeasor merely because he or she sits on the board of directors which allows or even "directs" the company to carry on a business during which the infringing acts are performed. Something more by way of personal involvement in the tortious acts is required. The first test has been referred to as the Performing Right Society test because it was the test formulated by Atkin LJ in Performing Right Society Ltd v ­­­­Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1. 273 The second test of liability is that a director is liable as a joint tortfeasor only where he or she has engaged in the deliberate, wilful and knowing pursuit of a course of conduct that is likely to constitute infringement or which reflected an indifference to the risk of it. It is clear that, despite the use of the words "deliberate" and "knowing" in this test, it is not necessary to prove that the director knew the relevant acts were infringing acts. The second test has been referred to as the Mentmore test because it was the test formulated by Le Dain J in the Canadian Federal Court of Appeal in Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc (1978) 89 DLR (3d) 195. 274 The precise formulation of the common law test has not been the subject of authoritative determination by the High Court. 275 The primary judge referred to the Performing Right Society test and the Mentmore test. She then referred to the decision of the Full Court of this Court in Allen Manufacturing Co Pty Ltd v McCallum & Co Pty Ltd (2001) 53 IPR 400 ("Allen Manufacturing") which considered the two tests. 276 It is useful to examine the case of Allen Manufacturing. Gyles J, at first instance, held that Allen Manufacturing Co Pty Ltd had infringed a registered design of a door hinge owned by McCallum & Co Pty Ltd. A Mr Harper owned and controlled Allen Manufacturing Co Pty Ltd. He held two of the three issued shares in the company and he was a director. His wife held the other share and she also was a director. Gyles J held that Mr Harper was personally liable as a joint tortfeasor. Mr Harper controlled the day to day activities of Allen Manufacturing and he made an application for registration of a design, the commercial embodiment of which was the infringing product (the Allen hinge). He licensed the registered design to a related party, who, in turn, sub-licensed it back to him. Furthermore, he caused Allen Manufacturing to enter into a distribution agreement with Nova Hardware Pty Ltd for the distribution of the Allen hinge. The Full Court upheld Gyles J's finding of infringement and his conclusion that Mr Harper was a joint tortfeasor. The Court referred to the Performing Right Society test and Mentmore test. The Court referred (at 409-410 [39]-[40]) to authorities in this Court which have discussed the two tests and expressed a preference for one or the other. The Court then said (at 410 [43]-[44]): The difference between the two tests may be more apparent than read [sic]. We are not aware of any case in which it has been held that a director or officer of a company directed or procured the company's infringing act, yet that person escaped liability because he or she did not deliberately, wilfully or knowingly pursue a course of conduct that was likely to constitute infringement or that reflected indifference to the risk of infringement. This may be because, in practice, an act of direction or procurement will generally meet the Mentmore test. It is notable that, in Mentmore itself, the Canadian Federal Court of Appeal declined (at 204) to "go so far as to hold that the director or officer must know or have reason to know that the acts which he directs or procures constitute infringement". The court declined to do this because that "would be to impose a condition of liability that does not exist for patent infringement generally". To the extent there is a real difference between the tests, each has eloquent supporters. One day it may be necessary, in a practical sense, to choose between them. But it is not necessary to do so in this case. We share the view of Gyles J that, on either test, Mr Harper must be held liable. 277 The Court said that the case before it was not one in which the relevant person had acted only as a director of the infringing company. Mr Harper knew of the registered design owned by McCallum & Co Pty Ltd. He had applied in his own name for registration of a design, the commercial embodiment of which was the infringing product, and he had licensed that design to a related party and taken a sub-licence back from that related party. The Court referred to the following words of Starke J in O'Brien v Dawson (1942) 66 CLR 18 at 32: The acts of Doyle [the company director] were the acts of the company and not his personal acts which involved him in any liability to the plaintiff. But I would add that it does not follow that a director of a company would escape personal liability under cover of the company's responsibility if he himself became an actor and invaded the plaintiff's rights, as by trespassing on his land, or seizing his goods and so forth. 278 The Court then expressed its conclusions in the following way (at 411 [47]): In the present case, in entering into the agreement with Nova for the manufacture and sale of the Allen hinge, Mr Harper acted on behalf of Allen Manufacturing. However, that was only one step in a sequence of actions in which Mr Harper was personally an actor invading McCallum's rights: by creating the Harper design and entering into licence and sub-licence agreements in relation to it. Mr Harper's sequence of actions, including his actions on behalf of the company, were "the deliberate, wilful and knowing pursuit of a course of conduct" that was likely to constitute infringement or, at least, reflected an indifference to the risk of infringement. Mr Harper himself infringed McCallum's monopoly in its registered design. 279 In this case, the primary judge also took the view that it was unnecessary to choose between the two tests because she held that, on either test, Messrs Keller and Armstrong were liable as joint tortfeasors. She said that each of them was personally an actor in invading LED Technologies' rights and that the "sequences of actions" to which she had previously referred satisfied the Mentmore test. The primary judge came to the conclusion that each of Messrs Keller and Armstrong had "a common design" with Ren and Olsen to infringe the Designs and each of them was jointly and severally liable to LED Technologies for the damages assessed. 280 The primary judge identified the factual basis for these conclusions earlier in her reasons and it is to those matters that I now turn. I preface my summary by saying that the language used by the primary judge suggests that her statement of the relevant conduct and knowledge was not an exhaustive one. However, I have read the relevant evidence and I do not think she has omitted any major matter. 281 In relation to Mr Keller, the primary judge identified the following conduct and knowledge: 1. Mr Keller was a director of Ren and Olsen respectively, and he gave evidence that he and Mr Armstrong were "the boss" of Ren and Olsen. 2. Mr Keller conceived and designed the infringing Condor products and, at the time he did so, he was aware of the existence of the Designs. More precisely, the primary judge found that, at the time Mr Keller conceived and designed the first version of the Condor products (there were three versions), he was aware of the existence of the Designs. 3. Mr Keller had discussions with manufacturers about the manufacture of the Condor products and the subsequent importation and sale of Condor products in Australia. He arranged for their manufacture and importation into Australia. 282 In relation to Mr Armstrong, the primary judge identified the following conduct and knowledge: 1. Mr Armstrong was a director of Ren and Olsen respectively. 2. Mr Armstrong was the nominated signatory for all applications by Ren and Olsen for Component Registration Numbers (CRNs) and the addressee for all correspondence from the Department of Transport and Regional Services ("the Department") relating to CRNs. 3. The primary judge explained the system for CRNs. Applicants for a CRN can be a component manufacturer, component supplier or a vehicle manufacturer. The CRN process is directed towards registering vehicle components to be used in new motor vehicles. CRNs will only be issued for components that are fitted to new motor vehicles. The Department creates a register of components that are commonly used in new vehicles for administrative convenience. The fact that a person may hold a CRN in respect of a particular vehicle component does not of itself legally entitle the holder to claim compliance with an Australian Design Rule, or that a component has been approved in terms of an Australian Design Rule. 4. Mr Armstrong was involved in photometric testing of Condor LED lights. 5. Mr Armstrong "knew what Mr Keller was doing in relation to the Condor Products". 6. It seems the primary judge found that Mr Armstrong was, like Mr Keller, aware of the Designs. 283 On the appeal, counsel for Messrs Keller and Armstrong submit that a company is only able to act through those who control it, that is, the directors or those authorised by the directors. The acts performed by those persons are attributed to the company and, in a case such as the present, lead to the conclusion that the company had infringed the Designs. It was submitted that those same acts should not also be a basis upon which the directors are held liable as joint tortfeasors with the company. Counsel submits that a director should only be held liable where, in acting, "he was doing something more than as a director". It must be shown that he did something "which makes him in addition to the company, an invader of the plaintiff's rights". Counsel submits that the conduct of Messrs Keller and Armstrong was no more than conduct by them "in the normal fulfilment of their roles as executive directors of the companies." Counsel put an alternative submission on behalf of Mr Armstrong. He submits that, even if Mr Keller's involvement was such as to make him liable, Mr Armstrong's involvement was much less and the primary judge erred in holding him liable as a joint tortfeasor. 284 In Root Quality Pty Ltd v Root Control Technologies Pty Ltd (2000) 177 ALR 231, Finkelstein J identified the decisive consideration as the extent of the director's personal involvement in the commission of the unlawful acts. His Honour made the point that it is difficult to state with precision the degree of personal involvement which will render a director personally liable as a joint tortfeasor. His Honour said (at 268 [146]): The director's conduct must be such that it can be said of him that he was so personally involved in the commission of the unlawful act that it is just that he should be rendered liable. If a director deliberately takes steps to procure the commission of an act which the director knows is unlawful and procures that act for the purpose of causing injury to a third party, then plainly it is just that liability should be imposed upon him. Lesser conduct may suffice. For example, if the director is recklessly indifferent as regards whether his company's act was unlawful and would cause harm, that may also suffice. In the end it will depend upon the facts of each particular case. Where the boundary lies between the non-tortious conduct of a director who acts bona fide within the course of his authority and the tortious conduct of a director who deliberately acts and maliciously to cause harm, cannot be stated with any precision. 285 In Cooper v Universal Music Australia Pty Ltd (2006) 156 FCR 380 (at 414 [161]), Kenny J, sitting as a member of the Full Court of this Court, said that she was inclined to agree with the approach taken by Finkelstein J. Branson J did not find it necessary to decide whether the Performing Right Society test or the Mentmore test was the correct test (at 394 [74]). French J (as his Honour then was) agreed with the reasons given by Branson and Kenny JJ (at 382 [1]). 286 The Performing Right Society test is a reasonably clear test. The cases suggest that it requires a direct and active involvement by the director in the particular acts which constitute the infringement. In the case of a one-person company, the test will invariably lead to the conclusion that the sole director/employee will be held jointly liable with the company. It means that, despite the fact that the law recognises the company as a separate legal person, a sole director may be held to have directed or procured acts carried out by him but attributed to the company. 287 The Mentmore test has been viewed as imposing a higher standard before a director is held liable, although whether there is any significant difference between the two tests was doubted by the Full Court in Allen Manufacturing. As I have said, even under the Mentmore test, it is not necessary to show that the director or other officer knew or had reason to know that the acts which he directed or procured gave rise to infringement. Nevertheless, there are difficulties with the Mentmore test because it lacks precision. On the one hand, a director is not liable if his or her purpose was no more than the direction of the manufacturing and selling activity of the company in the ordinary course of his or her relationship with it. On the other hand, he or she is liable if his or her purpose was "the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it". In Mentmore, Le Dain J recognised the imprecision of the test he formulated. He said (at 205): The precise formulation of the appropriate test is obviously a difficult one. Room must be left for a broad appreciation of the circumstances of each case to determine whether as a matter of policy they call for personal liability. 288 In Microsoft Corporation v Auschina Polaris Pty Ltd (1996) 71 FCR 231 (at 241-247), Lindgren J discussed the two tests. He identified various difficulties with the Mentmore test. He said (at 245): With respect, I do not find the formula, "making the tortious act his own", particularly illuminating, and, for reasons given earlier, in my opinion the reference to "limited liability" is confusing. The reference to "deliberateness" and "recklessness" is also troublesome in view of the fact, which no-one seems to doubt, that the director need not have known that the conduct was tortious. 289 After reviewing the relevant authorities, Lindgren J said (at 246) that he found the Performing Right Society test more satisfactory than the Mentmore test. His Honour said that, in any event, the Performing Right Society test was supported by Australian authority which he should follow unless he was convinced that the authority was clearly wrong. He was not convinced that the authority was clearly wrong. 290 It cannot be said that the cases decided since 1996 have resolved the question. 291 In my opinion, in considering a director's potential liability as a joint tortfeasor, it is necessary to consider carefully the director's involvement in the unlawful or infringing acts. A close personal involvement in the infringing acts by the director must be shown before he or she will be held liable. The director's knowledge will be relevant. In theory, that knowledge may range from knowledge that the relevant acts are infringing acts to knowledge of an applicant's registered designs to knowledge of acts carried out by others. 292 Both Ren and Olsen were effectively two-person companies. It seems to me that, on either test, the primary judge was right to conclude that Mr Keller was a joint tortfeasor. He was aware of the Designs. He was responsible for the design of the various versions of the Condor products. He was directly involved in the manufacturing and sale of the Condor products. He was in effect the driving force behind the acts which gave rise to the infringement of the Designs and those acts were carried out at a time when he was aware of the Designs. 293 The position of Mr Armstrong is not so clear. The primary judge did not make any adverse findings of credit in relation to Mr Armstrong and the facts as to his involvement, although somewhat general, are clear. It is open to this Court to draw its own conclusions as to Mr Armstrong's liability. 294 I would not place great weight on the fact that Mr Armstrong was a nominated signatory for all applications for CRNs and the addressee for all correspondence from the Department. Although it is not an irrelevant consideration, Mr Armstrong's evidence makes it clear that, other than as nominated signatory and addressee, he did not play a significant role in the applications by Ren and Olsen for CRNs. Mr Armstrong was chairman of the board of directors and, in addition to board meetings, he attended sales and marketing meetings of the companies. Mr Armstrong also attended important meetings involving the company's affairs. He attended meetings with the patent attorney and a meeting with representatives of the Australian Competition and Consumer Commission in April 2007. The meeting with the Commission concerned the issue of whether the Condor products complied with the Australian Design Rules. Mr Armstrong was not actively involved in the affairs of Ren and Olsen to the same extent as Mr Keller, but he was aware of what Mr Keller was doing. He had regular discussions with Mr Keller and he was aware of what Mr Keller was doing in relation to the Condor products. That was the finding of the primary judge and I see no reason to disagree with it. Like Mr Keller, Mr Armstrong was aware of the Designs. This fact requires some further elaboration. Mr Keller gave the following evidence in his first affidavit: 19. On a visit to China in about early 2006, I met with Mr Ron Carson of Asian Access (later known as China Trailer Industry). Asian Access is a trader, not a manufacturer. I had earlier dealings with Mr Carson through Olsen in relation to trailer couplings. Mr Carson provided me with a sample of a single red LED lamp in a chrome bracket lamp which he said was manufactured by one of his factories. Now produced and shown to me and marked Exhibit "AK-2" is the sample lamp. Mr Carson said he could make the lamps in three sizes, namely 80mm, 100mm and 125mm. I returned to Australia with the sample lamp. 20. As a result of enquiries made of Sandercock & Cowie, Patent Attorneys, I became aware of the Applicant's two designs ("Applicant's Designs") by an online search of the designs register. 295 It is apparent that the events described in these paragraphs took place before any of the infringing Condor products were imported and sold in Australia. Mr Armstrong gave the following evidence in his affidavit: 16. The sample light was delivered to Ren's patent attorney, Michael Kraemer of the firm Sandercock & Cowie. With Mr Keller, I attended some meetings with Mr Kraemer. As a result of this process, I became aware of the applicant's two registered designs. 296 On the authorities, knowledge of the Designs is a relevant factor. Mr Harper's knowledge of the design owned by McCallum & Co was a significant factor in Allen Manufacturing. 297 As I have said, Ren and Olsen were effectively two-person companies. Mr Armstrong had a greater degree of involvement than, for example, the usual involvement of a director of a large company. For a time after the hearing of the appeal, I considered that his knowledge of LED Technologies' Designs was a very important factor which, with his conduct, was sufficient to render him liable. However, on reflection, I think it accords with the common law principles to place primary weight on whether his conduct was such that it can be said that he had a close personal involvement in the infringing acts. I do not think that it can be said that he had such a close personal involvement in the infringing acts that it is proper to conclude that he directed or procured them. In my opinion, in the case of Mr Armstrong, the Performing Right Society test was not satisfied and, it follows, that the Mentmore test was not satisfied. 298 In my opinion, the primary judge was correct to conclude that Mr Keller was a joint tortfeasor in the infringement of the Designs by Ren and Olsen. In my respectful opinion, she erred in concluding that Mr Armstrong was a joint tortfeasor.

