Sports Network Ltd v Calzaghe

The applicant company, Sports Network Ltd, is well known in boxing circles. Its director, Mr Frank Warren, is a very successful manager and promoter of boxers and boxing. Among the many fighters he has managed and promoted is the much acclaimed world champion, Joe Calzaghe. Mr Warren has been closed involved with Joe Calzaghe, certainly in his big fights; all except the last, which was fought, I think, on 11 November last year when he fought and defeated Ray Jones Jr. This fight was promoted by companies under the control of the two boxers. Mr Warren was not best pleased. He, or more accurately his company, had brought a claim against his former protégé for damages for breach of contract, alleging that, under the terms of an oral agreement made with the company, acting principally by Mr Warren, Joe Calzaghe agreed that the company would promote the Jones fight and indeed promote any other fight in which the defendant would ever be engaged in the future. The defendant denied that he had made such an agreement. He counterclaimed monies due and owing to him by the company from his previous world record defence against Bernard Hopkins.

This particular dispute was fought out in the Royal Courts of Justice for something approaching two weeks before Wyn Williams J. It appears to have been as ferociously contested as any of the pugilistic encounters for which Joe Calzaghe is so famous. No holds were barred and no punches were pulled. Some of the punches may even have been a bit low. Both sides emerged bloody and bruised, but no knockout blow had been delivered. The learned judge was, however, entirely satisfied that Joe Calzaghe was the clear winner on points. On 16 March 2009 the judge ordered that the company’s claim be dismissed and that there be judgment on the defendant’s counterclaim in an amount something over £1.8 million.

The company now renews its application for permission to appeal, having been refused permission on the papers by Sir Paul Kennedy. Mr Jonathan Crystal now appears for the applicant, not having appeared in the court below, where the protagonists were represented by heavyweights at the bar: namely, Mr Ronald Thwaites QC and Mr William McCormick for the claimant and Mr Ian Mill QC and Mr Andrew Green for the defendant.

Mr Crystal has put in his written submissions, which I have carefully considered, and has advanced his arguments with cogency and conciseness, but with no less force, in the limited time available for these applications. I am grateful to him for the help he has given.

The challenge is both to the judge’s crucial finding that, at a meeting which took place on 15 January, attended by Mr Warren, by a Mr Simons, by Joe Calzaghe and his father Enzo and by their solicitor, Mr Gareth Williams, it was agreed that the Hopkins fight, which it had earlier been agreed would be promoted by Mr Warren and his companies, would result in a split of the profits from that fight in the proportion of 80% to the boxer and 20% to the promoter. The company’s stance entering that negotiation was that the split should take place in the proportions of 75% to 25%. There was eventually no dispute but that the agreement had been concluded in the terms put forward by the defendant, namely that he had the 80% share of the profit. The issue that was joined was whether or not Mr Calzaghe had agreed that all his future fights would be promoted by Mr Warren and his company, and the judge found in favour of the defendant on that crucial issue.

It was a long, and if I may say so, careful judgment. The judge remarked early in his judgment that, paragraph 18:

“In the light of the evidence given and the submissions made upon the evidence by counsel I have formed the clear view that I should treat the evidence of each of these witnesses with caution. I say now that there are aspects of the evidence given by each of these persons which has caused me to reflect long and hard upon their credibility, accuracy and reliability. When judging which parts of their evidence on important matters I accept or reject, I have looked for supporting evidence, particularly supporting documentary evidence where that exists. Further, I have sought to test the evidence of the principal witnesses by reference to the probabilities as I see them.”

