Anthony McGill v The Sports and Entertainment Media Group and others [2016] EWCA CIV 1063
Background
The case involved former football player Gavin McCann (“Player”), who was transferred from Aston Villa FC to Bolton Wanderers FC (“Bolton”) for £1 million plus VAT in 2007. Bolton paid an agent’s fee of £300,000 to The Sports and Entertainment Media Group and others (“SEM” & “Defendant”). Mr Anthony McGill (“Claimant”), claimed that prior to this transfer he had a binding oral contract with the Player to act as his agent. Accordingly he claimed that the £300,000 which was paid to SEM should have been paid to him. Mr McGill initially brought a claim against the Player in November 2007 which was eventually settled out of Court for around £50,000. Then in 2012 he brought another action against nine defendants in total. The first group of defendants were SEM, Jerome Anderson (CEO of SEM), Jeffrey Weston (agent) and David Sheron who was an employee of SEM (“SEM Defendants”). The second group of defendants were Phillip Gartside (Bolton chairman), Simon Marland (Bolton club secretary), Samuel Lee (Former Bolton Manager) and Frank McParland who was the Bolton general manager (‘Bolton Defendants’). The Claimant pleaded a number of causes of action including:-
- Inducing a breach of the alleged oral contract;
- Breach of confidence:- disclosing or threatening to disclose confidential information;
- Conspiracy to injure and conspiracy to use unlawful means:- The tort of conspiracy is where there is collusion or agreement between two parties (SEM/Bolton) to deprive a third party (Mr McGill) or to obtain an illegal objective;
- Unlawful interference with the actions of the Player:- These are acts (by SEM/Bolton) intended to cause loss by interfering with the freedom of a third party (Player) that was unlawful and intended to cause damage to the Claimant (Mr McGill);
- Quantum meruit:- This claim is that a reasonable sum of money should be paid for services rendered or work done when the amount due is not stipulated in a legally enforceable contract. So even if the oral contract was not enforceable then Mr McGill should be paid in any event; and
- Unjust enrichment:- This is a restitution claim which is different from a standard contract or tortious claim (which focuses on compensatory damages). A restitution claim aims to reverse the unjustified enrichment that the defendant received from an illegal act, and restore it to the claimant.
The claim was initially heard at the High Court by Judge Waksman QC (“First Judge”) in April 2014 and judgement was handed down on 15 September 2014. The First Judge dismissed the action in its entirety, however he was very critical of the evidence given by the SEM & Bolton Defendants, some of which he said had been fabricated to enhance their position. This was taken into account with a reduced costs order against Mr McGill.
Mr McGill appealed in respect of his claim against the SEM Defendants, and on the grounds that the First Judge had erred in relation to his rejection of the claim for inducing a breach of the alleged oral contract, conspiracy to use unlawful means and unjust enrichment.
Appeal Summary
The Appeal was heard by Lord Justice Lloyd Jones and Mr Justice Henderson (‘Appeal Judge’). Fundamental to this case, was the alleged oral contract between the Claimant and the Player and the Appeal Judge’s conclusions on this are outlined below:-
- Having considered the circumstances in which the oral contract was allegedly made (a hotel meeting), the Appeal Judge said there was no good reason to doubt that an oral contract was concluded between the Player and the Claimant, which was intended to be legally binding;
- The Defendant, had submitted that the oral contract was void for uncertainly, as there was no obligation on the part of the Player to enter into a subsequent written agreement. The Appeal Judge ruled the contract was not void for uncertainly as on analysis of the evidence the Player had clearly appointed the Claimant to act as his exclusive agent; and
- The Appeal Judge upheld the previous decision that SEM had induced the Player to breach his contract by inducing him to dismiss Mr McGill and to appoint them as his agent.
Causation and Loss
The First Judge had concluded that in order for the claim to succeed the Claimant had to prove that the Player would have signed a written agency agreement prior to the close of the transfer deal, so that a commission would been paid out to him (the commission being the damages the Claimant was seeking). On this criterion the First Judge decided the Claimant’s case failed, concluding on the balance of probabilities the Player would not have entered into a written contract.
