Termination
Cases
Jackson Distribution Ltd. v Tum Yeto Inc
[2009] EWHC 982
Royce J.
“In Martin-Baker Limited v Canadian Flight and Murison [1955] 2 QB 556 at 577 McNair J. said (in the context of a distribution agreement) :–
“accordingly, it appears to me that I have to approach the determination of this question not with any presumption in favour of permanence; and indeed if there is any presumption at all, it would seem to be a presumption the other way. It is to be borne in mind that this agreement is one in a commercial or mercantile field. No case was cited to me where it has been held that this doctrine of irrevocability applies to a contract in the commercial or mercantile field and I do not feel that the law merchant would normally look at such an agreement as this as being agreement intended to constitute permanent relationships.”
It is accepted on behalf of both parties that the agreement could not simply be terminated without any notice (in the absence of breach). That is wholly understandable in the circumstances which existed. I accordingly reach the clear conclusion that in this case there was an implied term that the sole distribution agreement should be terminable on reasonable notice.
What would have been reasonable notice of termination?
The Claimant contends that 2 years notice would have been reasonable notice. The Defendant contends that 4 to 6 months would have sufficed.
In Alpha Lettings Limited and Neptune Research and Development Inc. [2003] EWCA Civ. 704 Longmore L.J said at paragraph 30
“There is little authoritative guidance on the appropriate notice for termination of exclusive agencies or (as lawyers sometimes prefer to call them distributorships. One possible view is that the reasonable notice period should equate to the time needed to find an alternative supplier and get a new product approved. Another view is that it need only reflect the time required for an orderly winding down of the distributorship.The only common ground between the parties was that, in the absence of any express term, the question, of what notice of termination is to be taken as reasonable, must be determined as at the time of termination.”
He went onto set out some of the factors to be taken into account.
31 “One very important consideration will be the degree of formality in the relationship. A completely formal agreement would probably have its own provisions for termination so no problem about assessing a reasonable period for termination will arise. But the more relaxed the relationship, the less likely it will be that the law would imply a lengthy notice period. There was evidence in the present case that at an early stage in the relationship. Alpha had wanted a more formal relationship than then existed and had proposed, among other things, a contractual period of notice of 12 months. Mr Sule did not, however, want any formal relationship and nothing came of the discussions. One result of not having any formal written contract was that Alpha were entirely free to sell products of other suppliers to their customers even if those suppliers were competitors of Neptune. No doubt not all products so supplied could be described as competitive products but the fact is that Neptune’s business only accounted for 20% of Alpha’s overall turnover. This is an indication that a lengthy notice of period should not be implied.
32. Mr Jones sought to emphasise the length of time which the parties’ relationship had lasted (15 years from 1983 – 1998) as a factor in favour of a lengthy notice period. He likened the position to that of a valued and long-serving employee who would be entitled to a longer period of notice than an employee who had served a lesser period of time. I do not consider that a contract of employment is sufficiently analogous to an exclusive agency or a distributorship contract to be helpful. In the first place a distributor may have to spend or invest considerable capital at an early stage of the relationship to build up the business which may thereafter run with moderate annual expenditure. This would militate in favour of a lengthier notice period in the earlier years of the relationship and perhaps a lesser period once the business is up and running. No doubt it is right to lay some stress on the length of the relationship but I would not myself regard that as, in any way, critical, since businessmen expect to run risks in the ordinary course of business while employees have a legitimate (and often contractual) expectation that their services, rendered for the benefit of their employers, will be properly and adequately recognised. As McNair J said in Martin-Baker Ltd v Canadian Flight and Murison [1955] 2QB 556, 580-1, one of the few English cases to touch on the issue of reasonable notice for the purposes of a distributorshipagreement:-
“It is the common experience that people, who are prepared to put up capital for the development of new business, do run risks.”
It follows from this that while initial capital investment and business expenses out of the ordinary run of things may well be relevant to the amount of notice, ordinary and recurring expenditure is unlikely to have much relevance.
33. It must not be forgotten that every distributorship is a bilateral contract. There was some debate before us as to the appropriate implied obligation of a supplier in the position of Neptune in the present case but, in the end, both parties were prepared to agree that it was necessary to imply a term that Neptune would accept and fulfil orders placed by Alpha in respect of both standard and special valves if such valves were in Neptune’s current range and were ordered in reasonable quantities. The existence of this implied term is, of course, of great importance when it comes to assessing any damages for breach of contract on the part of Neptune for giving an unreasonably short period of notice, once such breach is proved. But there will have been a correlative obligation on Alpha, the extent of which was not debated before us, but is most likely to have been that Alpha were under an implied obligation to use their best reasonable endeavours to promote the sale of Neptune’s valves in the United Kingdom. The concept of a party to a contract being obliged to use his best endeavours to promote the products of the other party after notice of termination has been given (by whomsoever it may be given and in whatever circumstances) is a difficult one and must also militate in favour of a shorter rather than a longer period of notice.”
And later at paragraph 36
“36. We were not referred to any English authority apart from Martin-Baker Ltd v Canadian Flight and Murison [1955] 2QB 556 and Decro-Wall v Practitioners in Marketing Ltd [1971] 1 WLR 361. The first case concerned the distributorship in Canada of ejector seats from aircraft which had been manufactured and patented by Mr Martin Baker. The main issue was whether the agreement, which was in writing and provided that the distributor could not sell products of other suppliers which might compete with those of the supplier, was terminable by any notice at all or was intended to be permanent. It is not surprising to modern eyes that McNair J decided that it was terminable on reasonable notice; he held that such reasonable notice was a period of 12 months. Decro-Wall was much relied on by the judge in the present case and was a case of a distributorship of French tiles in which the Court of Appeal held that a twelve month notice was appropriate. But there are three major distinctions between that case and the present. First, as in Martin-Baker, there was an express provision that the distributor was not to sell any goods competing with those of the supplier; secondly, the French tile business constituted 83% of the distributor’s turnover, unlike the 20% of turnover in the present case; thirdly, although (as in the present case) there was substantial initial investment (“expensive spadework”) in launching and promoting a new product in the United Kingdom, the agreement was terminated only three years after it began before any real reward for the initial expenditure could be reaped. In this case, there had been ample opportunity for the reward of initial investment to be earned. One way of regarding cases such as Decro-Wall might be to treat them as belonging to a category of case in which there is an implication that the agreement must exist for a reasonable time before any notice can be given. That would, however, not be open to us in this case.”
The Judge at first instance had found that a reasonable period of notice was 12 months. The Court of Appeal determined that that was too long and a 4 month period was appropriate. On the different facts in the Decro-Wall case a 12 month period was held to be appropriate. Salmon L.J. emphasised the significance of early investment at page 370
“Mr Ross Munro has argued that the Judge was wrong in holding that reasonable notice is a 12 months notice. He says it cannot be more than 3 months notice. I am afraid that I cannot agree. I think that on the facts the Judge was fully entitled to reach the conclusion at which he arrived. After all, the Defendants had put in a lot of expensive spadework to which I have already referred. When a new product is being launched, no one can expect the real benefit of his efforts to accrue in the first year or two. These come later. In these circumstances I do not think that the Judge can be faulted in holding that 12 months notice is reasonable.”
Betty Martin Financial Services Ltd. v EBS DAC
[2019] IECA 327 (18 December 2019)
]
Page 1 ⇓Whelan JMcGovern JCollins JTHE COURT OF APPEAL
PRELIMINARY1. EBS DAC (“EBS”) appeals against the Judgment and Order of the High Court (Jordan J) of13 February 2019 (as varied by Order of 21 February 2019) whereby, for the reasons setout in its reserved judgment, the Court made various orders the effect of which was torestrain the termination by the EBS of a number of Tied Agency Agreements with thePlaintiff (“the Agent”) and to restrain the taking of any steps on foot of a notice oftermination that had been served by the EBS, pending the trial of this action. ThoseAgreements related to agencies operated by the Agent in Lucan, Athlone and Longford, allof which operate from premises owned by the EBS.2. On 19 February 2018 the EBS gave 12 months’ notice of termination of those Agreements(in terms said to be ineffective because of alleged non-compliance with the mandatoryrequirements of the Tied Agency Agreements), in reliance on an express power toterminate on the giving of such notice contained, in identical terms, in each of the TiedAgency Agreements.3. The High Court Judge concluded that there was a serious question to be tried that thetermination was unlawful, both on the basis flagged above – the Agent’s argument thatthe form of the notice did not comply with the mandatory requirements of the TiedAgency Agreements and a further argument that the notice had not been served inaccordance with the Agreements – and by reference to a number of arguments made bythe Agent to the effect that the termination was substantively unlawful. The Judgeconsidered that damages would not be an adequate remedy for the Agent becausedamages would not adequately compensate the damages to its reputation, and that of itsprincipals, that had been established over a lengthy period. In the Judge’s view, thebalance of convenience lay decisively in favour of granting the injunctions. The Judge alsoconsidered and rejected the EBS’s argument that the relief sought should be refused ongrounds of delay. Having heard the parties on his Judgment, the Judge made an order forcosts in favour of the Agent. That order is also the subject of appeal by the EBS.Page 2 ⇓4. The proceedings were commenced some 12 months ago. At the start of the hearing of theappeal, this Court was informed that the proceedings had been entered into theCommercial list but were nonetheless “a long long way from trial” due, the Court wastold, to ongoing dispute as to the proper scope of discovery and in particular the extent towhich the Agent is entitled to EBS documents relating to agencies it has, or had, withthird parties. That discovery dispute has yet to be determined by the High Court. TheCourt was also told that the EBS is seeking security for the costs of discovery.5. It follows that, in event that the High Court injunctions are upheld, they are likely toremain in place for some considerable time, a fact to which I will return below.THE TIED AGENCY AGREEMENTS6. The three Tied Agency Agreements at issue were executed in April 2011. Each relates to aparticular branch agency carried on by the Agent but they are otherwise in identicalterms. The evidence before the Court discloses that the agencies were all operated by theAgent prior to 2011 and that the agency businesses had been established by the lateBetty Martin. Betty Martin took over the EBS agency in Athlone in the 1990s and theagency in Longford some time after that. Mr Declan Martin (a director of the Agent andson of Mrs Martin) avers, without contradiction, that Betty Martin was the first woman tooperate an EBS tied agency in Ireland. Betty Martin Financial Services Limited wasestablished in 2004. In 2008, the Agent took over the Lucan branch of EBS. Asmentioned, the Tied Agency Agreements at issue in these proceedings were entered intoin April 2011, by which time Mrs Martin was less involved in the business due to illness.Sheila Martin, a daughter of Betty Martin, has been involved in the business since 2012.7. Although operated through a corporate entity, it is argued on behalf of the Agent that itsbusiness was and is a family business and in his submissions to this Court, DeclanMcGrath SC for the Agents submits that Declan and Sheila Martin have a “huge emotionalinvestment” in the business such as cannot properly or adequately be compensated by anaward of damages in the event that the termination is permitted to proceed and thatinvestment is lost (as it is argued would inevitably be the case).8. The Tied Agency Agreements are detailed documents which, it appears, are in a standardform adopted by the EBS from time to time. For the purposes of this Judgment, onlycertain of the Agreements’ provisions require to be noticed, as follows:•Clause 3 appoints the Agent, on a non-exclusive basis, to carry on the AgencyBusiness (as defined)•Clause 4.1 provides for the commencement of the Agreement and for itscontinuation “for the duration of the Term.” Clause 4.2 provides that the Agreement“may be terminated at any time in accordance with the provisions of Clause 15.”The effect of these provisions, along with the terms in which Term is defined, isthat the Agreement effectively operates as a contract of indefinite duration, butsubject to termination in accordance with Clause 15.Page 3 ⇓•There are a number of clauses that impose particular obligations, both positive andnegative, on the Agent. Clause 6.1 provides that the Agent is to act as such“subject to and in accordance with the provisions of this Agreement and theProcedures.” Procedures is defined as the procedure notices issued by EBS fromtime to time. No such notices were before us but it seems reasonable to infer fromthe reference to Procedures in clause 6.49 (see below) that these procedures cover(inter alia) appropriate selling of financial products. Clause 6.13 requires the Agentto submit a Compliance Statement annually, in the form set out in Schedule whichprovides for the Agent’s confirmation that it has “complied with all applicable lawsand regulations” save to the extent disclosed on the form. Clause 6.49 (which is ina section of the Agreement head “Regulatory Compliance”) requires the Agent tocomply “with Procedures regarding the sale of investment, saving and insurancerelated products to ensure such products are not mis-sold.” Clause 6.55 requiresthe Agent to notify the EBS of anything which has resulted or which may result in amaterial breach of any Laws (a term defined expansively to include codes ofconduct, guidelines etc whether or not having the force of law) and which mayresult in proceedings against the EBS or investigations involving it. Finally, Clause13.1 requires the Agent to comply with all Laws relating to the operation of theAgency and clause 13.2 – then identifies a number of legal instruments which theAgent “shall, in particular, comply with..”, including the Investment IntermediariesAct 1995 (as amended), the Consumer Protection Code and other Laws intended toprotect users of financial services. At the hearing of this appeal, there appeared tobe no dispute that the effect of these provisions was that the Agent wascontractually obliged not to engage in any mis-selling of financial products and, inthe event that it did so, it would be under an obligation to report that to the EBS.•Termination of the Agreement is addressed in Clause 15. Clause 15.1 and inparticular Clause 15.1(b) is central to the EBS’s defence to the injunctionapplication and so I shall set it out in full:“Without prejudice to any other rights which the parties may have to terminate thisAgreement, this Agreement shall terminate, whereupon its Term shall expire:(a) three months from the date on which the Tied Branch Agent gives notice tothe Society of its intention to terminate this Agreement;(b) twelve months from the date on which the Society gives notice to the TiedBranch Agent of its intention to terminate this Agreement;(c) on the first Business Day after the Society gives notice to the Tied BranchAgent pursuant to Clause 15.3.”Clause 15.3 provides that the Society may give notice of immediate termination inany of the “events” listed in that sub-clause. The long list of events includes breachof the Agreement by the Agent ((a) & (b)); breach of any law considered to bedetrimental to the Agency Business (i), insolvency ((d) & (e)) and many others.Page 4 ⇓Clause 17 is also relevant in the context of termination. In essence, it gives the EBSthe option of terminating the Tied Agency Agreement without cause, but withimmediate effect, on the basis of paying a termination payment calculated in themanner provided for in clause 17.2 i.e. a payment in lieu of notice.•There are a number of other provisions on which the EBS relies. One is Clause 18.1which provides that nothing in the Agreement shall create or be deemed to create apartnership between the parties. This, EBS says, means that the Agreement cannotbe considered to be a “relational contract” such as might give rise to mutualobligations of good faith. I return to this point below. The EBS also placessignificant reliance on Clause 24, an entire agreement clause in the followingterms:“24.1 This Agreement constitutes the entire agreement between the parties heretoand supersedes all prior agreements and understandings oral or writtenrelating to the subject matter of this Agreement.24.2 The Tied Branch Agent acknowledges that it has not relied upon any oral orwritten representations made to it by the Society or its employees or agentsand has made its own independent investigations into all matters relevant tothe Agency Business.”The effect of this clause (according to the EBS) is to preclude the Agent from advancingan argument to the effect that the operation of Clause 15.1 of the Agreement is affectedby the terms of a collateral contract alleged to have been entered into at or around thetime that the Tied Agency Agreements were entered into in April 2011.•Finally, Clause 28 should be noticed as it is an important element of the Agent’sargument that notice of termination was ineffective. It provides:“28.1 All notices and other communications required to be given or made underthis Agreement will be in writing and will be sent to the respective addressesspecified at the head of this Agreement or to such other addresses of whichnotice in writing has been given by the Society or the Tied Branch Agent tothe other.28.2 Any such notice or other communication shall be deemed to have been dulygiven or made as follows:(a) if sent by prepaid first class post, two Business Days after the date ofposting; and(b) if sent by fax, when dispatched.[proviso omitted]”Page 5 ⇓To anticipate the argument discussed in more detail below, the Agent makes two pointsabout the form of the notice of termination. Firstly, it is said that the notice is invalidbecause it proceeds on the basis that there was one umbrella Tied Agency Agreement,covering all three agencies operated by the Agent, when in fact each agency is thesubject of a separate Agency Agreement. Secondly, although the notice is addressed tothe Agent at the address specified in each of the Tied Agency Agreements (the branchpremises in Athlone), it was not in fact posted to that address but was rather handed tothe Agent at the Lucan premises.THE DISPUTE BETWEEN THE PARTIES: THE EVIDENCE9. I will summarise the issues in dispute between the parties, and the evidence that isbefore the Court directed to those issues, as succinctly as possible. This is an applicationfor an interlocutory injunction, heard on affidavit, and the Court cannot determine anyfactual disputes at this stage or seek to make any prediction how those disputes may beresolved at trial.10. Mr Martin has sworn a number of affidavits on behalf of the Agent. In addition, the Courthas the pleadings, including the Agent’s Statement of Claim and Amended Statement ofClaim, Replies to Particulars and Reply which set out the case being made by the Agent.11. Mr Martin says that, from 2010 onwards, he began to have issues with an ESB RegionalManager, Mr Tim Gleeson. Mr Gleeson initially had managerial responsibility for the Lucanbranch but as a result of restructuring within the EBS ultimately was responsible for (interalia) all three branches operated by the Agent. According to Mr Martin, the underlyingreason for these issues was the fact that Mr Gleeson sought to pressure the Agent to sellunsuitable investment products to its customers, specifically to sell higher-risk investmentproducts to customers whose assessments indicated that they ought to be sold low-riskproducts, such as deposits. The appropriate assessment of a potential investor’scapacity/appetite for risk is, of course, a central element of financial services regulation inthe State and elsewhere and in this context the Court’s attention was brought to Chapter5 of the Consumer Protection Code which sets out in detail the steps to be taken byregulated entities in terms of knowing the consumer and assessing the suitability offinancial products prior to offering, recommending, arranging or providing them.12. I should record immediately that Mr Gleeson has sworn an affidavit in this application inwhich he categorically denies these allegations. The allegations are also denied on theEBS’s behalf by Mr Des Fitzgerald, its Managing Director, in affidavits sworn by him.13. Mr Martin says that he resisted Mr Gleeson’s efforts and refused to sell high riskinvestment products to unsuitable customers. He says that things came to a head in2017. He was (he says) concerned that if continued to resist Mr Gleeson’s pressure, hewould lose the EBS business. Having discussed the issue with his sister, he decided tosurreptitiously record a meeting with Mr Gleeson on 18 January 2017. A purported“transcript” of that meeting was put before the High Court. The EBS makes the point thatthis document has not been prepared by a professional stenographer but by a relative ofMr Martin and also observes that it has never been provided with a copy of the audioPage 6 ⇓recording so as to verify the document. In his affidavit, Mr Gleeson complains that thedocument contains select excerpts taken out of context and that it does not convey the“mutual understanding of the position.” He also takes issue with the covert nature of therecording.14. In any event, by letter of 18 May 2017, signed by Mr Gleeson, the EBS gave 12 months’notice of termination of the three Tied Agency Agreements pursuant to Clause 15.1(b). Itmay be noted that this notice refers in clear terms to the three Agreements. In otherwords, the notice did not suffer from the alleged frailty said to vitiate the notice served inFebruary 2018. The letter did not give any indication of the EBS’s reason(s) forterminating the Agreements. The letter concluded by thanking the Agent “for [its]contribution to EBS over the years.”15. In response, Mr Martin arranged a meeting with Mr Des Fitzgerald, the EBS’ ManagingDirector, which took place on 29 May 2017. According to Mr Martin, at “that meeting, Idisclosed the mis-selling and misconduct of Mr Gleeson, Mr Fitzgerald confirmed that hewas withdrawing the Notice and that there would be an investigation into the mattersraised.” (Affidavit of 18 December 2018; para 28). Mr Fitzgerald says that the notice wassuspended rather than withdrawn but it does not appear necessary or useful to considerthat distinction further: the fact is that a further notice of termination issued in February2019 and the EBS subsequently confirmed that it was not relying on the earlier notice.16. It is also a fact that there was an investigation, undertaken by personnel from AIB GroupInternal Audit (AIB having taken over EBS in 2011). Mr Fitzgerald explains that heconsidered it appropriate to suspend the termination decision pending that investigationeven though he was “satisfied the reason for the decision [to terminate] was in no waylinked to any alleged failure on the part of the Plaintiff to engage in the mis-selling ofproducts.” (Affidavit of 4 January 2019 at para. 20). Mr Fitzgerald and EBS are silent onwhat was the reason for the decision to terminate the Agreements in May 2017.17. As part of that investigation, Mr Martin was interviewed by the investigators and atranscript of that interview was put before the High Court. Following that interview, theinvestigators followed up with a request for various information/material touched on inthe course of the interview, including all recordings held by Mr Martin (it having beensuggested in a draft affidavit of Mr Martin which had been provided to the investigatorsthat he had recordings of more than one conversation with Mr Gleeson). It appears,however, that Mr Martin did not provide any of this material to the investigators, forreasons which are unexplained. That is the subject of criticism by Mr Fitzgerald.18. In December 2017 AIB Group Internal Audit issued its Investigation Report. However,only a short Executive Summary was provided to Mr Martin and it was this document onlythat was before the High Court and this Court1. As Mr McGrath observed in hissubmissions to this Court, there is a caveat at the start of the Executive Summary to theeffect that the section is just a summary which did not incorporate the full details of the1 Exhibit “DM 6”Page 7 ⇓investigation and was intended only to provide an overview. It went on: “Decisionsrelating to this case should be based on the summary.” In any event, the documentidentified the two main headings of complaint as being pressure to mis-sell and pressureto cold-call customers (such cold-calling is not permitted by the Regulator). The findingsof the Group Internal Audit, as summarised in the document, warrant notice. As regardsthe issue of cold-calling, the document noted that it was not possible to determinewhether there had been cold-calling and that the investigation had instead sought todetermine whether Mr Gleeson had given any “explicit instruction” to the Agent, or to anyother agents in his region, to cold-call customers. There was no evidence of any suchexplicit instruction, though it seems from the document that the investigation consideredthat certain training material prepared by Mr Gleeson might be capable of beingunderstood as advocating cold-calling though it noted (without comment) Mr Gleeson’sexplanation that that was not what he intended to convey.19. As regards mis-selling, the investigation noted that, because customer financial reviewswere not recorded, it was impossible to say whether customer’s responses were beinginfluenced. As regards the suggestion that low-risk customers were being sold investmentproducts when they should not be, the document noted what it referred to as a “disparitybetween EBS’s and Irish Life’s views on how conversations with customers emerging fromthe financial review questions with a risk score of 1 or 2 should be progressed. Thedefault option for such customers is deposits. Mr Gleeson is clear that it is appropriate forthe Financial Advisor to ask a customer with this risk score if they wished to be informedabout investment options. Mr Gleeson encourages his Agents to have this conversationwith customers and provides coaching to the Agents on how to conduct suchconversations. Irish Life contends that a conversation about investment options must onlybe progressed by the Advisor, if the customer themselves initiates that discussion.” Theappropriateness or otherwise of an Agent initiating such a conversation with a customerwith a risk profile of 1 or 2 was “a question for EBS Management/Compliance to resolveand not a matter for the investigation to conclude.”20. I should explain that, at the relevant time, EBS did not have investment products of itsown and instead sold Irish Life products to its customers through its branches, as agentsfor Irish Life. The “disparity” identified by AIB Group Internal Audit therefore involvedwhat, on its face, appears to have been a material difference of view on the part of EBS(who were selling the products) and Irish Life (whose products were being sold) as to theappropriateness of the approach being advocated by EBS/Mr Gleeson. It is thereforesomewhat surprising that this identified “disparity”, and the compliance issues potentiallyarising from it, are not addressed by Mr Fitzgerald in his affidavits. The Court is thereforeunaware how EBS Management/Compliance may have resolved the issue identified by theinvestigation.21. I should also explain that the AIB Group Internal Audit document refers to, and relies to asignificant extent on, a separate report published by Irish Life in August 2017 which, itappears, had concluded that there was no evidence to support the allegations madeagainst Mr Gleeson regarding the sale of Irish Life products. That report was neverPage 8 ⇓furnished to the Agent and was not put before the High Court or before this Court onappeal. Mr Martin complains about the non-production of this report and also makes thepoint that Irish Life did not seek to speak to him in the course of preparing that report.22. In his judgment, the High Court Judge observed that the AIB Internal Audit Report wasrelied on heavily by EBS and questioned how it could be afforded the status the EBSwished to give it when all that had been produced was an Executive Summary (Judgment,at para 5a.). He also questioned why the “disparity” identified in the Executive Summarywas dispatched in such a “cavalier fashion” in the summary when the issue lay at the coreof Mr Martin’s assertions (5c.) and how it could be stated that Irish Life had concludedthat there was no evidence to support the mis-selling allegations given the disparity ofviews referred to in the summary (5d.)23. These are, it appears to me, fair questions, albeit it might be said that any criticism ofany failure to address the “disparity” ought more properly to be directed to the EBS thanto AIB Group Internal Audit. In fact, both Mr Fitzgerald and Mr Gleeson assert that theAIB and Irish Life investigations exonerated the EBS/Mr Gleeson. Thus, at para. 26 of hisaffidavit of 4 January 2019, Mr Fitzgerald says that the AIB investigation “found that therewas no substance to the complaints made by the Plaintiff” and Mr Gleeson in his affidavit(para 11) states that he had been “exonerated by both investigations undertaken byAllied Irish Banks plc and by Irish Life.” Absent sight of the full AIB Report and the IrishLife Report, these averments are difficult to assess but what can be said is that theExecutive Summary leaves a number of unanswered questions that the EBS’s evidencedoes not really engage with.24. In any event, the AIB executive summary appears to have been furnished on 15 February2018, followed very shortly afterwards by the second letter of termination of 19 February2018. In common with the earlier notice of termination, it did not identify any reason fortermination and no reason has been identified by the EBS in its affidavits or submissions.This second notice also concluded with an expression of EBS’s gratitude for the Agent’scontribution “over the years.”25. Mr Martin makes other allegations of inappropriate conduct by the EBS/Mr Gleeson in theaffidavits sworn by him and in particular his affidavit of 11 January 2019. Theseallegations are, it should be noted, disputed by Mr Fitzgerald and by Mr Gleeson. Inaddition to Mr Martin’s affidavits, the Agent has put before the Court a number ofaffidavits from former tied agents of the EBS which canvass complaints about the mannerthey were treated by the EBS and suggest – in varying terms and tone – that they hadfelt pressured to achieve sales even at the cost of breaching applicableregulations/guidelines.26. A further issue canvassed in the affidavits concerns the representations alleged to havebeen made to the Agent at or around the time it entered into the Tied AgencyAgreements in 2011 which are relied on as giving rise to a collateral contract. I will trackwhat has been said by the Agent in the affidavits and in its pleadings.Page 9 ⇓•At para 14 of his affidavit of 18 December 2018, Mr Martin avers that “at the timethat BMFS entered into the Tied Agency Agreements, I was expressly assured by MrGerry Middleton that EBS would never terminate it save for exceptional reasonsbeing misconduct or gross misconduct.”