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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Taylor v Rive Droite Music Ltd [2005] EWCA Civ 1300 (04 November 2005) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2005/1300.html Cite as: [2005] EWCA Civ 1300, [2006] EMLR 4 |
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A3/2004/2001 |
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE LEWISON)
HC02C 01010
Strand, London WC2 |
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B e f o r e :
LORD JUSTICE LATHAM
and
LORD JUSTICE NEUBERGER
____________________
MARK TAYLOR |
Claimant/Respondent |
|
- and - |
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RIVE DROITE MUSIC LIMITED |
Defendant/Appellant |
____________________
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Ian Mill QC and Miss Jane Mulcahy (instructed by Forbes Anderson of 16-18 Berners Street, London W1T 3LN) for the Respondent
____________________
Crown Copyright ©
Lord Justice Chadwick :
1. This appeal and cross-appeal are from the order made on 15 July 2004 by Mr Justice Lewison in proceedings brought by Mr Mark Taylor, a record producer and songwriter, against Rive Droite Music Limited ("RDM"), a music production and publishing company. As the judge put it at paragraph 2 of his judgment [2004] EWHC 1605 (Ch): "The main focus of the dispute between the parties is whether Mr Taylor was entitled to stop working for RDM in the circumstances in which he did".
The underlying facts
"1. Mark Taylor is a talented music producer and song writer. He has produced songs for world famous artistes, including Cher, Enrique Iglesias, Rod Stewart, Lionel Richie, Tina Turner and a host of other household names . . . In 1995 he entered into two agreements with Rive Droite Music Ltd . . . The first, which was oral, was a producer's agreement. The second, which was written, was a publishing agreement. The publishing agreement was renewed twice, latterly in 1998. At the end of November 2000 Mr Taylor stopped working for RDM. Since then he has worked for Brian Rawling Productions Ltd . . . That is a company principally owned by Mr Brian Rawling, but in which Mr Taylor also has a shareholding.
. . .
8. XIII Bis is a group of French companies set up by M. Laurent Dreux-Leblanc. The group has subsidiaries in many parts of the world. Its core business is the publishing, production, recording and distribution of music. Its head office is in Paris, where M. Dreux-Leblanc lives; and its central administration is conducted from there. In 1992 M. Dreux-Leblanc decided that it would be a good idea to establish a presence in England. RDM was established for that purpose. Mr Brian Rawling was recruited to head up RDM in England; but he reported to M. Dreux-Leblanc in Paris. . . . In essence the idea was that RDM would establish a stable of song writers. Songs written for RDM would then be offered (or 'pitched') to other record labels and artistes. If they liked the songs, then RDM would produce the tracks; in return for both a production fee and production and writers' royalties. . .
9. In early 1995 Mr Rawling came across Mr Taylor. Mr Taylor was very short of work at the time. But Mr Rawling was impressed; and decided to try to persuade M. Dreux-Leblanc to take him on. . . ."
These proceedings
The issues in this Court
The 1998 publishing agreement
"In this Agreement the term 'the Compositions' shall mean those compositions listed in Schedule A hereof and all musical compositions and/or lyrics and/or original arrangements of musical works (whether or not such musical works so arranged are in the public domain) which may prior to the date hereof have been written, composed or created in whole or in part by the Writer (whether under his own name or any other name) and not been assigned by the Writer to any third party, and/or any Compositions heretofore assigned to any third party the rights in which shall revert to the Writer at any time during the Term hereof, and/or any compositions which are during the Term hereof written, composed or created in whole or in part by the Writer including the title, words and music thereof."
"4(a) (i) The Term of this Agreement shall (subject to Clause 12(b) hereof) be for a period 2 (two) years from the date hereof,
(ii) In the event that all advances paid to the Writer hereunder have not been fully recouped (as hereinafter defined) at the expiry of the Term, then the Term shall be extended for the shorter of either 1 (one) year or to the end of the accounting period[2] in which recoupment occurs.
(iii) For the purposes of this Agreement the expression 'Recoupment' shall mean the accounting date at which, based on information reasonably available to the Publisher . . . the share of earnings accountable to the Writer hereunder shall be sufficient to recoup all advance payments made to the Writer hereunder.
