Sony Computer Entertainment Australia Pty Ltd v Turner

BETWEEN: SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LIMITED &

REASONS FOR JUDGMENT 1 The Applicants seek relief in the proceedings for infringement of certain trade marks, and for misleading and deceptive conduct in breach of ss 9, 10 and 12 of the Fair Trading Act 1999 (Vic), the relief sought being declarations, injunctions and damages. 2 The application and statement of claim were filed in Court on 27 June 2001 and were served on the Respondent on 30 July 2001. No appearance or defence has ever been filed by the Respondent. 3 These proceedings first came before me for mention on 9 August 2001, when I made orders and directions inter alia as to filing and service of a defence and affidavits by the Applicants by 25 October 2001. The proceedings were then stood over for further directions on 15 November 2001. All such orders and directions were made in the absence of the Respondent, who did not appear at the hearing or file a notice of appearance. The Applicants' solicitors notified the Respondent by letter of the directions so made, and of the next date for hearing further directions. 4 At the second directions hearing on 15 November 2001, the absence of any defence filed by the Respondent led to the proceedings being further stood over to 13 December 2001, on which date it was foreshadowed that the Applicants would seek on that occasion final relief pursuant to Order 10 Rule 7 of the Federal Court Rules. By letter dated 4 December 2001, the Applicants' solicitors notified the Respondent that default judgment would be sought against him on 13 December 2001. A notice of motion returnable on 13 December 2001 and seeking orders numbered 1 to 11 was filed on 4 December 2001 and personally served on the Respondent. 5 On 13 December 2001, the Respondent again failed to appear, and I ordered that the proceedings be listed for hearing on 6 February 2002. I was nevertheless satisfied that the Respondent was duly notified beforehand of the hearing on 13 December 2001. 6 On 6 February 2002, the Respondent again failed to appear and counsel for the Applicants proceeded to read the affidavit evidence directed to establishing the causes of action referred to in [1] above. I was satisfied that the Respondent was duly notified of the hearing on that hearing day. Included amongst the affidavits provided by the Applicants was one made by Mr O'Keefe, solicitor of Allens Arthur Robinson, who deposed to a telephone conversation conducted with the Respondent on 5 February 2002, in the course of which the Respondent said to him inter alia "… I mean, obviously I'm guilty as [expletive], so it's just a matter of how much I've got to pay I suppose". I was satisfied that the affidavit evidence established and made good the causes of action pleaded against the Respondents which I have earlier outlined. I granted the injunctive relief sought in the form of orders numbered 1 to 5 in the list of orders earlier notified to the Respondent, but stood over for hearing on 19 February 2002 for further consideration orders for certain additional consequential relief also notified to the Respondent, and in particular orders that the Respondent: (i) state the time period in which all such sales of infringing software were made by the Respondent; (ii) further state the gross sales of the Respondent of all infringing software; (iii) further state the gross profit of the Respondent derived from sales of infringing software; (iv) annex or exhibit copies of business records of the Respondent which record the calculation of the said gross profit; (v) further state the net profit of the Respondent derived from sales of infringing copies; and (vi) annex or exhibit copies of business records of the Respondent which record the calculation of the net profit. 7 The Applicants' solicitors duly notified the Respondent by letter of the orders so made, and in addition that on the adjourned hearing date of 19 February 2002, further orders in relation to outstanding issues of pecuniary relief would be sought. 8 After hearing argument from counsel for the Applicants on the adjourned hearing date, the Respondent once again not having appeared in Court, and further in light of authorities cited to me, I made the further orders by way of consequential relief set out in [6] above. 9 The authority upon which I principally relied in making the additional orders was Sony Computer Entertainment v Hinson [2000] FCA 1290, in which it had been first found that an individual had infringed trade marks in Sony computer software. Lehane J ordered that to assist the applicants in the proceedings to make an election as to the form of pecuniary relief they might seek, it was appropriate to order the respondent to file and serve an affidavit by way of discovery in aid of the claim for pecuniary relief. In so doing, his Honour said by way of explanation as follows (at [13]): "In order to make an election as to what pecuniary relief they might seek, the second applicant, at least, is entitled in my view to an affidavit of the kind sought: that is, one which will reveal the extent of the respondent's dealings with infringing goods and the pecuniary consequences of those dealings. Evidence of that kind is calculated to assist the determination of proceedings for pecuniary relief and, indeed, to assist the Applicants in determining whether this is a case in which it is appropriate to proceed with the claim for relief of that nature. I also think that it is appropriate, infringement being established, that an order for delivery up of infringing goods be made." 10 Prior to the judgment of Lehane J in Hinson, Madgwick J in Sony Computer Entertainment Australia Pty Limited v Reilly [1999] FCA 1694 had made similar orders as to both gross profits and net profits as are now proposed, as subsequently did Hely J in Sony Computer Entertainment Australia Pty Limited v Busselmann [2000] FCA 805, though in neither case were reasons given, doubtless because their Honours were respectively of the view that there already existed judicial precedent for the granting of such relief (such as that in Hinson). Subsequently to the foregoing cases, in Sony Computer Entertainment Australia Pty Ltd and Kabushiki Kaisha Sony Computer Entertainment v Stirling [2000] FCA 784, Emmett J stated as follows: "I will also make orders restraining further infringement and contravention and orders for discovery sufficient to enable the applicants to make an election as to whether they wish to proceed for recovery of damages or for an account of profits." It may well be the case that the additional orders I have made in the present proceedings have the effect of providing the opportunity for such an election to here be made. However orders to such effect would not offend the principle earlier discussed by Lindgren J, in the context of proceedings for breach of copyright in LED Builders Pty Ltd v Eagle Homes Pty Ltd (1996) 70 FCR 436, that a party entitled to relief in such circumstance is not entitled to be "informed" by the Court, by means of further reasons for judgment in the nature of an advisory opinion, of the amount which it would obtain as damages and profits respectively, so that that party could elect for that sum which would turn out to be the most advantageous. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Solicitor for the Applicants: Allens Arthur Robinson