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[1995] ZASCA 112
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South African Broadcasting Corporation v Pollecutt (98/94) [1995] ZASCA 112; 1996 (1) SA 546 (SCA); (21 September 1995)
CASE NO. 98/94
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE DIVISION)
In the matter between:
SOUTH AFRICAN BROADCASTING CORPORATION
Appellant
and
DAVID GEORGE POLLECUTT Respondent
CORAM: CORBETT, CJ, E M GROSSKOPF, F H GROSSKOPF,
HARMS, JJA et SCOTT, AJA
HEARD: 11 SEPTEMBER 1995
DELIVERED: 21 SEPTEMBER 1995
JUDGMENT
HARMS JA/...
2
HARMS JA:
This appeal relates to some of the intellectual property rights in the
television production Shaka Zulu. The question for decision
is the contractual
liability of the appellant, the South African Broadcasting Corporation ("the
SABC"), for payment of certain licence
fees to the respondent. The respondent is
a musician by occupation - he composes, performs and conducts
music.
It seems that the SABC commissioned the production of Shaka
Zulu during the latter part of 1984. On 27 November 1984 it entered into
three
agreements relating to the music for this production. Two were concluded with a
company, D & L Pollecutt Music and Publicity
Agency (Pty) Ltd ("the
company"), represented by the respondent. The third was with the respondent
personally. Nothing much turns
on the identity of the contracting party and I
shall assume for purposes of this judgment, as was done in the pre-trial
minutes,
that the contracts are all binding on the respondent personally. These
are the agreements:
3
[1] An appointment of the respondent as the composer and musical director
for the production of Shaka Zulu. He was to be responsible
for all work defined
by custom and practice to be associated with the duties of a composer and
musical director on a production of
this nature and scale. What the duties of a
musical director are, was not explained in evidence. It was a term of the
appointment
that the respondent would retain ownership of all his copyright in
and to all music composed by him, but he granted the SABC "the
perpetual right
to broadcast the music and to licence the broadcast of the music by third
parties without further compensation".
The total remuneration was to be R 30
000.
[2] A commission to provide the music for the production. The respondent
had to deliver to the SABC on a master tape music for ten
episodes of the
production. The music had to have an average length of 35 minutes for each
episode. His duties included the recording
and mixing of the music in 56
sessions of three hours each. For this purpose he had to employ and
4
remunerate, i a, a number of orchestras and a choir. His agreed fee was R
47 032. Of special importance to the litigation is clause
6 and it reads as
follows:
"Insofar as their contributions may constitute a performing right, you [the
company] hereby consent on behalf of all the performers
mentioned in clause 2
[the members of the different orchestras and the choir] hereof that the SABC may
record, broadcast and commercially
exploit their contributions to the PRODUCTION
[i e the television production .Shaka Zulu] without any further payment being
made
to you or any of the said performers."
I shall in
due course return to this clause. The company undertook further to
obtain the respondent's signature to the next document.
[3] A "composer's release form" was signed by the respondent. In it the
respondent in his capacity as composer granted to the SABC
the right to record,
broadcast and commercially exploit the production without any further
payment.
It will be immediately apparent that in circumstances like these there
are a number of different and distinct intellectual property
rights that have to
be taken into account. The first is the copyright of a composer in his musical
work (s 6
Copyright Act 98 of 1978
). The second is the copyright of the
author
5
of the lyrics in his literary work (also
s 6).
Then there is the
copyright in the
sound recording, that is the recording as embodied
on the master tape
(s 9).
There is also the copyright in the
cinematograph 51m
(s 8)
and that includes the
sounds embodied in the
associated sound-track
(s 1
s v "cinematograph film").
In the final
instance there are the rights of the performers involved, in this
case
the musicians and (presumably) the conductor. The rights of
performers are
created and protected by the Performers' Protection
Act 11 of 1967.
