England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE LTA 96/7708/B

Royal Courts of Justice

Wednesday, 18th December 1996

B e f o r e :

LORD JUSTICE NOURSE

LORD JUSTICE SAVILLE

LORD JUSTICE BROOKE

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(1) MOTHER BERTHA MUSIC LTD.

(2) MOTHER BERTHA MUSIC INC.

(Body Corporate)

Plaintiffs (Applicants)

-v-

BOURNE MUSIC LIMITED

Defendant (Respondent)

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Computer Aided Transcript of the Palantype Notes of

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MR. J. HIRST QC and MR. J. MELLOR (instructed by Messrs. Lovell White Durrant, London EC1) appeared on behalf of the Applicant Plaintiffs.

MR. R. HOWE (instructed by Messrs. Davenport Lyons, London W1) appeared on behalf of the Respondent Defendant.

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J U D G M E N T

(As Approved by the Court)

Crown Copyright

Wednesday, 18th December 1996

LORD JUSTICE NOURSE: On the first day of next term, 13th January, there is fixed to start in the Chancery Division the trial of an action between Mother Bertha Music Ltd. and Mother Bertha Music Inc., as plaintiffs, and Bourne Music Ltd., as defendant. The estimated length of the hearing is three days. The plaintiff companies are controlled by Mr. Philip Spector, the well-known songwriter, who in 1958, at the age of 18½, composed the music and lyrics of the song "To know him is to love him", which has since proved to be very popular. On 3rd July 1958 Mr. Spector entered into an agreement ("the songwriter's agreement") with a company called Warman Music Inc., whereby he made a partial assignment of copyright in the song to that company. On 17th October 1958 Warman Music Inc. entered into an agreement with the defendant, Bourne Music Ltd., whereby, on the face of the agreement, it assigned to the defendant all its rights under the songwriter's agreement except in the United States and Canada. By virtue of further dispositions to which I need not refer the plaintiff companies, or one of them, are entitled to all rights in the copyright which are not vested in the defendant.

The plaintiffs' case is that the defendant has no entitlement to the copyright in the song. The defendant's case is that, in the events which have happened, it is entitled to the copyright except in the United States and Canada. The outcome of the dispute depends essentially on the true construction of the songwriter's agreement, in particular clause 8, a question which, to one coming fresh to the matter, appears to be both short and eminently fit to be decided in favour of the plaintiffs. However, the agreement was made on a standard form of contract then in use in the United States and agreed to be governed by New York law, which is evidently said by the defendant to require it to be construed in a sense not immediately apparent to an English eye. I should make it clear that this question is not before us and, further, that since we have not called on Mr. Howe, for the defendant, to answer the application, it is not one on which we have heard anything of what the defendant might have to say.

The writ in the action was issued on 13th July 1989. In February 1995 it was set down for trial in January of this year, some six and a half years later. At the request of the plaintiffs, who were in difficulty over the availability of their leading counsel, in November 1995 it was adjourned to May 1996 by agreement. However, on 24th April 1996 the plaintiffs successfully sought leave to reamend the statement of claim so as to plead matters of New York copyright law and principles of construction, and that led to the second date being lost. So on 20th May 1996 the trial was fixed for a third time to start on 13th January next.

At that stage the defendant could reasonably have proceeded on the footing that the basis on which the action was to be tried had finally been resolved. However, in the second half of October the plaintiffs obtained documents from the Californian Superior State Court, which it is said could not reasonably have been obtained before, showing that that court's approval for the songwriter's agreement to be entered into by Mr. Spector, then a minor, was given by an order dated 14th August 1958. It was a term of the order that "neither of the contracts, nor any interest therein shall be assigned without the leave of this court". The coming to hand of those documents caused the plaintiffs to seek to re-reamend the statement of claim by introducing a contention that the agreement between Warman Music Inc. and the defendant dated 17th October 1958, having been entered into without the leave of the Californian court, was unlawful and void and of no effect under New York or Californian law. They also sought leave to make a further amendment so as to enable them to contend that that agreement was, by virtue of clause 18 of the songwriter's agreement, unlawful and void and of no effect under New York law.

The application for leave to amend was made by a notice of motion issued on 14th November. Not surprisingly, it was opposed. It came before Mr. Justice Robert Walker on 26th November, when it was dismissed. Four objections, or principal objections, were taken by the defendant: first, the lateness of the application; secondly, the immateriality and uselessness of the proposed amendments; thirdly, the absence of any explanation for their not having been made before; and fourthly, prejudice to the defendant.

