16
February
1998
HAMILTON
CJ:
I
have read the judgment of Murphy J and I agree with it.
MURPHY
J:
This
is an appeal by William Austin Cody and Princess Investments Limited (the
defendants) from the judgment of Keane J delivered herein on the 14th April,
1994, and the order made thereon on the 20th June, 1994.
In
the opening sentence of his judgment Keane J commented upon these proceedings
in the following terms:-
"The
application by the plaintiff in this case for certain interlocutory orders is
part of a long running legal battle between it and a number of persons and
firms who operate discotheques, night clubs and other places of entertainment
throughout the country."
Obviously
the duration of the battle has extended and, worse, intensified since Keane J
offered that comment.
The
members of the plaintiff company are all record companies who issue records to
the public in this country in the form of vinyl records, cassette tapes and
compact discs. The plaintiff claims it was established in order to collect
revenues, inter alia, from the public performance and broadcasting of their
members' sound recordings in this country and to restrain, and to recover
damages for, any infringement of the copyright in such recordings. It is its
claim that it is the only body established for that purpose in the State. The
second defendant is the owner of the Brandon Hotel in Tralee in which there is
a discotheque known as "Spirals". The plaintiff says that the defendants have
caused and are causing sound recordings, the property of their members, to be
heard in public at those premises. Prior to the 31st December, 1987, the
defendants paid certain charges or remuneration to the plaintiff in respect of
that facility. Thereafter the defendants made no payment to the plaintiff
although they have continued to cause the sound recording to be heard in public
at the discotheque. In those circumstances the plaintiff claimed in these
proceedings a series of injunctions to restrain the defendants from causing the
numerous sound recordings specified in the proceedings to be played in public
without payment of equitable remuneration to the plaintiff; damages for the
infringement of copyright and an account of the damages suffered by the
plaintiff or an account of the profits accruing to the defendants.
The
defendants pleaded that the plaintiff had refused to enter into any
negotiations concerning the amount of any "equitable remuneration" payable by
the defendant to the plaintiff in respect of such sound recordings. The history
of the matter and the attitude of the defendants would seem to suggest that the
proprietors of discotheques were aggrieved by what they perceived as the
peremptory demands of the plaintiff for non-negotiable remuneration in respect
of sound recordings in respect of which it claimed to be owner or licensee of
the copyright. The plaintiff has argued with equal indignation that rights of
property to which it and its members were entitled had been flouted or abused
by the defendants. The plaintiff interprets the actions of the defendants in
defending the proceedings at all as a device to postpone the payment of
royalties or equitable remuneration and in particular, believes that in putting
the plaintiff on proof of its title to the copyrights in question are abusing
the process of the courts. Counsel for each party readily recognises the
existence of procedures by which the matters in dispute could be resolved
without excessive delay or expense but contend that the failure to adopt such
procedure is due to the intransigence and unreasonableness of the other of
them. In fairness it must be recognised that alterations in the stance of the
parties since these proceedings were instituted eight years ago may be due in
part to judicial decisions given in that period which could have caused them to
re-evaluate their approach to the issues herein.
The
immediate background to the motion heard by Keane J was the failure of the
defendants to make an affidavit of discovery within the time limited by the
order of the Master of the High Court made herein on the 20th July, 1993. An
affidavit was sworn by them some four months outside the prescribed time limit.
On
the 17th December, 1993, the plaintiff's solicitors wrote to the defendants'
solicitors asking for their clients consent to the evidence of certain
witnesses being given on affidavit in the form of draft affidavits enclosed
with that letter. On the 2nd March, 1994, the plaintiff served on the
defendants notices requiring the defendants to admit the facts and documents
therein specified without further proof. Against that background the plaintiff
filed a notice of motion on the 24th January, 1994, claiming:-
(1)
an order dismissing the defendants' defence because of their failure to comply
with the order for discovery;
(2)
in the alternative to (1), an order striking out so much of the defence as puts
in issue the plaintiff's ownership of the copyright;
(3)
in the alternative to (1) and (2), an order permitting the plaintiff to
establish the matters of fact contained in the draft affidavits specified in
the schedule to the notice by affidavit in lieu of oral testimony.