Thus the judge embarked on his analysis of the evidence. He looked carefully at the contractual arrangements that had been made between these parties in the preceding decade or so. There is no apparent challenge to this part of the judge’s findings, but they are important in my view for at least establishing the deterioration in the relationship between these individuals. So I see at paragraph 64 the judge expressing his satisfaction that the defendant was disillusioned with the claimant in the weeks following his earlier fight with Mr Kessler. In paragraph 8 the judge records it being clear that, by November 2007, each was acutely aware of the potential sums involved whenever the defendant fought. In 7-9 the judge records his finding that the defendant’s refusal to accept the offer then under discussion was a clear indicator that by this stage he was adopting a much harder attitude in his negotiations with Mr Warren than he had displayed over the previous years. Perhaps this is all summed up in an extract of an interview Mr Calzaghe gave to a sports journalist, in which he said, paragraph 140 of the judgment:

“So I am disappointed obviously that he has been like this, because I feel that I have given him 12 years, not him given me. I'm the one getting my head punched in the ring. I am the one who is doing the hard work.”

One can only have a degree of sympathy for that attitude!

So that was the background against which this negotiation took place. Mr Crystal attacks the findings of the judge, principally because, in his submission, it was “commercially nonsensical” for Mr Warren to have capitulated in this negotiation and succumbed to the demands for the 80/20% split without his having received anything as the quid pro quo. There was no commercial advantage for him to have given up 5% unless, it is submitted, he was assured of being able to gain financially from any future fight or fights. There is, of course, force in that point. It is, of course, one way of looking at the probabilities inasmuch as one is endeavouring to figure out what was in the mind of the contracting parties. The judge, on the other hand, took a different view. He took the view, firstly, that there was an increasing disaffection on the part of Mr Calzaghe but he also found, at paragraph 151, that all of this was explicable in terms of the personality of Mr Warren. He said:

“Mr Warren is a resourceful and confident boxing promoter. He has self belief in substantial amounts. Once the Defendant and his father accepted that they would talk to Mr Warren about future promotions as they accept occurred in the meeting on 15 January 2008 my judgment is that Mr Warren immediately took the view that in due course he would be able to persuade the Defendant to participate in bouts promoted by the Claimant. Mr. Warren and the Defendant had a very long relationship. I have no doubt that Mr Warren felt that "when the chips were down" the Defendant would turn to him to promote his further bouts however many there would be. He also thought, no doubt, that in the weeks and months ahead he would be able to discuss these matters without the presence of Mr Williams and persuade the Defendant to his point of view.”

In my judgment the judge cannot be criticised for taking that view of the case. He had, after all, the best advantage to assess the character, the demeanour the personality and so forth of the protagonist and Mr Warren in particular. There are other pointers to the same effect. Enzo Calzaghe, who trained Joe, had his own relationship with Mr Warren because he managed or trained other fighters. From other passages in the judgment it appears that Enzo was quite able to say one thing to the Warren camp (see the Roberts attendance note) without meaning what he said. Mr Warren may well have relied on being able to persuade the Calzaghe family to stay with him, especially if they could get rid of the baleful, antagonistic influence of the aggressive solicitor; aggressive, as the judge found him to be, in a paragraph in the judgment in which he was referring to the role played by Mr Williams and his going aggressively into negotiations.

Mr Crystal attacks the judge’s finding that there was no so-called “breakout” meeting. In a nutshell the position is this. At some stage, said the claimant and his witnesses, they asked to speak privately to the Calzaghe team in the absence of this unwelcome solicitor. There was a dispute whether that could happen. Evidence was given in support of the claimant by a Mr Abbey, in whose offices this meeting took place. He said in his evidence that although he did not see the four men go into a separate room he saw them come out of it and they emerged seeming to be very pleased and it was clear that a deal had been done. That evidence was not challenged as being deliberately untruthful but simply as being unreliable and/or inaccurate. The judge was aware of the limited challenge and he analysed it carefully in paragraph 115 and 116 of his judgment and concluded that:

“117.

Having given the matter considerable thought I am not persuaded that I can accept Mr Abbey's evidence as reliable and accurate in so far as he asserts that he saw four men emerging from [the room].”

That is a pure assessment of the demeanour of Mr Abbey. It is a finding of fact which in my judgment it is impossible to appeal, because this court has not got the advantage of seeing and having heard that witness under cross-examination. It was peculiarly one for the judge as a primary finding of fact. There are no inferences one way or the other that assist in that matter, and I cannot see any prospect of the Court of Appeal disturbing that finding.

