Future Sound Asia Sdn Bhd v The 1975 Productions LLP & Ors

A company contracting with a corporate vehicle for services will not ordinarily obtain a parallel tort claim against the individuals performing those services. Personal liability may arise where the individual objectively assumes responsibility to the claimant, but the relevant dealings must cross the line between them and convey that assumption. A contractual allocation of risk is a powerful reason against imposing tortious duties which circumvent the chosen structure.

On an assumed-facts basis, a general undertaking given to a regulator, historic performance restrictions and communications with tour management did not establish personal assumption of responsibility. A common-design claim also requires more than trivial assistance. An inducement claim against an agent requires pleading that the agent acted outside the protection afforded to a servant acting bona fide within authority. Exemplary damages are unavailable for a claim founded merely on breach of contract.

The claimant, organiser of a Malaysian music festival, contracted with the first defendant limited liability partnership for a performance by The 1975. It sued the partnership and the individual band members after the festival was cancelled following alleged misconduct during the performance.

The application by the second to fifth defendants concerned alleged personal liability in negligence, joint tortfeasor liability based on common design, and inducement of the partnership’s alleged contractual breach. The parties agreed that the pleaded facts should be assumed true for the application and that the draft amended pleading represented the claimant’s best case. The central questions were whether the individuals had a real prospect of establishing a duty of care or accessory liability, and whether the pleaded inducement and exemplary-damages claims could proceed.

1. Application granted. The court struck out and/or granted reverse summary judgment on the claims against the individual defendants. It also struck out abandoned negligence and contractual allegations against the LLP and the individual defendants, and the claim for exemplary damages.
2. The court applied the strike-out and summary-judgment principles in Easyair Limited v Opal Telecom Limited [2009] EWHC 339 (Ch), approved by AC Ward & Son Limited v Catlin Limited [2009] EWCA Civ 1098. Pleaded facts were assumed true for strike-out purposes. The duty issue was principally one of law on the assumed facts, and there was no compelling reason to defer it to trial.
3. The contractual structure was the starting point. Under Lifestyle Equities CV v Ahmed [2024] UKSC 17, the normal understanding is that an agent performing through a principal does not thereby assume personal liability to the other contracting party. Tort should not circumvent a voluntary contractual allocation of risk.
4. The extended Hedley Byrne principle could in principle impose personal liability where there was an assumption of responsibility. Applying Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830, the touchstone was an objective assessment of things said or done by or on behalf of the individuals in dealings crossing the line between them and the claimant. There had been no personal dealings. The 2016 prohibitions were too remote, the PUSPAL Letter was addressed to the regulator and served the licensing process, and the conversation with tour management was too flimsy. The matters concerning the band’s knowledge or state of mind could not supply the necessary assumption.
5. It would also not be fair, just and reasonable to impose the pleaded duty. Doing so would circumvent the contractual risk allocation, undermine the limited-liability structure, and impose obligations concerning Malaysian rules of whose content the individuals were not alleged to have known. The negligence claim therefore had no real prospect of success.
6. The common-design claim was sufficiently pleaded in form, but, under Fish & Fish Ltd v Sea Shepherd [2015] AC 1229 and Lifestyle Equities, accessory liability required assistance more than trivial in nature. No such assistance was pleaded against D3 or D5.
7. The inducement claim against D2 and D4 failed under Said v Butt [1920] 3 K.B. 497. The claimant had not pleaded want of good faith outside the scope of authority, which was fatal under the principle applied in Holding Oil Finance Inc v Marc Rich & Co AG.
8. Exemplary damages were unavailable for a wrong consisting merely of breach of contract. The court reserved the precise form of order for further submissions.