Court of Appeal Success In Film Option Dispute

Lee & Thompson’s Mark Stafford and Emma Teichmann were in the Court of Appeal on 11 April 2018, representing Alfama Films Production and Paulo Branco in their dispute with Recorded Picture Company about whether or not the term of an Option Agreement relating to the film, The Man Who Killed Don Quixote, had been extended.

The Man Who Killed Don Quixote has had a long and chequered history. The brain-child of Terry Gilliam, it was written by Mr Gilliam and co-writer Tony Grisoni in the late 90s. A first attempt to produce the film began in 2000, but flash floods, herniated discs and a plethora of other issues shut down the production. In the years that followed, it became known as “one of the most famous films never made”, stuck in “development hell” and even gained a reputation for being “cursed” (see here ).

In March 2016, Alfama Films Production and Paulo Branco (the Producers) were granted a six month option from Recorded Picture Company (RPC) to acquire rights to produce the film, again with Mr Gilliam at the helm, and pre-production commenced. In August 2016, mere weeks before filming was scheduled to start, disagreements between the Producers and Mr Gilliam led Mr Gilliam to terminate his Directors Agreement. He adopted the stance that he would never direct the film for the Producers, and brought proceedings in the French Courts (which he lost at first instance; an appeal judgment is to be handed down on 15 June 2018). Meanwhile, in October 2016, RPC granted an option to a third-party producer, Tornasol Films, who went on to produce the film with Mr Gilliam as the director.

The Option Agreement that the Producers had entered into with RPC in March 2016 included a provision that the option term be extended in the event of “litigation or claims affecting the Work, the Rights, or the Film”, such extension to run “until the Deed can be performed or its obligations fulfilled”. The “Work” was defined as a “feature film project… to be directed by Terry Gilliam”. We argued on behalf of the Producers that the effect of these provisions was that the option continued to run and that RPC was in breach of its obligations by granting an option to Tornasol.

RPC brought a Part 8 claim in the English Courts, seeking a declaration that the Option Agreement had expired. The principle issue was one of construction, with us arguing that a dispute between the Producers and Terry Gilliam was a trigger event resulting in an extension of the Option term until resolution of that litigation, since the dispute was one which affected the Work and, by extension the Rights and the Film. The first instance judge, Lesley Anderson QC, agreed with us on all points, dismissing RPC’s claim.

RPC applied to the Court of Appeal for permission to appeal. This was granted, and the appeal expedited due to the fast-approaching deadline for delivery of the film to its distributors. The Court heard the appeal on 11 April 2018, with Andrew Scott of Blackstone Chambers representing the Producers (as he had done at first instance) and Richard Spearman QC representing RPC.

Lady Justice Arden and Lady Justice Asplin dismissed RPC’s appeal, upholding the conclusion and reasoning of Lesley Anderson QC, and confirming that “the natural and ordinary meaning of the definition of “Work”, in the context of the Deed as a whole, read against the backdrop of the relevant factual matrix, is that it refers to a film project based upon a particular script and directed by Mr Gilliam. The definition encapsulates the product in relation to which the option is to be granted.” You can read the full judgment here.

What this means for the future of the “cursed” film remains uncertain.