Twentieth Century Fox Film Corporation and Others v David Harris and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Barling |
| Judgment Date | 16 May 2014 |
| Neutral Citation | [2014] EWHC 1568 (Ch) |
| Docket Number | Case No: HC12F01500 |
| Court | Chancery Division |
| Date | 16 May 2014 |
[2014] EWHC 1568 (Ch)
Mr Justice Barling
Case No: HC12F01500
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Richard Spearman QC (instructed by Wiggin LLP) for the Claimants
The First Defendant appeared in person, and on behalf of the Third and Sixth Defendants
The remaining Defendants were not represented
Hearing dates: 02 – 06.12 & 09.12.2013
| I. INTRODUCTION | 5 |
| II. THE N1 ACTION | 7 |
| III. THE N2 ACTION | 11 |
| IV. EVENTS FOLLOWING THE JUDGMENTS OF ARNOLD J | 17 |
| V. THE PRESENT PROCEEDINGS | 17 |
| Commencement of proceedings | 17 |
| Summary of the main contentions of the parties | 18 |
| Evidence adduced | 21 |
| The Chat Logs | 25 |
| My conclusion as to the accuracy of the Chat Logs | 30 |
| Mr Harris's knowledge of, and participation in, the activities of N and the N1 website | 33 |
| Mr Harris's knowledge of and participation in the operation of the N2 website | 37 |
| The nature of Mr Harris's relationships with the other Effective Defendants: the nature and purpose of their activities/transactions | 42 |
| K; Payments to K; the FO website; Amberleigh | 43 |
| The Foundation | 48 |
| MFM | 54 |
| HKB, Mike Wong, the Flat and 4All | 58 |
| Other issues | 66 |
| Legal fees paid to Mr Harris | 66 |
| Extracting funds generally | 68 |
| VI. THE CLAIMANTS' CAUSES OF ACTION | 68 |
| Alleged liability of Mr Harris – infringement of copyright jointly with N | 68 |
| Mr Harris's Henderson v Henderson submission | 68 |
| Mr Harris a joint tortfeasor with N | 70 |
| Alleged liability of Mr Harris – infringement of copyright by reason of the operations of the N2 website | 72 |
| Alleged liability of Mr Harris and the other Effective Defendants – conspiracy to injure by unlawful means | 72 |
| Relevant findings | 74 |
| A combination of two or more persons | 75 |
| To take action which is unlawful in itself | 77 |
| (a) Conspiracy to infringe the Claimants' copyrights | 77 |
| (b) Conspiracy to defraud the Claimants | 80 |
| With the intention of causing damage to a third party | 83 |
| Who suffers the damage | 85 |
| Unlawful means conspiracy – my conclusions | 86 |
| VII. RELIEF | 86 |
| VIII. OTHER MATTERS | 87 |
| IX. ANNEX A | 88 |
| X. ANNEX B | 90 |
| XI. GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS | 98 |
INTRODUCTION
The Claimants are members of the Motion Picture Association of America Inc. ("MPA") and are the owners or exclusive licensees of copyrights in many motion pictures and television programmes. They sue in a representative capacity on behalf of themselves and all other companies which are controlled by, control, or are under common control with, members of the MPA. Their claims are for (1) infringement of copyright and (2) unlawful means conspiracy against the First Defendant ("Mr Harris"), the Second Defendant ("K"), the Third Defendant ("The Foundation"), the Sixth Defendant ("MFM"), the Seventh Defendant ("HKB"), and the Eighth Defendant ("4All") (collectively "the Effective Defendants"; references are also sometimes made to "the corporate Defendants" where it is necessary to distinguish the other Effective Defendants from Mr Harris).
Proceedings against the Fourth Defendant ("Paypal") have been discontinued, and settlement has been reached with the Fifth Defendant ("Mr E"), who was called as a witness by the Claimants. After the proceedings had begun, Mr E disclosed documentary evidence in the form of 1,119 printed pages of private internet discussions (more technically known as Internet Relay Chat) said to have taken place between Mr Harris, Mr E and other associates over the period December 2009 to August 2010 ("the Chat Logs").
