G-Star Raw C.V. v Jeanswest Corporation (New Zealand) Limited

[2013] NZHC 2179

G-STAR RAW C.V. v JEANSWEST CORPORATION (NEW ZEALAND) LIMITED [2013] NZHC 2179 [26

August 2013]

 

Copyto:

 

James & Wells, Auckland Martelli McKegg, Auckland D L Marriott, Auckland

C Elliott QC, Auckland

 

Solicitors:

 

Date……………

 

Registrar/Deputy Registrar

 

This judgment was delivered by me on 27 August 2013 at 10.00 am, pursuant to Rule 11.5 of the

High Court Rules.

 

REASONSFORJUDGMENTOFVENNING J

 

27August 2013

 

Reasons:

 

26August 2013

 

Judgment:

 

D L Marriott and I Finch for Plaintiffs

C Elliott QC for Defendant

 

Appearances:

 

26August 2013

 

Hearing:

 

JEANSWEST CORPORATION (NEW

ZEALAND) LIMITED First Defendant

 

AND

 

G-STAR AUSTRALIA PTY LIMITED

Second Plaintiff

 

G-STAR RAWC.V.

First Plaintiff

 

BETWEEN

 

of copyright infringement

 

INTHEMATTER

 

theCopyrightAct 1994

 

UNDER

 

CIV-2011-404-003243

[2013] NZHC 2179

 

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

 

design of the Jeanswest product.  Jeanswest provided redacted copies of documents

 

Thereafter  G-Star  sought  further  information  as  to  the  manufacture  and

 

[6]

 

infringement of the plaintiffs’ copyright, by importing, distributing and selling the

infringement product.

 

At   that   stage   the   pleadings   were   focused   on   Jeanswest’s   secondary

 

[5]

 

allocated a seven day fixture to commence on 23 September.

 

On  8  November  2012,  shortly  after  that  pleading,  the  proceeding  was

 

[4]

 

Jeanswest product, but denies the design was copied from the plaintiffs’ copyright

works and says that it imported and distributed the jeans in good faith and neither knew nor had reasonable grounds to know the Jeanswest product was an infringing

copy. That statement of defence was filed on 6 November 2012.

 

Jeanswest admits to importing, distributing and  selling various jeans, the

 

[3]

 

[2]      In the existing second amended statement of claim the plaintiffs (G-Star)

plead ownership of copyright in a denim jeans design 5620 Elwood (the Elwood design).  G-Star claims that from at least 2 July 2010 Jeanswest Corporation (New Zealand) Limited (Jeanswest) has imported, possessed in the course of business, distributed, offered for sale and sold through its Jeanswest chain of retail stores in New Zealand a style of jeans named “Dean Biker Slim” (the Jeanswest product) without licence or authority of the plaintiffs.   G-Star alleges that the  Jeanswest product infringes its copyright.  It seeks declarations confirming infringement of the

copyright and consequential relief, including an inquiry as to damages.

 

Background

 

declined  the  plaintiffs’  application  for  leave  to  join  two  additional  defendants

Jeanswest Wholesale Pty Ltd and Jeanswest Corporation Pty Ltd to this proceeding and  consequently to  adjourn the  fixture with  reasons  to  follow.    These are the

reasons.

 

In a results judgment delivered at the end of the hearing on 26 August 2013 I

 

[1]

 

Introduction

 

Hall & Coles Ltd in which Barker J cited the following passage from a decision of

 

Mr Marriott relied in particular on the case of NZI Insurance Ltd v Hinton

 

[12]

 

proposed defendants to be joined to enable the Court to adjudicate on or settle all

questions involved in the proceeding.   He accepted that joinder of the additional defendants would necessitate the adjournment of the trial date.

 

Mr Marriott referred to r 4.56 and submitted that it was necessary for the

 

[11]

 

The application

 

directions to ready the case for trial.  This application for leave was referred to the

List Judge for allocation of a fixture.   Because of counsels’ unavailability and the

Court’s commitments the fixture could not be heard before 26 August 2013.

 

On 5 August, in a duty Judge call, counsel were directed to confer and settle

 

[10]

 

issues.  Ultimately that led to the application for leave to join the defendants.  That

application was not made until 29 July 2013.

 

Even with the assistance of counsel, the parties were unable to resolve the

 

[9]

 

not substantively advanced during July.

 

Unfortunately because counsel for Jeanswest was overseas the position was

 

[8]

 

plaintiffs’ solicitors suggesting ADR.  However, they also confirmed that before they

would attend ADR G-Star required informal discovery from Jeanswest Corporation Pty Limited and Jeanswest Wholesale Pty Limited regarding the design, manufacture and importation of the Jeanswest product, including but not limited to design files, correspondence, file notes, instructions, samples and emails relating to the same. The solicitors  also  said that  if that  request  for disclosure was  resisted then the

plaintiffs would make a formal application to join both parties to the proceeding.

 

The  next  relevant  development  was  a  letter  of  25  June  2013  from  the

 

[7]

 

relating  to  those  issues  but  following  a  direction  at  an  interlocutory  hearing

Jeanswest then made unredacted copies of the documents available for inspection by

G-Star on 29 May 2013.

