1034

Imageview Management Ltd v Jack (CA) [2009] Bus LR

Court of Appeal A

Imageview Management Ltd v Jack

[2009] EWCA Civ 63
2008 Dec 18; Mummery, Dyson, Jacob LJJ
2009 Feb 13 B

Agency  Secret commission  Side deal  Foreign footballer wanting to play

professionally in United Kingdom  Agent negotiating contract for footballer
with UK club  Agent making side deal with club to obtain footballers work
permit in return for fee  Side deal not disclosed to footballer  Whether agent
in breach of duciary duty  Whether agency commission payable by footballer
 Whether footballer entitled to agents fee under side deal  Whether C
allowance to be made for true value of work done by agent in obtaining permit

The defendant was a national of Trinidad and Tobago who wanted to play
professional football in the United Kingdom. He entered into an agreement with
the claimant, a football agent, by which he would pay the claimant a commission
representing 10% of his monthly salary if the claimant arranged for him to sign with a
UK club. The claimant negotiated a contract for the defendant to play for a Scottish
D
football club. At the same time the agent agreed that the club would pay it £3,000
in return for obtaining a work permit, which the defendant required as a non
EU-citizen. The side deal to obtain the work permit was not disclosed to the
defendant. When he learned of it a year or so later he stopped paying the commission
due under the agency agreement. The claimant commenced proceedings to recover
unpaid commission. The defendant denied liability and counterclaimed for the
return of the commission he had already paid and the £3,000 the claimant had
received pursuant to the side deal made with the club in respect of the defendants E
work permit. The judge held that, in negotiating the side deal for itself, the claimant
had had a clear conict of interest and had acted in breach of duciary duty.
Accordingly, the defendant was not liable to pay the unpaid commission, was entitled
to recover the commission already paid and was also entitled to the whole of the
£3,000 fee received by the claimant under the side deal.
On the claimants appeal
Held, dismissing the appeal, that an undisclosed but realistic possibility of a F
conict of interest was a breach of an agents duty of good faith to his principal; that
the agents right to remuneration was lost once a conict of interest was shown
notwithstanding that the principal had received a benet from the agent; that
although it was possible for an agent to enter into a private separate agreement that
was collateral to his duty to his principal, the claimants secret prot was obtained
because it was the defendants agent; that, further, it was greater than the value of
the work done and related to the very contract that was being negotiated by the G
defendant; that, in the circumstances, the claimant had an interest in not faithfully
performing his duty to the defendant; that that being so, there was a direct conict of
interests between the claimant and defendant giving rise to a breach of duciary duty;
and that, accordingly, the claimants commission was forfeit, and further, in the
circumstances, the defendant was entitled to be paid the whole of the secret prot
without the claimant receiving an allowance for the work it had done in obtaining the
work permit ( post, paras 6, 7, 38, 44—45, 50, 51, 56, 59—63). H
Boston Deep Sea Fishing and Ice Co v Ansell (1888) 39 Ch D 339, CA; Andrews
v Ramsay & Co [1903] 2 KB 635, DC and Rhodes v Macalister (1923) 29 Com Cas
19, CA applied.
Hippisley v Knee Bros [1905] 1 KB 1, DC considered.
Decision of Underhill J [2008] EWHC 1421 (QB) a–rmed.
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[2009] Bus LR Imageview Management Ltd v Jack (CA)

A The following cases are referred to in the judgments:

Andrews v Ramsay & Co [1903] 2 KB 635, DC
Boston Deep Sea Fishing and Ice Co v Ansell (1888) 39 Ch D 339, CA
Hippisley v Knee Bros [1905] 1 KB 1, DC
Kelly v Cooper [1993] AC 205; [1992] 3 WLR 936, PC
Keppel v Wheeler [1927] 1 KB 577, CA
Murad v Al-Saraj [2005] EWCA Civ 959; [2005] WTLR 1573, CA
B Nitedals Taendstikfabrik v Bruster [1906] 2 Ch 671
OSullivan v Management Agency and Music Ltd [1985] QB 428; [1984] 3 WLR
448; [1985] 3 All ER 351, CA
Phipps v Boardman [1967] 2 AC 46; [1966] 3 WLR 1009; [1966] 3 All ER 721,
HL(E)
Rhodes v Macalister (1923) 29 Com Cas 19, CA
Robinson Scammel & Co v Ansell [1985] 2 EGLR 41, CA
C Salomons v Pender (1865) 3 H & C 639
Stewart Chartering Ltd v Owners of the Ship Peppy [1997] 2 Lloyds Rep 722
Stubbs v Slater [1910] 1 Ch 195; [1910] 1 Ch 632, CA
Warman International Ltd v Dwyer (1995) 182 CLR 544

The following additional cases were cited in argument:

Guinness plc v Saunders [1990] 2 AC 663; [1990] 2 WLR 324; [1990] 1 All ER 652;
D [1990] BCLC 402, HL(E)
Hurst v Bryk [2002] 1 AC 185; [2000] 2 WLR 740; [2000] 2 All ER 193; [2000]
2 BCLC 117, HL(E)
Hurstanger Ltd v Wilson [2007] EWCA Civ 299; [2008] Bus LR 216; [2007] 1 WLR
2351; [2007] 4 All ER 1118; [2007] 2 All ER (Comm) 1037, CA
Norfolks (Duke of ) Settlement Trusts, In re [1982] Ch 61; [1981] 3 WLR 455;
[1981] 3 All ER 220, CA
E
APPEAL from Underhill J
By a claim form issued in October 2006 in the Leeds County Court
the claimant, Imageview Management Ltd, a football agency company,
claimed from the defendant, Kelvin Jack, a footballer, the sum of £3,203.07
allegedly due by way of commission under an agency agreement made
between it and the defendant in July 2004. The defendant denied liability on
F
the ground that the claimant had entered into an undisclosed side deal with
Dundee Football Club pursuant to which it had received a secret fee, and
in so doing it had breached the duciary duty it had owed to him. By a
counterclaim the defendant sought recovery of all agency fees he had paid
and claimed the entire £3,000 received by the claimant under the side deal.
On 2 January 2008 Mr Recorder Walker sitting at Leeds County Court
G found that: (1) the £3,000 represented a secret prot; (2) the claimant
was allowed to retain a sum of £750 to reect the value of the work it had
carried out but the remainder should be paid to the defendant; and (3) the
claimant was entitled to all its commission under the agency agreement. The
defendant appealed on the ground that the recorder had erred (1) in holding
that he was not entitled to recover all of the commission that he had paid
under the agency agreement; and (2) in allowing the claimant to keep part of
H
the £3,000. By a decision dated 23 May 2008 Underhill J held that the
receipt by the claimant of the £3,000 constituted a breach of the agency
agreement such that the defendant was not liable to pay any outstanding
commission and, as regards commission already paid, was entitled to its
repayment; (2) that, in those circumstances, the court had no discretion to
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Imageview Management Ltd v Jack (CA) [2009] Bus LR
Jacob LJ

allow the claimant to keep any of the commission payable under the agency A
agreement; and (4) the claimant was liable to pay over all the £3,000 to the
defendant as a secret prot.
By an appellants notice and pursuant to permission granted by the Court
of Appeal (Scott Baker LJ) on 30 July 2008 the claimant appealed on the
grounds, inter alia, that (1) the judge had erred in holding that the payment
received by the claimant from Dundee Football Club constituted a secret
B
prot; (2) alternatively, having found that the payment constituted a secret
prot, the judge had erred in failing to consider whether the secret prot was
a collateral secret prot which preserved the claimants entitlement to its
commission; (3) the judge had erred in holding that he had no discretion as
to whether to order the agent to repay the commission already earned under
the agency contract; and (4) the judge had erred in holding that an allowance
for the claimants work and skill could not be made from the £3,000 it C
received by the football club.
The facts are stated in the judgment of Jacob LJ.

Jonathan Lopian and Seb Oram (instructed by Hill Dickinson,

Liverpool) for the claimant.
Steven Turner (instructed by Bates Wells & Braithwaite) for the
defendant. D

The court took time for consideration.

13 February 2009. The following judgments were handed down.

JACOB LJ
1 What if a footballers agent, in negotiating for his client, makes a E
secret deal with the club for himself on the side? That is what this case is
about. It would not have happened if Mr Mike Berry (whose company,
Imageview Ltd was the footballers agent) had been open. If he had told his
client, the footballer Kelvin Jack, that when he was going to negotiate for
Mr Jack to sign for Dundee United, he was also going to make a deal with
the club for himself about getting a work permit for Mr Jack, then, if F
Mr Jack had had no objection, there would have been no problem. Instead
of doing that Mr Berry made a secret deal.
2 The details are short and simple: (a) Mr Jack is Trinidad and Tobagos
international goalkeeper. In July 2004 he wanted to play professionally in
the United Kingdom (and had just been briey on the books of Reading FC).
The close of the transfer window was only a week or so away. He had
contact with Dundee United and then asked Mr Berry (whom he knew) to G
negotiate with the club. Mr Berry agreed that he (in fact via Imageview)
would act as his agent. There was no written contract of agency at the time.
There was one later, dated 3 August 2004. It is agreed that the written
contract reected the July oral agreement. So I can refer to its language as a
matter of convenience. (b) The contract was for a two-year term. Mr Jack
was to pay Imageview 10% of his monthly salary if Imageview successfully
H
made arrangements for him to sign with a United Kingdom club. Imageview
agreed, inter alia, to provide advice and representation in connection with
any contract or renewal of a contract which the player might wish to
enter into. It further provided that Imageview was to use its reasonable
endeavours to promote the player and act in his best interests. (c) Mr Berry
 1037
[2009] Bus LR Imageview Management Ltd v Jack (CA)
Jacob LJ

A spoke to his contact at Dundee. He negotiated a contract for Mr Jack to play

for the club for two years. At the same time he agreed that Dundee would
pay Imageview a fee of £3,000 for getting Mr Jack a work permit. Such a
permit was needed because Mr Jack is a non-EU citizen. (d) Mr Berry did
not tell Mr Jack about this work permit contract. And about a year later,
when Mr Jack asked about it, Mr Berry told him it was none of your
B
business. (e) Imageview duly obtained a work permit for Mr Jack and
Dundee paid the £3,000 fee. (f ) The recorder held that the actual value of
the work done in getting the permit in real terms was £750. There is not
(and realistically could not be) any appeal about that nding. (g) The fee of
£3,000 for the work permit contract was set by Mr Berry by, in part, taking
into account the length of Mr Jacks contract with Dundee. (h) Mr Jack
signed and played for Dundee and began paying the 10% due under his
C agency contract with Imageview. He stopped doing so after a year or so
when he found out about the work permit contract.
3 In these proceedings: (i) Imageview claims the unpaid agency fees
from Mr Jack (£3,203.07); (ii) Mr Jack defends that claim and himself
claims back the agency fees he has already paid; (iii) Mr Jack also claims the
full £3,000 received by Imageview from Dundee, alternatively the excess
D above the real value of the work done, namely £2,250.

