3PLR – GAUMONT-BRITISH PICTURE CORPORATION LTD V. ALEXANDER

POLICY, PRACTICE AND PUBLISHING, LAW REPORTS  3PLR

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GAUMONT-BRITISH PICTURE CORPORATION LTD

V.

ALEXANDER

KING’S BENCH DIVISION

23 JULY 1936

3PLR/1936/8 (KB)

OTHER CITATIONS

[1936] 2 All ER 1686

BEFORE: LORD PORTER J.

REPRESENTATION

Solicitors:

M A Jacobs & Sons (for the claimants);

Burton & Ramsden (for the respondent).

C St J Nicholson Esq Barrister.

MAIN ISSUES

COMMERCIAL LAW – CONTRACT OF SERVICE:- Breach of – How proved – “Want of mutuality” – Meaning – How determined – When a contract is properly deemed to be against public policy – Relevant considerations

EMPLOYMENT AND LABOUR LAW:- Master and Servant – Contract of service for the production of a movie as an artiste – “Want of mutuality” – Meaning – Stipulations in favour of one party – Restrictions during service – when deemed against Public policy – Suspension of salary – Penalty – when damages would proceed in addition – how treated

CHILDREN AND WOMEN LAW: Women in Business – Popular female actress – contract of service – “want of mutuality” and restraint of trade – Breach of contract through failure to perform – Extent of liabilities – Relevant considerations

ALTERNATIVE DISPUTE RESOLUTION – HYBRID PROCESSES – ARBITRATION:- Use of an arbitrator to determine terms of a disputed contract for specialised services – Duty of court in utilising the arbitrator’s report – Whether can review awards and principles adopted by arbitrator

LEISURE – ENTERTAINMENT LAW:- Movie artiste – Contract for the provision of movie production services – Breach of by artiste – Nature of reliefs available to movie company – Whether includes both the penalty of non-payment of salary and damages – Measure of damages – Relevant considerations

LEISURE – ENTERTAINMENT LAW:- Movie Artiste refusal to act in a movie under an entertainment contract –Penalties and damages pursuant to or claimed under the contract pursuant to the breach – Whether against public policy or unreasonable – Nature of evidence required – Determination made by arbitrator with specialized knowledge of the movie industry – Attitude of court to invitation to interfere therewith

LEISURE-ENTERTAINMENT LAW:- Contract as an entertainment artiste – How interpreted – When can be deemed void – Duty of court to interpret give business efficacy to provisions of the contract

ANTI-TRUST AND TRADE REGULATION LAW:- Contract in restraint of trade and contrary to public policy – How determined – Enforceability – Relevant considerations

MAIN JUDGMENT

PORTER J. [DELIVERING THE JUDGMENT OF THE COURT]

I am asked to find first of all that a certain contract which was dated 27 December 1933, and which was made between the claimants, the Gaumont-British Picture Corpn Ltd, of the one part and Miss Frances Day, the well-known artiste, of the other part, is void, and that it is void for one of two reasons: First of all because of want of mutuality, and, secondly, because it contains matters in restraint of trade which makes it contrary to public policy that it should be enforced. Those are taken as two separate arguments, and although they may have some interaction one upon the other, I am obliged to find, and I propose to find, my award upon each of them separately.

I am not, myself, very familiar in this connection with the phrase “want of mutuality”; I am very familiar with it in the other connection, in which it is said that parties have not entered into contract where they have not agreed all the terms one with the other. Here, as I understand the phrase “want of mutuality,” in the present position of the cases, it means that there has been no consideration, or no real consideration, for the contract which has been entered into. There appears to have been a time when it was thought that the court would have a kind of commission to go into the question of whether adequate consideration had been given for a contract. I think that appears if one deals with the earliest case which was quoted by Mr Evershed, the case of Young v Timmins; but that is not now, and it is admitted not to be now, the law; and the question really is: Was there any consideration, on that part of the case, it being left to the parties to make their own bargain as they pleased, one with the other? It is a part of the individual right which the law has been concerned to develop that that outlook should be preserved in the law of England. It has not always been preserved; one gets certain matters like the Truck Acts, and so on, where certain provisions are not possible, and if you make such a bargain it will be struck out. But this is not one of those cases, and therefore I am left in this case with the question: Is there any consideration on the part of the Gaumont-British Picture Corpn Ltd, or is it merely illusory?

