Universal International Inc v Flextech Rights Ltd
Reference:  EWCA Civ 1036
Court: Court of Appeal
Judge: Sir Anthony Clarke MR, Jacob and Neuberger LJJ
Date of judgment: 18 Jul 2006
Summary: Contract – preliminary issues – whether defendant entitled to dissolve contract
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Instructing Solicitors: Harbottle & Lewis for the Appellant; Wiggin LLP for the Respondent
In 1998 Universal licensed Flextech to broadcast episodes of The Jerry Springer Show (JSS) in the UK. The licence was expressed to continue for so long as JSS was produced and received specified exposure on US television. The contract contained a provision requiring Universal to ensure that the episodes of JSS delivered were “similar in content” to those of the 1998 benchmark season. In 2002 Flextech purported to dissolve the contract, alleging that it was entitled to dissolve because the show had become largely unbroadcastable before 2100 hours because of changes in content. The parties brought a list of preliminary issues before Cooke J for determination. One of those issues was whether on the assumption that the pleaded facts in support of the case on dissolution were proved, it followed that Flextech were entitled to dissolve the contract. Cooke J had held below that on those facts they would be so entitled.
The main issues were, (1) what was the proper construction of the content clause and (2) would Flextech be entitled to dissolve if the facts alleged in its Defence were proved?
The Court of Appeal held that the judge should have declined to answer the issue of dissolution, because all depended on whether the changes relied on by Flextech were such as to render the episodes of JSS in the 2002 season dissimilar in content to those in the benchmark season. The court also rejected Universal’s primary case that the content clause was limited to the essential characteristics of the show, eg that the JSS had to remain a live talk show dealing with outrageous topics and sensational disclosures. In equal measure, it did not follow that the alleged changes relied on by Flextech, e.g more sex and more violence, meant that the episodes were no longer similar in content. The issue was essentially a jury question and was one for the trial judge taking into account all the salient facts. Appeal allowed in part.
The decision is of general interest on the use of preliminary issues to resolve disputes.