Chanrai & Co. (Nigeria) Ltd V Khawam (1965) LLJR-SC

Chanrai & Co. (Nigeria) Ltd V Khawam (1965)

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This is an appeal from the judgment of the Ibadan High Court (Somolu, J.) awarding in favour of the respondent, hereinafter referred to as the plaintiff, a total amount of £6,832-10s as damages and 500 guineas costs. The appellants, hereinafter referred to as the defendants, are also restrained by injunction from importing into Nigeria, selling or exposing for sale the textile goods with which the plaintiff’s case is concerned. The plaintiff’s writ is endorsed as follows:-

“The plaintiff claims against the defendant Company:

(1)     An injunction restraining the defendant Company its servants or agents from importing or causing to be imported into Nigeria, selling or exposing or causing to be sold or exposed for sale, any textile piece goods bearing the plaintiff’s Registered Design No. 482244 or an obvious or colourable imitation thereof;

(2) £50,000 damages for the infringement by the defendant Company of the plaintiff’s said Registered Design, or an enquiry into an account of sales of all piece goods to which the said design or an obvious or colourable imitation thereof shall have been applied and of the profit made thereon;

(3) Delivery for public destruction of all textile piece goods to which the said design or an obvious or colourable imitation thereof shall have been applied that are in the possession or under the control of the defendant Company its servants or agents.

(4) Costs.

(5) Further or other relief.

In his statement of claim the plaintiff avers in substance that he is the originator of a particular design registered in respect of textile goods both in the Manchester branch of the Designs Registry of the Patent Office in the United Kingdom and also in Japan and that after importing for sale textile goods bearing his registered design, the defendants injected into the market textile goods of the same design, or a colourable imitation thereof, but of a cheaper quality causing him “loss of reputation and damage” as the defendants were selling under his own price. He claimed a total sum of £50,000 special and general damages made up as follows:

Total number of pieces imported and brought into stock 12,835 Total number of pieces sold from stock between mid/May and 15th July, 1962, at 32s a piece 9,505 Total stock unsold at July, 1962 3,330 Average profit for 14 months = 9,505 x 5s = £2,376-5s-0d Loss of profit on 3,330 pieces £sd = 3,330 x 5s 832 10 0 Estimated loss of profit for unexpired Portion of 1st five-year period of registration, = £2,376 x 60 14 10,183 8 7 Estimated loss of profit for first five-year period of registration 11,01687 Estimated loss of profit for two further five-year period of registration 22,032172 Paid to supplies for changing block of infringed design (to minimize loss of profit on 12,000 pieces ordered on 15th June, 1962) 50000 33,04959 GENERAL DAMAGES 16,450  14  3 £50 ,00000

At the close of the plaintiff’s case learned counsel appearing for him applied to the court to amend his statement of claim and the relevant note is to the following effect:-

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“Williams applies to strike out the words `made up as follows’ and all the figures following them on page 2 of the Statement of Claim and to make £33,049-5s-9d at page 3 special damages. Chukwura does not object. Order: Amendment granted as sought.”

In the light of this amendment the particulars of damages claimed by the plaintiff thereafter read as follows:-

£sd Special Damages 33,04959 General Damages 16,450143

TOTAL 50,00000

No particulars of the special damages were asked for or supplied. By their statement of defence the defendants admitted selling the textile goods in question but claimed that they were ignorant of the registration of the design by the plaintiff.

Both sides gave evidence at the trial and the learned trial judge came to the conclusion that the defendants were guilty of infringement of the plaintiff’s registered design. On the evidence before the court this finding is inescapable and the defences relied upon by the defendants were clearly not available to them. On this appeal the defendants have not disputed their liability for infringement or the order of injunction made against them. They complained about the amount of damages and costs awarded against them. The learned trial judge awarded against the defendants a total sum of £3,832-10s as special damages and £3,000 as general damages.

