England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		18/03/2013

Mr Justice Sales:

Introduction

1. This is an application for summary judgment in relation to copyright claims in respect of five motion picture films, An American Rhapsody, The Believer, Who is Cletis Tout?, Onegin and Rules of Engagement ("the Films"). The Claimant submits that it is entitled to judgment against the First Defendant ("Content") in England by reason of the success of companies associated with it in obtaining a judgment against other parties in proceedings in Canada. The successful claimants in the Canadian proceedings were Cinevisions and Stander Corporation Limited ("the Canadian plaintiffs"). They have assigned the benefit of rights in respect of the Films to the Claimant, and the Claimant says that as a result it is entitled to the benefit of the judgment obtained in Canada.
2. The Claimant is part of a group of companies ("the Hoffman companies") controlled by Peter Hoffman ("Mr Hoffman"), the Chief Executive Officer of the US parent company of the Claimant. The Canadian plaintiffs are part of the same group. In about 1999 certain of the Hoffman companies started to co-operate with a group of companies controlled by a Mr Firestone, primarily based in Canada ("the Canwest companies"), in the production of motion picture films. The Hoffman companies and the Canwest companies entered into agreements for financing the making of films, including the Films in issue on this application, and governing their distribution ("the Film Agreements"). The Film Agreements were made in the USA and are governed by relevant US law.
3. The Canwest companies maintained that under the terms of the Film Agreements, the copyright in the Films was granted to them. However, the Hoffman companies maintain that on proper interpretation of the contractual arrangements, the grant of copyright to the Canwest companies was conditional upon further agreement being reached about the distribution of revenue from the Films under the terms of a further agreement being negotiated between the parties, known as the Master Structure Agreement ("the MSA"). The Films were made while negotiations in relation to the MSA continued. Subsequently, the rights of relevant Hoffman companies in relation to the Films have been assigned by a chain of assignments via the Canadian plaintiffs to the Claimant.
4. The Hoffman companies and the Canwest companies fell out and litigation resulted. In 2002 the Hoffman companies commenced proceedings in California against the Canwest companies, alleging breach of the MSA and claiming a percentage interest in the films covered by the MSA, including the Films at issue in the present proceedings. The Hoffman companies did not at this stage include a claim for breach of copyright in relation to the Films. In the proceedings the Canwest defendants denied that the MSA had been finalised and become binding.
5. The MSA included a choice of forum clause nominating Ontario, Canada as the forum. Since the US court considered that the dispute between the Hoffman companies and the Canwest companies about the MSA could best be litigated in Canada, the court dismissed the proceedings brought by the Hoffman companies.
6. In 2003 the Canadian plaintiffs in the group of Hoffman companies commenced proceedings in the courts of Ontario ("the Ontario action"), again alleging breach of the MSA and again claiming a percentage interest in, amongst others, the Films. Once again, the Hoffman companies did not at that stage include a claim for breach of copyright in relation to the Films. In the Ontario action, the Canwest companies again adopted the position that the MSA had not been finalised and was not a binding agreement.
7. On 8 October 2004, the court in Ontario ordered the Canadian plaintiffs to provide security for costs in the sum of CAN$100,000. They failed to provide the security required and the Ontario action was stayed.
8. On 20 April 2005, the Hoffman companies commenced a second set of proceedings in California against the Canwest companies, this time alleging infringement of US copyright by the Canwest companies in relation to, amongst others, the Films ("the 2005 US action").
9. Shortly afterwards, the relevant Canwest companies assigned their rights in the Films to Content, an English company, pursuant to a written agreement dated 28 April 2005 ("the Canwest Assignment"). According to the evidence filed on this application for Content, this assignment was an arm's length transaction for value with Content paying some US$29 million for the rights assigned. According to the evidence of Mr Pasternak, the General Counsel for the Canwest companies at the relevant time, the Canwest companies only sold their rights in those films in relation to which they believed they had good title to copyright. The assignment was therefore limited to the rights of the Canwest companies in relation to certain films, including the rights in the five Films in issue on the application before me. The Hoffman companies quickly came to know about the assignment.
10. The Canwest Assignment included a provision whereby the Canwest companies agreed to indemnify Content in relation to any claims brought by the Hoffman companies in relation to the Films. The indemnity was included in recognition of the proceedings on foot between the Hoffman companies and the Canwest companies.
11. By an amendment dated 17 June 2005 of the Hoffman companies' claim in the 2005 US action, Content was joined as a defendant in that action. On 11 July 2005, the Hoffman companies issued an application for injunctive relief in relation to the Films, including against Content.
12. By a ruling dated 15 August 2005, the US court refused the application for an injunction on the grounds that there was a significant factual dispute in relation to the core issue in the proceedings, namely the ownership of the copyright in the Films.
13. The next day, 16 August, pursuant to an application made by the Canwest companies, the US court granted a stay of the 2005 US action on the basis that the real underlying dispute between the parties was a contractual dispute in relation to the Film Agreements and the MSA which ought to be determined by legal proceedings in Ontario. Content did not join in making this application and, according to its evidence, it was not made at Content's request.
14. After the stay was granted, the Hoffman companies applied back to the US court to lift it. At this stage, Content joined with the Canwest companies in opposing the lifting of the stay. Mr Tritton, who appeared for the Claimant before me, sought to attach significance to this, as an indication that Content itself at that stage wished issues of copyright entitlement in relation to the Films to be determined in proceedings in Ontario.
15. Mr Hollingworth, for Content, submitted that Content's joining with the Canwest companies for the purposes of opposing the lifting of the stay did not involve any express or implied representation on Content's part that the dispute between the parties should be referred to the courts in Ontario to be resolved in a way that bound everyone with interests in respect of the Films. In my view, Mr Hollingworth is correct about this. As he submitted, Content was simply concerned to resist any legal proceedings against it. At this stage, of course, the Ontario action was subject to a stay because the Canadian plaintiffs had not provided security for costs.
16. The Hoffman companies then applied in the Ontario action to have that action dismissed, in order to clear the way for them to pursue their copyright claims in the US proceedings. However, that application was dismissed by a ruling dated 11 September 2006 by Marrocco J. The learned judge followed the lead given by the US court, and its view that the dispute between the Hoffman companies and the Canwest companies and Content should be determined by the courts in Ontario.
17. It became clear to the US court that the proceedings in Ontario were not being prosecuted to a conclusion by the Hoffman companies, so by order dated 29 February 2008 it dismissed the 2005 US action "with prejudice", by reason of the Hoffman companies' failure to prosecute their claims. The Hoffman companies appealed against that order, but in due course, on 20 May 2009, the US Court of Appeals for the Ninth Circuit dismissed the appeal.
18. Meanwhile, since the Hoffman companies could not pursue their claims in the US courts, in May 2008 they eventually posted security for costs in the Ontario action and that action became active again.
19. On 3 December 2008, the Canadian plaintiffs amended their pleadings in the Ontario action to include, in the alternative to their claims based on the MSA, a claim for declaratory relief against the Canwest companies that they owned the US copyright in relation to the Films and for breach of copyright. Content was not a defendant in the Ontario action and the Canadian plaintiffs made no application to join it as a defendant.
20. In November 2009, Fireworks Entertainment Inc (Canada) ("FEI"), one of the Canwest companies which had assigned the rights in the Films to Content under the Canwest Assignment, declared its insolvency and entered into the Canadian bankruptcy process. A corporate trustee in bankruptcy ("the trustee") was appointed to administer FEI's affairs in the course of that process. Under Canadian law, there was an automatic stay of all proceedings on foot against FEI, including the Ontario action brought by the Canadian plaintiffs.
21. According to the evidence of Erick Kwak for Content, he made inquiries and was told that the Canwest companies were undergoing a reorganisation and would continue to defend the Ontario action.
22. The Canadian plaintiffs now made an application in the Ontario action for an order to lift the automatic stay of proceedings in relation to FEI. The written statement of case (known as a Factum) lodged by the trustee to oppose the Canadian plaintiffs' application objected that lifting the stay and permitting the action to continue with respect to declaratory relief without the involvement of "the real parties of interest" would result in the creation of additional claims against the relevant Canwest companies (i.e. by reason of a potential claim by Content under the indemnity contained in the Canwest Assignment). The trustee said that FEI had no true interest to oppose the grant of declaratory relief, because FEI's interest in the Films had been assigned to Content; that further proceedings by the Hoffman companies involving Content would be required to resolve issues regarding ownership of the Films and entitlement to revenues from the Films; that the Hoffman companies "can and should pursue their claim against [Content] directly"; and pointed out that, "If granted, the Declarations would not constitute a final and binding determination of the issues raised in the Action". The trustee did not oppose the lift of the stay as regards the Canadian plaintiffs' damages claim against the Canwest companies. The trustee's Factum concluded with the suggestion that if the Court were thinking of lifting the stay, it should require the Canadian plaintiffs first to give notice of the application to lift the stay to Content to allow it to respond, or in the alternative that, if the court were inclined to lift the stay to permit the Canadian plaintiffs to continue the Ontario action for the purposes of seeking declaratory relief without adjourning the application to allow notice to be given to Content, then the court should impose a condition on the order "requiring all interested parties to be added as parties to [the Ontario action]".
23. Mr Hoffman swore an affidavit in answer to the trustee's Factum. He pointed out that Content is an English company with no connection with Ontario and said, "it will be likely that any action against Content by the plaintiffs, for copyright infringement or otherwise, will have to be commenced in England." In response to a suggestion by lawyers acting for relevant Canwest companies in the Ontario action that it would be a waste of court resources for the Hoffman companies to try to adjudicate the claims on which they sought summary judgment in that action, Louis Sokolov ("Mr Sokolov"), the lawyer acting for the Canadian plaintiffs in that action, emailed on 15 April 2010 to say, "I do not agree that [Content] or any other party … is a necessary party to this action … my client does not intend to add [Content] as a party in this action."
24. In the event, the Ontario court followed neither of the courses proposed by the trustee. The application for the automatic stay to be lifted was not adjourned to allow Content to be given notice of it; nor did the court require Content to be joined as a party in the Ontario action. By order of Registrar Nettie dated 12 July 2010, the automatic stay of proceedings against FEI was lifted and the Canadian plaintiffs were ordered to give Content at least 30 days' notice of any motion for summary judgment against FEI and to provide Content with notice of the pendency of the Ontario action and copies of all the pleadings filed in it.
25. By letter dated 21 July 2010, Mr Sokolov informed Content that the stay of proceedings in relation to FEI had been lifted and that the Canadian plaintiffs would be seeking summary judgment and enclosed the pleadings in the Ontario action.
26. On 23 July 2010, the Ontario court gave directions for the listing of the summary judgment application and directed that Content should be given notice of the application. By letter sent later that day by Mr Sokolov to Content, Mr Sokolov informed Content that the hearing of the application for summary judgment had been scheduled for 10 February 2011. He wrote, "As you may be affected by an order of the court in this regard, we have been directed to provide you with notice of the motion so that you may have the opportunity to intervene, should you wish to do so."
27. Under cover of a letter dated 2 September 2010, Mr Sokolov sent Content a copy of the materials to be relied upon by the Canadian plaintiffs in support of their application for summary judgment. It appears that Mr Kwak did not take further steps at this stage to confirm whether FEI and the trustee would be defending the application for summary judgment. Further documents relevant to the application were sent to Content under cover of a letter from Mr Sokolov's firm dated 7 January 2011.
28. According to the relevant rules of procedure, it would have been open to the Canadian plaintiffs to apply to the Ontario court for permission to join Content as a party to the Ontario action. They did not make such an application. It would also have been possible for Content to apply to that court for permission to be joined as a party. Content did not apply to be joined as a party. Nor did it seek to appear at or participate in the hearing on the application for summary judgment against the relevant Canwest companies.
29. The evidence filed by the Canadian plaintiffs for that application included a report by an expert in relevant US law, Professor Netanel. According to his opinion, the Film Agreements did not have the effect of granting US copyright in the Films to the Canwest companies. The Canwest companies did not file evidence and did not appear at the hearing of the application for summary judgment.
30. At a hearing in Ontario on 10 February 2011, Whitaker J gave summary judgment in favour of the Canadian plaintiffs against FEI and two other Canwest companies ("the Ontario judgment"). The judge reviewed the evidence of Professor Netanel and accepted it. He granted a declaration in favour of the Canadian plaintiffs that they were the owner of the US copyrights in the Films, as registered and enforceable pursuant to the US Copyright Act 1976.
31. The Canadian plaintiffs have assigned their interests in the Films to the Claimant. By a letter before claim in England dated 1 March 2011 from the Claimant to Content, the Claimant referred to the Ontario judgment in favour of the Canadian plaintiffs, its affiliates, and asserted that Content as successor to the Canwest defendants "has no rights and never had any rights to distribute [the Films]." The Claimant stated:

