THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable

Case No: 50/2015

In the matter between:

THE SOUTH AFRICAN MUSIC PERFORMANCE RIGHTS
ASSOCIATION
APPELLANT

and

FOSCHINI RETAIL GROUP (PTY) LIMITED
AND 9 OTHERS
RESPONDENT

Neutral citation:
SAMPRA v Foschini Retail Group (Pty) Ltd (50/2015) [2015]
ZASCA 188 (30 November 2015)

Coram:
Mpati P and Mhlantla, Pillay, Swain and Zondi JJA

Heard:
17 November 2015

Delivered:
30 November 2015

Summary: Determination by Copyright Tribunal of royalty payable in terms of s 9A
read with s 30(b), 33(3) and 33(5) of the Copyright Act 98 of 1978 – jurisdiction of
tribunal – established by absence of agreement between user and owner of
copyright protected music as to amount of royalty – tribunal to be satisfied on all of
evidence that claim of user to a reduced royalty well-founded in terms of s 33(5) – no
onus upon user to prove this – determination of reasonable royalty – reference to
comparable royalties payable in foreign jurisdictions.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from: The Copyright Tribunal (Phatudi J, sitting as the Tribunal).

1.
The appeal is upheld to the extent of the order contained in para 2 below.
2.
The order of the Copyright Tribunal contained in para 79.1, read with para 76
of the judgment of the Copyright Tribunal, is set aside and substituted with
the following order:
a) The following tariff is declared to have been the reasonable rate of
royalties in terms of s 9A of the Copyright Act 98 of 1978 with effect from 1
January 2008:

Fees: Size of Premises (Audible Area
in square metres)
Licence Fee per store per Annum
(exclusive of VAT)
Up to 50
R150
51 to 100
R300
101 to 200
R450
201 to 300
R600
301 to 500
R750
501 to 750
R900
751 to 1000
R1050
1001 to 1250
R1200
1251 to 1500
R1350
1501 to 1750
R1500
1751 to 2000
R1650
2001 to 2500
R1800
2501 to 3000
R1950
3001 to 3500
R2100
3501 to 4000
R2250
4001 to 4500
R2400
4501 to 5000
R2550
5001 to 6000
R2700
6001 to 7000
R2850

7001 to 8000
R3000
8001 to 9000
R3150
9001 to 10000
R3300
Every additional 1 to 1000 (above 10000) R150

b) The tariff is subject to revision with effect from 1 January every year in
accordance with the Consumer Price Index for the previous year.
3.
The respondents are ordered to pay 50 per cent of the appellant‟s costs of
the appeal, such costs to include the costs of two counsel.
___________________________________________________________________

JUDGMENT
___________________________________________________________________
Swain JA (Mpati P and Mhlantla, Pillay and Zondi JJA concurring):
[1] In issue in this appeal is the amount to be paid as a royalty by the
respondents, a group of 10 retailers, formally cited as Foschini Retail Group and 9
others (the retailers), to the appellant, the South African Music Performance Rights
Association (SAMPRA), to entitle the retailers to play background music in their
stores. The retailers‟ legal obligation to pay a royalty is located in s 9A(1)(a) of the
Copyright Act 98 of 1978 (the Act). This section provides that in the absence of an
agreement to the contrary no person may broadcast, cause the transmission of, or
play a sound recording without the payment of a royalty to the owner of the relevant
copyright.1
[2] The obligation to make payment of the royalty to SAMPRA arises from its
legal status as an accredited representative collecting society to administer its

1 The playing of a sound recording includes „communicating the sound recording to the public‟ in
terms of s 9(e) of the Act.

members‟ rights to receive payment of these royalties. 2 The sole member of
SAMPRA is the Recording Industry of South Africa (RISA), which represents
members of the recording industry, in the form of the record companies which
produce sound recordings and own the copyright in these sound recordings.
[3] The amount of the royalty payable (the tariff) is in terms of s 9A(1)(b) of the
Act, to be determined by agreement between the user of the sound recording, the
performer and the owner of the copyright, or between their representative collecting
societies. In the absence of an agreement s 9A(1)(c) of the Act provides that the
user, performer, or owner may refer the matter to the Copyright Tribunal (the
tribunal), or they may agree to refer the matter for arbitration, in terms of the
Arbitration Act 42 of 1965 to resolve the dispute.
[4] The retailers and SAMPRA were unable to reach an agreement on the
amount of the tariff set by SAMPRA and payable by the retailers to SAMPRA. The
retailers accordingly referred the matter to the tribunal for determination. As will be
seen, a referral of the dispute to the tribunal reveals difficulties in the interpretation of
the powers of the tribunal as set out in chapter 3, and more specifically, ss 30 and 33
of the Act. This has given rise to competing submissions by the parties on the
tribunal‟s jurisdiction and powers, fundamental to the outcome of this appeal.
Consequently, although the parties are ad idem that the essential inquiry before the
tribunal in terms of s 33(5)(b) of the Act was to determine a tariff which was
„reasonable in the circumstances‟, they are however not in agreement as to whether
the retailers bear the onus of proving this issue. A further area of disagreement is
whether the tribunal only acquired jurisdiction to determine the dispute, once it was
satisfied that the tariff was unreasonable.
[5] The retailers and SAMPRA, with the objective of showing that the tariff which
they respectively espoused, was reasonable in the circumstances, placed a great

2 Regulation 3(1)(a) of the Collecting Society Regulations, GN R517 GG 28894, 1 June 2006.

deal of evidence before the tribunal. In the result, Phatudi J in his capacity as a
commissioner of patents, 3  sitting as the tribunal, 4  determined that in the
circumstances a reasonable tariff lay somewhere between the respective amounts
proposed by the retailers and set by SAMPRA. The tariff awarded exceeded that
proposed by the retailers, but was less than that set by SAMPRA. SAMPRA
accordingly applied for and was granted leave by the tribunal, to appeal to this court
against the tariff awarded, as well as the costs order granted in favour of the
retailers. The retailers did not challenge the tariff awarded by way of a cross-appeal.
[6] Before dealing with the central submissions of SAMPRA as contained in its
heads of argument before this court, it is necessary to briefly deal with entirely new
submissions advanced by counsel for SAMPRA at the hearing of the appeal which
had their origin in competition law. Counsel for the retailers correctly pointed out that
the hearing before the tribunal was not conducted on the basis of competition law
principles. In addition, the criticism levelled at the evidence of the retailers‟ main
expert witness Prof Ross, which was that he failed to have regard to competition law
principles, it was submitted, was unfair. This was because Prof Ross, who was
called as an economist, never had an opportunity to deal with any of these criticisms.
Counsel for SAMPRA contended, however, that the submissions were made in law
and related to the application of the Act. It is quite clear, however, that at no stage
during the lengthy proceedings before the tribunal were principles of competition law
referred to, or applied. The evidence led by the parties did not have as its objective
the proof of any principles of competition law. If from the outset the dispute between
the parties had been framed in the context of competition law principles, there is
ground for thinking that further, or other, evidence, would have been produced by the

