Neutral Citation Number: [2006] EWHC 2089 (Ch)
No.HC02C01010
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Date: Friday, 21st July 2006

Before:

MR. JUSTICE DAVID RICHARDS
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B E T W E E N :

MARK TAYLOR	Claimant

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RIVE DROITE MUSIC LTD.	Defendant

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Mr. I. Mill QC  (instructed by Forbes Anderson Free)  and  Mr. K. Whitehead  (Employed Barrister, Forbes Anderson Free) appeared on behalf of the Claimant.

Mr.  A. Sutcliffe QC  (instructed by Angel & Co.) appeared on behalf of the Defendant.

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J U D G M E N T

MR. JUSTICE DAVID RICHARDS:  

1	There are before the court two applications by the Claimant for summary judgment in respect of sums claimed from the Defendant.  The Claimant, Mark Taylor, is a record producer and songwriter.  The Defendant, Rive Droite Music Limited (“RDM”) is a music production and music publishing company controlled by M. Laurent Dreux-Leblanc.

2	For some years ending on 30th November 2000 Mr. Taylor in his capacity as a songwriter was signed by RDM under a succession of music publishing agreements.  During the same period he undertook work as a record producer under oral agreements on a large number of production projects involving, in many cases, very well known performers.  On such projects RDM would be engaged by a record company to produce the record and the production work would be undertaken by Mr. Taylor or others, either as sole or as joint producers.

3	The present applications relate to Mr. Taylor’s work as a producer.  By way of background I can take the following from paras.5 and 6 of the judgment of Kitchin J. delivered by him on 9th June 2006:

“The working relationship between Mr. Taylor and RDM ended acrimoniously in 2000.  Thereafter a large number of disputes arose between them.  Those disputes became the subject of litigation which ultimately came before Lewison J. in May and June 2004.  The learned judge gave judgment on 6th July 2004.  Mr. Taylor won on most of the points in issue.  Both parties appealed and those appeals came before the Court of Appeal on 16th and 17th May 2005.  The Court of Appeal gave judgment on 4th November 2005.  In the result Mr. Taylor won on all points save for one minor exception in that he was found liable for a technical conversion.  The costs of the trial and the appeal were duly awarded to Mr. Taylor.  RDM applied to the House of Lords for leave to appeal but that application was refused on 13th March 2006.

4	Prior to the trial before Lewison J. Master Bragge had, by an order dated 6th February 2003 on an application by Mr. Taylor for summary judgment, made orders for accounts of royalties and other sums to be prepared and produced by RDM.  

5	The first account was to be in respect of each recording which RDM knew or had reason to believe might have been produced or remixed by Mr. Taylor, whether jointly or alone.  It was to be an account of all advances or fees received by RDM in the period from 1st November 1999 to 31st October 2002, and stating the date, amount and identity of the person making each payment, any recording costs which it claims it was entitled to take into account in calculating the amount due to Mr. Taylor and the amount, if any, which it accepts Mr. Taylor was entitled to receive subject to RDM’s asserted right of set-off in the action.  A similar account was ordered in respect of royalties received by RDM in the period 1st July to 31st October 2002.

6	No order was made for payment of what was shown or found to be due on such accounts by reason of RDM’s counterclaims which, if successful, would have exceeded the amounts likely to be due to Mr. Taylor.  The counterclaims have all failed following the judgments first of Lewison J. and then the Court of Appeal.  Following the refusal by the House of Lords to give permission to appeal, the counterclaims have been finally determined.

7	RDM served accounts pursuant to the order of Master Bragge.  The present applications relate to sums which Mr. Taylor submits are shown in the accounts to be due to him, as well as further royalty payments in respect of later periods not covered by Master Bragge’s order.  Mr. Taylor does not accept that the accounts are accurate but his claims at this stage are for those amounts which he submits are in any event due to him.  

8	The terms of the oral contract for record production between Mr. Taylor and RDM were one of the subjects of dispute in the trial before Lewison J.  The disputed terms were found by Lewison J. to be as set out in a declaration made by him and contained in para.5 of his order dated 15th July 2004.  There was not any dispute, as I understand it, as to the division of royalties and other sums received by RDM.  For new productions, the record company would typically agree to pay royalties to a production company such as RDM on sales of records and would pay advances on such royalties.  For remixes the record company would pay a fee.  As between Mr. Taylor and RDM it was agreed that RDM would pay 50 per cent of royalties to Mr. Taylor if he was the sole producer.  If there were more than one producer working on a particular project, the 50 per cent share would be split equally between the producers.  The same applied to advances except that the share to be paid to the producer, the individual producer or split between joint producers, was 40 per cent.  50 per cent of the fee for remixes was to be paid to or divided among Mr. Taylor and other producers engaged by RDM on the particular project.

