Oceanic Communications Ltd v Fiji Visitors Bureau [2015] FJHC 1042; Civil Action 150.2008 (11 September 2015)

In the High Court of Fiji at Suva

Civil Jurisdiction

Civil Action no.150 of 2008

Oceanic Communications Ltd

Plaintiff

vs

Fiji Visitors Bureau

First defendant

Webmedia(Fiji)Limited

Second Defendant

Appearances : Mr Nicholas Barnes with Mr Ronald Singh for the plaintiff

Mr K.Singh with Mr A.Sokimi for the second defendant

Dates of hearing: 15^th and 16^th August ,2013, and 2^nd September,2013

JUDGMENT

1. Introduction
   1. The plaintiff, Oceanic Communications Ltd, is a company that designs web-sites. The Fiji Visitors Bureau, the first defendant, had entered into four agreements with the plaintiff to upgrade its website. This litigation arises in the aftermath of the termination by the first defendant of the ultimate agreement termed the “v.4 design”. The plaintiff alleges that the first defendant gave its intellectual property to the second defendant, also a company that designs web-sites, to develop the “v.4” design. The plaintiff prays for a declaration that the second defendant has breached its intellectual property rights in using its sitemaps, designs and proposal; and account for advertising revenue it has earned, since its website was in operation.
   2. The second defendant, in its statement of defence, contends that the first defendant represented to the second defendant that it had lawfully terminated its agreement with the plaintiff and progressively paid the plaintiff for work carried out. As a result,the second defendant believed that the intellectual property rights relating to the sitemap belonged to the first defendant. The second defendant denies that it used the plaintiff’s intellectual property. The re-design the second defendant undertook for the first defendant was modelled on other popular tourism websites containing common features. The second defendant counterclaims for damages for libel, in respect of a letter published by the plaintiff on its website stating that the second defendant had developed a website using the plainiff’s extensive work done and its intellectual property.
   100. The plaintiff, in its reply, contends that the publication is justified and constitutes a fair comment.
   4. On 16^th November,2010,the plaintiff had discontinued its action against the first defendant for damages for breach of using its intellectual property and its claim for the outstanding amounts due under the third and fourth agreements.
      
2. The hearing

PW1

1. PW1,(Amit Singh,Information System Officer from 2002 to 2009,at the first defendant company) in his evidence in chief said that the first defendant’s website “bulafiji.com” marketed Fiji as a global destination on a global scene. The plaintiff developed the first defendant’s website from concept to launch of site during the period 2002 to 2007.
2. In its ultimate agreement with the first defendant termed the “v.4 design”, the plaintiff was required to upgrade the first defendant’s website, carry out a review based on visitor’s statistics from the website traffic, identify areas of most activity and improve web pages. Version 4 included several new features conceived by the plaintiff .

100. PW1 said that he liased with Jonathan Siegel and Nitesh Chandra,(PW2) of the plaintiff company.The plaintiff completed more than 50% of version 4. It was the responsibility of Darren Yuen of the Marketing Department of the first defendant to provide the remaining components. This was not provided in a timely manner.

4. The plaintiff provided its “www.bulafiji.com Version 4(draft 3)” site map “Updated and unloaded by Oceanic on 31 July,2007” to the first defendant.This document was produced amd marked as “PE1”.
5. PW1 defined a site map as ‘‘the structure of a website. It shows how web pages are interlinked, equivalent of a building plan”.
6. The plaintiff’s contract was terminated by the first defendant. The second defendant was the next developer of the first defendant’s website. PW1 said that he reviewed their proposal. The sitemap “PE1” designed by the plaintiff was attached to the second defendant’s proposal.
7. PW1 said that he had a meeting with the first and second defendant, a month after the signing of the first defendant’s agreement with the second defendant. PW1 said that the sitemap remained the property of the plaintiff, as the first defendant did not fully pay the plaintiff for the work done on version 4.
8. PW1 further said that the mock home page prepared by the plaintiff (marked as “PE3”) and that prepared by the second defendant (marked as “PE4”) contained the same content and navigational elements. Only the colours were different.
9. Version 3 was successfully completed by the plaintiff and ranked in the top 5 of a Google Search. The performance dropped below the top 5 with the home page prepared by the second defendant. It was loading slowly. The flash aninmations were too heavy for the site.
10. In cross-examination, it was suggested to PW1 said that the version 4, draft 3 sitemap belonged to the first defendant, as its name was stated therein below the words “www.bulafiji.comVersion 4(draft 3)”.The witness replied that it was a working document and partially belonged to the first defendant. He denied that “everything to do with content” of the sitemap was given to the plaintiff by the first defendant.
11. He denied that the first defendant engaged the second defendant, since there were consistent errors in the plaintiff’s draft.

50. The witness agreed that in terms of a clause in the contract between the first and second defendants, texts,graphics and designs given to the second defendant by the first defendant belonged to the first defendant.