The rst question: was the undisclosed side deal a breach of Imageviews
duty as an agent?
4 Unless there was a breach of duty, the other questions do not arise
and Mr Jack is liable for the unpaid balance of the fees. Was the undisclosed
E side deal none of Mr Jacks business? Mr Recorder Walker, upheld
by Underhill J, held that it was indeed Mr Jacks business: it was not
Mr Berry/Imageviews private and separate arrangement.
5 The basis for such a nding was that Imageview in negotiating a deal
for itself had a clear conict of interest. Put shortly, it is possible that the
more it got for itself, the less there would or could be for Mr Jack. Moreover
it gave Imageview an interest in Mr Jack signing for Dundee as opposed to
F some other club where no side deal for Imageview was possible.
6 There is no answer to this. The law imposes on agents high standards.
Footballers agents are not exempt from these. An agents own personal
interests come entirely second to the interest of his client. If you undertake
to act for a man you must act 100%, body and soul, for him. You must act as
if you were him. You must not allow your own interest to get in the way
G without telling him. An undisclosed but realistic possibility of a conict of
interest is a breach of your duty of good faith to your client.
7 That duty should not cause an agent any problem. All he or she has to
do to avoid being in breach of duty is to make full disclosure. Any agent
who is doubtful about his position would do well to do just thatthe mere
fact that he has doubts will generally be a message from his conscience.
As Mr Steven Turner, counsel for Mr Jack put it, all an agent has to do is to
H
give the player details of any side deals that may form part of his transfer
arrangements. Sunlight is, after all, the best of disinfectants.
8 The law as to an agents duty of delity where there is a realistic
possibility of a conict of interest, goes back a long, long way. Sadly the
courts have found it necessary to restate it from time to time. I make no
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Imageview Management Ltd v Jack (CA) [2009] Bus LR
Jacob LJ

apology for doing so yet again. I go to just three old cases to demonstrate A
that what I said above contains nothing new.
9 At least as early as 1888 (there are earlier cases, for instance Salomons
v Pender (1865) 3 H & C 639, a citation from which appears below) the
principles were rmly laid down in Boston Deep Sea Fishing and Ice Co v
Ansell (1888) 39 Ch D 339. A managing director of a company in placing
orders for vessels for his company secretly agreed with the shipbuilders to B
receive a commission.
10 Cotton LJ said, at p 357:
Then when he was engaged in that contract, in respect of the matters
of that very contract, he in one instance got a percentage of 1% from the
Shipbuilding Company, and, in the other case, he insisted on getting
that is the evidenceand did get, a lump sum of £50. It is suggested C
that we should be laying down new rules of morality and equity if we
were to so hold. In my opinion if people have got an idea that such
transactions can be properly entered into by an agent, the sooner they
are disabused of that idea the better. If a servant, or a managing
director, or any person who is authorised to act, and is acting, for
another in the matter of any contract, receives, as regards the contract,
any sum, whether by way of percentage or otherwise, from the person D
with whom he is dealing on behalf of his principal, he is committing
a breach of duty. It is not an honest act, and, in my opinion, it is a
su–cient act to shew that he cannot be trusted to perform the duties
which he has undertaken as servant or agent. He puts himself in such a
position that he has a temptation not faithfully to perform his duty to
his employer. He has a temptation, especially where he is getting a E
percentage on expenditure, not to cut down the expenditure, but to let it
be increased, so that his percentage may be larger. I do not, however,
rely on that, but what I say is this, that where an agent entering into a
contract on behalf of his principal, and without the knowledge or assent
of that principal, receives money from the person with whom he is
dealing, he is doing a wrongful act, he is misconducting himself as
regards his agency, and, in my opinion, that gives to his employer, F
whether a company or an individual, and whether the agent be a
servant, or a managing director, power and authority to dismiss him
from his employment as a person who by that act is shewn to be
incompetent of faithfully discharging his duty to his principal.
11 Bowen LJ put it this way, at p 362:
G
This is an age, I may say, when a large portion of the commercial
world makes its livelihood by earning, and by earning honestly, agency
commission on sales or other transactions, but it is also a time when a
large portion of those who move within the ambit of the commercial
world, earn, I am afraid, commission dishonestly by taking commissions
not merely from their masters, but from the other parties with whom
H
their master is negotiating, and with whom they are dealing on behalf
of their master, and taking such commissions without the knowledge of
their master or principal. There never, therefore, was a time in the
history of our law when it was more essential that courts of justice should
draw with precision and rmness the line of demarcation which prevails
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[2009] Bus LR Imageview Management Ltd v Jack (CA)
Jacob LJ

