QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
THE HON MRS JUSTICE CARR DBE
| HULL AND HOLDERNESS MAGISTRATES' COURT
|1) ALISTER CHARLES DARROCH
2) CHARLES JOSE DARROCH
|- and -
|MEDIA PROTECTION SERVICES LIMITED
(2) FOOTBALL ASSOCIATION PREMIER LEAGUE LIMITED
Mr Richard Millett Q.C and Mr Edward Brown (instructed by DLA Piper UK LLP) for the Second Interested Party
Hearing date: 26th November 2014
Crown Copyright ©
The Hon. Mrs Justice Carr:
"We are asking the Court to determine whether, on what basis and to what extent the Interested Parties should bear the costs of the Applicants' successful application for judicial review, including the costs below."
In the event, the application has been pursued only against FAPL and then in respect only of the Applicants' costs below in the Hull and Holderness Magistrates' Court.
"297.— Offence of fraudulently receiving programmes.
(1) 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) Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.
In relation to a body corporate whose affairs are managed by its members "director" means a member of the body corporate."
"….MPS was independent of FAPL and was carrying out its own independent commercial activities in laying the relevant information."
Murphy v MPS  EWHC 529 (Admin) ("Murphy") : the costs ruling
"14. Neither Mr Howe QC nor Mr Mellor QC was able to make any submission as to the criteria to be applied by this Court for the purpose of deciding whether to apply the civil costs regime or the criminal costs regime. Nor did they refer to any authority that might guide us.
15. Clearly, save in exceptional cases, prosecutions and appeals in criminal cases should be and will be subject to the criminal costs regime. However the present case is unusual. The prosecution was brought by the respondent in order to protect a very substantial profit stream for the Football Association Premier League Ltd ("the FAPL"). It was treated by both parties as a test case, involving substantial legal resources, including two silks for the appellant and two silks and three junior counsel for the respondent for the hearing on 29 and 30 November 2007, and two silks and a junior for the appellant and two silks and two junior counsel for the respondent on 25 and 26 June 2008. Both hearings were conducted in a manner indistinguishable from a hearing in the Chancery Division or before the Civil Division of the Court of Appeal in which substantial sums are in issue. This was very far from being a typical appeal against a conviction for a summary offence, which is what section 297(1) creates.
16. In our judgment of 16 July 2008  EWHC 1666 (Admin) we said, at paragraph 60:
"We…voice our unease about the bringing of a prosecution under s.297(1) in circumstances where the establishment of an essential element in the offence, namely "intent to avoid payment of any charge applicable to the reception of the programme", depends upon the compatibility with EC law of an export ban imposed in a licence agreement between two companies who are legally strangers to the purchaser and user of the decoder card in question who is the defendant to the criminal charge. Our unease at this use of s.297(1) exists notwithstanding the additional requirement of dishonesty, and regardless of whether the export restriction and resultant absolute territorial protection are ultimately held to be enforceable. It seems to us unlikely that the legislature would have envisaged that the applicability of the avoided charge to the programme received by a defendant would be dependent upon something so remote from that defendant's own knowledge."
This unease was particularly relevant in connection with the present prosecution, in which the appellant's case was always that she relied on the legal advice given to her by her solicitor. The appropriate procedure to challenge that advice was a claim in the civil courts.
17. The reality is that these proceedings were part of a broader campaign to protect a private interest of the FAPL. Of course, private prosecutors may prosecute cases that affect their private interest. Shoplifting prosecutions are an obvious example. But those cases involve general dishonesty rather than the question whether the defendant genuinely relied on a solicitor's legal advice. Indeed, the finding of the Crown Court that the appellant "hid behind the legal advice as a convenient shield behind which to hide her dishonesty" is questionably adequate. The factual findings made by District Judge Sanders in the judgment to which we have referred fortify us in this conclusion, in particular his finding that FAPL retain overall control of the prosecutions brought by MPS and that FAPL has given MPS an indemnity against any award of damages and any order for costs made against it. It is finally difficult to believe that a public prosecutor, concerned that a defendant should not be wrongly convicted, would have resisted the application for a reference to the Court of Justice, and would have submitted, as the respondent did in its skeleton argument for the 2007 hearing in this Court, that "There is no matter of EU law for the Court justifying a reference under Article 234 EC …, this court can reject the Appellant's case on EU law with complete confidence…"
18 It is noteworthy that before us the respondent conceded, in the course of the hearing on 25 to 26 June 2008, that the finding of dishonesty against Mrs Murphy could not stand if the geographical restriction imposed on the use of her Nova decoder card were held to be unlawful and unenforceable as a matter of EU law (see paragraph 67 of our judgment of 16 July 2008  EWHC 1666 (Admin)).
