Concourse Initiatives Ltd v Maiden Outdoor Advertising Ltd
| Jurisdiction | England & Wales |
| Judge | RICHARD SIBERRY QC |
| Judgment Date | 20 December 2005 |
| Neutral Citation | [2005] EWHC 2995 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 20 December 2005 |
| Docket Number | Claim No. 2004 Folio 788 |
[2005] EWHC 2995 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Richard Siberry QC
Sitting as a Deputy High Court Judge
Claim No. 2004 Folio 788
Mr Michael Fealy (instructed by Herbert Smith LLP) for Concourse Initiatives Limited
Mr Tom Weisselberg (instructed by Olswang) for Maiden Outdoor Advertising Limited
Hearing dates : 9, 10, 11, 14 and 15 November 2005
Approved Judgment
(as handed down in public in redacted form)
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.
Introduction
The Claimant, Concourse Initiatives Limited ("Concourse"), is a former sales agent of the Defendant, Maiden Outdoor Advertising Limited ("Maiden"). In these proceedings Concourse claims commission allegedly due to it under a Sales Agency Agreement between the parties dated 8 January 1999 ("the Agency Agreement"), and damages for the allegedly wrongful termination of the Agency Agreement by Maiden with effect from 30 September 2004.
Concourse's claim for commission falls under five heads:
(1) Concourse claims £XXX, being its alleged entitlement under the Agency Agreement to a 31.5% share of the sum of £XXX, the gross sum which Associated Newspapers Limited ("ANL") committed to Maiden that it would spend on advertising through Maiden in the first year of an agreement dated 20 May 1999 between ANL, Railtrack PLC ("Railtrack") and certain train operating companies ("TOCs"), and Maiden, by which ANL was given rights, for an initial period of three years from 20 May 1999, to distribute a free newspaper called "London Metro" (subsequently called simply "Metro") at stations in and around London controlled and/or operated by Railtrack or the TOCs in question;
(2) Concourse claims £XXX, being its alleged entitlement to a 25% share of £XXX, the gross sum which ANL committed to spend on advertising through Maiden in the first year of an agreement dated 1 February 2000 between ANL, Railtrack and Maiden, by which ANL was given rights for an initial period of three years to distribute free provincial versions of Metro at stations controlled and/or operated by Railtrack;
(3) Concourse claims £XXX, being its alleged entitlement to a 31.5% share of sums paid or payable to Maiden in respect of the period from 20 May 2002 to 30 September 2004, pursuant to a commitment made by ANL to spend £XXX gross on advertising through Maiden in each year of an agreement dated 15 April 2002 between ANL, Railtrack, Maiden and its parent company The Maiden Group PLC ("Maiden Group"), by which ANL was granted rights to distribute Metro at Railtrack stations in and around London for a further ten-year term in direct continuation of the 20 May 1999 agreement;
(4) Concourse claims £XXX, being its alleged entitlement to a share of £XXX paid to Maiden pursuant to a so-called "Buy-Out Agreement" dated 31 March 2005 between ANL, Railtrack (by then renamed Network Rail Infrastructure Limited) and Maiden Group, by which Maiden's rights under the agreement dated 15 April 2002 were bought out by ANL;
(5) Concourse claims an £XXX share of the sum of £XXX paid by ANL to Maiden in connection with an agreement between Scotrail Limited ("Scotrail") and ANL granting ANL distribution rights at stations operated by Scotrail.
Maiden has denied that Concourse is entitled to any commission in respect of ANL expenditure on advertising pursuant to the various ANL agreements, or in respect of the £XXX paid to Maiden Group under the Buy-Out Agreement, or of the £XXX Maiden received from ANL in connection with its Scotrail distribution deal. Alternatively Maiden contends that Concourse's claims have been incorrectly calculated, in that claims (1)–(4) fail to take account of agency commission, and claim (5) has been calculated at the wrong percentage rate.
On 23 August 2004 Maiden gave Concourse written notice to terminate the Agency Agreement with effect from 30 September 2004. It was Maiden's case that Concourse had, for some time prior to that, been on notice that the Agency Agreement would terminate on that date, that written notice was not required, but that if it was, the 23 August 2004 notice constituted reasonable notice of termination, and that in any event the Agency Agreement expired by virtue of the express and/or implied terms thereof on 30 September or 1 October 2004.
