Venus Adult Shops Pty Ltd v Fraserside Holdings Ltd [2006] FCAFC 188 | Case summary

By making copies of Calvista films and parallel imported films Venus infringed s 101(1) of the Copyright Act. 2. By making copies of the "Slick Artwork" and "Disc Artwork" of the Calvista films and the imported films Venus breached s 36(1) of the Copyright Act. 3. Venus had breached s 103 of the Copyright Act by selling or exposing for sale or hire the imported Private Film DVDs. 4. The Directors (in which his Honour included Mr De Prima) had accessorial liability for breaches of ss 36, 101 and 103 of the Copyright Act. 14 Calvista was aware of its rights as sole distributor of Private Films in Australia. By advising Mr Vassallo that it was not concerned with imported "European or American Privates" it told Venus that it would not enforce its rights with respect to them. His Honour held that it would be unconscionable to allow Calvista to enforce its rights with respect to the sale of parallel imported Private Films during the period in which it had made no complaint. On this basis Calvista would not be entitled to damages under s 103 of the Copyright Act. The correctness of this conclusion and the reasoning by which it was reached were not in issue on this appeal. 15 Venus and the Directors had accepted from the outset that the case was essentially about assessment. His Honour identified two matters raised by them in connection with the damages question:
1. The acquiescence of Calvista in the sale of parallel imported Private Films as to which he had found for Venus.
2. The illegality of the sale, exchange and trade of "adult films" in New South Wales and Queensland. He also referred to a submission put by Venus that Calvista knew that Venus was selling its product illegally in New South Wales and Queensland and that therefore it was aiding and abetting a breach of the laws of those States. 16 After some discussion of cases in which copyright protection had been refused on public policy grounds, his Honour said, of the Private Film DVDs provided to the Court as exhibits and collected in the process of delivery up, that (at [41]): 'The sale or distribution of these DVDs in New South Wales and Queensland is illegal. But that is not so in respect of classified material in the Northern Territory or the Australian Capital Territory and it would appear that it is not illegal in the source countries of the parallel imported product.' The latter qualification informed his observation that a court could not act on public policy grounds on mere whim. Where no witnesses were called to allege artistic merit the court should look at the attitude towards the product in Australia and overseas. He observed that the classified Calvista product was "acceptable in at least two territories of this Commonwealth". The unclassified material was acceptable in countries overseas "… containing hundreds of millions of people." He could not say that the works were so grossly immoral or pornographic that they should lose the protection of the Copyright Act. There does not appear to have been any contention raised in the pleadings that copyright protection should be denied to Private Films on grounds of their immorality or pornographic character. 17 His Honour said (at [41]): 'The fact is that from the evidence which I have received in this case and from articles in the press including one in the Sydney Morning Herald only a short while ago there is very little will to enforce the relevant provisions of the Classification (Publications, Films and Computer Games) Enforcement Act 1995 (NSW).' He then expressed a concern that the effect of declining to grant relief would be to give free reign to any pirate who wished to copy and publish the material. The relevance of his findings in this respect and their factual bases were not apparent. His Honour went on to say (at [42]): 'I have decided that I will not make a finding that this material constitutes work in respect of which copyright protection should be denied. The applicants are therefore entitled to protection of their copyright and the benefits that ss 115 and 116 of the Act bestow upon them.' The issue of refusal of copyright protection on public policy grounds was not before his Honour. The questions before him, raised in the points of defence, were whether the sale of the Private Film DVDs was contrary to law in any parts of Australia and, if so, what effect the illegality of the product in those parts would have on the amount of conversion and additional damages to be assessed. 18 In relation to the alleged sale of the products in New South Wales, the only evidence before the Court was that the relevant sales were made by Venus and not by Fraserside or Calvista. His Honour rejected the contention that Fraserside and Calvista were disentitled to damages because they had aided and abetted the commission of offences by Venus. Venus had not shown there was an offence in New South Wales and Queensland or Australia of aiding and abetting a breach of the relevant Classification Enforcement Acts. This is a surprising conclusion given the general provisions of the criminal law in each State and Territory relating to accessorial liability. He also suggested that such an accessorial offence would have to be proved "beyond all reasonable doubt". This is not a requirement in civil proceedings. His Honour found that, in any event, breach of a relevant State Classification Enforcement Act by sale of Calvista product, purchased from Calvista, was not the subject of the litigation. He said (at [43]): 'The sales complained about in these proceedings are sales of parallel imported product and copied product. There has been no evidence that Fraserside, the primary copyright owner, has been involved in any of this activity at all. To the extent that Calvista acquiesced in the respondents' sale of parallel imported material and that such sale was illegal under both Commonwealth and State Law because it was not classified, a suggestion of aiding and abetting might be justified. But this is a long way from proof of a specific offence.' His Honour rejected the submission by Venus that its own illegality in relation to the sale of private films constituted an effective defence to a claim for damages for infringement of copyright. 19 His Honour found difficulty in determining what amount of damages could be awarded to Fraserside and what amount to Calvista. He assessed damages on the basis that he should determine a global amount under each of the headings claimed and indicate the extent to which he had reduced it because of the acquiescence of Calvista in relation to the sale of imported infringing DVDs. He said (at[45]): 'The applicants can then agree the apportionment of damages between themselves and if they are unable to do that will no doubt make an application to this or some other court on the basis of their own internal arrangements.' 20 Fraserside and Calvista had elected to claim nominal damages of $1 under s 115(2). They did this against the possibility that s 116 conversion damages were only available if s 115 damages were also awarded. They contended that any inability to sell the infringing material because of the provisions of the relevant film classification laws in New South Wales and Queensland was not a defence to a claim for conversion damages. They argued that the Court should make the strongest assumption against Venus as to the value of the DVDs. They submitted that the evidence of Mr Gordon indicated an estimated 1,450 "converted Private films" had been sold or swapped over 18 months. Swapping represented a cost of $20 per DVD to the swapper. They argued that, on the basis of Mr Gordon's evidence, the average sale price of a DVD should be assessed at $60 with a reduction of $13 to take into account the fact that two thirds of the stock was acquired for $20 and the rest by way of swaps. They argued that this yielded conversion damages, under s 116, of approximately $68,000. 21 In written submissions on quantum made at trial Fraserside and Calvista set out a table showing an estimated figure for conversion damages of $70,934. This was based upon estimated sales of 80 Private Films per month over a period of 19 months from May 2003 to December 2004. The alternative figure of $68,000 quoted in his Honour's judgment relied upon an 18 month period. That figure was apparently advanced by Fraserside and Calvista in oral submissions. 22 Mr Gordon's evidence on the matter was described by his Honour as "opaque and contradictory". His evidence, that 5% of his turnover came from Private Films was directed to what his Honour called "legitimate Private films", that is Calvista Private Films and parallel imports. His Honour did not think that Mr Gordon was talking about the Private Films which had been copied by Venus. On this basis he formed the view that the amount of $68,000 proposed by Fraserside and Calvista was too generous. He said (at [50]): 'It should not substantially affect any damages which I award under s 115(4) but I will reduce the conversion damages which I intend to award from $80,000 to $65,000 to take into account the second respondent's acquiescence in the sale of the parallel imported films.' It is not apparent how these figures were arrived at. His Honour held that in the special circumstances of the case, damages under s 116 were appropriate and should be awarded "over and above the s 115(2) damages of $1.00 against each of the first to fourth respondents…". 23 His Honour considered the claim of additional damages under s 115(4) of the Copyright Act. He found that the conduct of Venus and their Directors was flagrant. They had deliberately set aside batches of Private Film DVDs to use as a library in order to copy them and keep their stock fresh. They knew that the copying was illegal and they knew that it was rampant in their industry. Any reluctance they had had about copying DVDs only lasted up to the point from which they were able to make copies cheaply and without difficulty. 24 His Honour reflected adversely upon the conduct of Venus and their Directors in connection with the proceedings. They had failed on a number of occasions to comply with court orders particularly those for delivery up. Deadlines were seldom met. His Honour would have awarded the applicants the sum of $100,000 under s 115(4) in addition to the conversion damages. However he reduced that sum to $85,000, again because of the acquiescence of Calvista in relation to the sale of imported films. He declined to make a declaration as to infringement. 25 On 18 August 2005 his Honour made orders to give effect to his judgment. These included injunctions, delivery up orders, an award of damages and costs. Orders 9 and 10 are in issue in this appeal: '9. There be judgment for the Aplicants (sic) against the first, second, third and fourth respondents in the sum of $150,000 comprised of (a) $65,000 in damages pursuant to s 116 of the Copyright Act 1968 (b) $85,000 in additional damages pursuant to s 115(4) of the Copyright Act 1968, plus interest on the s 116 damages payable by the first, second, third and fourth respondents to be calculated for the period from 1 July 2004 up to and including the day on which the s 116 damages and interest are paid at the rate of 10.5% per annum as prescribed by Order 35 Rule 8 of the Federal Court Rules. 10. The first, second, third and fourth respondents to pay the Applicants' costs (a) as agreed; or (ii)(sic)failing agreement, in an amount equal to 80% of the Applicants' costs taxed in accordance with the Federal Court Rules.' A late attempt to amend 26 In par 30 of their points of claim filed in the Federal Magistrates Court, Fraserside and Calvista alleged: 'By reason of the infringements set out in paragraphs 19 to 29 above, each of the Applicants has suffered, and is likely to suffer, loss and damage.' 27 In the points of defence filed by Venus and the Directors, they responded to par 30 thus: '19. So far as paragraph 30 makes an allegation against each of them respectively, each of the First, Second, Third, Fourth and Fifth Respondents: (a) Denies paragraph 30 and says that the First and Second Applicants have not and are not likely to suffer loss and damage, including on the basis that the sale, exchange and trade of Private Films, Imported Copies, Other Imported Copies and Counterfeit Copies is illegal in New South Wales pursuant to section 6 of the Classification (Publications, Films and Computer Games) Enforcement Act 1995 (NSW) and is illegal in Queensland pursuant to section 15 of the Classification of Films Act 1991 (Qld); and (b) In further answer to paragraph 30 says that damages should be denied as the sale, exchange and trade of Private Films, Imported Copies, Other Imported Copies and Counterfeit Copies is illegal in New South Wales pursuant to section 6 of the Classification (Publications, Films and Computer Games) Enforcement Act 1995 (NSW) and is illegal in Queensland pursuant to section 15 of the Classification of Films Act 1991 (Qld).' The text of par 19(b) was repeated in par 22(b) of the points of defence. That paragraph was a response to the claim for additional damages in pars 32 and 33 which relied, in par 33, on the matters set out in par 30 and additional matters. 