"As successor in title to the Defendants, Content is bound by the Canadian judgment. In particular, it had the opportunity to intervene and did not.

Although the Canadian judgment related to US copyright claims, the position is not different outside the United States. [The Claimant] is the successor in title to the worldwide copyright in [the Films] and now owns the worldwide exclusive distribution rights in respect of [the Films]."

The Claimant accused Content of infringing its copyright in relation to the Films and claimed relief.

32. Content at this stage sought to defend itself by making an application to the Ontario court to set aside the order made pursuant to the summary judgment, on the grounds that it had been made by reason of a mistake on Content's part as to the position which would be adopted by FEI at the hearing before Whitaker J. Content made its application whilst at the same time protesting that it was not bound by that judgment or order.
33. On 28 April 2011, Whitaker J dismissed Content's application. He decided that Content had made no relevant "mistake" for the purposes of the relevant Ontario rule of procedure and also indicated that in any event he would have declined to exercise his discretion in Content's favour to set aside the judgment, since Content's position was that it would decline to be a party in the Ontario action if the judgment were set aside and that it would remain unaffected by the order the court had made.
34. On 27 May 2011, the Hoffman companies brought a further claim in the Federal Court in the USA, this time against Content and Paramount Pictures Corporation ("Paramount", which had been involved in distributing the Films and collecting royalties), claiming copyright infringement in respect of the Films and in an attempt to enforce the Ontario judgment ("the 2011 US action"). The Hoffman companies sought an interim injunction in that action. Their application was refused since it did not meet the required standard of being likely to prevail on the merits, because it appeared that the 2011 US action would be found to be barred by res judicata under US law by virtue of the 2005 US action having been dismissed "with prejudice" and because it appeared that the 2011 US action would be found to be time-barred under the limitation period set out in the US Copyright Act.
35. Content and Paramount then filed applications to have the 2011 US action dismissed on these grounds. However, before Content's application was heard, the Hoffman companies voluntarily dismissed Content from that action (i.e. withdrew their claim against Content in those proceedings) on 24 August 2011. Instead, following the judgment of the United Kingdom Supreme Court in Lucasfilm Ltd v Ainsworth [2011] UKSC 39; [2012] 1 AC 208, handed down on 27 July 2011 (which held that the English courts have jurisdiction to entertain claims in relation to infringement of foreign copyrights where there is a basis for in personam jurisdiction for those courts over a defendant), on 7 September 2011 the Claimant commenced the present action in England against Content, Paramount and the Third Defendant.
36. Meanwhile, the 2011 US action continued against Paramount, so Paramount's application to dismiss the action was heard. On 3 October 2011 the US court dismissed the action on the grounds that it was time-barred under the applicable limitation period. The Hoffman companies have entered an appeal against that decision.
37. Paramount has brought its own interpleader action in the USA, for directions as to which out of Content and the Hoffman companies it should pay royalties in respect of the Films. The Claimant unsuccessfully sought to have that action dismissed on grounds of lack of jurisdiction, but has appealed. Paramount's action is currently stayed pending the appeal.

Legal analysis

38. The parties were agreed on the familiar principles which should be applied on an application for summary judgment. I was taken to the helpful summary given by Lewison J (as he then was) in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15], and follow the principles set out there. In particular, I have considered whether Content has a realistic as opposed to a fanciful prospect of success on its defence to the claim: see Swain v Hillman [2001] 2 All ER 91.
39. Mr Tritton accepts that, if the Claimant is not entitled to rely upon the Ontario judgment to make good its claim against Content, and has instead to make out its case on the underlying facts, involving an investigation in the English court of the effect of the Film Agreements and other matters, then Content has a good arguable defence sufficient to defeat an application for summary judgment. He therefore based the Claimant's case on this application squarely upon what he submitted to be the binding effect upon Content of the Ontario judgment and the doctrine of issue estoppel.
40. General guidance on the operation of the doctrine is provided in the judgment of the Court of Appeal in Yukos Capital Sarl v OJSC Rosneft Oil Company [2012] EWCA Civ 855; [2013] 1 All ER 233 at [147], as follows:

"The primary requirements for the application of a foreign issue estoppel are agreed to be those set out by Lord Brandon of Oakbrook in The Sennar (No. 2) [1985] 1 WLR 490, 499A-B:—

'… in order to create an estoppel of that kind, three requirements have to be satisfied. The first requirement is that the judgment in the earlier action relied on as creating an estoppel must be (a) of a court of competent jurisdiction, (b) final and conclusive and (c) on the merits. The second requirement is that the parties (or privies) in the earlier action relied on as creating an estoppel, and those in the later section in which that estoppel is raised as a bar, must be the same. The third requirement is that the issue in the later action, in which the estoppel is raised as a bar, must be the same issue as that decided by the judgment in the earlier action.'

