Composers and Authors Society of Hong Kong Ltd v. M Channel Corporation Ltd and Others

HCA2272/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.2272 OF 2004

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BETWEEN

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Before : Hon Burrell J in Chambers

Date of Hearing : 6 January 2006

Date of Decision : 6 January 2006

Date of Reasons for Decision : 16 January 2006

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REASONS  FOR  DECISION

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1.On 25 October 2005, this matter was adjourned at the request of the defendants to enable them to respond to affirmations dated 13 and 20 October 2005 filed on the plaintiff’s behalf by Mr Mak Tun Sing.  During the adjournment, no affirmations were filed.  Prior to this adjourned hearing, the defendants’ solicitors applied by summons to cease acting for the defendants.  That summons was heard immediately prior to the plaintiff’s Order 14 and injunction applications and was granted.  The plaintiff’s applications were then heard unopposed although, Miss Teresa Au, a solicitor of the defendants’ former solicitors, very properly remained in court whilst the applications were made.

2.At the conclusion of the submissions made by Mr Roger Beresford who appeared on behalf of the plaintiff, I acceded to both the application for summary judgment and also for an injunction.  The order was in terms of paragraphs (a), (d), (f) and (g) of the Amended Statement of Claim dated 10 January 2005.  Interest on the judgment sum from the date of the writ was ordered to be at the judgment rate until satisfaction.  The terms of the injunction were in accordance with the draft order submitted by the plaintiff.

3.I now give brief reasons for the above order.

4.The plaintiff is a copyright licensing body within the meaning of s.145 of the Copyright Ordinance, Cap. 528.  In October 2001, the plaintiff and the 1^st defendant entered into an oral agreement enabling the defendants to use some of the works under its control for a monthly fee.  The defendants would also be liable to pay royalties in respect of some of the works which were the subject of copyright protection.

5.The monthly fee for October 2001 was paid but nothing has been paid since.  The liquidated sum in paragraph (a) of the relief claimed in the Amended Statement of Claim represents the total fees due from November 2001 to the date of the issuance of the writ.

6.There is considerable evidence that after October 2001, the defendants attempted to negotiate a reduction in the monthly fee and made offers to pay their increasing indebtedness by instalments.

7.There is also clear evidence by affirmation that the copyright, of which the plaintiff was the owner, in two musical works was infringed by the defendants.  Those two musical works are particularized in the Amended Statement of Claim and are but samples of the defendants’ infringements.

8.Since the failure of the defendants to respond to Mr Mak’s affirmations dated 13 and 20 October 2005, the plaintiff now additionally relies on s.121 of the Copyright Ordinance, Cap. 528, which states :

“121.   Affidavit evidence

(1)	An affidavit which purports to have been made by or on behalf of the owner of a copyright work and which states—
	(a)	the date and place that the work was made or first published;
	(b)	the name, domicile, residence or right of abode of the author of the work;
	(c)	the name of the owner of the work;
	(d)	that copyright subsists in the work; and
	(e)	that a copy of the work exhibited to the affidavit is a true copy of the work,
		shall, subject to the conditions contained in subsection (4), be admitted without further proof in any proceedings under this Ordinance.
…
(3)	The court before whom an affidavit which complies with the conditions in subsection (4) is produced under subsection (1) or (2) shall presume, in the absence of evidence to the contrary—
	(a)	that the statements made in the affidavit are true; and
…”

9.The plaintiff has complied with s.121 and the defendants have failed to rebut the presumption contained in s.121(3).

MAIN ISSUES

10.Even though the defendants did not appear to oppose the plaintiff’s applications, I will make brief reference to the two primary issues which have hitherto been raised by the defendants and which could defeat the plaintiff’s applications.

(1)  No concluded licence agreement between the parties?

11.This contention is plainly unsustainable.  Such contention is made by deponents who only became involved with the defendants in 2002 and thereafter.  The agreement was in 2001.  The defendants’ deponents were only involved in the negotiations to reduce the monthly fee.  The fact that they attempted to reduce the fee is additional cogent evidence that the agreement existed.  Throughout the negotiations, it was never suggested either that there was no agreement or that the October 2001 payment was intended to be the only payment.  In the absence of any other evidence, it may be assumed that fees subsequent to October 2001 were to be in the same amount as the first payment.

(2)  “Doubtful” copyright?

12.The defendants have also suggested, by affirmation, that the plaintiff’s performing rights and copyright are “doubtful”.

13.I have granted the plaintiff’s Order 14 application on the basis of the defendants’ breach of the licensing agreement.  The second issue above ((2)) concerns what damages, if any, may be due for the defendants’ copyright infringements.

14.The existence of the copyright is unassailable by virtue of Cap. 528, s.121 (supra).  Particularization of all the infringements are not required.  If an assessment of damages were necessary (which it is not because the defendants are in breach of the licence agreement), it would be a matter for the Copyright Tribunal.  The reality of how the law works in this regard is described in “The Modern Law of Copyright and Designs” Third Edition :

“A great deal of copyright law is not concerned with questions of subsistence of copyright, or infringement of copyright, but with the bread-and-butter business of commercial licensing.  For example, every day, all over the country, innumerable musicians are performing copyright music in public but there are vast numbers of copyright songs and it would be quite impracticable for each individual copyright owner to have to spend his time negotiating with all these performers on a one-to-one basis.  The expense would exceed the value of the royalties to be received.  Instead, collecting societies have been set up.  Typically, authors or composers assign their copyright to a collecting society which, therefore, gradually accumulates a vast collection of copyrights which it licenses to performers or other appropriate users in exchange for royalties.  These royalties are then distributed to members.  It is the collecting society’s business to see to it that those who require licences pay for such.  For example, a society may have inspectors travelling over the country checking that clubs, discos, shops and other places where music is performed in public duly pay royalties according to a published schedule.  Of course, the inspectors can only visit a minority of these places so it is impossible for a collecting society to know precisely what works have been performed and how often.  Instead collected royalties are put into a ‘black box’ and distributed to members on some workable pro rata basis, for example on an estimate of which works are most popular.”

15.In view of the defendants’ lack of opposition, further analysis is unnecessary.  The existence of the copyright and the right to sue are unarguable.  The infringements themselves, of the particularized instances, are apparent not only by the plaintiff’s evidence but also by implied admissions in the defence evidence.

(3)  Injunction?

16.In light of all the above, this is a classic case for an injunction to be granted to restrain further infringements of the plaintiff’s copyrights and performing rights without its consent.  I have not ordered an assessment of damages for breach of copyright as the plaintiff is content that such damages would be encompassed by the liquidated judgment sum already awarded for the breach of the licence agreement.

17.The costs of and occasioned by the plaintiff’s summonses for summary judgment, an injunction and an interim payment, shall be to the plaintiff.

Mr Roger Beresford, instructed by Messrs Lovells, for the Plaintiff

The 1^st, 2^nd and 4^th Defendants in person, absent