Eva Green v White Lantern Film (Britannica) Ltd & Anor.

A contractual renunciation requires a clear and unequivocal intention not to perform an essential contractual obligation. The question is objective, assessed from the perspective of a reasonable person in the position of the innocent party, and depends closely on the contractual and factual context. A party’s emotional or hyperbolic language does not necessarily amount to renunciation. A party is not required to prove a continuing subjective state of readiness, willingness and ability before performance is due. A contractual entitlement cannot be defeated by an uncommunicated intention not to perform unless that intention is clearly conveyed. Acceptance of renunciation must itself be clearly and unequivocally communicated. A broad implied duty of good faith will not be imposed where the express contract contains only a limited obligation of that kind.

The claimant, an actor, claimed a $1 million fee under a pay-or-play artist agreement with the first defendant, a film production company. The second defendant, a finance company controlling the production, joined in counterclaims alleging that the claimant had renounced the agreement, committed repudiatory breaches, and engaged in conspiracy, deceit and unlawful interference.

The defendants relied principally on a conversation in which the claimant said that making the film under the proposed control of a particular producer was impossible. The claimant said that she was seeking to negotiate the acquisition of the film rights so that production could proceed under a different structure. The issues were whether there had been renunciation, whether it had been accepted, whether other breaches justified termination, whether the claimant was entitled to the fee, and whether the tort claims were made out.

1. Renunciation. The governing test was whether the claimant’s words or conduct clearly and unequivocally evinced an intention not to perform the agreement, judged objectively in context. The claimant’s statement that making the film under the proposed structure was impossible referred to one contractual and commercial option, not to the agreement as a whole. The surrounding communications showed an intention to negotiate for the script rights and continue with the film under an alternative structure. There was no renunciation.
2. The proposed production structure was not shown to be required by the artist agreement. The claimant had consented to a change of location and to the producer’s involvement, but had not agreed to make the film under that producer’s sole control. The alternative rights transaction could have been implemented consistently with the commercial purpose of the agreement.
3. Acceptance. Even if there had been renunciation, the former directors had not clearly and unequivocally communicated that the agreement was at an end. Their conduct was consistent with pausing production while negotiating over the rights. The notice under the escrow agreement was tentative, referred only to an alleged breach or possible entitlement to suspend or terminate payment, gave no particulars, and was not a valid termination notice under the agreement or at common law.
4. Other breaches and implied terms. The alleged repudiatory breaches were not established and, in any event, had not been validly accepted. The agreement contained adequate mechanisms governing the claimant’s obligations. A wide implied duty of good faith was unnecessary and potentially inconsistent with the limited express obligation concerning approval and consultation.
5. Fee and tort claims. The pay-or-play clause entitled the claimant to the fee. The tort claims depended on an unproved renunciation and failed independently for want of inducement or reliance and because the former directors’ conduct was not shown to breach their duties to the production company.
6. The claimant was declared entitled to the fee, payable from the escrow account. The defendants’ defences, counterclaims and additional tort claims were dismissed.