Contraventions of s 52 and s 53(a) and (c) of the Trade Practices Act by the Corporate Respondents 299 At the trial, LED Technologies sought damages under s 82 of the Trade Practices Act and declarations and injunctions in relation to alleged contraventions of s 52 and s 53(a) and (c) of the Trade Practices Act. The primary judge found that the Corporate Respondents had contravened s 52 and s 53(a) and (c) of the Trade Practices Act ("representational contraventions") but she refused to grant relief. On appeal, LED Technologies claims that the primary judge erred in refusing relief. It does not now complain about the refusal to grant injunctions, presumably because the evidence suggests that the representational contraventions have ceased. The costs order the primary judge made in relation to the claims under the Trade Practices Act is set out above (at [156], order number 7). 300 It is fair to say that, in circumstances where this Court has upheld the award of damages for infringement of the Designs, the principal significance of LED Technologies' challenge to the primary judge's conclusions in relation to the claims under the Trade Practices Act is the effect a successful challenge will have on her costs order. I say that because, subject to one matter, LED Technologies does not contend that its damages for the representational contraventions exceed the damages awarded by the primary judge for the infringement of the Designs. 301 The one matter is that there is a small amount claimed by LED Technologies by way of additional damages, that is, damages over and above the damages awarded for the infringement of the Designs. The damages awarded for the infringement of the Designs relate to rear combination lights consisting of two and three lenses. The representational contraventions by the Corporate Respondents included such lights, but, in addition, they included single lens lights. LED Technologies sold single lens lights and, on its lost sales theory, it claimed that it suffered a small amount of loss and damage in the order of $9,000 in relation to the single lens lights. 302 The primary judge did not address this claim in her reasons, and it is unclear what prominence the claim was given at trial. I reject the claim. Relatively speaking, the amount claimed is very small and it seems to me that whether loss of the nature claimed was caused and, if so, its amount, is too speculative to justify this Court making an award for the first time on appeal. 303 It is appropriate then to proceed on the basis that LED Technologies suffered no additional damage by reason of the representational contraventions. Nevertheless, LED Technologies submits that the primary judge erred in not making declarations and in not making a costs order in its favour. 304 It is necessary to summarise briefly the primary judge's findings of fact in relation to the representational contraventions. 305 In one form or another and at different times, the following statements were made in relation to the Condor products: Complies with ADR 1/6/49 ADR approved Condor complies with ADR

For present purposes, it is not necessary to set out the details of the various versions of the Condor products which were sold, or the form in which the relevant statements were made. The relevant Australian Design Rules ("ADRs") were Rules 1, 6 and 49; hence, the reference to "ADR 1/6/49". The primary judge referred to the statements as captions and I will do the same. I will refer to the captions as comprising the "ADR Approved" caption and the "Complies with ADR" caption. 306 The primary judge said that there were two relevant classes of consumers and that the captions conveyed different matters to each class. The two classes of consumers were first, the manufacturers of vehicles and trailers and, secondly, those persons who comprise the aftermarket, namely, consumers who purchase tail lights to replace ones which have broken or to add another tail light to the existing tail lights on a vehicle or trailer. 307 In considering the effect of the captions on manufacturers, her Honour did not distinguish between the ADR Approved caption and the Complies with ADR caption. It is not clear from her reasons whether she treated them as conveying the same matters or simply dealt with the two captions together. At all events, she said that the captions conveyed to manufacturers: (1) that the product had been tested by a testing laboratory for particular performance characteristics against criteria set out in an ADR; and (2) that a report had been provided to the Department with an application for a CRN; and (3) that the Department had allocated a unique CRN number to the product in relation to the particular ADR against which it had been tested. 308 The primary judge found that these representations were false, misleading or deceptive, or likely to mislead or deceive, because "none of the Corporate Respondents had obtained a CRN, let alone a test result from a certified laboratory that provided any basis for making such a claim". 309 I should say at this point that, as I understand her Honour's reasons, she found that the industry's understanding of the Australian Design Rules and the way in which they operated was incorrect. The allocation of a CRN in relation to a product did not in fact operate as an approval in terms of the Australian Design Rules. 310 In considering the effect of the captions on the aftermarket, the primary judge considered the two captions separately. She said that the ADR Approved caption connoted approval by an authorised (that is, government or government approved) body. That was false, misleading or deceptive, or likely to mislead or deceive, because neither the Department nor a testing laboratory approved anything. The Complies with ADR caption connoted that the lights complied with "some kind of governmental safety standard". More particularly, the primary judge said that it conveyed the meaning that the product had been properly tested and had met the standard prescribed by the relevant ADR. That was false, misleading or deceptive, or likely to mislead or deceive, because, until at least August or September 2007, none of the Corporate Respondents had obtained written test results from a certified laboratory that provided any basis for making such a claim. 311 I turn now to consider LED Technologies' submission that the primary judge erred in refusing to make declarations. 312 An example of the declaration sought by LED Technologies is as follows: A declaration that by engaging in the conduct referred to in paragraphs 28 and 29 of the Fourth Amended Statement of Claim, the First Respondent has contravened sections 52, 53(a) and/or 53(c) of the Trade Practices Act 1974. 313 Paragraphs 28 and 29 of the Fourth Amended Statement of Claim are in the following form: 28. From a date unknown to the Applicant, being at least since November 2006, Elecspess has offered for sale and sold in Australia the Condor Products and Condor Single Lamps which bear the caption ("the Captions"): (a) "Complies with ADR 1"; (b) "Complies with ADR 6"; or (c) "Complies with ADR 249"; and (d) on the packaging of the Condor Products, "ADR Approved". 29. In the premises of paragraph 28 above, Elecspess has made representations in trade or commerce in Australia to the public and/or consumers of automotive lamps that: (a) The Condor Products and Condor Single Lamps comply with the ADRs; (b) The Condor Products and Condor Single Lamps are approved for the purpose of compliance with the ADRs, ("the Representations"). 314 In her final reasons, the primary judge said that one of the fundamental reasons declarations should not be made was that the claims failed. She said that a claim for damages under s 82 of the Trade Practices Act fails where no loss or damage is established, and she referred to Wardley Australia Limited v The State of Western Australia (1992) 175 CLR 514. However, proof of loss or damage is not a necessary pre-condition to the making of a declaration and a declaration may be made even where no loss or damage is proved: Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89. The Court may do so in order to mark its disapproval of particular conduct engaged in, in contravention of the Act. The primary judge referred to this decision and she did proceed to consider whether it was appropriate to make declarations by reference to other considerations. 315 Her Honour referred to the classes of cases identified by French J in Australian Competition and Consumer Commission v Kokos International Pty Ltd (No 2) (2008) 30 ATPR 42-212 at [48] and said that the case before her did not fall within any of them. She said it was inappropriate to make declarations having regard to the fact that the representations meant different things to different classes of consumers and the fact that the Australian Design Rules "suffer from their own problems". I think the reference to the problems with the Australian Design Rules is a reference to the industry's misunderstanding of the effect of obtaining a CRN. The primary judge concluded by saying there was "little, if any, utility in making the declarations" and there was the possibility that the making of any declaration would "create more confusion or itself be misleading". 316 The primary judge did not base her decision to refuse to grant declarations solely on the absence of proof of loss and damage under s 82 of the Trade Practices Act. Leaving aside the absence of loss and damage, I am not persuaded that the primary judge's other reasons involve error. 317 There is an additional reason not to make declarations, which the primary judge mentioned, but then, in LED Technologies' favour, she put to one side. In my opinion, the proposed declarations are deficient in form and that remains the case even after the hearing of the appeal. The proposed declarations are deficient in form because they use the phrase "and/or", because they are not, but, as I understand the evidence, should be, limited to a particular period and because (if they are being made on the ground that it is in the public interest to do so) they are, arguably, too general in form. 318 In my opinion, there is no proper basis to interfere with the primary judge's decision not to make declarations in relation to the representational contraventions. 319 I turn now to consider LED Technologies' submission that, but for the award of damages for infringement of the Designs, it established an entitlement to damages under s 82 of the Trade Practices Act and therefore a costs order should have been made in its favour. 320 It seems to me that this is a case where a party pursues a number of causes of action. For present purposes, I am focusing on the claim for damages for infringement of the Designs and the claim for damages under s 82 of the Trade Practices Act for the representational contraventions. Any damages of the latter type will, on the facts, be subsumed within the former. The party succeeds on the claim for damages for infringement of the Designs and no additional damages can be awarded for the other cause of action. If the party succeeds in establishing that, but for the award of damages for the infringement of the Designs, it would have received an award of damages under s 82 for the representational contraventions, then ordinarily that party should receive its costs of that claim, or perhaps, more accurately, there will be no reason not to give the party its costs of the proceeding generally. In fact, it might be seen as fairly harsh to award costs against it where, even though it does not establish loss and damage under s 82 of the Trade Practices Act, it has established representational contraventions. However, that is not the basis of LED Technologies' challenge to the primary judge's costs order. It submits that, but for the award of damages for infringement of the Designs, it established loss and damage under s 82 for the representational contraventions. 321 It is not entirely clear whether the primary judge found that, even if there had been no award of damages for infringement of the Designs, LED Technologies had failed to establish loss and damage under s 82 in relation to the representational contraventions. In the course of her reasons, she made the following observation: There was evidence that certain large manufacturers would only buy from suppliers holding CRNs; however, there was no evidence to show that ordinary consumers, particularly aftermarket consumers, considered safety compliance to be so material as to prevail over factors such as price or convenience. 322 These observations suggest that there was evidence of loss or damage in relation to the class of consumers comprised of manufacturers, but not the class of consumers comprised of the aftermarket. 323 LED Technologies submitted that the primary judge was satisfied there was some loss or damage because she said: Furthermore, it goes without saying that LED Techs' lost sales, whatever the precise number of units, cannot be double counted. 324 In the end, I do not need to resolve this question because I have reached the firm conclusion that the evidence supported a finding that, absent an award of damages for infringement of the Designs, the representational contraventions resulted in loss or damage to LED Technologies greater than nominal damage. I do not think it is possible for this Court to assess the damages. Had it been necessary to assess the damages, it would have been appropriate to send the matter back to the primary judge to do the best she could having regard to the evidence (Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 4 FCR 450). However, I do not think it is necessary to do that because the conclusion I have reached is sufficient for the purposes of determining the only relevant issue which is affected by it, namely, costs. 325 It seems to me that some loss or damage has been established because the Corporate Respondents sold Condor products to original equipment manufacturers and the primary judge found that certain large manufacturers would only buy from suppliers holding CRNs. Furthermore, the evidence established the importance to suppliers of compliance with the Australian Design Rules and the obtaining of CRNs. The Corporate Respondents' own marketing plan emphasised those matters. The evidence also established that the Corporate Respondents saw LED Technologies as a major competitor and that LED Technologies' products were the most comparable in function, price, footprint and appearance to the Condor products. In my opinion, absent the award of damages for infringement of the Designs, LED Technologies would have received an award of greater than nominal damages for the representational contraventions. That conclusion is sufficient to warrant interference with the primary judge's costs order. I will indicate the order which I think should be made after dealing with the claim under s 65C of the Trade Practices Act. 326 Before leaving this section of my reasons, I should mention that, although the Corporate Respondents did not appeal against the finding of representational contraventions, they did seek to challenge that finding in their notice of contention. They claimed in their notice of contention that the primary judge's refusal to grant relief in relation to the representational contraventions could be upheld on the alternative ground that there had been no representational contraventions. They submitted that her Honour's conclusion that there had been no contravention of s 65C of the Trade Practices Act removed the basis for the finding of representational contraventions. This submission must be rejected for two reasons. First, this Court has concluded that there were in fact contraventions of s 65C of the Trade Practices Act by the Corporate Respondents. Secondly, the submission fails to recognise the difference between the matters her Honour found were conveyed by the captions and the content of the obligation in s 65C of the Trade Practices Act.

The liability of Mr Keller in relation to the contraventions of s 52 and s 53(a) and (c) of the Trade Practices Act by the Corporate Respondents 327 The primary judge rejected a submission by LED Technologies that Messrs Keller and Armstrong were liable with respect to the representational contraventions by virtue of s 75B of the Trade Practices Act. The particular limbs upon which LED Technologies relied at trial were s 75B(1)(a) and (c), namely, that Messrs Keller and Armstrong were involved in the contraventions because they aided and abetted the contraventions or because they had been "in any way directly or indirectly, knowingly concerned in, or party to, the contraventions". On appeal, LED Technologies relied on s 75B(1)(c). 328 In its cross-appeal, LED Technologies did not appeal against the primary judge's conclusion with respect to Mr Armstrong. It did appeal against her conclusion with respect to Mr Keller. The ground of appeal is brief and it provides no indication of the precise basis upon which her Honour's conclusion is challenged. 329 The primary judge said that natural persons were liable in damages for a contravention by a corporation if they had a "close, rather than a remote involvement in the contravention" and she referred to Fencott v Muller (1983) 152 CLR 570 at 584 per Gibbs CJ. She said that the participation in the contravention necessary for the purposes of s 75B required actual, rather than constructive knowledge of the essential matters that made up the contravention, and she referred to Yorke v Lucas (1985) 158 CLR 661 at 666-670 per Mason ACJ, Wilson, Deane and Dawson JJ and 677 per Brennan J ("Yorke v Lucas"); Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 at [67]; Quinlivan v Australian Competition and Consumer Commission (2004) 160 FCR 1 at 4 [8]-[9]. 330 The primary judge found that Mr Keller was not liable by reason of s 75B of the Trade Practices Act because he did not know the facts which meant that the representations which she found were conveyed in relation to the Condor products were not correct. It is this finding of fact which is challenged by LED Technologies. 331 LED Technologies submits that, on the evidence, the primary judge ought to have found that Mr Keller knew the facts which meant that the representations were incorrect. I have already summarised her Honour's findings in relation to the contraventions (at [305-310]). 332 The primary judge said that, in relation to the ADR Approved caption, Mr Keller gave evidence of his subjective understanding of the representations conveyed, which, while possibly negligent or even reckless, was not such as to suggest wilful blindness or actual knowledge of how a relevant purchaser might understand it. I understand that to be a reference to Mr Keller's evidence that he understood the ADR Approved caption to mean that a testing laboratory had conveyed that a product complied with the ADRs. He did not understand it to mean that the Department had approved the product. It may be noted at this point that Mr Ransom, a person called to give evidence by LED Technologies (see [199] above), said that in the "simplest" form the ADR Approved caption essentially meant, "It's been tested to comply". In relation to the Complies with ADR caption, the primary judge said that Mr Keller gave evidence (which she accepted) that he acted upon oral and written assurances from his Chinese manufacturers and testing laboratories which turned out to be "belatedly or never substantiated". The primary judge said that that conduct might have been negligent or possibly even reckless, but that was not enough. Actual knowledge of non-compliance was required. The primary judge observed that it was not put to Mr Keller during cross-examination that he knew these "essential matters". 333 Section 75B of the Trade Practices Act is in the following terms, relevantly: (1) A reference in this Part to a person involved in a contravention of a provision of Part IV, IVA, IVB, V or VC, or of section 95AZN, shall be read as a reference to a person who: (a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by threats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention. 334 In order to establish accessorial liability under s 75B(1)(c), it must be shown that the relevant person had knowledge of the essential elements of the contravention. In Yorke v Lucas, Mason ACJ, Wilson, Deane and Dawson JJ said (at 670): In our view, the proper construction of par. (c) requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention. 335 For present purposes, knowledge may be considered to include wilful blindness. However, it does not include recklessness or negligence. 336 In a case concerning representations, the essential elements of the contravention are the fact that the representation was made and that, in a case such as the present, it was misleading or deceptive, or likely to mislead or deceive (s 52) or was false (s 53(a) and (c)). To establish accessorial liability it must be established that the relevant person knew the representation was made and the facts which made it misleading or deceptive, or likely to mislead or deceive, or false. It need not be shown that the relevant person actually drew the conclusion that the representation was misleading or deceptive, or likely to mislead or deceive, or was false. 337 In many cases, knowledge that a statement has been made will be knowledge that the representation has been made. That will be the case because the representation is clear from the statement. An example is a statement about the weekly takings of a business. In other cases, the representation may not be clear from a consideration of the statement alone, and it will be necessary to examine all the circumstances and the understanding of those to whom the statement was directed. In what I think is likely to be a relatively small class of cases, proof that the relevant person knew a particular statement was made may not of itself show that he or she knew that the representation found by the Court had been made. It seems to me that, in relation to the ADR Approved caption, the primary judge found that this was such a case. She referred to Mr Keller's subjective understanding of the representation conveyed as not being such as to suggest wilful blindness or actual knowledge of how a relevant purchaser might understand it. 338 At trial, there was a good deal to be said for rejecting Mr Keller's evidence as to his understanding of what the ADR Approved caption conveyed. Mr Keller had worked in the industry for some time and he had some familiarity with the Australian Design Rules. He was aware of the process whereby a CRN was obtained. In cross-examination, Mr Keller was unable to explain any difference between the two captions, having regard to his understanding of the ADR Approved caption. All of these things may be accepted, but the question for this Court is whether, on appeal, it should interfere with the finding of the primary judge. The Court is being asked to interfere with a finding of fact as to the subjective understanding of a witness made by a judge who has seen and heard the witness. No doubt this Court is required to conduct a proper examination of the evidence and arguments, but it is also entitled to have regard to the fact that the primary judge saw and heard the witness. 339 The matters which might have led to a rejection of Mr Keller's evidence may be incontrovertible, but they do not, to my mind, demonstrate that the primary judge's finding is erroneous (Fox v Percy (2003) 214 CLR 118 at 128 [28] per Gleeson CJ, Gummow and Kirby JJ). Nor do they demonstrate that the primary judge's conclusion was "glaringly improbable" (Brunskill v Sovereign Marine and General Insurance Co Pty Ltd (1985) 59 ALJR 842 at 844) or "contrary to compelling inferences" (Chambers v Jelling (1986) 7 NSWLR 1 at 10 per Kirby P). 340 I turn now to the Complies with ADR caption. In the case of this caption, the primary judge found that Mr Keller knew the representation had been made. She expressly found that Mr Keller knew that the Condor products were manufactured, sold and packaged and he knew of "the content of the manner in which they were sold which might lead members of at least one class of consumer to believe that the products complied with prescribed consumer product safety standards". However, as I have said, she found that Mr Keller did not know of facts which meant that the representation was not correct. 341 LED Technologies submits that that finding was in error and it points to the following evidence: (1) Mr Keller was familiar with the requirements of the ADRs and had previously experienced difficulties as a result of lights not complying with ADRs. He was aware of the importance of compliance with ADRs. (2) There were problems with the Version 1 light in terms of compliance with the relevant ADRs. The ACCC became involved and later there was a product recall. (3) Mr Keller's view was that the issuing of a CRN confirmed compliance with an ADR. No CRNs were issued in relation to the Condor Product until the latter part of 2007 and a CRN was not granted for the white light until 7 December 2007. (4) There were difficulties with the white light and, in August 2007, a TL 80W failed photometric testing. 342 Despite this evidence, the primary judge found that Mr Keller relied on assurances from his Chinese manufacturer and testing laboratories that the lights complied with ADRs. She considered that a reasonable person would not have relied on those assurances and that a person who did so was not only negligent, but possibly reckless as well. Again, the question is whether this Court sitting on appeal should interfere with a finding of fact as to the knowledge of a person who the primary judge had the benefit of seeing and hearing. There is an additional consideration which the primary judge thought was important and which I also think is important. It was never directly put to Mr Keller that he sold the Condor products knowing that they did not comply with the relevant ADRs. That is a significant impediment to the challenge to her Honour's finding of fact. At all events, I am not satisfied that there are sufficient grounds to interfere with her finding of fact. 343 In my opinion, LED Technologies' challenge to the primary judge's conclusion that Mr Keller was not liable under s 75B of the Trade Practices Act in relation to the representational contraventions by the Corporate Respondents must be rejected.