13. PW1 said that version 4 contained new features, design elements and improvements made by the plaintiff, consequent to research.
14. He agreed that the mock page contained four elements in many leading tourist website designs such as in New Zealand, Tahiti and Australia. Version 3 did not include these elements. There were more content features in the plaintiff’s version 4. This was undertaken one year later
15. PW1 was not directly involved in the contractual negotiations between the plaintiff and the first defendant. He was told that more than 50% of the work was created by the plaintiff before the second defendant entered into the contact with the plaintiff. PW1 admitted that he had no statistics to substantiate his evidence that the v4 version as developed by the second defendant, functioned worse than version3 on a google search.
16. It transpired that the version 3 site map was available on the web. He said that additional pages were added in version 4 together with sub-pages of headings. He agreed that if the v3 sitemap was available online, it was not difficult to develop a website from that site map.
17. In re-examination, PW1 said that a website developer is hired to design the creative side of the website and make it attractive. He said that the header and contents of the second defendants’ sitemap are the same. It has the plaintiff’s logo.
18. There were not many changes between the plaintiff’s and second defendant’s website. The difference was that the second defendant had flash animations in the header.

PW2,(Nitesh Chandra, Operations and Online Manager of plaintiff company)

1. PW2 said that his role was to manage the project undertaken by the plaintiff, to develop the second, third and fourth versions of the first defendant’s website. He liased with PW1 and Darren Yuen of the first defendant company. The plaintiff was instructed by the first defendant not to launch version 3 to the public, as there were many changes to be accommodated. Version 3 was completed by the plaintiff prior to May,2007.
2. He produced the proposal made on 5 July,2007, by the plaintiff to the first defendant on version 4 and the attached terms and conditions of the contract signed by Cherrill Watson of the first defendant on the same day.

100. PW2 said that a sitemap is a template where a design is made. A sitemap defines the contents of a web map. A website can be created without a map, but that is not professional. He compared a sitemap to an architectural drawing.

4. In order to develop a sitemap, the plaintiff engaged in client’s analysis and research The plaintiff spent a lot of time on creating the sitemap, as it importantly forms the basis of website. The sitemap was sent to the client to explain what they were going to do.
5. The plaintiff could not understand why the contract was terminated. After the contract was terminated, the plaintiff found that the second defendant had adopted the plaintiff’s draft designs in its sitemap.
6. The second defendant’s website “PE4” available on their “staging server” contained the same similarities in the mock page proposed by the plaintiff in “PE3”. The similarities were in the words used in the navigation such as “Discover the Islands” and “Places to Stay”. The plaintiff proposed “functional similarities” such as the interactive map of Fiji. Only the placements of the elements were different in “PE4”.
7. Mr Barnes, counsel for the plaintiff posed the question whether other websites also have these headings. The witness said that it was not exactly the same and the plaintiff came up with these headings after doing research with other tourism websites in other countries.
8. It was put to PW2 that the version 3 website was published online, as stated by PW1. PW2 replied that he supposed the sitemap was put on the web, as the second defendant paid for it. He said that the plaintiff spent months of research on the v 3 website project.
9. He said that a wire frame could be used as a starting point for building a website. Next he said that the second defendant’s document “PE4” used the same navigation words as the plaintiffs’“PE3” document. The words “ Discover the island”,“ Place to stay” and “Things to do and see” in the v3 web site was a result of the plaintiff’s research.
10. Mr Singh asked the witness as to how the plaintiff could claim months of research for four features. PW2 said that when designing a website, a web designer had to consider a number of matters that had to be updated, as for example the weather on a daily basis.
11. It was put to him that 90% of the contents of the version 3 site map were present in the v4 version. He said that it was “possible”, but the sitemap contained subject headings, not contents.

50. In answer to Mr Sokimi, counsel for the second defendant, PW2 said that version 3 was completed prior to May, 2007. It was put to him that given the time period between the creation of version 3 site map and the v4 version, the elements introduced in version 4 would have been in version 3. The witness did not accept that position.

13. PW2 was then cross-examined on the basis that a sitemap is not a template, contrary to his evidence in chief. It was put to him that a sitemap cannot be used to develop other websites. He then agreed that it was not a template and could not have been used for any other client.
14. The witness said that the plaintiff was at the design stage.
15. On the counterclaim of the second defendant, PW2 said that the plaintiff was certain that their ideas were stolen.
16. In re-examination, PW 2 said that the essence of their complaint was that the plaintiff did all the planning of the skeleton of the site map and the second defendant passed it as theirs. The plaintiff felt their work was stolen.

