Phonographic Performance (South East Asia) Ltd v. California Entertainments Ltd
Read the full judgment text of HCA 8093/1987 on BabelCite. This High Court CFI judgment.
1. The plaintiff on 8th December 1987 commenced the present action against the defendant. The plaintiff alleged that it was the owner of that part of the copyright of 7 sound recordings which consisted of the exclusive right of public performance of those recordings in Hong Kong. The plaintiff further alleged that the defendant had infringed the plaintiff's copyright by causing those sound recordings to be heard by the public at the restaurant and discotheque business carried on by the defendant
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HCA008093/1987 Copyright - permanent injunction may be awarded by a Judge in favour of owner of copyright in Order 14 proceeding for summary judgment - whether plaintiff's pleaded ownership of copyright if disputed a triable issue - evidential effect at interlocutory stage of statutory reversal of proof under s.20 of English Copyright Act 1956 and s.9 Copyright ordinance, Cap.39 - Held: 1. On facts dispute over ownership constitutes triable issue; 2. Unconditional leave to defend with costs of summons to defendant; 3. Defendant's Order 18 Rule 19 summons to strike out claim misconceived and dismissed with costs to plaintiff. IN THE SUPREME COURT OF HONG KONG HIGH COURT H.C.Action No.8093 of 1987 ______________________
____________________ Coram: Deputy High Court Judge Cruden Date of Hearing: 29th January 1988 Date of Judgment: 29th January 1988 Date of Handing Down Reasons: 3rd February 1988 ___________ JUDGMENT ____________ 1. The plaintiff on 8th December 1987 commenced the present action against the defendant. The plaintiff alleged that it was the owner of that part of the copyright of 7 sound recordings which consisted of the exclusive right of public performance of those recordings in Hong Kong. The plaintiff further alleged that the defendant had infringed the plaintiff's copyright by causing those sound recordings to be heard by the public at the restaurant and discotheque business carried on by the defendant and known as the "California" situate at Lan Kwai Fong, Hong Kong. The plaintiff claims an injunction, damages and other relief. 2. On 29th December 1987 the plaintiff issued a summons under Rules of the Supreme Court, order 14, Cap.4 for final judgment. On 23rd January 1988 the plaintiff obtained an order amending its Statement of Claim. On 28th January 1988 the defendant issued a summons under Order 18 Rule 19 for an order striking out the Amended Statement of Claim. The two summonses have now come before me for determination. 3. I heard comprehensive submissions by Counsel for both parties under the order 14 summons but unfortunately the majority of those submissions related to issues which were at best peripheral and at worst irrelevant. The only substantial issue on this summons was whether the plaintiff was the owner of that part of the copyright alleged to have have infringed. In considering this summons it was common ground that I was only concerned with the 7 recordings referred to in the original statement of claim and am unconcerned with the subsequent amendments. 4. The law is well settled that for a plaintiff to obtain final judgment under Order 14, the Court must be satisfied that there is no triable issue. If the Court is satisfied that there is a good defence on the merits, or that there is a dispute as to facts which ought to be tried, or that a difficult point of law is involved, then a defendant should be given leave to defend. 5. The plaintiff submitted that paragraph 1 adequately pleaded ownership of the copyright and that paragraph 2 gave particulars of the 7 recordings protected by the copyright. Turning to the evidence, I was referred to the first affirmation of Mr. S.K. Ho who is a director of the plaintiff. In paragraph 2 of Mr. Ho`s affirmation he stated, inter alia, that the Hong Kong public performance rights of certain sound recordings are vested in the plaintiff. Mr. Ho went on to affirm,
6. In relation to the evidence, Counsel for the plaintiff referred me to a number of statutory provisions which, in copyright cases, reverse the burden of proof and in his submission placed that burden on the defendant. I was first referred to Section 20(7) of the English Copyright Act 1965 which, by Order in Council, applies to Hong Kong - The Copyright (Hong Kong) Orders 1972 and 1979, Cap.29 App.III, DD1. 