Shaka Zulu was a great success, not only as a television series but its
music struck a sweet chord. As a result of this the respondent
during May 1986
entered into two further agreements:
[4]
The first was dated 3 May 1986 and was with Angela Music Publishing Company
(Pty) Ltd ("Angela"). In it the respondent assigned
his literary copyright in
the title and lyrics ("words") as well as his musical copyright in his
compositions. They were identified
in the assignment with reference to the
sound-track of Shaka Zulu. An addendum, called a rider, was entered into some
five months
later. It recorded that one Barry Leitch had been
6
a co-writer of the music of 28 of the compositions concerned and that the
royalties in respect of them would be split equally between
the two writers. It
may be noted that the respondent was not the author of the title theme We are
Growing.
[5] Shortly afterwards the respondent signed a document on
a letterhead of the SABC entitled Consent. It is on this document that
the
respondent's cause of action in this case was based. Its terms are material and
are thus quoted in full:
"
CONSENT
I, THE
UNDERSIGNED,
DAVID GEORGE
POLLECUTT
IN MY CAPACITY AS MUSICAL DIRECTOR/ARRANGER/ARTISTE OF
THE MUSIC FOR THE TV SERIES 'SHAKA ZULU' (EXCLUDING THE TITLE THEME 'WE ARE
GROWING') HEREBY GIVE MY UNCONDITIONAL CONSENT TO THE
SABC ATTENDING TO THE
MARKETING AND DISTRIBUTION OF THE
MECHANICAL
PHONOGRAPHIC LICENCES OF:
CASETTES, SINGLE OR LONG-PLAYING VINYL RECORDS, COMPACT DISCS, VIDEO
DISCS, VIDEO TAPES OR ANY FUTURE FORMAT.
7
THIS CONSENT IS SUBJECT TO THE PROVISION THAT I SHALL RECEIVE FROM THE SABC
A ROYALTY OF 10% (TEN PERCENT) OF
90% (NINETY PERCENT) OF THE RETAIL SELLING PRICE WORLDWIDE OF ANY SUCH
AFOREMENTIONED RECORD SOLD."
It was common cause that
this document reflected the terms of an agreement between the SABC and the
respondent. Although the SABC,
through its legal representatives, during the
course of the trial feigned ignorance about the subject matter of this
agreement, it
was common cause during the appeal that it concerned the
respondent's rights as performer of the music of the original production
of
Shaka Zulu. It was also agreed between counsel that, contrary to the SABC's
plea, the agreement did not deal or purport to deal
with copyright whether in
the musical work or in a sound recording. The importance of this will become
apparent in the course of
this judgment.
Subsequent to the consent agreement [5], the SABC entered into an
agreement with BMS Publication (Pty) Ltd ("BMS") on 20 October 1986.
It licensed
BMS to manufacture and sell in all countries (excepting France) records derived
from the master tape of Shaka Zulu, in
other words, records containing
8
the original music as performed in terms of the commission agreement [2].
The
agreement with BMS stipulated that BMS was to be solely responsible for
the
fulfilment of all copyright obligations arising out of the manufacturing
and
selling of the licensed records; and BMS had to calculate and
pay out all
performers' or other royalties. The respondent was not a
party to this agreement.
He in fact objected to the appointment of
BMS as licensee, but was overruled
by the SABC. His concern proved
to have been well founded because BMS in
due course floundered and
failed to make payment to him or the SABC of the
amounts due in terms of the consent agreement [5]. The SABC
initially
recognised the respondent's entitlement to payment, but reneged when it
realised
that the amount of its indebtedness to the respondent could not be
recovered
from BMS. Hence the action by the respondent. His claim for an account
and
for payment of the agreed royalties was upheld by Leveson J in
the
Witwatersrand Local Division. After the trial judge had refused leave to
appeal,
leave was granted by this Court pursuant to a petition for
leave.
9
Leveson J gave six judgments in the course of the proceedings. He first
dismissed an exception raised by the SABC at the beginning
of the trial. The
SABC then applied for a postponement in order to file a new plea. That was
refused. The trial Judge was then required
to consider two special pleas and
they were dismissed. All this took place on 4 August 1992. The SABC subsequently
amended its plea
and after hearing some mainly inconsequential evidence, the
court on 6 August 1992 upheld the claim and ordered payment of part of
the
royalties (R 37 635,34) and the delivery of an account in respect of the
balance. Thereafter the parties settled the accounting.
This produced a further
R 195 727,13 in royalties due. Leveson J made the settlement an order of court
and, after having considered
an application for a special order as to costs,
ordered the SABC to pay party and party costs. This occurred on 25 November
1992.