Concourse for its part accepted that the Agency Agreement was terminable on reasonable, written, notice. However it disputed that reasonable notice had been given, whether in writing or at all, or that the Agency Agreement expired by virtue of its express or any implied terms on 30 September or 1 October 2004. Concourse contended that in the circumstances that prevailed at the time the 23 August 2004 notice was given, a reasonable notice period would have been no less than 6 months. Accordingly it claimed damages for wrongful termination, in the sum of £136,587, calculated by reference to Concourse's net revenue under the Agency Agreement for the years 1999–(July) 2004.
Further to an application made on behalf of ANL on 8 November 2005, the day before the trial was due to commence, Aikens J directed, pursuant to CPR Rule 39.3(c), that the trial should at least begin in private, due to that fact that it would or might involve the revelation of commercially confidential information that might have a prejudicial impact on competitive tendering processes in which ANL was or might become involved, and that there did not appear to be any practical alternative means of regulating the conduct of the trial so as to avoid disclosure of such information, at any rate without undue disruption to the trial process. At the commencement of the trial, and having considered the papers before Aikens J on that application, I ordered that the trial should continue in private.
This judgment is, however, given in public, but in redacted form, following a further application by ANL that it should, for the reason indicated in the previous paragraph, either be given in private, or be given in redacted form, with various figures blanked out. Neither of the parties opposed the delivery of the judgment in redacted form. Copies of the judgment in unredacted form have been made available to the parties and to ANL, with "£XXX" substituted for monetary sums and "XXX" for certain other confidential matter.
The trial took place over 5 days, commencing on 9 November 2005. Concourse was represented by Mr Michael Fealy, instructed by Herbert Smith LLP. Maiden was represented by Mr Tom Weisselberg, instructed by Olswang. I am indebted to both counsel for the clarity of their written and oral submissions.
Concourse called Mr Alan Greaney and Mr Michael Kehoe to give oral testimony. Both Mr Greaney and Mr Kehoe had been directors of Concourse since its incorporation in December 1997. Mr Greaney was the director responsible for the general management of Concourse. He was for most of the relevant period primarily responsible for the sales side of the business, while Mr Kehoe was primarily responsible for the accounting side of the business, although by mid-2004 Mr Kehoe had more involvement on the commercial side. The background of both of these gentlemen was in accounting, though Mr Greaney also had a law degree, and Mr Kehoe had married into the law, as his wife is a partner at Herbert Smith LLP.
Maiden called Mr Roger Fernley, who had been the managing director of Maiden Transport, a division of Maiden, since 1995, and had responsibility for managing the railway concessions held by Maiden. Maiden also called Mr Donald Gray, the circulation director at the Metro division of ANL, who had originally joined ANL in February 1999 to advise on the launch and distribution of the Metro newspaper. In addition Maiden submitted witness statements from Mr Daniel Gollins, since January 2003 Financial Manager and since January 2005 Financial Controller at Maiden; from Mr Stephen Ames, who had worked until recently for Network Rail, and before that as commercial manager at Railtrack; and from Mr Steven Corney of Maiden's solicitors Olswang, who gave evidence of a telephone interview and follow-up email exchange with Mr Ames. None of Messrs Gollins, Ames and Corney was required by Concourse for cross-examination.
The facts
Background, the Advertising Agreement, and the First Exhibition Agreement
Concourse was (as already mentioned) incorporated in December 1997. Together with its sister-company Media Initiatives Limited ("Media Initiatives") it became a wholly-owned subsidiary of Media Initiatives Group Limited ("Media Group"), when that company was incorporated as a holding company in October 1998. The business conducted by these companies is that of a diversified media agency, and includes online advertising and "ambient media" advertising—that is, advertising beyond traditional media, on sites such as litter bins and shopping trolleys. Messrs Greaney and Kehoe have been directors of Media Initiatives since 1994, and of Media Group since October 1998.
Maiden's business is the exploitation of advertising and other promotional opportunities at "outdoor" sites, including roadside panels, stations, supermarkets and shopping malls. Maiden's involvement in railway advertising began in 1995, when it acquired British Transport Advertising Limited ("BTAL"), to which the British Railways Board had previously granted a concession to manage and promote the sale of advertising space at British Rail properties. After Railtrack had taken over the rail network and the management (as well as the ownership) of certain key...
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