3 In terms of s 8 of the Patents Act 57 of 1978.
4 In terms of s 29(1) of the Act.

parties. The issue was not investigated or canvassed before the tribunal.5 To apply
these principles now would alter the whole basis upon which the parties approached
and dealt with the central dispute between them. It would be unfair to allow this now.
[7] Central to SAMPRA‟s case on appeal are two propositions:
(a)
The retailers as applicants before the tribunal bore a duty, in terms of the
legislative framework, to satisfy the tribunal that their claims regarding the
unreasonableness of the tariff set by SAMPRA were well-founded. The tribunal‟s
jurisdiction to determine a reasonable tariff would only be activated once the retailers
had satisfied the tribunal that their claim of unreasonableness was well-founded.
(b)
Only then would the tribunal be empowered to determine a reasonable tariff
after the retailers had adduced sufficient evidence of „circumstances‟ applicable to
them, which would enable the tribunal to determine a tariff which was „reasonable in
the circumstances‟.
[8] SAMPRA then submits that the retailers did not adduce sufficient evidence in
support of their claims regarding the unreasonableness of the tariff and of the
„circumstances‟ to enable the tribunal to determine a reasonable tariff. In particular,
the retailers were obliged to lead evidence of the rand value they derived from the
use of sound recordings in their businesses, which was essential to a determination
by the tribunal of the reasonableness of the tariff in the particular circumstances of
the retailers. SAMPRA submits that the significance of this evidence lies in the
essential inquiry of whether the rand value the retailers derived from the use of
sound recordings, is disproportionately lower than the tariff set by SAMPRA.

5 Paddock Motors (Pty) Ltd v Igesund 1976 (3) SA 16 (A) at 23C-F; Bank of Lisbon and South Africa
Ltd v The Master & others [1986] ZASCA 121; 1987 (1) SA 276 (A) at 290D-F; Road Accident Fund v
Mothupi [2000] ZASCA 27; 2000 (4) SA 38 (SCA) para 30 and 33.

[9] In the result, SAMPRA submits that the appeal should be upheld, the tariff
determined by the tribunal be set aside and replaced by the tariff set by SAMPRA,
due to the retailers‟ failure to satisfy the tribunal that their claims regarding the tariff‟s
unreasonableness were well-founded. In the alternative, SAMPRA submits that the
matter ought to be remitted to the tribunal in terms of s 36(3)(b) of the Act, with
specific instructions for the conduct of a proper inquiry with particular emphasis on
evidence being placed before the tribunal by the retailers, to show that the value
derived by each of the retailers from the use of sound recordings is
disproportionately low when compared with the tariff. This procedure is advanced on
the basis that in the absence of this evidence, there is insufficient evidential material
available to this court on appeal to make its own determination of what a reasonable
tariff would be. SAMPRA adds that it is accordingly unwilling to consent to this court
substituting its own determination in place of the tribunal‟s tariff, in the name of
expediency.
[10] The retailers‟ responses to these submissions are that:
(a)
All that is necessary to activate the tribunal‟s jurisdiction is the absence of
agreement on the amount of the tariff between the retailers and SAMPRA. There is
no additional onus on the retailers to satisfy the tribunal that the tariff is
unreasonable, in order to activate the tribunal‟s jurisdiction to determine a
reasonable tariff.
(b)
The requirement in s 33(5) of the Act that the tribunal may make an order
declaring that an applicant „is entitled to a licence on such terms and conditions and
subject to the payment of such charges (if any) as the tribunal may . . . determine to
be reasonable in the circumstances‟ if the tribunal is „satisfied that the claim of the
applicant is well-founded‟ does not place an onus upon the retailers to satisfy the
tribunal on this issue.
(c)
The retailers placed sufficient evidence before the tribunal to satisfy it that
the tariff set by SAMPRA was unreasonable and to enable the tribunal to set a tariff
that was reasonable in the circumstances. The retailers denied that they were

obliged to lead evidence to establish the rand value they derived from the use of
sound recordings in their businesses. They accordingly denied that there are any
grounds for a remission of the matter to the tribunal in terms of s 36(3)(b) of the Act,
with an order compelling them to obtain and lead evidence on this issue.
[11] The following issues accordingly arise for decision:
(a)
Does the jurisdiction of the tribunal only arise once the party referring the
matter to the tribunal has discharged an onus of satisfying the tribunal that the tariff
is unreasonable, or does this arise when agreement cannot be reached between the
user (the retailers) and the owners of the relevant copyrights (represented by
SAMPRA) on the amount of the tariff?
(b)
If the jurisdiction of the tribunal is established by an absence of agreement
between the parties on the tariff, is the party referring the matter to the tribunal
required to satisfy the tribunal that their „claim‟ that the tariff is unreasonable is „well-
founded‟ by the discharge of a formal onus, or is the tribunal simply required to be
satisfied on this issue, on all of the evidence placed before it?
(c)
Was sufficient evidence placed before the tribunal for it to be satisfied that
the claim of the retailers was well-founded either on the basis that the retailers
discharged any onus resting upon them, or alternatively, on the basis that sufficient
evidence was placed before the tribunal, for it to be satisfied on this issue? If not,
should this matter be referred back to the tribunal with directions that the retailers
obtain and place before the tribunal evidence of the rand value derived by them from
the use of sound recordings on their premises?
(d)
If sufficient evidence was placed before the tribunal was, the tariff
determined by the tribunal reasonable in the circumstances? If not, what is a
reasonable tariff in the circumstances?
The jurisdiction of the Tribunal

[12] A consideration of the contentions of the parties as to the jurisdiction of the
tribunal requires a consideration of the provisions of ss 9A, 30, 31 and 33 of the Act.
At the outset, it should be noted that this court in National Association of
Broadcasters v South African Music Performance Rights Association & another
[2014] ZASCA 10; 2014 (3) SA 525 (SCA) para 57 stated the following:
„It is necessary at the outset to say something concerning the rather tortuous statutory
scheme in terms of which the tribunal derives its power. As pointed out by Dean in
Handbook of South African Copyright Law,6 the factual matrix set out in ch 3 of the Act has
to be read “mutatis mutandis to accommodate the adjudication of disputes arising out of s
9A”. This means that one has to strain to make these provisions compatible with those of s
9A more particularly those of s 9A(1)(b) and (2)(c). Put simply, the licensing-scheme
provisions are applied to the determination of the royalty rate. That notwithstanding, the
learned author rightly points out that to adopt a different view would render the provisions of
s 9A nugatory – a consequence that should be avoided. Section 33(5)(b) therefore applies
mutatis mutandis and requires the tribunal, when it is determining a royalty rate, to make
such order as it may “determine to be reasonable in the circumstances”.‟
[13] In National Association of Broadcasters only the calculation of the
„needletime‟ tariff was in issue. However, the „tortuous statutory scheme in terms of
which the tribunal derives its power‟ is equally apparent when the jurisdiction of the
tribunal is considered.
[14] The relevant portion of s 9A of the Act provides as follows:
„9A. Royalties –
(1)(a)
in the absence of an agreement to the contrary, no person may broadcast, cause
the transmission of or play a sound recording as contemplated in s 9(c), (d) or (e) without
payment of a royalty to the owner of the relevant copyright.

