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[2010] ZASCA 96
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Gallo Africa Ltd and Others v Sting Music (Pty) Ltd and Others (40/2010) [2010] ZASCA 96; 2010 (6) SA 329 (SCA); [2011] 1 All SA 449 (SCA); 2010 BIP 256 (SCA) (3 September 2010)
THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case No:
40/2010
In
the matter between:
GALLO AFRICA LIMITED First Appellant
GALLO LICENSING (PTY) LIMITED Second
Appellant
MAVUTHELA MUSIC COMPANY (PTY) LIMITED Third
Appellant
SM PUBLISHING (PTY) LIMITED Fourth
Appellant
ROBERT IAN VON MEMERTY Fifth Appellant
and
STING MUSIC (PTY) LIMITED First
Respondent
JT WHOLESALE (PTY) LIMITED Second Respondent JT
PUBLISHING Third Respondent
JOHAN (“JOE”) THERON Fourth
Respondent
PATRICIA THEMBI NYANDENI Fifth Respondent
GERTRUDE (TODD) TWALA Sixth Respondent
Neutral
citation:
Gallo Africa v Sting Music
(40/10
)
[2010] ZASCA 96
(3 September 2010)
Coram:
Harms DP, Nugent, Lewis, Ponnan and
Cachalia JJA
Heard:
17 August 2010
Delivered:
3 September 2010
Summary:
Copyright – jurisdiction –
South African court has no jurisdiction to hear copyright
infringement claims in respect
of foreign copyright – fact that
defendant an
incola
irrelevant.
_________________________________________________________________
ORDER
___________________________________________________________________
On appeal from:
South Gauteng High Court
(Johannesburg) (Makhanya J sitting as court of first instance):
The appeal is dismissed with costs, including the costs
of two counsel.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
HARMS DP (NUGENT, LEWIS, PONNAN and CACHALIA JJA
concurring)
[1] This appeal relates to the jurisdiction of a high
court to decide matters relating to foreign copyright. The issue was
raised
by way of exception by the six defendants, the present
respondents. The high court upheld the exception, finding that a
local court
does not have jurisdiction. This court granted leave to
appeal after leave had been refused by the court of first instance
(Makhanya
J).
[
2
] The five plaintiffs (the
appellants) issued summons against the defendants in the South
Gauteng High Court. They alleged that
they were (by assignment or as
original authors) the owners of copyright works consisting of musical
and literary works which make
up a musical known as ‘Umoja’.
They further alleged that the defendants had infringed their
copyright by performing
whole or part of Umoja, by making recordings
and cinematograph films thereof, and by having it broadcasted.
[3] Infringement, the plaintiffs said, had taken place
in South Africa since 2001. That is the uncontentious part of the
claim and
is based on the provisions of the
Copyright Act 98 of 1978
.
[4] The contentious part of the particulars of claim
relates to the allegation that the defendants have also committed
acts of infringement
in a large number of other countries, 19 in all,
from Japan in the east to the USA in the west. It is important to
stress that
in relation to these infringements the plaintiffs did not
rely on our
Copyright Act but
on the copyright laws of each of these
countries. The particulars in relation to each country are in similar
terms and it would
suffice if one country, say, the United Kingdom,
is given as an example. The particulars state the following (albeit
not in these
terms or sequence): the plaintiffs are the authors or
owners by assignment of the relevant copyrights for purposes of the
UK
Copyright Act; these
rights exist by virtue of the UK Act; the
copyrights have not expired due to lapse of time; they have been
infringed; and the plaintiffs
accordingly are entitled to claim an
injunction, damages and/or royalties to which they would be entitled
in terms of the UK Act.
[5] The exception by the defendants raised the question
of jurisdiction squarely. It stated that proceedings for infringement
of
copyright instituted in a local court may only be founded on the
provision of our
Copyright Act and
that in so far as the plaintiffs
seek to apply the relevant copyright legislation of foreign states
their claim is bad. As mentioned,
the court below upheld the
exception and set aside the particulars of claim to the extent that
they are based on copyright legislation
of other countries.
[6] Jurisdiction means the power vested in a court to
adjudicate upon, determine and dispose of a matter. Importantly, it
is territorial.
1
T
he disposal of a
jurisdictional challenge on exception entails no more than a factual
enquiry, with reference to the particulars
of claim, and only the
particulars of claim, to establish the nature of the right that is
being asserted in support of the claim.
In other words, jurisdiction
depends on either the nature of the proceedings or the nature of the
relief claimed or, in some cases,
on both. It does not depend on the
substantive merits of the case or the defence relied upon by a
defendant.
