FEDERAL COURT OF AUSTRALIA

Facton Ltd v Rifai Fashions Pty Ltd [2011] FCA 290

THE COURT DECLARES THAT:

(a)    The first and second respondents have infringed the Trade Marks (as defined in paragraph 4 of the affidavit of Anthony Brooke Watson sworn 21 December 2009 (“the Watson affidavit”), in breach of s 120 of the Trade Marks Act 1990 (Cth);

(b)    The first and second respondents have infringed the Copyright Works (as defined in paragraph 5 of the Watson affidavit);

(c)    The first and second respondents have contravened ss 42 and 44 of the Fair Trading Act 1987 (NSW);

(d)    The first and second respondents have contravened ss 52 and 53 of the Trade Practices Act 1974 (Cth);

(e)    The first and second respondents have engaged in conduct which constitutes the tort of passing off.

THE COURT ORDERS THAT:

1.    The first and second respondents jointly and severally pay the applicants damages in the sum of $9,213.

2.    The first and second respondents jointly and severally pay the second applicant damages in the sum of $11,000.

3.    The first and second respondents pay the applicants’ costs, other than travel and accommodation costs incurred by reason of the legal practitioners of the applicants attending the trial of the proceeding in Sydney.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

introduction

1    The applicants seek declarations and damages against the first and second respondents in relation to the sale of counterfeit goods. No claim is now pressed against the third respondent. At the commencement of the trial I ordered that the proceeding as against the third respondent be dismissed with no order as to costs.

2    The second applicant (“G-Star International”) is a company incorporated pursuant to the laws of The Netherlands. It designs, distributes and sells “G-Star” branded clothing and accessories (“G-Star Products”) throughout the world. The first applicant (“Facton”) is also a company incorporated in The Netherlands and is the registered owner of various Australian trade marks (“the G-Star Trade Marks”) described at paragraph 4 of the Affidavit of Anthony Brooke Watson of 21 December 2009 (“the Watson Affidavit”). G-Star International has an exclusive licence to use the G-Star Trade Marks and is the owner of copyright (described at paragraph 5 of the Watson Affidavit) in logos depicted in two of the G-Star Trade Marks (“the G Logos”). The third applicant (“G-Star Australia”) is a company incorporated in Australia and is the exclusive Australian distributor of the G-Star Products pursuant to a licence agreement with G-Star International.

3    The first respondent (“Rifai Fashions”) is a company incorporated in Australia. The second respondent (“Mr Rifai”) is the sole director of Rifai Fashions.

4    The applicants claim that Rifai Fashions and Mr Rifai have infringed the G-Star Trade Marks in breach of s 120 of the Trade Marks Act (1990) (Cth) (“the Trade Marks Act”). Further, it is claimed that they have infringed the copyright in the G Logos. Additionally, it is alleged that Rifai Fashions and Mr Rifai have contravened ss 42 and 44 of the Fair Trading Act 1987 (NSW) (“the Fair Trading Act”) and ss 52 and 53 of the Trade Practices Act 1974 (Cth) (“the Trade Practices Act”). Lastly, each of Rifai Fashions and Mr Rifai is accused of engaging in conduct constituting the tort of passing off.

5    Each of Rifai Fashions and Mr Rifai admit to infringing the G-Star Trade Marks, the G-Star Logos, to have contravened both the Fair Trading Act and the Trade Practices Act and to have engaged in passing off. Mr Rifai admits that he was a joint tortfeasor with Rifai Fashions in respect of each of the causes of action in question. Rifai Fashions and Mr Rifai, also admit to not adhering to two undertakings given to the applicants. They concede that the Court should make declarations in the terms sought by the applicants by their Amended Application.

