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[2009] ZASCA 75
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Feldman NO v EMI Music SA (Pty) Ltd/ EMI Music Publishing SA (Pty) Ltd (268/2008) [2009] ZASCA 75; 2010 (1) SA 1 (SCA); [2009] 4 All SA 307 (SCA); 2009 BIP 294 (SCA) (1 June 2009)
Links to summary
THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case
No: 268/2008 & 269/2008
DAVID FELDMAN N.O.
Appellant
and
EMI MUSIC SA (PTY) LTD
/
EMI MUSIC PUBLISHING
SA (PTY) LTD
Respondent
Neutral citation:
Feldman
v EMI Music
(268/2008)
[2009] ZASCA 75
(1 June 2009)
Coram:
Farlam,
Brand, Maya, Mhlantla JJA and Hurt AJA
Heard:
22
May 2009
Delivered:
1
June 2009
Summary:
Co-author
of work of joint authorship not entitled to sue for all damages
resulting from infringement without joining other co-authors
or
making out a case for such entitlement.
___________________________________________________________
ORDER
On appeal from:
Witwatersrand
Local Division (Jajbhay J sitting as court of first instance.)
1
The
appeal against the upholding of the first exception is dismissed.
2 Save as
set out in paragraph 1, the appeal succeeds.
3 The respondent is ordered to pay the appellantâs
costs of appeal, such costs to include the costs of two counsel.
4 The order of the court below is altered to read:
'
(a) The
first exception is upheld.
(b) Paragraphs 3 to 12 of the particulars of claim are
struck out.
(c) The plaintiff is given leave to amend the
particulars of claim by notice of amendment delivered within 21 days
of the date of
this order.
(d) Save as ordered in paragraph (a), the exceptions are
dismissed.
(e) The plaintiff is ordered to pay
the costs of the exceptions.'
5 The period of 21 days in para 4 (c) is to run from the
date of the delivery of this judgment.
JUDGMENT
HURT AJA
(Farlam, Brand, Maya and Mhlantla JJA concurring):
[1] The appellant, who is the executor in the deceased
estate of the well-known singer, Brenda Fassie, instituted two
actions in
the Witwatersrand Local Division of the High Court,
claiming relief based on copyright. The defendant in the first action
(and
the respondent in the first of the appeals) is EMI Music
Publishing (Pty) Ltd ('EMI Publishing') and, in the second, EMI Music
(Pty) Ltd ('EMI Music'). The respondents delivered notices to cure
vagueness and embarrassment in terms of Rule 23(1) of the Uniform
Rules of Court and, no response to these notices having been received
from the appellant, notices of exception were duly delivered.
The
cases were dealt with as one by Jajbhay J for the purposes of
deciding them. The learned judge upheld the exceptions with costs
and
gave the appellant leave to amend the particulars of claim within 21
days. This appeal comes before us with the leave of the
court below.
The Infringement Claims ('The
First Exception')
.
[2] The particulars of claim in each
matter commenced with a claim for damages based on copyright
infringement. The appellant claimed
to have joint ownership of the
copyright in 157 works listed in an annexure to the summons. With
four exceptions
1
the works listed (being music and lyrics for so-called 'pop songs')
are works in which the late Ms Fassie collaborated with others
to
compose them. They are accordingly works of 'joint authorship' as
defined in s1 of the Copyright Act 98 of 1978 ('the Act').
Having
made the necessary averments to establish that the works are entitled
to copyright protection, the particulars of claim
in the EMI
Publishing action proceed as follows:-
'4. From and
subsequent to 1980, the Defendant continuously, until the present
time, without the licence of the Plaintiff or any
of the persons
referred to in paragraph 3.1.1.1 above (
sc
the
joint authors), and whilst the exclusive right to do so vested in the
Plaintiff and the said persons:
[
reproduced,
published and made adaptations of the works and purported to grant
licences to third parties to perform similar acts]
2
5. In the premises, the
defendant, during the said period, infringed the copyright in respect
of the said works, referred to in
paragraph 3 above.
6. The defendant at all relevant
times bore knowledge of the fact that such conduct constituted an
infringement as aforesaid.
7. The Defendant received
royalties for performing the acts set out in paragraph 4 supra.
8. The damages suffered by the
Plaintiff constitute the reasonable royalty that would have been
payable by a licensee in respect
of the work.
