England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2A 2LL
		7 June 2013

1. LORD JUSTICE LAWS: This is an appeal by way of case stated against the decision of the South & West Devon Justices sitting at Plymouth on 4 September 2012 by which they dismissed three informations laid against the respondent alleging offences contrary to section 297(1) of the Copyright, Designs and Patents Act 1988 ("the CDPA"). Section 297(1) provides:

"A person who dishonestly receives a programme included in a broadcasting service provided from a place in the United Kingdom with intent to avoid payment of any charge applicable to the reception of the programme commits an offence and is liable on summary conviction to a fine not exceeding level 5 on the standard scale."

2. The respondent was the premises licence holder and designated premises supervisor of the Friary Vaults Club in Plymouth. Each of the informations alleged that the respondent dishonestly received at the club a programme, namely a BSkyB TV broadcast of a Premiership football match

"... provided from a place in the United Kingdom, with intent to avoid payment of a charge applicable to the reception of that programme, namely payment of a fee in accordance with a non domestic viewing arrangement. Contrary to section 297(1)..."

3. The first information related to the Stoke City v Chelsea match on 14 August 2011; the second to the West Bromwich Albion v Manchester United match, also on 14 August 2011; and the third to the Liverpool v Manchester United match on 15 October 2011. As the case stated recounts at paragraph 2 the proceedings were initiated by solicitors instructed by the Federation Against Copyright Theft Limited ("FACT") by summons on 9 February 2012. The trial took place on 3 and 4 September 2012. We have the magistrates' court's reasoned judgment as well as the case stated to which the judgment was annexed. I will take the facts from the case stated. The magistrates state as follows:

"8. The court found that Mr Ashton was the Premises Licence Holder and Designated Premises Supervisor for the Friary Vaults Social Club in Plymouth. The Social Club is a members' only establishment.

9. Mr Ashton had entered into a non domestic television contract with B/Sky/B to show its Sky Sports Live programmes in the licensed area of the Friary Vaults between the following dates:

• 23rd July 2004 - 20th July 2006

• 10th August 2007 - 16th March 2010

The contract was terminated on each occasion by B/Sky/B because of non payment of the non domestic monthly subscription fee.

10. Acumen investigators visited the Friary Vaults on the following dates:

• 2007 - Mr Minchinton attended to advise on the requirement to have the correct contract to show Sky Sports Live programmes in the non residential area of the premises.

• 14th April 2010 - visit by Mr Shaddick which was followed by a warning letter outlining the requirement to have the correct contract to show B/Sky/B programmes in the non residential areas.

• 14th May 2010 - Mr Minchinton gave a presentation to Miss Johnson (an employee of Mr Ashton) of the B/Sky/B 'Key Facts' document. On 10th June 2010 a copy of the 'Key Facts' document was sent to Mr Ashton by recorded post.

• On 26th October 2010, 20th November 2010 and 16th January 2011 further visits took place and Sky Sports was being shown on televisions and projector screens within the licensed area.

11. It was accepted on the relevant dates referred to within the Informations [that] televisions and projectors, in the licensed area of the Friary Vaults, were showing pictures of premiership football games which B/Sky/B had exclusive rights to show. It was further accepted that the broadcasts originated from the United Kingdom. The pictures seen on the screens did not have the logos which would indicate that they were being received under a commercial contract with B/Sky/B.

12. Further, it was accepted that there was not a non domestic contract between B/Sky/B and Mr Ashton at the time of the alleged offences.

13. Mr Ashton did have at the time of the relevant offences a residential Virgin media package including Sky Sports Live to his residential flat which was situated above the licensed area.

14. The parties accepted that there is generally a substantial price difference between the monthly cost of a B/Sky/B television subscription package which includes Sky Sport Live for domestic and non domestic customers."

