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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> BSI Enterprises Ltd & Anor v Blue Mountain Music Ltd  EWHC 1690 (Ch) (04 June 2014)
Cite as:  EWHC 1690 (Ch)
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The Rolls Building
7 Rolls Building
London EC4A 1NL
B e f o r e :
| BSI Enterprises Limited
Cayman Music Limited
| Blue Mountain Music Limited
Ian Mill QC and Tom Cleaver (instructed by Russells Solicitors) for the Defendant
Hearing dates: 13 and 14 May 2014
Crown Copyright ©
Mr Richard Meade QC sitting as a Deputy Judge of the High Court:ANNEX (agreed chronology)
|The Witnesses||Paragraph 37|
|The Issues||Paragraph 54|
|Issue 1 Were the copyrights in the Works transferred to Island under the March 1992 Agreement?||Paragraph 59|
|Factual Matrix||Paragraph 67|
|Terms of the March 1992 Agreement||Paragraph 74|
|The parties' contentions||Paragraph 78|
|Issue 3 The Claimants' restitutionary claim||Paragraph 114|
|Issue 4 Licence?||Paragraph 130|
Issue 1 Were the copyrights in the Works transferred to Island under the March 1992 Agreement?
'(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
(2) The background was famously referred to by Lord Wilberforce as the "matrix of fact," but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.
(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd  2 WLR 945
(5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in The Antaios Compania Neviera SA v Salen Rederierna AB  1 AC 191, 201:
"... if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense."'
a. The 1968 and 1973 Agreements.
b. The Misattribution Ploy (which was known as a fact to Island and strongly suspected by Mr Sims).
c. The New York Action, including in particular (i) that CMI had alleged the Misattribution Ploy but that its claim had been dismissed for limitation reasons, and (ii) the counterclaim, which was extant.
d. That it was possible the Misattribution Ploy would be complained of again in other future litigation because it had not been dismissed on the merits. As a result, ownership of (allegedly) misattributed works was unclear to some degree.
e. That there were likely to be works created by Bob Marley during the currency of the 1973 Agreement which had not been specifically identified ("lost works").
f. That Island was in the process of acquiring the Estate's interest in Bob Marley's creative output.
g. That this was being done by means of the 1988 Agreement, which remained under challenge, and although those challenges appeared to be slowly approaching a resolution, it was uncertain what form any final agreement would take.
h. The general terms of the 1988 Agreement. Mr Cuddigan relies on two particular elements of it, (i) that the Works were specifically listed, and (ii) that the New York claim by CMI was acknowledged as a piece of actual or potential litigation. I doubt if these details were in the active contemplation of the parties to the March 1992 Agreement, objectively speaking, not least because CMI was not a party to the 1988 Agreement, but I do not think it would make much if any difference if they had been.
i. That Island was desirous of obtaining as many as possible of the rights in Bob Marley's creative output.
j. That the Works were registered at the US Copyright Office as written by the misattributed authors, and Island had been paying royalties accordingly.
Terms of the March 1992 Agreement
Clause 1.1: which defines "Acquired Assets" to include (i) "Compositions" and (ii) "Songwriter Agreements".
Clause 1.8: which defines "Composition" and "Catalogue". This is the key clause as it the one on which the Defendant relies as giving it the Works.
Clause 1.9: which defines "encumbrance" to include claims or any other encumbrance or contingency of any nature whatsoever affecting any of the Acquired Assets.
Clause 1.20: which defines "restriction" as agreements restricting CMI's rights to exploit the Works, but not including non-exclusive agreements such as songwriter agreements.
Clause 1.22: which defines "Songwriter Agreements" to include all music publishing rights granted to CMI pursuant to its "songwriter contracts whereby [CMI] is entitled to rights to one or more Compositions". This became important in the course of the trial as I will explain below.
Clause 2.1: Transfers the Acquired Assets.
Clause 3.1: the purchase price paid to CMI for all the assets being acquired was $1,250,000.
Clause 5.4: in this clause, CMI provides a warranty as to title to "the Acquired Assets", itself defined as including the Compositions. The purposes of Schedules 8A and 8B are described; the former is a list of declared encumbrances; the latter lists those compositions in respect of which no representations as to title are made by CMI.
Clause 5.13: litigation and claims. This clause expressly refers to the counterclaim by the Estate in the New York claim. To the extent that the counterclaim results in the loss of any "Acquired Assets", that is deemed not to be a breach.
Clause 11.4: in the context of a condition to the obligations of the buyer, Island, this clause requires that no action, suit or proceeding shall have been commenced against CMI or against Island Logic or any of its affiliates, which seeks to restrain or change the transactions contemplated by the agreement.
