IN THE HIGH COURT OF JUSTICE
(QUEEN'S BENCH DIVISION)
Royal Courts of Justice
Strand, London WC2A 2LL
5th April 2001
B e f o r e:
Mr. JUSTICE BUCKLEY
(Claimant)
-and-
(First Defendant)
-and-
(Second Defendant)
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Mr. Christopher Quinn (instructed by Messrs Simons
Muirhead & Burton) for the Claimant.
Miss Marion Smith (instructed by Messrs Marriott Harrison) for the Second Defendant.
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1. The Claimant, Paul Yule, is a director of documentary films. The Defendant companies are part of a group of Little Bird companies. In the event, it is agreed, that I am only concerned with the second Defendant Little Bird Features Ltd. ("Features"). That company is a film production company.
2. By the re-amended Particulars of Claim, Mr. Yule claims various relief including damages for breach of contract, breach of copyright and moral rights, unjust enrichment and quantum meruit. During the course of the trial, Mr. Quinn, for Mr. Yule, abandoned the claims based on breach of copyright and moral rights.
3. The dispute between the parties arises out of a documentary film concerning the killing of Gianni Versace, the well known fashion designer. The film is to be shown by the BBC. The production company was "Features", the producer Pascale Lamche and the director James Kent. Pascale Lamche was neither an officer of nor employed by "Features", but has produced films for it before and clearly enjoyed a close working relationship with those effectively running it.
4. The essence of the dispute is that Paul Yule claims he was engaged to direct the film by Pascale Lamche, that he worked on the project for some months but was then dropped and replaced by James Kent. "Features" denies that he was so engaged. Its case is that such agreement as there was with Pascale Lamche was an agreement only in principle, that no formal contract was agreed and any contribution made by Paul Yule was at that early stage in the development of the project which those in the industry understand as speculative in the sense that it may lead to a formal engagement at a later stage, in particular when appropriate funding has been secured.
5. Miss Smith, for "Features", whilst maintaining a denial that Pascale Lamche was an agent of "Features", nevertheless accepted, for present purposes, that if there was otherwise a contract agreed between Pascale Lamche and Paul Yule, "Features" would be bound by it. She was, in my view, manifestly correct to do so.
6. Pascale Lamche and Paul Yule were friends in 1999 and had worked together, notably on a documentary film called "In the Footsteps of Bruce Chatwin". That project had originated with Paul Yule and he co-produced as well as directed it. However, it is common ground that at the end of September 1999 these two friends, who both lived near Hampstead Heath, met and as a result of their meeting and some further communications, agreed that Paul Yule would direct the Versace film, assuming it went ahead. The idea for the film had come from Nicholas Fraser, a commissioning editor employed by the BBC. He had previously discussed the idea with Pascale Lamche who in turn had taken the idea to "Features".
7. Sadly, the parting of the ways that occurred in January 2000, generated a good deal of animosity and the fact is that the events from September to January have come to be viewed and interpreted very differently by these two.
8. The pleaded case in contract appears in paragraph 5 of the re-amended Particulars of Claim:
5. Breach of Contract.
5.1 Further or in the alternative, by an oral contract made between the Claimant and Pascale Lamche acting for and on behalf of the First and/or Second Defendants, made on or about 27th - 30th September 1999 the Claimant and the First and/or Second Defendants agreed to work together for reward on the making of the said television programme.
5.2 It was an express term of the said agreement that the First and/or Second Defendants would engage the Claimant as the director of the television programme.
Particulars
(1) With an initial budget in the region of £700,000 the Claimant was entitled to a sum representing 10% of the programme's budget being the industry standard and a percentage of the producer's net; and/or
(2) The Claimant was entitled, following the reduction in the budget to a sum in the region of £400,000 to a figure representing at least 10% of the budget plus a percentage of the production fee and back-end receipts to be negotiated. The Claimant will rely in this regard upon the proposed budget which he was sent by Pascale Lamche by facsimile on 30th September 1999 . . . . .