•Mr Middleton had died in 2013 so obviously there was no direct response to thisassertion though Mr Fitzgerald made observations to the effect that it was plausiblein his first affidavit.•Para 7 of the Agent’s Statement of Claim – delivered on 11 January 2019 –contains a plea in the same terms as in Mr Martin’s affidavit, with the additionalplea that the parties thereby entered into a collateral contract.•In Mr Martin’s second affidavit – also dated 11 January 2019 – he gives whatappears to be a quite different account, stating that “firstly such assurances weregiven to my mother, Betty Martin, who raised this point specifically with Mr GerryMiddleton and Mr Tony Moroney when the plaintiff entered into the agreements”before going on to say that such assurances were repeated to him by Mr Middletonat a meeting on 28 January 2013 and a follow up call the following day.•On 4 March 2019 an Amended Statement of Claim was delivered which included anamendment to para 7 by which it was pleaded that the EBS has representedto/assured the Agent that the Agreements would not be terminated “save for goodcause such as insolvency or gross misconduct”•In Replies to Particulars dated 18 April 2019, further particulars of the allegedrepresentations/assurances were given, in substantially the same terms as MrMartin’s second affidavit i.e. to the effect that representations were made to MrsMartin prior to the Agent entering into the Tied Agency Agreements (in April 2011)and repeated to Mr Martin in January 2013.27. The final factual matter that it is necessary to note relates to events occurring since theservice of notice of termination in February 2018. Curiously, the Agent appears to havetaken no step to question or challenge the termination until 7 December 2018 when theseproceedings were commenced by the issue of a summons (which was not servedimmediately). On 11 December 2018, a letter was sent by its solicitors which referred tothe firm’s instructions “that the purported terminations are proceeding and that staff have[been] informed of same” and sought the withdrawal of the “purported terminations” or,in the alternative, an undertaking not to take any steps on foot of them, failing whichproceedings would issue and injunctive relief would be sought. No grounds for impugningthe validity and/or lawfulness of the terminations (and the letter consistently refers toterminations in the plural) were identified in that letter. This letter received a quickresponse confirming that EBS would not be withdrawing the notice of termination orgiving the undertaking sought. The proceedings were then served and this applicationfollowed.Page 10 ⇓28. Mr Martin seeks to explain the Agent’s failure to take steps to challenge the termination inthe period between February and December 2018 by saying that he understood fromspeaking to persons in the business (by which, presumably, he means EBS) that “matterswould calm down”, “the personal animosity would dissipate” and “common sense wouldprevail” (affidavit of 1 January 2019, paras 34 and 35). In all the circumstances, this isdifficult to understand, unless of course there was engagement between the parties thathas not been disclosed in the evidence.29. However, there are curious features to the position of EBS also. While Mr Fitzgerald refersto the “extensive preparation for the termination (which has been in train since February2018)”, the available evidence suggests that no concrete step was taken by EBS untilNovember 2018, when (according to Mr Fitzgerald) notification of the termination wasgiven to the Central Bank. Customers were not notified of the change in agent until 18December 2018, i.e. after the letter before action of 11 December 2018 and while thenotices to customers identified the new agent as Woods Financial Services Limited, theagreements between that entity and EBS were only entered into on 7 January 2019,2after the commencement of these proceedings and the bringing of this injunctionapplication. Whatever about the date of execution of the formal agreements, it is not atall clear from the evidence, such as it is, that, as of February 2018 (when the notice oftermination was served), Woods Financial Services Limited had been chosen to replacethe Agent or had agreed to act as such, even in principle. Mr Woods, the principal of thecompany, has sworn an affidavit but that simply says that had discussions with the EBSabout taking over the agencies going back to 2017, that these discussions “revived in2018” and culminated in the agreements of January 2019. I think it is a reasonableinference from this evidence that, as of February 2018, no definite arrangements were inplace in respect of the succession which, it seems to me, throws into sharp relief the issueof why the Agency was being terminated.30. There is also some evidence – in the form of a further “transcript” of another conversationsurreptitiously recorded by Mr Martin, this one with Mr Woods 3– that, if accepted at trial,might be thought to cast doubt on the reality of the arrangements between EBS andWoods Financial Services Limited. That is, however, a matter for trial.DISCUSSION31. The power to grant an interlocutory injunction in an appropriate case is, of course, acritical part of the effective administration of justice. The absence of such a power wouldsignificantly impair the capacity of the Courts to vindicate rights and prevent injustice.However, the grant of an interlocutory injunction also has the capacity to give rise toinjustice in that it may restrain a party from taking action which, it transpires, they werefully entitled to take or (in the case of mandatory injunctions) require them to undertakesome course of action they do not wish to undertake and which, it transpires, they wereunder no obligation to undertake.2 Exhibit “BW1”3 Exhibit “4DM1”Page 11 ⇓32. As the Supreme Court (per Clarke J, as he then was) observed in Okunade v Minister forJustice v Minister for Finance [2012] IESC 49; [2012] 3 IR 152, the problem that a courtfaces in determining an application for an interlocutory injunction “stems from the factthat the court is being asked, on the basis of limited information and limited argument, toput a place a temporary regime pending trial in the full knowledge that the court does notknow what the result of the trial will be” (at [67]). In these circumstances, Clarke J wenton, the “underlying principle must be that the court should put in place a regime whichminimises the overall risk of injustice”. As the Supreme Court (again per Clarke J)observed in Dowling v Minister for Finance [2013] IESC 37; [2013] 4 IR 576, thatproblem presents itself to any court deciding, in advance of a final determination on themerits, whether to make any form of interim intervention. Thus, albeit not identical to thecriteria applicable in this jurisdiction for the granting of interlocutory measures (which inturn closely reflect the position in England and Wales), the criteria applied by the Courtsof the European Union for deciding whether to grant interim measures are functionallysimilar, as indeed is evident from the detailed discussion in Dowling. As Clarke J pointsout (at [92] it is hardly surprising that there is such a similarity: the problem is the samein all cases.33. The recent decision of the Supreme Court in Merck Sharp & Dohme Corporation vClonmel Healthcare Limited [2019] IESC 65, where the sole judgment was given by O’Donnell J (Clarke CJ and McKechnie, Dunne and O’ Malley JJ agreeing with that judgment)is also relevant.4 It will be necessary to refer in more detail below to O’ Donnell J’sdiscussion of the interaction of the adequacy of damages (for applicant and respondent)and the balance of convenience. That discussion takes place in a context where O’ DonnellJ. emphasises the “essential flexibility” of the injunction remedy (para 27) and cautionsagainst a tick-the-box approach to the grant or refusal of an interlocutory injunction (para47). Elsewhere in his judgment, O’ Donnell J reminds us that the decision of the House ofLords in American Cyanamid v Ethicon [1975] AC 396 – the fons et origo of the modernlaw of injunctions both in England and Wales and, given its adoption by the SupremeCourt in Campus Oil v Minister for Industry (No 2) [1983] IR 88, in this jurisdiction also -should not be seen be approached “as though it were the laying down of strict mechanicalrules for the control of future cases” (at para 33) or “as akin to statutory rules” (at para34).34. Allowing that establishing a serious issue to be tried is a necessary (but not sufficient)condition to the grant of an injunction (at least where that issue, if established at trial,would provide a basis for a permanent injunction), the decision to grant or refusethereafter becomes a matter of overall assessment of where the balance of justice lies,though with particular (and, in many cases, decisive) weight being given to the adequacyof damages within that overall assessment. That is not to imply that the outcome is orought to be a matter of impression or intuition. As the decision in Merck Sharp & DohmeCorporation v Clonmel Healthcare Limited concretely illustrates, a decision to grant or4 The Court brought Merck Sharp & Dohme Corporation v Clonmel Healthcare Limited to the attention of the parties at thehearing of the appeal and also gave them an opportunity to provide supplementary submissions addressing the decision.Both parties did so and their submissions were helpful and to the point.Page 12 ⇓refuse an interlocutory injunction is a judicial decision, deriving from a structured andcareful assessment of the relevant considerations that is (or at least ought to be)reasoned and capable of review. However, there are likely to be multiple considerations tobe weighed in the balance, pointing in different directions, none of which are likely to bedecisive in itself.The Proper Approach of this Court on Appeal35. What is before this Court is, of course, an appeal from the decision of the High Court and,citing Lawless v Aer Lingus [2016] IECA 235 and Ganley v RTE [2019] IECA 18, the Agentcontends that that decision was made in the exercise of the Judge’s discretion, based on acorrect application of the applicable principles and that the decision was one that wasclearly open to him on the evidence and, accordingly, a significant margin of appreciationshould be afforded to that decision (para 11 of the Agent’s written submissions to thisCourt). In his oral submissions, Mr McGrath SC refined that position somewhat, accepting(correctly, in my view) that a distinction is to be drawn in this context between theanalysis of whether a fair question/serious issue had been established on the one handand, on the other, the Judge’s consideration of adequacy of damages, balance ofconvenience and delay. In respect of the former, Mr McGrath accepted that if this Courtidentified an error of principle in the analysis of the Judge, it could properly intervene butas regards the latter, intervention was appropriate only if this Court was satisfied thatthere is an injustice.36. Mr Gardiner SC did not seriously dispute the proposition that the hearing of an appealfrom an interlocutory injunction application did not involve a re-hearing. His primarysubmission in this context was that the High Court Judge had failed to deal with theissues and arguments and had provided no reasons for his determinations in respect ofthe crucial questions presented for decision. In these circumstances, Mr Gardinersubmitted, this Court had to conduct a rehearing of the application and, given that it hadthe same material before it as the High Court had, it was entitled to determine theapplication effectively de novo.37. In Lawless v Aer Lingus (a discovery appeal), Irvine J (with whose judgment Hogan andKeane JJ agreed), referred to her judgment (for the Court) in Collins v Minister for Justice,Equality and Law Reform [2015] IECA 27 (an appeal to this Court against the High Court’srefusal to dismiss the proceedings on grounds of delay) which comprehensively analysedthe authorities before expressing its conclusion in the following terms:“79. For all of these reasons, therefore, we consider that the true position is that set outby MacMenamin J. in Lismore Homes, namely, that while the Court of Appeal (or, asthe case may be, the Supreme Court) will pay great weight to the views of the trialjudge, the ultimate decision is one for the appellate court, untrammelled by any apriori rule that would restrict the scope of that appeal by permitting that court tointerfere with the decision of the High Court only in those cases where an error ofprinciple was disclosed.”38. In Lawless, Irvine J added the following qualification to that statement:Page 13 ⇓“23. However, it seems to me that all too often parties who are somewhat dissatisfiedby interlocutory orders made in the High Court seek to use this Court as a venue tore-argue their application de novo in the hope of persuading this court to exerciseits discretion in a somewhat different fashion from that which was adopted by theHigh Court judge at the original hearing. That is a practice which I believe is not tobe encouraged. In order for this Court to displace the order of the High Court in adiscovery matter the appellant should be in a position to establish that a realinjustice will be done unless the High Court order is set aside. It should not besufficient for an appellant simply to establish that there was a better or moresuitable order that might have been made by the trial judge in the exercise of theirdiscretion.”39. Accordingly, while as a matter of principle, “great weight” is to be given to the views ofthe High Court Judge, the ultimate decision on this appeal is for this Court. It is also clearthat the EBS is not required to establish any error of principle as a pre-requisite to thisCourt coming to a different conclusion to the Judge.40. The particular point made by Mr Gardiner remains to be considered. As a matter ofprinciple, it appears to me that Mr Gardiner is correct. Where the High Court does notexplain its basis for taking a particular view on a contested issue and/or fails to engageappropriately with the arguments made to the Court by one or other party on that issue,that will necessarily affect the weight to be attached to the Court’s view on appeal. Anobvious parallel is provided by the appropriate approach to findings of fact made by theHigh Court. In general, such findings will bind an appeal court: Hay v O’ Grady [1992] 1IR 210. That will not be the case, however, where the Judge fails to engage with theevidence of both sides and explain why one side or the other has been preferred: Doyle vBanville [2012] IESC 25; [2018] 1 IR 505.41. Separately, it is clear that a judge must give sufficient reasons for his or her decision suchthat the parties can understand the basis for that decision: see, for example, the decisionof this Court in Law Society v Callanan [2017] IECA 217; [2018] 2 IR 195, at paras 80-8-(per Hogan J).Fair Question/Serious Issue42. Neither party takes issue with the Judge’s view that the requirement to show a fairquestion/serious issue does not mean that the Agent must establish a very strong caseand that the threshold to be surmounted is generally recognised as low (para 11 of theJudgment under appeal). It may be useful to regard this threshold as akin to thethreshold that applies where a party seeks to dismiss a claim against it pursuant to theinherent jurisdiction and that was the approach taken by the High Court in a number ofdecisions cited to us including Wingview Limited v Ennis Property Finance DAC[2017] IEHC 674 (per Haughton J, at para 14) and O’ Gara v Ulster Bank DAC [2019] IEHC 213(per Barniville J at para 42).43. In the jurisprudence “fair question”, “bona fide issue” and “serious issue” (and othervariants of these phrases) have been used interchangeably. As a matter of language, IPage 14 ⇓prefer the expression “serious issue” (in the sense of serious issue to be tried) but inusing it I do not mean to suggest that the threshold is higher than it is.44. Notwithstanding its acceptance that the threshold is a low one, the EBS contends that noserious issue has been established by the Agent. That is not a merely formal position: itwas in fact the primary focus of the EBS’s appeal before this Court.45. In deference to the forceful submissions that have been made by Mr Gardiner, and havingregard also to the EBS’s complaints regarding the adequacy of the Judge’s analysis, Iconsider it appropriate to analyse and discuss the question whether the Agent hasestablished a serious issue to be tried in more detail than might normally be warranted.(i) The Form of the Notice of Termination and its Service46. The Judge concluded that there was a serious issue to be tried that the notice wasdefective because it did not refer specifically to the three Tied Agency Agreements, that itreferred in fact to an agreement which did not exist and was not in any event served asrequired by the Agreements: para 13. He went to indicate that he would have expected“three tailor made Notices to be served” in circumstances where the EBS sought to availof a condition which it asserted was a “strict condition” allowing the termination of a long-standing business relationship without having to give a reason (or have) a reason andeven if the reason is capricious. (ibid).47. It may be noted, firstly, that the Agent does not in fact contend that three separatenotices of termination were required, as Mr McGrath made clear in the course of hissubmissions to this Court. Its complaint is, rather, that the notice as served in February2018 (in contrast to the earlier notice given in 2017) refers to a Tied Agency Agreement(rather than Agreements in the plural, though in fact there are a number of references inthe notice to “Agreements”). It is not suggested that the form of the notice gave rise toany lack of clarity, confusion or prejudice; the Agent’s argument is a net legal one,namely that, in order for there to be a valid termination, there has to be preciseobservance of all applicable contractual conditions. Given the argument being made bythe Agent, it appears to me that the decision in Allam & Co Ltd v Europa Poster ServicesLtd [1968] 1 WLR 638, on which Mr Gardiner relied significantly, is of limited assistance.48. In support of its position, the Agent relies on a passage from Chitty on Contracts (32nded) in which following a discussion about requirements as to notice the editors state that“prima facie the validity of the notice depends on the precise observation of the specifiedconditions”. (para 22-05`). However, the text goes on to note that a consideration of therelationship of the notice requirements to the contract as a whole and regard to generalconsiderations of law may show that a contractual stipulation was intended to be anintermediate term, breach of which was intended to give rise to a claim in damages onlyand not invalidating the notice. More pertinently, perhaps, the very statement relied on tosupport the Agent’s argument is further qualified by a footnote to it, which suggests that“the prima facie rule may have to give way on the facts of the case when regard is had toPage 15 ⇓the underlying commercial purpose of the termination clause and the modern approachwould appear to place less emphasis on the need for precise compliance.”49. The underlying “commercial purpose” of Clause 15.1(b) was to enable the EBS toterminate the Tied Agency Agreements by giving twelve months’ notice of its intention toterminate. As Mr Gardiner emphasised, it is not a unilateral power: the Agent is alsoentitled to terminate the Agreement on giving notice, though in that situation only threemonths’ notice is required: clause 15.1(a). Notably, Clause 15.1(b) does not stipulate anyparticular form of notice. In fact, it does not in terms even require such notice to be inwriting. While the effect of clause 28.1 is to require written notice, it is perhaps significantthat the requirements of clause 28.1 apply generally to all “notices and othercommunications” under the Agreement and its requirements are not specific to clause15.1(b) termination notices.50. It seems to me, therefore, that the position here is remote from the oft-cited examplegiven by Lord Hoffman in Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd[1997] AC 749 where the use of pink paper for a notice exercising an option would(according to Lord Hoffman) render the notice invalid if the relevant contractual clausehad stipulated the use of blue paper. That fact is implicitly acknowledged by the fact thatMannai was not cited or relied on before this Court.51. In the absence of any stipulated form of notice, and absent any suggestion that the noticehere was ambiguous or confusing or that it otherwise caused any prejudice to the Agent, Iam not persuaded that a serious issue has been shown that the form of the notice, and inparticular its reference to Tied Agency Agreement rather than Agreements, renders itineffective or invalid.52. I have come to same view on the service point. Again, there is no suggestion that thenotice was not duly received by the Agent. In fact, the mode of delivery used ensuredthat it came to the attention of the Agent immediately, rather than a day or two later aswould have been the case if the notice had been posted. The commercial purpose ofclause 28, insofar as it relates to the giving of notice, is clearly to ensure that notices etccan be effectively delivered and that, where delivery is effected in accordance with itsterms, notices etc will be deemed to have been given at a particular time. There isnothing in clause 28 which suggests that it was intended to exclude other means ofdelivery or that a notice served otherwise than in accordance with clause 28.1 should beregarded as ineffective where, as a matter of fact, that notice has been delivered andreceived.53. It follows that I respectfully differ from the conclusion of the Judge on this issue. Forcompleteness, I would add that, even if I had been persuaded that a fair issue had beenestablished under this heading, I would nevertheless have been of the view that such afinding could not sustain the injunctions granted by the High Court in any event. At theconclusion of his judgment in Merck Sharp and Dohme v Clonmel Healthcare Limited, O’Donnell J sets out a useful series of steps which might be followed in injunctionapplications such as this (at para 64). The first is these is that the court should considerPage 16 ⇓whether, if the plaintiff succeeded at the trial, a permanent injunction would be granted.If not (he continues) then it is “extremely unlikely” that an interlocutory injunction couldbe granted. In my opinion, even if at trial the Agent were to succeed in establishing anydeficiency in the form of the termination notice and/or in its service, that would not besuch as to lead to the conclusion that the termination should be permanently enjoined.Rather, any such deficiency would, in my view, be addressed by way of damages (thoughindeed it is difficult at this point in time to see how anything other than nominal damagescould arise).(ii) The Alleged Collateral Agreement54. The High Court Judge considered the collateral agreement argument along with theAgent’s implied terms arguments. He noted that authorities had been opened by bothparties. Having noted that there was no authority on all fours with the case before him,he stated that it “would be easy to dismiss the arguments by reference to Clause 15 andthe express wording of the commercial contracts entered into” but to do so would be findthat there was no fair or serious issue to be tried, which was not his view havingconsidered the evidence and authorities. He concluded by stating that, in light of thesubmissions made and having regard to the authorities, there was a fair and serious issueto be tried on each of the grounds.55. Mr Gardiner criticises the Judgment for not giving any explanation for this conclusion andfor failing to engage with the arguments that had been made on the EBS’s behalf aboutthe meaning and effect of the Tied Agency Agreements, and in particular clause 15.1(b).In my opinion, these criticisms have considerable force. It appears from the Judgmentthat the Judge may have been of the view that, having formed the view that a seriousissue (or series of such issues) had been established, it was not appropriate to sayanything further and, as Mr McGrath observed in his submissions, it may be that theJudge had in mind the approach taken in summary judgment applications where, if anarguable defence is found to be established, courts conventionally refrain from furthercomment because the merits or otherwise of any such defence will then a matter for finaladjudication at trial.56. This is not an application for summary judgment and an order such as that made by theHigh Court cannot be equated with an order adjourning such an application for plenaryhearing. The order made by the High Court had immediate and significant effects for theEBS in that it suspended the termination of the Tied Agency Agreements in circumstanceswhere the EBS argued that the terms of those Agreements gave them an unambiguousand unqualified entitlement to terminate, excluded any reliance on any collateral contractand precluded the implication of any terms of the kind argued for by the Agent. Thosearguments were not of course necessarily determinative of the application before the HighCourt but the EBS was entitled to some explanation as to the basis on which the Courthad concluded that a serious issue had nonetheless been established. I do not mean tosuggest that any form of elaborate analysis is necessary. In many injunction applicationsthere will be little or no dispute that a serious issue has been raised and, even wherePage 17 ⇓there is a dispute, the position may be relatively straightforward. Here, however, thequestion was vigorously disputed in the High Court (as it was in this Court) and in thosecircumstances, something more than a conclusionary statement was required.57. It follows that, even if as a matter of principle any degree of deference ought to be givenby this Court to the High Court’s views on the serious issue question – and as alreadynoted Mr McGrath appeared to accept that that was not the case – no question of anydeference arises in the circumstances here.58. For my part, I am not persuaded that the Agent has established a serious issue to betried to the effect that there is a collateral contract in existence which modifies (and onthe Agent’s argument, radically alters) the EBS’s contractual entitlements under clause15.1(b). Quite apart from the evident (and significant) inconsistencies in the Agent’sevidence as to what is alleged to have been said, to whom and when (see para 26above), I agree with Mr Gardiner that this argument fails in the face of clause 24 of theAgreements.59. Mr McGrath places significant reliance on the decision of the Queen Bench Division (GrayJ) in Ryanair Limited v SR Technics Ireland [2007] EWHC 3089 (QB). It appears to methat that decision (which is not, of course binding on this Court in any event) is clearlydistinguishable, legally and factually. The entire agreement clause was in different terms,with no provision equivalent to clause 24.2 of the Tied Agency Agreements. Factually, thecollateral contract relied on by Ryanair (which was recorded in a formal and detailed sideletters executed by the parties and other written communications) addressed an issue –the need for DAA consent to any lease or licence which SRT might grant to Ryanair –which was not addressed in the main contract.60. Here the collateral contract argument relies on representations/assurances purportedlymade before the execution of the Agency Agreements. However, the whole purpose ofclause 24.2 (which, again, had no equivalent in the Ryanair/SRT contract) is to precludeany such reliance. Furthermore, unlike the position in Ryanair, the collateral contractrelied on by the Agent cannot properly be characterised as supplemental to the TiedAgency Agreements; rather it would radically alter Clause 15 (not just clause 15.1 butclause 15.3 also). Clause 24 excludes that argument in my view.