The judge clearly thought that the first objection was a formidable one. He said, at p.5F of the transcript:

"As regards lateness I must I think accept that mere lateness by itself is insufficient even in circumstances where the party seeking amendment has already been very dilatory in the conduct of the proceedings, and there have already been long delays in this case. There was in fact a gap of some one and three quarter years between December 1991 and September 1993 in which nothing at all seems to have happened. That was brought to an end by the Plaintiffs serving notice of intention to proceed on 1st September 1993 and then the matter has progressed, although somewhat slowly and painfully and with the adjournments that I have already mentioned to its present position.

It seems to me that to lose a third trial date would be a deplorable thing to happen and it seems to me I must now form some view as to whether the trial date would be likely to be lost or not rather than, as Mr. Alexander encourages me to, to permit the amendment if there is even a possibility that the trial date will not be lost. Mr. Howe for his part does not submit that the trial date will inevitably be lost. He tells me that those instructing him are only just making a start at attempting to obtain advice on Californian law. He realistically recognises that he cannot at this stage say that keeping the trial date would necessarily and predictably be impossible. It would however, he says, be extremely difficult.

As I have said, mere lateness in seeking leave to amend is not by itself a reason for refusing leave. However, I have to bear in mind, as higher courts have often observed, that the effects of delays are cumulative. The affidavits of Mr. Oliver Smith on behalf of the Defendant do seem to me to contain some material indicating that irreparable prejudice might arise as a result of a still further postponement."

The judge then considered the objection based on the immateriality or uselessness of the proposed amendments and concluded, at p.7G:

"It seems to me in the highest degree unlikely, whether the matter is approached by English law or by the law of New York or by the law of California, that an adult, who attained full age some 36 years ago and has since by himself or his companies conducted his business affairs on the basis that the assignment or sub-licence of 17th October 1958 was valid and binding on him, would now be permitted to resile from that. I am therefore considerably impressed by Mr. Howe's argument on the proposed amendment being immaterial and useless."

I do not think that the judge attached much, if any, weight to the lack of explanation. On the fourth objection, prejudice as an independent point, having recorded Mr. Howe's submission that it was not simply a question of investigating the state of Californian law some 40 years ago, he said at p.9A:

"There is also the difficulty that if issues of ratification, waiver or estoppel are raised (as it seems to me they would inevitably be raised in any amended defence seeking to answer the proposed amendments to the statement of claim) there may well be documentary evidence covering a period of 35 years or so which is material to that issue and to which no attention whatsoever has so far been paid, either in discovery or in the witness statements. Mr. Howe naturally cannot specify what documentary evidence there might be, but in the nature of things it seems to me it is almost inevitable that there will be documents (and perhaps a mass of documents) of that sort. The proposed amendment, viewed as a whole and with the likely response to it in a reamended defence, would therefore be raising not only new issues of Californian law and new issues of New York law but also potentially very wide issues of fact as to ratification, waiver and estoppel which have so far been wholly unexplored because not raised as issues in this case."

The judge expressed his decision as follows, at p.9F:

"Exercising my discretion as best I can and recognising that there is still 7 weeks, or omitting the holiday period at least 5 weeks before trial, and recognising that it may be that these matters could possibly be investigated within that time, nevertheless I have reached the conclusion that this is one of those cases where further delay would be likely to cause not merely serious prejudice but irreparable prejudice to the Defendant as a result of the raising of entirely new issues of fact of the sort which I have referred to. Therefore, although conscious that it is a strong thing to do, on those grounds (and most particularly on the ground of my strong inclination to think that Mr. Howe has a good point as to the proposed amendments being immaterial and useless) I think it is not right to grant leave for these amendments or any of them."

The plaintiffs now seek leave to appeal against Mr. Justice Robert Walker's refusal of leave to make the further amendments.

In this court Mr. Hirst QC, for the plaintiffs, who did not appear below, has dealt, first, with the question whether the amendments would be immaterial or useless. He says that the judge was plainly wrong in taking the view that it is in the highest degree unlikely that Mr. Spector would now be able to resile from the fact that he and his companies have conducted their affairs on the basis that the assignment or sub-licence of 17th October 1958 was valid and binding on him.