(b) Immediately following the expiry of the Term hereof (as may be extended), the Publisher shall continue to exercise the rights granted hereunder in respect of the Compositions for a further period of 25 (twenty five) years ('the Retention Period'). For the sake of clarity, the Publisher shall not be entitled to any rights in any musical works composed by the Writer after the expiry of the Term hereof. At the end of the Retention Period all right and interest in the Compositions shall, save as provided in Clause 4(c) hereof, revert to the Writer without further formality.
(c) Upon the expiry of the Retention Period, the Publisher shall have a further period of 2 (two) years in which to collect any and all income earned during the Term and/or the Retention Period but unpaid at the expiry of the Retention Period.
. . .
11. The Publisher agrees to pay to the Writer during the Term hereof the following advance payments on account of and recoupable from fees and royalties payable to the Writer pursuant to the Agreement:-
(a) £25,000 (twenty five thousand pounds sterling) during the first 12 (twelve) month period of this Agreement payable in 4 (four) equal quarterly instalments, the first such instalment being paid upon signature hereof and the subsequent instalments being paid on 1st of March 1999, 1st of June 1999, 1st September 1999;
(b) £25,000 (twenty five thousand pounds sterling) during the second 12 (twelve) month period of this Agreement payable in 4 (four) equal quarterly instalments, the first such instalment being paid on 1 December 1999 or such later date as may be occasioned by the extension of the first 12 (twelve) month period of this Agreement and the three subsequent instalments being paid at three-monthly intervals thereafter;
(c) £25,000 (twenty five thousand pounds sterling) during the third 12 (twelve) month period of this Agreement payable in 4 (four) equal quarterly instalments, the first such instalment being paid on 1st December 2000 or such later date as may be occasioned by the extension of the first and/or the second 12 (twelve) month period of this Agreement and the three subsequent instalments being paid at three-monthly intervals thereafter.
. . .
12 (a) The Writer hereby undertakes to deliver to the Publisher in each 12 (twelve) month period of the Term a minimum of an aggregate of 10 (ten) new Compositions by the Writer of a quality commercially acceptable to the Publisher ('the Minimum Commitment') and the Publisher undertakes to act reasonably and in good faith in assessing such acceptability. . . .
(b) In the event that the Writer fails to fulfil the Writer's Minimum Commitment for any 12 (twelve) month period as aforesaid at least 60 (sixty) days prior to the expiration of the relevant 12 (twelve) month period then without prejudice to any other rights of the Publisher the said 12 (twelve) month period of the Agreement shall be automatically extended without further notice or payment from the Publisher until 60 (sixty) days following fulfilment of the Writer's Minimum Commitment for the said 12 (twelve) month period (and the Term hereof shall be deemed extended accordingly) provided that no one period of extension shall exceed 2 (two) years SAVE THAT, notwithstanding any failure to fulfil the Minimum Commitment, no extension shall be applied in the event that all advances actually paid to the Writer hereunder shall have been recouped . . . "
The 1995 and 1997 publishing agreements
The judge's view
"217. . . . In opening Mr Mill submitted that clause 4(a)(ii) of the agreement provided that there would be a third year of the agreement in the event that Mr Taylor's advances had not been fully recouped by RDM by the end of the second year (or a subsequent accounting period). Clause 11(c) must therefore be interpreted as confined to the situation in which the Term of the agreement is extended by the operation of clause 4(a)(ii). This may involve reading clause 11(c) as if it dealt with the third year of the agreement 'should it occur'. In that way clause 11(c) can be read conformably with clause 4(a)(i); and there is no inconsistency.