28 The hearing commenced on 23 May 2005. It proceeded on 24 May and on 8 and 9 June 2005 and concluded on 21 June 2005 with the last written submission being filed on 24 June 2005. On or about 9 June 2005 Venus and the three directors sought to amend the defence. The proposed amendment was to par 19, to add a subparagraph 19(c) in the following form: 'In further answer to paragraph 30 says that damages should be denied because many Private films on DVD distributed for sale in Australia are not classified and/or display incorrect or misleading classification labels.' 29 When the amendment was foreshadowed his Honour required a notice of motion for leave to amend to be filed along with the evidence to be relied upon to prove the additional matters pleaded. His Honour's orders required the filing of: '… an affidavit setting out in full by reference to documents and in the form of a schedule each and every alleged breach of the requirement to classify films distributed on DVD by: name of film nature of alleged breach proof of non classification' The requisite motion was filed on 16 June. In addition, two affidavits sworn on 16 and 18 June 2005 by Tony Barber, the solicitor for Venus and the Directors were filed. 30 Mr Barber's affidavit of 18 June 2005 exhibited a table setting out the names of various films, their classifications and the features and extras to be found on the DVD versions. He also set out in the table the basis upon which it was said that the non-classification of the DVDs was proven and the nature of the alleged breach involved in selling or offering them for sale. The substance of the argument seemed to be that when a VHS film was turned into a DVD it had additional features offered which would have required it to be reclassified under the Commonwealth Classification Act and that, absent such reclassification, its resale was illegal, at least in New South Wales and Queensland. 31 The motion to amend was dismissed by his Honour on 21 June 2005. He referred to the affidavits sworn by Mr Barber. In an annexure to Mr Barber's affidavit of 16 June 2005 there were extracts from the classification database of the Office of Film and Literature Classification which could be correlated with the film titles contained in the schedule to the affidavit. Yet counsel for Venus and the Directors admitted that the vast majority of the film titles had not been distributed by Calvista in Australia. They were imports or copies of imports. Secondly, in relation to the 12 titles that were directly distributed by Calvista, there was no real evidence of the allegations made. Mr Barber had not deposed to his knowledge that the DVDs may or may not run as long as the original VHS or might contain additional material. He had obtained that information from the box and compared it with the information on the classification database advanced search. 32 There were further problems with the evidence. The proposed amendment to the defence relied upon an assertion that a film classified in a VHS format could not lawfully be issued as a DVD, without reclassification, unless in exactly the same format. It was argued that the addition of trailers of other films or interviews with actors of the type now common in DVDs would have required the DVDs to be reclassified. No basis for this assertion was shown to his Honour. On the other hand, he was referred by counsel for Fraserside and Calvista to the Commonwealth Classification Act setting out basic requirements for the classification of films. These did not support the argument for Venus. 33 While sensible of the requirement laid down by the High Court in State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146that amendment should usually be permitted where there is no prejudice to the other side other than one which could be cured by costs, his Honour said it was equally clear that an amendment must have some prospect of success if it was to be allowed. Although counsel for Venus said that the DVDs were in evidence and although he obtained a concession from a witness, Mr Newnham, that they may have to be reclassified in the event that they are taken from VHS masters and additions made, his Honour was not satisfied that an admission by a lay witness could bind the Court as to the law. His Honour said (at [7]): 'I take the view that if I was to allow the amendment on the basis of the evidence currently produced it would be bound to fail. To now adjourn the matter yet again to permit the respondents to put their case in order so that the appropriate evidence, if it exists, can be brought is not in the interests of justice given, in particular, that the question of illegality is still an issue in the proceedings and will have to be considered by the court.' He declined to allow the amendment. The issues on the appeal 34 There were 11 grounds of appeal. They are referred to in more detail below as each is considered. The principal issues arising from them and on which the appeal turns can be identified as follows:
3. Whether the magistrate erred in refusing the proposed amendment to the points of defence and limiting cross examination on the legality of the sale of the DVDs.
4. Whether the magistrate erred in his approach to quantification of damages under s 116 and of additional damages under s 115(4) particularly having regard to the content of the works and statutory provisions affecting their distribution and sale. Statutory framework - The Copyright Act 1968 (Cth) 35 Part IV of the Copyright Act is concerned with copyright in subject matter other than works which includes cinematograph films. Section 86 defines the nature of copyright in cinematograph films thus: 'For the purposes of this Act, unless the contrary intention appears, copyright in relation to a cinematograph film is the exclusive right to do all or any of the following acts: (a) to make a copy of the film; (b) to cause the film, in so far as it consists of visual images, to be seen in public, or in so far as it consists of sound, to be heard in public; (c) to communicate the film to the public.' Section 101(1) provides: 'Subject to the Act, a copyright subsisting by virtue of this Part is infringed by a person who, not being the owner of the copyright and without the licence of the owner of the copyright, does in Australia or authorises the doing in Australia of, any act comprised in the copyright.' Section 102 includes in the definition of infringing conduct with respect to subject matter other than works the importation of articles for the purposes of sale or hire where such articles, if made in Australia by the importer would have constituted an infringement of copyright. Section 103 covers sale or hire of an article, the making of which constituted an infringement of copyright. Each provision conditions each definition of infringement upon the fact that the importer, vendor or hirer, as the case may be, knew or ought reasonably to have known, that the making of the article would have or did constitute an infringement as the case may be. 36 Remedies for infringement of copyright applicable to works and subject matter other than works are provided by ss 115 and 116 of the Act. Section 115 provides: '(1) Subject to this Act, the owner of a copyright may bring an action for an infringement of the copyright. (2) Subject to this Act, the relief that a court may grant in an action for an infringement of copyright includes an injunction (subject to such terms, if any, as the court thinks fit) and either damages or an account of profits. (3) Where, in an action for infringement of copyright, it is established that an infringement was committed but it is also established that, at the time of the infringement, the defendant was not aware, and had no reasonable grounds for suspecting, that the act constituting the infringement was an infringement of the copyright, the plaintiff is not entitled under this section to any damages against the defendant in respect of the infringement, but is entitled to an account of profits in respect of the infringement whether any other relief is granted under this section or not. (4) Where, in an action under this section: (a) an infringement of copyright is established; and (b) the court is satisfied that it is proper to do so, having regard to: (i) the flagrancy of the infringement; and (ia) the need to deter similar infringements of copyright; and (ib) the conduct of the defendant after the act constituting the infringement or, if relevant, after the defendant was informed that the defendant had allegedly infringed the plaintiff's copyright; and (ii) whether the infringement involved the conversion of a work or other subject-matter from hard copy or analog form into a digital or other electronic machine-readable form; and (iii) any benefit shown to have accrued to the defendant by reason of the infringement; and (iv) all other relevant matters; the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances. And s 116: (1) The owner of the copyright in a work or other subject-matter may bring an action for conversion or detention in relation to: (a) an infringing copy; or (b) a device (including a circumvention device) used or intended to be used for making infringement copies. (1A) In an action for conversion or detention, a court may grant to the owner of the copyright all or any of the remedies that are available in such an action as if: (a) the owner of the copyright had been the owner of the infringing copy since the time the copy was made; or (b) the owner of the copyright had been the owner of the device since the time when it was used or intended to be used for making infringing copies. (1B) Any relief granted by a court in an action for conversion or detention is in addition to any relief that the court may grant under section 115. (1C) A court is not to grant any relief to the owner of the copyright in an action for conversion or detention if the relief that the court has granted or proposes to grant under section 115 is, in the opinion of the court, a sufficient remedy. … Subsections (1D), (1E) and (2) are not material for present purposes. 37 There is no global saving of common law by the Act although s 9(3) provides: 'This Act does not affect the operation of the law relating to breaches of trust or confidence.' Statutory framework - The National Classification Scheme - Commonwealth, New South Wales and Queensland Statutes 38 As the legality of the sale of the Private Films under State and Territory laws was raised, it is convenient to outline the way in which those laws operate. The classification and censorship of films in Australia is administered under a National Classification Scheme. This is a co-operative arrangement between the Commonwealth, the States and the Territories. Under the agreement the Commonwealth is responsible for the classification process and the States and Territories for the enforcement of the Act, including restrictions on the sale of films. 39 The Classification (Publications, Films and Computer Games) Act 1995 (Cth) (Commonwealth Classification Act) expressly provides for the classification of publications, films and computer games for the Australian Capital Territory (s 3). The Commonwealth has used the Territory's power to set up a regulatory structure for the classification process. The classifications determined under the Commonwealth Classification Act are enforced under separate Acts of the States and Territories within their respective jurisdictions. 40 The Commonwealth Classification Act states, in s 3, that it is: '… intended to form part of a Commonwealth/State/Territory scheme for the classification of publications, films and computer games and for the enforcement of those classifications.' As a note to the section observes, "Provisions dealing with the consequences of not having material classified and the enforcement of classification decisions are to be found in complementary laws of the States and Territories." 