FILM CONTRACT.

Star (Christchurch), Volume LXVI, Issue 20360, 18 July 1934, Page 13

FILM CONTRACT.

£6OO Damages Awarded for Breach. SUPREME COURT CASE. Per PreAssociation. AUCKLAND, July 17. A contract between two motion picture companies was the subject of a claim for £740 damages before Mr Justice Herdman in the Supreme Court. Plaintiff was the Dominion Picture Theatres Co., Ltd. (Mr West), owner of the Plaza Theatre, and defendant was British Dominions Films, Ltd. (Mr H. F. O’Leary, of Wellington). The parties had entered into an agreement under which defendant company was to supply plaintiff with all the motion picture films it released in New Zealand between September 22, 1932, and September 30, 1933. On July 26 r 1933, defendant ceased to supply any motion pictures to plaintiff. Plaintiff claimed that this was a breach - of contract, but defendant claimed that it had the right to cease supplying and was justified in doing so. Mr West said that the Plaza Theatre was administered to plaintiff by a company called Amalgamated Theatres. Ltd. 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, Ltd.

An All-British Theatre. Plaintiff undertook with defendant immediately to establish the Plaza Theatre as an all-British theatre and to expend £6O a week in advertising. In September, 1932, the Plaza Theatre was receiving and exhibiting pictures from any source and was not in any sense tied. Defendant company was conducting an “all-British” theatre in Melbourne and another in Sydney and its manager expressed a desire to establish the Plaza Theatre in Auckland immediately as an “all-British” house. The new policy was accordingly started by the Plaza Theatre, which agreed to accept no pictures other than those of defendant company. That, counsel submitted, must imply a continuous supply of pictures by 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 defendant company. Over £4OO defendant company was to get 60 per cent. Both parties carried out the contract until July, 1933, when j there were two months of the contract still to go. “No Funny Business.” Defendant then notified not plaintiff but its agents that it would be supplying no more pictures, counsel proceeded. 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 defendant company with which jt 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. The net profit, after paying royalties, on a good picture that ran for two weeks was about i £14.0, The profit on a picture that ran for one 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 17s 6d. . Plaintiff claimed for loss at the rats . of £92 10s weekly. A Competing Customer. Defendant company in June, 1933, entered into a contract with the Majestic Theatre to supply it with all British _ pictures after September 30, said coun- | set. That was done and the only in- , ference was that good pictures were ' held up for two months in order to give thjs competing house a good ’ chance in starting its new policy. Mr West submitted that defendant f company had entirely misconstrued . its rights under the contract. Even if the contract was open to the extra- . | ordinary interpretation that defendant had the right to stop it at any moment, . still that right must be exercised reasonably and bona fide. Mr O’Leary said that the defence . was that there was and had been no , breach of contract. Defendant was ’ ; only bound to supply films that were I released during the period and it did l supply all that were released. Counsel . jead the evidence of Ernest Turnbull, managing director of British Dominions Films, Ltd., ( taken on commission in Melbourne, chiefly describing the con- ' ditions under which the contract was . made. Witness said defendant company had the right, to 'ease supplying 1 at any time. If it ceased to supply ■ films, that would determine the con- ’ tract. Mr O’Leary said that the contract meant that, while the principal ’ chose to release, exhibitors had to take, l , but, if he chose not to release, exhibii tors would be relieved from the conL traet - The Verdict. -j His Honor said he was satisfied, [ | alter having carefully examined the > contract, that defendant was under an l obligation to supply pictures lor pro-! ;: grammes and plaintiff was under an, . obligation to have his theatre prepared, to engage in advertising and . pay over a portion of bis receipts to ; defendant. He thought that if he. l awarded plaintiff £6OO that would meet ■ the ends of justice. Judgment would be for £6OO, with ; costs as per scale, witnesses’ expenses i j and disbursements to be settled by the ■ - Registrar. ______________