7. Section 20(7) provides if the label or other mark on a sound recording, states the name of the maker of the sound recording, or the year it was first published, or the country in which it was first published, the label or mark "shall be sufficient evidence of the facts so stated except in so far as the contrary is proven." 8. I was also referred to Section 9 of the Copyright Ordinance, Cap.39 which in relation to notarially authenticated affirmations, creates a statutory presumption that the contents of such an affirmation are true "until the contrary is proved." I find that Mr. Ho's first and second affirmations were notarially authenticated and that the statutory presumption under Section 9 arises as to their contents. 9. Counsel for the defendant took me to an affidavit of Mr. R.H. Kaufman, the Executive General Manager of the defendant. Paragraph 16 of the affidavit deposes to Mr. Kaufman's belief that the plaintiff has not demonstrated it has legal title to sue and that the defendant has the defence set out in the draft defence exhibited to his affidavit. Paragraph 1 of the draft defence, in the following terms, denies that the plaintiff is the owner of the copyright:
10. In addition to the evidence in the affidavits, Counsel for the defendant also drew the Court's attention to what, in his submission, was a contradiction between paragraphs 1 and 2 of the statement of claims. It was submitted that while paragraph 1 contained the bare pleading that the plaintiff was the "owner" of part of the copyright, the particulars in paragraph 2 listed under the record label heading, 3 different companies, namely London Records Ltd., CBS Records and Phonogram Ltd. 11. The alleged contradiction, it was submitted, was relevant to the statutory presumption under Section 20(7)(a), that a person named on the label was the maker of the sound recordings. The 7 sound recordings were produced and I note that printed on 6 of their labels is the name of one of those 3 companies. The position of the remaining recording of "Faith" and other titles, is different. The statement of claim pleads that it has a CBS Records label. On inspection the record label is in the name of "CBS/SONY" and includes an endorsement:
The dustcover also refers to CBS/SONY Hong Kong Ltd., and includes a note that application for a public performance licence should be addressed to the plaintiff. The dustcover states that copyright subsists in all sound recordings manufactured or distributed by CBS/SONY Hong Kong Ltd. but does not state that any copyright subsists in the plaintiff. 12. Dealing first with the statutory presumptions under Section 20(7) 1 hold that they raise presumptions in favour of the makers names, appearing on the labels. In the case of 6 of the 7 recordings those names correspond with the names listed in paragraph 2 of the statement of claim. The plaintiff is not one of those names. This particular presumption in favour of a maker, does not, even on the pleadings, arise in favour of the plaintiff. 13. In the case of the remaining recording, the label indicates that the maker is CBS/SONY Hong Kong Ltd., and not the pleaded CBS Records. Section 20(7) refers only to labels and marks on the actual records when issued and not to their dustcovers. The various endorsements on the dustcover do not, as a matter of law, give rise to any statutory presumptions under Section 20. If the Section were wide enough to include the dustcover endorsements, they would still not assist the plaintiff. For the endorsements do not go so far as to state that the copyright subsists in the plaintiff but merely record that application for public performance should be addressed to the plaintiff. The presumption under Section 9 is not affected by these difficulties. Under that presumption the contents of Mr. Ho's affirmations are presumed to be true until the contrary is proven as I have already held. 14. On an order 14 summons the primary question is whether there is a triable issue. if the statutory presumptions were irrebuttable and arose on the facts, then clearly there would be no triable issue and the plaintiff would be entitled to summary judgment. However, both the presumptions are rebuttable and in any event the Section 20(7) presumption does not, I confirm, arise on the facts. The Section 9 presumption does arise. In considering whether a triable issue arises, I have to recognize, in favour of the plaintiff, that procedural reversal of proof. 15. Counsel for the plaintiff complained that the defendant in its affidavit had not condescended upon particulars. This is an obligation imposed on all defendants in order 14 proceedings but whether a particular defendant has done so, depends on the facts of each case. So far as the pleadings are concerned, the plaintiff also complained that the draft defence merely amounted to a bare denial. In considering whether there is a triable issue a defendant may show cause by affidavit or otherwise so the contents of the pleadings also are relevant. 