McCambridge Ltd v Joseph Brennan Bakeries

• Jurisdiction: Ireland
• Judge: Mr. Justice Kelly
• Judgment Date: 12 December 2013
• Neutral Citation: [2013] IEHC 569
• Court: High Court
• Docket Number: [2011 Nos. 2925 P and 74 COM]
• Date: 12 December 2013

McCambridge Ltd v Joseph Brennan Bakeries

COMMERCIAL

BETWEEN

MCCAMBRIDGE LIMITED

PLAINTIFF

AND

JOSEPH BRENNAN BAKERIES

DEFENDANT

[2013] IEHC 569

[No. 2925 P./2011]

[No. 74 COM/2011]

THE HIGH COURT

PRACTICE AND PROCEDURE

Lodgment

Application for leave to pay sum of money into court in satisfaction of claim - Account of profits - Infringement of copyright in bread packaging - Passing off - Claim for damages or account of profits - Defendant found liable - No knowledge of amount of profit - Nature of relief - Restitutionary damages - Jurisdiction of the court - Construction of rules - Interests of justice - Whether defendant sued for account of profits entitled to pay sum into court pursuant to O 22, r 1 of the Rules of the Superior Courts - Whether claim for account of profits action for damages - Nichols v Evens [1883] 22 Ch D 611; O'Neill v Ryanair Limited [1992] 1 IR 160; Larkin v Whitony Limited (Unrep, SC, 19/6/2002); House of Spring Gardens v Point Blank Limited [1984] IR 611; Hollister Incorporated v Medik Ostomy Supplies Limited [2012] EWCA Civ 1419, (Unrep, Court of Appeal, 9/11/2012); Ely v Dargan [1967] IR 89; Window & Roofing Concepts Limited v Tolmac Construction Limited [2004] ILRM 554; Kearney & Anor v Barrett [2004] 1 IR 1 - Dome Telecom v Eircom Ltd [2007] IESC 59, [2008] 2 IR 726 and PJ Carroll & Co Ltd v Minister for Health (No 2) [2005] IEHC 267, [2005] 3 IR 457 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 22, r 1 - Application refused (2011/2925P & 2011/74COM - Kelly J - 12/12/2013) [2013] IEHC 569

McCambridge Limited v Brennan Bakeries

PRACTICE AND PROCEDURE

Lodgment

Account of profits - Passing off - Whether claim for account of profits constituting claim for damages - Whether rules of court permitting lodgment in claim for account of profits - Whether rules of court to be interpreted broadly - Whether court having inherent jurisdiction to devise own procedure in interests of justice - Whether party claiming account of profits capable of making informed decision on acceptance of lodgment - Whether defendant to be permitted to make lodgment - Nichols v Evens (1883) 22 Ch D 611 approved - Dome Telecom Ltd v Eircom Ltd [2007] IESC 59; [2008] 2 IR 726; Ely v Dargan [1967] IR 89; Hollister v Medik [2012] EWCA Civ 1419, [2013] IP & T 577; House of Spring Gardens v Point Blank [1984] IR 611; Kearney v Barrett [2004] IEHC 39, [2004] 1 IR 1; Larkin v Whitony Ltd (Unrep, SC, 19/6/2002); My Kinda Town Ltd v Soll [1983] RPC 15; O'Neill v Ryanair Ltd (No 2) [1992] 1 IR 160; PJ Carroll & Co Ltd v Minister for Health (No 2) [2005] IEHC 267, [2005] 3 IR 457; Peter Pan Manufacturing Corporation v Corsets Silhouette Ltd [1964] 1 WLR 96 and Window and Roofing v Tolmac Const [2004] 1 ILRM 556 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 22, r 1 - Application refused (2011/2925P & 2011/74COM - Kelly J - 12/12/2013) [2013] IEHC 569

McCambridge Ltd v Brennan Bakeries

Facts: By a judgment of the High Court dated the 25 ^th November 2011, Peart J. upheld the plaintiff"s claim that the defendant had infringed the plaintiff"s copyright on bread packaging utilised on whole wheat bread and passed off the defendant"s bread as that of the plaintiff. Injunctive relief was subsequently granted against the defendant to prevent any further occurrences. The judgment was appealed to the Supreme Court but this was unsuccessful. As well as the injunctive relief, the plaintiff was also given the option of an award of damages or an account of profits in respect of both the copyright infringement and the passing off. The plaintiff subsequently sought information from the defendant with a view to informing the plaintiff as to whether it should elect for damages or an account of profits; this information was received on the 20th December 2012. As a result of the information, it was discovered that there was a profit of €608,481 arising from the sale of whole wheat products in the offending packaging, which convinced the plaintiff to elect for an account of profits. However, it later emerged that the infringing product was manufactured by a company called Doyle"s Quality Products (Doyle"s) and delivered fully packaged to the defendant. A request was then made by the plaintiff to the defendant asking it to clarify its relationship with Doyle"s. In response, the defendant wrote to the plaintiff on the 26 ^th September 2013 stating that it would account for any profits earned by Doyle"s in relation to the product without the necessity of joining Doyle"s in the proceedings.