6 O H Dean Handbook of South African Copyright Law (Revision Service 14, 2012) at 1-55.

(b)
The amount of any royalty contemplated in paragraph (a) shall be determined by an
agreement between the user of the sound recording, the performer and the owner of the
copyright, or between their representative collecting societies.
(c)
In the absence of an agreement contemplated in paragraph (b), the user, performer
or owner may refer the matter to the Copyright Tribunal referred to in section 29(1) or they
may agree to refer the matter for arbitration in terms of the Arbitration Act, 1965 (Act No 42
of 1965).‟
[15] The relevant portions of s 30 of the Act provide as follows:
‟30.
General provisions as to jurisdiction of tribunal –
Subject to the provisions of this Chapter, the function of the tribunal shall be to determine
disputes arising between licensing bodies, or other persons from whom licences are required
and persons requiring licences, or organisations claiming to be representatives of such
persons, either –
(a)
on the reference of a licence scheme to the tribunal; or
(b)
on the application of a person requiring a licence either in accordance with a licence
scheme or in a case not covered by a licence scheme.‟
[16] The relevant portions of s 33 provide as follows:
‟33.
Applications to tribunal –
(1)
. . . .
(2)
Any person who claims that in a case covered by a licence scheme the licensing
body operating the scheme has refused or failed to grant him a licence in accordance with
the provisions of the scheme or to procure the grant to him of such a licence, may apply to
the tribunal for an order under this section.
(3)
An application for such an order may also be made by any person who claims that
he requires a licence in a case not covered by a licence scheme, and either –

(a)
that a licensing body or person has refused or failed to grant the licence or to
procure the grant thereof, and that in the circumstances it is unreasonable that the licence
should not be granted; or
(b)
that any charges, terms or conditions subject to which a licensing body proposes
that the licence should be granted are unreasonable.
(4)
. . . .
(5)
On any application under subsection (2) or (3) the tribunal shall give the applicant
and the licensing body in question and every other party to the application an opportunity of
presenting his case, and if the tribunal is satisfied that the claim of the applicant is well-
founded, it shall make an order declaring that, in respect of the matters specified in the
order, the applicant is entitled to a licence on such terms and conditions and subject to the
payment of such charges (if any) as the tribunal may –
(a)
in the case of an application under subsection (2), determine to be applicable in
accordance with the licence scheme; or
(b)
in the case of an application under subsection (3), determine to be reasonable in
the circumstances.‟
In the present case the parties are ad idem that the disputed tariff does not form part
of a „licence scheme‟ in terms of the Act. Consequently, only the provisions of s
30(b) and s 33(3) read with s 33(5)(b) of the Act are relevant in assessing the
jurisdiction of the tribunal in connection with a referral to it, in terms of s 9A of the
Act.
[17] The problem of reconciling the provisions of these sections in order to
determine the jurisdiction of the tribunal is immediately apparent. Whilst s 9A
provides for the referral of „the matter‟ by either „the user, performer or owner‟ to the
tribunal, in the absence of agreement as to „the amount of any royalty‟, s 30 provides
that the tribunal has jurisdiction to „determine disputes‟ arising between „persons
from whom licences are required and persons requiring licences‟ on „the application
of a person requiring a licence‟. To resolve the apparent anomaly Prof Dean

suggests that s 30 should be interpreted as though owners and performers holding
performers‟ rights should be regarded as „other persons from whom licences are
required‟ and users should be regarded as „persons requiring licences‟.7 I agree with
this solution. On this basis a referral to the tribunal in terms of s 9A by a „user‟ being
a person „requiring a licence‟ and who has not reached agreement with the „owner‟
being the „person from whom a licence is required‟ should be interpreted as an
application in terms of s 30(b) of the Act. In the same way as the provisions of
s 33(5)(b) were held in National Association of Broadcasters to apply mutatis
mutandis to a referral in terms of s 9A, so should the provisions of s 30, with the
same objective, namely to prevent the provisions of s 9A being rendered nugatory.
[18] If a referral to the tribunal by a user in terms of s 9A, is an application to the
tribunal in terms of s 30(b) of the Act, this would also constitute an application „by
any person who claims that he requires a licence‟ in terms of s 33(3). The claim
advanced in terms of s 33(3)(b) would be that the „charges, terms or conditions
subject to which a licensing body proposes that the licence should be granted are
unreasonable‟.  Because the provisions of s 33(5) are expressly made applicable in
terms of the Act to an application under s 33(3), this reasoning also accords with the
decision in National Association of Broadcasters. Consequently, the tribunal dealing
with a referral in terms of s 9A, has to be satisfied that the claim of the applicant
(being the user or person requiring a licence) is „well-founded‟ and if satisfied may
determine what „charges, terms or conditions‟ subject to which a licence should be
granted, are reasonable. Accordingly, I do not agree with the submission of the
retailers, that they do not make any „claim‟ falling strictly within s 33(3), which would
render the provisions of s 33(5) applicable.
[19] It is against this analysis of the relevant sections of the Act that the
submissions of the retailers and SAMPRA as to the jurisdiction of the tribunal must

7 O H Dean op cir at 1-55.

be considered. As noted, the retailers submit that the jurisdiction of the tribunal is
located in s 9A, whereas SAMPRA submits it is located in s 33(5) of the Act. The
retailers submit that once they, as „the user‟ and SAMPRA, as „the owner‟, were
unable to reach agreement on the tariff payable, the retailers were entitled to refer
the dispute to the tribunal for determination. In other words, all that is necessary for
the jurisdiction of the tribunal to be established is a failure to reach agreement on the
amount of the tariff.
[20] As noted, SAMPRA submits, however, that the tribunal‟s jurisdiction to
determine a reasonable tariff is only activated in terms of s 33(5) once the retailers
satisfy the tribunal that their claim is well-founded, that the charges subject to which
a licence will be granted are unreasonable and thereafter present evidence of
„circumstances‟ applicable to them which will enable the tribunal to determine a tariff
that is „reasonable in the circumstances‟.
[21] For reasons which will become apparent later in this judgment, when the
issue of the onus is addressed, it is clear that the submission by SAMPRA conflates
the discrete issues of the tribunal‟s jurisdiction and the issue of whether there is an
onus resting upon a party to the dispute. It is clear that in terms of s 9A all that was
required before „the matter‟ could be referred to the tribunal was the absence of an
agreement between „the user‟ being the retailers and SAMPRA, as „the owner‟, as to
„the amount of any royalty‟ payable „to the owner of the relevant copyright‟. Once the
absence of an agreement was established the jurisdiction of the tribunal to determine
the dispute in terms of s 30, read with s 33(3) and 33(5), of the Act was established.
The issue of the onus
[22] Section 33(5) provides that the tribunal shall make an order declaring that
the applicant is entitled to a licence on such terms and conditions and subject to the
payment of such charges (if any), as the tribunal may determine to be reasonable in
the circumstances, „if the tribunal is satisfied that the claim of the applicant is well-
founded‟.

