JML Direct Ltd v Freesat UK Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Jacob,Lord Justice Moore-Bick,The Master of the Rolls |
| Judgment Date | 02 February 2010 |
| Neutral Citation | [2010] EWCA Civ 34,[2009] EWCA Civ 926 |
| Docket Number | Case No: A3/2009/0827 |
| Court | Court of Appeal (Civil Division) |
| Date | 02 February 2010 |
[2009] EWCA Civ 926
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE BLACKBURNE)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Jacob and
Lord Justice Patten
Case No: A3/2009/0827
Mr R Howe QC and Mr M Gay (instructed by DLA Piper UK LLP) appeared on behalf of the Appellant.
Mr B Lask (instructed by BBC Commercial & Regulatory Legal Department) appeared on behalf of the Respondent.
(Draft for Approval)
Lord Justice Jacob:
We are not inclined to give you leave to appeal on those issues. We are giving you leave to appeal on the other issues, on the grounds that it is a public interest matter. Costs in the appeal.
Order: Application granted on grounds 1, 2 and 4 only.
[2010] EWCA Civ 34
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr. Justice Blackburne)
Before: The Master of the Rolls
Lord Justice Moore-Bick
and
Lord Justice Toulson
Case No: A3/2009/0827
Mr. Robert Howe Q.C. and Mr. Mark Gay (Solicitor Advocate) (instructed by DLA Piper LLP) for the appellant
Mr. Tim Ward and Mr. Ben Lask (instructed by BBC Commercial & Regulatory Legal Department) for the respondent
Hearing dates: 13 th January 2010
Lord Justice Moore-Bick:
Background
The background to these proceedings is described in full in the judgment of Blackburne J. The following summary, which is sufficient for the purposes of the present appeal, is drawn from the judge's findings.
The respondent, Freesat UK Ltd, operates a digital multi-channel satellite television service by the name of 'Freesat' that is available at no charge to anyone who is willing to purchase the necessary receiving equipment. The appellant, JML Direct Ltd (“JML”), is a provider of television shopping channels. The programmes and other services available through Freesat are produced by broadcasting companies and are delivered from the studio to the viewer by third parties under separate agreements. Freesat's own role is to produce and manage an electronic programme guide (“EPG”), which has led to its being classed as a broadcasting “platform” by the regulator, Ofcom.
The EPG is transmitted to the viewer's home alongside television and other services. It contains programme information similar to that to be found in a television listings magazine and allows the viewer to navigate and select services by means of a remote control device. For this service Freesat charges in respect of each channel an initial registration fee of £1,500 and an annual fee of £30,000.
In the autumn of 2007 Freesat invited providers of radio and television channels to participate in the launch of its new service. On 19 th November 2007 JML formally applied to have two of its shopping channels included on the Freesat platform from the date of its launch in 2008 and in February 2008 it entered into a contract with Freesat for the provision of specified EPG services in accordance with Freesat's published Listing Policy. The contract expressly provided as follows:
“ 3. Provision of EPG Services
3.1 Freesat shall provide the EPG Services set out in Part A of Schedule 2 in respect of the Channel in accordance with the Listing Policy.
3.2 The Channel Provider shall comply with the obligations set out in Part B of Schedule 2
…
3.4 The Channel Provider recognises that it has no right or entitlement to any particular LCN and that LCNs are allocated by Freesat at its discretion in accordance with the Listing Policy.
…
10. Fault Handling
10.1 Freesat shall provide the EPG Services:
10.1.1 in accordance with all applicable laws and regulations (including, for the avoidance of doubt, the Ofcom Code); [and]
…
10.1.3 in accordance with the Listing Policy.”
The LCN (logical channel number) to which clause 3.4 referred is the channel number assigned to the service by Freesat and determines its position in the EPG.