2
[7] The plaintiffs argued that the
high court had jurisdiction to hear the foreign infringement claims
because (a) the relief sought,
namely interdicts and damages, are
within the high court’s competence; (b) the plaintiffs are
incolae
of the court below; (c) the defendants are domiciled or resident in
South Africa and within the jurisdiction of the court below;
(d) s
19(1)(a) of the Supreme Court Act 59 of 1959 confers jurisdiction on
a high court ‘over all persons residing or being
in its area of
jurisdiction; (e) a court can grant an effective interdict against
someone residing within its jurisdiction; and
(f) a court can
determine through expert evidence what the relevant foreign law is.
Some point was also made in relation to the
inconvenience of an
incola
who has to sue in 20 jurisdictions.
[8] In so far as point (b) is
concerned, the domicile of the plaintiff never determines
jurisdiction and, as to point (f), a court
does not necessarily
require evidence of foreign law – it may take judicial notice
of foreign law ‘in so far as such
law can be ascertained
readily and with sufficient certainty’.
3
The inconvenience of having to sue in multiple jurisdictions can also
be discounted at this early stage because the rule of jurisdiction
for which the plaintiffs contend would also apply in the case of a
single infringement by a local
incola
committed in another country; and the plaintiff may not even be an
incola
.
This is illustrated by the facts in
Lucasfilm
Ltd v Ainsworth
[2009] EWCA Civ 1328
, a judgment of the Court of Appeal (England and
Wales).
[9] The defendants relied heavily on
the judgment in that case in which the plaintiff, a US corporation,
sued an
incola
of the UK for a breach of American copyright. The acts were committed
in the UK but were considered for purposes of US law to have
been
committed in the USA. The court refused to entertain the matter,
holding that UK courts do not have jurisdiction to hear such
a case.
I shall revert to this judgment. Although our law relating to
jurisdiction is based on Roman-Dutch law as amplified by
statute, and
not on English common-law this judgment is important because it is
recent and also dealt with the issue comprehensively
and from a wider
perspective. I accordingly do not intend to repeat everything said in
that judgment.
[10] Section 19(1)(a) of the Supreme
Court Act provides that a
high court has
jurisdiction ‘over all persons residing or being in and in
relation to all causes arising . . . within its
area of jurisdiction
and all other matters of which it may according to law take
cognizance.’ The section has a long history,
which need not be
related. However, our courts have for more than a century interpreted
it to mean no more than that the jurisdiction
of high courts is to be
found in the common law.
4
For purposes of effectiveness the defendant must be or reside within
the area of jurisdiction of the court (or else some form of
arrest to
found or confirm jurisdiction must take place). Although
effectiveness ‘lies at the root of jurisdiction’
and is
the rationale for jurisdiction, ‘it is not necessarily the
criterion for its existence.’
5
What is further required is a
ratio
jurisdictionis.
6
The ratio, in turn, may for instance be domicile, contract, delict
and, relevant for present purposes,
ratione
rei sitae
. It depends on the nature of the
right or claim whether the one ground or the other provides a ground
for jurisdiction. Domicile
on its own, for instance, may not be
enough. As Forsyth (p 164) rightly said:
‘
First there is the search
for the appropriate
ratio jurisdictionis
; and then the court
asks whether it can give an effective judgment. . . . [and] neither
of these is
sufficient
for jurisdiction, but both are
necessary
for jurisdiction.’
[11] The point may be illustrated with reference to
Eilon v Eilon
1965 (1)
SA 703
(A). It was a marital dispute. This court held that since the
defendant was not domiciled in South Africa, local courts had no
jurisdiction to grant a divorce. However, since he was resident in
the country a local court had jurisdiction to grant a judicial
separation. A claim for maintenance, being one
ad
pecuniam solvendam
, was permitted because
such an action is justiciable where the defendant resides. The claims
in relation to property situated in
South Africa were also
justiciable. However, in relation to the claims relating to property
situated in Israel, the court held,
South African courts had no
jurisdiction. The reason was that in relation to real actions
directly raising the title of property
the
forum
rei sitae
has exclusive jurisdiction.
7
The court rejected the view that the court of the defendant’s
domicile had any jurisdiction to determine the rights to immovable
property situated in Israel. (At 726H-727B.)
[12] It may be mentioned that this rule does not
necessarily apply in respect of immovable property situated within
South Africa
because a distinction is drawn between the jurisdiction
of country state courts and that of South African high courts.
8
The detail is not germane for present purposes.
