Evangelical association’s breach of contract claim for cancelled arena event rejected by Glasgow sheriff

The Billy Graham Evangelistic Association was due to host an event in the Hydro on 30 May 2020. It sought a contractual remedy or alternatively damages from Scottish Event Campus Ltd for the cancellation of the event and for the “hurt feelings” of the pursuer and its members.

The case was heard in Glasgow Sheriff Court by Sheriff John McCormick. The pursuer was represented by Aiden O’Neill QC and David Welsh, advocate, while the defender was represented by Dean of Faculty, Roddy Dunlop QC and John McGregor QC.

Force majeure event 

The pursuer hired premises at the Hydro for an event involving Franklin Graham, the son of the Association’s founder and a controversial American evangelical preacher. On 29 January 2020, Glasgow City Council, the majority shareholder in SEC Ltd, wrote to the pursuer to request that it cancelled the booking.

In its letter, the Council stated that it was concerned that Mr Graham could make homophobic or Islamophobic remarks that could raise issues for, in terms of its duties under the Equality Act 2010 as well as damage the reputation of the city of Glasgow as a welcoming place particularly for members of the LGBTQ and Muslim communities.

On the same date, the defender wrote to the pursuer to inform them that their hire agreement was terminated by material breach on the basis of recent adverse publicity surrounding the tour the event was a part of. The pursuer interpreted this letter as an anticipatory breach of contract on the part of the defender.

In March 2020, following the raising of the action, the defender’s solicitors wrote to the pursuer’s to state that, assuming the contract was valid, it would be cancelled regardless as the coronavirus pandemic constituted a force majeure event as provided for in the hire agreement. The Hydro was also converted into a temporary hospital facility during the course of the pandemic, rendering it unsuitable for hosting an event.

It was submitted for the pursuer that the original termination letter clearly demonstrated that the defender would not perform its contractual duties, and it was entitled to insist upon performance. Further, there was no basis for the suggestion that Mr Graham would make any sort of hateful comments and he had issued a public statement to that effect in January 2020.

Addressing the COVID-19 argument it was submitted that the defender could not be wholly absolved of wrongdoing as a consequence of the pandemic. The argument was compared to “a doctor wrongfully removing a patient’s spleen arguing that he should escape liability for solatium because the patient subsequently suffers an injury which would have necessitated the removal of the spleen to save the patient’s life”.

The defender conceded that the pursuer’s Equality Act case in respect of religious discrimination against a mainstream Christian sect was relevant. However, the invocation of the force majeure clause made the possible earlier termination of the contract irrelevant, as it was either terminated by the clause or by common law frustration. With the contract at an end, there was no basis on which the pursuer could compel the defender to make the Hydro available to them on an alternative date and therefore no basis for any damages in respect of the cancellation.

Discretion to proceed

In his decision, Sheriff McCormick began by addressing the contractual issues, saying: “The pursuer raised these proceedings seeking an order to use the venue and related facilities in accordance with the contract. The pursuer has never accepted the anticipatory breach of contract. Accordingly the contract subsisted.”

On the effect of the pandemic, he said: “In abstract, where a force majeure event occurs the common law of frustration of contract intervenes unless the contract provides for such an event. Here the contract includes a force majeure clause. Therefore the common law of frustration of contract does not apply.”

He said of the text of the relevant contractual provision: “Clause 11.2 affords to the defender a discretion whereby, although the SEC ‘itself’ may be able to fulfil the substance of its obligations then the SEC shall be entitled to cancel ‘or’ suspend the event hire agreement.”

He continued: “The defender had discretion either to proceed with the agreement as best it could or to cancel the agreement. Therefore, while I agree with the pursuer that the event might have been, for example, postponed rather than cancelled, I do not accept that that option lies with the pursuer.”

Sheriff McCormick concluded on this matter: “[The pursuer’s decision] kept the contract alive. COVID intervened. The defender then exercised its option to cancel the (still subsisting) contract. That decision was within its discretion in terms of clause 11.2. In my opinion therefore, the pursuer’s case founded on an anticipatory breach of contract is irrelevant.”

Substantial averments 

Turning to the pursuer’s Equality Act case, Sheriff McCormick said: “Here the parties dispute many of the facts and, importantly, the true basis and motivation for cancelling the event. The pursuer’s averments are substantial and relevant. The defender’s averments are also detailed and, in my opinion, relevant.”

He continued: “If [the pursuer’s] averments, on balance of probabilities, can be proved, it seems to me that the court should be reluctant to limit the potential remedies available without first hearing evidence on the merits of the available options.”

On whether any compensation for injured feelings could be recovered, he said: “The pursuer seeks damages on behalf of an unspecified number of unnamed individuals who are not parties to these proceedings. Furthermore, damages are compensatory, not penal, in nature.”

He concluded: “It is unclear why the pursuer should be enriched by damages properly due to a third party. If parliament had intended that result, no doubt a provision to that effect would have been included in the legislation.”

For these reasons, Sheriff McCormick ordered a proof before answer in respect of a potential breach of the Equality Act 2010 and the practicality and appropriateness of the remedy sought, with the pursuer’s averments regarding hurt feelings excluded from probation.