Case No. IP-2020-000140

73.As will be seen from the brief summary above, Counsels’ submissions on the proposed amendments relating to the effective terms of the contract were complex. I commend both Counsel for their efforts to deal with the various issues in such a necessarily compressed time frame. I have considered all of the points made, although not all of them are necessarily dealt with explicitly below.74.I approach the Amendment Application with a view to furthering the overriding objective and bearing in mind the cautions in the authorities about circumstances in which it will be appropriate to conclude that a pleading has no reasonable prospects of success on the basis of legal submission on a summary basis. I have summarised above the considerations that affect the exercise of the discretion to permit amendment. The extent to which a judge hearing an amendment application will feel comfortable in concluding that the prospects of success are sufficiently low to exercise the discretion against granting permission may be affected by the complexity of the pleadings and of the related legal issues, particularly in circumstances where there is a concern about the sufficiency of the time available for the parties to develop and to make appropriate submissions.75.I have concluded that this is not a situation in which it would be appropriate to refuse Mr Hebden’s request to amend his case to plead that the 2001 Agreement should be construed as including an express continuing obligation to use reasonable endeavours to exploit the Masters by all then-industry-standard means or that, in the alternative, such an obligation should be implied. I cannot conclude summarily that that draft pleading faces no real likelihood of succeeding. I have reached the same conclusion in respect of the proposed amendment in respect of an implied duty of good faith.76.I am not satisfied that this aspect of the Amendment Application gives rise to short or clear points of law or construction. The dispute between the parties as to the meaning of the Release Commitment in the 2001 Agreement and what a ‘genuine commercial release’ may or may not have required at the time when that agreement was entered into is likely to require evidence to resolve. I found Mr Richards’ citation to the findings of Jonathan Parker J in Panayiotou to be helpful background, but was not satisfied that I had sufficient understanding of the factual context to reach a conclusion that Mr Hebden’s draft amended case had no realistic prospect of success or was merely fanciful. This was particularly so given the potential for changes to the industry between the early 1990s and the early 2000s, including the advent of digital distribution, referred to by both parties, and specifically in the evidence of Mr Hebden (and, more briefly, in the evidence of Mr Bell).77.I was also unable to conclude that Nichols, Schroeder and John v James precluded the possibility that a music recording contract might be construed to require continued exploitation of some sort, including potentially on the basis of a good faith obligation, as contended for by Mr Carter. Mr Carter’s submissions about the bases on which those authorities might, if necessary, be distinguished were sufficient overall to lead me to conclude that the law was not sufficiently clear to allow me to effectively determine the point on a summary basis.78.By way of example, in both the more recent cases (Schroeder and John v James) it was the Defendants in the action who had suggested that the respective contracts should be construed as containing some continuing obligation to deal in the copyrighted material. Had this been the case, it might have provided a defence against allegations that the contracts in question should be set aside (in Schroeder because otherwise the contract might be held to be in restraint of trade and in John v James79.In addition, neither Nichols nor Schroeder80.In respect of the requirements to be satisfied for implying terms into a contract, I was not persuaded that Mr Hebden has no realistic prospects of establishing that those conditions could, if necessary, be satisfied. To reach that conclusion would require a greater understanding of the factual position in the industry at the time the contract was concluded than is currently the case. Without that it is impossible to conclude that it would have been neither fair or reasonable to expect Domino to assume some continuing obligations in respect of the materials it had released, particularly as the implied term for which Mr Hebden contends is to use ‘reasonable endeavours’ in respect of those materials. It is also impossible to conclude that it is not arguable that some obligation to act in good faith could be regarded as fair and reasonable.81.It is also unclear at this stage that the proposed terms to be implied are not at least arguably necessary to make the agreement work. As to the proposed implied continuing obligations to exploit digitally, digital distribution has been a part of the parties’ relationship under the 2001 Agreement for some time. As set out above, the evidence currently available shows that the parties discussed specific aspects of digital distribution (not including royalty payments) during the term of the contract. It is not unarguable that the proposed term is consistent with the express terms of the 2001 Agreement, as this depends on the construction of those terms. As to the proposed obligation to act in good faith, for the reasons mentioned above, I conclude that it is arguable that such a term may be necessary to make the agreement work effectively and do not consider it to be clearly so inconsistent with the express terms of the 2001 Agreement as to be unarguable.82.Finally, I do not consider it to be clear that the authorities on which Mr Richards relies necessarily lead to the conclusion that the terms suggested by the Claimant are so contrary to principle and authority such that they could not be implied, not least when both Schroeder and John v James appear to have countenanced the possibility that terms of that nature might, in appropriate cases, be implied, and when both Nichols and Schroeder involved different types of assignment on rather different terms.83.As to other considerations, and in particular proportionality and the overriding objective, it is unclear whether the construction/contractual terms amendments proposed would require very substantial factual evidence. This was not the subject of significant discussion either in written submissions or during the hearing (although Mr Richards did note that restraint of trade cases such as Panayiotou often require significant evidence). As will be clear from my comments above, I consider that some evidence will be necessary. Overall, however, given the potential consequences for Mr Hebden of refusing permission to amend when I have concluded that the amendments are not simply fanciful and have at least some prospect of success, I consider that I would not be doing justice between the parties if I refused permission. Overall, the interests of justice require me to grant permission to amend the pleadings in respect of these issues.