House of Spring Gardens Ltd v Point Blank Ltd

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: O'Higgins C.J.,Griffin J.,McCARTHY J.
• Judgment Date: 11 January 1985
• Neutral Citation: 1985 WJSC-SC 288
• Docket Number: [1982 No. 1367P]
• Date: 11 January 1985

1985 WJSC-SC 288

THE SUPREME COURT

O'Higgins C.J.

McCarthy J.

Griffin J.

184/84

HOUSE OF SPRING GARDENS v. POINT BLANK

HOUSE OF SPRING GARDENS LIMITED,

ARMOURSHIELD LIMITED,

MICHAEL SACKS

Plaintiffs

and

POINT BLANK LIMITED,

EMORY LIMITED (IN VOLUNTARY LIQUIDATION),

WILLIAM E. WAITE,

SEAMUS WAITE,

ROBERT HUGH CHAPMAN,

GOVERNOR AND COMPANY OF THE

BANK OF IRELAND,

GORDON MACLEOD

Defendants

Synopsis:

ACTION

Cause

Confidence - Breach - Equitable principles - Absence of contractual liability - Proposals for commercial partnership - Plaintiff divulging to defendant details of design of body armour - Information misused by defendant - Plaintiff entitled to damages - Decision of Costello J. (20/12/82) affirmed - (184/84 - Supreme Court - 11/1/85).

House of Spring Gardens v. Point Blank

CONTRACT

Implied term

Necessity - Royalty agreement - Decision of Costello J. (20/12/82) affirmed - (184/84 - Supreme Court - 11/1/85).

House of Spring Gardens v. Point Blank

COPYRIGHT

Infringement

Reproduction - Authorisation - Cutting patterns for body armour - Prior publication of design in patent specification not fatal to claim - Decision of Costello J. (20/12/82) affirmed - (184/84 - Supreme Court - 11/1/85).

House of Spring Gardens v. Point Blank

DAMAGES

Assessment

Copyright - Infringement - Contract - Breach - Cutting patterns for body armour - Royalty agreement - Whether plaintiff entitled to account of defendant's profits - Decision of Costello J. (20/12/82) affirmed - (184/84 - Supreme Court - 11/1/85).

House of Spring Gardens v. Point Blank

EQUITY

Confidence

Breach - Damages - Decision of Costello J. (20/12/82) affirmed - (184/84 - Supreme Court - 11/1/85).

House of Spring Gardens v. Point Blank

1 JUDGMENT delivered the 11th day of January 1985by O'Higgins C.J.

2 On the 20th December 1982, Mr. Justice Costello in a reserved judgment declared the liability of the first four Defendants in respect of claims by the Plaintiffs for beach of contract, misuse of confidential information and infringement of copyright. As to the seventh Defendant, he found him liable for misuse of confidential information and infringement of copyright but not for breach of contract. The fifth and sixth-named Defendants were not involved in the trial and no orders were made or sought against them. Having heard submissions as tothe proper reliefs to be afforded to the Plaintiffs, the learned trial Judge in a later reserved judgment awarded damages for breach of contract against those held liable and an account of the profits made as a result of the misuse of confidential information and infringement of copyright. From these findings as to liability and the reliefs awarded appeals have been brought by the first, third, fourth and seventh Defendants. The second-named Defendant, which is in voluntary liquidation, has also appealed but has withdrawn the appeal.

3 The copyright alleged to have been infringed relates to cutting patterns for an armoured vest, which copyright is vested in the second-named Plaintiff, Armourshield Limited, and to certain photographs of an armoured vest and of materials used in testing armoured vests, which copyright vests in the third-named Plaintiff, Michael Sacks. The breach of contract alleged concerns an Agreement of the 10th September 1980 between the Plaintiffs and a number of parties including the first four Defendants. This Agreement was concluded insettlement of litigation between the parties which was then pending in both England and Ireland. This litigation concerned a complaint by the Plaintiffs as to the manufacture of an armoured vest in breach of copyright and other rights. In the Agreement armoured vest was described as being the product of certain cutting patterns of which Armourshield Limited held the copyright, or any agreed variation thereof. The Agreement provided, inter alia, for the continued manufacture of this armoured vest by these Defendants and the parties associated with them, but under express licence from the Plaintiffs, whose rights were acknowledged, and upon payment of a substantial royalty.