9	I will deal first with the application for summary judgment arising out of the royalties account provided by RDM pursuant to para.1.2 of Master Bragge’s order.  RDM accepts that there is now due to Mr. Taylor a sum of £452,451.81 in respect of the period 1st November 2000 to 30th April 2006.  With VAT this amounts to £531,630.87, and RDM accepts that there should be judgment in that amount.

10	The accounts provided by RDM show further royalties of £9,255.02 exclusive of VAT, to which RDM submits that it has an arguable defence.  This sum relates to a particular record which, on Mr. Taylor’s case, was co-produced by Walter Turbitt and himself.  The sum claimed by Mr. Taylor in respect of that record is therefore 25 per cent of the royalties.

11	RDM suggests by way of defence that Mr. Turbitt claims, or may claim, to be the sole producer and therefore no sum either is or may be payable to Mr. Taylor. 

12	The case that Mr. Turbitt was the sole producer is based on an invoice submitted by Mr. Turbitt on 4th December 1999 relating to this project.  Although it is headed “Prod/Mix W/Mark”, RDM argues that the words “50 per points due based on Rive Droite contract with record company”, also appearing on the invoice, show that Mr. Turbitt claims the entire producer’s share.  Mr. Taylor submits that it is at best ambiguous as it may equally refer to 50 per cent of the amount payable to the producers jointly.

13	RDM also relies on a letter dated 5th August 2002 from Mr. Turbitt to RDM in which he states:

“I was also promised 1 point for this track from Brian and Mark as I did the production.  If you agree to pay me I will agree to deal with any claims from them.  There won’t be a problem.”

14	This would, if anything, suggest an agreement by Mr. Taylor and Brian Rawlings to pay Mr. Turbitt rather than an agreement between Mr. Turbitt and RDM. 

15	The significant point, in my judgment, is that although Mr. Turbitt still undertakes production work for RDM and RDM has produced evidence in the form of a letter dated 5th July 2006 from Mr. Turbitt for the purposes of these proceedings, that letter does not refer to this claim.  If Mr. Turbitt was in truth claiming to be entitled to the full producer’s share of the royalty it would have been a simple matter for RDM to obtain evidence on it from him.  In view of the absence of such evidence, combined with the ambiguous nature of the invoice and letter relied on by RDM and the fact that they are six and a half years and four years old respectively, I am satisfied that RDM has no arguable basis to defend the claim for the additional sum of £9,255.02 plus VAT.  There will accordingly be judgment in favour of Mr. Taylor for the initial sum of £531,630.87, to which I have referred, together with the sum of £9,255.02 plus VAT.

16	Mr. Taylor claims interest on the amount of the judgment.  RDM argues that no interest should be awarded because until very recently it was justified in withholding payment to Mr. Taylor.  It makes two submissions in favour of this position.  First, it submits that until very recently it was unclear whether another producer, Brian Rawlings, was claiming all or some of the amounts now agreed to be due to Mr. Taylor, on the basis that Mr. Rawlings was the sole or a joint producer on the relevant projects.  The existence of a claim by Mr. Rawlings to part of the sums claimed by Mr. Taylor is at first blush surprising because when Mr. Taylor left RDM in acrimonious circumstances in November 2000 he and Mr. Rawlings went into business together as producers, and it is not suggested that there has been any acrimony or disagreement between them since then.  On the contrary, it was said on behalf of RDM that they worked closely together.

17	The basis relied on by RDM for a conflicting claim by Mr. Rawlings was a letter from him dated 10th January 2001, a few weeks after the severing of relations, and a letter dated 11th June 2001 from his solicitors.  In the first letter Mr. Rawlings wrote:

“Again, your explanation of my producer role is inaccurate, disrespectful and not accepted.  I am named on producer contracts as a producer because the record labels want me to be involved in the productions as I have always been, and certainly not because, as you are now suggesting, you wanted an employee credited on the records.  This is a ridiculous claim as is I owe you my success.  I worked very hard for my success and you should acknowledge that.

