Proactive Sports Management Ltd v Rooney & Ors

An agent may remain entitled to commission after termination where the contract makes procurement of the relevant transaction the event earning commission. The right does not depend on continuing services unless the agreement so provides.

The restraint of trade doctrine may protect an ancillary commercial activity, including exploitation of image rights. A sole agency attracts the doctrine where unusual or exorbitant features make its restrictions reasonably capable of oppressive enforcement. Once a restrained party withdraws from an unreasonable agreement, contractual remuneration cannot be enforced; the provider is confined to restitution, and the contractual rate is not binding when valuing its services.

A sports agency managed the exploitation of a footballer’s image rights under an exclusive eight-year representation agreement. After the relationship ended, the agency claimed commission on receipts from endorsement contracts which it had procured. The footballer’s image-rights company contended that the agreement was unenforceable as an unreasonable restraint of trade.

HHJ Hegarty QC held in [2010] EWHC 1807 (QB) that the agreement was unenforceable, that its commission clause did not extend to post-termination receipts, and that the agency’s remedy was a quantum meruit to be assessed later. He separately found an implied, non-exclusive agreement concerning Mrs Rooney’s image rights, but denied commission on receipts after that relationship ended.

The appeal concerned contractual construction, restraint of trade, accrued contractual remuneration, valuation in restitution and the terms implied from the parties’ conduct.

1. Appeal allowed in part. Clause 6.2 made procurement of a qualifying endorsement contract the event which earned commission. The word “payable” determined when commission became due and contained no limitation to sums payable during the agency. Commission therefore extended to post-termination receipts under contracts procured before termination: paras [37]–[51].
2. The image-rights agreement nevertheless attracted the restraint of trade doctrine. Exploitation of image rights was an economic activity capable of protection even if ancillary to professional football. The eight-year exclusive term, practical inability to terminate, absence of independent advice, inequality of bargaining power and untapered commission had to be considered together. They took the agreement outside the normal commercial category and made its restrictions capable of oppressive enforcement: paras [92]–[106]. Gross LJ agreed, emphasising that sole agencies are generally outside the doctrine only while they contain no special or exorbitant feature: paras [143]–[157].
3. The judge’s evaluative conclusion was not clearly wrong. Proactive did not challenge the further finding that the restrictions had not been justified as reasonable. The agreement was consequently unenforceable: paras [105]–[106], [141]–[142] and [157].
4. Once Stoneygate withdrew from the agreement, Proactive could not enforce either accrued or future contractual commission. The remuneration obligation was inseparable from the restrained agreement. Proactive’s remedy was restitution for a quantum meruit: paras [107]–[118].
5. The contractual commission rate did not bind the court when valuing the services. Because the evidence did not establish a uniform market rate and material evidential gaps remained, the judge was entitled to direct a later assessment. Proactive was directed to seek a case conference within 28 days: paras [119]–[124].
6. The implied agreement with Mrs Rooney’s company followed the essential commission pattern of the written agreement. It therefore entitled Proactive to 20% commission on all receipts from contracts which it had procured, including post-termination receipts: paras [133]–[135]. Sullivan LJ and Gross LJ agreed with Arden LJ’s disposition and answers to all five issues: paras [138]–[140].

1. Court of Appeal (Civil Division): In [2011] EWCA Civ 1444, the court unanimously allowed the appeal in part. It reversed the construction of the commission provisions and the finding concerning post-termination commission under the implied agreement with Speed, but upheld the restraint of trade, unenforceability and quantum meruit rulings.
2. High Court, Queen’s Bench Division, Manchester District Registry, Mercantile Court: In [2010] EWHC 1807 (QB), HHJ Hegarty QC held that the image-rights agreement was an unreasonable restraint of trade, denied contractual enforcement, directed later assessment of restitutionary remuneration, and determined the parties’ commission rights.