[23] As we have seen the „claim of the applicant‟ to a licence is advanced by way
of an application in terms of s 30(b), read with ss 33(3) and 33(5), as a result of the
referral in terms of s 9A. This referral has as its foundation an allegation that the
charges, terms or conditions, subject to which the licensing body will grant the
licence, are unreasonable. It is clear that before the tribunal will direct the licensing
body to issue a licence to the applicant, on terms and conditions and subject to
charges which it determines „to be reasonable in the circumstances‟, it must be
„satisfied that the claim of the applicant is well-founded‟.
[24] For the tribunal to be satisfied that the claim of the applicant is „well-founded‟
it must have a foundation in fact or reason, based on good grounds or evidence.8
There are, however, two possible interpretations of the statutory requirement that the
tribunal must be „satisfied‟. Either the onus is on the claimant to satisfy the tribunal,
or there is simply a requirement that the tribunal be satisfied on this issue on all of
the evidence. In the latter instance there can be no suggestion that the claimant
must satisfy the tribunal by the discharge of a legal onus of proof. In the former
instance, however, the claim must be proved by the claimant by the discharge of the
requisite onus of proof, to the satisfaction of the tribunal.
[25] The retailers submit that the strict application of an onus is „simply
inapposite‟ to a referral in terms of s 9A of the Act where the proceedings come
before the tribunal by virtue of an „absence of an agreement‟, and not by virtue of
any „claim‟ made by the retailers in terms of s 33(3). However, in the light of the
construction placed upon the relationship of ss 9A, 30, 33(3) and 33(5) in the Act, as
set out above, there can be no valid distinction drawn, for purposes of the presence
or absence of an onus.
[26] The retailers also submit that the imposition of such an onus upon referrers
such as the retailers, would confer undue protection in respect of the monopolistic

8 See the definition of „well-founded‟ in The Shorter Oxford English Dictionary 6 ed (2007) Vol 2.

price demanded by SAMPRA and would unduly limit the role and function of the
tribunal. SAMPRA, in turn, submits that the imposition of an onus is supported by the
purpose of the legislation, as well as the nature of the rights possessed by the
copyright owners. It argues that the Act creates exclusive rights in sound recordings
for specific usage categories and thereby establishes a monopoly in respect of each
sound recording, in the hands of the copyright owner. This was aimed at the
promotion, proliferation and just remuneration of the creative endeavours of the
copyright owners, as well as the stimulation of the local music industry. It submits
that this has been done against a backdrop of deprivation and injustice and in order
to transform the economic conditions of South African musicians.
[27] As regards the nature of the rights, SAMPRA submits that the copyright
granted to owners in respect of sound recordings is property that enjoys protection
under the Constitution. The power accorded to the tribunal to compel a copyright
owner to grant a licence to a user, it is submitted, is akin to a deprivation of property
and comparable to expropriation. The retailers contend, however, that the Act as
amended conferred protection upon copyright owners which they did not possess
before, to prevent the playing of their sound recordings in public without their
consent. Consequently, the compulsion to grant a licence subject to the payment of
a tariff does not constitute a deprivation of property. In the light of the conclusion
reached below on the interpretation of the Act, it is not necessary to decide the
validity of these submissions.
[28] It is clear that the primary purpose in the Act, as provided for in s 9A, is for
the parties to reach agreement on the amount of the tariff payable. As an alternative
to a referral to the tribunal when agreement cannot be reached, the parties may refer
the matter to arbitration in terms of the Arbitration Act 42 of 1965. The object is to
facilitate the resolution of disputes without resort to formal legal procedures.
However, if the user of copyright protected music bears a formal onus of proving that
the claim is well-founded, that the tariff demanded by the owner of the copyright is
unreasonable, there would be little or no incentive for the owner to reach agreement
with the user, or agree to a referral of the dispute to arbitration. This is because a
referral of the dispute to the tribunal would hold the considerable advantage to the

owner of requiring the user to discharge this onus. Such an interpretation would
undermine the apparent purpose of s 9A, which is for the amount of the tariff to be
resolved by agreement.9 That this is not a hypothetical danger is illustrated by the
facts of this case. Mr Lister, on behalf of SAMPRA, stated that –
„. . . the phrase “take it or leave it”, is one that does not embarrass me in the least, having
been the primary negotiator. We have said take it or leave it many many times, in exactly the
same way as yesterday Mr Rechardt said the Australian court I think said tough, because it
is take it or leave it, meaning if you do not want it, then do not play it. If you are objecting to
the tariff, let us get to the copyright tribunal.‟
On the take it or leave it approach he stated:
„. . . if any retailer felt that they did not want to pay it, there is no way that we would reduce it
or discount it. Obviously if we had found a wide scale rejection, we might have changed that
stance. But we did not. We did not find that wide scale rejection‟.
Mr Du Plessis also said „there is the very clear provisions of the Copyright Act which
says that once we have proposed a tariff that can be referred to the copyright
tribunal‟. This was said in the context of his view that SAMPRA could speak to the
retailers for 20 years „only to reach the conclusion then after 20 years that we still
cannot see eye to eye‟. He said it would be silly to gauge market response to the
proposed tariff before setting it. Mr Lister also added that their case had always been
that the onus was on the retailers to show what they do with the music, and why they
do it, and to prove the value to them of doing so. His attitude to the dispute is
encapsulated in the following statement: „Let us not waste time, money and energy,
emotion and relationships on trying to resolve a dispute that we are not going to
resolve. Let us get it to the copyright tribunal.‟
[29] In addition, there are a number of provisions in the Act, as well as the
regulations promulgated in terms of s 29(3)(a) of the Act, regulating proceedings

9 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593
(SCA) para 18.