Contraventions of s 65C of the Trade Practices Act by the Corporate Respondents 344 I have had the advantage of reading the reasons of Jessup J with respect to this issue. I agree with his Honour's reasons and with the conclusion that declarations of contraventions should be made. There is no case for damages bearing in mind the award made for the infringement of the Designs and the limited number of contraventions found.

The liability of Messrs Keller and Armstrong in relation to the contraventions of s 65C of the Trade Practices Act by the Corporate Respondents 345 This Court has found that some of the Corporate Respondents contravened s 65C of the Trade Practices Act by supplying Condor products which did not comply with a prescribed consumer product safety standard, being the Australian Design Rules. The primary judge did not make that finding and, in the circumstances, she did not need to consider the liability of Messrs Keller and Armstrong under s 75B in relation to such contraventions. This Court must address that issue. 346 It was not suggested by LED Technologies that Mr Armstrong's involvement and knowledge was greater than that of Mr Keller; in fact, it was, I think, accepted that he was one step removed from the activities of the Corporate Respondents. At all events, if Mr Keller is not liable, neither is Mr Armstrong. For the reasons I have given in relation to Mr Keller's alleged liability under s 75B in relation to the Complies with ADR caption (see [340]-[342]), Mr Keller is not liable under s 75B of the Trade Practices Act in relation to the contraventions of s 65C. 347 In my opinion, neither Mr Keller nor Mr Armstrong are liable under s 75B of the Trade Practices Act in relation to the contraventions by the Corporate Respondents of s 65C of the Trade Practices Act.

Damages for the infringement of the Designs from June 2008 and February 2009 348 The trial commenced in July 2008. LED Technologies put forward evidence of the loss and damage it suffered as a result of the infringement of the Designs during the period from November 2006 to May 2008 and the primary judge awarded damages for that period. LED Technologies claimed that the infringement was ongoing and, at the time final orders were about to be made in February 2009, it claimed damages for the period from June 2008 to February 2009. Initially, LED Technologies claimed the sum of $100,000, but, after some debate, it conceded that, if an order was to be made, it should be as follows: TheFirst to Fourth, Sixth and Seventh Respondents pay to the Applicant damages to be assessed (if any) for infringement of the Applicant's monopoly in the Registered Designs for the period from 25 July 2008 up to and including the date of any final order. 349 The primary judge refused to either award damages or make the order sought by LED Technologies. That refusal is challenged by LED Technologies in its cross-appeal. 350 I think the primary judge's conclusion is correct for the reasons she gave. She said in her final reasons: 21 The second ground of opposition is that the conduct is speculative, without any solid or reasonable foundation and was not the subject of any evidence at trial. That contention should be accepted. The infringing conduct and the Infringing Products are identified in the Reasons for Decision. They are also the subject of appropriate declarations and injunctions. However, during the course of trial, the Applicant made no attempt to prove its pleaded case that the Corporate Respondents intended to continue to make, import, sell or offer for sale any of the Condor products after May 2008. That was a simple task to prove - a few questions during the cross examination of the Directors might have provided evidence of that intended future conduct. The Applicant did not submit that the evidence adduced at trial showed it was probable that losses of the kind alleged would occur in the period between May 2008 and the date of final orders. In fact, the premise for the application for an order that further damages be allowed was that those damages had not yet been proved. If the evidence had been led at trial, it would have been open to me to make an assessment of future damages up to the date of final orders. That task is not now possible. It is too late. The Applicant is bound by the manner in which it conducted its trial unless, amongst other considerations, the evidence could not without reasonable diligence have been discovered before and it would cause no prejudice to the other party by reason of its introduction: Re Australasian Meat Industry Employees' Union (WA Branch); Ex Parte Ferguson (1986) 67 ALR 491 at 493-494 per Toohey J; Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256 at 266-267 per Brennan, Dawson, Toohey and Gaudron JJ. In the circumstances (including questions of fairness and management of the issue), it is inappropriate that there be an order in the terms sought by the Applicant.

The costs order made in favour of Mr Morrison 351 I have had the advantage of reading the reasons of Jessup J with respect to this issue. I agree with those reasons and with the conclusion his Honour has reached as to the appropriate order.

conclusions 352 The conclusions I have reached are as follows: 1. The appeal by Mr Keller in No VID 167 of 2009 should be dismissed. 2. The appeal by Mr Armstrong in No VID 167 of 2009 should be allowed to the extent that he not be the subject of the third, fourth and sixth orders made by the primary judge. 3. The appeal by Mr Morrison in No VID 167 of 2009 should be allowed and the fifth order made by the primary judge set aside and in lieu thereof there should be an order that the Applicant's claims against the Fifth Respondent in its Second Further Amended Application and Fourth Amended Statement of Claim filed 5 May 2008 be dismissed and the Applicant pay the Fifth Respondent's costs of those claims. 4. The parties should be heard as to Mr Armstrong's costs of the trial. 5. The cross-appeal by LED Technologies in No VID 167 of 2009 should be dismissed. 6. The parties should be heard as to the costs of the appeal, cross-appeal and notice of contention in No VID 167 of 2009. 7. The appeal by the Corporate Respondents in No VID 168 of 2009 should be dismissed. 8. The cross-appeal by LED Technologies in No VID 168 of 2009 should be allowed in part to the extent that: 8.1 Declarations of contraventions of s 65C of the Trade Practices Act should be made; and 8.2 The Corporate Respondents should pay LED Technologies' costs of the claims under the Trade Practices Act. 9. The parties should be heard as to the costs of the appeal, cross-appeal and notice of contention in No VID 168 of 2009. 353 I would hear the parties as to the precise form of the orders due to the complexity of issues raised on the appeals. I would also hear the parties as to the outstanding issues concerning costs. It seems to me that it would be appropriate to do that by putting in place a regime involving the filing and serving of written submissions. I certify that the preceding two hundred and six (206) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

AND: LED TECHNOLOGIES PTY LTD (ACN 100 887 474)

VID 168 OF 2009 BETWEEN: ELECSPESS PTY LTD (ACN 104 535 597)

AND: LED TECHNOLOGIES PTY LTD (ACN 100 887 474)

jessup J 354 Save with respect to the liability of Messrs Keller and Armstrong as joint tortfeasors, on all questions arising under the Designs Act 2003 (Cth) ("the Designs Act"), I agree with Besanko J. I agree with his Honour that Mr Armstrong was not jointly liable for the infringement of design with respect to which we have upheld the primary Judge, but, as will appear, my reasons differ from those of his Honour. Like Emmett J, I take the view that Mr Keller was not jointly liable for those infringements. I also agree with Besanko J in relation to all questions arising under ss 52, 53, 75B and 82 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act"). I agree that the breaches of ss 52 and 53 by the corporate appellants should have been reflected in costs orders made against them, not in favour of them. But, like Besanko J, I am not of the view that the primary Judge was in error not to have to have exercised the discretionary power to make declarations about such matters.