DW1

17. DW1,(Cherrill Watson, formerly Director Marketing of the first defendant company) in her evidence in chief said that the first defendant terminated the contract, as it was greatly frustrated by the sub-standard website provided by the plaintiff. The first defendant terminated the agreement due to the plaintiff’s non-performance and not meeting its requirements in a timely manner. The plaintiff quoted an additional amount for the flash interactive map. The plaintiff was already paid $ 17000 and later, a further sum of $ 2500.
18. She said that she sent DW2, their sitemap. He said that this would not suffice and will work on a new sitemap.
19. The plaintiff first drew a home page with the following: “Imagery/Branding (Flash)”; “Weather”;” Fiji in the Press” and “Fiji Packages out of”. DW1 said that Darren Yuen and she produced a mock page and sent it to the plaintiff.
20. She paid for the sitemap marked as “PE1” and requested that it be amended. The first defendant owned the sitemap.
21. The witness was referred to the completion date of the plaintiff’s contract with the first defendant, namely, 3^rd September,2007, as stated in the “Tentative Schedule Proposed-bulafiji.com v.4 upgrade”. She agreed that the first defendant launched their website 3 months later than the completed date.

5. DW1 said that the first defendant had not made full payment to the plaintiff. She was unaware of the correspondence between the plaintiff’s lawyers and the second defendant.

23. In re-examination, DW1 confirmed that she did not have the final version of the website from the second defendant by, the date of completion stated in the agreement with the plaintiff.

DW2

19. DW2,(Steven Reid, Executive Director of the second defendant company) in his evidence said that a template is essentially a pre-constructed pages of website including programming which can be edited, re-designed or refined. He said that the plaintiff’s site map “PE1” was not a template, but an “Overview” as stated in the document, “a broad snapshot ”. It does not involve pre-construction or programming and does not provide the ability to copy and paste or put text or pictures inside.
20. A finished graphic is created with the intent to publish directly to the public for communication purposes. He said that a site map would not qualify as a finished graphic, because a site map when published is simply a list, a floor chart of every page within the website. It lists every page within the website.
21. He said that the first time that he saw the plaintiff’s designs was two days before the hearing.

5. DW2 explainded that he received a call from Darren Yuen of the first defendant,who told him that he was unhappy with the existing provider’s work and wanted to move on. Darren Yuen showed him half a dozen regional tourist sites and the sitemap marked “PE1”

23. DW2 said that when he received the sitemap, he believed it belonged to the first defendant, since 80 or 90 % was already published on existing website of the first defendant, no new pages were added. It contained the first defendant’s logo and “possessive” language “Updated and uploaded by Oceanic on 31 July,2007”. The first defendant owned the intellectual property rights to “PE1”.

10. The sitemap was not included in the final contract between the first and second defendant.

25. He was next examined on his reply to the plaintiff stating that some of the plaintiff’s material was “inadvertently’ used by their administrative staff, when they were responding to a request by the first defendant. His explanation for writing that mail was he said to “soften” the position as the plaintiff’s solicitors had written a letter containing several points. He said that the second defendant did not inadvertently use the material, as the material belonged to the first defendant. The first defendant emailed the sitemap to the second defendant. The second defendant then, included it in its proposal.
26. DW2 said that they were instructed by the first defendant to work on the existing site map. The second defendant did not use the sitemap to construct the website. The second defendant used 90 % of the exisiting sitemap of the first defendant that was available online. He said the evidence of PW2 that the plaintiff took months of research to prepare the site map was “ highly incredulous”. It was 90% the same as the earlier version 3 site map and had added four extra modules that exist on the majority of regional sites.
27. In cross-examination, DW2 said that a sitemap is a list.
28. He accepted that in July,2007, he received an incomplete sitemap “PE1” from the first defendant, which did not belong to the second defendant.

0. He said that the sitemap was sent to him by Darren Yuen of the first defendant company. Darren Yuen said it belonged to the first defendant’s website and the second defendant could use it.

30. DW2 said that the second defendant created a different website and structure, only the text and pages remained the same.
31. He said that his reply stating that the plaintiff’s material was “inadvertently” used was an honest reply. It was pointed out by Mr Barnes that the email did not say that the sitemap belonged to the first defendant, as he now states.
32. In re-examination, he maintained that the first defendant owned “PE1” as at July,2007, as 90 % was already published and four or five small elements were added to an “overwhelming pre-existuing site map owned, operated and published online”. It was a collaborative effort of the plaintiff and the first defendant.
33. He said that he was given a wire frame and a site map, but no designs.
    

