Court of Appeal dismisses Quixotic contractual construction

May 29, 2018

In a case about Terry Gilliam’s The Man Who Killed Don Quixote, the Court of Appeal has dismissed an appeal about an option over rights in Terry Gilliam’s film The Man Who Killed Don Quixote.  The court confirmed that a reference to the director’s involvement in the definition of the “Works” under option was not a mere descriptor, but had contractual force.  Both text and context pointed to Mr Gilliam’s inextricable connection with the film, and so a dispute over his involvement in the project did in fact trigger an extension of the option period.

Background

Worthy of the famous knight-errant’s misadventures, the production of the film was fraught with difficulty at every turn. Over 20 years, productions had been plagued by actors taken ill, legal battles, flash floods and fighter-jet fly-pasts.  In 2014, when asked why he kept going back to Quixote after so many failed attempts, Mr Gilliam replied: “I really don’t know anymore … I’ve wasted far too much of my life doing it.  If you’re going to do Quixote, you have to become as mad as Quixote.”

In the course of such production difficulties, the option-holder fell out with Mr Gilliam, leading to litigation. The option-holder requested an extension from the grantor just before the option period was due to expire.  The grantor refused and instead granted an option to a third-party producer, which later engaged Mr Gilliam to direct it and eventually finished the film.

Under the original option deed, the option term was subject to automatic extension if (among other reasons) there were any litigation or claims affecting the “Work”, in which case the extension would last until the option deed could be performed or its obligations fulfilled. The term “Work” cited the film project, including a description that it was “to be directed by Terry Gilliam”.

Court of Appeal ruling

In Lady Justice Asplin’s view, the phrase “to be directed by Terry Gilliam” was not a mere descriptor, and so the “Work” definition encapsulated the product for which the option was to be granted. Although the dispute and litigation arose out of a director agreement to which RPC was not a party, it affected the “Work” optioned because it concerned the production and development of a film to be directed by Mr Gilliam.  Accordingly, the dispute and litigation did constitute “litigations or claims” affecting the “Work”, and the option period had in fact been extended.

Comment

In confirming the High Court decision, Asplin LJ applied the principles of contractual construction as reformulated by the Supreme Court in Wood v Capita, which emphasises the need to strike a balance between the contractual language used and commercial common sense.  The reference to Mr Gilliam in the definition of “Work” went further than mere description and, based on the facts, Mr Gilliam had had an inextricable connection to the “Work” for many years.

For the Quixote film, the decision means that the option-holder’s rights in the project have been confirmed.  Ultimately, then, Mr Branco’s permission will be required for the completed film to be released – another picaresque hurdle for this epic production to overcome.

Karim Amijee, Associate, Simkins LLP

To read the full article, click here.  Written for Entertainment Law Review.