Pbi Publications (Hong Kong) Ltd v. Marks Hundred Co Ltd

IN THE SUPREME COURT OF HONG KONG

COURT OF APPEAL

CIVIL APPEAL NO. 91/1987

(ON APPEAL FROM HIGH COURT ACTION NO. 1663 OF 1987)

__________________

BETWEEN

__________________

Coram: Hon. Cons V-P., Clough, J.A. & Macdougall J.

Date of hearing: 13^th November, 1987

Date of handing down of judgment: 25^th November, 1987

__________________

JUDGMENT

__________________

Macdougall J.:

1. This is the judgment of the court.

2. After the conclusion of argument on this appeal from the judgment of a master on an assessment of damages we allowed the appeal and stated that we would give our reasons later. This we now do.

3. The matter arose in this way. The appellant, who is the owner and publisher of a magazine known as “Playboy (Chinese Edition)” and the owner of the copyright in a collection of artistic photographs of a female model, published a number of these photographs in the January 1987 issue of its magazine. Subsequently the respondent, who publishes a weekly magazine called “Nouveau City Weekly Magazine”, published and sold an issue of that magazine which contained a reproduction of one of those photographs.

4. The appellant issued a writ against the respondent in which it claimed damages for both infringement of copyright and for conversion and sought an account of the profits made by the defendant.

5. Subsequently interlocutory judgment was entered for damages to be assessed. At the hearing before the Master, the editor and publisher of the appellant’s magazine testified that the appellant had paid the model $7,800 for her services in posing for the photographs and that it had incurred $30,380 in expenses in having the photographs taken of this and another model in the course of photography sessions that extended over three days. These expenses comprised the photographer’s fee, the cost of film, props, studio rental and the fees of a make up artist and a hair stylist.

6. The editor further testified that it was not the appellant’s practice to sell photographs in which it had copyright but that there had been one occasion on which it had sold one such photograph to an in-house magazine for $5,000. He also claimed that the quality of the respondent’s reproduction of the photograph was poor and that the photographer had complained to the appellant that he had expected that it alone would publish his work.

7. The solicitor who represented the appellant before the Master submitted to him that the appellant should be awarded a total sum comprised of $7,800 being the model’s fee, $15,190 being half the expenses incurred in photographing the two models, at least $5,000 in general damages, and damages for loss of reputation.

8. While accepting that the respondent had taken the benefit of both the fee paid to the model and the expenses incurred in taking photographs of her, the Master concluded that as the appellant had obtained from her exactly what it had paid for and, as there was no evidence that it had suffered any financial loss in respect of those sums, that head of claim must fail.

9. He rejected the claim for general damages without giving any reason other than that he had the greatest difficulty in finding that the appellant had sustained any pecuniary loss.

10. Finally, he rejected the claim for damages for loss of reputation on the ground that there was no evidence that anyone apart from the photographer had identified the photograph in the respondents magazine as having been the same as that published earlier in the appellant’s magazine.

11. Although the Master accepted that there had been an infringement of the appellant’s copyright in the photograph, he concluded that there was no satisfactory evidence to prove that the appellant had suffered damage and therefore made a nominal award of $10. And, in view of the amount of damages assessed, he awarded costs to the appellant on the scale appropriate to the District Court.

12. The appellant now seeks orders that the assessment and the order for costs be set aside, that there be a new assessment of damages and that we substitute an order that costs be assessed on the Supreme Court scale.

13. Mr. Maxwell Lewis, who appeared on behalf of the appellant, advanced a number of grounds of appeal. First, he submitted that by failing to indicate whether the nominal award was in respect of damages for infringement of copyright or for conversion, the Master had not appreciated that damages under these two heads were not alternative but cumulative. That may be so but we do not think that in this instance it is of any importance.

14. Secondly, counsel contended that the Master had failed to take into account that the measure of damage for infringement is the depreciation caused by the infringement to the value of the copyright as a chose in action. Since the Master did not state that the law was otherwise, it seems that this contention is founded on the fact that the award was purely nominal.

15. Thirdly, Mr. Maxwell Lewis submitted that, in having found that the appellant had lost its exclusivity in the photograph, the Master had either failed to find that damages would be a fair fee which the respondent would have had to pay for using the photograph or had failed to take into account the evidence before him of the value of a fair fee.

16. Fourthly, it was argued that the Master had either failed to take into account that the measure of damages for conversion is the value of the photograph at the time it was converted or had placed insufficient weight on the evidence as to its value.

17. We have some sympathy for the Master for it is apparent from the record that the argument addressed to him by the appellant’s solicitor was confusing and misconceived. We are satisfied, however, that the unchallenged testimony of the editor that the appellant had previously sold for $5,000 a similar photograph for use in an in-house magazine was evidence that he should have accepted as a basis on which to make an award. We are unable to agree with him that there was no satisfactory evidence to show damage.

