Kila Rocks Design & Printing v Lucky Star (PNG) Ltd and David Ling as General Manager of Lucky Star Ltd—Lae Merchandised Shop (2013) N5318

• Jurisdiction: Papua New Guinea
• Judge: Makail, J
• Judgment Date: 14 August 2013
• Court: National Court
• Citation: (2013) N5318
• Docket Number: WS NO 505 OF 2011
• Year: 2013
• Judgement Number: N5318

Full Title: WS NO 505 OF 2011; Kila Rocks Design & Printing v Lucky Star (PNG) Ltd and David Ling as General Manager of Lucky Star Ltd—Lae Merchandised Shop (2013) N5318

National Court: Makail, J

Judgment Delivered: 14 August 2013

N5318

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 505 OF 2011

BETWEEN

KILA ROCKS DESIGN & PRINTING

Plaintiff

AND

LUCKY STAR (PNG) LTD

First Defendant

AND

DAVID LING as General Manager of Lucky Star Ltd – Lae Merchandised Shop

Second Defendant

Kimbe: Makail, J

2013: 09th & 14th August

TORT – Passing-off – Remedies – Damages – Types of damages – Nominal damages – Damages to damage to trade mark reputation – Assessment of – Protection of – Proof of – Expenses must be a direct result of the infringement – Copyright and Neighbouring Rights Act, 2000 – s. 27.

Cases cited

Brinks Incorporated and Brinks Air Courier Australia Pty Ltd -v- Brinks Pty Ltd, Barry Tan and Herman Lucas (1997) N1567

Other References

Tort, Clerk & Lindsell, Sweet & Maxwell, London © 1989

Counsel

Mr A Klewaki, for Plaintiff

No appearance, for Defendants

JUDGMENT

14th August, 2013

1. MAKAIL, J: This is an action based on the tort of passing-off. It involves the copying of designs and prints of the plaintiff by the defendants. The designs and prints are in these terms: “PASIN WEST” with a conch shell, two coconut palms with the sea at the background and sun rising emblazoned with the words “YU KAM PINIS” printed well at the back of T-shirts and at the front of the T-Shirts is printed in block letters “KIMBE” and two coconut palms. On 19th October 2011, default judgment was entered against the defendants. The matter came for assessment of damages. The plaintiff claims loss of wages, school fees and balance of purchase price of real property, loss of business income, general damages, exemplary damages, interest and legal cost.

2. Andrew Bige the Managing Director of the plaintiff sworn an affidavit on 01st August and filed on 02nd August 2011 (Exhibit “P1”) to establish the plaintiff’s losses. It is submitted that the plaintiff bears the onus of proving its losses and based on Mr Bige’s affidavit, it has established its losses and should be awarded damages. The law is that where default judgment is entered, the onus of proof is on the plaintiff to prove its losses. The evidence must be clear, not vague or hearsay.

3. The law on passing-off has not been fully developed in this jurisdiction although the principles are settled and clear. As far as I am aware, the first reported case in Papua New Guinea is Brinks Incorporated and Brinks Air Courier Australia Pty Ltd -v- Brinks Pty Ltd, Barry Tan and Herman Lucas (1997) N1567, a decision by Injia, J (as he then was). It involved a dispute between the plaintiffs and the defendants over the use of the name “Brinks” or the like. One was protecting the use of the name “Brinks” or the like from being used by the other.

4. The Court dismissed the action because firstly, the first plaintiff did not acquire a reputation or goodwill in the country as it did not carry on any or sufficient business in the country to establish a reputation or goodwill; that the defendants did not misrepresent to the public in the country including the first plaintiff's customers or potential customers that their business was that of the first plaintiff, and that no damages were actually suffered or likely to be suffered by the plaintiffs as a result of the defendants’ use of the name “Brinks”.

5. Secondly, although the second plaintiff did acquire a reputation or goodwill in the country in the use of the name “Brinks” or “Brink’s” as attaching to the provision of high quality security services, in particular, the provision of armoured car security services in the transportation of valuables, the defendants did not misrepresent to the public in PNG or the plaintiffs’ customers or potential customers that the services they were providing was that of the second plaintiff or in any way associated with the second plaintiff, and because the second plaintiff did not actually suffer any damage or likely to suffer any damage as a result of the use of the name “Brink’s” or “Brinks”.

6. In the present case, the main issue is the measure of damages. Proof of damages or likely damage is the essence of the claim of passing-off. The plaintiff must show that it has suffered damages or likely to suffer damages. I think in recent times, the tort has been committed without much corrective or punitive action taken by the aggrieved party against the offending party. As a result, in 2000, Parliament legislated to regulate and control copyright and related activities by passing the Copyright and Neighbouring Rights Act 2000. The Act provided among others, civil remedies as well as criminal sanctions for breaches of the Act: ss. 27 & 28.

7. Section 27 provides for civil remedies. It states:

“7. Civil remedies.

(1) The owner of any right protected under this Act whose right has been infringed shall be entitled to payment of damages by the infringer for the prejudice suffered as a consequence of the act of infringement including such expenses directly caused by the infringement.

(2) For the purposes of Subsection (1), the amount of damages shall be fixed taking into account the importance of the material, the moral prejudice suffered by the owner of the right and the importance of the infringer's profits attributable to the infringement.

(3) Where the infringer did not or had no justifiable reason to know that he was engaged in an infringing activity, the Court may limit damages to the profits of the infringer attributable to the infringement.

(4) Subject to Subsection (5), where infringing copies exist, the Court shall order the destruction or other reasonable disposition of those copies and their packaging in such a manner as to avoid harm to the right holder, unless the owner of the right requests otherwise.

(5) Subsection (4) shall not apply to copies and their packaging which were acquired by a third party in good faith.

(6) Where there is a danger that implements may be used to commit or continue to commit acts of infringement, the Court may, whenever and to the extent it is reasonable, order their destruction or other reasonable disposition in such a manner as to minimize the risks of further infringements, including the surrender of the implements to the owner of the right.

(7) Where it appears to the Court that there likelihood of an act of infringement continuing, the Court may order that such act of infringement shall cease to be continued.

(8) A person who carries on an act of infringement in contravention of an order under Subsection (7) shall be liable, on conviction, to a fine not exceeding K100,000.00 in addition to any other penalty the Court is empowered to impose.”

8. At common law, the measure of damages is restricted to nominal damages and may include damages for damage to the plaintiff’s trade mark reputation. If the plaintiff claims substantial damages, he must prove them. The inquiry will not be limited to the sale made by the defendant to persons who were deceived by the infringement, but will extend to all sales made by the defendant under the offending mark, for the ultimate purchasers may have been deceived, although the immediate purchasers were not: see the 03rd volume of the 16th edition of the text Tort, Clerk & Lindsell, Sweet & Maxwell, London © 1989 at para 30-20 at pp 1638 – 1639 and para 30-42 at pp 1646 – 1647.

9. Under s. 27 (supra), damages may include damages for the prejudice suffered as a result of the act of infringement including such expenses directly caused by the infringement. In assessing the amount, consideration must be given to the importance of the material, the moral prejudice suffered by the owner of the right and the importance of the infringer’s profits attributable to the infringement.

10. Applying these principles to the present case, first the plaintiff claims loss of wages, school fees and balance of purchase price of real property. In my view, these claims are not nominal damages. They are substantial and unsupported by evidence. Similarly, under s. 27, the plaintiff is entitled to claim expenses incurred as a result of the...