The Listing Policy, to which clauses 3.1 and 3.4 referred, had been published by Freesat early in 2008. It contained, among other things, a description of the process by which Freesat intended to allocate LCNs in circumstances where applications for listing were received from more than one channel within the same genre. (Channels were to be listed in categories or 'genres' determined by the subject matter of the content.) A copy of the Listing Policy had been provided to JML together with the terms of the EPG agreement in response to its original application for listing. The material parts provided as follows:
“1. Introduction
1.1 This document states the policy of … Freesat … for the allocation of … EPG … numbers on the Freesat platform. After any such allocations have been made by Freesat, the EPG number continues to belong to Freesat and to be subject to its discretion and applicable policy.
…
2. EPG Listing Policy Objective
2.1 Freesat's objective is to apply the Policy in such a way as it considers to be for the long-term benefit of the Freesat platform, to fulfil viewer expectations and in the interests of viewer convenience (in each case as determined by Freesat in accordance with this Policy).
…
5. Allocation of EPG Numbers within Genres
5.3 Where Freesat is considering the allocation of an EPG number to more than one channel at the same time it will take into account the following;
(i) the applicability of sections 6 and 7 below to one or more channels;
(ii) the date on which the Launch Application Form was received by Freesat;
(iii) the date that the channel provider has entered into an EPG Agreement with Freesat;
(iv) the intended launch date of the channel; and
(v) viewer convenience and expectations.”
Section 6 was concerned with public service channels and is not material to the issues that arise on the appeal. Section 7, headed “Associated Channels and Reserved EPG Numbers”, provided, so far as material, as follows:
“7.1 Freesat considers that viewer convenience and expectations will be best served if channels which are Associated with another channel or other channels on the Freesat platform are more closely grouped together on the Freesat platform. It is Freesat's intention that the Policy will operate over time to achieve this.”
It was common ground that JML's two channels were “associated” for these purposes.
The Ofcom Code (“the Code”), to which clause 10 of the EPG Agreement referred, is the 'Code of practice on electronic programme guides' published by the communications regulator, Ofcom, pursuant to sections 310 and 316 of the Communications Act 2003. It provides, so far as material, as follows:
“ Introduction
1. This Code sets out the practices to be followed by EPG providers:
a. to give appropriate prominence for public service channels;
b. to provide the features and information needed to enable EPGs to be used by people with disabilities affecting their sight or hearing or both; and
c. to secure fair and effective competition.
…
Fair, reasonable and non-discriminatory treatment
14. Ofcom has concluded that, in order to secure that the providers of EPGs licensed by Ofcom do not enter into or maintain any arrangements or engage in any practice that Ofcom considers would be prejudicial to fair and effective competition in the provision of licensed radio or television services or of connected services as defined in section 316 of the Act, EPG providers should comply with the provision set out in this section.
15. In particular, EPG licensees are required:
a. to ensure that any agreement with broadcasters for the provision of an EPG service is made on fair, reasonable and non-discriminatory terms;
b. to publish and comply with an objectively justifiable method of allocating listings. This does not preclude different methods —for example, objectively justifiable methods could include 'first-come, first-served', alphabetical listings, and those based on audience shares;
c. to refrain from giving undue prominence in any listing or display to a channel to which they are connected, except as required by the appropriate prominence provisions set out in paragraphs 2 to 4 above;
…”
Freesat allocated channel number 810 in its EPG to one of JML's channels and channel number 809 to the other. As a result those channels were placed in tenth and eleventh positions in the list of shopping channels and neither therefore appeared on the first screen page of the shopping genre listing. That gave rise to a dispute between JML and Freesat over the way in which channels had been allocated and on 10 th October 2008 JML issued proceedings seeking an order for specific performance or damages for breach of contract. Its case was that Freesat had acted in an arbitrary or irrational manner in allocating channels. In particular, it said that Freesat had failed to give sufficient or any weight to the “first come, first served” principle set out in paragraph 5.3(ii) of the Listing Policy, that it had applied criteria or had regard to factors that had not been published in the Listing Policy, that it had wrongly disregarded the date on which JML had entered into the EPG agreement and that it had subsequently added further...
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