(iii) The Alleged Implied Terms61. The Agent next relies on certain contractual terms which, it argues, ought to be impliedinto the Tied Agency Agreements. The first such implied term is that the EBS would notterminate the agreement capriciously or for an improper motive. The second – andnarrower – implied term is to the effect that the EBS would not terminate the Tied AgencyAgreements on the ground that the Agent refused to mis-sell financial products or, as itwas also put, on the basis that the Agent complied with its contractual obligations not tomis-sell financial products.62. Before addressing the arguments of the EBS as to why no such terms can or should beimplied, I should note that the EBS accepts that the implied term issue is not affected byPage 18 ⇓clause 28 of the Tied Agency Agreements. In other words, the EBS does not contend thatthe entire agreement clause precludes the implication of terms such as those contendedfor by the Agent here.63. What the EBS says forcefully is that these terms do not satisfy the requirements for theimplication of a term set out in the jurisprudence, with particular reference to the decisionof the Supreme Court in Sweeney v Duggan [1997] 2 IR 531. According to the EBS,neither of these implied terms can be said to be “not merely reasonable but necessary”(per Murphy J in Sweeney v Duggan at 539). They also argue that such terms cannot beimplied because they would be inconsistent with the express terms of clause 15 and thatthey are not capable of being formulated with reasonable precision (criteria alsoarticulated in Sweeney v Duggan).64. According to the EBS, clause 15.1(b) of the Agreements gives an unqualified power to theEBS to terminate for any or no reason and the Court has no function to inquire into thereason(s) for termination in any given case. In answer to a question that I put to him inthe course of oral argument, Mr Gardiner did not shrink from the position that, even ifthere was irrefutable proof that the Tied Agency Agreements had indeed been terminatedbecause the Agent refused to succumb to pressure to mis-sell investment products, itwould no difference to the validity of the termination. Consistently with that position, MrGardiner also resisted any suggestion that evidence of discriminatory motives, such asracial or religious animus, could be relied upon to impugn a termination on noticepursuant to clause 15.1(b). The right to terminate on giving twelve months’ notice was,he submitted, “an unfettered, untrammelled absolute right.”65. In support of this submission, Mr Gardiner brought the Court to a decision of the PrivyCouncil, Reda v Flag Ltd [2002] UKPC; [2002] IRLR 747 and a recent decision of the (EW)Court of Appeal, Ilkerler Otomotiv Sanayai v Perkins Engines Co Ltd [2017] EWCA Civ 183;183; [2017] 4 WLR 144. In response, Mr McGrath relied on another decision of the (EW)Court of Appeal, Paragon Finance plc v Nash [2001] EWCA Civ 1466; [2002] 1 WLR 685.66. I do not consider that it either necessary or appropriate to examine these authorities indetail. This Court is adjudicating on an interlocutory appeal, not an appeal from the finaldetermination of these proceedings. It would not be appropriate to determine complexlegal issues at this stage. I will limit myself to observing that, in my opinion, neither thePrivy Council’s decision in Reda nor that of the Court of Appeal in Ilkerler necessarilyforecloses the arguments advanced by the Agent on the implied terms issue.67. As a general observation, it appears to me that the question of whether or not it isappropriate to imply a term into a contract depends on an assessment of the nature ofthe implied term suggested, consideration of the express terms of the contract and – atleast arguably – the (objective) context in which the contract was entered into and its(objective) purpose. It follows that I am not convinced that it is possible or appropriate toread across from the rejection of the implied terms contended for in Reda to concludethat the implied terms contended for here must necessarily be rejected also. The contractin Reda was a different form of contract, it appears that the termination clause was inPage 19 ⇓different terms to the termination clause here, the implied terms contended for were notthe same and the overall context was, it seems to me, quite different also. The samepoints may be made regarding Irkerler. In addition, I would observe that the Court ofAppeal in Irkerler did not appear to exclude in principle the possibility of implying a term(though it agreed with the judge below that the particular terms contended for should begiven “short shrift”) and, further, that the judge below clearly contemplated the possibilityof implying a general good faith term, in reliance on the observations of Yam Seng Pte Ltdv International Trade Corporation Ltd [2013] EWHC 111 (QB); [2013] 1 All ER (Comm) 1321.68. It would, in my view, be to go too far to conclude in this interlocutory appeal thattermination of the Tied Agency Agreements cannot in any circumstance be impugned byreference to what is said to be an improper reason for termination or that the Courtcannot in any circumstance seek to look behind a notice of termination given pursuant toclause 15.3(b). That may be the conclusion reached at trial but, in my opinion, it is not soclear that such a conclusion is inevitable that the Court could on this appeal properlyconclude that no serious issue arises.69. I would add that I am not at all convinced that the decision of the Court of Appeal inParagon Finance has the import contended for by Mr McGrath. It related to – andsubsequent case law suggests is limited to – the exercise of a unilateral contractualdiscretion by one contracting party (there the power vested in the mortgagee to vary theinterest rate payable by the mortgagor). No authority has been opened to the Court thatsuggests that a term such as was implied in Paragon Finance can or should be impliedinto a contractual provision such as clause 15.1(b) of the Tied Agency Agreements.70. Yam Seng was considered by the High Court and by this Court in Flynn v Breccia[2015] IEHC 547 (H Ct); [2017] IECA 74 (CoA). While reversing the High Court’s judgment, thisCourt left open the issue of whether it should be followed here. Furthermore, whileendorsing the proposition that there is no general principle of fair dealing and good faithin Irish contract law and holding that the shareholder agreement was not an agreement ofa type to which any general duty of good faith applied, this Court sensibly did not seek toidentify a priori those categories of contract to which such a duty might apply. There maybe further developments in this area of the law. However, in the course of hissubmissions, Mr McGrath made it clear that the Agent was not contending that a duty ofgood faith should be implied here. The terms for which he was contending were, heemphasised narrower than a term of good faith.71. In any event, looking at these issues through the prism of the Supreme Court’s decisionin Sweeney v Duggan, I consider that it is at least arguable that the second (andnarrower) term contended for by the Agent ought to be implied into clause 15.1. of theTied Agency Agreements. In other words, I consider that it is arguable that the clause15.1(b) termination power cannot properly be exercised where the basis for its exercise isthe performance by the Agent of its express contractual obligations under the AgreementsPage 20 ⇓not to engage in mis-selling and its refusal to succumb to pressure to do so exerted on itby the EBS. That is, of course, sufficient to establish a serious issue to be tried.72. I will briefly explain why I have come to that conclusion, emphasising the provisional andqualified nature of what follows. As for the need for such an implied term to be necessary(and not merely reasonable), it is I think important to avoid any exaggeratedunderstanding of what this requires. Rarely can a party demonstrate that, absent aparticular implied term, a contract simply cannot operate. That point is made by LordNeuberger in his judgment in Marks & Spencer plc v BNP Paribas Securities Services[2015] UKSC 72; [2016] AC 742 in which, in a passage cited by Haughton J in Wingview,he suggested that it may be more helpful to express that aspect of the test in terms of aterm being implied only if, without that term, “the contract would lack commercial orpractical coherence.”573. Here, given the nature of the contracts at issue, including the express obligations placedon the Agent, and having regard to the the regulatory context in which they were enteredinto and in which they fall to be performed, (which in my opinion is a very significantconsideration), it is arguable that such an implied term is necessary to give businessefficacy to the Tied Agency Agreements or (in the words of Lord Neuberger) to give it a“commercial or practical coherence”. The tests of necessity and obviousness are oftenused interchangeably (as indeed Murphy J in Sweeney v Duggan used them: see at page540) and, applying the test of obviousness, it is in my opinion arguable that if the fabledofficious bystander had asked the parties in 2011 whether the Agreements could beterminated (albeit on notice) because the Agent was performing its express contractualobligations (which of course reflect general obligations imposed by the general law, in theinterests of consumer protection) and resisting pressure to breach those obligations bymis-selling investment products, the answer would have been a testy “of course not”.74. As regards the other considerations identified in Sweeney v Duggan, it seems to mearguable that such an implied term is not inconsistent with or contradictory of clause15.1(b) but would rather operate as a very limited qualification to it. Lastly, I considerthat it is arguable that such a term can be formulated with sufficient precision.75. It follows that, in my opinion, the Agent has established a serious issue to be tried that,as a matter of law, the Tied Agency Agreements could not be terminated on the groundsthat the Agent declined to be pressurised into mis-selling financial products to itscustomers.76. Is there an arguable issue that such was the basis for the termination here? In theabsence of any contrary basis having been advanced by the EBS and having regard to theevidence of Mr Martin, as well as the contents of the Executive Summary consideredabove and the EBS’s silence on the “disparity” identified by AIB Group Internal Audit, Iam satisfied that there is. It is only proper to emphasise that this is a low threshold and isremote from any form of finding that EBS and/or Mr Gleeson actually engaged in the5 At para. 25, cited at para. 25 of WingviewPage 21 ⇓conduct alleged by the Agent. Any findings on that issue can only be made after a fullhearing.77. As regards the wider form of implied term argued for by the Agent (namely a term to theeffect that the EBS would not terminate the Tied Agency Agreements capriciously or foran improper motive) in light of the conclusion I have just reached on the narrower term,it is not strictly necessary to address this argument further. I would, however, observethat the arguments made by the EBS as to why the narrower term ought not be impliedappear to apply with greater force to this wider term. This wider term would not operateas a limited qualification of clause 15.1(b) but would rather recast it significantly. Further,though Mr McGrath was careful to disavow any such argument, the implication of anysuch term would arguably carry with it a corollary obligation on the EBS to give reasonsfor termination (at least if asked) which would involve a further recasting of clause15.1(b). Any argument that such a term was necessary would also appear to beconsiderably more difficult. Nevertheless, if it was necessary to reach a conclusion on thispoint, I would have been very reluctant to conclude that this argument did not raise aserious issue.Adequacy of Damages and Balance of Convenience78. The Judge considered the issue of the adequacy of damages and the balance ofconvenience sequentially. As to the former issue (discussed at para 15 of his Judgment)he considered that damages would not be an adequate remedy for the Agent. It hadestablished its business over a period of 17 years and its reputation, and the reputation ofits principals, would be dealt a severe blow if the Agreements were to be permitted to beterminated pending trial. Lost confidence, the Judge observed, is not easily restored.Furthermore, the business of the Agent would be “gone” if it was ousted. The case wasnot of the kind identified in Curust Financial Services Limited v Loew-Lack-Werk [1994] 1IR 450 and, similarly, the Judge considered that the decision of the High Court (Laffoy J)in Relax Food Corporation Limited v Brown Thomas [2009] IEHC 181 was readilydistinguishable.79. As to the balance of convenience, the Judge considered that it clearly favoured grantingthe relief sought: paragraph 16 of his Judgment. The Agent was operating the threebranches and there was no suggestion that it was not doing so as before and successfully.The Judge also noted that the notice of termination mandated the Agent to continue tooperate the branches throughout the notice period (which I take to be a reference to thefact that the EBS could have, but did not, terminate the Agreements with immediateeffect pursuant to clause 17). The Judge addressed the issue of loss/prejudice to the EBSunder the rubric of the balance of the convenience. In his view, the potential loss averredto by the EBS was “difficult to fathom” and any postal costs (associated with noticesrequired to be sent to customers) could be ascertained and compensated in damages. TheJudge expressed puzzlement at the fact that the Agreements between the EBS and thenew agent had been entered into after these proceedings had commenced but in anyevent he was of the view that the provisions of those Agreements, and in particular,Page 22 ⇓clause 16.3, would protect the EBS vis a vis the new Agent in the event that theinjunctions sought were granted.80. Before addressing the submissions of the parties on these issues (and I will addressseparately the arguments made by the EBS on the issue of delay), it is appropriate torefer again to the decision of the Supreme Court in Merck Sharp & Dohme Corporation vClonmel Healthcare Limited. The plaintiff sought an injunction restraining the sale by thedefendant of a generic equivalent of an anti-cholesterol drug manufactured by the plaintiffwhich was protected by a Supplementary Protection Certificate (SPC). The defendantalleged that the SPC was invalid. An interim injunction was not continued by the HighCourt on an interlocutory basis and the Court of Appeal dismissed the plaintiff’s appeal(Hogan J dissenting). The Supreme Court heard and determined a further appeal by theplaintiff despite the fact that it was likely (as in fact was the case) that the SPC wouldexpire before the Court was in a position to give its decision. It was agreed that the Courtwould determine the appeal by reference to the position as at the date of the initialapplication for an interlocutory injunction in the High Court in April 2018, effectively denovo, untrammelled by any constraints that might be argued to apply when an appellatecourt is invited to review the decision of a trial court on an interlocutory application: para5.81. One of the important questions discussed in Merck Sharp & Dohme is whether the issue ofthe adequacy of damages is antecedent to or part of the balance of convenience. In O’Donnell J’s view:“the preferable approach is to consider adequacy of damages as part of the balanceof convenience, or the balance of justice, as it is sometimes called. That approachtends to reinforce the essential flexibility of the remedy. It is not simply a questionof asking whether damages are an adequate remedy. As observed by Lord Diplock,in other than the simplest cases, it may always be the case that there is someelement of unquantifiable damage. It is not an absolute matter: it is relative. Theremay be cases where both parties can be said to be likely to suffer some irreparableharm, but in one case it may be much more significant than the other. On the otherhand, it is conceivable that while it can be said that one party may suffer someirreparable harm if an injunction is granted or refused, as the case may be, thereare nevertheless a number of other factors to apply that may tip the balance infavour of the opposing party. This, in my view, reflects the reality of the approachtaken by most judges when weighing up all the factors involved.” (at para 35)82. The reference to Lord Diplock is, of course, a reference to his speech in AmericanCyanamid and O’ Donnell J went on to observe that a noteworthy feature of that speechwas his acknowledgement that, save in the simplest cases, both parties will be able toshow some damage that cannot be adequately compensated for in damages. Even if (O’Donnell J observed) “a very structured and sequential approach is taken, therefore, it isimportant to keep in mind that, while the end point of most civil cases is the award ofdamages, the interests that the law exists to protect often extend beyond the purelyPage 23 ⇓financial.” (para 36) This is, in my view, a critically important observation, particularly inlight of the Judge’s discussion of Curust.83. As to Curust, for many years reliance had been placed on the judgment of Finlay CJ asauthority for the position that damages were to be taken as an adequate remedy for anapplicant for an injunction unless it was shown – as a matter of probability6 – that it wasstrictly impossible to quantify such damages. As every practitioner will be aware, verymany injunction applications have fallen at that daunting hurdle. According to O’ DonnellJ., however, the relevant passages from the judgment of Finlay CJ should be understoodin context and should not be understood as establishing a rule of general application thatif damages may be awarded, an injunction must be refused.7 The fact that is possible toaward damages does not preclude the grant of a permanent injunction – even in thecontext of a purely commercial transaction, a court may grant damages for a prior breachof contract and an injunction restraining future breach – and should not be understood asan absolute bar to the grant of an interlocutory order.8 Damages “are not a perfectremedy, and cannot be a complete answer to an application for an injunction whetherpermanent or interlocutory.9” The key question at interlocutory stage, according to O’Donnell J, is whether “the remedy in damages can be said to be necessarilycommensurate with any possible injury so as to preclude the possibility of the grant of aninjunction.” 10 O’ Donnell J went on to explain that, where the balance of convenience wasfinely balanced, it may be appropriate to have some limited regard to the merits.1184. At the conclusion of his judgment O’ Donnell J helpfully sets out “the steps which mightbe followed in a case such as this”:“(1) First, the court should consider whether, if the plaintiff succeeded at the trial, apermanent injunction might be granted. If not, then it is extremely unlikely that aninterlocutory injunction seeking the same relief upon ending the trial could begranted;(2) The court should then consider if it has been established that there is a fairquestion to be tried, which may also involve a consideration of whether the casewill probably go to trial. In many cases, the straightforward application of theAmerican Cyanimid and Campus Oil approach will yield the correct outcome.However, the qualification of that approach should be kept in mind. Even then, ifthe claim is of a nature that could be tried, the court, in considering the balance ofconvenience or balance of justice, should do so with an awareness that cases maynot go to trial, and that the presence or absence of an injunction may be asignificant tactical benefit;6 I confess that I have always been puzzled as to how it could be said that any element of the test for granting aninterlocutory injunction – where, of course, only affidavit evidence will be before the Court and where, accordingly, thecourt is not in a position to make any form of factual finding – could require to be established as a matter of probability.7 At para 408 Paras 42 and 439 Para 4410Para 4611Para 62Page 24 ⇓(3) If there is a fair issue to be tried (and it probably will be tried), the court shouldconsider how best the matter should be arranged pending the trial, which involvesa consideration of the balance of convenience and the balance of justice;(4) The most important element in that balance is, in most cases, the question ofadequacy of damages;(5) In commercial cases where breach of contract is claimed, courts should be robustlysceptical of a claim that damages are not an adequate remedy;(6) Nevertheless, difficulty in assessing damages may be a factor which can be takenaccount of and lead to the grant of an interlocutory injunction, particularly wherethe difficulty in calculation and assessment makes it more likely that any damagesawarded will not be a precise and perfect remedy. In such cases, it may be just andconvenient to grant an interlocutory injunction, even though damages are anavailable remedy at trial.(7) While the adequacy of damages is the most important component of anyassessment of the balance of convenience or balance of justice, a number of otherfactors may come into play and may properly be considered and weighed in thebalance in considering how matters are to be held most fairly pending a trial, andrecognising the possibility that there may be no trial;(8) While a structured approach facilitates analysis and, if necessary, review, anyapplication should be approached with a recognition of the essential flexibility of theremedy and the fundamental objective in seeking to minimise injustice, incircumstances where the legal rights of the parties have yet to be determined.”85. In my view, Merck Sharp & Dohme effects a significant (and, if I may say so, welcome)restatement of the appropriate approach to applications for interlocutory injunctions,mandating a less rigid approach, both generally and with particular reference to the issueof the adequacy of damages and emphasising that the essential concern of the court is toregulate matters pending trial pragmatically and in a manner calculated to minimiseinjustice.86. The Judge here applied the conventional approach of considering adequacy of damages(at least from the Agent’s point of view) prior to and separate from the balance ofconvenience. Rightly, no criticism is made of that approach, according as it did withgeneral understanding pre-Merck Sharp & Dohme. The Judge is, however, criticised bythe EBS for concluding that damages would not be an adequate remedy for the Agent inthe event that interlocutory injunctive relief was denied and the Agent was successful attrial. According to Mr Gardiner, damages would be easy to calculate by reference to thecommission that the Agent would have earned in the period between 19 February 2019and the ultimate High Court decision and, in the event that the Agent succeeded in itsclaim, it would be restored to the three agencies, restored to the premises from whichPage 25 ⇓those agencies operated and its reputation (and, so far as relevant, the reputations of itsprincipals) would ipso facto be restored also.87. Countering the argument that implementation of the termination of the Tied AgencyAgreements would result in the collapse of the Agent, Mr Gardiner pointed to the paucityof evidence before the Court as to the financial position of the Agents. In his submission,there is nothing to stop the Agent from setting up business as financial advisors.88. It is correct that no financial information regarding the Agent is before the Court. TheCourt is therefore unaware of its profitability, financial reserves and so on (though wewere told that the EBS is seeking security for costs in respect of discovery which seems toimply that it may have an adverse view of the solvency of the Agent). That is ratherunsatisfactory. However, what is clear is that, in the event that the injunctions granted bythe High Court are discharged, the Agent will lose its EBS tied agency business (at leastpro tem) which, the evidence clearly establishes, is in fact its only business. As to itscapacity to develop an alternative business, far from being “ideally placed” to do so (as isstated at para 54 of the EBS’s submissions to this Court), the reality would appear to bethat the Agent would be left trying to establish such a business without premises (thepremises from which it has traded being the property of the EBS) or staff (because, theCourt is told, it is anticipated that all staff will transfer to the new Agent under theTransfer of Undertakings legislation).89. The argument that, if successful at trial, the Agent will simply be restored to the threeagencies also strikes me as simplistic. In the first place – and Mr McGrath made this pointin argument – it is very difficult to reconcile that argument with the contentionsimultaneously advanced by the EBS to the effect that relationship between the partieshas broken down to such an extent that the EBS should not be compelled to deal furtherwith the Agent, even on an interlocutory basis. Secondly, I do not consider that the Courtcan or should ignore the fact that, in the event that the injunctions are discharged, thatwill immediately lead to a significant change in the status quo. The new Agent takes overthe branches. In the period between now and trial, there may be changes in the natureand/or level of business being done by those branches. Customers may move theirbusiness elsewhere. There would, in principle, be nothing to prevent the EBS from closingany of the branches and/or disposing of the premises from which they trade. Even in theabsence of any such step, it will be open to the EBS to argue at trial that, even if somebreach of contract is established, by reason of the circumstances existing at that stage –such as the fact that the new Agent may by then have been in place for a considerabletime, the impact on staff of another TUPE transfer and so on – the Court should not grantinjunctive relief, but should instead confine the Agent to a remedy in damages.90. Even if a permanent injunction(s) were to be granted at trial, it would not necessarilyfollow that damages assessed on the basis suggested by the EBS (the lost commissionaccruing in respect of the period to trial) would adequately compensate the Agent giventhat the profile of the agency businesses could alter significantly, and irreversibly, in thatperiod.Page 26 ⇓91. Therefore discharging the injunctions would, in my view, give rise to a position where thestatus quo is significantly altered and that alteration may significantly prejudice theposition of the Agent in this litigation, not just in the period between now and trial butbeyond.92. In this context, it is also relevant that there is, in my opinion, prima facie plausibleevidence before the Court that the Agent’s business is, in substance, a family business inwhich Mr Martin and his sister have a particular emotional/familial investment given thecircumstances in which the business was first developed by their mother and her apparentpioneering role as the first woman to be appointed as a branch agent by the EBS inIreland. The position disclosed by the evidence here is, it seems to me, materiallydifferent to the position in O’ Gara v Ulster Bank Ireland DAC where, on the evidencebefore him, Barniville J concluded that the assets at issue were effectively purelycommercial assets without any special feature or emotional attachment for the plaintiffs. Ido not think the evidence before this Court leads to that conclusion here. The Judgeattached considerable weight to this factor and in my opinion he was entitled to do so.93. In these circumstances, I am not satisfied that it can confidently be said the remedy indamages would, for the Agent, “be necessarily commensurate with any possible injury asto preclude the possibility of the grant of an injunction.” That is not to say that damageswould not be an available remedy at trial – clearly they would – but rather that theinterests that the Agent is seeking to vindicate in these proceedings extend beyond thepurely financial and, in my view, there is a very real risk that, if the injunctions grantedby the High Court were to be discharged, and if the Agent is successful at trial, an awardof damages at trial in respect of the intervening period will not adequately vindicate thoseinterests.94. As for the EBS, I am accept that it will suffer uncompensatable damage if the injunctionsare continued and it ultimately succeeds at trial, in that it will in such a scenario havebeen restrained, without justification, from exercising its contractual entitlement toterminate the Tied Agency Agreements and appoint a replacement agent(s) in its stead.95. It is not suggested that the EBS will suffer any other form of loss or damage if theinjunctions are continued. No case is made that the EBS will be at anycommercial/financial loss if the Agent, rather than Woods Financial Services Limited,continue to operate the branches between now and a trial. This is perhaps unsurprising asthere has never been any complaint by the EBS of any inadequate performance by theAgent.96. As for wider considerations of the balance of convenience (or balance of justice) the Judgewas firmly of the view that these weighed decisively in favour of granting the injunctionssought. The Judge is criticised for failing to address the submission made by the EBS tothe effect that it would be wrong to require the EBS to continue to deal with the Agent, incircumstances where serious (and, on the EBS’ case, unfounded) allegations had beenmade by the Agent. The decision of the High Court (Laffoy J) in Relax Food CorporationPage 27 ⇓Limited v Brown Thomas & Company [2009] IEHC 181 was relied on in support of thisargument.97. I do not think that the Judge overlooked this argument. It is addressed, in substance, inpara 16 of his judgment where he observed that there was no evidence or suggestion thatthe Agent was not operating (and/or would not continue to operate) the branches assuccessfully as before and where he also observed that the termination notice hadmandated the Agent to continue to operate the businesses during the termination period.In making that latter observation, the Judge clearly had in mind the fact that clause 17 ofthe Tied Agency Agreements gave the EBS the option of terminating under clause 15.2(b)with immediate effect (subject to the payment of compensation). That option had notbeen exercised, thus indicating, in a very concrete way, that the EBS was content tocontinue to deal with the Agent during the 12 months’ notice period.98. Relax Food Corporation must be understood by reference to its particular facts, which (sofar as relevant) were that the plaintiff’s concession traded from the department storeoperated by the defendant and operated check-by-jowl with the defendant’s own tradingoperations on the third floor of that store. (The fact that the concession agreement hadonly 11 months to run was also a significant factor in the decision to refuse theinjunction.)99. While the EBS was entitled to have this argument considered, as I read his judgment itwas in fact considered by the Judge and rejected by him. I see no basis for taking adifferent view. The evidence was that, in the period while the Agent’s complaints werebeing investigated by AIB Group Internal Audit, the relationship between the EBS and theAgent was managed professionally, and no issues arose. That was the position during thetermination period (and, as already noted, the EBS could have elected to paycompensation in lieu of notice but did not) and, as Mr Gardiner fairly acknowledged beforethis Court, in the period of approximately 9 months between the High Court Judgmentand the hearing before this Court no issue had arisen either.100. It is, of course, an imposition on the EBS to be compelled to deal with the Agent as theiragent pending trial, in circumstances where, on their case, the Tied Agency Agreementsterminated last February. I do not mean to underestimate that imposition when I expressthe view that the Judge’s conclusion that the balance of convenience favours the grantingof the injunctions sought (and their continuance by this Court) appears to me to beplainly correct. Albeit that the EBS has to continue to deal with the Agent, the Agent is anentity whose competence, diligence and/or integrity has never been impugned by theEBS. There is no reason to believe that the three branches will not continue to operatesuccessfully pending trial in the event that the injunctions remain in place. On the otherhand, were the injunctions to be discharged, that would have a significant and immediateadverse impact on the Agent. Its business would be lost, until trial at least. Its capacity topursue these proceedings effectively could be undermined. Its relationship with existingstaff would be ruptured. The status quo that has been in place since 2011 (and earlier)would be profoundly altered.Page 28 ⇓101. The question of delay remains to be considered, however.Delay102. It is clear that, as a general principle, a party seeking interlocutory relief is bound tomove with reasonable expedition: Nolan Transport (Oaklands) Limited v Halligan(Unreported, High Court, Keane J, 22 March 1994), followed in Futac Services Limited vDublin City Council (Unreported, High Court, Smyth J, 24 June 2003).103. The EBS complains that no plausible explanation is offered by the Agent for its delay inseeking interlocutory relief. It will be recalled that the notice of termination was served onor around 19 February 2018, following which no step appears to have been taken by theAgent to dispute the termination until December 2018, with a summons being issued (butnot then served) on 7 December 2018 and a pre-action letter being sent on 11 December2018.104. The Judge expressly addressed the issue of delay in his Judgment, concluding that itwould be unfair and inequitable to refuse the Agent relief on grounds of delay: para 17.That conclusion is one to which this Court is required to give weight and, notwithstandingthe forceful arguments of Mr Gardiner on this issue, I am not persuaded that thatconclusion was wrong, still less that it was not reasonably open to the Judge.105. The following considerations appear to me to be relevant in this context:•The Agent had challenged the earlier termination notice.•There was some – albeit limited – evidence from Mr Martin to the effect that he hadbeen led to understand that the EBS might not act on the second notice.•That might be said to be consistent with the fact that, as I have already observed,little or nothing appears to have been done by the EBS in the immediate aftermathof serving the second notice.•Notably, the EBS gave notice to its customers of the termination of the Agent afterthe pre-action letter was sent.•The Agreements with the new agent were entered into after the commencement ofthese proceedings and after the Agent had brought the injunction application.106. It is also relevant that, despite the timing of the injunction application, it was possible forthe High Court and hear and determine it before the expiry of the notice period.107. Having regard to all of these considerations, and allowing that there was delay on the partof the Agent and also allowing that the Agent has not convincingly explained that delay, Iagree with the Judge that it would not be just or equitable to refuse the injunctive reliefsought on grounds of delay.The Costs of the High CourtPage 29 ⇓108. At the commencement of the hearing of the appeal, the Court indicated that it wasminded to defer consideration of the EBS’s appeal against the order for costs made by theJudge. The parties will have an opportunity to address the Court further on that appealwith the benefit of this Court’s decision on the substantive appeal.DISPOSITION109. For the reasons set out above (at, I fear, excessive length) I would dismiss the EBS’sappeal against the injunctive relief granted by the Judge (in the terms as varied by himon 21 February 2019).110. I am very conscious that the effect of the orders made by the Judge, and now upheld bythis Court, is to continue the involuntary relationship between the EBS and the Agent for,potentially, a significant further period of time. The Court was informed at the hearing ofthe appeal that the proceedings are being managed in the Commercial list of the HighCourt and accordingly it is reasonable to assume that the proceedings will get on forhearing with all due dispatch. However, in the event that the EBS considers that theAgent is guilty of any undue delay, then it will be open to it to apply to discharge theinjunctions. In making that observation, I do not intend to appear to encourage thebringing of such an application or imply that the Agent will deal with the proceedings in away which will give grounds for such an application. It simply reflects the well-establishedprinciple that, where a party has sought and obtained an injunction pending trial, thatparty is under a particular duty to take all reasonable steps to ensure a timely trial.111. Equally, in the event that there is any material change in circumstance which appears toimpact on the continuing operation of the injunctions, it will be open to either party tobring whatever application appears appropriate arising from that.112. The EBS’s appeal is accordingly dismissed.
