Crystal Palace FC (2000) Ltd v Dowie [2007] EWHC 1392 (QB)

[2007] EWHC 1392 (QB)Case No TLQ/07/0199
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 14/06/2007
Before
MR JUSTICE TUGENDHAT
Between
CRYSTAL PALACE FC (2000) LIMITEDClaimantIain DowieDefendant
Mr John Davies QC and Mr Stuart Ritchie (instructed by Fladgate Fielder) for ClaimantMr Michael McParland and Mr Paul Toms (instructed by CMS Cameron McKenna) for DefendantHearing Hearing dates: 9th -11th and 14th -18th and 22nd May 2007
JudgmentMr Justice Tugendhat :
[1]Crystal Palace Football Club (“Palace”) and Charlton Athletic Football Club (“Charlton”) are among the most famous professional football teams in England. Palace plays at Selhurst Park Stadium and Charlton plays at The Valley, both in South London. From 26th December 2003 the Defendant, Mr Dowie was Manager of Palace under an Employment Contract terminating on 30th June 2008. In the season ending May 2006 Palace was playing in the Championship League, which is the second tier of the English professional game. On 9th May 2006 Palace played Watford FC in the second leg of the play-off semi finals to win promotion to the Football Association Premier League, otherwise known as the Premiership. They drew 0-0. They had lost 3-0 to Watford in the first leg, and so failed to achieve promotion. This was a great disappointment to Palace. Mr Dowie’s early departure from Palace was announced at a Press Conference on 22nd May. On 30th May 2006 Mr Dowie was appointed Manager of Charlton. Mr Dowie’s appointment as manager at Charlton was announced at another Press Conference held at The Valley also on 30th May 2006.[2]Since 2000 the proprietors of Palace have been the claimant company (“the Club”). Mr Simon Jordan owns the majority of the shares in the Club and is the Chairman. He was the youngest chairman of a Premiership club for the one year when Palace played in that League. That was in the 2004-2005 season. He has for some time been the youngest chairman of a Championship club. He made a fortune in a mobile phone business, which he sold while he was still in his early thirties. He invested some of his money in acquiring Palace from the team’s previous owner, which had gone into administration.[3]Before becoming a manager, Mr Dowie had had a successful career as a professional international footballer, including playing for Palace. He had also obtained a Master’s Degree in Engineering. He came to Palace as a manager from being manager at Oldham. That was a club in Division 1 which went into administration. He had previous experience as a caretaker manager at Queen’s Park Rangers.[4]The termination of Mr Dowie’s employment by the Club was in a written agreement (“the Compromise Agreement”). It was signed by himself and Mr Jordan at about 4pm on 22nd May 2006, shortly before the Press Conference held to announce the fact that he was leaving Palace.

THE DISPUTE

[5]The main allegation in these proceedings is that Mr Dowie made oral representations to Mr Jordan which were false and which were intended to and did induce Mr Jordan to sign the Compromise Agreement. Those are the only issues of fact which I have to decide in this trial. This is the trial of two preliminary issues which Master Miller ordered at a case management conference on 9th February 2007. The issues are:
“a) Whether or not the [Club] entered into the Compromise Agreement dated 22nd May 2006 on the basis of alleged fraudulent representations by [Mr Dowie] in the terms set out in paragraphs 1-3 (a)-(b), 5-22 of the Particulars of Claim; and b) whether, if the answer to issue (a) is “yes”, the Compromise Agreement dated 22nd May 2006 should be rescinded in accordance with paragraph 24(a) of the Particulars of Claim and paragraph 1 to the Prayer thereof”
[6]The word “fraudulent” in law embraces a wide range of conduct, including deceit. In this case the allegation is that Mr Dowie deceived Mr Jordan into releasing him from the Employment Agreement. In paras 5-22 of the Particulars of Claim the Club alleges that Mr Dowie made the false representations in the course of telephone conversations with Mr Jordan on 10th, 16th (by agreed amendment) and 20th May. The Club alleges that prior to the signing of the Compromise Agreement on 22nd May, and at the latest at that time on 22nd May, Mr Dowie knew that each of the representations was false. In its Reply the Club alleges that on 22nd May, before signing, and in response to a question from Mr Jordan, Mr Dowie again stated that he had no intention of going to Charlton.[7]The representations which the Club alleges Mr Dowie made, and the respects in which it alleges they were false, are that Mr Dowie; 1. Intended to leave Palace to move to the North of England for family reasons, whereas he did not intend to leave Palace for geographical reasons; 2. That this reason was the only reason for his wishing to leave Palace, whereas this was not the sole reason, the operative reason being to join Charlton; 3. Mr Dowie had had no contact with Charlton, whereas he had had contact with Charlton; 4. Mr Dowie had not been invited to attend an interview with Charlton, whereas he had been invited to attend an interview with Charlton; 5. Mr Dowie had no present intention to join Charlton, whereas he had a present intention to join Charlton.[8]The dispute is a bitter one. The terms of it were vividly expressed during the cross-examination of Mr Jordan by Mr McParland, who appeared on behalf of Mr Dowie. “MR MCPARLAND At the end of the day, Mr Jordan, you are a commercial man, you would like to get some money from Mr Dowie if you think you could? MR JORDAN I am a commercial man who was prepared to waive £1m worth of compensation on the basis of goodwill and human interest, who was lied to and duped and I don't take very kindly to it”.[9]Later Mr McParland put Mr Dowie’s case to Mr Jordan in this way:
“MR MCPARLAND Mr Jordan, you have not been a victim of any fraudulent misrepresentation, …What you have been the victim of is your own Machiavellian attempts to get money out of Charlton Athletic, and the victim of your own persistent abuse of Iain Dowie for your own purposes?”
[10]Palace and Charlton are, of course, rival clubs. But the rivalry in 2006 was much more than is normal between football clubs. A number of incidents had occurred in the previous seasons, all of them regretted by the individuals involved, as a result of which the personal relationships between the two chairmen were very poor indeed. In addition, on 15th May 2005 Charlton had equalised in the last few minutes of the second half, dashing Palace’s hopes of retaining a place in the Premiership. That was the last game of the season. It was played at The Valley, and Charlton supporters had demonstrated delight in Palace’s relegation from the Premiership. Mr Jordan and all those at Palace, and their fans, were still smarting at the insult a year later.[11]Mr Murray is the Chairman of Charlton Athletic Plc and its largest shareholder. He is also Deputy Chairman of its wholly owned subsidiary which operates Charlton. Mr Murray holds a number of important positions. He is a member of the Audit Committee of the Premier League. In 1983 he set up a company which provides specialist audio visual services to other companies, including those in sports and entertainment. The company was floated on the London Stock Exchange. He holds a number of other directorships.[12]The Claim Form was issued on 30th May 2006, the day of the Charlton press conference. Mr Jordan arranged for a process server to attempt to serve it on Mr Dowie at the Charlton Press Conference. That was filmed live on Sky TV, who had been tipped off by Mr Jordan. This gave the maximum possible publicity to the fact that he was claiming to have been deceived by Mr Dowie. It was also felt by Charlton and by Mr Dowie to be very damaging to them. Mr Murray attributed Mr Dowie’s disappointing performance at Charlton, and his early departure from Charlton later in the year, to Mr Jordan’s publication of his claims, not only at the Charlton press conference but also on other subsequent occasions.[13]At the Palace press conference the week before, Mr Jordan had given as the main explanation for Mr Dowie’s departure that Mr Dowie wanted to move back to the North to be with his wife and two young sons. Mr Dowie said that the family issue had been a problem but went on to say that it was also, may be, time for a different challenge. These explanations were not necessarily contradictory, and neither Mr Jordan nor Mr Dowie challenged the other, either in public or, afterwards, in private. But a well informed journalist asked Mr Jordan if he would be disappointed if Mr Dowie turned up down the road at Charlton. Mr Jordan referred to what he had said before. He referred obliquely to his enforcement in 2001of the contract of a previous manager, Mr Stephen Bruce: Crystal Palace FC (2000) Ltd v Bruce Burton J (unreported 22nd November 2001). He said that if Mr Dowie was out of work in six months time, then “the man is entitled to work”. He said that his conversations with Mr Dowie were private. He then said “You know my motivation is I can’t work with someone that’s not necessarily going to be here from one day to the next”. Finally he answered the question by saying: “… if Iain walks out of here and walks down the road to Charlton, am I going to be amused with him? No, I don’t think he would expect me to be. But also, by the same token, you know, I have waived my right for compensation, you pay your money, you take your choice, you rely on people’s integrity”.[14]Mr Dowie responded that he wanted to clarify what Mr Jordan was saying on what he called “the last point”. In fact Mr Dowie did not clarify that point. It was the second last point he clarified, his not going to be there from one day to the next. Mr Dowie said he had been “totally committed” at Palace. Mr Jordan agreed that, if he had not been leaving, Mr Dowie would be 100% committed to the job so long as he was there. Mr Dowie declined to answer questions about other clubs.[15]On the Club’s case, within a week Mr Jordan felt that he had been made to look a fool.

THE LAW

[16]The law on the tort of deceit is not in issue in this action. It can be taken from Clerk & Lindsell on Torts 19th Ed ch 18. The general principle (so far as material) is that where a defendant makes a false representation, knowing it to be untrue, and intends that the claimant should act in reliance on it, then in so far as the claimant does act in reliance on it, and suffers loss, the defendant is liable for that loss.[17]In this case there is a claim for damages for the tort of deceit, but that is not the primary claim. The primary claim is for rescission of the Compromise Agreement. The general principle of rescission is that where a person (the claimant) has been induced to enter into a contract as a result of a fraudulent misrepresentation by the other contracting party (the defendant), the claimant may rescind the contract, or claim damages, or both. Rescission is the legal term for the retrospective avoidance of a contract. It takes effect as from the time when the contract was made, so that the contract is deemed not to have been made at all. So, for example, where the contract is for the sale of goods, rescission has the effect of revesting any property transferred in the transferor who is the victim of the fraud. See Chitty on Contracts 29th ed paras 6-103, 6-111. I shall consider the law on rescission in more detail below. But whether the claim is for rescission of a contract, or for damages, the principles as to what has to be proved to establish fraudulent misrepresentation or deceit are the same, so far as relevant to this case.[18]The claimant must prove that the defendant has made a clear representation of present fact. But the representation may be either express or implied from conduct. A half truth may amount to deceit if it is suggestive of a falsehood and intended so to be. A representation by the defendant of his present intentions may be a sufficient representation of an existing fact to found a claim in deceit. Whether a person does, or does not, intend to act in a certain way is a question of fact. So a statement as to the future may imply a statement as to present intention.[19]A defendant who has made a statement that was true at the time it was made is bound to correct it if, after it is made, but before the parties enter into the contract in question, the statement is falsified by events to the defendant’s knowledge. A representation is said to be continuing. The tort of deceit is complete only when the representation is acted upon. The representation is deemed to be repeated throughout the interval between the time when it is made and the time when it is acted upon. So if it is false to the maker’s knowledge at the time when it is relied on, and has not been corrected, there will be the tort of deceit at the time it is acted upon.[20]In relation to the statutory right to rescind for innocent misrepresentation, it has been said that the representation bears the meaning in which it would reasonably be understood by the claimant, that is to say, the natural and ordinary meaning which would be conveyed to a normal person (Spice Girls Ltd v Aprilia World Service BV [2002] EWCA Civ 15; [2002] EMLR 510 at [67] Morritt V-C). This is also true of deceit or fraudulent misrepresentation. But where a statement is capable of being understood in more than one sense, it is essential for the claimant to prove that the defendant intended it to be understood in its untrue sense, or at the very least that he should have deliberately used the ambiguity for the purpose of deceiving the claimant: Clerk & Lindsell para 18-23. The law is stated in Akerhielm v De Mare [1959] AC 789, 805 as follows:
“The question is not whether the defendant in any given case honestly believed the representation to be true in the sense assigned to it by the court on an objective consideration of its truth or falsity, but whether he honestly believed the representation to be true in the sense in which he understood it albeit erroneously when it was made.”
[21]It is not necessary that the misrepresentation should be the sole cause which induced the claimant to make the contract. It is sufficient if it can be shown to have been one of the inducing causes: Chitty on Contracts 29th ed para 6-033.[22]Mr Davies QC, who appeared for the Club, accepts that an allegation of deceit is a serious one. These are civil proceedings, and so the standard of proof is the ordinary civil standard, namely proof on the balance of probabilities. But in such circumstances a court will normally approach the case on the footing that the more serious an allegation, the less likely it is that what is alleged in fact occurred, and the stronger the evidence should be that is required to proved that it did occur. See Re H (Minors) [1996] AC 563, 586-7. That this is the proper approach in law is not in dispute. I apply this standard in reaching my findings on the disputed issues of fact in this case.

