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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> McGann v Bisping [2017] EWHC 2951 (Comm) (15 December 2017)
URL: http://www.bailii.org/ew/cases/EWHC/Comm/2017/2951.html
Cite as: [2017] EWHC 2951 (Comm)
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Neutral Citation Number: [2017] EWHC 2951 (Comm)
Claim No: LM-2014-000190
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
THE LONDON CIRCUIT COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Date: Friday 15 December 2017
BEFORE:
MR RICHARD SALTER QC
Sitting as a Deputy Judge of the High Court
BETWEEN:
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ANTHONY MCGANN
Claimant
- and -
MICHAEL BISPING
Defendant
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Mr Nigel Lawrence QC and Ms Victoria Roberts (instructed by Couchmans LLP) appeared for the Claimant
Mr Gabriel Buttimore (instructed by Faradays Solicitors) appeared for the Defendant
Hearing dates: 26, 27, 28 April, 2, 3, 4, 8, 10, 15, 16, 17 May 2017
- - - - - - - - - - - - - - - - - - - - -
Judgment Approved
MR SALTER QC:
Introduction
3. Mr Bisping denies that any further monies are owed by way of commission. In particular:
3.1 He denies that any commission is payable on sums deducted at source by the US and Australian tax authorities
3.2 He denies that any commission is payable to Mr McGann on the value of two Range Rover motorcars which Mr Bisping received from Zuffa LLC (“Zuffa”) following his appearances in the reality television series The Ultimate Fighter (“TUF”), on the basis that those cars were a gift.
3.3 He denies that any commission is payable to Mr McGann on monies received by Michael Bisping Limited and/or Royal MMA Inc.
3.4 He denies that Mr McGann has any contractual right to commission following the ending of their relationship in May or July 2011
The course of the hearing
7. The action was originally listed for trial in March 2015 before HH Judge Mackie QC. However, on 26 February 2015 HH Judge Mackie vacated that trial date and adjourned the matter to come on not before 1 October 2015, on the grounds of what he described as “a deplorable failure by [Mr Bisping] regarding disclosure”, resulting in the case being in “a state of disarray”. HH Judge Mackie gave directions for mediation and/or a without prejudice meeting between the parties and their respective solicitors “with a view to seeing what steps can be taken to settle the case or at least narrow the issues in dispute between the parties”. Regrettably, no settlement was achieved, and the action was then re-listed for trial before HHJ Waksman QC on Monday 5 October 2015. Unfortunately, Mr McGann was injured in a road accident shortly beforehand, and that trial date also had to be vacated.
CPR 32.19
2. The Claimant relies on [the Management Agreement]. In this respect:
(a) no admissions are made as to whether the [Management Agreement] was signed by the Defendant and the Claimant is required to prove this;
(b) at all material times the Defendant understood that he was managed not by the [Claimant] personally, but by Wolfslair Promotions Ltd .. with which company the Defendant believes he signed a management agreement in or around May 2005. The Claimant is accordingly put to strict proof that the Claimant is the proper claimant for any management fees ..
It has therefore been plain since April 2013, on the face of the Statements of Case, that the authenticity of the Management Agreement was in issue, and was a matter which Mr Bisping required Mr McGann to prove.
7A. .. It is not admitted that the Management Agreement was signed by the Defendant and it is also not admitted that the Management Agreement in the form relied upon was presented to the Defendant for signing and accordingly it is not admitted that any of the acts relied upon amount to acceptance of the offer said to be contained in the Management Agreement by conduct ..
17. CPR 32.19 provides as follows:
Notice to admit or produce documents
(1) A party shall be deemed to admit the authenticity of a document disclosed to him under Part 31 (disclosure and inspection of documents) unless he serves notice that he wishes the document to be proved at trial.
(2) A notice to prove a document must be served:
(a) by the latest date for serving witness statements; or
(b) within 7 days of disclosure of the document, whichever is later.
18. Unlike its predecessor, RSC Ord 27 r 4[1], CPR 32.19 contains no proviso dis-applying the rule in the case of any document “the authenticity of which the party has denied in his pleading”. Nor does it expressly say that the rule applies only “unless the Court otherwise orders”. I accept the submission of Mr Lawrence that this is a mandatory provision, the purpose of which is to ensure that the parties and the court know, beyond question, whether the authenticity of any given document is a matter in dispute. Merely putting the other party to proof in a Statement of Case of the authenticity of a document does not satisfy the requirements of the rule: see Mumford v HMRC[2]. Nor are those requirements satisfied simply by a challenge made in a witness statement. Such a challenge would, in any event, be likely to come after the date specified in CPR 32.19 for the giving of notice, and so be too late for the issue to be dealt with satisfactorily in the witness statements of the other party.
21. The logic of Mr Lawrence’s submissions cannot be faulted. However, in my judgment, the justice of the present case requires a different result. Applying the three-stage approach laid down in Mitchell v News Group Newspapers Ltd[3], as explained in Denton v TH White Ltd[4]:
21.1 I must first consider the seriousness and significance of Mr Bisping’s failure to give the required notice. In my judgment, it was neither serious nor significant, on the particular (and perhaps unusual) facts of the present case. Mr McGann and his advisers were not misled by the failure, nor did the failure had any material effect on the orderly progress of the action. The parties, very sensibly, treated the pleading in paragraph 2 of the Defence as a sufficient indication that the authenticity of the Management Agreement was in dispute, and shaped their evidence on that basis in accordance with the timetable laid down by the court. They acted similarly in relation to the invoices and other documents relating to expenses, when these were eventually disclosed.
21.2 I must then consider why the default occurred. It seems to me to be plain that it occurred because of ignorance of the rule (an ignorance apparently shared by Mr McGann’s legal team, at least until the instruction of Mr Lawrence and Ms Roberts) rather than because of any deliberate default.
21.3 Finally, I must consider all the circumstances of the case, giving particular weight (in accordance with the guidance given in Denton[5]) to the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and orders.
23. CPR 1.3 requires the parties to help the court to further the overriding objective. As the Court of Appeal stated in Denton[6]: “Litigation cannot be conducted efficiently and at proportionate cost without .. cooperation between the parties and their lawyers”. That is particularly so in the Commercial Court (of which The London Mercantile Court forms part) where, as is stated in paragraph A1.6 of The Admiralty and Commercial Courts Guide “The Court expects a high level of co-operation and realism from the legal representatives of the parties”.
24. There is, of course, no general duty on parties to point out to their opponents the procedural mistakes that those opponents have made. However, where a party intends to take a procedural point which, if correct, will mean that costs are being wasted by the other side, the duty of cooperation under CPR 1.3 requires that party to take the point promptly. On the facts of the present case, the high level of realism and co-operation required of parties to commercial litigation should have involved Mr McGann’s legal team in giving notice of this point (if it was to be taken at all), either in correspondence or at one of the many case management hearings which took place, at a time well before the significant costs of dealing with these issues had already been incurred on both sides.
The August 2014 Order
(b) The Defendant must fully comply with all further orders of the Court hearing, including this Order. In the event of his failing to comply with any paragraph of this Order or any further order of the Court, he may make an application for relief but such application shall be made to HH Judge Mackie QC ..
In the event of the Defendant failing to comply with any of these conditions (and subject to any order for relief pursuant to an application under sub- paragraph (b) above), the Defendant shall not be entitled to rely on any witness evidence of fact at trial.
39. Mr Buttimore’s response, for Mr Bisping, was that Judge Waksman had already determined that there had, at least by 1 October 2015, been substantial compliance with all relevant Orders that had been made, and that it was not possible for Mr McGann now to seek to re-open that finding before me. The various Orders made by Judge Mackie and Judge Waksman after the August 2014 Order had impliedly superseded the sanctions provided in the August 2014 Order: and the parties and the court had proceeded on that basis. This was shown, inter alia, by the fact that Mr McGann’s 24 September 2015 applications sought only a declaration that the Re-Amended Defence and Counterclaim stood struck out, and made no reference to Mr Bisping being debarred from relying upon witness evidence. Had Mr McGann wished to rely upon this point, he should have raised them, and his attempt to do so now is primâ facie an abuse[7]. It was also shown by the fact that Mr Graeme McPherson QC’s 53-page Written Opening Submission for the trial listed to begin on 5 October 2015 assumed that there would be factual evidence called behalf of Mr Bisping. In any event, it would be just to grant Mr Bisping relief from sanctions, for the reasons set out in the fourth witness statement of Mr Symeou.
40. As with the submissions made by Mr Lawrence in relation to CPR 32.19, the logic of Ms Roberts’ submissions cannot be faulted. As the Court of Appeal explained in Marcan Shipping (London) Ltd v Kefalas[8], the sanction prescribed in an Order takes effect automatically as a result of a failure to comply with its terms. Unless the party in default has applied for a relief, or the court itself decides for some exceptional reason that it should act of its own initiative, the question whether the sanction ought to apply does not require a judicial determination[9].
42. I think that Mr Buttimore probably put his case too high in saying that this further application is strictly an abuse on Henderson v Henderson[10] principles. However, the issue of whether Mr Bisping was entitled to call any evidence of fact was (for all the reasons explained in paragraphs 23 and 24 above) plainly a matter which, in the interests of effective case management, ought to have been raised at the hearing on 1 October 2015 (if not at the hearing on 2 September 2015, or even earlier), and which should not have been left to be dealt with at the outset of the trial before me. It would be contrary to the Overriding Objective to permit such a fundamental objection to the basis upon which both parties have prepared for trial to be raised so belatedly, in the absence of any evidence giving a reasonable explanation as to why the point was not raised earlier. For that further reason, also, it seems to me that this application by Mr McGann must fail.
Mr McGann’s own disclosure
44. As I have said, Mr Bisping’s approach to his disclosure obligations was highly unsatisfactory: but there was also a strikingly unsatisfactory aspect to Mr McGann’s disclosure.
46.1 The letter was dated 1 July 2006 and stated “please find attached invoice of camp expenses including flights, hotels, per diems etc. Also included UK camp expenses. As agreed expense payment will lie on file and will be settled at a later date, when you are more financially comfortable”.
46.2 Immediately behind that letter was a “Training Camp Expense Invoice”, also dated 1 July 2006 with columns for “Flights US”, “Hotels”, “P/D”, “Taxi”, “Flights UK”, and “Timesheets”. The amounts in these columns totalled £32,397.
46.3 Immediately behind that was a page ruled in columns with numbered rows, as if from a ledger or account book, which had been filled in in manuscript. This was headed “Client: Michael Bisping”, “Subject: UFC TUF Finale”, “Prepared by A McGann Date April”, “Reviewed by [blank space] Date: July 2006”. This page provided a breakdown of the figures in the Invoice, including a list of “Time Sheet Totals”.
46.4 Immediately behind that were 4 printed “Employee TimeSheet” forms, again filled in in manuscript. The printed columns, which were headed “Date”, “Start Time”, “End Time”, “Regular Hours”, “Overtime Hours” and “Total Hours”, had all been completed, apparently week by week, in manuscript. At the bottom was a printed certificate that “these hours are a true and accurate record of all time worked during the pay period”, followed by a “Supervisor Signature” from Mr McGann, “Date: 30th June 06”.
46.5 The final document was an undated receipt signed by Francisco Netto.
I invoiced [Mr Bisping] for camp expenses after each fight. .. Records of all training camp expenses were kept in various files and ledgers in the office at the Wolfslair gym. I used these records as a reference to prepare the invoices I sent or hand-delivered to [Mr Bisping].
In May 2011, when the first serious problems in my relationship with [Mr Bisping] began to appear I realised for the first time that he might try to get out of repaying me for all the camp expenses over the years and therefore I would need to have clear and ordered documentation showing what expenses had been incurred (especially in terms of spar and coaching fees) so I could show [Mr Bisping] this and not give him an excuse to duck out of paying. The various ledgers and other pieces of paper I had kept over the years were not ideal for this, so when I had time I took them all and where necessary I rationalised them into new orderly timesheets showing the sessions that the coaches and sparring partners had provided at the time. The plan was to sit down and go through them all with [Mr Bisping] but once he cut off all contact with me after the Miller fight in December 2011 I never had the chance to do that. However, the rationalised records I produced were disclosed as part of this litigation.
Around this time I sent the rationalised records I had created along with copies of all the letters and invoices I had sent Michael over the years to my accountant, because I intended at some point to go through them all with him as well. Most of my office records were later destroyed in a fire at the Wolfslair gym in November 2011 .. Later in January 2013 I also asked some of the coaches and sparring partners who were involved in Michael’s training camps to provide written confirmation of the amount I paid them on Michael’s behalf to help show the expenses that I had incurred.
At the time of preparing my disclosure list in respect of this litigation, my solicitors and I have not discussed in detail the dates on which each individual document evidencing camp expenses incurred by me on [Mr Bisping’s] behalf was produced. As a result, we disclosed documents to [Mr Bisping] (and his solicitors) grouped together on the basis of the camp they related to using the date of the first invoice sent as a reference.
When my solicitors and I revisited this evidence in the course of producing this statement, we realise that the manner in which we disclosed the documents may inadvertently have created some confusion around the date of creation of the documents, specifically the internal rationalised records that I produced in mid-2011 but were never sent to [Mr Bisping]. My solicitors wrote to [Mr Bisping’s] solicitors on 27 February 2014 to explain this.
