Caxton Publishing Co Ltd v Sutherland Publishing Co

LorD THANKERTON. My Lords, I have had
the privilege of considering the opinion of my noble and learned
friend Lord Porter, with which I find myself in agreement, and I
only desire to add some further observations on two of the
four contentions of the plaintiff-respondents, videlicet, as
to the applicability of the limitation provision of s. 10 to
proceedings under s. 7, and as to the proper measure of
damages.

On the question of limitation, I have felt less difficulty
than my noble and learned friend, and I agree with the view
expressed by my noble and learned friend Lord Russell of
Killowen, whose opinion I have also been privileged to consider,
with regard to the proper construction of s. 14. The question
depends on whether proceedings under s. 7 constitute an
action "'in respect of infringement of copyright " within the
meaning of s. 10. The plaintiffs contended that proceedings
under s. 7 in respect of "infringing copies"' might be taken
in a case in which no infringement had occurred, having regard
to the definition of " infringing "' in s. 35, and the provisions of
s. 14 as to the importation of copies. The argument is that
copies imported in breach of the provisions of s. 14 are
"Imported in contravention of the provisions of this Act "
and are therefore infringing copies within the definition in s. 35,
though there has been no infringement of copyright. I agree
with my noble and learned friend Lord Russell that, by its
terms, s.14 is made a substantive part of the Customs
Consolidation Act, 1876, and that a contravention of the
provisions of s. 14 constitutes a contravention of the provisions
of the Customs Act, and not a "' contravention of the provisions
"of this Act'' within the meaning of the definition in s. 35.
The use in s. 14 of the phrase '"' prohibited by this section,"
in my opinion, presents no difficulty, when you find the express
direction that the section is to have effect as if it was part
of the Customs Act, for that, in my opinion, makes the
prohibitions of the section substantive prohibitions of the
Customs Act.

On the question of assessment of damages, I have little to
add to the reasoning of my noble and learned friend Lord

A. C. - AND PRIVY COUNCIL.

Porter. Under s. 7 the plaintiffs are to be treated as fictional
owners of infringing copies, which they did not create and
would never have created. The conception of these infringing
copies, where the plaintiffs' copyright matter is inextricably
mixed by manufacture with the non-infringing matter, is in
itself rather imaginary and problematical, and the question of
their value is bound to be different from the question of what
I may call the virgin value of the plaintiffs' copyright. The
infringing copies are found ina setting created by the defendants,
and I agree with my noble and learned friend that the Court,
in assessing the damages, is entitled and bound to take that
setting into account, and that this will fairly be done in
taking some proportion of the total value of the volume, after
making due allowance for expenses incurred after the act of
conversion.

I concur in the motion about to be proposed by my noble
and learned friend Lord Russell of Killowen.

LORD RUSSELL OF KILLOWEN. My Lords, in the course
of the hearing of these consolidated appeals four matters
arose for discussion and decision, namely :—

1. Whether on the true construction of the Copyright Act,
Ig1i, the respondents are entitled in respect of the same
copies both to damages for infringement under s. 6 and to
damages for conversion under s. 7? Farwell J. held that
they were not. The Court of Appeal held that they were.

2. Whether s. 10 of the Act applies to proceedings under
or by virtue of s. 7? Crossman J. held that it did apply.
The Court of Appeal (MacKinnon L.J. dissenting) held that
it did not apply.

3. What was the act of the appellants by which the
infringing copies were converted ?

4. What is the proper measure of the damages which the
respondents sustained by reason of the conversion ?

Upon the first question I have had the advantage of reading
and considering the opinions prepared by your Lordships upon
this point, and I agree with the view that it is impossible to find
any safe ground upon which we would be justified in holding

185

Hea)
1938
——
CAXTON

PUBLISHING

Co.

v.

SUTHERLAND

PUBLISHING
Co.

Lord
Thankerton.

186

Ue, 105s (685.))
1938
——
CAXTON
PUBLISHING
Co.
v.
SUTHERLAND

PUBLISHING
Co.

Lord Russell
of Killowen.

HOUSE OF LORDS [19389]

that the Legislature intended that these remedies should be
alternative and not cumulative.

The second question is one of some difficulty. One would
think that, since s. Io comes at the end of a group of five sections,
grouped together under the title '' civil remedies," the period
of limitation thereby fixed was intended to apply to all
proceedings for the enforcement of those remedies or any of
them. The remedies are for the protection of copyright.
To this prima facie assumption two objections are suggested :
first, that an action under or by virtue of s. 7 is not "an
"action in respect of infringement of copyright," and secondly,
that proceedings might be taken under s. 7 in a case where
there had not been any infringement of copyright, and that
consequently in such a case no point of time could exist from
which the period of three years would commence to run. The
second objection needs explanation. It depends on the joint
effect of the definition of "infringing'"' in s. 35, and the
provisions of s. 14 relating to the importation into the United
Kingdom of copies made out of the United Kingdom of any
work in which copyright subsists which if made in the United
Kingdom would infringe copyright. These copies I will for
brevity refer to as foreign copies. The argument runs thus:
"Infringing '? when applied to a copy of a work in which
copyright subsists means any copy made or imported in
contravention of the provisions of the Act, therefore, " infring-
ing copies' in s. 7 include copies imported in contravention
of the provisions of s. 14; but innocent importation does not
constitute infringement, therefore s.7 applies to copies which
may have come into existence without any act of infringement
having taken place.