9. This pleading is not easy to understand. It alleges in general terms an oral contract by which the parties agreed to work together for reward on the making of the television programme but then identifies an express term of that agreement that the Claimant would be engaged as the director. That sounds rather like an agreement to agree. But even if that hurdle is overcome there is no indication as to the time at which or circumstances in which the engagement was to come about. The Particulars take that matter no further. (1) simply states the Claimant's entitlement on the basis of the " industry standard." And (2) (the reduced budget alternative) introduces an entitlement to a percentage of the production fee and the back-end receipts "to be negotiated." There is no further enlightenment as to any negotiations, yet the percentages are, apparently, still claimed. However, Mr. Quinn opened the Claimant's case and maintained that a director's contract was entered into between 27th and 30th September 1999.
10. Paul Yule's witness statement, confirmed in evidence, was to the effect: that at Pascale Lamche's request the two of them met for breakfast on Monday, 27th September 1999 followed by a short walk on Parliament Hill; that during the walk Pascale Lamche explained that she had asked to meet that morning because she wanted to persuade him to be the director of the Versace film which was to be a major work made with a good budget and the BBC was financially committed to it; she emphasised that it was still early days and it would take hard work to get all the financing in place but the target was to complete the film towards the end of 2000; the following day Pascale Lamche telephoned formally to offer the job of director and that he accepted; as to the terms of the contract, it is stated that Paul Yule was to receive 10% of the budget in the event that it was a "Feature" film with a budget of some £700,000; alternatively, if the project turned out to be a smaller television production with a budget of about £350,000 then he would receive 10%, that is, £35,000 plus "a reasonable share of the back-end sales revenue"; also that it was agreed in either case the editing of the film would be done in his cutting room at Berwick Universal Pictures (Paul Yule's company).
11. Pascale Lamche's witness statement gave a very different account: it was Paul Yule who requested the meeting which in fact did not take place until the 29th September 1999; it was only after considerable conversation on other matters that Paul Yule finally asked her what she was working on and she eventually told him about the Versace project; it was Paul Yule who eventually managed to turn the conversation around so that she asked whether he would be interested in directing the film; her own state of mind at the time was that she was thinking of working with a new director; it was on the 30th September that he telephoned her to say that he would be interested in directing the film and in effect they then agreed; although a draft budget for the film was sent to Paul Yule on 30th September, which contained an item of £35,000 for the director, she did not discuss terms with him until much later, in fact the 27th October 1999.
12. In the end, save as to general credibility and accuracy of recollection, I do not consider that precise dates or who first raised the question of Paul Yule directing Versace is determinative of anything. There is an event in Amsterdam known as "The Forum". Some days before the meeting with Paul Yule at the end of September Pascale Lamche had sent appropriate application forms to The Forum in respect of Versace. The application form has a space for the name of the director in which she had put "T.B.C." ; (presumably To Be Confirmed). The notes to the application form call for, inter alia, a one page synopsis on the director. When sending in the form Pascale Lamche had indicated that if she had not resolved the identity of the director by December, which was the date of The Forum, she would proceed without one. In her own words "I will pitch it (Versace) from a conceptual and visual point of view, as I have done on most of my films". However, on the 30th September she spoke to an organiser of The Forum on the telephone and said that Paul Yule would be the director and she sent in a further application form naming him together with a so called filmography of Paul Yule. Although her witness statement states that she told the organiser that Paul Yule would be the "prospective" director I can find no hint of the word "prospective" in any of the documentation that was forwarded to The Forum.
13. It is thus clear that the parties, at least, had reached an understanding by the end of September that Paul Yule would direct Versace if the project went ahead. The difference between them as maintained in their evidence before me was that Pascale Lamche and "Features" case was that there was no contract entered into whereas Paul Yule maintained that he had a director' s contract from 30th September 1999 at the latest.
14. To my mind there are two main considerations. The first is whether the parties intended to enter into an immediately binding contract in September 1999. The second is whether, in any event, they had agreed enough to constitute a director's contract.