52. Mr Bisping challenged the veracity of Mr McGann’s explanation in relation to the Redcort documents. Mr Buttimore, on Mr Bisping’s behalf, pointed out that Mr McGann’s explanation that he wrote up all of these supporting documents from his ledgers and other records in mid-2011 does not explain why the supporting documents after the first 2 fights are not in the same format. If they were all created together as part of a single exercise, why are they not all on the same forms and in the same format? Mr Buttimore submitted that the production of these misleading documents is strong evidence in support of Mr Bisping’s case that all the letters and invoices now relied upon by Mr McGann have been produced specifically for the purposes of this litigation, and were not produced or handed to Mr Bisping at the time.
The witness statement of Paul Davies
54. I must also mention four other matters which occurred in the course of the trial.
Re-Amendment of the Particulars of Claim
60. Even then, Mr Buttimore maintained his objection on behalf of Mr Bisping to this late amendment, relying upon the principles discussed in cases such as Swain-Mason v Mills & Reeve LLP[11], Su-Ling v Goldman Sachs International[12], and Re Ralls Builders (No 2)[13].
Mr McGann discusses his evidence
62. Mr McGann began his evidence on the afternoon of Wednesday, 26 April 2017 (the first day of the trial) and was still being cross-examined when the court rose for the weekend at the end of Thursday, 27 April 2017. I gave Mr McGann the usual direction that, while he was giving evidence, he should not discuss the case (or his evidence) with anyone. I specifically instructed him that he should not discuss the case with any members of his legal team or with his wife, other family members or any of his friends.
67. Mr Buttimore challenged the accuracy of the accounts of these events given by Mr McGann and Mr Gwynn, submitting that the contents of Mr Gwynn’s 1 May 2017 email clearly showed that Mr McGann and Mr Gwynn had conferred directly about a number of aspects of Mr McGann’s evidence. Mr Buttimore did not make any applications or seek any specific relief on the basis of these events. Instead, he simply submitted that these matters reflected poorly upon the credibility of both Mr McGann and Mr Gwynn. That seemed to me to be a proportionate and practical approach.
68. Again, I shall return to this issue later in this judgment.
Scuffles outside court
The background facts
Introduction
70. This is a case in which both sides accuse the other, not just of being wrong, but of lying and deliberately fabricating evidence. In forming my views as to which parts of the evidence to accept, and which to reject, I have of course paid close attention to the demeanour of the witnesses in the witness box as they gave their evidence to me. I have borne in mind the fact that the events with which this trial is concerned began some 12 years ago, and that it is inevitable that memories have faded and been made less reliable by the passage of years[14]. I have been careful to test the evidence of each of the witnesses against all the other materials available to me, bearing in mind the helpful observations of Robert Goff LJ (as he then was) in The Ocean Frost[15]:
.. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth ..
2005 - Mr Bisping joins Wolfslair
73. Mixed martial arts (“MMA”) is a full-contact combat sport. It allows striking and grappling, both standing and on the ground, using techniques from other combat sports and martial arts. Among the disciplines in which MMA fighters have to be proficient are Brazilian jiu-jitsu (which focuses on grappling and ground fighting), boxing, Thai boxing (Muay Thai, which focuses on stand-up striking and various clinching techniques) and wrestling. Professional MMA fighters have to have a high level of proficiency in all four of these disciplines, and need to be very fit and resilient.
2005-2007 - The First PAR Agreement
78. Later in 2005, Mr Bisping auditioned in London for a role in season 3 of TUF. He was successful and, as a result entered into a Promotional and Ancillary Rights Agreement dated 6 January 2006 (“the First PAR Agreement”) with Zuffa. This was expressed to last for an initial period of one year from the date of the first fight involving Mr Bisping promoted by Zuffa following the conclusion of season 3 of TUF[16], but gave Zuffa options for a further 2 years thereafter. Mr Bisping was required to undertake a minimum number of fights to be promoted by UFC, and was to be entitled to a “Fighter’s Purse” in relation to each of them. The amounts payable depended on whether Mr Bisping won in the final event of season 3. If he won the final, his purse was to rise from USD 12,000 in the initial period, to USD 16,000 in the first option period, and to USD 22,000 in the second option period. The amounts payable if he lost in the final were considerably less, rising only to USD 11,000 in the second option period. In addition, Mr Bisping was to be entitled to a “Win Bonus” of a similar amount for every fight that he won. For the final of the third season itself, the “Fighters Purse” was USD 5,000, with a “Win Bonus” of a similar amount.
82. Mr Bisping took part in a number of further bouts under the First PAR Agreement. The detailed particulars of each of these fights were contained in specific Bout Agreements between UFC and Mr Bisping:
82.1 On 30 December 2006, Mr Bisping fought Eric Schafer in Las Vegas in “UFC 66”. Mr McGann asserts that he organised a training camp in California run by Kazeka Muniz, and sent an invoice for £12,490 to Mr Bisping on 7 January 2007 in relation to camp expenses. Mr Bisping denies receiving the invoice, and disputes that the expenses claimed were ever incurred, asserting (inter alia) that he trained in Las Vegas, not in California. Mr Bisping won the fight and, according to Mr McGann, was paid an Event Bonus of USD 101,000 and Sponsorship of USD 15,000 in addition to his “Purse Fee” and “Win Bonus”. Commission at 20% on the total of USD 140,000 would have been USD 28,000. Mr Bisping paid Mr McGann USD 22,000 shortly after the fight, leaving a balance of USD 6,000 which Mr McGann now claims. This sum forms part of Mr McGann’s claim for commission on sums withheld (at least initially) by overseas tax authorities from payments made to Mr Bisping.
82.2 On 21 April 2007, Mr Bisping fought Elvis Sinosic in Manchester. Mr McGann asserts that, although the training for this fight took place at Wolfslair, using Wolfslair’s in-house Brazilian coaches, he incurred and paid expenses of £12,180 on behalf of Mr Bisping, for which he invoiced Mr Bisping on 1 May 2007. Mr Bisping denies receiving the invoice, and disputes the incurring of the expenses. According to Mr McGann, Mr Bisping received USD 169,000 from this fight. Mr McGann accepts that all commission in relation to this fight was duly paid.
82.3 On 8 September 2007 Mr Bisping fought Matt Hamill in London. Mr McGann’s case is that Mr Bisping was invited to attend the training camp of Quinton “Rampage” Jackson (another MMA fighter managed by Mr McGann) in Big Bear, California, and in return agreed to provide and pay for training facilities when Quinton Jackson came to the UK to train. According to Mr McGann, he paid expenses of £17,300 on behalf of Mr Bisping in relation to Quinton Jackson’s training facilities, and invoiced those expenses to Mr Bisping on 20 September 2007.
82.4 This is all disputed by Mr Bisping, whose evidence on this point is supported by the evidence of Juanito Ibarra, who used to be Quinton Jackson’s manager. Mr Ibarra confirmed that Mr Bisping had trained with Mr Jackson in California, and that Mr Jackson had then travelled to England, had trained at Wolfslair, and had been accommodated by Mr McGann. No payment passed in either direction. However, according to Mr Ibarra, “At no point was it discussed or agreed that [Mr Bisping] would be responsible for the expense of our accommodation. At no point was it agreed or discussed that [Mr Bisping] would be responsible for any expenses of ‘Team Rampage’ during our stay in England”. According to Mr McGann, Mr Bisping earned USD 149,000 from this fight. Mr McGann accepts that all relevant commission in relation to this fight was duly paid.
82.5 On 17 November 2007, Mr Bisping fought Rashad Evans in Newark, New Jersey in the USA. Mr McGann’s case is that the training camp for this fight took place at the Wolfslair and at a temporary facility created by UFC in Newark. Mr McGann claims to have paid expenses of £11,200 on behalf of Mr Bisping, and to have invoiced those sums to Mr Bisping on 1 December 2007. All of this is disputed by Mr Bisping. Mr McGann’s case is that Mr Bisping’s total earnings from this fight were USD 212,000, on which commission would have been USD 40,000, but Mr Bisping paid only USD 32,400. The balance of USD 7,600 forms part of Mr McGann’s claim for commission on sums withheld (at least initially) by overseas tax authorities from payments made to Mr Bisping.
End 2007 – The meeting in the Wellington Arms
83. On Mr McGann’s case, Mr Bisping had by the end of 2007 accumulated a debt to Mr McGann in relation to training camp expenses of some £85,549, a sum slightly greater than the amount that Mr McGann had earned by way of commission on Mr Bisping’s earnings over the same period. According to Mr McGann, he regarded this as “a significant debt”, and he told Mr Bisping that he would have to look at reducing it soon. Again, according to Mr McGann, Mr Bisping fobbed him off, saying that he still couldn’t afford to pay back anything yet, but would do so soon. On Mr McGann’s case, Mr Bisping had by then earned a total of about USD 695,000 gross, USD 556,000 net of commission, over the previous two years. At the then current exchange rates, that would have been roughly equivalent to about £330,000. Mr McGann would, of course, have had to pay expenses and then tax from that sum.
84. Mr Bisping’s account of what happened at the end of 2007 is very different. According to him, he received a telephone call from Mr McGann, in which Mr McGann told him that he wanted 20% of all the “locker room bonuses” that Mr Bisping had received. When Mr Bisping challenged Mr McGann about this, Mr McGann’s response was that “it’s in the contract”. When Mr Bisping asked to see a copy of the contract, Mr McGann asked Mr Bisping to meet him at the Wellington Arms pub (which was about halfway between Mr Bisping’s home and Mr McGann’s). Mr Bisping and his father, Jan, attended the meeting, at which Mr McGann produced the contract for another fighter, Lee Dixon, rather than Mr Bisping’s contract. When Mr Bisping and his father asked why Mr McGann was not producing Mr Bisping’s contract, Mr McGann responded that Mr Bisping’s contract was “locked in a safe at Lee Gwynn’s property in Liverpool”, and offered to drive to collect it, if that was what Mr Bisping wanted.
86. Mr McGann accepts that he did meet Mr Bisping and Jan Bisping at about this time. However, according to Mr McGann, Mr Gwynn was also present. Mr McGann also accepts that, at the meeting, there was a discussion about the amounts that Mr Bisping owed. However, Mr McGann denies that there was any talk of “wiping the slate clean”, or about anything to do with what was to happen at the end of the Management Agreement. It was Mr McGann’s evidence that “this meeting had no particular importance; it was one of many meetings I had with [Mr Bisping] over the years arguing over unpaid expenses and commission”.
2008 – Further Bouts
87. Following this, Mr Bisping fought two further bouts under the First PAR Agreement:
87.1 On 19 April 2008, Mr Bisping fought Charles McCarthy in Montréal, Canada. According to Mr McGann, training for this fight took place at Wolfslair, then for several weeks in California, before the team went to Montréal. Mr Bisping accepts that he trained for the fight at Tiki’s Gym in Huntingdon California with Paul Kelly and later with Dave Jackson. However, he asserts that he paid for Paul Kelly’s flight himself, and paid directly any other expenses for which he was liable. He disputes Mr McGann’s claim for expenses of £12,420 and says that he never received the invoice dated 1 May 2000 on which Mr McGann relies. According to Mr McGann, Mr Bisping earned USD 149,000 from this fight, entitling him to commission of USD 29,800. Mr McGann accepts that all commission due in relation to this fight was paid.
87.2 On 7 June 2008, Mr Bisping fought Jason Day in London. According to Mr McGann, training for this fight took place at Wolfslair, and he agreed with Mr Bisping that he would bring in Kazeka Muniz to help. Mr McGann claims to have paid expenses of £9,200 on behalf of Mr Bisping, and to have invoiced those sums to Mr Bisping on 22 June 2008. Mr Bisping disputes this. According to Mr Bisping, he paid £5,000 for the services of Mr Muniz, because he was told by Mr McGann and Mr Gwynn that he had to pay it. “This was a shock, but I paid it under duress”. This in turn is disputed by Mr McGann, who claims that he was paid nothing. According to Mr McGann, Mr Bisping was paid a total of $226,000 for this fight, and accounted to Mr McGann in full for his 20% commission. Mr Bisping also asserts that he had an argument with Mr McGann about whether Mr Gwynn should act as one of his corner men for this fight, and that Mr Gwynn subsequently called Mr Bisping to threaten him when he refused.
September 2008 - Incorporation of MBL
October 2008 - The Second PAR Agreement
2009 - The Third PAR Agreement
91. The Third Promotional and Ancillary Rights Agreement (“the Third PAR Agreement”) was entered into on 5 June 2009. Again, this agreement was between MBL, Mr Bisping (as “Fighter”) and Zuffa, and its structure was broadly the same as its two predecessors It was stated to be for eight bouts or a period of 34 months from the first bout promoted under the agreement. If at the end of the term, Mr Bisping was then the UFC champion, the agreement was automatically to be extended for a further three bouts or one year. Under the Third PAR Agreement, the “Fighters Purse” for the first bout was to be USD 150,000 with a “Win Bonus” of USD 100,000. However, provided that Mr Bisping went on winning his bouts, the “Fighters Purse” would rise incrementally, so that for the eighth bout it would be USD 325,000 with a “Win Bonus” of USD 150,000. In addition, as UFC Champion, Mr Bisping was (in certain circumstances) to be entitled to a “pay per view bonus”, which could be of an even larger amount. As before, the Third PAR Agreement stated that Zuffa would provide incidentals such as transportation, lodging, meals and bout tickets (or payments in lieu), as specified in the particular Bout Agreement. This time however, these included a round-trip business-class air ticket for Mr Bisping as well as a round-trip economy-class ticket for one of his affiliates. It also provided for a Training Commencement Date, which could be up to 8 days prior to the date of the bout, to be specified in the Bout Agreement.