Having carefully considered the relevant provisions of the
Act I have come to the conclusion that these objections
cannot prevail. Sect. 14 it is true in terms prohibits the
importation of foreign copies as to which the owner of the
copyright gives notice to the Commissioners of Customs and
Excise that he is desirous that such copies should not be im-
ported, but the section is essentially a customs enactment.
It provides (sub-s. 1) that the foreign copies as to which

»
ful
{

A. C. AND PRIVY COUNCIL. 187

notice has been given shall be deemed to be included in the H.L. (E)
table of prohibitions and restrictions contained ins. 42 of the —_1938
Customs Consolidation Act, 1876, and that that section is to Caxton
apply accordingly. The Commissioners of Customs and Poe
Excise are given power (sub-s. 2) to make regulations respecting v.

the importation and forfeiture of such foreign copies. oa
Reference is, no doubt, made twice to the importation " which ee

"is prohibited by this section." But sub-s. 6 provides that Lord, Russell
"The foregoing provisions of this section shall have effect as if
"they were part of the Customs Consolidation Act, 1876."
Now what is the effect of that ? It surely must be, indeed it
cannot help being, that the prohibition of the importation of
foreign copies after notice given is in law a prohibition of
the Customs Act, and that copies so imported are imported
in contravention of that Act and not in contravention of the
Copyright Act.

This may seem at first sight a startling result, especially
in the face of the specific words which occur in s. 14, namely,
"the importation of which is prohibited by this section "' ;
but the prohibition it must be remembered is to have effect
as if it were a prohibition which was part of the Customs
Act. Moreover, this view produces consistency. For how
can the fictional ownership conferred by s. 7 of the Copyright
Act exist side by side with the provisions of the Customs
Act as to forfeiture and destruction of the objects included
in the table contained in s. 42 thereof? Fictional ownership
is inconsistent with the forfeiture and destruction contemplated
by s. 42 of the Customs Act. The relevant words in the
definition of "infringing," namely, "' imported in contravention
'of the provisions of this Act," may properly be referred to
importations in contravention of the provisions of s. 2, sub-s. 2
(d), and s. 11, sub-s. 1 (e), and are therefore necessary to the
definition.

The result is that if, as I think must be the case, s. 7 does not
apply to copies which are imported notwithstanding the
provisions of s. 14, the foundation of the argument upon this
point disappears; and there could never be a case of pro-
ceedings in respect of the conversion of infringing copies

188 HOUSE OF LORDS [1939]

H. L. (E.) which had come into existence without any act of infringement
1938 having taken place.

CaxToN If this be so, then in my opinion every proceeding in respect

PopesHING of such conversion may reasonably be described as an action

v. "in respect of infringement of copyright," because the fictional
SUTHERLAND

Pusiisninc Ownership on which such proceedings are based involves the
oe existence of a copyright and infringement of it, both of which

Lord Russell facts would require to be pleaded and proved by the fictional
"——~ owner.

A further consideration is this, that if s. 10 does not apply
to proceedings under or by virtue of s. 7, the period of limitation
applicable to those proceedings will vary according to the
country in which the proceedings are instituted. Under the
Act of 1842 a uniform period of one year was fixed by s. 26;
but on the respondents' argument the period would be six
years in England and forty years in Scotland, with the result
that a plaintiff barred in England after six years could, upon
founding jurisdiction in Scotland, claim in respect of all copies
converted anywhere within forty years.

My Lords, I am conscious that on any view there are
difficulties of construction under the Act, but with me what
was called the positional argument weighs most strongly.
The only answer to it seemed to be the alleged impossibility
in certain cases under s. 7 of fixing a starting-point for the three
years. For the reasons which I have endeavoured to explain
this alleged impossibility does not exist. Accordingly the
positional argument brings its full weight to bear, and I would
hold that as a matter of construction s. 10 applies to pro-
ceedings under s. 7.

As regards the question what was the act of the appellants
by which the infringing copies were converted, Crossman J.
held that this took place when the order was given to bind
up the sheets which contained the infringing matter. In the
Court of Appeal, the Master of the Rolls and Romer L.J. held
that the delivery to the purchasers was the act of conversion.
MacKinnon L.J. thought it was the sale of the volumes. I do
not know that this is a question of any very great moment
in the present case; but in my opinion the act of binding

A. C. AND PRIVY COUNCIL. 189

together the sheets which contained the infringing matter H.L. (E.)
was the act of conversion. The Master of the Rolls and 1038
Romer L.J. based their view on the supposition that the caxtow
delivery was the first evidence of any intention by the POPS™NG

appellants to deal with the infringing copies adversely to the v.
plaintiffs. But as Atkin J. pointed out in Lancashire and ee
Yorkshire Ry. Co. v. MacNicoll (1) the question of intention os
is immaterial in cases where a man deals with goods as his ord, Russell
own. If a man does that, you need not inquire as to his
intention. MacKinnon L.J. thought that the sale was the act
which made impossible any delivery up by the appellants ;
but a man can convert the goods of another without parting
with the possession of the goods. The only relevant question
here is, did the appellants deal with the infringing copies in
a way inconsistent with the rights of the owner, and if so
when ? In my opinion the answer must be that they did so
deal with them when they commenced to get them stitched
together for the purpose of incorporating them with their own
property into a composite article, namely, a book. They then
unequivocally dealt with them as their own, and therefore in
a manner inconsistent with the rights of the plaintiff.
The remaining question is, what is the proper measure of
damages for that conversion, which was in fact an unconscious

conversion ?