15. Mr. Quinn relied on various aspects of the matter as supporting the necessary contractual intention, including, the use of Paul Yule's name as director in The Forum application form, and the fact, as indeed it is, that he was introduced during the actual "pitch" in which he took part, as the director; a letter written by Pascale Lamche dated 25th January 2000 and the fact that it is not uncommon for directors or producers to work as such before a written contract comes into being. I find no support for the idea of a binding contract in any of those matters. They are equally consistent with the view that it was fully intended that Paul Yule would direct the film but no contract had yet been entered into.
16. Paul Yule said nothing in evidence, nor is there anything in his witness statement, that points unequivocally to an immediately binding director's contract save a bare assertion that he was the director. His evidence was as consistent with the concept that the parties had agreed that he would direct Versace if the concept went ahead and that if it did or to use the language of the parties, if it became a "go" project in the eyes of the production company, they would negotiate a director's contract. The parties genuinely anticipated that he would be the director and had indeed agreed some basic terms, in particular his director's fee, by reference to the likely budget. But there were several other very important terms that were never mentioned in September even on Paul Yule's own evidence. I will return to those in due course. I am satisfied on the evidence as a whole, and find, that the usual practice in the industry is that a producer and director may well liaise and spend some time on a concept or project, but that no-one is committed unless or until a contract is negotiated and agreed. The most obvious circumstance in which a project may fail is if the necessary funding is not obtained.
17. As at the date of The Forum, Paul Yule was the intended director but no funding was in place. Indeed the purpose of "pitching" the project to the various commissioning editors there was to obtain such funding. The BBC had indicated that they were behind the project but they never intended to put in more than about £80,000.
18. I also find, on the evidence, that there is a common practice whereby a commissioning party or broadcaster may enter into a development contract with a production company. That is, it will commit to a certain amount of money to enable the producer or production company to develop a project to a certain stage. That may well provide for some specific payment to a director for specific development work or for a period of time. There was no such development contract in this case that included Paul Yule and he could not suggest there was. That he was familiar with the concept is plain because he was involved in precisely such an arrangement concerning a project known as "Evil" to which I will refer again. The BBC also entered into two such agreements with "Features" in early 2000 in order to progress Versace and specific provision was made for payment to James Kent the director and Pascale Lamche as producer.
19. The letter written by Pascale Lamche, upon which Mr. Quinn relied, was to Paul Yule and dated 25th January 2000. It was written some days after apparently stormy conversations, the upshot of which was that Paul Yule was off the project. The breakdown, according to Pascale Lamche, occurred because Paul Yule had committed himself to the "Evil" project and she did not believe he could safely do both; at least she was not prepared to take the risk because Versace was extremely important to her and her own reputation. Paul Yule was and remains of the view that the decision had more to do with the fact that since The Forum in Amsterdam, Nicholas Fraser had not really wanted him as director. The passage upon which Mr. Quinn relied reads as follows:
Secondly, you and I had agreed a director's fee of £35,000 plus a fee in respect of off-lining. That proposition had been put to James Mitchell and accepted back in November. In our most recent telephone conversation you demanded compensation on the same basis as our Chatwin agreement, that is an equal share of overheads, production fee and net receipts. Not only was such a proposal never discussed or agreed, it would be clearly inappropriate. The Chatwin project was originated by you, and you and Nicholas had already raised BBC finance. In the case of Versace I got the BBC commission, I wrote the treatment myself and I have raised the international finance. How could a co-production arrangement with you possibly arise?
Again, this passage needs to be construed against the background I have described. To my mind it is entirely consistent with the parties agreeing enough to justify taking the project forward and the "director" making some contribution against the expectation that a contract would be negotiated in due course. Further, the point that Pascale Lamche was emphasising in this paragraph was that there was no basis for what she regarded as an extravagant claim then being made by Paul Yule based on the " Chatwin" agreement, pursuant to which Paul Yule was a co-producer. There was clearly no understanding that he would be so in respect of Versace, even if he had hoped to negotiate that.