The next main assault on the judgment is that the judge accepted as essentially accurate an attendance note made of this meeting by Mr Williams. That attack is supported because the judge made a series of telling adverse findings against Mr Williams, a solicitor and an officer of the court. He had two criticisms of him. The first is that he deliberately misled the court in falsely providing information as to why a prospective witness, a Mr Shafer, did not appear as a witness knowing that the information was totally inaccurate. The second criticism was that he had demonstrably advised the defendant to mislead Mr Warren about his activities, and both of those charges were well-founded. So quite clearly there was scope for Mr Thwaites to submit that the judge should not believe a word of Mr Williams’ evidence and should not rely on the (inaudible)

The judge correctly directed himself in paragraph 112 that those features made him cautious about Mr Williams’ evidence as a whole but he concluded:

“Nonetheless they fall far short of persuading me that Mr Williams was capable of deliberately creating an attendance note of the meeting of 15 January 2008 which he knew to be false in crucial respects. In my judgment, such conduct would be on a scale which was completely different (and much more serious) than the misconduct proved against Mr Williams.”

Again, I understand the force of the submission advanced by Mr Crystal that on another day and before another judge things may have turned out differently. But here Wyn Williams J saw and heard Mr Gareth Williams and was satisfied, having properly warned himself, if he had lied to him in two important respects or was untrustworthy in two important respects, nonetheless he could accept the attendance note as accurate. He did so partly because, as appears from paragraph 92 and 96, there were no challenges to substantial parts of the attendance note, which the judge was satisfied was written up a day or two following the event based upon contemporaneous note-taking and produced within a day or two of the relevant meetings. Under cross-examination Mr Warren and Mr Simons had no criticisms of the accuracy of large parts of the notes and one has therefore to wonder why he should have concocted a story and perhaps, in parenthesis, why he should have so badly concocted the story that Mr Crystal is able to submit today that parts of that attendance note are so vague as to provide scant support for the judge’s final conclusion. In my judgment this, again, was peculiarly a matter for the assessment of the judge, having seen and heard the witnesses, and once again although, as I say, on another day another judge may have taken a different view, this was peculiarly a matter where the Court of Appeal is reluctant to interfere, there being no knockout blow to show that he was plainly wrong.

There are, moreover, probabilities in favour of the defendants upon which the judge relied: for example that it was, as he found, something to beggar belief (see paragraph 146) that this agreement was not in writing, as all previous promotional agreements had been. There was an exchange of correspondence because Mr Williams wrote on 19 January further to that meeting:

“When I was pleased [he wrote] to note that we are able to resolve all outstanding issues in respect of the forthcoming Hopkins fight. I presume you will want Joe to enter into an agreement with yourselves and if that is the case then could you please let me have the same. Alternatively you may be happy to deal with it by way of an exchange of correspondence. I write merely to confirm the agreement. Namely that you will promote Joe’s forthcoming fight in Vegas with Bernard Hopkins in conjunction with Golden Boy who will be looking after the Hopkins interests…”

and then set out the 80/20% division. The response to that was:

“Thank you for your e-mail. Very happy for this to be agreed by this exchange of correspondence. However for the sake of good order it should be noted that the 80/20 split of the 50% of the profit as defined under the promotional agreement between Sports Network and Golden Boy. Trust this makes it clearer.”

There was ample opportunity for the claimant to respond and say words to the effect of “Hang on a minute. What about your recording the right we have to promote the future fights?” In my judgment the judge was entitled to rely upon that failure to record that in writing as confirming its absence from the agreement. The judge commented, moreover, on the somewhat astonishing docility of Mr Williams, this aggressive tiger in all negotiations, who: (a) allowed himself to be excluded from the meeting if a breakout meeting was to take place; and then (b) without comment, without advice, without justifying his presence there to protect Calzaghe’s interest, simply accepted that he had bound himself for his future boxing career contrary to the strong position he had held before the negotiation began. It is, in my judgment, a valid matter to take into account. The judge commented in paragraph 150 on the unlikelihood that the defendant who had insisted that the claimant should promote only one more fight after the Mikkel Kessler bout should apparently, a little more than two months later, be prepared to agree that the claimant would promote all of his fights; again, a factor which appears to me to be unassailable in the Court of Appeal.