My royalty entitlement as a co-producer is quite distinct from any bonus that I may have received and it is inaccurate and unacceptable for you now to try and describe my production royalties as a bonus.  Your own paperwork given to me by you and Stephanie covering my royalties and separately my bonus reflect that distinction.  My right to receive royalties from productions does not end with my employment by RDM and I shall expect to receive my agreed percentage for as long as the productions in question generate royalty income.”

18	He made the same points in a letter dated 4th February 2001.  In their letter dated 11th June 2001 his solicitors wrote under the heading “Copyright and unpaid producer’s royalties”:

“Where Mr. Rawlings was the producer or co-producer the copyright and the recording belongs to him and where relevant his co-producer.  It will require an assignment of rights for this copyright to pass from our client to a third party, including RDM.  There has been no such assignment.

Moreover, RDM has failed to pay the agreed or any producer’s royalties to our client for the last two periods since he left RDM.  RDM is therefore currently obligated to our client for a substantial sum by way of unpaid royalties.”

19	Following the judgment given by Lewison J. there was correspondence between the parties’ solicitors as to the form of order.  RDM’s solicitors resisted any order for payment on the grounds of possible conflicting claims by Mr. Rawlings either alone or with Mr. Turbitt or Graham Stack.

20	As to RDM’s position, Mr. Rawlings’ solicitors wrote a letter dated 14th July 2004 stating:

“Forbes Anderson have forwarded to us a copy of their letter to you of 7th July, together with a copy of your response of 12th July and its various enclosures.  We have reviewed that correspondence and taken our client’s instructions in relation to schedule 1 to your letter, which contains a summary of producer royalties due to Mark Taylor in the above action.  In particular we note that it is asserted by your clients that our clients assert a claim to the production royalties either in their own capacity or jointly with other third party producers.  The purpose of this letter is to advise you that neither of our respective clients …”

	I interpose there to say they are referring to Brian Rawlings and what is presumably his company Brian Rawlings Productions Limited:

“… asserts any claim to the production royalties payable to Mr. Mark Taylor and that any assertion that such a claim is being made on their behalf is incorrect.”

21	In my view, this letter clearly indicated that Mr. Rawlings was not laying claim to the sums claimed by Mr. Taylor, but RDM regarded it as containing ambiguities which were only cleared up to its apparent satisfaction by a letter in early July 2006 from Mr. Rawlings’ solicitors.  The interval between these letters is explained by the understandable decision of Mr. Taylor not to press for payment of amounts shown to be due on the accounts while actual or possible appeals against the dismissal of RDM’s counterclaims remained outstanding.

22	In my judgment, the basis of the allegation that Mr. Rawlings was making  conflicting claims was very thin.  However, even if there was a real basis for concern on RDM’s part, it does not, in my judgment, provide a basis for resisting the payment of interest.  RDM accepts that on any footing it was not entitled to retain for its benefit 50 per cent of the royalties.  As it transpires, it now agrees that Mr. Taylor is entitled to those sums.  In the meantime RDM has retained the money and made use of it in its business;  conversely, Mr. Taylor has been deprived of it.  If RDM entertained concerns about conflicting claims it could have issued interpleader proceedings and paid the money into court.  As the person found ultimately to be entitled to those sums Mr. Taylor would have received the interest earned on the money while held in court.  In these circumstances I can see no arguable basis for not ordering RDM to pay interest from the times that the royalty payments became due.

23	The second ground for resisting the payment of any interest is an assertion that RDM’s obligation to pay royalties only arises when Mr. Taylor renders invoices to it.  The evidence before me establishes that this was not a pre-condition to the payment of producer royalties (see paras.7 and 8 of the tenth witness statement of Andrew Malcolm Forbes).

24	As to the rates of interest claimed by Mr. Taylor, his claim, as originally formulated, was to interest at 8 per cent from the dates on which the royalties fell due to 2nd March 2004, and thereafter at 10 per cent above Bank of England base rate from time to time.  In the course of submissions this was altered in respect of the earlier period.  The interest claimed changed to a commercial rate of 1 per cent above base rate from the dates on which royalties became due down to 5th February 2003, being the date of Master Bragge’s order, and 8 per cent from 5th February 2003 to 2nd March 2004.

25	The submission in favour of an interest rate of 8 per cent from 6th February 2003 is that on that date Master Bragge made the order for an account.  Payment was not ordered only because of RDM’s alleged counterclaims.  Now that the counterclaims have failed it can be seen that Mr. Taylor was entitled to judgment which should be taken for these purposes to have been entered in his favour on 6th February 2003.