Keane
J rejected the plaintiff's contention that the affidavit of the defendants was
inadequate. He accepted that it was appropriate to postpone the discovery in so
far as it related to the issue of damages. In any event he made it clear that
he was not disposed to grant the drastic remedy of striking out the defendants'
defence for failure to comply with the order for discovery. However, the
plaintiff claimed that relief on another ground. It was submitted that the
defendants should not be allowed to maintain that the plaintiff was not the
owner or exclusive licensee of the copyright in any of the sound recordings
played in the defendants' premises whilst at the same time contending that the
amount of remuneration sought by the plaintiff was not equitable remuneration
within the meaning of the
Copyright Act, 1963. Keane J preferred the contention
of counsel on behalf of the defendants to the effect that her clients were
entitled, like any defendants, to rely on alternative defences and in
particular were entitled to require the plaintiff to prove its ownership of the
copyright in the recordings allegedly played by her clients whilst at the same
time disputing that the remuneration sought was equitable or that the
appropriate machinery for determining such remuneration was under
s. 32 of the
Act of 1963. The decision of the learned trial judge in that respect has not
been appealed by the plaintiff and counsel on behalf of the defendants relies
strongly upon the fact that their claim to make alternative or even
inconsistent claims has been upheld. This is of significance in considering the
subject matter of the appeal to this Court.
In
its notice of motion the plaintiff sought an order permitting it to establish
by way of affidavit rather than on viva voce evidence the matters of fact
contained in certain specified draft affidavits. That relief was granted by the
learned trial judge and it is from his decision in that respect that the
defendants have appealed to this Court.
In
his judgment having set out the history to the matter Keane J analysed the
distinction between the nature of the copyright subsisting in "sound
recordings" and those which may exist in literary, dramatic, musical or
artistic works. As he pointed out the manufacturer of a recording is obliged
under
the Act of 1963 to permit the playing of the record in public provided
the owner is paid "equitable remuneration" as defined in that Act and assessed,
if necessary, in pursuance of the provisions therein contained. In the case of
other forms of copyright the owners are absolutely entitled to prohibit the
performance of their work in public irrespective of the amount which may be
offered by way of royalty. One might say of a copyright subsisting in a sound
recording that it is not so much a case of inquiring whether the use thereof
will be permitted but how much must be paid for that privilege. Whilst to that
extent it may be said that issues in relation to the use or abuse of the
copyright in a sound recording may be reduced in many cases to the computation
of the equitable remuneration payable in respect thereof, the learned trial
judge upheld the right of the defendants to put in issue the title of the
plaintiff to the very many sound recordings involved in these proceedings.
The
learned trial judge rightly emphasised that the examination of witnesses viva
voce and in open court is of central importance in our system of justice and
that it is a rule not to be departed from lightly. That rule and the exceptions
to it are reflected in O. 39, R 1 of the Rules of the Superior Courts, which
provides as follows:-
"In
the absence of any agreement in writing between the solicitors of all parties,
and subject to these Rules the witnesses at the trial of any action, or at any
assessment of damages, shall be examined viva voce and in open court, but the
Court may, at any time for sufficient reason, order that any particular fact or
facts may be proved by affidavit, or that the affidavit of any witness may be
read at the hearing or trial, on such conditions as the Court may think
reasonable, or that any witness whose attendance in Court ought for some
sufficient reason to be dispensed with be examined by interrogatories or
otherwise before a commissioner or examiner; provided that, where it appears to
the Court that the other party, bona fide, desires the production of a witness
for cross-examination, and that such witness can be produced, an order shall
not be made authorising the evidence of such witness to be given by affidavit."
Keane
J described the rule as conferring a discretion on the court to permit
particular facts to be proved by affidavit where "sufficient reason is shown
for the making of the order and where justice requires that it should be made".
This is clearly the general effect of the order but I would refine that
analysis to the extent that where the proviso to the rule is applicable, that
is to say, where the production of a witness is bona fide desired by the other
party for cross-examination, the matter ceases to be one of discretion and the
order must be refused. Again it would seem to me that in seeking to persuade
the judge to exercise the discretion conferred on him by the rule that the onus
lies on the party making the application and in the case of the application
being resisted on foot of the proviso that the onus lies on the other party to
establish a bona fide desire for the production of the witness.