The Claimant stated this analysis by the First Judge was flawed and that the claim should be assessed on the basis of a ‘loss of chance’ (for the Claimant to obtain the commission monies) and whether the Player would have signed the written contract was not fundamental to the case. The Claimant stated that ‘but for’ the intervention by the Defendant the Claimant would have obtained the commission and that it was sufficient that there was a possibility the Player would have entered into a written contract. The Defendant pleaded that the Claimant’s alleged failure to plead the case as a ‘loss of chance’ claim in the first instance preluded them from putting forward this argument on appeal. Whilst the Appeal Judge accepted the initial pleadings were not clear, he rejected the Defendant’s argument and concluded it would be unjust to deny the Claimant’s the opportunity for recovery on this basis.
The Appeal Judge then considered key case law in this area including Allied Maples Group Ltd v Simmons and Simmons [1995] 1 WLR 1602 CA) and Wellesley Partners LLP v Withers LLP [2015] EWCA Civ 1146. On conclusion the Court agreed with the Claimant’s analysis that there was a chance the Player would have entered into a written contract and decided the claim should be analysed on the basis of a ‘loss of chance’.
It should also be noted that a ‘loss of chance’ claim usually yields less damages for the claimant. In this case, any amount of damages would have to consider, in percentage terms, the possibility of Mr McGill signing the written contract and take that in account when handing down the final award.
The ‘Jameson argument’
The Defendant pleaded the ‘Jameson argument’, so called after the case of Jameson v CEGB [2001] 1 AC 455. This states that where there has been a full and final settlement of a claim there is bar for a further claim for the same damage. Given Mr McGill sued the Player in 2007 and they settled out of Court, the question for the Appeal Judge was whether that settlement was full and final. If proven, this argument would be a total defence to all the grounds of appeal.
The Judge concluded that the ‘Jameson argument’ did not apply. He distinguished the Jameson case and stated that it would be unfair and unjust to Mr McGill to conclude that the previous settlement was full and final. The two claims were different in character and involved different defendants.
Grounds of Appeal – Conclusion
Inducing a breach of the alleged oral contract
As outlined above, the Appeal Judge decided that the First Judge had erred in his approach in respect of causation and loss. The Defendant had induced the breach of the contract which then meant Mr McGill lost the opportunity to earn commission from the Player’s transfer and as such Mr McGill was entitled to a damages award.
Conspiracy to use unlawful means
The Appeal Judge’s analysis on causation & loss also meant the Claimant’s claim for conspiracy to use unlawful means, succeeded. It had already been established that Defendants had conspired to unlawfully cause damage to the Claimant, therefore once the Claimant’s entitlement to the commission did not depend on proving the Player would have entered into a written contract (merely the possibility he might) then causation was proven and the Claimant was entitled to recover damages for the Defendant’s actions.
Unjust enrichment
The Appeal Judge agreed with the First Judge that there was no separate claim for unjust enrichment. Even if there was a separate claim for unjust enrichment, the Appeal Judge concluded that, he failed to understand how the requirement that SEM be enriched at the expense of Mr McGill, could have been satisfied. The fee was paid to SEM by Bolton not Mr McGill. Therefore SEM was enriched at the expense of Bolton not Mr McGill.
On the question of the amount of the award to Mr McGill, the Appeal Judge referred this back to the Court of first instance who would be better equipped to reach a figure.
Commentary
The decision to grant Mr McGill damages and the reasoning of the Appeal Judge provides some useful guidance for those involved in professional football transfers as well as legal practitioners. For agencies it serves as reminder on the correct way in which to conduct business, and the once the Appeal Judge had established the correct basis to view the claim it was clear on the facts that SEM’s conduct induced the breach of contract and caused loss to the Claimant.
Mr McGill’s failure to ensure the player signed a written contract in accordance with FA regulations (thereby potentially avoiding years of litigation) should also be noted. The nature of professional football and its network may lend itself to oral agreements in hotel lobbies; however parties must take care to document their business arrangements as soon as possible.
Legally, the case also provides excellent guidance on when the ‘Jameson argument’ is an applicable defence and practitioners should read the extended section in the judgment (paragraph 80 – 101) for the Appeal Judge’s full analysis.
This update does not cover every aspect of the Judgment, but aims to provide an overall summary. For the full case please see: http://www.bailii.org/ew/cases/EWCA/Civ/2016/1063.ht
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