The sixth order was the refusal of leave to appeal on 15 September 1993.
In its petition to this Court for leave to appeal, the SABC
did not disclose the
existence of the judgment and order of 25 November. It only applied for leave in
respect of the dismissal of
the special pleas on 4 August and
10
the partly interim order of 6 August. As a result, the leave that was
granted,
was leave against these two orders only. It is not clear
whether this limited
appeal can affect the order of 25 November. It
is also not clear whether it is
competent to appeal against an order
that has, in effect, been superseded by a
later order. Since these
matters were not argued and in the light of my
conclusion that the
appeal can, in any event, not succeed, I shall assume that
there is
a proper appeal before this Court.
As indicated, the respondent's
cause of action was the consent agreement [5]. In the particulars of claim
reference was also made
to an antecedent oral agreement but I am unable to
perceive a difference between the terms of the oral and those of the written
agreement.
The argument that the respondent should have been non-suited because
he had not given evidence relating to the oral agreement, has
no substance. The
same applies to the argument that he should have replicated to the SABC's
pleaded interpretation of the admitted
written contract. As I read the
pleadings, it was common cause that document [5] was the sole memorial of the
parties' contract.
11
It was also submitted on behalf of the SABC that the consent agreement
[5] did not reflect any positive obligation to pay royalties
but that it was
simply a conditional consent. I disagree. The document states explicitly in its
first paragraph that the consent
was being given unconditionally. The use of the
phrase subject to in the last paragraph may be indicative of a suspensive
condition
but that is not necessarily so (cf Pangbourne (Pty) Ltd v Gill &
Ramsden (Pty)Ltd)
1.
In the present instance the intention of the
parties is clear: the consent was given to enable the SABC to attend to the
marketing
of licences for sound recordings. Once licences had been entered into,
the sale of recordings would have followed. Royalties were
payable on the retail
selling price of every record sold. It makes commercial nonsense of the
agreement to argue that, in these circumstances,
the consent was conditional
upon the receipt of royalties and that, if the SABC had failed to pay the agreed
royalties, the consent
would have fallen away and that the respondent had then
to rely on his intellectual property rights and not on the agreement. It
may
also be mentioned
1
An unreported judgment of this Court delivered on 21
September 1995.
12
in conclusion on this aspect of the case that this argument flies in the
face of an express admission in the plea namely that the
SABC had undertaken, in
return for the licence, to pay the agreed royalties.
I have
mentioned the fact that the consent agreement dealt with the performing rights
of the respondent in the sound-track of the
original production. It is common
cause that he had acted as conductor and also as a musician in the production of
the music. The
Performers' Protection Act provides, i a, that a performer of a
literary or musical work must consent to the making of a fixation
of his as yet
unfixed performance (s 5(l)(b)). He must also consent to the making of a
reproduction of a fixation of his performance
if the reproduction is made for
purposes other than those in respect of which he had given his consent
originally (s 5(l)(c)(ii)).
The two remaining defences to the respondent's claim as argued before us
are in part based upon the provisions of this Act. The first
defence is the
alleged invalidity of the consent agreement [5] because of the failure of a
common assumption. The second and alternative
defence is the exceptio
non
13
adimpleti contractus. The basis for these defences is, according to the
argument, that the respondent was, when this agreement was
being concluded, not
possessed of any performer's rights which could have formed the subject of the
grant of a licence. That was
not the basis of the defences as reflected in the
plea as amended in the course of the trial or considered by the trial Judge.
In
the plea in its final form it was alleged (a) that the copyright
in the sound
recordings referred to in the agreement had vested at the relevant time
in either
the SABC or in Angela; (b) that the agreement had been entered into under
the common assumption that that copyright had vested in
the respondent; (c) that
because the assumption was false the agreement was void; and (d) that, in the
alternative to (b) and (c),
it had been the contractual obligation of the
respondent to grant to the SABC a licence, but, due to (a), it had failed to do
so.