6     As a result of these admissions and concessions, the controversy I need to determine is confined to some of the applicants’ claims for damages. The applicants have quantified their lost sales resulting from the sale by Rifai Fashions of counterfeit “G-Star” branded apparel at $9,213. Rifai Fashions and Mr Rifai concede that compensatory damages for lost profits in that sum should be awarded. The applicants also seek compensatory damages for damage to their reputations. That claim is resisted. Additionally the applicants claim additional damages pursuant to s 115(4) of the Copyright Act 1968 (Cth) (“the Copyright Act”) and exemplary damages in relation to the passing off by Rifai Fashions and Mr Rifai of “G-Star” apparel. Those claims are also resisted. Damages are not pressed in relation to the applicants’ claims under the Trade Practices or the Fair Trading Act.

7    In order to assess whether and to what extent damages should be awarded for loss of reputation and whether and to what extent an award should be made for additional or exemplary damages, I need to consider the evidence and make findings as to the nature and extent of each of the applicants’ reputations and as to the nature and extent of the infringing conduct engaged in by Rifai Fashions and Mr Rifai.

8    With some necessary modifications, I will make the declarations sought by the applicants and make orders for the payment of damages for lost profits in the sum of $9,213. For the reasons that follow, I have determined that additional damages of $11,000 should also be ordered.

the evidence

9    G-Star International sells G-Star Products through “G-Star” branded stores and independent retailers in 40 countries. It operates 73 showrooms around the world with over 4,600 retail points of sale. G-Star Australia sells G-Star Products to its franchisees that own and operate 10 “G-Star Concept Stores” throughout Australia, and also to over 40 independent retailers throughout Australia including major department stores. G-Star Australia advertises and promotes the “G-Star” brand in Australia in a number of ways including through billboards, signage on public transport, in-store advertising, advertorials and advertisements placed in various magazines. Substantial amounts of money are expended by G-Star Australia on advertising and promoting the “G-Star” brand in Australia.

10    The uncontradicted evidence led by the applicants was that through its marketing and promotional activities, G-Star International has generated and cultivated a reputation as being an innovative brand with cutting edge style that appeals to a wide range of customers. It is said that the rough, rudimentary and raw characteristics of G-Star Products give them a distinct, urban and unorthodox style. Based on those facets, G-Star Australia has built up a substantial reputation in the “G-Star” brand in Australia. Large quantities of G-Star Products are sold in Australia. A confidential exhibit identified the annual turnover of G-Star Australia and verified that the turnover is very substantial. Retail customers of G-Star Australia sell a pair of “G-Star” jeans for an average recommended retail price of $280 and a “G-Star” t-shirt for an average recommended retail price of $40.

11    Rifai Fashions and Mr Rifai have admitted the following facts and matters relevant to the applicants’ reputation:

The applicants have established a substantial, exclusive and valuable reputation and goodwill in Australia by reference to the G-Star Trade Marks and the Copyright Works [the G Logos]. The business and goods of the applicants have become widely and favourably known and identified by the general public in Australia by reference to the G-Star Trade Marks and the Copyright Works. The G-Star Trade Marks and the G Logos are featured on the G-Star Products and on packaging, promotional, and advertising material relating to the sale of the G-Star Products. The G-Star Products are available for sale from retailers throughout the world, including Australia. The G-Star Trade Marks and G Logos are, and have been at all material times, known to be distinctive of and signify exclusively the business and goods of the applicants.

12    The evidence relied upon by Rifai Fashions and Mr Rifai was given by Mr Rifai who swore an affidavit and was cross-examined. Mr Rifai is 67 years old. He has a rudimentary understanding of the English language and gave evidence with the assistance of an interpreter. He gave his evidence in a cooperative manner, but was at times slow to concede wrongdoing and at other times, it seems to me, his evidence was exaggerated.

13    Mr Rifai has been in the fashion industry for some 20 years. Through Rifai Fashions he and other members of his family have been involved in manufacturing and selling clothing over that period. Rifai Fashions has operated out of a factory at Punchbowl in New South Wales. Until about 2003, Rifai Fashions manufactured clothing including under its own brand. That apparel was sold either from the factory at Punchbowl or alternatively from a stall at a market in Flemington. Rifai Fashions has sold from the market stall for approximately the last 20 years. The market is open one day a week on a Sunday.

