Concourse Initiatives Ltd v Maiden Outddoor Advertising Ltd

An agent’s commission may extend beyond ordinary fees where the contract includes directly related other revenue. Revenue is directly related where it forms part of the consideration for the grant of exhibition or distribution rights. The agent need not have acted in the separate advertising business.

An agency continued after its original fixed term where the parties’ conduct showed that intention. Termination on reasonable notice need not be in writing unless the contract requires it. The appropriate notice period depends on the circumstances, including the relationship’s duration, the agent’s dependence on the agency and the parties’ contractual arrangements.

Concourse had acted as Maiden’s exclusive agent for exhibition and distribution business at railway stations. It claimed unpaid commission on advertising commitments made by Associated Newspapers as part of agreements granting newspaper distribution rights, commission on a later buy-out payment, commission on payments connected with Scotrail distribution rights, and damages for wrongful termination.

The central issues were the construction of the Agency Agreement, the effect of its continuation after its stated term, the validity and length of notice, and the assessment of damages for the lost opportunity to continue acting as agent.

1. Commission on advertising commitments. The advertising commitments in the Side Letter and the Second and Third ANL Contracts formed part of the consideration for the grant of distribution rights. They therefore constituted directly related other revenue under clause 8 of the Agency Agreement. The relevant question was the objective construction of the agreements in their factual context, not the parties’ subjective intentions.
2. Clause 8 was primarily directed to exhibition and distribution revenues, but the words directly related other revenue deliberately widened its scope. Revenue was directly related where it was received as consideration, or part consideration, for granting exhibition or distribution rights. Advertising revenue obtained independently of such a grant would not qualify.
3. Under clause 18, sums received after termination in respect of future business booked before termination remained commissionable. The Buy-Out Agreement discharged ANL’s obligations under the Third ANL Contract. The payment to Maiden was therefore commissionable future-business revenue.
4. Continuation and termination. The Agency Agreement continued after its five-year term by the parties’ conduct. It did not automatically expire when the related Railtrack agreements ended, and no such term could be implied. The continuing agency was terminable on reasonable notice, but the implied notice did not have to be in writing.
5. Applying the clear-notice approach in Mannai Investment Co. Ltd v Eagle Star Life Assurance Co. Ltd [1997] AC 749, the first effective notice was given orally on 28 July 2004. Six months was reasonable, having regard to the agency’s duration, Concourse’s dependence on it, the express three-month termination provision for unsatisfactory performance, staffing obligations and the parties’ experience of handovers. Maiden’s notice ending the agency on 30 September 2004 was therefore wrongful.
6. Damages. There was a real or substantial chance that Railtrack would have permitted Maiden to continue subcontracting work to Concourse. Applying Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602, that chance was assessed at 75 per cent. Damages were calculated on the contractual commission split for the unexpired part of the reasonable notice period.
7. Payments made by ANL in connection with its approach to Scotrail were connected with the marketing of distribution rights for which Concourse was the exclusive agent. Concourse was entitled to commission, but at the agreed 50 per cent rate.
8. Judgment was entered for Concourse for £1,187,206, together with damages for wrongful termination calculated by applying the 75 per cent chance assessment to the balance of the six-month notice period. Further orders were left for argument.