Re Multicoin Amusements Pty Ltd and British Amusements (North Coast) Corporation Pty Limited v Avel Pty Ltd [1989] FCA 529 (20 December 1989)

FEDERAL COURT OF AUSTRALIA

Re: MULTICOIN AMUSEMENTS PTY LTD and BRITISH AMUSEMENTS (NORTH COAST)
CORPORATION PTY LIMITED
And: AVEL PTY LTD
No. Q G67 of 1989
FED No. 830
Copyright

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Lockhart(1), Wilcox(1) and Spender(1) JJ.

CATCHWORDS

Copyright - Importation and sale of pinball machines manufactured in America - Copyright in machines vested in United States manufacturer - Respondent Australian distributor of certain models of the machines but limited to machines intended by the manufacturer for sale in Australia - Importation by appellants of used machines of the relevant models, those machines being purchased from companies independent of the manufacturer - Threats by respondent of legal proceedings to restrain appellants with importation and sale - Threats sought to be justified on the basis that respondent was an "exclusive licensee" of the copyright entitled to "publish" the copyright in Australia - Breach of s.37 of Copyright Act alleged - Whether respondent was an "exclusive licensee" of the copyright - Whether respondent had proved that importation was without the consent of the copyright owner.

Copyright Act 1968 ss.10, 31, 37, 115, 119, 202.

HEARING

BRISBANE
20:12:1989

Counsel for the Appellants: Mr K T Kilvington

Solicitors for the Appellants: Greg Kelly and Company

Counsel for the Respondent: Mr D Jackson

Solicitors for the Respondent: Chambers McNab Tully & Wilson

ORDER

1. The appeal be allowed.

2. The orders made by the Supreme Court of Queensland on
29 June 1989 be set aside and in lieu thereof it be
ordered that:
(a) a declaration be made that the conduct of
the defendant in threatening the
plaintiffs with an action or proceeding
in respect of an infringement of
copyright concerning used Williams'
pinball machines was unjustifiable;
(b) the defendant by itself, its servants and
agents, be restrained from renewing or
repeating any threat to institute an
action or proceeding against the
plaintiffs or either of them in respect
of an infringement of copyright
concerning used Williams' pinball
machines;
(c) judgment be entered for the first
plaintiff against the defendant for
damages in the sum of eighty-eight
thousand five hundred and sixty-five
dollars ($88,565);
(d) judgment be entered for the second
plaintiff against the defendant for
damages in the sum of two thousand three
hundred and thirty dollars ($2,330);
(e) the counter-claim be dismissed;
(f) the defendant pay the costs of the
plaintiffs, both in respect of the action
and counter-claim.
3. The cross-appeal be dismissed.
4. The respondent pay to the appellants their costs of
the appeal and cross-appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

This case concerns the entitlement of the appellants, Multicoin Amusements Pty Ltd ("Multicoin") and British Amusements (North Coast) Corporation Pty Limited ("British Amusements") to import into, and to sell within, Australia certain models of used pinball machines manufactured by an American company, Williams Electronics Games Inc ("Williams").
The background facts

2. The respondent, Avel Pty Ltd ("Avel"), which trades as Leisure and Allied Industries, has imported pinball machines from Williams for several years. In 1986 an agreement, styled a "distribution agreement", was entered into between Williams and Avel. This agreement was dated 1 May 1986. It contained the following recitals:

"A. Williams is the exclusive manufacturer of
various coin operated amusement machines
('the Games') which term shall mean and
include the parts of the Games whether
original or substituted and any other
product or products of a similar nature
dealt with or produced by Williams; and
B. Williams and the Distributor agree that
the Distributor will have sole and
exclusive rights of distribution in the
Commonwealth of Australia ('the
Territory') in respect of the Games upon
the terms and subject to the conditions
contained herein."