before the tribunal, in which an informal procedure is envisaged. For example
section 33(5) provides that „the tribunal shall give the applicant and the licensing
body in question and every other party to the application an opportunity of presenting
his case‟, which suggests a more informal procedure aimed at gathering evidence,
rather than the strict imposition of an onus on one of the parties. This is also
reflected in reg 27 of the Copyright Regulations10 which deals with the procedure at a
hearing before the tribunal. This regulation provides that „. . . every party to the
reference or application shall be entitled to attend the hearing and to address the
tribunal and call oral evidence‟. Regulation 31 of the Copyright Regulations, which
deals with the furnishing of evidence to the tribunal, provides that evidence „shall be
given orally or, if the parties agree or the tribunal so orders, by affidavit, but the
tribunal may at any stage of the proceedings require the personal attendance of any
deponent for examination and cross-examination‟. In the context of the informal
procedure envisaged by the Act, as well as the regulations, it would be incongruous
to impose a formal onus of proof upon a claimant to satisfy the tribunal that its claim
is well-founded.
[30] Consequently, all that is required of a claimant is to place evidence before
the tribunal on the issue of whether the claim is well-founded. In other words, an
evidentiary burden rather than a legal burden of proof. At the end of the day for the
claimant to succeed the tribunal is required to be satisfied, on all of the evidence
placed before it, that the claim is well-founded.
Was sufficient evidence placed before the tribunal for it to be satisfied that the
claim of the retailers was well-founded, and that the tariff proposed by
SAMPRA was unreasonable?
[31] It is necessary at the outset to deal with the contention by SAMPRA that the
retailers were obliged to lead evidence of the rand value they derived from the use of

10 Copyright Regulations, GN R2530, GG 6252, 22 December 1978.

sound recordings in their stores. SAMPRA submits that the tribunal could only
determine what is a reasonable tariff „in the circumstances‟ in terms of s 33(5)(b) of
the Act, once it was established that this value was disproportionately lower than the
proposed tariff. The discrepancy in value must be such as would cause economic
harm to the retailer. In addition, the argument went, it would have to be established
that the retailers need to use the recordings offered by SAMPRA under a blanket
licence in order to sustain the viability of their businesses. Further, the argument
continued, it would have to be established that no available substitute would serve
the retailers economic interests, even if such available substitutes are recordings of
the same musical works as those offered under a blanket licence by SAMPRA.
[32] The issue of whether the rand value to the retailers of playing music in their
stores had been researched by them, but not disclosed, played a significant role in
the evidence led by SAMPRA. Mr Keith Lister, the chairman of the board of
SAMPRA, stated that the retailers knew the value of playing music in their stores and
that the report prepared by their experts that they do not, was „a work of fiction‟. He
was of the view that the evidence of the economist of the retailers, that no one
knows the economic value of music and no one can presently calculate it, is
„complete nonsense‟. However, Mr Lauri Rechardt, an attorney in Finland and a
consultant to the International Federation of the Phonographic Industry, called by
SAMPRA, stated that he had not seen this type of evidence used in any court case.
He said he had not seen any studies that established that for a retailer to play
original recorded music „the value is X amount of Euros or Dollars or Rand. . . ‟
although he would prefer it if there was such evidence. He assumed that this was
because the retailers would be unwilling to assist in collecting such information,
which they would not wish to disclose.
[33] These views were echoed by another expert called by SAMPRA namely,
Prof Charles Areni, to comment on the use by retail businesses of atmospheric
music to achieve commercial objectives. He was not, however, asked to express an
opinion on whether the SAMPRA tariff was reasonable. He agreed that no research
had been done anywhere to assess the global relationship between playing music in
a retail environment and profits. He also agreed that any such study would be

prohibitively expensive and impractical, because it would take too long. He said he
would accordingly not criticise the retailers for not conducting this type of research.
He added that it was not just that the research was not available, but the magnitude
of the study would need so many retailers, so many different formats of music would
have to be tested, so many variables would have to be kept track of and even then
one could not be sure that the simple result would generalise to all retailers. He
added that anybody considering this type of research would consider that it was
going to cost a lot of money, take a lot of time and whatever conclusion was attained
may not apply to all retailers. Accordingly in his view, one could not expect the
retailers in this case to carry out this type of research.
[34] Mr David du Plessis, a member of the board of SAMPRA, stated that any
attempt by the retailers to measure the economic value of playing music in their
stores, would produce a result that would be speculative and subject to a wide range
of variables. He explained that different users may extract different value from the
use of the same repertoire of music. Even within one retailer, one might find a
different usage of the same music. He had no expectation that the retailers would be
able to say what the actual monetary value was to them, of playing music in their
stores.
[35] Prof Donald Ross, a professor in the school of economics at the University of
Cape Town, was called by the retailers to comment on the tariff set by SAMPRA,
how it would compare with one that a free market would be expected to set and how
it compared with a tariff that would optimise overall social welfare. He stated that no
research had been done by any party that would quantitatively estimate the value
range to retailers of broadcasting copyright protected music. It would not be
impossible to investigate this but would require time consuming, carefully designed
and relatively expensive experiments. The outcome of such research at a particular
retailer‟s store would not, however, be sufficient to set a tariff for all stores. In
addition, the sample of retailers studied would have to be random with respect to all
the variables in the structural model, and would involve the sharing of information
between the retailers studied. The researchers would have to have access to the
cash register outputs over a period of time of all the stores in the study. They would

have to share this confidential information. The reluctance of businesses to reveal
their cost structures to their competitors was a very sound principle of business, and
a reason why this research had not been done. He agreed that such a study would
be prohibitively expensive and that it had not been done anywhere to his knowledge.
It would cost millions of rands and take a couple of years to complete. Although this
research would have been the first choice for a systematic analysis of optimal tariffs,
it would require a retailer to release private information and no retailer anywhere in
the world would be prepared to do that.
[36] It is against this evidence that SAMPRA‟s submission that the retailers were
obliged to lead evidence to prove the rand value they derive from the use of sound
recordings, and that this is disproportionately lower than the proposed tariff of
SAMPRA, has to be assessed. It will be recalled that a further submission by
SAMPRA in this regard is that in the absence of this evidence, there is insufficient
evidence available to this court to make its own determination of the reasonableness
of the tariff. The consequence, according to SAMPRA, is that unless this court
upholds the tariff set by SAMPRA the only option is to remit the matter to the
tribunal. As pointed out, it is in this context that SAMPRA adds that it is unwilling to
lend its consent to this court substituting its own determination in the place of the
tribunal‟s tariff, in the name of expediency.
[37] SAMPRA submits that the unwillingness of the retailers to make confidential
information available could be addressed by appropriate orders of confidentiality.
The problem, however, with SAMPRA‟s insistence upon proof of the rand value to
retailers of playing music in their stores, lies not only in the issue of confidentiality.
The evidence is that this study would be prohibitively expensive and impractical as it
would take too long to complete. In addition, it cannot be said that any conclusion
reached could be applied to all of the retailers. In my view, it was accordingly not
necessary for the retailers to lead evidence of the rand value to them of playing
music in their stores, in order for the tribunal to be satisfied that their claim was well-
founded. There is accordingly no justification for a referral to the tribunal for this
purpose.