MR DOWIE’S EMPLOYMENT CONTRACT

[23]The employment contract which was in force in 2006 was one which the Club had entered into with Mr Dowie dated 14th July 2004, although signed later. In July 2004 Palace had just achieved promotion to the Premiership at the end of the first season under Mr Dowie as manager. As is well known, Premiership clubs benefit from very substantial financial advantages flowing from the television broadcasting contracts through which people all over the world are able to watch English football. The Club received a sum in excess of £19 million on Palace’s promotion to the Premiership in the 2004-2005 season, and over £7 million in what are called “parachute” payments over the seasons 2005-6 and 2006-2007. Such income permits generous rewards to be paid to the players and managers, as well as profiting the owners of the clubs. Mr Dowie’s remuneration was greatly increased in his 2004 Employment Contract.[24]There are a number of provisions of Mr Dowie’s 2004 Employment Agreement which cast light on why the parties entered into the Compromise Agreement in the way they did. Mr Dowie could terminate his employment at any time by giving not less than nine months notice to expire on 31st May in any season. But if Mr Dowie exercised that right, then the agreement included various consequential provisions, including, what is commonly known as a Garden Leave Clause. This provides that the Company may keep the employment in being for the period of the notice (thus preventing the manager taking another job for that period). The club is obliged to pay the agreed remuneration if it does this, but is not obliged to provide the manager with work. In the 2001 case the Court had granted the Club an injunction to enforce a similar garden leave clause against Mr Bruce, who was appointed Palace’s manager in June 2001, and who had given short notice to Mr Jordan, because he wanted to be considered for the manager’s job at Birmingham. So, if Mr Dowie contemplated resignation in accordance with the contract, that course would have serious disadvantages for him.[25]The clause in the contract which was at the centre of this dispute was the Compensation Clause. It reads as follows: “2.2.3 If [Mr Dowie] should leave the company and gain employment at any Football League Club or Premiership Football Club before 30 June 2008, the [the Club] will receive a compensation payment of £1,000,000 (one million pounds) on the day employment commences with the new club”.[26]I heard evidence of other clauses of this nature. One commercial purpose of such clauses is to encourage stability by making it expensive, and so to be a disincentive, for managers to leave prematurely. Managers are team leaders. When a manager leaves one club and goes to another he may want to bring some members of his team with him, as Mr Dowie did with Mr Harbin, a fitness coach. So the club which a manager leaves may lose a number of vital staff at one go, and have to recruit others unexpectedly. I make no finding as to whether the Compensation Clause is enforceable in law, since that is not one of the issues ordered to be tried at this stage.[27]Mr Dowie’s contract of employment also included a series of standard clauses required by the League (they were added by amendment on 18th November 2004). One of these was that Mr Dowie should observe and comply with the rules and regulations of the Football Association and the League and he should at all times act in accordance with the League’s code of conduct for Managers. Rule Q.1 of the Code Of Conduct provides: “A Manager shall strictly observe the terms of his contract with his Club and shall not (either by himself or through any third party) enter into negotiations with another Club relating to his employment without having first obtained the permission of his Club to do so”.[28]This standard clause, and the Code of Conduct, also present difficulties to a manager who might wish to go to a new club at a time when he is under contract to another club. They present corresponding difficulties to a club which needs to recruit a manager and would like to recruit one who is currently employed by another club.[29]The result is that the recruiting of a new manager can involveboth clubs and candidates engaging in something akin to a courting ritual. A manager will hesitate to inform his existing Club that he wants to be considered by another club. Clubs need stability in their managers and players, and such an announcement can seriously undermine the relationship. It is a risky thing for a manager to do at a time when, by the Code, he cannot yet have negotiated a deal with the new club - all the more so if the current relationship is a rocky one.[30]So too, if a club is contemplating a proposal to a manager who is under contract to another club, it will not normally want to go straight to that manager’s club before raising its interest directly with the manager first. The recruiting club will first want to have an idea whether the manager is likely to be receptive to the proposal. When a club does approach another club asking for permission to negotiate, the club whose permission is sought may well impose a price. It may grant permission, but only on terms that the requesting club agree to pay compensation in the event that the manager leaves. That is what happened on two occasions I heard about. Charlton did approach Hull City FC on 11 May to ask permission to negotiate with Mr Peter Taylor, having first arranged a meeting on about 30 April between their Chairman Mr Murray (together with others) and Mr Taylor for afternoon tea at the home of a friend. Charlton agreed to pay Hull up to £300,000 in the event that Charlton made an offer to Mr Taylor. And Mr Jordan agreed to pay Hull City FC compensation before they could negotiate with Mr Peter Taylor for him to take Mr Dowie’s place at Palace, as he subsequently did.[31]For the avoidance of doubt I must make clear that when I express views on the meaning or requirements of the Code of Conduct, I am expressing them only in so far as the provision in question is a term that has been incorporated into the contract between the Club and Mr Dowie. That is the only contract before me. I am not making any rulings on the Code in so far as it may apply to anyone else. Where I refer to the Code of Conduct in relation to Charlton, or any club other than Palace, it is to set out what I find as a fact the individuals concerned at those clubs understood the Code to require. That is not a ruling that their understanding was right, or wrong, in law.[32]Arranging an informal meeting is one way for a recruiting club to find out if the manager is likely to be receptive. The meeting may be, either genuinely, or ostensibly, to discuss some matter of mutual concern. Football is a small world, where many people have links of friendship or acquaintanceship. Another way for managers to make known their availability, and for clubs to make known their interest, is through intermediaries. There exists in football a number of people who act as agents for introducing players and managers to clubs, and whose skills are sometimes engaged by clubs looking for managers. But intermediaries can themselves raise difficulties. A club may not know whether a person purporting to communicate the availability of a manager or player really has that person’s authority, or whether the exercise is kite flying. And if a club responds to an approach from an intermediary, the intermediary will be likely to ask for a substantial fee, if and when a deal is done.[33]Mr Dowie’s remuneration under the 2004 agreement reflected the achievement of Palace in obtaining promotion and the value of that to the Club. His basic salary for the period to 30th June 2005 was to be £750,000. It had been £185,000 for the period up to 30th June 2004. If Palace were playing in the Premier League for the 2005-2006 season, the salary was to rise to £875,000. If Palace were playing in the Premier League for the 2006-2007 season, it was to rise to £1,000,000 per year. If Palace were playing in the Premier League for the 2007-2008 season it would rise to £1,200.000. On the other hand if Palace were to be demoted from the Premier League (as in fact happened) the salary would reduce to £500,000 and remain at that level for any period the team were playing in the Football League.[34]There are numerous provisions for bonuses varying from £50,000 to £500,000 for various specified achievements by the team. There is also a provision which reads:
“4.1.4 In the event that the [Club] sell a player [Mr Dowie] has brought to the team and the sale occurs before the end of this Agreement [Mr Dowie] will receive 5% of any net profit the [Club] makes from the sale”
. Other benefits include a contribution towards a pension, school fees and the like. The agreement contemplates (at clause 5.8) that other benefits might be provided and states that, if they are provided, and are not expressly referred to in the agreement, then they shall be at the entire discretion of the Company and shall not form part of the conditions of employment. Mr Jordan did provide discretionary benefits, and one which figured prominently in the dispute that has arisen is the provision of the cost of the air tickets for Mr Dowie to fly home to see his family on Saturday nights.

THE COMPROMISE AGREEMENT

[35]The Compromise Agreement is a two page document. It was provided to Mr Dowie in draft by the Club in a form which the Club had used for a player in the recent past. The draft was amended on Mr Dowie’s behalf by a solicitor acting for him. The main provisions of the agreement are that the employment of Mr Dowie terminated that day, and that the Club irrevocably waived its right to any compensation due to it under the Compensation Clause. The amendment by Mr Dowie’s solicitor added to this provision in relation to the Compensation Clause: “For the avoidance of doubt, upon signing this agreement, this right shall cease to exist and the Club accepts and agrees that this clause shall not be enforced against [Mr Dowie] or any other person, entity or otherwise”.[36]For a manager looking for a new job it is obviously a disadvantage to have such a compensation clause in a contract which is still in force. Getting rid of the compensation clause was a benefit to Mr Dowie. As he said in his witness statement, “It … meant that I would be free to look for another manager’s job without having to worry about the compensation clause”. So long as the compensation clause was there, another club considering employing Mr Dowie would have had to provide for payment of the compensation, and so would be to that extent less able to pay the salary that it would pay if there were no such clause.[37]Mr Dowie agreed to refrain from instituting any claims under the provisions of the Employment Rights Act 1996. The agreement provided that he was to be paid the sum of £20,000 as compensation for loss of employment.[38]Clause 8 of the Compromise Agreement included: “… the club will not make or issue or indirectly cause to be made or issued any statement whether oral or in writing which is likely to harm the business or reputation of the Employee”.[39]Mr Dowie contends that Mr Jordan has made a number of statements in breach of that clause which have been highly damaging to him. I am not concerned with that part of the dispute in this trial.[40]Mr Dowie also contends that the Employment Contract included an implied term of mutual trust and confidence between the parties. In a counterclaim he alleges that the Company has acted in breach of that term and that he was constructively dismissed. He counterclaims a declaration and other relief arising out of this contention, including an account of the bonus payments due to him. He also counterclaims for a declaration that the Compensation Clause is unenforceable because it is in restraint of trade or a penalty. None of these matters arose for consideration at the trial of these preliminary issues. The Order of 9th February 2007 provided that they were to be adjourned.[41]The Club also rely on the Misrepresentation Act 1967. There was some debate before me as to whether that issue would fall within the preliminary issues to be tried by me, or among the other issues that had been adjourned. I shall return to that question below.