There
are few authorities on the interpretation of the rule. Happily, one decision,
Cronin v Paul (1881) 15 ILT.R. 121, under the corresponding rule under the
Supreme Court of Judicature Act (Ireland) 1877, is that of Palles C.B. He held
that an order should not be made under the rule permitting the proof of facts
by affidavit which were directly in issue in the action and going to the gist
thereof. That decision was followed and applied by Maguire P. in Northridge v
O'Grady and Thompson [1940] Ir. Jur. Rep 19.
Proving
the existence of a copyright in each and every of the sound recordings referred
to in the proceedings herein and the devolution of the title or a licence to
the plaintiff would be an awesome task. It would be extremely difficult and
costly. Perhaps impossible. If it can be achieved it will involve an enormous
expenditure on the part of the plaintiff and, in the event of it succeeding in
the action, a corresponding burden on the defendants. I would have no
hesitation in concluding that the problems of assembling so many foreign
witnesses in this jurisdiction to deal with this issue constitutes "sufficient
reason" for seeking an alternative course if that can be achieved without
contravening the principle established in Cronin v Paul (1881) 15 ILT.R. 121.
The
report of the judgment in Cronin v Paul (1881) 15 ILT.R. 121, is short and for
that reason a reference to the facts may be helpful. The action was brought
against the committee of merchants in the city of Cork to test the legality of
the management of the Cork butter exchange. The defendants were anxious that
the evidence of one Nicholas Dunscombe, who was living in Bristol and was in
delicate health, should be given on affidavit. The evidence to be given by Mr
Dunscombe was that he was appointed one of the two weigh masters of the city of
Cork by the common council in 1829; that he acted as such under divers acts of
parliament; and that after the passing of certain subsequent acts he was
threatened with actions for penalties by the coopers of Cork if he branded any
butter casks that did not comply with the old statuable provisions; that the
public ceased to frequent the said market in September or October, 1829; that
he (Nicholas Dunscombe) ceased to act as and never resumed the business of
weigh master; that his colleague in his said office ceased to act before he did
and that he subsequently and by formal notice resigned his said office. The
affidavit sworn on behalf of the defendants grounding the motion is quoted in
the report as going on to say at p. 122:-
"...
this was the fifth action which had been brought by various plaintiffs to try
the same question, in none of which had they proved successful, and that at the
former trials Mr Dunscombe's evidence had not been impugned."
Before
turning to the judgment of the Chief Baron it would be helpful to quote from
the observations of the authors of a treatise on the Supreme Court and
Judicature Act (Ireland), 1877, (published 1878) on O. 36, r. 1, as it then
was, as follows:-
"In
England it seems not competent to order all the facts to be proved by
affidavit, or that the affidavit of all witnesses in the cause be read at the
trial."
It
was against that background that Palles C.B. expressed his judgment in the
following terms at p. 122:-
"I
would have made an order for evidence by affidavit on the first two questions
in the notice of motion as by consent but Mr Sugrue does not see his way to
this. Without consent I cannot grant any part of this motion. It is the
ordinary practice that everything going to the gist of the action should be
proved by oral evidence in cases of trial by jury. If proof of mere formal
matter were required I would grant this application; but here the evidence
required goes to the issues in the action; and the plaintiff's evidence as to
these matters would also, I think, by the rule be confined to evidence by
affidavit. This is a limitation I do not wish to impose on him. I must,
therefore, refuse the principal part of this application - that asking for
evidence by affidavit."
Clearly
the learned Chief Baron was distinguishing between evidence to be adduced in
proof of mere formal matters and evidence going to the issues in the action.
The former might be proved by affidavit; the latter not.
In
the present case the ownership of the copyright in the sound recordings or the
exclusive licence thereto is in law and in logic an issue, and perhaps the
primary issue, in the proceedings. The learned trial judge expressly, and in my
view rightly, upheld the entitlement of the defendants to dispute the
plaintiff's claim in that regard and to put it on proof of it. If one looks
back through the history of the proceedings one may well infer or suspect that
the defendants were not optimistic about defending successfully the proceedings
on that ground. It may well be that their real concern is, and at one stage it
certainly was, simply to reach agreement as to what constituted equitable
remuneration. On the other hand the defendants are not bound to pay
remuneration, equitable or otherwise, to the plaintiff unless and until the
plaintiff has established its title.
I
would respectfully disagree with the learned trial judge in his conclusion
that:-
"The
gist of this action is obviously the reasonableness of the remuneration being
sought by the plaintiff and the appropriate machinery by which any dispute as
to the level of such remuneration is to be resolved."