3. The determination
   1. The plaintiff’s case
      1. The plaintiff’s grievance is that the second defendant utilized its “intellectual property in the form of information architecture, site map and strategy”,to develop its website for the first defendant, without its plaintiff’s consent.
      2. On 5^th July, 2007, the plaintiff had entered into an agreement with the first defendant for the development of the “v.4 design” of its website.
      100. The agreement was terminated on 13^th August, 2007, prior to 3^rd September,2007, the stated date of completion in the agreement.
      4. The first defendant was to pay the plaintiff a sum of $ 43,725.00 in 3 stages:

Commence work $ 17490(40 %) Upon receipt

Development Completion $ 17490(40 %) Upon Development

Completion

Upon Site Launch $ 8745(20 %) Upon site launch

5. The plaintiff was not paid the full contract sum. The first defendant had paid the plaintiff a sum of $19,676.25, as confirmed by DW1 .
6. The first defendant thereafter,entered into an agreement with the second defendant on 20^th November,2007, to develop the “v.4” design.
7. The question for determination is whether the sitemap and mock pages designed by the plaintiff for the first defendant’s “v.4 design” website, belonged to the first defendant, as contended by the defence.
8. The plaintiff claims that the sitemap and mock pages remained its property, since full payment was not made by the first defendant to the plaintiff for its work.
9. Mr Singh contends that the first defendant was the owner, as its name and logo are printed on that document. It was also urged that PW1 (in cross-examination) said that it partially belonged to the first defendant. It suffices for me to reiterate the riposte of Mr Barnes that the name and logo of the first defendant were inserted as a means of identification.
10. The agreement of 5^th July,2007, between the plaintiff and the first defendant provides:

Upon, but not before, delivery of the completed web site and upon payment in full, all templates and finished graphics will become property of the FVB. (emphasis added)

11. It was undisputed that a sitemap is neither a template nor a finished graphic.

50. PW1 and PW2 in cross-examination accepted that a sitemap was not a template, as it could not be used to develop other websites. DW2 testified that a sitemap was not a template, but simply a list , an “Overview”.

13. It follows that the sitemap and the intellectual property it represented remained with the plaintiff. It would never belong to the first defendant in terms of the above clause,as concluded by Mr Barnes in his closing submissions.
14. The second argument runs that it was a collaborative effort of the plaintiff and the first defendant, as the first defendant gave its ideas to the plaintiff. The example given by both parties of a client giving its requirements to an architect adequately answers that elementary contention.
15. Next, it was strenuously contended that 80 to 90% of the v4 sitemap was published online in the v3 site map developed by the plaintiff
16. That position was not accepted by PW1 and PW2.
17. PW1 said that the v4 draft version contained additional pages and sub-page headings. PW2 said that the subject headings in the v3 and v4 sitemaps were not the same. In answer to Mr Singh, PW2 said that the headings added in the v4 sitemap envisaged the adoption of several features.
18. PW1 said that the plaintiff came up with the idea of new features in version 4. It was mostly design elements that were changed and improved. The outcome was version4 of the sitemap created by the plaintiff after research and discussions with the first defendant.
19. He further said that the second defendant took less than three weeks to develop the demonstration site, after signing of the contract. The product displayed was almost a complete site, which would ordinarily, be difficult to acheive in a short time frame, since the developer needs to understand the clients’ expectations of a website. The use of the plaintiff’s sitemap was a distinct advantage to the second defendant.
20. Importantly, the second defendant did not establish that there was no protectable work in the draft v4 version vis a vis the v3 sitemap.
21. The second defendant contends that its contract with the plaintiff is pursuant to a second proposal, which did not use the “alleged attending material”.

5. It is common ground that the sitemap titled “www.bulafiji.com Version 4 (draft 3)” developed by the plaintiff was attached to the proposal given by the second defendant to the first defendant.

23. DW1 and DW 2 said that the sitemap was not attached to the final contract. DW2 also said that the second defendant created a different website, only the text and pages remained.

10. Albeit the final contract does not attach the sitemap, I note that clause 1 of the final contract reiterates the following introductory paragraph contained in the second defendant’s proposal to the first defendant :

Pages

The site will include the pages on the attached pre-suggested sitemap along with any additional amendments...(emphasis added)

25. The evidence of DW1 in re-examination puts to rest any doubt on this point. She said that it “seemed like total duplication to photocopy everything and send it again ( we said) this is what we have, can you improve it”.
26. DW1 said that she sent DW2, their sitemap and two mock pages that Darren Yuen and she drew after receiving two such pages from the plaintiff. DW2 responded that this would not suffice and will work on a new sitemap.
27. DW2 said that Darren Yuen sent him the sitemap with the following email of 30 July,2007:
    

Bula Steve

Please find attached site map of bulafiji.com.This isn’t the final one as I’d just went back to the minor changes but essentially most parts are accurate. Also attached is a homepage wire frame draft that I had done for them after receiving 2 mocks from them. Essentially there are some features that we would like to see included in the homepage design. (emphasis added)

28. DW2 said that he was instructed by the first defendant to work on the existing sitemap that it owned, but he did not use the sitemap. He accessed the v3 version online He returned the sitemap to the first defendant, the next day. He kept it for 16 hours for “sample review” and returned it “ hand delivered through his staff ” with a covering letter. Mr Barnes pertinently asked DW2 why he had not produced the covering letter.