It was further agreed that, because the application of the estoppel must work justice rather than injustice, the court had a discretion to refuse to give effect to a foreign judgment if there were special circumstances making it unjust to recognise the decision, see Henderson v. Henderson (1843) 3 Hare 100 at 114–115, Carl Zeiss Stiftung v. Rayner & Keeler [1967] 1 AC 853, 947D per Lord Upjohn and Arnold v. National Westminster Bank [1991] 2 AC 93, 107C per Lord Keith of Kinkel. "

41. The Ontario court was a court of competent jurisdiction, and the Ontario judgment was a final and conclusive judgment on the merits of the case before it. The first requirement identified by Lord Brandon is therefore satisfied. However, Mr Hollingworth, for Content, takes issue with the Claimant in relation to the second and third requirements.
42. Addressing the doctrine of issue estoppel on which the Claimant relies, I consider that the Claimant's application for summary judgment must fail for a number of reasons.

(i) Content has a good arguable case that the Ontario Judgment would not be treated as res judicata against it under the law of Ontario

43. It is common ground that in order for an issue estoppel to arise in the courts in England by reference to a judgment of a court in a foreign jurisdiction (here, the Ontario Judgment), it is necessary to show not only that the requirements to establish an issue estoppel according to the law of the lex fori (England) are satisfied, but also that the issue in question would be treated as res judicata according to the law of that foreign jurisdiction: see Carl Zeiss [1967] 1 AC 853, 919A-C (Lord Reid), 927C-D (Lord Hodson), 936A-B (Lord Guest), 949C-D (Lord Upjohn) and 969G-970A (Lord Wilberforce).
44. Each side filed evidence of the approach that would be adopted on the question of issue estoppel in the courts in Ontario. Evidence on foreign law for Content was given in a report by the Hon. Ian Binnie CC, QC. Mr Binnie has an extremely impressive curriculum vitae. He served for nearly 14 years as a Justice of the Supreme Court of Canada. His report was compiled on the basis of an explicit recognition of the duty of an expert witness to give an objective and impartial opinion on matters within his expertise. He reviewed relevant Canadian law in detail and explained how in his opinion it would be applied if the question of issue estoppel against Content arose in proceedings in Ontario. His conclusion was set out at paragraphs 69 and 70 of his report, as follows:

"69. Estoppel does not apply here because of the lack of privity. Alternatively, viewed under the secondary ground of discretion, my opinion is that an Ontario Court in the hypothetical future case would be concerned about the procedural anomalies that gave rise to the granting of summary judgment without opposition, and would not look favourably on Hoffman's effort to suppress by estoppel any judicial inquiry as to the correctness of the disposition of the title dispute to the disputed copyrights.

70. Accordingly, in my professional opinion, neither res judicata nor abuse of process would prevent [Content] from denying in an Ontario Court that it was bound by the Whitaker, J. summary judgment order. An Ontario Court in any proceeding against [Content] would consider the issue of the [Content] title to the disputed copyrights afresh and decline to give the February 10, 2011 Summary Judgment preclusive effect."

45. Evidence on foreign law for the Claimant was given by Mr Sokolov. With all respect to him, his credentials as an expert on Canadian law are not as commanding as those of Mr Binnie. Moreover, Mr Sokolov is the lawyer acting for the Claimant in the proceedings in Ontario, and is not an independent and neutral expert as Mr Binnie is. Mr Sokolov disputed Mr Binnie's interpretation of relevant Canadian law and his conclusion.
46. In my view, there is no doubt that Content has raised a triable issue giving rise to a possible defence to the claim by reference to the evidence of foreign law adduced by it. In an effort to meet the obvious point that Mr Binnie's expert evidence appeared to give rise to an arguable defence and could not be discounted for present purposes by reference to Mr Sokolov's evidence, and that it would be necessary for the evidence of both experts to be tested at trial, Mr Tritton submitted that the proper approach was for this court to identify from Mr Binnie's report the governing principles regarding issue estoppel in the law of Ontario and then to decide for itself how they should be applied to the facts of this case. Otherwise, Mr Tritton said, this court would be allowing the expert witness to decide the very thing which the court had to decide, and would thus fail to fulfil its own duty. In Mr Tritton's submission, it could be seen from Mr Binnie's report that the general principles regarding issue estoppel in the law of Ontario were the same as or similar to those applicable in English law, and for the same reasons that Mr Tritton submitted an issue estoppel arose as a matter of English law the court should conclude that it would also arise under the law of Ontario.
47. I do not accept Mr Tritton's submissions, either as to the approach to be adopted in relation to the expert evidence nor as to the application of English principles of issue estoppel in this case. In my view, where an issue of foreign law arises in legal proceedings in England, the court should have regard to expert evidence both as to the general principles or legal framework which would govern the case under foreign law and as to how a court in that foreign jurisdiction would apply those principles or framework to the facts of the case. There is often no neat or coherent dividing line between a statement of general principles of law applicable in a case and how they actually fall to be applied in the context of the particular facts of the case, and in my view that is the position here. Although principles governing the law of issue estoppel in Ontario have developed by reference to English common law, they are stated at a relatively high level of generality and to work out how they would fall to be applied in a particular case it is necessary (or, at any rate, highly relevant) to have regard to what experienced practitioners in that legal system would expect the courts there to do in practice. The English court cannot, with full confidence, assume that Canadian lawyers and the Canadian courts would apply those general principles in exactly the same way as English lawyers and the English courts would.
48. Moreover, although there are, unsurprisingly, marked similarities between the law of England and the law of Ontario regarding issue estoppel, there is a distinct body of Canadian case-law bearing on that topic, referred to by Mr Binnie. This again means that the English court cannot confidently assume that the Canadian courts would always give the same answer on a question of issue estoppel as the English court would.
49. For these reasons, Content has shown that it has a good arguable defence to the Claimant's claim, by reference to the law of Ontario. A trial will be necessary for the differences between the views of expert witnesses to be explored in detail before this court can form a concluded view whether that defence is established or not.
50. Further and in any event, for the reasons set out below I reject Mr Tritton's submissions about the operation of the doctrine of issue estoppel in English law.

(ii) Issue estoppel in English law - the second requirement: is Content a privy of FEI and the other Canwest companies who were parties to the Ontario action?

51. The Claimant sought to rely on two distinct limbs of the doctrine of issue estoppel: (i) it maintained that there is privity of title or estate between Content and FEI and the other Canwest companies against whom the Ontario judgment was given, in relation to the copyright in the Films; and, further and in the alternative, (ii) it maintained that there is privity of interest between Content and FEI and those companies in relation to the subject matter of the Ontario proceedings. I do not accept either of these submissions.
52. Lord Reid in Carl Zeiss at [1967] 1 AC 853, 910-913, said:

"… there is no doubt that the requirement of identity of parties is satisfied if there is privity between a party to the former litigation and a party to the present litigation. …

It has always been said that there must be privity of blood, title or interest: here it would have to be privity of interest. That can arise in many ways, but it seems to me to be essential that the person now to be estopped from defending himself must have had some kind of interest in the previous litigation or its subject-matter. I have found no English case to the contrary. If that is right, then there can be no privity here because these solicitors [the defendants] had no connection with and certainly no interest in the German litigation.

There does, however, seem to me to be a possible extension of the doctrine of privity as commonly understood. A party against whom a previous decision was pronounced may employ a servant or engage a third party to do something which infringes the right established in the earlier litigation and so raise the whole matter again in his interest. Then, if the other party to the earlier litigation brings an action against the servant or agent, the real defendant could be said to be the employer, who alone has the real interest, and it might well be thought unjust if he could vex his opponent by relitigating the original question by means of the device of putting forward his servant. But this is not a case of that character. …"

The respondent sought to rely on American authorities. Their effect is summarised in the American Restatement (Judgments), Chap. IV. The only section which seemed to me to come near to applying to the appellant solicitors is at pp. 402-403, s. 85 (2):

'Where a person is bound by or entitled to the benefit of the rules of res judicata because of a judgment for or against him with reference to a particular subject-matter, such rules apply in a subsequent action brought or defended by another on his account.'