41 The Commonwealth Classification Act, when originally enacted, set out the National Classification Code in a schedule. By s 6 of the Commonwealth Classification Act, the Code can be amended with the agreement of the Commonwealth Minister and each Minister from the participating States and Territory. The Act established a Classification Board and a Review Board. The classification of publications, films and computer games is to be made by the Board in writing, on application (s 10(1)). The Board is required to take into account, in making a classification decision, a number of matters including: '(a) the standards of morality, decency and propriety generally accepted by reasonable adults;' 42 The Commonwealth Classification Act provides for classification guidelines to be made by the Commonwealth Minister with the agreement of each State and Territory Minister. The guidelines are to assist the Board in applying the criteria in the Code (s 12). A film can be called in for classification by the Director of the Board who can require the publisher to submit an application for its classification (s 23(a)). Although this power is expressed to apply to films being published in the Australian Capital Territory, a like power is conferred upon the Director by the State Acts in relation to films published in the States. The Act provides for a review of a decision of the Board by the Review Board. 43 Section 7(2) of the Commonwealth Classification Act sets out the different types of classifications for films in what is called "ascending order". They are: G General PG Parental Guidance M Mature MA 15+ Mature Accompanied R 18+ Restricted X 18+ Restricted RC Refused Classification The National Classification Code in Item 3 sets out the criteria for the various film classifications. Relevantly for present purposes the criteria for the classifications RC and X 18 + are as follows: '1 Films that: (a) depict, express or otherwise deal with matters of sex, drug misuse or addiction, crime, cruelty, violence or revolting or abhorrent phenomena in such a way that they offend against the standards of morality, decency and propriety generally accepted by reasonable adults to the extent that they should not be classified; or (b) describe or depict in a way that is likely to cause offence to a reasonable adult, a person who is, or appears to be, a child under 18 (whether the person is engaged in sexual activity or not); or (c) promote, incite or instruct in matters of crime or violence. 2 Films (except RC films) that: (a) contain real depictions of actual sexual activity between consenting adults in which there is no violence, sexual violence, sexualised violence, coercion, sexually assaultive language, or fetishes or depictions which purposefully demean anyone involved in that activity for the enjoyment of viewers, in a way that is likely to cause offence to a reasonable adult; and (b) are unsuitable for a minor to see.' 44 The State Acts provide for the enforcement of the restrictions attaching to the various classifications. The Classification (Publications, Films and Computer Games) Enforcement Act 1995 (NSW) (NSW Act) provides, inter alia, in s 6: 'A person must not sell or publicly exhibit: (a) a film classified RC or X 18+, or (b) an unclassified film.' 45 The enforcement of restrictions on the sale of classified films in Queensland is done under the Classification of Films Act 1991 (Qld) (Queensland Classification Act). That Act contains a definition of "objectionable film" as: '(a) a film classified X 18+ or RC; or (b) a film that - (i) is not classified, or has become unclassified under the Commonwealth Act; and (ii) if it were classified, would be classified X 18+ or RC.' 46 Section 39 of the Queensland Classification Act provides: 'A person must not display for sale or sell, or attempt to display for sale or sell, an objectionable film….' 47 The Classification (Publications, Films and Computer Games) (Enforcement) Act 1995 (ACT) (ACT Act) contains a list of definitions in a dictionary at the end of the Act. It defines the term "classified" as "classified under the Commonwealth Act, and includes reclassified under that Act". The word "film" is as defined under the Commonwealth Act. It is an offence under s 16 of the ACT Act to sell an unclassified film or a film refused classification. By s 17 a person commits an offence if the person sells a classified film "in a form other than the form in which the film is classified". It is also an offence to possess unclassified films or films classified RC at any premises where classified films are sold (s 20). 48 There is a general power in the relevant ACT Minister to exempt a film from specified provisions of the Act (s 55(1)). There are also powers in Pt VI of the ACT Act for the grant of licences to sell or copy X 18+ films. The Act establishes the office of a Registrar with licensing power. Interestingly, one of the matters to which the Registrar must have regard in determining whether to grant a licence is whether the applicant has infringed copyright within the meaning of the Copyright Act in relation to a cinematograph film. 49 The Classification of Publications, Films and Computer Games Act (NT) adopts the classification regime under the Commonwealth Act. Section 45 imposes a prohibition on the sale of a film unless it is classified and is sold under the same title as that under which it is classified and in the same form, without alteration or addition. There is also a prohibition on the possession of an unclassified film that would, if classified, be classified RC or R 18+, or possession of a film classified RC with the intention of selling or exhibiting it (s 50C). If a film is classified X 18+ it can only be displayed in a restricted publication area. A person cannot sell or hire the film to a person who has not made a direct request for it and cannot sell or hire it unless it was contained in a package made of opaque material (s 49). 50 There were amendments to the Commonwealth and State Acts in 2004 which introduced the classification X 18+ in lieu of X 18. The Act, as amended in 2004, has been outlined in the preceding summary. The amendments are not material for present purposes. Refusal to permit cross-examination on illegality - ground 1 51 Ground 1 of the grounds of appeal was as follows: '1. His Honour erred by upholding the second respondent's objection to David Newnham for the second respondent being questioned and required to answer questions in cross examination on the illegal or possible illegal conduct of the second respondent.' 52 In cross examining Mr Newnham, Calvista's general manager, counsel for Venus put to him that Calvista imported DVDs of adult films and that they were stored in Sydney or Melbourne. This drew an objection on the ground that it was irrelevant. The question was supported on the basis that it was "relevant to the question of illegality". This was a reference to prohibitions on the sale of such films in some places. The argument, as recorded in the transcript, was not easy to follow. It proceeded on a common assumption that the sale of the Private Film DVDs in New South Wales and Queensland would have been in breach of the State Classification Enforcement Acts. Counsel for Venus took the position that, on a royalty based claim, the only relevant notional sale from Calvista to Venus of the DVDs would necessarily have been in breach of State law. Counsel for Fraserside and Calvista argued that the relevant transactions between them and Venus could have taken place in the ACT and would have been lawful. The learned magistrate at one point said "I'll allow the question". This elicited another round of argument. Counsel sought to canvass his Honour's ruling. The position was confused in the transcript by the fact that the submissions made by counsel for Fraserside and Calvista were incorrectly attributed to the magistrate. That error was compounded when the same counsel was subsequently misdescribed as counsel for Venus. 53 Following the reopening of argument by counsel for Fraserside and Calvista, counsel for Venus was invited by his Honour to formulate the question which he wanted to put. He said: 'What I want to explore with this witness are the activities of his company selling in various States around Australia, including New South Wales and Queensland. And it doesn't just go to the question of whether or not there's been a breach of copyright, it goes to the general question of damages, the type of industry, the regulation in the industry, all sort of matters your Honour will have to take into account when determining if your Honour's (sic) determines there's been a breach, what damages, if any, should be applied. I intend to lead evidence about the fact this is a large and unregulated industry which has been founded on illegal copies for many years.' His Honour then said, after a further short exchange: 'Illegal activity seems to be allegedly illegal because of a breach of these two Acts, Queensland and New South Wales, they're different things. I'm sure Mr Cobden won't - well, he may do, but he may have more difficulty in objecting to questions about the way in which the industry is run, but I don't know why - I don't know why, I suppose and I was going let (sic) her hear it because - I'm sorry, I was going to ask the question because I didn't really see what relevance it all was, but it was all wasting an awful lot of time having an argument about it. Mr Cobden seems to think that it will put his client in a difficult position and I suppose it possibly could. So, if the question really doesn't have very much relevance, I just don't see how it does.' 54 Counsel for Venus was in turn misdescribed in the transcript as counsel for Fraserside and Calvista. He asserted that it was relevant to determine whether or not Venus should be penalised (under s 115(4)) for acting in flagrant disregard of the Copyright Act while those suing it had been acting "in flagrant disregard of the Act in six States in Australia". He also made a reference to equity and clean hands. 55 His Honour moved finally to a ruling, the reverse of that which he had made immediately before the reopening of the debate by counsel for Fraserside and Calvista. He said: 'I was prepared to hear the answers in order to get a move on in the case and I could easily disregard it if in the end it didn't prove relevant. I was going to admit it subject to relevance, but it's become rather important; I can see how it can become important and I think probably I can't - I don't think it is really relevant. You can ask the other questions or just ask questions and Mr Cobden will no doubt get up, argue at any - each and every time, but that question relating to that, no, sorry. So I won't allow that question. Next question.' Counsel for Venus then continued with his cross-examination of Mr Newnham. 56 The ruling made by the magistrate did not express with clarity the class of evidence excluded nor the basis upon which it was excluded. Nevertheless it was apparent that counsel for Venus was not permitted to cross-examine Mr Newnham on matters relevant to the unlawfulness of reselling Private Film DVDs in the States and Territories of Australia. Underpinning the proposed cross-examination was the assumption that the Private Films in respect of which Venus had infringed copyright could not lawfully be sold in New South Wales or Queensland. 57 The issue re-emerged when counsel for Venus cross-examined Mr Newnham about the fact that Fraserside and Calvista imported Private Films in VHS video format and recorded them onto DVDs, some of which had additional material such as trailers included in them. Counsel put to Mr Newnham that when Fraserside and Calvista had a title on VHS which had been classified and released the same title on DVD they did not seek reclassification of the DVD film. The objection was raised that the question took the court back into "illegality territory". Counsel for Venus submitted that it was relevant to the determination of additional damages under the category of "other relevant matters" in s 115(4) of the Copyright Act. In the event, the magistrate would not allow counsel to further question the witness on the point. This appears to have been related, at least in part, to the necessarily imprecise nature of the answers that could be given by the witness. His Honour left it open to counsel to bring in material subpoenaed from the Commonwealth Classification Board and make the point "by tender". 58 Another line of attack advanced by Venus in argument about the cross examination was that, by supplying product whose sale or supply would be unlawful in New South Wales and Queensland, Fraserside and Calvista aided and abetted Venus in relation to the commission of unlawful acts knowing full well that the products supplied would be offered for sale in those States. 59 The magistrate, in disallowing the questions put to Mr Newnham, also seemed to rely, in part, upon the proposition that there was no necessary connection between the infringement of copyright alleged against Venus and any infringing notional sale of Private Film DVDs, contrary to State or Territory laws, by Fraserside and Calvista. No such connection seems to have been identified in the case beyond a generalised "clean hands" argument. Let it be assumed that a Private Film DVD copied by Venus was classified X 18+ under the Commonwealth Act. It did not follow that it would have been unlawful to sell or supply that film in all States or Territories of Australia. The parties seem to have assumed that any of the Private Film DVDs could be sold or supplied in the ACT or the Northern Territory. Somewhat confusingly it was common ground on the appeal that unclassified films could not be sold anywhere in Australia. The proportion of copied X rated films saleable in the ACT and the Northern Territory to copied unclassified films not saleable anywhere, was not the subject of any finding. 