14    Rifai Fashions ceased manufacturing clothing in or about 2003 and commenced buying finished garments from various wholesalers in and around Surrey Hills in New South Wales. Local branded clothing was purchased and sold from either the Punchbowl factory or the market stall in Flemington. Additionally, from about 2003, Mr Rifai began to visit China and Thailand to source and import clothing. Whilst that clothing was branded, Mr Rifai’s evidence was that the branding was either Chinese or Thai, and did not include what he described as “known brands”.

15    In or about September 2009, Mr Rifai was approached by some people who he was unable to name. At that time and later he purchased a variety of clothing from there people including clothing that was branded with “known labels”. Those labels included “G-Star”. These suppliers were always paid in cash and they did not give receipts. Whilst Mr Rifai was somewhat slow to concede it, I find that in purchasing these goods Mr Rifai well understood that he was being supplied with counterfeit goods including apparel that was branded with the “G-Star” brand.

16    In October 2009, Mr Rifai visited Bangkok and made substantial purchases of clothing from a wholesale market in Bangkok. He purchased some 3,400 items of apparel, 2,857 of which were items which were “G-Star” branded. Mr Rifai knew when he purchased those items that they were counterfeit apparel. Mr Rifai paid about $32,000 for these goods.

17    It would appear that in or about early October 2009, the shipment of clothing purchased by Mr Rifai in Bangkok came to the attention of the Australian Customs and Border Protection Service (“Customs”). On 16 October 2009, the applicants’ solicitors received a call and were advised that Rifai Fashions was expecting a large shipment of counterfeit “G-Star” stock and were also informed of the existence of the Punchbowl factory. Investigations were then commenced on behalf of the applicants and an investigator attended the Punchbowl factory on 23 October 2009. He noted that a rack featuring “G-Star” branded clothing such as jeans, t-shirts, handbags and children’s wear were being offered for sale.

18    On 5 November 2009, the applicants’ solicitors were advised that Customs had seized 2,857 items of “G-Star” branded clothing. Although the date upon which notification was given by Customs to Rifai Fashions is not clear, on 5 November 2009 Mr Rifai signed a document headed “Notice of Consent to Forfeit Goods”. The notice consented to the forfeiture by the Commonwealth of the goods listed in its schedule. That schedule included the 2,857 items of “G-Star” branded apparel purchased in Bangkok in October 2009.

19    The applicants’ solicitors communicated with Rifai Fashions by letter of 10 November 2009. The applicants’ solicitors advised of the applicants’ interest in the G-Star Trade Marks and G-Logos, asserted various infringements by Rifai Fashions and made various demands, including for the provision of an undertaking to the effect that Rifai Fashions would cease from manufacturing, importing and selling infringing products. Mr Rifai signed the undertaking sought on 12 November 2009 (“the first undertaking”). Having not received a response to its earlier letter, the applicants’ solicitors wrote again on 20 November 2009 referring to the earlier correspondence and again enclosing a copy of an undertaking in the same terms as previously sought. On 23 November 2009, Mr Rifai signed the further undertaking (“the second undertaking”).

20    Despite these various communications, Rifai Fashions continued to sell counterfeit apparel branded with “G-Star” branding. An investigator appointed by the applicants visited the Flemington market stall on 15 November 2009 and noted that “G-Star” branded items were displayed for sale. On 22 November 2009, another investigator visited the market stall and observed that it was well stocked with “G-Star” branded items, such as jeans for $69, shorts for $45 and tops ranging from $25 to $35. On 22 December 2009, a search of the Punchbowl factory was conducted under the authority of an order made by this Court on 21 December 2009 (“the search order”). The independent solicitor appointed under the search order found two pairs of “G-Star” branded jeans on display in the shop of the Punchbowl factory. He also found three “G-Star” branded belts and one “G-Star” branded bag in one of the draws under the shop counter. In various backrooms elsewhere in the factory, a large number of G-Star branded apparel was also found. In total, 340 “G-Star” branded products were removed during the execution of the search order. A number of documents were seized during the search and those documents have formed the basis for the applicants’ claim for lost sales. Those documents evidence the sale of some 140 items with a retail value of $9,213.