The liability of Messrs Keller and Armstrong as joint tortfeasors under the Designs Act 2003 (Cth) 355 In its Fourth Amended Statement of Claim dated 5 May 2008, the respondent to the present appeals, LED Technologies Pty Ltd ("LED Technologies"), alleged that Ren International Pty Ltd ("Ren") had infringed its monopoly in the registered designs by making and importing articles which embodied a design that was identical to, or substantially similar in overall impression to, the registered designs. It alleged that Ren and Olsen Industries Pty Ltd ("Olsen") had infringed its monopoly also by offering for sale and selling in Australia articles which embodied such a design. It made a series of allegations against two of the appellants in appeal VID167/2009, Anthony James Keller and Lawrence Alfred Armstrong. Some of those allegations were (or were effectively) admitted. Thus, each of Mr Keller and Mr Armstrong admitted that he was, at what appeared to have been the material times, a director of each of Ren and Olsen, and the "ultimate shareholder" of 50% of the shares in each. That is to say, Ren and Olsen were each half-owned by Mr Keller and Mr Armstrong; and each man was a director of each company. However, the applicant also alleged against Messrs Keller and Armstrong that each was "acting … in furtherance of a common design" with Ren and Olsen; was "directing or procuring" the conduct of Ren and Olsen; was "making [the conduct of Ren and Olsen] his own"; and was "authorising" the conduct of Ren and Olsen. The applicant alleged that Messrs Keller and Armstrong "acted in concert" with Ren and Olsen in respect of the infringements alleged, or "wrongfully procured and/or induced" Ren and Olsen to infringe its monopoly. It alleged that Messrs Keller and Armstrong were, thereby, "joint tortfeasors" with Ren and Olsen in respect of the infringements alleged. These allegations were denied. 356 Messrs Keller and Armstrong admitted that Ren imported, offered for sale and sold the articles which the primary judge held embodied designs that infringed LED Technologies' monopoly. They denied that Ren had made those articles. They admitted that Olsen had offered for sale and sold those articles. 357 In that part of the primary Judge's reasons which dealt with the operation of s 75(2) of the Designs Act, her Honour made it clear that her judgment against Ren and Olsen did not involve a finding that either of them "made" the articles to which the infringing designs had been applied. That was because the articles had been made outside Australia, and, in her Honour's view, s 71(1) of the Designs Act did not have extraterritorial operation. Her Honour held, however, that Ren and Olsen were secondary infringers within the meaning of s 75(2)(b), in that they had imported the articles, and offered them for sale in Australia. She added that she "would consider" Messrs Keller and Armstrong to be secondary infringers as well, on a similar basis to that upon which Review Australia Pty Ltd v Innovative Lifestyle Investments Pty Ltd (2008) 166 FCR 358 was decided, namely (in the words of her Honour), that "importing or selling, as the case may be, should be understood to also include directing, causing or procuring an infringing item to be imported or sold". 358 In the orders made by the primary Judge on 24 February 2009, her Honour declared that certain Condor lights (identified by code number) "offered for sale and sold" by Ren and Olsen infringed the corresponding registered designs of the applicants. Her Honour restrained Ren and Olsen, and Messrs Keller and Armstrong, from "directly or indirectly making, importing, selling or offering for sale" automotive lamps to which the registered designs, or any design that was identical to, or substantially similar in overall impression to, the registered designs had been applied. In her short reasons given on that day, her Honour explained that the inclusion of the phrase "directly or indirectly" in the order to which I have referred was to leave no doubt but that the injunction extended to any conduct of Messrs Keller and Armstrong by way of "procuring, inducing or authorising" an infringement by Ren or Olsen. 359 Before proceeding to deal with the joint tortfeasor aspect of the present appeal as such, I should make a brief observation as to the context in which the primary Judge relied upon my reasons in Review. That was not a case of importation, but involved an allegation that the respondent had "made" the articles to which the infringing design had been applied. The respondent pointed out (as was the fact) that the articles had not been made in-house, as it were, but had been made for it by a separate business pursuant to contract (to the respondent's specifications). I said (166 FCR at 363 [21]): With respect to subpar (a) of the applicant's pleading, I do not accept the distinction, sought to be made by the respondents, between a product made by those directly employed by a company, on the one hand, and a product made by an independent contractor at the behest of a company, on the other hand. In the policy context of the Designs Act, I consider that the reference, in s 71(1)(a) thereof, to a person who "makes" a product includes a reference to a person who directs, causes or procures the product to be made by another, whether or not an employee of the person. To accept, as the respondents did, the application of the provision to a situation in which the product is made by an employee of the person necessarily excludes the construction that the word "makes" refers only to the manual task of making by the person himself or herself. That being so, there is no intelligible point, consistent with the scope and purpose of Pt 2 of Ch 6 of the Designs Act itself, at which a line should be drawn so as to exclude the making of a product by a contractor to, but at the direction of, the person. In this passage, I used the expression "directs, causes or procures" to convey the sense that the respondent had used the contractor as the instrumentality by which it made the infringing articles, no less than if it had used its own employed staff for the purpose, As will appear from the reasons set out below, that was, with respect to the primary Judge, a different context from that in which liability by the operation of joint tortfeasor principles is said to arise. 360 The factual findings which gave rise to the primary Judge's conclusion that Messrs Keller and Armstrong were joint tortfeasors were the following: At the time of the "relevant events", Mr Keller and Mr Armstrong were directors of Ren and Olsen with Mr Armstrong acting also as Chairman. Mr Keller's evidence was that he, together with Mr Armstrong, "is the boss" of Ren and Olsen. In relation to Version 1 lamps, the "relevant events" included, but were not limited to, the conception and design of the infringing Condor lights at a time when at least Mr Keller was aware of the existence of the Designs, discussions with manufacturers about the manufacture of the those lights and the subsequent importation and sale of them in Australia. In addition, Mr Keller designed and conceived the Version 2 and 3 lights and arranged for their manufacture and importation into Australia. Moreover, Mr Armstrong was the nominated signatory for all applications for CRNs and the addressee for all correspondence from DOTARS relating to CRNs. In addition, he was involved in photometric testing of Condor LED lights and knew what Mr Keller was doing in relation to the Condor Products. So far as I can see, there does not appear to be any other place in the reasons where her Honour made findings of primary fact for the purpose of determining the liability of Messrs Keller and Armstrong as joint tortfeasors. 361 To someone with no understanding of the way the law has developed in this area, and possessed only of a copy of the Designs Act, the idea that damages for infringement might be awarded against someone other than the primary infringer himself or herself might (and in my view would) appear rather odd. The statutory regime for relief against infringement is tight and specific. Section 71 sets out the acts which constitute infringement. They do not include any of the conventional categories of accessorial or derivative liability. By s 73, infringement proceedings may be brought "against another person alleging that the person has infringed the registered design". By s 75, the remedies that may be granted may include damages. There is no provision for obtaining damages from a person other than the infringer. However, it is said that, in the way the law has developed, damages for infringement may also be obtained against the director of an infringing company, at least where he or she directed or procured the doing of the acts under s 71 which constituted the infringement. It is said that this exposure to damages arises even in cases where there was no conscious intention on the part of the director that the company should infringe: consciously to direct or procure the act which, objectively, amounted to an infringement will suffice. In the present case, the primary Judge took this approach. As will appear, there was no shortage of authority to justify her doing so. For reasons which follow, however, and with respect to those who take a contrary view, I consider that that approach was and is unsound. 362 In holding that Messrs Keller and Armstrong were joint tortfeasors with Ren and Olsen in relation to the infringing conduct of the latter, the primary Judge adverted to what she described as two lines of cases, which propounded different tests for the liability of an individual said to be a joint tortfeasor with the company of which he or she was director. The first was the test derived from Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1, 14-15, and the other was the test derived from Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing (1978) 89 DLR (3d) 195. Her Honour mentioned the judgment of the Full Court in Allen Manufacturing Co Pty Ltd v McCallum & Co Pty Ltd (2001) 53 IPR 400 and, like the Full Court in that case, held that the choice of test would make no difference to the outcome in the case before her. Either way, Messrs Keller and Armstrong were to be regarded as joint tortfeasors. Her Honour said: The position here is the same. This is not a case in which Messrs Keller and Armstrong acted only as directors of the infringing companies. Each had personal knowledge of the Designs and of the other facts and matters set out above (see [169]). To adopt the language of the Full Court, it was clear that each of Messrs Keller and Armstrong "was personally an actor invading [LED Tech's] rights: by creating the [Condor Products]" and taking the other steps outlined above. These sequences of actions were "the deliberate, wilful and knowing pursuit of a course of conduct" that was likely to constitute infringement or, at least, reflected a conscious indifference to the risk of infringement. As a result, each of the Directors also engaged in the design infringement. Each is a joint tortfeasor to the design infringement as each had "a common design" with Ren and Olsen to infringe the Designs and is jointly and severally liable to LED Tech for the damages assessed. 363 Performing Right was a copyright case. The company in question managed a theatre, and had engaged a group of musicians who chose their own music. Some of the music which they played was the subject of copyright, and they had no licence to play it. The company was held liable for the breach, and did not appeal. The manager of the company was also held liable for the breach, and he appealed to the Court of Appeal. All members of the court decided the appeal favourably to the manager, substantially on the ground that a servant of a company - even one in a position of management - was not vicariously liable for the tortious conduct of other servants. In the course of his reasons, Atkin LJ went further, and adverted to the principle by reference to which such a manager might be liable for such a tort. His Lordship referred to the following observation by Lord Buckmaster in Rainham Chemical Works Ltd (in liq) v Belvedere Fish Guano Company Ltd [1921] 2 AC 465, 476: If the company was really trading independently on its own account, the fact that it was directed by [its directors] would not render them responsible for its tortious acts unless, indeed, they were acts expressly directed by them. If a company is formed for the express purpose of doing a wrongful act or if, when formed, those in control expressly direct that a wrongful thing be done, the individuals as well as the company are responsible for the consequences, but there is no evidence in the present case to establish liability under either of these heads. In Performing Right, Atkin LJ said that it would not be necessary for any such direction to be express, and that an implied direction would be sufficient. His Lordship said ([1924] 1 KB at 15): If the directors themselves directed or procured the commission of the act they would be liable in whatever sense they did so, whether expressly or impliedly. This observation has been of significant impact in the years which have followed, particularly in the area of intellectual property. It is difficult to conceive of anything done by a company which is not, directly or impliedly, directed or procured by a director, or by a manager at some level. The potential reach of Atkin LJ's dictum is particularly conspicuous in the context of civil wrongs which do not require a mental element (such as infringement of design). 364 Rainham Chemical involved a Rylands v Fletcher (1868) LR 3 HL 330 situation in which, as it happened, Lord Buckmaster held that the individual defendants, who were the original occupiers of the premises upon which the non-natural user was carried out, had not done sufficient to pass occupation to the company which they had formed: see [1921] 2 AC at 478. Their liability, therefore, was neither vicarious nor by way of joint tortfeasance: they were directly liable as occupiers. Strictly, therefore, what his Lordship said was obiter. But, in the passage later referred to by Atkin LJ, Lord Buckmaster was concerned to deal with, and to reject, the basis upon which the case had been decided by Scrutton LJ in the Court of Appeal. Scrutton LJ had held that agreements entered into by the company (eg for the appointment of a manager and by way of policies of assurance) were paper shams and made no difference to the reality. Lord Buckmaster, however, held that the existence of a company could not be disregarded simply because it was found, in the course of legal proceedings, that all the capital of the company took the form of fully-paid shares, and that there was no free capital for working. His Lordship continued ([1921] 2 AC at 475): [In] truth the Companies Acts expressly contemplate that people may substitute the limited liability of a company for the unlimited liability of the individual, with the object that by this means enterprise and adventure may be encouraged. A company, therefore, which is duly incorporated, cannot be disregarded on the ground that it is a sham, although it may be established by evidence that in its operations it does not act on its own behalf as an independent trading unit, but simply for and on behalf of the people by whom it has been called into existence. It is in this latter sense that I read so much of his Lordship's judgment as was extracted by Atkin LJ in Performing Right. That is to say, when Lord Buckmaster referred to those in control of a company expressly directing that a wrongful thing be done, his Lordship had in mind a situation in which the directors were in effect using the company as an instrument for their own ends. 365 Atkin LJ's statement of the position in Performing Right was based upon what Lord Buckmaster had said in Rainham Chemical, qualified only to the extent of allowing for an implied direction to give rise to liability on the part of the director. What I understand his Lordship to have meant was that, if company directors in effect used the company as their instrument to carry out a tortious act, they would be liable. It was in this sense, in my view, that his Lordship used the otherwise uninformative expression "directed or procured". 366 Mentmore Manufacturing was a patent infringement action with respect to a mechanism for retractable ball point pens. The question which arose was whether the owners and directors of the infringing company were personally liable for the infringement. During at least part of the period that was relevant, both of the directors were aware of the existence of the patent, and of the patentee's allegations of infringement. Nonetheless, it seems that their company continued to manufacture the articles that were later held to be infringing. In his judgment on behalf of the Appeal Division of the Federal Court, Le Dain J set out the approach which the trial judge had taken to the liability of the directors as follows: The trial Judge found that "Goldenberg and Berkowitz imparted the practical, business, financial and administrative policies and directives which ultimately resulted in the assembling and selling of some goods … which I have found infringed the plaintiff's rights", but that this was not enough to make Goldenberg personally liable for the infringement. He expressed the test to be applied in the following passage from his reasons for judgment: In my opinion, there must be some evidence of intention (or evidence from which a reasonable inference can be drawn) that Goldenberg (or Goldenberg and Berkowitz jointly) deliberately or recklessly embarked on a scheme, using the company as a vehicle, to secure profit or custom which rightfully belonged to the plaintiffs. I add that I make a distinction between the intention I have referred to in dealing with the liability of a person as a director and the overall matter of intention in respect to infringement generally. As to the matter of "intention in respect to infringement generally", the trial Judge had pointed out that intention was immaterial in a patent infringement action. 367 Le Dain J continued: What is involved here is a very difficult question of policy. On the one hand, there is the principle that an incorporated company is separate and distinct in law from its shareholders, directors and officers, and it is in the interests of the commercial purposes served by the incorporated enterprise that they should as a general rule enjoy the benefit of the limited liability afforded by incorporation. On the other hand, there is the principle that everyone should answer for his tortious acts. The balancing of these two considerations in the field of patent infringement is particularly difficult. This arises from the fact that the acts of manufacture and sale which are ultimately held by a Court to constitute infringement are the general business activity of a corporation which its directors and officers may be presumed to have authorized or directed, at least in a general way. Questions of validity and infringement are often fraught with considerable uncertainty requiring long and expensive trials to resolve. It would render the offices of director or principal officer unduly hazardous if the degree of direction normally required in the management of a corporation's manufacturing and selling activity could by itself make the director or officer personally liable for infringement by his company. [Emphasis added.] Le Dain J said that this principle should apply no less in the case of a "small, one-man or two-man corporation" than in the case of large corporations. His Honour noted that it had been held that "the mere fact that individual defendants were the two sole shareholders and directors of a company was not by itself enough to support an inference that the company was their agent or instrument in the commission of the acts which constituted infringement or that they so authorized such acts as to make themselves personally liable", referring in this respect to British Thomson-Houston Co., Ltd v Sterling Accessories, Ltd (1924) 41 RPC 311 and to Prichard & Constance (Wholesale), Ltd v Amata, Ltd. (1924) 42 RPC 63. His Honour continued: It is the necessary implication of this approach, I think, that not only will the particular direction or authorization required for personal liability not be inferred merely from the fact of close control of a corporation but it will not be inferred from the general direction which those in such control must necessarily impart to its affairs. I, therefore, have no difficulty in concluding, with respect, that the learned trial Judge was correct in holding that the fact "Goldenberg and Berkowitz imparted the practical, business, financial and administrative policies and directives which ultimately resulted in the assembling and selling of some goods (in National's over-all stock of goods) which I have found infringed the plaintiff's rights" was not by itself sufficient to give rise to personal liability. What, however, is the kind of participation in the acts of the company that should give rise to personal liability? It is an elusive question. It would appear to be that degree and kind of personal involvement by which the director or officer makes the tortious act his own. It is obviously a question of fact to be decided on the circumstances of each case. I have not found much assistance in the particular case in which Courts have concluded that the facts were such as to warrant personal liability. But there would appear to have been in these cases a knowing, deliberate, wilful quality to the participation: see, for example, Reitzman v. Grahame-Chapman and Derustit Ltd. (1950), 67 RPC 178…; Oertli AG v EJ Bowman (London) Ltd [1956] RPC 341…; Yuille v B & B Fisheries (Leigh), Ltd & Bates [1958] 2 Lloyd's Rep 596; Wah Tat Bank Ltd v Chan Cheng Kum [1975] A.C. 507 (PC). [Emphasis added] 368 Having considered English and American authorities on the point, Le Dain J continued: I do not think we should go so far as to hold that the director or officer must know or have reason to know that the acts which he directs or procures constitute infringement. That would be to impose a condition of liability that does not exist for patent infringement generally. … But in my opinion there must be circumstances from which it is reasonable to conclude that the purpose of the director or officer was not the direction of the manufacturing and selling activity of the company in the ordinary course of his relationship to it but the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it. The precise formulation of the appropriate test is obviously a difficult one. Room must be left for a broad appreciation of the circumstances of each case to determine whether as a matter of policy they call for personal liability. Opinions might differ as to the appropriateness of the precise language of the learned trial Judge in formulating the test which he adopted - "deliberately or recklessly embarked on a scheme, using the company as a vehicle, to secure profit or custom which rightfully belonged to the plaintiffs" - but I am unable to conclude that in its essential emphasis it was wrong. [Emphasis added.] In the result in Mentmore Manufacturing, the directors were held not to be jointly liable for their company's infringement. 