[38] I turn to consider whether sufficient evidence was placed before the tribunal
for it to be satisfied that the claim by the retailers was well-founded in that the tariff
proposed by SAMPRA was unreasonable. The evidence of Prof Ross and Prof Areni
described three possible methods which could be utilised to determine the tariff. The
first method dealt with above was the determination of the rand value to the retailers
of playing music in their stores. The remaining two methods were the „market-based
solution‟ proposed by Prof Areni and the use of tariff levels in foreign jurisdictions as
a benchmark, proposed by Prof Ross.
[39] Prof Areni stated that in the absence of agreement between the user and
copyright owner, the operation of market forces should be left to determine the tariff.
The appropriate criterion was that the tariff should maximise SAMPRA‟s revenue and
market forces would constantly move towards where the optimum tariff rate should
be. This would mean that there would be no need for intervention by the tribunal.
However, he accepted that the tribunal must act in the public welfare and set a tariff
that accords with public welfare. He conceded in cross-examination that he was not
aware of the legal framework in which the tribunal operated, which directed the
tribunal to determine the tariff. This accordingly precluded market forces being left to
decide whether the tariff was too high or too low. In the result, there is no basis for
Prof Areni‟s view that market forces should be left to determine the tariff.
[40] I turn to the issue of the use of tariff levels in foreign jurisdictions as a
benchmark to establish the tariff. Mr Lister disagreed that tariff levels in foreign
jurisdictions could serve as a basis for determining a reasonable tariff. The role of
foreign tariffs was simply a point of reference, once it had been decided what a
reasonable tariff would approximately be. Mr Smit, the national sales manager for
SAMPRA, stated that his first role when he joined SAMPRA was to gather
information in order to establish tariffs for SAMPRA. He looked at the tariffs of
collecting societies in other countries, which he used as a guide to establish the
tariffs in 32 different categories for SAMPRA. When cross-examined he said that in
setting the tariff for retailers he looked at the tariff set in the United Kingdom by
Phonographic Performance Ltd (PPL) and the tariff of the Phonographic
Performance Company of Australia (PPCA) in Australia, as well as the tariff of the

South African Music Rights Organisation (SAMRO), which administers the
performance rights of composers and lyricists. Consequently, the two currencies he
looked at were the UK pound sterling and the Australian dollar. He was told by Mr
David du Plessis to examine these two tariffs because PPL was the oldest society
and the trading conditions in the United Kingdom and Australia were similar to South
Africa. Mr Du Plessis confirmed that what was presented to Mr Lister to determine
the tariff was the Australian and UK tariff levels together with the SAMRO tariff
levels. The evidence of how SAMPRA went about determining the tariff accordingly
does not support the assertion made by SAMPRA, that to use any form of
benchmarking to determine the tariff would be both unreasonable and arbitrary.
[41] Prof Ross stated that in the absence of research to establish the rand value
to retailers of playing copyright protected music in their stores, the only practical
recourse in order to avoid economic arbitrariness was for the tribunal to have regard
to comparable tariffs in other countries. Prof Areni stated that although he was not
qualified to comment on Prof Ross‟ testimony that it was standard practice, when
regulating the price in regulated markets around the world to do benchmarking
exercises, he agreed that this was fair. He conceded that reference to international
benchmarks was a relevant input in setting tariffs, but should not solely be relied
upon.
[42] In the light of the evidence that SAMPRA paid regard to international
benchmarks in setting the tariff, as well as the above concession by Prof Areni, the
view of Prof Ross that international benchmarking is a method of preventing
economic arbitrariness in setting the tariff, must be accepted. This court in National
Association of Broadcasters (para 70) referred to international benchmarks in
determining the „needletime‟ royalties payable by commercial and public radio
stations for the broadcasting of sound recordings.
[43] Prof Ross stated that he focused on the United Kingdom and Australia when
carrying out his benchmarking exercise. He did not do this because these two
jurisdictions had been relied upon by SAMPRA, but for a number of independent
reasons. These countries had Copyright Tribunals in which there had been fairly

recent reviews of needletime tariffs and the legislative and regulatory framework
governing music rights and collecting societies closely resembled South Africa‟s. He
concluded that Australia, however, was the best reference point for a qualitative
evaluation of South African tariffs for a number of additional reasons.
[44] In South Africa and Australia there are two principal collecting societies. The
PPCA is the counterpart to SAMPRA in Australia, which collects licence fees for
copyright and recorded versions of musical words. The Australian Performing Rights
Association Ltd (APRA) is the counterpart to SAMRO, which collects licence fees for
copyright in the musical works themselves. The South African rand and the
Australian dollar are both currencies based to a large extent on extracted industry
being minerals and are small, quite heavily traded, currencies. As a result historically
they have tended to track each other very closely and accordingly the economic
analysis was much less likely to invoke arbitrariness or error. In addition, both
markets are not integrated into a large free trade area. In both countries the markets
are relatively far from other large markets that produce a lot of recorded music and
have relatively vulnerable indigenous music, which does not have a presence in
other international markets and which is accordingly dependent on the domestic
market. Both countries, therefore, have similar concerns to ensure their domestic
niches are protected. In addition, the retailers of domestic music sales in both
countries are similar and, as both countries use English as the main language of
business and trade, the appeal of the dominant US and UK music catalogues was
comparable. In his view there was no factor unique to Australia which would have
the result of drawing down tariff levels in that country, relative to the rest of the world.
[45] Mr Lister, on behalf of SAMPRA, was of the view, however, that Australia
was the country which was the least comparable to South Africa. His reason was
that the indigenous music scene in South Africa consisted of several language
groups, whereas domestic music in Australia consisted of „imitation American music‟.
The South African industry was about making music that reflected the diversity of the
country‟s culture, whereas Australia was a mono-cultural society. However, it seems
that the similarity is simply that both markets have relatively vulnerable indigenous
music.