I
accept that remuneration is part of the gist of the action but the gist is
twofold: it includes the right or title of the plaintiff to receive such
remuneration.
At
the end of the day remuneration may be the more hotly contested issue but as
the defendants deny the title of the plaintiff that issue must be resolved in
favour of the plaintiff before any other issue can arise. In my view it is not
possible to dismiss the dispute as to ownership as "formal", as the Chief Baron
said or "collateral" as Maguire P. indicated simply because there are grounds
for suspecting that the defendants have no witnesses or evidence on which to
challenge the plaintiff's title. The defendants are entitled, as the learned
trial judge has found, to put the plaintiff on proof of its title and as long
as that issue remains it is a significant one. The strength or weakness of the
case to be made by either party does not reflect upon the importance or primacy
of any issue. The case of Cronin v Paul (1881) 15 ILT.R. 121, itself
illustrates the proposition that the weakness of an argument, in that case its
failure on five previous occasions, did not render an issue any the less "the
gist of the action" so as to permit proof by affidavit. As I am satisfied that
the ownership of the copyrights or the exclusive licence therein is or forms
part of the "gist" of the present action I must conclude that the learned trial
judge misapplied the principles established in Cronin v Paul and consequently
erred in the exercise of his discretion.
Having
regard to that conclusion the question whether the defendants bona fide require
the production of the deponent for cross-examination does not arise. In fact
the rule under consideration in Cronin v Paul (1881) 15 ILT.R. 121, did not
include the proviso containing that qualification. Formerly it was contained in
a separate rule. I accept that onus would fall on the defendants to establish
the bona fide desire for the production of a witness but I do not accept that
it necessarily follows that the defendants would have to show the existence of
evidence casting doubt upon that to be offered by the deponent. It might be
sufficient in a case such as the present to point to the complexities of the
matters in respect of which it is sought to tender proof by affidavit and
assert the right to explore with the witnesses their competence and credibility
in giving evidence in relation to them. However, as I say, it is not necessary
for me to express any final view on the proper interpretation of the proviso or
the rights of any party invoking the same having regard to the view which I
take as to the rights of the parties under the remainder of the rule.
The
rejection of the plaintiff's application to adduce evidence otherwise than viva
voce leaves unresolved the difficulty of the plaintiff in procuring the
attendance in Ireland of the many witnesses required to prove its entitlement
to the repertoire of sound recordings referred to in the pleadings herein. No
doubt the problem could be resolved by agreement between the parties. In any
adversarial proceedings it may be imprudent to assume that such agreement would
be forthcoming. Having regard to the obvious hostility between the parties in
the present case it appears that there is no prospect here of any useful
agreement being reached or implemented. Any solution will have to be imposed by
the courts. The then President, having consolidated several of the actions
between the plaintiff and various discotheque owners by his order dated the
20th March, 1997, it would seem to me desirable to have the issue as to
ownership of copyright tried in stages as against all the defendants in those
proceedings. If agreement could have been obtained as to what constituted a
random or meaningful sample of those recordings the problem could have been
satisfactorily resolved but in the absence of any such agreement it may be
necessary to deal with the question of ownership in stages until it is
established there is no need to debate the issue further.
However,
the procedure to be adopted is a matter for the President of the High Court or
the judge assigned by him to deal with the proceedings. It would be impertinent
for this Court to attempt to dictate any solution but it is material for the
purposes of this judgment to recognise that some alternative is available.
In
particular I would accept that there could come a time when the trial judge
having satisfied himself of the plaintiff's title to a sufficient number of
recordings, say forty or fifty such recordings, by oral evidence in the usual
way might decide to treat that evidence as prima facie evidence of the
plaintiff's claim to the entire repertoire of sound recordings or
alternatively, to permit affidavit evidence of title to be adduced at that
stage. The trial judge must be afforded an adequate discretion to deal with the
plaintiff's claim to title in an evolving situation. Finally I would take the
liberty of recommending to the learned President of the High Court that the
multiplicity of actions herein might be assigned to one judge who would have
the responsibility of applying to them the most effective principles of case
management with a view to bringing all of these proceedings to a speedy
conclusion.
In
the circumstances I would allow the appeal.
LYNCH
J:
I
agree.