Since the hearing before the judge there has, without objection, been further evidence put in on behalf of the plaintiffs to deal with this point. The plaintiffs' solicitor, Miss Golding, has sworn an affidavit, in paragraph 5 of which she says:

"Mr. Spector also informs me that, although he cannot remember the precise date, he does not remember seeing a copy of the Warman/Bourne Agreement of 17 October 1958 until some time after the expiry of the original term of US copyright on 31 December 1986. I am informed by Mr. Spector that he believes that he would have seen the Warman/Bourne Agreement for the first time some time between 1987 and 1989."

Mr. Hirst says that there is no evidence to refute the evidence as to Mr. Spector's state of knowledge there asserted. That no doubt is so, but that is not at all conclusive of the matter. First, it would not only be Mr. Spector's state of knowledge which would be material; there would also be the knowledge of his lawyers, agents or others who might have acted for him at the material time or in the 36 intervening years. Secondly, it would be open to the defendant to produce evidence, if it was available, to the effect that Mr. Spector or his lawyers or agents knew or must have known that the agreement of 17th October 1958 had operated as an assignment to the defendant.

There was evidence before the judge in the form of an affidavit sworn by the defendant's solicitor, Mr. Oliver Smith, which set out in broad terms the steps which the defendant would or might wish to take if leave to make the amendments was granted. Having dealt with the fact that it would require investigation, on the defendant's side, of Californian law, something which would not so far have been necessary in the action, and that the defendant might need to carry out its own investigations into the Californian court file and the circumstances in which the assignment by Mr. Spector to Warman Music Inc. was made, Mr. Smith said, in paragraph 9:

"They may need to trace and inspect the files of the lawyers concerned at the time, although it is highly probable that few if any of the relevant documents will by now be in existence. They will need to speak to the lawyers concerned, but they may now be dead. Ms Golding only refers to Mr. Pukal, Warman's lawyer in 1958. She does not say who acted for Mr. Spector and whether they are alive. The amount of work involved in the foregoing and time required for it could be substantial."

That evidence goes not only to the question whether the new point proposed to be taken would be likely to be successful, it also goes to the question of prejudice, to which I will shortly come.

In addition to the points made by Mr. Smith, it would seem that the defendant would have to go through its own files over a long period of time in order to see whether there was a possibility of their containing any evidence which might go to the question whether Mr. Spector, his lawyers or agents did or did not have the necessary knowledge. On a view of this point as a whole, Mr. Hirst has been unable to convince me that the judge was not entitled to take the instinctive view which he expressed in the passage in his judgment beginning at p.7G, to which I have twice referred.

I go on to consider the other important point in the case, which is prejudice in the form of the consequences which would or might ensue if the amendments were allowed, in particular the point made by the judge at p.9A, where he refers to the inevitability that defences of ratification, waiver or estoppel would be raised if the amendments were allowed. Again Mr. Hirst has said that the judge's view was quite unjustified. I am unable to see that that is so. It seems obvious that, if leave to make the amendments was given, the defendant would seriously have to consider raising those defences and, if they were raised, that questions of discovery, evidence and so forth arising under them would make it a practical impossibility for the trial to begin on 13th January.

In anticipation of our taking such a view, Mr. Hirst has suggested an intermediate course, which is that leave to make the amendments should be granted at this stage, but with a direction that the trial should proceed on 13th January on the basis of the pleadings without those amendments. Then, if the plaintiffs fail on the pleadings as they presently stand, they can raise what Mr. Hirst has throughout described as this "longstop" point at that stage. He says that there would be no serious prejudice to the defendant if that course was taken. That suggestion might perhaps meet the objection based on prejudice and the inability to be ready for trial on 13th January. It would not meet the main objection of the judge, of which I have already spoken in support, namely that it is in the highest degree unlikely that Mr. Spector would now be able to resile from the basis on which he and his companies have conducted their affairs for the last 36 years.

The question whether leave to amend pleadings should be given or not is essentially one for the discretion of the judge of first instance. Looking at the matter as it stood before him, I can see no ground on which this court could properly say that he had applied a wrong principle or given a decision which was plainly wrong. In my opinion the views which he took were well open to him on the material before him and none of the further material now before this court, nor the submissions of Mr. Hirst today, have substantially eroded the basis of the judge's decision.

For those reasons I would dismiss this application.

LORD JUSTICE SAVILLE: I agree.

LORD JUSTICE BROOKE: I also agree.

Order: application dismissed with costs.