Portobello Productions Limited v Sunnymarch Limited

Portobello Productions Limited v Sunnymarch Limited

The court held that clause 11.3 of the Co-Production Agreement gave the claimant an absolute, unqualified right to terminate if the specified conditions were met. The defendant failed to demonstrate that it was necessary or obvious to imply a term requiring the claimant to exercise this right rationally or in accordance with the reasonable expectations of the parties. The authorities do not support the implication of a Socimer/Braganza limitation on an absolute right to terminate in a commercial contract between parties of equal bargaining power. Accordingly, the defendant's pleaded implied term had no real prospect of success and was bound to fail.

Parties
Claimant: Portobello Productions Limited; Defendant: Sunnymarch Limited
Jurisdiction
England and Wales
Judgment Date
07 November 2022
Procedural Posture
Commercial/contractual Dispute / Summary Judgment Application Under CPR Rule 24.2 And/or Strike Out Under CPR Rule 3.4(2)(a)
Outcome
Summary judgment granted for the claimant on the issue arising from paragraph 14 of the defence; paragraphs 15 to 18 of the defence to be struck out.
Legal Topics
Implied Terms, Summary Judgment, Termination of Contract, Good Faith, Discretionary Powers in Contracts
Contract Law Commercial Law Implied Terms Summary Judgment Termination of Contract Good Faith Discretionary Powers in Contracts

Case Brief

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Parties

Portobello Productions Limited

Claimant

Sunnymarch Limited

Defendant

Procedural Posture

Commercial/contractual Dispute / Summary Judgment Application Under CPR Rule 24.2 And/or Strike Out Under CPR Rule 3.4(2)(a)

Legal Issues

  1. 1 Whether a term should be implied into clause 11.3 of the Co-Production Agreement requiring the claimant to exercise its right to terminate rationally and in accordance with the reasonable expectations of the parties
  2. 2 Whether the defendant's pleaded implied term has any real prospect of success at trial
  3. 3 Whether the court has jurisdiction to determine the issue under CPR rule 24.2

Ratio Decidendi

The court held that clause 11.3 of the Co-Production Agreement gave the claimant an absolute, unqualified right to terminate if the specified conditions were met. The defendant failed to demonstrate that it was necessary or obvious to imply a term requiring the claimant to exercise this right rationally or in accordance with the reasonable expectations of the parties. The authorities do not support the implication of a Socimer/Braganza limitation on an absolute right to terminate in a commercial contract between parties of equal bargaining power. Accordingly, the defendant's pleaded implied term had no real prospect of success and was bound to fail.

Court Disposition

Summary judgment granted for the claimant on the issue arising from paragraph 14 of the defence; paragraphs 15 to 18 of the defence to be struck out.

Orders

  • Summary judgment on the issue of the implied term as pleaded in paragraph 14 of the defence.
  • Paragraphs 15 to 18 of the defence to be struck out.