21    Mr Rifai admitted by his affidavit filed in the proceeding, that “G-Star” branded products purchased from the unnamed local suppliers had been sold by Rifai Fashions over the course of a year commencing in or about September 2009. His evidence was that he believed that about 200 “G-Star” branded items were sold by Rifai Fashions at a profit of less than $10,000. Whilst that evidence was contested on the basis that it ought not be believed, no contradictory evidence was called. I accept, based on my view of Mr Rifai as a witness, that the number of items said to have been sold is likely to be a significant underestimate and that it is likely that the number of items actually sold was significantly greater. I accept, however, that the purchases of counterfeit “G-Star” branded apparel by Rifai Fashions from the local suppliers were relevantly modest. Mr Rifai was adamant, and I accept, that he had not purchased “G-Star” branded apparel overseas prior to his trip to Bangkok in October 2009. It is clear by reason of the number of items purchased on that trip, that Rifai Fashions intended to very substantially increase the sale of “G-Star” branded products and that, by reason of the forfeiture of those goods by Customs, that did not occur. The amount of product which the documentary evidence suggests was sold, the product seen by the investigators, the number of items seized from the Punchbowl factory, together with my view of Mr Rifai as a witness, suggests to me that in the course of the year in question, the sales of “G-Star” branded items by Rifai Fashions was more likely to be in the order of 500 items.

22    Rifai Fashions admitted that both the first and second undertakings were not adhered to. The extent of that non-adherence was in controversy. Mr Rifai conceded that after he received notification from Customs and after signing the first undertaking, Rifai Fashions continued to sell “G-Star” branded products. His evidence was this occurred on two Sundays only, at the Flemington market, and that the number of sales involved was very small. Whilst he knew what he was doing was wrong, Mr Rifai said that he was under financial pressure, including by reason of the forfeiture of the goods by Customs. He said he continued for a short period to sell counterfeit “G-Star” branded products. The evidence of the investigators confirms that on both 15 November 2009 and 22 November 2009, “G-Star” branded items were still available for sale from the market stall at Flemington. The evidence collected during the search of the Punchbowl factory, tends to suggest that sales from those premises had ceased in accordance with the evidence given by Mr Rifai. Only two items were found on display and Mr Rifai’s evidence was that he was unaware of those items. I accept that despite the undertakings given, Rifai Fashions continued for some weeks to sell “G-Star” branded products. However, I infer that the number of products sold was small.

23    Mr Rifai also gave evidence that “G-Star” branded apparel (of the kind that Rifai Fashions was selling) was readily available in Sydney. It was being sold at other stalls at the Flemington market, at a market in Sydney’s CBD and also at Bankstown. His evidence was that at various times and for reasons unbeknown to him certain brand names become popular with customers and become widely sold. In 2009 “G-Star” branded apparel had become popular and was widely sold. Whilst the applicants challenged the veracity of that evidence suggesting that it was exaggerated, in my view it is likely that Rifai Fashions was not the only outlet for counterfeit “G-Star” branded apparel during the year in question. It is far more likely that the popularity of “G-Star” branded apparel, the availability of counterfeit apparel both locally and overseas (which Mr Rifai’s evidence demonstrated) will have led to other businesses, in similar circumstances to those of Rifai Fashions, also selling counterfeit “G-Star” branded goods. I accept that in and around a number of markets in Sydney, counterfeit products bearing the “G-Star” brand were available for retail sale from a range of sources.

damages – loss of reputation

24    Section 115(2) of the Copyright Act provides that in an action for an infringement of copyright a court may grant an order for damages. Damages are also available for the tort of passing off.

