The Supreme Court

Phonographic Performance (Ireland) Limited v Cody 

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.