26	In my view, this reasoning is flawed.  The rate of interest prescribed on judgments, which has at all material times been 8 per cent, is just that, interest on judgments.  Judgment was not entered for Mr. Taylor on 6th February 2003 precisely because RDM had arguable counterclaims, and it was decided that it was not therefore appropriate to enter judgment for Mr. Taylor at that stage.  He was in no different position to any claimant who is met with arguable defences which ultimately fail.  So far as I am aware, and counsel did not disagree, it is not the practice of the court to award interest at the judgment rate for periods between either the issue of proceedings and judgment or a failed application for summary judgment and final judgment.

27	Counsel were agreed that if I rejected the claim to interest at 8 per cent but was minded to order the payment of some interest, a rate of 1 per cent above base rate from time to time was appropriate for all periods before 2nd March 2004.

28	The claim for interest at 10 per cent above base rate for the period after 2nd March 2004 was based on an offer made by Mr. Taylor under CPR Part 36 and the decision of Lewison J. on the basis of the same Part 36 offer to award interest at that rate on sums which may be found due to Mr. Taylor on the inquiry as to damages ordered by Lewison J.  RDM was refused permission to appeal by Lewison J. from that part of his order.  The application for permission to appeal was renewed before the Court of Appeal, which ordered that the application should be heard with the main appeal.  After the Court of Appeal gave judgment on the main issues on the appeal the parties reached terms on this and other outstanding issues.  The application for permission to appeal was, in accordance with those terms, dismissed.

29	The Part 36C offer made by Mr. Taylor was contained in a letter dated 9th February 2004.  It was a comprehensive offer to settle all the claims between the parties.  It covered the issues which were determined by Lewison J. and it made an offer to settle Mr. Taylor’s claim for production royalties and for advances and fees for the period up to 31st October 2003 in a total sum of £490,000, attributing £400,000 to royalties and £90,000 to advances in fees.

30	Lewison J. accepted that Mr. Taylor had done considerably better at the trial than his Part 36 offer.  The position is even more strongly in Mr. Taylor’s favour following the appeal.  For this reason Lewison J. made the orders for interest at 10 per cent above base rate for the period following 2nd March 2004.

31	Mr. Mill for Mr. Taylor submits on the same basis that I should award interest at 10 per cent above base rate on the production royalties for the period following 2nd March 2004.  The amount due in respect of royalties for the period covered by the offer was about £390,000, but with interest at an ordinary commercial rate it would exceed the offered sum of £400,000.

32	Mr. Mill accepted that there was one difference between the position as before Lewison J. and the position today.  The cost consequences and consequences as to interest of an offer under Part 36 apply only at trial.  They do not in terms apply to an application for summary judgment.  However, as an aspect of the court’s general discretion as to the award of interest, it can apply on a summary judgment application the approach set out in Part 36.

33	The Court of Appeal dealt with this issue in Petrotrade Incorporated v. Texaco Limited [2002] 1 W.L.R. 947.  Lord Woolf said, first at para.58:

“It will be noted that the opening words of Rule 36.21 are ‘This rule applies where at trial’.  Those words are not to be ignored.  They mean that the rule does not apply where, as in this case, summary judgment is given under Part 24.  Part 24.1 sets out a procedure by which the court may decide a claim or a particular issue without a trial.  This may seem surprising but it is to be borne in mind that a court always has the power to order costs on an indemnity basis.  The court also has the general power to award interest at such a rate as it considers just.  Furthermore, if the proceedings are disposed of summarily this will normally be at an early stage of the proceedings so that questions of costs and interest will not be as significant as they would otherwise be.”

	Then at para.74 he said:

“Although Rule 36.21 has no application where an offer is made by a Claimant in the present circumstances, it is possible for the court, when exercising its general jurisdiction as to interest, to give a higher rate of interest than the going rate.  It is important that the courts bear this in mind otherwise Claimants might be tempted not to obtain summary judgment in cases where it could be obtained with the objective of obtaining higher rates of interest at the conclusion of a trial.  That would be entirely contrary to the whole ethos and policy of the CPR.  I am confident that if it was shown that this had occurred the court would use its powers to ensure that a Claimant did not benefit by any such tactic.”

34	He then went on to consider the appropriate order to make as to interest in that case and concluded that, in circumstances where there had been an offer to which Part 36 would apply if there had been a trial, it was appropriate to award an enhanced rate of interest of 4 per cent above base rate.