25    An award of damages, as a statutory remedy for infringement of an intellectual property right has, in general, been treated as attracting similar considerations as attend an award of damages in tort: Bailey v Namol Pty Ltd (1994) 53 FCR 102 at 110. The relevant principles are conveniently collected by Gordon J in Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd [2009] FCA 633 at [5] and [6] and include the following:

    Damages are compensatory in nature and are awarded for the purpose of compensating for loss suffered and not to punish the respondent;

    The measure of damages, so far as is possible, is to be that sum which will put the applicant in the same position as it would have been if it had not suffered the wrong; and

    In relation to damages under s 115(2) of the Copyright Act, any award of damages should reflect, the depreciation to the value of the applicant’s copyright as a chose in action, that resulted from the respondent’s infringing conduct.

As to onus and the manner in which damages may be assessed, the relevant principles are stated by Black CJ and Jacobson J in Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (in liq) (2007) 157 FCR 564 at [2], [34]-[35] and [39], including:

    The applicant bears the onus of proving depreciation or loss;

    Where it is found that the respondent is a wrongdoer, damages should be liberally assessed, in the sense that inferences will be more readily drawn against the wrongdoer;

    If a court is satisfied that damage has occurred, it must do its best to quantify the loss even if some degree of speculation and guess work is involved;

    However, a stricter approach will be taken when an applicant has failed to adduce evidence that was apparently available to prove the loss; and

    If an applicant fails to discharge its onus, nominal damages may be awarded.

26    Rifai Fashions and Mr Rifai admit that the applicants had established a substantial, exclusive and valuable reputation and goodwill in Australia by reference to the G-Star Trade Marks and the G Logos. They further conceded that the G-Star Trade Marks and G Logos are, and have been at all material times, known to be distinctive of and signify exclusively the business and goods of the applicants.

27    I would infer that, as the exclusive distributor of G-Star Products in Australia and given the evidence as to its very substantial turnover, G-Star Australia has a valuable reputation or goodwill which is, to a significant degree, generated by and reliant on the reputation of the “G-Star” brand. I would therefore agree that the value of the goodwill attached to the business of G-Star Australia will be affected by damage sustained to the “G-Star” brand, including because G-Star Australia:

    Loses some sales of G-Star Products, because counterfeit products are available at cheaper prices; and

    Loses customers because some customers no longer purchase G-Star Products, as that apparel is no longer considered exclusive.

28    In relation to the loss suffered by G-Star International, the damage to reputation was pressed on the basis that, as the owner of the copyright in the G Logos, loss of reputation is manifested in the probable diminution in the value of the copyright as a chose in action. I accept that, as a chose in action, the G Logos are likely to hold significant value.

29    The basis upon which Facton claims damage by way of lost reputation was not identified, despite the claim that Rifai Fashions had damaged the reputation of each of the applicants.

30    The applicants jointly seek general damages to reputation in the amount of $100,000. The applicants made no attempt to distinguish between the goodwill or reputation held respectively by each. Nor was any attempt made, either by way of evidence or even submission, to identify the value of the reputation or goodwill concerned. The value of the reputation or goodwill held by each of the applicants is clearly a matter in relation to which evidence could have been called by each of the applicants. In the absence of that evidence, the Court is left to wholly speculate as to the value of the goodwill held by G-Star Australia and as to the commercial value of the G-Star Logos as a chose in action. If the Court had been provided with that evidenciary starting point, it may then have been possible to quantify, with some degree of speculation and guess work, the loss that may have been occasioned by reason of the infringing conduct. However, without evidence as to the value of the reputations concerned, I have no capacity to measure loss.