A between commissions which may be honestly received and kept, and

commissions taken behind the masters back, and in fraud of the master.
And, at p 363—364:
Now, there can be no question that an agent employed by a principal
or master to do business with another, who, unknown to that principal or
master, takes from that other person a prot arising out of the business
B
which he is employed to transact, is doing a wrongful act inconsistent
with his duty towards his master, and the continuance of condence
between them. He does the wrongful act whether such prot be given to
him in return for services which he actually performs for the third party,
or whether it be given to him for his supposed inuence, or whether it be
given to him on any other ground at all; if it is a prot which arises out of
C the transaction, it belongs to his master, and the agent or servant has
no right to take it, or keep it, or bargain for it, or to receive it without
bargain, unless his master knows it.
12 In those days the courts were apt to use the word fraud for a
breach of an agents duciary duty. These days such use can perhaps iname
matters and detract from the debate. The term used does not matter, it is the
D breach of duty which does. This appears best from the judgment of Fry LJ,
at pp 368—369:
In my judgment, the conduct of Ansell in so dealing was a fraud
a fraud on his principalsa fraud, not according to any articial or
technical rules, but according to the simple dictates of conscience, and
according to the broad principles of morality and law, and I think it is the
E duty of the courts to uphold those broad principles in all cases of this
description. We were invited to consider the state of mind of Mr Ansell;
whether he thought it wrong; in other words we are invited to take as the
standard for our decision the alleged conscience of a fraudulent servant.
I decline to accept any such rule as one on which the court is to decide
such questions.
F 13 It is evident that the court felt it necessary to state the principles
forcefullywitness Bowen LJs reference to the large portion of agents he
thought were doing undisclosed side deals for themselves.
14 The e›ect of Ansells breach of duty was that he had to account for
the commissions received and that he was not entitled to outstanding salary
which otherwise would have been due. That clearly governs Imageviews
G claim for outstanding commission which would otherwise have been due.
15 Note also that it did not matter whether or not Ansell thought he
was doing wrong. So also here. It does not matter whether Mr Berry
thought it was all right to make the side deal, as he may have done if a
practice of side deals exists in the world of football agents. I note that
Mr Berry did not allege such a practicehis main defence at trial was that he
had told Mr Jack all about the deal at the time. The recorder did not believe
H
him. That he lied perhaps suggests that he knew in his heart that he ought to
have been open with his client. Otherwise why lie? There is no point in
speculating further.
16 Twenty-ve years on from the Boston Deep Sea Fishing case 39 Ch D
339 there was Andrews v Ramsay & Co [1903] 2 KB 635. It was because
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Imageview Management Ltd v Jack (CA) [2009] Bus LR
Jacob LJ

this case was the principal authority upon which the judge based his decision A
that Scott Baker LJ gave permission for this second appeal, saying that there
was a question of principle as to whether it should be followed. We have had
more authorities cited. And a search reveals that Andrews v Ramsay & Co
has been regularly cited down the years. Never, so far as I can see, has it
been doubted.
17 The facts of Andrewss case were these. The plainti› principal had
B
asked the defendant estate agents to nd a purchaser for his property at a
price of £2,500 and if one such was found the agents fee would be £50.
A purchaser (with the splendidly Edwardian name Clutterbuck) at £2,100
was found. He paid the agents £100 by way of deposit. The agents paid
the principal £50 and, with the principals consent, retained £50 as their
commission. But it then transpired that the agents had had a side deal with
Clutterbuck whereby he paid them £20. Oddly there were two actions, C
though no point turned on this. In the rst the principal claimed and
recovered the £20 as a secret prot made by the agent in breach his duty of
good faith. In the second action the principal claimed the return of the £50.
He succeededeven though he had had the benet of the agents services.
18 Lord Alverstone CJ said, at pp 636—638 (and I make no apology for
citation at length): D
It is said that the defendants ought not to be called upon to hand over
the £50 to the plainti› because the plainti› has had the benet of their
services. The principle of Salomons v Pender (1865) 3 H & C 639 seems
to me to govern the case, and it is, in my opinion, amply su–cient to do
so. In that case it was held that an agent who was himself interested in a
contract to purchase property of his principal was not entitled to any E
commission from the principal. The principle there laid down is that,
when a person who purports to act as an agent is not in a position to say
to his principal, I have been acting as your agent, and I have done my
duty by you, he is not entitled to recover any commission from that
principal. In Salomons v Pender Bramwell B said, at p 642: It is true
that . . . the defendant has had the benet (if it be one) of the plainti›s
services. But the defendant is in a position to say, What you have done F
has been done as a volunteer, and does not come within the line of your
duties as agent. And in the same case Martin B quoted the passage from
Story on Agency, p 262, para 210, where it is said: In this connection,
also, it seems proper to state another rule, in regard to the duties of
agents, which is of general application, and that is, that, in matters
touching the agency, agents cannot act so as to bind their principals, G
where they have an adverse interest in themselves. This rule is founded
upon the plain and obvious consideration, that the principal bargains,
in the employment, for the exercise of the disinterested skill, diligence,
and zeal of the agent, for his own exclusive benet. It is a condence
necessarily reposed in the agent, that he will act with a sole regard to
the interests of his principal, as far as he lawfully may; and even if
H
impartiality could possibly be presumed on the part of an agent, where his
own interests were concerned, that is not what the principal bargains for;
and in many cases, it is the very last thing which would advance his
interests. The seller of an estate must be presumed to be desirous of
obtaining as high a price as can fairly be obtained therefor; and the
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[2009] Bus LR Imageview Management Ltd v Jack (CA)
Jacob LJ

