Court of Appeal

Published October 30, 2009

Joseph and Others v Spiller and Another

Before Lord Justice Pill, Lord Justice Hooper and Lord Justice Wilson

Judgment October 22, 2009

Where terms in an agency contract were unlawfully contained in a separate document to the main contract, that breach did not necessarily operate to render the entire contract, or even the terms themselves, unenforceable.

The Court of Appeal so held when allowing, in part, the appeal of the defendants, Jason Spiller and 1311 Events Ltd, from the decision of Mr Justice Eady, who, sitting in the Queen’s Bench Division ([2009] EWHC 1152 (QB)) in an interlocutory application in a defamation suit by the claimants, Craig Joseph, Jason Joseph and Anthony Raymond, members of a band, The Gillettes, struck out, inter alia, parts of the defendants’ defence of justification.

The claimants had entered into a contract, online, with 1311 Events, the second defendant company, which provided entertainment booking services.

The principal contract referred to a separate document containing terms and conditions, including a re-engagement clause which provided that the client and artist agreed that any subsequent bookings of an artist provided by the company had to be made through the company, and not with the artist directly.

In alleged breach of that term, The Gillettes performed a second concert for a client, after being contacted directly by the hirer without reference to 1311 Events.

On discovering the booking, Mr Spiller, the first defendant, a director of 1311 Events, published a statement on the company’s website alleging that the claimants “are not professional enough to feature in our portfolio and have not been able to abide by the terms of their contract”.

The claimants commenced defamation proceedings seeking general and special damages, and the defendants served their defence, raising justification, fair comment and qualified privilege.

The judge at the interlocutory application struck out the defences of fair comment and qualified privilege and ordered that those parts of the amended defence of justification which relied on the breach of the reengagement clause be struck out. The defendants appealed in relation to justification and fair comment.

Mr Paul Epstein, QC and Mr David Price, solicitor, for the defendants; Mr William Bennett for The Gillettes.

LORD JUSTICE PILL said regulation 14(2) of the Conduct of Employment Agencies and Employment Business Regulations (SI 2003 No 3319) was included primarily as a safeguard for artists against oppression or obscure arrangements proposed by agents, and a criminal sanction was contemplated.

However, it was difficult to find an intention to exclude civil remedies, for example, a claim for commission on a completed engagement, upon a breach of the regulation.

It was also difficult to extract an intention of Parliament that a contract might be enforceable in part, that was, that the obligations in the principal document were enforceable but those in a subsidiary document were not.

The question of whether the re-engagement clause was unenforceable because it was contained in a separate document was to be determined upon the test expressed by Mr Justice Devlin in St John Shipping Corporation v Joseph Rank Ltd ([1957] 1 QB 267, 287): where a contract had as its object the doing of the very act that was prohibited by legislation, did the legislation in fact mean to prohibit the contract?

The court would be very slow to hold that legislation intended to interfere with the rights and remedies given by the ordinary law of contract.

Applying that test, the failure to put the re-engagement clause in the principal document did not render either it or the contract as a whole unenforceable.

The appeal against the striking-out of parts of the justification defence was therefore allowed. The appeal against the striking-out of the fair comment defence was dismissed on the facts.

Lord Justice Hooper and Lord Justice Wilson agreed.

Solicitors: David Price Solicitors & Advocates; Howard Kennedy.

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