9. The plaintiff has no
knowledge of the extent of the royalties the Defendant received as
aforestated.
10. In order to determine the
amount of a reasonable royalty, having regard to the provisions of
section 24(1B)
of the
Copyright Act, the
Plaintiff will seek an order
directing that an enquiry be held.'
[3]
The
relief sought in respect of the infringement claim is an order for
damages equivalent to the royalties which would reasonably
have been
payable by a licensee of the copyright and an enquiry aimed at
establishing the amount of such royalties. There is a
further prayer
for what are sometimes referred to as 'punitive damages' based on the
provisions of s 24 (3) of the Act.
3
[4] The particulars in the EMI Music action are almost
identical to those set out above, save that the date of inception of
the
alleged acts of infringement in paragraph 4 is 1993, the words
'and/or fees' appear after the word 'royalties' in paragraph 7 and
the words 'and that the defendant be ordered to pay to the Plaintiff
the amount found to be due pursuant thereto' appear after
the words
'an inquiry to be held' at the end of paragraph 10. These variations
are not material to the issues raised by the first
exception in
either action.
[5] The notices of exception taken to the claims based
on infringement, after recounting the nature of the copyright relied
upon
by the appellant, state that:
'4. The claims pursued by the
plaintiff in this action are claims founded upon copyright ownership.
5. The
plaintiff has not indicated that any of the joint authors listed in
Annexure A to the particulars has ceded or otherwise
made over their
copyright to Fassie. It is accordingly unclear on what basis the
plaintiff has the requisite
locus
standi
to sue on his own.
6. The
particulars are accordingly vague and embarrassing,
alternatively
lack averments necessary to sustain the cause of action, and the
defendant is accordingly unable to plead thereto.'
This will be referred to as 'the first exception'.
[6] Before dealing with the parties' respective
contentions, it will be convenient to refer briefly to the law
concerning joint
authorship of works protectable by copyright.
Section 21(1)(a) of the Act states that:
'Subject to the provisions of
this section, the ownership of any copyright conferred by section 3
or 4 on any work shall vest in
the author or, in the case of a work
of joint authorship, in the co-authors of the work.'
Section 3 of the Act confers
copyright on,
inter
alia,
any literary
or musical work of which the author or any one of the joint authors
is a South African citizen or is domiciled or
resident in the
Republic at the time that the work is composed. It is not in dispute
that the late Ms Fassie and her co-authors
in this case qualify under
the section. Although subsections 22(1) and 22(5) equate copyright to
movable property for the purpose
of dealing with transmission of the
rights by way of 'assignment, testamentary disposition or operation
of law', there are features
of co-ownership of copyright which differ
from co-ownership of movables. Thus, for instance, one co-owner of
copyright does not
have the right, without the consent of the
other(s), to exploit the rights comprising his copyright.
4
As to the proportions in which individual co-authors are entitled to
share in the proceeds of the copyright, much will depend,
in each
instance, on the basis on which the co-authors have agreed to
collaborate to produce the work. It is clear from the definition
of a
'work of joint authorship',
5
however, that in the absence of agreement between the co-authors, the
share of each will be an undivided one. In this regard
Copinger
and Skone James
6
suggest that the circumstances surrounding the creation of the work
will generally be relevant to a decision as to the respective
share
for which each co-author qualifies. In the absence of clear contrary
indications as to the parties' intention, it is suggested,
the
co-authors will each be taken to hold an equal, undivided share as
'tenants in common'. It seems that this is the position
under the
Act, but it is not necessary for the purposes of this judgment to
investigate this aspect further. What is clear, and
what was not in
dispute in argument before us, is that one co-author cannot
ordinarily claim the whole proceeds of any exploitation
of a work of
joint authorship. It must follow that, in invoking the provisions of
section 24(1A) of the Act as a basis for quantifying
his or her claim
for damages, a co-author suing individually for damages for
infringement or their surrogate under the section
will be restricted
to the portion of the 'reasonable royalty' to which he or she would
have been entitled if the work had been
duly licensed.
