regard, instead of arriving at 6,5%, he determined 7% to be reasonable. It certainly was never suggested,
with substantiation, by any of the witnesses that owners of copyright in sound recordings were entitled to
rate their talents at twice the rate received by composers.
[72] It was submitted on behalf of SAMPRA that the discretion conferred on the Tribunal in terms of section 31(5) of
the Act was the widest form of discretion in our law and that the Tribunal could legitimately adopt any one of
a range of options about which there may well be a justifiable difference of opinion as to which one would be
the most appropriate. Such discretion, so it was contended, is what is known as a strict discretion. In this
regard the judgment of this Court in Oakdene Square Properties (Pty) Ltd and others v Farm Bothasfontein
(Kyalami) (Pty) Ltd and others 2013 (4) SA 539 (SCA) [also reported at [2013] 3 All SA 303 (SCA) Ed], is
relevant.
[73] NAB, on the other hand, contended that the Tribunal did not have an unfettered discretion. Both parties,
however, agreed that if we were to conclude that the Tribunal proceeded from incorrect facts and ignored
relevant factors, the determination could be overturned and we could substitute a conclusion based on the
available evidentiary material.11 The parties were ad idem that any further delay was undesirable.
[74] In my view, Sapire AJ's determination occurred without reference to the very important evidence and factors
set out above, with the consequence that the determination is liable to be set aside and substituted.
[75] For all the reasons set out above, a reasonable rate would be 3,0% of revenue as a maximum rather than the
7% determined by Sapire AJ or the 10% proposed by SAMPRA. In my view, the only justifiable exclusion from
SAMPRA's definition of editorial time is the broadcast of advertising. There is no doubt in my mind that revenue
should be that which is
Page 280 of [2014] 2 All SA 263 (SCA)
reflected in a radio station's financial statements. In this regard the practice followed by SAMRO, about which
we were advised from the Bar, appears salutary. It appears that broadcasters are invoiced two months in
arrears, based on the revenue certified by its accountants, which, after the end of the financial year, is
verifiable by way of audited financial statements. The time lag will enable SAMPRA to verify, preinvoicing, that
part of a radio station's play list that is rightly subject to copyright. From what is set out above, it is clear that
I did not consider profitability or audiencereach to be included in a formula to arrive at the royalty rate. In my
view, for the reasons already provided, I am unpersuaded that NAB's proposal that revenue should be
calculated per time channel within a total broadcast period is justified. In this regard I bear in mind the
concession by Ms Hollis who testified in support of NAB's case that a simple formula is to be preferred. NAB's
formula is somewhat complex and more susceptible to disputes.
[76] Thus, the formula to be applied in determining the royalty rate is the following:
"A
B
×
C × 3
100
Where:
A = the amount of time used by a radio station in any period to broadcast the sound recordings administered by
SAMPRA;
B = the total amount of time used by a radio station in that period to broadcast editorial content,
and
C = a radio station's net broadcasting revenue based on what is reflected in its financial statements or certified by its
accountants.
'editorial content' is defined as content, including the repertoire, broadcast for entertainment, information or interest
of members of the public and shall not include broadcast time allocated to advertisements."
[77] I now turn to address the remaining issue flowing from the crossappeal by NAB. In my view, the approach to
the South Gauteng High Court for the declaratory order referred to earlier in this judgment was misplaced.
Counsel representing NAB rightly did not argue the contrary too strenuously. It was for the Tribunal to
consider whether what it was required to determine was within its statutory powers. If it erred, that decision
could be challenged on appeal. Counsel on behalf of NAB accepted that we were not bound by the decision of
the High Court concerning the powers of the Tribunal to determine the date from whence the royalty is
payable. In the latter regard, it is important to note that the Tribunal's power is narrowly circumscribed and
does not include the power to deal with disputes concerning the time from which the royalties are due.
Moreover, there are a number of issues that impact on the question of the date from which royalties become
due including, but not limited to, prescription and claims for unlawful breach of copyright. Questions
concerning the application and enforceability of the provisions of the Act also come into play. Sapire AJ did not
address the question raised in the crossappeal at all. In my view, there is no basis for concluding that the
Tribunal was empowered to deal with the questions that arise from the crossreferral on this aspect.
Page 281 of [2014] 2 All SA 263 (SCA)
[78] No costs were awarded in the court below. This was justified by Sapire AJ on the basis that both parties had
contributed equally towards his determination and that he did not wholly adopt the formula of either one. In
my view, the same reasoning applies in this Court. For the reasons set out above, the following order is
made:
1.
The appeal is upheld to the extent reflected in the formula set out below, and the crossappeal is
dismissed with no order as to costs.