Result: Dismiss appeal
Hearn v. Collins
, High Court, February 3, 1998
JUDGMENT of Mr Justice O’Sullivan delivered the 3rd day of February, 1998.
THE PARTIES
1. The first named Plaintiff (hereinafter “Barry Hearn”) claims to be entitled to 25% of the Defendant’s earnings for the year ending on the 10th May, 1996 less appropriate deductions as the Defendant’s manager. The second named Plaintiff (hereinafter “Matchroom Boxing”) was at all material times under the effective management and control of Barry Hearn and is a co-Plaintiff in these proceedings on the basis that it is entitled to enforce an agreement dated 17th February, 1995 (hereinafter called “the bout agreement”) for the benefit of Barry Hearn.
2. The Defendant (hereinafter “Stephen Collins” or “Collins”) is the World Boxing Organisation (hereinafter “WBO”) super middleweight champion of the world, having attained this title when he defeated Chris Eubank at Millstreet, County Cork on the 18th March, 1995.
3. The amount of the Plaintiff’s claim is not particularised and the Plaintiff accordingly claims an Order for an account.
4. In his defence Stephen Collins pleads that the management agreement between himself and Barry Hearn of the 9th May, 1994 (hereinafter “the management agreement”) expired on the 8th May, 1995 and was not extended so that there was no agreement in place during the period in respect of which Barry Hearn claims. It is further pleaded that a second agreement dated the 15th January, 1995 (hereinafter called “the manuscript agreement”) never acquired legal effect and at the hearing it was further claimed that if it did, it ceased to have effect shortly after its operative date so that it too did not extend to cover the relevant period. In respect of a third agreement, namely the bout agreement, the Defendant pleads that Barry Hearn is not a party to that agreement and is not entitled to rely on it either in his own capacity or at the suit of Matchroom Boxing. In the alternative it is pleaded that if the management agreement was extended then Barry Hearn was in breach of his obligations thereunder thereby entitling Stephen Collins to terminate the agreement, which he did by letter of 6th June, 1995 which brought to an end any obligations, including the obligation to pay fees, owed by him to
Barry Hearn.
THE PROCEEDINGS
5. The instant proceedings were preceded by English proceedings in the summer and early autumn of 1995 wherein Barry Hearn as Plaintiff sought mareva style Orders against Stephen Collins and other Defendants. Barry Hearn was unsuccessful in those proceedings primarily because the learned Judge held that he was bound by the jurisdiction clause in the bout agreement whereby the parties (which he held included Barry Hearn) consented to the jurisdiction of the High Court in Dublin.
6. In the present proceedings the Plaintiffs claim that Barry Hearn had a management agreement (the management agreement) with Stephen Collins for a year commencing on the 11th May, 1994. It is further claimed that by agreement dated the 15th January, 1995 (the manuscript agreement) the management agreement was extended for a further year in the event, which happened, that Stephen Collins beat Chris Eubank as therein specified. It is further claimed that by an agreement dated the 17th February, 1995 (the bout agreement) the management agreement was extended on the same or a similar basis as specified in the manuscript agreement. The entitlement of Matchroom Boxing to claim a management charge on behalf of Barry Hearn is articulated by means of various legal devices set out in the Statement of Claim to which I will return later.
7. In his defence Stephen Collins claims that the management agreement expired on the 10th May, 1994 and was not extended. The manuscript agreement never came into existence because a pre-condition dealing with legal advice was not satisfied and in evidence Stephen Collins claimed that if it did come into existence it remained effective only for a short period and ceased to have effect when the bout between himself and Chris Eubank was changed from Belfast in February, 1995 to Millstreet, County Cork in March, 1995. With regard to the bout agreement, Stephen Collins claims that this agreement is between himself and Matchroom Boxing and neither Barry Hearn nor Matchroom Boxing is entitled to sue him on foot of it for the management charges.
8. In the alternative to the foregoing Stephen Collins pleads that he was entitled to serve notice of termination by letter of 6th June, 1995 by reason of the breach of obligation of Barry Hearn and that he had no obligations towards Barry Hearn after that date.
9. A reply in general form was delivered to that defence which, inter alia, denied that Barry Hearn acted in breach of any obligations.
10. The case was set down for trial in October of 1996. In August, 1997 a Notice for Particulars was delivered by the Plaintiffs’ Solicitors which sought, inter alia, details of the allegations of breach. No reply was furnished to this notice and the case came on for hearing on Wednesday the 15th October, 1997 in the absence of any details of the breach of agreement alleged against Barry Hearn.
11. In the course of cross-examination of the Plaintiffs’ witnesses, however, details of the alleged breaches did emerge and at the conclusion of the Plaintiffs’ case Counsel for the Plaintiffs sought leave of the Court to amend the reply by the addition of a number of paragraphs which dealt in particular with the issues of alleged conflict of interest (arising by reason of the management by Barry Hearn of other fighters including Chris Eubank), implied variation of the management agreement, waiver and estoppel. After legal argument I allowed this amendment and also gave leave to Stephen Collins to resume the cross-examination of Barry Hearn in light of the fresh issues now joined.
12. On the eleventh day of the trial (Tuesday the 4th November, 1997) Counsel for Stephen Collins informed the Court that certain documentation had come into the hands of his Solicitor on the previous Friday comprising copy correspondence from Barry Hearn to a Mr Francisco Valcarcel then President of the WBO which was relevant to the issues in the present case, had not been discovered, and suggested the existence of earlier correspondence passing between the same parties. On that day Barry Hearn undertook to have Matchroom Boxing institute a search to see if any such earlier documentation existed and two days later produced documentation commencing with a copy letter from Barry Hearn to Mr Valcarcel dated
7th june, 1995 which documentation will hereafter be referred to as “the Valcarcel correspondence”. The subsequent cross-examination of Barry Hearn included cross-examination arising out of the Valcarcel correspondence.
13. Quite apart from major factual issues which I will identify and having set out a summary of the evidence in this case, it is clear from the foregoing that a number of legal issues arise for determination as follows:
LEGAL ISSUES
1. Was the management agreement extended
(a) by the manuscript agreement, or
(b) by the bout agreement?
2. Did the manuscript agreement come into effect or was it subject to a pre-condition that Stephen Collins be given legal advice which pre-condition was not satisfied; alternatively was it unconscionable on the basis that Barry Hearn procured Stephen Collins’ agreement by undue pressure?
3. If the manuscript agreement came into effect did it cease to have effect when the Belfast bout was replaced by a fight between the same two fighters in Millstreet, County Cork?
4. Was the management agreement extended by the bout agreement and if so is Barry Hearn entitled to sue on foot of it?
5. Is Matchroom Boxing entitled to sue on foot of the bout agreement on behalf of Barry Hearn?
6. What was the effect in law (if any) of Stephen Collins’ letter dated the 6th June, 1995 to Barry Hearn expressed as formal notice of termination of the previous agreement between these parties?
7. Was Barry Hearn guilty of any breach of obligation (including fundamental breach) such as would disentitle him to claim his management fees or such as brought to an end any contractual relationship between him and Stephen Collins?
THE EVIDENCE
14. Before dealing with these legal issues I intend in the next portion of this Judgment to summarise the evidence given by each of the witnesses.
BARRY HEARN
15. Barry Hearn’s evidence can be summarised as follows:-
16. He is and has been for several years a successful promoter and manager of professional sportsmen. As manager he looks after the career of the individual professional: as a promoter he promotes the particular event and generally pays all expenses. He has managed professional snooker players such as Steve Davis and in early 1993 enjoyed great influence with television and with the WBO. Since the late ’80s he had managed Chris Eubank who was the WBO World Super Middleweight Champion immediately before Stephen Collins. In 1993 he had a stable of big boxing names such as Chris Eubank, Chris Pyatt, Nigel Benn, and Herbie Hyde.
17. He had seen Stephen Collins when fighting under the management of the Petronelli Brothers in Boston. He was impressed by him as a good fighter who attracted an Irish crowd. Subsequently Stephen Collins had come under the management of Barney Eastwood who was not able to deliver television coverage which is essential if big money is to be made. Stephen Collins had lost his attraction back home because he had gone to the United States and he was never a big crowd puller. His career had not gone as well as it might have and when Stephen Collins came to visit him in January of 1993 he was disillusioned and almost valueless having lost two previous fights. They had a long talk. Stephen Collins was anxious to be trained by Freddy King who was working for Barry Hearn. Stephen Collins needed careful management. He needed a series of relatively easy fights which he would be certain to win and thereby to earn a shot at a title fight. At this meeting he agreed on a handshake to manage Collins.
18. Stephen Collins was a very hard trainer and won a series of fights at relatively low purses. On the 26th June, 1993 he won a fight which entitled him to a “Junior” World Championship, namely, the Penta Continental Middleweight title. This enabled Barry Hearn to persuade the WBO to establish Collins as a mandatory challenger for the official middleweight title then held by Chris Pyatt. Meanwhile Collins successfully defended his “Junior” title on the 30th November, 1993 by beating Wayne Elliot. In January of 1994 he was established as the mandatory challenger for Chris Pyatt’s title.
19. The holder of an official title must accept challenges within a stipulated period normally from the number one contender who is the mandatory challenger.
20. The Collins/Pyatt fight which was held on the 11th May, 1994 went to “purse offers”. This is a system which establishes the market value of any particular bout where the managers of the fighters and the promoter cannot agree a purse. Promoters who are officially registered with the organising body (in this case the WBO) are entitled to bid. There is a minimum price but no maximum. The title holder usually gets 75% of the purse and the challenger 25% (except when the title holder is fighting in a foreign country where he is entitled to 80%). In the case of the Pyatt fight, Stephen Collins’ 25% share of the purse bid was £50,000 of which Barry Hearn received £13,500 as his manager’s fee (25% of Collins’ earnings). This was the only money which Barry Hearn ever received to date from
21. Stephen Collins.
22. Before this Collins had had a fight in Belfast which both Collins and Freddy King wanted him to have but Barry Hearn was against it because there was too much risk. The purse was small and Collins had too much to lose.
23. Such was Barry Hearn’s influence with the WBO at this stage that, contrary to their practice up to then, he persuaded that organisation to conduct the weigh-in the night before the Pyatt fight as distinct from the day of the fight. This was of great value to Collins who was heavy for a middleweight. He had to train hard and sweat and dehydrate in order to make the weight. The advantage of holding the weigh-in the night before was that between that and the time of the actual bout itself Collins was able to put on weight and he looked like a giant when he entered the ring in Sheffield on the 11th May. Barry Hearn claims credit that within eighteen months he had brought Collins from the situation of being a disillusioned and nearly valueless fighter to the point where he was now the WBO middleweight world champion.
24. Prior to the bout on the 9th May he had required a written agreement with Collins. A standard British boxing board form of agreement had been furnished to his solicitor but Collins always remained affiliated to the Boxing Union of Ireland (BUI) and this standard form was not appropriate. His solicitor drafted the agreement (“the management agreement”) which was ultimately signed. It came into effect if and when (as happened) Stephen Collins beat Chris Pyatt.
25. Collins was brilliant on the night he beat Pyatt. It was the nicest moment between the two of them. They celebrated in Sheffield where the fight took place; Hearn laid on a limousine for the four to five hour journey back to Romford and there was a party there the following night. This was the achievement of Collins’ ambitions and Hearn could see it in his eyes that he felt a success.
26. Collins was a hungry champion: he wanted work and kept pressing for fights. An opportunity arose to fight Lonnie Beasley in Hong Kong for a purse of £100,000. Stephen Collins trained in Herbie Hyde’s training camp in Norwich. He went there gladly to avail of the services of Freddy King whom he shared as trainer with Herbie Hyde. They all went to Hong Kong some ten days or two weeks before the venue. The whole trip turned out to be a disaster because the promoters, Top Rank Inc., a well known American promoter, failed to comply with the financial requirements guaranteeing the purse and the whole venue had to be called off. The costs were borne by Matchroom Boxing. Stephen Collins’ complaint in these proceedings that Barry Hearn advised him not to get on the scales after the cancellation is a pointless one because the argument that this would have given Collins legal leverage to compel a rematch or compensation was overtaken by the event that the rematch was arranged (as the promoters were obliged to do) for Boston in December. Stephen Collins travelled out there but was again unfortunate because he contracted a virus which meant that he had to withdraw from the bout.
27. Barry Hearn was aware from September 1994 that his great rival Frank Warren was interested in Collins and had made direct approaches to him. In the case of one approach where Warren was suggesting a bout between Collins and Sean Cummins for a purse of £100,000 he advised Collins not to accept this promotion. Freddy King agreed with this advice on the basis that Frank Warren’s company could not be trusted and Stephen Collins accepted this advice.
28. Collins’ great opportunity came when Ray Close failed a medical and had to pull out of a bout with the then WBO super middleweight world champion Chris Eubank. Barry Hearn saw the opportunity for Collins to replace Close as a contender for this title. It was a wonderful opportunity. Part of the background was what was known as the “B sky B” agreement whereby B Sky B contracted with Barry Hearn’s company for eight fights with Chris Eubank for a total fee amounting to some £6 million together with ancillary rights. Chris Eubank wanted easy opponents and at this point Sky Television were pressing for a more credible opponent for Eubank. Stephen Collins was a credible opponent and was also himself hungry for a major bout.
29. Barry Hearn insisted, however, on two conditions, namely, that if Collins lost he would still retain his middleweight title and, secondly, that Sky would accept him as a replacement for Ray Close. Both these conditions were met. The fight which was originally to occur in February was, however, postponed to the 18th March, 1995 in Millstreet,
30. Co. Cork because Collins had not yet fully recovered from his virus and sought this delay.
31. This was the context in relation to which the agreement known as the “manuscript agreement” came into being. It was signed on the 15th January, 1995. Barry Hearn was aware of rumours that Collins was talking to Frank Warren. They met on Sunday 15th January for approximately an hour. Collins insisted on receiving £150,000 for himself out of the fight and Barry Hearn agreed to waive his management fee so that Collins would receive the entire £150,000. Collins did not insist on or seek legal advice. There was an urgency that an agreement be signed to satisfy the scheduling of Sky Television.
32. Subsequently it was necessary, as in all cases, to have a bout agreement. This was discussed between them on the 19th January, 1993. Collins wanted one or two changes and specified that he required legal advice. Barry Hearn was about to leave for South Africa and left the agreement with Stephen Dawson of Matchroom Boxing to arrange to have Collins sign it. He returned from South Africa on the 14th February and the agreement had not yet been signed. At this stage there was pressure to sign in order to satisfy Sky’s scheduling. Doubts were beginning to enter into Hearn’s mind as to whether Collins was really going to fight this fight at all. He arranged to have the agreement faxed to Stephen Collins in Las Vegas where he was training and the signed version was faxed back by Collins.
33. Collins had gone to Las Vegas because he needed to see Tony Quinn. All arrangements for Collins’ Las Vegas trip were left to his staff, namely Stephen Dawson and John Wischussen. The agreement between them meant that if Collins beat Eubank at Millstreet Barry Hearn would be his manager for another year. Collins did beat Eubank at Millstreet. Barry Hearn had thought that Eubank had the slight edge and would probably win. He knew, however, from Collins’ behaviour at Millstreet immediately after the fight that things were not right between them and that there would be trouble. After the fight Collins said to him:
“Don’t talk to me of less than a million, Barry – but if you are going to get a cut out of it you are going to need more than a million.”
34. The atmosphere between them was not the same as it had been when Collins had beaten Pyatt. He did not have a party with Collins after the fight but went home with his wife.
35. Prior to the fight he had asked Collins’ permission to lead Chris Eubank out to the ring and explained that it would not be possible for him to lead Collins as well due to time constraints. Collins had no problem with this and was quite happy to have Barney Eastwood lead him out instead. Collins was quite focused. All the detailed arrangements in Millstreet were made through Stephen Dawson and john Wishcussen.
36. After the fight Stephen Collins became arrogant. He was revelling as champion and insisted that the press would follow him to his dressing room.
37. Barry Hearn was still Collins’ manager, however, and they discussed alternatives some time later. Neither of them was interested in a low purse bout. The obvious option was a rematch with Eubank. Barry Hearn’s job was to maximise his fighter’s earnings. He was also hoping to salvage their relationship. Various financial options were discussed including a suggestion from Barry Hearn that Collins would himself promote the fight. Collins, however, was not interested in taking any risks. He wanted a guarantee. Barry Hearn waived his options under their existing agreement and made an offer of £825,000 net which was the equivalent of the ultimate purse offer bid offer of £1.2 million. Barry Hearn knew that Collins was talking to other promoters at this stage. Collins did not come back to him in relation to that offer but he did fax to him his solicitor’s letter to Frank Warren’s solicitors in relation to a proposed promotion by Warren of four fights for Collins.
38. Barry Hearn was still Collins’ manager and whilst he was extremely disappointed and shattered at Collins’ attitude after Millstreet he had to give him the best advice he could and told him that if he had any doubt about the value of any offer he should allow the bout to go to a purse bid. Barry Hearn had not received any complaints about his management. He made several efforts to contact Collins over the period following the 18th March, 1995 but without success.
39. On the 29th May in New York he attended the purse bid ceremony for the Collins/Eubank re-match. This was ultimately won by Frank Warren’s representative at a bid of £1.2 million. In cross-examination Barry Hearn accepted that he made highly critical comments about sports network (Frank Warren’s company) and Frank Warren at the purse bid ceremony. He did not think that he spent as long as half an hour criticising them or reflecting on the integrity of Mr. Warren and his company and said that it would have been futile to suggest that they should not be permitted to bid because he could not stop that happening. He may have done his best to criticise them for effectively taking away one of his fighters while he was under contract.
40. The letter from Stephen Collins dated the 6th June, 1995 (received on the 9th) came as a complete shock to him. There had been no prior complaints from Collins. Frank Warren had won the purse offer and had agreed a four fight package. He wrote refusing to accept the termination of the agreement and regarded himself as Stephen Collins’ manager until he finally accepted the situation in mid-September when he gave the contractual thirty days notice of termination expiring on the 14th October, 1995. That is the day when he ceased to be Stephen Collins’ manager. The Chris Eubank rematch took place on the 9th September, 1995 in Cork at a purse of £1.2 million.
41. Barry Hearn estimated that Matchroom Boxing would have spent some £200,000 (a guesstimate) on Stephen Collins up to that point. Pay day for a promoter and a manager comes if and when the fighter makes good and honours his commitments.
42. Under cross-examination he accepted that after the purse bid ceremony in New York he approached Mr. Roberts of Matchroom Boxing and asked him to send his fee of 25% direct to him. He did not expect Mr. Roberts would comply. He accepted he did not have a right to receive this money direct. He accepted that he might well invoice for his management services through the company. He accepted that one of the principal obligations of a manager was to negotiate the best possible terms from the promoter for the fighter. In the case where his fighter knew that he was also the promoter (as did Collins in the case of the Eubank and Pyatt matches) all he could do was to do a fair deal which he did.
43. Stephen Collins’ complaints in relation to Millstreet did not stand up in light of the result. He never received any complaints in relation to Collins’ treatment in Las Vegas. He stood to gain, in fact, by Stephen Collins’ win over Chris Eubank because he had a contract with both parties and now Stephen Collins was on the brink of lucrative earnings. Whilst he was very disappointed for Chris Eubank he was pleased for Stephen Collins and this did not prevent him from doing his job as manager for Collins. He maintained that the fight at Millstreet was the same bout as was agreed for Belfast where Collins would replace Ray Close but accepted that legal correspondence between the lawyers for B Sky B and himself indicated that Sky’s lawyers had formally rejected Collins as replacement and renegotiated the Collins/Eubank bout for Millstreet. Barry Hearn insisted, however, that Collins was accepted promptly by Sky’s head of sport Vic Wakling, who was delighted to have Stephen Collins as he was a very credible opponent for Chris Eubank and this fight was accepted as part of the “Eubank World Tour” series of eight bouts the subject of the agreement with Sky. The lawyers, however, availed of the opportunity to renegotiate the contract in relation to Millstreet. The card may have been rejected: Stephen Collins was never rejected by Sky.
44. In relation to the Valcarcel correspondence [1] Barry Hearn said that this correspondence was written by him as Chris Eubank’s manager. Its objective was to keep Eubank busy. It did not affect Stephen Collins nor could it ever have done. It was a tactical correspondence. Collins’ position as champion was protected by the WBO rules which entitled him to a period of up to one hundred and eighty days before he could be stripped of his title in the event of failing to defend it once he had sent in a medical certificate (as he had done) indicating that he was unfit for a specified bout. All Barry Hearn was seeking to do in this correspondence was to set up an interim fight for Christ Eubank who was pressing him very strongly for such a fight in the event that the rematch scheduled for the 27th July was going to be delayed. At the time of the correspondence Barry Hearn was not aware of when Frank Warren was proposing to hold the rematch. There was no possibility that Collins’ title would be stripped and there was no possibility that the Collins’ share of the purse to which he would be entitled could be reduced from 75% to 50% as contended for by him in the correspondence. In the end this tactical correspondence was successful: it achieved an interim match for Eubank: Collins got his rematch at the agreed purse, Warren got his fee and nobody lost.
45. Barry Hearn flatly denied that he approached and attempted to influence
46. Ron Lipton, the referee of the Millstreet fight, on either of the two occasions given in evidence by Ron Lipton. He did, indeed, at the Rules Committee deliver his standard address imploring the referee to give “cut men” an opportunity to deal with any cuts rather than stop a fight prematurely because of cuts because he viewed this as unsatisfactory. He did not approach Ron Lipton at all as alleged attempting to influence him against Stephen Collins. It would have
been impossible for him to approach Ron Lipton on his way to the ring for the fight because of crowds of people and the limited time available. He rejected this allegation in the strongest terms.
FREDDY KING
47. Mr. King gave evidence that he was an ex-professional boxer, a trainer, a qualified “cut man” (that is a specialist in dealing with boxers’ cuts at the ringside) and his success as a trainer was due to his understanding of, and empathy with boxers. He trained Chris Eubank for years and had a long association with Mr. Hearn. He was a shareholder in Matchroom Boxing but became independent of Barry Hearn in September 1995. He was a full time trainer since May 1991 and has trained a number of world champions including Herbie Hyde, Chris Eubank, Stephen Collins and Paul Jones. He met Stephen Collins in January of 1993 and spoke directly to him to the effect that Collins would have to do what he told him. He was disillusioned at the time. He was a strong fighter and a very good trainer. He was able to help Collins with some technical matters and improve in particular his knock out punch. He also trained Herbie Hyde who was with Matchroom and at that time he was an ex-trainer of Chris Eubank. this was to Stephen Collins’ advantage at the Millstreet bout. He was very fond of Stephen Collins and did not like giving evidence against him.
48. His practice was to make contact with the maintenance men who are running any particular bout on the ground and did so at Millstreet. There was an issue as to whether towels, buckets, ice and water was in Stephen Collins’ room. He did check this on the night of the Millstreet bout and these items were there. He carried them around with him. It was a great win for Stephen Collins who had beaten “the unbeatable”. Very few thought that Stephen Collins would win but Freddy King said he thought he would.
49. Stephen Collins was close to Tony Quinn at Millstreet and he did not like this: he became distant after the fight. He waited a long time with his wife that evening but did not attend the party. He waited with his wife until late at night and in the early hours went and said good-night to Stephen Collins before going to bed. Stephen Collins was cool. His relationship with Stephen Collins was like a father to a son. He had taken a very active part in Stephen Collins’ training, choosing fights, opponents and sparring partners. Stephen Collins wanted the fight with Chris Eubank. He did need more time to prepare for it because he was not 100% ready and he had persuaded Barry Hearn to delay the fight from February in Belfast to March in Millstreet although this annoyed Barry Hearn.
50. Before that fight Stephen Collins had wanted to go to the United States. He should have stayed training with Freddy King who was to a degree upset that he did not do this. Freddy King was with Herbie Hyde at the time who was training in England in preparation for a bout in the States. Stephen Collins did not complain about the arrangements or conditions in the States and accepted it when Freddy King phoned him to tell him there would be a three or four day delay because training was not going well with Herbie Hyde. Stephen Collins was content about this. When he went out to Las Vegas he was training both Herbie Hyde and Stephen Collins. It was a shattering routine. He treated them equally. He did not prefer Hyde to Collins. He did not know why Stephen Collins returned home before Herbie Hyde’s fight.
51. Freddy King was a bit upset by the fact that he had to use a special telephone code in order to make contact with Stephen Collins in Millstreet before the fight with Eubank. Freddy King checked his dressing room on the evening of the fight at 6.00 p.m. and there were towels, a couple of buckets of ice and water. He put them there himself; he always carried these things personally. He again checked at 6.30 p.m. and Steve Collins arrived at 7.00 p.m. with his entourage which included Tony Quinn. He was quite happy to be led out to the ring by Barney Eastwood. Stephen Collins made no complaints to him.
52. After the fight he found Stephen Collins very stand-offish and strange. It was his, Freddy King’s, wedding anniversary and he stayed around with his wife but did not go to any party. Immediately after the fight Tony Quinn took over Stephen Collins’ dressing room and was very close to him speaking to him all the time. Freddy King felt a bit put out by this. He stayed up with his wife until about 2.30 a.m. He was very hurt at Stephen Collins’ attitude. Together they had beaten the unbeatable. In the early hours he met Stephen Collins and said “Son, I am going to bed” and Collins said “O.K.”. He was completely baffled. He could not express himself because he did not want to spoil the evening for Stephen Collins. He was frustrated and hurt at Collins’ attitude.
