Cases referred to in judgment
Bank of Lisbon and South Africa Ltd v The Master and others [1987] 1 All
SA 286 ([1986] ZASCA 121, 1987 (1) SA 276) (A) Referred to
43
Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] 2 All
SA 262 ([2012] ZASCA 13, 2012 (4) SA 593) (SCA) Referred to
50
National Association of Broadcasters v South African Music Performance
Rights Association and another [2014] 2 All SA 263 ([2014] ZASCA 10,
2014 (3) SA 525) (SCA) Referred to
45
Paddock Motors (Pty) Ltd v Igesund [1976] 3 All SA 332 (1976 (3) SA 16)
(A) Referred to
43
Road Accident Fund v Mothupi [2000] 3 All SA 181 ([2000] ZASCA 27,
2000 (4) SA 38) (SCA) Referred to
43
Judgment
SWAIN JA:
[1] In issue in this appeal is the amount to be paid as a royalty by the respondents, a group of 10 retailers,
formally cited as Foschini Retail Group
Page 42 of [2016] 2 All SA 40 (SCA)
and 9 others ("the retailers"), to the appellant, the South African Music Performance Rights Association
("SAMPRA"), to entitle the retailers to play background music in their stores. The retailers' legal obligation to
pay a royalty is located in section 9A(1)(a) of the Copyright Act 98 of 1978 ("the Act"). This section provides
that in the absence of an agreement to the contrary no person may broadcast, cause the transmission of, or
play a sound recording without the payment of a royalty to the owner of the relevant copyright.1
[2] The obligation to make payment of the royalty to SAMPRA arises from its legal status as an accredited
representative collecting society to administer its members' rights to receive payment of these royalties.2 The
sole member of SAMPRA is the Recording Industry of South Africa ("RISA"), which represents members of the
recording industry, in the form of the record companies which produce sound recordings and own the
copyright in these sound recordings.
[3] The amount of the royalty payable ("the tariff") is in terms of section 9A(1)(b) of the Act, to be determined by
agreement between the user of the sound recording, the performer and the owner of the copyright, or
between their representative collecting societies. In the absence of an agreement section 9A(1)(c) of the Act
provides that the user, performer, or owner may refer the matter to the Copyright Tribunal ("the tribunal"), or
they may agree to refer the matter for arbitration, in terms of the Arbitration Act 42 of 1965 to resolve the
dispute.
[4] The retailers and SAMPRA were unable to reach an agreement on the amount of the tariff set by SAMPRA and
payable by the retailers to SAMPRA. The retailers, accordingly, referred the matter to the tribunal for
determination. As will be seen, a referral of the dispute to the tribunal reveals difficulties in the interpretation
of the powers of the tribunal as set out in Chapter 3, and more specifically, sections 30 and 33 of the Act. This
has given rise to competing submissions by the parties on the tribunal's jurisdiction and powers, fundamental
to the outcome of this appeal. Consequently, although the parties are ad idem that the essential inquiry
before the tribunal in terms of section 33(5)(b) of the Act was to determine a tariff which was "reasonable in
the circumstances", they are however not in agreement as to whether the retailers bear the onus of proving
this issue. A further area of disagreement is whether the tribunal only acquired jurisdiction to determine the
dispute, once it was satisfied that the tariff was unreasonable.
[5] The retailers and SAMPRA, with the objective of showing that the tariff which they respectively espoused, was
reasonable in the circumstances, placed a great deal of evidence before the tribunal. In the result, Phatudi J in
his capacity as a commissioner of patents,3 sitting as the tribunal,4 determined that in the circumstances a
reasonable tariff lay somewhere
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between the respective amounts proposed by the retailers and set by SAMPRA. The tariff awarded exceeded
that proposed by the retailers, but was less than that set by SAMPRA. SAMPRA accordingly applied for and
was granted leave by the tribunal, to appeal to this Court against the tariff awarded, as well as the costs
order granted in favour of the retailers. The retailers did not challenge the tariff awarded by way of a cross
appeal.
[6] Before dealing with the central submissions of SAMPRA as contained in its heads of argument before this
Court, it is necessary to briefly deal with entirely new submissions advanced by Counsel for SAMPRA at the
hearing of the appeal which had their origin in competition law. Counsel for the retailers correctly pointed out
that the hearing before the tribunal was not conducted on the basis of competition law principles. In addition,
the criticism levelled at the evidence of the retailers' main expert witness Prof Ross, which was that he failed
to have regard to competition law principles, it was submitted, was unfair. This was because Prof Ross, who
was called as an economist, never had an opportunity to deal with any of these criticisms. Counsel for