3. The agreement contained 28 operative clauses. It is necessary to set out only the first two of these clauses:

"1. Rights of Distributor. In consideration
of the 'Premium' set forth in Exhibit A being paid
by the Distributor in the 'Manner' and with respect
to the 'Games' set forth in said Exhibit, Williams
grants to the Distributor the sole and exclusive
right to:
(a) receive from Williams or direct Williams
as to the delivery of;
(b) sell or resell transfer or otherwise
dispose of or arrange for the sale or
resale of or other disposal by Williams
of; and
(c) advertise and otherwise in any manner
promote the lease, sale, distribution and
use of
Games produced or dealt with by Williams and
intended by Williams for disposal and use within
the Territory, provided, each Game dealt with by
Williams subsequent to the Games set forth on said
Exhibit A shall be subject (i) to the mutual
agreement of the parties as to the Premium to be
paid and (ii) to the execution and delivery of an
amendment to said Exhibit A.
2. Sole Rights. Williams shall not:
(a) distribute, sell, dispose or otherwise
deal with the Games in competition with
the Distributor within the Territory, nor
(b) grant the right to allow any other person
to distribute, sell, dispose of or
otherwise deal with the Games in
competition with the Distributor without
the prior written consent of the
Distributor having been first obtained."

Exhibit A to the agreement referred to two models of pinball machines, namely Williams' Grand Lizard and Williams' Road King.

4. The term of the agreement was for one year, but this period was subject to extension. It is common ground that the agreement was extended and that it remained extant at the time of the trial of this proceeding. It is also common ground that, from time to time, Williams and Avel agreed to apply the terms of the agreement to other models of pinball machines, including Williams' Pin-Bot.

5. Mr V P Ditton is the managing director of Multicoin. Before taking up that position in January or February 1987 he was the sales manager of British Amusements. Multicoin and British Amusements are associated companies, the former carrying on business as a wholesaler of pinball machines, amongst other goods, and the latter being a retailer.

6. In early February 1987 British Amusements imported into Australia from the United States nine new and five used Williams' Road King machines. The company advertised the machines for sale in two trade magazines. Avel responded by publishing an advertisement, in the March 1987 edition of "Leisure Line", in which it claimed to "own the exclusive rights for a number of games including ... Williams Pinball Games (all models since 1985)". The advertisement ended with a threat to "institute legal proceedings without notice against any person, firm or company who imports, manufactures, distributes or operates any game which is an infringement of our rights".

7. Mr Ditton saw the advertisement. He responded with an advertisement in "Cash Box Australia" in which he claimed, on behalf of British Amusements, that the company's marketing of Road King machines did not infringe the rights of any other person. This advertisement provoked a letter from Avel's solicitors. After exchanges of letters between those solicitors and the solicitors for British Amusements, in May 1987 British Amusements agreed, on a "without admissions" basis, to pay to Avel, in settlement of the dispute between the two companies, the sum of $9,000. It also agreed to insert in the next issue of "Cash Box Australia" an advertisement retracting the claim earlier made by it. Further, British Amusements undertook not to import into Australia any further Road King machines "and/or otherwise infringe your clients' copyright which undertaking will include, but will not be limited to, any advertising inconsistent with your client's rights". For its part, Avel agreed that British Amusements should be entitled to sell the machines which it had already imported. It did so, although at prices lower than it had been able to achieve before the dispute occurred.

8. It is probable that the willingness of British Amusements to settle its dispute with Avel was heightened by a visit which Mr Ditton paid to America in April 1987. Mr Ditton called to see Mr Martin Glazman, vice-president (marketing) of Williams. He asked Mr Glazman about the possibility of Multicoin obtaining distribution rights in Australia for Williams' products. The discussion related only to new machines. Mr Glazman told Mr Ditton that Avel was the exclusive distributor of Williams' games in Australia.

9. In November 1987 Multicoin ordered a consignment of used Williams' machines from two American dealers, World Wide Distributors Inc ("World Wide") and C A Robinson & Co Inc ("C A Robinson"). The shipment was to consist of a total of 27 machines: 19 Hi-Speed machines and eight Pin-Bot machines. The order came to the attention of Mr M D Steinberg, the managing director of Avel. He telephoned Mr Ditton, who confirmed that he proposed to import the machines. Mr Steinberg told him that, if Multicoin took this step, his company would take whatever steps were necessary to protect its rights, including legal action. Mr Steinberg told Mr Ditton that his company's agreement with Williams covered "all machines since 1985", that it had paid a lot of money to obtain the Williams' distributorship and would spend whatever was necessary to protect it.