If my understanding of the SABC's new case is correct, these defences
remained intact at the appeal stage save that the reference
to copyright has to
be replaced with a reference to a performer's rights under this Act. No
amendment of the plea was moved to reflect
the new case. The presentation of a
case on appeal in this
14
manner is, to say the least, to be deplored (AJ Shepherd (Edms) Bpk v
Santam Versekeringsmaatskappy Bpk
1985 (1) SA 399
(A)).
Before
considering these defences any further, it is convenient to deal with the
reasons proffered by the SABC as to why the respondent
had no residual rights to
dispose of by way of a licence agreement. The first argument on behalf of the
SABC in this regard was that
in clause 6 of the commission agreement [2] the
respondent had given his consent to the fixation of his
performance. The sale of phonograms containing the music so
performed and fixed was covered by the terms of that consent. Accordingly,
so
the argument went, the respondent had no residual performer's rights that could
have formed
the subject of a licence.
The quoted clause 6 of the commission agreement contained a consent
relating to the recording, broadcast and commercial exploitation
of the
performers' contribution to the production. I have pointed out that the
production was the television series Shaka Zulu. It
contained nearly six hours'
music. The purpose of the consent was to enable the SABC to screen on
15
television that audio-visual production. Its purpose was not to enable it
to market recordings of music. It had evidently not been
contemplated at the
time of the commission that the series would be such a success that a demand
would have been created for recordings
of the music on the sound track. In other
words, with regard to the wording of s 5(l)(c)(ii), the reproduction of the
music for the
purpose of the sale of records is a reproduction of the fixation
of the performance for a purpose other than the purpose that had
been the
subject of the consent contained in the commission agreement.
It is
also not clear whether clause 6 applied to the respondent's personal
performance. That depends on whether he had been a performer
"mentioned in
clause 2" of the agreement. There was no evidence coupling his performance to
clause 2. In an attempt to meet this
problem, reference was made on behalf of
the SABC to s 6(1) of the Performers' Protection Act. It states that where
several performers
as a group take part in the same performance, it suffices if
the consent required under s 5 is given by, say, the manager of the
group. This
section does not provide an answer because the
16
consent given in clause 6 was not unqualified. It had only been given on
behalf of the performers mentioned in clause 2 and not on
behalf of any other
performer.
All this is not the end of the inquiry. The Performers'
Protection Act provides for exceptions to s 5, namely for instances where
the
consent of a performer is not required for the fixation or the reproduction of a
fixation of his performance. There is a fair
deal provision, e g, the use of a
fixation for purposes of private study (s 8(2) and (4)). Special arrangements
are made for the
SABC (s 8(3)), but they have no application in this case. The
most far reaching exception is to be found in s 8(1). It states that
if a
performer consents to the incorporation of his performance in a visual or
audio-visual fixation, s 5(1) "shall cease to apply
in respect of the
performance so fixed". The simple and attractive argument of the SABC in this
regard took as a starting point the
fact that the respondent had consented to
the incorporation of his performance in an audio-visual work namely the
television series
Shaka Zulu. His consent was thus not required for the
reproduction of his performance because s
17
5(l)(c)(ii) had ceased to apply in respect of this performance. He
consequently had no remaining rights to license.
S 8 is not easy to
understand. Ss (4) appears to be tautologous in the light of ss (2). Taken
literally, ss (1) does not make sense,
especially if read with s 5(l)(b). It is
only after a consent in terms of the latter provision had been given to the
fixation of
a performance in a visual or audio-visual work that the former comes
into operation. Stated slightly differently, s 8(1) has as its
starting point
the consent of the performer to a fixation given in terms of s 5(l)(b). How it
can cease to apply, I fail to understand.
Nor can s 5(l)(c)(i) and (iii
)2
cease to apply if a consent as understood by s 8(1) has been given. Both
these paragraphs can only apply if a fixation was made in
accordance with
any
2
These read:
"Subject to the
provisions of this Act, no person shall without the consent of the performer
—
(a)
(b)
(c) make a reproduction of a fixation of a performance of such performer
—
(i) if the original fixation, other than a fixation excluded by section 8
from the necessity for
obtaining the consent of the performer, was itself made without his
consent; or (ii) ...; or
(iii) if the original fixation was made in accordance with the provisions of
section 8, and the reproduction is made for purposes
not covered by those
provisions."
