Facts
Iain Dowie managed Crystal Palace. His employment contract contained a clause requiring £1 million in compensation if he left early and took certain jobs with another football club. After Crystal Palace failed to win promotion, Dowie said he wanted to move nearer his family in the north of England. Crystal Palace agreed to terminate the contract without insisting on that clause. Dowie subsequently joined Charlton Athletic.
Issue
Did Dowie make fraudulent representations that induced Crystal Palace to enter the compromise agreement, and should that agreement be rescinded?
Decision
The High Court held that Dowie’s initial statements about his family reasons had not been false when made. But he later knowingly misrepresented his contacts with Charlton and, by implication, his intentions about joining it. Those misrepresentations induced Crystal Palace to enter the agreement.
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The court refused rescission. It was impractical to revive the original employment contract and impossible to revive the compensation clause on its own. The judge considered that financial relief could be adapted to do justice, but this judgment did not fix damages or order payment of the £1 million.
Reported citations: [2007] IRLR 682
Source: Full judgment
