Miller v Sutton & Anor

On 2 March 2012 I allowed the defendants’ application to strike out the claim, or for summary judgment on it; awarded the defendants the costs of the application and of the proceedings so far as not previously dealt with; and refused permission to appeal. These are my reasons.

The application, which is the second such application made in these proceedings, arises in the following circumstances.

In about 2003 a company called Purple Haze Records Limited issued a CD of two concert performances given by Jimi Hendrix in Stockholm in January 1969. In 2004, a company called Experience Hendrix LLC, the successor in title to J imi Hendrix’s estate, brought proceedings in England against Purple Haze and against the present claimant (“Mr Miller”), w ho controlled Purple Haze. - The claim was based on the assertion that Experience Hendrix owned performer’s property rights in the Stockholm performances, and that the production and distribution of the CD infringed its reproduction and distribution rights. On 24 January 2005 Hart J upheld that claim on a summary judgment application: Experience Hendrix LLC v Purple Haze Records Ltd [2005] EWHC 249 (Ch).

The solicitor who acted for Purple Haze and Mr Miller was the first defendant to these proceedings (“Mr Sutton”). Mr Sutton carried on his practice under the name of Clive Sutton Solicitors, and he is sued in that name as the second defendant. In reality, he is the only defendant.

Mr Miller started these proceedings in the Commercial Court on 18 January 2011. In his particulars of claim, drafted by himself and dated the previous day, he assert ed that M r Sutton had be en negligent in his conduct o f the defence of Exp erience Hendrix's pr oceedings, and that but for t hat negligence the claim would have failed. Many instances of negligence were alleged "against Mr Sutton; such as taking on work that he was not competent to handle and putting his pecuniary interest under a CFA ahead of his duties to his clients. The only one relevant to this application is contained in paragraph 46, which was in the following terms:

Mr Sutton applied to strike out the claim, or for summary judgment on it. The application was heard by Eder J, who by order dated 9 October 2011 struck out all the allegations in the particulars of claim save the substance of that contained in paragraph 46. His order gave Mr Miller permission to serve new particulars of claim

Mr Miller took the opportunity to replead his case, producing new Particulars of Claim dated 21 October 2011. Many of the allegations in them - such as those relating to Mr Sutton’s competence and those asserting conflicts of interest - are a repetition of complaints that Eder J struck out. Although Mr Miller told me that he wants to appeal Eder J’s order, he has not yet taken any steps to do so; and any allegation in the new Particulars of Claim that merely repeats an allegation that has already been struck out must itself be struck out as an abuse of process.

That means that the only matter for consideration by me is the merits of Mr Miller’s case on the Sue Records Agreement. Mr Miller is not a lawyer, and his pleading of his case on that agreement is neither as clear nor as concise - running as it does to 114 paragraphs - as Eder J no doubt hoped it would be. Both I and Mr Edwards, counsel for Mr Sutton, have therefore approached this application on the basis that it must fail if it emerges from the material before the Court that Mr Miller has a real prospect of succeeding on his claim, whether his case is currently adequately pleaded or not.

A number of the issues determined by Hart J in Experience Hendrix LLC v Purple Haze Records Ltd [2005] EWHC 249 (Ch) related to an agreement made in December 1966 between J imi Hendrix and Yameta Co Ltd. Purple Haze had relied on this agreement (“the Yameta agreement”) primarily as an assignment of Jimi Hendrix’s performer’s rights in the Stockholm performances or as a licence to exploit recordings of the Stockholm performances. Hart J held that the Yameta agreement was neither an assignment nor a licence, and provided no defence to the claim.

The reference in paragraph 46 of Mr Miller’s original particulars of claim to an exclusive recording artist’s contract was understood by Mr Sutton and his advisers to be a reference to the Yameta agreement. At the hearing before Eder J, however, it transpired that Mr Miller was intending to refer to a quite different agreement, the Sue Records Agreement.

I deal with the terms of that agreement later in this judgment. If Mr Miller is to rely on it, however, he must first demonstrate an arguable case that the benefit of it was vested in Purple Haze by the time of the hearing before Hart J. Mr Miller’s case was that Purple Haze had acquired the right to publish and distribute recordings of the Stockholm performances by virtue of an assignment dated 21 October 2003 from a Mr J A Hillman, who had himself acquired all Yameta’s rights to outstanding contracts with Jimi Hendrix pursuant to a board resolution of Yameta dated 5 December 1975. I accept, as Hart J appears to have done in relation to the Yameta agreement, that Mr Miller has a reasonable prospect of establishing that Purple Haze had acquired such rights as Yameta itself had to produce and distribute recordings of the Stockholm performances.