53. Later he telephoned and got Collins’ answering machine. Collins did not return his calls and Freddy King was upset because Collins was leaving and doing a deal with somebody else without ever giving any explanation. On occasion in the past in the pub while training he used to say that Freddy King was the best trainer he ever had. Yet he never said “thank you” or expressed gratitude to Freddy King in any way after the 18th March, 1995.
54. In cross-examination he would not agree that there was a conflict where the same individual was manager and promoter or even if the same individual managed both fighters in the same bout. It was a question of the fighter accepting the deal if he wanted it. He was aware in general of the Sky deal. He would not accept that Herbie Hyde was more important to him than Stephen Collins. He insisted that he arranged training for Collins in Las Vegas with Top Rank and arranged sparring partners.
55. He got no complaints from Stephen Collins except only one: Collins complained that his picture was not on the wall with other great boxers in Barry Hearn’s study. He did not see that he should have gone to Las Vegas with Stephen Collins – he was not a baby minder. Training winds down as one comes closer to the date of the bout. In relation to the party after Millstreet he was not told where it was and he felt very neglected. Stephen Collins may have telephoned him after that fight but it was only to get sparring partners: it was not Stephen Collins talking to him as a friend.
STEPHEN DAWSON
56. Stephen Dawson was in charge of the accounts and other management matters with Matchroom Boxing. In relation to the bout agreement for the Millstreet fight he went through this with Stephen Collins on February 9th 1995. Collins took it away with him. Collins understood that the management agreement was incorporated in the schedule to the bout agreement. There was pressure to sign the bout agreement due to the Sky scheduling. He faxed a copy of the agreement to Stephen Collins’ solicitor Mr. Delahunt on the
15th February, 1995. He asked Mr. Delahunt whether Clause 4 of the Schedule should be in the agreement. Mr. Delahunt confirmed that it was all right to have it there. In cross-examination he accepted that Mr. Delahunt may not have been aware explicitly of the management agreement: he, Mr. Dawson, assumed that he had been given a copy of it by Stephen Collins.
57. Mr. Delahunt did not raise the point that the Belfast bout had not taken place and that this was a different agreement; he did not raise any point in relation to Barry Hearn not being a party as distinct from the company. He did not complain in relation to the treatment of Stephen Collins by Barry Hearn.
58. In relation to the estimate of expenditure by Matchroom Boxing on
59. Stephen Collins these related to living accommodation, gym expenses, trainer expenses and other overheads all paid by Matchroom Boxing over a twenty-seven month period. He produced documentation in support of these estimates. He confirmed that the company had made a loss on the Hong Kong venture.
JOHN WISCHUSSEN
60. This witness was in charge of co-ordinating travelling arrangements and other arrangements on behalf of Matchroom Boxing. He had regular contact with Stephen Collins during his time with Matchroom and there were never any difficulties or complaints. He was in charge of making the arrangements for Stephen Collins in relation to Boston and Millstreet. Collins had asked him to book a flight to Las Vegas. He got the impression Stephen Collins wanted to be away from it all and suggested that journalists’ pressure on Collins following an allegedly racist remark by Collins referring to Chris Eubank at a press conference in Jurys Hotel was part of this pressure. In relation to Las Vegas he confirmed that he arranged for Collins to travel earlier than the rest of the Matchroom group and that he had booked and paid for a room in the hotel in Las Vegas. In relation to the Millstreet venue he confirmed that Matchroom Boxing had booked Collins into the Great Southern Hotel. He had booked him a suite where he assumed his wife would stay also. Barry Hearn was booked into a separate hotel and Chris Eubank into a further hotel again.
61. He attempted to contact Stephen Collins while at Millstreet but was unable to do so. He managed to get through to his wife but was not able to contact Collins directly. She did not make any complaint. He had not been given the name of Collette Millea (an assistant to Tony Quinn) as a contact person. He found it very difficult to make arrangements for Stephen Collins due to this lack of contact.
62. He was at Millstreet himself. There were no complaints made on behalf of Collins. He could not agree that there were no ice buckets, towels or water in Collins’ dressing room. In cross-examination, however, he accepted that it was possible that Freddy King carried these around himself and it was possible that a bucket was not in Stephen Collins’ dressing room. He had been in all the dressing rooms between 3.00 p.m. and 4.00 p.m. and checked each of them.
63. A point had been made that Chris Eubank usually travels first class: John Wischussen pointed out that this was largely paid for by Eubank himself. He felt that Stephen Collins’ request to upgrade his ticket to Las Vegas from economy to first class was reasonable and it had been done. He produced a hotel bill to show that Collins had been pre-booked in the hotel in Las Vegas. He understood that the training and management of Collins’ fights had been sorted out and he produced an invoice for a car for Stephen Collins from Cork Airport to Millstreet. The situation in Stephen Collins’ dressing room after the Millstreet fight was chaotic.
EVIDENCE FOR THE DEFENDANT
RON LIPTON
INTRODUCTION
64. I would make one or two introductory remarks to set the evidence of this witness in context. He was brought over on behalf of Stephen Collins to make a very serious allegation against Barry Hearn. He was the referee of the Millstreet bout and he had given advance instructions to Counsel for Stephen Collins that Barry Hearn had approached him on his way to the ring on the night of the fight and said “Watch out for Collins he is a dirty fighter. Watch his use of the head”. Subsequently it emerged that the allegation was that Barry Hearn had approached Ron Lipton on two occasions, the first being on his, Mr. Lipton’s, way to the mock weigh-in on the night before the bout and the second on the night of the fight on his way to the ring to check the ring before the fight proper. He says that he had given this information on the telephone to Stephen Collins in April 1995 a short time after the Millstreet bout. He says that he merged the two instances into one on that occasion whereas Stephen Collins says that it was then that he told him about the two approaches. Both confirmed that it was only on the occasion of this telephone call between Ron Lipton and Stephen Collins in April 1995 that Ron Lipton became aware that Barry Hearn was actually the manager of Stephen Collins as well as the manager of Chris Eubank and promoter of the bout. These approaches are referred to hereafter as the “nobbling” approaches.
65. Between April 1995 and the commencement of the trial Stephen Collins lost contact with Ron Lipton. Mr. Lipton gave his evidence on day fifteen of the hearing and by agreement between the parties was interposed during the evidence of Stephen Collins.
THE EVIDENCE
66. Mr. Lipton’s evidence can be summarised as follows:
67. He was the referee for the Millstreet bout on the 18th March, 1995. He had been a professional boxer and a policeman for twenty years with the New York Police Department from which he retired ten years ago on medical grounds. Since then he has been a referee and has kept up-to-date, particularly with medical issues and he produced a number of certificates to show this. He knew Barry Hearn and Matchroom Boxing especially since refereeing the Loughran-Duran bout in Belfast in January 1994. Before the Millstreet bout, Barry Hearn had suggested that he would referee another fight instead of Millstreet but did not suggest that he was unfit to referee the Millstreet bout.
68. The World Boxing Organisation wanted him to be the referee for this bout and appointed him. He denied that they were reluctant in doing this. There were no complaints following the Loughran-Duran fight in Belfast. Towards the end of that fight Barry Hearn had yelled at him to stop the fight. At that stage there were only forty-five seconds of the twelfth round left. The doctor came to the ring but had not told him to stop the fight. The doctor advised him to stop the fight but left it to him whether it could be carried on. He had not overruled the doctor in that fight.
69. He arrived in Millstreet some days before the bout and had dinner in the hotel with the officials and Barry Hearn who was a gracious host. Before the fight he approached
70. Mr. Montano who was the official from the WBO and made complaints in relation to a particular matter. Subsequently he said that he told Mr. Montano about the entirety of his complaint which included an alleged attempt to threaten him (which I ruled inadmissible); damage to his property and disturbance in his hotel bedroom and the “nobbling” approaches of Barry Hearn to him. Later again he specified that he had not told Mr. Montano of the “nobbling” approaches.
71. He said that he was not aware at the time that Barry Hearn was Stephen Collins’ manager. He said that Barry Hearn approached him on his way to the ring for the ceremonial weigh-in on the night before the bout. The ceremonial weigh-in was necessary because a huge crowd turned up, measured in thousands, who could not be accommodated at the actual weigh-in and it was agreed to have a ceremonial weigh-in in the ring itself. In relation to this approach by Barry Hearn he said:-
“He was next to me, put his arm around me, pulled me into him and said ‘Tomorrow night, make sure you watch Collins’ use of the head. He is a dirty fighter. Watch his tatics. He is a real pro with the head.’
and I said to him ‘I have seen him fight before, Barry. He seems like a clean fighter to me’
He said ‘ Just make sure you watch his head’
and I said ‘ I will watch both fighters’
and I told him I was still very upset at what had happened me in the hotel.”
72. He then referred to a second ‘nobbling’ attempt by Barry Hearn on the occasion when he went to the ring on the Saturday night to check the ring before the actual bout itself. In relation to this he said:-
“I will have to define on my way to the ring, in actuality, yes, on my way to the ring, but it was not immediately prior to the fighters entering the ring, it was when I went to the ring to check the ring. I had judged the fight, there was some preliminaries.” (This is a reference to his being a judge at a preliminary cruiser-weight contest).
73. Then he went on:-
“It was a brief conversation repeating what he had said the night before
‘Keep an eye on Collins. Watch his head, watch the fouls by him. He is a real pro. He knows how to get away with that kind of stuff.’
and I told him ‘O.K. I will. I will watch both fighters. You do not have to have any concern. I know what I am doing and let it go at that.’
He said ‘O.K., O.K., O.K…'”
74. Since Millstreet he has refereed a number of title bouts. There have been no complaints from the WBO about Millstreet. He wrote to both fighters and to Barry Hearn after the fight. These were very friendly letters. There was a complaint to the WBO on the part of Chris Eubank.
75. At the Rules Committee meeting prior to the Millstreet bout he did not recall Barry Hearn’s speech in relation to cuts. At that meeting there was great controversy because Chris Eubank said he would not fight and the fight was off. Later in cross-examination he described that meeting as chaotic.
76. In a telephone call in April after the fight Stephen Collins rang in relation to rumblings concerning improprieties. He confirmed these to Stephen Collins and told him of the approach by Barry Hearn. He was not aware until this telephone call that Barry Hearn was Stephen Collins’ manager. He did not give Collins the exact words but told him what he had said. In cross-examination he said that he did not tell Collins on the telephone in April 1995 of the two approaches but ran them together. He did tell Mr. Montano of both incidents. It was not a normal rules committee meeting and he could not recall anyone representing Stephen Collins at it.
77. When he came into the meeting there was chaos. There was no normalcy and no Rules Committee meeting because there was no fight. There was no kind of meeting for anyone to be in charge of. He mentioned his complaint in its entirety to Mr. Montano. He waited for Mr. Montano to arrive as an independent official. He would have been shocked if he knew that Barry Hearn was Stephen Collins’ manager. He did hear rumblings after the fight and a complaint from Mr. Hearn. The WBO had been under negative criticism, especially as Wiesel Fernandez of the WBO had appointed himself to be referee. This should not have happened.
78. In relation to the Duran fight he said he had a clock in his head and the incident with the doctor occurred in the twelfth round when there were forty five seconds left. He heard someone prompting him to give a TKO (technical knock out). When the doctor came up he was prompted by Barry Hearn and this caused him to weigh up the doctor’s motives. The cut did not get worse in those forty five seconds. Later he said that if he called the doctor it would have been out of concern for the fighter. He said that he did not overrule the doctor. He asked his advice but the doctor had left the decision to him. He would only accept that he called the doctor if a video showed him making a T gesture to show that time should stop (the video was later shown and did indicate this gesture). He accepted that there were six criminal charges outstanding against him in the State of New York, that he was out on bail in relation to these charges but his bail permitted him to travel to Ireland. These charges arose out of substantial self-defence, not violence arising out of the same incident. He lived in a rough neighbourhood.
79. Later he accepted that he did not tell Mr. Montano of the two “nobbling” approaches but only his other complaints. He did not tell Mr. Mel Crystal about these approaches. After the event he wrote to Barry Hearn in the friendliest of terms. He had become aware of complaints relating to missing items from his hotel bedroom in Millstreet and asked Stephen Collins on the telephone to check into these complaints for him. Later he accepted that the video of the Duran fight showed that the doctor incident occurred thirty eight seconds into the round: not when the round had only forty five seconds left. He said that he did not report the “nobbling” approaches to Mr. Montano. Since then he had not been appointed referee by the WBO and he thought that this was some kind of punishment. He denied that he was giving evidence as a revenge or out of a sense of grievance against Barry Hearn.
STEPHEN COLLINS’ EVIDENCE
80. He is married with three children. He comes from a very sporting family. He started his post-school life with a job in Guinness. He had his first boxing match at the age of eight and was an amateur for fifteen years. He married in July 1985 and made his professional debut in 1986. He went to live in Boston where he worked and trained with the Petronelli Brothers. He came to Ireland in 1990 and was managed by Barney Eastwood. At the end of 1992 he had lost two verdicts, he thought unfairly, and he was looking for a new manager who would give a lift to his career. He tried several and then went to Barry Hearn. He thought Barry Hearn was the right man for him because of his influence with television and because he managed a stable of boxers which would assist in his promotion. Also he wanted to train with Freddy King who worked for Barry Hearn because he liked the style of boxers trained by him. He met Barry Hearn in January 1993 and was promised a title fight within six to twelve months. He would not agree he was worthless or broken at this stage. He was still a highly ranked fighter.
81. He trained hard at Barry Hearn’s camp at Romford, Essex and was prepared to put up with the primitive conditions for the sake of his career. His family were living in Dublin and he visited them at weekends. He had a number of fights all of which were competitive. He beat Johnny Melfah in Cardiff on the 6th February, 1993; Ian Strudwick in London in early March; Gerry Botes on the 29th June, 1993 and Wayne Elliott on the 30th November, 1993 in Cardiff. This was a “Junior” World title fight known as the Penta Continental Middleweight title. He beat Johnny Melfah on the 22nd January, 1994 in Belfast for a low purse. He got short notice for this fight and was asked to do it by Freddy King for Barry Hearn as a favour. He had too much to lose and did not want this fight but was pressurised into it for a low purse. On the 9th February, 1994 he beat Paul Wesley. He would not agree that Mr. Wesley was a journey man or a loser as described by Barry Hearn. He was a tough and dangerous adversary.
82. He became the mandatory challenger of Chris Pyatt who was the WBO World Middleweight Champion. Pyatt had been managed by Barry Hearn but in February of 1994 he left Barry Hearn and following this Barry Hearn said to him “I’ll no longer protect Chris Pyatt from you any more” and also “The little so and so: that fight is going to happen now” . Prior to the Pyatt challenge he signed the contract of the 9th May, 1994. He had legal advice about this agreement and fully accepted that contract which ran for a year. He fought Pyatt on the 11th May, 1994 in Sheffield and knocked him out in the fifth round. Barry Hearn was delighted because it brought the title back into his control. Pyatt had gone over to Frank Warren and Barry Hearn had scored over Frank Warren. Stephen Collins was delighted. It was his life’s ambition achieved. His family were very happy and they had a party in Sheffield and he drove by limousine provided by Matchroom Boxing to Romford where there was another party.
83. Now he was a champion and he was hungry for fights. Barry Hearn promised him that he would have headline fights in Ireland. He went into Barry Hearn’s office often seeking fights. He was often met with talk from Barry Hearn explaining why he could not have a fight. Sometimes he was flattered by Hearn saying that “Nigel Benn won’t fight you.” When he would come out of the office he would realise that he had not got a promise of a fight. In September 1994 an offer with a £100,000 purse came from Barney Eastwood. Barry Hearn’s initial reaction was that it seemed good and was worth investigating. On investigation it emerged that Frank Warren was behind the offer and immediately Barry Hearn’s attitude changed. There was some change in the original offer indicating a purse of £80,000 and £20,000 worth of tickets. He was advised by Barry Hearn and Freddy King not to accept the deal because the offer was not trustworthy. He accepted this advice at the time. During this time the energy in Matchroom Boxing was centred on the Chris Eubank World Series.
84. He got an opportunity to fight Lonnie Beasley in Hong Kong on the
23rd October, 1994 because his original opponent (Zack Pedilla) had pulled out. Despite being requested to do so Barry Hearn would not re-negotiate the purse for him which stood at £100,000. He went to Norwich to Herbie Hyde’s training camp where Freddy King was training Hyde. He went there because he needed Freddy King to train him as well. He travelled with the Matchroom Group first class to Hong Kong and everything was done correctly. A problem arose at the weigh-in and the fight was cancelled because the promoters, a U.S. company called Top Rank, had not guaranteed the purse. Other managers insisted that their fighters would get on the scales because that gave them leverage with the promoters for compensation if there was not a rematch. Barry Hearn advised him not to weigh in and this was bad advice. He had gone to enormous efforts to make the weight by not drinking liquids and sweating in the Hong Kong heat.
85. His bout was rearranged for Boston in December against Lonnie Beasley for £100,000. Freddy King did not travel to Boston with him as he should have done. He needed Freddy King. He had to arrange training from his old manager, Petronelli. Freddy King arrived on the day before the weigh-in. His sparring against Paul (Silky) Jones had not gone very well. He got a virus and on medical grounds he had to pull out of the bout. No arrangements had been made by Matchroom Boxing for sparring, or for a gym or training as there should have been. He accepted that in entering into the management agreement (9th May, 1994), the manuscript agreement (15th January, 1995) and the bout agreement (17th February, 1995) he knew that Barry Hearn managed Chris Eubank, Herbie Hyde, Eamon Loughran and Chris Pyatt. This was not a difficulty for him: he just expected fair play from Barry Hearn. He complained that in January 1994 he got one day’s short notice of a fight for a low fee when there was too much risk.
86. After he came back from Boston his morale was low. He called Frank Warren and discussed making a deal with him. He was told that the Sean Cummins’ offer (which had originally been made in September of that year (1994)) was still open. He suggested that Frank Warren might be interested in buying out his management agreement with Barry Hearn. He did not inform Barry Hearn of these approaches. He arranged to have a meeting with Frank Warren after Christmas. In January 1995 he got work as a commentator on TV.
87. On the 13th January Ray Close pulled out of a proposed bout with Chris Eubank on medical grounds. Barry Hearn suggested to him that he could be a substitute. He was immediately suspicious but at the same time it was a wonderful opportunity which he was very anxious to take. He felt in a strong bargaining position and asked Barry Hearn for £200,000 for the bout. Barry Hearn said that it would be less 25% with an amount of £150,000 for Stephen Collins. He also said that Stephen Collins should pay the trainer. Collins said that he would have to have £150,000, no more no less. Barry Hearn said he would ring him the next day to confirm and he did this and said that the fight was on.
88. This was at the time that he had a pre-arranged meeting with Frank Warren. Stephen Collins was happy with the deal but Warren warned him to be very careful because he would have to fight the whole Matchroom organisation.
89. He really wanted the fight with Chris Eubank. He signed the manuscript agreement on the 15th January for this reason. At the time of signing Barry Hearn did not tell him that the B Sky B lawyers had cancelled the agreement for February. He wanted his solicitor to have a look at the manuscript agreement but was told he had to sign because of the time pressure from Sky television. He felt he was forced to sign because he wanted that fight. It was his first big pay day.
90. He signed the bout agreement but added a paragraph specifying that he did so without legal advice. He then went to Las Vegas to train. The atmosphere at Matchroom Boxing was a-buzz because the Eubank World Tour was on again. He felt he was a small cog in the overall machine and was not expected to win. He felt that he needed help, that he was on his own and he needed a sports psychologist. The fight was not delayed because of his illness. He was ready for it and had a doctor’s certificate which was available in Romford to prove it. He was told that the fight was postponed to the 18th March and he suggested Millstreet as a venue and it was taken up by Barry Hearn and became the venue.
91. He went to Las Vegas because Herbie Hyde had a fight out there and Freddy King would be travelling with Herbie Hyde. He needed to go because he needed to train with Freddy King. He made arrangements to see Tony Quinn in Las Vegas and when he was told that there was a delay to facilitate Herbie Hyde, he needed to go out earlier than the rest of the group. Stephen Dawson did show him the bout agreement before he went to Las Vegas but went over it too quickly and he took away a copy.
92. When he arrived in Las Vegas he found that no one had informed his substitute trainer, Bozza Edwards. There was no one to look after him. He was not booked into the hotel, arrangements were not made to collect him at the airport and he had to fend largely for himself and pay for many of his expenses. His training went well under all the circumstances and when Freddy King did come out with Herbie Hyde he shared him as trainer in the same gym. He left before Herbie Hyde’s bout and flew back to London where there was nobody to meet him. He finally got a ride back to Romford where he was put up on a Saturday night one week before his Millstreet bout in the training camp beside the offices where it was very noisy into the small hours. He did not sleep well. He had been suffering from jet lag, had been delayed at the airport so he moved to a B&B until he left for Cork.
93. When he arrived at Cork there was no one to meet him and he had to take a lift for the two to three hour drive to Millstreet with one of the judges. He was booked into a suite in the Great Southern Hotel in Killarney but there was noise outside his window that night and he left and went to a house which had been taken by Tony Quinn where he stayed until the Millstreet bout. He left word with Tony Quinn’s assistant, Collette Millea, as a contact person with Matchroom. He did not arrange to be uncontactable.
94. On his first attempt he did not make the weight for the Millstreet bout: he had only meat scales available to him and he had to skip in order to lose weight. This provided a morale boost for Chris Eubank. When he got to the venue on the night of the fight there was bedlam. He was not provided with an escort. His room was locked. It was not kitted out. Freddy King, his trainer, should have been there.
95. He won the fight that night and he felt that he beat all those who were working against him. Barry Hearn was as sick as a parrot. After the fight he was light-headed and passed out on the floor of his room. He was covered in a silver foil blanket and he stayed there for approximately an hour. Later he saw Freddy King’s wife who hugged him and Freddy King at the party. He was celebrating with Freddy King. Late in the night Freddy King told him that he was tired and wanted to go to bed but before doing so he cleared up his eye. Barry Hearn was not happy that night.
96. He was given two civic receptions in Dublin and Cork and invited Freddy King and Barry Hearn to both of them but neither turned up.
97. Following the fight he was aware of rumours that Barry Hearn was attempting to have him stripped of his title. He contacted Ron Lipton by telephone in April who was not aware that Barry Hearn was his manager until that telephone call. Ron Lipton told him of the “nobbling” approaches both before the match and on the night of the fight. He also told him about damage to his property in his hotel room. He did not train or return to Matchroom after the Millstreet fight.
98. It cost him money to leave Barry Hearn because he had to pay Tony Quinn £360,000 but it was worth it to get away from Barry Hearn. At the purse ceremony in New York on the 29th May, 1995 Barry Hearn tried to prevent Frank Warren’s company from bidding. If Barry Hearn had succeeded in doing this it would have ruined everything for him. He did not regard himself as bound by the bout agreement and wrote the letter of the 6th June, 1995 confirming that situation.
99. In cross-examination he said that some boxers were slaves to their managers and he would describe Barry Hearn as a user. He signed the manuscript agreement of the
15th January, 1995 because he wanted the bout with Chris Eubank. He agreed that he signed three agreements with Barry Hearn in May 1994 and January and February of 1995 . In January 1995 he felt that he was in a strong bargaining position as champion and did actually bargain. He thought that this agreement was over when Sky cancelled the Belfast bout. There was a new deal with a new venue in different circumstances.
100. He had an increasing sense that he wanted to get away from Barry Hearn arising out of a lot of little things. These included that he had to go to Las Vegas when he did not want to, there was no booking for him there, there was no one to collect him at the airport, there was no sparring partner there, there were no proper arrangements for a gym, Bozza Edwards was not notified to be his temporary trainer, there was no one to collect him on his return at Heathrow, there was no proper accommodation at Romford, the arrangement at the Great Southern Hotel in Millstreet was unsatisfactory, there was no one to meet him at the stadium on the night of his fight, there was no one to point out his dressing room and the arrangements in the dressing room were inadequate. A combination of these show that Barry Hearn was not acting in his interests and at the end of the fight at Millstreet he concluded that Barry Hearn was biased.
101. The other witnesses on behalf of Barry Hearn were coached. Freddy King was a loyal friend of Barry Hearn and regrettably gave false evidence. He never went back to Matchroom after Millstreet. Barry Hearn failed in his job as manager to get him the most beneficial deal by attempting to “nobble” the referee and by the many things referred to which all added up. At the time, after Millstreet, he was not yet ready to stand up to Barry Hearn who was very powerful in boxing circles. He insisted that he never actually calculated how much he was being sued for in these proceedings.
102. In relation to many extracts put to him in cross-examination from the book “Celtic Warrior” by Steve Collins with Paul Howard he accepted that many of these extracts were not true but he permitted them to be published at the time as being a better story. He hoped that the story would attract a hollywood producer. It was beneficial at the time for him to promote the book: he accepted that he made some changes in the draft manuscript and that these conflicted with his evidence in the case.
103. He accepted that he co-operated with the production of the book the Celtic Warrior but he had a dispute with Brandon Book Publishers because they had assured him that they had legal advice protecting him from any responsibility in relation to the contents of that book. He subsequently became aware that the legal advice came from a person who was not legally qualified and this was the reason he had a quarrel with Brandon Books. He accepted that his income increased significantly between January 1993 and March 1995.
104. He insisted that the amount of the purse for Millstreet was agreed at £200,000 with Barry Hearn to get his 25% management fee.
105. The “nobbling” of the ref operated in his mind when he sent his letter of the
6th June, 1995 as did the rumours that Barry Hearn was making efforts to strip him of his title. This was a very serious breach and one of many breaches that added up. Another very serious breach was for Barry Hearn to go to the purse bid ceremony supposedly as a Matchroom representative to bid for the fight and to try to prevent the top bidder which was Frank Warren’s Sports Network from bidding for that fight so that he would not have a good pay day. This was a very serious breach and to him was probably the final thing that Barry Hearn had done to him.
“When that happened, I said that’s it, It’s over as far as I am concerned. I do not want any part of this man or his organisation and I am going to have to make it be known to him that I do not want him.”