0. I find it simply inconceivable that the second defendant, a web provider would return the sitemap by hand, particularly when he received it by email and subsequently responded to a letter from the plaintiff’s solicitors by email.

30. By letter of 24^th October,2007, Messrs MUNRO LEYS, the plaintiffs’ solicitors had informed the second defendant that the use of the plaintiff’s material contravenes their intellectual property rights.
31. On 3^rd October, 2007, DW2 replied by email as follows:

We would like to thank you for pointing out that some of your material was inadvertently used by one of our administrative staff when we were responding to a request by FVB. Rest assured it was never and will never be used in any signed contractual agreement and we certainly have no intention whatsoever to use any Oceanic material or intellectual property in any future way with any company. (emphasis added)

32. Mr Barnes asked DW 2 the reason he did not state in his response sent six days later, that the sitemap belonged to the first defendant, as he assert in his evidence. He said that he panicked when he received the letter from MUNRO LEYS. But he admitted that ordinarily, he was very cautious with words.
33. DW2 was asked why he thought it necessary to say that the material would never be used “in a signed contractual agreement”. To that he posed the question “why would we use it in a contractual agreement ?’.
34. Messrs MUNRO LEYS had requested the second defendant to provide an undertaking that it “will not any time in the future use Oceanic’s site maps, graphic designs, proposals and logo”. There was no reference to a contractual agreement.

2. DW2’s explanation of his email is in my view, totally unacceptable. I found DW2 to be an unreliable witness .

36. I note that there was likewise no response from DW1 to the detailed email of 16 August, 2007, of Jonathan Segal of the plaintiff company sent to her stating that the first defendant had shared the plaintiff’s work with another developer, during the duration of their contract .
37. I conclude that it is evident that the second defendant undertook to update the existing “pre-suggested sitemap” of the plaintiff, as stated in the final contract.

0. On a review of the totality of the evidence, I would agree with Mr Barnes that it is an inescapable conclusion the second defendant went on to use the plaintiff’s sitemap to develop a website for the first defendant.

39. The plaintiff states that the designs produced by the second defendant in its home page shows similarities with all the elements produced by the plaintiff, in its design of its mock page.
40. PW1, in his evidence in chief said that the content and navigational elements were the same in the mock home pages of the plaintiff and the second defendant, only the elements were re-arranged in different colours.
41. PW2 said that the only difference were the placements of the elements. It was put to him that the headings are found in other tourist websites too. PW2 said it was the plaintiff’s research.
42. DW1 in her email of 30 July,2007, (which I have reproduced) forwarded a wire frame that she said she had done “after receiving 2 mocks from them”,(the plaintiff) and said “Essentially there are some features that we would like to see included in the homepage design”.
43. DW2 said that he was given a wire frame and specifically told by Darren Yuen not to look at the plaintiff’s designs.
44. The wire page was the initial draft sketch for the more elaborate mock pages.
45. An examination of the wire frame produced in evidence depicts the following headings:“DISCOVER the Islands/PLACES TO Stay/Things to DO & See/ Getting to FIJI ”,“Weather”,“Fiji in the Press”,“Interactive Map”and“Fiji Packages out of”.
46. I find that the headings in the wire page are also contained in the mock home pages of the plaintiff and second defendant, though placed differently. In my view, the second defendant’s home page taken as a whole is substantially similar to the plaintiff’s home page.The second defendant admittedly,had access to the plaintiff’s wire page.
47. I refer to a recent decision of the Federal Court of Australia in Tamawood Limited v Habitare Developments Pty Ltd(Administrators Appointed)(Receivers and Managers Appointed), [2015] FCAFC 65.

0. Tamawood Ltd, a firm of architects had designed plans to build homes for Habitare Ltd. Habitare Ltd with the consent of Tamawood Ltd obtained Council approval for the use of the plans. Habitare Ltd subsequently decided not to engage Tamawood Ltd to build the homes. Habitare Ltd approached Mondo Architects Pty Ltd, to prepare the constructions plans and engaged yet another firm to complete the construction, in accordance the plans of Tamawood Ltd.

49. The Court held that Tamawood Ltd had granted a bare licence to Habitare Ltd, to use its plans for the purposes of obtaining planning approval from the Council.The licence to use those plans terminated when Habitare Ltd decided not to proceed with Tamawood Ltd as builder. The reasoning of the Court, as stated in paragraph 133, was as follows:

..This case is not analogous to that of any architect who, having been paid to prepare plans for a development application, is taken to have granted a license for the construction of the building in accordance with those plans..Tamawood prepared those plans and permitted Habitare to lodge them .. in the common expectation that Habitare would appoint Tamawood the builder. Habitare could not have (and, in fact did not have) any expectation at any time that, having decided Tamawood could not be appointed the builder due to the fundamental issues not able to be resolved between them,Habitare would nevertheless be able to use Tamawood’s plans for the construction of the buildings. It is obvious that Habitare never had that expectation (and rightly so) because it engaged Mondo to prepare plans that were “generally in accordance with” Tamawood’s plans for construction purposes without infringing Tamawood’s copyright. That

Habitare did not in fact avoid infringing Tamawood’s copyright..does not change the fact that Habitare knew it was not authorized to use Tamawood’s plans once it decided not to proceed to engage Tamawood as the builder.

