Paymaster (Jamaica) Ltd v Grace Kennedy Remittance Services Ltd

• Jurisdiction: Jamaica
• Court: Supreme Court (Jamaica)
• Judge: Palmer Hamilton, J
• Judgment Date: 11 June 2020
• Docket Number: CLAIM NO. SU2019CD00083
• Date: 11 June 2020

Between

Paymaster (Jamaica) Limited

Claimant/Respondent

and

Grace Kennedy Remittance Services Limited

1 ^st Defendant

and

Paul Lowe

2 ^nd Defendant/Applicant

[2020] JMCC Comm 11

CLAIM NO. SU2019CD00083

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN THE COMMERCIAL DIVISION

Damages — Assessment of damages based on undertaking given on obtaining an interlocutory injunction

Mr. Vincent Chen and Mr. Makene Brown instructed by Chen Green & Co. for the Applicant

Mr. Maurice Manning and Mr. Mark Paul Cowan instructed by Nunes, Scholefield, DeLeon & Co. for the Respondent

IN OPEN COURT

Palmer Hamilton, J

BACKGROUND

1 The Court is called upon to make an enquiry into damages in relation to the Claimant's (hereinafter “the Respondent”) undertaking given to the Court on the grant of an interim injunction in this matter. The history of litigation between the parties herein has been long. Therefore, I will attempt to summarize only the facts that are relevant to the determination of the issues in the instant application.

2 The 2 ^nd Defendant, Mr. Paul Lowe (hereinafter “the Applicant”) was in the business of developing software programmes for bill payments. In the 1980's, he developed a computer programme known as the CCSREMIT which he marketed to companies in Jamaica including agencies of the Government of Jamaica, the Cayman Islands and Tortola British Virgin Islands. The Applicant's business practice entailed modifying his basic CSSREMIT programme to meet the specific needs of each client and, retaining his copyright, to grant the client a non-exclusive licence to use the programme as so modified. This meant that he earned not only by charging a licensing fee but also by charging for the maintenance of the software and its adjustment from time to time.

3 The Applicant granted the Respondent a non-exclusive licence to use CSSREMIT for the multi-payment programme which he developed at the Respondent's request and expense. The Respondent used the modified programme to operate its business.

4 In 1999, after negotiations, the Respondent gave the 1 ^st Defendant a nonexclusive licence to use the programme and by virtue of this licence, the 1 ^st Defendant entered the market for the provision of a multi-payment agency system in Jamaica in competition with the Respondent. The Respondent contended that both the 1 ^st Defendant and the Applicant had infringed its copyright in the software which the Applicant had prepared for it and initiated proceedings asserting same.

5 In 2000, the Respondent obtained an interlocutory injunction preventing the 1 ^st Defendant and the Applicant from using the software. The ex parte Order is coined as follows:-

• “(1) The Defendants be restrained whether by themselves, their officers, servants or agents or any of them otherwise howsoever from doing any of the following acts—

  • a. Reproducing or authorising the reproduction without the Plaintiff's consent of the Paymaster multi-payment collection software system of its computer software programme.

  • b. Possessing in the course of business or selling or offering for sale or using without the Plaintiff's licence any copies or materials of the said programme.

  • c. Converting for their own use infringing copies of the Plaintiff's said computer software.

• (2) The Plaintiff gives the usual undertaking in damages…”

6 The Applicant has not used that software since being forbidden not to do so. The matter proceeded to trial and judgment was given in favour of the 1 ^st Defendant and the Applicant and it was also ordered that there be an enquiry into damages consequent on the Respondent's undertaking given to the Court on the granting of the interim injunction. The Respondent appealed to both the Court of Appeal and to the Judicial Committee of the Privy Council and both pronounced in favour of the Applicant.

7 Pursuant to the ruling of the Supreme Court and the Court of Appeal that also made a further Order for the enquiry as to damages pursuant to the undertaking given by the Respondent, the Applicant now wishes to enforce the Respondent's cross-undertaking. It is that assessment that is now before me.

8 Both parties made detailed written and oral submissions supported by authorities for which I am grateful. I do not propose to repeat all the evidence of the parties or the submissions but I will only discuss so much of it as impacts my determination. The parties and their Counsel however, can rest assured that I have carefully reviewed and considered the evidence and submissions as well as the authorities cited.

