Sony Music Entertainment (Ireland) Ltd v UPC Communications Ireland Ltd

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan
• Judgment Date: 24 March 2017
• Neutral Citation: [2017] IECA 96
• Date: 24 March 2017
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2017] IECA 96 Appeal No. 2015 338

[2017] IECA 96

THE COURT OF APPEAL

Finlay Geoghegan J.

Finlay Geoghegan J.

Hogan J.

Faherty J.

Neutral Citation Number: [2017] IECA 96

Appeal No. 2015 338

BETWEEN/

SONY MUSIC ENTERTAINMENT (IRELAND) LTD.,

UNIVERSAL MUSIC IRELAND LTD.

AND

WARNER MUSIC IRELAND LTD.

PLAINTIFFS/RESPONDENTS

AND

UPC COMMUNICATIONS IRELAND LTD.

DEFENDANT/APPELLANT

Costs – Injunction – Special circumstances – Parties seeking to appeal and cross appeal against an order for costs – Whether trial judge erred in his approach in reducing the costs awarded to the plaintiffs

Facts: The plaintiffs/respondents, Sony Music Entertainment (Ireland) Ltd, Universal Music Ireland Ltd and Warner Music Ireland Ltd, as copyright holders issued proceedings against the defendant/appellant, UPC Communications Ireland Ltd, as a non-infringing internet service provider (ISP) for an order or injunction pursuant to s. 40(5A) of the Copyright and Related Rights Act 2000 giving effect to Article 8(3) of Directive 2001/29/EC. In the High Court an injunction was granted and orders made which with minor variation were upheld upon the appeal to the Court of Appeal. In the High Court there was also a subsequent hearing on costs, following which the trial judge made orders that the plaintiffs should recover 60% of their costs up to the date of the substantive judgment in the High Court (27th March 2015) and that thereafter each party should bear its own costs. On appeal to the Court of Appeal, the opposing contentions of the parties related to the 60% order in favour of the plaintiffs. The plaintiffs' contention was that they succeeded in their substantive claim for an injunction which had been resisted by UPC and that there was no justification for departing from the normal order that costs should follow the event. They also submitted that the trial judge was in error in taking into account as special circumstances justifying a departure from the general rule that cost follow the event the fact that the proceedings were both novel and complex. UPC submitted that the trial judge failed to take into account the special circumstances of the case which they submitted justifies no order for costs in favour of the plaintiffs notwithstanding the injunction granted and some costs in favour of the defendant. The special circumstances upon which they particularly relied were: (i) the fact that UPC is a non-infringing internet service provider which has not committed any legal wrong; (ii) the fact that UPC succeeded on many issues and that the form of order granted was, they submitted, radically different to the relief sought; and (iii) the novelty of the issues and the test case nature of the application.

Held by Finlay Geoghegan J that the trial judge did not err in his approach of treating these proceedings as adversarial proceedings between the plaintiffs and UPC and not departing from the approach that costs should follow the event except in accordance with the principles in Veolia Water (UK) & Ors v Fingal County Council (No. 2) [2007] 2 IR 81. The Court was not satisfied that either UPC or the plaintiffs had established that the trial judge erred in his approach in reducing the costs awarded to the plaintiffs as the successful party on the main issue in the proceedings by reason of the fact that UPC had succeeded on certain issues. The Court could not be satisfied on the submissions made that in effect awarding UPC costs of 20% of the overall costs of the proceedings creates an injustice for either party in the circumstances of the proceedings. The Court did not consider that there was any basis for an award of costs other than on an ordinary party/party basis.

Finlay Geoghegan J held that she would dismiss the appeal and the cross-appeal on costs and that she would award the plaintiffs the costs of the appeal in the Court of Appeal, but only on the usual party and party basis and not on a solicitor/client basis.

Appeal dismissed.

JUDGMENT delivered by Ms. Justice Finlay Geoghegan on the 24th day of March 2017

1 This judgment relates to an appeal and cross appeal against the order for costs made by the High Court (Cregan J.) on 17th June, 2015 and one issue in relation to the costs of the appeal.

2 Judgment in the substantive appeal was delivered on 28th July, 2016 (by Hogan J. Finlay Geoghegan J. and Faherty J. concurring): see Sony Music Entertainment Ireland Ltd & Ors -v- UPC Communications Ireland Ltd [2016] IECA 231. There was a subsequent hearing in relation to costs.

