Fulham Football Club (1987) Ltd v Tigana
| Jurisdiction | England & Wales |
| Judge | Mr Justice Elias |
| Judgment Date | 12 November 2004 |
| Neutral Citation | [2004] EWHC 2585 (QB) |
| Court | Queen's Bench Division |
| Date | 12 November 2004 |
| Docket Number | Case No: HQ03X02751 |
[2004] EWHC 2585 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Elias
Case No: HQ03X02751
MR DAVID PHILLIPS Q.C. and MR MICHAEL DUGGAN (instructed by Kendall Freeman) for the Claimant
MR PAUL GOULDING Q.C. and MR THOMAS CROXFORD (instructed by Clifford Chance) for the Defendant
JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS)
In 1997 the well-known businessman, Mr Al Fayed, took a controlling interest in Fulham Football Club. It was at that time languishing in the Second Division of the Football League. Mr Al Fayed had, and still has, great ambitions for the Club. His aim is to make it "The Manchester United of the South". He appointed a capable and experienced manager in Kevin Keegan who took the Club to the First Division before leaving to become manager of England. Then in the summer of 2000 he appointed Jean Tigana, the Defendant in these proceedings. Tigana was steeped in the ways of football. He played international football for France; he had been a coach to two leading French Clubs, Olympique Lyonnais ("Lyon") and also AS Monaco; and he was also for a short period a football agent dealing with younger players. He was enticed away from his agency (and his vineyard in France) by the offer of the post of manager of Fulham. He was also made a director of the Club, and remained in that office for the whole period during which his contract was in force.
Initially, the relationship was highly successful. The Club was promoted to the Premier Division in Mr Tigana's first year in charge. Sadly, during the second year the relationship between Mr Al Fayed and Mr Tigana deteriorated. The principal cause appears to have been that Mr Al Fayed became disillusioned about a particular player, Steve Marlet, bought for the Club at the instigation of Mr Tigana. Mr Al Fayed strongly felt that the player was nowhere near worth the amount paid for him. He began to suspect that he had been cheated and that a number of people involved in the transfer, including Mr Tigana, had dishonestly made money out of the transfer deal. He began to investigate other transfer deals and was suspicious about the Defendant's conduct in relation to some of those also.
The breakdown of trust was manifest in a number of ways. In May 2002 Mr Al Fayed brought into the Club as Director of Football an Italian, Franco Baresi, who was to advise on the acquisition of players. That was done without Mr Tigana's knowledge and without consultation. Certain players were bought without Mr Tigana's knowledge or approval. In June Mr Al Fayed directly confronted Mr Tigana with his suspicions of the manager's dishonesty. Stories of alleged dishonesty somehow leaked into the press.
Then in March 2003, the Club made it publicly known that Tigana's contract would not be extended when it expired on June 30 th of that year. In those circumstances Mr Tigana found it difficult to retain the respect of the players and by mutual agreement he went on garden leave, as it is colloquially termed, on the 17 April 2003.He remained on garden leave until the Club purported to dismiss him for gross misconduct by a letter sent to him by fax on the 30 th June. The reason for effecting a determination in that way rather than simply letting the contract expire on that same date by effluxion of time, is that if the Claimants are justified in dismissing for gross misconduct, then the Defendant is precluded from taking the value of certain share options which were awarded to him pursuant to the contract. They are worth £2.1 million.
In this action, commenced after the Defendant's contract had terminated, the Claimants contend that the Defendant was in breach of various contractual and fiduciary duties owed to it. It is alleged that Mr Tigana caused the Club to spend more on the acquisition of two players, Edwin van der Sar and Steve Marlet, than was proper or necessary; that he took steps to facilitate the transfer of a proposed player, John Carew, in circumstances where he knew that the Claimant through its Chairman, Mr Al Fayed, had reached a settled and irrevocable decision not to proceed with that transaction; and that he subsequently provided dishonest, misleading and incomplete information to the Claimant in respect of the Marlet transfer in circumstances where he knew that it was important for him to give accurate and careful information. Fulham allege that it has suffered loss as a result of each of these various contractual breaches.
