Phonographic Performance Ltd v Nightclub (London) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Warren |
| Judgment Date | 21 April 2016 |
| Neutral Citation | [2016] EWHC 892 (Ch) |
| Docket Number | Case No: HC-2014-000981 (formerly HC14F03650) |
| Court | Chancery Division |
| Date | 21 April 2016 |
[2016] EWHC 892 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr Justice Warren
Case No: HC-2014-000981 (formerly HC14F03650)
Gwilym Harbottle (instructed by GSC Solicitors LLP) for the Claimant
The Defendant and Mr Sokol Toska not appearing or being represented
Hearing date: 6 April 2016
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is an application of the claimant (" PPL") for permission to issue a writ of sequestration against the defendant (" the Company") and for committal of its sole director and shareholder Sokol Toska (" Mr Toska"). I heard the application in the absence of the Company and Mr Toska. My reasons for proceeding in their absence are explained later in this judgment. I should, at the outset, as well as commending his oral submissions, acknowledge the helpful skeleton argument and note for hearing prepared by Mr Harbottle who appears for PPL. I have drawn on them significantly in preparing this judgment.
The facts and the procedural history
The evidence is contained in the affidavits of Adam Dickman (17 February 2016), Anna Killick (14 January 2016), Wayne Petford (29 January 2016), Steve May (26 January 2016) and Dave Avraam (2 February 2016) and the exhibits to those affidavits. There is an error in Ms Killick's affidavit. She stated that she had read Mr Dickman's affidavit; what she had actually read was a draft of that affidavit. The affidavit as eventually sworn contained only minor changes to the draft. Ms Killick has provided a supplementary affidavit correcting the error and confirming the accuracy of what Mr Dickman says in his affidavit as sworn. The Company and Mr Toska have taken no part in the proceedings at any stage; there is no evidence from them. My findings appear in the following paragraphs.
The Company has been the Premises Licence Holder in respect of the nightclub premises known as Kolis, 1 Archway Road, London N19 (" the Premises") since 24 November 2005 and as such is authorised by the local authority to play recorded music.
Mr Toska has at all material times been the sole director and shareholder of the Company as well as being the designated premises supervisor in respect of the Premises. As such supervisor he is responsible for the day-to-day management of the Premises pursuant to the Guidance under Licensing Act 2003. Although Mr Toska has asserted that the appropriate party to hold PPL's licence in respect of the Premises is another company called Entertainment Enterprise Limited (which it appears he also controls), he has produced no evidence to support that assertion. In the absence of any such evidence, I conclude that the Company remains the proprietor of the Premises.
PPL became aware that the Company was trading at the Premises in June 2013. After numerous reminders, the Company declared that recordings from PPL's repertoire were being used as "background music" at the Premises and a licence was granted in respect of that use for the period to 13 April 2015.
PPL suspected that the Company was also using recordings in its repertoire as "specially featured entertainment" (DJ presentations and the like), which generally attracts a higher licence fee. This was confirmed by an agent who visited the Premises on 9 August 2014. Attempts to persuade the Company to obtain PPL's licence for specially featured entertainment had no result and proceedings were commenced on 18 September 2014. There was no acknowledgement of service and no Defence.
An order was made by Norris J on 14 November 2014 on an application by PPL for default judgment (" the Order"). The Order was in similar form to those frequently made in actions of this nature brought by PPL. The Order contained an injunction restraining the Company from infringing PPL's copyright and/or the copyright to which PPL's members hold an exclusive licence by playing in public any sound recording, or recordings in PPL's repertoire. Although not identified in the Order – the list would be far too long – the Order contained an undertaking by PPL to make available a searchable database of the sound recording comprising that repertoire. The Order also contained an order for costs against the Company.
On 14 November 2014, copies of the Order were posted to the Company at its registered office and at the Premises. The covering letter explained that further playing of PPL's repertoire in public was a breach of the Order and at the Company's peril; and it was suggested that the Company seek legal advice if it was in any doubt. In response to attempts to enforce the costs part of the Order, on 20 February 2015 Mr Toska asserted that he had paid the licence fees. It was explained to him that he had only paid the licence fees for background music. Mr Toska then applied for a licence in respect of specially featured entertainment in the name of "Nightclub Kolis" but failed to pay the invoice, so that the Premises therefore remained unlicensed.
The Company did however pay the costs of the proceedings to High Court Enforcement Officers. By letter to the Company dated 13 March 2015 (also emailed to Mr Toska), PPL's solicitors acknowledged this but explained that continued unlicensed public performance of sound recordings was a breach of the Order and an infringement and threatened to continue the proceedings.
The Company submitted directly to PPL a completed licence application form; it was submitted in the name of Nightclub Kolis and dated 24 February 2015. PPL raised an invoice but this was never paid.
On 11 April 2015 a copy of the Order endorsed with penal notices addressed both to the Company (at the top) and Mr Toska (at the bottom) was personally served on Mr Toska at the Premises. Although the penal notices are in comparatively small print, the first page of the Order contains a notice that breach of the injunction could result in the Company being found in contempt of court and "any of your Directors may be sent to Prison or fined". In any case, when the Order endorsed with penal notices was personally served, Mr Toska acknowledged himself, and the penal notice addressed to the Company (although not the one addressed to him) was read to him. The process server states that she read the penal notice to Mr Toska. She set out what she read: "If you disobey the injunction in this Order you may be found guilty of Contempt of Court and any of your Directors may be sent to Prison or fined and you may be sent to Prison or fined or your assets may be seized". Those words are actually words of the Notice in the Order itself and not, verbatim, the words either of the penal notices. I do not think this matters. Clearly Mr Toska should have understood from what was read to him the consequences of disobeying the injunction; although the penal notices were in small print, the combination of those Notices and the words read out to him by the process server can have left him in no doubt about his exposure.
On 13 April 2015 the background music licence expired and the Premises have been completely unlicensed ever since.
On 22 April 2015 a person who identified himself as "Daniel" telephoned PPL's solicitors. The attendance note, the contents of which I see no reason to doubt and accept, records that Daniel was told that the licence fee remained outstanding; he stated in reply that he did not accept that and said that he would place the Company into administration. The note also records "He stated that the premises was not currently trading". The person holding the conversation with Daniel recorded his belief that Daniel was actually Mr Toska. I agree that that is likely. Indeed, the inevitable inference from the threat by Daniel that he would put the Company into liquidation is that he was able to do so; the only person in the position to do so was Mr Toska. In the absence of any contrary evidence, I conclude that Daniel was, indeed, Mr Toska.
Contrary to Daniel's assertion, the Premises remained open and trading and on 13 June, 15 August and 19 December 2015 in breach of the Order sound recordings in PPL's repertoire were played in public at the Premises by way of specially featured entertainment. I am satisfied that this was so from the affidavits of Wayne Petford, Steve May and Dave Avraam which I have already mentioned.
By letter dated 28 September 2015, PPL's solicitors notified the Company of the breaches dated 15 August 2015. The letter was copied by email to Mr Toska. The letter clearly warned the Company (and the email warned Mr Toska) of the risk of sequestration, fines or imprisonment.
A further letter was sent on 28 January 2016 reiterating that the playing of sound recordings in public at the Premises continued to be a breach of the Order. Despite having been invited in those letters to regularise the position, the Company has failed to do so. The Islington Licensing department confirmed on 4 February...
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