Summer 2009 - Season 9 of TUF
95. In June and July 2009, Mr Bisping appeared as head coach of one of the teams in Season 9 of TUF. The evidence of Dana White, the President of Zuffa, was that this appearance was not negotiated through Mr McGann, but with Mr Bisping directly. Mr White confirmed that Mr Bisping did not receive any compensation for participating in this season, apart from “transportation, housing and a small per diem”. The benefit which he received was “the exposure he received from appearing on the series and the notoriety that came along with it”.
2009 – The agreement to split expenses 50/50
97. Mr Bisping lost his first bout under the Third PAR Agreement.:
97.1 On 11 July 2009 Mr Bisping fought Dan Henderson in Las Vegas. According to Mr McGann, the training camp for this fight took place at Wolfslair and at the Zuffa gym in Las Vegas. Mr Bisping specifically requested that the camp should be run by a wrestling expert, Zak Light. Mr McGann therefore arranged for Little Big Man LLC (which owed money for sponsorships) to forward USD 11,900 to Mr Light. In support of this, Mr McGann produced an email dated 24 August 2009 from a Mr Rowlands of MMA Authentics (on behalf of Little Big Man LLC), showing payments to Mr Light at Mr McGann’s request of USD 9,900 on 22 June and USD 2,000 on 8 July 2009. However, the table attached to that email also shows that the funds from which these payments were made included commission of USD 10,000 due to Mr Bisping: and Mr McGann’s evidence did not (in my judgment) satisfactorily explain why at least that part of the money paid to Mr Light belonged to Mr McGann rather than to Mr Bisping. In all, Mr McGann claimed to have paid expenses of £13,800 on behalf of Mr Bisping, and to have invoiced those expenses to him on 21 July 2009.
97.2 Mr Bisping’s evidence was that this was the first time that fight camp issues had arisen. He agreed to Mr McGann’s suggestion that expenses (“ie outside coach sparring partners from overseas, or full camp trips overseas etc”) should in future be split 50/50, but was surprised to be asked for USD 30,000 by Wolfslair for his share of the costs of this camp. That was particularly so since (according to Mr Bisping) Mr Bisping paid for all food when he was present, two of the flights were paid for by Zuffa, and everyone stayed at the Palace Station Hotel owned by Zuffa and so paid a heavily discounted rate. Again, according to Mr Bisping, no supporting documentation was ever provided. Mr McGann’s evidence was that, to the contrary, he paid for all the food and accommodation: and this was certainly not the first occasion on which issues about payment for fight camp expenses had arisen.
97.3 Mr Bisping lost this fight, so did not receive any “Win Bonus”. However, according to Mr McGann, Mr Bisping’s total earnings from this fight were USD 306,000, meaning that the commission due to Mr McGann was USD 61,200. Mr Bisping paid only USD 46,200. The remaining USD 15,000 forms part of Mr McGann’s claim for commission on monies withheld by overseas tax authorities.
September 2009 - Incorporation of Wolfslair Promotions Ltd
2009 - Sponsorship monies
2009-2010 – Further bouts
101. Continuing the list of bouts under the Third PAR Agreement:
101.1 On 14 November 2009, Mr Bisping fought Denis Kang in Manchester. According to Mr McGann, Mr Bisping requested Mr McGann to arrange for some wrestlers from Canada who had previously trained with his opponent to come to the training camp, which took place at Wolfslair. Mr McGann’s case is that Mr Bisping himself paid approximately 50% of the expenses directly, but that he (Mr McGann) paid £7,299 on behalf of Mr Bisping for which he rendered an invoice on 2 December 2009.
101.2 Mr Bisping’s evidence was that, on this occasion, he was for the first time given a document setting out the amount of the camp expenses: “I was given a breakdown which had fight costs totalling £14,084 .. I was not at all happy with this. I agreed to pay ½ of this (after certain deductions) on that occasion but told them from here on everything must be approved by me as they could not simply spend my money as they wished”. This account is supported by an email dated 4 December 2009 from Mr McGann to Mr Bisping to which a JPG image of a handwritten ledger sheet headed “Mike Camp” was attached. This ledger sheet has at its bottom a final figure of £14,084.
101.3 Mr Bisping’s account is disputed by Mr McGann. Mr McGann’s evidence was that the training camp was very important because of Mr Bisping’s recent loss to Dan Henderson - which meant that a win this time was imperative. According to Mr McGann, he brought in a number of other specialist sparring partners, and cleared everything with Mr Bisping as he went along. Mr Bisping (in Mr McGann’s view) has simply invented his account of saying that “from here on everything must be approved by me”. Mr Bisping, in the event, won the fight. According to Mr McGann, his total earnings were USD 346,000, meaning that the commission payable was USD 69,200, and that was paid in full.
2010 - The Agreement to split expenses 80/20
102. On 21 February 2010 Mr Bisping fought Wanderlei Silva in Sydney Australia as part of UFC 110.
102.1 According to Mr McGann, it was at about this time that he agreed with Mr Bisping that Mr Bisping would pay 80% of camp expenses, only 20% being advanced by Mr McGann. Mr McGann’s evidence as to the timing of this agreement was slightly contradictory. In his first witness statement, he initially said that “By the time we reached the Kang fight training camp in September 2009, [Mr Bisping] had agreed to pay 80% of expenses himself and I would cover the remaining 20% on the understanding I would be repaid at a later date”. However, in the subsequent passages of the witness statement which deal with individual bouts, Mr McGann says that, in relation to the Kang fight, “at this point [Mr Bisping] was paying approximately 50% of his training camp expenses directly himself”. It is only in relation to the Silva bout in February 2010 that Mr McGann says “For this fight and the next 3 fights .. [Mr Bisping] had agreed to pay 80% of his camp costs himself and I would pay 20% on his behalf on the understanding that I would be paid back”.
102.2 Mr Bisping in his evidence, accepted that “in the period 20 February 2010 to 27 February 2011 I paid 80% even though this completely went against what we had agreed when I signed with the Wolfslair .. In any event all expenses were squared as we went along. There should no[t] have been any significant outstanding costs at the termination of our relationship”.
102.3 According to Mr McGann, the training camp for this fight took place at the Wolfslair gym and then at the Elite Fighting gym in Sydney. Mr McGann sent an email dated 4 February 2010 to Mr Bisping, explaining that he had arranged for him to train at the Elite Fighting gym, to which Mr Bisping replied “Good job mate. Manager of the year!!!”. Mr McGann claims that he organised several specialist sparring partners, agreed with Mr Bisping in advance. He asserts that he paid expenses of £4,167 on behalf of Mr Bisping that he invoiced on 27 February 2010. According to Mr McGann “the letter and invoice were sent or delivered by hand to [Mr Bisping] on or around 27 February 2010”.
102.4 According to Mr McGann, Mr Bisping earned a total of USD 252,000 in respect of this fight, entitling Mr McGann to commission of USD 50,400. Of this, Mr McGann has paid only USD 44,000. leaving a balance of USD 6,400 which Mr McGann now claims. This sum forms part of Mr McGann’s claim for commission on sums withheld (at least initially) by overseas tax authorities from payments made to Mr Bisping.
2010 – Submission of Mr Bisping’s Schedule of Tax Deductions and Tax Rates
103. On 20 January 2010, prior to the fight, Zuffa sent emails to all fighters participating in UFC 110 and their managers, giving information about Australian immigration and tax requirements and including a blank Schedule of Tax Deductions and Tax Rates form. This email stated that UFC/Zuffa had retained (and would pay the fees of) Michael Roseby, an accountant in Melbourne, to assist with the filing of the various documents necessary to fulfil each fighter’s tax obligations. Mr Bisping did not receive his copy until the following day, at which point Zuffa were pressing for an urgent response. Mr Bisping forwarded all this to Mr McGann by email dated 24 January 2010.
104. On 25 January 2010, Mr Bisping signed a “Representation Authority” to Mr Roseby’s firm, Roseby Rosner & Young Pty Ltd, in connection with his tax affairs in Australia and New Zealand. On about 27 January 2010 this was sent to Mr Roseby, together with the Schedule of Tax Deductions and Tax Rates form, completed in manuscript and signed by Mr Bisping. On this document, Mr Bisping claimed expenses totalling USD 52,460, including sums for the fees and expenses of spars and coaches, plus a 20% deduction from gross earnings for “Wolfslair Management” and a 30% deduction for “Trainer/Coach”, split evenly between the three disciplines of Brazilian jiu-jitsu, Muay Thai, and wrestling.
We still haven’t made any progress with your accountant concerning reclaiming the outstanding monies withheld by the American IRS ..
.. Our unclaimed 20% is becoming substantial and is a great concern .. Please make it a priority to get your accountant to make some progress.
If it helps with Brads Smuckler at the UFC, he advised that it is a simple act of claiming all your expenses back like I did for you in Australia. I would include the documents for your accountant to review ..
108. In cross-examination, Mr Buttimore put to Mr McGann that his reference in this letter to “claiming all your expenses back like I did for you in Australia” was inconsistent with his evidence that he had played no part, except that of intermediary, in the submission in January 2010 of Mr Bisping’s Schedule of Tax Deductions and Tax Rates form. Mr McGann did not accept this suggestion, and asserted that the letter simply referred to the fact that he had submitted the January 2010 document on Mr Bisping’s behalf.
2010 – Further bouts
109. Mr Bisping’s remaining bouts under the Third PAR Agreement were as follows:
109.1 On 29 May 2010 Mr Bisping fought Dan Miller in Las Vegas. According to Mr McGann, the training camp for that bout took place at the Wolflair and that the Striking Unlimited gym in Las Vegas. A number of other fighters from the Wolfslair team were also fighting, so they all trained and prepared together. Mr McGann’s case is that he paid expenses of £4,232 on behalf of Mr Bisping that were invoiced on 7 June 2010 but which were never paid back to him. According to Mr McGann, Mr Bisping’s total earnings were USD 400,000, meaning that Mr McGann’s commission was USD 80,000. Of this, Mr Bisping paid USD 61,000 some months later, leaving USD 19,000 unpaid. That sum forms part of Mr McGann’s claim for commission on sums withheld (at least initially) by overseas tax authorities.
109.2 On 16 October 2010 Mr Bisping fought Yoshihiro Akiyama in London. According to Mr McGann, the training for this fight took place at the Wolfslair, and Mr Bisping himself paid the coaching fees. Mr McGann therefore paid only £400 in respect of food and travel for the coaches on behalf of Mr Bisping, which Mr McGann says that he invoiced on 25 October 2010. According to Mr McGann, is to Bisping and a total of USD 412,000 from this fight, entitling Mr McGann to commission of USD 82,400. Mr McGann accepts that this commission was paid in full.
December 2010 - Meeting
110. Mr Bisping’s case is that, during 2010, he made a number of complaints to Mr McGann about Mr McGann’s failure to pass on sponsorship income to which Mr Bisping was entitled. This led, according to Mr Bisping, to a meeting in December 2010 between himself, Mr McGann, Lee Gwynn and a friend of theirs who they referred to as “Harry Potter”. It was Mr Bisping’s evidence that, at that meeting, agreement was reached after lengthy discussions on the amounts due from and to Mr Bisping, and Mr Bisping agreed to make (and did thereafter make) a bank transfer of £49,970 in full and final settlement of all amounts to date. Mr Bisping’s bank statement, which he produced, shows that payment being made and it is not denied by Mr McGann: though it is noteworthy that Mr Bisping’s original pleading alleged a payment of between £50,000 and £60,000. Mr Bisping’s evidence was that he remembers Mr McGann saying in a phone call something like that “don’t that feel good we are all completely square”. Mr McGann does not dispute that there was a meeting at about that time, but does dispute that there was any agreement on a full and final settlement or that he made the remark attributed to him by Mr Bisping. Mr McGann also disputes that Mr Bisping had any proper grounds for complaining of any failure to pass on sponsorship monies.
January 2011 – The second Schedule of Tax Deductions and Tax Rates
111. Thereafter, Mr Bisping had one further bout under the Third PAR Agreement.
111.1 On 27 February 2011 Mr Bisping fought Jorge Rivera in Sydney, Australia. According to Mr McGann, the training camp this fight took place at Wolfslair and then, for 3 weeks, at the Elite Fighting gym in Sydney. Mr Bisping was one of 3 Wolfslair fighters on the card, and he paid most of his expenses. However, according to Mr McGann, he paid expenses of £3,610 on behalf of Mr Bisping that he invoiced on 1 April 2011. Again, according to Mr McGann, Mr Bisping’s total earnings from the fight were USD 424,000, entitling Mr McGann to a commission of USD 84,800. However, according to Mr McGann, Mr Bisping paid only USD 74,300. The balance of USD 10,500 forms part of Mr McGann’s claim for commission on sums withheld (at least initially) by overseas tax authorities.
112. In January 2011, prior to this fight, Mr Bisping had completed a further “Representation Authority” to Mr Roseby’s firm, Roseby Rosner & Young Pty Ltd in connection with his tax affairs in Australia and New Zealand. Mr Bisping had also submitted another Schedule of Tax Deductions & Tax Rates. This was in materially identical (and similarly over-stated) terms to the form which he had submitted in relation to the fight against Wanderlei Silva the previous year. The 2011 form, however claimed only USD 45,460 (disregarding the percentages also claimed as deductions), since it omitted the USD 7,000 claimed in 2010 for “hotel expense for spars and coach”.
