Forstater & Anor v Python (Monty) Pictures Ltd & Anor

A written agreement is construed according to its language and commercial context. Rectification requires convincing evidence, on the ordinary civil standard, that the parties shared an objectively ascertainable common intention at the date of contracting and that the document failed to record it by mistake. Subsequent conduct may corroborate the existence and content of an earlier common intention, although it does not ordinarily determine construction. Contractual terms are not implied merely because they would produce a fairer or more reasonable bargain. A professional trustee’s liability for agreeing rights-management remuneration depends on negligence, assessed by considering the agreement as a whole and allowing appropriate room for professional judgment.

The claim concerned the division of continuing income from Monty Python and the Holy Grail. Mark Forstater and Mark Forstater Productions Limited claimed that the producer agreement entitled him to one-seventh of the income retained by Python (Monty) Pictures Ltd as the “Top Half” of certain merchandising and spin-off receipts. Alternatively, they sought rectification of the agreement.

The claimants also disputed the assignment of the relevant rights and challenged a later agreement under which Freeway CAM (UK) Ltd, as trustee, agreed that Fergus Spence Management Ltd would receive 10 per cent of gross receipts for rights-management services. The issues were construction, rectification, assignment, implied contractual terms and trustee negligence.

1. Construction. The producer agreement gave Mr Forstater 7.1429 per cent of the “merchandising profits”, namely the 50 per cent retained by Python (Monty) Pictures Ltd as the Top Half. It did not give him one-seventh of that Top Half. The provision was coherent and rational, and there was no sufficient basis for correcting its language through construction.
2. Rectification. The applicable principles, derived from Daventry District Council v Daventry & District Housing Association Ltd [2011] EWCA Civ 1153, required convincing evidence that the parties and the authorised agents of the company shared an objectively ascertainable common intention at the date of the agreement and that the written document failed to record it by mistake. The subsequent rendering and payment of invoices, correspondence, and the absence of evidence from Anne Henshaw strongly corroborated the claimants’ case. The agreement was therefore rectified by doubling the percentage payable from the Top Half.
3. Assignment. The relevant rights had passed to Mark Forstater Productions Limited. The earlier assignment to Julian Doyle concerned the mainstream profit participation and did not assign the separate contractual rights to the Top Half.
4. Implied terms. The agreement did not contain implied requirements that deductions be reasonable or made in the best interests of profit participants, or that Python (Monty) Pictures Ltd refrain from arrangements affecting the claimant’s receipts. The express wording and the contractual background did not justify those terms.
5. Trustee negligence. Freeway CAM was required to exercise reasonable skill and care under section 1 of the Trustee Act 2000 and the trust deed. The 2007 rights-management agreement had to be assessed as a whole. Its provision for a 10 per cent commission on gross receipts, including continuing income from prior agreements and receipts from 1 January 2007, was not shown to be negligent. The claim against Freeway CAM was dismissed.

This was a first-instance decision. The judgment records no earlier appellate decision.