35	Mr. Sutcliffe for RDM emphasised that because Part 36 does not in terms apply to this application the court has a broad discretion on the approach to be taken to the award of interest.  He accepted that the court can take the Part 36 offer into account, but it was not bound to do so and it was not necessary for him to show that it would be unjust not to do so (contrast Part 36.21(4)).

36	Mr. Sutcliffe in particular resisted an order for an enhanced rate of interest on two principal grounds.  First, he repeated a submission which he had made unsuccessfully to Lewison J.  The costs consequences and consequences as to interest under Part 36 apply in their full rigour only if the offer was made by a Claimant.  He submitted that the Part 36 offer made by Mr. Taylor should not for these purposes be regarded as in substance a Claimant’s offer.  It was, he submitted, chance that Mr. Taylor rather than RDM was the Claimant.  If Mr. Taylor had been the Defendant and had made a Part 36 offer which RDM accepted he would have had to pay RDM’s costs.  The principal claims, Mr. Sutcliffe submitted, were those made in RDM’s counterclaim. 

37	RDM is thus running for a second time an argument which has already been rejected in this action on this offer in a decision by another High Court judge.  It is also a decision from which no appeal can lie following the dismissal of RDM’s application for permission to appeal.

38	Assuming, as I do, that it remains nonetheless open to RDM to run this argument again I agree entirely with the decision of Lewison J. to reject it, for the simple reason that Mr. Taylor was the Claimant.  I see no reason on this ground why I should not take the offer into account on this application.

39	Secondly, Mr. Sutcliffe challenged whether Mr. Taylor had done better than the offer of £400,000 for the period covered by the offer.  The principal sum for that period was a little over £390,000.  Mr. Sutcliffe submitted that it was £381,000, but that was after deducting the alleged conflicting claim for Mr. Turbitt which I have rejected.  He submitted that the offer does not include interest and therefore Mr. Taylor’s offer exceeded his entitlement and he has done worse, not better, than his offer.  I reject this submission.  Part 36.22 provides that an offer is treated as including interest unless the contrary is indicated by the offer.  Mr. Taylor’s offer did not indicate the contrary.

40	I conclude that as from 2nd March 2004 it is appropriate to award Mr. Taylor an enhanced rate of interest on the royalties covered by his Part 36 offer.  Lewison J. ordered interest at a rate of 10 per cent above base rate which is the maximum permissible under Part 36.  His judgment does not set out his reasons for choosing that rate although, as Mr. Mill suggested, it may reflect the extent to which RDM failed as compared with the offer.

41	On this separate issue of royalties, which has not been the subject of a lengthy trial, I do not consider that the maximum rate would be appropriate.  In my judgment, a rate of 5 per cent above base rate strikes an appropriate balance and properly reflects the failure of RDM to accept Mr. Taylor’s offer.

42	The result is, therefore, that Mr. Taylor is entitled to interest at 1 per cent above base rate on those royalties covered by the Part 36 offer from the dates on which they respectively fell due for payment to 2nd March 2004, and interest at 5 per cent above base rate is payable on those royalties from 3rd March 2004 to today’s date.  Mr. Taylor is entitled to interest of 1 per cent above base rate on the other royalty payments for which judgment is given today from their respective due dates for payment to today’s date.

43	In addition to these monetary awards Mr. Taylor seeks two further orders in relation to his entitlement to royalties.  First, he seeks an order for disclosure of documents vouching for and evidencing the amounts due for the periods covered by the account ordered by Master Bragge and by the summaries for subsequent periods provided by RDM.  RDM was willing to allow an accountant to inspect the relevant documents for periods subsequent to those covered by the accounts, but resisted any order in respect of the periods covered by the accounts.  For reasons which I need not go into in this judgment that offer is now withdrawn and RDM resists the order for disclosure sought by Mr. Taylor.  It submits that it spent a lot of time on the accounts provided pursuant to Master Bragge’s order and there has been a long period of delay with no objection raised to the accounts.  I do not regard these as sound objections.  The lapse of time since service of the accounts is reasonably explained by Mr. Taylor’s decision not to apply for further orders while RDM’s counterclaims were determined.  Mr. Taylor does not accept the accounts but cannot particularise objections without access to the underlying documents.  In my judgment, it is appropriate to make the order for disclosure sought by Mr. Taylor in respect of the period 1st November 2000 to 30th April 2006.

