Recorded Picture Company Limited v (1) Alfama Films Production; (2) Paulo Branco

The project has been under development for many years and “is widely regarded as one of the most infamous examples of development hell in film history” (see e.g. here). The appeal is part of a dispute between the Respondents and Mr Gilliam that has been the subject of considerable media interest (see e.g. here and here). The background is in summary as follows.

By a March 2016 deed, the Appellant granted the Respondents an option to acquire rights to produce the film. The option term was 6 months, subject to extension under Clause 16 of the Deed in the event of “… litigation or claims affecting the Work, the Rights, or the Film…” such extension to run “until the Deed can performed or its obligations fulfilled”. The “Work” was defined as (among other things) a “feature film project… to be directed by Terry Gilliam”. In August 2016, disputes arose between the Respondents and Mr Gilliam, who adopted the stance that he would not direct the film for them; litigation followed in the French Courts. Meanwhile, the Appellant granted a like option to a third-party producer, for which Mr Gilliam went on to direct the film.

Against this background, the Appellant brought in England a claim for a declaration that the option term had expired by effluxion of time. The claim failed at first instance, Lesley Anderson QC (sitting as a judge of the Chancery Division) concluding that the effect of the dispute and litigation with Mr Gilliam was to trigger Clause 16 of the Deed and extend the option term pending resolution of that litigation. The Court of Appeal granted the Appellant permission to appeal and ordered expedition to accommodate the timetable for delivery of the film to its distributors.

In dismissing the appeal, the Court of Appeal (Asplin and Arden LJJ) upheld the conclusion and reasoning of Lesley Anderson QC. The Court held that the Respondents’ construction of the key term “Work” and the relevant part of Clause 16 reflected the natural and ordinary meaning of the relevant contractual language and the commercial context in which it was agreed, such context including Mr Gilliam’s inextricable connection to the project and his involvement in the Appellant’s decision to grant the option to the Respondents.

Andrew Scott (instructed by Lee & Thompson LLP) appeared for the Respondents at first instance and on appeal.