20. Other considerations that satisfy me there was no contractual intent at the early stage in question, include that there are no contemporaneous notes on either side that point to the sort of negotiations I would have expected if a director's contract had been agreed. James Kent's director's contract was produced before me. It was not suggested by Mr. Quinn that it was in any way unusual or untypical. It is a six and a half page document which covers several important matters apart from the basic director's fee. For example, that his services were at various stages of the project to be rendered on a first call or exclusive basis; that the basic director's fee was to be paid monthly and for a specific period; that he was to receive 5% of "Features" net profits from exploitation (known as " back-end"); that he was to receive director's credits as described; assignment of copyright; various warranties given by the director; provisions for the suspension of the project in certain circumstances and termination of his contract.
21. There was no evidence that these matters were negotiated let alone agreed between Pascale Lamche or James Mitchell of Little Bird and Paul Yule. Of course, I have in mind the parties may agree the essentials of a contract and simply accept that other terms may be fixed by reference to an earlier contract, a standard form or previous course of dealing. But there was no sufficient evidence before me that the parties here proceeded on any such basis. I have already mentioned that "Chatwin" the last film the parties made together was on a different basis in that it was Paul Yule's idea and he was a co-producer.
22. I regard the payment provisions as particularly relevant, because, if as Paul Yule suggested he had a director's contract by the end of September, I would have expected him to have received some payments, monthly or otherwise, between September and January 2000. There was no suggestion or evidence that he received or requested any such payment until after he was replaced by James Kent. Miss Smith's submission that no production company would commit itself to paying a director at such an early stage when funding was a long way off, certainly has the support of common sense and is at least consistent with such evidence as I have in this matter. Further, Pascale Lamche and Paul Yule went to Dublin on 1st November 1999 to see James Mitchell. No evidence was given that there were any contractual negotiations or any reference to a concluded contract on this occasion. I find that extraordinary if Paul Yule really considered he had concluded a contract with Pascale Lamche binding on "Features" as opposed to an understanding that he would direct assuming the project went ahead.
23. In the end I am satisfied that there was no contract between Paul Yule and "Features" in this case, both because there was no contractual intent at the material time, namely September 1999, and no sufficient terms were agreed either expressly, impliedly or by reference to any other mechanism for determining them.
24. For the avoidance of doubt, the factual matters to which I have referred were either agreed or are found by me on the evidence I received.
25. The law has recognised from very early times that circumstances may exist in which, although there is no binding contract between the parties, conscience or justice requires that a party should be paid for services rendered or goods delivered to another. See Goff and Jones The Law of Restitution and Chitty on Contracts - General Principles. One of the many examples of this doctrine arises when parties expect a contract to be entered into and in anticipation of it one party does some work for the other. See William Lacey (Hounslow) Ltd v. Davis [1957] 1 WLR 932.
26. In this case I find it is plain on the evidence as a whole that Pascale Lamche and Paul Yule both anticipated, even assumed that a contract would come into being. Pascale Lamche accepted that when I asked her. Paul Yule, of course, maintained he considered a contract already in being. During the course of the trial I indicated to the parties that it was not appropriate to investigate in detail the time spent by Paul Yule on Versace. I did so not just because the hearing was over-running its estimate, but because the parties had come to trial without evidence as to appropriate levels of remuneration in the film industry, although leave was given for such an expert. The question of quantum under this head or issues to which it gave rise did not seem to have been properly clarified. Thus I shall simply identify the categories or topics upon which I find Paul Yule spent time.