31    Whilst I accept that some degree of speculation and guess work may be appropriate in assessing the diminution of an asset by reason of infringing conduct, that task needs to be performed on the basis of a secure foundation. If the Court is left to do nothing but guess at the value of the intangible asset involved, the task of assessing the diminution in value of that asset becomes wholly speculative. In circumstances where the applicants could have adduced, but have failed to adduce, evidence to demonstrate the value of each of their goodwill or reputation, I am not prepared to wholly speculate as to that value. I have no basis from which to assess any diminution in that value resulting from the infringing conduct of Rifai Fashions and Mr Rifai. In those circumstances, I am not able to award damages for loss of reputation.

EXEMPLARY damages

32    The applicants also seek exemplary damages, or alternatively additional damages under s 115(4) of the Copyright Act.

33    The claim for exemplary damages is put on the basis that Rifai Fashions and Mr Rifai have engaged in “conduct showing a conscious and contumelious disregard for the plaintiff’s rights”: XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 at 471 per Brennan J. The applicants rely on the evidence that Rifai Fashions continued to sell counterfeit “G-Star” branded apparel after Mr Rifai signed the Notice of Consent to Forfeit Goods and after each of the first and second undertakings were signed. That was said to be knowing conduct with an extra level of dishonesty, which raised the conduct to the level apt for an award of exemplary damages.

34     Whilst the power of a court to award exemplary damages was severely curtailed in the United Kingdom, that position has not been followed in Australia: Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118; Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185; and Sanders v Snell (1997) 143 ALR 426 at 450-452.

35    However, to act in contumelious disregard of the rights of another involves more than knowing, deliberate or wilful conduct. Contumelious conduct involves an element of malice or spite or the like, often manifested in insult or humiliation: see “Contumely” Macquarie Dictionary (5th ed, 2009). In Sanders, Wilcox, O’Loughlin and Lindgren JJ at 451 expressed the position in Australia by reference to an early edition of McGregor on Damages and the passage there contained that exemplary damages:

can apply only where the conduct of the defendant merits punishment, which is only considered to be so where his conduct is wanton, as where it discloses fraud, malice, violence, cruelty, insolence or the like; or as it is sometimes put, where he acts in contumelious disregard of the plaintiff's rights.

36    The applicants were unable to point me to any decision where exemplary damages were awarded for passing off, other than a decision of the Federal Magistrates Court in Crimson SRL v Claudia Shoes Pty Ltd (No 4) [2007] FMCA 1728. That decision seems to equate a breach of s 115(4) of the Copyright Act involving flagrant conduct, with a conscious and contumelious disregard of an applicant’s rights. With respect to the learned Federal Magistrate, flagrant disregard and contumelious disregard of a person’s rights are not the same. Flagrancy speaks of the glaring extent of the disregard and not as to its malicious or spiteful character.

37    I have no hesitation in finding that Mr Rifai’s conduct (and thus that of Rifai Fashions) was knowing and deliberate. It can be said that the continued selling of a small number of counterfeit goods after the giving of undertakings involved wilfulness. However, the conduct was not wanton, there was no malice or insolence or the like disclosed. Whilst there was conscious disregard for the applicants’ rights, that disregard was not both conscious and contumelious. This is not one of those rare occasions where an award of exemplary damages is appropriate.

additional damages

38    Where an infringement of copyright is established a court may, in assessing damages, award additional damages if it is satisfied that it is proper to do so having regard to the matters referred to in s 115(4)(b): Aristocrat at [40]. As Black CJ and Jacobson J said in Aristocrat at [43]: “the objectives of an award of additional damages include deterrence”, and “an element of penalty”. One of the purposes of an award of additional damages is to strip the infringer of the pecuniary benefits received from the infringement: Aristocrat at [44] and [48]. There is no need for any proportionality between the amount of compensatory damages awarded under s 115(2) and any additional damages ordered: Aristocrat at [45].

39    I am satisfied that it is proper to award additional damages. My satisfaction, in particular, is based upon the need to strip Rifai Fashions and Mr Rifai of the pecuniary benefit likely to have been obtained as a result of their infringement and also because of the need to punish and deter. There are however militating factors which, whilst not negating the need for an award of additional damages, significantly diminish the amount that might otherwise have been awarded.

