Quick Draw Lp v Global Live Events Llp and Others
| Jurisdiction | England & Wales |
| Judge | Sarah Asplin |
| Judgment Date | 30 July 2012 |
| Neutral Citation | [2012] EWHC 2105 (Ch) |
| Docket Number | Claim No: HC11C04064 |
| Court | Chancery Division |
| Date | 30 July 2012 |
[2012] EWHC 2105 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY
Royal Courts of Justice
Rolls Buildings
London EC4A 1NL
Sarah Asplin QC (Sitting as a Deputy High Court Judge)
Claim No: HC11C04064
Mr Siward Atkins and Mr Jonathan Hill (instructed by Wiggin LLP) for the Claimant
The Second and Third Defendant appearing in person and the Fourth Defendant appearing by its sole director, the Second Defendant
Hearing dates: 22, 23, 24, 25, 28, 29 and 30 May 2012
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
MISS SARAH ASPLIN QC
Sarah Asplin QC:
The Claimant, Quick Draw LLP (Quick Draw) is a limited partnership registered in the Cayman Islands which provides gap finance to the media industry including the provision of urgent finance for media events and projects. It provided short term bridging finance to Global Live Events LLP (GLE), the First Defendant, in relation to the Michael Jackson Forever tribute concert at the Millennium Stadium in Cardiff on 8 October 2011 (the Concert). The finance was provided on the terms contained in a Loan Agreement and Debenture both dated 22 September 2011 to which I shall refer in detail below.
GLE is in administration and was not represented before me. However, before the end of the hearing I was informed that the administrator was content that any order of the court be made against it save for an order as to costs. The Claimant readily agreed.
Mr Hunt, the Second Defendant, and Mr Henry, the Third Defendant, were the prime movers in organising the Concert. Mr Henry set up GLE as a special purpose vehicle to produce the Concert and it was incorporated by registration as a limited liability partnership on 29 March 2011. It was governed by the terms of the Event Company Agreement dated 4 April 2011 and made between GLE, JA-TAIL Enterprises LLC, referred to as the US Member, Limelight Media Events Limited (Limelight) referred to as the UK Member, and Mr Bailey, referred to as the First Ordinary Member.
Mr Hunt and Mr Henry were GLE's Designated Members until the date of the Concert. On that date, they were replaced by two corporate entities one of which was Limelight which they controlled.
Mr Henry, the Third Defendant, is a solicitor specialising in entertainment and intellectual property law and is the editor of certain books of media law precedents. Of late, he has worked primarily as a film financier. GLE is a collective investment scheme within the meaning of s235 Financial Services and Markets Act 2000. Park Place Financial Strategy LLP (Park Place), of which Mr Henry is the founder, is the FSA authorised promoter and operator of GLE. Mr Henry was responsible for all the contractual arrangements which were made by GLE in relation to the Concert and either drafted or was actively involved in the negotiations in relation to the drafting of the relevant contractual documentation between Quick Draw, GLE and Iambic.
Mr Hunt is also the sole director and shareholder of Iambic Media Limited, the Fourth Defendant (Iambic). Iambic specialises in the production and distribution of music programmes. It was engaged by GLE to produce the film and sound recordings of the Concert required for GLE to carry out the Business referred to in the Event Company Agreement, by virtue of the Commissioning Agreement dated 18 April 2011. The precise nature of the arrangement between GLE and Iambic and the ownership of the rights arising in the sound and film recordings of the Concert are at the heart of part of the dispute.
Mr Henry appeared before me in person as did Mr Hunt. I also gave permission that Mr Hunt as sole director of Iambic should represent the company before the court.
This matter arises from the fact that GLE was unable to repay the loan made to it by Quick Draw in relation to the Concert. In addition to the claims in relation to the financing of the Concert, Quick Draw also makes claims in relation to the intellectual property rights and materials which it says it acquired from GLE by way of security for the loan. It makes an alternative claims for procuring breaches of the Loan Agreement and in deceit against Mr Henry and Mr Hunt. Mr Hunt and Iambic counterclaim in malicious falsehood.