369 It is apparent that Mentmore Manufacturing was quite a different case from the hypothetical case referred to by Atkin LJ in Performing Right. The conduct which was held to constitute an infringement of patent was otherwise a conventional and legitimate business activity for the company concerned. In no sense were the directors using the company for their own tortious purposes. They were aware of the patent, and of the patentee's allegations. They knew that the products in question continued to be made. But the infringing conduct was part of the general business activity of the company, and the directors' involvement in it was by way of "the direction of the manufacturing and selling activity of the company in the ordinary course of [their] relationship to it …". Le Dain J was unable to say that the trial Judge was wrong to formulate the test in terms which involved using the company "as a vehicle" to achieve an end which was infringing. The essence of this test is not, in my view, so far removed from that of the Performing Right test (as explained above) as some of the authorities have appeared to discern. 370 The question with which we are here concerned has, in one form or another, come before the Full Court on three occasions. The first was King v Milpurrurru (1996) 66 FCR 474. A company, of which there were three directors, infringed copyright by importation. Only one of the directors was involved in the day-to-day operations of the company, and he had been the person who made the arrangements by which the goods bearing the infringing reproductions were imported. The other two directors had no role in that activity and, it seems, knew nothing of it until the proceeding in question was commenced. At that point, they were informed by the first director that the infringing importation had ceased. As it happened, that was not the case, and the two non-executive directors were, at trial, held liable along with the company (and the executive director) for infringement of copyright as joint tortfeasors. Their appeal to the Full Court was successful. 371 In the Full Court, Jenkinson J noted that the trial Judge had approached the question of directors' liability by reference to the Performing Right test. His Honour (the trial Judge) had held the directors liable because he inferred that they took no action, when served with the proceedings, other than to accept the explanation of the executive director that the infringing importation had ceased. Jenkinson J held that that inference did not go far enough to establish liability. His Honour said (66 FCR at 480-481): "[F]or tortious liability to be imposed on the respondents what is required is that they confer on [the executive director] and [the company] their authority to commit the torts so that they can be said to have agreed in the commission …." His Honour added that the evidence which the trial Judge had accepted could not support a finding that the non-executive directors did confer that authority. 372 Beazley J undertook a lengthy examination of the authorities with respect to the liability of directors for the wrongful conduct of their companies. Her Honour referred to the tests in Performing Right and in Mentmore Manufacturing. She preferred the latter. She said (66 FCR at 500): However, I do not consider that the principles stated in the Performing Right Society case pay sufficient regard, either to the separate legal existence of the company, or to the fact that the company acts through its directors. Nor do I find the language used sufficiently describes the need to find conduct over and above that engaged in as part of the management of the company to find a director personally liable for the tortious conduct of the company. Her Honour found the Mentmore Manufacturing line of authority "a more satisfactory approach to the question of personal liability of a director" at least in the circumstances of the delict with which the Full Court was then concerned. Referring to s 37 of the Copyright Act 1968 (Cth),Beazley J said (66 FCR at 500): "A director will be liable if, having the requisite mental element prescribed by s 37, he commits or directs the commission of the tort, deliberately or recklessly, so as to make the tortious conduct his own." Quite clearly, the actions of the non-executive directors in the case before the Full Court did not meet that description. 373 The third member of the Full Court in Milpurrurru, Lee J, dissented. In the result, while there was a majority view that the non-executive directors in the case were not liable for their company's infringement of copyright, there was no single articulation of the jurisprudential basis for that view. 374 The point next came before the Full Court in Allen Manufacturing. This was a design case involving hinges. The director, and the person in control, of the infringing company had previously worked for the company which later became the owner of the registered design. After that design had been registered, and had commenced to be used commercially, the director applied for registration, in his own name, of a design for a hinge which was held to be a fraudulent imitation. The question was whether the director was, along with his company, liable for the infringement. 375 The Full Court referred to the tests in Performing Right and Mentmore Manufacturing. Their Honours referred to the approaches which had been taken by different members of the court at first instance in various cases. They said (53 IPR at 410 [43]): The difference between the two tests may be more apparent than read [sic]. We are not aware of any case in which it has been held that a director or officer of a company directed or procured the company's infringing act, yet that person escaped liability because he or she did not deliberately, wilfully or knowingly pursue a course of conduct that was likely to constitute infringement or that reflected indifference to the risk of infringement. This may be because, in practice, an act of direction or procurement will generally meet the Mentmore test. It is notable that, in Mentmore itself, the Canadian Federal Court of Appeal declined (at 204) to "go so far as to hold that the director or officer must know or have reason to know that the acts which he directs or procures constitute infringement". The court declined to do this because that "would be to impose a condition of liability that does not exist for patent infringement generally". Their Honours observed that, to the extent that there was "a real difference between the tests, each [had] eloquent supporters". They took the view that, on either test, the director of the infringing company in the case before them would be liable. 376 The point was also considered in Cooper v Universal Music Australia Pty Ltd (2006) 156 FCR 380. One of the appellants was a person who operated a website which facilitated the downloading of music from third party sources, much of which was copyright. The other appellants were one of two companies which together operated an Internet service provider business, the director (and controlling mind) of both those companies and an employee of the other of them. The first appellant's website was hosted by the Internet service provider. The appellants had been held liable at first instance for copyright infringement under the terms of s 101(1) and (1A) of the Copyright Act. The appellant company and the director failed in their appeals, but the employee succeeded in his. In relation to the company, Branson J decided the case wholly by reference to s 101, although she passed briefly on the principles with which we are here concerned. In relation to the director, her Honour observed (156 FCR at 391 [54]) that he did not challenge the conclusion of the primary Judge that, as the controlling mind of the Internet service provider company, he was liable for its infringing conduct. 377 As I read her reasons, Kenny J too determined the matter adversely to the Internet service provider company under s 101. With respect to the position of the director, her Honour adverted to Allen Manufacturing, and expressed the view that "the law concerning the liability of directors and other officers for corporate wrong doings is unclear" (156 FCR at 413 [160]). Her Honour referred to the tests deriving from Performing Right and from Mentmore Manufacturing and to a third test which was articulated by Finkelstein J in Root Quality Pty Ltd v Root Control Technologies Pty Ltd (2000) 177 ALR 231, 268 [146] in the following terms: "The director's conduct must be such that it can said of him that he was so personally involved in the commission of the unlawful act that it is just that he should be rendered liable." (156 FCR at 414 [161]). Kenny J said that she "[tended] to agree with his Honour's approach" (156 FCR at 414 [161]). Her Honour said that the director of the Internet service provider company in the case before the Full Court was "plainly liable for the wrongdoing of the company" (156 FCR at 414 [163]). She said that he would be liable for copyright infringement whichever test were applied. She continued: [The director] directed and procured [the company's] authorization, in circumstances where he knew about the contents of the website and the copyright difficulties to which the website gave rise. He knew that, by hosting the site, [the company] was permitting internet users to download and copy sound recordings in which copyright subsisted. He consented to the arrangement entered into between his companies and [the website operator], whereby they advertised on the website in return for largely free hosting. Through his companies, he sought to derive financial benefit from the internet users' use of the website. [The director] took no steps to prevent the infringing acts after [the website operator] failed to comply with [the company's] request to take the website down, although, as the controlling mind of [the company], he could have caused [the company] itself to take the website down or decline to continue to host the site. As a second basis for her conclusion, Kenny J said that the director was, apart from the principles referred to above, directly liable because of his authorization of the company's conduct, pursuant to the deeming provisions of s 101 of the Copyright Act (156 FCR at 414-415 [164]). 378 The employee of the service provider company who appealed in Cooper was the primary point of contact as between that company and the person who operated the website. It is implicit at least in the reasons of the Full Court that he was well aware of the nature of that operation, and of the fact that it facilitated the downloading of music from third-party sites. At the technical and operational level, it would seem that whatever needed to be done on behalf of the Internet service provider company was done by this employee. However, both Branson J and Kenny J held that he was not liable for copyright infringement. There was unchallenged evidence that his was a subordinate role in the way of technical support. Branson J noted that it was not entirely clear upon what basis the primary Judge had found the employee liable. Her Honour noted that the primary Judge had specifically rejected the proposition that the employee was a joint tortfeasor with his company. Her Honour rejected the proposition that he fell within the terms of s 101(1A) of the Copyright Act. She held that the employee would not be liable either under the Performing Right test or under the approach favoured by Finkelstein J in Root Quality. Her Honour's short reasons for this conclusions were as follows (156 FCR at 394 [74]): Further, for the reasons given above, the evidence before the primary judge was insufficient to demonstrate that [the employee] held an executive or managerial role within either [of the internet service provider companies] such that his involvement with their acts of copyright infringement rendered him personally liable for those acts of copyright infringement. 379 Kenny J held (156 FCR at 415 [167]) that the employee could not be liable under any of the three tests to which she had adverted (ie Performing Right, Mentmore Manufacturing and Root Quality). Her Honour regarded that proposition as quite plain. She said that the employee's role was to provide technical support, that he had no control over the company's affairs, that he had no policy-making role in the company, and that, when problems arose, or a decision affecting the company needed to be made, he went to his superiors. 380 The third member of the court, French J, agreed with the reasons of both Branson J and Kenny J. 381 The uncertain state of the law as revealed by these three Full Court authorities (particularly Allen Manufacturing and Cooper) is reflected in judgments of single members of the court. As noted above, Finkelstein J had to deal with the problem in Root Quality, and, after a very comprehensive review of the cases, his Honour formulated the test to which I have referred. In another judgment about seven years later, TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444, Finkelstein J considered the problem again, and stated that he was not persuaded that his approach in Root Quality had been in error (158 FCR at 491 [186]). 382 In Microsoft Corporation v Auschina Polaris Pty Ltd (1996) 71 FCR 231, Lindgren J also undertook a careful examination of the authorities as they then stood. His Honour made two distinctions which are, in my respectful view, of singular importance (71 FCR at 241-242). The first was between what he called "dealings cases" and other cases. Where the injured party had chosen to "deal" with the company instead of the director, there would, as I understand his Honour, be a more obvious reason for confining him or her to remedies which may be secured as against the company. The second distinction was between cases in which the law imposed a duty on the director personally, and those in which it did not. The example which his Honour gave was of a director who negligently drove a motor car into a fence: the fact that he or she was acting as a company director (and that the company would, therefore, be vicariously liable) would not derogate from the director's personal liability for his or her negligent act. 383 This second distinction is, in my view, of more importance than is often appreciated, particularly in the field of intellectual property. There are some delicts which, of their nature, can be done by anyone. The reproduction of a literary work is an example. To take the simple case of photocopying such a work, if the director stood at the photocopier and performed that function, he or she would have infringed. So would the company of which he or she was a director. The position would be no different if the director had instructed a clerk to take a copy of the work. In that case, the director would be liable because, in essence, the act of photocopying was his or her own. The role of the clerk would be purely instrumental (a circumstance which would not, of course, absolve the clerk of liability in addition to that of the director). In this case the company would be liable because the infringement was done by its director and employee. 384 The situation is different where, of its nature, the delict cannot be done by a person other than the company itself. In Microsoft, Lindgren J was faced with just such a situation. The copyright infringements there alleged were the importation and sale of articles the marketing of which, if done in Australia, would have amounted to infringements. His Honour noted that the director neither imported nor sold the articles. Although not so stated in terms, what his Honour clearly had in mind was the circumstance that it was the company which obtained, had and disposed of property in the articles, and that the director (and any other person) was, therefore, incapable of direct infringement. This put the class of cases with which his Honour was concerned outside the conventional "joint tortfeasor" line of authority as represented, most typically, by Brooke v Bool [1928] 2 KB 578. 385 In Microsoft, Lindgren J referred to Mentmore Manufacturing, and to the preference for the "made the tortious act his own" criterion expressed by Nourse J in White Horse Distillers Ltd v Gregson Associates Ltd [1984] RPC 61. His Lordship had identified the Mentmore Manufacturing principles in the following terms ([1984] RPC at 91): Before a director can be held personally liable for a tort committed by his company he must not only commit or direct the tortious act or conduct but he must do so deliberately or recklessly and so as to make it his known [sic], as distinct from the act or conduct of the company. It is unnecessary for him to know, or have the means of knowing, that the act or conduct is tortious. It is enough if he knows or ought to know that it is likely to be tortious. The facts of each case must be broadly considered in order to see whether, as a matter of policy requiring the balancing of the two principles of limited liability and answerability for tortious acts or conduct, they call for the director to be held personally liable. Noting that this was a higher test than that referred to by Atkin LJ in Performing Right, Nourse J continued ([1984] RPC at 92): Subject to the question of policy, there is, in my view, much to be said for the higher test, particularly in regard to its requirement that the director should make the act or conduct his own as distinct from that of the company. That would seem to be an entirely rational basis for personal liability. Conversely, it would seem to be irrational that there should be personal liability merely because the director expressly or impliedly directs or procures the commission of the tortious act or conduct. In the extreme, but familiar, example of the one-man company, that would go near to imposing personal liability in every case. As for deliberateness or recklessness and knowledge or means of knowledge that the act or conduct is likely to be tortious, I think that these may on examination be found to be no more than characteristic, perhaps essential, elements in the director's making the act or conduct his own. In Microsoft, Lindgren J reacted to this passage as follows (71 FCR at 245): With respect, I do not find the formula, "making the tortious act his own", particularly illuminating, and, for reasons given earlier, in my opinion the reference to "limited liability" is confusing. The reference to "deliberateness" and "recklessness" is also troublesome in view of the fact, which no-one seems to doubt, that the director need not have known that the conduct was tortious. His Honour referred also to the judgment of Beazley J in King v Milpurrurru and expressed his preference (departing from her Honour) for the "directed or procured" test deriving from Performing Right. 386 The Performing Right test as preferred by Lindgren J in Microsoft has been followed in a number of subsequent first-instance judgments of the court: see Henley Arch Pty Ltd v Clarendon Homes (Aust) Pty Ltd (1998) 41 IPR 443, [463]-[464]; Microsoft Corporation v Goodview Electronics Pty Ltd (2000) 49 IPR 578, 586-587 [39]-[41]; Sony Music Entertainment (Aust) Ltd v CEL Music Pty Ltd (in liq) (2002) 54 IPR 289, 295-296 [28]-[29]. In other cases, however, Judges have noted the existence of the two competing tests, and decided the matters before them without the need to resolve the uncertainty: see Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd (2004) 61 IPR 242, 249-250 [38]-[39]; Australasian Performing Right Association Ltd v Metro on George Pty Ltd (2004) 210 ALR 244; AMI Australia Holdings Pty Ltd v Bade Medical Institute (Aust) Pty Ltd (No 2) [2009] FCA 1437, [96]-[105]. 387 Notwithstanding the preference of Lindgren J, Judges of the court have at times expressed reservations as to the Performing Right test. I have referred to the judgment of Finkelstein J in Root Quality. His Honour adverted to the difficulties with the test that the judgments which had applied it did not confront. His Honour said (177 ALR at 260 [125]): A corporation is an abstraction; a creature of statute. It can carry out acts only because the law attributes to the corporation certain actions of its directors and officers. Thus a corporation can interfere with the rights of a third party only when the acts constituting the unlawful interference are attributed to the corporation. There is a reason why, in that circumstance, the law should not impose liability both on the corporation for unlawful interference and separate liability on the director or officer for procuring that interference. His Honour then referred to the Said v Butt [1920] 3 KB 497 and O'Brien v Dawson (1942) 66 CLR 18 line of cases, which emphasised the conceptual inappropriateness of regarding a company officer, relevantly controlling the actions of the company, as contemporaneously inducing the company to breach a contract which it has with a third party. In formulating his own test (to which I have referred) Finkelstein J implicitly rejected the Performing Right test (while recognising that it remained the test then being applied in the English courts). 388 In the same year as Finkelstein J decided Root Quality, Finn J decided Oakley Inc v Oslu Import & Export Pty Ltd (2000) 48 IPR 32. Although his Honour did not advert to Performing Right as such, it is clear that he approached with much reserve the notion that a director might, by reason of his or her position as such, be liable for a tort committed by his or her company. His Honour said (48 IPR at 39 [35]): While judges in this court in other intellectual property settings have discussed the nature of this liability … such are both the controversies surrounding it in the common law world and its implications for small companies … that, in the absence of argument directed to the foundation of the tort - and in particular to whether it properly is to be regarded in the present setting as an intentional tort - I am not prepared to assume liability from the fact that, as the company's alter ego, [the director] directed the actions that gave rise to the infringements. As events turned out, his Honour listed the case for further hearing on the issue of the liabilities of the director, and, on 10 April 2001, he held that the director was liable: [2001] FCA 385. His Honour followed Sundberg J in the judgment to which I next refer, while recognising that "the question of accessorial liability of a director [was] a vexed one on which views differ". 389 Pioneer Electronics Australia Pty Ltd v Lee (2000) 108 FCR 216 was also a copyright case involving importation. Sundberg J observed that the law was in "an uncertain state". He identified four separate views which had judicial support, namely (108 FCR at 233): 1. A director will be liable along with the company when he has procured or directed it to commit the tort: Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1 at 14; Kalamazoo (Aust) Pty Ltd v Compact Business Systems Pty Ltd (1985) 84 FLR 101 at 127; Martin Engineering Co v Nicaro Holdings Pty Ltd (No 2) (1991) 100 ALR 358; Microsoft Corporation v Auschina Polaris Pty Ltd (1996) 71 FCR 231; 142 ALR 111; Lott v JBW & Friends Pty Ltd (2000) 76 SASR 105; Henley Arch Pty Ltd v Clarendon Homes (Aust) Pty Ltd (1998) 41 IPR 443 at 464. 2. A director will be liable only if he has made the wrongful act his own as distinct from it being an act of the company: Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc (1978) 89 DLR (3d) 195; White Horse Distillers Ltd v Gregson Associates Ltd [1984] RPC 61 at 91; King v Milpurrurru (1996) 66 FCR 474 at 495-501; 136 ALR 327 at 346-351. 