218. Mr Sutcliffe disputed that submission on the following main grounds. First, clause 4(a)(ii) provides for the extension of the Term in the event that all advances paid to Mr Taylor have not been fully recouped at the expiry of the Term. If Mr Taylor is unrecouped, the Term is extended for the shorter of one year or to the end of the accounting period in which recoupment occurs. This means that there is no automatic one year extension. The accounting periods were the six month periods ending on 31 December and 30 June in each year. Mr Taylor might become fully recouped in the accounting period immediately following the end of the Term (i.e. by the following 31 December). Thus, if the fixed Term were taken to be 2 years ending on 30 November 2000, and if Mr Taylor became fully recouped in the accounting period ending on 31 December 2000, the Term would expire on 31 December 2000, only a month after the date on which the Term would otherwise have expired. If Mr Taylor became fully recouped in the following accounting period, the Term would end on 30 June 2001. If Mr Taylor never became recouped, the Term would be extended for the full year; that is to 30 November 2001. The same position would apply if Mr Taylor became recouped in the third accounting period. Although that accounting period would not in fact end until 31 December 2001, the long-stop date would kick in, and the Term would come to an end on 30 November 2001. Second, clause 11(c) speaks of 'the third 12 month period of the Agreement'. It does not envisage that 12 month period being shortened by earlier recoupment. Third, it makes no commercial sense for RDM to be paying Mr Taylor a further advance of £25,000 in circumstances where the Term has only been extended by virtue of clause 4(a)(ii) because he is unrecouped. The only purpose of extending the Term for a further period is to enable RDM to recoup advances already paid. By clause 11(c), RDM would be required to pay Mr Taylor a further sum of £25,000. This further payment reduces the possibility of recoupment within the extension period. Fourth, the 1995 and 1997 agreements contain clause 4(a)(ii) in identical terms but no clause 11(c). It is hard to see why clause 11(c) should have been absent from those agreements but came to be included in the 1998 agreement, especially in circumstances where the annual advance payable under the 1998 agreement was two and a half times higher than that payable under the two previous agreements. Lastly, Mr Mills construction inevitably involves reading an apparently unqualified obligation to pay the advance during the third twelve month period as being qualified by some phrase as 'if it should occur'.
219. In his impressive reply, Mr Mill gave detailed answers to Mr Sutcliffe's objections. Mr Mill accepted that, contrary to his opening submission, on analysis clause 4(a)(ii) did not provide for an automatic extension of one year. Depending on the date of recoupment, the extension could be for one month (to 31 December 2000), seven months (to 30 June 2001) or one year (to 30 November 2001). However, he fastened on the opening words of clause 11:
'The Publisher agrees to pay to the Writer during the Term hereof the following advance payments on account of and recoupable from fees and royalties payable to the Writer pursuant to the Agreement' (emphasis added)
220. Thus Mr Mill submitted that if the extension of the term came to an end on, say, 30 June 2001, RDM's obligation to pay advances would cease on that date, because the obligation was only an obligation to pay 'during the Term hereof'. This dealt with Mr Sutcliffe's first two objections. It also obviated the need to read any words into clause 11(c) (again, contrary to his opening submission). Next he submitted that there was a plain commercial purpose in the clause, whether looked at from the point of view of the writer (Mr Taylor) or the publisher (RDM). From Mr Taylor's perspective, an extension of the term would continue the period during which he would be exclusively tied to RDM. He could not therefore sell his compositions elsewhere. He would need an income to live on during the extension, and clause 11(c) provided the machinery for this. From RDM's perspective, the combination of clauses 1 and 4(b) gave the publisher the right to exploit the writer's works created during the Term for a period of 25 years after the Term ended. The obligation to pay advances was an obligation to pay on account of royalties etc. payable 'pursuant to the Agreement'. There was every reason to suppose that during the period of 25 years following the termination of the Term the publisher would recoup advances out of royalties. In addition, he submitted that the minimum commitment applied during the extension so that the publisher would have the benefit of the writer's delivered compositions during the extension. I do not agree with this last point. The minimum commitment is an obligation to deliver 10 compositions during each twelve month period of the term. If the term were to be extended for the full period of one year, then I can see that the minimum commitment would apply. But if the term were to be extended for a shorter period (say, to 30 June 2001), then I do not see how the minimum commitment clause could be apportioned or rewritten so as to oblige the writer to deliver, say, five compositions in a six month period. Mr Mill's fall-back position on this point was that in practice, since the writer has nowhere else to go during the extension period (because he is exclusively tied to the publisher) he would in practice deliver compositions for the publisher to exploit. I think the point can also be made that the copyright in any composition written or created during the extension period would automatically be assigned to the publisher under clause 1. . . . In answer to Mr Sutcliffe's fourth objection Mr Mill submitted that although a comparison between the 1998 agreement and the 1995 and 1997 agreements was legally permissible, it was unhelpful. Just because the two earlier agreements were workable without clause 11(c), it did not follow that the 1998 agreement was unworkable with the inclusion of clause 11(c)."