113. When cross-examined about the 2011 form, Mr Bisping denied seeing it at the time. Mr McGann’s evidence, in his second witness statement, was that Mr Bisping gave it to him to submit on his behalf. “I later noticed that [the 2010 and 2011 forms] were exactly the same and therefore in my opinion they are fraudulent”. In cross examination, he said that he probably sent this form to Zuffa, but could not remember whether he faxed it, emailed it or handed it in. He vigorously denied that he filled the form in. It was nevertheless part of Mr McGann’s case that on 21 April 2011, he sent an email letter to Mr Bisping in pursuit of his claim for commission on overseas withholding tax amounts, which began “Brad Smuckler commented on your obtaining the lowest rate in Australia after the job we did on your expense’s sheet. I believe we got it down to 14% ..”[17].
2011 - The Fourth PAR Agreement
118. It is common ground that, at about this time, Mr Bisping again visited Mr McGann at his house and, in the course of that meeting, told Mr McGann that Mr Bisping and his family were intending to move to America. According to Mr Bisping, Mr McGann wanted to discuss the tax implications of that move, outlined a plan of how this thing could avoid paying taxes by laundering his earnings through the Gibraltar bank account used by a company owned by Mr McGann. Mr Bisping’s evidence was that he had now discovered that this company was called Diamond Blue Ventures Limited: and he produced what purport to be three invoices issued by Diamond Blue Ventures Limited in relation to the Evans fight (UFC 114) on 29 May 2010. Mr Bisping also produced what appears to be a certified copy dated 27 June 2014 of an entry dated 5 August 2009 in the Gibraltar Registry of Companies showing McGann as the director of another Gibraltarian company, Bellana Ltd, together with a copy of an invoice from Bellana for “Managerial Fees UFC 114 05/29/10”, claiming 10% of a pay-per-view bonus of USD 1m. Mr McGann accepts that he did own a company called Bellana, but says that it was closed down “years ago”. He denies owning Diamond Blue Ventures Limited, and says that there was no discussion about tax at this meeting.
May 2011 – Mr Bisping says he wants to “move on”
119. It is also common ground between Mr McGann and Mr Bisping that, in May 2011, Mr Bisping telephoned Mr McGann to ask him what had happened to some sponsorship monies that Mr Bisping thought he was owed. Mr McGann was in the USA, helping Quinton “Rampage” Jackson, at the time, and said he was too busy to chase these items up. This led to a heated argument. In their evidence, Mr McGann and Mr Bisping each blamed the other for this.
I just want to follow up on the conversation I had with you (Anthony). My decision to move on from the Wolfslair is nothing personal, and I have no problem with you guys or the gym. It simply a case of me moving on with my life. I want to thank you both for everything you have done to me over the years.
I signed with you guys in 2005 and it’s been a great 6 years that I have thoroughly enjoyed being a loyal member of the Wolfslair team. The contract has now run its course and as I said on the phone I want to do my own thing.
I wish you both, the coaches and the team my very best.
Obviously we still have some outstanding financial issues from the last fight. I will wire the money in today. I have outlined it below.
Fight purse £183,516 20% = £36,703
Affliction £12,407 20% = £2,481
I paid you £20,000 earlier in the year and you have said you have collected the MMA elite and Venum money, which I believe total £8,063, minus your 20% which equals £6,451.
I think that leaves a total of £12,733 outstanding to you guys. As I said, I will wire the money in today.
Of course there is still the money from Musclepharm and USD 1,800 you mentioned from Tapout. When I receive these I will forward your cut.
Thanks again for everything
Mike
122. According to Mr McGann, he tried to call Mr Bisping in the days following that email, to find out what was really going on and to attempt to resolve the situation amicably. Emails sent by Mr McGann at the time seem to confirm this. On 28 May 2011, Mr McGann sent a long letter by email to Mr Bisping. The letter was headed with the name and address of WPL, and was written as if from that company rather than from Mr McGann personally. Its terms are important, because they are heavily relied upon by Mr Bisping as being inconsistent in many respects with the claims now advanced by Mr McGann. Despite the length of the letter, it is therefore necessary to set its terms out almost in full.
There have been several conversations between you and our agent Anthony McGann in regards to you ending your relationship with the Wolfslair Academy. It is now come to our attention that, even after we agreed to put this issue off till next week, you have already proceeded to inform the UFC of your departure. You requested our position in an email so here it is. Like we discussed at great length the business of Michael Bisping goes beyond the contract.
History before the Wolfslair
You came to the gym around the time of your Dave Radford fight (4/30/05). At this time you were with your previous manager/trainer Paul Lloyd Davies. We assisted you in this and the next fight against Alex Cook (6/18/2005). You decided that we could offer you more in the training and management world, so you left Paul Davies and joined the team. This is now in a legal action being handled by our lawyer Mike Blood. Paul is seeking his 20% for the period of his contract.
History since joining the Wolfslair
We then took your training to a new level importing Brazilian Black Belts at huge cost to the company. We not only paid for all the travel and expenses but also visa’s [sic] and even there [sic] families accommodation and expenses .. At this time .. as you were then 9 wins and no losses we made the move towards the UFC and the Ultimate Fighter show. We flew in a Brazilian manager who was close to Joe Silva and a verbal agreement was made and you entered the show.
Josh Haynes
This was the final of the Ultimate Fighter 3 reality show, the Wolfslair Academy put a full spread of coaches and sparring partners in Las Vegas for 5 weeks to prepare you for the show. This was a great cost to the company. We realise that you never made much money from the event and never pursed [sic] our costs, from that fight to this day you have constantly tried to put as many expenses as you can on the company. For the next 7 fights over a two-year period. You not only strove for us to pay camp bills, you resisted paying us from any bonuses received. Although it clearly was payment for your fights and is clearly stated in your contract you resisted heavily. A similar position as any gifts received related to the business, you were effectively paid with a Range Rover for TUF9.
We eventually got to a position where we were paying 50/50 of bills after the Evans fight in New Jersey (11/17 2007), we were not happy with this but we had invested in you since early 2005. Our position was that we would get you through the reltitively [sic] weak Reality show contract and then re-negotiate a better deal with the UFC which we did. The new contract started in July 2009 with the Henderson fight. Because you had visa issues we had to run most of the camp from Las Vegas again at huge cost to the company. We then agreed to drop the camp splits to 80/20 as the contact [sic] was strong and were no longer working on a bonus system .. This continued for another 5 fights, 2 being in Australia and 1 in Las Vegas. After your last fight you upset the UFC by acting inappropriately in Australia. We fixed the problem by travelling to Las Vegas and meeting with them, and secured you a new 8 fight deal for more money.
Investment in Michael Bisping
April 2005 to December 2005
Radford/Cook/Mehmet/Lovestad/Pointon
We paid all coaches wages, living expenses, accommodation, (all expenses free events)
Mario Sukata & family
Tony Quigley
Henrique Noguiera
Loquinha
Cost to company Total = 32,000 pound
December 2005 to December 2006
Haynes/Schafer
Again all UK costs for coaches` 52,000 pound
Plus Las Vegas camp bill (Haynes) 30,000 pound
Plus Las Vegas/UK camp bill (schafer) 12,000 pound
Cost to Company Total = 94,000 pound
December 2006 to December 2007
Sinosic/Hamill/Evans
Again all UK costs for coaches 52,000 pound
Sinosic camp bill 10,000 pound
Hamill camp bill 17,000 pound
Evans camp bill New Jersey 12,000 pound
Cost to Company Total = 91,000 pound
December 2007 to December 2008
All UK coaches cost 52,000 pound
McCarthy/Day/Leben
McCarthy Bill Montréal 12,000 pound
Day camp bill 8,000 pound
Leben camp bill 5,000 pound
Cost to Company Total = 77,000 pound
December 2008 2 December 2009
Henderson/Kang
All UK coaches cost 52,000 pound
Henderson camp bill Las Vegas 25,000 pound
Kang camp bill (80/20) 2,000 pound
Costs to Company 79,000 pound
December 2009 to December 2010
Silva/Miller/Akiyama
All UK coaches cost 52,000 pound
Silva camp bill Australia 3,000 pound
Miller camp bill Las Vegas 2,000 pound
Akiyama camp bill nil
Costs to Company Total = 57,000 pound
December 2010 to today
Rivera camp bill Australia not completed yet
Agreed all UK costs for coaching isn’t just on you but a proportion of it is, this would have to [be] assessed respectfully
I believe if we put a figure of 10,000 a year for UK coaching [it] will be adequate for this exercise although I think that is low.
So in total we have an investment of 220,000 pound for training and camp expenses
Tax Deduction
Over the years every time you fought in the US or Australia tax was deducted. Our contract is before tax, once again we could never claim this as it was a problem even getting our camp money never mind withheld tax
Evans 2007 50,000 withheld 10,000 usd
Henderson 2009 80,000 withheld 16,000 usd
Silva 2010 32,000 withheld 6,400 usd
Miller 2010 90,000 withheld 18,000 usd
Rivera 2011 65,000 withheld 12,500 usd
Total amount not received 62,900 usd
Exchange 40,000 pound
Range Rover received from TUF
Total amount not received 20,000 pound
So Mike although all these figures are not exact they are very close. We have kept all our records for a long time and all can be easily shown by a forensic accountancy.
Summary
You are taking the position that you have paid your 20% and served your 6 years. If you wish to use the contract in its literal terms then you should never have constantly strove for the company to invest in you. I will give you an example of this. You fought heavily over the Las Vegas camp bill for Henderson.
You were paid $170,000 usd.
At 20% we should have received $34,000 usd as per contract
It cost us 12,500 pound which at the time was $22,000 for camp
It cost us another $7,000 in coaching fees
The company had $5,000 usd left and you kept back the tax deduction.
So, if we are to stick to the contract then why are we paying out $29,000 usd. Why are we paying 50/50 on camp bills and all on coaches when you receive 80% of gross. The contract simply states that we have to make the Wolfslair available to you nothing more.
You cannot use one agreement to terminate another. If you wished to stick to your contract then that is what you should have done.
The company has invested a lot and also hasn’t received a lot of monies to the region of 280,000 pounds.
We also secured your new 8 fight deal and the term is below;
2.1.2 a sum equal to 15% (fifteen per cent) of all income received from any renewals extensions modifications or variations to commercial contracts entered into for a period of 3 years following the expiry of the term
That means for 8 fights or any other UFC contract in the three-year period you owe the company 15%
8 x $425,000 = $3.4 million at 15% $510,000
Irrespective of any future pay-per-view
So like I said at the start of this letter, a six-year business doesn’t end in an email Mike.
So I see as having several ways to proceed
(A) We work off the contract literally and all issues are resolved by this. Including outstanding monies in future percentage. If you stick to one path instead of 2 and we recoup our investment in future monies we would be happy with this.
(B) We continue in the business as we have 6 years. We continue to resolve the Lloyd Davies issue. I know Mike Blood told you it went conflict but believe me it will.
(C) We turn everything over to the lawyers and our relationship ends quite badly.
If there is any issue over the 8-fight deal I also have a video of you praising the company for their acquirement of it and its is contractually solid
If your argument is that we have always agreed on all monies then that is correct. However, whatever was agreed was always is an ongoing concern and from the company’s perspective and investment in new and future business. The contract that you wish to use to terminate this relationship is no mention of the company investing in you.
Thank you
124. Mr Bisping responded by email on 28 May 2011, saying “Obviously I will have to look at it closely, but until you forward me a copy of the contract I cannot give you an informed reply”. His evidence was that he was “utterly and completely shocked by this letter”, and that he saw it “as a massive indication that they were trying to scam some money out of me somehow”. According to Mr Bisping, this letter was the first time that Mr McGann had brought up the issue of commission on tax withheld or the issue of commission on the value of the Range Rover.
Summer 2011 - TUF 14 and the meeting in Las Vegas
126. It is common ground that in about June 2011, while Mr Bisping was in Las Vegas filming for Season 14 of TUF, he had a meeting with Mr McGann at which they discussed their future relationship. According to Mr McGann, Mr Bisping was “charming and friendly” during this meeting. Mr McGann’s evidence was that he told Mr Bisping that, if Mr Bisping wanted to remain a part of the Wolfslair team, he (Mr McGann) was happy to stand aside as Mr Bisping’s manager, so as not to ruin Mr Bisping’s relationship with the team, provided that Mr Bisping paid up what was due. Mr McGann suggested, however, that since Mr Bisping was contractually obliged to carry on paying commission, he “may as well continue to get the benefit of my services and I was happy to carry on doing what I had always done for him but it was up to him”.
129. In fact, Mr Bisping did respond briefly by email dated 20 July 2011, in which he explained that he was very busy, was only just catching up on emails, and so would call Mr McGann later to catch up.
Late in 2011 – Mr Bisping settles into the USA and prepares for his next bout
131. Mr Bisping was due to have his next bout in December 2011. On 7 October 2011, Mr McGann sent an email to Mr Bisping. In it, Mr McGann referred to earlier telephone conversations, in which Mr Bisping had suggested having his training camp for this fight over 4/5 weeks at the Musclepharm facility in Denver. Mr McGann confirmed that this had been approved by Musclepharm, and also confirmed details of coaches and sparring partners that he had provisionally booked, and the fees that they would require. The email concluded:
.. I think we can probably chip [Mark] Kinney down to 4k with 1k bonus and if we give the same to Mario and Ryan that’s 15k for coaches, the spars are at around 7,400 for three of them. Flights will come in around a couple of grand, so all in all your looking at around 25k for the camp. I have already done a fair bit speaking to people, they have calendars too, so as I say if you want to change this position then speak to me mate.