44	Secondly, Mr. Taylor applies for an injunction requiring RDM to comply in the future with its obligation as determined by Lewison J. to deliver to his solicitors accounts for royalties and within 14 days after the delivery of each account to provide copies of the documents vouching for and evidencing the accuracy of the accounts.  Notwithstanding the declaration made by Lewison J. as to RDM’s obligations in this respect, RDM failed to provide information, still less accounts, for any period beginning on or after 1st May 2004 until May 2006.  Mr. Taylor is entitled to be sceptical of RDM’s statements of willingness to comply with its obligations in the future and, in my judgment, it is appropriate to make the orders sought, including the delivery of supporting documents.

45	Mr. Taylor’s second application for summary judgment relates to advances and fees.  Pursuant to para.1.1 of Master Bragge’s order RDM served an account of the relevant advances and fees.  The accounts show that RDM had received advances and fees from commissioning record companies on a number of projects, but in each case one or more reasons were summarised in the account for not making payment to Mr. Taylor.

46	The application relates to amounts in respect of six projects which have been chosen for this application because, as it seemed to Mr. Taylor’s advisers, the reasons for non-payment raised by RDM related to conflicting claims which were essentially the same as those raised in relation to royalties.  I will take the claims in respect of each of the relevant projects in turn.  However, I will first say this.  There was considerable argument before me as to whether it was open to RDM to raise some of the issues in the light of the pleadings in the action and in the light of the course of the trial before Lewison J., including the decision of RDM not to pursue issues similar to some of the issues raised on this application.  However, I have decided that it would not be right to decide those issues on that basis, particularly in the light of Mr. Forbes’ witness statement where he explains the approach adopted on Mr. Taylor’s behalf to the issues raised by RDM in the account.

47	Turning, therefore, to the individual projects, on 8th October 2002 RDM received £161,806 as an advance on a project for Hall and Oates of which Mr. Taylor claims 40 per cent.  A number of reasons are put forward for non-payment.  First, it is said that there may be conflicting claims as to the identity of the producer.  Any such alleged claim by Mr. Rawlings has been dealt with by the correspondence to which I have earlier referred.  M. Dreux-Leblanc suggests that T Bone Wilke and Darrell Hall were also producers, but there is no evidence that either was engaged by RDM and therefore entitled to a percentage of advances paid to it.  It is not suggested that either of them, or indeed anyone else, has made a conflicting claim in nearly four years since this sum was paid to RDM.

48	Secondly, a deduction of £4,675.07 is made in respect of a payment to Gary Miller for services supplied by him.  As found by Lewison J. the only permissible deductions from the advances before calculation of Mr. Taylor’s share are for musicians’ fees and a £150 notional fee for tapes.  Mr. Miller’s fee falls into neither category and is not therefore a relevant deduction.

49	Thirdly, it is said that Mr. Taylor has failed to provide credit information as to other producers, with the result that RDM does not know who to pay.  There is, however, as I have indicated, no evidence of there being any other producers to whom any percentage may be due.  In these circumstances, even if Mr. Taylor was otherwise required to provide this credit information, it cannot be a breach which entitles RDM now to withhold payment.

50	Fourthly, it is said that Mr. Taylor has failed to provide information as to costs incurred.  RDM accepts that it was RDM itself which incurred costs and that it has received invoices for such costs.  Mr. Sutcliffe submitted that Mr. Taylor was required to provide information as to the costs so that RDM could match invoices against them.  However, this is not supported by evidence from RDM and no invoices are produced to show any difficulty with them.  Mr. Taylor has never been asked about any invoices.  Mr. Rawlings, who was employed by RDM, worked on the projects and RDM, through him, had knowledge of any costs incurred.  There is nothing in the judgment of Lewison J. or elsewhere to support the existence of an obligation on Mr. Taylor to provide this information.  In fact, in its defence RDM admitted that it was obliged to provide costs information to Mr. Taylor rather than the other way round.

51	Fifthly, Mr. Taylor appears from the CD sleeve to have produced only five out of the 13 tracks on the album so that at most, RDM submits, Mr. Taylor is entitled to 40 per cent of five-thirteenths of the advances received by RDM.  This was not a point taken by RDM in the account and there is no explanation as to who, if not Mr. Taylor, might be entitled to the balance of the 40 per cent of the sum paid to RDM.  Without some evidence of a genuine rival claim this defence, in my view, lacks any real substance.