The Defendant has strenuously denied these allegations. He in turn counterclaims for sums of money which he says are contractually due and owing to him, and in particular for the benefit of the share options which he claims have been unlawfully withheld from him. It is not necessary for me to consider the counterclaim in any detail since Fulham concede that if it was not justified in summarily dismissing Mr Tigana, the counterclaim must succeed. The relevant sums are not, I understand, in dispute.
The Law.
Although there has been some conflict between the parties as to the precise nature of the Defendant's legal obligations, there has been no significant disagreement about the applicability of the legal principles ultimately relied upon by the Claimant.
The terms of the contract between the Claimant and the Defendant are set out in an agreement dated 9 th April 2000. The relevant terms, insofar as they are material, are as follows:
Clause 1.1,
The Club hereby appoints the Manager and the Manager agrees to serve the Club exclusively as Manager of the Club [from I July 2000 to 31 June 2003] in accordance with the provisions set out herein.
Clause 1.2,
The Manager shall have overall responsibility for the Team which shall include the motivation and training of players, the performance of the Team, the selection of players, recommending to the Board the buying and selling of players and liasing with other Clubs within the Football League.
Clause 1.3.
In addition to the Manager's responsibility for the Team he shall have general responsibility for the development of all football playing activities within the Club […] In particular, the Manager shall be responsible in conjunction with the Chairman of the Club for negotiating and agreeing (with Board approval) the terms of new employment contracts for the following positions within the Club:
Assistant Manager
Assistant Trainer
Goalkeeping Coach
Youth Academy Director
Chief Scout
The Manager's Personal Assistant
Clause 2.1
The Manager shall faithfully and diligently perform to the best of his abilities such duties and exercise such powers in relation to the business of the Club as are consistent with his appointment hereunder and as may from time to time be assigned to or vested in him by the Board and shall at all times and in all respects conform to and comply with the reasonable directions and regulations made by the Board.
Clause 2.2,
The Manager shall promptly and fully inform the Board (in writing if so requested) concerning the progress of his activities and duties carried out by him under this Agreement or otherwise in relation to the affairs of the Cluband provide such information and explanations as the Board may require in connection therewith
Clause 11.1.
This agreement shall be subject to immediate termination by the Club on notice in the event that the Manager shall have: -
Committed any material or serious breach of his obligations hereunder.
The Claimants also rely upon the well-established duties of good faith and loyalty implied into every contract of employment.
Fulham contends that on a proper construction of these clauses two specific duties arise. I confess that I have had difficulty in identifying clearly the scope of the first. It was that the Defendant was under an obligation, in certain rather ill-defined circumstances, personally to negotiate the appropriate transfer of a player whom he had recommended the Club to buy. In fact Mr Phillips Q.C., counsel for Fulham, did not in the event place any reliance on this duty and therefore I need spend little time on it. Suffice it to say that in my judgment it cannot be said that the contract, properly construed, imposes any general duty on the Defendant to seek to negotiate the transfer of players who have been identified as appropriate targets. The obligation to recommend the buying and selling of players goes no further, in my view, than recommending who should be bought and sold. It does not extend to negotiating or even recommending the terms of sale. The language of clause 1.2, naturally construed, does not impose such a duty, and I see nothing in the context of this agreement to give the clause an unusual meaning. Moreover, such a construction is in my opinion inconsistent with clause 1.3 which provides expressly for the circumstances when the manager has the responsibility for negotiating agreements with third parties. Nor do I see any basis for implying a term to this effect, as Mr Phillips suggested might be done. There is no universally established practice whereby managers in England always conduct negotiations so as to show that the term "goes without saying." Nor is it necessary to imply such an obligation to give business efficacy to the contract. Indeed, the evidence showed that frequently other directors would direct the negotiations for players, and that in all transfers the final word rested with Mr Al Fayed. I am inclined to accept that Mr Tigana would be under an obligation to negotiate a particular transfer if requested. However, since it is not alleged that he was in breach of any such duty, it is not necessary to explore that question further.
The second duty said to arise...
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