[13] The position is not necessarily the same for
movables. Although the
forum rei sitae
has, in principle, jurisdiction, this jurisdiction is not necessarily
exclusive and the court of the domicile of the defendant
may also
have jurisdiction. This explains, to the extent that it is necessary,
the judgment in
Metlika Trading Ltd v
Commissioner SA Revenue Services
2005 (3) SA
1
(SCA). It dealt with a movable, an aircraft, belonging to an
incola
. This court
held that a local court had by virtue of that fact jurisdiction to
grant an interdict in personam relating to the use
of the aircraft
which was overseas. The discussion relating to effectiveness did not
impact on this part of the reasoning.
[14] For purposes of, inter alia, jurisdiction in
respects of incorporeals our law (like many others), and in spite of
possible
dogmatic flaws, also distinguishes between movable and
immovable incorporeals.
9
The
situs
of an
intangible ‘is to be found where the intangible can be
effectively dealt with’.
10
Therefore, and by analogy with movable corporeals, the
forum
domicilii
has jurisdiction in relation to
incorporeals.
11
And in relation to immovables the rule laid down in
Eilon
would apply.
[15] Intellectual property rights (IPRs) are territorial
in nature.
12
As Prof Alexander Peukert explains in a forthcoming publication:
13
‘
To begin with, one has to
distinguish different aspects of “the” territorial
principle in IP. Its fundamental objective
dimension means that an IP
right is limited to the territory of the state granting it. The
exclusive right can only cover activities
occurring within the
respective territory. No intangible subject matter is protected by
one uniform right covering the whole world.
Instead, technical
inventions, works of literature and arts, signs, etc. are subject to
a bundle of possibly more than 150 territorial
rights of national or
regional provenance. These rights are independent from each other so
that an invention, work, etc. may be
protected in one country, but in
the public domain in another. . . . A comparative study reveals that
this objective territoriality
has long been accepted in the EU, its
Member States like Germany or the Netherlands, other European
countries like Switzerland,
common-law countries around the globe,
Japan, and not least the U.S.’
[16] Territoriality applies to registered IPRs such as
patents
14
and trademarks.
15
It also applies to unregistered rights. For instance, well-known
unregistered trademarks are entitled to local protection by virtue
of
art 6bis of the Paris Convention for the Protection of Industrial
Property provided they are locally well known.
16
A comparable instance is goodwill – the plaintiff must have a
reputation within the area of jurisdiction of the court.
17
[17] The same applies to copyright.
18
That the plaintiffs appreciated this fact appears from the
particulars of claim where the right to copyright and infringement
was defined with reference to the laws of each particular
jurisdiction. As McEwan J said in relation to the South African
copyright
in a work authored by an Indian national in India:
‘
those rights are property
in the Republic created by an Act of the South African Legislature.’
19
The same would, obviously, apply to copyright in the UK.
[18] The
Berne Convention for the Protection of Literary and Artistic Works
does not affect the position.
20
It rests
on three basic
principles, namely national treatment, automatic protection and
independence of protection.
National
treatment
refers to
the principle that works originating in one of the contracting states
(that is, works the author of which is a national
of such a state or
works which were first published in such a state) must be given the
same protection in each of the other contracting
states as the latter
grants to the works of its own nationals.
Automatic
protection
means
that copyright protection may not be conditional upon compliance with
any formality. And
independence
of protection
signifies that copyright protection is independent of the existence
of protection in the country of origin of the work. It should
also be
borne in mind that the convention does not form part of our law but
merely places international obligations on governments
that have
acceded to it. This means that the convention is not directly
justiciable in our courts.
21
[19] This leads ineluctably to the conclusion that IPRs,
including copyright, are immovable intangibles and that, according to
the
principle accepted in
Eilon
,
local courts do not have jurisdiction in respect of foreign copyright
issues. In addition, the fact that a work was created in
this country
is beside the point for present purposes.
[20] The conclusion finds support in Antipodean
jurisprudence. In
Potter v Broken Hill Pty
Company Ltd
[1906] HCA 88
the High Court of
Australia had occasion to consider whether a patentee could institute
action
in the Supreme Court of
Victoria by the appellant against a company incorporated and
registered in Victoria for the infringement
in New South Wales of a
New South Wales patent. In order to determine whether the court in
Victoria had jurisdiction the High Court
considered the nature of the
patentee’s right. The court held that a patent right was
incorporeal
personal property and that since a patent monopoly has no effective
operation beyond the territory of the state under
whose laws it is
granted and exercised ‘it partakes of the nature of an
immoveable as distinguished from a moveable’.
