Seven Arts Entertainment Ltd v Content Media Corporation Plc & Ors

A foreign judgment can support issue estoppel in England only if it satisfies the English requirements and would also be treated as res judicata in the foreign jurisdiction. The English court must assess expert evidence on both foreign legal principles and their likely application.

For personal property assigned while title litigation is pending, a later judgment against the assignor does not bind the assignee unless the assignee was joined. Notice and an opportunity to intervene do not ordinarily suffice. Privity of interest is a narrow exception requiring strong and exceptional facts.

Issue estoppel also requires identity of issue. A judgment on US copyright does not determine non-US rights or defences not addressed. The summary judgment application was dismissed.

The claimant, an assignee within the Hoffman group, sought summary judgment against Content on copyright claims concerning five films. It relied on an Ontario judgment obtained by predecessor companies, which declared them owners of the US copyrights and held that the Canwest companies had not acquired those rights. Content had acquired rights from Canwest while related litigation was pending, but was not joined to the Ontario action and did not intervene.

The central question was whether the Ontario judgment bound Content in England by foreign issue estoppel. The application also raised the effect of foreign law, privity of title and interest, identity of issue, and unresolved US-law limitation and abuse-of-process defences.

The application for summary judgment was dismissed.

1. On summary judgment, the court applies the familiar test of whether the defence has a realistic rather than fanciful prospect of success. Content had raised substantial issues requiring determination at trial.
2. Foreign issue estoppel requires a competent, final and conclusive judgment on the merits, identity of parties or privies, identity of issue, and treatment of the issue as res judicata under the foreign law. The court also retains a discretion where recognition would work injustice. The principles were drawn from Yukos Capital Sarl v OJSC Rosneft Oil Company [2012] EWCA Civ 855, The Sennar (No. 2) [1985] 1 WLR 490 and Carl Zeiss Stiftung v Rayner & Keeler [1967] 1 AC 853.
3. Expert evidence on foreign law must address both the governing legal framework and how courts in that jurisdiction would apply it to the particular facts. The court could not confidently assume that Ontario courts would apply principles similar to English law in precisely the same way. Content therefore had a good arguable defence under Ontario law.
4. There was no privity of title or estate. For personal property, an assignee taking before judgment is not bound by a later judgment against the assignor in pending litigation, even where the assignee knew of the litigation, unless joined as a party. The responsibility lay on the party seeking a binding judgment to join the assignee. This approach was supported by Wigram v Buckley [1894] 3 Ch 483 and Powell v Wiltshire [2004] EWCA Civ 534.
5. Privity of interest is a narrow exception. It may apply where a non-party knowingly allows another to litigate on its account or as its proxy, but strong and exceptional facts are required. The cases of Gleeson v J. Wippell & Co Ltd [1977] 1 WLR 510, Nana Ofori Atta II v Nana Abu Bonsra II [1958] AC 95 (PC) and House of Spring Gardens Ltd v Waite [1991] 1 QB 241 did not make Content a privy. Notice from the Ontario court did not shift the ordinary joinder requirement.
6. The Ontario judgment determined US copyright ownership under US law. It did not determine ownership or assignment of UK or other non-US copyright, and it did not resolve the US limitation and abuse-of-process defences arising from earlier US proceedings. Article 5(2) of the Berne Convention for the Protection of Literary and Artistic Works (1971) did not harmonise those matters or justify assuming identical laws across jurisdictions. The Ontario judgment therefore did not create an issue estoppel capable of disposing of the English claims.

The judgment describes the earlier United States and Ontario proceedings leading to the Ontario judgment. No appellate history for the present English action is stated.