THE BACKGROUND TO THE DISPUTE

[42]The events giving rise to the dispute can be summarised as follows. 28 April to 10 May at Charlton[43]Alan Curbishley was appointed as manager of Charlton on 24 July 1991 and managed Charlton for nearly 15 years. His contract was not due to expire until June 2007, but in early 2006 he did not wish to extend it. He wanted to take a break. Mr Murray and Mr Varney were concerned to ensure that there was a smooth transition to a successor as manager. When a manager is not expected to remain at a club for more than a year, that can create difficulties in long term planning. For example, players want to know who the manager will be, and if it is uncertain in respect of the near future, it may be more difficult to bring new players into a club, or to keep existing players.[44]On 28 April 2006 Mr Murray agreed with Mr Curbishley that his contract would come to an end on 30 June 2006 and that his last game at Charlton would be the team’s final game of the 2005-2006 season, against Manchester United on 7 May 2006.[45]The Board of Charlton agreed that Mr Murray, Mr Whitehand and Mr Chappell should be the three directors who would meet and approve the new candidate for the job. Mr Murray and Mr Varney were to manage the recruitment process, assisted by Mr Mills. Mr Mills had formerly been an agent. He had recently been employed by Charlton to assist Mr Varney and Mr Murray, in particular in the purchase and sale of players. They decided to carry out the recruitment process in more than normal secrecy. The reason for that was that they foresaw that bets would be made on who the new manager would be.[46]There were specific factors which governed the manner and speed with which the recruitment process was to be carried out. The number of credible candidates to manage Charlton was in any event limited. Charlton was a Premiership Club, but it was in the bottom four of the twenty teams in that League, and it had one of the smaller capacities. Mr Murray and his colleagues felt that the only qualified people who might be interested in coming to Charlton were those who had managed one of the other two or three teams below them in the Premiership, or one of the top six to ten clubs in the Championship, or a foreign manager, which Mr Murray felt would be a big risk.[47]Managers who were under contract to other clubs would not be expected to apply for the job at Charlton, and Charlton could not approach them except in accordance with the Code of Conduct and Rules. If a manager under contract wished to be considered, Mr Murray expected a message to reach him through an agent or other third party. Those managers who were not under contract at the time, were less likely to have the recent experience of success which Charlton were looking for. The availability of candidates in May was also affected by other events in the calendar to which they might be committed. The World Cup was to take place in Germany between 9 June and 9 July 2006. There were play-offs to take place up to the end of May. Managers who were free to do so would be expected to take a holiday in the first half of May. After the end of the current season, players were expected back for training on 7 July for the new season, which was to start with a friendly game against Millwall on 11 July.[48]Charlton placed an advertisement for the job in the Daily Mail on 3 May 2006, with a closing date for applications on 10 May.[49]The result of the advertisement in the Daily Mail was disappointing. All but twelve of the hundred or so applicants lacked the required experience. Before meeting Mr Murray, Mr Varney decided that he and Mr Mills should draw up a list for Mr Murray to consider when they met him on 11 May. On 10 May Mr Varney prepared his list on a computer and headed it “Team Manager Vacancy”. There are two or three versions of it, some with handwritten notations. Mr Mills prepared his list in manuscript. Mr Varney also prepared a document headed “Appointment of Team Manager”. This includes notes on the new management structure within which the manager was to work, and the qualities Charlton were seeking in the candidate.[50]Mr Varney’s document headed “Team Manager Vacancy” is divided into two parts, “Applicants recommended for interview” and “Applicants not recommended for interview”. Those recommended for interview numbered from seven to nine, according to the version. Mr Dowie’s name appears under that heading in all versions of the document. His name also appears in Mr Mills’ list. Mr Dowie had nevertheless not in fact applied for the job at any time.[51]Mr Varney explained why Mr Dowie’s name (and some other names) appeared on the lists. There were insufficient applicants with the qualities that Charlton sought, and so the lists were drawn up to include names of people who had not applied, but might be found. They were what Mr Varney called his “wish list”.[52]One of those recommended for interview was Mr Peter Taylor, as already mentioned. An approach similar to that made to Hull should have been made in respect of any other candidate in the same position as Mr Taylor, if there were any with whom Charlton proposed to negotiate. An approach was made to one club Chairman, but he refused Charlton permission to talk to the manager in question, and so that person had to be excluded as a candidate.[53]Mr Dowie was under contract at that time, and no approach was made to Mr Jordan for permission to negotiate with Mr Dowie. Mr Murray explained that although his name was on the list, there were a number of obstacles to Mr Dowie’s candidature. Mr Murray said that he knew that if he had made an approach to Mr Jordan, it would have been most unlikely that Mr Jordan would have been willing voluntarily to assist Charlton, and that he would not have given Charlton permission to speak to Mr Dowie. In this connection, Mr Murray and Mr Varney knew of Mr Jordan’s case against Mr Bruce and discussed together its implications for Mr Dowie in May 2006. He also said that Charlton fans would not want an ex Crystal Palace manager as their manager. In the light of what in fact occurred, I accept that the first reason is genuine, but I am not convinced by the second. 10 May at Palace[54]Mr Jordan lives for most of the time in Spain. On 10th May he returned there after the defeat on 9th May 2006, when Palace failed to achieve promotion to the Premiership. Mr Jordan and Mr Dowie were very disappointed, as no doubt were all Palace players, staff and fans. As far as Mr Jordan was concerned, the failure to achieve promotion back in to the Premiership meant that he had to plan the Club’s financial affairs on a much less favourable basis than he had hoped. The parachute payments were to end with the 2006-2007 season. A club in the Championship is much less well placed to pay the wages expected by players who are in a position to find a place in a Premiership team. Failure to achieve promotion raised the prospect of selling players and reviewing budgets. The financial implications of the defeat the day before were that the Club could no longer look forward to receiving revenue of the order of £30 million, which it would have received if Palace had been promoted. The loss of this hoped for revenue for the Club fed through into corresponding losses of prospective earnings amongst those who worked for the club. Not least of these was Mr Dowie himself, whose basic pay was, as a result, to remain at £500,000. So the defeat in the play-off against Watford FC represented a loss to him of prospective salary and bonus of a minimum of £1 million for one season alone.[55]To put these figures in the context of the Club’s overall financial position it is necessary to look at the Club’s financial statements. The Profit and Loss Accounts for the years ended 30th June 2004, 2005 and (in draft) 2006 show turnover (and operating expenses) at £9.8m (£17.4m), £33.6m (£25.2m) and £20.2m (£19.6m). In the financial years 2004 and 2005 there were staff numbering respectively 130 and 144, including full time players, managers and coaches numbering 78 and 90 respectively. Staff costs represented some two thirds of the operating expenses.[56]Mr Jordan wanted to discuss matters with Mr Dowie. One reason for his wanting to do this so soon was that he understood that Mr Dowie was planning to meet the staff, and Mr Jordan wanted to talk to Mr Dowie before Mr Dowie spoke to the staff. Mr Dowie did in fact speak to the staff within a few days. Given the financial implications to all concerned, it was unfortunate that Mr Jordan and Mr Dowie had to have this important conversation so soon. There had been very little time to prepare for this change in the Club’s prospects.[57]The dates, lengths and times of telephone calls referred to in this judgment are almost all derived from the itemised phone bills of the persons concerned, almost all of which (apart from Mr Robert Dowie’s) were adduced in evidence. Witnesses not working for the Club or Charlton disclosed their own bills.[58]Before Mr Jordan spoke to Mr Dowie, Mr Dowie spoke very briefly to Mr McGuire at 18.55 on 10th May. Mr McGuire is the Deputy Chief Executive of the Professional Footballers’ Association (“PFA”) and a licensed FIFA agent. In his capacity as agent he negotiates contracts not only on behalf of players, but also on behalf of managers. The PFA offers this service to managers because they are former players. Mr McGuire had negotiated with Mr Jordan the terms of Mr Dowie’s employment by the Club in 2003 and 2004. The PFA does not charge for this service in the way that other agents do. In effect the service is free to the manager, but commonly clubs pay a very modest contribution towards the benevolent purposes of the PFA. The fact that Mr McGuire’s services as a negotiator were provided for free to Mr Dowie does not mean that he was any less assiduous to promote Mr Dowie’s interests than any other agent would have been. But he was not a general agent of Mr Dowie. He only acted for him in negotiations. Mr McGuire gave evidence that he had a good relationship with Mr Jordan, having worked with him on a number of occasions in relation to matters not involving Mr Dowie.[59]In evidence Mr McGuire said that during that short conversation on 10th May 2006 he understood that the relationship between Mr Dowie and Mr Jordan had broken down. He said that he always felt that the relationship was deteriorating. Mr Dowie also rang Mr McGuire on 11th May at 15.11 and spoke for over five minutes. I find that it was probably on 11th May that Mr McGuire learnt that the relationship had broken down, rather than on 10th May. But I also find that by 10th May the relationship had deteriorated. So for that reason also, the conversation between Mr Jordan and Mr Dowie on 10th May was taking place in difficult circumstances.[60]After Mr Dowie had become manager of Palace, the Club employed his brother, Mr Robert Dowie as Director of Football. Mr Robert Dowie remained at Palace until 31 October 2006. Mr Robert Dowie’s position cannot have been easy between May and October, but he carried on professionally and left on good terms. While he was still in post, in July 2006, he prepared a written witness statement with the assistance of his own independent solicitors, and sent a copy to the parties. On 24 April 2007 he prepared a second witness statement with the assistance of CMS Cameron McKenna. In court he verified both statements and asked that both be treated as his evidence in chief. Other things being equal, the 2006 statement is likely to be the more reliable, not least because it was written within a few weeks of the events in question.[61]Mr Dowie was not always easy to contact by telephone, and Mr Jordan first spoke to Mr Robert Dowie. There is some difference between the recollections of Mr Jordan and Mr Robert Dowie as to what was said between them at that stage. Mr Robert Dowie says that they had an extended discussion on what the previous day’s defeat would mean for the Club, and in particular that Mr Jordan said that the Club would need to cut the wages bill and to sell players. Mr Jordan’s recollection is that the call was just to ask Mr Robert Dowie to tell Mr Dowie to call Mr Jordan. Nothing turns on this difference of recollection. Mr Robert Dowie has a background in business. He would not have needed an extended discussion with Mr Jordan to understand what Mr Jordan would think the defeat would mean for the Club. And it is obvious that a manager of a team hoping to obtain promotion to the Premiership will be disappointed at the financial implications of the loss of that hope. Whatever anyone said, Mr Jordan was going to have to review expenditure plans, and Mr Dowie was going to find that there was less money to spend on players, and facilities for players, than he had expected and hoped for.[62]Mr Jordan and Mr Dowie are both strong personalities and intelligent men. Mr Robert Dowie describes them as often being at loggerheads, and his role being in part to act as a facilitator between them. Mr Jordan referred to Mr Robert Dowie’s role as including acting as an interface between himself and Mr Dowie.[63]Mr Robert Dowie describes Mr Jordan as being on occasions charming and approachable, but often abusive, swearing and calling people names. Having seen Mr Jordan give evidence over some two days, I saw that he can be charming. Mr Jordan made a number of favourable comments about Mr Dowie while he was at Palace, which were reported in the press. Mr Jordan also says things in the heat of the moment which he later regrets. There was an occasion under cross-examination when he suggested that Mr McGuire might have been party to deceit, and later apologised through his counsel for saying this. The suggestion arose from a simple misreading of a handwritten entry in Mr McGuire’s diary. In his oral evidence Mr Jordan from time to time also used phrases which he regretted and quickly withdrew. I have taken this into account in considering the extent to which I can accept the evidence of Mr Jordan where it is disputed by Mr Dowie. Mr Jordan does not deny he often uses swear words as what he calls punctuation. He says many people in football, including Mr Dowie, do this, when they are not with their families. Mr Jordan was not the only one who could be difficult. Mr Dowie had complained publicly about Mr Jordan while still the Palace manager, and his complaints were published in the press. Mr Dowie complained that Mr Jordan was not showing enough of what he called ambition, by which he meant spending money on buying players.[64]Upon Mr Jordan’s arrival at his home in Spain a telephone conversation of about one hour and forty minutes took place between him and Mr Dowie.