60 Mr Newnham could not have been asked for his opinion as to the legality of selling particular DVDs in the various States and Territories. That was a matter which would have required a factual foundation, the presentation of argument and a finding by the magistrate. Indeed his Honour disallowed further questions directed to Mr Newnham on the basis that he could not really give sensible answers on the matters being put to him. Venus never laid the factual foundation and Mr Barber's evidence in support of the proposed amendment was not evidence at the trial. 61 The question of the lawfulness of the sale of films which had been argued was not a question to be answered by reference to whether Fraserside and Calvista sold or supplied or offered them for sale or possessed them contrary to the provisions of particular State or Territory laws. The questioning of Mr Newnham in that respect was irrelevant and rightly disallowed. The primary basis upon which Venus raised the issue was that it was relevant to the calculation of the value of the pirated DVDs for the purposes of assessing damages under s 116. This would have required, for each film copied, evidence of its classification or lack thereof and submissions about the application of each State and Territory law to its sale, offering for sale or possession for sale. Broad common assumptions about all of the films copied and the lawfulness of their resale in New South Wales, Queensland, the ACT and the Northern Territory were not sufficient for that purpose. The first ground of appeal is not made out. Refusal of leave to amend - ground 2 62 Ground 2 of the grounds of appeal reads: 'His Honour erred by refusing leave to the first to fourth appellants to amend their defence to points of claim to include that damages should be denied as many Private films distributed for sale in Australia are not classified and/or display incorrect or misleading classification labels on the basis that that defence as to damages was bound to fail or at all.' (sic) 63 In his oral argument at the appeal, counsel for Venus said at one point that he was: '… content not to follow, not to pursue the failure to amend so long as I can pursue the exclusion of the evidence.' This was evidently a reference to Mr Barber's evidence. Counsel accepted, however, that when the amendment was refused the evidence which was tendered to support it fell away. He had not sought to tender it on any other basis. He then resiled from the suggestion that he would not pursue the amendment ground. 64 The proposed amendment to the defence involved a narrow point. That was that "damages should be denied because many Private films on DVD distributed for sale in Australia are not classified and/or display incorrect or misleading classification labels". The term "Private film" as noted earlier, refers to films produced by the Private film group with which Fraserside and Calvista are associated. 65 The question whether the amendment should be permitted involved the exercise of a discretion on the part of the magistrate. It was not suggested that there was any prejudice that might flow from the amendment which could not be cured by a costs order. However, his Honour was not satisfied that the proposed evidence was sufficient to sustain the amendment. There was no basis, in the evidence to be proffered, for the assertion that the DVDs would require reclassification. His Honour did not err in refusing the amendment. The second ground of appeal fails. Factual errors relevant to the assessment of damages - grounds 3, 4 and 5 66 Grounds 3, 4 and 5 were taken together in the submissions made on behalf of Venus. The errors relied upon in such of this group of grounds as were pressed were as follows:
5. A wrong inference that Venus, Tropher, Vassallo and Gordon copied Private films from at least the time that they and Calvista had a dispute as to accounts - there being no evidence from which such an inference could be drawn (ground 3(b)).
6. That De Prima was liable as an accessory for breaches of the Copyright Act 1968 by Venus there being no such allegation made against De Prima (ground 3(c)).
7. Erroneous failure to reduce or adequately reduce the damages recovered by Fraserside and Calvista in light of the following factual findings favourable to Venus, Tropher, Gordon and Vassallo: (a) that the evidence of Vassallo was preferred to that of Newnham; (b) that Venus, Tropher and Vassallo did not parallel import Private films; (c) that Calvista acquiesced in the sale by Venus, Tropher, Vassallo and Gordon of parallel imported Private films; (d) that Calvista was not entitled to damages for breaches by Venus, Tropher, Gordon and Vassallo of s 103 of the Act in relation to parallel imported Private films; and (e) that Venus, Tropher, Vassallo and Gordon stopped purchasing Private films from Calvista after a dispute as to accounts. (ground 4)
8. Failing to reduce or adequately reduce damages on account of there being no claim for damages as against De Prima (ground 5). 67 The first error of which complaint was made was the finding reflected in the magistrate's reasons, when he said of Mr Gordon (at [29]): 'But I believe the evidence of his involvement in the business indicates that if one infers, as I have done, that copying was going on from at least the time that relations between the applicants and the respondents became less friendly then he must have been aware that some of the sales going on in his stores were sales (and by that I include swaps) of product copied by the Venus Shops.' This passage went to Mr Gordon's accessorial liability but incidentally included the finding, based on inference, that copying had commenced in 2003. His Honour had earlier rejected evidence by Messrs Vassallo and Gordon that they were unaware until recently that DVDs could be copied. He said (at [14]-[15]): 'I think that is naďve and I do not accept their evidence. I am prepared to accept that copying was not a significant problem until about 2003. However, it was in 2003 that the Venus Shops stopped dealing with Calvista. This arose out of a dispute as to accounts. Thereafter the Venus shops did not buy any Private product distributed by Calvista.' 68 The period of copying adopted by his Honour was a reasonable inference in the circumstances from the evidence of copying that was before the Court. It was a feature of the case that there were few detailed records kept by Venus. The commercial desirability to Venus of maintaining continuity in Private Film offerings would support the inference, more comfortably drawn in the absence of contrary evidence, that the copying commenced at or shortly after the time of the breakdown in relations with Calvista. The first alleged error is not made out. 69 The second alleged error raised in ground 3(c) is that Mr De Prima was wrongly held liable as an accessory for breaches of the Act by Venus when no such allegation had been made against him. The relevant finding appears at par [31] of the reasons for judgment in which the magistrate said: 'The third, fourth and fifth respondents as directors of the first and second respondents and as persons who have the day to day control of small proprietary limited companies have accessorial liability for the breaches of ss 36, 101 and 103 Copyright Act.' Mr De Prima was a director and shareholder of Venus Adult Shops Pty Ltd. His Honour had earlier observed that he had consented to declarations and injunctions being made against him and that no damages or costs were sought. 70 The only orders made against Mr De Prima on 18 August 2005 were by way of injunctions which were made by consent. In the course of the trial in the Federal Magistrates Court, Venus and the Directors offered to consent to orders for permanent injunctions but not to pay any damages. Fraserside and Calvista said at the hearing that they would not pursue Mr De Prima for anything other than the injunctive relief to which he had offered his consent. In the magistrate's reasons for judgment he recorded that Venus and the Directors had consented to the grant of permanent injunctions. The final orders made by his Honour, all purported to be made by consent. However those which related to damages and costs were agreed, after publication of the reasons, in order to give effect to the magistrate's reasons. They were not true consent orders. 71 The magistrate's finding of accessorial liability on the part of Mr De Prima was not justified having regard to the absence of any factual findings to ground it beyond the fact that he was a director of Venus Adult Shops Pty Ltd. However, there were no damages and no costs sought or awarded against him. The appeal by Venus and the Directors is about damages. There is no basis disclosed on which the injunctive orders could be set aside as they were made by consent. In the circumstances there is no order flowing from the allegedly erroneous finding which could be the subject of appeal. Nor is there any basis upon which the damages award, so far as it relates to damages under s 116 of the Copyright Act, could be reduced by reference to the fact that no damages were sought against Mr De Prima. The amount of the conversion damages remains the same regardless of how many people were involved in the copying. There is nothing in the submissions to indicate the way in which Mr De Prima's position could have affected the quantum of additional damages awarded. 72 This disposes of both ground 3(c) and ground 5 of the appeal. 73 The third error, which is raised in ground 4, alleges failure on the part of the magistrate to reduce or adequately reduce the damages recovered by Fraserside and Calvista in light of certain factual findings. The relevant findings of fact cited by Venus and the Directors all went to the question whether Venus had infringed the rights of Fraserside and Calvista by the sale of parallel imported Private Films. As acknowledged in the ground of appeal itself, the magistrate found that Calvista was not entitled to damages for breaches of s 103 of the Copyright Act in relation to parallel imported Private Films. It is difficult therefore to see how the magistrate's findings should otherwise have affected the assessment of damages. The written submissions refer to his Honour's findings that the conversion damages of $68,000 calculated by Fraserside and Calvista on the basis of Mr Gordon's evidence (taken by them to represent a minimum position) was too generous to Venus and the Directors. That complaint about this aspect of his Honour's reasons was not shown to have anything to do with his findings of fact relevant to parallel importing. Ground 4 cannot succeed as a basis for challenging the assessment of damages. The question of his Honour's substitution of a higher figure for conversion damages than that advanced at the hearing is dealt with in ground 9. 74 For the preceding reasons grounds 3, 4 and 5 fail. The assessment of damages for infringement of illegal or immoral copyright works - grounds 6 and 7 75 Grounds 6 and 7 of the grounds of appeal were as follows: 6. His Honour erred in the assessment of damages under sections 115 and 116 of the Act by failing to: (a) Consider or adequately consider whether damages should be denied as it is illegal to sell, trade and exchange Private films in New South Wales and Queensland, instead considering whether damages should be denied as Private films might be considered immoral, the latter being a defence as to damages the first to fourth appellants expressly did not make; and (b) Deny damages as it is illegal to sell, trade and exchange Private films in New South Wales and Queensland. 7. His Honour erred in the assessment of damages under sections 115 and 116 of the Act by: (a) Considering that the first to fourth appellants were required to and/or did not show that there is an offence of aiding and abetting the illegal sale, exchange and trade of Private films in New South Wales and Queensland; (b) Considering that the first to fourth appellants were required to prove any such offence beyond all reasonable doubt; (c) Considering that the sale of the second respondent's Private films was not the subject of the application; and (d) Accordingly failing to reduce damages on account of the first and second respondents' aiding and abetting of the first to fourth appellants' sale, exchange and trade in Private films.' 76 Before considering these grounds against the learned magistrate's reasons, it is helpful to consider some questions of general principle which they raise. These include:
9. Whether copyright protection may be denied by reference to public policy considerations flowing from the content of the work.
