Thursday, 9 June 2011

Araci v Fallon [2011] EWCA Civ 668: derby disaster

The biggest horse race on the flat was held over the weekend; a tight finish saw 19 year old Mickael Barzalona claim a thrilling victory, just ahead of Her Majesty’s Carlton House and comparative outsider Treasure House.

One jockey who was not involved in the finish was Kieran Fallon, six time Champion Jockey and three time Derby winner.  Definitely one to have on one of your horses, which is what the Araci family thought when they had a likely nag.  They accordingly paid Fallon ten grand to be the chosen rider for Native Khan, entered in the Derby on the back of three wins in five races.  Fallon rode it to two of those wins; he evidently knew the horse.

Trouble is, Fallon then agreed to ride a different horse, Recital.  The Aracis were not pleased; not only would they lose the services of a top rider, they would see him riding in opposition.  If it came to a head to head between Recital and Native Khan, Fallon’s knowledge might have been the difference maker.

So the Aracis sought an injunction to stop Fallon riding.  It was pretty much conceded that they could not force Fallon to ride Native Khan, indeed they probably wouldn’t want that – the trust had gone – but they could stop him taking advantage.

It’s a difficult thing to get.  The Court does not like a party stopping someone else from making a living, even if that living is a breach of contract.  Normally the Court would say that damages would be enough.  Indeed this is what the court decided first time of asking; Fallon was free to ride Recital.

But the law can’t half shift when it wants to.  An appeal was lodged, heard the same day and the result given the next morning.  The reason?  That morning happened to be Derby day.  And the Court of Appeal awarded an injunction.

The Court looked at the factors afresh.  The case was finely balanced, but there were a couple of key considerations.  Firstly, would damages be appropriate?  Even ignoring the kudos in owning a Derby winner, damages would be fiendishly difficult to calculate.  If Recital won, with Native Khan third, would Fallon’s breach of contract have caused NK to finish third rather than first?  Or would third have been the best it could have done even had I been riding Recital?  Secondly, let’s assume that the Aracis missed out on the huge stud fees a Derby winner could command.  Maybe millions of pounds.  Could Fallon afford it?  There was no evidence.

So the Court took the unusual step of awarding an injunction.  Only an interim one – stopping Fallon from riding in the Derby, the rest will be sussed out at a full trial – but the Court was pretty scathing of Fallon’s evidence, giving a pointer to an end result.  The injunction may yet be made permanent insofar as major races go, and damages will also, presumably, be awarded.  As best as can be assessed, at any rate.

Ironically, Native Khan came fifth – just ahead of Recital.  Maybe Fallon made the wrong choice anyway…

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