4. As regards the "substantial price difference" there referred to, the undisputed evidence was that at the time of the alleged offences a BSkyB non-domestic contract for the Friary Vaults would have cost £547.20 per month whereas the Virgin Media residential contract which the respondent had was costing him £102.40. The Virgin contract of course was for domestic use only. It is beyond contention that at the material times the respondent was showing Sky Sports Live programmes in a licensed (thus of course non-residential) area of the Friary Vaults but he did not have, and was not paying for, a non-domestic contract to permit him to do so. The programmes were received and shown through the facility of his Virgin Media residential contract which did not permit him to do that.
5. The court's findings are shortly set out in the case stated at paragraph 24 under the heading "Was there sufficient evidence on which the Court could properly find that the respondent did make payment to Sky via his Virgin contract including Sky Sports Live?" The court stated:

"The Court found that payment was made for the following reasons:

A. It was the evidence of Ms Norman that the Sky had the exclusive rights to show live premiership football in the United Kingdom and to receive the Sky Sports Live signal a payment would have been made.

B. It was accepted by all the parties that Mr Ashton did not have a domestic or non domestic contract with B/Sky/B at the relevant time of the alleged offences. Mr Ashton did have a contact [sic] with Virgin Media to supply television services to his flat. Therefore, we found the only method which Sky Sports Live was shown in the licensed area was via the Virgin Media Contract which included Sky Sports Live."

Then in the judgment annexed to the case, it is stated at paragraph 25:

"The court, therefore, concludes that Mr Ashton did make payment to Sky via his Virgin Media contract which included Sky Sports Live."

In the circumstances the respondent was acquitted.

6. The magistrates posed three questions for the opinion of this court as follows:

"Q1. Whether section 297(1) Copyright Designs and Patents Act ... on its proper construction proscribes the reception of a programme in circumstances where within the United Kingdom:

I. A person (A) subscribes to a company (B) which is only entitled to provide programmes for domestic use; and

Ii. (B) provides those programmes at a charge which is lower than the charge applicable for their reception in non-domestic/commercial premises; and

Iii (A) knows that the price charged by (B) is lower than the charge applicable for the reception of the programmes in non-domestic/commercial premises and (A) also intends to avoid payment of the higher charge; and

Iv. (A) knows that the higher charge is payable to company (C) which has exclusive rights to broadcast the programmes in non-domestic/commercial premises.

Q2. Were we right to find that the payment for the 'domestic use only' service to Virgin Media in the above circumstances was the payment of any charge applicable to the reception, of the programme(s) in commercial premises (the showing of the live Premiere League football matches)?

Q3. Having regard to the evidence that was agreed and the live evidence called was there any evidence to support our conclusion at paragraph 25 of our written ruling, namely: '...that Mr Ashton did make payment to Sky via his Virgin Media contract which included Sky Sports live.'"

7. Mr Bodnar has been instructed for the respondent late in the day. He produced a skeleton argument and has addressed us this morning with conspicuous skill and economy. We are indebted to him. He referred to the Murphy cases, including Murphy C-403/08 in the European Court of Justice. In that case the prosecution was laid against the defendant who used a decoder to receive football programmes in her public house via a satellite which beamed the programmes from a provider in Greece. The allegation made by the defence was that this was in effect an attempt to enforce a geographical restriction which was contrary to European Union law. It had been conceded by the prosecutor (see paragraph 18 of Murphy III [2012] EWHC Admin 529) that the finding of dishonesty against the defendant in that case could not stand if the geographical restriction on the use of the decoder was indeed unlawful. Murphy in the ECJ was necessarily concerned with identifying the place of broadcast for the purpose of section 297(1). Mr Bodnar seeks to draw out of the Murphy line of cases, and also the definition provisions contained in section 6 of the CDPA which we were shown this morning, a conclusion expressed in his skeleton argument as follows:

"15.4. When identifying the relevant 'broadcasting service' therefore, it is necessary to identify the transmission made for 'simultaneous reception by members of the public and capable of being lawfully received by them' (Murphy I, para 36 and Murphy in the ECJ paras 57-58).

15.5. It follows that the relevant programme in relation to which a charge must have been avoided for the purposes of s 297(1) CDPA is a programme included in a transmission intended for simultaneous reception by members of the public and capable of being lawfully received by them.

16. In the instant case it has not been suggested that Virgin Media does not provide a 'transmission for reception by members of the public and capable of being lawfully received by them' in its own right. Similarly, there is no suggestion that Virgin Media has in any way 'pirated' the transmission of its programmes by Sky Sports 1 and 2/Sky Sports Live...

...

