Proactive Sports Management Ltd v Rooney and Others [2011] EWCA Civ 1444
Restraint of trade, image-rights agency agreements and commission after termination.
Facts
Wayne Rooney assigned his image rights to Stoneygate 48 Ltd. In 2003, when he was 17, Stoneygate appointed Proactive Sports Management as its exclusive representative for an eight-year term. Proactive was to negotiate endorsement and other commercial opportunities, receiving 20% of the gross sums payable under contracts it procured.
The arrangement was commercially successful, but the relationship broke down and Stoneygate moved to another agent. It purported to terminate the agreement in December 2009, and Proactive accepted that as a repudiatory breach. Proactive claimed unpaid commission, including commission on income falling due after termination under endorsement contracts it had already negotiated.
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Proactive had also represented Coleen Rooney and her company, Speed 9849 Ltd. There was no signed representation agreement with them, but Speed had paid commission at 20%. Their relationship with Proactive also ended, creating a separate dispute about continuing commission.
At trial, the judge held that Stoneygate’s agreement was an unreasonable restraint of trade and unenforceable. Proactive could seek reasonable remuneration for services already supplied, but could not enforce the contractual commission provisions. The judge also rejected its claim to post-termination commission from Speed. Proactive appealed.
Issues
The appeal raised distinct questions: what the commission clause meant; whether the restraint-of-trade doctrine applied to the exploitation of image rights; whether accrued commission could nevertheless be enforced; how reasonable remuneration should be assessed; and what commission terms could be inferred from Speed’s conduct.
Decision and reasoning
The Court of Appeal allowed the appeal in part. Arden LJ gave the principal judgment, Sullivan LJ agreed, and Gross LJ added reasons on restraint of trade.
The meaning of the commission clause
Proactive succeeded on interpretation. Procuring an endorsement contract was the event that earned its right to commission. Payment did not depend on Proactive continuing to provide services throughout that endorsement contract’s life. The clause contained no restriction confining commission to sums becoming payable before the agency ended.
This interpretation did not itself make the clause enforceable. The court had to address the separate restraint-of-trade objection.
Why the agreement required justification
The court rejected the argument that image-rights exploitation fell outside the doctrine because Rooney’s principal occupation was football. An ancillary earning activity could also be protected. Nor was the agreement exempt merely because it enabled him to earn substantial income.
The terms and circumstances had to be considered together. The unusually long eight-year exclusive tie covered a substantial part of his likely playing career; early termination was practically difficult; and the flat commission did not reduce as income increased. Rooney and his family lacked commercial experience and independent legal advice, and the terms had effectively been dictated by Proactive. These features took the agreement outside an ordinary commercial agency arrangement requiring no justification.
The issue was assessed when the agreement was made. Its later profitability did not establish that the original restrictions were acceptable. Proactive did not challenge on appeal the trial judge’s separate conclusion that the restrictions had not been shown to be reasonable. Its challenge to the restraint-of-trade ruling therefore failed. The court did not hold that all exclusive agency agreements, or a 20% commission rate by itself, were objectionable.
Unpaid commission and reasonable remuneration
Proactive could not enforce unpaid contractual commission against Stoneygate merely because it had already performed the relevant services. Once Stoneygate withdrew from the unenforceable agreement, its unperformed obligation to pay commission could not be enforced in contract.
Proactive retained a claim in restitution for a quantum meruit: reasonable payment for services supplied for which it had not already been remunerated. The contractual 20% rate was not binding in that assessment. The evidence did not establish an applicable uniform market rate, and further evidence was needed. The court upheld the decision to leave valuation to a later hearing.
The different result for Speed
Speed’s agreement, inferred from the parties’ conduct, was non-exclusive and had no fixed eight-year term. The same restraint-of-trade objection did not arise. The judge had found that its essential commission arrangements followed the pattern of Stoneygate’s agreement: similar services in return for 20% commission.
It followed that Proactive’s right was triggered by procuring the endorsement contracts. Speed therefore owed commission on receipts from those contracts even after the agency relationship ended. This was a separate contractual entitlement, unlike the restitutionary claim against Stoneygate. The appeal’s partial success reflected that distinction.
