IMAGEVIEW MANAGEMENT LTD V JACK

[2009] EWCA Civ 63, Court of Appeal, Lord Justice Mummery, Lord Justice Dyson and Lord Justice Jacob, 13 February 2009

Agency – Secret contract entered into between agent and third party leading to profit for agent – Whether principal entitled to recover all sums paid to agent – Whether principal entitled to recover the price paid to the agent for the secret contract

J, a footballer, appointed IML to act as his agent for the purpose of negotiating a transfer to a UK football club. It was agreed that IML would, if successful, receive 10 per cent of J’s monthly salary for two years. IML arranged a contract with Dundee. There was a separate agreement between IML and Dundee that ILM would obtain a work permit for J, for a fee of £3,000. That contract was not disclosed to J. About a year later J discovered the contract, and stopped paying agency fees. IML brought the present action for its fees, and J counterclaimed for sums paid to IML as well as the fee for the work permit or at least the profit made by IML on the contract, some £2,250. The Court of Appeal held that: (1) IML was in breach of its duty of fidelity by not disclosing the contract; (2) J was discharged from the duty of having to pay future agency fees, and was entitled to repayment of the fees paid by him; (3) J was entitled to recover the entire £3,000 without having to make any allowance for the work actually done.