18
sub-section of s 8 (and not only ss (2) and (3) as was argued). As far as
the present proceedings are concerned, I shall assume that
as a result of s 8(1)
the respondent's consent was not required for the reproduction of his
performance fixed in the television production.
That leaves for consideration
whether the records contemplated by the consent agreement [5] were reproductions
of that performance.
I think not. It was for instance common cause between the
parties that the original sound-track of the production had been mixed
stereophonically for the purposes of the recordings. The undisputed evidence of
the witness O'Hara was further that one had to edit
and remix the original music
made for the television series in order to make a commercially viable gramophone
record. It would therefore
seem that the performance as fixed originally was not
the subject of the agreement (s 5(l)(c)(iii)). S 8(1) would then not be of
application. I do realize that this interpretation may, to an extent, emasculate
s 8(1). It is, however, a provision which must be
interpreted restrictively
because it limits the rights granted to performers under s 5. In the
19
case of a conflict with s 5, it must yield to the clear wording of s 5,
especially that of s 5(l)(c)(iii).
There appears to be another
reason why s 8(1) is not germane to the issues in this case. It is subject to
the overriding provision
of s 13 which recognises the supremacy of the freedom
to contract. According to it a performer may, notwithstanding the provisions
of
the Act, enter into any contract with any user or prospective user of his
performance in respect of the use of his performance.
If it is assumed that the
respondent had no residual rights by virtue of s 8(1), it remained permissible
for him to enter into the
consent agreement [5] which gave him rights not
recognised by s 8(1). This agreement would then by implication have returned to
him
what had been taken away by the commission agreement and by s 8(1). That is
permitted by s 13.
Consideration must next be given to the interaction between the
Performers' Protection Act and the
Copyright Act. This
arises because of yet
another argument of the SABC as to why the respondent had no performer's rights
to license. According to this
submission the SABC was the owner of the
20
copyright of the sound recording. (The special plea and other parts of
the main plea had it differently - according to these it was
Angela. That is
neither here nor there.) It had, as a consequence, the exclusive right to make
or authorize the making of a record
embodying the sound recording
(s 9
of the
Copyright Act). The
recognition of the respondent's right to his performance
will nullify that right. The
Copyright Act is
of a later date than the
Performers' Protection Act and it has, in the result, impliedly repealed the
rights of performers as set
out in the latter Act. I consider the argument to be
specious. It was agreed, according to the pre-trial minutes, that although the
SABC had been at the relevant time the owner of the master tape itself, it had
not been the owner of the "copyrights" in and to the
production. Ownership of a
tape and ownership of the copyright in what has been recorded on the tape are
separate and distinct rights.
There was also no evidence that Angela had any
sound recording rights. Its agreement [4] with the respondent certainly did not
relate
to such rights. That ought to put to rest the factual basis of the
argument.
21
Its legal foundation is also without any redeeming features. The
Performers' Protection Act provides in s 2 that the rights created
by the Act in
no way restrict or affect the rights provided for by any other law relating to
copyright in literary and artistic works.
These are defined in s 1 to include
musical, dramatic and dramatico-musical works. A sound recording does not fall
within either
category. When this Act was enacted, copyright was regulated by
the Copyright Act 63 of 1965. It recognised copyright in sound recordings
(s
13). In essence the protection under the 1978 Copyright Act is the same. The
only difference is one of legal philosophy. Under
the 1978 Act copyright is
defined as an exclusive right to do or authorize others to do certain acts.
Under the 1965 Act copyright
restricted others from doing those self same acts.
I fail to understand how a change in legal or legislative philosophy can, on its
own, repeal a different statute.
The reason why the Performers' Protection Act does not refer to sound
recordings in this respect, may have to do with its genesis.
Copyright is
regulated by the Berne Convention for the Protection of Literary and
Artistic
22
Works. It does not accord copyright to sound recordings. Our legislature
has, on the other hand, done so since the promulgation of
the Patents, Designs,
Trade Marks and Copyright Act 9 of 1916 (3rd Schedule par 19). The Performers'
Protection Act was intended
to give effect to the International Convention for
the Protection of Performers, Producers of Phonograms and
Broadcasting
Organizations of Rome. See s 4. It had no need to deal
with phonograms
because the Copyright Act had already catered for them. S 2 of the
Performers'
Protection Act was based upon art 1 of the Rome Convention. This article
states
that protection granted under the Convention shall leave intact and shall
in no
way affect the protection of copyright in literary and
artistic works. The
Convention does not define these terms and may either have left it to
domestic
law to circumscribe or may have intended to give the terms their meaning
as
defined in the Berne Convention. The recognition of the rights of
performers
may, in the absence of such a provision, cause a tension between the
rights of
the persons whose works are being performed and those who perform
them.
