(1) Kiley Mcphail (Aka Kiley Fitzgerald) 2) Owen Doyle v (1) James Bourne 2) Mathew Sargeant
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE MORGAN,Mr Justice Morgan |
| Judgment Date | 06 June 2008 |
| Neutral Citation | [2008] EWHC 1235 (Ch) |
| Docket Number | Case No: HC05C03880 |
| Court | Chancery Division |
| Date | 06 June 2008 |
[2008] EWHC 1235 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
MR JUSTICE MORGAN
Case No: HC05C03880
Tim Penny (instructed by Hamlins LLP) for the Claimants
Ian Mill QC and Tom Weisselberg (instructed by Forbes Anderson Free) for the Defendants
Hearing dates: 26 th, 27 th,28 th, 29 th of February, 3rd, 4 th, 6 th, 7 th, 10 th, 11 th, 12 th, 13 th, 14 th, 17 th, 18 th, 19 th of March, 15 th, 16 th,17 th 259 of April 2008.
Approved Judgment
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.
The parties
The First Claimant is Kiley McPhail. He is also known as Kiley Fitzgerald. This is because his father, Scott McPhail, a professional singer, is professionally known as Scott Fitzgerald. I therefore refer to the First Claimant as Kiley Fitzgerald, rather than Kiley McPhail. Kiley Fitzgerald's first name was routinely shortened to “Ki”. At the trial, the First Claimant and also the Second Claimant and the Defendants were generally referred to by their first names and so in this judgment I will refer to the First Claimant as Ki. Ki was born on the 25 th September 1983 and turned eighteen on the 25 th September 200Accordingly, for a substantial part of the time which is central to this dispute, Ki was under eighteen, that is he was a minor. The Claimants say that Ki made two very important contracts as a minor, first, a contract of partnership and, secondly, a contract between himself on the one hand and the Second Claimant and the Defendants on the other hand concerning the ownership of song copyrights.
The Second Claimant is Owen Doyle, to whom I will refer as Owen. Owen was born on the 2 nd May 1981 and so was over eighteen at the time of the events subject of this dispute.
The First Defendant is James Bourne, to whom I will refer as James. James was born on the 13 th September 1983 and turned eighteen on the 13 th September 2001. Accordingly, he also was under eighteen at the time of some of the events which are of importance in the present dispute.
The Second Defendant is Mathew Sargeant. He is professionally known as Mathew Willis. His first name was routinely shorted to “Mat” and I will so describe him in this judgment. Mat was born on the 8 th May 1983 and turned eighteen on the 8 th May 2001 and so he was under eighteen during the earlier part of the period which is now relevant for the purposes of this dispute.
At the time of the events which are relevant for this judgment, the Claimants and the Defendants were referred to as “the boys” or “the four boys” or in a similar way. At the trial, the parties were also described as “the boys” or by a similar expression. Accordingly, in this judgment, I will from time to time refer to the parties as “the boys” even though they are now no longer minors.
Mr Rashman
A central figure in the events which have given rise to this dispute is a Mr Richard Rashman. Mr Rashman is an American who has a law degree and MBA from UCLA. He remains registered as an active attorney under the State Bar of California Membership Rules but has not been employed as a lawyer since 1980.
It is not necessary to recite Mr Rashman's various business interests in the United States. He was connected with an American corporation, Rashman Corporation. One of the activities of Rashman Corporation was the management of pop music bands. That activity was carried out under the trading name, Prestige Management. In this judgment, for the sake of simplicity but at the risk of occasional inaccuracy, I will not distinguish between Rashman Corporation, Prestige Management or Mr Rashman personally but I will generally refer to Mr Rashman as encompassing both or all or those entities.
It is common ground that Mr Rashman entered into a formal management agreement with the Claimants and the Defendants on the 15 th March 2001. Mr Rashman says that his management contract with the Claimants came to an end on the 8 th October 2001 but the Claimants say that the management contract between them and Mr Rashman continued for some considerable time after that date. After 8 th October 2001, Mr Rashman continued to manage the Defendants and, indeed, when the Defendants were joined by a third person Charlie Simpson, in the way I will describe below, Mr Rashman managed the Defendants and Charlie Simpson. Mr Rashman was originally a Defendant in these proceedings but the Claimants' claim against Mr Rashman has been settled on terms which have not been disclosed to the other Defendants or to the Court.