10. The character of the conversion damages remedy.
11. The effect on the assessment of conversion damages under s 116 of statutory prohibition or restrictions upon the sale, hire or distribution of articles in which the relevant copyright subsists. Public policy, immorality and the denial of copyright protection 77 There is long standing authority in England for the proposition that copyright protection will not be extended to a publication whose content is contrary to community standards or values. This seems to have originated in a judge-made doctrine emanating from the Courts of Equity - Walcot v Walker (1802) 7 Ves 1; 32 ER 1; Southey v Sherwood (1817) 2 Mer 435; 35 ER 1006. In the latter case Lord Eldon refused to enjoin infringing publication of "Wat Tyler" because of its libellous tendency. In the result, as Lord Campbell observed: "hundreds of thousands of copies of Wat Tyler were circulated over the kingdom": Lives of the Chancellors (4th Ed, 1857). In Murray v Benbow [1822] Jac 474n; 37 ER 929 Lord Eldon said that no work injurious to religion was entitled to copyright protection. He refused to enjoin publication of a pirated edition of Byron's "Cain". Leach VC did the same for Lord Byron's "Don Juan" in Byron v Dugdale (1823) 1 LJ Ch 239. In Stockdale v Onwhyn (1826) 5 B&C 173,108 ER 65, damages were refused for infringement of copyright in the Memoirs of Harriette Wilson, a book about the love life of a courtesan. In Baschet v London Illustrated Standard Co [1900] 1 Ch 73 the Court of Appeal refused injunctive relief and damages under the Fine Arts Copyright Act 1862 to two out of seven photographs in which copyright subsisted under French law on the basis that the two were indecent. 78 The existence of "immoral tendency" as a basis for denying copyright protection was influentially reasserted in Glyn v Weston Feature Film Company [1916] 1 Ch 261. Younger J said that it was "… clear law that copyright cannot exist in a work of a tendency so grossly immoral as this, a work which apart from its other objectionable features, advocates free love and justifies adultery where the marriage tie has become merely irksome" (269). Glyn was cited with approval by Lords Keith, Griffith and Jauncey in the Spycatcher case: Attorney General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 at 262, 275-276 and 294. Browne-Wilkinson VC in Stephens v Avery [1988] 1 Ch 479 referred to it and said he entirely accepted the principle that "a court of equity will not enforce copyright … relating to matters which have a grossly immoral tendency" (482). The existence of a discretion to refuse copyright protection on "public policy grounds" was restated by Lightman J in ZYX Music GmbH v Chris King and Others [1995] FSR 566 at 577. The public policy grounds related to works which were "dishonest or misleading", "of a grossly immoral tendency" or "reeking of turpitude", the latter referring to breach of confidence. 79 In Hyde Park Residents Limited v Yelland [1999] RPC 655 Jacob J asserted that "in principle public policy can prevent copyright enforcement completely". He added that while some might say it was remarkable that the courts take away what was given by parliament "… that is what the courts have done in extreme circumstances". This is a proposition which would be constitutionally untenable in Australia in both Federal and State jurisdictions. The Court of Appeal in Yelland found legislative space and constitutional legitimacy for a public policy ground for denial of protection in s 171(3) of the Copyright Patents and Designs Act 1988 which provided that "Nothing in this Part affects any rule of law preventing or restricting the enforcement of copyright, on grounds of public interest or otherwise". Aldous LJ considered the power of the courts to refuse to enforce copyright on public interest grounds as an aspect of their "inherent jurisdiction to refuse to allow their process to be used in certain circumstances": Hyde Park Residents Limited v Yelland [2001] Ch 143 at 160 [44]Aldous LJ). 80 A more restrained judicial censoriousness was predicted in the 15th edition of Copinger and Skone James on Copyright: 'Such readiness on the part of judges in the past to apply their own views in deciding what works should be refused protection gave rise to criticism. In the present day, in which the public perception of such matters is different, the courts can be expected to reflect this difference and to take an attitude which is far less protective of the public. Attitudes to what amounts to unacceptable irreligious material have changed, and at least in relation to sexual conduct protection is only likely to be refused to a work considered as having a grossly immoral tendency by present day standards.' Copinger and Skone James on Copyright, (15th Edition, Sweet & Maxwell, 2005) p 183. See also Cornish and Llewellyn, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (5th Edition, Thomson Sweet & Maxwell, 2003) p 11-56. 81 The Courts of the United States reflected, in a long line of cases, a doctrine of non-protection of works found to be obscene, immoral, blasphemous, libellous, irreligious and even merely misleading - see Phillips J, Copyright in Obscene Works: Some British and American Problems (1977) 6 Anglo-Am L Rev 138. An interesting and elegantly penned historical review is also to be found in Rogers E, Copyright and Morals (1919-20) 18 Mich L Rev 390. In 1979 however the Court of Appeal for the 5th Circuit rejected the contention that obscene content in a copyright work is a defence to a claim for its infringement: Mitchell Bros Film Group v Cinema Adult Theater (1979) 604 F2d 852 and was followed in Jartech Inc v Clancy (1982) 666 F2d 403. A comprehensive review of United States, Canadian and English authority was essayed by Davies J in the Supreme Court of British Colombia in Aldrich v One Stop Video Ltd (1987) 13 BCLR 2(d) 106. The cases and issues are discussed, from an Australian perspective, in Morgan J, Copyright, the Public Interest and Content Restrictions (Intellectual Property Institute of Australia Working Paper No 13/03 May 2003). 82 In the Phillips' paper the author pointed quite properly to the difficulty of conditioning the existence of a property right on a legal test whose application was "no more than a value-judgment based upon a variety of psychological apprehensions which we are unable to comprehend". He added (at 168): 'For as long as 'property' depends upon 'content', not 'form', commercial practice will be subject to the caprice of this doctrine." 83 Whatever the powers of English Courts past and present, Lahore makes the point correctly about the Australian Act: 'There is nothing in the 1968 Act which denies copyright protection to obscene or blasphemous material.' And further: 'As copyright can subsist in all original literary, dramatic and artistic works under the 1968 Act without any exception provided that the requirements of the Act are complied with, it is preferable to accept that copyright can subsist in a seditious, libellous, immoral, blasphemous or fraudulent work, but that the court may not grant a remedy as a matter of public policy.' Lahore, Copyright and Designs (Butterworths) par 6150 This position is consistent with the rejection, by Gummow J in Collier Constructions Pty Ltd v Foskett Pty Ltd (1990) 19 IPR 44 at 57, of a public interest defence to copyright infringement. Although lying on the other side of the moral coin the principle governing such a rejection is applicable to reject defences based upon the immorality of the copyright work. As Gummow J said of the public interest defence (at 57): '… there is no legislative or other warrant for the introduction of such a concept into the law of this country.' 84 In relation to works and subject matter other than works there is no room, in the definition under the Act, of the rights comprised in the relevant copyright, for a qualification based upon general public policy considerations. There is no equivalent of s 171(3) of the Copyright, Designs and Patents Act 1988 (UK). The closest approach to such a provision is to be found in s 9(3) which preserves the operation of the law relating to breaches of trust or confidence. There is therefore no statutory basis under existing Australian copyright law for a finding that copyright does not subsist because the content of the relevant work or subject matter offends against community values or standards. That is not to say that such considerations may not inform the discretion to award particular classes of remedy but the scope of such an exercise of discretion would seem to be narrow. The conversion damages remedy - general principles 85 Accepting that copyright protection in Australia is not to be denied by reference to normative concerns about the "content" of a work or other subject matter in which copyright subsists, it is necessary to consider how statutory prohibitions or restrictions upon the production, possession, sale or distribution of an article the subject of copyright interacts with the availability of damages for its imputed conversion under the Act. This requires a brief consideration of the way in which conversion damages following infringement of copyright are assessed under s 116. 86 Section 116 of the Copyright Act should not be regarded as creating a fictional conversion of infringing copies. Rather, it creates a fictional ownership in them. Infringement by reproduction does not of itself establish conversion or give rise to an entitlement to damages under s 116. Conduct constituting conversion of the infringing copies according to the common law governing that tort, must be demonstrated. In an action for damages on which s 116 is invoked the facts constituting the conversion of the infringing copies should be pleaded. In International Writing Institute Inc v Rimila Pty Ltd (1995) 57 FCR 135, the Full Court said (at 139): 'Conversion occurs when goods are dealt with in a manner inconsistent with the rights of the owner, but this must be clear ... Whilst it is possible that conversion occurs at some different point … the sale of the goods will, generally speaking, provide the necessary certainty." And further (at 139): '… there is nothing in the cases on this matter which suggests that a proper approach would be to look to some other dealing when a clear act of conversion, on sale, has been shown.' 87 The mere production of infringing material by copying from an original work does not constitute an imputed conversion for the purposes of s 116 because no infringing copy comes into existence until after the reproduction has occurred. This is a consequence of the language of s 116(1A) which allows the grant of remedies available in an action for conversion in relation to infringing copies "as if … the owner of the copyright had been the owner of the infringing copy since the time the copy was made." That reflects the long-standing approach to similar provisions in English copyright statutes (which no longer contain a conversion remedy) expressed in Caxton Publishing Co Ltd v Sutherland Publishing Co [1939] AC 178 at 202 (Lord Porter, Lords Thankerton and Roche agreeing). 