West is West Distribution Ltd v Icon Film Distribution

JurisdictionEngland & Wales
JudgeLord Justice Simon
Judgment Date09 December 2015
Neutral Citation[2015] EWCA Civ 1543
CourtCourt of Appeal (Civil Division)
Docket NumberA3/2015/1330
Date09 December 2015

[2015] EWCA Civ 1543

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

(HHJ MACKIE QC)

Royal Courts of Justice

Strand

London, WC2

Before:

Lord Justice Simon

A3/2015/1330

West is West Distribution Ltd
Claimant/Applicant
and
Icon Film Distribution
Defendant/Respondent

Mr O Radley-Gardner (instructed by Hugh Cartwright & Amin) appeared on behalf of the Applicant

Mr F Campbell (instructed by Radcliffes Le Brasseur) appeared on behalf of the Respondent

Lord Justice Simon
1

This is a renewed application by West is West Distribution Ltd (the applicants) for permission to appeal one part of a judgment given by His Honour Judge Mackie QC sitting in the Mercantile Court in London, on 1st April 2015, the sealed order being made on 1st May.

2

The judgment dealt with a number of issues arising from the breakdown of a film distribution agreement between the parties dated 9th September 2009. That has been referred to as the "AA". This agreement provided for the distribution of a film, 'West is West', under licence. The applicant is and was the owner of the rights in the film and the respondent in a company engaged in the distribution of films, through cinema, television, DVD and other means.

3

The AA provided, in simple terms, that the respondent was contractually bound to exploit the rights to the film and deal with the income according to its terms which, among other things, provided for the division of income and the allocation of expenditure between the parties. The AA was one of four interlinked contracts agreed at the same time, but only one of these is relevant to the present application, the inter partes agreement (IPA). The IPA was also dated 9th September 2009 and, as its name suggest, is a multi-party agreement. Among the parties to the agreement were the applicant (Party 6) and the respondent (Party 7). The IPA provided by clause 9.1 that the recipient of income held that income on trust and was bound to pay it into a centralised collection account. The applicant relies on this provision as creating a fiduciary relationship.

4

The AA came to an end as a result of what the judge found to be the respondent's breach of contract and the applicant's contractual exercise of a right to determine the agreement. Various heads of claim were decided in favour of the applicant but one claim, the material claim so far as this application is concerned, was decided in favour of the respondents.

5

This claim described by the judge as "receipts from unauthorised sub-distributors" was based primarily on the terms of clause 10 of the AA. This provided for the pre-approval of certain named sub-distributors.

6

The final sentence of this clause provided:

i. "The appointment of any other sub-distributors for any of the rights shall be subject to consultation between the licensor and the licensee [that is to say the applicant and the respondent]."

7

The applicants argued that that the respondent had appointed three sub-distributors (Universal or UMO, Spafax and Phantom Media) without consultation, and that the right to exploit the film by these companies and the receipts from these companies fell outside the terms of the AA and were not subject to its terms as to costs and revenue splitting. Mr Radley-Gardner focuses on the use of the word "rights" to which I will return shortly.

8

The argument is that since the respondent acted outside the terms of the AA, it was neither entitled to deduct the...

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