19 In our judgment, these circumstances justify the application of the civil costs regime."
Relevant costs legislation: the criminal costs regime
"(5) Where –
a) in any proceedings in a criminal cause or matter are determined before a Divisional Court of the Queen's Bench Division;
the court may make a defendant's costs order in favour of the accused.
(6) A defendant's costs order shall, subject to the following provisions of this section, be for the payment out of central funds, to the person in whose favour the order is made, of such amount as the court considers reasonably sufficient to compensate him for any expenses properly incurred by him in the proceedings.
(7) Where a court makes a defendant's costs order but is of the opinion that there are circumstances which make it inappropriate that the person in whose favour the order is made should recover the full amount mentioned in subsection (6) above, the court shall—
(a) assess what amount would, in its opinion, be just and reasonable; and
(b) specify that amount in the order.
(9) Subject to subsection (7) above, the amount to be paid out of central funds in pursuance of a defendant's costs order shall—
(a) be specified in the order, in any case where the court considers it appropriate for the amount to be so specified and the person in whose favour the order is made agrees the amount; and
(b) in any other case, be determined in accordance with regulations made by the Lord Chancellor for the purposes of this section."
"(a) there has been serious misconduct (whether or not constituting a contempt of court) by the third party, and
(b) the court considers it appropriate, having regard to that misconduct, to make a third party costs order against him."
Relevant costs legislation: the civil costs regime
"51. Costs in civil division of Court of Appeal, High Court and county courts.
(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in—
(a) the civil division of the Court of Appeal;
(b) the High Court; and
(c) any county court,
shall be in the discretion of the court.
(3) The court shall have full power to determine by whom and to what extent the costs are to be paid.
(5) Nothing in subsection (1) shall alter the practice in any criminal cause, or in bankruptcy."
"28A Proceedings on case stated by magistrates' court or Crown Court.
(1) This section applies where a case is stated for the opinion of the High Court—
(a) by a magistrates' court under section 111 of the Magistrates' Courts Act 1980; or
(b) by the Crown Court under section 28(1) of this Act.
(2) The High Court may, if it thinks fit, cause the case to be sent back for amendment and, where it does so, the case shall be amended accordingly.
(3) The High Court shall hear and determine the question arising on the case (or the case as amended) and shall—
(a) reverse, affirm or amend the determination in respect of which the case has been stated; or
(b) remit the matter to the magistrates' court, or the Crown Court, with the opinion of the High Court, and may make such other order in relation to the matter (including as to costs) as it thinks fit."
a) copyright subsistence: there could not be any dishonest (or conscious disregard) of the exclusive rights of the broadcaster, since no exclusive rights existed or were proved;
b) the broadcast argument: the programme received by the Applicants was not "in a broadcasting service" because it was extracted material which was only streamed via broadband to the public houses;
c) incompatibility: s.297 is invalid as being incompatible with EU Council Directive 93/83/EEC of 27th September 1993 on the co-ordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission.
These were matters, all of which (for the avoidance of doubt) are contested by the FAPL, but which were not addressed in the Murphy litigation. But for the decision in Crawford (see paragraph 13 above) all of these arguments would have been tested fully in this Court.