10. On 23 November 1987 Multicoin wrote to Mr Glazman requesting clarification as to Williams' agreement with Avel. In particular, Multicoin sought information as to the duration of the agreement, the position in relation to earlier models and used machines and, in particular, whether the importation by an Australian importer of used Hi-Speed and Pin-Bot machines would breach the agreement between Williams and Avel. Mr Glazman responded, by fax, on the same day referring Multicoin to Mr Steinberg for this information. Mr Glazman sent a copy of the fax to Avel. Upon the next day Multicoin cancelled its order for the proposed consignment.

11. Notwithstanding, or perhaps in ignorance of, the cancellation, the solicitors for Avel wrote to Mr Ditton on 27 November 1987. The letter asserted an exclusive right to import games manufactured by Williams; no distinction being made between new and used machines. It concluded with a demand for the provision within seven days of two undertakings:

"1. An undertaking that your company, its
servants and agents, will refrain from
importing the Williams games or any other
amusement games designed and manufactured
by Williams, into Australia;
2. An undertaking that your company, its
servants and agents, will refrain from
taking any steps either directly or
indirectly to procure Williams to
discontinue and/or vary their exclusive
arrangements with our client."

The letter forecast legal action if the undertakings were not supplied.

12. The solicitors for Multicoin responded to the letter on their client's behalf. In that letter they stated that Multicoin had not imported any Williams' machines and would not do so pending clarification by Avel of the matters raised with Mr Glazman. In connection with that matter, the solicitors said:

"We hereby renew our client's request that you
clarify the terms of your client's exclusive
rights unequivocally in relation to
importation into Australia and sale of used
(second hand) Williams Pinball machines and
Williams equipment and for what period your
client claims exclusive rights, together with
an unequivocal answer as to whether your
client's exclusive agreement with Williams
covers all machines regardless of year and
manufacture."

The requested undertakings were refused.

13. The solicitors for Avel replied to this letter. They refused to supply any information as to their client's agreement with Williams, on the ground that its contents were confidential. In connection with the undertakings the solicitors said:

"It is noted that your client is not prepared
to provide the undertaking sought by our
client in paragraphs 1 and 2 on page 3 of our
letter of the 27th November, 1987. Our client
notes, however, your client's denial that it
was importing Williams games into Australia
and further notes your client's denial that it
has or intends to import any Williams games
into Australia. Our client understands from
information received that your client recently
cancelled an order for machines on the basis
that the supplier could not provide a written
assurance from Williams that the sale would
not be in violation of our client's exclusive
rights. As it appears that your client has
refrained, we are instructed to advise, that
without prejudice to our client's rights, our
client is prepared to withhold any proceedings
at this stage against your client. Our client
will monitor the situation carefully and
should it be found that your client takes
steps to breach our client's rights,
consideration will be given to bringing
proceedings against your client at that time
for appropriate relief including damages."

14. Section 202 of the Copyright Act 1968 provides a mechanism for bringing to resolution threats of legal proceedings in respect of infringement of copyright. Relevantly, the section provides:

"202. (1) Where a person, by means of
circulars, advertisements or otherwise, threatens a
person with an action or proceeding in respect of
an infringement of copyright, then, whether the
person making the threats is or is not the owner of
the copyright or an exclusive licensee, a person
aggrieved may bring an action against the
first-mentioned person and may obtain a declaration
to the effect that the threats are unjustifiable,
and an injunction against the continuance of the
threats, and may recover such damages (if any) as
he has sustained, unless the first-mentioned person
satisfies the court that the acts in respect of
which the action or proceeding was threatened
constituted, or, if done, would constitute, an
infringement of copyright.
(2) ...
(3) ...
(4) The defendant in an action under this
section may apply, by way of counterclaim, for
relief to which he would be entitled in a separate
action in respect of an infringement by the
plaintiff of the copyright to which the threats
relate and, in any such case, the provisions of
this Act with respect to an action for infringement
of a copyright are, mutatis mutandis, applicable in
relation to the action.
(5) ..."