88 The essence of conversion is interference with a right of possession. It is nevertheless properly described as a "varied and somewhat amorphous tort" serving two distinct functions. One function is tortious, whereby it compensates a person deprived of the use of goods. However it also acts as a "surrogate for the Roman vindicatio; that is, in order to give a dispossessed owner the means to recover his goods in specie, or if that is not appropriate their market value" - Tettenborn, Wiley and Bennett; The Law of Damages, (LexisNexis UK, 2003) (at 294). The conduct which may constitute conversion is diverse. It has been said to include: (i) refusal to return; (ii) taking; (iii) receipt; (iv) disposal or deprivation of title; (v) destruction; (vi) loss as a bailee; (vii) keeping. The diversity of that list raises questions about the universal appropriateness of a "market value" approach to the assessment of damages - Tettenborn A, Damages in Conversion: the Exception or the Anomaly (1993) 52 CLJ 128. 89 Mere possession by a person of the goods of another does not necessarily constitute their conversion - Flowfill Packaging Machines Pty Ltd v Fytore Pty Ltd (1993) Aust Torts Reports, 81-244 (Young J). On the other hand there is nothing in the judgment of the Full Court in International Writing Institute Inc v Rimila supportive of a condition requiring sale of infringing copies to have taken place before damages can be awarded under s 116. When infringing copies are brought into existence for the purpose of sale or letting or some other form of disposal enough may be shown to indicate an assertion of dominion over them inconsistent with the deemed ownership of the copyright owner. So conversion may be demonstrated at that point. In the present case, on the facts found by the learned Federal Magistrate which are not in dispute, it could be inferred that conversion occurred at or about the time that the infringing copies came into existence. 90 The measure of damages for conversion is said to be well settled but its application may be difficult. The normal measure is the market value of the goods converted. But as Lord Porter observed in Caxton, it cannot be said that an article is to be treated as valueless to its owner because there is no means of selling it. He put the question rhetorically (at 203): 'Has a book a different and diminished value to me who have just purchased it from what it had a moment before in the hands of the bookseller, even though the bookseller will not take it back and I have no market for its sale?' One way of assessing value is to find out "what price for infringing matter … the public or some individual is prepared to pay or in some other way in the light of other events": Caxton at 2043-204 (Lord Porter). 91 In the 17th edition of McGregor on Damages at 33-006, it is accepted that conversion damages may have to be calculated when there is no market value. In Hall v Barclay [1937] 3 All ER 620 there was no current market value for the converted goods. The Court of Appeal held that the measure of damages in that event was the cost of their replacement. Scott LJ described market value as a convenient means of valuation where there is a current market value for the article in question. He added (at 627): '… but where there is no market, in my view it would be doing injustice to the owner of the article converted if a hard-and-fast rule were applied that, unless he could prove a market selling price, he could get nothing.' See also Kuwait Airways Corporation v Iraq Airways [2002] 2 AC 883 in which conversion damages for aircraft were assessed by reference to current market price, that is the replacement cost of the converted aircraft. 92 The British Columbia Court of Appeal in Tom Hopkins International, Inc v Wall & Redekop Realty Ltd (1985) 20 DLR (4th) 407 was concerned with a copyright case involving "meagre market data". It referred to the discussion of assessment absent "market value" evidence in Mayne and McGregor (the 13th edition) and to Hall v Barclay. The Court said (at 414): 'In these circumstances, having regard to the meagre market data available, the assessment of damages for conversion becomes an almost impossible task. While it is true that there was some demand for the plaintiff's tapes, the extent of that demand was limited to two sales, both of which were concluded in Western Canada. The best that can be said for the plaintiff is that the market value of the tapes probably exceeded the cost of reproduction. The extent of the excess of market value over cost is unknown. While some damages have been proved, the paucity of evidence prevents the court from making a large award.' A figure of $3,000 was awarded. The basis upon which it was selected was not clearly stated. It seems to have been a prudentially low estimate. 93 The position in England has changed since the Copyright Act 1956 was replaced by the Copyright Designs and Patents Act 1988 and the remedy in conversion abolished. Before that change the anomalies to which conversion could give rise were referred to in Infabrics Ltd v Jaytex Ltd [1982] AC 1 when Lord Wilberforce spoke of the "very harsh results" that might arise in some cases (18) and Lord Scarman spoke of the "perplexities" of the conversion damages and compensatory damages provisions and their relationship to each other (25). The remedy was considered in Australia by the Copyright Law Review Committee in its report on Conversion Damages published in July 1990. The Committee recommended against its abolition on the basis that, in its absence. "… defendants can readily and unfairly avoid losing the value of infringing copies in their possession by disposing of them following receipt of a letter of demand or other notice from a copyright owner" (par 40). The Committee recommended retention of the remedy coupled with a "wide discretion to determine whether a particular case is an appropriate one in which to order delivery up and/or to award conversion damages" (par 41). The present form of s 116 was enacted by the Copyright Amendment Act 1997 (Cth) which gave effect to the recommendations of the Copyright Law Review Committee. 94 The remedy under s 116 is discretionary. It is limited by the prohibition upon the grant of relief if the Court is of the opinion that relief it has granted or proposes to grant under s 115 is a sufficient remedy. As to that, it should not be assumed that a copyright owner can simply elect to pursue conversion damages. Such an assumption appears to have informed the approach taken in this case. The claim for compensatory damages under s 115(2) was limited to a nominal figure so that conversion damages could be pursued. The correctness of the assumption underpinning that approach does not fall for decision in this appeal. "Illegal" works and the conversion damages remedy 95 The preceding discussion does not involve consideration of the effect, on remedies for infringement, of statutory restrictions or prohibitions on the possession, sale or hiring of the work or article in which the copyright is said to subsist. Section 116(1A) allows a court, in an action for conversion in relation to infringing copies to grant "all or any of the remedies that are available in such an action". To the extent that illegality would provide a defence to an action in conversion at common law it would also provide a defence to proceedings in conversion under s 116. 96 It has been said to be a "fundamental principle of the common law … that a court will not lend its aid to a plaintiff who founds a cause of action upon an immoral or illegal act, particularly when both parties are equally at fault". That proposition, as noted in Nelson v Nelson (1995) 184 CLR 538 at 554 (Deane and Gummow JJ), dates back to Holman v Johnson (1775) 1 Cowp 341; 98 ER 1120. Alleged statutory illegality requires consideration of the relationship between the relevant prohibitions or restrictions and the cause of action asserted or the relief claimed in relation to it. That necessity was discussed in the context of equitable claims in Nelson. The discretionary approach of the "clean hands" doctrine in equity was there distinguished from those cases in which an applicant for relief seeks to enforce a transaction or trust which is prohibited by law. 97 Here the Court is concerned with an "illegality" question in relation to the grant of a tortious remedy imported by reference into the Copyright Act. In that context it is worth noting the observation in Nelson that illegality has been of diminishing significance in tort - Nelson at 561. In negligence claims it has been reduced to a factor relevant to the existence and/or standard of a duty of care - Jackson v Harrison (1978) 138 CLR 438 and Gala v Preston (1991) 172 CLR 243. A somewhat controversial English example of its non-application in conversion was Bowmakers, Ltd v Barnet Instruments, Ltd [1945] 1 KB 65. The case involved an action for the wrongful conversion of machine tools delivered under hire purchase agreements which contravened wartime statutory orders. The Court of Appeal said (at 71): '… a man's right to possess his own chattels will as a general rule be enforced against one who, without any claim of right, …, has converted them to his own use, even though it may appear from the pleadings, or in the course of the trial, that the chattels in question came into the defendant's possession by reason of an illegal contract between himself and the plaintiff, provided that the plaintiff does not seek, and is not forced, either to found his claim on the illegal contract or to plead its illegality in order to support his claim.' The Court went on to say, however, that an "obvious exception" to the general rule it had stated was "the class of cases in which the goods claimed are of such a kind that it is unlawful to deal in them at all, as for example, obscene books". No further analysis of the logic of the exception was offered. 98 Bowmakers was distinguished in Thomas Brown & Sons Ltd v Fazal Deen (1962) 108 CLR 391 in which a bailee held gold contrary to the National Security (Exchange Control) Regulations which required its deposit in the Commonwealth Bank. There the conversion action was time barred. Action on the bailment would have been action upon an illegal contract. The exception mentioned in Bowmakers for obscene books was adverted to in passing in Gollan v Nugent (1988) 166 CLR 18. It was inapplicable in that case which concerned the viability of a defence to an action for the return of articles seized from the Australian Pedophile Support Group. It was alleged in the defence that the articles were intended by their owners to be used for illegal purposes. The defence was not tenable as the relevant statute did not penalise intention. Nor was it clear that mere possession was unlawful. A repleading of the defence to assert a public policy ground for denying relief was permitted. Bowmakers has been criticised in England on the basis that it allows, via enforcement of property rights, the enforcement of illegal contracts. However it has been applied in Australia in Blackburn v Properties Limited [1980] VR 290 to allow enforcement of a resulting trust in land held pursuant to a transfer intended to deceive planning authorities - see generally the discussion in Buckley R, Illegality and Public Policy, (Sweet and Maxwell, 2002) at 16.04. 