A purchaser must equally be presumed to desire to buy it for as low a price

as he may. It seems to me that this case is only an instance of an agent
who has acted improperly being unable to recover his commission from
his principal. It is impossible to say what the result might have been if the
agent in this case had acted honestly. It is clear that the purchaser was
willing to give £20 more than the price which the plainti› received, and it
may well be that he would have given more than that. It is impossible to
B
gauge in any way what the plainti› has lost by the improper conduct of
the defendants. I think, therefore, that the interest of the agents here was
adverse to that of the principal. A principal is entitled to have an honest
agent, and it is only the honest agent who is entitled to any commission.
In my opinion, if an agent directly or indirectly colludes with the other
side, and so acts in opposition to the interest of his principal, he is not
C entitled to any commission. That is, I think, supported both by authority
and on principle; but if, as is suggested, there is no authority directly
bearing on the question, I think that the sooner such an authority is made
the better.
19 Having regard to Mr Jacks claim for the return of the commission
already paid by him it is also worth citing what Wills J had to say, at p 638:
D
The £50 in question was paid by the purchaser to the defendants as
agents for the plainti› as part of the £100 deposit on the purchase, and
the defendants were allowed by the plainti› to retain £50 in the belief that
they had earned that sum as commission. If the money had all been paid
over, and the defendants had had to sue the plainti› for commission, it
seems to me perfectly clear that they could not recover it. They would
E have no chance whatever of succeeding in such an action, and I think that
they ought not to stand in any better position because the plainti›,
believing that they had acted properly, had allowed them to retain the
£50. The case ought to be the same whether the commission has already
been paid or whether the agent has to sue for it.
20 Twenty years later this court, in the shape of that formidable trio
F Bankes, Atkin and Scrutton LJJ, felt it necessary, apparently by reason of its
widespread breach, to spell out again the high nature of an agents duty
of delity. This was in Rhodes v Macalister (1923) 29 Com Cas 19.
The plainti› agent had acted in nding a seller of mineral rights for the
defendant principal. The agents told their principal that the properties
could be purchased for from £8,000 to £10,000. The terms of the agency
were then agreed on the basis that if the agent could nd a seller at below
G
£9,000, then, he, the agent, could have the di›erence between the actual
price and £9,000. The agent found a seller at £6,625 and claimed the
di›erence, viz £2,375. But secretly the agent had also negotiated with the
seller, at a time when they made the contract with the buyer, to be paid a
commission on the sale. The agents claim failed.
21 Bankes LJ said, at pp 20—21:
H
There seems to be an idea prevalent that a person who is acting agent
or servant of another is committing no wrong to his employer in taking a
commission or bribe from the other side, provided that in his opinion his
employer or principal does not have to pay more than if the bribe were
not given. There cannot be a greater misconception of what the law is,
1042
Imageview Management Ltd v Jack (CA) [2009] Bus LR
Jacob LJ

or what the duty of a servant or agent towards his master or principal in A

reference to such matters is, and I do not think the rule can too often be
repeated or its application more frequently insisted upon.
And, at pp 23—24:
what was [the agents] position and what was his duty? Of course, as
long as he was acting for the vendors of these properties only he was
B
perfectly entitled to suggest to them that they should x a price which
would include a commission to himself, and he would be perfectly
justied in receiving that commission or putting forward the price to an
intending purchaser as the only price which he could persuade the vendors
to give, so long as that was his real opinion. But the moment he accepted
the position of agent for the intending purchasers his entire position in
law changed. He could no longer consistently with his duty, unless he C
disclosed the facts, act as agent for the vendors to procure purchasers with
the result of some commission or payment to himself. He could not retain
that position consistently with his duty to the purchasers of obtaining
these properties at as low a price as he possibly could . . . the moment he
accepted the position of agent to procure these properties as cheap as
possible for the intending purchasers his interest and duty conicted, and D
he could no longer act honestly towards the intending purchasers without
disclosing to them that in that gure of £8,000 to £10,000 which he had
mentioned as the probable price of these properties he had included a
gure which he intended should cover a commission to himself.
22 Scrutton LJ said, at p 25:
I agree with the judgment that has just been delivered and I only E
propose to restate it in my own words because I think it is of very great
importance that the principle upon which we are acting should be
thoroughly understood, and from Mr Vachells argument it is not
thoroughly understood by commercial men, especially in that part of the
country from which his clients appear to come [the property was mining
rights in the Forest of Deanso somewhere in or near Gloucestershire.] F
At p 27:
The law I take to be this: that an agent must not take remuneration
from the other side without both disclosure to and consent of his
principal. If he does take such remuneration he acts so adversely to his
employer that he forfeits all remuneration from the employer, although
G
the employer takes the benet and has not su›ered a loss by it.
And also, at p 27, after citation from Lord Alverstone CJ in Andrewss case
[1903] 2 KB 635:
I hope it is thoroughly understood in London; and if it is not
thoroughly understood in the Forest of Dean, then the sooner it is
understood there the better for commercial honesty. H
23 I would say the same about the world of football and other sports
agents. Like any other agent he or she cannot serve two masters. Nor,
without full disclosure, can his or her own interest ever be allowed to conict
with that of his or her principal.
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[2009] Bus LR Imageview Management Ltd v Jack (CA)
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A 24 Scrutton LJ in Rhodess case 29 Com Cas 19, 28 went on to say:

But I decide it on the broad principle that whether it causes damage or
not, when you are employed by one man for payment to negotiate with
another man, to take payment from that other man without disclosing it
to your employer . . . is a dishonest act. It does not matter that the
employer takes the benet of his contract with the vendor; that has no
B e›ect whatever on the contract with the agent, and it does not matter that
damage is not shown. The result may actually be that the employer
makes money out of the fact that the agent has taken commission.
Also, at pp 28—29:
In this case, therefore, it appears that as one of the two joint agents
C has, in breach of his duty, taken commission from the other side, he
forfeits, and they both forfeit, all right to remuneration from their
employer. The more that principle is enforced the better for the honesty
of commercial transactions. I have only repeated what my Lord has said
because it cannot be repeated too often to commercial menthat in
matters of agency they must act with strict honesty.
D 25 Atkin LJ spoke in equally strong terms, at p 29:
This is a class of case where the courts always have maintained, and
do maintain, and I trust always will maintain, a very high standard of
conduct on the part of agents. It is a standard of conduct which I am
afraid sometimes conicts with the standard of conduct adopted for
themselves by commercial mennot by honourable men in commerce,
E but by a great many men engaged in mercantile transactions. I entirely
agree with what has been said as to the importance of repeating and
letting it be known as widely as possible what the standard of conduct
expected of an agent is at law.
26 I like to think that Lord Atkin, as he became, would have been
pleased to see his trust fullled; that the courts have indeed maintained that
F high standard of conduct, as we do in this case. He added, at pp 29—30:
Now that is not an impossible standard of attainment. It is laid down
by the law and it is in respect of a practical matter. The remedy is a very
simple one and it is well within the compass of any ordinary business
man. The complete remedy is disclosure, and if an agent wishes to receive
any kind of remuneration from the other side and wishes to test whether it
G is honest or not, he has simply to disclose the matter to his own employer
and rest upon the consequences of that. If his employer consents to it,
then he has performed everything that is required of an upright and
responsible agent.
27 The principles applied in that trio of cases (there are of course others,
but three are enough) to my mind show quite clearly that in making the side
H deal in this case the agent, Imageview, through Mr Berry, acted in breach of
the duty of delity which it owed to the principal Mr Jack.
28 Mr Lopian, bravely, but to my mind hopelessly, tried to persuade us
otherwise. He raised two somewhat interrelated arguments, one on the facts
and the other on the law.
1044
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29 The heart of his submission was that there is nothing improper in an A

agent, when acting for a principal, having a private separate arrangement
by which he may make a prot for himself provided that that separate
arrangement is collateral to his duciary duty to his principal. There
must be a su–cient nexus between the agent/third party arrangement and
the principal/agent relationship. And there was no su–cient nexus here on
the facts. B
30 Mr Lopian submitted that if the courts below had been shown the
right authorities they would have recognised this principle of harmless
collaterality and applied it on the facts here. And at any rate we should do
so. The authorities he took us to were rst the textbook Bowstead &
Reynolds on Agency, 18th ed (2006), and then Hippisley v Knee Bros [1905]
1 KB 1; Nitedals Taendstikfabrik v Bruster [1906] 2 Ch 671; Stubbs v Slater
[1910] 1 Ch 632; Keppel v Wheeler [1927] 1 KB 577; Robinson Scammel & C
Co v Ansell [1985] 2 EGLR 41; Kelly v Cooper [1993] AC 205; Phipps v
Boardman [1967] 2 AC 46 and Stewart Chartering Ltd v Owners of the Ship
Peppy [1997] 2 Lloyds Rep 722.
31 The passage in Bowstead & Reynolds relied upon ( pp 226—227,
para 6-079, art 47) is as follows:
clearly not everything acquired in the course of the agency D
relationship can be made the subject of account to the principal . . . It can
be said that the test is to ask whether acquisitions on the agents own
account would be inconsistent with his undertaking to act for his
principal. It will be inconsistent where the benet is acquired within
the scope of the activities which the agent has undertaken to pursue on his
principals behalf or where the agent uses his position or connection with E
the principal to obtain a benet; or obtains one while holding himself out
to another party as representing the principal.
32 I do not see how this assists Mr Lopian. It is against him. Mr Berry
clearly used his position or connection with Mr Jack to obtain a benet
for himself.
33 I do not propose to go to all of these authorities. It is su–cient to F
consider a few, starting with Hippisleys case, because it was placed at the
forefront of Mr Lopians argument. The defendants were auctioneers,
employed by the plainti› to sell some goods. The payment was to be
percentage commission with a minimum of £20, certain xed amounts plus
all out of pocket expenses. These included the cost of advertisements.
After the sale which triggered the minimum commission of £20 the G
auctioneers bill included that plus the gross cost of the advertisements.
In fact the auctioneers had received a discount on this cost. They included
the gross sum in the bill in the honest but mistaken belief that there was a
custom which entitled them to do this, the point being that if the client had
ordered the advertisements directly, no discount would have been given.
The bill was paid in full. When, later, the plainti› discovered that there
H
had been a discount he sued, not only for the amount of the discount, but
also for the entire £20 commission. He succeeded in the former claim but
not the latter.
34 Mr Lopian relied upon what was said about the latter claim. I quote
Lord Alverstone CJ [1905] 1 KB 1, 7—8 in full:
 1045
[2009] Bus LR Imageview Management Ltd v Jack (CA)
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A The other claim made by the plainti›, and in respect to which we did
not call upon the defendants counsel, was that in consequence of the
defendants conduct they were not entitled to retain the £20 which they
had deducted from the gross proceeds for their commission, and in
support of that claim Mr Salter relied upon the judgment of this court
in Andrews v Ramsay & Co [1903] 2 KB 635, where we held that a
dishonest agent could not recover any commission at all. I desire,
B
speaking for myself, to say that in this case I am satised that there was no
fraud, but that what was done by the defendants was done under a
mistaken notion as to what they were entitled to do under the contract:
they thought that by reason of the alleged custom they were entitled to
deduct from the proceeds of sale the gross amounts of the advertising and
printing bills. That is enough to di›erentiate the present case from
C Andrews v Ramsay & Co, where we were dealing with an agent who
acted with downright dishonesty. But Mr Salter went further, and
contended that if there has been a failure by the agent to account for a
secret discount received, even though that failure may have been due to a
bon½ de mistake, he is not entitled to receive any commission or
remuneration for his services from the principal. I am not prepared to go
that length. If the court is satised that there has been no fraud or
D
dishonesty upon the agents part, I think that the receipt by him of a
discount will not disentitle him to his commission unless the discount is in
some way connected with the contract which the agent is employed to
make or the duty which he is called upon to perform. In my opinion,
the neglect by the defendants to account for the discounts in the present
case is not su–ciently connected with the real subject matter of their
E employment. If the discount had been received from the purchasers the
case would have been covered by Andrews v Ramsay & Co; but here it
was received in respect of a purely incidental matter; it had nothing to do
with the duty of selling. It cannot be suggested that the plainti› got by
one penny a lower price than he would otherwise have got. Therefore
I come to the conclusion that, so far as the £20 commission is concerned,
the plainti› is not entitled to succeed.
F
35 Kennedy J said, at pp 9—10:
With regard to the £20 claim, I agree with my Lord that this is not one
of the cases in which it would be just to deprive the agent of his agreed
remuneration as well as of his secret prot. I feel it is di–cult to lay down
any denite rule upon the subject with condence, but I would venture to
G suggest the following: that where the agents remuneration is to be paid
for the performance of several inseparable duties, if the agent is unfaithful
in the performance of any one of those duties by reason of his receiving a
secret prot in connection with itand I here use that word unfaithful
as including a breach of obligation without moral turpitudeit may be
that he will forfeit his remuneration, just as in certain cases a captain of a
ship might be held in the Admiralty Court to forfeit his wages as a result
H
of misconduct in any branch of his duty as a captain; but where the
several duties to be performed are separable, as to my mind they are in
the present case, the receipt of a secret prot in connection with one of
those duties would not, in the absence of fraud, involve the loss of the
remuneration which has been fairly earned in the proper discharge of
1046
Imageview Management Ltd v Jack (CA) [2009] Bus LR
Jacob LJ