132. Mr Bisping replied by email that same day, saying:
.. I know you have spoke to Musclepharm, but I decided I will do my full camp in Orange County. I move into a house the first week of November the timing is just not right to disappear out to Denver for a while. Sorry about that. I know I said otherwise .. So you know I’m training my ass off. Things are going well. Just need to get the Wolfslair coaches and possibly a couple of guys that can bang. I’ve put some feelers out. I’d like to try and find them local so I don’t have to pay for flights, but let’s see how that pans out.
We had a situation with your contract with us, we amicably fixed it with the agreement to move forward with you as a member of the team still managed by us.
You informed the UFC to stop corresponding with me, this situation remains. I can’t do my job if you don’t fix this ..
.. I am still speaking to people and waiting your final instructions, then you tell me the plans changed your staying in OC and you have contacted Travis and Tyson yourself and brought them there. Travis and Tyson looked to me to lead the team, how do I look if I don’t even know that you brought to them to camp.
Now all these things are no big deal really Mike, but put it all together and it’s not good business. If we are moving forward in the correct manner Mike then we need to act accordingly. Please inform the UFC that I manage you and to correspond with me, that way I can do my job. If you’re, make moves concerning guys that I use please keep me in the loop out of respect ..
.. Do you want me in camp? You fight is very important to us all and I would love to assist. I can stay with Quinton but I would expect you to at least pay for my flight and light expenses (food etc). I can do Cali or Denver, it’s been a long journey with you and although your in the states now I would like to see you live your dream ..
.. If you can’t call me at least bring me up to speed by covering all my points here, once again I’m trying to do a good job for you mate.
Would love to have you around for the camp, you’re always great to have around and bring good energy so of course ..
.. Please apologise to the guys in Denver for me .. We spoke about Travis in Denver and I ended up having a few drinks with Tyson and talked about training after the fight. So I just called and asked when was the soonest they could come out. I was just being proactive and call them to try and get things moving and they said they would come right away. I see what you’re getting at though.
Yes, confirm with Kinney for 4k + 1k win. And of course Mario, when is the soonest he can come out?
This Fabio sounds interesting, how much would he want you think? ..
.. I’ll talk to the UFC and get that sorted straightaway ..
Things are coming together, I’ve got a great new strength and conditioning guy and a great nutritionist which he recommended
As I said, once I get the Wolfslair coaches and yourself out here it’s all systems go.
This is all very formal mate. It does feel a bit weird as this is the first time for the situation.
Looking forward to a great camp, call you tomorrow.
136. Mr McGann responded on 11 October with an email of advice about the coaches and sparring partners needed for Mr Bisping’s forthcoming fight, to which Mr Bisping responded on 12 October saying “you make a lot of good points, which I’m taking on board”, but indicating that he wanted to carry on with the plans that he had already made for the moment, and to “play it by ear for now”. Mr McGann also entered into email correspondence with third parties about Mr Bisping’s US tax position. He copied this to Mr Bisping, who replied on 20 October to say that his US corporation was being set up on Monday (24 October). Mr McGann also corresponded with UFC by email about Mr Bisping’s travel arrangements, and entered into email discussions about clothing designs, sponsorship and similar matters.
October 2011 - The fire at Wolfslair
October and November 2011 - The incorporation of RMI and the Fifth PAR Agreement
December 2011 - The Miller fight
140. Mr Bisping’s first fight under the Fifth PAR Agreement was against Jason Miller on 3 December 2011 in Las Vegas. Mr Bisping won the fight. Mr McGann accepts that Mr Bisping paid all the training camp expenses in relation to this bout himself.
140.1 Mr Bisping received a Purse Fee of USD 275,000 and a Win Bonus of USD 150,000, a total of USD 425,000. Commission at 15% on that sum would be USD 63,730 and (in circumstances which I shall explain below) WPL invoiced Mr Bisping for that amount on 13 December 2011.
140.2 According to Mr McGann, sponsorship and other receipts would have meant that Mr Bisping would have earned at least another USD 6,700. Mr Bisping admits that he received USD 6,500, on which commission at 15% would be USD 975.
140.3 McGann’s present case, however, is that he is entitled to commission at 20% on all Mr Bisping’s earnings from this fight, because “any variation [Mr Bisping] and I had agreed to in May 2011 was conditional upon [Mr Bisping] paying on time and beginning to repay the historical amounts which of course he never did”.
December 2011 - The 3 invoices
I understand that you like to relax after a fight and I appreciate that, but ignoring 23 phone calls and a stack of text is quite insulting, you have excepted [ie accepted] a fight on short notice over the Xmas holidays, this is your choice, but how can I do my job in the circumstances if you don’t speak to me ..
.. I am assuming you are displeased that I wasn’t there. If you would have spoken to me I would have explained the problem. My ESTA was cancelled as soon as I booked my flight, they told me I have spent too much time in the USA on the visa waiver and have to go into the embassy and do a business visa ..
.. As you know I have greatly supported you throughout the past six years .. You know I have had a fire at the gym and it is causing many problems that I had to deal with here, the Visa issue came out of the blue and was a pain in the arse. I am done with my visa and Lee got his three days ago. All I ask is that you at least respect that problems occur and you support and understand this. I’ve always gone way beyond the call of duty for you Michael, I used my home like a hotel for many years for your benefit. I even helped out with problems connected to your family ..
.. The last year has been quite strained. We went through the renegotiation issue and I thought we would move forward and here I am again being ignored and disrespected ..
.. Okay and finally, let’s not mess about here. If you have a problem, then let’s just get on with it, you have your business and I have mine, and I can’t be arsed calling you all the time and being ignored. However if you haven’t got a problem, then put 20 mins aside for me and let’s do what we do.
142. Mr Bisping replied on 13 December 2011 as follows:
..As you guessed, I was annoyed that you didn’t turn up for the fight. Initially you were supposed to be there four weeks before the fight. You never showed, and didn’t contact me for around two weeks later. You then assured me you would be there week of the fight, in the end you text me the day of the weight cut to say you won’t wouldn’t be there, asking me to call, I didn’t call as I was cutting weight.
I was annoyed as I say, if felt like you didn’t care to be honest. I know you had issues back home, and I do respect that. Things happen.
After the fight I was annoyed as I said, and I [j]ust wanted some time away from everything. I also had to go to Chicago. I didn’t want to talk about my next. I just need some time off from it all.
143. Mr McGann’s response the same day was, in effect, a demand for payment.
Mike, let me just say that I’m not obliged to attend any camp and for that matter any event. I do not need to allow my house to be used as an hotel or financially assist fighters throughout their career. I do so at no benefit to myself, I am not paid any extra money for this and in your case do not even recover my travel expenses. I do all the above as I care about my fighters, every one of them, and in your case I have cared and sacrificed for many years at considerable cost. My gym was burnt down in this game is a big problem to me, and also my Visa was refused at the same time. I find it difficult to accept that all the above which I do because of friendship and the will for the guys to win, be chucked up in my face and I have my own unavoidable problems.
Just so you know, I am forwarding my Expedia flight and hotel reservation so you can believe my intentions to still attend even though I had problems
I drew the attached paperwork up today in relation to our position, we would like for you to deal with this as quickly as possible especially monies owed from the recent fight. I have kept the sums within reason. However, if you wish to discuss any of the issues involved, Lee will be in Orange County for the whole of Quinton’s and Kongo’s camps and will happily meet you to resolve any problems you have. This situation has caused a lot of problems between me and him, as it was me who has allowed the various non-payments over the years to mount up. I always allowed you a lot of slack Michael and I am finally repaid by you insulting me like this.
But it’s not the first time either. You have my invoices and you have my number, you also have the opportunity to discuss anything with Lee in person. Everything I have included doesn’t cover my total investment in you and I do this because as per contract these figures cannot be a[r]gued. If you decide that you won’t be paying me then I will see this as you are robbing me and will act accordingly.
144.1 The first of these invoices, addressed to Mr Bisping and “also” to MBL was given the Invoice Number “BISPING 1”. It was described in Mr Gwynn’s letter as follows
As discussed when we renegotiated in Las Vegas in June, there are several large amounts not paid to us by you over the term of your contract. The contract states you pay us 20% although from December 2005 till February 2011 (14 fights from Hayes to Riviera [sic]) we never received 20% not once. The first invoice will be for these outstanding amounts
The heading to the invoice was in similar terms:
Outstanding Monies from the following fights as per contract at 20%
However, the figures given in this invoice were not for the amounts of commission which Mr McGann claims were outstanding in relation to the overseas withholding tax elements of Mr Bisping’s income. Those sums were claimed in the next invoice, “BISPING 2”. Instead, they were for round figure sums which were similar - though not identical – to the sums which Mr McGann claims that he had previously invoiced to Mr Bisping for training camp expenses paid on Mr Bisping’s behalf. In each case, the sum invoiced in “BISPING 1” is a little lower than the amount which Mr McGann says he had previously invoiced. For example: for the Haynes fight, Mr McGann says that he originally invoiced £32,397, but only £30,000 was claimed in “BISPING 1”; for the Schafer fight, the equivalent sums were £12,490 and £12,000; for the Sinosic fight, £12,180 and £10,000. The total claimed in “BISPING 1” was £128,500. The invoices which Mr McGann says that he had previously given to Mr Bisping in relation to these fights totalled £147,845.
144.2 The second of these invoices, again addressed both to Mr Bisping and MBL, was given the Invoice Number “BISPING 2”. Like “BISPING 1” it was headed “Outstanding Monies from the following fights as per contract at 20%”. This invoice covered two sets of claims: first, commission amounting to £40,000 on the two Range Rovers received as gifts in respect of Mr Bisping’s participation as a coach in TUF 9 and TUF 14; secondly, unpaid commission amounting to USD 62,900 (converted at USD 1.5 = GBP 1 to produce £41,933) on the withholding tax amounts. The amounts claimed under this heading in “BISPING 2” do not precisely correspond with those presently claimed by Mr McGann. “BISPING 2” does not include the USD 6,000 now claimed in relation to the Schafer fight: and only one of the other amounts (in relation to the Silva fight) is an exact match for the amount now claimed.
144.3 The third of these invoices was addressed to Mr Bisping and RMI, and was given the Invoice Number “BISPING 3”. It was for commission at 15% on the Fighters Purse and Win Bonus received by Mr Bisping in relation to the Miller fight on 3 December 2011, and stated at the bottom “Sponsorships still not collected but invoiced for and will forward to [RMI]”.
146. Mr Bisping responded by email on 14 December 2011, saying:
Let me start off by saying I am not trying to rob you guys and if money is owed that you know that I have always paid what is due when we square up. .. I know we have to square up on the Mayhem fight
I am confused by the Invoices, for example the Josh Haynes fight you say there is still £30,000 outstanding, but if I remember correctly, the entire purse was for only around £12,000.
If you recall, we sat down after the Akiyama fight and squared everything up.
I need a copy of the agreement between us to see if I owe you any money for the Range Rovers ..
.. So from my side we are pretty squared up except for the Mayhem fight. Obviously as soon as the cheques clear, I will forward you your 15% ..
148. On 16 December 2011 Mr McGann emailed to Mr Bisping:
Here I am again requesting a time for you to be able to speak to me, is this so difficult?
Mr Bisping responded:
Unfortunately, the reality is that, yes, it is a little difficult to speak to you now.
You have sent me through bogus invoices, cc’iing Mike Blood in every email, said that you would “take it that I’m robbing you” and finally decided to visit my mother’s house late at night.
Because of this I am advised to keep all contact by email or through legal representation.
As I said, when the cheques clear in a few days I will forward the money that is owed from the Mayhem fight
149. Mr McGann replied to that email within the hour:
Okay so it’s all by email and legal representation. Can you provide me with your legal counsel in the USA and also your counsel in the UK so we can get things moving along.
I haven’t provided any bogus invoices, I merely consolidated the document sent to you by email on 28 May 2011 at 20.32pm. Within that document I provided a breakdown of outstanding monies not collected by us and monies invested in you over the period of your career building stage. I also showed you that on average this investment by us reduced our pay from 20% to around 7%. When we met in Las Vegas recently we discussed this situation/document and after renegotiating our future position and you declaring that you wished to remain a Wolfslair team fighter then these issues we [sic] no longer pursued at that time.
The invoices provided relate to monies not paid because of tax being withheld and the benefit going to you, our contract is gross not net. Also any gift seen as payment is subject to the contract, and falls in the 20%.
Also invoiced are the monies expended by us solely on you (not the team) for UFC fight camps, in reality we invested a hell of a lot more but this becomes a grey area as the team were also present.
Once again, these are not bogus, you have two range Rovers, you have a tax benefit, you have a lot of camps in a lot of countries, not the team but you ..
150. This reply resulted in a letter dated 20 December 2011 to Mr McGann from Faradays solicitors, acting for Mr Bisping. In that letter, they asked Mr McGann for a copy of the contract relied on by him, a full breakdown of any fees claimed, and for a confirmation from Mr McGann that he accepts that the contract between him and Mr Bisping had now been terminated. It appears that Mr McGann did not send a formal response to this solicitors’ letter. However, he has disclosed an undated draft letter, setting out his case, which appears to have been put together as a potential response.