"(1) Although costs orders against non-parties are to be regarded as "exceptional", exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question in any such "exceptional" case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against. (2) Generally speaking the discretion will not be exercised against "pure funders", described in para 40 of Hamilton v Al Fayed (No 2)  QB 1175, 1194 as "those with no personal interest in the litigation, who do not stand to benefit from it, are not funding it as a matter of business, and in no way seek to control its course". In their case the court's usual approach is to give priority to the public interest in the funded party getting access to justice over that of the successful unfunded party recovering his costs and so not having to bear the expense of vindicating his rights. (3) Where, however, the non-party not merely funds the proceedings but substantially also controls or at any rate is to benefit from them, justice will ordinarily require that, if the proceedings fail, he will pay the successful party's costs. The non-party in these cases is not so much facilitating access to justice by the party funded as himself gaining access to justice for his own purposes."
a) this Court does not have jurisdiction to apply the civil costs regime and make the order sought;
b) in any event, this was not an exceptional case such as Murphy was, and the discretionary factors required for a third party costs order were not met.
a) the only costs for our consideration are the costs below;
b) the proceedings below were not so unusual as to be exceptional. The hearing was a short one, lasting two days (followed by a short oral judgment);
c) although points of law were raised, the matter was conducted like many prosecutions with junior counsel on both sides. The mere fact that points of European law were raised did not, without more, take a case into the category of being an "exceptional" case or a "test" case. There was no reference to the CJEU;
d) Murphy, by contrast, was undoubtedly a "test case". Indeed it determined the copyright subsistence/"exclusive rights" issue sought to be re-argued by the Applicants (see paragraphs 43 and 44 of Karen Murphy v Media Protection Services Ltd  EWHC 3091 (Admin));
e) whilst it might be said that the full appeal would have raised novel issues, that appeal has never proceeded. The costs of such an appeal are not before us;
e) equally, the fact that a non-party has a strong financial interest in the prosecution does not make it an "exceptional" situation entitling a defendant to secure a costs order against it. There was in addition a public interest being served (in terms of upholding and enforcing the criminal law).
"7. It is common ground that this Court has power to order costs here and below pursuant to sections 28A and 51 of the Senior Courts Act 1981. We have referred to the power under, in particular, section 51 as the civil regime. Section 28A confers power on this Court, on an appeal by way of case stated by the magistrates' court or the Crown Court to "make such…order in relation to the matter (including as to costs) as it thinks fit". Section 51(1) provides that subject to the provisions of the 1981 Act or any other enactment or to rules of court, the costs of and incidental to all proceedings in (among others) the High Court shall be in the discretion of the court. Subsection (5) provides that nothing in subsection (1) shall alter the practice in any criminal cause or matter.
8. It was not suggested by Mr Mellor QC, for the respondent, that there is any provision of the 1981 Act, or any other enactment or rule of court, or practice in criminal causes or matters, that constrains the exercise of the power or the discretion of the Court under section 51. However he submitted that 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 1985 and Regulation 3 of the Costs in Criminal Cases General Regulations 1986 and/or pursuant to section 16 of the Prosecution of Offences Act 1985. We have referred to this jurisdiction as the criminal costs regime."
"(1) Subject to the provisions of this or any other Act and to rules of court, the cost of and incidental to all proceedings in the civil division of the Court of Appeal and in the High Court, including the administration of estates and trusts, shall be in the discretion of the court, and the court shall have full power to determine by whom and to what extent the costs are to be paid. (2) Nothing in subsection (1) shall alter the practice in any criminal cause or matter…"
"…possibly assist [the defendants]. The very provisions themselves clearly exclude application to criminal proceedings."
"3.8 The High Court is not covered by section 18 of the Act but it has complete discretion over all costs between the parties in relation to proceedings before it : section 51 of the Senior Courts Act 1981…
4.5 Wasted costs orders in the High Court
4.5.1 In the High Court (Divisional Court) where the court is considering whether to make an order under section 51(6) of the Senior Courts Act 1981….it will do so in accordance with CPR 46.8…."
"The powers enable the court to award costs in criminal proceedings are primarily contained in Part II of the [POA]..." (emphasis added)