the other duties. Here the auctioneers were employed for a certain A
commission to act faithfully as auctioneers. If they had improperly by
connivance sold to a purchaser at a lower price than they could fairly have
got they would clearly not have been able to recover their commission.
There is nothing of this kind in the present case. But by the special terms
of their contract they undertook, in addition to their duty as auctioneers,
that if the plainti› would pay them their out of pocket expenses they B
would truly account to the plainti› for those expenses. And it seems to
me that it would be wrong to say that because the defendants failed in the
performance of their duty properly to account for the out of pocket
expenses, therefore they are not to have their commission, although they
performed all their duty as auctioneers faithfully.
36 Mr Lopian submitted that Hippisleys case [1905] 1 KB 1 C
demonstrated that an agent could legitimately try to make a prot on the
side which was not regarded as so serious that his entire commission
became repayable. Mr Lopian fastened on the phrases in some way
connected, not su–ciently connected and purely incidental matter in
Lord Alverstone CJs judgment and several duties to be performed in the
judgment of Kennedy J.
37 He submitted that the principle brought out by Hippisleys case was D
accurately summarised by David Steel QC in The Peppy [1997] 2 Lloyds
Rep 722, 729:
this decision of the Court of Appeal admirably demonstrates
the di›erence between a collateral secret prot which preserves the
entitlement to commission and a secret prot (albeit honest) directly
impacting on the moneys payable to the principal which may destroy the E
entitlement.
38 I am not myself satised that that is quite right: certainly Hippisleys
case [1905] 1 KB 1 does not establish a direct impact test. The better way
to look at it is to ask whether the agent was faced with a realistic possibility
of a conict of interest, rather than whether there was a secret prot . . .
directly impacting on the moneys payable to the principal. It is the conict F
of interest which ought to bring his conscience into play.
39 The rst case which used the word collateral, I think, was Stubbs v
Slater [1910] 1 Ch 195. The facts do not really matter for present purposes,
just the language used by Neville J, at p 204:
The concealed remuneration obtained by the agents in the present
case is in the precise matter in which they were instructed to act as agents G
for their principal. Consequently it cannot be said, as in Hippisley v Knee
Bros [1905] 1 KB 1, that what they did was something which was
collateral to, and not directly within, their duty as agents. That
determines this matter so far as the question of commission is concerned.
40 Keppel v Wheeler [1927] 1 KB 577 is the last of Mr Lopians
H
authorities to which it is necessary to refer. The plainti› engaged the
defendant estate agents to sell a property, instructing them to market it
at £6,500 but that he would accept £6,000. They found someone who
o›ered £6,150, an o›er accepted subject to contract. Before exchange of
contracts, another potential buyer o›ered £6,750. Instead of communicating
 1047
[2009] Bus LR Imageview Management Ltd v Jack (CA)
Jacob LJ