Representation
At the trial, Mr Tim Penny appeared on behalf of the Claimants and Mr Ian Mill QC and Mr Tom Weisselberg appeared on behalf of the Defendants. I am grateful to all of them for the clarity and helpfulness of their submissions and for the way in which they conducted the trial. It is clear that counsel and their instructing solicitors have done a great deal of hard work by way of preparation for, and during the conduct of, the trial and I appreciate all the efforts that have been made in those respects.
The rival cases: a summary
At this point, it is convenient to give a summary of the rival cases being put forward. I will first describe the case put forward by the Claimants. The story begins, essentially, in December 2000. At that time, as a result of an introduction effected by Mr Rashman, Ki and Owen were introduced to James. In January 2001, Ki and Owen and James were introduced to Mat. Almost immediately from the time that Ki and Owen and James and Mat came together, they entered into a contractual relationship under which the four boys formed a pop group or band, agreed to write songs to be performed by the band and agreed to take steps to obtain a recording contract in the hope of succeeding in the pop music industry. The Claimants say that the contractual relationship between the four boys was a partnership at will. The Claimants also say that the four boys agreed that any song written by any one or more of the four boys would be owned beneficially by the four boys in equal shares. The four boys entered into a formal management contract with Mr Rashman on the 15 th March 2001. Before and after the 15 th March 2001, the four boys or one or more of them wrote a large number of songs and they rehearsed those songs and took steps to obtain a recording contract. From late April 2001, the band used the name “Busted”. The band did not obtain a recording contract and by October 2001, the four boys were dissatisfied with the services of Mr Rashman. On the 3 rd October 2001, the four boys wrote to Mr Rashman purporting to determine the management contract with him. However, almost immediately, the attempt to end the management contract was withdrawn and the management contract continued as before and essentially unaffected by what had occurred. However, on the 8 th October 2001, the band split up. In particular, Ki and Owen separated from Mat and James. Ki, in particular, seems to have wanted to pursue a solo career. James and Mat stayed together and invited Charlie Simpson to join them as a third member of a new band. There was a dispute between the Claimants and the Defendants about ownership of some of the songs written prior to October 2001. The dispute concentrated on six songs in particular. The dispute was, on the face of it, settled by a written settlement agreement entered into by the four boys on the 22 nd March 2002. Under the settlement agreement, Ki and Owen obtained the rights to two of the songs and James and Mat obtained the rights to four of the songs. This present dispute is principally about the four songs which, under the settlement agreement, were acquired by James and Mat to the exclusion of Ki and Owen. Ki and Owen say that the settlement agreement should be set aside by the Court. They say that the Court should set aside the settlement agreement on three different grounds. The first is that the settlement agreement was entered into by Ki and Owen as a result of undue influence exercised upon them by Mr Rashman and by another person, a John McLaughlin. The undue influence was actual undue influence and/or presumed undue influence. Further, Mr Rashman and Mr McLaughlin made misrepresentations to Ki and Owen and the latter are now entitled to rescind the agreement for misrepresentation. In the further alternative, because the settlement agreement was arrived at as part of the process of winding up a dissolved partnership, James and Mat were under a duty to disclose certain relevant matters to Ki and Owen and James and Mat broke that duty of disclosure, entitling Ki and Owen to seek an order setting aside the settlement agreement. If the settlement agreement is set aside in this way then the ownership of the songs will be governed by the agreement made in early 2001 that the songs should be beneficially owned by the four boys. Alternatively, the copyright in these songs will be owned by the joint authors of the songs and the Court is asked to determine disputes of fact as to who were the joint authors of the songs. In addition to these claims, Ki and Owen claim an account of certain profits made by James and Mat. In March 2002, just before the settlement agreement of 22 nd March 2002, James and Mat entered into a lucrative recording contract with a substantial recording company. The new three piece band of James, Mat and Charlie Simpson, also called “Busted”, was very successful. The entry into the recording contract and the many gains made by the three piece Busted were the result of improper use, without the informed consent of Ki...
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