19. It is submitted that the Justices were correctly concerned with whether the Respondent had avoided 'any charge applicable' to the reception of the programme included in the Virgin Media broadcasting service, not with whether he had avoided 'any charge applicable' to the reception of the same programme included in an alternative broadcasting service."

8. The decision of District Judge Sanders in FACT v Gabriel (Bury Magistrates Court, 23 August 2012) in relation to proposition 1 set out above was relied on in the magistrates' court, and is also relied on by Mr Bodnar in this court. Mr Gabriel was the licensee of a public house which was favoured by the name of the Spanking Roger. He had a domestic viewing agreement with Sky. On various occasions he received and showed Sky Sports programmes in the pub, thus in a non-domestic situation. The district judge held (paragraph 11) that Mr Gabriel should have entered into a Sky non-domestic viewing agreement. His judgment however proceeds:

"12. However, section 297 requires the prosecution to prove that he intended to avoid any charge applicable to the reception of that programme. The use of the word 'any' seems to me to be the key to this case. It must have a specific meaning, otherwise Parliament would not have included the word.

13. The prosecution seek to persuade me that 'any charge' means the full and proper charge that Sky (or any other broadcaster) would wish to charge for the reception of that programme at that time and in that place. However, with respect, that is not what the Act says. If the wording was 'the charge', or 'the proper charge', then I might well agree with the prosecution, but it is not: it specifically states that the prosecution must prove that Mr Gabriel had the intent to avoid any charge applicable to the reception of the programme.

...

15. On the facts of this case, Mr Gabriel (or another) had paid Sky for the reception of that programme, contained as it was in the domestic broadcasting service. Whilst Mr Gabriel had clearly intended to avoid paying the higher non-domestic charge, it is not the case that he intended to avoid payment altogether for the programme actually being shown in the pub. The fact that it was being shown in a pub was in clear breach of the agreement which the subscriber had with Sky, and may well have given rise to a civil claim for recovery of subscription revenue, and even a civil injunction to prevent the continued showing of the programme in the Spanking Rodger, but that is not this issue - the issue is whether Mr Gabriel has committed a criminal offence. On the facts of this case, he had not sought to avoid paying for the programme altogether, since it was screened using a paid-for decoder card."

