Recorded Picture Company Ltd v Alfama Films Production & Anor

The construction of an option deed depends on its natural and ordinary meaning, read with the instrument as a whole and the admissible factual matrix. A recital incorporated into the definitions may identify the essential product to which the option relates. A force majeure clause covering litigation or claims affecting the work, rights or film is broad and is not confined to chain-of-title disputes. It may cover a dispute involving a director where that dispute affects production of a film defined by reference to that director. When triggered, the contractual extension operates automatically until the deed can be performed or its obligations fulfilled, plus the additional period specified by the deed.

Recorded Picture Company Limited granted Alfama Films Production and Paulo Branco a six-month option to obtain a licence to develop, produce and exploit a film project written by Tony Grisoni and intended to be directed by Terry Gilliam. A dispute between the Producers and Mr Gilliam led to litigation in France before the option expired. RPC contended that the option had expired; the Producers relied on clause 16 of the Deed, which extended time where litigation or claims affected the Work, Rights or Film.

The High Court dismissed RPC’s Part 8 claim by order dated 8 December 2017. The appeal concerned the meaning of Work and Rights, and whether the Gilliam dispute and French litigation triggered clause 16.

The appeal was dismissed. Lady Justice Asplin delivered the judgment, with Lady Justice Arden agreeing.

1. The phrase identifying the Work as a film project to be directed by Terry Gilliam was not a mere description. Read in the context of the Deed as a whole and the factual matrix, it identified the product in relation to which the option was granted. The Rights, being defined by reference to the Work, therefore concerned a film project involving Mr Gilliam’s direction. This did not amount to a warranty or guarantee that his services would be provided.
2. Clause 16 was a contractual mechanism for allocating the risk of supervening events affecting performance. Its reference to litigation or claims affecting the Work, Rights or Film had a broad ordinary meaning. It was not limited to disputes concerning chain of title. The Gilliam dispute arose from an agreement to which RPC was not a party, but it affected the Work and Rights because they concerned production of a film to be directed by Mr Gilliam.
3. The clause contained three distinct triggers: an Event of Force Majeure preventing performance, RPC’s default or material breach, and litigation or claims affecting the Work, Rights or Film. The third trigger was engaged. The option period therefore extended automatically until the Deed could be performed or its obligations fulfilled, plus 30 days. The Gilliam dispute and French litigation accordingly prevented the option from expiring on 30 September 2016.
4. The inclusion of the director’s death among the force majeure events did not justify implying a limitation to temporary events. There was no textual basis for such a limitation, although the issue was not decisive because the French litigation was not permanent. RPC could not rely on the later completion of the film with another producer to circumvent the extension that had already taken effect.

• Court of Appeal (Civil Division) dismissed RPC’s appeal and upheld the High Court’s construction of clause 16: [2018] EWCA Civ 767.
• High Court of Justice, Chancery Division, Ms Lesley Anderson QC sitting as Deputy High Court Judge, dismissed RPC’s Part 8 claim by order dated 8 December 2017.