THE 10th MAY CONVERSATION BETWEEN MR JORDAN AND MR DOWIE

[65]Most of this conversation was a call from Mr Dowie’s mobile phone, starting at 19.41 English time and lasting for one hour 26 minutes, that is to 21.07. But the last part, some twelve minutes, was on Mr Dowie’s home landline from which he called Mr Jordan at 21.09, after a two minute break. Mr Dowie was in his home with his wife during the calls.[66]Mr Robert Dowie spoke to both Mr Jordan and Mr Dowie on 10th May about the call that the two of them had had. Mr Dowie called his brother for about 9 minutes, at 21.27, that is within minutes of Mr Dowie having ended his call to Mr Jordan. In his July 2006 witness statement Mr Robert Dowie gives an account of what they each said to him. I regard this as a reliable contemporaneous account of what each of Mr Jordan and Mr Dowie considered had been said in that call between one another.[67]Mr Robert Dowie’s account is as follows. Mr Jordan called back Mr Robert Dowie and told him that the conversation had not gone well. Mr Jordan reported to Mr Robert Dowie that the conversation had been lengthy, that it had started badly, but as it continued it had improved. Mr Jordan said that much to his surprise it had ended with Mr Dowie asking Mr Jordan if Mr Jordan would be prepared to give him the opportunity to speak to any club in the North of England should they declare an interest in retaining his services. (This was of course a reference to the Code of Conduct for Managers, requiring permission to be given by Mr Jordan). Mr Jordan sounded very angry and said words to the effect that this request changed everything. Mr Robert Dowie thought Mr Jordan used the words “I can’t back him now” and “I can’t give him my money”. Mr Jordan said that he did “not feel able to support a manager that “was not 100% with him”. At the close of the conversation between Mr Robert Dowie and Mr Jordan, Mr Jordan said that he would have to go away and think about it very carefully.[68]Following the conversation with Mr Jordan, Mr Robert Dowie spoke to his brother. Mr Dowie was also clearly upset about the way the conversation had gone. Mr Dowie had reported that Mr Jordan had sworn at him at length and had told him that the season was a total failure. Mr Dowie understood that Mr Jordan blamed him for that failure but Mr Robert Dowie does not record that Mr Dowie said that Mr Jordan had expressly blamed him for the failure. Mr Dowie told Mr Robert Dowie that Mr Jordan had outlined his intention in relation to the wage bill, the transfer of players and the future of the club. He said that Mr Jordan had told him that he wanted to raise £12 million in player sales, and wanted to reduce the yearly budget to £5-6 million pounds, that being the budget of the 2003-2004 season, from the current level which Mr Dowie reported to be around £7 ½ to £9 million. He also said to Mr Robert Dowie that Mr Jordan had told him that the Club would no longer pay for his weekly flights home to his family in Bolton, and had asked him on several occasions why he did not resign.[69]I interpose to say that the direct costs in relation to players’ and managers’ remuneration and agents’ fees in the Club’s accounts to the year ending July 2004 had been a budget of £7.9 million, and actual expenditure of £8.4 million. For the year to July 2005 the corresponding figures had been £18½ million and £16 million. The difference between the two sets of figures is in relation to players’ basic salary. In the year to July 2004 that figure had been £4.7 million. In the year to 2005 the actual figure was £9.7 million. The budget for 2005 had been £12 ½ million. These figures are, of course, just one part of the total budgets and expenditure of the club. The total cost of the weekly flight for Mr Dowie was of the order of £7,000 a year.[70]Mr Robert Dowie went on to ask his brother if he had requested permission of Mr Jordan to be allowed to talk to another club “in the North”, as Mr Jordan had said to Mr Robert Dowie. Mr Dowie told Mr Robert Dowie that he had only raised it with Mr Jordan as a direct result of being asked by Mr Jordan to resign on several occasions. Mr Dowie further stated that Mr Jordan had made a big deal of this one remark and had conveniently forgotten the two hours of comment he had made, basically rubbishing everything Mr Dowie had done at the club to date. Mr Robert Dowie said that both Mr Jordan and his brother were aware that there was an obligation to pay the club £1million compensation in the event that Mr Dowie was employed by another club. Mr Robert Dowie said that his brother told him that he (Mr Dowie) had told Mr Jordan that Mr Dowie had not considered resigning, and had no intention of doing so, and would have to remain as manager unless an agreement could be reached between them, whereby the club would waive the obligation to pay compensation in consideration of Mr Dowie waiving his rights to the remainder of the sums due under the contract.[71]Mr Jordan’s account is as follows. In his witness statement Mr Jordan says that he did not set out to encourage Mr Dowie to resign. He rejects the suggestion that he was attempting to save money, explaining that Mr Taylor enjoys the same salary and bonus provisions as Mr Dowie had. There were other matters discussed as both Mr Jordan and Mr Dowie agreed, that is matters not mentioned by Mr Robert Dowie. These included a request by Mr Jordan to watch videos of the games with Mr Dowie on the Mondays after the games. Another matter they discussed was the cost of new gym facilities which Mr Jordan did not wish to proceed with. They discussed how much the budget would be for investing in new players if other players were sold. They discussed the players who might be sold. The reference to watching videos was obviously a very sensitive matter so far as Mr Dowie was concerned. He regarded it as an inappropriate intrusion by the Chairman into the role of Manager which would be badly viewed by the players. Mr Jordan says he saw it as an attempt to gain a better, closer working relationship between the two of them and a better understanding of Mr Dowie’s thinking. Mr Jordan accepts that he was critical of Mr Dowie in respect of Mr Dowie’s ability to “manage up”. By this he meant Mr Dowie’s ability to conduct his relationship with Mr Jordan as chairman of his employer.[72]Mr Jordan states that there came a point when Mr Dowie was not accepting what Mr Jordan was saying and in response to that Mr Jordan said words to the effect that Mr Dowie could always resign. He said that he did not want Mr Dowie to resign. On the contrary he wanted him to stay. Mr Jordan says that he told Mr Dowie this. He said that Mr Dowie responded by saying that he, Mr Dowie, could not afford to resign. Mr Jordan said that Mr Dowie asked Mr Jordan whether he was trying to get Mr Dowie to resign. Mr Jordan said that he replied that if that is what he wanted, that is what he would say.[73]Mr Jordan says that it was late in the conversation when Mr Dowie said that he was not seeing enough of his boys and was missing his wife. He said to Mr Jordan that if he got a job opportunity near his home he would like an opportunity to talk to the club and take such a job. Mr Jordan states that his response to this was:
“Hang on a minute, we have just been talking about the future of Crystal Palace and now you are saying you won’t be a part of it. How can I make plans if I can’t rely on you being there?”
[74]Mr Jordan described this as being thrown a “curveball”, and that that is what he described it as to Mr Dowie at the time. Mr Jordan said that Mr Dowie then asked about the £1 million compensation clause in the contract, saying that it would be a problem. Mr Jordan said that he responded to this by saying it was in the contract and “why are you any less important than a player?” Mr Jordan says the conversation ended by Mr Jordan saying that he would go away and think about it.[75]Mr Dowie’s account is as follows. In his written witness statement Mr Dowie states that immediately after the defeat on 9th May he started receiving calls from various members of the media asking whether he was intending to resign from Palace. He says he responded stating that he had no intention of resigning. He said that his brother called, asking him to ring Mr Jordan, and saying that Mr Jordan was very unhappy with the fact that Palace had been knocked out. Mr Dowie states that he expected Mr Jordan to be aggressive and outspoken, but that he was not prepared for the way Mr Jordan spoke to him on the telephone. According to Mr Dowie, Mr Jordan was very abusive, ultra aggressive demeaning and angry. Mr Dowie said that he defended his performance as manager setting out all the achievements including financial ones. He was upset and resentful at the withdrawal of the discretionary benefit of flights home. He regarded this as a punishment.[76]I interpose to say that Mr Jordan with hindsight recognised that the subject of Mr Dowie’s flights home was not a topic which should have been raised on the telephone at that time, but rather in a face to face meeting.[77]Mr Dowie confirms Mr Jordan’s statement to the effect that he, Mr Dowie, regarded the suggestion that they watch match videos together as an unjustifiable interference with his role as manager. There was clearly a sharp exchange of words on that topic. Mr Dowie in his statement expresses particular concern about the reductions in the wages budget. He says that he could not understand why Mr Jordan would legitimately want to take such a drastic measure when he kept asserting that he, Mr Jordan, wanted to win promotion to the Premiership. Mr Dowie states that it was in response to his saying this to Mr Jordan, that Mr Jordan stated that if he did not like it he, Mr Dowie, should resign. Mr Dowie said that Mr Jordan said that on a number of occasions during the conversation.[78]According to Mr Dowie the exchange about his family went as follows. Mr Dowie said “Simon, I have no problem with you as a person but you are difficult to work for especially when I am living two hundred miles from my family when my kids are growing up”. He says Mr Jordan replied “What are you saying Ian”. He says that he replied to Mr Jordan:
“I am saying that I miss my family like any family man would”
. He says that Mr Jordan said “Are you saying that you want to move back North?” And Mr Dowie replied “No, but if a job came up I would like you to consider allowing me to speak to them”. Mr Dowie states that he did not limit his response to clubs in the North. Mr Dowie agrees he said that he could not afford to resign. Mr Dowie states that the conversation ended with Mr Jordan stating that he, Mr Jordan, would consider Mr Dowie’s position at the club and that he, Mr Dowie should also reflect on his future.[79]My findings of fact on this conversation are as follows. In so far as there are differences between these accounts in relation to anything other than the alleged representations as to Mr Dowie’s intentions as to the future, I do not have to resolve such differences. Those differences might arise for resolution, if at all, in any trial of the claim by Mr Dowie that he was constructively dismissed.[80]So far as the representations are concerned, I do not accept Mr Dowie’s version. I find that Mr Dowie did say that he was not seeing enough of his boys, was missing his wife, and that if he got a job opportunity nearer his home (which is in the North, at Bolton) he would like permission to talk to the Club and take such a job.[81]Mr Jordan’s account on this point seems to me to be the most sensible interpretation of the gist of what Mr Dowie accepts that he was saying. Mr Dowie accepts that he said he was living 200 miles from his family when his kids were growing up, and that he missed them. He accepts that it was in connection with that remark that Mr Jordan asked if he wanted to move back North. It does not make sense that Mr Dowie should respond to Mr Jordan’s question about moving back North (a question addressed to a man who said he was missing his family two hundred miles away in the North) that he wished to be allowed to speak to any club that might want to talk to him, wherever that club might be situated. Moreover, Mr Dowie had come to Palace from Oldham, which is in the North. And Mr Jordan’s account is the one which is most consistent with what Mr Robert Dowie states that Mr Jordan and Mr Dowie said to himself, Mr Robert Dowie, immediately after the conversation, namely that Mr Dowie had requested permission of Mr Jordan to be allowed to talk to another club “in the North”.[82]I find that the compensation clause was mentioned. I find that in the conversation between Mr Dowie and Mr Jordan on 10th May Mr Jordan was not seeking to procure the resignation of Mr Dowie. Whether what he said amounted in fact to constructive dismissal is a different question which I do not have to decide. Mr Jordan did not start out the conversation intending to raise the question of Mr Dowie leaving Palace. He raised it in response to what he saw as Mr Dowie’s inappropriate attitude to the plans which he considered that he, as Chairman of the Club, had to review.[83]Mr Dowie did not start out the conversation with Mr Jordan intending to raise the possibility of his leaving Palace, but the situation in which Mr Dowie found himself after the defeat the day before was one which was not attractive to him. His relationship with Mr Jordan had been deteriorating, and the prospects for Palace were not as good as they had been. He raised the genuine concerns he had about his family in response to Mr Jordan’s raising the possibility of his resignation. The prospect of his departure from Palace to a club nearer his home (that is, in the North) was in principle something which would have suited him at the time. It would solve both his problems with Mr Jordan and his problems with his family.[84]So far as this conversation is concerned, I find that the Club has proved the first misrepresentation (para 7.1 above), that Mr Dowie said that he intended to leave Palace to move to the North of England for family reasons, if he got a job opportunity near his home. The Club has not proved that Mr Dowie represented in this conversation that that was the only reason for his wishing to leave Palace. His reasons for wishing to leave Palace included the difficulties that had arisen between himself and Mr Jordan as to the way forward for Palace. Mr Jordan later referred (at the Palace press conference) to these as “other underlying issues”. The other representations are not alleged to have been made in this conversation. BACKGROUND TO 16TH MAY CONVERSATION 10th to 17th May at Charlton

BACKGROUND TO 16TH MAY CONVERSATION

[85]Mr Murray and Mr Varney made plans for interviewing candidates over four days, Sunday 14th to Wednesday 17th May. There was one interview on 14th. There were two interviews on Tuesday 16th. The first was an informal meeting at 12 pm with Billy Davies “to determine whether he would be interested”, in Mr Murray’s words. It took place at the private home of a friend. It could not, at that stage, be a negotiation, because Mr Davies was under contract to Preston North End FC. Mr Murray and Mr Varney were impressed and Mr Mills spoke to the Chairman of Preston to ask permission for the formal interview. This was then arranged to take place on 22nd May. Meanwhile, on 17th and 18th May Mr Varney started work on a draft contract to be submitted to Mr Billy Davies on 22nd May, if thought fit.[86]The second interview on 16th May was with Mr Taylor. The interview went well, but for his own reasons, Mr Taylor decided to withdraw his candidature for Charlton on 19th May. Mr Taylor was naturally unhappy at being involved as a witness in this dispute. His evidence as to what he had been told by Mr Mills after his interview was deployed by Mr Davies QC with a view to eliciting from the Charlton witnesses evidence that Mr Dowie had been interviewed by Charlton for the manager’s job before 23rd May. In the event, no such evidence was forthcoming. So it is not necessary for me to set out in detail the evidence upon which it was sought to make that case. The evidence was not enough to give rise to the inference that Mr Dowie had been interviewed before 23rd May by Charlton, and Mr Davies QC recognised that that was so in his closing speech. There were grounds to believe that Mr Dowie might have been interviewed by Charlton before 23rd May, but following the investigation of these grounds at the trial I find that Mr Dowie was not interviewed by Charlton before the interview that in fact took place on 23rd May 2006.[87]On 17th May Mr Murray called Mr McGuire. After that he attended interviews with two further candidates at 1530 and 1730 in the afternoon. 11th to 18th May at Palace[88]As already mentioned, on 11th May Mr Dowie spoke to Mr McGuire and made clear that his relationship with Mr Jordan had broken down. On 14th May Mr Dowie made the first of a number of calls to Mr Horton at Derby County FC, a call lasting 20 minutes. Derby County was a Championship club which was looking for a manager. Mr Dowie gave evidence that he went for an interview for that position on 20th or 21st May. Mr Dowie explains the calls between 14th and 16th May as being for the purpose of him giving advice to Mr Horton who wanted to pick his brains on Derby County’s plans for restructuring themselves. He accepts that on 17th May his conversation with Mr Horton also included some talk of Mr Dowie as potentially a manager for Derby (see paras 102 and 111 below).[89]I do not accept that Mr Dowie is being candid about these conversations. I accept his evidence that Mr Horton was picking his brains on the restructuring. But in their context I find that these conversations were understood by Mr Dowie as being about himself as a potential manager. Where two parties are courting one another, the fact that they are talking can be just as important as the topic they are discussing. There is a lot of mutual and informal help offered between clubs and managers, and in some contexts there would be no sub-text in the communications. But after 9th May it was obvious to all informed observers of football that Mr Dowie’s position at Palace might be uncertain, and the series of conversations between Mr Dowie and Derby, which was in fact looking for a manager, did involve the potential of Mr Dowie’s candidature for the job. Derby is, of course, north of London and not far from Bolton.

THE 16TH MAY CONVERSATION BETWEEN MR JORDAN AND MR DOWIE

[90]On 16th May there was a 50 minute conversation when Mr Jordan rang Mr Dowie at 19.59. This was in response to a voice mail message which Mr Dowie left with Mr Jordan at 17.07. The message was to the effect that Mr Dowie was awaiting a call from Mr Jordan to decide Mr Dowie’s future. Mr Jordan had also heard through Mr Robert Dowie that Mr Dowie was upset and wanted a further talk. This conversation was more amicable than the one of 10th May.[91]According to Mr Jordan, the conversation included the following. Mr Jordan said that he would rather that Mr Dowie stayed at Palace. Mr Dowie said that he wanted to go up North for his family. And, as is common ground, Mr Jordan asked Mr Dowie if Mr Dowie would give Palace another year. Mr Jordan says that Mr Dowie responded by re-iterating his desire to move back to his family and suggested that there be some arrangement.[92]Much of the rest of the conversation is common ground. Mr Jordan said to Mr Dowie that he would get another job, because he was the best person Mr Jordan had ever interviewed. Mr Dowie also expressed confidence in his ability to get another job, and his concern about the Compensation Clause. Mr Jordan suggested an arrangement whereby the Club released Mr Jordan from his contract, waiving the Club’s right to compensation, and Mr Dowie would waive any financial claims against the Club. Mr Jordan made a mistake about the amount of the compensation due under the Employment Contract, and Mr Dowie corrected him. Mr Jordan queried why Mr Dowie had said on 10th May that he could not afford to resign, but now seemed confident that he could get another job. Mr Jordan asked Mr Dowie if he was sure he wanted to go. The conversation ended with Mr Jordan saying he would organise a press conference for the following week to announce Mr Dowie’s departure, that the Club would draw up a formal agreement and with Mr Dowie saying that the PFA would represent Mr Dowie.[93]The rest of Mr Dowie’s account of this call can be taken from the Defence That is dated 12th July 2006, less than two months after the events in question. Mr Dowie states that he complained of the contempt that Mr Jordan had expressed for the work Mr Dowie had done at the Club and that Mr Jordan advanced further criticisms of Mr Dowie. Mr Dowie states that he asked if he was also giving up his claim for 5% in respect of transfers. Mr Jordan does not accept that he did say this, but nothing turns on it.[94]I accept that that probably was raised by Mr Dowie. It was expected that there would be very large sums paid to the Club for transfers. The difference between the parties on this is as to whether Mr Dowie would have been entitled to a substantial sum. Mr Jordan accepts that Mr Dowie would have been entitled to a sum of the order of £20,000, but no more, assuming he had not left Palace and the sales of players had gone ahead as they did after Mr Dowie’s departure. Mr Dowie contends that it would be £500,000, mainly in respect of the transfer to Everton FC of Mr Andrew Johnson. The Club argue that Mr Johnson did not come within the terms of Mr Dowie’s contract, because he had been at Palace before Mr Dowie. Mr Dowie does not address this point in his witness statement, and I do not have to resolve this dispute.[95]Mr Dowie says his wanting to go up North to be with his family was never raised. He also says that he did not agree to such a limitation, and that he would not have said or agreed what Mr Jordan alleges, because there are only limited opportunities for work as a manager in the Premiership and Championship, and he needed to work.[96]There is no doubt that Mr Dowie has never entered into an agreement promising not to work outside the North. It is not the Club’s case that he did make such a promise. The Club’s case is that Mr Dowie represented that that was what he intended to do.[97]I find that Mr Dowie did say that he wanted to go North for his family. That was the truth. His children were settled at schools in Bolton and the family did not want to move South.[98]So my findings of fact as to the 16th May conversation are similar to those in relation to the 10th May conversation. They are set out at para 84 above.[99]Mr Jordan states that he said that he was making the proposal to waive the Club’s right to compensation solely out of respect for Mr Dowie and to allow him to go to the North of England so he could be near his family. I accept that that was a major factor in Mr Jordan’s thinking. I also find that one reason why Mr Jordan was willing to enter into the agreement in the form he did was because he did not wish to have a manager who did not want to stay with Palace, and this seemed a sensible commercial arrangement of a difficult state of affairs. It was a difficult situation for both parties. The Compensation Clause required a high figure that could make it difficult for another club to take Mr Dowie, but Mr Dowie had asked to be allowed to talk to any club in the North, should they declare an interest. By this he had indicated that he no longer wished to manage Palace, and so a lack of commitment.[100]It was suggested on behalf of Mr Dowie that the finances of the Club, and of Mr Jordan himself, were in such a poor state that that was the reason why Mr Jordan entered into the Compromise Agreement. There was no foundation for this suggestion.

