Taylor v Rive Droite Music Ltd

Where contractual provisions appear inconsistent, the court must first consider whether they can be reconciled by construction. If they cannot, the court must determine which provision prevails by reference to the wording, the agreement as a whole, business common sense and admissible background. A clause expressly defining duration prevails over a payment provision that merely assumes a longer term.

In a standard-form publishing agreement, copyright assignments covered completed compositions, not works still under development. An implied term preventing frustration of a condition ordinarily restrains positive acts of prevention and does not impose a positive duty to co-operate. Serious allegations of dishonest removal or common design must be pleaded and put to the defendant.

Mr Taylor, a record producer and songwriter, entered into publishing and production agreements with Rive Droite Music Ltd. The dispute concerned the duration of the 1998 publishing agreement, the scope of copyright assignments, injunctive relief, alleged interference with computer files, and production work for Cher.

Lewison J held that the publishing agreement lasted two years, found copyright infringement in aspects of two Iglesias songs, found limited unlawful interference with goods, and held that Mr Taylor had breached an implied term concerning the Cher project. The parties appealed and cross-appealed from that decision, reported at [2004] EWHC 1605 (Ch). The central questions were the proper construction of the agreements and whether the findings and remedies could stand.

The Court of Appeal dismissed RDM’s appeal on the duration of the publishing agreement and on injunctive relief. Mr Taylor’s cross-appeal was allowed on copyright, interference with goods and the Cher project.

1. Duration. The majority, comprising Neuberger LJ and Latham LJ, held that the agreement lasted two years. Apparent inconsistencies should ordinarily be reconciled, but the court must not adopt a construction the parties could not sensibly have intended. If reconciliation fails, the express duration clause prevails over a payment clause which merely assumes a third year. The approach required attention to the words used, the contractual scheme and commercial context. Chadwick LJ would have treated the provisions as irreconcilable and given effect to the third-year provision.
2. Copyright. The majority accepted Neuberger LJ’s construction of Mr Barry’s substantially identical agreement. “Compositions” meant fixed or completed works, not works still being developed. The assignment therefore did not cover the unfinished versions of the Iglesias songs existing during the relevant period, and the finding of infringement was reversed. Latham LJ agreed with that conclusion; Chadwick LJ would have upheld the wider construction.
3. Injunction. The refusal of an injunction was upheld. RDM had no proper basis for restraining exploitation on the majority’s construction. In any event, the proposed order would have served principally to improve RDM’s negotiating position over publishing credits, rather than prevent infringement. The equitable discretion under section 51 of the Supreme Court Act 1981 did not require such relief.
4. Interference with goods. A finding based on removal of back-up copies and a common design carried an allegation of dishonesty which had not been pleaded or put to Mr Taylor. Liability was limited to the improperly timed deletion of files, attracting nominal damages. The inquiry and consequential orders were set aside.
5. Cher project. An implied term preventing a party from frustrating a condition ordinarily prohibits positive acts of prevention. It does not, without clear necessity, impose a positive duty to secure the condition. Mr Taylor’s inaction or delay did not breach the term, and the finding against him was reversed. The distinction was supported by the difficulties concerning implied duties to co-operate identified in Mona Oil Equipment and Supply Co. Ltd [1949] 2 All ER 1014.

Costs and interest issues under CPR Part 36.21 were left for further consideration.

1. Court of Appeal (Civil Division): The court dismissed RDM’s appeal on the contractual duration and injunction issues, and allowed Mr Taylor’s cross-appeal on copyright, interference with goods and the Cher project: [2005] EWCA Civ 1300.
2. High Court of Justice, Chancery Division: Lewison J held that the publishing agreement lasted two years, found limited copyright infringement and unlawful interference, and found a breach of an implied term concerning the Cher project: [2004] EWHC 1605 (Ch).