20. The majority of the Court in finding that Tamawood Ltd’s copyright had been infringed held that when determining infringement of copyright, the question of whether or not there is a causal connection between the two works(ie,whether there has been copying) needs to be determined before ascertaining whether or not there has been a substantial reproduction of the work. The Court cited the followang passage from the judgment of Gibbs CJ in S.W Hart & Co. Pty. Ltd v Edwards Hot Water Systems, [1985] HCA 59; (1984-1985) 159 CLR 466 at page 472 :

The notion of reproduction, for the purposes of copyright law, involves two elements – resemblance to, and actual use of, the copyright work, or, to adopt the words which appear in the judgment of Willner L.J in Francis Day & Hunter Ltd. V. Bron (21), “a sufficient degree of objective similarity between the two works” and “some causal connection between the plaintiff’s and the defendants’ work.

51. In the present case, the creation of the sitemap and mock home pages by the plaintiff was an initial step in the first stage of the development of the first defendant’s website titled “Define” in the “Tentative Schedule Proposed-bulafiji.com v.4 upgrade” document attached to the plaintiff’s letter to the first defendant of 5 July,2007, forwarding the contract. It was not envisaged that the first defendant would upon termination of the contract, engage another web provider to continue with the development of its website with the plaintiff’s material. This was clearly wrong, as in the Tamawood case.
52. In my judgment, the plaintiff is entitled to a declaration that the second defendant has breached its intellectual property rights, in using its sitemaps and design.

aaa. The closing submissions of the plaintiff states that the plaintiff is not pursuing the relief sought that the second defendant account for advertising revenue earned, since its website was in operation. In any event, the revenue sharing agreement was between the plaintiff and the first defendant and the plaintiff has settled its claim against the first defendant.
bbb. The closing submissions claims damages, when there is no claim for damages in its statement of claim nor was any evidence adduced in this regard .

2. The Counterclaim
   1. The second defendant counterclaims in respect of the following letter “open letter” published on 20^thDecember,2007, by the second defendant on its blog website (www.blog.oceanic.com.fj) .

Dear Web Media Fiji

1. Oceanic is well aware that you’ve used Oceanic’s intellectual property in a proposal to a client (see below). We’re well aware you’ve developed a website based fully on months and months of the planning work Oceanic has done.
2. We find it amusing how you could have so poorly implemented a nice, clean strategy as well. If we can use one of your favourite words, we’ll use “abomination” to describe the way you’ve decimated a

responsible web presence. No, you didn’t do it alone. You had plenty of help so don’t take all the credit. In one quick motion, you’ve significantly reduced the amount of valuable content on an essential website for Fiji. You’ve irresponsibly pushed an agenda surrounding false claims of “search engine optimisation” in order to sell your magic formula and you’ve effectively begun destroying a recurring web presence. Again, you had plenty of help here but you

drove a strategy which had originally been based around content development and openness towards ALL tourism operators into something very different from where it began.

3. You’re all FLASH, no substance and that’s where you differ from successful design firms. You sell bells and whistles without foundation.
4. Web Media Fiji, you probably have difficulty understanding the following sentence but just because you do, don’t assume its not true.
5. Our concern is not losing a client.
6. Agencies lose clients all the time. In this case, however, you have acted improperly and committed the biggest
   

sin possible for a design firm. You’ve taken someone else’s work and passed it off as your own.

7. Over the past year or so, we’ve heard countless stories of your marketing style and how it usually includes talking down the competition. Compare that to a more responsible style of talking up your own abilities which is how better companies do it.
8. Good luck with your reputations.
   

Sincerely,

Oceanic

cc: The entire world

Feel free to take a look at Web Media Fiji’s proposal, clearly incorporating Oceanic’s intellectual property. Download the Web Media Fiji proposal here. Notice the last page where Oceanic’s site map had been included. They never even bothered to remove our logo

(emphasis added, numbering of paragraphs mine)

2. The second defendant states that it has been seriously injured in its professional character, credit and reputation and been brought into public scandal,odium and contempt.