99 As a matter of first principle it is difficult to see how an owner of copyright could invoke the conversion remedy if the infringing copies are such that their possession is contrary to law. In such a case it is arguable there would be no conversion because the person, whose ownership is imputed by operation of s 116, has no right of possession that could be the subject of interference. It may be simply another way of saying the same thing to say that no remedy could be granted the enforcement of which would necessarily involve illegal conduct. That proposition goes to the existence of the remedy. Alternatively, the illegality associated with enforcement would go to the exercise of the discretion to withhold relief. So an applicant could not expect to get delivery up of infringing copies of a work which it is unlawful to possess under Commonwealth law. Illegality under State law would also probably be accommodated within s 116. 100 In the present case there are prohibitions in certain of the classification statutes referred to earlier, affecting possession of Unclassified or X-rated films at premises where classified films are sold (ACT Act s 20) or with intent to sell (NT Act s 50C). But mere possession of such films does not appear to be an offence. The case below was not contested on the basis that it is an offence. As in Gollan v Nugent illegality cannot be invoked simply on the basis that there is an intention to commit an offence in the way that the infringing DVDs, if recovered by the copyright owner, would be used. This is, however not the end of the relevance of the statutory restrictions upon sale or hire of the films the subject of these proceedings. There is a distinct question whether legal restrictions on the sale of the copyright works are logically relevant to the market value and so to the assessment of damages in conversion of infringing copies. This was the point that, as observed later in this review, was not adequately considered by the learned magistrate in his reasons for judgment. 101 In Stockdale v Onwhyn the effect of the absence of a "right to sell" was considered by Abbott CJ (at 176): 'The question then is, whether the first publisher can claim a compensation in damages for a loss sustained by an injury done to the sale of such a work. In order to establish such a claim, he must, in the first place, shew a right to sell; or if he has not that right, he cannot sustain any loss by an injury to the sale.' See also Holroyd J at 177. After citing Stockdale v Onwhyn, Fullarton JA in the Manitoba Court of Appeal in Pasickniak v Dojacek [1928] 2 DLR 545 said (at 548): 'It is clear from the above authority that unless there is something in the plaintiff's book which makes the sale of it an offence against the law, the plaintiff has the right to sell it and consequently the right to restrain the defendant from infringing his copyright.' 102 In Aldrich, Davies J referred to these authorities and said (at [103]): 'If an act is illegal in that it is contrary to law, either statute or otherwise, courts should not enforce the actor's expectation of receiving any consequent benefit. There is no legal right to perform an illegal act. Likewise there can be no legal right to claim compensation for being unable to perform such an act.' And further (at [104]): '… copyright is not a right to perform the enumerated acts which the owner may prevent others from performing. It is the sole right to perform acts which are otherwise legal. Therefore, if the plaintiffs are founding their claim to damages on the loss of expected gain from actions which are illegal, that loss is not compensable.' In relation to remedies for delivery up and, alternatively, damages for conversion Davies J referred to s 21 of the Copyright Act RSC 1970 which, like s 116 of the Copyright Act 1968, effectively deems a copyright owner to own infringing copies. Davies J said of the remedy of damages for conversion (at [124]): 'Damages for conversion are determined by the value at the time of conversion, that is, at the time of unauthorized reproduction. The damages cannot be based on the market value of the goods if sold in Canada in keeping with the principle of non-compensable loss of illegal gain. Rather, they must be based on the cost of production to the plaintiffs, that is, upon the value of the goods as unmarketable videotapes which can be possessed.' As a general proposition it is difficult to see how a market value assessment could be undertaken of goods which, by law, cannot be sold. Damages assessed in respect of such goods could properly be based upon the cost of their replacement as in Hall v Barclay or Kuwait Airways Corporation v Iraq Airways. 103 A further issue relevant to the present appeal is where the onus of proof lies in relation to the effect of statutory prohibitions or restrictions upon the sale of infringing articles. In the ordinary course where illegality is alleged in respect of a contract the burden is upon those who invoke it to prove the illegality - Attorney-General of the Commonwealth of Australia v Adelaide Steamship Co Ltd [1913] AC 781; North Western Salt Company Ltd v Electrolytic Alkali Company Ltd [1914] AC 461 at 480 (Lord Sumner). 104 In relation to the legality of a loan to a firm of bookmakers, Scrutton LJ said, in Humphery v Wilson [1929] All ER Rep 171 at 173: '… in my view the person in court who alleges that such a transaction is made void and irrecoverable must prove it strictly.' That decision was cited with approval in Commissioners of the State Bank of Victoria v Tripp [1985] VR 297 at 303 (Tadgell J). 105 In Holidaywise Koala Pty Ltd v Queenslodge Pty Ltd [1977] VR 164, the legality of a lease granted for use of premises as a motel without any development permit was held not to be on its face illegal. In discussing the onus of proof of illegality, Gillard J said (at 176): 'As Lord Abinger, CB pointed out in Lewis v Davison … "when the act which is the subject of the contract may, according to the circumstances, be lawful or unlawful, it will not be presumed that the contract was to do the unlawful act, the contrary is the proper inference".' 106 There may be cases in which the illegality of a transaction or conduct relied upon to support a cause of action is patent and the court obliged to have regard to that illegality whether or not it is raised by a party. It is not for the Court, however, to search out illegality whether in contract cases or otherwise. As a general rule the party who affirms illegality much establish the necessary factual basis for that contention. The burden of proof does not apply to the establishment of a proposition of law based upon facts found, but the party advancing the proposition will ordinarily be expected to make it good in argument. 107 In the case of a claim for damages for conversion of goods where the owner of the goods has shown that there is a market for their sale and the illegality of their sale is not patent, it is not for the owner to demonstrate that their sale in that market is lawful. It is for the respondent to show the facts upon which it could be concluded that their lawful sale is not possible or that it is so conditioned by statutory restrictions as to affect their value. There may be some cases in which illegality is apparent by reference to facts which are not in dispute. That is not this case. The challenge to assessment of conversion and additional damages based on illegality - grounds 6 and 7 108 The first complaint in ground 6 relates to his Honour's digression into the question whether copyright protection should be denied on public policy grounds because of the "immorality" of the content of the Private Films copyright in which had been infringed. This was a distraction as the defence did not rely upon the "immorality" of the films as a reason for denying relief on public policy grounds. His Honour held that there is what he called "… a remedial power to refuse protection to works having a grossly immoral tendency by present day standards". In the light of the authorities discussed earlier and the position under the Copyright Act 1968 there is no basis for a conclusion that the scope of copyright protection is qualified by reference to community standards and the content of the copyright work or other subject matter. To the extent that his Honour was referring to the availability of relief there is nothing in the Act that limits the availability of the remedies for which it provides by reference to community standards and the content of the works. While there may be a case in which the content of a work would be a factor relevant to the grant of particular remedies on public policy grounds, the scope for the refusal of relief on such grounds is likely to be quite narrow. An example of an arguable basis, in public policy, for the refusal of relief in relation to articles likely to be put to illegal uses was seen in Gollan v Nugent, discussed earlier in these reasons. See also in the context of statutory illegality the discussion of "the equity of the statute" in Nelson v Nelson. 109 In the present case the learned magistrate refused to decline relief on the basis of the immorality of the films. His finding in that respect is not challenged on appeal. Rather it is said to have distracted him from the question of illegality and its effect upon the assessment of damages which was raised in pars 19 and 22 of the points of defence. His Honour expressly referred in his reasons to pars 19 and 22 of the points of defence. However his reasoning does appear to have conflated the public policy and illegality issues. 110 His Honour referred to the argument made by Fraser and Calvista that any inability to sell the infringing article because of the provisions of the Classification Act is not a defence to a claim in conversion and that on the contrary the Court should make the strongest presumption against a respondent as to the value of the DVDs where, as here, there is a paucity of evidence as to the number or cost of goods sold or the amount received for the exchanges. It seems that his Honour accepted that submission. He proceeded to assess the value of the infringing articles in a way strongly adverse to Venus and the directors. Indeed he took the view that the amount of $68,000 conversion damages proposed by Fraser and Calvista was too generous. He did not deal clearly in his reasons with the illegality issue as it affected assessment of damages which was raised by Venus and their directors in the points of defence. The question is whether there was evidence upon which the assessment of damages under s 116 could have been affected by an examination of the statutory prohibitions and restrictions under the Classification Acts of the States and Territories. 