September 20, 2021
In 1998, members of the punk band The Sex Pistols entered into a Band Member Agreement (BMA), which set out rights and obligations in relation to the future exploitation of the band’s music and other rights. On its face, it seemed to allow for a majority of the rights holders to bind the minority as to whether any exploitation took place.
One of the former members of the band, Glen Matlock, together with the trustee of the estate of Simon Ritchie, known as Sid Vicious (who replaced Mr Matlock in the band in 1977, i.e. before the band broke up in 1978), wished to give permission to use the band’s music in a proposed series of TV programmes, to be called “Pistol” and to be directed by Danny Boyle. The programmes would be based on a memoir written by another former band member, Steve Jones, called “Lonely Boy: Tales from a Sex Pistol”. John Lydon (the former lead singer and main lyricist of the band, well known as Johnny Rotten) opposed that permission.
Accordingly, Mr Jones issued proceedings against Mr Lydon seeking declaratory and injunctive relief in order to establish and enforce what he said were Mr Lydon’s obligations under the BMA, i.e., to require Mr Lydon to acquiesce in or grant approval to license the music for use in the TV programmes as approved by the majority.
Mr Lydon argued that he was not obliged to participate in the grant of rights under the BMA and that, in any event, Mr Jones was estopped from asserting his claims, as the BMA had never been relied on in the past, and the various band members had always been allowed a veto on any acts of exploitation.
Mr Lydon relied on “the doctrine of estoppel generally”, which Sir Anthony Mann said is “not something known to law”, as the doctrine has developed on the basis that each type of estoppel has its own requirements, although they can be seen to be related. However, Mr Lydon’s pleading also specified some of the ingredients of each type of estoppel, meaning that he had pleaded:
- estoppel by convention: where the parties share a common understanding or assumption of a state of affairs which is not necessarily accurate, or where one party acquiesces in the erroneous misunderstanding or assumption of the other and it is unjust to go back on the assumption;
- estoppel by representation: in which it must be established that: (i) a clear or unequivocal, or precise and unambiguous, representation of fact was made; (ii) the later position taken contradicts the original representation; and (iii) the original representation induced, and was made with the intention and result of inducing, the party raising the estoppel to alter his position on the faith of it and to his detriment;
- proprietary estoppel: which operates to confer some sort of proprietary right, which Sir Anthony said did not have any application to this particular case; and
- promissory estoppel: where: (i) by his words or conduct, one party to a transaction (A) freely makes to the other (B) a clear and unequivocal promise or assurance that he or she will not enforce his or her strict legal rights; (ii) that promise or assurance is intended to affect the legal relations between A and B, or was reasonably understood by B to have that effect; (iii) before it is withdrawn, B acts upon it (with A either knowing or being able to reasonably foresee that B would act on it); and (iv) B’s actions alter his or her position such that it would be inequitable to permit A to withdraw the promise.
Sir Anthony said that the essence of an estoppel is that a party is forced to accept a legal factual position which is not necessarily the actual position. It gives effect to the erroneous belief of the person with the benefit of the estoppel because the other person has either given rise to it (usually by a representation) or has shared it (estoppel by convention where there is a shared assumption) or has himself/herself gone along with that belief without actually sharing it (estoppel by convention where one side acquiesces in the erroneous belief of the other). Estoppel by convention based on acquiescence fills a gap where a person is responsible for the belief of another without actually creating it in the first place by a representation, he said.
Mr Lydon relied on a long series of events from 2005 onwards that he said demonstrated that the parties never relied on or asserted the BMA as entitling a majority to override a minority in the grant of rights and that the parties operated on the shared assumption that the majority had no such rights, and that unanimity was required. He said that the evidence demonstrated that where one party to the BMA did not consent to the use of protected material, they were effectively able to exercise a veto on the proposed project.
However, Sir Anthony Mann found that, on the facts and the witness evidence before him, none of the incidents demonstrated assumptions and representations that would give rise to estoppel.
As for reliance, detriment and unconscionability (which Sir Anthony did not, strictly speaking, need to address given his findings on assumptions and representations, but which he did in any event as he had received submissions on the topic), Sir Anthony said that there was no real pleading as to what the detriment was. Mr Lydon applied to amend his pleading to argue that in reliance on a belief that unanimity was required, he had invested significant time and effort, on the basis that he had a veto, in considering licence applications and granting or refusing consent, and that he would not have done this had he known that he could be overruled by the majority on any issue.
Sir Anthony refused the application to amend, but still addressed the point on the evidence before him. He found that Mr Lydon’s argument lacked credibility on various levels, including in the context in which all the parties were operating. Mr Lydon’s argument presupposed that the absence of a veto by Mr Lydon meant that the others could, and would, override Mr Lydon in every transaction that they favoured, but the evidence did not show this: it did not show that the other parties would override Mr Lydon every time they disagreed. The regime the parties operated throughout was one of consultation and respect for opposing views, with the BMA in the background.
There was no other case to say that it would be unconscionable for Mr Jones to resile from any representation or assumption about the BMA (had there been any). Accordingly, Mr Jones was entitled to invoke the majority voting rules against Mr Lydon. Sir Anthony also held that the BMA contained an implied term that the parties were obliged to consent to decisions of the majority in relation to the use of The Sex Pistols material. (Steve Jones v John Lydon  EWHC 2321 (Ch) (23 August 2021) — to read the judgment in full, click here).