"I confess that although Mr Sutcliffe persuaded me that Mr Mill's original formulation was a very improbable reading of the agreement, Mr Mill has persuaded me that his revised formulation is a permissible reading, given the extreme reluctance of the court to hold that clauses in a contract are truly inconsistent, with the consequence that one of them must be rejected or rewritten. In my judgment the two clauses can be conscientiously and fairly read together."
"Where the court is confronted with two conflicting terms in an agreement, both dealing with duration, but one doing so directly, and the other indirectly, the court should infer that the clause dealing with duration directly represents the 'real intention' of the parties. The conventional structure of an agreement such as this one is that duration is referred to in a separate clause; and that is where the reasonable person with the background knowledge of the parties would look to discover the duration of the agreement."
On that basis had he thought the two clauses mutually inconsistent - the judge would have rejected clause 11(c) of the 1998 publishing agreement.
Are clauses 4(a)(i) and 11(c) of the 1998 publishing agreement mutually inconsistent?
"In point of fact, this is likely to occur only where there has been some defect of draftsmanship. . . . But where the document has been drafted as a coherent whole, repugnancy is extremely unlikely to occur. The contract has, after all, to be read as a whole; and the overwhelming probability is that, on examination, an apparent inconsistency will be resolved by the ordinary processes of construction."
Which of the two clauses should prevail?
"Preparation of the written agreement. M. Dreux-Leblanc says that he prepared the new written agreement in November 1998, using a previous RDM agreement as his precedent. He changed clause 11 to reflect the new dates for payment of the quarterly advances. He added a new clause 11(c) (which had been marked 'intentionally deleted' in the previous agreement) to deal with the payment of advances in the third year of the term. He added a new clause 20, which referred to Mr Taylor's previous agreements. However, he says that he forgot to change clause 4 which retained its description of the term of the agreement as '2 (two) years'."
"248 In my judgment each version of a song, if it is a musical and/or literary work, is a composition within the meaning of the agreement. The copyright owner is essentially given negative rights; that is to say the right to prevent anyone else from infringing copyright. . . . To reach a construction that makes the assignment of copyright dependent on the writer's subjective opinion of when a song is 'complete' or 'finished' creates acute commercial uncertainty as to what rights the publisher has. Equally, to conclude that no copyright is assigned until the writer delivers the song, means that the writer can delay assigning copyright simply by delaying delivery of a song. It is true that by so doing he might be in breach of the minimum commitment, but that is not a complete answer. . . . Moreover it would be productive of potential commercial conflict if the publisher was entitled only to copyright in the finished song, but copyright in preliminary versions remained with the writer.
249. It may be objected that if copyright in the draft of an unfinished song vests in the publisher as soon as it has been fixed, then the writer will infringe the publisher's copyright if he carries on working on the song. However, there would, in my judgment, be implied under the publishing agreement a licence for the writer to continue working on the song for the purposes of the agreement. Such an implication would, in my judgment, be necessary to give business efficacy to the agreement and/or is so obvious that it goes without saying. . . . "
"26. The question really, as it seems to me, is whether it is Mr Taylor who is continuing any activity in infringing copyright. As I have said, he was the joint author of both of those works. In fact even though the joint authorship was itself an infringement of copyright, he has assigned his copyright interest to Metrophonic, and consequently is in no position to do anything about the publication of those two works.