Yameta is said to have acquired and retained the rights to the Sue Records Agreement in the following way. By an agreement dated 31 May 1966, Sue Records assigned to a Michael Jeffrey “all right, title and interest of Sue Records Inc in and to the exclusive recording services of Jimmy (James) Hendrix”; and it seems that shortly afterwards the benefit of the Sue Records Agreement was assigned “at least insofar as said agreement applies to the United States and Canada” by Mr Jeffrey to Yameta. This appears from the recitals to an agreement dated 24 June 1968 to which Jimi Hendrix, Mr Jeffrey, Yameta and Warner Bros were parties. By that agreement Yameta sold to Warner Bros “all of Yameta’s rights to the services of Hendrix as a recording artist for the United States and Canada ... including, without limitation, all of Yameta’s rights for the U.S. and Canada to Hendrix’s services pursuant to the [Sue Records Agreement]”.

Mr Edwards argued that these materials did not establish a chain of title from Sue Records to Purple Haze. He accepted that the sale to Warner Bros was on the face of it confined to rights relating to the United States and Canada, leaving open the possibility that Yameta had retained the rights to Jimi Hendrix’s services in other parts of the world. He pointed out, however, the difficulties of operating the Sue Records Agreement with two parties entitled to Jimi Hendrix’s services under it: to whom, for example, would Jimi Hendrix’s obligation to record a minimu m number of discs then be owed? He suggested that Warner Bros would not have paid the substantial price required under the 1968 agreement unless it was to get all the services Jimi Hendrix had agreed to provide under the Sue Records Agreement, and that in reality nobody had intended Yameta to retain any of those rights. At most, the position had been deliberately left unclear in relation to the rest of the world because of litigation concerning another exclusive recording contract entered into by Jimi Hendrix with PPX Enterprises Inc in 1967. This litigation was compromised by PPX, Yameta and Warner Bros in relation to the United States and Canada, but it was suggested that PPX needed the position to be left uncertain in relation to the rest of the world so that it could continue to maintain a claim in England.

As matters stand on this application, the position is too unclear for me to accept Mr Edwards’s argument on this point. The only information about the assignment by Mr Jeffrey to Yameta comes from the 1968 sale agreement with Warner Bros. That agreement expressly affected only the rights to Jimi Hendrix’s services in the United States and Canada. The Sue Records Agreement, however, covered Jimi Hendrix’s services world-wide. I do not read the recital as necessarily carrying the implication that Mr Jeffrey had retained the rights to Jimi Hendrix’s services in all areas of the world except the United States and Canada. The reference to Mr Jeffrey having assigned the Sue Records Agreement “at least” insofar as it applied to those territories is explicable on the basis that that was all it was necessary to state, Warner Bros having no interest in acquiring rights in other areas; and the expression “at least” is capable of implying that in fact more had been assigned. In my judgment, Mr Miller has a reasonable prospect of establishing that the rights to Jimi Hendrix’s services except in relation to the United States and Canada were assigned to Yameta, were retained by Yameta following the sale to Warner Bros, and ultimately came to be held by Purple Haze.

Against that background, I can turn to the Sue Records Agreement itself. Mr Sutton accepts that he was provided with a copy of it before the hearing by Hart J. He also accepts that it was not referred to at that hearing, and that for the purposes of this application I must assume that it was not referred to because he did not draw it to the attention of counsel.

The position is accordingly that, if it is fairly arguable that the outcome of the hearing before Hart J would or might have been different if the Sue Records Agreement had been drawn to his attention, the application to strike out Mr Miller’s claim in negligence must fail. In considering that question, the nature of the application before Hart J is relevant: since it was a summary judgment application, Purple Haze would have had to show only that the Sue Records Agreement gave it a reasonable prospect of defending Experience Hendrix’s claim.

I should mention that Mr Miller argued that the only person who could say whether or not knowledge of the Sue Records Agreement would have affected Hart J’s decision would be Hart J himself; that since he is now regrettably dead his views can never be known; and that it should therefore be assumed in Mr Miller’s favour that the Sue Records Agreement would or might have led to the dismissal of the summary judgment claim. I reject this argument: Hart J would have considered the effect of the Sue Records Agreement in the light of the applicable law and the materials before him, and I am in as good a position to reach a decision on its effect as he would have been in. I therefore turn to consider its terms.

Headed “Exclusive Recording Artist Contract”, it was made on 27 July 1965 between Sue Records Inc (called “Company” in the agreement) and Jimi Hendrix (called “Artist”). It is to be construed according to the law of Sue Records Inc’s principal place of business, which I take to be the State of New York. I have had no evidence of how that law would apply to the agreement, and I assume that it would not cause the provisions of the agreement to be construed any differently from the way in which they would be construed under English law.

The following provisions of the agreement are relevant.

Clause 1: “Artist hereby grants and Company engages Artist’s exclusive personal services in connection with the production of phonograph records”.

Clause 2: “The term of this agreement shall be for period of two (2) year(s) from the date hereof; during which time the Artist agrees to record under Company’s supervision and Company agrees to record a minimum of the equivalent of Eight (8) 7 inch 45 rpm (single faced) commercially and technically satisfactory record sides. The Artist agrees to record such selections at such times and places (within the city where the principal office of Company is located) during the term hereof, as Company may designate and under Company's supervision. ... Artist agrees to re-record each selection to be made hereunder until a commercially and technically satisfactory “master” record thereof shall have been obtained.”

