The court was concerned with a long-term management contract for the Dorchester Hotel between Regent as managers and Pageguide. When Regent sold the hotel to Pageguide the management contract would continue and be novated (with some amendment) as between Regent and Pageguide. Pageguide sought to cancel the management contract alleging serious and fundamental breach. Injunctive relief was granted restraining Pageguide ‘from taking any steps to prevent or hinder [Regent] from performing their function of the management and operation of the Dorchester Hotel in accordance with the management agreement’. It was conceded that there was no rule of law precluding specific performance, but counsel for Regent identified principles based on public policy, fairness and practical convenience which militated against the relief sought. Under the heading of public policy, he identified both moral and economic grounds, referring in each context to the breakdown of trust and confidence which Pageguide was asserting.
Held: The Court of Appeal refused to accept counsel’s argument that no injunction was appropriate because there had been a breakdown of trust and confidence was that this was in issue. Regent’s case was the Pageguide was acting cynically and in bad faith, for pure financial or business motives. But the court also said this: ‘Leaving aside the factual issue as to whether Pageguide would be able to establish that they have lost confidence in the Regent companies, in regard to which there is, in my judgment, a serious question to be tried, this action raises the further serious question, as yet unresolved by English authority, as to the extent to which a commercial arrangement of this kind between two independent companies, which does not provide for the employment of any named individuals and is part of a larger package including the sale of the hotel itself, can be properly treated as analogous to a contract of personal service. There are, however, two commonwealth decisions, one from Canada and one from Singapore, both of which were concerned with attempts by hotel owners to terminate long-term management contracts and in both cases the courts granted interlocutory relief. The Canadian case went to the Court of Appeal of Montreal which affirmed the decision: Loewess Hotel Montreal v Concordia City Properties [1979]. In the Singapore case, Holiday Inns v Holiday Enterprises [1975] the court expressly contemplated that specific performance was available.’
Citations:
Times 13-May-1985, Unreported, 10 May 1985
Jurisdiction:
England and Wales
Cited by:
Cited – Warren v Mendy CA 1989
A boxing manager and promoter sought injunctive relief to restrain the defendant from interfering with a management contract between himself and B, a talented young boxer, and from acting for B in B’s professional career. B was at his request joined . .
Cited – Lady Navigation Inc v Lauritzencool Ab and Another CA 17-May-2005
The shipowner appealed the award against them of an injunction requiring them not to act inconsistently with a time charterparty. The company said that such a form of order was improper.
Held: The existence of the contract to do what was . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice, Contract
Updated: 02 June 2022; Ref: scu.225449