16. In the present summons the plaintiff must prove ownership of the copyright. Paragraph 1 of the Statement of Claim is adequate in simply pleading that the plaintiff is owner. In view of the fact that the plaintiff was not the maker of the records, some pleaders might have elected also to plead the manner by which the maker's rights or some of them had become vested in the plaintiff. But to do so was not obligatory. 17. However, in the plaintiff's affidavit it was obligatory to provide evidence in relation to the bare plea of ownership. While I reject the defendant's submission that there is a contradiction between paragraphs 1 and 2 of the statement of claim, the differences between the plaintiff's name and the pleaded label names, mean that the internal contents of the plaintiff's own pleadings also, if obliquely, raise this issue. The importance given to the maker of the recordings, by Sections 12 and 20 of the Copyright Act, would also have made it desirable to have explained by affidavit the legal relationship of the maker with the plaintiff, as pleaded owner. 18. On this crucial issue the plaintiff relied on Mr. Ho's affirmations and the rebuttable statutory presumptions, one of which I have already held, does not apply. Under Order 14 the plaintiff's affidavit must verify the facts relied upon. The purported verification of ownership, was limited to Mr. Ho's general unparticularised statement, in his first affirmation, that he had checked the plaintiff's books and records and that the plaintiff was the owner of the exclusive right of public performance in Hong Kong of the 7 recordings in issue. In view of the fact that the plaintiff was not the maker of the recordings and because of the importance of ownership, it would have been at least desirable for the name of the maker and the legal means by which the plaintiff subsequently became owner, to have been set forth. If assignments had been executed, the parties to and the dates of the assignments could have been affirmed to, while the assignments themselves or other documents of transfer, could have been exhibited. The Court simply does not have the assistance that might have been provided by such particulars. 19. If the question of ownership had not been put in issue by the defendant's affidavit and draft defence, the bare statement by Mr. Ho may have been sufficient. In this particular case the defendant's documents do not stand alone, for their stance is reinforced by the internal contents of the plaintiff's own pleadings, already referred to, which indicate that the makes of the recordings and the current owner are different persons. The only evidence which attempts to bridge that material factual gap is the bare statement in Mr. Ho's affirmation. For the purposes of Order 14, the rebuttable presumption under Section 9 does not entitle the plaintiff to judgment Nor is it fatal to the defendant's attempt, to show cause that there remains a triable issue. This is, of course, a lesser burden than the burden placed on the plaintiff, to establish its claim on the higher standard of the balance of probabilities, if it seeks judgment. 20. Counsel for the plaintiff referred me to The Lady Tennant v. Associated Newspapers Group Ltd. (1979) FSR 298, Elec & Eltek Ltd. v. Auto Process Enterprises HCA No.5398/83, Blue Box Toy Factory Ltd. v. Jimson Plastic Factory Ltd. HCA No.5961/81, J. Albert & Sons Pty. Ltd. v. Fletcher Construction Co. Ltd. (1976) RPC 615. The latter case sets out various general principles applicable also to Hong Kong which I accept. 21. The former 3 cases were cited as being particularly relevant, as each concerned order 14 summons brought in relation to copyright infringements, where summary judgment was granted to the plaintiffs. I accept that Order 14 summonses may properly be brought in copyright cases. However, whether summary judgment should be granted, depends on the facts of each case. There are major differences between the cases cited and the instant facts. In particular, an important difference, is that in each of the 3 cited cases, there was no dispute over title. The plaintiff's ownership of the copyright, alleged in each case to have been infringed, was not in issue. In the present case that is the major point in issue. 