3 The proceedings are by the plaintiffs as copyright holders against the defendant ('UPC') as a non-infringing internet service provider ('ISP') for an order or injunction pursuant to s. 40(5A) of the Copyright and Related Rights Act 2000 (as inserted by Article 2 of the European Union (Copyright and Related Rights) Regulation 2012 ( S.I. No. 59 of 2012)) giving effect to Article 8(3) of Directive 2001/29/EC. In the High Court an injunction was granted and orders made which with minor variation were upheld upon the appeal to this Court.

4 In the High Court there was also a subsequent hearing on costs, following which the trial judge made orders that the plaintiffs should recover 60% of their costs up to the date of the substantive judgment in the High Court (27th March 2015) and that thereafter each party should bear its own costs.

5 The order made in respect of the period after the substantive judgment in the High Court was not the subject of submissions on appeal. The opposing contentions of the parties related to the 60% order in favour of the plaintiffs.

6 The plaintiffs' contention is that they succeeded in their substantive claim for an injunction which had been resisted by UPC and that there was no justification for departing from the normal order that costs should follow the event. They also submit that the trial judge was in error in taking into account as special circumstances justifying a departure from the general rule that cost follow the event the fact that the proceedings were both novel and complex.

7 UPC submits that the trial judge failed to take into account the special circumstances of the case which they submit justifies no order for costs in favour of the plaintiffs notwithstanding the injunction granted and some costs in favour of the defendant. The special circumstances upon which they particularly relied are:

(i) the fact that UPC is a non-infringing internet service provider which has not committed any legal wrong;

(ii) the fact that UPC succeeded on many issues and that the form of order granted was, they submit, radically different to the relief sought; and

(iii) the novelty of the issues and the test case nature of the application.

Appellate jurisdiction

8 This Court is exercising an appellate jurisdiction in what is a discretionary order of the High Court. In accordance with Ord. 99, r. 1(1) the costs of and incidental to every proceeding in the High Court is in the discretion of that Court. As is clear from the case law reviewed by the judgment of Irvine J. in this Court in Collins v. Minister for Justice Equality & Law Reform [2015] IECA 27 (with which the other members of the Court concurred) whilst great deference will normally be granted to the views of the trial judge, this Court in accordance with its appellate jurisdiction under Article 34.4.1 retains jurisdiction to exercise its discretion in a different manner in an appropriate case. McMenamin J. in Lismore Builders (in receivership) v. Bank of Ireland Finance Limited [2013] IESC 6 put it this way:

'4. ... Although great deference will normally be granted to the views of a trial judge, this Court retains the jurisdiction of exercising its discretion in a different manner in an appropriate case. This is especially so, of course, in the event there are errors detectable in the approach adopted in the High Court. The interests of justice are fundamental. This is clear from the judgment of Geoghegan J. in Desmond v. MGN [2009] 1 I.R. 737, where he states at pp. 742-743:-

'The expression "discretionary order" can cover a huge variety of orders, some of them involving substantive rights and others being merely procedural in nature including mundane day to day procedural orders, such as orders for adjournments etc. I think that in reality over the years since In bonis Morelli; Vella v. Morelli this court has exercised common sense in relation to that issue. The court would be very slow indeed to interfere with the High Court Judge's management of his or her list, but in a case such as this particular case where much more substantial issues are at stake the court, while having respect for the view of the High Court Judge, must seriously consider whether in all the circumstances and in the interests of justice it should re-exercise the discretion in a different direction.'

9 Desmond, Lismore, and Collins all concerned applications to strike out or dismiss proceedings for delay. Desmond indicates the wide spectrum of orders in relation to which the High Court will be exercising discretion and indicates that the threshold for interference on appeal may differ across the spectrum. Orders for costs undoubtedly involve substantive rights and property or monetary rights and are not merely procedural orders in relation to the running of a case with which an appeal court should be very slow to interfere. Nevertheless I am of the view that great deference should be given to orders made by a High Court judge in exercise of his/her discretion in relation to costs pursuant to Ord. 99, r. 1. This is perhaps especially in relation to proceedings such as the present one which were complex, included many issues, and were at hearing over 10 days in...