3. A director will be liable if he has assumed responsibility for the company's acts: Trevor Ivory Ltd v Anderson [1992] 2 NZLR 517. 4. A director is not liable for procuring the company to infringe the rights of others: Said v Butt [1920] 3 KB 497; O'Brien v Dawson (1942) 66 CLR 18 at 32, 34; Rutherford v Poole [1953] VLR 130; Root Quality Pty Ltd v Root Control Technologies Pty Ltd (2000) 177 ALR 231. Sunberg J said (at 234) that the "clear preponderance of authority" favoured the first approach. His Honour was not convinced that that approach was clearly wrong, and he applied it. 390 It was in this state of things that Allen Manufacturing was decided at first instance: McCallum & Co Pty Ltd v Allen Manufacturing Co Pty Ltd (2001) 52 IPR 550. Gyles J noted that there had been "divergence of opinion" on the question of the liability of a director for the wrongs of his or her company "which has not been authoritatively settled" (52 IPR at 555 [30]). As noted above in these reasons, no such settlement emerged from the judgment of the Full Court in the same case. 391 The present state of the law in England, such as it is, was laid down in the judgment of the Court of Appeal in MCA Records Inc v Charly Records Ltd [2002] FSR 26. Chadwick LJ, who delivered reasons with which Tuckey and Simon Brown LJJ agreed, said ([2002] FSR at 415) that the basis of an assertion of joint tortfeasor liability in relation to an alleged infringement of a statutory right had been explained by Mustill LJ in Unilever Plc v Gilette (UK) Ltd [1989] RPC 583. That was a patent case in which the plaintiff sought to add as defendant the US parent of the existing defendant, on the basis that it was jointly liable because of a common design. The interlocutory application was decided substantially by reference to the question whether the parent company could be so jointly liable. In a judgment with which the other members of the Court of Appeal agreed, Mustill LJ said ([1989] RPC at 602-603): In a case such as the present, where the infringement alleged includes (for example) the sale of the patented product made up into a marketable form, and the importation of the product, a literal interpretation of the section might lead to the conclusion that only the person who has actually sold the product and imported it can be an infringer - apart, perhaps, from the exceptional case, contemplated by Sir George Jessel M.R. in Townsend v. Haworth (1878) 48 L.J. Ch. 770 at 772 where the direct infringer is the "mere cat's-paw" of someone else. This is not however the way in which the law has developed. It has gone further than this, in two stages. The first of these stages was the development of the principle of joint tortfeasance: The Koursk [1924] P 140; Brooke v Bool. The second stage was the recognition that someone who had not directly infringed a patent could nonetheless be liable because of his or her involvement in a common design with the primary infringer. In Unilever, it was held that, given the existence of a common design (which was alleged), the parent company could be liable, and the amendment was allowed. 392 However, Unilever was not concerned with the question of a director's personal liability for the wrongs of his or her company. The other party sought to be joined was a shareholder. The separation of ownership and control implicit in the structure of a modern joint stock company will mean that it will not often be a shareholder who (in that capacity) directly performs (or authorizes) the acts of his or her (or its) company. The directors have both the legal and the practical obligation to do that. Neither Performing Right nor Mentmore Manufacturing was considered in Unilever, and I do not regard it as direct authority on the question with which we are presently concerned. 393 Returning to MCA Records, in the result Chadwick LJ set down four "propositions" which were considered to be consistent with the authorities. With the assent of the other members of the court, his Lordship said ([2002] FSR 26 at [49] - [52]): 49. First, a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the governance of the company - that is to say, by voting at board meetings. That, I think, is what policy requires if a proper recognition is to be given to the identity of the company as a separate legal person. Nor, as it seems to me, will it be right to hold a controlling shareholder liable as a joint tortfeasor if he does no more than exercise his power of control through the constitutional organs of the company - for example by voting at general meetings and by exercising the powers to appoint directors. Aldous LJ suggested, in Standard Chartered Bank v Pakistan National Shipping Corporation (No 2) [2000] 1 Lloyd's Rep 218 , 235 - in a passage to which I have referred - that there are good reasons to conclude that the carrying out of the duties of a director would never be sufficient to make a director liable. For my part, I would hesitate to use the word "never" in this field; but I would accept that, if all that a director is doing is carrying out the duties entrusted to him as such by the company under its constitution, the circumstances in which it would be right to hold him liable as a joint tortfeasor with the company would be rare indeed. That is not to say, of course, that he might not be liable for his own separate tort, as Aldous LJ recognised at paragraphs 16 and 17 of his judgment in the Pakistan National Shipping case. 50. Second, there is no reason why a person who happens to be a director or controlling shareholder of a company should not be liable with the company as a joint tortfeasor if he is not exercising control through the constitutional organs of the company and the circumstances are such that he would be so liable if he were not a director or controlling shareholder. In other words, if, in relation to the wrongful acts which are the subject of complaint, the liability of the individual as a joint tortfeasor with the company arises from his participation or involvement in ways which go beyond the exercise of constitutional control, then there is no reason why the individual should escape liability because he could have procured those same acts through the exercise of constitutional control. As I have said, it seems to me that this is the point made by Aldous J (as he then was) in PLG Research Ltd v Ardon International Ltd [1993] FSR 197 . 51. Third, the question whether the individual is liable with the company as a joint tortfeasor - at least in the field of intellectual property - is to be determined under principles identified in CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013 and Unilever Plc v Gillette (UK) Limited [1989] RPC 583. In particular, liability as a joint tortfeasor may arise where, in the words of Lord Templeman in CBS Songs v Amstrad at page 1058E to which I have already referred, the individual "intends and procures and shares a common design that the infringement takes place". 52. Fourth, whether or not there is a separate tort of procuring an infringement of a statutory right, actionable at common law, an individual who does "intend, procure and share a common design" that the infringement should take place may be liable as a joint tortfeasor. As Mustill LJ pointed out in Unilever v Gillette, procurement may lead to a common design and so give rise to liability under both heads. These propositions have been used by English courts since then. 394 As to these four propositions, I would, with respect, make the following observations. The first proposition does not, it seems to me, come to grips with the kind of practical questions that have arisen in the cases, or that are likely to arise. It challenges one to contemplate what a director might do that was more than merely voting at board meetings. What would be, for example, the position of a director who had been a member of a board sub-committee that recommended a particular investment? As his Lordship recognised, his propositions were not intended to be prescriptive principles, but I would regard the first of them as going no further than establishing the most basic of starting points. 395 His Lordship's second proposition likewise operates, if I may so observe, at a very basic level. It seems to be no more than that the circumstance that the putative defendant is a director of the company which is the primary wrongdoer will not absolve him or her from liability, if otherwise that liability would arise under normal principles - ie by reference to his or her participation or involvement in the wrongful act. The proposition does not grapple with the question of what participation or involvement will be required in a case in which the primary wrongdoer was a company and the individual was a director doing more than merely voting at board meetings. 396 In his Lordship's third proposition, Chadwick LJ linked the liability of an individual as a joint tortfeasor with his or her company first to CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013. The joint tortfeasor question which arose there was whether the makers of sound recording equipment sold into the consumer market were liable for infringement of copyright along with those who purchased their equipment and used it to reproduce copyright works. As to that question, with the assent of the other members of the House of Lords, Lord Templeman said ([1988] AC at 1058): My Lords, I accept that a defendant who procures a breach of copyright is liable jointly and severally with the infringer for the damages suffered by the plaintiff as a result of the infringement. The defendant is a joint infringer; he intends and procures and shares a common design that infringement shall take place. A defendant may procure an infringement by inducement, incitement or persuasion. His Lordship went on to hold that the makers of the equipment had not acted in this way merely by advertising and selling the equipment to consumers. However, like Unilever, CBC Songs did not involve the liability of a director for the wrongs of his or her company, and it did not deal with the different tests in Performing Right and Mentmore Manufacturing. Because it contains no analysis of the conceptual issues which have been drawn to attention in the judgments of this court to which I have referred, I am disposed to think that CBS Songs does not, save by way of general background, provide much assistance in the resolution of the present question. 397 I also consider, with respect, that Chadwick LJ's fourth proposition takes the matter no further than the third, in the sense that it affirms the point that an individual who intends, procures and shares a common design with the primary infringer that the infringement should take place may also be liable. Further, there is a certain tentativeness about the fourth proposition, in that it is proposed that such an individual "may" be liable as a joint tortfeasor. Consistently with the principle which his Lordship appeared to be upholding, it is difficult to see how an individual could not be liable if he or she intended that the infringement take place, procured it to take place and shared a common design with the primary infringer that it should take place. 398 For the above reasons, I am not persuaded that MCA Records (which as I have said, represents the currentstate of the law in England) comes satisfactorily to grips with the conceptual and practical issues that troubled Le Dain J in Mentmore Manufacturing , Beazley J in Milpurrurru and Finkelstein J in Root Quality. Indeed, I am disposed to think that the "literal interpretation of the section", which Mustill LJ implied (in Unilever) might be regarded as the more obvious basis for determining who should be liable in patent and analogous cases (see para 391 above) would represent a more jurisprudentially convincing approach to take. However, because of the limited nature of the argument which we received here, the present case is not the right occasion to consider whether someone other than the primary infringer under s 71 of the Designs Act can ever be liable in damages. I shall limit my consideration of the problem to the dimension of it which concerns the liability of directors in circumstances in which their companies are the primary infringers. 399 It will be apparent that the law is in an uncertain state. I do not consider it a satisfactory resolution of the present appeal for us to go no further than to note that circumstance, and to attempt to decide the matter in a way which avoids confronting the uncertainty. On two previous occasions, Full Courts have adopted such an approach and, while I do not for a moment imply that they were not entitled to do so in the circumstances with which they were dealing, the result has been that the state of the law as to the liability of a director for the torts of his or her company is unclear. This lack of clarity is, if I may say so with respect, very neatly encapsulated in the short extract from the judgment of Sundberg J in Pioneer Electronics which I have set out above. The point is directly raised in the present appeal and, so far as may be done, I consider that we ought attempt to resolve some of the issues disclosed in the authorities. 400 It is universally accepted that a director is not liable for the wrongs of his or her company merely by reason of the office of director which he or she holds. In other words, there is no special rule of law that makes a director liable in such circumstances. The problem has arisen from the application to directors of the general rules of law by which a person who has not directly committed a civil wrong will be liable for the wrong of another because of his or her relationship with that other (eg where the person is the master and the other the servant) or involvement in the wrong done by that other (eg where the wrong itself was done pursuant to a common enterprise; or where the wrong was done by the other at the direction of the person). 401 It has likewise been observed on occasion that there is no reason why a person should be immune from liability, pursuant to general rules of the kind to which I have referred, merely because he or she happens to be a director of the company which is the direct wrongdoer. This seems clear as a matter of principle, but there is a sense in which it goes no further than to beg the question in a situation in which the director himself or herself was the human agency through which the company acted in committing the wrong. I am, of course, here dealing not with cases in which the director would be directly liable for something done by him or her in the service of the company (such as negligently driving the company vehicle so as to cause injury to a pedestrian), but with cases in which there would be no wrong at all but for the acts of the company (such as the importation of goods in infringement of design). What is it about the position of the director whose actions have caused the company to commit the wrong which should make him or her liable in addition to the company? 402 As I observe it, there are several aspects of such additional liability that have troubled courts in the past, notwithstanding the apparent simplicity of the verbal formula in Performing Right. At base is the circumstance that a company is an artificial person which can act only through the agency of individuals. When a company does something, there will usually be someone who has directed or procured it to be done. When a company breaches its contract, there will often be an individual whose decision has caused the company so to act. However: A company "cannot act in its own person for it has no person" (Ferguson v. Wilson (1866) 2 Ch. App. 77, at p. 89). So it must of necessity act by directors, managers, or other agents. The company, if it were guilty of a breach of its contracts in this case, acted through its director the respondent Doyle, but it is neither "law nor sense" (Lagunas Nitrate Co. v. Lagunas Syndicate (1899) 2 Ch. 392, at p. 431) to say that Doyle in the exercise of his functions as a director of the company combined with it to do any unlawful act or become a joint tortfeasor. Again, it is equally fallacious to assert that Doyle knowingly procured the company to break its contract. The acts of Doyle were the acts of the company and not his personal acts which involved him in any liability to the plaintiff. (O'Brien v Dawson, 66 CLR at 32, per Starke J). With respect to those who take a contrary view, I consider that there is something conceptually doubtful about a proposition that would have a director in the position of Mr Doyle in O'Brien v Dawson directing or procuring the company to act in a particular way. 403 Another cause for concern relates to the matter of limited liability. While perhaps more an issue of policy than of analysis, the fact is that, to make a director liable for the wrongs of his or her company - when he or she would not otherwise be liable - would be to expose those who serve the company to greater liability at the suit of third parties than are the proprietors themselves. As a matter of principle, it is no answer to this concern to rejoin that the director would in any event be answerable to the company for the external consequences of his or her internal mistakes: so it may be in some cases, but it provides no rational jurisprudential basis for making the director liable directly to the third party. I also consider that it is altogether too simplistic an approach to assume that a director will necessarily be liable at the suit of the company for the consequences of any wrong committed by the company by reason of his or her conduct. Merely to have acted in a way that exposed the company to a claim by a third party will not always amount to a breach of duty to the company, the remedy for which would correspond closely with that achieved by the third party as against the company. 404 Returning to the question which I posed at the end of para 401 above, I believe that the answer lies in the application of the conventional rules of law as to joint liability to the particular circumstance where the primary wrongdoer is an artificial person who can act only by human agency. Each of the two main conventional rules to which I have referred - directing another to commit a tort and participation in a joint enterprise - requires, or at least assumes, a duality (or multiplicity) of actors. In this sense, the presentation of the problem has much in common with that of inducement to breach of contract with which Starke J dealt in O'Brien v Dawson. For a director to be liable because he or she directs or procures his or her company to commit a wrong, the context must be such that the director is effectively standing apart from the company and directing or procuring it as a separate entity. There must be a sense in which the director is using the company as the instrument of his or her own wrong. This is, as I have explained earlier, the original sense in which Atkin LJ's words in Performing Right are to be understood, at least to the extent that they drew upon what Lord Buckmaster had earlier said in Rainham Chemical. Likewise with a joint enterprise, unless the director is conceptually separate from the company, there is, it seems to me, no "jointness" about the enterprise at all, but merely a one-person wrong in which the company is actor. 405 It will be seen from the foregoing that I agree substantially with so much of the judgments of Le Dain J in Mentmore Manufacturing, of Nourse J in White Horse and of Beazley J in Milpurrurru as make it a requirement of liability that the director should make the tort his or her own. Other courts have at times expressed reservations about this formula but, in my view, its utility lies in the focus it gives to an understanding of the principle of dual or multiple participation as I have attempted to explain it above. It would be a mistake to attempt to resolve cases by reference to a search for the moment in time when a director made the company's wrongdoing his or her "own". We are not here dealing with a species of property, or with ownership in any sense. However, in a situation in which the company-role and the personal-role of the director may be blurred, the formula does highlight the crucial distinction between acts which are done for and in the service of the company and acts which, in addition, are done in the director's own personal capacity - a "non-company capacity" as it were. 406 I consider that effectively the same end point is reached if the first of Chadwick LJ's four propositions in MCA Records is taken to its logical conclusion - a conclusion which, at least generally, is both just and in accordance with principle. I can, with respect, see no reason to limit the proposition to so much of the activities of a director as involve him or her voting at board meetings. In practice, problems nearly always arise in this area in the case of executive directors. I see no reason to draw the line at the proceedings of the board, but short of acts done by a director consistently with board decisions. I would apply the proposition to any act done by a director in what he or she, in good faith, reasonably perceives to be the interests of the company. In such a circumstance, the act of the director should be seen as the means by which the company itself acts, and not as the director "directing or procuring" the company to act, or participating in some joint enterprise. To regard the act in either of the latter senses would, in my view, be to take a quite artificial approach to the matter. 407 Although I have discussed the problem above with reference to directors as such, and although the context of the present appeal is so limited, it will be apparent that the solution which attracts itself to me is not, in point of principle, limited in its application to a situation in which it is a director whose acts have brought about the commission of the tort. What I have said applies equally to any servant or agent whose acts have that consequence. Indeed, one of the anomalies of the present state of the law (such as it is), in my respectful view, may be seen in the distinction which Branson and Kenny JJ drew in Cooper between a person in a position to determine what the company itself would do and a person in a subordinate role. The latter, it seems, could never be liable in accordance with the test in Performing Right. In my view, this is an unsatisfactory distinction. The point should not be whether the individual sought to be made liable can, or did, determine how the company might act, but whether there was a dimension to his or her role which was separate from the good faith discharge of his or her duties in the service of the company. If so, there will be a basis, in accordance with general principles, for making the individual liable because he or she was involved in a joint, wrongful, enterprise with the company. 408 In my view, the question arising in the present case should be resolved in accordance with the approach to which I have referred. The facts set out at para 360 above are not such as would, consistently with that approach, sustain a finding that either of Messrs Keller and Armstrong was a joint tortfeasor with Ren or Olsen in the infringement of LED Technologies' registered designs. Their appeals against the primary Judge's findings of infringement should be allowed.

