Winlink Marketing Ltd v The Liverpool Football Club & Athletic Grounds Ltd
| Jurisdiction | England & Wales |
| Judge | Pelling |
| Judgment Date | 14 September 2020 |
| Neutral Citation | [2020] EWHC 2271 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: LM-2019-000198 |
| Date | 14 September 2020 |
[2020] EWHC 2271 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (QBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
HIS HONOUR JUDGE Pelling QC
SITTING AS A JUDGE OF THE HIGH COURT
Case No: LM-2019-000198
Mr Andrew Sutcliffe QC and Mr William Day (instructed by BLM Solicitors) for the Claimant
Mr Robert Anderson QC and Mr Theo Barclay (instructed by DLA Piper UK LLP) for the Defendant
Hearing dates: 8–11, 15 June 2020
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.
HIS HONOUR JUDGE Pelling QC SITTING AS A JUDGE OF THE HIGH COURT
HH Judge Pelling QC:
Introduction
This is the trial of a claim by the claimant (“WML”) for commission in the sum of £1.125m said to be due under an introduction agreement between the parties made on 18 October 2013 (“ IA”), following the introduction by WML of BetVictor Limited trading as BetVictor (“BetVictor”) to the defendant (“LFC”) in late 2013, by reference to a sponsorship agreement that LFC entered into with BetVictor on 27 May 2016 (“2016 sponsorship agreement”).
By the end of the trial, there were only two defences relied on by LFC. Firstly LFC alleges that the 2016 sponsorship agreement had been entered into after the expiry of the Introduction Period as specified in clause 1.1.8 of the IA, the text of which is set out below, as that phrase is to be construed applying conventional English Law construction principles. Secondly, LFC alleges that the IA was subject to an implied term that required WML to be the or an effective cause of the sponsorship agreement and alleges that WML was not the or an effective cause of LFC entering into the 2016 sponsorship agreement with BetVictor. WML disputes LFC's construction of the IA, disputes that an effective cause term was to be implied into the IA and in any event maintains that WFL was an effective cause of BetVictor entering into the 2016 sponsorship agreement.
The trial took place between 8 and 15 June 2020. I heard oral evidence on behalf of WML from Mr Mark Dixon, a senior marketing executive who at all material times worked and works for WML and an associated company Bettor Marketing Limited (“Bettor”) and on behalf of LFC from:
i) Mr Jonathan Kane, LFC's Director of International Business Development at the relevant time and Mr Dixon's principal contact at LFC;
ii) Ms Raffaella Valentino, a marketing executive who entered employment by LFC in 2016 having previously been employed by Targeted Regional Marketing Limited (“TRM”), where she had also had a role in negotiating BetVictor's sponsorship of Chelsea Football Club (“Chelsea”). LFC's factual case is that Ms Valentino was exclusively responsible for securing the sponsorship agreement with BetVictor by reason of the long standing and strong commercial relationship that she had developed with BetVictor's then Chief Executive Officer Mr Meinrad; and
iii) Mr William Hogan, LFC's Managing Director and Chief Commercial Officer. He explains that both Mr Kane and Ms Valentino reported to Mr Olly Dale. Mr Dale was not called as a witness however, nor was Mr Meinrad.
This is a dispute relating to events that took place some years ago. In those circumstances, I have approached the factual issues between the parties that are material to this dispute by testing the oral evidence of each of the witnesses wherever possible against the contemporary documentation, admitted and inconvertible facts and inherent probabilities. This is an entirely conventional approach – see Onassis and Calogeropoulos v. Vergottis [1968] 2 Lloyds Rep 403 at 407 and 413. This is not to say that a judge can attempt, or that I have attempted to, resolve factual disputes by referring only to contemporaneous documentation. It is necessary to consider all of the evidence – see Kogan v. Martin [2019] EWCA Civ 164 per Floyd LJ at paragraphs 88–89. However, there is nothing in that authority or the requirement to consider all of the evidence that prevents the evaluation of oral evidence using the techniques I have referred to. In my judgment the use of such techniques is all the more appropriate having regard to the lapse of time since the events with which this case is concerned – see Gestmin SGPS SA v. Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) per Leggatt J (as he then was) at paragraphs 15–22. I return to the credibility issues that arise to the extent necessary later in this judgment.
