An Exercise in Damage Control

Coles v Dormer & Ors (No 2) [2016] QSC 28

In early August 2015, Henry J of the Queensland Supreme Court made an unusual set of orders in relation to the infringement of building plans

Facts

Mr Coles had won at auction a house described as “French Provincial with a Caribbean influence”. The Dormers, a couple who lost to Mr Coles at auction, ordered an exact replica to be built in the same gated community. Mr Coles obtained an assignment of copyright in the building plans from the architect, Mr Skyring and sought an injunction from the Supreme Court to prevent his home being copied by the Dormers and their builders.

Having found that the copyright in Mr Coles’ home had been infringed by the Dormers and others, Henry J ordered the Dormers to:

- Remove the dormer roofs.
- Remove and replace the extant arched and circular windows with rectangular or square windows and any external remnant space, appearance or outline of the arched and circular window shapes be filled and concealed by rendering.
- Grind, cut away or remove the areas of stone edge trim to the extent necessary to render those areas flush with the walls and fill and conceal by render any remnant appearance or outline of the stone edge trim

This cosmetic remedial work has now been completed. In this decision, Henry J was asked to award damages to Mr Coles. Mr Coles elected to seek both compensatory and additional damages. The defendants conducted a joint defence.

Compensatory damages

The defendants argued the measure of damages should be assessed by the diminution of the copyright’s value to the original copyright owner, Mr Skyring or his company, rather than Mr Coles, the assignee. The defendants further argued the compensation should be assessed by determining a hypothetical bargain between Mr Skyring and the defendants. The court rejected these arguments because Mr Coles owned copyright at the time the infringement took place. The court found the loss suffered by Mr Coles was the loss of enjoyment of a locally unique residence and a potential loss of that residence’s value. The court noted the loss of enjoyment lasted until the remedial work was finished which took two years, and further noted that the loss in value of the residence was potential and hypothetical. The remedial work cost the defendants $43,750 and the court determined that this complemented compensatory damages which was assessed at $10,000. Compensatory damages were awarded for the loss of enjoyment of his “locally unique residence” caused until the remedial work was completed and the slight loss of future enjoyment following the remedial work.

Additional Damages

The court noted that section 115(4) of the Copyright Act 1968 allows a court to have regard to the flagrancy of the infringement, the behaviour of the defendant and deterrence in any award of additional damages. The court dismissed several arguments put forward by the defendants to lessen any award of additional damages on the basis that the infringement derived from a mistaken belief that the original owner of the house owned copyright. The court found that after Mr Coles had informed the defendants that he owned copyright and had sought to negotiate, the defendants took a “calculated commercial risk in the pursuit of their own benefits in disregard of Mr Coles’ rights”. The court found it appropriate to award additional damages and awarded $60,000.

In total, Mr Coles was awarded $70,000.

Comment

This decision is a good example of how damages for copyright infringement are proven and assessed in Australia. Without the award of additional damages due to the flagrancy of the defendants’ conduct, the compensatory damages would have been relatively small. This is different from other countries, such as the United States, where the quantum of damages for copyright infringement is set out in the legislation.