15. It is common ground that s.202 applies to the present case. It is agreed that, at various times, Avel made threats to each of the appellants of legal action in respect of infringement of copyright.
The Supreme Court proceedings

16. On 22 June 1988 Multicoin and British Amusements instituted the present proceeding in the Supreme Court of Queensland. The relief claimed in that proceeding, as set out in an Amended Statement of Claim filed shortly before the trial, was as follows:

"(a) a declaration that the threats made by
the Defendant are unjustifiable;
(b) an Injunction to restrain the Defendant,
whether acting by its Directors, officers,
servants or agents or otherwise howsoever from
threatening the Plaintiffs or either of them,
their customers, servants or agents whether by
letters, circulars, advertisements or
otherwise with any legal proceedings for
infringement of any copyright for importing
into Australia second-hand Williams amusement
games and new Williams amusement games apart
from games known as 'Grandlizard', 'Road King'
and 'Pin-Bot';
(c) alternatively, an Injunction pursuant to
section 80 of the Trade Practices Act to
restrain the Defendant from continuing conduct
in contravention of section 52 of the Trade
Practices Act;
(d) damages pursuant to section 202 of the
Copyright Act or section 82 of the Trade
Practices Act;
(e) further or other relief;
(f) costs."

17. Avel denied the entitlement of Multicoin and British Amusements to the claimed relief. It counter-claimed for the following relief:

"(a) A declaration that in the circumstances
its conduct was justifiable and in
protection of its rights as an exclusive
licensee of Williams;
(b) An injunction restraining the Plaintiffs,
by their servants or agents or howsoever
otherwise, from infringing copyright in
the Williams Games and otherwise acting
in contravention of the Defendant's
rights under its exclusive distribution
agreement."

18. The hearing of the matter before Helman AJ of the Supreme Court of Queensland commenced on 28 April 1989, judgment being delivered on 29 June 1989. As these claims indicate, the major issue at the trial was the justifiability of the threats made by Avel. As was made clear by an exchange of correspondence shortly before the trial, Avel maintained the position that the appellants would import even used Williams' machines at their peril.

19. In relation to the Hi-Speed machines, Helman AJ held that the threats made by Avel were not justifiable, since the distribution agreement which it held with Williams did not extend to that model. His Honour declared accordingly and granted an injunction restraining any further threats concerning Hi-Speed machines. His Honour awarded Multicoin damages of $20,000, with interest of $3,200, in respect of the losses sustained by that company as a result of the Hi-Speed threats. However, in relation to all other models, Helman AJ held against the present appellants. His Honour declared that Avel's conduct, except in connection with Hi-Speed, "was justifiable in protecting its rights as exclusive licensee of Williams". His Honour made an order restraining the present appellants "from infringing copyright in the Williams Games the subject of the Defendant's exclusive licence, namely Grand Lizard, Road King, Pin-Bot, F14 Tom Cat, Fire, Big Guns, Space Station, Cyclone, Banzai Run, Swords of Fury, Taxi, Jokerz, Nark and Earthshaker".

20. The appellants complain in this Court of the order of Helman AJ insofar as it upholds Avel's claim to an exclusive licence in connection with the games other than Hi-Speed. In the submission of the appellants, Helman AJ ought to have held that none of the threats made by Avel was justifiable. Two reasons are advanced: that Avel is not an "exclusive licensee" of the relevant copyrights, within the meaning of the Copyright Act, and thus has no standing to restrain any breach by the appellants of Williams' copyright and, in any event, that Avel failed at the trial to demonstrate a breach or threatened breach by the appellants of that copyright. The appellants also claim that the damages allowed by Helman AJ were inadequate, even if it was entitled to succeed only in relation to the Hi-Speed machines; but a fortiori if in relation to other models as well.

