|
1986 No. A 3317
IN THE SUPREME COURT OF HONG KONG
HIGH COURT
_______________
BETWEEN
|
XIANG SI HUA also spelt as HON SEE HUA |
Plaintiff |
|
and |
|
|
BAILEY RECORD COMPANY LIMITED |
Defendant |
_______________
Coram: Master P.H. O’Donnell in Chambers
Parties Present: |
Mr. P. CHAN, Counsel instructed by P.P. Sin & Co. for Plaintiff
Mr. A. Ismail, Counsel instructed by John Ip & Co. for Defendant |
Dates of Assessment Hearing: 12th, 13th and 14th February 1987
Date of Decision: 2nd March 1987
_____________________________
ASSESSMENT OF DAMAGES
_____________________________
1. The Plaintiff, a musician, brought this action against the Defendant, a record company, seeking various injunctions, orders and damages for infringement of copyright, conversion and passing off. Judgment was entered on 16th December 1986 against the Defendant by consent upon admissions made in its notices of admitted facts for the various injunctions and orders sought in the Plaintiff’s Statement of Claim. As part of this judgment an inquiry was ordered as to the damages for infringement of copyright on an assessment of damages before a Master in chambers.
2. The evidence on this assessment of damages occupied 2½ days during which the Plaintiff gave evidence by affirmation and viva voce and also called 3 other witnesses in support of her claim for damages. Three witnesses gave evidence both by affirmation and viva voce on behalf of the Defendant company. It is not proposed to traverse the evidence called at this assessment of damages as it is a matter of record and will be referred to where relevant in this decision.
3. The Plaintiff obtained leave to file an amended Statement of Claim without objection from the Defendant immediately prior to the assessment. Counsel for the Plaintiff advised that the various heads under which damages were being sought as follows: -
(1) Damages for passing off on the basis of injury to the Plaintiff’s goodwill and reputation.
(2) Special damages relating to infringement of the Plaintiff’s copyright
(3) Additional damages for aggravating circumstances under Section 17(3) of the Copyright Act 1956 (a U.K. statute which applies in Hong Kong).
(4) Damages for conversion being the value of the infringed copies.
(5) Infringement damages in the form of fair remuneration to the Plaintiff for the playing and arranging of the music which was recorded in the infringed copies.
Counsel for the Defendant had agreed on the quantum for two of the heads of damages as follows: -
(1) Special damages of $6,000.00 relating to the infringement of the Plaintiff’s copyright.
(2) Additional damages of $10,000.00 for aggravating circumstances as provided in Section 17(3) of the Copyright Act 1956.
4. Counsel for both parties had provided lengthy and full submissions in writing at the conclusion of the evidence at this assessment which were of considerable assistance in reaching a decision as to the quantum of damages to award in this comparatively obscure area of the law of damages. The first head of damages in dispute between the parties was that relating to passing off as it affected the Plaintiff’s goodwill and reputation.
5. It was agreed that the assessment of damages for passing off was at large to the extent that the Court is required to consider all the circumstances of the case and arrive at a fair and temperate sum to compensate the Plaintiff for the injury to her reputation and goodwill. The obvious starting point is the Plaintiff’s reputation in this field. On the evidence given by the Plaintiff herself and the witnesses called on her behalf the Court is more than satisfied that the Plaintiff has an international reputation as a Chinese Zheng soloist and in the arrangement of traditional Chinese Zheng pieces for playing. The 16 pieces of Zheng music which were passed off to the public as being played by the Plaintiff were described by witnesses as being quite different in style and recognizable as such, and of a much lower standard than Plaintiff’s Zheng playing and arrangement. The second witness for the Plaintiff, who was also a musician, described the playing of these 16 pieces as vulgar in treatment, superficial and bad in fingering of the instrument. The third witness for the Plaintiff, a music reviewer, gave evidence that the difference in the playing was very noticeable because of the primitive manner in which these 16 pieces were played.
6. There has been an adverse effect on the Plaintiff’s goodwill and reputation by this passing off which is shown by the reactions of friends and students in raising the matter with her. The infringed copies of the cassette tapes had been advertised locally in 5 newspapers and distributed widely by retailers in Hong Kong and indirectly overseas. The Defendant took no action to restrict or prohibit distribution of the infringed copies to the public despite 3 letters from the Plaintiff until her solicitors wrote 2 months after the date of her first letter. The Court is satisfied that this was a deliberate and calculated passing off by the Defendant company for profit from the sales of the infringed copies. That this was so is confirmed by the first witness for the Defendant who admitted paying $15,000.00 to a possible competitor to obtain master copies of the infringed cassette tapes. There is no corroboration to support the contention by Chan Ma, a director of the Defendant company, that the China Record Company, Guangzhou Branch, delivered the infringed cassette tapes and authorised the Defendant to reproduce, publish and distribute the same for sale in Hong Kong and abroad. The Court has grave reservations about the truth of this evidence.