I have had an elaborate and interesting argument as to whether the contract should be so regarded, but I cannot say that I find myself capable of so regarding it. I do not think I want to go further than this as far as I am concerned, that there was a promise that at any rate the respondent should have the opportunity of earning £6,750 a year. She takes her risk, it is quite true, of a good many things which may prevent her from earning that sum, or from earning the whole of that sum, but I do not myself view the fact that she takes some risk as one which makes it a contract for which there is no consideration. People do from time to time enter into contracts in which they take certain risks, and one example is the class of contract where it is left absolutely to the determination of an architect as to whether the contract has been properly fulfilled. It is true that he has to be honest, and so on, as in this contract, but it has never yet been held that there is no consideration for such a contract because in his absolute discretion, whether reasonable discretion or not, he is left to decide whether such a sum is or is not due. People take the risk, and they get a corresponding advantage, and that seems to me to be the consideration.

Then there were various other matters which were referred to as showing that really this contract meant nothing to the respondent in the case. It is quite true that there are certain disadvantageous terms imposed upon the respondent in this contract, terms which, if this contract were to be insisted upon in its strictest sense, might prove very disadvantageous to her, but of that I think she takes her risk. As a matter of common sense, they are not likely to arise, and if, knowing, as she must know, that the Gaumont-British Picture Corpn are a body who carry out their business for the purpose of making films for exhibiting and releasing them, and for the purpose of making money out of films and theatres—if, as I say, knowing that, she chooses to enter into a contract in the form which she did, I cannot say that there is any want of mutuality, or that there is no consideration, and I hold that there was consideration.

Now, with regard to the other question, that gives rise to a good deal more difficulty. That is the question of whether it is contrary to public policy. I think a contract would be thought to be contrary to public policy if there were a restraint, such as a restraint of trade, which would be unjustifiable for the business of the claimants in the case; but I do not myself know of any case, although it is possible that there may be a case, where circumstances might arise in which it would be held that a restraint during the progress of the contract itself was an undue restraint—although that is possible, it is not necessary for me to decide it here, and I myself know of no such case, and I do not propose to decide one way or another if it is possible until it becomes necessary, when the matter is directly brought before me. All I can say is that with regard to this case I do not find anything in it which would lead me to say that during the period of the service there is such a restraint as is contrary to public policy. Indeed, for the most part, those who contract with persons and enter into contracts which one may for this purpose describe as contracts of service, have generally imposed upon them the position that they should occupy themselves solely in the business of those whom they serve; and in this matter, in a matter where I should have myself said that it must be largely a question of evidence how far the protection of clauses of that kind would extend, at any rate during the existence of the contract of service; in cases of this kind, where I should have thought that evidence was essential to the knowledge of the tribunal as to what protection was required, I should not myself lightly upset the decision of the learned arbitrator when he holds that at any rate in that respect the contract was both reasonable and not contrary to public policy in the sense that it was to the disadvantage of the community.

Then, secondly, there are one or two matters which deal with the future, and they are contained in clauses 8, 9 and 10. I have had most doubt with regard to clause 8, and I have had much doubt with regard to that because it seems to tie up the artiste for ever from reproducing songs or dialogue and speech which have formed part of the artiste’s work in the matters in which she has performed when she was under this contract of service. I think, myself, that it would be possible to strike out the whole of that clause. I think it is a separate clause from the rest of clause 8, but again I find difficulty, not being the learned arbitrator, and not being sufficiently acquainted with the evidence which was given in the matter, in saying that he could not find as a question of fact that it was neither contrary to public policy nor unreasonable for the protection of the Gaumont-British Picture Corpn. So far as clauses 9 and 10 are concerned, I do not myself regard a clause which merely allows the use of the portrait, picture, photograph or film by the claimants, if you please for ever, as being a restraint of trade as against the respondent. It seems to me to be no more a restraint of trade than if she were to sell to somebody the whole or a part of her literary output, or her artistic output if she were an artiste, or anything of that kind;