27. The walk on Hampstead Heath and such discussions as took place in September 1999, which ended with agreement that Paul Yule would direct if the project went ahead and which involved some of Paul Yule's time, do not fall to be remunerated. I am quite satisfied those very early discussions were preliminary even to agreement reached in principle and neither side could reasonably have expected they were other than voluntary. However, thereafter various steps were taken, or undertaken, by both parties. Pascale Lamche confirmed to The Forum that Paul Yule was the nominated director, his filmography (or C.V.) was sent and, as I have mentioned, he took part in the "pitch" in December. Pascale Lamche and Nicholas Fraser, who also gave evidence, stated that The Forum "pitch" was really just " theatre" and that Paul Yule's part in it was irrelevant; it was Pascale Lamche who obtained the funding from some of the commissioning editors present and would have done so in any event. I cannot say whether the precise funding that was eventually obtained would have been so in any event, but the fact remains that Nicholas Fraser was keen for the project to be " pitched" at The Forum and Pascale Lamche involved Paul Yule in it. He did not go specifically for that purpose, since he was to be there in any event sitting on a jury. However, he discussed the "pitch" with Pascale Lamche both in Amsterdam and beforehand and took part in it. Despite the Defendant's general evidence to the effect that commissioning editors were not influenced by Paul Yule's presence or the fact that he was the director, I am satisfied that Pascale Lamche, at the time, perceived some possible advantage in nominating a director and one that had a good track record. In any event, she did so and involved him in the "pitch".
28. It is common ground that there were various discussions between September 1999 and January 2000 and diary entries and casual notes confirm that Paul Yule spent, at least some time, thinking about the project and how it could be presented and produced as a documentary film. Before Paul Yule was approached, Martin Raymond had been commissioned by "Features" to write a "treatment" of the project, which he did and, I believe, Pascale Lamche contributed to that. The "treatment" was discussed between Pascale Lamche and Paul Yule and it is clear he made some further suggestions and contributed some ideas which Pascale Lamche then wrote into subsequent versions. He also, in effect, made some editorial alterations which were adopted. Here again, some time was spent and his professional skills were utilised. Pascale Lamche expressly or impliedly requested his input. It is clear that at the very least she knew he was spending time on this and accepted the fruits of such labours.
29. Pascale Lamche and Paul Yule had a meeting with "Fineline", potential funders, at which Versace was "pitched" and they went to Little Bird's Dublin office to meet and discuss the project with James Mitchell, who also gave evidence. I find all these matters or actions were done either at Pascale Lamche's request or accepted by her in the context of furthering the aim of obtaining funding for Versace. The question I must decide is whether it is just and reasonable to hold that "Features" should pay Paul Yule a reasonable sum in respect of them. There is one further consideration, relevant to the determination of that question. It is why Paul Yule was removed from the project.
30. I find that after the "pitch" in Amsterdam and a longish conversation that took place at the airport on the way home between Nicholas Fraser and Paul Yule, Nicholas Fraser was not in favour of Paul Yule as director of this particular project. He said in evidence that he would never have chosen Paul Yule in the first place, but was prepared to be persuaded by Pascale Lamche. He intended no disrespect to Paul Yule, it was just a question of horses for courses. Nicholas Fraser's idea was that the film should focus more on the financial background and implications of the Versace empire as opposed to what he saw as Paul Yule's "arty and philosophical" approach.
31. A considerable amount of evidence was given concerning the events in December, after The Forum, and leading up to mid-January when the end came. Those events clearly caused great upset, recriminations and the end of a friendship and working relationship. Having seen and heard the two parties I formed the view that, perhaps understandably, both had convinced themselves of matters that were not necessarily accurate. Each, to an extent, convinced of the justice of their cause, placed very different interpretations on events. In particular, Pascale Lamche was convinced that Paul Yule only mentioned his involvement with the "Evil" project in December and his commitment to it in January. Paul Yule was equally convinced that he had mentioned his involvement with "Evil" as early as October.
