Tigana Ltd. v Decoro Ltd.

Under the Commercial Agents (Council Directive) Regulations 1993, “termination” includes expiry of a fixed-term agency contract by effluxion of time. Regulation 17 may therefore apply where the principal declines to renew the contract.

Compensation under Regulation 17 is not confined to the circumstances in Regulation 17(7)(a) and (b). There is no mandatory two-year tariff based on French law or practice. The court must assess compensation by a broad but reasoned evaluation of the circumstances, including the agency’s duration, its terms, the value retained by the principal, the agent’s lost benefits, and payments under Regulation 8(a).

Tigana acted as Decoro’s sales representative for leather furniture in the United Kingdom and Eire under a one-year agreement dated 1 January 1999. The agreement expired on 31 December 1999 and was not renewed.

Tigana claimed unpaid contractual commission, post-termination commission under Regulation 8(a), and compensation under Regulation 17. Decoro admitted unpaid commission but disputed the statutory claims. Its counterclaim alleging breach concerning compliance with UK fire-safety requirements was abandoned before trial.

The remaining issues were the amount of post-termination commission under Regulation 8(a), whether Regulation 17 applied after expiry by effluxion of time, and the amount of any compensation.

1. Regulation 8(a). A transaction is concluded when the relevant order is placed. “Mainly attributable” requires a causative link between the agent’s efforts and the conclusion of the transaction. The inquiry is one of judgment and assessment, not discretion, and depends on the circumstances of each case.
2. The requirements in Regulation 8(a) are cumulative. Orders placed during 2000, except those from new customers introduced after October 2000, were mainly attributable to the claimant’s earlier introductions. A reasonable period after termination was nine months. Decoro was therefore liable for commission under Regulation 8(a), in an amount to be assessed, subject to a minimum of $606,836.64.
3. Regulation 17 and expiry by effluxion of time. In context, “termination” in Regulation 17 includes the coming to an end of a fixed-term contract by expiry. This interpretation is supported by Regulations 8, 19 and 20, by the protective purpose of the Directive, and by the absence of any reason to exclude non-renewed fixed-term contracts. A reference to the European Court of Justice was unnecessary.
4. Assessment of compensation. Regulation 17(7) identifies circumstances in which damage is deemed to occur, but does not exhaust the circumstances in which compensation may be awarded. The compensation provisions do not apply ordinary common-law mitigation principles. The court must adopt a broad but reasoned “balance sheet” approach, considering factors such as the duration and nature of the agency, its exclusivity, the customer base and repeat business, benefits retained by the principal, post-termination restrictions, payments under Regulation 8, the manner of termination, and relevant breach.
5. French law and practice may illuminate the Directive’s background or serve as a comparator, but they do not impose a two-year tariff on an English court applying English law. Compensation may be assessed by reference to gross or net remuneration, depending on the circumstances. Here, a 20 per cent deduction for expenses was appropriate. Compensation was assessed at $452,346.
6. Decoro was ordered to pay $350,000 contractual commission, post-termination commission under Regulation 8(a) to be assessed, and $452,346 compensation under Regulation 17. Further directions concerning interest and costs were reserved.

First-instance decision. The judgment itself does not state any prior appellate decision in this litigation.