27 . It seems to me also that I must take into account the realities of an injunction in exercise of the equitable jurisdiction to grant or withhold an injunction under what used to be Lord Cairns' Act, and is now section 51 of the Supreme Court Act 1981, for this seems to me to be a case in which the principal purpose of the grant of an injunction against Mr Taylor will be the use by RDM of that order to better its negotiating position vis-ΰ-vis the record companies in order to require record companies to change the credits on the information provided to the public on the sleeve of the CD. There is no real question of actually stopping the released versions of the works in question.
28 . That, in my view, is not what the equitable jurisdiction is designed to achieve. As a matter of discretion therefore I decline to order the grant of an injunction."
"Any deletion of files and wrongful removal of back-ups was carried out as part of a common design to which Mr Taylor was a party. Thus he is liable jointly for any tort committed as part of that common design."
"278. On 17 January 2001 Warner Music UK Ltd (Cher's record label) wrote to Messrs Rawling and Taylor. They said that they understood that they would 'shortly commence' production of three tracks by the artiste Cher. On 13 February 2001 they wrote to RDM asking for confirmation that RDM were exclusively entitled to the production services of Messrs Rawling and Taylor. They said that:
'if you are unable to furnish these services or if you do not confirm to us immediately that you are able to contract with us on this basis we will proceed to contract with Brian [Rawling] and Mark Taylor directly.'
279. On 15 February 2001 \ Mr Rawling wrote to M. Dreux-Leblanc. Under the heading 'Cher' he said:
'The album still has not been started or agreed to. Last conversation was she was in LA resting and this album will be started as and when she feels good about it.
I will be involved with Mark TAYLOR in the production of the album. (Unless WARNERS tell me something else.)'
280. On 20 February 2001 RDM replied to Warners confirming its ability to enter into an agreement, and asserting that the tracks in question were produced in RDM's studios by its employees or sub-producers. This fax seems not to have reached its addressee, because on 28 February Warners wrote to say that as they had had no reply to their letter of 13 February they were proceeding to contract directly with Mr Rawlings and Mr Taylor. RDM replied on the same day. They referred to the draft agreements, prepared in the name of RDM and asserted that Warners were bound to deal with RDM. On 2 March Warners asked the pointed question:
'Is [your] company still able to deliver the services of Messrs Rawling and Taylor?'
281. Warners had sent copies of its correspondence with RDM to Mr Negus-Fancey, the lawyer acting for Mr Rawling. On 6 March he said that RDM had no authority to contract on his behalf. He continued:
''In addition, contrary to RDM's assertions, the three commissioned tracks have not been and will not be produced at RDM's studios. Cher's vocals are scheduled to be recorded in the States and the producers are recording and mixing the tracks at alternative studios."
"This is the strength of Mr Mill's submission that Mr Taylor's obligation to carry out production for RDM was conditional on RDM winning the project. But where a contract is conditional, it is commonplace to imply a term that neither party will prevent fulfilment of the condition. Thus Mr Sutcliffe [for RDM] submits that the true position is that Mr Taylor and Mr Rawling planned to do everything they could to ensure that the Cher project became one of BRP's first projects. Neither of them had any intention whatever of allowing Warner to put the project through RDM. There was not even a remote possibility of RDM being able to secure Warner's agreement to making a contract with RDM in relation to the Cher project. Mr Taylor was part of BRP. His true position was that he would only do the project thought BRP. Accordingly the cause of RDM's inability to secure the Cher project was Mr Taylor's own wrongdoing. It was not any independent action of Warner or any failure on the part of RDM. Mr Taylor is not, therefore, entitled to rely on his own wrong in asserting that the condition has not been fulfilled."
"I consider that if Mr Taylor had indicated that he would provide his producer services through RDM there would have been a high probability that RDM would have secured a contract from Warners for his services. I assess that probability at 75 per cent."
That conclusion is reflected in paragraphs 11 and 12 of the order of 15 July 2004.
"Brian Rawling, Mark Taylor, Graham Stack and I agreed between us that work on the Cher and Enrique Iglesias projects should be delayed as far as possible until we started the new business. However, work on these and other projects was started before we left RDM."
