Ministry of Sound v World Online

Ministry of Sound (Ireland) Ltd v World Online Ltd [2003] EWHC 2178

Contract law – Breach of contract – Summary judgments

Facts

M was one of a group of companies that appealed against a summary judgment that had refused its application for the payment of a final instalment payment as per the terms of a written agreement with W, an internet provider, for the association to its brand name. Under the agreement, M was required to distribute CDs made by W. W argued that M had breached the contract in relation to evidence of promotional activities and levels of expense. M counter-argued that W had not provided the CDs and that this failure had damaged their brand image. In defence, based on the case of White & Carter (Councils) Ltd v McGregor [1962] AC 413, W argued that where a defendant had prevented the claimant from carrying out the contract, the claimant could only sue for damages and that M had suffered no loss so the action should be dismissed.

Issue

The issue for the court was whether the actions of M still required W to complete the final payment as agreed between the parties. The court was also required to consider whether W could rely on its own breach of contract to prevent specific performance.

Decision/Outcome

The court held that W was liable to pay the final payment for the instalments agreed under the contract between the parties. The claim was to make payments on specific dates and this had been breached. The principle in White was restricted to cases where the performance prevented was a precondition to payment, whereas, in the current situation, the payment had almost finished. W could not rely on its own breach of contract to prevent a claim of specific performance. The court ordered a full trial due to the nature of the complex facts.