My inclination, unassisted by your Lordships' opinions,
would be to award only a small sum of some 35/. or thereabouts.
This would be upon the footing that the fictional property
of the respondents which has been converted is not to be
valued as being a proportionate part of a completed whole,
but merely as being pieces of paper with printed matter
thereon for which the appellants would be prepared to pay
a sum equal to what it would cost them to replace them. But
Crossman J., the Court of Appeal and all your Lordships
think otherwise. In these circumstances I am not prepared
to disturb this pleasing unanimity.

For the reasons which I have stated I would affirm the
order of the Court of Appeal dated February 7, 1936, and

(x) 88 L. J. (K. B.) 601, 605.

190 HOUSE OF LORDS [1939]

H.L.(E.) I would discharge the order of the Court of Appeal dated
1938 | November 15, 1937, except in so far as it ordered the appellants
Caxton here to pay the costs occasioned by their notice by way of
PuBrisHIN® cross-appeal. I would order the respondents here to pay the
Be ori, costs of their appeal to the Court of Appeal by notice dated
Pususninc February I9, 1937, and also to pay to the appellants here
Co. two-thirds of their costs of the consolidated appeals to your

Lordships' house.

LorD MACMILLAN (read by LorD PorTER). My Lords, I
am of opinion that on a sound construction of the Copyright
Act, 1911, the remedy of damages for infringement provided
by s. 6 and the remedy of damages for conversion pro-
vided by s. 7 are not in law mutually exclusive and that the
respondents are entitled in the present case to recover under
both heads.

I am also of opinion that the triennial limitation enacted
in s. 10 of the Act applies to a claim of damages for conversion
under s. 7.

As regards the act of conversion, this was in my view the
binding up of the infringing sheets with the innocent sheets
so as to form the volumes produced by the appellants. The
question of the quantification of the damages for conversion
I have found to be by no means an easy one. The difficulty
lies not so much in determining the principle on which
damages for conversion should be awarded, for that is well
settled, as in the application of the principle to a highly
artificial situation. I am not satisfied that the Court of
Appeal have erred in the method which they have adopted
and I accordingly agree with your Lordships that the damages
under this head should be assessed at 150l., being the figure
which the Court of Appeal would have awarded had they
held that the triennial limitation was applicable.

Having reached these conclusions I concur with the motion
which I understand your Lordship on the Woolsack is about
to put to the House.

LorpD RocuEe. My Lords, I have had the advantage of

A. ¢. AND PRIVY COUNCIL.

reading in advance the opinions both of those of your Lord-
ships who have already spoken and of my noble and learned
friend Lord Porter. It is unnecessary for me either to

Igl

H: L. (E.)
1938

ea.

recapitulate the facts, or, save on one pointy to*add«mariy POSUSaNe

observations to those which are contained in those opinions.

Co.
v.
SUTHERLAND

As to the first point: I think with all your Lordships that Pustisame

the Court of Appeal was right in reversing the judgment of
Farwell J. and that the remedies are not alternative.

As to the second point, the period of limitation: The
construction of the material sections of the Act seems to me
to raise questions of great nicety and difficulty and I confess
that my mind has fluctuated as to the true conclusion to be
reached. But upon the whole I think that the result arrived
at by MacKinnon L.J. in his dissenting judgment is correct
and that the appeal upon this point should be allowed.

As to the third point, the relevant act of conversion: This
was, in my opinion, the binding of the sheets, but I regard the
act or process of stitching or binding as one and continuous
from its commencement to its conclusion. I therefore regard
the whole act or process as the act of conversion.

As to the fourth point, the measure of damages : I entertain
no doubt but that the judgments of Crossman J. and of the
Court of Appeal were right as regards this matter, and I will
state my reasons for my conclusion.

The case for the appellants that the damages should be
assessed at some small sum, be it 15/. or 36/., is in my opinion
in contradiction to the principles of the law applicable to
the assessment of damages generally and to those applicable
in particular to the assessment of damages in respect of the
tort of conversion.

As to damages in general there is no question but that the
respondents are entitled to a just sum by way of indemnity
to represent their loss by reason of the wrong done to them.
That which on the appellants' case would be allowed seems
to me to fall far short of representing such loss. The sheets
were not merely capable of forming part of a complete work.
They were adapted and destined and used for that purpose.
They in fact formed one-twentieth part of a volume to be

Co.

Lord Roche.

192

Hn La(E)
1938

—
CAXTON
PUBLISHING
Co.

v.
SUTHERLAND
PUBLISHING
Co.

Lord Roche.

HOUSE OF LORDS [1939]

sold at 20s. and in fact sold at that price to the extent of
3500 copies in the course of three years alone. In my
judgment in assessing loss regard was properly given to
that outstanding fact and to ignore it would be to ignore the
realities of the case.