With that I would agree; and, if these solicitors were bringing this action on account of or for the benefit of the Council of Gera, I would hold that res judicata could be pleaded against them. But I have already stated my view that this action is not brought on account of or for the benefit of the Council of Gera and, in particular, these solicitors are not contesting the issue now before your Lordships for the benefit of that council. …"

53. Mr Tritton's first submission was that there is privity of title between Content and FEI and the other Canwest companies subject to the Ontario judgment, because Content derives its copyright title to the Films from the Canwest Assignment. The Ontario court had ruled that those companies had not acquired copyright in respect of the Films under the Film Agreements, so they had had no copyright to assign to Content. Moreover, Content had acquired the rights it now purports to enjoy from the Canwest companies whilst on notice that the Hoffman companies were asserting claims that it was they who really had copyright in the Films (that, indeed, had been the reason why the Canwest Assignment included an indemnity in favour of Content). Content, therefore, could not maintain that it was a bona fide purchaser of the legal title to the Films for value without notice of the claims by the Hoffman companies, and since Content was not "Equity's darling" in this traditional sense could not be entitled to protection from the doctrine of issue estoppel per rem judicatem, which therefore operated in favour of the Claimant.
54. In my judgment, the doctrine of issue estoppel is not applicable in this case on the grounds of privity of title or estate between Content and the Canwest companies subject to the Ontario judgment.
55. The law in relation to privity of estate and issue estoppel where there is litigation in relation to property which is transferred by the defendant in those proceedings to another person who is not a party in that litigation is of long-standing and is settled. It was common ground that a person taking a purported assignment of property, whether real or personal, is bound by a prior judgment of a relevant court which established that the assignor did not have title to assign: see Spencer Bower and Handley, Res Judicata, 4^th ed. (2009), paras. 9.39 to 9.40, and Powell v Wiltshire [2004] EWCA Civ 534; [2005] QB 117 at paras. [19]-[21]. The question in dispute on this application is whether the assignee will also be bound where there is not already a judgment against the assignor but only pending legal proceedings in relation to his right to the property in question. In my view, it is established by the authorities that, in relation to assignments of personal property (as opposed to real property), the assignee will not be bound by any later judgment obtained against the defendant in those proceedings.
56. Spencer Bower and Handley, op. cit.¸ at para. 9.41 state the rule thus: "Alienations of personal property are governed by the general principle that a judgment against the vendor only binds the purchaser if it predates the assignment." For this proposition they cite Wigram v Buckley [1894] 3 Ch 483, CA and Powell v Wiltshire. By contrast with the position in relation to personal property, where there was pending litigation in relation to real property on foot at the time of the assignment, the rule which came to be recognised was that the assignee would be bound by a judgment given in that litigation after the date of the assignment.
57. In Wigram v Buckley the Court of Appeal distinguished the position in respect of personal property from that in respect of real property. The case concerned an assignment of book debts in relation to which there was litigation on foot at the time of the assignment concerning the title to those debts. The litigation had been registered in the register of lis pendens established under statute. Nonetheless, the assignee was held not to be bound by the subsequent judgment obtained against the assignor in that litigation. After a thorough review of the authorities, and reversing the judgment of Chitty J at first instance, at p. 494 Lindley LJ said:

"Upon principle and authority I am of opinion that the doctrine in question [of lis pendens] is inapplicable to personal property other than chattel interests in land. The inconvenience of extending the doctrine to ordinary personal property is so extremely serious that it would, in my opinion, be very wrong so to extend it now for the first time, even if such extension could be justified by reasoning from well-established general propositions which might serve as premises for arriving at such a conclusion."

Davey LJ came to the same conclusion. He was at pains to distinguish the position of personal property (in relation to which the doctrine of lis pendens did not apply) from real property (in relation to which it did). At p. 497 he said:

"Is it reasonable, or in accordance with the habits of business people, to expect persons who deal in shares of joint stock companies, bills of exchange, bills of lading, book debts, and other similar property, to search the register of lis pendens before concluding any contract of sale or mortgage at the risk of losing their money if the property in question is the subject of an action or of an order for an injunction or a receiver? Suppose an action to enforce a trust against the legal registered holder of shares in a railway company. He sells them, in breach perhaps of an injunction, and another person (probably not the immediate purchaser from him) takes a transfer. Would it be right or just to hold that transferee subject to whatever equitable rights may ultimately be established in the action? Could the multifarious business of life be carried on on such terms? Real estate and leaseholds stand on a different footing, because they are the subject of title, and no prudent person in this country deals with them without at least some investigation of title. And this is known and recognised amongst business people."

58. The same rule has been affirmed in recent authority, in Powell v Wiltshire (even though the Court of Appeal in that case did not have its attention drawn to Wigram v Buckley). That case concerned a dispute over ownership of a light aircraft. Mr Ebbs brought an action against Mr Wiltshire for its return. Before the action came to trial, Mr Ebbs purported to sell the aircraft to a syndicate composed of Mr Etherington, Mr Heapy and Mr Storey. In turn, the syndicate sold the aircraft to Mr Powell. At the trial of the Ebbs/Wiltshire action (to which none of the syndicate or Mr Powell was a party, although Mr Heapy gave evidence – para. [5]), Mr Wiltshire obtained a declaration that he was the owner of the aircraft. The trial judge, Judge O'Rorke, concluded that the syndicate "clearly knew the background of the dispute as to the ownership of [the aircraft]" (para. [5]). In subsequent proceedings by Mr Powell against Mr Wiltshire (and, if it transpired that Mr Powell had not become the true owner, against the syndicate), the trial judge, Mr Recorder Maw, gave judgment in favour of Mr Powell, declaring him to be the owner of the aircraft. He concluded that Mr Powell had purchased the aircraft in good faith without any knowledge that there were problems about its ownership, but was unconvinced that when the syndicate sold the aircraft to Mr Powell they were unaware of the fact that there was a dispute as to its ownership (para. [9]). Mr Wiltshire appealed on the ground that the issue as to ownership of the aircraft had been determined by the judgment in the Ebbs/Wiltshire action, which bound the syndicate and Mr Powell, who was thereby estopped from asserting his ownership of the aircraft. Mr Wiltshire's appeal was dismissed.
59. At paras. [15] and [16] Latham LJ referred to Sir Robert Megarry's judgment in Gleeson v J. Wippell & Co Ltd [1977] 1 WLR 510 (which I consider in detail below) and later, at para. [20], emphasised his statement that: "Any contention which leads to the conclusion that a person is liable to be condemned unheard is plainly open to the gravest of suspicions." Latham LJ reviewed commentaries in the third edition of Spencer Bower and in Halsbury's Laws of England and certain authority which he took to indicate that the rule in relation to assignments of real property was that the assignee would only be affected by a judgment given before the assignment, and not by a judgment given afterwards but in litigation pending at the time of the assignment. (This is a curious feature of Latham LJ's judgment, which is at odds with the analysis in Wigram v Buckley and with what appears to be the better view, according to the 4^th edition of Spencer Bower and Handley - which has an expanded coverage of this topic at paras. 9.41 to 9.42 - that the doctrine of lis pendens applies in relation to real property, with the result that an assignee is bound by a later judgment in litigation pending at the time of the assignment). Latham LJ continued as follows at [25]-[26]:

25. In the light of these authorities, even though there is no direct authority to this effect, I am prepared to accept that where title to goods is in dispute, the same principles can be applied by analogy as those which are applicable to disputes relating to interests in land. In other words a person claiming title is privy to the interests of those through whom he claims that title for the purposes of the operation of the doctrine of estoppel per rem judicatam but only if the title he claims was acquired after the date of the judgment.

26. It follows that Mr Powell is not precluded by these principles from claiming good title to the [aircraft], which he purchased before the date of the judgment in question. He can only be precluded from asserting good title by reason of the wider principles suggested in the judgment of Sir Robert Megarry V-C in Gleeson v J Wippell & Co Ltd [1977] 1 WLR 510 and the approval by Stuart Smith LJ in House of Spring Gardens v Waite [1991] 1 QB 241 of the citation from Lord Denning in Nana Ofori Atta II v Nana Abu Bonsra II [1958] AC 95. Whatever may be said about the position of Mr Etherington, Mr Heapy who gave evidence in the earlier proceedings, and Mr Storey it has never been suggested that Mr Powell stood by in the knowledge of the proceedings, let alone took any part in them. On the other hand, it is clear from the judgment of Judge O'Rorke, that Mr Wiltshire knew full well that by the time his claim came to trial, the [aircraft] was in the possession of Mr Powell. He took no steps to join Mr Powell in the proceedings nor did he take any steps in relation to Mr Powell to protect his claimed ownership in the aircraft. It is a pity that Judge O'Rorke did not indicate to Mr Wiltshire that it would be necessary to join Mr Powell in the proceedings in order to ensure that the issues could be fully and properly litigated in those proceedings. I can see no reason why, in those circumstances, justice requires the court to consider Mr Powell to be bound by that earlier judgment on any of the principles to which we have been referred. …".