152. Mr McGann’s response was further a long email dated 21 January 2012, in which he set out “our contract clauses for you to review”. These consisted of clauses 2.1.2 and 7.1.4 of the Management Agreement, which Mr McGann relied upon to support a claim for commission on all fights under the Fifth PAR agreement, and on sponsorship and merchandising income; clause 2.2 of the Management Agreement, which Mr McGann relied upon to support his claim to commission on the value of the Range Rovers as an “in-kind contribution”; and clause 8, which Mr McGann relied upon both in support of his assertion that Mr Bisping had “never terminated the original term in the proper manner”, so that the original period of the Management Agreement was automatically extended for a further three years, and by way of justification for delivering copies of the 13 December 2011 invoices to Mr Bisping’s mother.
.. [Y]ou never terminated the original term in a proper manner. This gives us the original position of an automatic 3-year extension under the original terms and percentage (20%) .. A negotiation took place in Las Vegas and both parties agreed on the justification of the 3 year extension of contracts only, at the reduced percentage (15%). However this second position has yet to be adhered to as you have not paid your percentage after I continued to adhere to my obligations as manager ..
.. So that is basically our contractual position Mike. Your contract with us was more of a business partnership, hence our heavy investment in you. From Cook to Evans over 9 fights we paid for all your camps. Including training, sparring, travel etc etc. From McCarthy to Kanga over 5 fights we paid 50% of all the bills. From Silva to Riviera over 4 fights we paid 20% of the bills. This situation does not exist in the fight world, or in the contract. You know all this, we invested in you because we knew our contract encompassed all the above situations.
I hazard a guess that you are being advised that when a contracts up then it’s up, and in a normal manager/fighter relationship then this is so. But remember our contract was designed specifically because we were investing heavily in our athlete that’s why we went to Couchman Harrington in London at great expense. The contract was built by the best for this very position we are in now. It was Couchman Harrington’s advice to us to make the contract 6 years as it was in their experience, reflecting on the world of football, that to regain our investment it would take 6 years. This issue was heavily discussed and was the basis for the original business plan. Like all expensive advice it has proved correct. In a position of a legal fight it will also be Couchman Harrington who we will instruct as they drafted the contract and understand its fundamental properties. So please don’t listen to gym solicitors.
To be honest Mike I have appraised the whole situation from top to bottom and the length of time and money invested on both sides of this relationship is a difficult problem to solve simply. I think that we are in the same position as we were when we met last time in Las Vegas. You are tied to me contractually and I am tied to you from investment. If we fight this out on any level it will be disastrous. I have been here before and the lawyers’ bills are insane, and the amounts that the lawyers go after are insane. I propose that I continue to represent you till our contract runs out. You do not have to be part of the team and I will play no role in your camps. You are paying a manager you might as well have my services. Or we can continue on a path of mutual damage ..
Damian called with a follow-up to further discuss certain points, and you decide to show up at Damian’s house with an ultimatum. You tell Damian that you are not interested in talking settlement numbers, and that I better pay the outrageously exaggerated sum of money you claim I owe, or bad things were going to start happening, claiming Lee is going crazy back in the UK and is unpredictable. I will not tolerate any threats, I will [not] negotiate with someone who tries these methods to conduct his business.
He requested that any further contact should be through solicitors.
I don’t no [sic] why you keep asking me for a copy of your contract you have your own copy! Because you think I have lost my copy this is just another game! One of many you play to avoid paying
don’t reply to this email this is the last email you will be getting off me
Another email to Mr McGann came from Audie Attar of Paradigm Sports Management LLC. This email, dated 25 January 2012, informed Mr McGann that Paradigm was now retained by Mr Bisping.
2012-2014 – Further fights
155. Mr McGann’s case includes a claim for commission on a number of further bouts:
155.1 On 28 January 2012 Mr Bisping fought Chael Sonnen in Chicago.
155.1.1 It is agreed between the parties that Mr Bisping earned a Purse Fee of USD 275,000 and an Event Bonus of USD 25,000, making a total of USD 300,000. Commission at 15% on that sum would be USD 45,000.
155.1.2 It also agreed that Mr Bisping earned a further USD 7,100 from sponsorship and similar arrangements in connection with this fight. Commission at 15% on that sum would be USD 1,065. However, Mr Bisping’s case is that the agreements under which these monies were earned were not made during the Term of the Management Agreement.
155.1.3 Mr McGann sent a letter by email to Mr Bisping on 10 February 2012, in which he claimed commission on a total of USD 481,000 at 15%, amounting to USD 72,150. He now claims commission on Mr Bisping’s earnings in connection with this bout at 20%.
155.2 On 22 September 2012 Mr Bisping fought Brian Stann in Toronto.
155.2.1 It is agreed between the parties that Mr Bisping earned a Purse Fee of USD 275,000 and a Win Bonus of USD 150,000, making a total of USD 425,000. Commission at 15% on that sum would be USD 63,750
155.2.2 It is also agreed that Mr Bisping earned a further USD 13,500 from sponsorship and similar arrangements in connection with this fight. Commission at 15% on that sum would be USD 2,025. Again, Mr Bisping’s case is that the agreements under which these monies were earned were not made during the Term of the Management Agreement. In addition, USD 10,000 of that income was derived from MMA Elite. Mr Bisping alleges that it was paid under an agreement dated 1 May 2012 between Ultimate Brand Management LLC, MMA Management LLC and Mr Bisping, which provided for payment to be made to MMA Management LLC and not to Mr Bisping.
155.2.3 Mr McGann rendered an invoice to Mr Bisping “trading as [MBL] trading as [RMI]” dated 25 September 2012 claiming commission on a total of USD 548,0000 at 20%, amounting to USD 109,600. According to Mr McGann, the overstatement in this invoice was because “my figures were estimates”. He now claims commission on Mr Bisping earnings in connection with this bout at 20%
155.3 On 19 January 2013 Mr Bisping had a bout in Brazil against a fighter called Belfort.
155.3.1 It is agreed between the parties that Mr Bisping received a Purse Fee of USD 275,000 and an Event Bonus of USD 25,000, making a total of USD 300,000. Commission at 15% on that sum would be USD 45,000
155.3.2 Mr McGann also alleges that Mr Bisping received at least USD 50,000 from sponsorship under the agreement with MMA Elite. Mr Bisping denies the accuracy of the figure, and asserts once more that the agreement was not made during the Term and in any event did not provide for payment to Mr Bisping personally
155.3.3 Mr McGann’s evidence was that he did not send an invoice for this commission, as by then the parties were already in litigation. He now claims commission on all Mr Bisping’s earnings in connection with this bout at 20%
155.4 On 28 April 2013 Mr Bisping had a bout in the USA against a fighter called Belcher.
155.4.1 It is agreed between the parties that Mr Bisping earned a Purse Fee of USD 275,000 and a Win Bonus of USD 150,000, making a total of USD 425,000. Commission at 15% on that sum would be USD 63,750
155.4.2 Mr McGann again also alleges that Mr Bisping received at least USD 50,000 from sponsorship under an agreement with MMA Elite. Mr Bisping denies the accuracy of the figure, and asserts once more that the agreement was not made during the Term and in any event did not provide for payment to Mr Bisping personally
155.4.3 Mr McGann’s evidence was that he did not send an invoice in relation to this fight because litigation had already begun. He now claims commission on all Mr Bisping’s earnings in connection with this bout at 20%
155.5 On 16 April 2014, Mr Bisping fought Tim Kennedy in Canada.
155.5.1 It is agreed between the parties that Mr Bisping earned a Fighters Purse of USD 275,000 and an Event Bonus of USD 25,000, making a total of USD 300,000. Commission at 15% on that sum would be USD 45,000.
155.5.2 According to Mr McGann, Mr Bisping also earned an estimated USD 50,000 in sponsorship in connection with this fight. This is denied by Mr Bisping, on the pleaded basis that “it is not known to which sponsorship agreement [Mr McGann] intends to refer”.
The witnesses
Mr McGann and Mr Bisping
158. Neither Mr McGann nor Mr Bisping was a wholly satisfactory witness.
159.1 Mr McGann’s evidence denying that he knowingly participated in Mr Bisping’s submission of dishonestly overstated Schedules of Tax Deductions & Tax Rates in 2010 and 2011 was inconsistent with the terms of Mr McGann’s own letters dated 14 March 2010 and 21 April 2011, in which he proudly claimed credit for those expense submissions, and in my judgment was untruthful.
159.2 The evidence which Mr McGann gave in which he claimed only to have disregarded my instructions by discussing his evidence by “ranting” about those Australian tax matters (and nothing else) with his wife (and no one else) was inconsistent in many respects with the terms of the email sent by Mr Gwynn which led to the court being informed of what had happened It is plain from that email that a number of other aspects of Mr McGann’s evidence were discussed directly between Mr McGann and Mr Gwynn. Again, in my judgment, Mr McGann’s evidence on that topic was untruthful. Mr McGann’s (and Mr Gwynn’s) reluctance to provide the court with a full and unredacted, copy of Mr Gwynn’s email also reflects badly upon Mr McGann’s (and Mr Gwynn’s) general credibility.
159.3 Mr McGann was at some pains, in his evidence, to deny any partnership with Mr Gwynn in relation to the management of Mr Bisping. That evidence however was inconsistent with the conduct of Mr McGann and Mr Gwynn in relation to this litigation. It was clear from the bench that Mr Gwynn was playing an equal, if not leading, role in relation to this case. That evidence was also inconsistent with much of the contemporary correspondence, including the letter from WPL dated 28 May 2011 the subsequent letter from WPL signed by Mr Gwynn to which the “BISPING 1-3” invoices were attached, and Mr Gwynn’s own emails dated 22 December 2011, 23 January 2012 and 24 January 2012 (all of which were worded as if the commission and outstanding expenses were due to Mr Gwynn rather than to Mr McGann). In my judgment, Mr McGann’s evidence on this aspect was untruthful, and was deliberately put forward by Mr McGann in order to bolster his case that Mr Bisping was mistaken in believing that the contract which he signed in 2005 was a contract with “Wolfslair” (ie both Mr McGann and Mr Gwynn), rather than the Management Agreement with Mr McGann alone.
Lee Gwynn
Mike Wood
168. It seemed to me that Mr Wood was a careful witness, who gave his evidence clearly and calmly.
Dave Jackson, Gavin Sterrit, and Francisco Neto
170. Mr Jackson seemed to me to be careful and straightforward witness.
Jamie Peters
176. It seemed to me that Mr Peters was often evasive in his answers to Mr Buttimore’s questions.
Paul Lloyd Davies
Jan Bisping
Juanito Ibarra
Dana White
Gary Farnsworth
The issues
(1) Did Mr McGann and Mr Bisping enter into the Management Agreement in the form relied upon by Mr McGann?
(3) Is Mr McGann entitled to commission on the value of the Range Rovers or on discretionary bonuses?
(9) Is Mr McGann time barred from recovering any element of his claim?
(10) Can Mr McGann recover commission on monies due and/or paid to MBL or RMI?
(12) To what relief (if any) are Mr McGann and Mr Bisping entitled?
190. In what follows, I shall deal with each of these issues in turn.
(1) Did Mr McGann and Mr Bisping enter into the Management Agreement in the form relied upon by Mr McGann?
(2) Is Mr McGann entitled to be paid commission on the gross amount of Mr Bisping’s overseas earnings, even where withholding tax has been deducted from those earnings at source?
198. Under clause 1.1 of the Management Agreement, Mr Bisping appointed Mr McGann:
.. On a sole and exclusive basis to promote and manage his activities within MMA and all income producing activities that result from it throughout the World ..
Mr Bisping’s obligation to pay commission was dealt with in clause 2. Clause 2.1 provided:
2.1 In consideration of performing his obligations under this Agreement, you agree to pay to AM the following commissions:
2.1.1 a sum equal to 20% (twenty per cent) of all income received by you in the form of monies and/or “in-kind contributions” from any contracts entered into or substantially negotiated during the Term in relation to all income producing opportunities arising directly or indirectly from your role as a MMA fighter and/or your image and profile as a professional sportsman and entertainer including, without limitation, personal endorsement or team sponsorship, appearance fees, merchandising revenues and all other potential income (“Commercial Contracts”)
201. The court’s task when interpreting a commercial contract such as the Management Agreement has been explained by the Supreme Court in a number of cases, of which the most recent are Rainy Sky SA v Kookmin Bank[18], Arnold v Britton[19], and Wood v Capita Insurance Services Ltd[20]. In short, the court’s aim is to try to determine the objective meaning of the language in which the parties have chosen to express their agreement. This involves ascertaining what a reasonable person (who had all the background knowledge that would reasonably have been available to the parties in the situation in which they were at the time of the contract) would have understood the parties to have meant. In reaching its view, the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context, including the consistency of any particular suggested interpretation with business common sense.
2.4 All monies received under Commercial Contracts shall be paid directly to AM. AM shall deduct his commission due and then shall pay the balance as soon as reasonably practicable following receipt.
2.5 You shall notify AM upon receipt of any monies or any instalment thereof, and/or any “in-kind contributions” from any Commercial Contracts.
2.6 In the event of you receiving any monies are set out in paragraph 2.1.2[21], you shall pay the commission due to AM within 14 days of receipt of an invoice from AM. All sums due from you not paid by the due date shall bear interest on a daily basis at the annual rate of 4% over the base rate of the HSBC in London.
In these later clauses, it would not accord with business common sense to interpret “receipt”, “received” and “receiving” as being equivalent to “earned” or “earning”. For example, in clause 2.4, interpreting “receipt” as meaning “earned” would mean that Mr McGann was obliged to pay Mr Bisping’s earnings to him (minus commission) as soon as they were contractually due, irrespective of whether or not Mr McGann had actually received them. Clause 2.5 also makes much more sense if the notification obligation springs up upon payment, rather than upon contractual entitlement.