The line of reasoning adopted by Crossman J. and the
Court of Appeal seems to me to be equally justified by a
consideration of the rules as to damages for the particular
tort now in question. There is no dispute but that the
measure of damages is the value of the thing converted at
the time of the conversion. It is true enough to say that
the value is the value to the owner; but it is wrong to say
this if you mean what the owner will make out of the thing
in money if it is not taken away from him. This latter idea
was repelled by this House in a series of cases dealing with
such trespasses to goods as deprived the owner of them
temporarily. They were cases where the owner either did
not use the things at all or not for money gain, for example,
spare lightships and dredgers. The Mediana (1) is an instance.
It was said in the judgment of Lord Halsbury L.C. in that
case that, if the owner of a chair was deprived of it, it was no
ground for giving nominal damages that he did not want to
sit upon it: and that it might be necessary in such cases
to resort to a variety of tests of value during the time of
deprivation. One such suggested test was what would have
to be paid by way of hire for such a chair or any chattel in
question. It is true that that was a case of trespass and
not conversion, but Lord Halsbury L.C. said that the same
principles applied. So with permanent deprivation or wrongful
appropriation of a chattel one of a variety of tests may be
the best available test of value according to circumstances.
In Reid v. Fairbanks (2) there was a very good one available
—because the true owner had contracted to sell a ship under
construction when finished for x pounds. Held, or rather
agreed (because the actual decision was on another point)
that the damage was x-y, y representing the cost of finishing
the construction. Here, unfortunately, the available material

(1) [t900] A. C. 113. (2) (1853) 13 C. B. 692.

A. C. AND PRIVY COUNCIL.

is very different and not so easy to deal with. The sheets
in question only became the respondents' property after the
appellants had brought them into existence by reproducing
the respondents' letterpress and illustrations in a form useful
not for the respondents' publication but for their own.
I conceive the proper test here is what ought the appellants
to have paid for that matter in the form it was when converted.
I say '' ought to have paid " because of certain cases I propose
to refer to, but I do not think that the test of what they
would have paid would yield a different result. The cases
are such cases as were mentioned by appellants' counsel
relating to trespass to land by the removal of coal, timber, etc.
These cases contain reference to a doctrine distinguishing an
innocent from an intentional or fraudulent trespasser for the
purposes of damages which is unknown to the law of con-
version, but the utility of the cases seems to consist in the
reference in the judgments and orders made to the " fair
value '' to be assessed. In one of them, Burmah Trading
Corporation, Ld. v. Mirza Mahomed Ally Sherazee (1), the avail-
able test of value adopted was the price realized or to be realized
less expenses to be incurred in securing it. In such cases,
to treat the wrongdoer as if he were a purchaser appears to
me to be right. In assessing what he ought to pay or, what
is the same thing, what is the fair value of the thing in
question, its adaptability for a particular use may be an
important element in its value. The triptych example
furnished by the Court of Appeal is a strong example of this
and seems to me to be much in point here. The parties in
this: case seem to have proceeded on this basis of
value. All the material put before Crossman J. was sub-
mitted on this basis—the figures and the agreement about
the one-twentieth proportion seem to me to be consistent
with no other view. The only question was what items should
represent the true value. The appellants said the cost of
printing at most. Crossman J. thought this was wrong, so
did the Court of Appeal, and it was unanimous upon this
point. A similar conclusion had been reached in Ash v.
(1) (1878) L. R. 5 Ind. App. 130.

A. C. 1939. 3 O

193

H, L. (E;)
1938

-—
CAXTON
PUBLISHING

Uv.
SUTHERLAND

PUBLISHING
Co.

Lord Roche.

194

leh Ieee (2)
1938
—
CAXTON
PUBLISHING
Co.
v.
SUTHERLAND

PUBLISHING
Co.

Lord Roche.

HOUSE OF LORDS [1939]

Dickie (1), which I think was rightly decided. I am of opinion
that in the present case Crossman J. and the Court of Appeal
were right in rejecting the appellants' contention. It is not
easy to see why the cost of printing only is to be taken. The
articles in question would seem to be worth at least replace-
ment value and to replace the printed material would require
the employment of a writer and a process engraver at the
cost of money, to which would fall to be added a proper
share of all overhead and standing charges. I entirely accept
the view that expenses incurred after the conversion should
come off, and although the binding was the only one which
appears to have been so characterized below I should have
been prepared, had the appellants made a case asking for
further proof, to consider whether there should not be a
remit to Crossman J. to deal with other expenses. But no
such case or request was made, and the appellants stood on
their printing basis. That seems to me, as I have said, to be
wholly wrong.

I agree with my noble and learned friend Lord Porter that
the proper inquiry is not what the appellants would have
given or the respondents have taken for the pirated material.
As the appellants in fact used the material, the proper inquiry
is as to its fair value. However, if the other test were to be
adopted, I do not believe that, committed as the appellants
were to this composite work, many copies of which had been
sold as the process of conversion continued, they could
reasonably have said and in business would have said anything
other than that they would pay up to a proportion of the
sale price less what it would still cost them to realize' that
price. The Court was bound to exercise its judgment on the
materials submitted to it in a rather exceptional and peculiar -
case where direct evidence of the parties or of experts would
be either useless or inadmissible, and though it may have
proceeded by "a rusticum judicium," in my opinion Cross-
man J. hit upon a figure which represents as nearly as may
be the value to be assessed, and to interfere with it would
in the circumstances be wrong and to replace it by the

(x) [1936] Ch. 655.

A. C. AND PRIVY COUNCIL.

appellants' figures would, in my opinion, for the reasons
I have given, be unjust and erroneous.

I am therefore for allowing the appeal only on the point
of the period of limitation and for restoring the judgment
of Crossman J.