9. In my judgment the Murphy cases do not assist here. Murphy did not address the question whether, when a programme may be received through either of two providers in a particular location, section 297(1) prohibits the use of one where to do so would breach the other's rights. There is of course no EU or cross-border issue in the present case. Mr Bodnar submits (and this is central to his case) by reference to the definitions in section 6 that the phrase "programme included in a broadcasting service" in section 297(1) means that the subsection is directed only to the service provider actually deployed, here Virgin. But I do not consider that the critical phrase "any charge applicable to the reception of the programme" requires so narrow an approach. Nor do I share District Judge Sanders' view as to the significance of the word "any" in the subsection. The phrase "any charge applicable to the reception of the programme" has to be read as a whole. It refers in my judgment to whatever charge is properly applicable to the reception of the programme in the circumstances in question. On the district judge's view a charge applicable in quite different circumstances, removed from the actual situation of the defendant, would be covered; and that as it seems to me would undermine the effect of the statutory provision.
10. My Lord Irwin J during the course of argument postulated a case where a broadcaster knowingly violates another broadcaster's rights by marketing his broadcast to pubs or clubs, though his own entitlement is only to broadcast to domestic recipients. Such a situation as it seems to me would not be caught by the provision.
11. It has moreover been submitted, and Mr Bodnar has placed some emphasis on this this morning, that in the events which have happened Sky and Virgin may be left to rely on their civil rights. But as it seems to me section 297(1), although plainly a penal statute, is there to protect rights in intellectual property; and in a case like this it can only do so effectively if it is interpreted as I have indicated.
12. Mr Bodnar says that this approach involves reading in the adverb "properly". But in a criminal statute intended to protect rights this is in my view unsurprising and involves no strain of the language. It seems to me highly improbable that in enacting this provision in 1988 Parliament did not have well in mind the commercial difference between domestic provision and commercial provision of television programmes.
13. For all these reasons I consider that the magistrates' court's approach to section 297 was incorrect and I would answer question 1 posed by them in the affirmative and question 2 in the negative. I also consider that the magistrates fell into error in paragraph 25 of the annexed judgment in holding effectively that the payment made by the respondent to Virgin amounted to a payment to BSkyB. The only relevant payment by the respondent was to Virgin. That is not evidence of payment by him to Sky. I would answer question 3 in the negative.
14. In these circumstances, I would allow the appeal, quash the acquittal and answer the questions as indicated. Subject to any further submissions, and we have not heard counsel on this, I would as proposed by Mr Caplan in his skeleton for the appellant remit the matter to the Justices for a ruling as to whether it is proved that the respondent acted dishonestly.
15. MR JUSTICE IRWIN: I agree. In my view, the wording of the Act under section 297 makes it clear that Parliament had in mind the discrete, or potentially discrete, intellectual property rights of programme makers, or of others holding such rights in respect of a given programme, and of those providing a broadcasting service.
16. LORD JUSTICE LAWS: Are we in agreement as to the order to be made?
17. MR CAPLAN: My Lord, for our part, yes. Thank you.
18. LORD JUSTICE LAWS: Mr Bodnar?
19. MR BODNAR: One could make a point about the length of time (Inaudible) but in light of your Lordship's judgment I am not sure I can, with any force, resist the remittal of the case.
20. LORD JUSTICE LAWS: Well, it is not that long, is it? The trial was September last year.
21. MR BODNAR: Yes, but it is 2010/2011 since.
22. LORD JUSTICE LAWS: Unless you wish to submit to the contrary, we would make the order that was proposed by Mr Caplan. Very well, would counsel have the goodness to see that there is an agreed note of the order for the associate. Any other matters?
23. MR CAPLAN: Mr Bennett is going to deal with the issue of costs.
24. MR BENNETT: My Lord, there is one other matter which, as my learned friend says, is costs. Because, and it is my error, that the wrong version of Murphy III was printed in your bundle.
25. LORD JUSTICE LAWS: I saw that, yes.
26. MR BENNETT: One might have taken the view that was overly optimistic on my part, but the relevant provisions for our purposes are to be found at tab 6. My application is for costs from central funds. I will explain why it is from central funds in a moment. But by reason of section 19, and if I invite your Lordship to paragraph 8 of tab 6, page 32 at the bottom because there were similar arguments that arose at the conclusion of the Murphy litigation. Bottom of that paragraph and over the top, please.
27. LORD JUSTICE LAWS: "This being a criminal cause or matter, the appropriate jurisdiction for the Court to exercise is that under to section 19 of the Prosecution of Offences Act..." There is no difficulty about the jurisdiction, is there?
28. MR BENNETT: No, and it is an application for costs from central funds to be assessed, which means I do not need to state a figure today. The reason it is from central funds, your Lordships have it, there has been a legal aid order. There is not an awful lot of point, for reasons that I need not divulge in open court, as to why not to pursue the issue of costs against Mr Ashton.
29. LORD JUSTICE LAWS: Is there any practice, I ought to know this but I do not think I do, is there any practice as to the making of such orders in this court in favour of a successful appeal by a prosecutor?
30. MR BENNETT: Yes. Paragraph 11 goes on to deal with the Practice Direction (Costs in Criminal Proceedings).
31. LORD JUSTICE LAWS: Which tab was it?
32. MR BENNETT: Tab 6, page 34 at the top. Paragraph 10, paragraph 11 and 2.6.1 sets out in effect when such costs orders from central funds should be made.
33. LORD JUSTICE LAWS: I see. Orders should be made save where there is a good reason for not doing so.
34. MR BENNETT: Yes. I stress it would be assessed, but there is no good reason in our submission, us having tried to persuade the Justices unsuccessfully in the lower court, why such an order should not be made today.
35. LORD JUSTICE LAWS: We will make the order. Costs out of central funds to be assessed.
36. MR BENNETT: Thank you.
37. MR BODNAR: In so far as I need it, would your Lordship order the determination of this defendant's publicly-funded costs?
38. LORD JUSTICE LAWS: You want a detailed assessment for the purposes of the Legal Services Commission. Yes, certainly.
39. MR BODNAR: One final matter. If we wish to seek a certificate from your Lordships, we do that in writing within 14 days.
40. LORD JUSTICE LAWS: All right. Thank you very much. We are indebted to you. Thank you.