BURDEN & ORS v ESR GROUP (NZ) LIMITED
Court of Appeal of New Zealand
Kós P, Brown and Courtney JJ
23 September, 12 November 2020
 NZCA 560
Copyright – infringement – remedies hearing – application by successful plaintiff to amend pleading prior to remedies hearing to include further instances of primary infringement – principles governing amendment of pleadings in intellectual property cases prior to remedies hearing – the appropriate test in New Zealand comprises the interests of justice – amendment permitted to allow claim for issuing to the public – s 31 Copyright Act 1994(NZ) rules 7.77, 22.24, 22.25 High Court Rules (NZ)
Application to strike out second proceedings – as leave given to amend pleadings in 2014 proceeding, abuse of process to allow second claim.
In the liability phase of this litigation (“the 2014 proceeding”) the defendant, ESR, was held liable for secondary infringement of the copyright works of PGT International and PGT Vietnam (“the Plantation interests”) by importing into New Zealand a range of furniture known as the Roseberry Collection on 28 August, and 5 and 12 September 2014. In addition to granting injunctive and declaratory relief, the trial Judge reserved leave to pursue damages or an account of profits at a separate hearing in respect of the infringing Roseberry items.
In the subsequent discovery process the Plantation interests realised that there had been earlier importation by ESR of different infringing items (“the Westbury Collection” and one further Roseberry item) from May 2013.
On 17 December 2018 the Plantation interests filed a new proceeding (“the 2018 proceeding”) alleging primary infringement (s 31 Copyright Act – issuing of copies to the public) of both the Roseberry and Westbury Collections in New Zealand. ESR applied to strike out the 2018 proceeding.
On 2 May 2019 the Plantation interests made a formal election to pursue an account of profits.
The Plantation interests then applied on 15 May 2019 for leave to amend the 2014 proceedings not only to include the Westbury Collection, but to add a new cause of action of primary infringement (issuing to the public) in respect of both furniture collections. The Plantation interests relied on English case law and textbook authorities that, at a remedies hearing, a plaintiff may extend to all infringements of the “type” proved at the liability trial, and the Court may permit it to extend to “related” infringements which amount to new causes of action, if it is fair and convenient to do so.
ESR opposed the application to amend.
In the High Court, ESR accepted that a number of the new furniture items not considered at the liability hearing could fall within the existing finding of secondary infringement. Venning J declined the application for leave to amend the 2014 proceedings. The Judge also declined to strike out the 2018 proceeding.
The Plantation interests and ESR both separately appealed.
Held (allowing both appeals):
Application to amend the 2014 proceedings
(i) Although the potential difficulties associated with split trials for liability and assessment of monetary relief are well known, separate hearings are commonplace, particularly in intellectual property cases, because of their potential to achieve significant savings in time and cost .That objective has long been recognised in the patent jurisdiction where a plaintiff is required to deliver particulars of breaches which provide at least one instance of ‘each type of infringement’.
Belegging-en Exploitatiemaatschappij Lavender BV v Witten Industrial Diamonds Limited  FSR 59 (CA), 63-64; Unilin Beheer BV v Berry Floor NV  EWCA Civ 364;  1 All ER 156; Fabio Perini SPA v LPC Group Plc  EWHC 911 (Ch),  RPC 885; AP Racing Ltd v Alcon Components Ltd  EWHC 815 (Ch), [2016 FSR 28 referred to.
(ii) In appropriate cases the Court may permit a new issue of liability to be raised at a quantum hearing. That reality is reflected in the High Court Rules relating to patents which allow for the grant of leave to adduce evidence relating to matters not specified in particulars and to amend particulars of infringement, the latter on terms which the Court considers just .
(iii) The “fair and convenient” threshold set the bar too low for a departure from a split trial direction . Liability issues should only be permitted to be revisited at a remedies hearing if the Court can be satisfied that the interests of justice so require, this being the standard that the High Court Rules prescribe for an amendment of particulars in a patent infringement claim. .
(iv) The Court was satisfied in this case that the interests of justice required that the amendment be permitted ,  and  for the following reasons:
(a) The Court considered that the statement of claim in the 2014 proceeding was fairly and properly construed as asserting a s 31 infringement (‘issuing to the public’) so that the interests of justice would require that the monetary relief hearing should extend to include the s 31 infringement allegation ,  and .
(b) Consistently with primary infringement being in issue, trial counsel for the Plantation interests had cross-examined ESR’s witness on the date of first sale of the furniture items in New Zealand .
(c) In an addendum to its closing submissions, ESR had engaged with the s 31 allegation of primary infringement .
(d) It seemed implicit in the order for discovery which the trial Judge made in her liability judgment that the supply of furniture in New Zealand by ESR was in contemplation .
(v) There was not any significant prejudice for ESR arising from this outcome. In an amended statement of defence ESR admitted not only to having imported the relevant furniture into New Zealand, but also to having kept it for sale, offered it for sale, and sold it in New Zealand . The Plantation interests had undertaken to amend their proposed amended statement of claim to obviate the need for ESR to prove the fact of its earlier transactions involving the infringing furniture being manufactured and sold in Vietnam prior to the infringing items of furniture coming into the hands of ESR and being distributed by it in New Zealand. Consequently, the issue which would remain for determination on the primary infringement allegation would be a narrow legal and factual dispute .
Strike out appeal
(vi) The consequence of allowing the appeal on the amended application was that the appeal against refusal to strike out the 2018 proceedings could be disposed of in short order. The amendment permitted to the 2014 proceedings rendered the 2018 proceeding unnecessary. It would be an abuse of process to allow this proceeding to continue when it advanced the same causes of action as an existing claim - .