In a recent New South Wales decision, the Supreme Court of Australia found that television company Seven Network (Operations) Limited (Seven) was entitled to final injunctive relief against UK former Spice Girl Mel B(rown), who sought to work on a competing television talent program in breach of her contract to provide exclusive services to Seven in Australia on the X Factor.

Seven argued that it had exercised an option in Mel B’s contract, under which she was committed to provide her exclusive services to Seven until 31 January 2014.  However, it allowed her to provide these services in a more limited form after learning that her children’s visa issues would affect her ability to remain in Australia for the extended period required for the filming of the series.

Mel B, in move ironically reflective of her lyric, ‘Yo, I’ll tell you want I want, what I really, really want’, sought to walk away from her obligations to Seven and through her husband’s management company entered into a written agreement with rival network Nine to act instead as a celebrity judge on Australia’s Got Talent in 2013.  Mel B argued that following discussions between her husband and Seven’s Director of Production:

  • there was no promise to extend the agreement; and
  • even if there was, as a result of various exchanges in February 2013 it had been terminated or discharged; or
  • if it had not been terminated/discharged, the agreement was a restraint of trade and so unenforceable.

Seven was successful in the first round of judging by the Court, obtaining an Order restraining Mel B and her husband’s company from performing any agreement with any person other than Seven for her to appear on television in Australia at any time before 31 January 2014.

In the Grand Final hearing for a permanent injunction for the term, Mel B was told to ‘Stop right now, thank you very much’.  The Court found there was no evidence of a release of obligations and the agreement had not been terminated.  Further, there was a binding agreement based on terms which went no further than to release Mel B from physically coming to Australia to perform the role as originally contemplated before the visa issues arose, and did not extend to permitting her to engage in television work in Australia other than via Seven.  The Court found the proposition that this limited agreement was a restraint of trade to be untenable. Hammerschlag J found that were Mel B to perform under the agreement, Seven would be obliged (and it had expressed a willingness to) pay her in accordance with the contract.  However, if Mel B was not ready and willing to perform she was not entitled to remuneration under the contract.  “It is all in her own hands”, he said, with some understatement.

This decision confirms the importance of including well drafted exclusive service clauses in contracts to prevent key personnel from being poached or developing conflicting interests which compromise or prevent the performance of their duties during the contract term, particularly in competitive industries.  While this case involved a contract for service, the case also has application to employment contracts.  Although every employee in Australia is subject to the common law duty of fidelity, it is recommended that employment contracts give this duty express contractual force by including an exclusive service clause.  Similarly the written contract here was slowly buried under a pile of oral and email “clarifications” and misunderstandings, caused by the failure of both parties, Seven in particular, to keep their eye on the ball and to keep reiterating the key points – that if Mel B were going to be on television in Australia, it could only be via Seven.  In the end, Seven got to lift the big prize (ensuring that Mel B did not appear on any Australian television variety show unless one of its own) but only at very significant cost and uncertainty all round.  People say that lawyers’ insistence on reducing obvious points to writing in employment and consultancy contracts is unnecessary.  Here is proof positive that when counter-allegations and real or engineered “miscommunications” are in play, nothing beats a decent document.