206. In the US and other jurisdictions where the law made provision for a withholding tax, Zuffa discharged its monetary obligations under the Bout Agreements by doing 2 things: first, by transferring a sum to Mr Bisping’s account[22] which was less than the gross amount payable under the Bout Agreement by the amount which the law required it to retain; and, secondly, by retaining the amount required by law, for which it was thereafter obliged to account for the benefit of Mr Bisping to the relevant tax authorities.
210. Mr Bisping has an alternative argument, pleaded in paragraph 22(d) of the Re-Re-Amended Defence and Counterclaim, to the effect that the Management Agreement was varied by conduct and/or Mr McGann is estopped from asserting this claim.
212. The specific sums claimed by Mr McGann under this head amount to a total of USD 64,500, made up as follows:
212.1 Schafer 30/12/06 USD 6,000
212.2 Evans 17/11/07 USD 7.600
212.3 Henderson 11/07/09 USD 15,000
212.4 Silva 20/02/10 USD 6,400
212.5 Miller 29/05/10 USD 19,000
212.6 Rivera 27/11/11 USD 10,500
(3) Is Mr McGann entitled to commission on the value of the Range Rovers or on discretionary bonuses?
215. Clause 2.2 of the Management Agreement defines “in-kind contributions” as:
.. monies not in cash by [sic] the value of any goods, services, products or property provided to you.
The value represented by any “in-kind contributions” shall be determined by way of agreement between you and AM. Failure to agree shall result in an independent mutually agreed party being asked to determine value, and such a decision on value shall be final and binding on both parties
The word “monies” in clause 2.2 seems to me to be a reference back to clause 2.1.1, which entitles Mr McGann to commission on “all income received by you in the form of monies and/or ‘in-kind contributions’ from any contracts entered into or substantially negotiated during the Term”.
216. Both sides relied, at least to some extent, on the other party’s contemporary comments and/or conduct as showing that these cars were, or were not, treated when received as “in-kind contributions” on which commission was payable. However, this issue is primarily one of interpretation of the Management Agreement: and it is trite law that (subject to immaterial exceptions) subsequent conduct is not admissible as an aid to interpreting a written agreement[23].
220. Again, Mr Bisping has an alternative argument, pleaded in paragraphs 23(c) to (f) of the Re-Re-Amended Defence and Counterclaim, to the effect that Mr McGann is estopped from asserting this claim[24]. Again, on the evidence, Mr McGann’s words and conduct were not such as to give rise to the suggested estoppel, nor in my judgment did Mr Bisping in fact rely on any relevant words or conduct of Mr McGann.
(4) Is Mr McGann entitled to be repaid for the sums he claims to have spent on training camp expenses?
3.1 advising generally on the progression of your career;
3.2 provide you with access to first-class MMA coaching and training;
3.3 enable you to use the MMA facilities including the cage, the gymnasium and the weights at Wolfslair MMA;
3.4 advise you on suitability of events to enter and the progression of your career generally;
3.5 use reasonable endeavours to introduce you to companies interested in entering into sponsorship and endorsement merchandising appearance packages or other income producing arrangements with you; 3.6 provide access to third-party services (which costs you shall be responsible for provided you have a proven in advance) if reasonably required including media exposure and publicity; legal and accountancy services to include tax and other specialist advice; such other services which are considered beneficial to you.
223. Clause 2.8 of the Management Agreement provided:
2.8 AM’s day-to-day expenses in carrying out his obligations shall not be recoverable. Any extraordinary expenses incurred by AM such as travel, accommodation and subsistence shall be recoverable provided you approve such expenses in advance.
230. Among my reasons for this view are the following:
230.1 First, the misleading impression created by the documents which Mr McGann produced on disclosure as if they were contemporary but which he now accepts were created by him several years after the event: see paragraphs 44 to 52 above. The overall impression given by the way that these copy documents were produced on inspection, and by the way that they had been filled in, was deceptive: and Mr McGann offered no plausible explanation for the fact that he twice wrote a 2006 or 2007 date next to a signature which he now admits he did not put on the relevant document until 2011. In my judgment, his intention in creating these documents was to deceive: and I reject his explanation about how these misleading documents came to be disclosed in the way that in fact occurred.
230.2 Secondly, the fact that it is implausible that Mr McGann would have sent his email dated 4 December 2009 to which the “Mike Camp” ledger sheet was attached, showing total expenses of £14,084, if (as he now claims) he had only 2 days before sent or handed to Mr Bisping a letter dated 2 December 2009 attaching a “Camp Bill Report” totalling £7,299 in relation to those very same expenses: see paragraph 101 above.
230.3 Thirdly, the absence of any reference to the invoices on which Mr McGann now relies in his correspondence with Mr Bisping beginning with Mr McGann’s 28 May 2011 letter (see paragraph 122 above) until after Faraday’s letter dated 20 December 2011 (see paragraph 150 above). When Mr McGann, in his 13 December 2011 email, said to Mr Bisping “you have my invoices and you have my number”, he was plainly referring to the 3 newly-created invoices attached to that email, not to the documents on which he now seeks to rely. If Mr McGann had truly sent formal invoices to Mr Bisping after each and every bout, it is almost inevitable that he would have referred to them at some point in this correspondence. The fact that he did not do so strongly suggests that those invoices did not then exist.
230.4 Fourthly, the words used by Mr McGann in that correspondence to describe the arrangements between himself and Mr Bisping in relation to these expenses: in particular (though by no means exclusively) Mr McGann’s repeated references to these expenses as part of his “investment” in Mr Bisping. Mr McGann would no doubt argue (as Mr Gwynn did in his 1 May 2017 email referred to in paragraphs 62 to 67 above) that “investment can equally mean recoverable”. That is no doubt true: but what is striking in this correspondence is the absence of any reference to the case now advanced by Mr McGann, that there was a specific agreement between him and Mr Bisping that the amounts paid by Mr McGann should “lie on the file”, to be paid only when Mr Bisping’s financial position improved. If such an agreement had truly been made, it is almost inevitable that Mr McGann would have referred to it in this correspondence, and would not simply have described this expenditure as an “investment”.
230.5 Fifthly, the discrepancies between the sums claimed in invoice “BISPING 1” dated 13 December 2011 in relation to these expenses, and the sums claimed in the invoices on which Mr McGann now relies. Mr McGann’s explanation that “this was done without the benefit of papers because they were with my accountant” is implausible, given the level of detail in “BISPING 1”. It is not credible that the invoices sent on 13 December 2011 were put together simply from memory. It is more likely that they were put together from the records then available to Mr McGann and Mr Gwynn, and that those records did not include the invoices on which Mr McGann now relies, because those invoices did not then exist.
230.6 Sixthly, the fact that Mr McGann’s email dated 16 December 2011, in describing the 3 invoices dated 13 December 2011, specifically distinguishes between “outstanding monies not collected by us” (which appears to be a reference to the commission monies claimed in BISPING 2 and BISPING 3) and “monies invested in you by us over the period of your career building stage” (which seems to be a reference to the monies now claimed in BISPING 1). In relation to these, the 16 December 2011 email says: “also invoiced are the monies expended by us solely on you (not the team) for UFC fight camps, in reality we invested a hell of a lot more but this becomes a grey area as the team were also present”. That, like the 28 May 2011 email which was said to be “consolidated” into the 13 December 2011 invoice, appears to indicate that the sums claimed had very recently been collated or estimated by reference to the available records, a process which would have been unnecessary had the specific sums already been invoiced bout by bout.
230.7 Seventhly, the fact that, even though email correspondence going back to 2005 has been disclosed, there is no reference to any of the letters and emails on which Mr McGann now relies in any of that correspondence.
230.8 Eighthly, the fact that, as at the date when several of the letters and invoices on which Mr McGann now relies purport to have been written, Mr McGann was not physically at the Wolfslair. While that does not make it impossible that he (or someone on his behalf) could have produced these computer-generated documents in this form, they are unlike the small number of invoices and receipts which he verifiably produced at the time, which all seem to be handwritten.
231. In other circumstances, I should have been minded to hold that the effect of Mr McGann’s and Mr Bisping’s words and conduct in the way that they operated their relationship of manager and fighter was to vary the provisions of the Management Agreement in relation to expenses, so as to make Mr Bisping responsible only for those expenses which he was specifically asked to pay, and did in fact pay, bout by bout. However, I can only decide this case on the basis of the pleaded issues[25], and Mr Bisping has not pleaded any such agreement of variation in his Re-Re-Amended Defence & Counterclaim. The nearest he gets (in paragraph 31(c)) is the averment that Mr McGann’s requests for payment of specific expenses (which Mr Bisping then paid) each amounted to an implied representation, sufficient to found an estoppel, that no other expenses were then due. Since the evidence does not establish either any sufficient representation by Mr McGann or any sufficient reliance on any such representation by Mr Bisping, that plea cannot itself provide a good answer to Mr McGann’s claims.
232.1 First of all, my finding that the letters, invoices and supporting documentation on which Mr McGann now relies for his claim are all recent fabrications means that, in relation to most of the expenses now claimed, there is no reliable proof of the fact and amount of that expense. I except from that finding those airfares for which there are copy printouts from a travel company website, and those expenses which relate to sums paid to Mr Jackson, Mr Neto, Mr Peters and Mr Sterritt, and which those witnesses have confirmed in their own evidence.
232.2 Secondly, even in relation to those sums for which there is reliable proof of the fact and amount, there is no reliable proof (except in relation to the airfares) that they are properly chargeable to Mr Bisping. Mr Jackson, Mr Neto Mr Peters and Mr Sterritt were all (to put the matter broadly) closely associated with Mr McGann and the Wolfslair gym. Mr McGann has not, in my judgment, established that those specific payments to these particular coaches and sparring partners fall within the concept of “extraordinary expenses” for the purposes of clause 2.8, rather than being part of the general overhead for which Mr McGann himself was responsible under the Management Agreement.
232.3 Thirdly, and perhaps most importantly, in relation to each and all of the expenses now claimed by Mr McGann (including the airfares), Mr McGann has failed to establish that that specific item of expense was approved by Mr Bisping as an item chargeable to Mr Bisping. I accept the evidence of Mr McGann and his witnesses that Mr Bisping was closely involved in planning his training for his various bouts. Indeed, Mr Bisping did not deny it. Against the background (as I have found it to be) of the way in which Mr McGann and Mr Bisping operated their relationship in relation to expenses, it seems to me that Mr Bisping’s general approval of the training arrangements for a particular fight, including his approval of particular coaches and sparring partners, did not amount to an approval of the cost of those arrangements as an “extraordinary expense” chargeable to him under clause 2.8. The contrast between the way in which Mr McGann and Mr Bisping dealt with expenses in relation to the Miller fight in December 2011 (see paragraphs 131 to 136 and 140 above) and their earlier conduct is telling. It is common ground that Mr Bisping himself paid all expenses in relation to that bout.
234. That conclusion makes it unnecessary for me to deal in detail with the alternative argument deployed by Mr Buttimore on behalf of Mr Bisping, which was that, were I to find (as I have) that Mr McGann had fabricated documents in support of his claim, I should strike out those parts of the claim as an abuse of the process, without entering upon the merits. Mr Buttimore relied upon the cases of Arrow Nominees Inc v Blackledge[26], Masood v Zahoor[27], and Alpha Rocks Solicitors v Alade[28].
.. it must be a very rare case where, at the end of a trial, it would be appropriate for a judge to strike out a case rather than dismiss it in a judgment on the merits in the usual way ..
In my judgment, the appropriate way to deal with this aspect of Mr McGann’s claim is to deal with it on the merits, as I have done.
(5) Did Mr McGann and Mr Bisping reach an agreement, either in late 2007 and/or in December 2010 to “wipe the slate clean”, in such a way as to amount to a settled account and/or a compromise of all existing claims?
239. Strictly speaking, to be a “settled account” in equity, the agreed account must be in writing[29]. However, an accord and satisfaction – where the parties agree that a certain figure should be accepted, and the person to whom that sum is owing agrees not to claim any more and the person by whom it is owing agrees not to pay any less – may have much the same effect in law, and can perfectly well be made orally[30].
.. I have always paid what is due when we square up .. If you recall, we sat down after the Akiyama fight [which took place on 16 October 2010] and squared everything up ..
However, that email then went on to say “I need a copy of the agreement between us to see if I owe you any money for the Range Rovers”. That suggests that Mr Bisping did not see at least that particular claim as having been compromised by any prior agreement.
(6) Did Mr Bisping effectively terminate the Management Agreement, either by agreeing in 2007 that it would come to an end at its expiry, or by giving notice orally and/or by his email dated 24 May 2011?
245. Clause 1.3 of the Management Agreement provides:
This agreement shall commence on the date hereof and shall continue for a period of 6 (six) years (“Term”) unless previously terminated in accordance with the provisions of this Agreement are set out below. Following the conclusion of the Term this Agreement shall automatically renew for a period of 3 (three) years, unless you notify AM in accordance with clause 7.1
Clause 7.1 provides:
Upon expiry of the Term, this Agreement shall automatically renew for a further 3 (three) years, unless you notify AM no sooner than 3 (three) months prior to the end of the Term and no later than one month prior to the end of the Term that you no longer wish to continue using AM’s services
Also relevant is clause 8.1, which states:
All notices or other communications required or permitted to be served on, or given to either party under this Agreement, shall be deemed properly served if in writing and sent by registered post or delivered by hand to the intended party
251. In my judgment, that is not the correct interpretation of these clauses. There is nothing in clause 8.1 which expressly or impliedly limits the way in which notices under the Management Agreement may be given. It does not say “notices under this agreement may be given” in one of the following ways[31]. It simply says that notices “shall be deemed properly served” if given in either of the specified manners. With regard to the ways in which notices can properly be given, it is therefore permissive rather than mandatory. It prescribes the consequences of following the stated method, but does not make that the only way in which service can properly be effected.