52	Sixthly, it is said that Mr. Taylor has not supplied the midi file and multi-tracks to RDM.  The same defence is raised as regards some of the other projects.  RDM asserts that this prevents it from completing its obligations to the commissioning record companies and is a pre-condition to payment to Mr. Taylor.  However, the record companies paid these advances to RDM between four and six years ago and have not sought repayment of them.  Even if it is right that Mr. Taylor has not supplied the relevant material to RDM it cannot at this distance of time be a bar to payment to him of his share of the advances and fees.  There is no suggestion of any claim against RDM by any of the commissioning record companies for failure to complete any of the projects.

53	On 18th December 2000 RDM received £12,000 as fees for a remix of Please Stay by Kylie Minogue, of which Mr. Taylor claims 50 per cent.  First, it is said by RDM that it has no evidence that Mr. Taylor produced the remix.  If that is so there was no reason to include it in the account.  RDM has not suggested that anyone else produced it or that it has paid a percentage to anyone else.  

54	That too is the answer to the second point taken, as with the Hall and Oakes project, that Mr. Taylor has produced no credit information.

55	Thirdly, it is said in the account that Mr. Taylor did not sign a production agreement, but that is not relied on in RDM’s evidence.  It is relied on in the case of other projects and therefore it is convenient to deal more generally with it here.  There is no basis in Lewison J.’s judgment or elsewhere for the assertion that signature of a production agreement is a pre-requisite to payment.  It was not pleaded by RDM in the many implied terms asserted by it in para.77 of its Defence.  M. Dreux-Leblanc states that without it RDM has no confirmation that Mr. Taylor has assigned any copyright to RDM.  In my judgment, it is implicit in the relationship between RDM and its producers, just as it is no doubt usually explicit in RDM’s contracts with commissioning companies that copyright is duly assigned from one party to the other.  Mr. Taylor has not asserted any copyright.  If there is a real basis for an agreement to be signed by Mr. Taylor RDM would be entitled to an order to that effect, but it is not, in my judgment, a defence to payment of the percentage to which Mr. Taylor is entitled.

56	On 13th July 2000 RDM received £20,000 for the production of I Will Love Again by Lara Fabian of which Mr. Taylor claims 40 per cent.  The defences raised in respect of this project are similar to those raised in respect of the previous projects and the same reasoning applies to them.

57	On 22nd November 2000 RDM received an advance of £90,000 for the production of Angel and other tracks by Lionel Ritchie, of which Mr. Taylor claims 40 per cent.  The defences raised are first that Mr. Taylor has not supplied costs information.  This is not an arguable defence for the reasons already given.

58	Secondly, it is said that credit information was not provided and there is evidence of a conflicting producer’s claim by Mr. Miller.  However, the only evidence put forward in support of this assertion of a conflicting producer’s claim is an invoice for remixing rendered by Mr. Miller in September 2000, and presumably paid, in an amount of £5,875.  There is no evidence of a conflicting claim to a producer’s percentage either by Mr. Miller or by anybody else.

59	On 23rd January 2001 RDM received an advance of £52,925 for the production of tracks by Ricky Martine.  The defences raised are, first, a failure to sign a production agreement, to which the points already made apply.

60	Secondly, it is said that there is a potential conflicting claim to a producer’s percentage by Desmond Child, but there is no evidence that he was engaged by RDM and therefore entitled to a share of advances paid to RDM;  and there is no evidence that he has ever asserted a claim against RDM.  The third defence of a failure to provide credit information is likewise without merit.

61	On 28th March 2001 RDM received £10,000 as a production advance on a project for Rod Stewart, of which Mr. Taylor claims 40 per cent.  All the defences raised have previously been addressed in the context of other projects.

62	A defence raised in respect of all projects is that payment was conditional on the receipt of an invoice from Mr. Taylor and none has been rendered.  Reference is made to the order of Lewison J. which does indeed refer to payment being due within a reasonable time after the receipt of an invoice.  The only reason why no invoice has been rendered is that RDM has relied on its counterclaims and defences to refuse payment.  If it had been willing to pay the percentages when due Mr. Taylor would have rendered the invoices.  There is absolutely no reason to suppose that he would not have done so.  

63	However, once he did so he would be liable to HM Customs and Excise, now HM Revenue and Customs, for VAT on those amounts, even though he did not receive payment from RDM.  RDM cannot in these circumstances rely on the absence of invoices given that their absence was due solely to their wrongful refusal to acknowledge the indebtedness.  This point was not raised in the account and was raised for the first time in M. Dreux-Leblanc’s ninth witness statement.  In the circumstances, in my judgment, it is a point without merit.