LorD PorTER. My Lords, this action raises a number of
questions of some importance, two involving the construction
of the Copyright Act, Ig11, and two raising the more general
question of the damages to be awarded against those who
have, though inadvertently, made use of matter containing
the copyright of others.

It arises in this way. The plaintiffs are the owners of the
copyright in a literary work entitled " Heating and Ven-
tilating."" The defendants are the publishers of a book
entitled '' The Modern Practical Plumber '"' and have caused
to be printed and sold a number of copies thereof.

It is admitted that certain portions—we were told portions
of four sheets—of the defendants' work are infringements of
the plaintiffs' copyright.

The plaintiffs by writ dated May 2, 1935, brought an
action against the defendants claiming (1.) an injunction
restraining the infringement; (2.) an inquiry as to damages;
and (3.) delivery up of all infringing books and material.

The defendants admitted the infringement and, while
relying on s. 10 of the Copyright Act, 1911, and the Statute of
Limitations, offered to submit to judgment on their admissions.
But they contended (1.) that the plaintiffs were not entitled
to both damages for infringement of copyright under s. 6,
sub-s. I, of the Act and at the same time to damages for
conversion under s. 7: they said the plaintiffs must elect
which remedy they would take; (2.) that the limit of three
years provided by s. 10 of the Act applied both to a claim
for infringement under s. 6 and to a claim for conversion
under s. 7; (3.) that the conversion was the printing or order
to bind or binding of their work, and not its sale ; and
(4.) that the damages were not to be calculated by finding the

price of their complete work (of which the part containing
3 Oz

195

HOE. (E:)
1938

——
CAXTON
PUBLISHING
Co.

v

SUTHERLAND

PUBLISHING
Co;

196

Fee is0((E)
1938
—
CAXTON
PUBLISHING
Co.
v.
SUTHERLAND

PUBLISHING
Co.

Lord Porter.

HOUSE OF LORDS [1939]

the plaintiffs' copyright constituted only a small fraction)
and then attributing to the plaintiffs' copyright some portion
of that price after making due allowance for the cost of
binding, but was the value of the plaintiffs' work to the
plaintiffs as contained in the four sheets, a value which they
said was mere pulping value or at most a small portion of
the cost of the production of the whole work.

At the hearing before this House they were content to
take the binding as the act of conversion, and both sides
accepted the position that if the damages for conversion
were to be calculated by reference to the value of the whole
volume the proper proportion to be taken was one-twentieth.

As to the first point Farwell J., who was asked to give a
decision upon that alone, decided that the remedies under
ss. 6 and 7 were alternative and not cumulative. He was
reversed by the Court of Appeal, who held that the damages
were cumulative but that care must be taken that they do
not overlap so as to give the plaintiffs the same damages
twice over.

Upon the other points Crossman J., to whom they were
referred after the judgment of the Court of Appeal, decided
that the three years' limit applied to both claims, that the
order for binding was the conversion and that the only way
in which he could determine the value of the respondents'
portion of the work was to take the selling price of the whole
volume, find what proportion was attributable to the plaintiffs,
and, after making due allowance for the binding (which in his
view was an expense incurred after the conversion), to divide
the total price by that proportion and multiply it by the
number of copies sold.

In this way he arrived at a sum of Is. per volume as the
value of that part of the work which infringed the plaintiffs'
copyright, and as about 3000 copies had been sold during the
three years preceding the date on which action was brought,
at a sum of 150/. as the value of the converted portion.

He found also that the plaintiffs had not by reason of
the infringement suffered any loss of sales and he therefore
awarded no sum to the plaintiffs in respect of any such loss.

A. C. AND PRIVY COUNCIL. 197

But he found that the plaintiffs had suffered in reputation H. L. (E.)
from the infringement and gave a sum of 50/. as damages _1938
under this head. Of this last award no complaint is made. Caxton

The Court of Appeal differed from the learned judge, taking cea
the view, by a majority, that the three years' limitation aco ee
applied only to the damages under s. 6, and that the ordinary Pustisuinc
period of six years was the proper period of limitation under au
s. 7. They also held that the act of conversion was not the
order for binding but the sale of the infringing work.
Otherwise they affirmed the judgment of Crossman J., and
so arrived at a figure of 494/., since the number of copies sold
during six years before action brought multiplied by Is. per
volume made up that figure. )

The appellants argued in the Court of Appeal, as they had
argued before Crossman J., that the true measure of value
was the value of the infringing portion of the four sheets to
the plaintiffs, that that value was no more than the pulping
value, since the plaintiffs could make no use of them, or, if
the possibility of the defendants paying for them rather than
incurring the expense of having the peccant sheets rewritten
and reprinted is to be taken into consideration, the value was
at most something slightly more than the cost of printing
those sheets and of the paper itself; that sum they said was
approximately represented by one-twentieth of Is. 4d. per
volume.

They further argued that in any case the value of each
volume was not 21s. less binding, but that a proper sum for
the cost of disposing of the volumes sold, so far as that cost
was incurred after the conversion, must be deducted.

As to (1.) the Act by s. 6 gives certain remedies for infringe-
ment of copyright, remedies which include an injunction,
damages, and accounts. By s. 7 it enacts that infringing
copies shall be deemed to be the property of the owner of
the copyright and states that accordingly the owner may
take proceedings to recover possession of them or in respect
of their conversion. I do not see that these rights are neces-
sarily inconsistent one with another—no doubt, as is pointed
out by the Master of the Rolls (Sir Wilfrid Greene), the

Lord Porter.