106. He was aware that Barry Hearn managed Chris Pyatt, Chris Eubank and others and all he wanted was fair play. He did not train with Matchroom after the 18th March. He had a new trainer, Freddy Roche, who organised sparring partners. From the 18th March he did not want Barry Hearn to be his manager. He did not want him to be manger in April or in May or in June. He did want Freddy King to train him but that did not happen. In relation to the proceedings in the United Kingdom his solicitor gave different grounds for his break with Barry Hearn. In relation to the U.K. proceedings he had been advised that Barry Hearn was powerful and not to give all the reasons for terminating his agreement with him, that he had enough evidence in what he said to win that case and he accepted this advice.
107. He contacted Ron Lipton after the present case started. He accepted that he signed the manuscript agreement (15th January, 1995) notwithstanding a number of complaints which he was now relying on. A week later that contract was finished because B Sky B cancelled the bout in Belfast. It was not postponed because he was ill. He had told Barry Hearn that he was “ready to rumble”.
108. In relation to the Valcarcel correspondence he did have a problem with his knuckle which he subsequently avoided by having water-filled punchbags. In relation to the letter of the 6th June, 1995 he requested his solicitor to inform Barry Hearn that he wanted to regularise the whole situation and tell him officially in case there was any doubt, that he was no longer requesting him to be engaged with him in any way at all because he had breached their previous agreement of contract. Nobbling the referee had been a breach of contract, attempting to deprive him of the purse at the purse bid ceremony had been a very serious breach as had his request for direct payment of 25% of the money from Chris Roberts once Sports Network had been accepted as promoter.
MEL CRYSTLE
109. He is the President of the Boxing Union of Ireland (hereinafter “the B.U.I”). He gave evidence under subpoena and stressed his neutrality and admiration for both Mr. Hearn and Mr. Collins. In relation to the duties of a manager he said that his duties were to look after the financial and physical welfare of his fighter. The relationship is governed by the written contract and in his view there were no legal obligations on the manager outside the terms of the agreement. A bond can develop between a manager and a fighter especially over time. In relation to the Millstreet fight he said that this was a massive undertaking. The promoters received a licence from the B.U.I. for the event. The B.U.I. gives the promoter a licence for an event as distinct from an annual licence. This licence is subject to conditions which make provision in relation to securing the purse and funds for the small creditors. Stephen Collins was the underdog at that fight.
110. In relation to the evidence of alleged approaches by Barry Hearn to Ron Lipton as the referee, Mel Crystle said that such approaches would not be appropriate. The proper forum for clarifying any matters of this kind is the rules Committee. He did not agree that the Rules Committee in the case of the Millstreet fight was chaotic. It was necessary that a certificate be signed for the WBO official, Mr. Montano, confirming that the rules had been gone through and also that the gloves and spares be initialled on behalf of both fighters.
111. It is true that there was doubt as to whether Chris Eubank was prepared to fight but there was not chaos at the meeting. Ron Lipton made no complaint to him in relation to the fight. Mel Crystle confirmed that he was at the party after the fight and that all present were in great form including Freddy King. He recalled the party in some detail. He said that Stephen Collins was quite restrained but was very satisfied and he described Freddy King as a very restrained individual but said that he was in very good spirits.
112. After giving evidence he requested to come back the following day to clarify one matter. He then said that he had recalled that he himself had signed the gloves and the certificate on behalf of Stephen Collins who had asked him to represent him at the Rules Committee.
113. It is worth noting that the evidence of Mel Crystle contrasts with three pieces of evidence which were in issue. In the first place Ron Lipton had said that the Rules Committee was chaotic. Mr. Crystle said that it was not. Secondly, Freddy King said that he did not join the party and he was very disappointed. Mr. Crystle recalls that he was there and in very good spirits. Thirdly, Barry Hearn who gave supplementary evidence after Mr. Crystle’s said that he had signed the certificate on behalf of Stephen Collins. The following day Mr. Crystle asked to be recalled to clarify that it was he, Mr. Crystle, who had signed the gloves and the certificate on behalf of Stephen Collins who had asked him to act as his agent at the Rules Committee. The evidence of Mr. Lipton, Mr. King and Mr. Hearn has been challenged in regard to each of these three points. On each of these matters I accept the evidence of Mr. Crystle as more reliable.
114. The foregoing concludes the summary of evidence.
115. Before dealing with factual controversies I turn to deal with the several legal issues concerning the contractual position between the parties.
THE CONTRACTUAL POSITION
THE MANAGEMENT AGREEMENT
116. It is common case that the management agreement operated between the parties for a period of one year commencing on the 12th May, 1994. This arose because the condition precedent, namely, that Stephen Collins would succeed in his bout against Chris Pyatt, was satisfied. Stephen Collins does, of course, allege breaches of this contract but it is common case that the management agreement was operative for a year and no point arises as to its status in this regard.
THE MANUSCRIPT AGREEMENT
117. A number of legal challenges relate to the issue as to whether, and if so for how long, the manuscript agreement was the effective agreement between the parties. Stephen Collins maintains that it never came into existence because the bout against Chris Eubank at the King’s Hall, Belfast on February 11th, 1995 did not occur. He says this was a pre-condition to the agreement.
118. I do not agree. Two specific conditions which are clearly pre-conditions are set out. First, B Sky B had to agree to a televised “Eubank/Collins fight” as part of the Eubank World Tour agreement, and second, the WBO had to confirm that Stephen Collins’ existing Middle Weight title was not at risk.
119. I will return to these pre-conditions in a moment: I consider that the intention of the parties was that these were the only pre-conditions. I consider that the phrase “the Eubank/Collins fight” includes that fight at Millstreet on the 18th March, 1995. On the overall balance of evidence I consider that both Barry Hearn and Stephen Collins accepted that on the
18th March Barry Hearn was manager to Stephen Collins under that agreement.
120. It is further argued, however, that the first specified pre-condition was not satisfied. B Sky B specifically refused to accept Stephen Collins as a substitute for Ray Close and re-negotiated terms accepting the Collins/Eubank fight at Millstreet as part of the Eubank world tour agreement. The manuscript agreement does not specify that Stephen Collins is to be a substitute for Ray Close: rather it refers to the “Eubank/Collins fight”, albeit at Belfast on the 11th February, 1995. My view is that if either of the parties had been confronted on the eve of the Millstreet fight with the proposition that Barry Hearn was not Stephen Collins’ manager each would have rejected that proposition. This is consistent with the former’s claim that he continued as Stephen Collins’ manager, and the latter’s allegations of breach of agreement and subsequent letter of 6th June.
121. I hold that the manuscript agreement was not specific to the fight taking place in Belfast on February 11th, that it was acknowledged in and supplemented by the schedule to the bout agreement as detailed hereunder and, furthermore, I consider that the parties proceeded upon the basis that a management agreement was in place which covered the Millstreet fight. I also hold that the pre-conditions to the manuscript agreement were satisfied.
122. A further argument was advanced to the effect that if the manuscript agreement did come into existence it was cancelled or replaced by the insertion of clause 4 of the first schedule to the bout agreement which was ultimately signed by Stephen Collins on the 17th February, 1995. Clause 4 provides:-
“The fighter agrees that should he defeat Chris Eubank and win the WBO Super Middleweight title then the fighter agrees to extend the management agreement dated the 9th May, 1994 with Barry Hearn for a period of one year as and from the termination date of his existing management contract. “
123. In support of this argument it is pointed out that the management agreement in the schedule to the bout agreement was different to the management agreement in the manuscript agreement and this is accepted by the Plaintiffs. The position of the Plaintiffs in response to this contention is that they are happy to rely on the bout agreement in circumstances where it is accepted that Barry Hearn is a party to the bout agreement. They further point out that it would be quite unacceptable if Barry Hearn’s position as a party under the manuscript agreement could be altered by the bout agreement in circumstances where he was not a party to and could not avail of the benefit of the latter.
124. In the English proceedings Counsel for Barry Hearn accepted that his rights arose under the bout agreement. Counsel for the Plaintiffs in the present proceedings have contended, notwithstanding, that Barry Hearn’s rights during the relevant period which include the 18th March and 6th June, 1995 were governed by the manuscript agreement but they have also said that they are happy to rely on the bout agreement provided Barry Hearn is a party to that agreement.
125. I think the probability is that the parties to the bout agreement considered that they were therein recording an existing agreement (namely, the manuscript agreement) between them together with supplementary provisions which included an amendment to the terms of the management agreement. The evidence of Steve Dawson who negotiated the bout agreement with Stephen Collins’ solicitor Mr. Delahunt was that he raised the issue with Mr. Delahunt as to whether clause 4 should be in the bout agreement and was reassured on this point by Mr. Delahunt. His evidence is not contradicted. I consider that the agreement between Barry Hearn and Stephen Collins in relation to management was contained in the manuscript agreement as acknowledged in and supplemented by the schedule to the bout agreement.
126. Barry Hearn was clearly a party to the manuscript agreement which I have held came into existence because the pre-conditions were satisfied and did not go out of existence because of the change of venue. That being the case it would be quite unjust in my view if his position under the manuscript agreement could be altered to his detriment by means of a further agreement to which he was not a party and pursuant to which he could assert no rights.
127. A further point is made on behalf of Stephen Collins to the effect that the manuscript agreement did not come into existence because of the failure to permit Stephen Collins to get legal advice and also because of the pressure under which he was placed to sign the manuscript agreement. I am not impressed by either argument. Stephen Collins has demonstrated (in the first draft of the bout agreement) a capacity to assert his position in relation to legal advice but in the case of the manuscript agreement he did not do so. Furthermore I do not think he was under pressure in any way which is relevant to this submission because on his own evidence he said that at the time he felt himself in a strong negotiating position and in fact did negotiate. He said, quite fairly, that he signed the agreement because he dearly wanted the bout with Chris Eubank.
128. The cases relied upon by the Defendants do not in my view assist them. In particular Costello J., as he then was, held on the 29th April, 1982 in O’Flanagan -v- Ray Ger Limited that the Defendant in that case had a strong and forceful personality and had exercised considerable influence amounting to domination over the deceased. The agreement was “grievously unfair to the deceased’s wife and family”. That situation contrasts starkly with the situation of Stephen Collins in the present case where he candidly admits he felt in a strong bargaining position and actually did bargain.
129. I reject, further, any argument to the effect that Stephen Collins found himself under pressure from economic duress and for the same reason.
THE BOUT AGREEMENT
130. It follows from the foregoing that the manuscript agreement came into existence, did not go out of existence by reason of the change of venue and governed the Millstreet fight. Stephen Collins argues further, however, that Barry Hearn is not entitled to rely on the bout agreement and he also says that even if the manuscript agreement did come into existence it was replaced by the latter.
131. This general Defence is articulated by means of a number of specific arguments which include reference to the doctrine of privity of contract where it is stressed that the exceptions to the general principle that only parties to an agreement are entitled to enforce must be strictly applied. It is contended that the only party to the bout agreement was Matchroom Boxing and that it was clear that they were not acting as agent for Barry Hearn. In relation to this latter point reliance was placed on Eurymedon [1974] 1 All ER 1015 and in particular to an extract from the judgment of Lord Wilberforce at page 1018 which in turn referred to the leading case of Scruttons Limited -v- Midland Silicones Limited [1962] AC 446. In the latter, however, Lord Reid had referred to the possibility of success of the agency argument if four conditions were satisfied, namely,
(a) that it was intended by the parties that the non-party would be protected;
(b) that it was clear that the contracting party was doing so as agent for the non-party,
(c) that the contracting party had authority so to do and
(d) that any difficulties about consideration moving from the non-contracting party were overcome.
132. In my view these four conditions are satisfied in the bout agreement. It is clear that both parties were aware that only a human individual as distinct from a company could be a manager of a boxer. Clause 4 of the First Schedule to the bout agreement must be given some meaning and cannot be so interpreted or applied as to have no effect or no enforceability. That I think would be the result if the Defendant’s argument was correct. From this it follows, I think, that the parties to the bout agreement intended that Barry Hearn as a human individual would have the benefit and be under the obligations specified therein, and to that extent it was clear, in my view, that Matchroom Boxing was contracting as agent for Barry Hearn. The company clearly had authority, in my view, to do that. The consideration which moved from Barry Hearn as an individual was his undertaking to extend the management agreement and also of course to be bound by its terms and provide appropriate services to Stephen Collins thereunder.
133. It follows that Barry Hearn is entitled to sue on foot of the bout agreement and also that he is bound by any obligations arising thereunder for a year following the termination date of the management agreement. Further submissions were made in relation to the trust doctrine, collateral agreement and specific performance but in light of the foregoing it is not necessary for me to deal with these further submissions.
134. In the result I hold that the management agreement as acknowledged in and supplemented by the bout agreement was extended for one year from the 11th May, 1995. Barry Hearn was accordingly at all material times manager to Stephen Collins under the management agreement or under the management agreement as extended.
ALLEGED BREACHES OF CONTRACT
135. I turn, accordingly, to deal with the issue of the alleged breaches of this agreement.
136. Before dealing with allegations of fundamental breach, I propose to deal with allegations of numerous breaches which are not claimed to be fundamental and with other criticisms amounting to complaints by Stephen Collins as to how Barry Hearn carried out his duties under their management agreement. The Plaintiffs in response to these various allegations submitted that these breaches could be conveniently categorised under four headings and this categorisation was accepted, for the purpose of concluding submissions, by Counsel on behalf of Stephen Collins. I propose to adopt them as well. These categories relate to the various breaches alleged to have taken place:
(a) prior to the 15th January 1995;
(b) between the bout agreement and the 18th March, 1995;
(c) between the 18th March, 1995 and the 6th June; and
(d) subsequent to 6th June, 1995.
PRIOR TO THE 15TH JANUARY, 1995
137. These allegations include a failure of Barry Hearn to follow up on promotion offers and in particular his failure to negotiate with Frank Warren/Sports Network in October 1994 and his failure to re-negotiate a better deal for Stephen Collins for the Hong Kong fight in September of that year; there is also the allegation that Barry Hearn failed to ensure that Freddy King travelled with Stephen Collins to Boston and there are a number of complaints in relation to the Boston trip concerning the absence of suitable arrangements for Stephen Collins.
138. In this context Stephen Collins points to Clause 3.1 of the management agreement which provides:-
“The manager will arrange the boxers professional boxing affairs and engagements so as to secure for the boxer the most financial beneficial profits and rewards.”
139. In response, the Plaintiffs point to the fact that the management agreement which was drafted by Stephen Collins’ solicitor should be construed strictly against him and that this agreement does not in fact provide for any of the matters now complained of. For example, it does not specify that Mr. King should travel with Mr. Collins. It is further pointed out that no complaints were made by Stephen Collins during this period and also that Stephen Collins with clear knowledge of those breaches entered into an extension of the management agreement by signing the manuscript agreement on the 15th January, 1995. Rather than exercise his right of termination under clause 6 of the management agreement Stephen Collins renewed it. In any event there is no claim for damages arising from loss.
140. I have carefully considered the evidence on both sides and also the arguments. I am not prepared to hold that any of the matters referred to amounted to breaches which are now actionable of the manuscript agreement during this period. No claim for damages is made in respect of these allegations and it is not asserted that any of the alleged breaches were fundamental. By renewing the agreement on 15th January, 1995 I consider that Stephen Collins waived any rights to sue on foot of these alleged breaches. I will refer later in a little more detail to the alleged failure of Mr. Hearn to follow up on the promotion offer from Frank Warren when I come to deal with allegations of fundamental breach.
PERIOD BETWEEN THE BOUT AGREEMENT AND THE 18TH MARCH, 1995
141. These allegations include an allegation that there was a breach by Mr. Hearn because he continued as manager to Chris Eubank and was involved in a large promotional arrangement with B Sky B relating to Mr. Eubank.
142. Before dealing with other breaches alleged during this period I should say at once that I do not accept this proposition. I consider that the very foundation of the manuscript agreement and, indeed, the bout agreement was the Collins/Eubank fight and that those agreements were reached between the parties in the full knowledge that Barry Hearn was the manager of Chris Eubank and would be promoter of the bout. Furthermore, Stephen Collins was aware in general terms of the Eubank world tour arrangement between Matchroom Boxing and B Sky B. No point arose at the time from Stephen Collins or from his solicitor in relation to this ground and I do not think that clause 3.3 of the management agreement can be construed in a manner which would force Barry Hearn to cease to manage Chris Eubank, to withdraw from the B Sky B agreement or to procure such withdrawal by Matchroom Boxing or not to promote the bout at Millstreet. On the contrary the very basis upon which the agreement was reached contemplated that the Plaintiffs would do these things and indeed the large purse arranged for Millstreet was, I think, closely connected with the fact that the bout was accepted by B Sky B as part of the Eubank world tour. I must therefore reject Stephen Collins’ argument in relation to this.
143. In this period in addition, apart from the allegation that Barry Hearn had “nobbled” the referee of the Millstreet bout which I will deal with later when I come to deal with allegations of fundamental breach, there were a number of specific allegations made in relation to the lack of arrangements or the inadequacy of the arrangements made for Stephen Collins while he was in Las Vegas including arrangements in relation to accommodation, training, sparring and travelling. Again complaints are made in these proceedings in relation to his return journey to London and Romford and his further journey to Cork and Millstreet.
144. The Plaintiffs in response to these allegations (apart from dealing with the issue of fundamental conflict which I will deal with separately) say that Clause 3.3 of the management agreement when properly construed specifically refers only to engagement in “contracts or agreements” as distinct, I understand, from performance thereunder. If this is the submission of the Plaintiffs I reject it. One cannot “indirectly” engage in a contract or an agreement and my view is that the intention of clause 3.3. is to cast upon Barry Hearn an obligation to avoid conflict under such contracts or agreements with his duties or obligations to Stephen Collins. However this clause must be read in the context of the entire agreement and as I have already said I do not think that the fact that Barry Hearn continued to manage Chris Eubank or to promote the Millstreet bout or to avail of the advantages of the B Sky B agreement (all of which I hold were known to both parties at the time of entering the manuscript agreement) could constitute a breach of clause 3.3. This does not mean, however, that clause 3.3 is entirely irrelevant in regard to the implementation of these agreements by Barry Hearn. I think both Barry Hearn himself and Stephen Collins agreed that he had to operate even-handedly as between Stephen Collins and Chris Eubank and I consider that any departure from this standard would in principle be a breach of clause 3.3. This point is in addition, of course, to any breach which would qualify as a fundamental breach which would remain a fundamental breach even if clause 3.3 did not apply at all.
145. The Plaintiffs submit, further, however, that Stephen Collins did not rely on the provisions of clause 6 entitling him to terminate the agreement on thirty days notice in the event of a breach. They further point out that no loss resulted to Stephen Collins from these alleged breaches and indeed no damages are claimed. It is also acknowledged by the Plaintiffs that both parties approached the management contract on the basis that they were still entitled to look out for their own interest. No criticism is made of this. Stephen Collins acknowledges that in December 1994 and January 1995 he was having consultations with Frank Warren with a view to arranging a promotion for himself which he could present to Barry Hearn as his manager. He even contemplated that Frank Warren might be interested in buying out Barry Hearn’s management contract. As things turned out, however, the offer of a bout with Chris Eubank once Ray Close withdrew became known in January 1995 and despite his growing disenchantment with Barry Hearn and advice from Frank Warren that he would be taking on the whole of Matchroom, Stephen Collins signed the manuscript agreement on the 15th January, 1995 because above all he wanted the match with Chris Eubank and this was the way to get it.
146. Once again my view is that there is no clearly made out actionable breach of contract during this period against Barry Hearn. Stephen Collins came to rely on Tony Quinn in the period immediately prior to the Millstreet fight and even if he did not make himself inaccessible, communications were indirect at best. The evidence in relation to the night of the fight at Millstreet is confused and even if I was prepared to hold, which I am not, that specific items such as buckets, water, towels and so on were not provided for Stephen Collins these specific complaints of themselves would not amount in all the circumstances to a breach of contract.
147. On the other hand, however, I am not prepared to hold, as alleged by Barry Hearn, that immediately after the fight Stephen Collins became arrogant and overly triumphalist. I accept that he was exhausted after the fight, collapsed in his dressing room, had to be wrapped in silver foil, that he was attended closely by Tony Quinn but that he subsequently gave a press conference and attended late night and early morning celebrations at which all in attendance, including his trainer Freddy King, were in good spirits.
THE 18TH MARCH, 1995 TO 6TH JUNE, 1995
148. The allegation made in relation to this period is that Mr. Hearn attacked the credibility of Frank Warren/Sports Network at the purse-bid ceremony in New York on
29th May. The attack has been admitted by Barry Hearn although he does not accept that it extended for as long as the Defendant alleges and he also claims that it was futile as an attempt to have Sports Network prevented from bidding.
149. As this is an allegation of fundamental breach I will deal with it shortly with other such allegations.
THE PERIOD SUBSEQUENT TO 6TH JUNE, 1995
150. The allegation relating to this period will be dealt with below under the heading “The Valcarcel Correspondence” but first I propose to make some introductory observations on the law relating to fundamental breach of contract.
FUNDAMENTAL BREACH OF CONTRACT
151. I think it is important to clarify the different legal consequences which arise where there have been breaches of an agreement as distinct from fundamental breaches. This matter is dealt with by O’Keeffe J., as he then was, in Carvill -v- Irish Industrial Bank Limited [1968] IR 325 at p.345 as follows:-
“In principle it is difficult to understand how an act can be relied upon to justify dismissal unless it is known at the time of dismissal. It must be conceded that there can be some breaches of contract so fundamental as to show that the contract is entirely repudiated by the party committing them, and that such an act might be relied upon in an action for wrongful dismissal, not as justifying the dismissal, but as supporting a plea that the dismissed servant had himself put an end to the contract. Where the act is not of so fundamental a character but would warrant the dismissal of the servant at the option of the employer, it appears to me to be quite illogical to say that an employer may be heard to say that he dismissed his servant on a ground unknown to him at the actual time of dismissal.”
152. Subsequently in Glover -v- BLN Limited [1973] IR 388 Walsh J. observed (page 426) as follows:-
“Furthermore, as was settled by this Court in Carvill -v- Irish Industrial Bank Limited an employer in defending an action by an employee for wrongful summary dismissal, cannot rely upon misconduct which was not known by the employer at the time of the dismissal. I would add that the misconduct, if known but not in fact used as a ground for dismissal at the time, cannot be relied upon afterwards in an effort to justify the dismissal.”
153. A distinction emerges from these passages between breaches and fundamental breaches.
154. If a fundamental breach comes to light after the dismissal it may still be relied upon by the employer to make a claim not that this subsequently known ground was relied upon as a reason for or otherwise justified the dismissal, but rather that the contract at the time of the dismissal had already been repudiated.
ALLEGATIONS OF FUNDAMENTAL BREACH
THE “NOBBLING” ISSUE
155. In the course of his evidence, Mr Lipton was compelled to contradict or heavily qualify himself on a number of occasions. Even before he gave his evidence questions were raised in relation to it as I indicated in the introduction to my summary of his evidence earlier in this judgment. It might be thought, however, that inaccuracy of recollection on points of detail or even on points of substance are in a different category to the fabrication of a serious allegation that Barry Hearn attempted, on two occasions, to influence him against Stephen Collins in the circumstances described. The nobbling allegation is flatly contradicted by Barry Hearn as a fabrication. Mr Gallagher S.C. for Barry Hearn has submitted that a number of serious questions remain in relation to Ron Lipton’s evidence.
156. Amongst these questions are the fact that there is no explanation for the assertion on the twelfth day of this trial that only one approach was made by Barry Hearn; that the allegation was altered to specify that the second approach was made to Mr Lipton when he was on the way to the ring on the night of the fight prior to the match in order to correct same in response to Barry Hearn’s reaction that an approach made on the way to the ring for the fight proper would have been impossible given the crowd and time constraints; that there was no complaint made by Mr Lipton either to Mr Montano of the WBO or Mel Crystal of the BUI in circumstances where Mr Lipton was aware that Barry Hearn managed Stephen Collins arising out of his phone call with Stephen Collins in April, 1995; that Mr Lipton exhibited an animus against Barry Hearn which was shown by his insistence in repeatedly trying to link Barry Hearn with acts of intimidation in the hotel in Millstreet, despite my prior ruling that no reference should be made to same; that the nobbling allegations were completely at variance with the friendly letter written by Mr Lipton to Barry Hearn shortly after the Millstreet fight; that he described his post Millstreet non-appointment by the WBO as a referee as a punishment by the WBO whom he associated to some extent with Barry Hearn, and finally, apart from the inherent self contradictions, Ron Lipton’s description of the rules committee as chaotic, was in flat contradiction to the evidence of Mel Crystal that it was not.
157. The allegation of nobbling is one of particular gravity. Whilst I accept that the standard of proof required, in relation to this allegation, is proof on the balance of probabilities I consider that the observation of Mr Justice Keane in Masterfoods Limited t/a Mars Ireland -v- HB Ice Cream Limited [1993] ILRM 145 following at page 183 where he says:
“It may well be that that standard should be applied with some degree of flexibility and that the Courts should require allegations of particular gravity to be clearly established in evidence”
is apposite to my consideration of this allegation, although I quite accept, as was made clear by Keane J. in the same context, that this does not mean that a different standard of proof is to be applied.
158. In my view it would be unsafe to accept that Barry Hearn approached Ron Lipton on either one or both of the occasions claimed, because I do not consider that this particularly grave allegation has been clearly established in evidence.
159. I should make it plain that in refusing to accept that this allegation has been clearly made out, I am not rejecting the evidence of Stephen Collins that in the telephone call in April, 1997 Ron Lipton told him of these alleged nobbling approaches. I consider that Stephen Collins generally gave his evidence in a conscientious and truthful fashion and I accept his evidence that in this telephone call, Ron Lipton made these allegations to Stephen Collins against Barry Hearn.
THE VALCARCEL CORRESPONDENCE
160. Despite voluntary discovery, this correspondence only came into the hands of Mr. Delahunt, the Solicitor for Stephen Collins on Friday 31st October and was first mentioned in the course of this trial on the following Tuesday 4th November (the eleventh day of the hearing). This correspondence had been passed to Mr Delahunt by a third party, apparently Sports Network, a company under the control of Frank Warren an admitted rival of Barry Hearn’s. The manner of the introduction of this correspondence was every bit as controversial as the manner of the introduction of the assertions made by Ron Lipton.
161. It will be recalled that Barry Hearn considered himself Stephen Collins’ manager up to the 13th October, 1995 when the 30 days notice, which he served, pursuant to clause 6 of the management agreement expired. In any event the letter dated 6th June, 1995 terminating what was therein described as the prior agreement was stamped and received by the Plaintiffs on the 9th June.