100. The plaintiff admits the publication.

4. The second defendant alleges that the words in paragraphs 1, 2(part) and 6 in their natural and ordinary meaning meant and were understood to mean that the second defendant “used the Plaintiff’s intellectual property to secure a client”; “developed a website based on extensive work done by the Plaintiff ; “has taken credit for a website that they had help in developing”;“You had plenty of help so don’t take all the credit”;“you have acted improperly and conmmitted the biggest sin possible for a design firm” and “has taken the Plaintiff’s work and passed it off as their own”.
5. I have found that the second defendant has used the plaintiff’s sitemap and designs. In my view, the statements made by the plaintiff in paragraphs 1 and 6 are justified .
6. The words in the note to the letter titled “ cc The entire world” are factually entirely correct.
7. I agree with the second defendant that the rest of the statements in the letter were understood to mean that the second defendant has “poorly implemented a website based on the Plaintiff’s good, clean strategy”;“devalued the content of an essential Fiji website”;“makes false claims in regard to “search engine optimisation” in order to secure clients;“is of no substance in the web design and development market and is not a successful design firm as a result”;“sells additional features without a good foundation to its websites”;“ uses slanderous methods to reduce the credibility of their competition instead of focusing on their own strengths; and “does not hold a good reputation”.
8. I am satisfied that these statements in their ordinary and natural are defamatory of the second defendant and convey the imputations stated in the statement of defence particularly, as regards its incompetence in developing websites and its reputation.
9. The plaintiff failed to prove the truth of these statements with cogent evidence. The defence of justification fails.
10. The plaintiff contends that these statements constitute fair comment .
11. Section 16 of the Defamation Act,(cap 34) provides that “In an action for defamation in respect of words consisting partly of allegations of fact and partly of expression of opinion, a defence of fair comment shall not fail by reason only that the truth of every allegation of fact is not proved if the expression of opinion is fair comment having regard to such of the facts alleged or referred to in the words complained of as are proved.”

50. In Abbas Ali v Thompson,(Civil Appeal no.ABU 0029 of 2010), Chitrasiri JA set out the five requisites required for establishing the defence of fair comment in page 5, as laid down in Albert Cheng v TseyWai Chun Paul, (2000) HKCFA 35 as follows:

The comment must be a matter of public interest.

The comment must be recognizable as comment as distinct from an imputation of fact.

The comments must be based on facts which are true or protected by privilege.

The comment must be explicitly indicated at least in general terms, what the facts of which the comments are being made.

The comments must be one which could have been made by an honest person, however prejudiced hemight be, and however exaggerated or obstinate his view. It must be germane to the subject matter criticised. (emphasis added)

13. I find that the defamatory statements are expressed as facts and not as comment or opinion. I do not find that the defence of fair comment had been made out.
14. I turn to the question of damages.
15. The Court of Appeal in Fiji Daily Post Co Ltd v Rabuka ,[2006] FJCA stated:

The two questions which the Judge appreciated that he had to ask himself were first, whether the words complained of were capable of conveying defamatory meaning and secondly whether they in fact conveyed such a meaning (Jones v Skelton (1963) 1 WLR 1362,(1963) 1 A11 ER 952).

16. In Ratcliffe v Evans, [1892] UKLawRpKQB 131; [1892] 2 Q.B. 524 it was held that damages are presumed in the case of libel and slander. Bowen LJ at page 528 stated:

The law presumes that some damages will flow in the ordinary course of things from the mere invasion of his absolute right to reputation.

17. In English & Scottish Co-operative v Odhams Press Ltd [1940] 1 KB 440 Lord Goddard LJ at page 461 stated:

There is no obligation on the plaintiffs to show that they have suffered actual damage..... In every case (a plaintiff) is entitled to say that there has been a serious libel upon

him, that the law assumes he must have suffered damage, and that he is entitled to substantial damage.

18. The closing submissions filed on behalf of the defendant submits that an appropriate award of damages should exceed $ 250,000. Mr Barnes, in his closing submissions suggests a sum of $ 25000.
19. The evidence before me is that the letter has been accessed by18 people.
20. It is not in dispute that the article has been removed by the plaintiff from the blog. I do not accept the second defendant’s contention that the article will continue to be accessed.
21. In Al Amoudi v Brisard and Anr, [2006] EWHC 1062(QB) as referred to in the closing submissions of the plaintiff, Justice Gray citing Mathew Collins, The Law of Defamation and the Internet,(2^nd Ed) and Jameel v Dow Jones, [2005] EWCA Civ 75; [2005] QB 946 stated that “it would be for the claimant to prove that the material in question was accessed and downloaded”.

5. Justice Gray stated further that he was unable to accept that under English law, a claimant in a libel action on an Internet publication is entitled to rely on a presumption of law that there has been a substantial publication.

23. The “extent of publication is also very relevant: a libel published to millions has a greater potential to cause damge than a libel published to a handful of people”: John v MGN Ltd, [1997] QB 586 .

10. The second defendant pleads that the words and/or statements were published maliciously to injure its reputation by imputations of dishonesty and fraud.

