The defendant appealed against an order made on the claimant’s assertion that there were due to it substantial underpayments of royalties over many years. The issues were as to the construction of licensing agreements particularly in the context of digital sales, under which the appellants were found to owe the respondents come 10 million pounds in royalty arrears.
Held: The appeal failed (Carnwath LJ dissenting in part). Before the court can be satisfied that something has gone wrong, the court has to be satisfied both that there has been ‘a clear mistake’ and that it is clear ‘what correction ought to be made’.
Lord Neuberger MR said: ‘Commercial common sense strongly supports the case advanced by PFM, as the Chancellor said. It seems perverse to imagine that the parties envisaged the integrity of the Albums being rigidly controlled by PFM so far as they were physically recorded and distributed, but that PFM would have no control whatever over the integrity of digital recordings and distribution, particularly when one bears in mind that downloading by the eventual purchaser can involve a permanent recording being held on a physical format. While it is true that digital distribution was in its infancy at the time, it was plainly in existence and was seen by the parties as being commercially significant, and, on the issue of maintaining the integrity of recordings, no sensible reason for distinguishing between physical format and digital recordings has been advanced. ‘
An application allowing the redaction of a commercially sensitive percentage was incorrect: ‘a private hearing or party anonymisation will be granted in the Court of Appeal only if, and only to the extent that, a member of the Court is satisfied that it is necessary for the proper administration of justice.’
Judges:
Lord Neuberger MR, Laws, Carnwath LJJ
Citations:
[2010] EWCA Civ 1429, [2011] 1 WLR 770
Links:
Jurisdiction:
England and Wales
Citing:
Appeal from – Pink Floyd Music Ltd and Another v EMI Records Ltd ChD 11-Mar-2010
The claimant sought summary judgment for a claim under Licensing agreements under which the defendants had marketed and sold the claimant’s products. The remaining disputes concerned differences as to royalties from digital downloads sold through . .
Cited – City Alliance Ltd v Oxford Forecasting Services Ltd CA 16-Nov-2000
The parties disputed the construction of a clause in the contract between them.
Held: Chadwick LJ said: ‘It is not for party who relies upon the words actually used to establish that those words effect a sensible commercial purpose. It should . .
Cited – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Cited – Chartbrook Ltd v Persimmon Homes Ltd and Others HL 1-Jul-2009
Mutual Knowledge admissible to construe contract
The parties had entered into a development contract in respect of a site in Wandsworth, under which balancing compensation was to be paid. They disagreed as to its calculation. Persimmon sought rectification to reflect the negotiations.
Held: . .
Cited – Mannai Investment Co Ltd v Eagle Star Assurance HL 21-May-1997
Minor Irregularity in Break Notice Not Fatal
Leases contained clauses allowing the tenant to break the lease by serving not less than six months notice to expire on the third anniversary of the commencement date of the term of the lease. The tenant gave notice to determine the leases on 12th . .
Cited – East v Pantiles Plant Hire Ltd CA 1981
The court considered the circumstances under which rectification could properly be ordered in respect of a deed. Brightman LJ said: ‘It is clear on the authorities that a mistake in a written instrument can, in certain limited circumstances, be . .
Cited – City Alliance Ltd v Oxford Forecasting Services Ltd CA 16-Nov-2000
The parties disputed the construction of a clause in the contract between them.
Held: Chadwick LJ said: ‘It is not for party who relies upon the words actually used to establish that those words effect a sensible commercial purpose. It should . .
Cited – KPMG Llp v Network Rail Infrastructure Ltd CA 27-Apr-2007
The parties disputed the interpretation of a break clause in their lease. Carnwath LJ said that courts should not readily accept that parties have made mistakes in formal documents: ‘correction of mistakes by construction’ is not a separate branch . .
Cited – Lediaev v Vallen CA 5-Mar-2009
. .
Cited – Kirin-Amgen Inc and others v Hoechst Marion Roussel Limited and others etc HL 21-Oct-2004
The claims arose in connection with the validity and alleged infringement of a European Patent on erythropoietin (‘EPO’).
Held: ‘Construction is objective in the sense that it is concerned with what a reasonable person to whom the utterance . .
Cited by:
Cited – Rainy Sky Sa and Others v Kookmin Bank SC 2-Nov-2011
Commercial Sense Used to Interpret Contract
The Court was asked as to the role of commercial good sense in the construction of a term in a contract which was open to alternative interpretations.
Held: The appeal succeeded. In such a case the court should adopt the more, rather than the . .
Cited – Campbell v Daejan Properties Ltd CA 20-Nov-2012
The tenant appealed against an order requiring the amendment of what was found to be an obvious error in the lease as to the responsibility of the lessor to make repairs to certain walls and rooves, and the apportionment of liability for payment of . .
Cited – AJ Building and Plastering Ltd v Turner and Others QBD 11-Mar-2013
An insurance company had engaged a main contractor to handle repairs to houses insured under its policies. The contractor had engaged the claimant subcontractor to carry out the works at the defendants’ homes, but then went into insolvent . .
Cited – Chief Inspector of Education, Children’s Services and Skills v The Interim Executive Board of Al-Hijrah School CA 13-Oct-2017
Single Sex Schooling failed to prepare for life
The Chief Inspector appealed from a decision that it was discriminatory under the 2010 Act to educate girls and boys in the same school but under a system providing effective complete separation of the sexes.
Held: The action was . .
Cited – Lu v Solicitors Regulation Authority Admn 6-Jul-2022
No Unmnecessary Anoniymity
The appellant, having been acquitted of misconduct, complained of the anonymisation of various partied by the SDT.
Held: The court was critical of the approach taken by the Tribunal. ‘I see no good reason why Ms Pearson, Ms Stone, Mr Ewing and . .
Lists of cited by and citing cases may be incomplete.
Contract, Media
Updated: 14 July 2022; Ref: scu.427179