Facts:

In September 2021 under the border enforcement provisions of the Copyright Act, the plaintiff (Stabicraft) lodged with NZ Customs several notices requesting detention of pirated goods (NRDPC) based on its copyright designs of marine craft.

The first defendant (Sea King) imported a 9.3m pontoon boat (the Easy Craft 9.0) for ultimate use by a third-party charter fishing business on Great Barrier Island.  The Easy Craft boat was built in China and shipped to Sea King. 

As a result of the NRDPC’s, Customs detained the boat and, after inspection, made a determination under s 137(3) Copyright Act (served on Stabicraft and the defendants on 21 January 2022) that the boat appeared to be a pirated copy of one of the copyright works contained in the NRDPC’s. 

Once a notice of determination is made, s 140 provides that the goods must be detained by Customs until certain events occur.  One such event is that 10 working days have elapsed since the notice of notice of detention was served (on the importer) and the Chief Executive of Customs has not received notice of proceedings having been commenced under s 141(3).  The purpose of issuing proceedings under s 141 is to have the court determine whether the detained goods are pirated and should be forfeited to the Crown or released to the importer.  [22]

In the present case, Stabicraft served a statement of claim on Customs on 27 January 2022 within the 10-day period.  The defendants alleged that the statement of claim did not amount to proceedings brought under s 141(3) and therefore that service was not effected for the purposes of the border protection measures.  The defendants claimed that the first time a claim was made under s 141(3) was when Stabicraft filed and served an amended statement of claim dated 16 March 2022.  This amended statement of claim was filed and served outside the 10-working day period required by s 140(1)(e). 

The original statement of claim pleaded that Stabicraft was exclusive owner of copyright in a series of artistic works for listed boats.  The five copyright works were only a selection of seven copyright works specified in the NRDPCs.  [33-34] The statement of claim further pleaded that Sea King had advertised, imported and sold four boats (the Explorer Boats).  Paragraph 15 of the statement of claim under the heading “Detention of Explorer Boat by NZ Customs” described a boat approximately 9m in length and that it had been detained as a result of Stabicraft’s NRDPCs. 

Held (granting the defendants’ application):

      i.                None of the boats particularised in the statement of claim nor shown in annexure B to it referenced the boat that had been detained by Customs.  [40]

     ii.                The amended statement of claim pleaded that the Easy Craft 9.0 being detained by Customs derived from various Stabicraft copyright works and was a pirated copy for the purposes of s 141(3).  [43-47]

    iii.                Under Part 7 Copyright Act there is clearly a statutory obligation on a plaintiff seeking continuing detention of goods to apply for a determination that the goods are a pirated copy “to which the notice relates” [60]. The effect of the statutory obligation was to create a presumptive hurdle that the plaintiff must establish before its proceeding could be properly constituted for the purpose of the border protection measures of the Act.  [61]

   iv.                The plaintiff’s original statement of claim did not contain all the essential factual and legal elements so as to inform the defendants of the claim against them.   A court (considering that pleading) could not have ruled on the essential question for determination in s 141(3).  The statement of claim fell far short of informing the defendants that the case against them was in relation to the detained boat.  It did not assert that the detained boat was a pirated copy.  [64]

     v.                The plaintiff Stabicraft had not served Customs with properly constituted proceedings for the purposes of s 141(3).  Customs therefore had wrongfully detained the detained boat and it must be released to Sea King forthwith.  [68]  Customs was ordered to release the Easy Craft 9.0, with the order stayed for 10 working days to enable Stabicraft to appeal.  [70-71]