According to the judgment, the special damages of £3,832-10s is made up of (i) £832-10s representing the loss sustained by the plaintiff on 3,330 pieces of the textile goods which he was forced to sell at a reduced rate whereby he lost 5s profit on each piece; and (ii) £3,000 representing the plaintiff’s loss on a further consignment of 12,000 pieces of the textile goods stated by him to be on order. The general damages of £3,000 is stated in the judgment to compensate the plaintiff for the loss he “would sustain in respect of the fifteen years during which he could have the exclusive use of the registered design, as well as the loss of goodwill or reputation due to the marketing of the obviously inferior stuff’ i.e. the goods distributed by the defendants.

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There was evidence at the trial that the plaintiff ordered out a total of 12,835 pieces of textile goods of the registered design and sold at 32s a piece making a profit of 5s on every piece sold and that between May, 1961, and July, 1962, when the defendants put their own goods on the market, the plaintiff had sold a total of 9,505 pieces but had 3,330 pieces left unsold. The defendants sold their inferior stuff at 27s a piece but had in fact ordered out only 1,000 pieces 900 of which were sold in Lagos and the remaining 100 in Ibadan, and that they had on the whole transaction made a profit only of £41-3s-11d. The plaintiff, as a result of the appearance of the defendants’ goods on the market, had reduced his selling price to 27s a piece in order to be able to sell the stock of 3,330 pieces he then had. He also testified that he had placed an order for a further consignment of 12,000 pieces (and produced in evidence the indent for this order) but said no more about this further consignment and was not questioned about it either.

On the question of damages, learned counsel for the defendants before us submitted that the trial judge erred in awarding damages for both the loss sustained by the plaintiff on the goods he had sold at reduced rates and the loss he would sustain or have sustained on the 12,000 pieces the sale of which is not proved to have been affected by the action of the defendants. He further contended that the judge erred in his award of £3,000 general damages inasmuch as the assessment bears no reference to the quantity of the offending goods admittedly imported and sold by the defendants and disregarded the protection already offered the plaintiff in respect of the further periods of renewals of his registration by the injunction granted against the defendants as well as the reparation already done to the plaintiff’s reputation by the judgment which he has obtained in the case.

Counsel referred us to the case of the United Horse-Shoe and Nail Co. Ltd. v. John Stewart & Co. (1888) 13 A.C., 401, and submitted that the judge should not have taken into consideration the loss suffered by the plaintiff as a result of reducing his own prices of his own accord. Counsel maintained that the plaintiff was not entitled to damages for the periods of renewals in view of the injunction already granted, but submitted in the alternative that even if he was so entitled on the authority of the case of Khawam & Co. v. K. Chellaram & Son (Nigeria) Ltd., (1960), 5 F.S.C. 29, an amount of £3,000 was inordinately high. Finally, counsel referred us to the case of Draper v. Trist and Ors. [1939] 3 All E.R.513, and submitted that even though the trial judge had purported to base his assessment of the general damages of £3,000 on that case he had overlooked the principle on which the case was decided to the effect that although the plaintiff in such a case is entitled to damages for injury to the goodwill of his business, such damages should be assessed by reference to “what is a fair and temperate sum to give to the plaintiff for that Injury”.

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On behalf of the plaintiff it was submitted that he was entitled to damages for the injury to the goodwill of his business and for the periods of renewals of his registration and also that a court of appeal would not interfere with the assessment of damages by a court of trial unless it was shown that the trial court has based its assessment upon considerations which are wrong.

Cases dealing with assessment of damages have presented no small difficulties and it is impossible to lay down any hard and fast rule as to what circumstances should be taken into consideration in arriving at the award. In Draper v. Trist supra, Sir Wilfrid Greene, M.R., has summarised the principle as follows at p. 519:

“The real problem is, when all the facts are considered and all the considerations on either side are given fair weight, the proper sum at which to estimate the plaintiff’s damage. That a jury would be entitled, if it were shown that goods were sold under a deceptive appearance or description, to award something more than nominal damages is, in my opinion the law. What that damage is to be is a matter which is to be considered in the light of all the facts of the case and the whole of the evidence led.”

We take the view that this is a correct statement of the principle to be applied in the assessment of damages

Other Citation: (1965) LCN/1247(SC)

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