Section 65C of the Trade Practices Act 409 Relevantly to the present case, s 65C(1)(a) of the Trade Practices Act provides that a corporation shall not - … in trade or commerce, supply goods that are intended to be used, or are of a kind likely to be used, by a consumer if the goods are of a kind … in respect of which there is a prescribed consumer product safety standard and which do not comply with that standard …. In the proceeding below, it was (and it remains on appeal) common ground that certain Australian Design Rules ("ADRs") to which I shall refer, were prescribed consumer product safety standards within the meaning of s 65C. However, it was and is controversial whether the Condor lights complied with the ADRs which were applicable to them. But that was not the basis upon which the primary Judge decided this aspect of the case adversely to LED Technologies. Rather, her Honour found that LED Technologies had "failed to connect particular lamps, having been supplied at particular times, to particular tests demonstrating non-compliance of those lamps with the ADRs". Her Honour proceeded to make observations as to the difficulty which would have confronted LED Technologies in establishing non-compliance, but the basis of her decision was LED Technologies' failure to make the connection referred to. 410 In its case on the cross-appeal, LED Technologies submitted that the primary Judge had overlooked an affidavit sworn by Anthony Ottobre on 15 July 2008. Read together with the other evidence that was before her Honour, that affidavit provided a basis for the following findings: (a) In about November 2006, Mr Rod Carpenter of Elecspess supplied two Condor light units to Mr Ottobre, at the latter's request. They were a two-lens combination and a three-lens combination, 80 mm square in each case. On 5 December 2006, Mr Ottobre sent the three-lens combination light to Queensland University of Technology ("QUT") for testing. Tests were conducted under the supervision of Assoc Prof Ian Cowling. They showed that the white reverse lamp did not comply with Vehicle Standard (Australian Design Rule 1/100 - Reversing Lamps) 2005 ("ADR-1"), that the amber direction indicator did not comply with Vehicle Standard (Australian Design Rules 6/00 - Direction Indicators) 2005 ("ADR-6") and that the red stop lamp did not comply with Vehicle Standard (Australian Design Rules 49/00 - Front and Rear Position (Side) Lamps, Stop Lamps and End Outline Marker Lamps) 2006 ("ADR-49"). (b) In October 2007, Mr Geoff Lance, at the request of Mr Ottobre, purchased two Condor 80 mm three-lens light units from Olsen. Mr Ottobre forthwith sent one of them to QUT for testing. Tests were conducted under the supervision of Assoc Prof Cowling. They showed that the white reverse lamp did not comply with ADR-1. The other two lamps complied with the ADRs that were applicable to them. (c) In February 2008, Elecspess supplied three Condor light units to a business called "Down Under Trailers". They were three-lens combinations, sized 80 mm, 100 mm and 125 mm. They were passed on to Mr Ottobre, who forthwith arranged for them to be sent to the University of New South Wales ("UNSW") for testing. Tests were conducted under the supervision of Prof Stephen Dain. They showed that the white reverse lamp did not comply with ADR-1 in the case both of the 80 mm and of the 100 mm unit. For that reason, no further test was conducted with respect to those units. The 125 mm unit complied with the ADRs that were applicable to it. In its submissions on appeal, LED Technologies also drew our attention to evidence that lights other than those referred to above did not comply with the relevant ADRs. However, Mr Ottobre's affidavit of 15 July 2008 did not provide evidence of the necessary connection between the supply of those other lights in trade or commerce and the failure of the same lights to satisfy the relevant ADRs. Indeed, in the case of some of the other lights, they appear to have been withdrawn from stock for the purposes of testing, rather than ever having been supplied in trade or commerce. 411 Regarding the lights referred to in subparas (a), (b) and (c) of the previous paragraph of these reasons, and save for questions concerning the operation of the ADRs in the context of s 65C of the Trade Practices Act to which I turn below, it was not submitted by Elecspess or Olsen that the evidence before the primary Judge was insufficient to sustain findings along the lines of those set out above. There was no Notice of Contention in either cross-appeal seeking to support her Honour's conclusion on grounds other than those on which she relied. As to the cross-appeal itself, I would accept the argument advanced on behalf of LED Technologies that the primary Judge appears to have overlooked Mr Ottobre's affidavit of 15 July 2008. When that affidavit is taken into account, it is apparent that LED Technologies did lead evidence that connected particular lamps, supplied at particular times, to tests which demonstrated non-compliance with the ADRs in some respects. If that were the end of the matter, the cross-appeal would have to be upheld in these limited respects. 412 However, her Honour did not make findings that the lights which had been sent for testing at QUT and UNSW did not comply with the relevant ADRs. Indeed, she expressed the view that the task of demonstrating non-compliance would have been "tricky, if not impossible". The problem did not relate to any shortcoming in the tests conducted, or to any controversy about what might be called compliance at the substantive level. Rather, it related to the unusual structure of the ADRs, and their suitability to perform the kind of role contemplated by s 65C. It was issues of this kind which occupied the bulk of the parties' energies in presenting their respective cases under s 65C on the cross-appeal. 413 For the sake of convenience, my analysis of the legal position will be confined to ADR-1. For present purposes, the terms of ADR-6 and ADR-49 are relevantly indistinguishable. The "scope" of ADR-1 is stated as follows: This vehicle standard prescribes the photometric requirements for reversing lamps which will warn pedestrians and other road users that the vehicle is about to move or is moving in the reverse direction, and which during the hours of darkness will aid the driver in reversing manoeuvres. The "Requirements" of ADR-1 are stated as follows (para 4.1): Devices complying with the technical requirements of Appendix A as varied by part 5 Exemptions and Alternative Procedures and part 6 Supplementary General Requirements shall be accepted as complying with this design rule. Appendix A, there referred to, is a regulation of non-Australian origin. It is the "UN/ECE Regulation No. 23/00 - Uniform Provisions Concerning the Approval of Reversing Lights for Motor Vehicles and Trailers" ("Reg 23"). As appears from the provision most recently quoted above, ADR-1 provides for there to be variations and supplements to Appendix A, the operation of which introduces some complexity into the task of assessing compliance under s 65C. It is convenient to commence with a brief consideration of the full terms of Reg 23, unaffected by the variations imposed by ADR-1. 414 The first thing to notice about Reg 23 is that it is concerned with the "approval" of lamps. Consistently, it opens with a series of provisions, Section 2, which deals with an application for approval. Two samples of the light in question must be submitted with each application. Section 3 deals with the markings that must be on the samples. Section 4 opens with the statement: "If the two samples of a type of reversing lamp meet the requirements of this Regulation, approval shall be granted." The remaining provisions of Section 4 are concerned with the markings, symbols and the like that must be placed on "[e]very reversing lamp conforming to a type approved …." 415 Section 5 of Reg 23 opens with a requirement that "[e]ach sample shall conform to the specification set forth in the paragraphs below." The substance of the specification is set out in Sections 6 and 8. Section 6 is headed "Intensity of Light Emitted", and opens thus (para 6.1): The intensity of the light emitted by each of the two samples shall be not less than the minima and not greater than the maxima specified below and shall be measured in relation to the axis of reference in the directions shown below (expressed in degrees of angle with the axis of reference). Quite clearly, the "two samples" here referred to are the samples required to be submitted with the application for approval (Section 2). The remaining provisions of Section 6 set out the quantitative requirements of luminous intensity required of those samples (the relevant unit of measurement being the "candela"). Section 8 requires the colour emitted by the lamp to be white. Section 7 is concerned with the procedures by which testing is to be carried out. 416 Section 9 of Reg 23 is clearly of some importance in jurisdictions in which Reg 23 operates according to its terms. It provides: CONFORMITY OF PRODUCTION The conformity of production procedures shall comply with those set out in the Agreement, Appendix 2 (E/ECE/324-E/ECE/TRANS/505/Rev.2), with the following requirements: 9.1. Lamps approved under this regulation shall be so manufactured as to conform to the type approved by meeting the requirements set forth in paragraphs 6 and 8 above. 9.2. The minimum requirements for conformity of production control procedures set forth in annex 5 to this Regulation shall be complied with. 9.3. The minimum requirements for sampling by an inspector set forth in annex 6 to this regulation shall be complied with. 9.4. The authority which has granted type approval may at any time verify the conformity control methods applied in each production facility. 417 As is apparent, Section 9 calls up the provisions of Annex 5 and Annex 6 of Reg 23. Annex 5 deals with "Minimum Requirements for Conformity of Production Control Procedures". It provides that the "conformity requirements shall be considered satisfied, from a mechanical and geometric standpoint, if the differences do not exceed inevitable manufacturing deviations within the requirements of this Regulation." Paragraph 1.2 of the annex reads, in part: With respect to photometric performances, the conformity of mass-produced lamps shall not be contested if, when testing photometric performances of any lamp chosen at random and equipped with a standard filament lamp, or when the lamps are equipped with non-replaceable light sources (filament lamps or other), and when all measurements are made at 6.75 V, 13.5 V or 28.0 V respectively: 1.2.1 no measured value deviates unfavourably by more than 20 % from the values prescribed in this Regulation. Section 2 of the annex is headed "Minimum Requirements for Verification of Conformity by the Manufacturer". A manufacturer who has obtained an approval under Reg 23 must carry out the tests prescribed by Section 2. It is required that "[s]amples of lamps … be selected at random from the production of a uniform batch". The lamps so selected must be tested for photometric and colorimetric characteristics. Paragraph 2.5 of the annex provides: The manufacturer is responsible for carrying out a statistical study of the test results and for defining, in agreement with the competent authority, criteria governing the acceptability of his products in order to meet the specifications laid down for verification of conformity of products in paragraph 9.1. of this Regulation. The criteria governing the acceptability shall be such that, with a confidence level of 95 %, the minimum probability of passing a spot check in accordance with annex 6 (first sampling) would be 0.95. 418 Annex 6 deals with "Minimum Requirements for Sampling by an Inspector". It opens with the same general statement about conformity requirements as does Annex 5. It duplicates the passage from para 1.2 of Annex 5 that I have set out above. It provides for a "first sampling" and for "repeated sampling". The first sampling requires the selection of four lamps at random, the first two of which are "sample A" and the second two of which are "sample B". If neither lamp in sample A deviates from the values prescribed in the regulation by more than 20%, one goes to sample B. If both lamps in sample B do not deviate from those values, the conformity of mass-produced lamps with the regulation "shall not be contested". There are then prescribed more serious deviations from the values which will lead to the conformity of the mass-produced lamps with Reg 23 being "contested". In such a case, the manufacturer is to be "requested to make his production meet the requirements" of the regulation. Yet more serious deviations from the values activate the provisions of Reg 23 under which approval may be withdrawn. The procedures for "repeated sample" apply in the case of a first sample which produces a situation in which conformity is contested, and provide, in effect, for the same sampling process to be carried out again, presumably to achieve conformity with the tolerances prescribed. 419 The structure of Reg 23 deserves comment in the present context. The provisions of the regulation down to and including Section 8 are concerned with the approval of lamps. They address matters of process and substance. Section 9 is concerned, as the heading makes clear, with "conformity of production". It addresses the means by which, and the standards by reference to which, a manufacturer of previously-approved lamps maintains conformity with the requirements of the regulation. It opens with a statement of the requirements of "conformity of production procedures", apparently the subject of an "agreement" in App 2. No such agreement was in evidence in the present case. It seems tolerably clear, however, that, once a lamp is approved, continuing compliance with the substantive standard in Sections 6 and 8 is enforced by requiring the manufacturing process to be such that, within the scheme of Annexes 5 and 6, conforming lamps are produced. At least so far as appears from Reg 23 itself, the failure of a single lamp - purchased somewhere within the mercantile universe - to meet standard would result not in some remedy becoming available against the supplier but in an inquiry into compliance by the manufacturer with Annexes 5 and 6, and possibly in the withdrawal of approval for the lamp in question. 420 I now return to ADR-1, and to the provisions of para 4.1 thereof. By the "exemptions" set out in para 5.1, it is provided that many of the provisions of Reg 23 are not applicable. Those provisions are: 5.1 Section 2 Application for approval Section 3 Markings Section 4 Approval Section 9 Conformity of production - partial (for particular deletions to the section refer to paragraphs 5.1.2 and 5.1.3) Section 10 Penalties for non-conformity of production Section 11 Production definitely discontinued Section 12 Names and addresses of technical services responsible for conducting approval tests and of administrative departments Annex 1 communication concerning the approval or extension or refusal or withdrawal of approval or production definitely discontinued of a type of reversing lamp pursuant to Regulation No.23 Annex 2 Examples of arrangements of approval marks 5.1.1 The opening paragraph in Section 9, paragraph 9.4 and 5.1.2 Paragraphs 2.3 and 3.3 in Annex 6 5.2 The opening paragraph in Section 9, paragraph 9.4 and 5.3 Paragraphs 2.3 and 3.3 in Annex 6 Additionally, ADR-1 provides as follows, by way of supplement to the applicable provisions of Reg 23 (para 6.1}: The requirements and procedures set out in Annexes 5 and 6 of Appendix A are acceptable for the purposes of demonstrating compliance with the technical requirements of this rule. 421 It appears as though it was intended, in the drafting of ADR-1, to adopt the substantive requirements of Reg 23 without the procedural aspects relating to the approval of lamps and the like. Unlike the position which apparently obtains in jurisdictions in which Reg 23 applies directly, in Australia it is not necessary for combination lights to be "approved" before being placed on the market. Thus, withdrawal of approval is not available as an administrative penalty for non-compliance. Rather, by omitting the opening paragraph of section 9 of Reg 23, ADR-1 has in effect turned what was a regime for conformity of production into a statement of the minimum requirements of lights as such. However, ADR‑1 also makes clear, in the passage last quoted above, that compliance with Annexes 5 and 6 of Reg 23 shall be treated as sufficient. That is to say, even if, considered as an individual item, a light would fail to meet the standard set by para 9.1, if it has been manufactured in accordance with the kind of regime for which Annexes 5 and 6 provide, it shall be treated as compliant. 422 In the facts of the present case, LED Technologies caused lights to be supplied, ad hoc, by Elecspess and Olsen. On the first occasion Elecspess supplied a light to Mr Ottobre at his request. On the second and third occasions, Olsen and Elecspess supplied lights ostensibly in the normal course of their trade. The lights - or at least some of them - did not comply with the substantive requirements of para 6.1 of Reg 23. In the case of LED Technologies, this meant that they did not comply with the applicable ADR and that there had, therefore, been a contravention of s 65C(1)(a) of the Trade Practices Act. Elecspess and Olsen resisted that conclusion at two levels. First, they submitted that Reg 23, and therefore (by incorporation) the ADRs, did not set up any absolute requirement of compliance for every light bought off the shelf in the course of trade, or individually supplied howsoever else. They submitted that the norms established by Reg 23 were mandated, and enforced, by a procedure of testing. LED Technologies had not availed itself of any such procedure. Since the regime of testing for which Reg 23 provides allows for some degree of non-conformity, it cannot be open, so Elecspess and Olsen submitted, for a competitor such as LED Technologies to establish a breach of s 65C by obtaining a single supply on an isolated occasion and proving only that the light so obtained did not comply. Secondly, they submitted that Reg 23, and therefore ADR-1, allowed for a tolerance of 20% in any event. A contravention of s 65C could not be established without at least demonstrating a deviation from standard of more than 20%. 423 Although the terminology employed is not altogether felicitous, I consider that the sense of para 4.1 of ADR-1 is that, subject to the variations, exceptions and supplements later provided for, compliance with Reg 23 is required. As pointed out above, in Australia, lamps must be manufactured so as to meet the requirements of Sections 6 and 8. Annexes 5 and 6 of Reg 23 (as applied in Australia) provide a means by which the manufacturer may establish conformity with Reg 23, and thus with the ADRs. Any lamp made in accordance with a manufacturing process which complies with Annexes 5 and 6 is to be deemed compliant with the ADRs, whether or not, considered as an individual item, it does in fact comply with Sections 6 and 8 of Reg 23. 424 In the present case, it would have been open to Elecspess and Olsen to show that the light combinations supplied by them had been manufactured under a regime that was compliant with Annexes 5 and 6 of Reg 23. They did not so proceed. Rather, they submitted that the ADRs simply did not impose any standards save by reference to the testing and sampling procedures for which those annexes provide. They contended, in effect, that it lay upon LED Technologies to prove that the relevant manufacturing process was non-compliant with the requirements of those annexes. I would not accept that contention. For reasons set out above, I consider that the ADRs operate by setting up primary quantitative standards, and then by allowing the manufacturer to bring himself or herself within those standards by reference to Annexes 5 and 6. In other words, it lies upon the manufacturer, or upon the person in whose interests it is to establish compliance with the annexes, to lead the evidence necessary for that purpose. 425 It is only in the context of conforming manufacturing processes for which Annex 5 of Reg 23 provides that a deviation of up to 20% from standard is permissible. In circumstances where Elecspess and Olsen have chosen not to establish that the lights supplied to the representatives of LED Technologies were manufactured in accordance with Annex 5, this provision has no operation. 426 Thus I take the view that, in relation to the supplies referred to in para 410 above, the combination lights which were found by QUT and UNSW to fail the tests carried out by those organisations did not comply with the applicable ADRs. There was, in each case, a contravention of s 65C(1)(a) of the Trade Practices Act. LED Technologies' cross-appeal should be allowed to this extent, and appropriate declarations made. I agree with Besanko J, however, that no case has been made for an award of damages over and above those to which LED Technologies would be entitled for design infringement. In addition to the avoidance of double-counting, I note that it was only with respect to the specific supplies referred to in para 410 that LED Technologies has established a contravention of s 65C. It is not in the least apparent - and it was not suggested in LED Technologies' arguments on appeal - how any loss or damage in fact occurred as a result only of those supplies.