21. For its part, Avel brings a cross-appeal against the decision of Helman AJ. In the filed Notice of Cross-Appeal Avel challenged the decision of Helman AJ in connection with Hi-Speed. However, this position was abandoned at the hearing of the appeal and Avel contented itself with challenging the award of damages.
Avel's standing to sue

22. A fundamental question in the case is the entitlement of Avel to institute any proceedings against the appellants in connection with the alleged infringements of the Copyright Act. The relevant machines were all designed and manufactured in America by or on behalf of Williams. It is common ground that the machines contain elements which may be the subject of copyright: the software program which operates the machines and the artwork which they exhibit. It is also common ground that, if there is copyright, that copyright is vested in Williams. However, despite forecasts by Avel's solicitors at one time that Williams would join in any proceedings, Williams has never asserted any right to restrain the importation of used machines by the appellants. Avel stands alone.

23. The entitlement of persons to take legal proceedings to restrain breaches of copyright is governed by Part V of the Copyright Act. Section 115, which appears in that Part, provides that, subject to the Act, "the owner of a copyright may bring an action for an infringement of the copyright". Section 119, which is also in Part V, provides that, except against the owner of the copyright, "the exclusive licensee has the same rights of action as he would have".

24. Avel makes no claim to be the owner of any relevant copyright; but it does claim to be an "exclusive licensee" within the definition of that term in s.10 of the Act, viz:

"'exclusive licence' means a licence in
writing, signed by or on behalf of the owner
or prospective owner of copyright, authorizing
the licensee, to the exclusion of all other
persons, to do an act that, by virtue of this
Act, the owner of the copyright would, but for
the licence, have the exclusive right to do,
and 'exclusive licensee' has a corresponding
meaning;".

The appellants contest that claim.

25. The only basis advanced by Avel for its claim to hold an exclusive licence is the distributorship agreement of 1 May 1986. Counsel for Avel makes the point that this agreement makes no distinction between new and used machines. He points to evidence which indicates that, at the time the decision was taken by Williams and Avel to apply the agreement to each particular model, that model had not yet been released in Australia. Accordingly, counsel argues, the exclusive right to sell the particular Williams' machine which was granted by clause 1(b) of the agreement amounted to a right to first "publish" the machine in Australia. Section 31 of the Copyright Act includes amongst the rights given to copyright owners, in connection with both literary and artistic works, "the exclusive right ... to publish the work". It follows, according to counsel, that -- although, in terms, the agreement is merely a distribution agreement -- it is in effect an "exclusive licence", because it authorises Avel "to do an act that, by virtue of this Act, (Williams) would, but for the licence, have the exclusive right to do".

26. We think that there are a number of difficulties about this submission, but it is not necessary to go to them all. The short answer to the submission is that the distribution agreement does not give a right in respect of all individual machines which fall within a particular model. The rights specified in paras.(a), (b) and (c) of cl.1 are restricted to the "Games produced or dealt with by Williams and intended by Williams for disposal and use within" Australia. It may be agreed that the "Games" referred to are games designated by a specified model name, such as Road King or Pin-Bot, but they must also be the individual machines falling within that category which are intended by Williams for disposal in Australia. In other words, clause 1 relates only to the individual machines -- whether new or used -- which are designated by Williams for the Australian market. Clause 1 has no application to goods which are designated for the Australian market by somebody else; having originally been supplied by Williams to some other market.

27. On this analysis the critical question is not whether particular goods are new or used. Although it might naturally be expected that, as a manufacturer, Williams would deal primarily in new goods, clause 1 would apply to any used machines, of the relevant models, which Williams might choose to designate for the Australian market. But it does not apply to goods selected for the Australian market by some other, independent dealer, such as World Wide or C A Robinson. In relation to those machines clause 1 gives no right whatsoever. It follows that, leaving aside any other difficulties, the clause confers no right to "publish" those machines. And these are the machines which the appellants sought, and continue to seek, to import.

28. In response to the objection just discussed, counsel refers to the provisions of clause 2. This clause is stated in unqualified terms but it gives no rights to Avel. The clause is merely a covenant by Williams not to compete with Avel, directly or indirectly, in Australia. It has no relevance to the present situation, where the threatened competiton is by persons acting independently of Williams.

