FILM CONTRACT

New Zealand Herald, Volume LXXI, Issue 21855, 18 July 1934, Page 15

FILM CONTRACT

SUPPLY OF PICTURES CLAIM BY CITY THEATRE agreement" not completed AWARD OF £6OO DAMAGES A contract between two motion picture companies was the subject of a claim for £740 damages before Mr. Justice Herdman in the Supreme Court yesterday'. The plaintiff was the Dominion Picture Theatres Company, Limited (Mr. West), owner of the Plaza Theatre, in Queen Street, and the defendant was British Dominions Films, Limited Olr H. F. O'Leary, of Wellington). The parties entered into an agreement on September 22, 1932, under which the defendant company was to supply the plaintiff with all motion picture films it released in New Zealand between September 22, 193?, and September 30, 1933. On July 26, 1933, defendant ceased to supply any motion pictures to the plaintiff. Plaintiff claimed that this was a breach of contract, but the defendant claimed that it had a right to cease supplying and was justified in doing so. Mr. West said the Plaza Theatre was sdministered for the plaintiff by a company called Amalgamated Theatres, Limited. The defendant company was incorporated in Victoria and was carrying on business there and in New Zealand distributing sound motion pictures. It carried on its distributing business in New Zealand through Greater Australasian Films, Limited. Plaintiff undertook with defendant immediately to establish the Plaza Theatre as an all-British theatre, and to expend £6O s week in advertising. "All-British" Programmes

In September, 1932, the Plaza ' Theatre was, receiving and exhibiting pictures from any source and was not in any sense tied. The defendant company was conducting an "All-British" theatre in Melbourne and another in Sydney, and' its manager expressed the desire'to establish the Plaza Theatre in Auckland immediately as an "AllBritish" house. A new policy was accordingly started by the Plaza Theatre, which agreed to accept no pictures other than those of the defendant company. That) counsel submitted, must imply a continuous supply of pictures by the defendant company. The agreement provided for the payment of a royalty of 30 per cent of the gross weekly box receipts up to £4OO a week to the defendant company. Over £4OO the defendant company was to get 60 per cent. '' Both parties carried out the contract until July, ,1933, when there were two months of the contract still to go. The defendant then notified, not plaintiff but its agents, that it would be supplying no more pictures. Very appropriately, it stated that the last picture supplied would be "No Funny Business." It was clear there were any number of pictures available to the defendant company with which it could have completed its contract. "Whatever the motive may have been, the company gave no reason. The Plaza Theatre was / naturally placed in a great difficulty. .. Profits on Pictures The net profit, after paying royalties on a good picture that ran for two weeks, was about £l4O a week. The profit on a picture that ran for one i week would be between £9O and £IOO a week. The average weekly net profit for the two months during which pictures were not supplied by defendant was £26 lZs 6d. They claimed for loss at the rate of £92 10s weekly. / The defendant company in June, 1933, entered into a contract with the Majestic Theatre to supply it with all- " British pictures after September 30, said counsel. That was done, and the only inference was that good pictures were held up for two months in order to give this competing house a good chance in starting its new policy. Mr. West submitted that the defendant company had entirely misconstrued its rights under the contract, Even if the - contract was open to the extraordinary interpretation that the defendant had the right to stop it at any moment, still that right must be exercised reasonably and bona fide. The film manager for Amalgamated Theatres, Limited, Esmond James McBrearty, gave evidence in support of the claim.?, This was corroborated by Michael Joseph Moodabe, governing ' director of Amalgamated Theatres, who said £I2OO or £ISOO had been spent in inaugurating the new policy of an all-British theatre. Details of prohts ■were given/by J. A. Gentles, accountant, now a director of the plaintiff com- , panv. Denial of Breach Mr. O'Leary said the defence was -that there was and had been no breach of the contract. The defendant was onlj bound to supply films that were released during the period, and they did supply all that were released. Counsel read the evidence of hrnest Turnbull, managing director of British Dominions* Films, Limited, 'taken on commission in Melbourne, chiefly describing the conditions under which the contract was made. Witness said the defendant company had the right to cease supplying at any time. If it ceased to supply films that would determine the contract. Mr O'Leary said the contract meant that, while the principal chose to release, the exhibitors had to take, but if he chose >not to release the exhibitors would be relieved from the contract. * On the question of damages, counsel submitted that the weekly loss was not £92 10s, but £66. . His Honor said he was satisfied, after having carefully examined the contract, that defendant was under an obligation to supply pictures for programmes, and plaintiff was under obligation to have his theatre prepared, to /. engage in advertising, and pay over portion of his receipts to the defendant. He thought, that if he awarded plaintiff £6OO that would meet the ends of .justice. Judgment would be for £6OO, with costs as per scale, witnesses' expenses and disbursements to be settled by the registrar