Proactive Sports Management Ltd v Rooney and another
| Jurisdiction | England & Wales |
| Judgment Date | 15 July 2010 |
| Neutral Citation | [2010] EWHC 1807 (QB) |
| Docket Number | Case No: 8LS90350 |
| Court | Queen's Bench Division |
| Date | 15 July 2010 |
[2010] EWHC 1807 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY MERCANTILE COURT
Manchester Civil Justice Centre
1, Bridge Street West, Manchester, M3 3FX
Before: Judge Hegarty QC
Case No: 8LS90350
Ian Mill QC & Tom Weisselberg (instructed by McCormicks) for the Claimant
Paul Chaisty QC & Mark Harper (instructed by Hill Dickinson LLP) for the Defendants.
Hearing dates: 2 nd, 3 rd, 4 th, 5 th 9 th, 10 th, 11 th, 12 th, 15 th, 16 th, 18 th, 19 th & 22 nd February 2010;
Judgment circulated in draft: 30 th June 2010.
| CONTENTS | |
| PART 1 | |
| INTRODUCTION | 1 |
| PART II | |
| THE BACKGROUND | 29 |
| The Initial Discussions with Proactive | 30 |
| The Preparation and Execution of the July 2002 Agreement | 36 |
| The Terms of the July 2002 Agreement | 51 |
| Legal Advice | 63 |
| The September 2002 Agreement | 68 |
| The December 2002 Agreement | 70 |
| Proactive_s Preparations for its Agency Role | 72 |
| The Involvement of Couchman Harrington | 84 |
| The Meetings on 15th January 2003 | 100 |
| The Exchanges on 16th January 2003 | 113 |
| The Events of 17th January 2003 | 124 |
| The Playing Contract | 140 |
| Mr Harrington's letter of 20th January 2003 | 148 |
| Subsequent Exchanges and Further Drafts | 160 |
| The Execution of the Agreement | 175 |
| The Agreements | 186 |
| The Assignment | 187 |
| The Variation Agreement | 193 |
| The Image Rights Representation Agreement | 197 |
| Financial Aspects of the Contractual Arrangements | 208 |
| The Subsequent Relationship Between the Parties | 219 |
| The Sponsorship Contracts | 230 |
| The Manchester United Image Rights Agreement | 243 |
| Mrs Rooney and Speed | 254 |
| The Warrington Trial | 266 |
| The FA Disciplinary Proceedings | 274 |
| The Aftermath of the Disciplinary Proceedings | 284 |
| Subsequent Developments | 300 |
| PART III | |
| THE FACTUAL ISSUES | 309 |
| The Witnesses | 310 |
| The Extent of Mr Stretford's Knowledge | 334 |
| The Letter of 20th January 2003 | 344 |
| The E-Mail Exchanges of 25th and 26th January 2003 | 351 |
| The Events of 17th January 2003 | 357 |
| The Extent of Proactive's Knowledge Prior to 17th January 2003 | 383 |
| The Extent of the Rooney Family's Knowledge | 402 |
| PART IV | |
| THE EXPERT EVIDENCE | 415 |
| Remuneration | 427 |
| The Agent's Role | 435 |
| Exclusivity | 447 |
| Post-Termination Commission | 451 |
| Duration | 471 |
| The Practical Effect of the Eight-Year Term | 477 |
| Justification | 491 |
| PART V | |
| CONTRACTUAL ISSUES | 515 |
| Post-Termination Commission | 521 |
| Breach of Contract | 556 |
| Clause 8 | 568 |
| Contractual Remedies | 577 |
| PART VI | |
| MISTAKE | 600 |
| PART VII | |
| RESTRAINT OF TRADE | 620 |
| Does the Doctrine Apply? | 622 |
| The Legal Principles | 624 |
| The Application of these Principles | 642 |
| The Relevance of the 2002 Agreement | 656 |
| Estoppel | 664 |
| Affirmation | 672 |
| Justification | 714 |
| Consequential Matters | 732 |
| Quantum Meruit | 743 |
| PART VIII | |
| THE CLAIMS AGAINST SPEED | 763 |
| PART IX | |
| MISCELLANEOUS ISSUES | 788 |
| Value Added Tax | 789 |
| Other Invoice Issues | 798 |
| PART X | |
| CONCLUSIONS | 818 |
HH Judge Hegarty QC:
Mr Wayne Mark Rooney (“WR”) is a professional footballer of international standing and repute. Even at the age of 16, he was widely perceived as a player of immense potential. At that time, he was playing for Everton Football Club; and he continued to do so after he reached the age of 17 on 24 th October 2002, eventually signing full-time professional forms with the Club on 17 th January 2003. Since then, of course, he has been transferred to Manchester United Football Club and has become an outstanding performer for both club and country. His success on the field has provided him with a very substantial income derived directly from his footballing activities. But it has also provided him with a platform to enhance his earning capacity to a very substantial degree in other directions by allowing him to exploit what are termed his “image rights”. He has done so through the medium of a limited company, Stoneygate 48 Limited (“Stoneygate”), the principal Defendant in these proceedings, to which he has assigned the rights in question. Stoneygate has since entered into a number of lucrative sponsorship contracts with major companies such as Coca Cola and Nike by which they have agreed to pay substantial fees to Stoneygate in return for the right to use the Rooney “brand” in connection with the advertisement and promotion of their products.