64	Accordingly, I am satisfied that there is no arguable defence available to RDM in respect of any of the percentages of advances and fees claimed on this application by Mr. Taylor, and I will accordingly enter judgment for the amount claimed.

65	A claim to interest is made on Mr. Taylor’s behalf on the basis of 1 per cent above base rate down to 2nd March 2004 and an enhanced rate of interest from 3rd March 2004 to today’s date.  The grounds for the application for an enhanced rate of interest are precisely the same as in respect of the royalties claim, and for the reasons that I have already given in that respect I consider it appropriate to award interest of 5 per cent above base rate for that latter period.

L A T E R :

MR. JUSTICE DAVID RICHARDS:  

66	So far as time for disclosure is concerned, I am not satisfied that what I am told is the annual closure for the month of August would prevent RDM from complying with the disclosure obligation.  I think it appropriate, therefore, to order disclosure within the period that I would in any event have ordered it, which is 21 days.  So that is the period for disclosure.

67	So far as costs are concerned, having regard to, in particular, what was said by the Court of Appeal in the Petrotrade case and having regard to the Part 36 offer and what I have already said today in my judgment about its impact on an award of enhanced interest, I consider it appropriate to order the costs of these applications to be assessed on the indemnity basis.

68	I do not think that the matters to which Mr. Sutcliffe has rightly drawn attention as providing, as he described it, a “modicum” of success from his client’s point of view are sufficient to provide a reason for not ordering those costs.  The level of success was, I think it fair to say, modest indeed in the context of the whole.

MR. SUTCLIFFE:  Could I address you on amount, my Lord, I have not addressed you?

MR. JUSTICE DAVID RICHARDS:  On what, sorry?

MR. SUTCLIFFE:  On the amount, on the quantum.

MR. JUSTICE DAVID RICHARDS:  Certainly you can.  I am sorry, Mr. Sutcliffe.

MR. SUTCLIFFE:  It is simply I have very detailed ----

MR. JUSTICE DAVID RICHARDS:  Do you want to give me a figure?

MR. SUTCLIFFE:  I have a costs draftsman who is now on board, because we have been faced with a bill for £940,000 in the main set of proceedings, so these bills have been referred to a costs draftsman.  I could go through a whole series of ----

MR. JUSTICE DAVID RICHARDS:  As I understand it, you are not going to resist an order for an interim payment.

MR. SUTCLIFFE:  No.

MR. JUSTICE DAVID RICHARDS:  So if you want to start by giving me the figure you would urge on me and then give me the underlying reasons for it?

MR. SUTCLIFFE:  Thank you, that is probably the best way of dealing with it.  My Lord, I think the total that my friend gave you of the four bills that have now been provided is £44,000.  We will submit in due course on a detailed assessment that that is, even on an indemnity basis, a grossly excessive amount for this application.  You have got to be satisfied as to the principle that the sum that you award now is a sum which will definitely be awarded on assessment.

MR. JUSTICE DAVID RICHARDS:  Yes, absolutely.

MR. SUTCLIFFE:  I would normally, had it been a reasonable figure, have asked that you order no more than 50 per cent of that figure.  I would ask, given what I am told by the costs draftsman, that it be no more than £20,000 on the interim basis.

MR. JUSTICE DAVID RICHARDS:  If I were to say to you that I was minded to order £25,000, do you want to take instructions as to whether you want to take me through the detailed points.

MR. SUTCLIFFE:  Could I.  (After a pause)  I think, given the time, and it is a Friday afternoon, certainly not.

MR. JUSTICE DAVID RICHARDS:  

69	I will order an interim payment of £25,000, and if there is money in this blocked account that can meet that as well as the other sums then I think, exceptionally, the order can be made for immediate payment, because there is no point in doing otherwise.

MR. MILL:  My Lord, I will take the conduct of drawing up a minute.  Obviously I hope my learned friend will assist by coming back to me at the earliest possible opportunity with the interest figure so that it can be finalised because my client is not going to be paid until this order is drawn up since it requires the order of the court for the monies to be released.  So there is some real urgency there.

MR. SUTCLIFFE:  I can assure my friend that, although I am on a train to Yorkshire this evening, I will respond to his email on Monday.

MR. MILL:  Monday will be fine, it is just that I know that sometimes my learned friend seems to have difficulty getting instructions.

MR. JUSTICE DAVID RICHARDS:  Thank you both very much.  I think there is no reason why I should keep these papers, so those can go back.  I leave it to you to remove all the yellow sticky labels and disregard such scrawl as there might be.  I put some of the things into a different file.

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