Because of this the court held that the
forum
rei sitae
had exclusive jurisdiction to
decide cases relating to patent infringement. The analogy has been
extended to copyright by courts
in Australia and New Zealand.
22
[21] The fact that copyright exists without registration
is without consequence. Prof Austin explained that
‘
intellectual property
rights exist at the sufferance of the domestic sovereign. With
respect to patents and trade marks, whose
existence depends on
bureaucratic action, this characterisation is fairly clear.
Individual copyrights do not depend on state
action to come into
existence. However, individual domestic copyright statutes still
define the circumstances in which copyrights
come into existence and
the nature and content of authors’ rights.’
23
The first sentence requires some modification. As was
mentioned in
Lucasfilm,
24
‘[s]overeignty in any realistic sense does not come into’
registered rights. There is no difference between the grant
of a
trading licence and a patent or trade mark registration. They are all
bureaucratic acts by administrative staff in terms of
generally
applicable laws. Copyright, which does not involve administrative
intervention, exists naturally by virtue of local legislation.
[22]
Lucasfilm
,
as mentioned, dealt with exactly the same issue that concerns this
court. Although UK courts had personal jurisdiction, the question
was
whether they had subject-matter jurisdiction, ie, whether there was a
causa jurisdictionis
.
It is not necessary to traverse all the reasoning which led the court
to the conclusion that a UK court did not have jurisdiction
to decide
a matter involving the infringement of foreign copyright. For present
purposes it suffices to point out that the court
applied a
jurisdiction rule applicable to immovables, which is for all intents
and purposes the same as the rule in
Eilon
,
to copyright. The rule derives from
British
South Africa v Companhia de Moçambique
[1893] AC 602
in which the House of Lords drew a distinction between
‘matters which are transitory and those which are local in
nature’,
holding that English courts did not have jurisdiction
over the latter.
25
In this regard it mentioned that its approach coincided with the
position under Roman law (at 623-624).
[23] The rule was affirmed in
Hesperides Hotels v
Aegean Turkish Holidays
[
1979]
AC 508
where the rule was said to be that an English court has no
jurisdiction to entertain an action for (1) the determination of the
title to, or the right to the possession of, any immovable situate
out of England (foreign land); or (2) the recovery of damages
for
trespass to such immovable.
26
[24] Although Laddie J
27
was not prepared to accept that it was correct to describe IPR as
immovables and although the court in
Lucasfilm
did not in so many
terms mention that copyright is an incorporeal immovable, such a
finding is a necessary corollary of the ratio
of this judgment in the
context of our law, which is a fusion of Roman and Germanic law.
28
[25] The court in
Lucasfilm
also had regard to
practical considerations as to why a local court should not exercise
jurisdiction over foreign copyright.
29
In other words, the court was able to justify its conclusion not only
on principle but also on the grounds of convenience and common
sense.
30
These considerations include the fact that enforcement may involve a
clash of the IP policies of different countries; that
extra-territorial
jurisdiction involves a restraint on actions in
another country – an interference which prima facie a foreign
judge should
avoid; and that it will create too much room for
forum-shopping. In addition,
31
‘
it is
quite clear that those concerned with international agreements about
copyright have refrained from putting in place a regime
for the
international litigation of copyrights by the courts of a single
state. . . . A system of mutual recognition of copyright
jurisdiction and of copyright judgments could have been created but
it has not.’
Plaintiffs’ counsel did not even attempt to refute
the validity of any of these propositions.
[26] It follows that the appeal must be dismissed with
costs, including the costs of two counsel, and it is so ordered.
_____________________
L T C HARMS
DEPUTY PRESIDENT
APPEARANCES
APPELLANT/S A Subel SC (with him O Salmon SC)
Instructed by Werksmans, Sandton
Matsepes Incorporated, Bloemfontein
RESPONDENT/S: J Blou SC (with him C Bester)
Instructed by Deborah Mann Attorney, Johannesburg
Lovius Block Attorneys, Bloemfontein
1
Ewing McDonald & Co Ltd v M&M Products
Co
[1990] ZASCA 115
;
1991 (1) SA 252
(A) 256G-H.
2
Makhanya v University of Zululand
2010
(1) SA 62
(SCA)
paras 28-36 and 54 read
with
Estate Agents Board v Lek
1979 (3) SA 1048
(A) 1063F-G,
Steytler
NO v Fitzgerald
1911 AD 295
at
314-315, 346-347 and
Gcaba v Minister
for Safety and Security
2010 (1) SA
238 (CC).