18. The fully documented evidence as to the fee paid to the model and the expenses incurred in conducting the photography sessions during which the photograph was taken, although not directly referable to a head of damage, does give some indication of the expenditure involved in obtaining this type of photograph and is relevant to show that a license fee of $5,000 would not have been inappropriate.

19. In commenting on the subject of damages for infringement of copyright the authors of Copinger and Skone James on copyright 12^th edition observe at paragraph 643:

“The measure of damage is the depreciation caused by the infringement to the value of the copyright as a close in action. Thus if the defendant has dealt with the plaintiff’s copyright work as if he had a licence, the defendant ought to pay as damages an amount equivalent to a fair fee which he would have had to pay for a licence to do the acts which he has done. There will also be taken into account any loss which the copyright owner has suffered by reason of the diminution of the sales of his work, or the loss of profit which he might otherwise have made, but there will not be taken into account under this head any benefit which may have accrued to the defendant by the use of his work. The fact that the operated work may have injured the reputation of and vulgarized the original is also a fact that may be taken into consideration in assessing the amount of damages, and generally the damages may be said to be at large.”

20. The second sentence in this extract is bases on Stovin-Bradford v. Volpoint Ltd. (C.A.)(1) where Lord Denning said at page 1016:

“The defendants’ took the plaintiff’s plan and took it as if they had a licence to use it as they pleased – to take so much of it as suited them and leave out what they did not want. They ought to pay as damages an amount equivalent to the fee which they would have had to pay for a licence. This is how Crossman J put it in Chabot v. Davies(2); ‘What is the remuneration which the plaintiff could fairly have got for his plan if the defendant had applied for his licence to use it?’ That was approved by Uthwatt J on Meikle v Maufe.(3)”.

21. Salnon L.J. used similar words at page 1021:

“The damages must be assessed on the basis of what would be fair remuneration to have paid the architect for a licence to use the copyright for the purpose for which it was used.”

22. Miss Corcoran, who represented the respondent at the hearing of the appeal, submitted that on a proper interpretation of the editor’s testimony it is apparent that even on payment of a license fee the appellant would not have permitted the respondent to use the photograph in its magazine, and that by implication the Master had so understood that testimony.

23. While not disputing that the principle that emerges from the above cases is entirely correct, Miss Corcoran sought to persuade us that it had application only where the evidence discloses that the owner of the copyright would be willing to grant the defendant a license to use the article in question. She was unable, however, to cite any authority to support this proposition and we do not think that there is any justification for making such a distinction. Moreover, we are satisfied that the interpretation Miss Corcoran sought to place on the editor’s testimony would only be valid if the part on which she relied were looked at in isolation.

24. On an overall view of the evidence it is tolerably clear to us that, although the appellant would have been reluctant to sell the photograph to the respondent on payment of a normal commercial fee due to the fact that it regarded the respondent’s magazine as being a down market publication that sold at a much lower price than its own magazine, it would nevertheless have done so on payment of a premium.

25. On the question of damages for conversion Mr. Maxwell Lewis conceded, as he had to, that the appellant had not sought discovery of the circulation of the respondent’s magazine and that the evidence before the Master would not have entitled him to conclude that any more than two copies had been sold. In the circumstance he accepted that an award of nominal damages for conversion would be appropriate.

26. Finally Mr. Maxwell Lewis submitted that, although the Master had a discretion in awarding costs, he ought not to have awarded costs on the District Court scale because by so doing he had failed to take into account the public interest involved in an action for infringement of copyright. We do not accept this argument. Proceedings are no less public in the District Court than they are in the High Court. It should have been obvious to the appellant that in bringing this action in the High Court the damages which it was likely to receive would have fallen far short of the $60,000 ceiling of the jurisdiction of the District Court. Although the Master based his award of costs on the nominal damages of $10 we have no reason to believe that he would have done otherwise had the assessment been in the sum we have in mind. We are satisfied that his order was a proper one and accordingly dismiss the appeal as to costs.

27. We are of the view that there is no merit in the appellant’s claim for damages for loss of reputation and, whilst there was no specific evidence as to what amount the appellant would have charged the respondent by way of premium over and above a normal license fee for the use of the photograph, we have come to the conclusion that an overall award of $7,500 would meet the justice of this case.

28. We therefore allowed the appeal on the assessment of damages and award the appellant the sum of $7,500 and the costs of the appeal.

Mr. Cameron Maxwell Lewis instructed by M/S Gordon D. Oldham & Co. for the Appellant.

Miss Carmel Patricia Corcoran instructed by M/S Haldane Midgley & Cheung for the Defendant/Respondent.

(1)  [1971] 1 Ch 1007

(2)  [1936] 3 All E.R. 221, 228

(3)  [1941] 3 All E.R. 144