40    Mr Rifai claimed that he had made less than $10,000 from selling G-Star branded counterfeit goods. No substantiation was given and because of my view that Mr Rifai tended to play down the level of his wrongdoing, it is likely that the profits made were significantly larger and in the order of twice the amount that was actually conceded. An award of damages totalling $20,000 would likely strip Rifai Fashions and Mr Rifai of all pecuniary benefits received by reason of their infringements. Given the amount of compensatory damages which I intend to award, that analysis suggests that a further sum of $11,000 be awarded by way of additional damages.

41    There are factors that militate against a larger award of additional damages. Firstly, because I intend to require the respondents to pay the applicants’ costs of this proceeding, there will be a substantial impost upon the respondents which will likely substantially exceed the damages awarded. Secondly, I take into account that a significant and costly lesson would have been learnt by Mr Rifai when the goods purchased in Bangkok were forfeited by Customs, at a cost of some $32,000. Thirdly, the need for deterrence is diminished by Mr Rifai’s acceptance of his wrongdoing and that of his company. Rifai Fashions admitted liability at a very early stage of the proceedings. Mr Rifai admitted that he was a joint tortfeasor when that allegation was first raised. Other appropriate admissions and concessions have been made and together with the cooperation shown, the apology given, and Mr Rifai’s candid acknowledgment of his foolishness, I have come to the view that any need for punishment or specific deterrence which remains is already addressed by the damages and costs orders that I intend to make. I have, in relation to deterrence and punishment, also taken into account Mr Rifai’s evidence as to the respondents’ poor financial position.

orders

42    With necessary modification I will make the declarations claimed in paragraph 1 of the Amended Application. Those modifications will reflect the fact that the applicants did not proceed against the third respondent and did not press a finding that Mr Rifai had contravened ss 52 and 53 of the Trade Practices Act by virtue of the operation of s 75B of that Act. Further, I do not see the need for the declarations sought in 1(g), (h), and (i) of the Amended Application. The breach of the first and second undertakings and that Mr Rifai was a joint tortfeasor with Rifai Fashions are all matters that were admitted, are the subject of findings and are not necessary to be included in declarations made by the Court.

43    The claim of $9,213 for lost sales was acceded to but the applicants have not differentiated as to which of them incurred the loss or to what extent. In those circumstances, I will proceed on the basis that the sum agreed upon represents the joint loss to the applicants and should be paid to them jointly. As the claim for additional damages is based on the infringement of copyright owned by G-Star International, the additional damages ordered should be made payable to G-Star International. Given that I have found liability against a company and its sole effective director in circumstances where he admits his conduct as a joint tortfeasor, it is appropriate that I order that each of Rifai Fashions and Mr Rifai be jointly and severally liable for compensating the applicants. I will make orders that Mr Rifai, jointly and severally with Rifai Fashions, pay the applicants $9,213 for compensatory damages and G-Star International $11,000 for additional damages.

44    I will also make orders that Rifai Fashions and Mr Rifai pay the costs of the applicants. I will exclude from the requirement to pay the applicants costs, any costs occasioned as a result of any expenses incurred by the applicants’ legal practitioners in travelling to Sydney for the trial. I will make that qualification because in my view it would be appropriate that the applicants meet their own costs in that respect. The applicants filed this proceeding in the Victorian Registry of the Court. Whilst I did not accede to a late application that the proceeding be transferred to the New South Wales Registry of the Court, I did consider it appropriate and ordered that that the trial be conducted in Sydney. The proceeding had nothing to do with Victoria other than for the fact that the chosen legal practitioners of the applicants operate from Melbourne. The respondents ought not bear the burden of expenses which have arisen purely out of the applicants’ insistence that they be represented by Melbourne practitioners.

Associate:

Dated:    30 March 2011