The copyright in the literary or artistic work precedes the performance
and any
23
rights that can arise from it. The right of the performer can also not
exist
without the literary or artistic work. The same applies to the
rights (copyright
or otherwise) of the producer of a sound recording
or phonogram. That is why
the rights of the Rome Convention are
sometimes called neighbouring or
secondary rights. The rights of the
producer of a phonogram are, similarly,
dependent upon the rights of
the performer because without the performance
there can be no
phonogram.
It follows from this excursion that the SABC has, in my view, failed to
establish that the respondent had no right to
license.
As far as the defence of common
assumption is concerned, the SABC had to prove counsel's new allegation that
both parties had entered
into the agreement on the common assumption that the
respondent was the owner of the performer's right when the consent agreement
was
concluded. No evidence was led at the trial by any party relating to any
assumption on the part of any of the parties. In spite
of this, and ever
hopeful, counsel submitted that the common assumption was apparent from the
words of the agreement itself. I am
24
not persuaded. The terms of the agreement do not justify, on a balance of
probabilities, the conclusion that it had been concluded
on that or any other
assumption. It may be that it had been concluded because the parties were
uncertain as to the scope of their
rights. It may also be that they had wished
to amend the effect of the commission agreement especially in the light of the
unexpected
commercial success of the production. It may also have been the
result of a unilateral mistake. Each of these possibilities is at
least as
probable as the assumption postulated by counsel.
In relation to the
exceptio non adimpleti contractus it was the case of the SABC at the appeal
stage that the consent agreement had
placed an obligation upon the respondent to
grant to the SABC a licence in respect of his performer's rights. Since he had
not in
law been possessed of them, he had been unable to comply with his part of
the bargain and he could, in the result, not claim performance
from the SABC.
The argument is based upon a misconception relating to the terms of the consent
agreement. It placed one duty and
one duty only upon the respondent and that was
to give his consent.
25
That he did by signing the document. He had no other obligation relating
to a prestation and it seems to me that the appeal to the
principles of the
exceptio is totally unfounded.
This means that the appeal has to be
dismissed. Respondent's counsel asked for a special order as to costs namely on
the scale of
attorney and client. The same request was made in the court below.
Leveson J, on this aspect of the case made some pointed remarks
about the
conduct of the SABC in the proceedings. Prior to the litigation it had
recognised its liability but informed the respondent
that everything possible
would be done to extend the date for payment. It seemed to the learned Judge
that in some respects the conduct
of the SABC had been "wilfully obstructionist"
and "high-handed". He nevertheless refused to comply with the request. In order
to
be able to interfere with his discretion it was necessary for the respondent
to cross-appeal and to show that the discrection had
not been exercised
properly. Neither had been done and the scale of the costs order must remain as
it was.
26
I wish to say something in conclusion about the record. It contains a
large number of inconsequential documents. There is, for instance,
the record of
an application for discovery. There are discovery affidavits and other formal
documents. There are pleadings which
have been replaced and had nothing to do
with the case. The application for leave to appeal appears in three forms. The
six judgments
were bound in at random. The unacceptable habit of producing a
bundle of documents for the trial court without establishing its status
and then
reproducing it for no good reason for purposes of appeal, is amply exemplified
by this record. I have already referred to
the misleading petition for leave to
appeal. This must serve as a warning to those who are responsible for the
preparation of records
on appeal that orders de bonis propriis may follow if the
interests of the Court and of their own clients are not served because
of the
failure to file acceptable and sensible records.
27
The appeal is dismissed with costs.
L T
C HARMS JUDGE OF APPEAL
CORBETT, CJ )
E M GROSSKOPF, JA ) Agree
F H
GROSSKOPF, JA )
SCOTT, AJA )