[7] The debate about the first
exception in the court below appears to have focused on a contention
that the infringement claims
were excipiable because the appellant
had not joined the joint authors in the action. Jajbhay J referred to
various authorities
to the effect that a joint owner should join his
co-owner(s) in litigation concerning the joint property. As authority
for the
proposition that non-joinder may be raised as a matter for
exception, the learned judge referred to
Collin
v Toffie
1944 AD
456
, and
Smith v
Conelect
1987 (3)
689 (W). Apart from noting that Tindall JA in
Collin
stated that a point of non-joinder may be taken on exception, but
only if it is expressly referred to in the exception,
7
it is not necessary to consider whether the decision by Jajbhay J of
the first exception on the basis of joinder was correct in
law. An
excipient is obliged to confine his complaint to the stated grounds
of his exception. As in
Collin
,
the exceptions here contain no mention of non-joinder. They
accordingly fell to be decided on the grounds taken, namely that
the
particulars did not contain averments which founded the claim for
relief. Nor, in arguing the appeals, did counsel for either
party
present argument based on the ground of non-joinder.
[8]
Mr
Gautschi
, who
appeared with
Mr
Smit
for the
appellant, submitted that, on a fair reading of the particulars of
claim, it was implicit that the plaintiff was only
claiming his pro
rata share of the 'reasonable royalty' contemplated in section
24(1A). I think that such an interpretation of
the particulars would
involve more than just a 'fair reading' of the claims â it would
involve interpolating presumptions and
a measure of speculation into
the particulars. On the basis set out in para 7, a plaintiff will not
be entitled to the whole of
the 'reasonable royalty' accruing from a
work of co-authorship unless, at the time of the creation of the
work, there was an agreement
between the co-authors that the
plaintiff was to be entitled to all the fruits of the work or, of
course, unless the plaintiff
had taken cession of the rights of his
co-author(s). The matter is complicated in a case such as this where
a substantial number
of the works are alleged to be the product of
more than two authors. The short answer to the question raised by the
exception is
simply that the averments in the particulars of claim,
read fairly, are silent as to the basis upon which the plaintiff
contends
that he is entitled to the 'damages' which he claims. As to
the claim for 'punitive damages', I consider that such damages would
ultimately have to be assessed as a lump sum figure which would have
to be shared pro rata by the co-authors. The defendant in
this
situation would be exposed to substantial prejudice if he were to be
ordered to pay the plaintiff the total amount of such
damages but
still remain exposed to a similar claim by one or more of the other
co-authors. The absence of averments relating to
the plaintiffs share
of the copyright accordingly has the effect of rendering the claim
for 'punitive damages' excipiable as well,
on the basis submitted in
the exceptions..
The Exceptions Based on Vagueness
('The Second Exception').
[9] Each defendant relied upon an exception based on the
contention that the claim for damages was vague and embarrassing for
want
of particularity as to the royalties allegedly received by the
defendants from the acts of infringement. (These will hereinafter
be
referred to as 'the second exception' in each case.) Jajbhay J upheld
these exceptions. In response to the submission on behalf
of the
plaintiff that s 24(1B) of the Act expressly provides for an enquiry
as to what would be a reasonable royalty 'for the purposes
of
determining the amount of damages', the learned judge said:
'
Section 24
(1B) of the
Copyright Act contemplates
and permits an enquiry into
the quantum of damages only, and not into the existence of an act of
infringement. Proof of infringement
of copyright, in respect of which
the plaintiff bears the
onus
,
is a pre-requisite to any entitlement to invoke the enquiry
provisions of
section 24
(1B). It is at the level of proof of
infringement that the plaintiff's particulars fail. Consequently, the
provisions of
section 24(1B)
offer no assistance to the plaintiff
against this exception.'
There was no basis, in the
circumstances of these cases, to assess the appellant's prospects of
proving wh
at is
alleged. The appellant alleged that the respondent, in each action,
received royalties from the acts of infringement and that
he has no
knowledge of their extent.
Section 24(1B)
was obviously inserted into
the Act to cover just such a contingency. I may say that
Mr
Liebowitz
, for the
respondents, wisely did not press his contentions in this regard with
any discernible degree of enthusiasm. The appeal
against the
upholding of the second exception in each case must therefore
succeed.
Mutually Contradictory Averments
('The Third Exception')
.