Latham LJ's conclusion that Mr Powell was not bound by the judgment given by Judge O'Rorke in the litigation pending when the aircraft was assigned to him is clear. It was based on the general principle drawn from Gleeson v Wippell referred to at [20] in his judgment as well as on what appears, with respect, to have been a mistaken view about the effect of a lis pendens in relation to assignments of real property. Since the general principle is, in my view, a sufficient basis for the conclusion Latham LJ arrived at, I do not think his statement of the legal rule in his conclusion can be discounted. I address below the "wider principles" he referred to in para. [26] of his judgment.

60. The other members of the Court, Arden LJ and Holman J, came to the same conclusion as Latham LJ for similar reasons. Holman J at [49] emphasised the same statement by Sir Robert Megarry V-C set out by Latham LJ at [20], and also like Latham LJ applied what he understood to be the rule in relation to real property to personal property in support of his conclusion that there was no issue estoppel, because the judgment in the Ebbs/Wiltshire action post-dated all relevant assignments of the aircraft ([50]-[62]). Arden LJ at paras. [31]-[33] placed particular emphasis on Hodson v Walker (1872) LR 7 Ex 55, which she took to be authority that none of the syndicate or Mr Powell were bound by an issue estoppel as privies in estate with Mr Ebbs, because their interest was obtained prior to the judgment of Judge O'Rorke in the Ebbs/Wiltshire action. As Mr Tritton pointed out, it is possible to distinguish Hodson v Walker (a real property case) on the grounds that the assignment of the interest in issue occurred before proceedings were issued. Nonetheless, the conclusion arrived at by Arden LJ at [33] was very clear, and expressed her own independent view regarding the law to be applied (since she did not regard herself as necessarily bound by Hodson v Walker).
61. In none of the authorities has it been suggested that the doctrine of issue estoppel is a mere doctrine of equity, in relation to which there should only be protection for Equity's darling as suggested by Mr Tritton. In fact, it is clear that the doctrine is a doctrine common to the courts of law and equity. The cases have not turned on examination of issues of notice of pending litigation or bona fide purchase of the rights assigned. In particular, in relation to application of lis pendens principles it has been expressly stated that the rules are not rules of equity and that they apply regardless of questions of notice: for real property, see Bellamy v Sabine (1857) 1 De G & J 566, 578 (Lord Cranworth LC) and 584 (Turner LJ), cited in Spencer Bower and Handley, op. cit., para. 9.41 (and see also para. 9.42, where it is pointed out that there was statutory intervention in relation to the lis pendens principle as it affected assignments of real property, precisely because it "operated harshly on bona fide purchasers without notice"); and for personal property see the statements of the law in Wigram v Buckley set out above. I therefore reject Mr Tritton's submission that this is an area to be governed by equitable principles, and that it is only if Content can show that it qualifies as Equity's darling and had no notice of the litigation affecting the title to the Films at the time of the Canwest Assignment that it can escape being bound by the Ontario judgment. Rather, in relation to personal property, a simple and clear rule has been applied, namely that if there is not a relevant judgment in place at the time of the assignment, the assignee is not affected by any litigation on foot against the assignor at the time of the assignment nor by any judgment obtained after the assignment in that litigation (unless he is joined as a party in that litigation).
62. Mr Tritton submitted that I should be prepared to develop the law in line with his submissions. He submitted that there was no clearly binding authority in favour of the approach set out above and a strong argument in favour of an adjustment of it, in that if the law were not re-stated as he suggests it would be open to a person facing litigation in relation to his title to an asset to avoid the impact of the litigation (say, if it were going badly for him) by assigning the asset on to another person, thereby compelling the claimant to re-litigate the issues against that person. According to Mr Tritton, this undesirable escape mechanism should be foreclosed by re-stating the law so as to have the effect that if the assignee of property is at the time of the assignment on notice of pending litigation affecting title to that property, he will be bound by the outcome of that litigation.
63. I do not consider that it is open to me to re-state the law as Mr Tritton suggests. The law as regards the position of an assignee of personal property (like Content in this case) where there is pending litigation is settled. That assignee is not bound by later judgment in that litigation between the assignor and a third party.
64. Nor do I think that there is any compelling or sufficient case to justify a court in trying to change that law. The person who claims title to property in issue in such litigation has available a simple way of seeking to bind the assignee by a judgment in those proceedings, namely by joining him as a party in the litigation. In my view, that is the fairest approach. If joined as a party in the litigation, the assignee will have all the important procedural protections that come with the status of being a party in the proceedings: he can decide what defences to maintain, what legal submissions to make and what evidence to call to defend himself. If not joined as a party, the assignee is without such protection and at the risk of real injustice being done to him as a result. Moreover, I think the threat conjured up by Mr Tritton of property owners who fear they are facing defeat in litigation assigning on their rights to avoid the claims against them is over-stated. The practical likelihood of a potential assignee being willing to pay substantial sums to take property which is subject to serious litigation to reclaim it is low, and the means to bind him by a final judgment in the proceedings (by joining him as a party in the proceedings) is readily to hand.
65. As Mr Hollingworth submitted, what is fundamentally at issue in the arguments on this part of the case is whether the onus was on the Canadian plaintiffs (the Claimant's predecessors in title) to seek to join Content as a party in the Ontario action, so that it would be bound by a judgment given in that action, or whether it was incumbent on Content to take steps to have itself joined as a party in that action so as to have the opportunity to defend itself in it. I agree with his submission that the onus was on the Canadian plaintiffs, who wished to obtain a judgment in the Ontario action which would be binding on Content, to take steps to join Content as a party in that action. The usual – and very basic - rule is that a person who wants to obtain a binding judgment against another should sue them. It is not the responsibility of the other person to inform himself about litigation in which he is not a party, and then officiously to try to intervene in it to defend himself against possible prejudice arising as a result of that litigation. There are no good grounds for any departure from the usual basic rule in the circumstances of this case.
66. Against this, Mr Tritton sought to place emphasis on the direction of the Ontario court of 12 July 2010 that Content should be given notice of the proceedings and of the application for summary judgment. He submitted that this meant that the ball was in Content's court if it wished to be involved to try to avoid any judgment being given which would affect its claim to title in the Films.
67. I do not accept this. In giving that direction, the Ontario court was expressing no view whatever about what might be the effect upon Content of any judgment which might ultimately be given in the Ontario action. The court left that question completely open. The Hoffman companies could not reasonably interpret what happened as some sort of advice or ruling by the Ontario court that they could expect to obtain a judgment in that action which would be binding on Content without making Content a party in the action. Still more importantly, the direction did not operate as some form of fair notice to Content that it should now take steps to participate in the Ontario action, on the basis that a judgment obtained in that action would be binding on it. The existence of the order of 12 July 2010 does not justify any departure from the usual basic rule that a person should be joined as a party in legal proceedings if it is desired that he should be bound by a judgment to be obtained in those proceedings.
68. In the alternative to relying on the notion of privity of estate in the sense discussed above, the Claimant submitted that Content should be treated as being the privy of FEI and the other Canwest companies in relation to the Ontario judgment by reason of their privity of interest in relation to the subject matter of the Ontario action. The authorities establish that there is a class of case in which a person may be found to be bound by an issue estoppel in relation to proceedings in which he was not a party, where he has stood by knowing of the significance of the proceedings for himself but allowing others to litigate to defend his interests as his proxy. Mr Tritton submitted that Content fell within this limb of the issue estoppel doctrine. It had been aware of the Ontario action and the summary judgment application against FEI and the other Canwest companies, to determine whether they had copyright title in respect of the Films, and had allowed them to litigate that issue in substance on Content's behalf. Content had stood by while they fought its battle for it, and Content should now therefore be bound by the result of that battle.
69. Before turning to two authorities particularly relied upon by Mr Tritton, I should refer to the judgment of Sir Robert Megarry V-C in Gleeson v Wippell. His judgment has been recognised by the House of Lords and Court of Appeal as a leading statement of the law in this area: see Johnson v Gore Wood & Co. [2002] 2 AC 1, at 32 per Lord Bingham of Cornhill, and Powell v Wiltshire at [16]. The case involved issues of copyright in relation to the design of a shirt. The plaintiff, Miss Gleeson, brought an action against a company ("Denne") for breach of copyright in her drawings for the shirt, the essence of her claim being that Denne had copied a shirt supplied to them by the defendant ("Wippell"), which was itself a copy of a shirt manufactured for Miss Gleeson as copied from her drawings. Miss Gleeson failed in her action against Denne, the court holding that there was no infringement of her copyright. She then commenced a further action against Wippell, alleging infringement of copyright by Wippell. Wippell applied to strike out the claim on the grounds that it had already been held in the Denne action that Wippell's shirt did not infringe Miss Gleeson's copyright. The application to strike out failed. Sir Robert Megarry V-C held that there was no privity of interest between Wippell and Denne, so no issue estoppel arose between Miss Gleeson and Wippell.
70. Sir Robert Megarry V-C made reference to the notion of privity of interest referred to in Carl Zeiss at [1967] 1 AC 853, 910, and to a number of authorities in which no issue estoppel had been found to arise and went on to say this, at 515A-516F:

"Privity for this purpose is not established merely by having 'some interest in the outcome of litigation.' So far as they go, I think these authorities go some way towards supporting the contention of Mr. Jacob [counsel for Miss Gleeson] that the doctrine of privity for these purposes is somewhat narrow, and has to be considered in relation to the fundamental principle nemo debet bis vexari pro eadem causa.

I turn from the negative to the positive. In Zeiss No. 2 [1967] 1 A.C. 853, 911, 912, Lord Reid suggested that if a plaintiff sued X and established some right in that action, a servant or third party employed by X to infringe the right and so raise the whole question again should be regarded as being a privy of X's in subsequent proceedings, for it would be X who would be 'the real defendant.' Lord Reid agreed with a statement which applied the rules of res judicata to subsequent proceedings brought or defended 'by another on his account,' that is, on X's account.

This is difficult territory: but I have to do the best I can in the absence of any clear statement of principle. First, I do not think that in the phrase "privity of interest" the word "interest" can be used in the sense of mere curiosity or concern. Many matters that are litigated are of concern to many other persons than the parties to the litigation, in that the result of a case will at least suggest that the position of others in like case is as good or as bad as, or better or worse than, they believed it to be. Furthermore, it is a commonplace for litigation to require decisions to be made about the propriety or otherwise of acts done by those who are not litigants. Many a witness feels aggrieved by a decision in a case to which he is no party without it being suggested that the decision is binding upon him.

Second, it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase "privity of interest." Thus in relation to trust property I think there will normally be a sufficient privity between the trustees and their beneficiaries to make a decision that is binding on the trustees also binding on the beneficiaries, and vice versa.

Third, in the present case, I think that the matter may be tested by a question that I put to Mr. Skone James in opening. Suppose that in the Denne action the plaintiff, Miss Gleeson, had succeeded, instead of failing. Would the decision in that action that Wippell had indirectly copied the Gleeson drawings be binding on Wippell, so that if sued by Miss Gleeson, Wippell would be estopped by the Denne decision from denying liability? Mr. Skone James felt constrained to answer Yes to that question. I say "constrained" because it appears that for privity with a party to the proceedings to take effect, it must take effect whether that party wins or loses. As was said by Buckley J. in Zeiss No. 3 [1970] Ch. 506, 541 (where the question was rather different) 'The relationship cannot be conditional upon the character of the decision.' In such a case, Wippell would be unable to deny liability to Miss Gleeson by reason of a decision reached in a case to which Wippell was not a party, and in which Wippell had no voice. Such a result would clearly be most unjust. Any contention which leads to the conclusion that a person is liable to be condemned unheard is plainly open to the gravest of suspicions. A defendant ought to be able to put his own defence in his own way, and to call his own evidence. He ought not to be concluded by the failure of the defence and evidence adduced by another defendant in other proceedings unless his standing in those other proceedings justifies the conclusion that a decision against the defendant in them ought fairly and truly to be said to be in substance a decision against him. Even if one leaves on one side collusive proceedings and friendly defendants, it would be wrong to enable a plaintiff to select the frailest of a number of possible defendants, and then to use the victory against him not merely in terrorem of other and more stalwart possible defendants, but as a decisive weapon against them.

With those considerations in mind, I turn to the case before me. I cannot see any ground for holding that Wippell is in privity of interest with Denne, or that they are linked in such a way as to make any doctrine of res judicata applicable. There was a trade relationship between the two, in the course of which Denne, at Wippell's request, copied a Wippell shirt: but that is all. If the plaintiff had succeeded against Denne, there would, in my judgment, have been no ground whatever for saying that Wippell should be bound by the decision against Denne. On the footing that the relationship of privity operates whether the decision is for or against the party in question, that seems to me to be conclusive."

71. In my judgment, Gleeson is a case which provides strong support for Content's submission that no issue estoppel arises in this case by reason of privity of interest between Content and FEI in relation to the Ontario action. A number of features of the judgment deserve emphasis. Sir Robert Megarry V-C stated that the doctrine of privity of interest is "somewhat narrow", and his reference to Lord Reid's formulation that issue estoppel will apply where subsequent proceedings are brought or defended "by another on [the first defendant's, X's] account" (and see the quotation from Lord Reid's speech in Carl Zeiss at pp. 910-913, set out above) tends to reinforce the narrowness of the doctrine. In the present case, it cannot be said that Content has participated in these English proceedings on FEI's account. It has done so purely on its own account.
72. It should be noted that Gleeson was a strong case, because Miss Gleeson had in fact had a full opportunity at the trial of the Denne action, in which she was plaintiff, to try to establish that the Wippell shirt was an indirect copy of her drawings; yet still she was not bound by the outcome of the case on that issue when she brought her further action against Wippell. By contrast, in the present case Content was not a party to the Ontario action, so the argument for Content to be bound by an issue estoppel is correspondingly weaker. Indeed, in my view, the present situation is directly analogous with the example posited by Sir Robert Megarry V-C of the situation which would have arisen if Miss Gleeson had succeeded in her action against Denne. If that had happened, Wippell would not in Sir Robert's view have been bound by the judgment against Denne in proceedings in which it was not a party and had no voice (even though Wippell had been on notice of the proceedings and its employees had given evidence at the trial: see p. 513G-H). In such circumstances it would have been "most unjust" to conclude, and there would "have been no ground whatever for saying", that Wippell should be bound by the decision against Denne.
73. As stated above, the basic rule is that, before a person is to be bound by a judgment of a court, fairness requires that he should be joined as a party in the proceedings, and so have the procedural protections that carries with it. This includes the opportunity to call any evidence he can to defend himself, to challenge any evidence called by the claimant and to make any submissions of law he thinks may assist his case. Although there are examples of cases in which a person may be found to be bound by the judgment of a court in litigation in relation to which he stood by without intervening, in my judgment those cases are illustrations of a very narrow exception to the general rule. The importance of the general rule and fundamental importance of the principle of fair treatment to which it gives expression indicate the narrowness of the exception to that rule.
74. The authorities particularly relied on by Mr Tritton were Nano Ofori Atta II v Nana Abu Bonsra II [1958] AC 95 (PC) and House of Spring Gardens Ltd v Waite [1991] 1 QB 241. Nano Ofori Atta II concerned a dispute in relation to tribal lands in West Africa in which there had been a judgment in one action between parties who belonged to rival tribal factions. The question arose whether it created an issue estoppel binding in a later action between the chiefs of those rival factions. It was held that it did. At pp. 101-102, Lord Denning, giving the opinion of the Privy Council, said:

"English law recognizes that the conduct of a person may be such that he is estopped from litigating the issue all over again. This conduct sometimes consists of active participation in the previous proceedings, as, for instance, when a tenant is sued for trespassing on his neighbour's land and he defends it on the strength of the landlord's title and does so by the direction and authority of the landlord. If the tenant loses the action, the landlord would not be allowed to litigate the title all over again by bringing an action in his own name. On other occasions the conduct consists of taking an actual benefit from the judgment in the previous proceedings, such as happened in In re Lart, Wilkinson v. Blades [1896] 2 Ch 788. Those instances do not however cover this case, which is not one of active participation in the previous proceedings or actual benefit from them, but of standing by and watching them fought out or at most giving evidence in support of one side or the other. In order to determine this question the West African Court of Appeal quoted from a principle stated by Lord Penzance in Wytcherley v. Andrews (1871) LR 2 P&M 327, 328. The full passage is in these words: 'There is a practice in this court, by which any person having an interest may make himself a party to the suit by intervening; and it was because of the existence of that practice that the judges of the Prerogative Court held, that if a person, knowing what was passing, was content to stand by and see his battle fought by somebody else in the same interest, he should be bound by the result, and not be allowed to re-open the case. That principle is founded on justice and common sense, and is acted upon in courts of equity, where, if the persons interested are too numerous to be all made parties to the suit, one or two of the class are allowed to represent them; and if it appears to the court that everything has been done bona fide in the interests of the parties seeking to disturb the arrangement, it will not allow the matter to be re-opened.'"