4 The trial of this action lasted fifteen days in the High Court and involved the consideration by the trial Judge of a vast amount of technical and other evidence, both documentary and oral. His reserved judgment, which was necessarily lengthy, is a model of judicial care and clarity. He reviewed and assessed this mass of evidence under practical and convenient headings and set out his findings of fact under each such heading on eachmatter of controversy that arose before him. In addition, he analysed the legal principles which should apply to the causes of action which he had to try and referred to all the leading cases on copyright infringement and misuse of confidential information.

5 For my part I will not attempt to recount the events which led to the initiation of these proceedings. To do so would be to cover ground already fully and amply covered by the learned trial Judge and would be a totally unnecessary exercise. In dealing with the issues which arise on this appeal I will, of course, refer to the relevant facts and to the findings which the learned trial Judge made. Other than this, the long and absorbing story of what happened between Michael Sacks, who had knowledge and experience in the making of armoured vests, and William Waite and his son Seamus, who had contacts which could lead to the supply of such vests to the Libyan army and a possible fortune for the suppliers, must remain as recounted by the learned trial Judge.

6 It seems to me that I should first consider thefinding that the first four Defendants were in breach of contract. This finding has been appealed by three of these Defendants who assert that what they did was well within their rights and was in no sense prohibited by or in breach of the Agreement of the 10th September 1980. To consider this issue I must first refer to some relevant facts and events which preceded the making of this Agreement. It appears that in 1978 William Waite, who had commercial contacts in Libya, and, being aware of a possible market for the sale of armoured vests to the Libyan army, contacted Michael Sacks. Michael Sacks had been indicated to him as a person likely to have considerable experience and knowledge in the manufacture of armoured clothing. An apparently promising business relationship quickly developed between William Waite, who was joined by his son Seamus and his son-in-law Gordon MacLeod, the seventh-named Defendant. It was agreed in principle that they would embark on a joint venture, on a fifty-fifty basis, in the manufacture and supply of armoured vests which would be supplied under contract to theLibyan army. This involved Michael Sacks in providing the design and the technical knowledge and the Waites in doing the manufacturing. An initial contract for 15,000 vests was secured by the Waites and concluded in the name of Emory Limited, a company which they controlled. This contract provided for a price of £5,259,604.50, and was expected to be the first of a number of contracts for the supply of a total of 50,000 such vests to the Libyan army. Having concluded this contract the question of the manufacturer of the vest required to be decided. Earlier, the cutting designs, which were the property of Michael Sacks, had been made available to the Waites. This had been done for the purpose of preparing a sample vest to show the Libyan authorities. They and their associates had also been given considerable technical information regarding materials and manufacturing process. Everything appeared ready to launch the joint venture when quite suddenly the relationship between Michael Sacks and the Waites came to an end. Whether this was contrived or accidental is immaterial. At the time itoccurred the Waites, unknown to Michael Sacks, had formed Point Blank Limited, a company wholly owned by Emory Limited. This company was based in Cork and on its premises the manufacture of the armoured vests to fulfil the Libyan contract commenced. When this fact became known to Michael Sacks he initiated legal proceedings in both England and Ireland against the Waites and companies associated with them, alleging that his copyright and patents had been infringed. These proceedings were settled and the terms of the settlement were incorporated in the Agreement of the 10th September 1980.

7 This Agreement in effect acknowledged that the armoured vest which the Waites, through Emory Limited, had contracted to sell to the Libyan army was the vest designed and produced by Michael Sacks and knows as "M.S.6". It further acknowledged that the vest which Point Blank Limited was manufacturing in Cork was a variation of M.S.6 and was, of course, within the copyright of Michael Sacks. This Agreement went on to provide for a licence being given by the Plaintiffs to the Waites and theirassociated companies, including Point Blank Limited, for the continued manufacture of M.S.6 vests to fulfil the Libyan contract and authorised what had already been manufactured. It also provided for the payment of a substantial royalty in return for the licence.

8 Some clauses in this Agreement have particular relevance to thePlaintiffs" allegation of breach of contract and should be looked at in detail.

Clause 1

9 Clause 1 defines the "armoured vest" which was acknowledged to be the property of Michael Sacks and to be the subject of the licence. It is in the following terms:

"In this Agreement "armoured vest" shall mean the product exhibited as M.S.6 to an Affidavit of Michael Sacks sworn herein on the 4th June 1980 and any variation of such product as may be mutually agreed in writing by the licensors or any of them and the licensees or any of them. In accordance with this clause the licensors hereby agree that the product already manufactured by Point Blank Limited and complained of in the above-mentioned proceedings...