Paymaster (Jamaica) Ltd v Grace Kennedy Remittabce Services Ltd and Paul Lowe

• Jurisdiction: Jamaica
• Judge: JONES J.
• Judgment Date: 30 April 2010
• Judgment citation (vLex): [2010] 4 JJC 3002
• Court: Supreme Court (Jamaica)
• Date: 30 April 2010

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN THE CIVIL DIVISION

CLAIM NO. 2000/C.L.P - 82

BETWEEN

PAYMASTER (JAMAICA) LIMITED

CLAIMANT

AND

GRACE KENNEDY REMITTANCE SERVICES LIMITED

1 ^st DEFENDANT

AND

PAUL LOWE

2 ^nd DEFENDANT

^st

^nd

COPYRIGHT - Breach of copyright - Breach of confidence - Passing-off - Inducing breach of contract

JONES J

1 Introduction

2 [1] The case brought by Paymaster (Jamaica) Limited (hereafter called "Paymaster") against Grace Kennedy Remittance Services Limited (hereafter called "GKRS") and Paul Lowe has by their account many villains: a calculating predator, "ruthless and unfair" business executives, a competent but unscrupulous chameleon and the like. And of course, there is the victim. Paymaster has asked this court to draw a straight line from one to the other. The truth, however, is seldom that pure and by no means that simple. There is no easy connecting of the dots.

3 [2] Paymaster claims Copyright in the CSSREMIT/Paymaster Multi-Payment Software Head Office Programme (hereafter called "Paymaster Multi-Payment Software"). They designed the architecture, provided the specifications and contracted Paul Lowe to write the software from the specifications. Paul Lowe licensed the software to GKRS who used the program to start Bill Express, as a competitor of Paymaster. There is an astonishing lack of clarity in the contractual arrangements between Paymaster and Paul Lowe regarding ownership in the copyright to the Paymaster Multi-Payment Software. Paymaster says there is an implied agreement between the parties that the copyright belongs to them.

4 [3] GKRS claims a licence for the use of the Multi-Payment software from Paul Lowe as owner of the copyright. Paul Lowe maintains that he is the owner and claims an entitlement to license it to anyone he chooses.

5 [4] GKRS was given a copy of Paymaster's Business Plan which included a report on their network architecture and other vital information. Paymaster alleges that this information was given in confidence and GKRS used it to launch Bill Express as a competitor. This is hotly denied by GKRS who claims a legitimate business opportunity. There is no legal obligation to be kind.

6 [5] Feeling mortally wounded by (what they considered to be) the incendiary tactics of GKRS, and betrayed by Paul Lowe, Paymaster filed an action in this Court claiming:

• a) Breach of Copyright;

• b) Breach of confidence;

• c) Passing off; and

• d) Breach of contract and inducing breach of contract.

7 [6] We begin with the issues. As a preliminary issue, GKRS and Paul Lowe complain that Paymaster had raised for the first time in its submissions reliance on an implied agreement for the ownership of the copyright for the Paymaster Multi-Payment Software. Consequently, there is one preliminary issue and four substantive issues.

8 Issues:

9 [7] First, the preliminary issue:

• i) By the Copyright Act 1988, the author of a protected work is the first owner of the copyright unless there is an agreement to the contrary. Paymaster pleaded ownership of the Paymaster Multi-Payment Software as creator; during the trial it claimed ownership by way of an implied term in an agreement. It is a cardinal rule that a party's pleadings must provide a clear and precise case that the party is relying on and it cannot go forward with a case, whether by way of claim or defence which it has not pleaded. Paymaster contends that the law at the time of pleadings required facts, not evidence and law to be pleaded. They say the pleadings contained the factual basis supporting an implied agreement for ownership of the Paymaster Multi-Payment Software. Was an implied agreement pleaded by Paymaster? If not, should Paymaster be allowed to raise for the first time during this trial, ownership by way of an implied agreement?

10 [8] Second, the four substantive issues:

• i) The Copyright Act 1988 provides protection for computer programs as literary works. A computer program is a set of instructions given to a computer to perform certain works. Paymaster provided design specifications to Paul Lowe to develop a Paymaster Multi-Payment Software using Paul Lowe's CSS REMIT program as a base. Paul Lowe wrote the program and subsequently licensed it to GKRS, a competitor of Paymaster, without Paymaster's permission. Is Paymaster the owner or co-owner of the Paymaster Multi-Payment Software? Has Paul Lowe and/or GKRS breached Paymaster's copyright?

