Full case report

Araci v Fallon

Reference [2011] EWCA Civ 668
Court Court of Appeal

Judge Jackson LJ, Elias LJ

Date of Judgment 4 Jun 2011


Summary

Sport – horseracing – jockey – 1 year retainer contract – request to ride C’s horse in Epsom Derby – anticipatory breach – contract for services – express negative obligations – injunction – whether injunction oppressive – whether damages an adequate remedy


Facts

On April Fool’s day 2011 the leading Jockey F entered into a written agreement with C to ride C’s horse NATIVE KHAN as and when requested over a 1 year period, in return for a fee and other benefits. The contract included express obligations to ride C’s horse whenever possible and not to ride any other horse as and when retained to ride NATIVE KHAN. There was a liquidated damages provision by which the parties agreed that damages for not riding C’s horse would be assessed at  “minimum £30,000 per race not ridden”. C requested F to ride the horse in the Epsom Derby on 4 June 2011. On 30 May 2011, F texted C to say that he would not. F had agreed to ride a rival horse, RECITAL, in the Derby.  C applied for an injunction to restrain F from doing so. MacDuff J refused the injunction, holding that to grant an injunction would be oppressive to the defendant, and that damages would be an adequate remedy. C appealed.


Issue

(1) Did the Judge err in principle?

(2) Was the Judge clearly wrong to refuse the injunction?


Held

(1) The Judge had correctly identified the following principles that applied to the case: (a) where there is a negative contractual stipulation, breach may be restrained by injunction as a matter of course; (b) the balance of convenience test does not apply where there  is a clear or uncontested breach of a negative covenant; (c) where the grant of an interim injunction amounts in substance to a final determination the court will take into account the relative strengths of the parties’ cases; (d) this is all subject to discretion, and relief may be refused if it would be oppressive to the defendant or cause him particular hardship.

(2)  However, the authorities showed that one qualification of those principles should be added: that where the defendant is proposing to do something he has promised not to do there must be special circumstances, such as restraint of trade contrary to public policy, before the court will exercise its discretion to refuse an injunction. Doherty v Allman [1878] 3 App Cas 709 applied; Hampstead and Suburban Properties Ltd v Diomedous [1969] 1 Ch 248 (Megarry J) approved.

(3) The Judge was wrong in law to hold that damages would be an adequate remedy. The assessment would be highly complex, and inherently incapable of arriving at a correct answer or one that did justice to C.

(4) The Judge erred in the exercise of his discretion. The factors relied on by him to justify withholding an injunction were not capable of justifying the refusal of relief in a clear case such as the present.


Comment

The Court of Appeal applied long-established principles. When a person promises, for good consideration, not to do something the court will usually prevent him from reneging on his contract. Some comment in the media suggested that it is custom and practice for jockeys to retain freedom to choose their ride until the time comes for a formal declaration. But in this case there had been an express written agreement which was to last 12 months, and in return for his promises the jockey had got £10,000 “plus a number of additional benefits, some of substantial value” (para [11]). As Jackson LJ said, ([65]), “There is nothing special about the world of racing which entitles the major players to act in flagrant breach of contract.”


Instructing Solicitors

Regnum for C; Stewart Moore for F