Coulthard v Disco Mix Club Ltd
| Jurisdiction | England & Wales |
| Date | 1999 |
| Court | Chancery Division |
Limitation of Action - Trust - Action for account - Principal claiming account of money received by agent - Wilful under-accounting by agent - Claim alleging deceit at common law, breach of fiduciary duty and breach of trust - Whether equitable claim subject to same limitation period as common law claim - Whether money due under account trust property -
In September 1997 the plaintiff issued a writ making various claims against the defendants based on a series of management and agency agreements allegedly entered into from 1982 to 1994 between the plaintiff in his capacity as a disc-jockey and one or more of the defendants for the commercial exploitation by them of remixed sequences of popular songs prepared and recorded by the plaintiff. That was achieved mainly through the creation of a subscription service, whereby other disc-jockeys would receive exclusive mixes together with a magazine in exchange for a monthly subscription, which business was initially set up in partnership by the plaintiff, the second defendant and the third defendant, and was incorporated in September 1983 as the first defendant company. Several of the mixes were also released by record companies. The principal complaint involved allegations of under-accounting, some of it deliberate, in respect of sums allegedly due to the plaintiff under those agreements. That allegation formed the basis of a number of claims for breach of duty to account, fraudulent breach of contract, breach of fiduciary duty and deliberate and dishonest breach of fiduciary duty. The plaintiff also claimed that, as a result of the pleaded wrongdoing, two of the defendants were liable to account as constructive trustees for certain moneys in their hands. The defendants denied the claims and contended that the plaintiff's claims were in any event barred by section 5 of the Limitation Act 1980.F1
On the first and third defendants' application to have the plaintiff's writ and statement of claim struck out as speculative, vexatious or having no reasonable prospect of success:—
Held, granting the application, (1) that, unlike the true fiduciary duties of loyalty and fidelity, a simple duty to account, even when owed by a person in a fiduciary position, gave rise to a purely contractual claim which was subject to the six-year limitation period set by section 5 of the Act of 1980; and that, accordingly, in so far as they fell outside that limitation period, the plaintiff's claims for simple under-accounting were statute-barred (post, pp. 728A–G, 733E–F).
(2) That by operation of section 36 of the Act of 1980 equitable claims which were broadly analogous to claims available at common law were subject to the same statutory limitation periods even if the equitable claim offered a wider range of remedies; that, where, therefore, an allegation of breach of fiduciary duty was grounded on the same facts as a common law claim for fraud, the equitable claim was subject to the same limitation period; that a claim for constructive trust which was merely a formula for providing for equitable relief, rather than a claim for breach of trust against a person who had assumed the duties of a trustee over trust property, was likewise subject to the same limitation period as the analogous common law claim; that, whilst the pleaded allegations of deliberate and dishonest breaches of trust were true breaches of fiduciary duty, they were simply the counterparts in equity of the parallel allegations of fraud at common law; that, moreover, the absence of any trust property meant that the commercial relationship between the parties was not one of trustee and beneficiary, and gave rise only to personal claims; and that, accordingly, those equitable claims were subject to the six-year time limit under section 5 of the Act of 1980 and in so far as they fell outside that limitation period would be struck out (post, pp. 730A–E, 731H–732D).
The following cases are referred to in the judgment:
Attorney-General v. Cocke [
Attorney-General v. Guardian Newspapers Ltd. (No. 2) [
Bristol and West Building Society v. Mothew [
Clarkson v. Davies [
Hicks v. Sallitt (
Hovenden v. Lord Annesley (
Kelly v. Cooper [
Kershaw v. Whelan (No. 2), The Times, 10 February 1997
Knox v. Gye (
Nelson v. Rye [
Paragon Finance Plc. v. D. B. Thakerar & Co. [
Selangor United Rubber Estates Ltd. v. Cradock (No. 3) [
Soar v. Ashwell [
Taylor v. Davies [
No additional cases were cited in argument.
Summons
By a writ issued on 3 September 1997 the plaintiff, Alan Terence Coulthard, made a number of claims against the first defendant, Disco Mix Club Ltd., the second defendant, Christine Whitehead (professionally known as Christine Prince), the third defendant, Thomas Richard Whitehead (professionally known as Tony Prince), the fourth defendant, Gabrielle Caroline Whitehead, and the fifth defendant, Daniel Jason Whitehead, (the fourth and fifth defendants being the children of the second and third defendants). In particular the plaintiff claimed: (1) 10 per cent. of the proceeds of sale of Disco Mix Club Holdings Ltd. and a further 10 per cent. of the gross income of a subscription business allegedly set up as a partnership between the plaintiff and the second and third defendants; (2) alternatively, a declaration that an agreement of May 1983, under which the plaintiff was entitled to 10 per cent. of the gross income from that subscription business, be set aside by reason of the undue influence of the third defendant; a claim to a partnership in the subscription business, a dissolution of that partnership and the usual accounts and inquiries; (3) a declaration that various purported amendments to the agreement of May 1983 which reduced the plaintiff's remuneration thereunder were void or voidable or amounted to a repudiatory breach which was accepted by the plaintiff thereby terminating that agreement and withdrawing any implied licence permitting the defendants to use the plaintiff's confidential information, copyright and performers' rights in the mixes produced by him; (4) damages, alternatively an account, in respect of breaches of confidence committed by the second and third defendants; (5) damages for breach of contract or breach of fiduciary duty in relation to management agreements of 1982 and 1988 and an agency agreement of 1992; (6) an account for a breach of fiduciary duty of loyalty by the third defendant in allowing his interest in the first defendant company to conflict with his duty to the plaintiff as his manager; (7) an account in respect of a deliberate and dishonest beach of fiduciary duty by the first defendant in taking a commission in excess of the 25 per cent. agreed under the 1988 management agreement; (8) an account, alternatively damages, for deliberate and dishonest breach of fiduciary duty or contract by the first and third defendants in relation to the commercial release of a number of the plaintiff's mixes; (9) an account for a deliberate and dishonest breach of fiduciary duty by under-accounting to the plaintiff for royalties owed in respect of various mixes; (10) a general account by reason of the wilful default of all sums due under the 1982 and 1988 management agreements also the 1992 agency agreement in relation to all the mixes produced by the plaintiff on the basis that no proper accounts were made or rendered, alternatively on the basis that such accounts as were made or rendered should be reopened by reason of fraud; (11) a declaration that the second defendant received trust property as a result of the breaches of fiduciary duty committed earlier knowing or believing the same to have resulted from breaches of fiduciary duty, or knowingly procured or assisted in some or all of the said breaches, and was therefore liable to account to the plaintiff as a constructive trustee; (12) damages for infringement of copyright or performers' rights in relation to the mixes referred to in the statement of claim; and (13) damages for infringement of copyright or performers' rights in relation to 146 mixes produced by the plaintiff, in which the plaintiff claimed copyright and performers' rights, which were released by the first defendant as part of compilation recordings of back catalogue “greatest hits” in breach of any licence implied to give effect to the earlier management or agency agreements.
The first and third defendants applied to strike out the plaintiff's claim under
The facts are stated in the judgment.
Adrian Speck for the first and third defendants.
Stephen Bate for the plaintiff.
1 March 1999. Jules Sher Q.C. handed down the following judgment. This is an application to strike out the writ and...
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...with those observations. 139 The defendants refer to the decision of Mr Jules Sher QC in the case of Coulthard v Disco Mix Club Limited [2000] 1 WLR 707 at 728 E to F. There the deputy judge said that: “… the simple duty to account, central though it is, is not a fiduciary duty. It is a co......
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