• ii) It is an actionable tort for one party without justification to pass confidential information belonging to the other party to others not privy to the contract. Paymaster contends that during negotiations with GKRS they obtained confidential information relating to its business plans which was used to advance GKRS's own business interest. GKRS denies that it received Paymaster's business plans, and says that no relationship of confidence existed between them. Did a relationship of confidence exist between GKRS and Paymaster and was confidential information belonging to Paymaster obtained by GKRS and passed to third parties?

• iii) A person cannot pass off his business as that of another. Paymaster contends that Bill Express used the $ sign and similar colours in its logo in order to deceive the public and deprive it of goodwill. Bill Express says that the $ sign in its logo was already in use; the logos are different and the public would be unlikely to be deceived by it. Was the Bill Express logo likely to deceive the public to use their bill payment services rather than Paymaster's? Has GKRS committed a "Passing Off"?

• iv) A person induces a breach of contract where he procures a third party to commit a wrongful act to prevent the performance of a contract. Paymaster contends that GKRS induced Paul Lowe to breach his contract with Paymaster by paying him US$20,000 to license his software for use in their bill payment business. GKRS denies this, and contends that they believed that Paul Lowe was the owner of the software. Did GKRS know or ought to have known about the ownership of the software? Did Paul Lowe breach his contract with Paymaster? Did GKRS induce Paul Lowe to breach his contract with Paymaster?

11 Facts:

12 [9] The extended drama that is the case of Paymaster against GKRS and Paul Lowe contains both an inspirational story and a cautionary tale. The first act began sometime in 1983 when Paul Lowe and William Ingram formed Complete Systems Services Ltd. (CSS). They developed a cashiering program which collected payments for a single company directly, which they named (CSSREMIT).

13 [10] Over a nine year period CSS promoted CSSREMIT to various companies to assist in their collection needs. CSSREMIT is licensed to the Collector of Taxes, Norman Manley Airport, Jamaica Public Service Company Limited, Income Tax Department and the Stamp Commissioner. In the latter part of the eighties Paul Lowe bought out the shares of his partner William Ingram and in 1992, he closed down CSS while at the same time continued with the promotion and marketing and licensing of CSSREMIT.

14 [11] Act two of the story starts in 1994 when Ms. Audrey Marks, while resident both in Jamaica and in the United States of America, came up with the Paymaster Multi-Agency Payment concept. Ms. Marks returns to Jamaica with the concept of a Multi-Payment agency and consults with Dr. Maurice McNaughton through his company, Jamaica Online Information Services Ltd (JOL) to provide consultancy services for the development of the software package to deliver the services that she wanted.

15 [12] It would take a year for Dr. McNaughton to produce the architecture for the Paymaster's Multi-Payment Agency System and he then formulates Paymaster's first Business Plan.

16 [13] In April 1995 Dr. McNaughton contacts Paul Lowe on behalf of Paymaster requesting permission to license Mr. Lowe's CSSREMIT software and customise it to Paymaster's specifications. One month later JOL completes the Head Office system design and begins system development work.

17 [14] In June 1995 work on the Paymaster Multi-Payment Software is suspended while awaiting feedback information from the utility companies. In early 1996, Ms. Marks rents her first store location in order to demonstrate the Paymaster system to the utility companies. She then begins discussions with GKRS with a view to having a Western Union Sub-Agency placed at that location. Ms. Marks then invites GKRS to invest in the Paymaster Project and provides its Managing Director, Brian Goldson with a copy of her Paymaster Business Plan. This included the Paymaster Collection Network Architecture and Operations Plan (PCNAO).

18 [15] Paymaster receives an encouraging response from the utility companies and a request for additional requirements. In the meantime, JOL continues to work on the Paymaster Multi-Payment Software and to revise the specifications for the cashiering software. Dr. McNaughton for the first time includes Paul Lowe in the project, requesting him to write the software and implement the architecture and specifications provided to him. Dr. McNaughton advises Paymaster of the developments including the involvement of Paul Lowe and provides an activity schedule with estimated costs.

19 [16] In September 1996, Paul Lowe completes his task of adapting and customising his CSSREMIT program to Paymaster's specifications, but there were some problems. It was apparent that further work was required to be done on the Paymaster Multi-Payment Software and two additional modules were to be written by Paul Lowe to solve the problems.

20 [17] After the completion of the additional work the testing of Paymaster Multi-Payment system begins, but is delayed in September, 1997 by the utility companies and Dr. McNaughton withdrawing from the project. Paul Lowe (already under contract to...