The justification for applying such a rule and finding an issue estoppel was the special circumstances which applied in West Africa at the time, as Lord Denning explained at pp. 102-103:

"The principle, as Lord Penzance said, is founded on justice and common sense. It may have been found appropriate in England only in special conditions. But there is no reason why in West Africa it should not be applied to conditions which are found appropriate for it there, but which have no parallel in England. It seems to be the recognized thing in this part of West Africa for all persons with the same interest in a land dispute to range themselves on one side or the other. Sometimes they apply to be joined as parties. On other occasions they regard the named party as their champion and support him by giving evidence. If he wins, they reap the fruits of victory. If he fails, they fall with him and must take the consequences. It is now 25 years ago that the Chief Justice drew attention to this way of looking at litigation … It has led the Court of Appeal in West Africa to look for a principle to meet the situation and they have found it in the principle stated by Lord Penzance …^"

The judgment does not support a wide principle of issue estoppel between persons who were not parties to the previous litigation. It only recognises that such an issue estoppel might arise under "special conditions", of which the particular custom and practice in West Africa was one example. In my judgment, this case is very remote from the circumstances in the proceedings before me and does not support the Claimant's claim that an issue estoppel applies here.

75. House of Spring Gardens Ltd v Waite is also an exceptional case and does not support the Claimant's claim. In that case the plaintiffs succeeded against three defendants (including Mr McLeod as the third defendant) in their claims for damages for misuse of confidential information and breach of copyright in relation to the production and sale of bullet-proof vests after a trial in Ireland in 1982 lasting 16 days before Costello J. The three defendants appealed to the Irish Supreme Court, in the course of which appeal they made an application to adduce fresh evidence seeking to show that the judgment had been obtained by fraud by the plaintiffs and sought an order for a new trial. The Supreme Court allowed the defendants' motion for a new trial on terms that a large sum representing damages and costs awarded by Costello J was paid into court. The defendants did not pay the sum into court, so no new trial took place and the appeal was dismissed in January 1985. A few days later, the first and second defendants ("the Waites") launched a new action in Ireland to set aside the judgment of Costello J on the same grounds, that it had been obtained by fraud by the plaintiffs. The action was dismissed in 1987 after a trial before Egan J lasting 22 days. Meanwhile, in March 1985 the plaintiffs had issued proceedings in England to enforce the judgment of Costello J against the three defendants. In his defence, Mr McLeod relied upon the second set of Irish proceedings before Egan J. The plaintiffs did not take steps to pursue the English proceedings until after Egan J's judgment, at which point they issued an application for summary judgment against the three defendants. They sought to defend themselves on the grounds that there was a triable issue whether the judgment of Costello J had been obtained by fraud. That defence was rejected by the English High Court, on the grounds that the judgment of Egan J created an issue estoppel on that point both against the first and second defendants and also against Mr McLeod, by reason of privity of interest between him and those defendants. All three defendants appealed, but their appeals were dismissed.
76. In relation to Mr McLeod's appeal, at pp. 252A-253E Stuart-Smith LJ referred to the statements of the relevant principles in the judgments of Sir Robert Megarry V-C in Gleeson and of the Privy Council in Nana Ofori Atta II. He went on at 253F-254E:

"How are these principles to be applied in this case? All three defendants were joint tortfeasors, having acted in breach of the duty of confidence in relation to the confidential information imparted to them and in breach of the plaintiffs' copyright in the cutting patterns for the vest. The judgment against them was joint and several. If the Waites' action to set aside Costello J.'s judgment had succeeded, that judgment would have been set aside in toto, not just against the Waites; it obviously could not stand. Even if (which I do not accept) the judgment against Mr. McLeod did not automatically fall in the event of the Waites' succeeding, it is plain that in the English proceedings the plea of estoppel or abuse of process would have prevented the plaintiffs pursuing the claim on Costello J.'s judgment against Mr. McLeod.

Mr. McLeod was well aware of those proceedings. He could have applied to be joined in them, and no one could have opposed his application. He chose not to do so and he has vouchsafed no explanation as to why he did not. Mr. Swift says he was not obliged to do so; he was not obliged to go to a foreign jurisdiction; he could wait till he was sued here. He speaks as if Mr. McLeod was required to go half-way round the world to some primitive system of justice. That is not so. He had to go to Dublin, whose courts, as the judge said, are perfectly competent to deal with this matter. Moreover, it was a process that was good enough for the Waites. Instead, he was content to sit back and leave others to fight his battle, at no expense to himself. In my judgment that is sufficient to make him privy to the estoppel; it is just to hold that he is bound by the decision of Egan J.

But there is a further point upon which Mr. Lightman [counsel for the plaintiffs] relied, and it is the pleading in Mr. McLeod's defence which I have already quoted, referring to the Waites' proceedings to set aside the judgment. Mr. Lightman submitted that that was a plea of estoppel by Mr. McLeod and that since estoppels were mutual, it could be relied upon against Mr. McLeod. Mr. Lightman cited In re Defries; Norton v. Levy (1883) 48 L.T. 703 , 704, where Pollock B. said:

'But the defendants cannot be said to have waived the estoppel by not pleading this judgment, for it was not in existence when the pleadings closed. I think it will be found that there is an old decision that it is sufficient to plead pendency of another action in order to enable the party pleading to put the judgment in such action in evidence by way of estoppel.'

In my judgment, the plea in the defence was a plea of estoppel; and as I have already said, had the Waites succeeded it was a plea that would have availed Mr. McLeod. It is plain that he was asserting that although he was not a party to those proceedings, he was privy to them. He was right."

At a later point in his judgment, in considering an argument based on abuse of process, Stuart-Smith LJ stated that "it would be a travesty of justice" to allow the issue of fraud to be litigated again in the English courts, after it had been determined against the defendants at trial before Egan J: p. 255B.

77. McCowan LJ did not base his judgment on issue estoppel, but on abuse of process. He focused in particular on the defence put in by Mr McLeod in the English proceedings, at p. 258A-C:

"In my judgment, the wording of that paragraph of Mr. McLeod's defence was tantamount to saying: 'Let the Irish courts decide the issue of whether the judgment was obtained by fraud, and until they have, let not this action proceed.' In taking that line Mr. McLeod was, I consider, not merely acquiescing in, but positively encouraging a decision of this issue by the Irish courts in an action to which he was not a party. That was a very clever tactic. If the judgment of Costello J. were set aside as against the Waites, he would certainly have benefited because in practical terms it could never have been enforced against him. If, on the other hand, the Waites failed in their Irish action, he could do what he has in fact now done, which is to say that he is not bound by the decision in that action since he was not a party to it, and have another bite at the cherry of alleging fraud against the plaintiffs."

In the light of this, McCowan LJ held that the attempt by Mr McLeod to raise the defence of fraud was an abuse of process: p. 259E-F. Fox LJ agreed with Stuart-Smith LJ and McCowan LJ.