Clause 3: "the Artist agrees that during the term of this agreement, he will not perform with or without credit, individually, as a leader, as a member of a group, as an instrumentalist, vocalist or narrator or otherwise for any other person, firm or corporation for purpose of making phonograph records. ... If during the term of this agreement (including any exercised option period) plus five (5) years thereafter Artist performs any composition for the purpose of making any recording for any medium other than phonograph records he will do so only pursuant to a written contract containing an express provision that neither such performance nor any recording thereof will be used directly or indirectly for the purpose of making phonograph records or any other device for home use. This paragraph is of the essence of this agreement....”

Clause 7: "all performances recorded hereunder, all recordings released hereunder and all derivatives made therefrom, shall be entirely the property of the Company to be used by Company in any manner it sees fit”. The same clause contained a grant by the Artist to the Company of various identified rights in relation to performances recorded "hereunder" or records made "hereunder".

Clause 8 contained provisions for payment by the Company for the Artist's services.

Clause 11 gave to the Company options to extend the period of the agreement for successive periods of two years and one year.

Although the initial duration of the Sue Records Agreement was two years from 27 July 1965, it was clearly still in existence at the date of the agreement between Yameta and Warner Bros in June 1968. That suggests that the first of the two options to extend had been exercised; and on that basis Mr Sutton accepts for the purposes of this application that the Sue Records Agreement was still in effect at the time of the Stockholm performances in January 1969.

Given that the agreement was in effect, the critical question is whether Mr Miller has a reasonable prospect of showing that it conferred rights to recordings of the Stockholm performances. If it did, then those rights will have taken priority over Jimi Hendrix’s performers’ rights, and so would have provided a defence to the claim made on behalf of his estate by Experience Hendrix. That defence would have been on one or more of the grounds identified by Hart J in paragraph 24 of his judgment as the assignment argument, the Regulation 31 argument, the Regulation 27 argument, and the licence argument. As I have indicated, those defences failed in relation to the Yameta agreement; but it is in my judgment likely that they would have succeeded (at least at the summary judgment stage) in relation to recordings covered by the Sue Records Agreement, since the clear effect of that agreement was to give Sue Records a better right to produce such recordings than Jimi Hendrix himself had. Mr Edwards did not contend otherwise.

It is, however, on this last issue that I consider Mr Miller fails: he does not have a reasonable prospect of successfully establishing that the recordings of the Stockholm performances were recordings to which the Sue Records Agreement applied. On the face of it, they were not: the agreement contemplates the making of recordings to a commercial standard under the supervision of Sue Records. Despite Mr Miller’s evidence recorded in the next paragraph, he suggests that there is some doubt about the circumstances in which the Stockholm performances were recorded; but it is quite clear that they are recordings of live performances. Nothing in the Sue Records Agreement prevented Jimi Hendrix from giving live performances: the only obligation relevant to such performances is that in clause 3 preventing him from performing any composition for the purpose of making any other form of recording than phonograph records except on terms that neither the performance nor any recording of it would be used for the purpose of making phonograph records.

Despite these facts, there would - as Mr Edwards acknowledged - have been nothing in principle to prevent Jimi Hendrix and Yameta (which was by then entitled to the benefit of the Sue Records Agreement) agreeing that the Stockholm performances should be recorded under the terms of the agreement and count towards the minimum recording obligation. On Mr Miller’s own evidence, however, that is not what happened. In a witness statement dated 20 January 2005, made for the purposes of the hearing before Hart J, he said this.

Mr Miller told me that he was not responsible for the contents of his witness statement, and that he had never had any such conversation with Mr Helen. I have difficulty in accepting that: the conversation was described in the witness statement as having occurred shortly before the statement itself was made, and I think Mr Miller's memory of what occurred is likely to have been more reliable in 2005 than now, seven years after the relevant events. But in any case, the witness statement was part of the material on which Hart J was askedto act, and he would have taken it into account in his consideration of the effect of the Sue Records Agreement.

What Mr Miller's evidence establishes is that Yameta consented to the making of the recording by Swedish Radio. That has two consequences: first, that the recording was not made pursuant to the Sue Records Agreement; secondly, that Jimi Hendrix did not break the Sue Records Agreement by allowing the recording to be made. Each consequence is important. Since the recording was not made under the Sue Records Agreement, the rights conferred on Yameta by that agreement did not apply to it; and, since the recording did not involve a breach by Jimi Hendrix of his contract with Yameta, there could be no objection (on the general principle that a person may not take advantage of his own wrong) to an assignee from his estate enforcing his performers' rights against Yameta’s assignee.

The outcome is accordingly this. The allegations relating to the effect of the Sue Records Agreement have no realistic prospect of success, and Mr Sutton is entitled to summary judgment on them. The allegations in the revised particulars of claim whose substance is the same as the allegations struck out by Eder J are themselves struck out. That means that there is no surviving issue in the claim. Costs follow the event, and are to be subject to detailed assessment if not agreed. Permission to appeal is refused on the basis that there is no reasonable prospect of success on an appeal and no other compelling reason for an appeal.