198 HOUSE OF LORDS [19389]

H. L. (E.) damages may overlap, but the overlapping of damages is no
1938 new thing in English law. Two persons may cause an
Caxton accident by separate acts of negligence and judgment for the

PUBLISHING Whole damages may be given against each. So, too, damages
v. to the full value of the property converted may be given
SUTHERLAND

PupuisHinc against two persons for successive conversions of the same

a chattel and, until payment in full of the sum awarded is

Lord Porter. made by one of the defendants, the judgment remains in
force against the other.

In neither case, however, would the plaintiff be permitted
to recover more than the sum awarded for the injuries
received or the value of the chattel as the case might be,
because the law will not permit any greater sum to be
recovered than the actual damage suffered.

It was sought to distinguish those cases from the present
on the ground that in them the recovery was against two
persons and in the present case both sets of damages would
be awarded against the same person.

No doubt where the judgment is against one person the
recovery of double damages would be avoided not by pre-
venting the receiving of double damages after judgment
given, but by diminishing the damages given under the
judgment, e.g., in the present case by diminishing the damages
under the head of infringement so that they do not include
anything given under conversion. But of the two methods
the second seems to give rise to the lesser difficulty if there
be in fact any difference in principle.

The argument to the contrary, however, as I understand it,
proceeds thus. Sect. 6 gives amongst other remedies damages
for infringement or an account of profits: those remedies
are alternative not cumulative. An account of profits is also
alternative to damages for conversion and therefore damages
for infringement are alternative to damages for conversion.

I do not think the result follows. The grounds on which
a claim for damages and an account have been held to be
incompatible are that a claim for an account condones the
infringement : De Vitré v. Betts (1) and Neilson v. Betts. (2)

(1) (1873) L. R. 6H. L. 319. (2) LOR SSH Ole 1,422:

A. C. AND PRIVY COUNCIL.

For the same reason, namely, that by doing so the plaintiff
affirms the action of the converter, it is possible for a
plaintiff to lose his remedy in conversion by electing to sue
for money had and received and so waiving the tort : Smith
v. Baker. (1) But in the present case the respondents have
not sued for an account or for money had and received, and
I cannot see that they have waived their remedy either for
the one tort or the other by electing to sue for both as torts.
To succeed the appellants must show that the remedies under
s. 6 and s. 7 are mutually exclusive, and I do not think they
have done so.

Indeed there are indications in the two sections which lead
to a contrary conclusion. Could it be said, for instance, that
where a defendant has in his possession infringing plates
and has by their means produced and sold infringing copies,
a plaintiff would lose his remedy for infringement because he
also claimed in detinue to recover the plates. So to hold
would prevent the plaintiff from recovering his actual loss
by reason of the infringement even though he might recoup
himself by using the plates to make his own copies. He
might not desire to do so, and in any case the Act has made
the plates his to use as he pleases. I think the decision of
the Court of Appeal was right in this case and that at any
rate, so far as it involved the same view, the decision of the
Court of Appeal in Ash v. Hutchinson & Co. (2) was right also.

(2.) The limitations of time in respect of which recovery
may be made under this Act give rise to great difficulty.

The words to be construed are contained in s. 10, and are
as follows : '' An action in respect of infringement of copyright
"shall not be commenced after the expiration of three years
"next after the infringement."'

Does this section apply only to an action for infringement
under s. 6, or does it also cover an action brought under s. 7
in respect of infringing copies ?

By s. 35 of the Act 'Infringing when applied to a copy
"||. means any copy made or imported in contravention
"of the provisions of this Act."

(1) (1873) L. R. 8 C. P. 350. (2) [1936] Ch. 489.

199

H. L. (E.)
1938
—
CAXTON

PUBLISHING

Co.

v.

SUTHERLAND

PUBLISHING
Co.

Lord Porter.

200

eee (Es)
1938

es
CAXTON
PUBLISHING
Co.

v.
SUTHERLAND
PUBLISHING
Co.

Lord Porter.

HOUSE OF LORDS [1989]

When, therefore, s. 7 uses the phrase "' infringing copies"'
the words "' copies made or imported in contravention of the
'provisions of this Act '' may be substituted. The difference
between the words used in s. 6 and s. 7 is marked and patent.
Ins. 6, sub-s. 1, they run ''where copyright has been infringed"';
in s. 6, sub-s. 2, "in respect of infringement ''; in s. 6,
sub-s. 3, " for infringement " and in s. 6, sub-s. 3 (0), "in
"respect of the infringement." Unless the words " infringing
'copies' connote infringement, there is no mention of infringe-
ment in s. 7.

Of course, if no action in respect of an infringing copy is
possible save where there has been an infringement, such an
action might well be included in the phrase " action in respect
"of an infringement."

Is then an infringement necessary in the case of an
infringing copy ?

One instance to the contrary is suggested in the case of a
copy which is imported in contravention of s. 14 of the Act:
i.e., a copy which is made out of the United Kingdom of
any work which if made in the United Kingdom would
infringe copyright and as to which the appropriate notice to
the Commissioners of Customs and Excise has been given.

That section in terms forbids the importation of such
copies and speaks of them as "' prohibited by this section."

