Joseph and others v Spiller and another [2009] EWCA Civ 1075; [2009] WLR(D) 306

Where a contract term was contained in a separate document to the principal contract, thereby contravening reg 14(2) of the Conduct of Employment Agencies and Employment Business Regulations 2003 (SI 2003/3319), that breach did not operate to render the term or the contract as a whole unenforceable.

The Court of Appeal so held when allowing, in part, the appeal of the defendants, Jason Spiller and 1311 Events Ltd, against the decision of Eady J ([2009] EWHC 1152 (QB)), dated 22 May 2009, whereby, in defamation proceedings brought by the claimants, Craig Joseph and others, he allowed, in part, the claimants’ interlocutory applications and struck out parts of the defendants’ justification defence.

The claimants, members of a musical group, entered into a contract with the second defendant, a company which provided entertainment booking services. A “re-engagement clause”, contained in a document separate to the main contract, specified that “the client and artist agree” that any subsequent bookings of an artist provided by the company had to be made through the company and not with the artist direct. In purported breach of that term, the claimants were booked for a concert directly by the client. Upon discovery of that booking, the first defendant, a director of the company, published a statement on the company’s website which alleged, inter alia, 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 damages and special damages in respect of two engagements said to have been cancelled by hirers who had read the words complained of. In an interlocutory judgment, the judge, inter alia, struck out parts of the defence of justification that relied on a breach of the re-engagement clause on the ground that that clause was unenforceable by virtue of reg 14(2) of the 2003 Regulations.

PILL LJ said that reg 14(2) was included primarily as a safeguard for artists against oppressive or obscure arrangements proposed by agents, and contemplated a criminal sanction. However, an intention to exclude civil remedies, for example a commission on a completed engagement, should not, necessarily, be attributed to a breach of the regulation. Moreover, it was difficult to extract an intention of Parliament that a contract might be enforceable in part, that is, 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 had to be determined upon the test in St John Shipping Corp v Joseph Rank Ltd [1957] 1 QB 267, 287, per Lord Devlin, ie whether the legislation meant to prohibit the contract as a whole. 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, by reason of the breach as such. There was no clear implication in the 2003 Regulations that either the clause, or the contract as a whole, should be unenforceable for a breach of reg 14(2). The appeal on the issue of regulation 14(2) would therefore be allowed.

HOOPER LJ and WILSON LJ agreed.