[46] In the face of this evidence the allegation by Prof Areni that Prof Ross had
selected Australia as a suitable comparator, simply because it had the lowest tariffs,
which suited his clients‟ interests and the selection of which Prof Ross did not
genuinely believe in, is quite clearly without foundation. From the detailed reasons
Prof Ross furnished as to his selection of Australia as a suitable comparator as well
as the fact that SAMPRA utilised the Australian tariffs in setting the tariff, it is clear
that Prof Ross‟ selection of Australia was justified.
[47] Prof Ross accordingly ascertained the tariff of the PPCA for each of the
categories specified in the tariff, determined by the floor area of retail stores in
square metres. The retailers did not dispute that the tariff should be based upon the
square meterage of individual retail stores, which was the accepted approach
internationally. The PPCA tariff sounding in Australian dollars was converted into
rands, using two alternative conversion factors being purchasing power parity (PPP)
and the exchange rate. He explained that PPP indicates how many rands you would
need in South Africa, to buy what you could for one Australian dollar, in Australia. In
this way the foreign price is placed within the local context. A conversion utilising the
exchange rate does not do that, because a conversion using the exchange rate
means that South African consumers would be paying more in real terms, than their
Australian counterparts. South African consumers would then be charged for
recorded music as if they were in Australia, operating in the general Australian price
and income context. This would, however, be unfair, because South African incomes
are much lower than Australian incomes and South African prices are lower than
Australian prices in real terms. He stated that where a regulator, such as the tribunal,
is primarily concerned with maximising the welfare of domestic people, purchasing
power parity is the more appropriate comparison. Prof Ross accordingly
recommended that the tribunal endorse a tariff at the PPCA level converted to rands,
in accordance with purchasing power parity. In this context it is clear from the
evidence of Mr Smit that SAMPRA‟s provisional tariffs were set by converting the
Australian tariff to rands, using purchasing power parity, in the form of the Big Mac
index. This index was developed by economists as a simple way to estimate the
extent to which a currency is relatively over-valued, or undervalued by exchange
rates. The exchange rate prices of McDonald‟s Big Mac hamburgers across a range

of countries are compared. The basis for this comparison is that the hamburger is a
common product having the same ingredients and therefore draws from a range of
inputs across the economies.
[48] Prof Ross stated that a comparison of the SAMPRA tariff with the PPCA
tariff indicated that the SAMPRA tariff was substantially higher than the PPCA tariff
which became more marked, the larger the store. This was the case regardless of
whether PPP, or the exchange rate, was used as a conversion. He was of the view
that the tariffs he recommended were closer to an efficient market rate than the
current monopolistic rate of SAMPRA‟s tariffs. The tariff he recommended was,
however, higher than the rate which a competitive market would produce. The tariff
categories produced by Prof Ross were based upon the SAMPRA tariff categories
determined by the square meterage of each distinct category.
[49] Apart from the evidence of Prof Ross that the tariff established by SAMPRA
was excessive, there are a number of other factors which indicate that this is so. Mr
Lister stated that in determining the tariff he identified in ascending order, the tariffs
in other countries. This was because the record companies felt they had „been sold
short‟, and SAMPRA was going into the market for the first time and did not want to
be locked into the bottom half of the table of comparative rates in other countries. He
therefore positioned the tariff at the 75 per cent mark of these tariffs to see whether
anybody was able to say they were „way out of line‟. He conceded that although
some people may think the tariff was out of line, he did not. Prof Ross criticised this
approach as he did not understand why the tariff in a developing country such as
South Africa should be placed in the top quartile of the tariffs of countries in general,
as economically it was arbitrary and not rational. He stated that SAMPRA‟s tariffs
ranged between the 14th and 17th most expensive, and were higher than almost all of
the developing countries and higher than a few of the wealthier countries, including
Australia. In general, SAMPRA‟s rates were approximately equivalent to the average
counterpart rates in countries with per capita gross domestic products about one
third higher than South Africa. In other words, SAMPRA‟s tariffs were on a par with
countries that on average were one third richer than South Africa, for which there

was no economic justification. Consequently, the SAMPRA tariff, in comparison with
other tariffs, was unreasonable.
[50] SAMPRA also submitted as justification for the amount of the tariff that its
tariff should be higher than that of SAMRO. This was based upon the view of Mr Du
Plessis that the value in the sound recordings was worth more than the value in the
underlying composition, at least in the bulk of the music used by the retailers.
According to Mr Du Plessis this had nothing to do with the fact that the SAMRO rate
was unreasonably low. This court, however, in National Association of Broadcasters
(para 63) expressed the view that „[i]t does not appear that royalty rates for sound
recordings internationally exceed composer royalty rates. It is arguable, though not
definitive, that composers are the key component in relation to the production of
music.‟ Prof Areni stated that he was not aware of any research on this issue and
accordingly there was no scientific basis for the proposition. Ms Kobie Swart, an
expert in music therapy, agreed that one could not make a general statement in this
regard, as it would depend upon the individual piece of music as well as the type of
music. I accordingly agree with the submission by the retailers that there was no
rationally justifiable basis for SAMPRA‟s decision to adopt a tariff level considerably
higher than that of SAMRO.
[51] SAMPRA led no expert evidence to rebut the evidence of Prof Ross that the
tariff set by SAMPRA was excessive and therefore unreasonable. Prof Areni, as
pointed out above, stated that he had not been asked to express an opinion on
whether the rate set by SAMPRA was reasonable. There was accordingly sufficient
evidence before the tribunal for it to be satisfied that the retailers‟ claim was well-
founded, ie, that the tariff set by SAMPRA was unreasonable. In coming to this
conclusion I do not overlook the contentions of SAMPRA that a relevant factor in
setting the tariff was the administrative benefit to users of copyright music, in having
to deal with one entity, namely SAMPRA, and not several record companies to agree
a tariff. I also do not overlook the contention of the retailers that a further relevant
factor to setting the tariff is the benefit to SAMPRA of having its music played in the
retailers‟ stores and exposing it to the public. In the context of all of the evidence I do

not regard either of these contentions as being of significance in determining
whether there was sufficient evidence before the tribunal.
[52] The remaining issue is whether the tariff determined by the tribunal was
reasonable in the circumstances. The table below sets out the discrete categories
based upon the floor area of a store in square metres. The first column is the
SAMPRA tariff for each category and the second column is the equivalent PPCA
(Australian) tariff converted to rands, using PPP by Prof Ross. The third column sets
out the tariff awarded by the tribunal for each category. The final column sets out the
tariff which counsel for the retailers submitted was a reasonable tariff in each
category.
Size of store
SAMPRA
tariff
2008/2009
Retailers/Prof
Ross
recommended
tariff
Copyright
Tribunal tariff
Copyright
Tribunal
tariff
set at 30% of
Sampra tariff
Up to 50 m²
R500
R279.46
R389
R150
Between
and 100 m²
R1000
R279.46
R389
R300
Between
and 200 m²
R1500
R337.32
R568
R450
Between
and 300 m²
R2000
R376.10
R620
R600
Between
and 500 m²
R2500
R399.49
R840
R750
Between
and 750 m²
R3000
R511.52
R930
R900
Between
and 1000 m²
R3500
R549.69
R1050
R1050
Between 1000
and 1250 m²
R4000
R646.94
R1110
R1200
Between 1250
and 1500 m²
R4500
R676.49
R1110
R1350
Between 1500
and 1750 m²
R5000
R709.73
R1220
R1500

