Crystal Palace v Dowie

Crystal Palace Football Club (2000) Ltd v Dowie [2007] EWHC 1392

Contract – Misrepresentation – Fraud – Rescission – Remedy – Terms – Employment Contract

Facts

The defendant, Mr Dowie, was a football manager for the complainants, Crystal Palace Football Club. In the terms of his employment contract, it stated that he would pay £1,000,000 to the football club if he left his post before the end of the contract and joined a premiership football club. When Crystal Palace Football Club did not achieve promotion, the defendant had discussions about his contract with the chairman. Mr Dowie said that he wished to leave, so he could be closer to his family. Due to this reason, the parties made a compromise agreement where his contract would be terminated, but he would not have to pay the compensation fee. However, he was later made the new manager of a premiership team.

Issues

The complainants argued that they had been deceived by the defendant and there was fraudulent misrepresentation. The issue in this case was whether the agreement that was made could be rescinded. 

Decision/Outcome

The court held that Mr Dowie had made a fraudulent misrepresentation. However, in this situation, it was not so straightforward to simply rescind the agreement. This would mean he would be employed by two football clubs, as this would restore his old contract. This would be unfair on the defendant’s new club. Thus, the court held that it was appropriate for Mr Dowie to pay damages to Crystal Palace Football Club for the compensation fee they would have received by him joining a premiership club.