He held, at paragraph 207 of his judgment, that:
"Mr Taylor was advised to and did delay work on projects (and in particular the Cher project), with a view to ensuring that the projects would go to the new company."
"Cher arrived in England on 16 November. She had been supplied by Mr Dickins with a CD containing possible songs for inclusion on the new album, and she was already beginning to learn them. She planned to stay in England until the new album was finished. Shortly after her arrival Mr Dickins played her another RDM song, written by Paul Barry, Steve Torch and Mr Taylor, called 'Love is a Lonely Place Without You'. The US presidential election had just taken place, and Cher had been an active campaigner for the defeated candidate, Al Gore. Her disappointment with the result, coupled with difficulties with her London accommodation, caused her to cut her visit short."
Thereafter, there is nothing to suggest that the position was not as set out in Mr Rawling's letter of 15 February 2001. He wrote:
"'The album still has not been started or agreed to. Last conversation was she was in LA resting and this album will be started as and when she feels good about it."
Lord Justice Latham :
Lord Justice Neuberger
The first issue: the duration of the 1998 Agreement
Introductory
If irreconcilable, which of the two clauses prevails?
Can the two clauses be reconciled?
"[W]e are not concerned with what the [parties] may have intended or said. We are only concerned with interpreting the words which they chose to use in their contract. I do not think that we are entitled to assume that they must have had a clear intention and that it must have been a reasonable intention, and to hold that, even if the words which they have used will not bear that construction, that intention must prevail. It might be the law that a court should be entitled to amend the parties' contract if satisfied that no reasonable men could have meant what it says and also satisfied as to what they must have intended to do if, being reasonable men, they had directed their attention to the point. Perhaps that should be the law. But, so far as I am aware, there is no authority for a court having that power".
Conclusion on the first issue
The second issue: the meaning of "Compositions" in its contractual context
"244. Clause 1 of the publishing agreement assigned to RDM copyright in the 'Compositions' as defined by clause 3. Compositions were defined by clause 3 as including:
'all musical compositions and/or lyrics and/or original arrangements of musical works and/or any compositions which are during the Term hereof written, composed or created in whole or in part by the Writer including the title, words and music thereof'.
245. Clause 12 dealt with the minimum commitment. It said:
'The Writer hereby undertakes to deliver to the Publisher in each 12 (twelve) month period of the Term a minimum of an aggregate of 10 (ten) new Compositions by the Writer of a quality commercially acceptable to the Publisher and the Publisher undertakes to act reasonably and in good faith in assessing such acceptability'
246. Put shortly, the rival contentions were as follows. Mr Sutcliffe submitted that copyright vested under clause 1 as soon as a musical or literary work was fixed. Successive versions of a work resulted in successive assignments of copyright in each version. Clause 12 operated quite independently of assignment of copyright; and if necessary 'composition' should be given a different meaning in clause 12 to the meaning that it bears in clause 3. Mr Mill submitted that copyright did not vest until a composition was delivered under clause 12."
"and/or any Compositions which are during the Term hereof written, composed or created in whole or in part by the Writer including the title, words and music thereof."
The third issue: the injunction and the extent of any implied or express licence
The fourth issue: unlawful interference
The fifth issue: the Cher Project
"But where a contract is conditional, it is commonplace to imply a term that neither party will prevent fulfilment of the condition."
Conclusion
(i) Affirm the Judge's conclusion that the 1998 Agreement was for a term of two years;
(ii) Conclude that Mr. Barry's Agreement only extended to "fixed", or completed, compositions;
(iii) Affirm the Judge's refusal to grant the injunction sought by RDM;
(iv) Reverse the Judge's finding of unlawful interference against Mr. Taylor;
(v) Reverse the Judge's finding that Mr. Taylor was in breach of contract in relation to the Cher Project.
Lord Justice Chadwick:
Summary of Conclusions
Note 1 There is no appeal from the judges refusal (if he were wrong as to construction) to order rectification of the agreement. [Back] Note 2 In that context, accounting period means the period ending on the accounting date - 30 June or 31 December (as the case may be) - for which accounts are to be prepared under clause 14(a).
[Back]