Anthony McGann v Michael Bisping
| Jurisdiction | England & Wales |
| Judge | Hugh Southey |
| Judgment Date | 24 March 2021 |
| Neutral Citation | [2021] EWHC 704 (QB) |
| Date | 24 March 2021 |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB-2019-002184 |
[2021] EWHC 704 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Hugh Southey QC (sitting as a Deputy Judge of the High Court)
Case No: QB-2019-002184
Jonathan Bellamy (instructed by Ward Hadaway) for the Claimant
Gabriel Buttimore (instructed by Faradays) for the Defendant
Hearing dates: 16 March 2021
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Hugh Southey QC
Hugh Southey QC (sitting as a Deputy Judge of the High Court): Introduction
The Defendant in these proceedings is a professional mixed martial arts fighter. The Claimant is a sports agent / manager.
On 124 October 2012 the Claimant issued a claim form alleging that the Defendant had breached a management agreement by which the Claimant became the Defendant's manager.
On 15 December 2017 Mr Richard Salter QC, sitting as a Deputy High Court Judge, delivered a judgement determining as much of the claim as he could ( [2017] EWHC 2951 (Comm)). Because there were a number of matters that could not be determined, he ordered that account and enquiry be taken of various matters.
The claim remains outstanding because the process of taking account and enquiry has not concluded. There have been various procedural orders made with a view to account being taken. However, that process has not concluded.
On 19 June 2020 the Defendant applied for an order that the Claimant's claim be struck out on the basis it was an abuse of process. Although the application notice is not entirely clear, the accompanying witness statement makes it clear that one reason why strike out was sought was the fact that the Claimant had been declared bankrupt on 10 March 2010.
On 16 March 2021 I heard oral argument regarding the application to strike out the claim. On that date argument focused on what was accepted by both parties to be a pure issue of law. That was the effect of the bankruptcy order. At the end of oral argument I indicated that I was going to strike out the claim. However, in light of the novelty of the issues I indicated that I wished to reserve judgment. This judgment is my judgment on the strikeout application.
I thank counsel for their helpful and focused submissions.
Structure of the judgment
This judgment will address the following issues:
i) The relevant factual background.
ii) The applicable legal framework.
iii) A summary of the parties' arguments.
iv) My conclusions.
Factual background
The findings of Mr Richard Salter QC make it clear that in July 2005 the Claimant and the Defendant signed a management agreement. Relevant provisions of this agreement include:
“2.1 In consideration of performing his obligations under this Agreement, you agree to pay to AM the following commissions:
2.1.1 a sum equal to 20% (twenty per cent) of all income received by you in the form of monies and/or “in-kind contributions” from any contracts entered into or substantially negotiated during the Term in relation to all income producing opportunities arising directly or indirectly from your role as a MMA fighter and/or your image and profile as a professional sportsman and entertainer including, without limitation, personal endorsement or team sponsorship, appearance fees, merchandising revenues and all other potential income (“Commercial Contracts”).
2.1.2 a sum equal to 15% (fifteen per cent) of all income received from any renewals, extensions, modifications or variations to commercial contracts entered into for a period of 3 years following the expiry of the Term.
3. Obligations of AM:
AM shall assist you in relation to the following:-
3.1 advising generally on the progression of your career;
3.2 provide you with access to first class MMA coaching and training;
3.3 enable you to use the MMA facilities including the cage, the gymnasium and the weights at Wolfslair MMA;
3.4 advise you on suitability of events to enter and the progression of your career generally;
3.5 use reasonable endeavours to introduce you to companies interested in entering into sponsorship endorsement merchandising, appearance packages or other income producing arrangements with you;
3.6 provide access to third party services (which costs you shall be responsible for provided you have approved them in advance) if reasonably required including;
— media exposure and publicity;
— legal and accountancy services to include tax and other specialist advice;
— such other services which are considered beneficial to you.
3.7 AM shall at all times perform its obligations herein in your best interests and AM shall at all times work diligently and with best endeavours to promote and protect your interests.
3.8 AM shall not bear any financial responsibility for any fines and / or other penalties imposed upon you by any authority. …
8 General
… 8.2 AM shall have the right to assign this agreement, and may do so at his discretion.”
As already noted, the Claimant was declared bankrupt on 10 March 2010. There was some dispute in the papers as to when persons became aware of the bankruptcy and/or its significance. Having heard argument regarding the strikeout, it appears to me to be clear that this issue is of no relevance and no party suggested that it was relevant. As a consequence I make no findings regarding this.
Mr Salter QC found that:
i) The ‘term’ in clause in 2.1.1. ended on 21 July 2011 [258.1]. Commission from contracts entered into before that date continue to be payable [271].
ii) For the purposes of clause 2.1.2, the 3 years ran from 22 July 2011 to 21 July 2014 [258.2]. Commission from renewals will continue after the end of the 3 year period [273].
As already noted above, on 24 October 2012 the Claimant issued a claim form alleging that the Defendant had breached a management agreement by which the Claimant became the Defendant's manager.
Applicable legal framework
Section 283 of the Insolvency Act 1986 (‘the 1986 Act’) defines a bankrupt's estate as:
“(a) all property belonging to or vested in the bankrupt at the commencement of the bankruptcy, and
(b) any property which by virtue of any of the following provisions of this Part is comprised in that estate or is treated as falling within the preceding paragraph.”
Section 436 of the 1986 Act states:
““property” includes money, goods, things in action, land and every description of property wherever situated and also obligations and every description of interest, whether present or future or vested or contingent, arising out of, or incidental to, property; …”
In Gwinnutt v George [2019] EWCA Civ 656 Newey LJ held that:
“It is “legitimate and necessary to bear in mind the statutory objective” when interpreting the 1986 Act, albeit that “however desirable it may be to construe the Act in a way calculated to carry out the parliamentary purpose, it is not legitimate to distort the meaning of the words Parliament has chosen to use in order to achieve that result” (see Bristol Airport plc v Powdrill [1990] Ch 744, at 758–759, per Browne-Wilkinson V-C) [10(i)].
“[T]he statutory objective of the provisions of the 1986 Act” is that, “subject to certain specific exceptions, all a debtor's property capable of realisation should be vested in the trustee for him to realise and distribute the proceeds among the creditors” ( Patel v Jones [2001] EWCA Civ 779, [2001] Pens LR 217, at paragraph 39, per Mummery LJ). [10(ii)] …
That approach accords with the “principle of public policy” that:
“in bankruptcy the entire property of the bankrupt, of whatever kind or nature it be, whether alienable or inalienable, subject to be taken in execution, legal or equitable, or not so subject, shall, with the exception of some compassionate allowances for his maintenance, be appropriated and made available for the payment of his creditors” ( Hollinshead v Hazleton [1915] AC 428, at 436, per Lord Atkinson)” [10(iii)]
Consistent with the statutory objective identified above, in Gwinnutt v George Newey LJ noted how broadly the definition of property had been interpreted. He stated that:
“… Jessel MR's analysis in Huggins does not appear to have depended on the existence of a contract. He stressed that “property” “goes far beyond choses in action” and that the “mere fact that you cannot sue for the thing does not make it not ‘property’”.” [21]
In this case there was no real dispute about the breadth of the term ‘property’. In particular, there is no dispute that in general contracts are property. That is obviously correct (see, for example, Krasner v Dennison [2001] Ch 76 at [36] – [37]).
In Krasner v Dennison it was held that a pension and annuities which had provisions that contained an expression restriction on alienation was...
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