22. The plaintiff further relied on The Lady Tennant v. Associated Newspapers Group Ltd. for its observation that a defendant under order 14 does not get leave to defend to investigate alleged obscurities or in the hope that something will turn up on investigation. I am satisfied that the present defendant's position is quite different to that of the defendant in that case and is far stronger than what the Vice-Chancellor critically described in that case as being merely "surmise and micawberism." 23. I was also referred to the evidence in the affidavit and affirmations, that the defendant had for several years been negotiating with the plaintiff, over the rate of licence fees and had not at that earlier stage, contested the plaintiff's entitlement to fees but was only arguing over the amount. Counsel for the plaintiff submitted that the relevance of that evidence, was that the defendant had no defence to the injunction sought. Counsel for the defendant explained. those earlier negotiations as having proceeded on the false assumption, that the plaintiff was entitled to those fees, which was the very issue now hotly disputed. At this order 14 stage, I do not consider those negotiations prejudice the defendant's position or right to proceed to trial, if there is a triable issue between the parties. Certainly it would be undesirable to attempt to make findings on the nature of those negotiations merely on affidavit evidence. 24. Counsel for the plaintiff also submitted that even if none of the statutory presumptions applied, the evidence provided by Mr. Ho's affirmation was still sufficient to establish ownership. In view of the matters I have already referred to, I would not have been satisfied by the bare, unparticularised and undocumented statements of Mr. Ho, that the plaintiff was now the owner of the copyright. To have accepted that statement as adequate, in the present circumstances, would have been to delegate to Mr. Ho, this Court's own fact finding responsibility. 25. Counsel for the plaintiff also criticised the defendant, for not filing a defence and for other delays. Counsel for the defendant informed the Court that the defendant had deliberately not filed a defence because it did not accept the plaintiff's ownership of the copyright. It was for that reason that the defendant had issued the Order 18 summons which I will consider shortly. I was referred to 1 'The Supreme Court Practice 1988' page 326 where at 18/19/19 it is noted:
26. In the present action the writ was issued on 8th December 1987; the Order 14 summons on 29th December 1987; the statement of claim was amended on 23rd January 1988; the Order 18 summons was issued on 28th January 1988. Between some of those days the Christmas and New Year Vacation intervened. I reject the plaintiff's submission and hold that the defendant's position has not been prejudiced by delay. The plaintiff also questioned the defendant's good faith in issuing the order 18 summons. I equally reject that submission. When I review all the evidence and other matters relevant to the Order 14 summons, I am satisfied that the plaintiff is not entitled to summary judgment. The defendant is entitled to unconditional leave to defend. The plaintiff will pay the defendant's costs on this summons to be taxed if not agreed. 27. The defendant's summons under Order 18 Rule 19 asks that the Amended Statement of Claim be struck out on the ground that it may prejudice, embarrass or delay the fair trial of the action. Counsel for the defendant submitted that paragraph 1 of the Amended Statement of Claim was defective as it pleaded both facts and law. Pleadings, of course, should plead facts not law. I accept Counsel for the plaintiff's submission that it contains no pleading of law. Paragraph 1 contains a clear, if bare, pleading of the fact of ownership. 28. The defendant's further submission, that as it wished to dispute the plaintiff's status as owner, the proper course was to file an Order 18 summons, rather than file a defence, was also misconceived. The attack on ownership was not an attack on the plaintiff's authority to sue. On the pleadings and draft pleadings to date, it is not suggested that the plaintiff did not duly authorise the commencement of the present action. The defendant's concern is whether the plaintiff is owner of the copyright. The plaintiff contends it is the owner and clearly has the right to sue. The proceedings are properly commenced. The question of ownership will be an issue to be determined in the action. It is an issue to which the defendant may properly plead by way of defence. 29. The defendant's Order 18 summons must be dismissed with costs to the plaintiff to be taxed if not agreed.
Representation: Mr. C. Maxwell Lewis instructed by Denton, Hall, Burgin & Warrens for plaintiff Mr. Barnabas W. Fung instructed by Gordon D. Oldham & Co. for defendant. |