Michael Farnan v Sunderland Association Football Club Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Whipple |
| Judgment Date | 21 December 2015 |
| Neutral Citation | [2015] EWHC 3759 (QB) |
| Docket Number | Case No: A90MA167 |
| Court | Queen's Bench Division |
| Date | 21 December 2015 |
[2015] EWHC 3759 (QB)
Mrs Justice Whipple
Case No: A90MA167
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Liverpool Civil and Family Courts
35 Vernon Street, Liverpool 2, L2 2BX
Paul Gilroy QC (instructed by JMW Solicitors LLP) for the Claimant
David Reade QC & Alexander Robson (instructed by Muckle LLP) for the Defendant
Hearing dates: 24, 25, 26, 27, 30 November, 1 and 3 December 2015
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.
INTRODUCTION
This is a claim for damages for wrongful dismissal brought by Mr Michael Farnan against his erstwhile employer, Sunderland Association Football Club Ltd ("SAFC"). Mr Farnan also claims payment of unpaid bonus due (he says) under his contract of employment. SAFC defends this claim on grounds that it was entitled to dismiss Mr Farnan without notice, and nothing is now due to him by way of damages or bonus.
Employment Tribunal proceedings have been commenced in parallel with this action and are currently stayed. The parties agree that the issues before me are purely contractual in nature. There is a dispute about the extent to which issues of process, procedure and fairness of the manner of Mr Farnan's dismissal, all of which are the subject of the ET proceedings, are relevant to this contractual claim. I will deal with those aspects, to the extent I consider them relevant, later in this judgment.
EVIDENCE
For the Claimant, I heard evidence from the Claimant himself, as well as from Stephen Pearson, James Wright, Dale Agar, Moses Mwangi and Frank Devoy. David Miliband and another witness, Trevor Birch, had provided witness statements which the Defendant agreed, meaning that neither needed to be called.
The Defendant had filed and served witness statements from eight witnesses, of whom four were called: Margaret Byrne, Claire Cogdon, Angela Lowes and Clare Wilson. The Claimant by his Counsel, Mr Paul Gilroy QC, complained that the other four witnesses had, at the last minute, been stood down. Those other witnesses were Niall Quinn, former Chairman of SAFC, Amanda Goulden, head of HR who wrote the Claimant a letter notifying him he was dismissed, Gary Hutchinson, commercial director of SAFC who took over much of Mr Farnan's job when he was dismissed, and Peter Weymes, Facilities Manager, who chaired the disciplinary hearing on 23 May 2013 and also wrote to the Claimant following that hearing, notifying him that he had been summarily dismissed.
It is for the parties to call such witnesses as they wish in support of their case. If the Defendant only chooses to call four witnesses, that is a matter for the Defendant. I shall determine this case on the evidence which was before me, and shall not speculate about other evidence which might have been heard.
BACKGROUND FACTS
Scope and nature of Mr Farnan's employment
Mr Farnan has been involved in the sports marketing industry for many years. In the past, among his many roles, he has worked in the corporate environment as Managing Director of Manchester United International, and Executive Director at Sheffield United. He has also held senior roles at Jordan F1 and AC Parma.
Immediately prior to joining SAFC he was involved in a sports marketing agency called Red Strike Marketing Ltd ("RSM"). Mr Farnan's wife was the director of RSM, but Mr Farnan was the driving force behind RSM. RSM's main client was Macron, a sports kit manufacturer. RSM's role for Macron was to introduce Macron to sporting teams and try to secure technical kit contracts and sponsorship deals for Macron.
In around June 2010, Mr Farnan met Niall Quinn, then the Chairman of SAFC, a football club then (as now) playing in the English Premier League. Mr Farnan and Mr Quinn discussed, in general terms, SAFC's sponsorship profile. They met again in May 2011, when Mr Quinn invited Mr Farnan to work at the club. Mr Quinn explained changes which were to be made to the management of SAFC, which would see Mr Quinn remaining as Chairman, supported on the Board by Margaret Byrne, who would become CEO and Angela Lowes who would become Finance Director. Also on the board would be Per-Magnus Andersson, who represented the club's owner, Ellis Short, and David Miliband MP who would be non-executive vice-chairman. Mr Farnan accepted an offer of employment with the club, and a contract was drawn up (which I shall detail below). Mr Farnan's job title was "International and National Marketing Director". He was to sit on the executive Board of SAFC, as a statutory director with responsibilities under the Companies Act 2006. In evidence, Mr Farnan described his intended role as follows: "It was to develop an international sponsorship strategy and attract a better quality of sponsors than those SAFC had attracted historically". I accept that broad description. SAFC wanted to raise its international profile and increase its sponsorship revenue. Mr Farnan had extensive experience in the sports marketing industry, which SAFC wanted to employ, with a view to developing an international sponsorship strategy.