A winding-up order was made against K on 21 October 2013 on the petition of HMRC in respect of an outstanding tax liability of about £361,000. The effect of that order is that, pursuant to s130(2) of the Insolvency Act 1986, "no action or proceeding shall be proceeded with or commenced against the company or its property, except by leave of the court and subject to such terms as the court may impose". The Claimants expressly do not ask for leave in the present case.
At the heart of the Claimants' case are the following allegations: that since about mid-December 2009 until about the end of November 2012 Mr Harris has been the driving force behind mass deliberate infringements of the Claimants' copyrights; that K, the Foundation, MFM, HKB and 4All are his corporate creatures, owned and/or controlled by him; and that he has used them for the purposes of inter alia channelling to himself or for his benefit the revenues earned from those infringing activities, as well as for syphoning off funds from Newzbin Limited ("N"), another company owned by him, and thwarting the Claimants' ability to recover costs and compensation for the infringement by N of their copyright, established in earlier proceedings.
The Chat Logs have to some extent been relied upon by Mr Harris, but in other respects are said by him to have been fabricated by Mr E. However, if, as the Claimants contend, they accurately record the conversations in question, then they would provide very powerful evidence in support of the Claimants' allegations in these proceedings. The genuiness of the Chat Logs is, therefore, one of the issues of fact which I need to determine.
The present proceedings follow two earlier cases brought by the Claimants. It is necessary to explain the nature and outcome of both those cases in order to understand how the present matter has come about. The first ("the N1 action") was a copyright infringement claim brought against N. It was heard by Kitchin J (as he then was), and his judgment dated 29 March 2010 is at: Twentieth Century Fox Film Corp. and others v Newzbin Limited [2010] EWHC 608 (Ch). The second ("the N2 action") was a claim for a blocking injunction pursuant to section 97A of the Copyright, Designs and Patents Act 1988 ("the 1988 Act"). It was decided by Arnold J, and his judgment dated 28 July 2011 is at Twentieth Century Fox Film Corp. v BT [2011] R.P.C. 28. (A further judgment by Arnold J relating to the form of relief to be granted was given on 26 October 2011, and is to be found at: Twentieth Century Fox Film Corp v BT [2011] EWHC 2714 (Ch)).
THE N1 ACTION
The N1 action arose out of the operation by N of a website which was known as Newzbin ("the N1 website"). The sole purpose of the N1 website was (as the Claimants contended and the learned Judge found) to make available to its users unlawful copies of copyright works, including movies and TV programmes. Kitchin J summed up his main findings as follows:
"111. …. I have found that the defendant well knows that it is making available to its premium members infringing copies of films, including the films of the claimants. In summary, the defendant operates a site which is designed and intended to make infringing copies of films readily available to its premium members; the site is structured in such a way as to promote such infringement by guiding the premium members to infringing copies of their choice and then providing them with the means to download those infringing copies by using the NZB facility; the activation of the NZB facility in relation to one of the claimants' copyright films will inevitably result in the production of an infringing copy; the defendant has encouraged and induced its editors to make reports of films protected by copyright, including those of the claimants; the defendant has further assisted its premium members to engage in infringement by giving advice through the sharing forums; the defendant has profited from the infringement; and finally, the claimants are not able to identify particular infringements by particular members only because the defendant keeps no records of the NZB files they have downloaded.
112. In all these circumstances, I believe the question I have identified admits of only one answer. The defendant has indeed procured and engaged in a common design with its premium members to infringe the claimants' copyrights…….
125. …. This service is not remotely passive. Nor does it simply provide a link to a film of interest which is made available by a third party. To the contrary, the defendant has intervened in a highly material way to make the claimants' films available to a new audience, that is to say its premium members. Furthermore it has done so by providing a sophisticated technical and editorial system which allows its premium members to download all the component messages of the film of their choice upon pressing a button, and so avoid days of (potentially futile) effort in seeking to gather those messages together for themselves. As a result, I have no doubt that the defendant's premium members consider that Newzbin is making available to them the films in the Newzbin index. Moreover, the defendant has provided its service in full knowledge of the consequences of its actions. In my judgment it follows from the foregoing that the...
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