29. Accordingly, it seems to us that the position taken by Avel is misconceived. Relevantly, it is not an exclusive licensee. Avel has no standing to restrain any infringement by the appellants of Williams' rights.
Proof of infringement of s.37

30. This conclusion is enough to dispose of the main issue between the parties. But we record our view that, in any event, Avel has failed to demonstrate any infringement by the appellants of Williams' copyright. The only infringements suggested are breaches of ss.37 and 38 of the Act, relating respectively to importation and sale. Those sections read as follows:

"37. The copyright in a literary, dramatic,
musical or artistic work is infringed by a person
who, without the licence of the owner of the
copyright, imports an article into Australia for
the purpose of--
(a) selling, letting for hire, or by way of
trade offering or exposing for sale or
hire, the article;
(b) distributing the article--
(i) for the purpose of trade; or
(ii)for any other purpose to an extent
that will affect prejudicially the
owner of the copyright; or
(c) by way of trade exhibiting the article in
public,
where, to his knowledge, the making of the article
would, if the article had been made in Australia by
the importer, have constituted an infringement of
the copyright.
38. (1) The copyright in a literary, dramatic,
musical or artistic work is infringed by a person
who, in Australia, and without the licence of the
owner of the copyright--
(a) sells, lets for hire, or by way of trade
offers or exposes for sale or hire, an
article; or
(b) by way of trade exhibits an article in
public,
where, to his knowledge, the making of the article
constituted an infringement of the copyright or, in
the case of an imported article, would, if the
article had been made in Australia by the importer,
have constituted such an infringement.
(2) For the purposes of the last preceding
sub-section, the distribution of any articles--
(a) for the purpose of trade; or
(b) for any other purpose to an extent that
affects prejudicially the owner of the
copyright concerned,
shall be taken to be the sale of those articles."

31. There is no doubt that the appellants have sought to import into Australia, and to sell within Australia, the relevant machines, copyright to which is vested in Williams. But ss.37 and 38 are breached only if the relevant acts are carried out "without the licence of the owner of the copyright". This phrase was considered by the High Court of Australia in Interstate Parcel Express Co Proprietary Limited v Time-Life International (Nederlands) BV [1977] HCA 52; (1977) 138 CLR 534. The Court held that the word "licence" meant no more than consent, and that a licence need not be a formal grant but might be given orally or implied from conduct: see per Gibbs J at p 539, per Stephen J (with whom Barwick CJ agreed) at p 548, per Jacobs J at p 557 and per Murphy J at p 558. The onus of negativing consent lies upon the party who asserts infringement, even in a case in which the alleged offender is the moving party: see Computermate Products (Aust) Pty Ltd v Ozi-Soft Pty Ltd (1988) 20 FCR 46 at p 48. A fortiori that is the position in proceedings instituted pursuant to s.202 of the Act in relation to which the applicant is entitled to succeed "unless the first-mentioned person satisfies the court that the acts in respect of which the action or proceeding was threatened constituted, or, if done, would constitute, an infringement of copyright".

32. The submission of the present appellants is that no evidence was offered at the trial that the importation and sale of the Road King machines and the proposed importation and sale of the Hi-Speed and Pin-Bot machines, were, or would be, acts which lacked the consent of Williams. There was no admission of lack of consent made by or on behalf of either of the appellants. No evidence was called from any representative of Williams. Indeed, counsel for Avel successfully objected to the tender of correspondence with Williams in which its attitude was set out. The rejection of this tender is a matter raised by the appellants on this appeal. But it is not necessary to determine whether this correspondence, or any part of it, should have been admitted. The simple position is that there was no evidence before the trial Judge that Williams had not consented to the importations. Avel failed to make out its case under ss.37 and 38.