BACKGROUND TO THE 20TH MAY CONVERSATION

[101]After the conversation on 16th May Mr Jordan asked Mr Watts, the Club’s Human Resources and Commercial Director to prepare the Compromise Agreement. On 19th May he sent a form previously used by Palace to the in house lawyer at the PFA, Jo Armstrong.[102]In evidence Mr Dowie said that he had serious discussions with Derby County about their job from 17th May onwards. When asked by Mr Davies QC why Derby did not seek permission from Palace for these talks, Mr Dowie answered that as far as he was concerned his job at Palace was terminated on 16th May and that he considered that he was a free agent from the time his conversation with Mr Jordan ended that day. As a matter of law that was not the case. The legal effect of the agreement to part was that it was not binding. It was an agreement subject to the terms being formally drawn up and signed. This included the requirement that Mr Dowie receive independent legal advice in accordance with the Employment Rights Act s.203, as he did, through the PFA. Mr Dowie knew this. In his Defence he correctly states that this was the position. That did not prevent him from exploring future job possibilities, but it did mean that until there was a binding agreement he was constrained as to what he could discuss by the terms of his contract with the Club, including the term incorporating the Code of Conduct.[103]On 17th May Mr McGuire had fourconversations relevant to this action. On 10th July 2006 he prepared a witness statement on paper with the letter head of the PFA and provided a copy to both sides. In this he describes two calls on 17th May, one he received from Mr Jordan following the other, which was a brief conversation he had with Mr Dowie. The conversation with Mr Dowie was at 12.20. Mr McGuire’s phone bills bear out his evidence that he makes an enormous number of calls. The bills reminded him of other calls, which he refers to in his formal witness statement.[104]The first of these calls was at 12.18. Mr McGuire called Mr Murray, and spoke for nearly three minutes. At 12.20 (as soon as he had finished his call to Mr Murray), Mr McGuire called Mr Dowie. At 12.23 he called Mr Robert Dowie. These two short calls at 12.20 and 12.23 were voicemail messages by Mr McGuire asking Mr Dowie to ring him, as Mr Dowie did at 12.49. During the call at 12.49 from Mr Dowie, the conversation lasted over one minute.[105]Mr McGuire knew Mr Murray from dealings in the past. Mr McGuire had on occasions also been retained by Mr Billy Davies. In this particular case he had not been retained by Mr Billy Davies. As will appear, Mr Billy Davies was being represented in relation to Charlton by his uncle, Mr James Price, a solicitor practising in Glasgow. On 15th May Mr McGuire had read in the papers about Charlton being interested in Mr Billy Davies.[106]Mr McGuire stated that he was surprised and disappointed not to hear from Mr Billy Davies himself, and so he rang Mr Murray at 12.18 on 17th May. Mr McGuire’s account of the call is that he asked Mr Murray whether it was true that Mr Billy Davies was on the list at Charlton and whether there had been any contact with him. Mr Murray said that Charlton were very interested, but that there was a solicitor involved. Mr McGuire understood that this must be Mr Price. Mr Murray then asked Mr McGuire whether the rumours were true about Mr Dowie leaving Palace and whether he was currently looking for a new job. Mr McGuire replied that he was not sure what Mr Dowie’s position was. Mr McGuire explained that Mr Murray was able to ask him about Mr Dowie, because “it was not a secret” that the PFA looked after Mr Dowie. Mr Murray said: “Does the PFA still look after Iain, what is his situation at Crystal Palace?” and that Mr Murray then asked if Mr Dowie was currently looking for a new job. Mr McGuire had not spoken to Mr Murray about his representation of Mr Dowie.[107]Mr McGuire understood from that enquiry by Mr Murray that there was a likelihood that Mr Murray would be interested in talking to or interviewing Mr Dowie for the Charlton job. So as soon as he had finished speaking to Mr Murray, Mr McGuire rang Mr Dowie to inform Mr Dowie of what he understood Charlton’s interest to be. As Mr Dowie put it, what Mr McGuire told him was that Mr Murray had asked whether the rumours were true and that Mr McGuire had said that he could not comment, and that he thought Mr Murray might be in contact with Mr Dowie.[108]Mr Murray refers to this call with Mr McGuire in his witness statement of 24th April 2007. Mr Murray describes how, towards the end of the conversation about Mr Billy Davies, Mr McGuire informed Mr Murray that he had represented Mr Dowie in the past. Mr Murray decided to ask if the rumours about Mr Dowie leaving Palace were true. Mr McGuire responded:
“You wouldn’t expect me to comment on that would you?”
Mr Murray thought that this was what he called a “loaded” response and that Mr McGuire would have denied the rumours had he known them to be false.[109]These accounts differ in detail, but they are not inconsistent. I accept them all. Mr McGuire’s call to Mr Murray was before Mr McGuire spoke to Mr Dowie on that day. When Mr McGuire spoke to Mr Murray, Mr McGuire had not been told by Mr Dowie of Mr Dowie’s conversation on 16th May with Mr Jordan, but he knew of Mr Dowie’s relationship with Mr Jordan up to that point. The effect of Mr McGuire’s call to Mr Murray was that Mr Murray and Mr Dowie were quickly in touch with one another in circumstances where they each understood that Charlton might be interested in Mr Dowie and vice versa.[110]Mr Varney gave evidence of a conversation he had with Mr Murray about Mr Murray’s conversation with Mr McGuire. Mr Murray told Mr Varney that Mr McGuire’s reaction led him to believe that Mr Dowie would be leaving. Mr Varney referred to this as “football speak”. People who work in the same business and know one another do not need to ask explicit questions or give explicit answers in order to communicate information important to both of them. Mr McGuire, Mr Murray and Mr Dowie all knew one another and were well informed about what was going on in the world of football.[111]At 12.56, some five minutes after the call from Mr McGuire to himself, Mr Dowie made the first of two calls to Mr Murray. That lasted only seconds, and I infer Mr Dowie left a message asking Mr Murray to call him. Mr Murray did call him, twice, during the minute after 13.09, but did not get through. Mr Dowie was by this time engaged in a call he had made to Mr Horton of Derby. The call started at 12.59 and lasted for almost 22 minutes. This I take to be the call that Mr Dowie accepts was a conversation about himself and the job at Derby (see para 88 above).[112]At 13.25, as soon as Mr Dowie had finished that call, he rang Mr Murray and spoke for almost two minutes. Mr Murray states, and I accept, that Charlton might expect Palace to sell some players following their recent defeat, and that some players might be interested in Charlton. I also accept that conversations on such a topic would not have been unusual coming from himself to Palace. Mr Murray says that was what his call to Mr Dowie was about.[113]Mr Murray goes on to state, and I accept, that he told Mr Dowie that he had heard that Mr Dowie was on the way out at Palace and asked him if it was true. Mr Dowie replied that he could not comment but that something should be announced at the weekend or early next week where all would be revealed in a press conference. Mr Murray said that he would be interested to know when that was going to take place, and Mr Dowie said that he would let Mr Murray know.[114]Mr Murray’s next paragraph (para 42) includes the following:
“I do not believe that my calls to or from Iain Dowie on 17 May 2006 were made with the aim of contacting him about the Charlton Athletic job but rather to discuss player transfer opportunities. Iain would have known that Charlton Athletic were looking for a manager as it was common knowledge, but I did not give Iain any indication that he was being considered for the manager’s job nor did I encourage him to apply. I simply asked him to let me know when the press conference was”
. He goes on to state that he assumed that Mr Dowie would be interested in the Charlton job, but that Mr Dowie did not say anything to make him think that Mr Dowie was particularly interested.[115]Mr Murray’s language in this paragraph is not straightforward. He did not have beliefs about his own aims. He knew they were to have Mr Dowie as a candidate. That is what, five days later, on 22nd May, he told Mr Price that Mr Dowie was (see para 181 below).[116]Mr Dowie in his witness statement describes the call from Mr Murray on 17 May. Mr Dowie states that Mr Murray asked if Palace were looking to sell any players, and that Mr Dowie then mentioned some players’ names. Mr Dowie states that Mr Murray then said he had heard a rumour that Mr Dowie was leaving Palace, to which Mr Dowie replied that he could not comment, but that there was going to be an announcement and a press conference. He too states that Mr Murray said he would be interested to know when the press conference was, and that Mr Dowie said he would let him know. Mr Dowie then goes on to state: “I do not believe that [Mr Murray] specifically mentioned the Charlton job and I certainly wasn’t invited to attend an interview for the job. I knew that Charlton were looking for a new manager but I did not think that this call from [Mr Murray] was contact about the Charlton job because we had spent most of the call talking about players. I had already had a number of conversations with Mike Horton about the Derby job and I thought that I would probably be going there after I left Crystal Palace”.[117]I accept that in the conversation of 17th May Mr Murray did not invite Mr Dowie to attend an interview at Charlton. But given the content and rapid sequence of the calls that day, as I have already described them, I do not believe the explanation that Mr Dowie’s call to Mr Murray at 13.25 was all about Charlton’s interest in players. It may be that players might have been discussed. But if they were, that was neither the purpose of the call, nor its main subject.[118]The timing and sequence of the calls makes it clear, and I find, that each of Mr Dowie and Mr Murray were showing to one another their interest in Mr Dowie being a candidate for the Charlton job. Establishing that they each shared that interest was what the conversation between them was about. That is why Mr Dowie called Mr Murray within minutes of Mr McGuire informing him of Mr Murray’s interest. Mr McGuire had not called Mr Dowie to say that Mr Murray wanted to talk about players, and Mr Murray had not suggested to Mr McGuire that he wanted to talk to Mr Dowie about players.[119]The significance of the timing of the press conference was that once the announcement of Mr Dowie’s departure from Palace had been made there would be no need to get permission to talk from Mr Jordan. Mr Dowie also rang Mr Jordan on 17th May at 14.09 to ask how the mechanics of the release were going to be dealt with, and Mr Jordan told Mr Dowie that Mr Watts was dealing with it.[120]Mr Dowie says that he called Mr McGuire on 19th May to tell him that he and Mr Jordan had agreed on a compromise and to ask the PFA to review it. Mr Dowie did have three calls with Mr McGuire on 19th May, but it was on 17th May that he told Mr McGuire about the agreement he was reaching with Mr Jordan.[121]Mr Dowie and Mr Murray did not speak again until the morning of 22nd May.[122]On Friday 19th May 2006 Mr Jordan spoke to Mr Dowie informing him that the press conference to announce his departure would be on Monday 22nd May. Mr Watts faxed the draft Compromise Agreement to the PFA at 1530, shortly before he left for a holiday.[123]Also on that day Mr Dowie spoke on the telephone with McGuire about the terms of the Compromise Agreement upon which the PFA were to advise Mr Dowie.[124]In the late afternoon of that day Mr Jordan announced that there would be a press conference at Palace on the Monday 22nd.[125]At about 19.14 on Friday 19th May a journalist, Mr Ashton of the Daily Mail, rang Mr Jordan. Mr Ashton asked for Mr Jordan’s comments on information that Mr Ashton had received that Mr Dowie had resigned from Palace and was going to Charlton. Mr Jordan was at first very angry and put the phone down. But he rang back about an hour later, and they spoke for about 25 minutes. Mr Ashton revised his draft article in the light of these calls and Mr Jordan apologised for getting angry.[126]Mr Jordan then rang Mr Robert Dowie in an attempt to make contact with Mr Dowie. He told Mr Robert Dowie that someone had told him that Mr Dowie had been offered the job at Charlton. Mr Robert Dowie knew nothing about his brother and Charlton. Mr Robert Dowie called Mr Jordan back to say that it was not worth speaking to Mr Dowie that night as he was having a few pints with the boys.