Mr Farnan's employment started on 17 August 2011. He entered into a Service Agreement (the "SA"), the key terms of which are set out in the Appendix to this Judgment. He was employed on a salary of £190,000 per annum. He was entitled to a discretionary bonus in addition, according to the criteria at Appendix 1 to the SA. He was also entitled to life assurance, personal medical assurance and a car. The notice period was one month. The SA contained provisions for termination of the contract without notice. He was to work in three places: SAFC's offices at the Stadium of Light in Sunderland, his own home, and Mr Short's offices in London.
Mr Quinn ceased as Chairman of SAFC in October 2011, but remained on the Board for some months, while Ellis Short, the club's owner, took over the Chairmanship. Mr Quinn left the club in February 2012.
The conclusion of engagement with RSM
Mr Farnan was to devote himself exclusively to SAFC during his employment. He gave assurances that he would cease his role with RSM. There was an exchange of emails on 11 August 2011 between Mr Farnan and Ms Byrne, the CEO, in which Mr Farnan confirmed that he would cease his activities with RSM immediately on joining SAFC, but he noted that his wife would continue to be the sole shareholder and director, and that various colleagues would continue to manage the RSM client list after Mr Farnan had disengaged from the business. Ms Byrne accepted that.
Mr Farnan was at this stage using his RSM email address to correspond with SAFC. His SAFC email address was not set up and functional until September 2013. Ms Byrne emailed Mr Farnan on 5 September 2013 asking him to use his SAFC email address from now on.
Tullow Oil/Invest In Africa
Mr Farnan joined SAFC just as the 2011/12 football season was commencing. SAFC had an existing shirt sponsor for that season. But a shirt sponsor was needed for the next season (2012/13), and this was an issue high on Mr Farnan's agenda on joining SAFC.
Mr Quinn used his existing contacts to gain an introduction to Aiden Heavey, CEO and founder of Tullow Oil, an oil company with extensive interests in Africa. During November 2011, Mr Farnan was introduced to Mr Heavey too, and a discussion took place about marrying Tullow's corporate social responsibility ("CSR") ambitions in Africa with some of the work SAFC was doing in the UK. The proposal was discussed at a Board meeting on 17 November 2011. Mr Quinn led that discussion. He described the proposal as "ground-breaking" for the club, because it would involve the club assisting in health and education programmes in Ghana, and would build a legacy for SAFC; he was noted to feel passionately about it. At that meeting, Mr Farnan delivered his commercial and marketing report, in which he mentioned a number of contacts with other corporates with a view to sponsorship of various types; he also raised the issue of naming rights for the stadium.
On 24 November 2011 Mr Farnan emailed Ms Byrne to report back on negotiations with Tullow, in which Mr Farnan was now involved. He said he would produce a document for Tullow, which would set out the programme which would be badged under Tullow's CSR initiative, Invest in Africa ("IIA"). It would involve Tullow underwriting the project for the first year (at a cost of £6 million) with the hope of attracting other partners with business interests in Africa each of whom would pay £1 million. Mr Farnan concluded that email by saying that Mr Quinn was "like a dog with a bone" who "would not let Aiden off the hook". I understand this to mean that Mr Quinn was intent on securing the deal with Tullow, because it was something Mr Quinn felt passionately about and was committed to.
Mr Farnan took the Tullow Oil proposal forward. He tasked Clare Wilson, his assistant, to draw up a presentational document entitled "Invest in Africa". Much of that document was generic SAFC material which was in the public domain; some parts of it, specific to the IIA project, were based on information provided by Mr Farnan, which Ms Wilson incorporated in the document. She circulated that document for comment on 1 December 2011. Mr Farnan and Ms Wilson went to Korea that week, to speak to a number of corporates about sponsorship; in an email dated 9 December 2011, after the...
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