Phonographic Performance Ltd v Nightclub (London) Ltd

A company director may be committed for contempt where the company breaches an injunction and the director, knowing of the order, wilfully fails to take reasonable steps to secure compliance. A sole director cannot rely on the possibility that another officer was supervising compliance. Contempt must be proved to the criminal standard. The court may proceed in the alleged contemnor’s absence where service, notice, opportunity to respond, likely prejudice, and the interests of justice justify doing so. Even after contempt is established, the court should pause before sentencing where further attendance may be secured or material matters remain unresolved.

The claimant sought permission to issue a writ of sequestration against the defendant company and the committal of its sole director and shareholder for breaches of an injunction restraining unlicensed public performance of sound recordings. The company and director had been served with the order, penal notices, the application and hearing notices, but neither attended or provided evidence. A bench warrant issued at an earlier hearing had not been executed. The issues were whether the company had breached the injunction, whether the director was personally liable for contempt, whether the application could be heard in their absence, and whether the court should proceed immediately to sentence.

1. The company was, beyond reasonable doubt, in contempt of court. The evidence established repeated public performance of recordings in the claimant’s repertoire without the required licence, after service and explanation of the injunction and warnings of the consequences of breach.

2. A director who knows of an order restraining the company from specified acts is under a duty to take reasonable steps to secure compliance. Wilful failure to do so may constitute contempt. The director need not have actively participated in the breach; culpable failure to supervise, investigate or prevent the breach is sufficient. The sole director and shareholder was the company’s controlling mind and could not rely on another director or officer taking the necessary steps.

3. It was appropriate to hear the application in the respondents’ absence. The court applied the relevant considerations, including proper service, sufficient notice, absence of an explanation for non-attendance, the likelihood that an adjournment would secure attendance, prejudice caused by delay, the opportunity to challenge the evidence, and the overriding objective of dealing with the matter justly, expeditiously and fairly.

4. The court should not sentence immediately. Following the approach in JSC BTA Bank v Solodchenko, the court should pause after proving serious contempt in a respondent’s absence and consider whether an adjournment may secure attendance. Further information was also required about whether a payment had been appropriated to the relevant licensing period. The application was adjourned before sentence, with service of the judgment requiring attendance at the sentencing hearing.

Not stated in the judgment.