THE 20TH MAY CONVERSATION BETWEEN MR JORDAN AND MR DOWIE

[127]At 11.42 on Saturday 20th May 2006 Mr Dowie called Mr Jordan, who rang back. Mr Jordan told Mr Dowie that they would meet at about 3pm, that is about an hour before the press conference was due to start. They spoke about what Mr Ashton had said. There is no dispute as to some of the important words that were said. Mr Dowie set them out in his Defence and Counterclaim served on 12th July 2006, and in his witness statement. The quotation marks are Mr Dowie’s: Mr Jordan said:
“I have heard that you were going to meet Charlton”
. Mr Dowie replied:
“I do not know who your source is but he is wrong as I have had absolutely no contact whatsoever from Charlton”
. Mr Jordan said: “You wouldn’t go to Charlton” and “You can’t go to a club that was dancing on our f*ing graves when we got relegated” (a reference to May 2005).[128]Mr Jordan’s recollection of the words he used in the first of these two statements attributed to him is less precise than Mr Dowie’s, but the sense is not materially different, and I accept Mr Dowie’s version. In cross-examination Mr Jordan accepted that Mr Dowie then said that going to Charlton would ensure that he lost all credibility with Palace fans, which Mr Jordan commented he found quite strange. In cross-examination Mr Jordan also accepted that Mr Dowie said that on Monday he would be out of work, and that he said “obviously I have to work”.[129]In his witness statement Mr Jordan stated that he also asked Mr Dowie to confirm that he was leaving for geographical reasons only and that Mr Dowie confirmed that that was the case. However, in cross-examination he said he could not definitely recall this.[130]In his witness statement Mr Jordan stated that he said:
“I can’t go into a press conference if it is not, as it will make me look a c**t”
. Mr Jordan states that Mr Dowie replied:
“If I am out of work for a long time and Charlton offer me a job and offer to pay my flights home what would be the position?”
Mr Jordan states that he answered: “That may well be different in 6 months time but you are telling me you have had no contact with Charlton and intend to move North which is the only reason I am releasing you”, and Mr Dowie agreed that that was true.[131]Mr Dowie denies that this was said. Mr Dowie’s version of this is that he said:
“On Monday I will be out of work and Charlton are an established Premiership club. However, I understand that in light of the relationship between the fans it would a difficult option for me, but that I have to work and I have to consider all job offers”
. Mr Dowie states that Mr Jordan did not respond to this.[132]Mr Jordan goes on to state that if Mr Dowie had told him that he was talking to Charlton, he would not have gone ahead with the press conference and would have told him to get Charlton on the phone immediately. Mr Jordan states that “there is no way I would have allowed him the possibility of going to Charlton at the very least without making Charlton pay, which, as a Premiership club, they were well able to do”.[133]I shall return below to set out the further findings I make as to this conversation (para 144 below). “… I have had absolutely no contact whatsoever from Charlton”[134]As already noted Mr Dowie accepts that he said these words. But he had had contact from Charlton. This fact was demonstrated to Mr Jordan when Mr Dowie’s itemised phone bills were disclosed. Mr Murray had spoken less than three days before, on 17th May, and the call had ended with Mr Dowie agreeing to Mr Murray’s request that Mr Dowie let Mr Murray know the time of the press conference.[135]Mr Dowie’s explanation for what he said is that he had been contacted by Mr Murray, and that he “did not think that this call from [Mr Murray] was contact about the Charlton job because we had spent most of the call talking about players”. This explanation first appeared in his witness statement dated 25th April 2007.[136]In evidence Mr Dowie said that his words to Mr Jordan meant that he had had no contact with Charlton about the job vacancy, and that in that sense what he said was true. Mr Jordan was cross-examined as to his understanding of the phrase. He did not accept that that was what Mr Dowie meant. He said if Mr Dowie had told him that Mr Dowie had had conversations with Charlton of any nature, he would not have signed the Compromise Agreement and would have taken a completely different view.[137]Although the Club did not know the details of the contact between Mr Murray and Mr Dowie on 17th May before disclosure of the phone bills, the Club alleged that there had been contact, and its advisers pursued enquiries. Mr Dowie’s response to the Club’s case, and to these enquiries, is as follows.[138]In the Particulars of Claim para 13 the Club pleaded that on 20th May Mr Dowie “denied that he was going for an interview with Charlton FC or that he had had any contact with Charlton FC”. The Club pleaded these as misrepresentations in separate sub-paragraphs of para 15:
“He had had no contact with Charlton FC” and “He had not been invited to attend an interview with Charlton FC”
. In para 18 the Club pleaded the falsity of these representations in a single sub-paragraph “the Defendant had had contact with, and had been invited to attend an interview with Charlton FC”.[139]I find that, before the conversation on 20th May, Mr Dowie had not been invited to attend an interview. But Mr Davies QC still invites attention to the way in which Mr Dowie responded to the Club’s case that there had been contact.[140]In his Defence Mr Dowie verified the statement:
“Mr Dowie had had no contact with Charlton FC”
. In a letter from Mr Dowie’s solicitors dated 4th October 2006 it is written that Mr Dowie “expressly denied [on 20th May 2006] that he was going for an interview with Charlton F.C... or that he had had any contact with Charlton F.C”. Mr Dowie’s mobile phone bills were referred to in his disclosure statement dated 10th October 2006. On 20th October 2006 Further Information was given by Mr Dowie in response to the Club’s request. Mr Dowie verified the following statement:
“Mr Dowie did not deceive the Claimant. Mr Dowie had not been contacted by Charlton Athletic and invited to attend an interview with that Club until after the press conference on 22nd May”
. On 1st March 2007 Mr Dowie verified a second statement by way of further information. He stated:
“… the first communication with Charlton ... in connection with the possibility of his filling the role of Manager of Charlton … was that which occurred shortly after 7pm on 22nd May 2006 when Mr Dowie received a telephone call from Mr .. Murray … in which Mr Murray invited Mr Dowie to attend a preliminary meeting with Charlton…”
Those two answers are also significant in the light of my findings as to the contacts between Mr Dowie and Mr Murray that occurred on 22nd May. In his witness statement Mr Dowie takes the same stance as in his Defence, saying “At that stage I had not even had a discussion with Charlton … about the vacant Manager’s job”.[141]Mr Dowie’s explanation that his contact from Mr Murray was not about the Charlton job, because they spent most of the call talking about players, came late and is unconvincing. The exchanges referred to in the pleadings provided an opportunity to Mr Dowie to address the contacts he had had with Mr Murray. The fact that he had not been invited to an interview as at the time of the conversation on 20th May was not a reason for Mr Dowie to omit to address candidly the contact that he had had.[142]From 20th October 2006, in his Further Information, Mr Dowie treated the allegation about the interview and the allegation about the contact as one composite allegation, when in fact they are two separate allegations. His response “Mr Dowie had not been contacted by Charlton Athletic and invited to attend an interview with that Club until after the press conference on 22nd May” is literally true only in the sense that he had not both been in contact and invited to an interview. But it is confusing and misleading to run the two points together in that way. They required to be addressed separately, as Mr Dowie had addressed them in the Defence and in his solicitors’ letter of 4th October 2006.[143]Mr McParland submits that, by the words I have found he spoke (as set out at paras 128 and 144), Mr Dowie made clear that he was keeping all job options open, including Charlton. Further, if Mr Jordan had been under the impression that Mr Dowie intended to go North, then from that point onwards he knew that Mr Dowie was not limiting himself to any geographical area. I cannot accept this submission.[144]I find that Mr Dowie has not been candid about the 17th May conversation with Mr Murray because he knew that it was about the Charlton job. My further findings of fact in relation to the 20th May conversation are as follows. I do not accept that Mr Jordan asked Mr Dowie if he was leaving for geographical reasons only. But I do find that Mr Jordan asked Mr Dowie if he was leaving for geographical or family reasons, and that he said something about being made to look a fool if Mr Dowie went straight to Charlton. Mr Dowie said words to the effect that he would be out of work on Monday, and he did refer to Charlton, but he did not say that he had to consider any job offer from Charlton.[145]The statement by Mr Dowie that “I have had absolutely no contact whatsoever from Charlton” was a representation about an existing fact. It was false when Mr Dowie made it to Mr Jordan on 20th May. Mr Dowie knew it was false. It was literally false, in the sense that he had had contact from Charlton on 17th May. I find that (including as they do the words “absolutely … whatsoever”) the natural and ordinary meaning of Mr Dowie’s words which would be conveyed to a normal person was not confined to contacts about the job vacancy. But whether that is so or not makes no difference. The statement was also false in the narrower natural and ordinary meaning which Mr Dowie accepts would be conveyed to a normal person, namely that the contact in question was about the job vacancy. I find that the contact was, as Mr Dowie knew, about Mr Murray’s and Mr Dowie’s shared interest in Mr Dowie being a candidate for the position of manager at Charlton. This is not a case of an ambiguous representation which was true in the sense in which Mr Dowie erroneously understood it (see para 20 above). It is a case of a representation which was false in the sense in which Mr Dowie claims to have understood it.[146]By implication, the statement “I have had absolutely no contact whatsoever from Charlton” was also a representation about Mr Dowie’s intentions. It was a statement that he had no present intention of joining Charlton. It is true that he had no firm intention of doing that. He had not been offered the job. But he had a conditional intention of doing so. He intended to join Charlton if offered the job on the right terms, and if he did not have another offer which he preferred to accept.[147]I find that the Club has proved the alleged in para 7, sub-paras 3 and 5 were made, and were false to Mr Dowie’s knowledge, in the manner the Club alleges. Mr Dowie had represented that he had had no contact from Charlton, whereas had had contact from Charlton, and Mr Dowie had represented, by implication, that he had no present intention to join Charlton, whereas he had a present intention to join Charlton, if the conditions referred to were fulfilled.[148]The context of this call, on the Saturday morning two days before the Compromise Agreement was due to be signed, leaves no room for doubt as to the purpose and effect of the misrepresentation. By this misrepresentation Mr Dowie intended to induce Mr Jordan to sign the Compromise Agreement, and the Club was induced by it to enter into that agreement in the form in which the parties signed it.[149]Mr Dowie puts it this way in his statement (as corrected in oral evidence in chief). He states that he believes that Mr Jordan has brought this claim because he had left Palace and then went to a rival club which Mr Jordan particularly dislikes. Mr Dowie does not think that Mr Jordan would have reacted in the same way if he had gone to another club elsewhere in the country. What Mr Jordan would have done if Mr Dowie had been frank about his contact with Charlton is not an issue before me now, but may be an issue at a later stage in any further proceedings in this action. But I do find what he would not have done: he would not have signed the Compromise Agreement in the form and at the time he did sign. BACKGROUND TO 22ND MAY CONVERSATION “Advancing tne [sic] Addicks”

BACKGROUND TO 22ND MAY CONVERSATION

[150]The Addicks is the nickname of Charlton. This document (with the word ‘and’ misspelt in the heading) was used by Mr Dowie in a presentation which Mr Dowie made to Charlton on 23rd May. The existence of the document came to light because it was referred to in the notes of that meeting made by Mr Mills and disclosed by Charlton. It should have been disclosed by Mr Dowie in the normal way. His explanation to me for not disclosing it in his Disclosure Statement is that he had forgotten it. In fact it was disclosed only on 2nd May, a week before the trial. A keyword search was done on Mr Dowie’s computer in the course of disclosure, but the document does not contain any of the key words used, for example “Charlton”.[151]The document is a list of things which Mr Dowie proposed to do, or to arrange, if appointed manager of Charlton. The fact that Mr Dowie arrived for interview with a laptop containing such a presentation made an impression on Mr Murray and others at Charlton.[152]On 9th May 2007, at the start of the trial, Mr Davies QC made an application for disclosure of data relating to the creation of this document, and that application was opposed. I ordered that Mr Dowie disclose the Properties file, that is the file of data which is automatically created in documents produced on MS Word. Mr Dowie made a second witness statement dated 12th May, the Saturday after Day 3 of the trial. A print of the Properties file is exhibited and it shows that the document was created on 19th May at 11.57 and modified on 22 May 2006 at 12.57. The data in a Properties file of this kind are not necessarily to be taken as accurate. Files are moved from one computer to another (as had happened in this case, as Mr Dowie obtained new computers at different jobs). The data in the Properties files are only as accurate as the settings on the computer on which they were saved. But there has been no suggestion by Mr Dowie that the Properties file shows an inaccurate date for the creation and modification of the file in question in this case.[153]Mr Dowie explained that he had used an earlier version of this document at a meeting he said he had had with Derby County over the weekend of 20 and 21st May. When created on 19th May he said that it had had a different title “Re-invigorating the Rams” (that being Derby County’s nickname). He simply changed the title on 22nd May for use at Charlton. In his second statement he says that until he saw the screen prints he thought he had modified it on the morning of 23rd May, but now he is not certain. He produced other files with versions of the document bearing different headings which he had used when he was looking for a job again in January and February 2007. He had also prepared a version in 2004, apparently for use when Blackburn Rovers were looking for a manager.[154]I am unable to believe that Mr Dowie had forgotten the document until reminded of it by seeing it referred to in the note taken by Mr Mills of the meeting of 23rd May. I also find that the document was put in to its present form (that is with the heading referring to Charlton) no later than 11.57 on 22nd May 2006.[155]The telephone bills show that on 21st May that Mr Dowie spoke to Nottingham Forest. They gave a number of dates when their chairman would be available in the following week. Mr Dowie did not respond to this and the contact with Nottingham Forest went no further than that. 22 May Mr Murray contacts Mr Dowie[156]At 0911 on Monday 22nd May 2006 Mr Dowie telephoned Mr Murray, leaving a voicemail message. Mr Murray returned the call at 0912, when they spoke for just over one minute. Mr Dowie states that this call was to advise Mr Murray of the time of the press conference, as he had promised to do. It was to be at 4pm. Mr Dowie told Mr Murray that he would be leaving Palace by mutual consent. Mr Murray suggested that they should speak after the press conference, and Mr Dowie agreed. Mr Dowie states that he does not believe that Mr Murray specifically mentioned the Charlton job, but Mr Dowie accepted that the conversation had nothing to do with players.[157]Mr Dowie was asked in cross-examination what he thought he would be talking to Mr Murray about after the press conference. Mr Dowie replied that he did not know, but that he had an inkling that maybe it was about the Charlton job.[158]Mr Murray was asked whether that was the intention he was intending to convey. He said that he was not trying not to convey that impression. He accepted that it could be regarded as a nod and a wink. Mr Dowie was not Mr Murray’s first choice for the job, but he did not want to rule Mr Dowie out either.[159]At 12.57 Mr Dowie saved on his computer the document headed “Advancing tne Addicks”.[160]I find that the upshot of the conversation at 09.12 was that Mr Dowie and Mr Murray each made clear that they wanted to meet the next day, leaving the details to be arranged after the press conference. That is why Mr Dowie then prepared his presentation. This conclusion is also supported by other evidence. In an answer Mr Murray gave in re-examination, speaking of the conversation that he and Mr Dowie had at 1905 that evening, Mr Murray said he told Mr Dowie that at that time they were “a long long way down the road to appointing someone” (as they were, see below) but he would like to meet Mr Dowie anyway. Mr Murray said that Mr Dowie replied “I’d still like to meet with you”. In their witness statements Mr Dowie and Mr Murray state that it was Mr Murray who said that Charlton “would still like to meet” him. Either way the word “still” means that before the press conference Mr Dowie, or Murray, had expressed the wish to meet in the context of Mr Dowie being a candidate for the Charlton job.[161]Around midday the copy of the Compromise Agreement amended by the PFA was e-mailed to Palace.[162]At 1341 Mr Murray called Mr Dowie for the second time that day. He left a voicemail and again, Mr Dowie states, Mr Murray asked Mr Dowie to call him after the press conference. Mr Dowie did call Mr Murray back after the press conference at 1850, and left a voicemail asking Mr Murray to call back.[163]Mr Jordan flew in from Spain. The flight was delayed and he arrived later than he had intended, at about 3.30pm. When he reached Selhurst Park he was given a copy of the Compromise Agreement amended to include the new clause about compensation. Mr Jordan was slightly uneasy about this clause and would have wished to ask advice from Mr Watts, but he was on holiday.