Mr Morrison's costs 427 It is convenient to commence consideration of Mr Morrison's appeal against the costs order made by the primary Judge with a brief review of the relevant pleadings. At this stage I refer to the pleadings as they stood at the time of the trial. LED Technologies alleged that, at all material times until 5 April 2007, Mr Morrison was a director, and the company secretary, of each of Ren and Olsen; the sole shareholder of Ren; the owner of 25% of the shares in Olsen; acting as servant or agent of Ren and Olsen; in effective control of Ren's conduct; together with Messrs Keller and Armstrong, in absolute control of the conduct of Ren and Olsen; acting with Ren and Olsen in furtherance of a common design; directing or procuring the conduct of Ren and Olsen; making the conduct of Ren and Olsen his own; and authorising the conduct of Ren and Olsen. In his Defence, Mr Morrison admitted that he was a director and company secretary of Ren between 29 June 2005 and 5 April 2007, that he was a director of Olsen between 15 November 2006 and 5 April 2007, and that he was a former shareholder of both companies. Otherwise, he denied all these allegations. 428 In its Statement of Claim, LED Technologies alleged that, until at least 5 April 2007, Mr Morrison acted in concert with each of Ren and Olsen in the infringement of LED Technologies' monopoly in its registered designs, or wrongfully procured and/or induced Ren and Olsen to infringe that monopoly, thereby becoming a joint tortfeasor with them. Mr Morrison denied these allegations, adding that, in the absence of proper particulars, they were embarrassing and should be struck out. LED Technologies also alleged that, until at least 5 April 2007, Mr Morrison aided and/or abetted and/or was, directly or indirectly, knowingly concerned in, or party to, the contraventions by Ren and Olsen of ss 52, 53(a), 53(c) and 65C of the Trade Practices Act. Mr Morrison's liability was said to arise under ss 75B, 80 and 82(1) of that Act. Mr Morrison denied these allegations and, in the case of those which were tied to alleged infringements by Ren and Olsen of ss 52, 53(a) and 53(c) of the Trade Practices Act, added that, in the absence of any proper particulars, the allegations were embarrassing and should be struck out. 429 I note that further and better particulars of LED Technologies' Statement of Claim were provided on 25 February 2008. The request for those particulars was not included in the appeal papers, but the nature of it may be inferred from the terms of the particulars provided. Relevantly to the present question, the particulars set out a number of instances in which Mr Morrison participated in meetings and other events which related to the Condor Products with respect to which LED Technologies sued. It was said that, by reason of those matters, "Morrison had knowledge of the promotion, sale and distribution of the Condor Products by Ren and Morrison acquiesced in, approved and/or took no steps to stop or prevent the same when he was in a position to do so". The particulars referred to a meeting on or about 22 June 2006 in which Mr Morrison participated, and at which the distribution of the Condor products by Ren to Olsen, and the promotion and sale of the Condor Products by way of a brochure to be prepared for Olsen, was reported on or discussed. As a result of this, it was said that Mr Morrison "had knowledge of the promotion and sale of the Condor products by Olsen and acquiesced in, approved and/or took no steps to stop or prevent the same when he was in a position to do so". 430 In an affidavit sworn on 9 February 2009, LED Technologies' solicitor referred to a letter sent on behalf of his client to Mr Morrison's solicitors on 7 February 2008. Although exhibited to that affidavit, the letter did not form part of the appeal papers (a cross-reference to what was apparently intended to be another copy of that letter in a memorandum handed up by counsel for LED Technologies on the hearing of the appeal was erroneous). However, the solicitor's affidavit summarises the presently relevant contents of the letter of 7 February 2008. In the letter, LED Technologies offered to withdraw its claims against Mr Morrison "if he provided a statement regarding his involvement with Ren and Olsen and confirming that he was not involved in the decision to import and sell the Infringing Products". That offer was not accepted. 431 On 18 February 2008, Mr Morrison made an offer of compromise to LED Technologies under O 23 of the Federal Court Rules. He proposed that LED Technologies would discontinue its proceeding against him, that he would discontinue his cross-claim against LED Technologies, and that LED Technologies would pay 90% of his party/party costs of the proceeding. The offer was open for acceptance within 14 days. It was not accepted. 432 On 2 April 2008, Mr Morrison made a further offer of compromise to LED Technologies under O 23. He proposed that LED Technologies' proceeding against him, and that his cross-claim against LED Technologies, both be dismissed, with no order as to costs. Again, the offer was open for fourteen days. Again, it was not accepted. On the same day, the individual appellants sent a letter to LED Technologies, which was "without prejudice save as to costs" and which was said to be made in accordance with the "principles" enunciated in Calderbank v Calderbank [1976] Fam 93. It proposed that the proceeding as against those appellants (then respondents) should be dismissed, that those appellants' cross-claims should be dismissed and that there be no order as to costs. 433 On 10 April 2008, Mr Morrison caused an affidavit by himself to be filed in which, according to LED Technologies' solicitor in his affidavit sworn on 9 February 2009, he swore for the first time that he was "never involved in the acquisition of products, their design or development". Mr Morrison's affidavit of 10 April 2008 is not in the appeal papers, but what LED Technologies' solicitor said about it appears to be uncontroversial. 434 In the course of her reasons for judgment delivered on 18 December 2008, the primary Judge said that, during the course of the hearing before her, LED Technologies stated that it no longer sought relief against Mr Morrison. In final orders made on 24 February 2009, her Honour ordered that LED Technologies' claims against Mr Morrison be dismissed, and that it pay Mr Morrison's costs of those claims incurred after 10 April 2008. In her Honour's reasons given that day, the only reference to Mr Morrison's costs was the following: In relation to para 5 of the Orders, I have not awarded costs to the Fifth Respondent on an indemnity basis. Not only was the application not actively pursued at the hearing, I do not consider that the Fifth Respondent has established any basis for costs to be awarded on an indemnity basis: see Colgate-Palmolive Company and Another v Cussons Pty Limited (1993) 46 FCR 225 at 232-234 per Sheppard J; Bagshaw v Scott [2005] FCA 104 at [39]-[43] per Bennett J; Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Ltd) (No 2) [2007] FCA 179 at [4] per Finn J; Ruaro v Ferrari [2008] FCA 307 at [17] per Emmett J; Tadros v J & R Investment Services Pty Ltd (No 2) [2008] FCA 832 [13]-[16] per Buchanan J. Otherwise, her Honour contented herself with saying that the costs orders which she proposed to make (which included the order relating to Mr Morrison's costs) "deal with the issues of costs on the claim, the cross claims and the costs of those cross claims in the most appropriate manner". 435 Mr Morrison appealed against the costs order made in relation to him by the primary Judge. He had two points: first, that, as a successful party, he ought to have received his costs generally, not only those incurred after 10 April 2008; and secondly, since he had secured a result more favourable to him than that proposed in both, or either, of his offers of compromise, he should have been awarded his costs, to the extent that they were incurred subsequently, on an indemnity basis. 436 As will be apparent from what I have written above, the primary Judge did not indicate, in her reasons of 24 February 2009, why she limited her award in favour of Mr Morrison to the costs which he had incurred after 10 April 2008. It may be inferred, however, that her Honour's decision was based on the service of Mr Morrison's affidavit on that day in which, apparently for the first time, he went on his oath as to his lack of involvement in the affairs of which LED Technologies complained. No other basis for the identification of that date was suggested by any party on appeal. It was submitted on behalf of Mr Morrison that the timing of his affidavit was no legitimate basis upon which to deny him a portion of the costs to which, as a successful respondent to a proceeding in the court, he would have the usual expectation. On the other hand, it was implicit in the case advanced on behalf of LED Technologies that the ostensible indications, arising from the offices which Mr Morrison held at least until 5 April 2007, justified the inference that he was likely to have been a joint tortfeasor with respect to such design infringements as were established and to have had the kind of involvement that is the concern of s 75B of the Trade Practices Act, with respect to such contraventions of that Act as were established. It was submitted that her Honour's costs order was justified because Mr Morrison in effect remained silent about his own involvement until 10 April 2008. 437 An award of costs does, of course, involve the exercise of a judicial discretion which will be disturbed on appeal only in the limited circumstances referred to in House v The King (1936) 55 CLR 499. We are, however, at something of a disadvantage in the present case because of the absence of any reasons by the primary Judge for her decision to deny Mr Morrison a part of the costs to which, as a successful party, he would normally be entitled. There may be circumstances in which it would be appropriate to penalise a party who, although ultimately successful, had uncooperatively declined to reveal the facts, not reasonably available to the other party, which would sustain his or her success. However, for reasons which follow, I do not think that this case was in that category. 438 LED Technologies did not originally make any claims against Mr Morrison. Those claims were introduced, in relation to Ren, on 18 September 2007 and, in relation to Olsen, on 27 November 2007. In response to them, Mr Morrison admitted his former shareholding, and the offices which he had held (and the dates between which those offices had been held) in those companies, but otherwise denied the allegations made against him. Broadly speaking, Mr Morrison's Defence (filed on 7 December 2007) stated the position to which he swore on 10 April 2008, that is, one which involved a denial of any involvement in the infringing and unlawful conduct of which LED Technologies complained. The effect of the orders made by the primary Judge was to deny Mr Morrison his costs of instructing his legal representatives, and of preparing and filing a Defence. With respect to her Honour, I cannot appreciate how that result might be justified by the circumstance that it was only on 10 April 2008 that Mr Morrison, for the first time, went on oath as to his involvement in the affairs of which LED Technologies complained. 439 From the filing of Mr Morrison's Defence, LED Technologies was squarely on notice that he denied any involvement in those affairs. By a Reply dated 7 January 2008, it joined issue. It was not until 7 February 2008, apparently, that it sought an indication from Mr Morrison as to his involvement with Ren and Olsen, and a confirmation that he was not involved in the decision to import and sell the Condor lights. It is not apparent why Mr Morrison chose not to respond to that invitation, but I do not think that his failure to do so was a sufficient basis to modify the costs order that would otherwise be made in his favour. LED Technologies' letter of 7 February 2008 seems to bespeak an ignorance on its part of the facts surrounding Mr Morrison's involvement in the importation and sale of the Condor lights, notwithstanding that both versions of the Statement of Claim, and the Reply, carried the professional endorsement required by O 11 r 1B of the Federal Court Rules. It is not for me to canvass the options which might then have been available to LED Technologies, but it was, in my view, in the position of a litigant who, seeing smoke, pursued its claims against another party who had denied that there was fire. Such a litigant presses on at the risk of suffering the usual consequences of its ultimate failure, that is, that it will be obliged to pay the costs of the party who succeeds. 440 I wish to emphasise that we have been obliged to consider this question for ourselves because of the absence of any reasons on the point given by the primary Judge on 24 February 2009. On my view of the matter, Mr Morrison should be regarded as a successful party to whom costs should have been awarded in the normal course. 441 On appeal, it was also contended on behalf of Mr Morrison that he should have been awarded his costs on an indemnity basis to the extent that they post-dated the expiration of the offers of compromise which he made on 18 February and 2 April 2008 and/or the Calderbank offer which his solicitors made on behalf of him and the other individual respondents on 2 April 2008. These contentions were, however, the subject of little or no elaboration in Mr Morrison's submissions on appeal. We were not taken to the provisions of O 23 of the Federal Court Rules under which an entitlement to indemnity costs was said to be available. How O 23 r 11 operates in the context of a respondent/cross-claimant who proposes a single composite basis for the settlement of the whole proceeding against, and by, him may be a matter of some complexity, but we were not addressed upon it. 442 Neither was any attempt made by Counsel for Mr Morrison to persuade us that their client achieved a result at trial not less favourable than that proposed in one or other, or both, of his offers of compromise. On LED Technologies' claim against him, Mr Morrison succeeded, and I have concluded that he ought to have secured an order for his costs. On his cross-claim against LED Technologies, however, Mr Morrison failed, and a conventional costs order was made against him. Taken together, these outcomes do not self-evidently amount to the disposition of the proceeding as a whole in a way that was more favourable to Mr Morrison than proposed in his offers of compromise. As noted above, in his offer dated 18 February 2008, Mr Morrison proposed that LED Technologies should pay 90% of his costs. In the result, he failed to achieve a result as favourable as that proposed in the offer. In his offer dated 2 April 2008, Mr Morrison proposed that there be no order as to costs. On the appeal, no attempt was made by counsel for Mr Morrison to demonstrate that such an outcome would have been less favourable to him, or more favourable to LED Technologies, than that ultimately achieved by both (where LED Technologies paid Mr Morrison's costs of the claim, and Mr Morrison paid LED Technologies' costs of the cross-claim). We were not asked to assume that LED Technologies' costs of defending Mr Morrison's cross-claim would necessarily be no more than Mr Morrison's costs of defending the claim. 443 For the above reasons, I am not persuaded that Mr Morrison ought to have been regarded by the primary judge as entitled to have his costs taxed on an indemnity basis, to the extent that they were incurred after the expiration of one, or of both, of his offers of compromise. There is no basis upon which I would hold that the primary judge erred by not awarding Mr Morrison his costs on an indemnity basis under O 23 r 11 of the Federal Court Rules. 444 As it happens, it appears that, before the primary Judge, counsel for Mr Morrison may have relied not upon O 23 r 11 in their application for indemnity costs, but upon the individual appellants' Calderbank letter of 2 April 2009. In her Honour's reasons given on 24 February 2009, the primary judge made no reference to the Federal Court Rules, and, on appeal, it was not submitted that her Honour was in error in this respect. Her Honour approached the matter as though the only question was whether Mr Morrison was entitled to have his costs taxed on an indemnity basis in accordance with general principles. As noted above, her Honour held that Mr Morrison had not "established any basis for costs to be awarded on an indemnity basis". She referred to a number of first instance judgments, some of which rely upon the judgment of the Full Court in Hamod v New South Wales (2002) 188 ALR 659. In that case, Gray J said (with the assent of Carr and Goldberg JJ) (188 ALR at 665 [20]): Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. Her Honour appears not have been referred to the judgment of the Full Court in CGU Insurance Ltd v Corrections Corp of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173. With respect to the entitlement of the maker of a rejected Calderbank offer to his or her costs on an indemnity basis, the Full Court said (at [75]): From the tenor of claims which have come before the court in recent years, there appears to be a view abroad that the failure of a party who has rejected a Calderbank offer ultimately to achieve a better outcome than provided for in the offer leads to a presumptive entitlement to indemnity costs with respect to the period subsequent to the offer. Such a view would be mistaken. Where a moving party (including a cross-claimant) offers to settle for a sum which is less than he or she eventually achieves at trial, there is a presumptive entitlement to indemnity costs under O 23 r 11(4) of the Federal Court Rules. However, where recourse is not had to the O 23, but reliance is placed upon the court's general discretion, it is necessary for the party seeking indemnity costs to demonstrate that the other party's refusal of the Calderbank offer was unreasonable: Black v Lipovac (1998) 217 ALR 386 at 432; Maniotis v JH Lever & Co Pty Ltd (No 2) [2006] FCAFC 28. It is not sufficient that the offer was a reasonable one: Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121 at 128 [35]; Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2008] FCA 42, [11]. In considering this question in a particular case, the matter of unreasonableness will be judged by reference to the circumstances facing the offeree at the time of the offer. While the eventual outcome in the case may go part of the way in this regard, there is no presumption that ultimate success in the proceeding for the offeror necessarily renders the offeree's rejection unreasonable. 445 In the present case, the primary judge observed that Mr Morrison's application for indemnity costs was "not actively pursued at the hearing". On appeal, no criticism was ventured of this observation. No attempt was made to demonstrate that the exercise of her Honour's discretion miscarried in relevant respects. For my part, I am quite unable to see how the rejection of the Calderbank offer made on 2 April 2008 by the individual appellants might have been regarded as any kind of a basis for a special costs order in favour of Mr Morrison. That offer did not propose a settlement as between LED Technologies and Mr Morrison alone. It was a single, undifferentiated, offer which would have required LED Technologies to agree to have its claim against Messrs Keller and Armstrong dismissed. On no view was it unreasonable for LED Technologies to have rejected that offer. 446 Likewise, to the extent that it might be thought that the offers of compromise under O 23 r 11 also performed service for the purposes of the court's general discretion to award indemnity costs, because of the costs provisions proposed in those offers LED Technologies' rejection of them could not be regarded as unreasonable. It was not, for example, unreasonable of LED Technologies to have rejected a proposal that would have required it to abandon any claim for the costs which it presumptively had in relation to the preparation of its defence to Mr Morrison's cross-claim, simply because Mr Morrison elected not to pursue his own costs of defending LED Technologies' action. No attempt was made to demonstrate that, at the time when the offers were made, LED Technologies would have been acting unreasonably by refusing to take the view that its own costs on the cross-claim would be no more than Mr Morrison's costs on the claim. 447 In the result, I would vary the orders made by the primary Judge to the extent only of giving Mr Morrison his costs of defending the applicant's claim in the proceeding generally, but I would reject his application to have those costs taxed on an indemnity basis. There has, of course, been no challenge to so much of the orders made by the primary Judge as required Mr Morrison to pay LED Technologies' costs of his unsuccessful cross-claim. I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.