In recent decades, it has become common for professional footballers to retain the services of agents to represent their interests and negotiate on their behalf. Agents who represent a professional footballer in connection with his playing or “on-field” activities are regulated by rules laid down by FIFA and, in England, by the Football Association. Such an agent must be registered with the FA and any on-field representation agreement in relation to on-field activities must be in writing and must be limited to a maximum term of two years. A copy of any such contract must be lodged with the FA, though the evidence suggests that until comparatively recently this requirement was not rigorously enforced. Nonetheless, the FA exercises a disciplinary jurisdiction over football agents and can impose sanctions such as suspension or fines for breach of the relevant rules. By contrast, contracts covering off-field activities are, at present, wholly unregulated whether by FIFA or the FA.
Given WR's considerable reputation even as a teenager, many football agents were interested in signing him up to such a representation contract. The early winner in this regard was a Mr Peter McIntosh, who operated through the medium of a company known as Proform Sports Management Limited (“Proform”). A representation agreement was entered into between Proform and WR on 12 th December 2000, at a time when he was only a little over 15 years of age. It was for the maximum period of two years and would, therefore, have expired on or about 12 th December 2002. But, in view of his age, it was questionable whether this contract would have been binding upon WR unless and until he ratified it on achieving the age of 18. As it happens, it was subsequently held that it was not enforceable by His Honour Judge Hodge QC, sitting as a Judge of the High Court, in Proform Sports Management Limited v Proactive Sports Management Limited [2006] EWHC 2903 (Ch); [2007] Bus. L.R. 93.
The Defendant in that action (“Proactive”) is, in fact, the Claimant in the present proceedings. Proactive is a company which, amongst other things, provides management, agency and personal representation services to sports professionals, and in particular football players. In 2002 and for some time thereafter, its Chief Executive was a Mr Paul Stretford, who was also a director of the company and was registered in his own name as a football agent with the FA. Though Proactive came on the scene much later than Mr McIntosh, it succeeded in obtaining WR's signature to a written contract dated 17 th July 2002 by which it was to act as his agent in respect of both on-field and off-field activities for a period of eight years. This, of course, was at a time when he was still only 16 years of age and when his subsisting contract with Proform still had some five months to run. To enter into an on-field representation agreement during the currency of a subsisting contract with another agent is a potentially serious breach of FIFA and FA regulations, as is entering into such an agreement for a period in excess of two years. But both Mr Stretford and Proactive have vigorously maintained that they believed that the July 2002 contract covered only image rights and other off-field activities and that it was not for some years that they discovered for the first time that, as a matter of fact, it also provided for representation in respect of on-field activities. It will be necessary to consider the terms of this agreement in greater detail later in this judgment.
In fact, Proactive entered into two further contracts with WR during the course of 2002, one dated 19 th September 2002 and the other dated 14 th December 2002, just after the expiration of the Proform Agreement. Both of these agreements were in a similar form and provided for Proactive to represent the player in relation to both on-field and off-field activities. In each case, however, in contrast to the earlier contract, they were for a period of two years only.
By the end of 2002, therefore, if one disregards the September Agreement, there were two contracts in force between Proactive and WR; one for a term of eight years commencing on 17 th July 2002; and the other for a period of two years from 14 th December 2002. In each case, whatever Proactive and Mr Stretford may have assumed or believed, they covered both on-field and off-field activities. So it is hardly surprising that Proactive, primarily in the person of Mr Stretford, became heavily engaged in negotiations on behalf of WR with Everton FC with a view to reaching agreement as to the terms upon which he would be willing to enter into a playing contract with the club. Agreement was eventually reached and contract forms were duly signed on 17 th January 2003.
But, at the same time, consideration was being given within Proactive to the way in which WR's off-field earning capacity might best be exploited. In the light of specialist tax and legal advice, it was decided that a suitable mechanism would be for WR to assign his image rights to a limited...
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