Interim Relief
This matter came before the court on 20 to 23 January 2012 when Nicholas Strauss QC sitting as deputy judge in the Chancery Division granted Quick Draw an interim injunction to prevent the Defendants from dealing with the film and sound recordings in relation to the Concert, pending trial. Applying Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900, he found that Iambic's argument that irrespective of whether it was paid or not, Iambic owned the copyright in the sound and film recordings either outright or jointly with GLE as a result of the Commissioning Agreement and in particular, clause 5, clearly failed. He also held that Iambic's argument that copyright did not pass to GLE until GLE had paid for Iambic's services failed in the light of clauses 3.1 and 3.2 of Commissioning Agreement. He also rejected the argument that the rights in the sound and film recordings were not acquired by GLE because the Concert was not broadcast live as hopeless because the sound and film recordings were still produced under the Commissioning Agreement and were subject to it.
The Witnesses
Before turning to the facts, I should state that I found both Mr Henry and Mr Hunt to be extremely evasive and unreliable witnesses who changed their explanations in relation to important matters on a number of occasions. Accordingly, unless their evidence is consistent with the contemporaneous documents I prefer the oral evidence of others where it differs from their account of events. I should add that in coming to this conclusion I have taken account of the fact that both Mr Hunt and Mr Henry represented themselves at the trial and therefore did not have professional assistance throughout in formulating their defences or making their submissions. (They were professionally represented by solicitors and counsel before Mr Strauss QC on the hearing of the application for an interim injunction and, in the case of Mr Hunt and Iambic, when drafting their original defences.)
I found Mr Gillard, Quick Draw's solicitor, to be a careful, reliable and truthful witness. When weighing his evidence, I take into account that his competence as a solicitor engaged in media work was being called into question. Although I found Miss Giles on behalf of Quick Draw generally to be a reliable witness there were certain aspects of her evidence in relation to which I prefer the evidence of others and the documentary evidence available. Lastly, Mr Bailey (who was called at short notice to give evidence for the Defendants) gave his evidence in a cavalier manner and I found his testimony in relation to the expectation of profits from GLE to be lacking in credibility. Accordingly, I attach relatively little weight to it.
Background facts prior to the provision of finance by Quick Draw
Mr Hunt and Mr Henry had conceived the idea of the Concert at least by the beginning of 2011, if not long before. The budget for the Concert was in the region of US $25 million. Mr Henry drafted all of the central documentation in relation to the Concert including the Event Company Agreement dated 4 April 2011. It was made between GLE, JA-TAIL Enterprises LLC, Limelight and David Bailey.
The Event Company Agreement provided the structure for the governance of GLE and its role in relation to the Concert. It set out the manner in which the parties were to be remunerated, divided their responsibilities and made clear that the initial term of the venture was intended to be seven years. It also set out the nature of GLE's business at clause 2.1 as:
"The Business of the Event Company shall be the contracting production staging filming and exploitation of a tribute concert for Michael Jackson to take place at the Millennium Stadium in Cardiff ("the Venue") on 8 October 2011 ("the Event Date") and exploitation of all films and recordings made of the tribute concert in any and all media throughout the world for the full period of copyright and after that so far as permissible in perpetuity (the preceding tribute concert and all embodiments and adaptations of it together constitute the "Event")…."
"Films" was widely defined in clause 19 as "the audiovisual recordings of the Event to be made by the Event Company" and "Net Revenue" was defined as:
"100% of all sums received by or credited to the Event Company in relation to the exploitation of the Event from any source in relation to the exploitation by the Event Company of any film or sound recordings or intellectual property of any nature associated with the Event. … such exploitation to be by any manner or means whether now known or in the future invented throughout the world for the full period of protection conferred by intellectual property rights now or in the future."
In addition, by clause 3.3 of the Event Company Agreement the UK Member, which was Limelight, agreed to be responsible for:
"all aspects of the audio and audio-visual recording of the Event in such manner as is suitable for exploitation in all available media including all means of television such as pay-per-view, relays to international stadiums. global television or home entertainment including DVD and / or Blu-Ray, download, streaming or radio to be filmed in 2-D High Definition and 3-D Including performance concert programme plus behlnd·the-scenes documentary and negotiation and...
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