33. It follows from the above that, in our respectful opinion, Helman AJ erred in holding that, except in relation to Hi-Speed, the threats made by Avel were justifiable and in restraining the conduct of the appellants. In our opinion his Honour ought to have held that the threats made by Avel were not justifiable. His Honour should have restrained Avel from threatening the appellants in relation to any of the Williams' games. We propose to vary the order made in the Supreme Court accordingly.
Damages

34. The remaining matter is the appropriate amount of damages.

35. The first item of damages claimed by the appellants represents re-imbursement to them of the moneys which British Amusements paid to Avel in the May 1987 settlement. It is true that this payment was made in the settlement of a dispute arising out of threats made by Avel. Nonetheless, we do not think that the settlement moneys are recoverable. The moneys were paid as a result of a considered decision to compromise the then dispute, certain concessions being made by Avel at the time. The payment must be regarded as having been occasioned by the settlement rather than the original threats. Moreover, it should be noted that the subject matter of that dispute included nine new Road King machines. The justifiability of threats by Avel in connection with the importation and sale of new machines has not been litigated.

36. The second item is a claim by British Amusements for the loss it sustained when it sold three of the used machines the subject of that settlement. The amount claimed is $1,650. The evidence indicates that the machines were selling readily before the public threats, after which buyers were inhibited. When the machines were ultimately sold, lower prices were received. We think that this loss is recoverable, as it directly resulted from the threats made in early 1987. Pre-judgment interest, for the period of two years and nine months, at 15% per annum should be added. That interest comes to $680, taking this item to $2,330. That is the only amount of damages which British Amusements is entitled to recover.

37. As previously indicated, in November 1987 Mr Ditton cancelled the proposed consignment from World Wide and C A Robinson to Multicoin. The trial judge held that, if this importation had proceeded, the appellants would have realised a profit of $15,519.43. The appellants concede that there ought to be deducted from that figure advertising ($150) and telephone expenses ($300), but otherwise this amount is unchallenged. There is ample evidence of demand for the machines and there is no reason to doubt that a result such as this would have been achieved. The cancellation of the consignment was directly related to the threats of legal action made by Avel. We propose to allow this item at the rounded figure of $15,050. We add pre-judgment interest, for two years at 15% per annum to this figure, that is $4,515. This $4,515 takes the amount to $19,565.

38. Multicoin also claims damages in respect of the period between November 1987 and the date of judgment. In relation to that period, calculation cannot be so precise. It is true that Mr Ditton conceded under cross-examination that by early February 1988, when he received a fax from World Wide enclosing a copy of a letter to that company from Williams, he was confident of his position; but the fact is that, despite strong demand, he was not willing immediately to import used Williams' machines. Instead he caused the appellants to institute the Supreme Court action. This was a reasonable course to take, given Avel's attitude and its continuing failure to supply the information which Multicoin had sought from Williams in November. It was entirely understandable that the appellants desisted from making any importation until the matter was clarified. Although Mr Ditton may have thought he knew the position, he would have been exposing the appellants to considerable risk if he had turned out to be wrong.

39. The difficulty about this element of the claim is to say how many consignments would have been made, absent the threats. Demand was strong, as is evidenced by the response to an advertisement which Multicoin published in March 1988. Multicoin had entered into arrangements with three other wholesalers, each of which was prepared to take large numbers of the machines. Officers of each of those companies gave evidence to that effect. Mr Ditton apparently had in mind three or four consignments each year; so there may have been up to eight consignments between the beginning of 1987 and the present time. It is reasonable to take $15,000 as the approximate net value to the appellants of each consignment. But the evidence of the availability of used machines for export to Australia is tenuous. Although Mr Ditton experienced no difficulty in arranging his first consignment, and although there are apparently large numbers of used Williams' machines in America, it may not have been possible to import at the planned rate. On the whole of the evidence, it seems to us that it would be fair to assume four lost consignments in this period, resulting in a loss of $60,000 in profit. The appellants are entitled to pre-judgment interest on this sum, but calculation is complicated by the fact that the loss was sustained intermitently over the period. The easiest way of calculating the amount of that interest is to allow interest on the whole sum for one half of the total period. Accordingly, we allow one year's interest, at 15%, on the sum of $60,000. This amount is $9,000. When these amounts are added to the figure of $19,565 previously allowed, the total damages payable to Multicoin come to $88,565.