THE 22nd MAY CONVERSATION BETWEEN MR JORDAN AND MR DOWIE

[164]Mr Jordan and Mr Dowie met when Mr Jordan arrived for the press conference. Mr Dowie informed Mr Jordan that he had been approached by Derby County and by Nottingham Forest over the weekend about him becoming their manager. He said nothing about Charlton. Mr Jordan suggested to Mr Dowie that they do the press conference without signing the Compromise Agreement, but Mr Dowie insisted the signatures must come first. Mr Jordan then spoke to his brother, who is Vice Chairman of the Club. So much is common ground.[165]Mr Jordan states that he again asked Mr Dowie whether he was going to Charlton and stressed to him that he was letting Mr Dowie go on the basis that he wanted to be nearer his family, and that Mr Dowie again told Mr Jordan that he was leaving to move North and had no intention of going to Charlton. As already noted, this allegation is not pleaded in the Particulars of Claim. It is first pleaded in the Reply. That is dated 23rd August 2006, which is later, albeit not long after the events in question.[166]Mr Jordan’s evidence on this exchange is not as clear and consistent as other parts of his evidence.[167]I have given a brief summary (paras 13 and 14 above) of what Mr Jordan and Mr Dowie said during at the Palace press conference. During that press conference Mr Jordan accepted that there had been words between him and Mr Dowie, and that there were other underlying issues, but he emphasised that ultimately the main reason for Mr Dowie’s move was because he needed to be geographically closer to his family. Mr Jordan made clear that he could not work with a manager who was not going to be there for the long term. He referred to the difficulties that would cause with players. Mr Jordan made numerous references to Mr Dowie wanting to go North and to geographical matters.[168]Mr Dowie did not deny this. He said:
“… the family issue has been a problem but it’s also may be time for a challenge for me too…”
[169]Mr Dowie was given an opportunity to clarify his position during questions from reporters. There had been much speculation in the press over the weekend that Mr Dowie was going to Charlton, some of it apparently well informed, as events turned out.[170]Against that background, there was this exchange with a reporter:
“REPORTER Iain, you say new challenge. But if there wasn’t this geographical problem, do you think you would still be at Palace? MR DOWIE It’s the square in the circle. I mean really, I am not in the issue of discussing. I’ve made what I am going to say. I don’t really want to make too much more comments on it. REPORTER Does this mean you’ve already got somewhere in mind to go then? MR DOWIE No, I mean, I have talked to Simon long and hard about this….. REPORTER Can we assume that you’re not going to be going for a job in the South East then? MR DOWIE Listen, my issue, I’ve just said that I need to work for a living, so you have got to take everything. Obviously clearly some things will be better than others but I am not here talking about other clubs because it’s disrespectful”
.

REPORTER Does this mean you’ve already got somewhere in mind to go then?

[171]In this passage Mr Dowie does not exclude the possibility that he might go for a job in the South East, but he does not give any indication that that possibility may already exist. When the press conference finished Mr Jordan and Mr Dowie parted without saying anything to one another.[172]Immediately after the press conference Mr Jordan held an interview with Palace World. That is in effect the Palace TV channel. The reporter referred to Mr Dowie’s reference to a new challenge, and asked “what if he ends up down the road at Charlton?”[173]Mr Jordan replied:
“Iain knows what he agreed and without contradicting the press conference … Iain knows the motivation for leaving was geographical. If he turns up at Charlton, no, I’m not going to be amused with him, no I think it will be a very different ending or a different spirit to the agreement that we’ve just entered into, but you can’t legislate for anything, if he’s out of work for six months and needs to feed his family and Charlton come and give him a job, do I have a right to be upset about someone trying to work in the South East? … whilst he top and tailed it with the fact that he also needed a new challenge, you know … he did himself say that geography was a big part of it, so you know who’s going to look bad? You know, I’ve been hoodwinked, you know he has not been telling the truth… I don’t think that is the case…”
[174]The fact that neither Mr Dowie nor Mr Jordan contradicted one another during the press conference is of no significance. It is not to be expected that they would do that in public. Nor do I attach significance to the fact that they did not discuss the matter immediately afterwards. But what is significant is the way that each expressed himself at the press conference. That was the last occasion before the dispute in this case had arisen on which each spoke of the Compromise Agreement, and what led up to it. And they spoke in a form that leaves no doubt as to what was said.[175]I find that Mr Jordan expressed himself as he did because that is what he understood the facts to be. He understood at that time that Mr Dowie would like to go back to work in the North because of the nature of his family situation, and that was the predominant reason, although not the only reason, why he wished to leave Palace. He was also not expecting Mr Dowie to become Charlton’s manager immediately after leaving Palace. There was nothing contrived about Mr Jordan making the statements that he did make in the press conference. He said what he believed to be the facts. I reject the contention put forward by Mr Dowie that all references to Mr Dowie going back to the North to be closer to his family were designed by Mr Jordan to disguise other reasons for Mr Dowie leaving. The other reasons identified by Mr Dowie as the true reasons were Mr Jordan’s desire to replace him with a manager who was willing to accept Mr Jordan’s plans for the future of Palace and to paint himself in a sympathetic light. If that had been Mr Jordan’s reason for mentioning Mr Dowie’s family, that would not explain why Mr Jordan made clear, as he did in response to a question, and later to Palace World, that he would not take it well if Mr Dowie went straight to the job at Charlton.[176]I find that at the meeting when the Compromise Agreement was signed, something was said by Mr Jordan and Mr Dowie in which Mr Jordan expressed his hesitation about signing the Compromise Agreement and Mr Dowie made disclosures about Derby County and Nottingham Forest, but not about Charlton. I am unable to find exactly what was said. I find that Mr Dowie did not expressly state that he was leaving to move North. Nor did he expressly state that he had no intention of going to Charlton. If he had made express statements to this effect, Mr Jordan would have set them out in his Particulars of Claim. But I also find that Mr Dowie left Mr Jordan with the understanding at this point that Mr Dowie still intended to move North.[177]There was certainly an opportunity at this point for Mr Dowie to bring Mr Jordan up to date about his contacts with Charlton but he did not do that. Even if (contrary to my finding) Mr Dowie had believed that the statement he made on 20th May was true at the time when he made it, the statement had since been falsified by events to his knowledge. The events were his conversation with Mr Murray that morning, and his preparation of ‘Advancing tne the Addicks’. So when Mr Dowie spoke to Mr Jordan before signing the Compromise Agreement he was bound to, but did not, correct what he had said on 20th May. That statement on 20th May was false to Mr Dowie’s knowledge at the time when Mr Jordan relied on it by signing the Compromise Agreement. That is so, whether or not I am correct in finding that it was false to his knowledge when he made it on 20th May.[178]So far from correcting what he had said, Mr Dowie did the opposite. By his references to Derby County and Nottingham Forest (but not Charlton), Mr Dowie impliedly affirmed the initial representation made on 20th May and its falsity. Accordingly in relation to the 22nd May I make the same finding as I made in relation to the 20th May conversation, which I set out at para 147 above.[179]Mr Dowie intended Mr Jordan act in reliance upon the misrepresentations he made by entering into the Compromise Agreement in the form that it was on 22nd May and Mr Jordan felt that he could trust Mr Dowie on this point. On that basis he signed. 22nd MAY AT CHARLTON[180]The period of the Palace press conference was also a busy time at Charlton. On the afternoon of 22nd May Charlton were meeting Mr Billy Davies with Mr Price. By this time Mr Varney had prepared what Mr Murray called a £3m offer to Mr Billy Davies. Mr Billy Davies arrived at Charlton at about 2pm and was given a tour of the grounds for two hours with Mr Price. At about 4pm Mr Price met Mr Murray and Mr Varney, while Mr Mills and Mr Billy Davies were left together outside. Mr Murray opened the meeting saying that he wished to offer Mr Billy Davies the job, and Mr Varney took out the contract. Mr Price first made enquiries to establish that there was no intermediary involved who might claim a fee.[181]What Mr Murray said next provided the strongest basis for the mistaken belief that Mr Dowie had already been interviewed by Charlton. Mr Murray told Mr Price that there were five candidates, whose names Mr Price gave. They included Mr Billy Davies, Mr Taylor, Mr Dowie and two others. As Mr Murray gave the names he gave a short description of each of them. Each of them apart from Mr Dowie had been interviewed by Charlton, having appeared under the heading ‘applicants’ on the lists prepared by Mr Varney since 11th May.[182]The descriptions given by Mr Murray are vivid. The one he gave of Mr Dowie was “not photogenic but hard working and disciplined”. It appeared to Mr Price that the Charlton board had considered all of these candidates and rejected the others in favour of Mr Billy Davies. Mr Murray then said to Mr Price that Mr McGuire had put forward Mr Dowie and was pushing him. (In fairness to Mr McGuire I note that that is what Mr Murray said to Mr Price. Mr McGuire’s evidence is that he did not put anybody forward as a potential manager. He said he would not get involved in that anyway, and certainly not while Mr Dowie was at Palace. I have not had to make any findings of fact on this).[183]Mr Price was not challenged on this evidence in cross-examination. In his witness statement Mr Murray accepted that he may have mentioned Mr Dowie’s name, but explained that that was to put pressure on Mr Billy Davies to make a decision.[184]I have no hesitation in accepting Mr Price’s account. I conclude that at the time of that interview, which was simultaneous with the Palace press conference, Mr Murray did regard Mr Dowie as a candidate, notwithstanding that he had not interviewed him for the job. Mr Murray was able to describe Mr Dowie and form a judgment on his abilities because they had met in the usual course of visits between their two clubs, although not recently. I have taken this into account in arriving at my findings as to what occurred between Mr Dowie and Mr Murray and between Mr Dowie and Mr Jordan on that day.[185]Mr Price then went through the draft contract with Mr Varney, and Mr Price said he would take instructions and call them back the next day. At the end of the meeting Mr Billy Davies and Mr Mills were invited into the room. Mr Murray said to Mr Billy Davies “We have offered you a contract and look forward to working with you”. In the event, next day Mr Billy Davies did not want to take up the offer. But he did not communicate that promptly, which caused some confusion and surprise at Charlton. On 24th May Charlton withdrew the offer.