162. This correspondence comprises a series of letters from Barry Hearn to Francisco Valcarcel then President of the WBO. In the first, dated 7th June, 1995 Barry Hearn raises a doubt as to whether Frank Warren really intended to promote the Collins Eubank re-match before the 31st July as stipulated at the purse bid ceremony in New York on the 29th May. He suggested that “Mr Warren will ignore the orders of the WBO and instigate either a medical delay or some other reason…”. This suggestion carried with it the inference that Stephen Collins would be a party to an instigated medical reason for postponement of the fight in breach of the arrangement specified. The letter presses strongly for the right to have Chris Eubank fight for an interim championship “… on the 29th July, with the winner going on to fight Steve Collins for the official title on a 50/50 basis”. This request, if it had been carried out, would have meant that Stephen Collins’ entitlement to a 75% share of the purse as champion, would have been reduced to a 50% share. The letter did, indeed, acknowledge that if Frank Warren was not in a position to promote the fight then his deposit should be distributed to the champion and the challenger in accordance with the WBO rules.
163. The second letter in the series is dated 13th June 1995 – coincidentally the date on which Barry Hearn wrote to Stephen Collins stating that he was staggered at the contents of Stephen Collins letter to him of 6th June, 1995 and writing “to formally advise you that I do not accept your termination of our agreement and in an attempt that you will reconsider your position after you have had a time to reflect further on the matter”.
164. On the same day he wrote a letter to Mr Valcarcel noting that it would come as no surprise “that Steve Collins has pulled out of his planned defence against Chris Eubank on the grounds of illness”. In the course of the letter he writes:
“Before a delay in this contest can be allowed, surely we must insist on a reputable doctor’s certificate outlining details of the illness (?) that Collins is suffering from. It is eight weeks before the fight, so one assumes that it must be quite a serious illness!”
165. The request for an interim championship fight for Chris Eubank is repeated, this time supported by reference to precedent with a repetition of the suggestion that the winner would fight Steve Collins once again “obviously on a 50/50 basis”.
166. The next letter is dated the 15th June, 1995 and commences:
“Dear Francisco,
I have heard now that Steve Collins has an injured finger (!) and will not be able to train for two weeks and therefore promoter Frank Warren wishes to postpone the fight until September.”
167. The earlier requests are repeated, the finger injury is criticised as a valid reason for postponing the contest when Barry Hearn points that “an injured finger does not stop a fighter running, skipping and generally keeping himself 100% fit – it purely prevents him from sparring.” He further writes:
“We all know, I believe that this is just an excuse and that Frank Warren has been unable to come up with a venue that can stage the fight within the WBO time scale and clearly he does not want to lose his deposit, hence Mr Collins’ very serious injury to his finger!”
168. A later paragraph refers to “these ridiculous excuses” . The letter is insistent upon a decision on the interim championship proposal and points out:
“Time is of course of the essence and bearing in mind the poor excuse of Steve Collins’ finger injury, I hope the WBO will now fax me to confirm that Chris Eubank may fight an interim world championship on July 29th …”
169. A second letter of the same date emphasises that Mr Eubank will face serious financial loss “… due to the non-performance of Mr Warren of not promoting the Eubank/Collins fight under the deadline…”
170. The next letter dated the 19th June, 1995 emphasises the huge financial losses and includes the following:
“Steve Collins’ injury to his finger is laughable and I trust you will give us the opportunity now to keep this title active in line with past practice…”
171. A further letter of 20th June emphasises that the purse bid was conditional on the fight taking place before July 31st and reiterates that there is a precedent within the WBO rules for previous interim championships when a mandatory fight cannot take place by the prescribed date. “I trust again that we will maintain consistency in our decisions by ordering another interim championship prior to the end of July”.
172. The last letter in the series is dated 26th June by which time an arrangement had been worked out. This letter seeks written confirmation of what is described as the “following compromise agreement in respect of Chris Eubank and Steve Collins mandatory title fight:-
1. WBO will agree to Chris Eubank having a 10 round non-title fight on the 29th July against Jose Ingacio Barreutabena of Spain.
2. Barreutabena will be installed in the WBO ratings in July at number 4 to replace Frankie Liles, who has been included in the WBO rankings, but it is in fact the WBA super middleweight champion.
3. Should for any reason Frank Warren the promoter announce that the Eubank/Collins fight will not take place prior to the 9th September, 1995 then the Barreutabena/Eubank contest will be recognised as an interim title fight under the WBO rules”.
173. The explanation given by Barry Hearn in evidence for the foregoing correspondence was that he was acting as manager for Mr Eubank who was pressing him on a daily basis to arrange an interim fight given that the Collins/Eubank rematch was going to be postponed; that any criticism of Stephen Collins could not damage the latter’s position which was protected under the WBO rules which provided that once a medical certificate had been furnished the title holder could not be stripped of his title unless he failed to defend it within 180 days; that the entire correspondence was tactical and aimed at achieving the result which was actually achieved namely that Chris Eubank got a fight before the Collins/Eubank rematch, Steve Collins remained champion entitled to his full purse on that rematch and Frank Warren remained promoter. Barry Hearn explained in evidence that at the time he did not know the date (subsequently established as 9th September) selected for the Collins/Eubank rematch and he also agreed that he had no contact with Steve Collins at the time (despite several attempts by him) so that his assertion that the finger injury (later clarified by Steve Collins in evidence in this case as an injury to his knuckle) was based purely on the information that he derived from newspaper reports.
174. I am unable to accept that this explanation given by Barry Hearn in evidence in this trial represents the whole truth. I am asked by the author of these letters to reject their plain, insistent and repeated meaning in favour of an explanation which leaves me unconvinced. I accept that Barry Hearn’s purpose in writing this correspondence was to achieve a benefit for Chris Eubank, whom he also managed at this time. I consider that he was motivated by hostility against Frank Warren, who had succeeded, despite his best efforts to put an obstacle in his way, in winning the promotion of the Collins/Eubank rematch at the purse bid ceremony in New York on the 29th May thereby taking over one of his fighters as he has himself put it. On the face of it, this correspondence seeks to damage Steve Collins in two fundamental ways, namely by interfering with his 75% share entitlement to the Collins/Eubank rematch purse and secondly, by suggesting that he was a party to a phoney medical excuse in order to achieve a postponement of that rematch. I have been furnished with a copy of the WBO rules and I do not accept Barry Hearn’s claim that Stephen Collins’ position as title holder was absolutely impregnable under those rules once a medical certificate had been furnished. Rule 8 refers to a champion being justifiably disabled but specifies that “such disability has to be proven to and accepted by the world championship’s committee”. I do not accept it as clear beyond argument, as Barry Hearn contended, that the WBO could not accede to the various suggestions put forward in the Valcarcel correspondence to the detriment of Steve Collins.
175. My conclusion is that if Barry Hearn was at that time under any obligation as manager to Steve Collins, this correspondence comprises fundamental breach of such obligation.
THE PURSE BID
176. It was put to Barry Hearn in cross-examination on the third day of the hearing that he attended the purse bid ceremony in New York on the 29th May, 1995 in relation to the Collins/Eubank rematch, and that he addressed the presiding officer making various highly critical remarks about Sports Network and Mr Frank Warren. Barry Hearn’s initial reply was:
“No, I’m afraid I don’t (remember). It doesn’t mean to say I didn’t make them. I just don’t recall them.”
177. Further on in evidence it was suggested to him that he spent close to half an hour damnifying Sports Network and Mr Warren in particular, that his remarks reflected on the integrity of Mr Warren and that he suggested that he should not be permitted to bid. He was asked did he recall any of that and he said “No, but it doesn’t surprise me”. Barry Hearn went on to specify that if a company is registered and they have paid a sanction fee then despite his personal feelings about Sports Network “I don’t see it’s possible to stop them bidding”. It was put to him that he did his best to stop them, to which he replied “It would be a futile exercise. You can’t stop the bidding. I may have done my best to certainly criticise them, as I would have done for effectively, in my view, taking away one of my fighters when he was under contract”. Later in evidence he accepted again, that he had been highly critical of Sports Network and Frank Warren, but claimed that it wasn’t a “long damning”.
178. In evidence Stephen Collins claimed that if this attack had succeeded in preventing Sports Network from bidding or being accepted it would have ruined everything for him and deprived him of the £1.2 million purse. Barry Hearn claims on the other hand that he could not prevent Sports Network from bidding or being accepted and that the attack was a futile exercise.
179. Once again I think this is not the whole truth. Barry Hearn acknowledges that he attended the purse bid ceremony as manager of Chris Eubank and Stephen Collins. It is accepted generally that a fighter’s “pay-day” comes if and when he wins a title which establishes him as a champion entitled to 75% (or 80%) of the purse involved in defending his title for as long as he remains champion. I cannot see how his manager, with an acknowledged obligation to do his best to achieve optimum earnings for his fighter, can justifiably attend a purse bid ceremony and launch an attack on the credibility of this substantial bidder and even go as far as suggesting that he should not be allowed to bid.
180. I do not consider that Barry Hearn spent his time engaged in exercises which he can subsequently describe as futile. He has asked me to accept that the attack on Frank Warren and Sports Network was futile. If so, why did he travel to New York in order to launch it? He has asked me to accept that the Valcarcel correspondence means something completely and wholly different to what it plainly and repeatedly says. In both instances my impression is that Barry Hearn was engaged in an attack on and an attempt to damage his rival Frank Warren and Sports Network and that he permitted himself in so doing to endanger the fundamental interests of his fighter Steve Collins, whether this was his primary objective or merely an ancillary by-product. Whatever the entire truth of the matter, I am satisfied that the attack made by Barry Hearn on Frank Warren and Sports Network at the purse bid ceremony in New York on the 29th May, 1995 constituted a fundamental breach of his obligations to Steve Collins because it was diametrically opposed to his acknowledged obligation to achieve the best possible financial outcome for Steve Collins. I do not accept that this attack was futile and the fact that it did not succeed in preventing Sports Network from bidding and being accepted as a bidder does not, to my mind, mean that the attack itself may now be regarded as innocent or excusable. On the contrary, in my view, it was a fundamental breach of Barry Hearn’s obligation to Stephen Collins. It follows that no management fees could become owing to the Plaintiffs arising out of the Collins/Eubank re-match.
THE REQUEST FOR DIRECT PAYMENT
181. Following the purse bid, Barry Hearn approached Mr Roberts of Sports Network and requested him to pay the 25% management fee direct to him. Again he claims that this was not seriously meant and he admits that he had no entitlement to be paid direct. I am not prepared to hold that this particular request of itself was a fundamental breach of agreement, but it does have another significance; namely, it is consistent only with the view that Barry Hearn at that time regarded himself – as indeed he has said in evidence – as the manager of Stephen Collins. If a distinction is to be made between what Mr Hearn at any particular point in time considered to be his legal obligation to Stephen Collins on the one hand, and on the other what actually as a matter of law was the true position, – a matter to which I will return later in this judgment – it is instructive to note that Barry Hearn considered himself manager to Stephen Collins when he attended at the purse bid ceremony on the 29th May and also during the entire period of the Valcarcel correspondence which commenced on the 7th June and concluded on the 26th.
MANAGER OF OPPONENTS
182. A further allegation of fundamental breach was made on the general basis that Barry Hearn should not have continued as manager of Chris Eubank and indeed should not have continued as manager of Chris Pyatt and that so to do amounted to a fundamental breach of agreement. As already indicated I do not accept these contentions. My view of the two contracts namely the management agreement of the 9th May, 1994 and the manuscript agreement of 15th January, 1995 is that they were entered into by the contracting parties upon the basis that Barry Hearn was manager of both the challenger and the title holder in each case and that this was accepted by the challenger namely Stephen Collins. That seems to me to be the common sense interpretation of the agreements themselves and it is also the basis advanced on behalf of Barry Hearn and accepted by Stephen Collins in evidence. He repeatedly said that all he wanted from Barry Hearn was a fair deal and equal treatment. I therefore reject the general argument that Barry Hearn under these agreements was required to retire as manager of the title holder and that by remaining as manager he is in fundamental breach of those agreements.
ALLEGATION OF REPUDIATORY BREACH AGAINST STEPHEN COLLINS
183. I will deal with this topic later in my judgment when I come to deal with Stephen collins’ own behaviour.
FURTHER LEGAL CONSIDERATIONS
THE LETTER OF 6th JUNE 1995
184. The text of that letter is as follows:
“I have now had the opportunity to consider, in detail, the terms and conditions under which you previously agreed to act in relation to my boxing activities.
In this regard it is of great concern to me that you have obviously chosen to disregard your obligations to me and have engaged in activities which clearly demonstrate your continuing intention to pursue your own independent interests (and those of others with whom you are engaged by contract or agreement).
In these circumstances I note your breach of our previous agreement and accordingly please take this letter as formal notice of termination (which I send by registered post). Please note that any future correspondence or communication that you or your associates intend to make to me should be directed through my solicitors.”
185. The Plaintiffs have contended that this letter is not an attempt to operate clause 6 of the agreement. If it had been it would have formally given thirty days notice. It does not. The main thrust of the letter, to my mind, asserts a breach by Barry Hearn of the agreement and whilst this is not specified in the letter, I have held that there was a fundamental breach on the 29th May and equally a fundamental breach in the Valcarcel correspondence commencing on the 6th June. The thrust of the letter of the 6th June is more consistent, in my view, with an acceptance by Stephen Collins of the fact that Barry Hearn has repudiated their agreement than it is with an attempt to implement clause 6 thereof.
186. This interpretation is re-enforced by Stephen Collins’ own evidence on day twenty-one (page 13) of the transcript of the trial when he said:-
“I requested my solicitor to inform Barry Hearn I wanted to regularise the whole situation and tell him officially, in case he was in any doubt, that I was no longer requesting him to be engaged with me in any way at all, because he had breached our previous agreement of contract… I know I did not tell him until the 6th June; so therefore he would be still under the impression that he was my manager. So if he was under the impression or was acting on my behalf as my manager, for him to go to the purse bids on the 29th May supposedly being my manager for the person who supposedly being my manger for my manager to go to those purse bids to try to prevent the biggest or best purse bid being accepted which would have been the best possible – ….him saying he was under the impression he was my manager so if my manager is going to go to the purse bid and say do not let Frank Warren purse bid because I do not like, whatever he does not like about him, he was preventing me from earning the biggest pay day available to me. That is a definite breach of a contract by a guy who says he believed he was acting on my behalf as a manager.”
187. The foregoing is an extract only of a long answer in the course of which, it should be noted, Stephen Collins also referred to the nobbling of the referee. I have held that on the evidence I am not satisfied to hold that the nobbling occurred. If it had I would certainly also have held that that was a fundamental breach. The fact remains that Stephen Collins gave evidence in this passage and elsewhere that in writing the letter of 6th June he relied on Barry Hearn’s behaviour at the purse bid ceremony and also on the fact that he was attempting to strip him of his title which he was aware of through the rumour mill (albeit that proof only subsequently came to hand).
188. In my view three alleged fundamental breaches of contract were operating in the mind of Stephen Collins when he wrote the letter of 6th June, 1995. First, Barry Hearn’s behaviour at the purse bid ceremony which pre-dated the letter of the 6th June, was known to Stephen Collins, and was part of the reason why he wrote the letter accepting the repudiation. Second, the “nobbling” was also operating in the mind of Stephen Collins when he wrote that letter but I have rejected the evidence in relation to that so clearly it would not justify an acceptance of a repudiation on that ground. Third, the “Valcarcel correspondence” breach was rumoured, prior to the 6th June, and this rumour was relied upon by Stephen Collins in writing his letter of 6th June. There was no proof that it actually happened until the 7th June. My understanding of the law in relation to fundamental breaches of contract, however, is that any fundamental breach can be relied upon as supporting a plea made at any time that the party in fundamental breach has himself put an end to the contract by repudiating it. I do not understand this to depend on the timing of the letter of 6th June in the present case. Be that as it may, my view is that Stephen Collins by his letter of 6th June accepted the repudiation of the contract by Barry Hearn and was entitled so to do because of the fundamental breach at the purse bid ceremony on the 29th May. This acceptance was made known to Barry Hearn on date of receipt which was 9th June, 1995.
189. In addition to this finding, however, and if contrary to my foregoing conclusion, a management contract between Barry Hearn and Stephen Collins was in existence during the period of the Valcarcel correspondence namely between 7th June and 26th June, 1995, then in my view Barry Hearn was thereby in fundamental breach of any such agreement and Stephen Collins is entitled to make a successful plea that Barry Hearn himself put an end to the contract by the fundamental breach amounting to repudiation thereof in that correspondence.
THE FRANK WARREN PROMOTION OFFER
190. The complaint in this regard is in a somewhat different category to ‘fundamental breach’. Complaint is made by Stephen Collins that Barry Hearn was in breach of the manuscript agreement in the way he handled an offer which originally came through Barney Eastwood in September 1994. The promotion would have been a fight against Sean Cummins with a purse of £100,000. Subsequently this was amended to a purse of £80,000 with £20,000 worth of tickets. Initially Barry Hearn was interested and indicated it was worth following up but subsequently it emerged that the offer was not from Barney Eastwood himself but was made on behalf of Frank Warren and Sports Network. Stephen Collins said that as soon as this became apparent Barry Hearn lost all interest and advised him to reject the promotion and there are letters in the correspondence indicating this and also asserting that Barry Hearn was Stephen Collins’ manager and any approaches should be made to Barry Hearn.
191. Barry Hearn’s explanation for this advice was two fold. At one point he indicated that he thought the promotion might have clashed with the Hong Kong venue. In fact the Hong Kong venue was in late October whereas this promotion was initially suggested for September. At another point Barry Hearn indicated that the offer was untrustworthy, that it had changed and that there was no guarantee that the promoter would deliver.
192. This particular episode was not relied upon by Stephen Collins as a fundamental breach and probably correctly so because following this Stephen Collins participated in the Hong Kong promotion and subsequently the proposed Boston bout and of course in the New Year he signed the agreement dated the 15th January, 1995 which was followed by the bout agreement of the 17th February. Furthermore this particular head of complaint was not dealt with in any great depth in the evidence and accordingly, I do not think it would be proper for me to make any ruling as to whether Mr. Hearn’s handling of this promotional offer amounted to a fundamental breach or any breach. I would note, however, that if I had been satisfied after full and adequate testing in this hearing that there had been a failure on the part of Barry Hearn to follow up the potentially advantageous promotional offer for a Stephen Collins’ bout without adequate excuse or explanation and without subsequent acquiescence on the part of Stephen Collins, I would have held that this too was a fundamental breach. I consider – and I think both parties agree – that the core obligation of a manager is to procure the best financial advantage for his fighter and any substantial breach of that obligation would in my view constitute a fundamental breach of the management agreement.
THE EVIDENCE IN THE ENGLISH PROCEEDINGS
193. I turn now to deal with a submission on behalf of Barry Hearn to the effect that these serious allegations are unreliable because they were not mentioned in paragraph 29 of Mr. Delahunt’s affidavit of the 23rd August, 1995 which purports to set out “the principal breaches” alleged against Barry Hearn on the instructions of Stephen Collins who at that time was in America training for the Collins/Eubank rematch which was due to be held (and was held) in Pairc Ui Cuiv, Cork on the 9th September.
194. It is submitted that this shows that the reasons now relied upon as breaches were not relied upon on the earlier occasion and that this evidence should be treated with caution. I have considered this submission and given appropriate weight to it.
195. I would point out, in this context, that the affidavit of Brian Delahunt was apparently prepared upon the understanding that the true legal position was that the management agreement expired by efflux of time on the 11th May, 1995. Paragraph 29 of
196. Mr. Delahunt’s affidavit concludes by referring to the relatively trivial alleged breaches of agreement (none of which are now relied upon as fundamental) referred to earlier in the paragraph with the following averment:-
“Stephen Collins informs me and I verily believe that this led to a break-down in the trust and confidence which he reposed in the Plaintiff as his manager. This was the reason why Stephen Collins did not extend the agreement with the Plaintiff.”
197. Paragraph 29 purports to deal with “breaches of the management agreement of 9th May, 1994” and proceeds upon the basis that that agreement ceased to have effect on the
11th May, 1995. Many of the breaches asserted in these proceedings preceded the 11th May, 1995 but of the fundamental breaches only that relating to the nobbling of the referee did so. I have given weight, therefore, to the submission that it is anomalous that no reference is made to this alleged nobbling in paragraph 29 of Mr. Delahunt’s affidavit. Mr. Collins’ explanation of this was that he had been advised by his lawyers not to “take on” Barry Hearn at this stage because he was still powerful with the WBO and in boxing circles and he had been further advised that as the English proceedings were concerned with jurisdiction there was sufficient material in the breaches referred to in paragraph 29 to succeed on that point and in the result that advice had proved correct.
198. Whilst the English proceedings did in fact succeed on the jurisdictional point I do not accept that they were concerned exclusively with jurisdiction and indeed paragraph 29 purports to set out the “principal breaches” then alleged against Barry Hearn. I find it difficult to accept that Stephen Collins was advised as he now says or that he correctly understood whatever advice was given him. The new promotion agreement between his company and Frank Warren is dated the 5th September, 1995 and I assume that at the end of August when Mr. Delahunt’s affidavit was sworn he was in active negotiation with Frank Warren. Nor does this submission become irrelevant merely because I have rejected the evidence in relation to the nobbling approach. This allegation was strenuously pursued in these proceedings and I have accepted Mr. Collins’ evidence that in April of 1995 he was made aware of it. It is indeed strange, therefore, that no mention is made of it in paragraph 29 of Mr. Delahunt’s affidavit and I do not think that this has been explained in a completely satisfactory way.
199. Be that as it may, it is clear and accepted by Barry Hearn that he did indeed attack Frank Warren/Sports Network at the purse bid ceremony and I have held that this was a fundamental breach involving repudiation which was accepted by Stephen Collins in his letter of 6th June, 1995. I am also satisfied that the Valcarcel correspondence of that month was a fundamental breach. The fact that they are not mentioned in paragraph 29 of Mr. Delahunt’s affidavit of 23rd August, 1995 (when clearly they could have been) does not alter the fact of their existence or the legal implications which flow from it. Notwithstanding the reservations which I have expressed in relation to paragraph 29 of Mr. Delahunt’s affidavit, I am satisfied that Stephen Collins was overall a reliable and truthful witness and in general I accept his evidence. The one noteworthy exception to this to which I should refer is his claim that Barry Hearn had procured the false testimony of the other witnesses who gave evidence for the Plaintiff. I do not accept that this was so and I think I made that clear at the trial. However, this does not alter my view of Stephen Collins’ evidence generally.
STEPHEN COLLINS’ OWN BEHAVIOUR
200. I deal now with a submission made on behalf of Barry Hearn that Stephen Collins had himself rendered the management agreement impossible of performance since the 18th March, 1995. He had not gone back to train in Romford since the Millstreet bout, was well nigh impossible to contact despite frequent attempts so to do by Barry Hearn and he acknowledged in cross-examination that he wanted nothing more to do with Barry Hearn after the Millstreet fight and that this remained his attitude in the months of March, April, May and June.
201. It is a matter of common sense, I think, that Stephen Collins cannot complain of a failure on the part of Barry Hearn to provide services for him which he did not want and which he effectively prevented.
202. The submission that Stephen Collins had himself repudiated the agreement must, however, be seen in the light of the following evidence in relation to the attendance by Barry Hearn as Stephen Collins’ manager, at the Purse Bid ceremony in New York on 29th May, 1995 for the Collins/Eubank re-match.
203. Barry Hearn agrees that he went to the purse bid ceremony in New York on the 29th May as manager of Stephen Collins. Furthermore Stephen Collins accepted that if Barry Hearn had been the successful bidder then he would have accepted the promotion of the Eubank rematch under the promotion of Barry Hearn. In this regard, therefore, I hold that Stephen Collins did not make it impossible for Barry Hearn to attend in his capacity as his manager at the purse bid ceremony. I think a distinction has to be drawn, furthermore, between a failure to deliver a service and an active attempt at sabotage. In my view Barry Hearn attempted to undermine the efficacy of the purse bid by attacking the credibility of Frank Warren/Sports Network and this is something which cannot be explained or excused by the argument that Stephen Collins was preventing him generally from carrying out his duties. Plainly Barry Hearn was not prevented from attending on behalf of Stephen Collins at the Purse-Bid ceremony in New York on 29th May. His conduct thereat was a fundamental breach by him amounting to a repudiation of the management agreement, as indeed was the subsequent “Valcarcel” correspondence.
204. I consider that Barry Hearn’s repudiation of the management agreement was accepted by Stephen Collins in his letter of 6th June, 1995. Furthermore I hold that no management services entitling Barry Hearn to a fee were provided after the 18th March, 1995 and specifically that Barry Hearn is not entitled to a fee in connection with the Collins/Eubank re-match for reasons already given.
205. In light of the foregoing I find that the Plaintiffs are not entitled to any relief and I must dismiss their claims.
Bushell Interiors Ltd v Liecht Kuchen AG
[2014] IEHC 3
JUDGMENT of Mr. Justice Michael Moriarty delivered on the 14th day of January, 2014
1. This matter comes before the court by way of the defendant’s Notice of Motion seeking to set aside the within proceedings for want of jurisdiction, pursuant to Order 12 Rule 16 of the Rules of the Superior Courts ,1986, as amended.
2. The plaintiff is a limited company, having its registered office in the State. The defendant is a corporation with a registered office at Grounder Strasse, 70 D- 73550 Valdstetten, Germany.
3. In these proceedings, the plaintiff seeks damages for alleged breach of contract and interference with its economic interests. Furthermore, the plaintiff seeks compensation pursuant to Art. 17(3) of Council Directive 86/653/EEC of 181h December, 1986, on the Co-Ordination of the Laws of Member States related to Self- Employed Commercial agents, which was implemented in Irish law by way of the European Communities (Commercial Agents) Regulations, 1994 (S.I. 33 of 1994) and the European Communities (Commercial Agents) Regulations, 1997 (S.I. 31 of 1997) (taken together, “the Commercial Agents Regulations”).
