Eurovideo Bildprogramm GmbH v Pulse Entertainment Ltd

For permission to appeal, a proposed construction that an exclusive first exploitation right concerns only the first circulation of each copy has no real prospect where the agreement grants the right of first exploitation of the works in the territory. The expression denotes a right which has not previously been granted to others.

Where a misrepresentation challenge is arguable, permission may be granted on that issue even though a pleading objection is merely technical. Permission should be limited to the arguable issue.

Pulse sought permission to appeal from judgments of His Honour Judge Crawford QC, sitting as a deputy High Court judge, in Eurovideo’s claim concerning a video distribution licence. The judge found that the agreement represented that the relevant works had not previously been exploited in the German-language territories, and held that the agreement could be rescinded and damages awarded.

Permission had previously been granted on paper in relation to the measure of damages. The renewed application concerned the construction of the first exploitation clause and whether the findings supported rescission for misrepresentation rather than only damages for breach of contract.

1. Construction of the licence. Lord Justice Aldous held that the proposed construction of the exclusive first exploitation right had no real prospect of success. The right concerned first exploitation of the videos in the relevant territory, meaning exploitation rights that had not previously been granted to others. It did not merely confer the right to place each newly made copy into circulation for the first time. The judge below was therefore right on that issue, and permission was refused.
2. Misrepresentation. The judge below had found that the pre-contractual documents and the agreement represented that the rights granted would be first exploitation rights, that the representation was untrue, and that Eurovideo relied upon it. The contention that this issue had not been pleaded was regarded as purely technical and insufficient to justify troubling the court.
3. The contention that the evidence established only a contractual promise, and not an actionable pre-contractual misrepresentation capable of supporting rescission, was arguable. Lord Justice Aldous accordingly granted permission to appeal, limited to the misrepresentation argument. Lord Justice Robert Walker agreed.
4. The order granted permission on that limited basis and allowed the appellant’s counsel 14 days to submit a fresh skeleton argument and grounds of appeal, if necessary.

• Court of Appeal (Civil Division) — In [2002] EWCA Civ 101, permission to appeal was granted, but limited to the misrepresentation argument.
• High Court, Queen’s Bench Division — His Honour Judge Crawford QC, sitting as a deputy High Court judge, found that the licence agreement contained representations concerning first exploitation rights, held that those representations were relied upon and untrue, and concluded that the agreement could be rescinded with damages awarded.