[10]
The
third basis upon which the exception was framed in each case was the
mutually contradictory allegations concerning the current
ownership
of the copyright. In the EMI Music matter, after setting out, in
paras 1 to 12, the claim based on infringement, the
particulars
contain a second claim, not pleaded in the alternative, in which the
appellant relies on the conclusion by Ms Fassie
of a number of
so-called 'performance agreements'. The claim is that EMI Music
failed in its obligations, in terms of these agreements,
to render
regular, accurate and proper accounts of what it had received and
what was due to Ms Fassie and her estate. The notice
of exception
alleged that the appellant's claim, in para 3 of the particulars, to
ownership of the copyright and the allegation
in para 12 that there
were no licensees of the works was inconsistent with the contention
that Ms Fassie had entered into what
were effectively assignments
and/or licensing agreements. This exception was upheld by the court
below but abandoned by EMI Music
shortly before the appeal was
argued. In the EMI Publishing action the claim for contractual
royalties was specifically pleaded
in the alternative to the
infringement claim. Jajbhay J held that the particulars were vague
and embarrassing and that EMI Publishing
was prejudiced thereby
'more
particularly in that the defendant is unable to know whether to come
to court to meet a case based on ownership of copyright
vesting in
the plaintiff, or to meet a case based on ownership of copyright
vesting in the defendant, and a consequent claim for
royalties and a
statement and debatement of account. These two claims are mutually
destructive of one another . . .'
.
[11]
It
is not necessary to refer to authority for the proposition that a
plaintiff is entitled to rely on mutually contradictory averments
in
his particulars of claim, provided that it is clear from the manner
of pleading them that he is only relying on the one in the
event that
the other is not sustainable. In this instance one might well have
expected that the claim based on contract would be
relied on as the
main claim and that the claim for damages would be pleaded in the
alternative, eg in the event of the claim on
contract failing. But
the circumstance that the contractual claim is pleaded in the
alternative to that for infringement damages
does not detract from
the fact that it is clear to the reader of the particulars that the
claims are relied upon in the alternative.
That the defendant will be
required to come to court to meet one of two alternative claims is
certainly no basis for a finding
that the defendant is embarrassed or
prejudiced. This exception should accordingly have been dismissed.
[12] In the result the appeals
succeed only insofar as the second and third exceptions are
concerned.
Mr
Leibowitz
submitted
that since both parties had had a measure of success in the appeal,
there should be no order as to the costs in this
court. However, it
was necessary for the appellant to come to this court to have the
second and third exceptions set aside and
on that basis the appellant
should have the indemnity of a costs order.
[13] In each case, the following
order is made:
1. The appeal against the upholding
of the first exception is
dismissed.
2. Save as is set out in paragraph 1,
the appeal succeeds.
3. The respondent is ordered to pay the appellantâs
costs of appeal, such costs to include the costs of two counsel.
4. The order of the court below is altered to read:
(a) The first exception is upheld.
(b) Paragraphs 3 to 12 of the particulars of claim are
struck out.
(c) The plaintiff is given leave to amend the
particulars of claim by notice of amendment delivered within 21 days
of the date of
this order.
(d) Save as ordered in paragraph (a),
the exceptions are dismissed.
(e) The plaintiff is ordered to pay the costs of the
exceptions.
5. The period of 21 days in para 4(c) is to run from the
date of delivery of this judgment.
____________________________
NV HURT
ACTING JUDGE OF APPEAL
Appearances:
For Appellant:
JR
Gautschi SC
M Smit
Instructed by:
Feldman & Nance Kivell
Johannesburg
Lovius Block Bloemfontein
For Respondent:
David
Leibowitz
Instructed by:
Rosin Wright Rosengarten Johannesburg
Claude Reid Inc Bloemfontein
1
In which Ms Fassie was stated to be the sole
composer/author of the music and lyrics.
2
This is a précis of the detailed allegations of conduct which
constituted copyright infringement.
3
'Where in an action under this section an infringement of copyright
is proved or admitted, and the court having regard, in addition
to
all other material considerations, to
(a) the
flagrancy of the infringement; and
(b) any benefit shown to have accrued to the defendant by reason of
the infringement,
Is
satisfied that effective relief would not otherwise be available to
the plaintiff, the court shall in assessing damages for
infringement
have power to award such additional damages as the court may deem
fit.
4
O H Dean
Handbook of South African Copyright Law
p1-30A; K
Garnett, G Davies, G Harbottle
Copinger and Skone James on
Copyright
15 ed p 288.
5
'
work of joint authorship
means a work produced by the
collaboration of two or more authors in which the contribution of
each author is not separable from
the contribution of the other
author or authors'.
6
Op cit
pp 287 to 288.
7
p 467.