Background
WML and Bettor are intermediaries whose business is to introduce sports rights holders to commercial entities willing to sponsor the sporting rights holder concerned. Much as an estate agent is retained by a property vendor to find a purchaser using its contacts and other marketing skills, entities such as WML are retained by sporting rights holders to find sponsors. Sponsorship can take a number of different forms – it can include in the football context advertising on the electronic hoarding surrounding the field of play in a football stadium (referred to in the correspondence between the parties to this dispute as “LED” advertising), advertising material on players' playing or practice kit or parts of it and the naming of stadia using the name of the sponsor.
The sums involved are substantial. Mr Dixon's evidence as to this was that:
“… Manchester United priced its front of shirt partnership at £64 million in 2014 and again in 2020. For the same years, its training kit partnership was c£15 million, and its betting partnerships started at approximately £3 million. Liverpool was a little cheaper, but still towards the top of the market. Its front of shirt partnership was £20 million in 2014 and £40 million in 2020. Its training kit partnership went from £3 million in 2014 to £9 million in 2020. And its betting partnerships went from c£1.5 million in 2014 to c£5 million in 2020. To give a third example, Everton's combined front of shirt and training kit partnership was priced at £4 million in 2014 and £9 million in 2020.”
Generally, a sponsor will be prepared to invest sums of this magnitude because sponsoring a sporting rights holder that is prominent either globally or in particular regional markets is thought likely to enhance the market recognition of the sponsor, thereby attracting business that it would or might not otherwise attract. Generally sponsorship agreements with football clubs run for the duration of a football season (July to June in England) or multiples of such seasons. It follows that generally sponsorship agreements will have to be finalised well before the start of the first season to be sponsored, not least so that the promotional material on which the sponsor's name is to be displayed can be designed, approved and manufactured.
Although many sporting rights holders will operate their own marketing operations (as LFC did at all times material to this dispute) and seek to obtain sponsorship by direct marketing of the rights on offer to sponsors, WML maintains and it is not seriously in dispute that it and companies like it enable sporting rights holders to access a wider variety of potential sponsors than may be accessible by a sporting rights holder's marketing department, by reason of the intermediary's contacts within the senior management of potential sponsors and to identify those most likely to be interested in sponsoring particular sporting rights holders, having regard to the spondee's prominence, attractiveness to particular commercial sectors and in particular regions.
WML has operated as such an intermediary for many years, particularly, though not exclusively, in relation to professional football clubs in the first and second tier of the English game and European clubs of equivalent status. At a number of stages in the course of the evidence there seemed to be some confusion in the minds of the various witnesses as to whether the principal of a company such as WML was the sporting rights holder or the potential sponsor. In this case the only formal agreement was the IA between LFC and WML under which LFC was WML's principal. In my judgment however the intermediary's principal can be either a sporting rights holder or a potential sponsor depending on the circumstances and the terms of any formal agreements that are entered into. Although the fees of the intermediary will generally be paid by the sponsee rather than the sponsor, that is not a certain guide to who is to be regarded as principal because in most cases any fee paid by the sponsee will come from money that either comes to or would otherwise go to the sponsee as part of the sponsorship arrangement.
Mr Dixon had known Mr Kane for a number of years prior to the events with which this dispute is concerned. He cold called Mr Kane in May 2013, when Mr Kane informed Mr Dixon that LFC was looking for a betting sponsor for the 2014/15 season. By August 2013, Mr Dixon was able to inform Mr Kane that he was able to introduce LFC to potential betting business sponsors including BetVictor. The detail surrounding these early contacts does not matter.
It is common ground that Mr Kane made clear that LFC would only be prepared to work with WML if it entered into a formal agreement with LFC. Although there was a significant amount of detail in the evidence concerning the negotiations that followed, none of that is material to the...
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Winlink Marketing Ltd v The Liverpool Football Club & Athletic Grounds Ltd
...detail to be found in the submissions. The Outcome of the Trial 2 Readers of this Ruling are referred to the substantive Judgment ( [2020] EWHC 2271 (Comm)). In summary until shortly before the trial there were four issues to be determined: i) A No Agreement issue – it being contended by t......