4. The parties were engaged in a commercial relationship from around September of 2008, whereby the plaintiff supplied the defendant with what are described in the pleadings as “high end kitchens” for further distribution. The plaintiff submits that the relationship between the parties went beyond that of supplier and purchaser, and that it acted as agent for the defendant in this jurisdiction. The plaintiff claims, in support of this contention, that it had been listed on the defendant’s website as a dealer and that it was referred to by the defendant in inter partes correspondence as a “highly qualified Leicht Master Dealer”. It is common case, however, that any agency agreement between the parties was not reduced to writing at any point.
Legal Issues Arising
5. The defendant submits on various grounds that this court lacks the jurisdiction to adjudicate upon this matter. These submissions broadly centre around whether Clause 14 of the plaintiffs General Terms of Sale, Delivery and Payment (“Clause 14”) is binding upon the defendant, having regard to the provisions of Article 23 of Regulation 44/2001, and in the alternative that the defendant is not a commercial agent.
6. In response, the plaintiff submits that Clause 14 applied only to the “particular legal relationship” as between the parties pursuant to the contract for sale, delivery and payment, and not to the purported relationship of principal and agent.
Council Regulation No. 44/2001
7. There is broad consensus between the parties as to the articles of Council Regulation No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I”) that are relevant to this application. Article 2 (1) sets out the well established general rule that:
“Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.”
8. However, Article 5.sets out certain exceptions to the general rule, upon which the plaintiff seeks to rely:-
“A person domiciled in a Member State may, in another Member State, be sued:
1. (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;
(b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be:
– in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered
– in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided,
(c) if subparagraph (b) does not apply then subparagraph (a) applies; …
5. as regards a dispute arising out of the operations of a branch, agency or other establishment, in the courts for the place in which the branch, agency or other establishment is situated”.
9. Article 23 of Brussels I (regarding “Prorogation of Jurisdiction”) provides the following:-
“1. If the parties, one or more of whom is domiciled in a Member State, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either:
(a) in writing or evidenced in writing; or
(b) in a form which accords with practices which the parties have established between themselves; or
(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.
2. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to “writing”.
3. Where such an agreement is concluded by parties, none of whom is domiciled in a Member State, the courts of other Member States shall have no jurisdiction over their disputes unless the court or courts chosen have declined jurisdiction.
4. The court or courts of a Member State on which a trust instrument has conferred jurisdiction shall have exclusive jurisdiction in any proceedings brought against a settlor, trustee or beneficiary, if relations between these persons or their rights or obligations under the trust are involved
5. Agreements or provisions of a trust instrument conferring jurisdiction shall have no legal force if they are contrary to Articles I3, I7 or 2I, or if the courts whose jurisdiction they purport to exclude have exclusive jurisdiction by virtue of Article 22. “
10. The plaintiff argues that, pursuant to Articles 5(1) and 5(5), the Courts of this jurisdiction are the appropriate forum to deal with this dispute, while the defendant submits that, notwithstanding these provisions, Clause 14 sets out a binding prorogation of jurisdiction for the purposes of Article 23.
Interpretation and Effects of Clause 14
11. Clause 14 provides, inter alia, the following:-
“Place where a Contract is to be fulfilled- Venue- Validity of Laws
1. For all disputes arising from business relations, directly or indirectly, including payment problems with bills of exchange, acceptance or cheques, the involved parties agree, as merchants to the exclusive jurisdiction of the courts in Schwabisch Gmund. Moreover, the plaintiff is also entitled to sue/bring an action at the defendant’s headquarters.
2. German law is exclusively valid for all sales and deliveries and all legally founded relations. The Vienna UN Agreement on contracts for international sales/purchase of goods of April II, I980 cannot be applied.
3. Place of fulfilment of all mutual obligations is the head office of our company in Waldstetten.”
12. At the commencement of their business relationship, on 12th September, 2008, the defendant wrote to the plaintiff setting out buying, payment and delivery terms, stating:-
“Thank you for your recent orders for the supply of a showroom display kitchen and an end customer’s kitchen. We now write to confirm the trading terms agreed and enclose a copy of our Terms and Conditions of Sale.”
13. A further letter was furnished on 1Oth March, 2009, setting out renewed trading terms and stating:-
“This supersedes and invalidates all previous Typelists and Agreements. Our Terms and Conditions of Sale remain unchanged”
14. In McCabe Builders (Dublin) Limited v. Sagamu Developments Limited [2011] 3 IR 480 at p. 492, Fennelly J. stated:-
“I agree with the statement in Contract Law, by Paul A. MacDermott (Butterworths, Dublin, (2001)) at p. 171, that in ‘commercial arrangements it will be presumed that the parties intended to create legally binding contracts’. Lord Wright said in Hi/las & Co. Ltd v. Arcos Ltd (1932) 147 LT 503 at p. 514:-
‘Business men often record the most important agreements in crude and summary fashion; modes of expression sufficient and clear to them in the course of their business may appear to those unfamiliar with the business far from complete or precise. It is accordingly the duty of the court to construe such documents fairly and broadly, without being too astute or subtle in finding defects; but, on the contrary, the court should seek to apply the old maxim of English law, verba ita sunt intelligenda ut res magis valeat quam pereat. That maxim, however, does not mean that the Court is to make a contract for the parties, or to go outside the words they have used, except in so far as there are appropriate implications of law … ‘
In other words, the courts should seek to give effect to the apparent intentions of parties to enter into binding contracts. It is clear that the parties to the present proceedings intended that their relationship would be governed by a formal legal contract. The question is what the terms of the contract are. “
15. In the case of Clare Taverns v. Gill [2000] 1 IR 286 at p. 295, McGuinness J. considered the incorporation of a forum clause in circumstances where it had formed part of the general terms and conditions printed on the reverse side of an invoice:-
“In the submissions made before this Court, it was not seriously suggested that the practice of printing general conditions of sale on the reverse side of invoices and similar documents, with a reference on the face of the document to the said conditions, was not a common commercial practice in the type of international trade with which we are concerned here. Indeed, from the point of view of practical experience every ordinary consumer, and still more anyone engaged in trade or commerce, must be familiar with this type of document.
In the instant case the defendant had regularly traded with the first third party both from 1987 to 1989 and subsequently from 1995 onwards. It is established by the affidavit of Mr. Dodd and the exhibits thereto that the defendant had repeatedly received invoices, which included clause 19, the jurisdictional clause. At no stage had the defendant even raised a query in regard to this clause. Still less had he refused to be bound by it. It seems to me, therefore, that the contract entered into by the defendant and the first third party, whether it be a written contract or a contract partly in writing and partly oral, incorporated the terms and conditions set out repeatedly on the invoices sent out by the first third party in the course of trade. In these circumstances the Court must hold that there was consensus between the parties as to the jurisdictional clause … “
16. In Leo Laboratories Ltd. v. Crompton BV [2005] 2 I.R. 235, Fennelly J. approved the foregoing dictum of McGuinness J, stating at p. 235:-
“[T}he defendant’s acceptance of the plaintiffs order contained reference to the ‘general terms and conditions of sale and delivery as stated on the back hereof’. Counsel for the plaintiff stated, at the hearing of the appeal, that the plaintiff had not seen the conditions before their production in court. They were, nonetheless, before the High Court. O’Higgins J. dealt specifically with the contention that these terms did not form part of the contract between the parties. He decided that they did. He referred to the High Court judgment of McGuinness J. in Clare Taverns v. Gill [2000} I I.R. 286. He held that the plaintiff ‘knew or should have known [of these terms] and are attached with the knowledge of the terms of the contract’.
I fully agree with this conclusion of O’Higgins J. It is well established that it is for the national court to determine the terms of the contract. I so stated in my judgment, delivered in this court with which the other members of the court agreed, in Bio-Medical Research Ltd. v. Delatex S.A. [2000} 4 I.R. 307. I relied on the decision of the European Court of Justice in Leathertex v. Bodetex (Case C-420-97) [1999} E.C.R. I-6747.
17. In the context of the consideration of the effect of Article 23 of Brussels I, Fennelly J. held in O’Connor v. Masterwood [2009] IESC 49 (Unreported, Supreme Court, I st July, 2009) at para 19:-
“It would be to overlook the obvious, if the court were to ignore the admitted signature of the first named plaintiff on a set of printed conditions containing a clear and express jurisdiction clause. It may well be that the first-named plaintiff paid little attention to the terms of printed conditions. That is commonplace. However, people engaged in trade, certainly in international trade, must be taken to be aware that printed conditions contain clauses which can affect their rights. They choose to ignore them at their peril. That is why Article 23, section 1, subparagraph (c) refers to practices of which parties ‘ought to have been aware. ‘”
18. Therefore, it is abundantly clear that the parties are bound by the provisions of Clause 14, certainly insofar as it relates to the contracts for sale and delivery of kitchen units. A broader question arises, however, as to whether a separate legal relationship subsisted between the parties, beyond that governed by the General Terms of Sale Delivery and Payment.
19. The plaintiff urges upon the court to hold that the Clause 14 should not be taken as applying to the entirety of the trading relationship between the parties, but only to the contracts for sale of kitchen units. It is submitted by the plaintiff that the words “in relation to a particular legal relationship” should be strictly construed as limiting the application of Clause 14 to the General Terms of Sale Delivery and Payment
20. In support of this submission, the plaintiff relies upon Biomedical Research v. Delatex [2000] 4 IR 307. In that case, the parties had entered into a distribution arrangement whereby the French-based defendant company distributed products furnished by the Irish-based plaintiff. The plaintiff’s terms and conditions of sale, endorsed on its invoices, contained a “Governing Law” clause, prorogating jurisdiction to the courts of Ireland. Fennelly J considered that this clause could not be interpreted as modifying or affecting the distribution agreement, stating at page 319:-
“None of them contains any reference to distribution, exclusive or otherwise, or even to the fact that the goods are being sold for resale in France. They have all the appearance of standard conditions regarding the sale of goods and nothing more. It would require a very strained interpretation to apply them to the question of the exclusivity of an agreement for distribution of goods sold in another member state of the European Union. This is, as agreed, a matter of Irish law. … I do not think that the common sense approach recommended in those cases at all requires that the condition be interpreted as requested by the plaintiff”
21. Referring to the application of article 5 of the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988 (No.3), which had given effect to the 1968 Brussels Convention in this jurisdiction and is identical insofar as relevant to article 5 of Brussels I, Fennelly J stated at page 315:-
“Before reaching a conclusion on this point, I should refer briefly to the relationship, as it has been described by the Court of Justice and by this court, between the general principle of jurisdiction based on domicile of the defendant and the cases of special jurisdiction laid down in article 5. Section 4 of the Act of 1988 requires the Court to take judicial notice of ‘any ruling or decision of, or expression of opinion by, the European Court’ in the matter.
In Handbridge Ltd. v. British Aerospace Communications Ltd. [1993] 3 I R. 342, at p. 358, Finlay C.J, delivering the unanimous judgment of the Supreme Court held that the
‘onus is on the plaintiff who seeks to have his claim tried in the jurisdiction of a contracting state other than the contracting state in which the defendant is domiciled to establish that such claim unequivocally comes within the relevant exception. ‘
The cases of special jurisdiction constitute, nonetheless important independent bases of jurisdiction. The derogations were introduced:-
‘in view of the existence in certain well-defined cases of a particularly close relationship between a dispute and the court which may be called upon to take cognisance of the matter, with a view to the effective organisation of the proceedings.'”
22. The plaintiff seeks to impute from the defendant’s use in its letter of 12th September, 2008, of the phrase, “We now write to confirm the trading terms agreed and enclose a copy of our terms and conditions of sale” and in its letter of 10th March, 2009 of the words, “This supersedes and invalidates all previous Typelists and Agreements. Our Terms and Conditions of Sale remain unchanged”, the existence of separate “trading terms” as distinct from the terms and conditions of sale.
23. I am of the view that the plaintiff’s submission in this regard is unsustainable. A plain reading of the terms of Clause 14, states that it applies to “disputes arising from business relations, directly or indirectly”. The plaintiff has not sought to contest the efficacy of the clause, merely to suggest that its application should be limited. However, the plain and unambiguous language of the clause simply does not permit such an interpretation.
24. Having regard to the trading terms letters, I find that the interpretation that is proposed by the plaintiff is likewise unsustainable and flies in the face of business common sense. The letters were in the first instance furnished alongside a copy of the General Terms of Sale Delivery and Payment, and subsequently explicitly affirmed the latter’s applicability. It is clear on the evidence before me that the letters and the terms must be read in conjunction and represent the totality of the agreement between the parties. In assessing the dealings between the parties in this regard, I am fortified in the view I have taken by the robust words of Steyn LJ in Continental Bank NA v. Aeokos Cia Naviera SA [1994] 2 All ER 540, as approved by McGuinness J in Clare Taverns v. Gill, already referred to.
25. Furthermore, I am not satisfied that the plaintiff has discharged the onus upon it to demonstrate to this court that business common sense and the effective organisation of proceedings require that this court should assume jurisdiction pursuant to article 5 of Brussels I.
Application of the Commercial Agents Regulations
26. Given my findings in relation to the application of Clause 14, it is not necessary to embark upon a detailed analysis of whether a relationship of principal and agent could be said to have existed between the parties for the purposes of the Commercial Agents Regulations. However, for completeness, I propose to briefly consider the position as it appears to me.
27. Regulation 4 of S.I. 33 of 1994 states:-
“The agency contract shall not be valid unless it is evidenced in writing.”
28. It is common case that no written agreement was entered into between the parties appointing the plaintiff as agent of the defendant. The plaintiff submits that, notwithstanding this fact, the purported agreement is adequately evidenced by way of the “Trading Terms letters” furnished by the defendant to it on a regular basis, as adverted to supra.
29. Even taking this argument at its height, there is nothing in the trading terms letter that evidences or that may allow the court to infer the existence of an agency agreement between the parties, nor has any documentary evidence been produced that may entitle the court to make such a finding. I am therefore of the view that the purported agency contract, would be invalid for the purposes of the Commercial Agents Regulations as not having been adequately evidenced in writing. However, I must also add that it seems to me that there is no evidence before the court of such a contract having been entered into as between the parties.
Conclusion
30. In summary, in my judgment Clause 14 is binding upon the parties, representing an effective prorogation of jurisdiction for the purposes of article 13 of Brussels I. The clause is stated to govern, “disputes arising from business relations, directly or indirectly”. On any reasonable interpretation, this clause is couched in sufficiently broad terms so as to encompass the entirety of the business relations between the parties. Furthermore, insofar as it was necessary to consider the point for the purposes of adjudicating upon this application, I am not convinced that the plaintiff has made out a stateable case that it was the agent of the defendant for the purposes of Commercial Agents Regulations.
31. In any event, notwithstanding foregoing considerations, I am not satisfied that the plaintiff has discharged the onus upon it to demonstrate that article 5 of Brussels I should apply in this case.
32. Accordingly, I will grant the defendant’s application and order that these proceedings be dismissed for want of jurisdiction, pursuant to Order 12, Rule 26 of the Rules of the Superior Courts, 1986 (as amended).
Ward v. Spivack Ltd
[1957] IR 40
Davitt P.
I must confess I have no great affection for cases of this type. They are often difficult and the evidence frequently vague and conflicting with the witnesses on either side testifying to conversations which took place years ago without any contemporary record of what was said.
The first thing to decide is what was the nature of the contract in each case. Was it a contract of employment? Did it create the relationship of master and servant or did the parties contract as two independent principals? One of the marks of the relationship of master and servant is the existence of control by the master over the servant as regards the doing of his work, whereas if one of the parties who does work for the other is free to do it how, when, and in what way he likes he is hardly a servant.
In this case the plaintiffs both maintain that they were agents and not employees. Mr. Spivack maintained that they were his employees. The facts seem to be that both Fagan and Ward were not engaged whole-time in work for Spivack; each had to buy a car out of his own resources for the purpose of his work; each discharged all expenses; they were free to do their work as they liked or thought best. They could plan their trips and their routes. They were not in any sense under the dictation of Mr. Spivack. I come to the conclusion that in each case the relationship created was not that of master and servant. It is significant that in Ward’s case he carried on his work from his own business premises in Essex Street. The distinction between an employee and an independent agent is also important in that the employee is usually remunerated by wages or salary only; he exchanges his labour for his pay and the fruits of his labour belong to his employer. It can be otherwise with an agent.
The next matter to be determined is what were the terms of each contract. In Fagan’s case there is a controversy as to the terms. The gist of Fagan’s version is that Spivack told him:”You are getting into a good thing. After the trip you will have commission on orders and repeat orders, and on the business that comes in just the same as if you booked them yourself.” Spivack’s version of the conversation after the preliminary trip was:”The plaintiff mentioned commission and I said ‘Six per cent.’ He said, ‘Will that be all mine?’ I said, ‘Yes.’ He asked, ‘Will I get that on all orders?’ I said, ‘Yes, on all orders you bring in from your territory.’ “At a later stage Spivack said:”I can’t say what was said but it was understood that he was to get 6 per cent on Hardy’s round on any orders he secured from Hardy’s former territory. It was to be paid on all orders brought in by him or coming in by post from that territory while in my employment.”I am not satisfied that the qualification, “While in my employment,” was ever mentioned. What was to happen as regards commission if the agency was terminated was, I believe, never discussed. It was a contingency with which they did not deal. Should a term then be implied with regard to it. The test is, I think, as I suggested to Mr. Wood during the hearing. Let us envisage the parties at the moment they have agreed on the expressed terms of their contract. Then imagine one of them saying, with regard to the term sought to be implied:”Of course such and such is understood?” If the probability is that the other would say, “Of course!”, then the term may be implied. If the probability is that he would say, “Certainly not, I will agree to nothing of the kind,” then clearly the term cannot be implied no matter how desirable or reasonable it may seem, as the Court cannot make a contract for the parties; it can only determine what they agreed on,either expressly or impliedly. Let us apply the test here. If after the terms already mentioned had been agreed on Fagan had said:”Of course, it is understood that in the event of my ceasing to be your agent commission will still continue to be payable to me and after my death to my executors on all business subsequently done with any customer in my territory whether introduced by me or not,” I am quite sure that Spivack would have said, “Certainly not; I am not going to agree on commission being paid on that basis.” I must also look at it the other way round. If Spivack had said:”Of course, it is understood that in the event of your agency coming to an end you will cease to draw any commission except on orders still to be completed; and I will continue to reap the benefit of your work and receive orders from customers introduced by you without paying you anything,” I cannot imagine Fagan entering into the contract at all.
Another way of looking at the matter is this. Consider the ordinary case of a house agent whom I employ to secure a purchaser to buy my house at a certain price. The agent produces a purchaser who is suitable and willing to pay their price, and a deal is made. I am not entitled to terminate his agency before concluding the deal so as to deprive him of his commission which he has earned.
I do therefore hold that I should imply a term to the effect that if Fagan’s agency were determined he would be entitled to draw continuing commission on all orders from customers which had been introduced by him. In Ward’s case I come to similar conclusions of fact and imply the same term in his contract. In his case there was no conflict of evidence as regards the express terms.
In each case, therefore, there will be a declaration that the plaintiff is entitled to continuing commission on any business to be done by the defendant with any customer first introduced to the defendant by him. I will also direct an account to be taken in accordance with the terms of the declaration in each case.
From this judgment the defendants appealed to the Supreme Court (1).
d
Supreme Court.
MAGUIRE C.J. :
23 June 1955
Although these two cases differ in certain respects the main issue raised for our consideration is the same in both.
Both plaintiffs were appointed as sole agent within a defined area for the sales on a commission basis of the products of the defendant Company. The plaintiff, Daniel Ward, was allotted as his area the City and County of Dublin; while the plaintiff, James Fagan, was allotted the other twenty-five counties of the Republic. By the terms of their respective contracts, which were not in writing, each was to receive a commission of 6 per cent on all orders, with certain specified exceptions, received by the defendant Company from customers in their respective areas, no matter how these customers were introduced.
The defendant Company having terminated these agencies, the question for decision was whether they were entitled to continue to receive commission thereafter.
The President of the High Court has held that the relationship between the plaintiffs and the defendant Company was not that of master and servant. He found that when the contracts were being made “what was to happen if the agency was terminated was not discussed. It was a contingency which they did not deal with.” The plaintiff, Daniel Ward, accepts this finding. The plaintiff, James Fagan, contended that the words used should be construed as an agreement that commission was to continue to be paid notwithstanding the determination of his agency. I am unable to accept this contention. The question accordingly in both cases arises whether a term should be implied to this effect in the contract. Each plaintiff’s claim, as pleaded and put forward in the High Court, was that a term should be implied which would give him the right to continue to receive commission on all orders from customers in his area who did business with the defendant Company during the period of his agency. The President, while not accepting this contention that a term so wide should be read into the contracts, has held that a term should be implied that commission was to continue to be paid, limited, however, to orders from customers introduced by the plaintiffs. He stated the test, which he considered should be applied, in the following terms:”Let us envisage the parties at the moment they have agreed on the expressed terms of their contract. Then imagine one of them saying, with regard to the term sought to be implied:’Of course such and such is understood?’ If the probability is that the other would say:’Of course,’ then the term may be implied. If the probability is that
he would say:’Certainly not, I will agree to nothing of the kind,’ then clearly the term cannot be implied no matter how desirable or reasonable it may seem, as the Court cannot make a contract for the parties; it can only determine what they agreed on, either expressly or impliedly.”
Applying this test he says that he is quite sure that Spivack would not have agreed to commission being paid on the wide basis originally claimed by both parties and still claimed by Mr. Fagan. On the other hand he took the view that if Spivack had said that it was understood that in the event of the agency coming to an end no further commission would be paid, save on orders still to be completed, he, the President, could not imagine either of the plaintiffs entering into the contracts at all.
The President went on to say that another way of looking at it was to compare the contracts with the ordinary case of a house agent employed to secure a purchaser to buy a house at a certain price. The agent secures a purchaser willing to pay the price and a deal is made. It is clear, the President says, that the vendor in such a case would not be entitled to terminate the agency before concluding the deal. This reasoning led him to hold that he should imply a term that if the agency of the plaintiffs was determined they would be entitled to continue to draw commission on all orders from customers who had been introduced by them. As already stated, Mr. Ward is satisfied with this. Mr. Fagan, however, asks this Court to imply the wide term embodied in his statement of claim.
Although stating that he was satisfied with the order of the President, Mr. Heavey advanced an argument which seems inconsistent with this attitude. He contended thatprima facie an agreement de futuro is unlimited in point of time and that the burden of showing that it was not intended to be perpetual was on the party who alleges it not to be so. In support of this proposition he cited the case of Llanelly Railway and Dock Co. v. London and North Western Railway Co. (1). The agreement in that case was that the defendant company was to have running powers over the plaintiff company’s lines. There was no mention in the agreement of any time for which it was to endure. It was held that all the provisions of the agreement showed that it was a permanent and not a terminable oneLord Cairns in his speech finds evidence of the non-terminable nature of the agreement in its terms. He points out, however, that the case bore no analogy to the case of hiring and service and contract of partnership. With regard to these contracts he says, at p. 559, that”. . . the law is well settled . . . assigning to each of them certain notices by which they can be terminated; and they are, besides, engagements which depend upon the personal confidence which one of the parties reposes in the other, and which in their nature cannot be supposed to be of a perpetual character.” His opinion that the agreement under consideration was perpetual was arrived at “upon the nature of the agreement itself, and upon the construction of that agreement as we find it expressed” and that it was entered into in the circumstances of that case.
Lord Selborne, upon whose opinion much reliance was placed, having stated the proposition put forward by Mr. Heavey, says, at p. 567:”In the present case, the character of perpetuity attaches both to the legal personality of each of the contracting parties, and to the legal character and use of the subject-matter, the railway.”
None of these characteristics are present in these cases. Even if the rule applied the character of the parties, the nature of the subject-matter and the personal relationship between the parties as well as the terms of the contract would suffice to discharge the onus on the defendants of showing that the contracts were not intended to be perpetual.
I turn to the question which would appear to be the only one argued in the High Court, whether a term should be implied in these contracts that on being determined a commission was to continue to be paid either on the basis originally claimed by both plaintiffs and still contended for by Mr. Fagan or on the narrower basis decided by the President.
It is settled law that a term may be implied in a contract to repair what Cheshire and Fifoot, (3rd ed., 1952, at p. 127) calls “an intrinsic failure of expression.” Where there has been such a failure the judge may supply the further terms which will implement their (the parties) presumed intention and in a hallowed phrase give “business efficacy”to the contract. “In doing this he purports at least to do merely what the parties would have done themselves had they thought of the matter. The existence of this judicial power was asserted and justified in The Moorcock(1).”In that case Bowen L.J. explained the nature of the implication in all the cases; he says where they were implied “the law is raising an implication from the presumed intention of the parties, with the object of giving to the transaction such efficacy as both parties must have intended that at all events it should have.” The test to be applied by the Court has been stated by several judges in much the same language: see Scrutton L.J., in Reigate v. Union Manufacturing Co. (Ramsbottom) (1); and MacKinnon L.J. in Shirlaw v.Southern Foundries (1926), Ltd. (2).
It will be seen from the language used in so stating the tests that something more is required than the probabilityof which the President speaks that the parties must have agreed to the term to be implied had the matter been mentioned. There must be something approaching certainty or as put by Jenkins L.J. in Sethia (1944) Ltd. v.Partabmull Rameshwar (3) it must be “clear beyond a peradventure that both parties intended a given term to operate, although they did not include it in so many words.”
Can it be said with the degree of confidence required that the parties must, had the matter been raised, have agreed to the continuance of commission on the basis contended for by Mr. Fagan? The President came unhesitatingly to the conclusion that it cannot be so said. With this I am in complete agreement. Whatever view one might take had the agency only related to orders obtained from customers introduced by the plaintiffs the fact that the contract was to pay commission on all orders with the exceptions mentioned suggests that Mr. Spivack was quite unlikely on behalf of his Company to agree to the continuance of commission beyond the period of the agency. What had happened with regard to Mr. Hardy supports this view strongly. Furthermore although it might have been a reasonable thing for Mr. Spivack to have agreed to continue to pay commission on orders from customers introduced by the plaintiffs at least for some time after the termination of the agency I am quite unable to hold as the President does that had the matter been raised Mr. Spivack must have agreed. To read such a term into the contract would in my view not be to make clear the intention of the parties unexpressed at the time but would be to make a new contract.
I have been authorised by the other members of the Court to say that they agree with the foregoing judgment.