British Movietonews Ltd v London and District Cinemas Ltd
| Jurisdiction | England & Wales |
| Judge | Viscount Simon,Lord Simonds,Lord Morton of Henryton,Lord Tucker |
| Judgment Date | 26 July 1951 |
| Judgment citation (vLex) | [1951] UKHL J0726-1 |
| Date | 26 July 1951 |
| Court | House of Lords |
[1951] UKHL J0726-1
Viscount Simon
Lord Simonds
Lord Morton of Henryton
Lord Tucker
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause British Movietonews Limited against London and District Cinemas Limited, that the Committee had heard Counsel, as well on Monday the 25th, as on Tuesday the 26th, Wednesday the 27th and Thursday the 28th. days of June last, upon the Petition and Appeal of British Movietonews Limited, whose registered office is situate at Twentieth Century House. Soho Square, in the County of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal of the 21st of June 1950, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of London and District Cinemas Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled. That the said Order of His Majesty's Court of Appeal, of the 21st day of June 1950, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Honourable Mr. Justice Slade of the 17th day of February 1950, thereby set aside, be, and the same is hereby, Restored: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Courts below, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the King's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
By a letter dated 24th May, 1948, addressed by the Respondent Company to the Appellant Company, the former gave notice to terminate as from 30th June, 1948, the then existing contract between them. This contract was contained in a Principal Agreement dated 25th July, 1941, as modified by a Supplemental Agreement dated 3rd May, 1943. The Appellant Company refused to accept the notice of termination, claiming that it was not such as the contract authorised and that the Respondent Company were still bound. The Respondent Company persisted in their view and the Appellant Company, by writ issued on 4th February, 1949, sued the Respondent Company for a declaration that the Agreement remained in full force and effect and for consequential relief.
The question involved in this Appeal is thus not difficult to state, but in answering the question there has emerged a difference of opinion between Mr. Justice Slade, who tried the action and decided in favour of the Appellant Company, and the Court of Appeal (Bucknill and Denning L.JJ. and Mr. Justice Roxburgh), which in a judgment prepared by Denning L.J. allowed the Appeal of the Respondent Company. It now becomes necessary to decide which party in the litigation is right. Moreover, the judgment delivered in the Court of Appeal includes an expression of some general views as to the nature and extent of the judicial function in deciding the rights and obligations of parties under an executory contract which will require careful and candid consideration from the House.
The Respondent Company is an "Exhibitor" of News Films and the Appellant Company is a "Renter", i.e., a supplier, of such films. A News Film takes some eight minutes to show and is normally exhibited in the cinema where it first appears for three days, after which it is passed on for showing elsewhere for similar periods. Owing to the necessity of the news it contains being up to date, the total life of a given News Film is approximately only two and a half weeks. In consequence of this limited life, although the film for a newsreel is so much shorter than the length of film required for ordinary pictures, the total amount of raw film used up to supply a succession of News Films in the various cinemas is much larger than the amount required in the same period for the main exhibits which have a longer currency.
By the Principal Agreement, the Appellant Company as Renter, by its agents Twentieth Century Fox Film Company Limited (thereafter called the "Distributor") agreed to furnish to the Respondent Company, as Exhibitor, for exhibition at the Respondent Company's cinema in Aylesbury, commencing on 4th August, 1941, two News Films a week for the price of Ten Guineas weekly. The printed form used to embody the contract contains the provision:—
"Minimum Period of Agreement—26 (twenty six) weeks and thereafter determinable by four weeks' notice."
Below this is a typed insertion as follows:—
"Notwithstanding the minimum period of this contract it is agreed that same may be terminated by the Exhibitor by giving one month's notice, any time after the expiration of the first month."
Below this again in the print is the provision:—
"The Exhibitor has the right at any time after the expiry of the minimum period to give to the Renter or the Distributor four weeks' notice in writing to determine this arrangement."
Since it is necessary to treat the typescript insertion as prevailing over the printed provision which it contradicts, the result is that, under the Principal Agreement, the Exhibitor had the option to determine the Contract after a minimum period of eight weeks (assuming that "month" means a lunar month of four weeks), while the Renter could not take steps to determine it until twenty-six weeks had expired, after which he might give four weeks' notice to end it. Once, however, that the first twenty-six weeks had expired i.e. as from February 2nd, 1942, the two parties were in the same position so far as the right to terminate the Agreement by giving notice is concerned: thereafter, it would continue until one party or the other gave four weeks' notice to bring it to an end.
Performance under the Principal Agreement ran on without either side giving notice to terminate it and on May 3rd, 1943 the parties entered into the Supplemental Agreement, the terms of which raise the problem which has to be solved. "This Supplemental Agreement contains the recital that by the Cinematograph Film (Control) Order 1943 it has become necessary to restrict the consumption of raw film stock". Then come three clauses which must be set out, as follows:
"1. During the continuance of the Cinematograph Film (Control) Order 1943 the following special conditions shall also apply to the Principal Agreement:—
( a) The Principal Agreement shall remain in full force and effect until such time as the said Order is cancelled and thereafter for any unexpired period stipulated in the Principal Agreement.
( b) One copy of a newsreel will if necessary be used to serve two Exhibitors during the same period and this shall if necessary be deemed to include newsreels supplied by other Renters not parties hereto.
( c) If the newsreel to be supplied hereunder shall be required to serve two theatres during the same period the Exhibitor shall comply with any notice in writing whereby he is required to deliver or receive the newsreel to and from another theatre which the Renter shall specify. All arrangements governing the crossing over of the newsreel between performances at the two theatres and any costs incidental thereto shall be the responsibility of the Exhibitor or Exhibitors concerned and no claim shall arise against the Renter by virtue of any failure in the aforesaid cross-over arrangements.
( d) The stipulated rental payable under the Principal Agreement shall continue to be paid irrespective of ownership of the Film which is supplied to the Exhibitor and notwithstanding that the same may not be that stipulated for in the Principal Agreement or not actually supplied by the Renter party hereto.
( e) The rental stipulated in the contract may be increased from time to time by such an amount as may be authorised by a Committee composed of representatives of the News Reel Association and the C.E.A. to cover:—
(i) Increased cost of Film Stock and/or
(ii) Increased expenses incurred by the Renter due to the operation of force majeure.
2. All disputes arising out of the interpretation or operation of these special conditions shall be referred to the said Joint Committee of the News Reel Association and the C.E.A. whose decision shall be final and binding on both parties.
3. All the conditions of the Principal Agreement shall remain in full force and effect in so far as the same are not excluded modified or varied hereby."
The Respondent Company advance two arguments. They first contend that the modification in the Principal Agreement effected by the Supplemental Agreement does not touch their original right to end the whole arrangement by four weeks' notice at any time. This contention has not prevailed in either of the Courts below, and I cannot accept it. Clause 1 ( a) provides in effect that the Principal Agreement is to remain in full force and effect till the Cinematograph Film (Control) Order is cancelled and "thereafter" until four weeks' notice is given to terminate it, and this appears to me to rule out the Exhibitor's previous right of determination at any time and to substitute a new Minimum period for both parties alike. So long as the Order of 1943 continues, neither side can give notice to terminate.
The Respondent Company next...
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