Winlink Marketing Ltd v The Liverpool Football Club & Athletic Grounds Ltd

A commission agreement may require the introduction to be an effective cause of the transaction, even where the agreement contains no express effective-cause clause. The court must first construe the express terms. If they do not resolve the issue, an effective-cause term may be implied where it is necessary for commercial or practical coherence and does not contradict the agreement. In construing an undefined contractual period, the court may derive its meaning from the agreement as a whole, including termination and anti-avoidance provisions. A mere introduction is insufficient: the intermediary must show that its services brought about the transaction in the relevant commercial context.

Winlink Marketing Ltd claimed £1.125 million commission from Liverpool Football Club under an introduction agreement concerning sponsorship opportunities. Winlink introduced BetVictor representatives to Liverpool in December 2013. BetVictor later entered into a substantially different training-kit sponsorship agreement with Liverpool in May 2016.

Liverpool argued that the agreement was concluded outside the “Introduction Period” and that Winlink was not an effective cause of the 2016 transaction. The issues were the construction of the Introduction Period, whether an effective-cause requirement formed part of the agreement, and whether Winlink satisfied that requirement.

1. Construction of the Introduction Period. The phrase “entered into during the Introduction Period” was poorly drafted and undefined. Reading the agreement as a whole, including clauses 7, 8 and 9, it referred to a sponsorship agreement entered into before termination, or after termination where the relevant client had been introduced before termination. Clause 9.2 operated as an anti-avoidance provision preserving the commission clause after termination. Clause 2.2.2 did not define the period.
2. Effective cause. Applying the ordinary principles governing construction and implication of terms, the agreement required Winlink’s introduction to be an effective cause of the relevant contract. The non-exclusive appointment, the recitals, the definition of Introduction, the commission clause and the post-termination protection were consistent with that conclusion. The alternative construction would expose Liverpool to commission for a transaction having no causal connection with the introduction and potentially to double commission.
3. Alternatively, if the agreement did not contain that requirement as a matter of construction, an effective-cause term would be implied. Without it, the agreement lacked commercial or practical coherence. The term was necessary to give the agreement business efficacy and was not inconsistent with any express provision.
4. Application. The relevant inquiry was whether Winlink brought about the transaction, bearing in mind that an introduction may be no more than a causa sine qua non. The 2016 sponsorship was qualitatively and commercially different from the opportunities discussed in 2013–15. The transaction arose principally from the longstanding relationship between BetVictor’s chief executive and Liverpool’s employee, together with the commercial value of the proposal. Winlink’s 2013 introduction did not cause the transaction.
5. The claim was dismissed.

First-instance judgment of the High Court (Commercial Court). No appellate history was stated in the judgment.