One must not forget that there were adverse findings made against each of these parties. Each of them had told lies here or there and perhaps more than once. This is an experienced judge. He had made no reference to the well-known criminal Lucas direction but it is to me inconceivable that he did not have well in mind that, whereas a party may tell a lie in one respect, it does not follow that he is lying in every respect. This was a long and careful judgment and for my part I see absolutely no prospect whatever of the Court of Appeal upsetting those findings of fact. There is no real prospect of success and I would refuse to grant permission to appeal against the dismissal of the claimant’s claim.

That leaves the counterclaim. The issue there arises in this way. The negotiations conducted on behalf of Hopkins and Calzaghe led to a split of a fixed guaranteed payment being made to Hopkins’ promoter and to the claimant. The payment was set at £9 million. But the next day Planet Hollywood the venue for the fight entered into a side agreement, under which the company agreed to take and pay for £1 million worth of tickets, but, because they did not manage to sell them all, there was a loss possibly for the company. The issue, as put by Mr Crystal, is that one must not confuse “received” and “receivables”. The company’s stance was that their share of the guaranteed payment was £1 million less by virtue of this side agreement, and that that was an expense, on one view of it, which should be borne by the undertaking before the 80/20% split took place.

Mr Crystal submits that, because the claimant did not receive the whole of the money, their division of profit should be judged by what they had received and not by what they might have been entitled to receive. The judge rejected that argument. He held that the agreement with Planet Hollywood was not in any real sense a contract which was reasonably and sensibly entered into as a foreseeable consequence of the promotion of the fight. Even if it was, the claimant’s breach of that contract was certainly not a foreseeable consequence of the promotion of the fight. He held in paragraph 169 that the claimant was not entitled to deduct $1 million from its share of the profits in its account with the defendant. That was a loss incurred by the claimant, which was unrelated to the agreement between the claimant and the defendant, and the claimant should bear the consequences of that loss. As I see it, the agreement was to share the net profits of this joint venture; from the monies due to the claimant from Planet Hollywood could be deducted expenses of the promotion. But this side agreement was nothing of that character. It was a deal between the two of them, for the success or failure of which the claimant had to bear sole responsibility. Sir Paul Kennedy refusing permission put the matter succinctly in this way and I cannot really improve upon it. He said:

“It is said that in rejecting the claimant’s assertion of a right to withhold $1 million from the sum admitted to be owed, the judge overlooked the evidence of Mr Robert Earl but, as the judge explained at paragraph 162, the case for the claimants in relation to this issue changed during the trial. Even if it be accepted that it was part of the deal between the claimants and Planet Hollywood that the claimants would sell a block of tickets in order to earn the overall fee of $9 million, I do not see how the claimants can claim to be entitled to reduce their liability to account (?) to the defendant, who was not a party to the deal between the claimants and Planet Hollywood, simply because they failed to sell tickets as agreed and therefore receive from Planet Hollywood less than the overall agreed fee.”

As I see it, the withholding of the $1 million was a problem borne of the claimant’s own failures. The consequences of that were for the claimant to bear alone. They cannot properly be visited upon Joe Calzaghe. I see no prospect of success on this score and, although I have been concerned that this court is dealing with very considerable sums of money, the fact remains, in my judgment, that this was a very thorough, very careful assessment of the evidence of five parties whom the judge saw and heard. I see no compelling reason, simply by virtue of the amount of money at stake, to trouble the Court of Appeal with what ultimately is, I am afraid to say, a hopeless case. I would dismiss the application.

Like my Lord, I would like to pay tribute to the care with which the judge analysed the facts and, for the reasons given by my Lord and by Sir Paul Kennedy on paper, I too agree that this is a hopeless application and must be refused.