It does not seem to me that it prevents her from carrying on her trade, although it may enable them to have the use of her photograph or film on a future occasion.
Finally, I should not myself construe clause 10 as doing more than applying to the period of the service. Normally, in reading the clause, which is a clause in an agreement of service, I should take the restraint contained in it as applying to the time of service, and not to any future time. That general view might readily be modified if I found something in the contract itself which would lead to the modification of that view, but I do not find it necessarily modified, because, although there are certain indications which might lead me to modify it, on the other hand I find other indications, such as the indication where there is a specific provision, I think in clause 8, “at any time after the date of this agreement,” and clauses of that kind, where specific references are made to what is to happen after the agreement is over; and having regard to those, I do not find that there is anything here to lead me to the view that clause 10 must be applied to anything other than what I should normally apply it to, namely, the period during which the contract was in force.
I am asked to say that the lady should not pay damages in addition to foregoing her salary. I am bound to say that I have a little sympathy with her position, but I have to determine the matter legally, and it seems to me that I should be extending the law if I were to hold that in law the claimants were not entitled to withhold the salary and also to claim damages. After all, the word “penalty,” both in the cases quoted and in general use in the legal profession, as a rule means “I promise to pay so much money if I break certain terms of the contract.” It is quite true that if you so determine the contract, if recovery is made of the penalty as a penalty and not as liquidated damages, that is conclusive of the matter. That is a promise to pay a certain sum of money.

Now here, as I see the matter, the lady failed to give her services to the shooting of the film. That means that the claimants were deprived of her services during that period, and, being deprived of her services during that period, they were not obliged to pay her for services which she failed to render. Then so far as damages are concerned, in addition to that they suffered damage. Let me take the kind of damage which has been suggested as one of the matters which have to be considered. I do not know whether these are the facts, but this is the kind of way in which damage may arise: They bring on to the scene a number of other artistes; they have got to pay them, and pay them only if they bring them on the scene, and it is obvious that in addition to the loss of her salary it is causing considerable damage and monetary expense to the Gaumont-British Corpn in making preparations for, employing artistes for, and incurring expense in order to prepare for, the shooting of the film on that day. It being possible that there is such damage over and above the loss of salary, I am not sitting here merely discussing the question as to whether an arbitration award should be enforced or not. I am not in a position to say whether those damages which have been determined by the arbitrator are right or not; I am bound to accept them as they stand. What I have to see is whether necessarily the claimants cannot both recover damages and refuse to pay salary, which is what they claim to do, and in my view, in law, they are entitled both to refuse to pay salary and to claim damages.

Now that concludes the matter, really, but let me say this, that so far as the question of construction of the document is concerned I find myself obliged to construe it as I think people carrying on the business of preparing films and acting in films would construe it. I must give it a common sense construction. In some ways I find that common sense construction more exact than a construction which would be possibly more in accordance with some legal outlooks; and I say that for this reason, that when you get questions like the questions on clause 17, which was quoted to me—

‘In the event of the corporation being unable to commence or continue its work in the said films or the said performances or the said recordings or closing its studios or theatres by reason of or on account of illness or default of the artiste—’

and so on, it was pressed upon me that I ought to read it with supreme literalness. I think I have read it with supreme literalness, but I do not think one can say off-hand that the words bear a meaning which it is easy to construe, or that one could place too much reliance upon their containing obviously unjust provisions, if “unjust” be the right word. I can see a great deal which might be said with regard to “being unable” for instance, “in the event of the corporation being unable to commence or continue its work … by reason of or on account of illness”—that may be more simple—”or of any strike lock-out war civil disturbance.” They follow one upon the other, and it may be a matter for a great deal of evidence and a great deal of legal dispute. I only say that for those reasons I must not be thought to be merely giving a loose construction, in my view, to this contract. In some ways I think I am giving an extremely strict construction to it, and perhaps in all ways, but I think that in construing it I am bound to give business efficacy to its provisions, and I have endeavoured to do so.
 

Cases referred to

Young v Timmins (1831), 1 Cr & J 331; 43 Digest 27, 186.

Hepworth Manufacturing Co v Ryott [1920] 1 Ch 1; 43 Digest 57, 589.

Sykes v Dixon (1839), 9 Ad & El 693; 34 Digest 170, 1326.

Pilkington v Scott (1846), 15 M & W 657; 34 Digest 169, 1324.

Hartley v Cummings (1847), 5 CB 247; 34 Digest 50, 247.

Mortimer v Beckett [1920] 1 Ch 571; 12 Digest 626, 5153.

Milsted (W H) & Son Ltd v Hamp & Ross & Glendinning Ltd [1927] WN 233; Digest Supp.

Dowden & Pook Ltd v Pook [1904] 1 KB 45; 43 Digest 31, 247.

McEllistrim v Ballymacelligott Co-operative Agricultural & Dairy Society [1919] AC 548; 43 Digest 35, 309.

Wessex Dairies Ltd v Smith [1935] 2 KB 80; Digest Supp.

Hillas & Co Ltd v Arcos Ltd (1932), 38 Com Cas 23; Digest Supp.

Freeth v Burr (1874), LR 9 CP 208; 12 Digest 340, 2838.