25. The particulars of malice pleaded read:
    1. That at no time prior to the publication of the said letter and/or words did the plaintiff inquire with the plaintiff to determine the truthfulness and accuracy of the said letter concerning the second defendant.
    2. The plaintiff wrote, published and caused to have been published the said letter and/or words without any honest belief in their truth.
    100. The plaintiff has refused and/or neglected to retract the defamatory letter they made against the second defendant.
         
26. The closing submisisons of the second defendant cites the following passage from 28 Halsbury’s Law of England,(4^th Ed, para 145) :

What is malice. Express of actual malice is ill will or spite towards the plaintiff or any indirect or improper motive in the defendant’s mind at the time of the publication, which is his sole or dominant motive for publishing the words complained of. This must be distinguished from legal

malice or malice in law which means publication without lawful excuse and does not depend on the defendant’s state

of mind. The defences of both fair comment and qualified privilege are defeated by proof that the defendant’s sole or dominant purpose in publishing the words was improper will establish malice. The fact that the defendant did not believe that what he said was true is usually conclusive evidence of malice to rebut the defence of qualified privilege; and in fair comment it is usually conclusive evidence of malice to show that the defendant did not honestly hold the opinion expressed. If a defendant publishes untrue defamatory matter recklessly, without considering or caring whether it is true or not, he is treated as if he knew it to be false. (emphasis added)

27. Gatley on Libel and Slander,(10 ^th Ed, page 585) states :

If what the defendant has written be most untrue, but nevertheless he believed it, if he was acting under the most vicious of judgments, yet, if he exercised that judgment bona fide, it will be a justification to him in this case. Whether his belief be such as a man of sound sense and knowledge of business would have formed is not the question.”

“The question here is not what judgment a sensible or reasonable man would have formed in this case, but whether the defendant did or did not entertain the opinion he communicated.” ((emphasis added,footnotes omitted)

28. The evidence demonstrated that the plaintiff honestly believed in the statements made. PW2, in his evidence, said that he was of the opinion that the website developed by the second defendant had “heavy flash animations” and design. It lacked content.PW2 said, it was in that context, the letter stated “you’ve significantly reduced the amount of valuable content on an essential website for Fiji.”and :“You’re all FLASH, no substance and that’s where you differ from successful design firms. You sell bells and whistles without foundation” .

0. I do not find that the plaintiff was actuated by malice.

30. I would agree with Mr Barnes that the plaintiff was provoked to make the defamatory statements by its conduct in using its material. The second defendant was not an innocent infringer of the plaintiff’s material.
31. Mr Barnes has cited Sir Thomas Bingham MR in John v MGN Ltd,(op. cit) as follows:

The bad conduct of the plaintiff himself may also enter into the matter, where he has provoked the libel or where he has perhaps libeled in reply. What is awarded is thus a figure which cannot be arrived at by any purely objective computation. This is what is meant when the damages in defamation are described as being at large .....just as they can be reduced if the defendant has behaved well – as for instance a handsome apology – or the plaintiff badly, as for

instance provoking the defendant or defaming him in return.

32. In my judgment, the second defendant is entitled to compensatory damages in a sum of $40,000.
33. The second defendant claims aggravated damages.
34. Aggravated damages are not available to a company. It has no feelings to injury: Lewis v Daily Telegraph, [1964] AC 234 at page 262,as cited in the closing submissions of the plaintiff..

2. I do not consider this to be a case for the award of aggravated damages.

36. The claim is declined
37. The second defendant also claims exemplary damages.

0. The FCA in Borron v Fiji Broadcasting Commission & Newspapers of Fiji Limited, (Civ. Appeal No. 40/81 FCA at page 5):

Exemplary damages are damages which are awarded to punish a defendant and vindicate the strength of the law. In considering whether exemplary damages should be awarded the Court should ask itself whether the sum it proposes to award as compensatory damages, which may include an element of aggravated damages is adequate in all the circumstances for compensating a plaintiff and also for punishing or deterring a defendant. Only if it is inadequate for the latter purpose should the Court consider awarding exemplary damages.

The Court of Appeal stated further that “exemplary damages or punitive damages are exceptional and only in rare cases are they awarded”.

39. I do not consider the present case to be one for the award of exemplary damages.
40. The second defendant claims damages for the mental distress,anxiety and suffering of its directors. The directors are not claimants nor does the letter make any reference to them. That claim is misconceived.
    

4. Orders

I make orders as follows:

1. The second defendant has breached the intellectual property rights of the plaintiff in using its sitemaps and design.
2. The plaintiff shall pay the second defendant a sum of $ 40,000.00 as damages.

100. The second defendant’s claim for aggaravated and exemplary damages is declined.

4. The plaintiff shall pay the second defendant costs summarily assessed in a sum of $ 3000.
   

11^th September 2015 A.L.B.Brito-Mutunayagam

Judge