Reveille Independent LLC v Anotech International (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Judge Mackie |
| Judgment Date | 19 March 2015 |
| Neutral Citation | [2015] EWHC 726 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2013 FOLIO 1137 |
| Date | 19 March 2015 |
[2015] EWHC 726 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge Mackie QC
Case No: 2013 FOLIO 1137
Turlough Stone (instructed by Bryan Cave) for the Claimant
Matthew Cook (instructed by Goodman Derrick LLP) for the Defendant
Hearing dates: 9 to 12 and 16 February 2015
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.
Judge Mackie QC:
This dispute is mainly about whether a binding contract came into existence in the world where TV shows about cooking meet the manufacture of cookware. The Claimant, Reveille Independent LLC, a US television company, brings this claim against the Defendant, Anotech International (UK) Limited, a distributor of cookware, for debt and damages for breach of contract, quantified at US$1,710,000, together with interest and costs.
The claim arises from the Claimant's alleged agreement to licence to the Defendant US intellectual property rights (the "MasterChef US" brand) in the United States and Canada for a five year period and to permit the integration and promotion of the Defendant's home cookware and bakeware products into three episodes of the television series "MasterChef US", broadcast on the FOX Network in the USA in late July and early August 2011.
The Claimant contends that in March 2011 it entered into a binding agreement with the Defendant for the licensing and integration on the terms set out in a Deal Memorandum signed by the parties ("the Deal Memo"), and that, having fully performed its obligations, it is entitled to payment of:
— an advance of US$52,500, payable upon signing.
— US$300,000 for the integration of the Defendant's products into Series 2 of "MasterChef US".
— US$157,500, US$250,000 and US$250,000 on 1 st May 2011, 1 st March 2012, and 1 st March 2013.
These sums, totalling US$1,010,000, are claimed as a debt, alternatively as damages. The Claimant also claims damages of a further US$700,000, representing the sums of US$350,000 that would have been payable under the Deal Memo on 1 st March 2014 and 1 st March 2015, had the Claimant not accepted the Defendant's repudiation and terminated the contract on 24 th July 2013.
Alternatively, the Claimant contends that, having granted the relevant licences to the Defendant and integrated the Defendant's products into its television shows, it is entitled to reasonable consideration for doing so, valued at US$1,710,000. This is advanced as an unjust enrichment claim.
The Defendant says that no contract was reached between the parties and therefore the claim fails. It says that the Deal Memo executed by the Defendant on 28 February 2011 was not, as the Claimant alleges, signed by Mr Friedman of the Claimant on 2 March 2011. The Defendant claims that there was never a binding contract between the parties, either on the terms of the Deal Memo or otherwise, that even if there was such a contract, it was subject to a condition precedent which was never fulfilled ("the Brands Conflict Term issue"). If that be wrong the Defendant says that the Claimant failed to perform its obligations under any contract, a claim that has rather fallen away.
The Trial.
The court has numerous bundles in electronic form and heard evidence from three witnesses for the Claimant.
Ms Lori Heiss was the Global Brand Manager for Shine 360, a sister company of the Claimant. Ms Heiss negotiated the alleged agreement with Mr Chris Stevens the then Managing Director of the Defendant through a series of emails and telephone conversations in late January to early March 2011. By the time she gave evidence Ms Heiss was no longer working for any company on the Claimant's side. She was a transparently honest and frank witness with no axe to grind.
Mr Jeffrey Friedman was until April 2014, the Claimant's Vice President and then Senior Vice President for Business & Legal Affairs. Mr Friedman approved the proposed terms of the agreement and claims to have signed the Deal Memo on 2 nd March 2011. He was then involved in the Claimant's implementation of the agreement between the parties between March and August 2011. Mr Friedman too was an honest witness doing his best to assist the court, the issue being the quality of his recollection of having signed a relatively routine document, now lost, almost four years ago.
Mr Chad Bennett was Vice President, Brand Development and Production for the Claimant. Mr Bennett was also involved in the approval, negotiation and implementation of the alleged deal. He too was an honest and credible witness most of whose evidence was closely supported by contemporaneous documents.