111 In written submissions to this Court, Venus and the Directors relied upon evidence before the Federal Magistrates Court from Messrs Gordon and Vassallo. Referring to the Fraserside and Calvista DVDs as "Private films" by reference to the name of the corporate group with which those companies were associated, Mr Gordon stated in his affidavit evidence in chief; "I verily believe that all the Private DVDs and the VHSs sold, offered for sale and exchanged by Tropher and Venus have at all times been and are either classified 'X-Rated' by the Office of Film and Literature Classification ('OFLC') or are not classified by the OFLC". Mr Vassallo made a statement to similar effect in his affidavit. These were statements of belief concerning a class of film by reference to its producer. Their factual basis was not disclosed. Independently of any ruling as to relevance the learned magistrate would have been entitled and indeed, absent concession, bound to disregard them. 112 The evidence before the learned magistrate did not establish a factual foundation for a finding that the sale of the infringing articles was prohibited under State and Territory classification statutes. The generalised and unsupported statements of belief in the affidavits of Messrs Gordon and Vassallo were inadequate for that purpose. The affidavit evidence of Mr Barber which was tendered in support of the proposed amendment to the defence was relevant to the proposition that DVDs reproducing VHS films, for which classification had been granted, would require reclassification because of additional material contained in them. That evidence was received only for the purpose of assessing whether the amendment should be allowed. Had the amendment been allowed, then it would have been evidence adduced pursuant to the amendment. The learned magistrate held it was insufficient to justify the amendment. As counsel accepted in the course of argument in the appeal, the Barber affidavits were not evidence in the proceeding and were not tendered as such. 113 It seems to have been common ground that the products could be sold in X-rated versions in the ACT and the Northern Territory. Even if they were the only markets in which they could have been sold, there was no basis advanced upon which the conversion damages could be limited by reference to that restriction. In any event, even in relation to New South Wales and Queensland, there was no adequate foundation upon which to make findings about the application of particular restrictions to particular films copied and/or sold by Venus. In the result, even though his Honour's reasons, with respect, failed to adequately discuss the illegality question and its relevance to the assessment of damages, there was no evidence before him from which he could have come to a different result on that basis. The effect of the statutes in the assessment of damages required that a relevant factual substratum be established by the defendants who bore the burden of proving the necessary facts. They failed to discharge it. This aspect of grounds of appeal 6 and 7 therefore fails. 114 So far as additional damages are concerned, these embody both aggravated and exemplary elements. The latter element is punitive in character. The question of the availability of a market for the films was not relevant to this head of damages. The inadequate evidence as to illegality of the films in the class of "Private Films" referred to in the grounds of appeal and the common ground that there were markets in which they could legally be sold, militates against any argument that illegality would have supported a public policy basis for reducing the award of additional damages. No other basis was shown for reducing his Honour's award in this respect, there being no necessary connection between that assessment and the primary damages awarded in conversion. 115 The same comments apply to ground 7. Both grounds 6 and 7 therefore fail. Relevant and irrelevant factors in assessment of additional damages - ground 8 116 In ground 8 Venus and the Directors complain that the magistrate erred in his assessment of additional damages under s 115(4) of the Act by failing to take into account the following matters: (a) that Venus, Mr Gordon and Mr Vassallo from early in the proceedings consented to permanent injunctions; (b) that Fraserside and Calvista did not warn Venus, Mr Gordon and Mr Vassallo of their intention to bring proceedings; (c) that Venus, Mr Gordon and Mr Vassallo did not purchase parallel imported Private Films to minimise damages in the proceedings; (d) that parallel imported Private Films were a significant portion of Venus' turnover; It is also complained that his Honour gave "too much account" to the allegedly poor conduct of Venus and Messrs Gordon and Vassallo during the proceedings and their failure to provide meaningful financial data. 117 As appears from the reasons for judgment, his Honour took into account the following factors in assessing additional damages:
12. That Venus and the Directors had deliberately set aside batches of DVDs to use as a library for the purpose of copying and keeping their stock fresh knowing that copying was illegal and that it was rampant in the industry. This aspect of their conduct was 'flagrant' for the purposes of s 115(4).
13. The conduct of Venus and the Directors failing to comply with Court orders and deadlines set by the Federal Magistrates Court in the proceedings in that Court.
14. That the Directors benefited from the infringement by the sale of Fraserside and Calvista's copyright material without paying for it.
15. The sale of parallel imported material without payment of any royalty which might have been payable in Australia and might have been higher than the royalty payable in Europe or America from which the parallel imported Private Films were sourced. The relevance of this consideration is not obvious.
16. On the other side of the equation, was the fact that Fraserside and Calvista gave Venus and the Directors no warning that they proposed to bring action against them. In this respect his Honour said (at [55]): 'The applicants came straight to this Court and obtained interlocutory relief. This did not give the respondents the opportunity to put their house in order or to cease and desist before the commencement of proceedings.'
17. Calvista's acquiescence in the sale of parallel imported Private Films.
18. The attempt by Venus and the Directors 'to use their own illegality as a shield against the claim by both applicants'.
19. The complete failure of Venus and the Directors to produce any financial data of a meaningful nature that would have assisted the Court in calculating damages or understanding the severity of their actions. 118 His Honour also referred to a suggestion made by Fraserside and Calvista that Venus and the Directors had purchased parallel imported Private Films for the purpose of the Court proceedings in order to minimise the damages that could be claimed against them. However he was not satisfied of that from the evidence that he had heard. The relevant purchases were genuine and appeared to include a large number of those offending films. 119 His Honour did not, in awarding additional damages, refer to the agreement by Venus and the Directors to consent to permanent injunctions. It is perhaps not surprising that that was not taken into account as it only occurred in the course of the hearing. He did take into account the absence of any prior warning to Venus and the Directors before Fraserside and Calvista commenced proceedings. He discounted the suggestion that Venus had purchased parallel imported Private Films to minimise damages in the proceedings. Contrary to what seems to be implied in Ground 8 the absence of any such purchase intention could not be a mitigating factor in relation to additional damages. His Honour referred to the fact that parallel imported Private Films were a significant proportion of the Venus turnovers. He had regard to the acquiescence of Calvista in relation to the purchase and sale of parallel imported Private Films. He discounted the additional damages assessed by reference to that acquiescence. He took into account the conduct of Venus and the Directors during the proceedings and their failure to provide meaningful financial data. None of these matters could be viewed as irrelevant to the determination of additional damages which attracts a broad discretion. There is nothing to indicate that his Honour gave too much weight or too little weight to any of them. In any event the weighting of relevant factors was a matter for him. In respect of the matters raised in ground 8, his discretion is not shown to have miscarried and ground 8 therefore fails. Increasing conversion damages beyond amount proposed - ground 9 120 Ground 9 of the notice of appeal states: 'His Honour erred in the assessment of damages under s 116 of the Act by: (a) Taking into account; and (b) Increasing the starting point for the assessment of damages from the amount sought by the First and Second Respondents on account of an "impression" that the Fourth Appellant's reference to 5 percent of turnover referred to legitimate Private Films an "impression": (c) Not open on the evidence; and (d) Not being a fact proved on the balance of probabilities.' 121 The aspect of his Honour's reasoning attacked by this ground relates to his assessment of damages under s 116 at a higher figure than was sought by Fraserside and Calvista and his discount using that figure as a base. The case advanced by Fraserside and Calvista involved a figure of $68,000 calculated by reference to sales of infringing Private Films at the rate of 80 per month at $47 each (discounted for costs and swaps). The table produced showed a figure of $70,934 calculated over 19 months. His Honour took the higher figure of $80,000 on a view of Mr Gordon's evidence less favourable to Venus and the Directors than that advanced by Fraserside and Calvista which his Honour saw as too generous. Venus and the Directors submitted in the appeal that his Honour's impression that the Fraserside and Calvista figure was too generous was neither open on the evidence nor squarely put to Mr Gordon. 122 His Honour erred in taking the figure of $80,000 as the base line for conversion damages. No case for such a figure had been advanced. It was therefore a breach of procedural fairness to adopt it. To this extent this ground of appeal succeeds. The discount which his Honour allowed from the sum of $80,000 reflected his opinion that Calvista, in effect, had acquiesced in the sale of a number of the films which were "parallel imported films". There does not seem to have been any complaint about the proportionate reduction that he made. The figure of $65,000 which his Honour assessed in the end reflects a reduction of 20% from the base line figure of $80,000. Applying that logic to the proper base line figure of $68,000 would have resulted in damages of $54,400. Ground 9 therefore succeeds. Conclusion 123 For the preceding reasons the damages awarded under s 116 should be reduced to $54,400. This does not lead to any consequential reduction in the amount of additional damages as there is no necessary linkage between additional damages and conversion damages. No basis is shown for disturbing the other orders made by his Honour. Having regard to the limited scope of success of the appeal there should be no order as to costs. I certify that the preceding one hundred and twenty-three (123) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices French and Kiefel.

Venus Adult Shops Pty Ltd v Fraserside Holdings Ltd

At a glance

Court

Decision date

Source

Judgment (21 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (15)

Cited By (2)