7. The submission by Counsel for the Defendant that the conduct of the Defendant is irrelevant in determining the quantum of damages for passing off as these factors have already been taken into account in the agreed aggravated damages of $10,000.00 under Section 17(3) of the Copyright Act is not accepted as the law. No authority was cited in support of this submission. Further, an award of nominal damages only for the injury to the Plaintiff’s reputation and goodwill would be inappropriate. Upon consideration of all the circumstances of this case a fair sum to compensate the Plaintiff for the injury to her reputation and goodwill as damages under this head of passing off would be an award of $75,000.00.
8. The Plaintiff ahs not opted for an account of profits from sales of the infringed copies, but rather claims infringement damages under Section 17(1) of the Copyright Act. Counsel for the Plaintiff has cited authorities for the proposition that where loss of profit is not appropriate to assess infringement damages the proper award would be fair remuneration to the Plaintiff for playing and arranging the 40 pieces of music used in the infringed copies. Counsel for the Defendant submitted that the Plaintiff is not entitled to damages for infringement on the basis that such damages merge with the damages for conversion. Caxton Publishing Co. Ltd. v. Sutherland Publishing Co. Ltd. (1938) 4 AER 389 is authority for the proposition that infringement damages under Section 17(1) of the Copyright Act and conversion damages under Section 18 of the same Act are cumulative and not alternative and this is accepted.
9. The Plaintiff claims remuneration of $60,000.00 for performing and arranging the 40 pieces of music at the rate of $1,500.00 a piece. This rate is fixed on the basis that she had been paid this rate for playing one piece of music in a public performance in the past. This rate does appear to be excessive when it is considered that the Plaintiff was paid $6,000.00 to record 12 pieces of music for Life Records in 1982 and will be paid $5,000.00 by H.K. Records to record 12 pieces in a duet with a Japanese violinist in the near future. Taking this into account and that most of the 40 pieces played in the infringed copies are her own arrangements of traditional Chinese music , a fair remuneration fee to the Plaintiff would be $25,000.00. Accordingly, this sum will be awarded as infringement damages.
10. The last head of damages in dispute between the parties is the award of damages for conversion under Section 18 of the Copyright Act. The measure of damages in conversion is agreed to be the market value of the infringing copies without taking into account production costs and sales expenses. The only evidence in this respect is the audited copy of the Defendant’s trading account for the period 20th November 1985 to 31 st July 1986, produced as Exhibit D5, which shows that 2,287 copies of the infringed tapes were sold for the total sum of $30,515.83. Whereas, Counsel for the Plaintiff reluctantly accepts this figure in the absence of any other records as the value of the infringed tapes, Counsel for the Defendant submits that there must be a deduction from this figure where only part of the Plaintiff’s work has been infringed but where it has been included with the other parts. Defence Counsel relied on the Caxton Publishing case referred to earlier for this proposition. After a careful consideration of the judgment of the House of Lords in Caxton Publishing Co. Ltd. v. Sutherland Publishing Co. Ltd. it is agreed with Counsel for the Defendant that there should be a proportionate deduction for the 16 pieces in the infringed copies which were neither played by the Plaintiff nor were pieces arranged by her in which she could claim copyright. Obviously, the damages for conversion under Section 18(1) of the Copyright Act can only be claimed by the owner of the copyright in question. Therefore, the Plaintiff as the owner of the copyright for 40 pieces of music out of the total of 56 pieces is restricted to claiming damages for the 40 pieces over which she holds the copyright. This approach is necessary in consideration later of the question of any overlapping of the different heads of damages. On this bais the award of damages for conversion of the 40 copyright pieces of music is $ 21,797.
A summary of the various heads of damages awarded or agreed are as follows: -
| (1) |
Damages for passing off awarded at |
$75,000.00 |
| (2) |
Damages for infringement awarded at |
$25,000.00 |
| (3) |
Damages for conversion awarded at |
$21,797.00 |
| (4) |
Special damages relating to copyright infringement agreed at |
$6,000.00 |
| (5) |
Aggravated damages for copyright infringement agreed at |
$10,000.00 |
|
TOTAL |
$137,797.00 |
11. The final consideration is whether there has been any overlapping under the various heads of damages awarded or agreed between the parties. The authorities cited by Counsel for the Defendant make it clear that overlapping of damages must not be allowed so as to avoid awarding excessive damages. As indicated in setting out reasons for the damages awarded for infringement of copyright and the damages for conversion of copyright there has been no overlap under those heads of damage. The parties had agreed to additional or aggravated damages of $10,000.00 under Section 17(3) of the Copyright Act and special damages of $6,000.00 relating to eh infringement of copyright. However, these heads of damage do not overlap or merge with the general infringement damages of $25,000.00 awarded under Section 17(1) of the Copyright Act. As explained earlier the infringement damages were awarded on the basis of fair remuneration to the Plaintiff for the playing and arrangement of the 40 infringed pieces of music. The aggravated damages are self-explanatory, being in terms of the statutory provision, and the special damages presumably relate to the Plaintiff’s actual expenses incurred in investigating the breach of her copyright. For these reasons the heads of damage awarded and agreed to do not overlap and have not resulted in excessive damages being awarded to the Plaintiff.
12. Interest will be awarded on the general damages at 2% per annum from the date of the issue of the writ until the date of this assessment. The Plaintiff’s costs on this assessment are to be met by the Defendant, to be taxed if not agreed, with a certificate to issue for Counsel.
|