AFTER THE PALACE PRESS CONFERENCE

[186]As already noted Mr Dowie called Mr Murray at 18.50, and Mr Murray called him back at 19.05. They spoke for nearly two minutes, during which Mr Murray invited Mr Dowie to a meeting about the Charlton job, as more fully described above. At 22.00 Mr Murray sent Mr Dowie a text message with the time and place of the meeting, and Mr Dowie announced to his brother and other friends that he had been offered an interview at Charlton.[187]Mr Dowie attended his interview with Charlton on 23rd May at the central London house of a friend of Charlton’s. He made a good impression.[188]Charlton became concerned about the lack of response from Mr Billy Davies, and on the evening of 23rd May Mr Murray invited Mr Dowie to meet for a second interview on 25th May.[189]On 24th May Mr Dowie left a voicemail message for Mr Jordan saying that he had been to see Derby County and Charlton. The message about Derby County is surprising. According to Mr Dowie, he had been to see Derby County during the weekend before 22nd May 2006, and he had already mentioned Derby County to Mr Jordan on 22nd May. Mr Jordan consulted his lawyers.[190]On 25th May at the second interview Charlton offered Mr Dowie the job. On 30th May Mr Dowie signed the contract with Charlton (on the same terms as those offered to Mr Billy Davies) and Charlton announced his appointment at their press conference.[191]The Charlton press conference was broadcast by Sky TV. Mr Murray made the announcement with Mr Dowie sitting beside him. As soon as Mr Murray finished what he had to say, there was the following exchange: “QUESTIONER When you left Crystal Palace a week ago did you always intend coming to Charlton? MR DOWIE No. Not at all. No. There’ll be a lot made of it. The first conversation I had with Charlton was two days after. You know, and that was because I had a phone call the following day saying they’d like to talk, so, what I did find, they were very enthusiastic … At that time I never really envisaged it at all. It was something probably furthest from my mind. You know you can never read into speculation. I’d had no contact whatsoever and am fully comfortable with the fact that I’ve covered myself with lots of integrity”.[192]At trial Mr Dowie accepted that this account was false, if only on the basis that it was inconsistent with the case he was advancing at the trial. It was not true that the first conversation Mr Dowie had with Charlton was two days after he left Palace. On his case at trial the first conversation was either at 19.05 on 22nd May, the day he left Palace, or on 23rd, the following day, when he attended the first interview. On his case the phone call saying they’d like to talk was the one at 19.05 on 22nd. It was not on “the following day”.[193]Nor was it true that he had no contact whatsoever. When first asked about that Mr Dowie replied that although there had been contact with Charlton, what he said at the Charlton press conference was true, because the contact had not been about the Charlton job. I have already set out my findings as to the contact before Saturday 20th May, where I have not accepted Mr Dowie’s account. But by the time Mr Dowie repeated this statement on 30th May, there had also been the further contact on 22nd May, as I have set out. Mr Dowie does not advance as an explanation for the contact on 22nd May 2006 that it was to talk about players. So even on his own account of 22nd May, he had had contact with Mr Murray in which he did envisage coming to Charlton. On his own evidence at the trial, as it emerged, it was not true that he “never really envisaged coming to Charlton at all”, and that that was “something probably furthest from his mind”.[194]So at the Charlton press conference on 30th May Mr Dowie gave a false account of his contact with Charlton, while at the same time claiming to have acted with integrity. I have taken this into account when assessing the extent to which I should accept Mr Dowie’s evidence in relation to the other matters on which his evidence conflicts with that of Mr Jordan.[195]On 30th May the Claim Form was issued.[196]On 13th June it was announced that Mr Taylor was the new manager of Palace. The Club paid compensation to Hull in the sum of £300,000 plus VAT. Mr Taylor’s remuneration is similar to that provided for under Mr Dowie’s contract.[197]Mr Dowie ceased work at Charlton on 13th November 2006 and commenced work as manager of Coventry City FC on 19th February 2007.

SUMMARY OF FINDINGS OF FACT ON MISREPRESENTATION

[198]I have found (in paras 84 and 98 above) that, in relation to the 10th May and 16th May conversations, the Club has proved that Mr Dowie said that he intended to leave Palace to move to the North of England for family reasons, if he got a job opportunity near his home (para 7.1 above). These representations were not false when made. Mr Davies QC made clear that he does not suggest that they were false when Mr Dowie made them.[199]The Club has not proved that Mr Dowie represented that that was the only reason for his wishing to leave Palace (para 7.2 above).[200]I have found (in paras 147 and 178 above) that, in relation the 20th and 22nd May conversations, the Club has proved that the misrepresentations alleged in para 7, sub-paras 3 and 5, were made, and were false to Mr Dowie’s knowledge. Mr Dowie had represented that he had had no contact from Charlton, whereas he had had contact from Charlton on 17th May, and again on the morning of 22nd May. And Mr Dowie had represented, by implication, that he had no present intention to join Charlton, whereas he had a present intention to join Charlton, if the conditions referred to were fulfilled.[201]The Club has proved that Mr Dowie represented that he had not been invited to attend an interview with Charlton. That is implicit in the representation that he had had not contact from Charlton. But the Club has not proved that that representation was false (para 7.4 above).[202]In the light of my findings in relation 20th and 22nd May, I do not have to make a finding whether, on either of those dates, the representations made on 10th and 16th May had been falsified by events, so that, on 20th and 22nd May, Mr Dowie came under a duty to correct what he had said on 10th and 16th May. It would not make any difference whether that were so, or not. I do not think that I ought to make findings on a hypothetical basis. On 20th and 22nd May Mr Dowie made the misrepresentations I have found as to his contacts from Charlton. It would be a hypothetical exercise to consider what (if anything) Mr Dowie ought to have said about his intentions to move North to be with his family, if he had not made the misrepresentations that he did make about his contact from Charlton.[203]Similarly, although I have found that Mr Dowie represented, by implication, that he had no present intention to join Charlton, whereas he had a present intention to join Charlton, if the conditions referred to were fulfilled, I do not have to consider the legal effect of the conditional intention that I have found Mr Dowie had. It makes no difference that he made a misrepresentation as to his intentions, given that he has made a misrepresentation as to the facts of the contact from Charlton.[204]I have found (paras 148 and 179 above) that Mr Dowie intended Mr Jordan to act in reliance upon the misrepresentations he made by entering into the Compromise Agreement in the form that it was on 22nd May, and that Mr Jordan was so induced to enter into it by those misrepresentations.[205]I should make clear what I mean in those instances where I have not accepted the evidence of Mr Jordan. I do not mean that he was attempting to mislead the court. On the contrary, I find that he was doing his best to give true evidence. At times he confused what Mr Dowie actually said with what he understood Mr Dowie to mean. At other times Mr Jordan’s recollection was not sufficiently clear to satisfy the high standard of proof that I have applied to the facts of this case.

THE CLAIM UNDER THE MISREPRESENTATION ACT 1967

[206]It follows from the foregoing that I do not have to consider any alternative claim for innocent misrepresentation under the 1967 Act.

THE CLAIM FOR RESCISSION

[207]In paragraph 24(a) of the Particulars of Claim the Club contends it is entitled to(a) rescission of the Compromise Agreement, and all orders necessary to effect rescission,(b) payment of £1 million pursuant to the clause 2.2.3 of the Employment Contract;(c) alternatively, damages in lieu of rescission. In paras 25 and 26 the Club contends, in the alternative, that it is entitled to damages, including restitutionary damages, or an account of profits. When this claim was framed, Mr Dowie was still at Charlton and the Club had in mind the difference between what Mr Dowie was expected to earn at a Premiership club compared to the lower sum that he would have been expected to earn if he had remained at Palace. In other words, the Club sought an order that he give to the Club the profit the Club claimed he had made from his deceit. Given Mr Dowie’s premature departure from Charlton, and his period of unemployment before going to Coventry, it is not possible to say if he has made any profit. At the start of the trial Mr Davies QC applied to me for disclosure orders that would cast light on this point. I refused to make the orders sought on the grounds that they were not necessary for the issues I have to decide and premature.[208]All of the orders the Club seeks are financial. It is submitted that all relevant sums can be calculated and put in the balance to arrive at a figure which it is just that Mr Dowie should be ordered to pay to the Club. There is no suggestion that Mr Dowie ought to return to active employment with the Club.[209]I have set out above (para 17 above) some provisions of the law relating to rescission. In the present case the contract which was entered into on the basis of the misrepresentation was the Compromise Agreement, which terminated the preceding Employment Contract. It follows that the effect of rescission would be retrospectively to revive the Employment Contract. See Chitty para 6-103 and Occidental Worldwide Investment Corp. v Skibs A/S Avanti [1976] 1 Lloyd’s Rep 293, 337 col 1. The Employment Contract expires according to its terms in a year’s time, 30th June 2008. But as already noted, it is Mr Dowie’s contention, made in his Counterclaim, that if the Employment Contract has not been terminated by the Compromise Agreement (because the Compromise Agreement is rescinded) then it was terminated at an unspecified date in May 2006 by reason of the constructive dismissal of Mr Dowie, given the breaches of the implied terms of trust and confidence that Mr Dowie alleges the Club has committed. Alternatively, if the Employment Contract is still in being, and has not been terminated by reason of his constructive dismissal, then he claims (amongst other things) to be entitled to all sums due under that contract, including bonus payments.[210]Mr McParland submits that the remedy of rescission is not available to the Club, and never has been, because it is impossible to return the parties to the position in which they were before the Compromise Agreement was signed. Mr Dowie cannot be returned to the employment of the Club, and the Club cannot restore to him his job at Palace. Mr Dowie is under contract to Coventry, and the Club has another manager in place. The rights of third parties are therefore engaged. The provisions of Mr Dowie’s Employment Contract are closely related to the performance of the Club, and it makes little sense for the contract to subsist unless Mr Dowie is in fact working (subject to the temporary situation that might prevail under the gardening leave clause).[211]Mr McParland’s argument is based on the rule of law that a contract induced by fraud is not void, but voidable at the option of the party defrauded. It follows that when that party exercises his option to rescind, he must be in a state to rescind, that is he must be in a state to put the parties into their original state before the contract. This used to be called a requirement for restitutio in integrum and is now said to be for counter restitution. In none of the cases cited to me by counsel did the court have to consider a case where rescission would have the effect of putting the parties back into a contractual relationship which they had previously agreed to terminate. That was not the situation in Occidental, because in that case the impugned agreement was one varying the original contract, not terminating it.[212]Each party cited to me a number of authorities on the question whether rescission was available in the present circumstances. The most recent case, relied on by Mr Davies QC, is Halpern v Halpern [2007] EWCA Civ 291. The court did not have to reach a conclusion on the facts of that case, but the principles are discussed in the judgment of Carnwath LJ. He said:
“60. ... The classic statement ... is in Erlanger v New Sombrero Phosphate Company (1878) 3 App.Cas.1218, 1278, per Lord Blackburn: "… a Court of Equity could not give damages, and, unless it can rescind the contract, can give no relief. And, on the other hand, it can take accounts of profits, and make allowance for deterioration. And I think the practice has always been for a Court of Equity to give this relief whenever, by the exercise of its powers, it can do what is practically just, though it cannot restore the parties precisely to the state they were in before the contract." (emphasis added) In more modern times, the same approach was adopted and applied by this court in O'Sullivan v Management Agency and Music Limited [1985] 1 QB 428 (see p 458 per Dunn LJ). ... 74. ... for the purposes of "practical justice", the primary objective may not always need to be to restore both parties to their previous positions. As Professor Treitel has said (in the context of rescission for misrepresentation): “… the essential point is that the representee should not be unjustly enriched at the representor's expense; that the representor should not be prejudiced is a secondary consideration, which is only taken into account when some benefit has been received by the representee" (Treitel, Law of Contract 11th Ed, 2003 p 380, a passage quoted by Burrows at p 178).” 75. … the practical effect of counter-restitution, in the terms explained by Lord Blackburn in Erlanger, will depend on the circumstances of the particular case… The form of the remedy, whether equitable or tortious, is a matter which cannot sensibly be decided until the facts are known…” "… a Court of Equity could not give damages, and, unless it can rescind the contract, can give no relief. And, on the other hand, it can take accounts of profits, and make allowance for deterioration. And I think the practice has always been for a Court of Equity to give this relief whenever, by the exercise of its powers, it can do what is practically just, though it cannot restore the parties precisely to the state they were in before the contract." (emphasis added) “… the essential point is that the representee should not be unjustly enriched at the representor's expense; that the representor should not be prejudiced is a secondary consideration, which is only taken into account when some benefit has been received by the representee" (Treitel, Law of Contract 11th Ed, 2003 p 380, a passage quoted by Burrows at p 178).”
[213]The point of substance which Mr McParland submits makes the remedy of rescission important is that if there is no rescission then Mr Dowie will be in a position to enforce clause 8 of the Compromise Agreement to prevent further public abuse by Mr Jordan in the media. I have not heard argument on the enforceability of clause 8 in the light of this judgment, and at present I can form no view as to how significant this point might be in practice.[214]Mr McParland also submits that there has never been any genuine claim to rescind, and that the purpose of the proceedings is not to restore the employment of Mr Dowie at Palace, but to obtain compensation. I accept that the Club does not wish Mr Dowie to act as manager again, but the purpose of obtaining compensation is not inconsistent with seeking a remedy by way of rescission.[215]Mr Davies QC submits that the court must fix on the goal of doing what is practically just, and that the requirement of counter restitution is not to be applied too literally. That is not in dispute. He goes on to submit that if third party rights are engaged, that is a consideration that goes to whether counter restitution is possible.[216]The rights of Coventry City FC under that club’s contract of employment of Mr Dowie seem to be a significant point that is not of a kind that is normally considered under the heading counter restitution. Counter restitution is what the representee (the Club) would have to give in exchange for Mr Dowie giving up his release from the Compensation Clause and returning to the Club’s employment. It would in principle include the salary and bonuses (if any) due to Mr Dowie under the revived Contract of Employment. In my judgment it would not be just to Coventry City FC that this court should make an order the effect of which is to place Mr Dowie under an employee’s obligations to the Club. A manager cannot perform two Employment Contracts at the same time. And if the Club envisages, as it apparently does, that it will not call for Mr Dowie to perform any obligations under the Employment Contract other than the obligations under the Compensation Clause, then that does not seem to me to be rescission in any practical sense at all. It is not possible to sever one term of the Employment Contract from all the others. It is either revived by rescission of the Compromise Agreement, or it is not.[217]In my judgment practical justice in this case means the making of appropriate orders for damages or other financial relief. It might at some point be necessary to categorise the claims as either damages in tort, or damages in lieu of rescission, or in other ways. That is not necessary at this stage. Practical justice does not require that the Compensation Clause be revived on its own, severed from all the other obligations the Employment Contract placed on Mr Dowie. The financial remedies available to the court can be adapted to the circumstances of the case.[218]In my judgment the Compromise Agreement should not be rescinded. SUMMARY[219]The Club’s claim that Mr Dowie deceived Mr Jordan succeeds. The reasons are in the findings of fact that I have made, which are summarised in paras 198 to 204 above. The answers to the questions posed in para 5 are: a) The Club entered into the Compromise Agreement dated 22nd May 2006 on the basis of fraudulent representations by Mr Dowie to the extent that I have found summarised in paras 198 to 204 above (and the paragraphs referred to therein); b) The Compromise Agreement should not be rescinded.

Cited in 2 later judgments