The Defendant called two witnesses. Mr Jan Helskens is a director and majority shareholder of Anotech International Limited, the parent company of the Defendant and has been a director of the Defendant since August 2012. Mr Helskens was not directly involved in most areas of controversy in this case. Mr Helskens too was an honest witness, not giving evidence in his first language. Not being close to the detail or to many of the events some of his evidence was more advocacy for the Defendant's case than relevant evidence. I was not persuaded by much of that advocacy.
Mr Wim de Veirman was Managing Director of GreenPan Inc from May 2007 until May 2012 and is now CEO of The Cookware Company. In 2011, there was an informal joint venture between Anotech International and GreenPan Inc which led to a formal merger in 2013. This witness did his best to assist the Court but had little of real relevance to say apart from providing helpful background information about how this industry works.
The Claimant points out that there has been no evidence from its principal point of contact at the Defendant, Mr Stevens, who was the Managing Director (and its sole director) until August 2012. Mr Stevens negotiated the alleged deal with the Claimant and signed the Deal Memo on the Defendant's behalf and was responsible for its implementation. The Claimant attaches importance to what it sees as the deafening silence from Mr Stevens, who although no longer working for the Defendant, is alive, well and in the UK. The Defendant says that, on analysis, evidence from Mr Stevens was unnecessary because, as it sees things, the only real disputes of fact are, as it were, on the Claimant's side of the line. That is correct to a degree. Nevertheless the Defendant was hampered by the absence of a witness to those events which were not internal to the Claimant. Mr Stevens was central to the Brands Conflict issue with the Claimant. He was the principal point of contact on the licensing of the relevant intellectual property. He also wrote accepting that the Claimant's invoices for sums due under the alleged contract would be "paid by return".
Facts agreed or not much in dispute.
In early 2011 the parties began negotiations for a legally binding short form agreement which became the Deal Memo. Once concluded, this would set out the terms which would be replaced by detailed long form agreements which the parties would negotiate. The real dispute between the parties is whether a binding agreement on the terms of the Deal Memo was entered into, since subsequent negotiations broke down at a late stage. It is accepted that if the Deal Memo was entered into it was otherwise a legally binding commitment. On 19 January 2011 there was a Conference call between Chris Stevens (Defendant) and Lori Heiss, Chad Bennett and Lee Rierson (Claimant). Thereafter the parties negotiated proposed terms.
Unfortunately the chronology of events produced by the Claimant is neither full nor neutral. I have therefore tried to assemble the more important events by reconstructing that chronology. Without it examination of the witness evidence in a case of this kind will either be inadequate or too long.
The text of the Deal Memo
| 19 January 2011 | Conference call between Chris Stevens (Defendant) and Lori Heiss, Chad Bennett and Lee Rierson (Claimant). Thereafter the parties negotiated proposed terms |
| 16 February 2011 | Ms Heiss sends a first draft deal memorandum to Mr Stevens |
| 23 February 2011 | Mr Stevens returns an amended version of the Deal Memo. Claimant informs Defendant that the approval of Fox, the network which broadcast MasterChef US is required. |
| 24 February 2011 | Mr Bennett and Mr Friedman approve the revised deal memorandum. Ms Heiss sends a clean revised copy of the deal memorandum to Mr Stevens. |
| 24/25 February 2011 | Mr Stevens asks whether the Claimant had "any images of presenters we can use". The reply said that a colleague would respond "though note we cannot use GR's name or likeness". Mr Stevens requests logos and information about the use of the Claimant's intellectual property for the Chicago Show. This was provided by the Claimant via email. |
| 120 boxes of the Defendant's products are delivered to the "MasterChef" set. They weigh 2340 lbs. | |
| 28 February 2011 | Telephone call between Ms Heiss and Mr Stevens regarding Gordon Ramsay. |
| Ms Heiss sends an internal e-mail which says: " Got a panicked call from Chris Stevens this morning about Gordon Ramsay's QVC positioning in the US — on the website he is listed as The Master Chef in the marketing copy at the top of his page (see below). Obviously problematic. I already had scheduled in a meeting with GR's people here in London to talk about working together / avoiding conflicting positioning so will bring this up with them then. Chris was meant to have sent the deal memo via fax over the weekend, but hasn't because of this... |
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