78. The circumstances in which Stuart-Smith LJ and Fox LJ were prepared to find an issue estoppel binding upon Mr McLeod as a result of the judgment of Egan J were, in my opinion, exceptional. Mr McLeod was bound by the judgment of Costello J and had an equal interest with the Waites to attack it to set it aside as obtained by fraud. He had participated with them in an appeal to the Supreme Court predicated on the claim that the judgment had been obtained by fraud, and the Supreme Court gave him the same opportunity as them to join in proceedings to establish that. He disabled himself from pursuing that opportunity, by failing to pay money into court as required. Mr McLeod then by his pleading in the English proceedings positively sought to rely upon and take the benefit of the further action in Ireland brought by the Waites to challenge the judgment of Costello J on the same grounds. His decision not to join in that action was deliberate and he offered no explanation for it. On these very strong and exceptional facts it could fairly be said that he let the Waites "fight his battle" for him, such that it would be unjust for him later to claim to be able to fight the same battle all over again in the English courts. The same cannot fairly be said of Content in relation to the proceedings in Ontario in the present case.
79. House of Spring Gardens was treated as an exceptional case with special and distinctive features in Skyparks Group Plc v Shah [2001] EWCA Civ 319, at [34] to [42] per Robert Walker LJ. In that case, by contrast, no issue estoppel was found to arise in relation to successive legal proceedings in relation to the matrimonial home, said to be held on a trust, involving first the husband and then the wife. House of Spring Gardens was distinguished.
80. It is also noteworthy that in Powell v Wiltshire at para. [26], in addressing the issue of privity of interest, Latham LJ's view was that the proper solution to the situation which had arisen in that case was that it was "necessary" for Mr Wiltshire to join Mr Powell in the Ebbs/Wiltshire proceedings, "in order to ensure that the issues could be fully and properly litigated in those proceedings." In that case, at the time of the assignment of the aircraft to Mr Powell and at the time of the trial, he did not have knowledge of the Ebbs/Wiltshire proceedings, whereas by the time of the trial in those proceedings Mr Wiltshire did have knowledge that Mr Powell might well have a claim to the aircraft. The position here is somewhat different, in that at the time of the Canwest Assignment Content did have knowledge of the litigation on foot between the Canadian plaintiffs and the Canwest companies (and later on had notice of the application for summary judgment) and at the time the Ontario action was commenced and before the application for summary judgment in that action the Canadian plaintiffs knew that Content was claiming title to the Films. The position of Content is not the same as that of Mr Powell; but the position of the Canadian plaintiffs (and, through them, the Claimant) is equivalent to that of Mr Wiltshire. Despite the difference on the facts, in my opinion the view of Latham LJ that the proper course was for Mr Wiltshire to join Mr Powell in the existing action supports the conclusion I have come to that the proper course for the Canadian plaintiffs, if they wished Content to be bound by a judgment in the Ontario action, was to join Content as a party in that action. The judgment of Holman J at para. [62] provides direct support for this conclusion: he said that since the syndicate and also Mr Powell all purchased the aircraft before the date of the judgment of Judge O'Rorke, none of them was bound by it. Although Mr Powell had no knowledge of the Ebbs/Wiltshire action, it appears that the syndicate probably were aware of it at the time of the assignment of the aircraft to them and certainly knew of it by the time of the trial before Judge O'Rorke (Mr Healy gave evidence at the trial). The syndicate's position was therefore closely similar to that of Content in relation to the Ontario action, but according to Holman J they were not bound by the judgment obtained in that action. His view, like that of Latham LJ, was that all of the syndicate and Mr Powell should have been joined as parties in the Ebbs/Wiltshire litigation: para. [63]. The judgment of Arden LJ also supports this conclusion: her view was that none of the syndicate nor Mr Powell could be regarded as privies in estate or in interest with Mr Ebbs (see paras. [33], [35] and [37]).
81. For completeness, I should mention that it would be possible for a different combination of facts to arise in another case, where for example the assignee of personal property is aware at the time of the assignment of the ongoing litigation involving the assignor, but the person litigating against the assignor is unaware during the course of the litigation of the existence of the assignee and his claims to be entitled to the property in question. In my view, even in this situation it would still require strong and exceptional facts before the conclusion could be reached that the assignee would be bound by a judgment obtained in that litigation after the assignment took place.
82. For the reasons set out above, I reject the Claimant's submissions that there is privity of estate or privity of interest between FEI and the other Canwest companies sued in the Ontario action and Content in relation to the Ontario judgment. Therefore no issue estoppel arises by reference to any such privity between FEI and the Claimant.

(iii) Issue estoppel – the third requirement: identity of issue in the proceedings

83. In my judgment, the Claimant also fails to satisfy this requirement in respect of critical features of its claim against Content. The issues determined in the Ontario judgment were that, as a matter of US law, the Canadian plaintiffs own and have at all material times owned the US copyright and associated rights in US law which they claim in respect of the Films and that, as a matter of US law, that copyright and those rights were not granted to the relevant Canwest companies. However, the Claimant's claim in the present proceedings in England, as successor in title to the Canadian plaintiffs, is not limited to a claim in respect of US copyright and associated rights in US law, but also includes a claim for relief on the basis of an assertion of copyright by the Claimant in other jurisdictions. Further, even in relation to the assertion by the Claimant of an entitlement in respect of US copyright, Content maintains that it has good defences as a matter of US law (a defence of limitation and a defence of abuse of process, by reference to the "with prejudice" dismissal of the Hoffman companies' proceedings in the USA: see paras. [17], [34] and [36] above) which have not been ruled upon by the courts in Ontario nor determined by the Ontario judgment.
84. In both respects, in my view, the Claimant fails to show that there is a relevant identity of issue as between the matters determined in the Ontario judgment and the claims now asserted by the Claimant in these proceedings. Content also submits that those matters give rise to an abuse of process defence in the English proceedings which has a real prospect of success. I accept that submission.
85. I deal first with non-US copyright issues. The existence of copyright entitlements in particular jurisdictions depends upon the relevant law of those respective jurisdictions. The Claimant claims to benefit from assignments from other Hoffman companies of both UK copyright and other non-US copyright in respect of the Films. Whether and to what extent UK copyright is assignable and has been validly assigned is a matter of the law of the United Kingdom (in particular, as set out in the Copyright, Designs and Patents Act 1988); and whether and to what extent other non-US copyright is assignable and has been validly assigned is a matter of the law of each relevant jurisdiction: Copinger and Skone James on Copyright, 16^th ed. (2011), paras. 5-72 and 5-73. The Ontario judgment does not determine whether there have been valid assignments of non-US copyrights to the Claimant.
86. Mr Tritton sought to meet this objection by submitting that, nonetheless, for the purposes of the Claimant's application for summary judgment, the Court could be confident that the law in relation to assignment of copyright in the United Kingdom and other jurisdictions is the same as in the USA. He said this even though the Claimant put forward no evidence of other foreign law, on the basis that the Court could rely for these purposes on international harmonisation of copyright law pursuant to the Berne Convention for the Protection of Literary and Artistic Works (1971).
87. I do not accept this submission. The Berne Convention does not provide for complete harmonisation by states party to the Convention of all aspects of the law relating to copyright. In particular, it does not provide for harmonisation of conditions for the valid assignment of copyright nor for harmonisation of limitation periods. Article 5(2) of the Convention states, inter alia, that "apart from the provisions of this Convention, the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed." The Convention therefore provides no sound basis for the submission that this court should presume that the laws relating to copyright of all states party to the Convention are in all respects the same. A similar submission, to the effect that the court should presume that the law of copyright in other countries is the same as that of the United Kingdom (which is itself a party to the Berne Convention), was rejected by Ferris J in Mother Bertha Music Ltd v Bourne Music Ltd [1997] EMLR 457, at 488-493. Ferris J upheld the submission that it was "wholly unrealistic and unfair to [the defendant] to allow the plaintiffs to proceed in the way that they propose. It is manifest that the law of copyright in other countries will be found not to be precisely the same as it is in the United Kingdom." Reference to the Berne Convention does not provide any good reason to justify making the assumptions which Mr Tritton invites me to make about the identity of the issues determined by the Ontario court and the issues falling to be resolved in the English proceedings.
88. Moreover, in my judgment, even if one focuses only on the Claimant's claim to be entitled to assert US copyright against Content, the Claimant would not be entitled to judgment on this application because at the very least Content has raised a triable defence that there is no proper identity of issue between these English proceedings and the Ontario judgment. Arguments that it would be an abuse of process for the Claimant to seek to enforce US copyright when the US court has dismissed "with prejudice" the 2005 US action in which the Hoffman companies complained of infringement by Content of US copyright in relation to the Films and that the US rights which the Claimant now seeks to enforce are barred by limitation of time (as held by the US court in relation to Paramount: see para. [36] above) were not addressed in the Ontario judgment. In my view, resolution of the issues between the Claimant and Content regarding the impact of these aspects of the US proceedings on the Claimant's claim in the English proceedings is likely to require expert evidence of US law on each side. The inter-play of the proceedings in the USA, Ontario and England is so complex that it cannot in justice be concluded on this application for summary judgment that the Ontario judgment creates an issue estoppel even in relation to issues of infringement of US copyright, especially since the issues I have referred to were not argued out before the Ontario court nor made the subject of any explicit ruling by it.

Conclusion

89. The Claimant's application for summary judgment is dismissed.