Between 1750
and 2000 m²
R5500
R739.89
R1220
R1650
Between 2000
and 2500 m²
R6000
R792.83
R1220
R1800
Between 2500
and 3000 m²
R6500
R839.00
R1220
R1950
Between 3000
and 3500 m²
R7000
R880.24
R1220
R2100
Between 3500
and 4000 m²
R7500
R917.17
R1220
R2250
Between 4000
and 4500 m²
R8000
R951.03
R1220
R2400
Between 4500
and 5000 m²
R8500
R983.03
R1220
R2550
Between 5000
and 6000 m²
R9000
R1039.67
R1220
R2700
Between 6000
and 7000 m²
R9500
R1090.76
R1220
R2850
Between 7000
and 8000 m²
R10000
R1136.92
R1220
R3000
Between 8000
and 9000 m²
R10500
R1179.40
R1220
R3150
Between 9000
and 10000 m²
R11000
R1218.17
R1220
R3300
Every additional
to
1000
(above 10000)
R500

[53] From the table it is apparent that the tribunal placed a limit on the tariff in
stores with a floor area of 1750 square metres. Thereafter the rate was fixed without
regard to the increasing size of the store. No reasons were given in the judgment for
this radical departure from the approach of SAMPRA and the retailers that there
should be a progressive increase in the rate, based upon the increased size of a
store. In addition, no reasons were furnished in the judgment why a particular tariff
was determined for each category. The tariff set by the tribunal is considerably less
than the tariff set by SAMPRA. Other than the statement in the judgment that the

tariff should „optimise public welfare‟ and that it „is reasonable in the circumstances‟
no other reasons are furnished for its award. An examination of the tariffs determined
by the tribunal reveals no rational or consistent basis for their computation, save that
it appears the tribunal arrived at the initial rate of R389 up to 50 square metres, by
averaging the initial rates for this category of SAMPRA and the retailers.
[54] The determination of the tariffs by the tribunal, in terms of s 33(5)(b) of the
Act, accordingly is not „reasonable in the circumstances‟. In terms of s 36(3)(a) of the
Act, this court is entitled to confirm, vary or set aside the order of the tribunal as this
court „may deem fair‟. It is in the context of determining a tariff that is fair to both
parties and which is reasonable in all of the circumstances that I find merit in the
submission by counsel for the retailers. The submission was that SAMPRA should
be awarded 30 per cent of the tariff set by it. The resultant tariff set out in the fourth
column of the table is higher than the tariff awarded by the tribunal in stores with an
area exceeding 1000 square metres. In addition, except for stores up to 50 square
metres, it is higher than the tariff recommended by Prof Ross in each category. This
disparity becomes more apparent in stores over 1250 square metres in size, where it
is approximately double the tariff recommended by Prof Ross. This progressive
increase becomes more marked in larger stores where it increases to two and a half
times the rate recommended by Prof Ross. The rate proposed is accordingly
considerably higher than the PPCA (Australian) tariff for all floor sizes, except for
stores less than 50 square metres in size. When regard is had to Prof Ross‟
recommendation that the tariff should be set at the Australian tariff level and this is
the only expert evidence that attempts to determine what a reasonable tariff is in the
circumstances, in my view the tariff proposed by the retailers is fair to SAMPRA and
the retailers and reasonable in the circumstances of this case.
[55] As regards costs SAMPRA submits that the view of the tribunal that
SAMPRA‟s „take it or leave it‟ approach at the time of setting the tariff, justified an
award of costs in favour of the retailers was unjustified. This was because the
legislative framework did not impose a duty on either of the parties to reach an
agreement. However, the tribunal followed this statement by adding that the retailers
succeeded in having the tariff set by SAMPRA reduced, as justification for the award

of costs. In terms of reg 36 of the Copyright Regulations the tribunal has a discretion
to award „the costs of and incidental to any proceedings‟ to any party. In all of the
circumstances, I can see no reason to alter the costs order of the tribunal. As
regards the costs of the appeal, although SAMPRA has succeeded in achieving an
increase in the tariff awarded by the tribunal in respect of floor areas greater than
1000 square metres, this is still considerably less than that determined by SAMPRA.
In addition, the increase in the tariff in this appeal was not as a result of any of the
legal submissions advanced by SAMPRA being upheld. In all of the circumstances,
the extent of SAMPRA‟s success should be acknowledged by awarding it 50 per
cent of its costs of the appeal.
[56] I make the following order:

1.
The appeal is upheld to the extent of the order contained in para 2 below.
2.
The order of the Copyright Tribunal contained in para 79.1, read with para 76
of the judgment of the Copyright Tribunal, is set aside and substituted with
the following order:
a) The following tariff is declared to have been the reasonable rate of
royalties in terms of s 9A of the Copyright Act 98 of 1978 with effect from 1
January 2008:

Fees: Size of Premises (Audible Area
in square metres)
Licence Fee per store per Annum
(exclusive of VAT)
Up to 50
R150
51 to 100
R300
101 to 200
R450
201 to 300
R600
301 to 500
R750
501 to 750
R900
751 to 1000
R1050
1001 to 1250
R1200
1251 to 1500
R1350
1501 to 1750
R1500
1751 to 2000
R1650

2001 to 2500
R1800
2501 to 3000
R1950
3001 to 3500
R2100
3501 to 4000
R2250
4001 to 4500
R2400
4501 to 5000
R2550
5001 to 6000
R2700
6001 to 7000
R2850
7001 to 8000
R3000
8001 to 9000
R3150
9001 to 10000
R3300
Every additional 1 to 1000 (above 10000) R150

b) The tariff is subject to revision with effect from 1 January every year in
accordance with the Consumer Price Index for the previous year.
3.
The respondents are ordered to pay 50 per cent of the appellant‟s costs of
the appeal, such costs to include the costs of two counsel.

K G B Swain

Judge of Appeal

Appearances:

For the Appellant:
M Brassey SC (with D Ehrlich) (heads of argument
prepared by G Marcus SC and D Ehrlich)

Instructed by:

Edward Nathan Sonnenbergs Inc, Sandton

Matsepes Inc, Bloemfontein

For the Respondents:
A R Sholto-Douglas SC (with M Blumberg)

Instructed by:

Bernadt Vukic Potash & Getz, Cape Town

Lovius Block, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

30 November 2015

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form
part of the judgment.

SAMPRA v Foschini Retail Group (Pty) Ltd (50/2015) [2015] ZASCA 188 (30
November 2015)

Media Statement

The SCA partially upheld an appeal by the South African Music Performance Rights
Association against the tariff determined by the Copyright Tribunal in terms of s 9A of
the Copyright Act 98 of 1978, to permit the respondents, Foschini Retail Group (Pty)
Ltd and 9 other retailers, to play copyright protected music in their stores. The SCA
held there was no onus on the respondents to satisfy the tribunal that the tariff set by
the appellant was unreasonable. The tribunal simply had to be satisfied on all of the
evidence that this was the case. In determining a reasonable tariff regard may be had
to tariffs payable in comparable jurisdictions. The tariff awarded by the Copyright
Tribunal was accordingly altered.

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