McGann v Bisping

A contractual commission may be calculated on gross income where tax is withheld at source, if the contractual scheme treats the withheld sum as payment made for the fighter’s benefit. A discretionary benefit, such as a car supplied because of participation in a contracted programme, may constitute an in-kind contribution even if it was not contractually guaranteed. Commission provisions may also apply to income received by companies used by the contracting party to provide his services.

However, recoverable expenses must fall within the contract, be properly proved, and have been approved in advance. Procedural points raised only at trial may be refused where both parties have prepared and incurred costs on an opposing assumption.

The claimant had managed the defendant, a mixed martial arts fighter, under a Management Agreement said to have been signed in 2005. He claimed unpaid commission on overseas earnings, Range Rover vehicles supplied after television appearances, income received through companies associated with the defendant, and training-camp expenses. He also sought an account.

The defendant disputed the agreement, the authenticity of documents supporting the expenses, the commission entitlement, the duration of the relationship and the sums claimed. He counterclaimed for accounts. The court determined the contractual and procedural issues and ordered judgment for specified commission sums, dismissal of the expenses claim, and mutual accounting and inquiry.

1. Procedural applications. The defendant’s failure to serve a notice under CPR 32.19 ordinarily deemed the disclosed documents authentic. Applying the approach in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 and Denton v TH White Ltd [2014] EWCA Civ 906, the court dispensed with the notice because the default was neither serious nor significant, was inadvertent, and both parties had prepared for trial on the basis that authenticity remained in issue. The late objection to the defendant’s factual evidence was likewise rejected as inconsistent with effective case management and the overriding objective.
2. Contract and commission. The Management Agreement was proved. “Income received” ordinarily meant income actually paid, rather than merely earned. But where Zuffa paid the gross contractual amount partly to the defendant and partly to tax authorities for his benefit, the defendant received the gross amount for commission purposes. The defendant therefore owed commission on the gross overseas earnings.
3. The Range Rovers were in-kind contributions. Although discretionary gifts, they resulted from the defendant’s contracts to participate as a coach in the relevant television series and therefore fell within clause 2.1.1 and the definition in clause 2.2.
4. The commission entitlement was not avoided by payment through MBL or RMI. On the proper construction of the Management Agreement, income generated by the defendant’s activities and paid to companies he used for tax or other purposes remained within the commission provisions. Alternatively, that result would follow from an implied term meeting the strict criteria stated in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72.
5. The training-expense claim failed. Clause 2.8 covered extraordinary expenses only where they were properly chargeable, incurred by the claimant, and approved by the defendant in advance. The supporting letters, invoices and records were recent fabrications or otherwise unreliable. The claimant failed to prove the fact, amount, contractual character and prior approval of the individual expenses.
6. The alleged 2007 and 2010 settlements were not proved. The May 2011 email effectively prevented automatic renewal because clause 8.1 prescribed a permissible method of service, not an exclusive one. A temporary trial arrangement followed in June 2011 at 15% commission, but no unconditional three-year renewal was agreed. The Management Agreement’s term therefore ended on 21 July 2011, with the three-year post-term commission provision operating thereafter.
7. The defendant’s complaints did not amount to repudiatory breach. The court applied the substantial-deprivation test in Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26. The claimant’s failure to attend the later fight fell below the expected standard but would not, if necessary, have amounted to repudiation.
8. The claimant was entitled to specific commission sums and contractual interest on the accurately invoiced Miller-fight commission. His expenses claim was dismissed. The court ordered an account of monies received and paid under the Management Agreement and an inquiry into earnings and commission, followed by determination of any net balance. The court made no immediate costs order and indicated that the claimant’s litigation conduct might justify denying him recovery of his costs.

First-instance decision of the High Court (Commercial Court). The judgment records earlier transfers between county and mercantile courts but no prior merits judgment.