 

NZI Insurance Ltd v Hinton Hall & Coles Ltd (1996) 9 PRNZ 615 at 619.

 

1

 

not a case of confusion about the identity of the correct defendant.   The existing

defendant is the correct defendant in New Zealand.  It admits importing, distributing and selling the jeans in issue.

 

This case is not analogous to the passage relied on by Mr Marriott.  This is

 

[16]

 

their presence to be before the Court as parties to enable the Court to adjudicate on

and settle those questions.

 

It is not necessary for the proposed additional defendants to be joined or for

 

[15]

 

of the proposed second and third defendants is not necessary to enable the Court to

adjudicate on and settle the questions involved in that proceeding.   The questions involved in the proceeding as defined by the second amended statement of claim are whether the copyright G-Star claims in the Elwood design is infringed by the Jeanswest product imported, distributed and sold by Jeanswest, and if so, whether Jeanswest knew or ought to have reasonably known that the Jeanswest product was

an infringing copy.

 

As the pleading stands in the second amended statement of claim the joinder

 

[14]

 

Reasons for decision

 

Mr Marriott submitted that case was on all fours with the present.

 

[13]

 

“It  is  a  kind  of  case  that  is  characteristic  of  the  conditions  of  modern

international commerce; and on this account the present appeal assumes a particular importance. One New Zealand company, which transacts in New

Zealand the business of one of such international groups of corporations, has

for years done business with another New Zealand company, whose function it is to act similarly as the New Zealand representative of another such international group. The two New Zealand companies, after statutory course of business extending over some years, have fallen out over a transaction. The first company has sued the second, only to be met with the reply ‘not I’. When such a thing has happened is it to be necessary to abandon the proceedings and start again? Or would justice better be done by ordering the joinder, whether as plaintiffs (subject to the plaintiffs' consent) or the defendants, of all the parties required to ensure that the proper members or members of each group are brought before the Court thus enabling the merits to be determined with expedition.”

 

the Court of Appeal in Westfield Freezing Co Ltd v Sayer & Co Ltd [[1970] NZLR

137]:1

 

interests of other parties that have cases before the Court.  This case has been before

the Court since May 2011.  It should be heard.  Fixture dates should be maintained.

 

I have also taken into account the interest of justice overall, including the

 

[22]

 

to make available an employee, a member of the design team, to give evidence to

explain the design process.  I take it from that the witness will be identified and will be available if the plaintiffs require him or her to be available to give evidence at the

trial.

 

Mr Norbury has also said that Jeanswest Corporation Pty Limited is prepared

 

[21]

 

he confirms he is instructed that Jeanswest Corporation Pty Limited is prepared to

provide voluntary disclosure of all documents in its possession which relate to the design,  manufacture  and  supply of the jeans.    They can  be made available for

inspection on relatively short notice.

 

Mr Norbury also deposes the jeans were manufactured in China.  Importantly,

 

[20]

 

Australia by Jeanswest Corporation Pty Ltd.  That is an admission by an agent.  The

fact  the jeans  were designed  in Australia should  not  come as  a surprise  to  the plaintiffs as Jeanswest is the second largest retailer of jeans in Australia.

 

He  deposes  that  the  jeans  in  issue  were  designed  in  Melbourne,

 

defendants.

 

Australian  legal  practitioner  for  the  defendant  and  also  for  the  two  proposed

 

He  confirms  he  is  the

 

Norbury,  a  legal  practitioner  in  Melbourne,  Australia.

 

belatedly.  In support of the opposition the defendant has filed an affidavit from Mr

 

The  issues  of  design  and  manufacture  have  now  been  clarified,  albeit

 

[19]

 

the  view  that  if  voluntary  disclosure  relating  to  the  design,  manufacture  and

importation of the Jeanswest product was not made then application would be made to join the proposed second and third defendants.  The proper course was to make an application for non-party discovery.  It is not appropriate to seek discovery from a

party and to threaten, in default of compliance, to join them.

 

In my judgment this application miscued at the outset when the plaintiff took

 

[18]

 

causes of action to include not just secondary but primary infringement.

 

The proposed third amended statement of claim would expand the existing

 

[17]

 

Venning J

 

made an order that costs are to lie where they fall on this application.

 

As I accepted both parties have contributed to the way this issue has arisen, I

 

[26]

 

Costs

 

directions to confirm the readiness of this fixture for trial.

 

For the above reasons I declined the application for joinder and made the

 

[25]

 

On his instructions there are a very limited number of jeans, numbering in the low

hundreds, that have been sold. The amount at stake is not significant.

 

Finally, I accept there is also force in Mr Elliott’s proportionality argument.

 

[24]

 

necessary.    To  the  extent  that  the plaintiffs wish  to  pursue a  claim  against  the

proposed second and third defendants for primary infringement of the copyright it is open for them to issue separate proceedings to do so.

 

Next, any prejudice the plaintiffs may suffer can be addressed by costs if

 

[23]

 

The allocation of fixtures involves the allocation and commitment of limited judicial

resource to cases.  As this case has been allocated a fixture for 23 September 2013, that date was then not available for other cases.