It was argued on behalf of the appellants that importation
in breach of the terms of s. 14 was not in essence a contra-
vention of the Copyright Act, 1911, but was really a breach
of the Customs Consolidation Act, 1876, and that the true
effect of s. I4 was merely to apply the provisions of the
Customs Consolidation Act to attempts to import copies of
matter which is the subject of copyright in this country.

It was further contended that infringing copies could not
have been intended to include copies imported in contravention
of that section since the Customs Consolidation Act made the
copies forfeit and subject to destruction or other disposal as
the Commissioners of Customs might direct. Such a right in
the Commissioners, it was said, was inconsistent with the
ownership being deemed to belong to the owner of the copyright

A. ¢. AND PRIVY COUNCIL.

under s. 7. Sect. 14, the appellants argued, assumed that
the copies would be seized at the place of importation,
or at any rate by the Commissioners, and, though they might

201

Jaks I, (3)
1938

—
CAXTON

escape detection, they could not be said to be "imported " PUBLISHING

within the meaning placed upon that word in the definition
of "infringing "'
copies would be confined to copies which the importer knew
to be infringements or of which he knew that they would be
infringements if made in the place of importation.

The difficulty caused by the wording of s. 35 persists, but
the contention has force.

It is strengthened by the position of s. 10 at the end of a
number of sections headed "' Civil remedies,'"" amongst which
is included s. 7, and by the fact that even a three years'
limitation is an extension of the one year given by the Copy-
right Act of 1842. Its weakness lies in the distinction
apparently drawn in the wording of the later Act between
infringement and infringing copies and in the difficulty of
ascertaining the date from which time is to run where no
infringement in fact takes place.

In the case of an argument so evenly balanced I should
not myself have felt justified in differing from the majority
of the Court of Appeal. But as your Lordships take a different
view I am not prepared to dissent from the opinions which
have been expressed.

I am the more ready to accept this view, as I cannot but
believe that whatever its wording may express, the intention
of the Act was to limit the right of action to a term of three
years in all cases.

Damages.

Under this head two further questions arise : (3.) What is
the act of conversion ? and (4.) what damages flow from that act ?

As to (3.) conversion was defined by Atkin J., as he then
was, in Lancashire and Yorkshire Ry. Co. v. MacNicoll. (1)
"Dealing," he said, '" with goods in a manner inconsistent
"with the right of the true owner amounts to a conversion,
'provided that it is also established that there is also an

(x) 88 L. J. (K. B.) 601, 605.

Co.
v.
UTHERLAND

in s. 35. In this view imported infringing Pusutsuine

Co.

Lord Porter,

202 HOUSE OF LORDS [1939]

H.L.(E.) "intention on the part of the defendant in so doing to deny

1938 ''the owner's right or to assert a right which is inconsistent
Caxton 'with the owner's right."

PupesHING — This definition was approved by Scrutton L.J. in Oakley v.

v. Lyster. (1)
SUTHERLAND 3 is 3
PusuisHinc Atkin J. goes on to point out that, where the act done is
aa necessarily a denial of the owner's right or an assertion of a
lord Porter. right inconsistent therewith, intention does not matter.
Another way of reaching the same conclusion would be to
say that conversion consists in an act intentionally done
inconsistent with the owner's right, though the doer may not
know of or intend to challenge the property or possession of

the true owner.

In the present case Sir Stafford Cripps, I think rightly,
conceded that the mere printing of the infringing matter
could not amount to conversion since no copy, and therefore
no infringing copy, was in existence until after the printing
had been done. He further admitted that he could not rely
upon the order for binding. Until the binding took place,
the infringing matter was still under the control of the
defendants in an unaltered form and mere possession of the
property of others is not conversion, since by a fiction
the original possession is regarded as lawful.

But he argued that the infringing copy was not the book
or part of the book, but such portion of the four unbound
sheets as contained infringing matter, and that the binding
was the act of conversion.

With the last contention I agree. I think the binding was
an act inconsistent with the owner's right. This is a view
midway between that held by Crossman J. and the Court of
Appeal. I should myself have thought that the conversion
was not complete until the binding was complete, and that
we must not too meticulously regard the conversion as taking
place when the binders insert the first or second stitch.
Therefore, when one is considering the value of the infringing
matter one should regard it as part of a bound volume ready
for sale and what the appellants would pay to avoid unstitching

(1) [1931] 1 K. B. 148, 153.

A. C. AND PRIVY COUNCIL.

and rebinding is one of the matters to be taken into account.
But I doubt if this makes any or any substantial difference
to the value I should put upon the infringing matter.

As to (4.) there is no dispute as to the principle on which
in general the measure of damages of conversion is calculated.
It is the value of the thing converted at the date of the
conversion, and this principle was accepted by both sides in
the present case. But I should wish to leave open for
consideration in a case in which it directly arises the question
whether the statement of Abbott C. J. in Greening v.Wilkinson (1)
that the jury ''may give the value at the time of the conver-
"sion or at any subsequent time "' can be supported or not.

The appellants sought to place a qualification upon the
words "the value of the thing converted' by adding the
words '' to the owner."

Such a qualification is, I think, inaccurate and likely to
lead to confusion of thought.

