Sports Network Ltd v Calzaghe

An alleged oral agreement to promote future sporting events must be proved on the evidence, viewed in its commercial and documentary context. A party sharing profits cannot ordinarily deduct a loss caused solely by its own breach of an unrelated contract, particularly where the other party neither knew of nor participated in that contract. Legitimate promotional expenses may be deducted where the agreement permits the implication of reasonable and proper deductions. Where an English-law contract contains no express or implied payment currency, damages should be awarded in the currency that best expresses the claimant’s loss.

Sports Network Ltd claimed that Joe Calzaghe had agreed orally to allow it to promote all his future bouts on agreed profit-sharing terms. Calzaghe accepted an agreement concerning the Bernard Hopkins bout but denied any agreement extending beyond it. Sports Network claimed damages after Calzaghe arranged a later bout with Roy Jones Jr and sought to set off those damages against sums due to him. Calzaghe counterclaimed for his unpaid share of the Hopkins profits. The issues were whether the alleged future-promotions agreement existed, what deductions were permissible, and the appropriate currency and timing of payment.

1. Claim for breach of promotional agreement. The claim was dismissed. The court accepted the contemporaneous attendance note of the 15 January 2008 meeting and found that the parties agreed only the financial terms for the Hopkins bout. The claimant failed to prove any agreement that it would promote the defendant’s future bouts. The absence of any written record was particularly significant because every earlier promotional arrangement had been recorded in writing and the alleged agreement had substantial commercial value.
2. Profit deductions. The claimant could not deduct US$1 million from the defendant’s share. The reduction arose from the claimant’s own breach of its ticket agreement with Planet Hollywood, of which the defendant had no knowledge and to which he was not party. The agreement could support an implication permitting reasonable and legitimate promotional expenses, but not a loss unrelated to the parties’ agreement and caused solely by the claimant’s breach.
3. The claimant was entitled to deduct US$171,000 as a legitimate promotional expense. The precise sum due on the counterclaim was left for counsel to agree.
4. Currency and payment. Applying the principle in The Despina [1979] A.C. 685, judgment was to be given in the currency that best expressed the defendant’s loss. There was no express or implied term requiring payment in US dollars. The defendant’s loss was best expressed in pounds sterling. Payment was due within a reasonable time after the claimant received its profit tranches; the court fixed 6 June 2008 as the payment date and, absent contrary evidence, the date from which interest would run.
5. The allegation of breach of fiduciary duty was adjourned and was not investigated unless the claimant failed to satisfy the judgment.

Not stated in the judgment.