Soon after the letter of the 26 ^th September was sent, the defendant made an application to the Court for an order pursuant to O. 22, r. 1 of the Rules of the Superior Courts granting it leave to pay into court a sum in satisfaction of the plaintiff"s claim. This order confers a right on a defendant who is sued for a debt or damages to pay into court a sum of money in satisfaction of the claim, at any time after he has entered an appearance in the action and before it is set down for trial, upon notice to the plaintiff. The defendant argued that a claim for an account of profits was accommodated by the provisions of O. 22, r. 1 because such a claim could be regarded as an action for damages. It was also argued that judicial dicta supported the notion that O. 22, r. 1 should be interpreted liberally so as to allow the making of a lodgement even in a case which clearly is not encompassed in the Rule.

Held by Kelly J. that contrary to the defendant"s first argument, it could not be said that a claim for an account of profits was an action for damages. The defendant had argued that the notion of damages had widened in recent years by relying on passages within Chapter 1 of the then current edition of McGregor on Damages. However, it was found that despite the relevant passages supporting such an argument, paragraph 1-008 of McGregor clearly stated that a claim for an account of profits was not a claim for damages, but for equitable compensation. The defendant"s argument in this regard was, therefore, found to be flawed.

In regards to the defendant"s second argument, it was held that legal precedent made it clear that an account of profits could not to be equated with a claim for damages. It was true that the Court retained an inherent jurisdiction to exercise control over process by regulating its proceedings. However, it was noted that a liberal interpretation of a rule should only be permissible if there was an obvious problem of fair procedures or efficient case management. In the defendant"s case, it was said that whilst a grant of leave to the defendant to make a lodgement into Court could bring about an early, expeditious and cost effective resolution, there was nothing unfair in refusing to permit such a course of action. On the contrary, it was said that the plaintiff could not be equated to somebody suing for damages because it did not know the extent of the damage and so could not make an informed decision on whether or not to accept a lodgement. On that basis, it was held that to allow a lodgement into Court would expose the plaintiff to costs implications if the account yielded a lesser sum than that lodged, which was regarded as being unfair to the plaintiff.

Application refused.

RSC O.22 r1

NICHOLS v EVENS 1883 22 CH D 611

RULES OF COURT 1875 O.30 r1

O'NEILL v RYANAIR LTD & ORS (NO 2) 1992 1 IR 160 1990/8/2193

COMPANIES ACT 1963 S205

LARKIN v WHITONY LTD & ORS UNREP SUPREME 19.6.2002 2002/15/3620

HOUSE OF SPRING GARDENS LTD & ORS v POINT BLANK LTD & ORS 1984 IR 611

HOLLISTER INC & ANOR v MEDIK OSTOMY SUPPLIES LTD 2013 BUS LR 428 2013 ETMR 10 2013 FSR 24 2012 EWCA CIV 1419

RSC O.22

MCGREGOR MCGREGOR ON DAMAGES 18ED 2009 CHAP 1

MCGREGOR MCGREGOR ON DAMAGES 18ED 2009 PARA 1.001

MCGREGOR MCGREGOR ON DAMAGES 18ED 2009 PARA 1.002

MCGREGOR MCGREGOR ON DAMAGES 18ED 2009 PARA 1.006

MCGREGOR MCGREGOR ON DAMAGES 18ED 2009 PARA 1.007

MCGREGOR MCGREGOR ON DAMAGES 18ED 2009 PARA 1.008

ELY (AN INFANT) v DARGAN 1967 IR 89

WINDOW & ROOFING CONCEPTS LTD v TOLMAC CONSTRUCTION LTD 2004 1 ILRM 554 2009/58/14832

KEARNEY v BARRETT & ORS T/A COLLINS BROOKS & ASSOCIATES 2004 1 IR 1 2004 2 ILRM 43 2003/29/6814

DOME TELECOM LTD v EIRCOM LTD 2008 2 IR 726 2007 15 3078 2007 IESC 59

PJ CARROLL & CO LTD & ORS v MIN FOR HEALTH & ORS (NO 2) 2005 3 IR 457 2005/10/2026 2005 IEHC 267

Issue

1 1. Is a defendant who is being sued for an account of profits entitled to pay a sum into Court pursuant to O. 22, r.1 of the Rules of the Superior Courts in respect of that claim? If so, should the defendant in the present case be permitted to do so?

2 2. These are the issues which fall for determination in this judgment.

The Proceedings

3 3. On 30 ^th March, 2011, the plaintiff commenced proceedings against the defendant alleging an infringement of the plaintiff's copyright in bread packaging utilised on whole wheat bread. The plaintiff claimed injunctive relief in respect of that infringement and also in respect of the alleged passing off of the defendant's bread as that of the plaintiff.

4 4. The plaintiff also claimed damages (including aggravated and/or exemplary damages) or at the plaintiff's option an account of profits in respect of both the copyright infringement and the passing off.

5 5. The litigation was subsequently transferred into the Commercial List and on 16 ^th May, 2011, I gave pre-trial directions and fixed the trial to commence on 21 ^st July, 2011. At the hearing, on 16 ^th May, the parties agreed that the trial would deal only with the question of liability. If the question of damages were to arise it would be addressed on a later occasion.

6 6. I directed that any discovery which was to be made in anticipation of...