The Applicant's Claim and Submissions

9 By Notice of Application the Applicant sought, inter alia, an Order that there be an enquiry into damages consequent on the Respondent's undertaking. In his Witness Statement, the Applicant detailed the harm caused to him by the interlocutory injunction obtained by the Respondent. He described the harm as irreparable and indicated that it caused him to lose his position in the market as frontrunner in the creation and development of bill collection software.

10 The Applicant indicated that subsequent to the injunction the collection of bills on behalf of others has developed into a flourishing industry and was undertaken by numerous organisations other than the Respondent and the 1 ^st Defendant. He was regularly approached by other local and international companies. However, during and after the trial and subsequent appeals there was little or no contact, citing that the assertions of the Respondent followed him everywhere.

11 The Applicant also averred that although the CSSREMIT was well known and accepted in the market place, because of the existence of the injunction he could not make it available to new customers as it would have included the functions required by the Respondent. The result has been that his reputation as the owner of an advanced collection software programme has suffered and he now has difficulty attracting clients.

12 It was further proffered by the Applicant that had he been allowed to continue to develop and maintain his position in the market any number of these organisations could have retained him for the purpose of developing the programme to cater to the specific requirements of each individual company and its subsequent maintenance for the foreseeable future.

13 In order to quantify his financial losses suffered over the eighteen (18) year injunction period, the Applicant undertook the following calculations:-

• “a. Using the evidence filed at this Honourable Court and ventilated in the trial of this matter formulated a scenario that accounts for the sale of licences and maintenance of the program that I anticipated over the life of the injunction.

• b. From this interest, based on the average BOJ Commercial Lending Rate is placed on the maintenance Cost from year to year to maintain the value of the maintenance cost from year to year.

• c. Then Interest Lost is calculated on the value of the sale and the interest that would have been accumulated in that sale for the year.

• d. Then as the market expands over time the estimated value of that sale is accounted for as I would have had software I would adjust as needed and it was the only one available on the market that was proven and in production. This would have given me an advantage in the market which I have used to arrive at the financial loss I suffered.”

14 The Applicant produced his estimate based on the above scenario and this revealed that he suffered loss of approximately Four Hundred and Seventy Million Four Hundred and Thirty-Two Thousand Three Hundred and Eleven Dollars and Thirty-Two Cents ($470,432,311.32).

15 Learned Counsel Mr. Chen submitted that the Court having ordered that an enquiry ought to be held into the damages, the matter now to be determined is quantum. He stated that the traditional approach to the assessment was stated obiter by Lord Diplock in F. Hoffman-La Roche & Co. A.G. and Others v Secretary of State for Trade and Industry [1975] A.C. 295 at 361E as follows:-

“The assessment is made upon the same basis as that upon which damages for breach of contract would be assessed if the undertaking had been a contract between the plaintiff and the defendant that the plaintiff would not prevent the defendant from doing that which he was restrained from doing by the terms of the injunction…”

16 In assessing the relevant principles to be applied, Learned Counsel cited and explored the following cases:-

• 1. Graham v Campbell (1878) 7 Ch.D. 490;

• 2. Ansett Transport Industries (Operations) Pty Ltd v Halton [1979] 25 A.L.R. 639;

• 3. Les Laboratories Servier and another v Apotex Inc and others (No 2) [2008] EWHC 2347 (Ch);

• 4. Abbey Forwarding Limited (In Liquidation) and HM Revenue & Customs v Richard John Hone, Patrick Daniel Owen and William James Owen [2012] EWHC 3525 (Ch);

• 5. Fiona Trust & Holding Corporation v Yuri Privalov & Others [2016] EWHC 2163 (Comm); and

• 6. AstraZeneca AB and another v Krka dd Novo Mesto and another [2015] EWCA Civ 64.

17 In summary, Mr. Chen submitted that the remedy under a cross-undertaking in damages is by way of equitable compensation rather than common law damages, so the defendant, in this case the Applicant, has to show that the damage would not have been sustained but for the injunction and not that the injunction was the sole cause. He further submitted that the court is compensating for loss caused by the injunction which was wrongly granted.

18 It was also averred by Learned Counsel for the Applicant that the present position of the law is that the Court's hands are not tied by strict rules as to remoteness in contract cases but it is a requirement to look at all the circumstances when deciding whether what is being claimed is as a result of the injunction and is assessable.

19 Mr. Chen urged that the Court should approach the determination of the loss in two...