Schedule 2: this is the list of Compositions provided by CMI, and is referred to in clause 1.8. None of the Works appears on it.
Schedule 8A: CMI discloses a lists of encumbrances that CMI says relate to the "Acquired Assets". It refers to the counterclaim by the Estate in New York (listed in Schedule 12) as an encumbrance. It also lists certain other musical works as being subject to claims from SBK, Ackee and Number 11 Music Publishing.
Schedule 8B: provides a list of Compositions in relation to which CMI makes no warranty as to title. Schedule 8B concludes with the following statement:
"There are no restrictions other than as set forth in Schedule 12 herein on [CMI's] right to sell the Acquired Assets."
It should be noted that all the musical works listed in Schedules 8A and 8B also appear in Schedule 2.
Schedule 12: Identifies the New York Counterclaim and goes on to say that "There are no other claims threatened or pending against Seller with regard to the Acquired Assets".
"1.8 'Composition' and 'Catalogue.' The term 'Catalogue' shall mean all presently-existing musical compositions, or portions thereof, including cues, domestic or foreign, whether originally claimed or registered as a musical composition or as a part of a dramatic-musical work, consisting of lyrics and/or music whether or not registered in the United States Copyright Office or elsewhere, whether published or unpublished, written recorded by Robert N. Marley, Winston Peter McIntosh and/or Neville Livingstone, and/or certain musical compositions written or composed by Alfonso Pyfrom and/or Jimmy Norman (which were recorded by any of Robert N. Marley, Winston Peter McIntosh and/or Neville Livingstone), under their own names or under any pseudonyms, individually or as part of any collaboration between or among any of them or others (individually a 'Composition' and collectively the 'Compositions') and all right, title and interest in and to such Compositions, including all copyrights and renewals and extensions of copyrights thereto in all jurisdictions throughout the Universe, to the extent such compositions, copyrights, renewals and extensions are owned, controlled or administered, in whole or in part, by any member of Seller or by Seller's Music Publishing Business as of the Closing Date, or from which any member of Seller or Seller's Music Publishing Business receives income, including, but not by way of limitation, the Catalogue listed on Schedule 2 attached hereto. In furtherance of the foregoing, and not by way of limitation, the Compositions also include all musical compositions owned by Seller which were recorded by Robert N Marley (whether alone or in combination with any other artists)."
The parties' contentions
Issue 3 The Claimants' restitutionary claim
Issue 4 Licence?
a. The Claimants have no rights in the Works because the copyrights in the Works passed to Island (specifically Island Logic Ltd) under the March 1992 Agreement.
b. Accordingly, the Claim fails.
c. It is not appropriate to decide the Claimants' claim in restitution but I make the relevant factual findings above.
d. Had the Claimants had rights in the copyrights in the Works as they allege, Island would have had a licence down to the date of the Claim Form.
IN THE HIGH COURT OF JUSTICE Claim no. HC12B01510
|14 June 1968||Publishing Agreement between Johnny Nash Music Inc and Bob Marley||4.1/3/121|
|11 Oct 1973||Publishing Agreement between CMI and Bob Marley||1/2/13|
|11 Oct 1973 to 11 Oct 1976||Works in issue composed by Bob Marley|
|11 May 1981||Bob Marley dies intestate|
|15 October 1984||Complaint in New York Action issued by CMI v Rita Marley (as administratrix of the Estate of Bob Marley), BMML and Island Records Inc & Ors||4.1/1/95|
|14 January 1988||Judgment dismissing New York Action on limitation grounds||4.1/2A/120.1|
|27 April 1988||Conditional Agreement between Mutual Security Merchant Bank and Trust Co Ltd (as administrator of the Estate of Bob Marley) and Island Logic Inc||4.1/4/131|
|20 March 1992||Asset Purchase Agreement between Island Logic Ltd and Cayman Music Inc & Ors||4.1/5/185|
|Ancillary Agreement between Vanguard Films and Cayman Music Inc||4.1/5/431|
|10 September 1992||Sale agreement between Mutual Security Merchant Bank and Trust Co Ltd (as administrator of the Estate of Bob Marley) and Island Logic Ltd & Ors||4.2/6/484|
|15 May 2006||Judgment in the matter of Aston Barrett and Universal-Island Records Ltd & Ors||6/19/1420|
|20 May 2008||Agreement between BSI Enterprises Ltd and Cayman Music Inc & Ors||4.2/12/676|
|1 October 2011||Licence between BSI Enterprises Ltd and Cayman Music Ltd||4.3/16/844|
|13 April 2012||Claim Form Issued||1/1/1|
|20 July 2012||Amended Claim Form Issued||1/1/1|