32. It is clear that during this period the topic was discussed and a sketched schedule or timetable was produced in evidence showing how the two films could be made, at least to Paul Yule's satisfaction. It is unnecessary to resolve many of the details that were so hotly contested. Some basic matters are reasonably clear. I find that Pascale Lamche had not expressly told Paul Yule or discussed with him that he would be required to commit exclusively to Versace; Paul Yule believed, rightly or wrongly, that he could do both films; Pascale Lamche was genuinely concerned he might not succeed and was not prepared to take the risk since her own reputation with both the BBC and Little Bird (James Mitchell) were on the line; her concern was conveyed to Nicholas Fraser, in particular, who since he was never keen on Paul Yule for this project, doubtless thought he should be replaced. If James Mitchell and Nicholas Fraser had been prepared to carry on with Paul Yule I have no doubt Pascale Lamche would have continued. But since I infer that neither was, she was deputed to give Paul Yule the bad news. I also find that James Mitchell's and Nicholas Fraser's lack of enthusiasm for Paul Yule as director was significant at this stage because Pascale Lamche did not offer Paul Yule any choice. She did not say to him that they would carry on if he would commit exclusively for a particular period or even agree to "first call".
33. I have already held that neither side was contractually committed up to this point but that Paul Yule had given some of his time and expertise to the development of the project, pursuant to the common expectation that a director's contract would be negotiated. If the project had failed through lack of funding, the common understanding, as I find, would have been that each side would write off the time spent to experience. But that does not mean that the one party could withdraw for its own reasons and expect the putative director's time spent at its request to go unrewarded. I am inclined to accept the Defendant's evidence to the effect that a film as significant as the Versace project, could not be directed at the same time as another major project. However, it does not follow that no way forward could have been found. As I have said Paul Yule was not given the chance to choose between the projects or to seek to persuade those involved with "Evil" ; to accommodate him in some way. I conclude that James Mitchell's and, in particular, Nicholas Fraser's lack of enthusiasm for Paul Yule as director was causative of the breakdown. It was not the only cause but it was a cause.
34. Thus I have found that both parties expected a contract to be concluded; that Pascale Lamche requested or at least accepted work and services from Paul Yule and that Paul Yule provided them in the context of furthering the project, in particular, obtaining funding for it. Both would have benefited if the project had gone ahead successfully. In the circumstances I have found and described I do not consider it reasonable that Paul Yule should go unrewarded. I hold that a quantum meruit is the appropriate means by which a reasonable remuneration should be arrived at. As already intimated, I direct that the matter be referred to a Master for assessment of such remuneration in accordance with the findings I have made in this judgment and the findings he will need to make concerning the actual time spent and an appropriate level of remuneration for someone of Paul Yule's standing in the profession. I would like to think that some sensible compromise may be arrived at between the parties so that further legal costs will not be incurred on this unhappy matter.
35. Quantum meruit is regarded by some commentators as one aspect of unjust enrichment. However, Mr. Quinn pursued his claim under this head on the express basis that it was the only way he could obtain a percentage of the production company's profit and a percentage of other "back-end" earnings. I shall deal with this shortly as I regard it as wholly unsustainable. In this type of situation it is not possible fairly to identify the necessary "benefit" conferred on the Defendant. Undoubtedly the benefit of Paul Yule's time and professional expertise was conferred but, other than on the basis of a quantum meruit, that cannot sensibly be quantified. Even if it did contribute to obtaining funding for the project there is no doubt that Pascale Lamche's efforts were mainly responsible for the funding that was eventually obtained. Further, in the event, Paul Yule did not direct the film and consequently if any profits are ultimately made by the Second Defendant those profits will more directly have been achieved through the efforts of Pascale Lamche, James Kent and " Features". There is no readily quantifiable benefit that Paul Yule has bestowed on "Features" in this context. If necessary, I would have found that Pascale Lamche would have obtained funding for this project in due course without Paul Yule's input. The backing of Nicholas Fraser and the BBC was clearly a major factor in persuading other commissioning editors to join in. These are just the main reasons why I regard any further claim under the heading of unjust enrichment in addition to a quantum meruit as wholly inappropriate in this case.
36. The claim succeeds to the extent that I will remit the matter to a Master who will assess a reasonable sum based on quantum meruit.