Case : Hummingbird Music V Dino Acconci and Giulio Acconci – Outcomes Essay

Carlson DHCJ rejected all Soler’s defences. In respect of the defence of “restraint of trade”, Carlson DHCJ held that the arrangement between the parties was a joint venture and the parties were of equal bargaining power. Soler appealed on the primary ground that the Agreements was in restraint of trade. The decision of the Court of Appeal Restraint of trade The Court of Appeal stated that Soler’s pleading in respect of their allegation of restraint of trade was wholly defective and should have prevented the point from being considered any further.

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The CA held that “a contract is not regarded in law as being in restraint of trade simply because it ties the parties during the continuance of the contract. ” Assuming the study made by Jonathan Parker J in Panayiotou & Ors v Sony Music Entertainment Ltd [1994] EMLR 229, the CA concluded that in considering whether a contract falls within the legal category of being in restraint of trade, a two stage process should be invoked.

The CA agreed with Carlson DHCJ’s finding that the arrangement between Hummingbird and Soler was a type of joint venture and held that there is no restraint of trade.

The Court found that there was no inequality of bargaining power between the Plaintiff and the Defendants. The Plaintiff was a novice manager and the Defendants had some industry experience. Undue Influence One of the issues raised by the Defendants was that the 2nd Agreements were voidable for undue influence. In doing so, the Defendants alleged that there existed a relationship of confidence between manager and artist, in which the Plaintiff “occupied a position of dominating influence”. This would give rise to the issue of undue influence when the artist enters into a transaction which cannot be explained by ordinary motives.

However, the Court rejected the Defendants’ arguments. Since the Defendants were individuals in their mid-thirties who were well able to decide what was best for them and they made the decision by signing on the 2nd Agreements, there was no evidence showing that the Defendants were subject to undue influence when they entered into the 2nd Agreements. Fiduciary Duties The Plaintiff, being the manager/agent of the Defendants, owes fiduciary duties, to act in good faith and in the best interests of the Defendants.

The Defendants alleged that the Plaintiff had breached fiduciary duties by misappropriating and failing to give proper account of the Defendants’ income. However, the Court held that the Plaintiff had acted conscientiously in relation to its duties to the Defendants. Conclusion Specific performance cannot be granted for a contract of personal services on both sides which involves mutual trust and confidence. In these circumstances, the Court will award damages of HK$5 million to be paid by the defendant but the plaintiff could no longer use the advantages of defendants for commercial exploitation.

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