I do not accept the view that an article has no value or a
diminished value to its owner because he has no machinery
for selling it. Has a book a different and diminished value
to me who have just purchased it from what it had a moment
before in the hands of the bookseller, even though the bookseller
will not take it back and I have no market for its sale? The
value is not necessarily the price for which the owner could
sell the article. Is a publisher who infringes an author's
copyright to make a large profit out of an unexpectedly
successful book because he could have bought the copyright
cheaply if before the publication he had approached the author
and paid his price ? Even the loss of the use for a time of
a chattel which the owner would not have used during that
time may give rise to substantial damage whether in an
action for damages or in an action for conversion: see The
Mediana. (2) It is the value known or unknown which has
to be paid, and that value is not necessarily the price which
the owner could have obtained or would have taken. It may
have to be ascertained by finding out what price for the
infringing matter, in the form in which it is offered, the public

(1) (1825) 1 C. & P. 625, 626. (2) [1900] A. C. 113.

203

below es (6,
1938

CAXTON
PUBLISHING
Co

v

SUTHERLAND

PUBLISHING
Co.

Lord Porter.

204

i E)
1938
——
CAXTON
PUBLISHING
Co:
Uv.
SUTHERLAND

PUBLISHING
(Cos

Lord Porter.

HOUSE OF LORDS [1939]

or some individual is prepared to pay, or in some other way
in the light of after events.

In the present case, so far as one is able to judge by the
steps which they took, the respondents were not anxious to
dispose of their copyright at all. They claimed in the action
an injunction to prevent further infringements of copyright
and delivery up of all infringing matter in the appellants'
hands. They could claim damages only for conversion in
respect of the matter used in the copies sold, since it was too
late to recover the matter itself. I will assume that the
infringing matter is such part of the four sheets before binding
as contains a portion of the respondents' copyright.

If the sheets were still in the appellants' possession, the
infringing matter might be cut out and handed over to the
respondents. Obviously this material would be useless to
them, but equally the appellants would be left with four
mutilated sheets, parts of volumes which they desired to bind
at once and sell, volumes which, judging from the figures
supplied to the Court, the market was ready to absorb. To
cope with this demand the appellants would have had to
employ some one else to fill up the gaps left, to reprint the
peccant sheets and bind the volumes. In those circumstances,
I cannot but think they would have paid a substantial price
for the copyright matter printed in the infringing sheets, and
I do not think I should regard 1s. a copy as too much. In
truth, however, I do not think myself justified in speculating
as to what sum in a bargain between the appellants and the
respondents the one would pay or the other accept.

Indeed to inquire what is the value of the infringing matter
so removed from its context is to my mind an artificial way
of considering the problem. The respondents' property has
in fact been incorporated in the appellants' volume and sold
to the public. The appellants never considered what they
would have been willing to pay as each infringing copy was
bound into the volume, nor the respondents what they would
have been willing to receive if they had been prepared to sell
at all. The two parties have in fact combined in furnishing
(though unwittingly on the respondents' part) material

A. C. AND PRIVY COUNCIL. 205

for a volume in which it was afterwards incorporated and H.L. (E,)

sold. 1938
In such circumstances, if one considers how the property Caxton

has actually been treated, the value of the respondents' part PUPUSHING

Co.
is not unfairly calculated by taking some proportion of the v

total value of the volume (after making due allowance for peat |
expenses incurred after the act of conversion) and multiplying og
that proportion by the number of copies sold. This was the 14 Porter.
method adopted by both Courts below, and in principle I think

in the cases of Ash v. Dickie (1) and John Lane v. Associated
Newspapers. (2) I can see no legal objection to its adoption.

If no such method can be adopted, then I see no answer to

the difficulty suggested in the Court of Appeal arising in a

case where A converts three parts of a triptych belonging to

three separate owners X, Y and Z, joins them together and
produces an article infinitely more valuable than the sum of

its parts. To hold that X, Y or Z can recover only what he

would get for his part in a market in which the other parts

are not procurable would be to leave the converter in
possession of a large sum of money to which none of the

owners would be entitled.

The resultant figure is, of course, but a rough and ready
test of the true value and must be modified by the Court
which has to determine it in accordance with the facts of each
case;-but in the present case it is admitted that, if the method
adopted was not wrong in principle, the proportion of one-
twentieth was not unfair.

Some discussion took place as to what allowances were
permissible. The cost of binding has been allowed, but Sir
Stafford Cripps contended that the cost of collection and
delivery, and the expense of advertising and selling, should
also be deducted.

I should myself be for allowing all expenses properly and
necessarily incurred by the appellants after the conversion
in selling the volumes containing the respondents' copyright
matter in so far as those expenses would not have been incurred
but for the sale of those volumes. But the appellants are

(1) [1936] Ch. 655. (2) [1936] 1 K. B. 715.

206 HOUSE OF LORDS [1989].

H.L.(E.) wrongdoers, albeit unintentional wrongdoers, and it is for

1938 them to show that, after the conversion took place, they have

Caxton necessarily expended the money for which they seek to get
PUBLISHING credit.

i a It is admitted that there is no evidence to this effect except
Pusuisuinc the probability that the expenses claimed, or at any rate
Sa some part of them, would be incurred after that date. I see
Lord Porter. no ground for making this assumption. It may be correct
or not. It has not been proved and in any case it is not clear
that the same expenditure would not have taken place whether
the appellants had sold the infringing volumes in the course
of their general business or not.

I would concur with the order proposed by my noble and

learned friend Lord Russell of Killowen.

First appeal dismissed.
Second appeal allowed.