3
Law of Evidence Amendment Act 45 of 1988
s 10(1).
4
">
4
C F Forsyth
Private
International Law
4 ed p 167 fn 64 and
65 for the cases.
5
Ewing McDonald & Co Ltd v M&M Products
Co
[1990] ZASCA 115
;
1991 (1) SA 252
(A) 259D-E, 260B-E.
6
Veneta Mineraria spa v Carolina Collieries
(Pty) Ltd
1987 (4) SA 883
(A)
893E-894B.
7
These rules are based on Voet 5.1.77. See
Rosa’s
Heirs v Inhambane Sugar Estates Ltd
1905
TH 11
;
Welgemoed and another NNO v The
Master
1976 (1) SA 513 (T) 522.
8
Hugo v Wessels
1987 (3) SA 837
(A) 851D-F, 856H-I.
9
Francois du Bois (ed)
Wille’s
Principles of South African Law
9 ed
pp 412-413, 419-425 (2007); C G van der Merwe
Sakereg
2 ed pp 36-47 (1989).
10
Spier Estate v Die Bergkelder Bpk
1988 (1) SA 94
(C) 98G-J.
Graham Austin
Private
International Law And Intellectual Property Rights: A Common Law
Overview
para 36 available electronically at
www.wipo.int
.
11
MV Snow Delta: Serva Ship Ltd v Discount
Tonnage Ltd
2001 (4) SA 746
(SCA)
paras 9-14.
12
Cornish & Llewelyn
Intellectual
Property
5 ed p 26 (2003).
13
Territoriality and Extraterritoriality in
Intellectual Property Law
electronically available at http://ssrn.com.
14
Norbert Steinhardt & Sons Ltd v Meth
[1961] HCA 33
para 7 (Australia);
Plastus
Kreativ v 3M
[1995] RPC 438
447 (UK);
Voda v Cordis Corporation
[2007] USCAFED 29
;
476 F.3d 887
(USA).
15
Victoria’s Secret Inc v Edgars Stores Ltd
[1994] ZASCA 43
;
1994 (3) SA
739
(A).
16
McDonald’s Corporation v Joburgers
Drive-Inn Restaurant (Pty) Ltd
[1996]
4 All SA 1
(A),
1997 (1) SA 1
(A).
17
Caterham Car Sales & Coachworks Ltd v
Birkin Cars (Pty) Ltd
[1998] ZASCA 44
;
1998 (3) SA 938
(SCA) para 20.
18
Society of Composers, Authors and Music
Publishers of Canada v Canadian Association of Internet Providers
2004 SCC 45
;
[2004] 2 SCR 427
para 56 (Canada).
19
Vagar (t/a Rajshree Release) v Transavalon
(Pty) Ltd (t/a Avalon Cinema)
1977 (3)
SA 766
(W) 769E. Compare
Appleton v
Harnischfeger Corporation
[1994] ZASCA 141
;
1995 (2) SA
247
(A) 257D-258D.
20
Christopher Wadlow
The
Enforcement of Intellectual Property in European and International
Law
p 11-14 (1998).
21
Memory Institute SA CC t/a Memory Institute v
Hansen
2004 (2) SA 630
(SCA) para 6.
22
Tyburn Productions v Conan Doyle
(1990) 19 IPR 455
;
Atkinson
Footwear Ltd v Hodgskin International Services Limited
(1994) 31
IPR 186
(NZ), both referred to in
Lucasfilm
para 157. See
also the views of Justice Gummow, ‘Introduction’ in
Rickett & Austin (eds)
International Intellectual Property
and the Common Law World
5 (2000) quoted by Prof Graham Austin
op cit
. The judgment in
KK Sony Computer Entertainment v
Van Veen
(2006) 71 IPR 179
(New Zealand) came to a different
conclusion by following
Pearce v Ove Arup Partneship Ltd
[1999] 1 All ER 769
but
Lucasfilm
held that
Pearce
had
been misunderstood.
23
At para 21.
24
At para 182 (iii) and (iv).
25
Lucasfilm
para
140 and 175.
26
Lucasfilm
para144.
27
Coin Controls v Suzo International
[1999]
Ch 33
at 44D-E. See also the similar views of Fawcett &
Torremans
Intellectual Property and
Private International Law
p 280-293
(1998).
28
See the references in fn 9.
29
Lucasfilm
para 177-181.
30
Compare
Sonia (Pty)
Ltd v Wheeler
1958 (1) SA 555
(A)
562A.
31
Lucasfilm para
179