After the defendant’s email of 24 May 2011, the Claimant and the Defendant had further communications further to which the parties agreed that their relationship would continue to be governed by the Management Agreement subject to the Claimant agreeing to a reduced commission of 15%
258. Those findings mean that:
258.1 For the purposes of clause 2.1.1, the “Term” of the Management Agreement ended on 21 July 2011;
258.2 For the purposes of clause 2.1.2 the “period of 3 years following the expiry of the Term” ran from 22 July 2011 to 21 July 2014;
258.3 Notwithstanding the provisions of clauses 2.1.1 and clause 2.2.2, Mr McGann is in principle entitled (subject to the matters considered later in this judgment) to commission at the rate of 15% on any income “arising directly and indirectly from [Mr Bisping’s]’s role as an MMA fighter and/or [Mr Bisping’s] image and profile as a professional sportsman and entertainer” during the period between the end of the Management Agreement on 21 July 2011 and the end of December 2011, whenever the relevant Commercial Contract was entered into or negotiated. This will include all earnings connected with the Miller fight in December 2011.
(7) Alternatively, did Mr Bisping bring the Management Agreement to an end in May 2011 or in December 2011 by accepting repudiatory breaches committed by Mr McCann?
263.1 failing to produce proper accounts
263.2 failing to provide access to first-class coaching and training
263.3 failing to get Mr Bisping’s approval in advance before engaging third parties on his behalf
263.4 failing to work diligently and with best endeavours to maximise Mr Bisping’s income and/or to promote and protect Mr Bisping’s interests
267. Even taken at their face value, on no sensible basis could it be said that the various matters relied upon by Mr Bisping were (individually or when taken together) such as to deprive Mr Bisping “of substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as the consideration for performing” his side of the contract[32].
(8) What rate of commission (if any) is payable by Mr Bisping to Mr McCann for the period from December 2011 onwards?
(9) Is Mr McGann time barred from recovering any element of his claim?
274. The Claim Form in this action was issued on 24 October 2012. The limitation period in relation to claims for breach of contract is 6 years from the date the cause of action arose[33]. Prima facie, therefore, any of the claims put forward by Mr McGann in relation to which the cause of action arose prior to 24 October 2006 will therefore be statute-barred
(10) Can Mr McGann recover commission on monies due and/or paid to MBL or RMI?
279.1 Under clause 2.4 of the Management Agreement, all monies received as a result of Mr Bisping’s activities as an MMA fighter should have been paid to Mr McGann rather than to these companies. Mr Bisping is therefore seeking to rely upon his own breach of the Management Agreement in procuring that the payments went to these companies.
279.2 To the extent that these companies received monies as a result of Mr Bisping’s activities as an MMA fighter, they did so on Mr Bisping’s behalf;
279.3 On the true interpretation of the Management Agreement Mr McGann was entitled to commission on all monies paid as a result of Mr Bisping’s activities as an MMA fighter.
279.4 It was an implied term of the Management Agreement that Mr McGann should be entitled to commission on all monies paid as a result of Mr Bisping’s activities as an MMA fighter;
280. In my judgment, the first 2 of these arguments are misconceived.
280.1 With regard to the argument based upon clause 2.4, it is circular. Clause 2.4 applies to “all monies received under Commercial Contracts”. While it is correct that the definition of “Commercial Contracts” does not specify the parties, and clause 2.4 does not itself specify the person by whom the monies are to be received, it seems clear that this is a reference back to clause 2.1.1, which identifies the relevant monies as “income received by you”, ie Mr Bisping. It follows that, unless the monies represent income received by Mr Bisping (in the extended sense in which the word “received” is used in these provisions - see Issue (2) above), they do not fall within clause 2.4.
280.2 The argument that the companies received the money on Mr Bisping’s behalf is inconsistent with the structure of the relevant PAR Agreements and Bout Agreements. The PAR Agreements do not expressly identify the party to be paid by Zuffa. However, it would make little commercial sense if the money to be paid under these agreements was, on their true interpretation, to be Mr Bisping’s income and not that of the companies. That would defeat the tax-driven purpose of having the companies in the first place. That that is the correct interpretation is made clear by the terms of the various Bout Agreements, all of which refer to payments being made to the company or to “Fighter [ie Mr Bisping] as its authorised agent”.
283. It has been said that the processes of consideration of express terms and of the possibility that an implication exists are all part of an overall, and potentially iterative, process of objective construction of the contract as a whole[34]: and, were I to be wrong about the correct interpretation to be put on clause 2.1, I would instead hold that it was an implied term of the Management Agreement that Mr McGann’s entitlement to commission on income under clause 2.1 should not be altered by the use of Mr Bisping of a structure such as this, under which income that would otherwise have been payable and paid to Mr Bisping himself becomes payable and paid at Mr Bisping’s request to a third party. The test for implication is a strict one, particularly in a professionally drafted agreement such as this. However, it seems to me that such a term would here meet all of the relevant criteria: it would be reasonable and equitable; so obvious that ‘it goes without saying’; capable of clear expression; and would not contradict any of the express terms of the contract[35].
(11) Is Mr McGann entitled to interest on any of the sums claimed by him, and if so from when at what rates?
286. The Management Agreement contains two provisions dealing with interest:
286.1 Clause 2.6 states:
In the event of you receiving any monies as set out in Paragraph 2.1.2, you shall pay the commission due to AM within 14 days of receipt of an invoice from AM. All sums due from you not paid by the due date shall bear interest on a daily basis at the annual rate of 4% over the base rate of the HSBC in London
286.2 Clause 2.10 provides:
Upon termination, you shall pay any invoiced amounts to AM in respect of 2.1.1, within 14 days of the date of invoice. All sums due from you not paid by the due date shall bear interest on a daily basis at the annual rate of 4% over the base rate of the HSBC in London
(12) To what relief (if any) are Mr McGann and Mr Bisping entitled?
295. It is not in dispute that much of the income earned by Mr Bisping and his companies from sponsorship deals was paid to Mr McGann, as Mr Bisping’s agent. It was therefore his duty, under clause 2.9 and at common law “to preserve and be constantly ready with correct accounts of all his dealings and transactions in the course of his agency” and “to produce to [Mr Bisping] upon request, or to a proper person appointed by [Mr Bisping], all books, correspondence and documents (including emails and other electronic material) under his control relating to [Mr Bisping’s] affairs”[36].
297. As for McGann’s own claim for an account as against Mr Bisping, Mr Buttimore is right in saying that Mr McGann cannot rely upon any contractual right equivalent to clause 2.9 in support of his claim, and that the Management Agreement does not make Mr Bisping a trustee or quasi-trustee of any property, so as to make him an accounting party in equity. An action of account, properly so called, is available to a principal against his agent, but not to an agent against his principal[37].
Conclusion
302. For the reasons set out above, the Orders which I propose to make are as follows:
303. I propose to give judgment in favour of Mr McGann in relation to the following sums:
303.1 USD 64,500 in respect of commission at 20% on sums withheld by overseas tax authorities (Issues (2) and (10))
303.2 USD 40,000 in respect of commission at 20% on the value of the Range Rovers (Issue 3)
303.3 USD 63,750 and USD 975 in respect of commission at 15% on Mr Bisping’s admitted earnings in connection with the bout against Jason Miller in December 2011 (Issues 6 and 10)
303.4 USD 45,000 in respect of commission at 15% on Mr Bisping’s admitted earnings from Zuffa in connection with the bout against Chael Sonnen in January 2012 (Issues 6 and 10)
303.5 USD 63,750 in respect of commission at 15% on Mr Bisping’s admitted earnings from Zuffa in connection with the bout against Brian Stann in September 2012 (Issues 6 and 10)
303.6 USD 45,000 in respect of commission at 15% on Mr Bisping’s admitted earnings from Zuffa in connection with the bout against Belfort in January 2013 2012 (Issues 6 and 10)
303.7 USD 63,750 in respect of commission at 15% on Mr Bisping’s admitted earnings from Zuffa in connection with the bout against Belcher in April 2013 2012 (Issues 6 and 10)
303.8 USD 45,000 in respect of commission at 15% on Mr Bisping’s admitted earnings from Zuffa in connection with the bout against Tim Kennedy in April2014 (Issues 6 and 10)
303.9 Contractual interest on the sum of USD 67,350 awarded in paragraph 303.3 above at the rate of 4 % over the base rate of HSBC Bank Plc from 13 December 2011 to the date of judgment (Issue 11).
306. I propose to direct that:
306.1 An account should be taken (having regard to the determinations made in this Judgment) of the sums received and payments and deductions made by Mr McGann under the Management Agreement (and under the temporary trial extension thereof agreed by Mr McGann and Mr Bisping in June 2011) year by year for the period from 22 July 2005 up to and including 31 December 2011;
306.2 An enquiry should be made to determine (having regard to the determinations made in this Judgment) what earnings were received by Mr Bisping or by companies associated with him in the period from 22 July 2005 to date on which commission has or should have been paid, and what commission was accordingly due to Mr McGann on those earnings:
306.2.1 Under clause 2.1.1 of the Management Agreement, and
306.2.2 Under clause 2.1.2 of the Management Agreement;
306.3 A determination should be made, as a result of that account and that enquiry and taking into account the sums for which judgment has already been given in this action, as to the net sum (if any) that remains due from Mr McGann to Mr Bisping or from Mr Bisping to Mr McGann;
And I intend to order the payment of any sum so found due.
310. Finally, I yet again encourage the parties to try to settle their differences.
Postscript
[1] “(1) Subject to paragraph (2), and without prejudice to the right of a party to object to the admission in evidence of any document, a party on whom a list of documents is served in pursuance of any provision of Order 24 shall, unless the Court otherwise orders, be deemed to admit: (a) that any document described in the list as an original document is such a document and was printed, written, signed or executed as it purports respectively to have been; and (b) that any document described therein as a copy is a true copy.
This paragraph does not apply to a document the authenticity of which the party has denied in his pleading.”
[2] [2017] UKFTT 19 (TC) at [50], per Tribunal Judge John Clark.
[5] At [31] to [38]
[6] [2014] EWCA Civ 906, [2014] 1 WLR 3926 at [40]
[7] In this connection, Mr Buttimore referred me to Woodhouse v Consignia Plc [2002] EWCA Civ 275, [2002] 1 WLR 2558; and to Aldi Stores Ltd v WSP Group Plc [2007] EWCA Civ 1260, [2008] 1 WLR 748.
[9] See at [34], per Moore-Bick LJ
[10] (1843) 3 Hare 100. For more modern statements of the relevant principles, see Johnson v Gore Wood & Co [2002] 2 AC 1; and Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160.
[12] [2015] EWHC 759 (Comm) at [36] to [38], per Carr J
[13] [2016] EWHC 1812 (Ch), [2016] 1 WLR 5190 at [35] to [41], per Snowden J
[14] See the valuable observations on the fallibility of human memory made by Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) at [15] to [22].
[15] [1985] 1 Lloyd's Rep 1 at 57
[16] The agreement actually refers to the second series, but that seems to be an error as the second series ran from August to November 2005, and so ended prior to the date of the First PAR Agreement.
[17] Emphasis added
[21] Which provides for Mr Bisping to pay Mr McCann a sum equal to 15% of all income received from any renewals, extensions, modifications or variations to Commercial Contracts entered into for a period of 3 years following the expiry of the Term
[22] For the purpose of this analysis, I disregard the issues arising from the interposition of MBL and RMI, which are dealt with later in this judgment under Issue (10).
[23] Chitty on Contracts (32nd ed) para 13-129.
[24] Mr Bisping’s Response to Request for Further Information dated 30 December 2013 answered requests for information about how he had treated the Range Rovers for tax in the US and the UK by stating that "Paragraph 23(f) of the Defence and Counterclaim is no longer being relied upon". Mr Bisping nevertheless expanded paragraph 23(f) in the Re-Amended Defence & Counterclaim served by him in September 2014: and Mr Buttimore has relied upon this estoppel argument in his Written Closing Submissions.
[25] See eg Al-Medenni v. Mars UK Limited [2005] EWCA Civ 1041 per at [21]-[25], per Dyson LJ.
[26] [2000] CP Rep 59, CA.
[30] See Phillips-Higgins v Harper [1954] 1 All ER 116 at 117 per Pearson J; affd on another point [1954] 1 QB 411 at 420, CA.
[31] Contrast the wording of clause 12 of the 1992 ISDA Master Agreement, considered by Carr J in Greenclose Ltd v National Westminster Bank plc [2014] EWHC 1156 (Ch), [2014] 2 BCLC 486 at [88] to [134]
[32] Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 at 66, per Diplock LJ.
[33] Limitation Act 1980 s 5.
[34] Trump International Golf Club Scotland Ltd v Scottish Ministers [2015] UKSC 74, [2016] 1 WLR 85 at [44], per Lord Mance.
[35] See Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72, [2016] AC 742 at [14] to [32], per Lord Neuberger; and Hallman Holding Ltd v Webster [2016] UKPC 3 at [14], per Lord Hodge.