A that o›er to their principal, the agents went to the original o›eror, suggesting
he could sell on and make a prot. They did so in good faith, believing that
they had already fullled their duty to their principal, not understanding that
only formal exchange of contract brings their duty to an end.
41 The plainti› was awarded damages for breach of the agents duty.
These were the di›erence between the two prices, namely £600 less the extra
commission which that £600 would have earned. But the plainti› had to
B
pay commission on the sale itself.
42 Bankes LJ said, at p 588:
The appellant contended that the agents have disentitled themselves
to recover the commission, but I do not take that view at all. It seems to
me that an agent might quite properly claim his commission, and yet have
to pay damages for committing a bona de mistake which amounts to a
C
breach of duty. In these circumstances, I think the respondents are
entitled to the claim which they make for commission.
43 Atkin LJ said, at pp 591—592:
The other question is whether the respondents should succeed on
their counterclaim. Now I am quite clear that if an agent in the course of
D his employment has been proved to be guilty of some breach of duciary
duty, in practically every case he would forfeit any right to remuneration
at all. That seems to me to be well established. On the other hand, there
may well be breaches of duty which do not go to the whole contract, and
which would not prevent the agent from recovering his remuneration;
and as in this case it is found that the agents acted in good faith, and as the
transaction was completed and the appellant has had the benet of it, he
E
must pay the commission. Therefore, I think, the defendants are entitled
to recover on their counterclaim.
44 I accept Mr Lopians submission that there can be cases of harmless
collaterality. And that there can be cases where there is just an honest breach
of contract such as Keppels cases [1927] 1 KB 577. But this is simply
not such a case. This is a case of a secret prot obtained because
F
Mr Berry/Imageview was Mr Jacks agent. And there was a breach of a
duciary duty because of a real conict of interest. That in itself would be
enough, but there is more: the prot was not only greater than the work
done but was related to the very contract which was being negotiated for
Mr Jack. Once a conict of interest is shown, as Atkin LJ said in the last
passage quoted, the right to remuneration goes.
G 45 Mr Lopian suggested that Dundee would not, and had made it clear
that it would not, pay Mr Jack any more than £700 per week. For that
reason the side deal was collateral. Neither court below accepted that. Nor
can I. It ies in the face of reality to say that once the terms of Mr Jacks
contract had been negotiated in principle they could not be reopened.
Suppose, for instance, Mr Berry had, after negotiating his £3,000 fee, said to
Dundee: well that shows you are willing to pay more to get Mr Jack playing
H
for you. How about reducing my fee and giving it to my client, Mr Jack? As
Mr Jacks agent he had an interest in saying just that; his own interest was in
saying nothing. He had a temptation not faithfully to perform his duty to
his employer: per Cotton LJ in the Boston Deep Sea Fishing case 39 Ch D
339, 357. Of course, since he never said anything, we shall never know what
1048
Imageview Management Ltd v Jack (CA) [2009] Bus LR
Jacob LJ

Dundee would have done. Nor do we need to (it is impossible to gauge A

in any way . . . what the plainti› has lost, per Lord Alverstone CJ in
Andrewss case [1903] 2 KB 635, 636—637).
46 I would also observe this: that none of the cases relied upon by
Mr Lopian involve a direct conict of interest between that of the agent and
of his principal: they do not involve any question of a breach of duciary
duty arising from such a conict. Nor do any of the cases involve a secret
B
payment to the agent from the very party with whom the agent is dealing on
his principals behalf. It is in such cases that the Andrews principle applies
with its full rigour.
47 Finally in relation to this point and indeed the further points about
the appropriate remedies I should mention what was something of a
constant refrain from Mr Lopian. It was this: Mr Jack got the benet of the
contract negotiated for him. Why should he not have to pay for it? Why C
should he have the benet of the agents work for nothing at all?
48 The answer is twofold. First it has already been given in the cases,
and second there are sound policy reasons as to why.
49 As far as the cases are concerned, I have already cited enough to
show that the principle is established: see for instance Atkin LJ in Keppels
case [1927] 1 KB 577, 592 (forfeit any right to remuneration at all), D
Lord Alverstone CJ in Andrewss case [1903] 2 KB 635, 636 (not entitled to
recover any commission), Wills J in Andrewss case at p 638 (The case
ought to be the same whether the commission has already been paid or
whether the agent has to sue for it), Scrutton LJ in Rhodess case 29 Com
Cas 19, 28 (The result may be actually that the employer makes money out
of the fact that the agent has taken commission).
50 The policy reason runs as follows. We are here concerned not with E
merely damages such as those for a tort or breach of contract but with what
the remedy should be when the agent has betrayed the trust reposed in him
notions of equity and conscience are brought into play. Necessarily such a
betrayal may not come to light. If all the agent has to pay if and when he is
found out are damages the temptation to betray the trust reposed in him
is all the greater. So the strict rule is there as a real deterrent to betrayal. F
As Scrutton LJ said in Rhodess case 29 Com Cas 19, 28, The more that
principle is enforced, the better for the honesty of commercial transactions.

Questions 2 and 3: are further agency fees payable and can the paid fees
be recovered?
51 Accordingly, as the courts below held, there was a breach of G
duciary duty here. The cases I have cited make it plain that, where there is
such a breach, commission is forfeitso Mr Jack need pay no more agency
fees and is entitled to repayment of the fees paid by him.

Question 4: can Mr Jack recover all or some of the £3,000 fee received
by Imageview?
H
52 The £3,000 was a secret prot made by a duciary. On normal
equitable principles it is recoverable, subject to the possibility (which I park
for the moment) of a reasonable remuneration deduction. Snells Equity,
31st ed (2005), para 7-127 puts it this way: A duciary is bound to
account for any prot that he or she has received in breach of duciary
 1049
[2009] Bus LR Imageview Management Ltd v Jack (CA)
Jacob LJ

A duty. Cases such as the Boston Deep Sea Fishing case 39 Ch D 339 (if it is
a prot which arises out of the transaction, it belongs to his masterper
Bowen LJ, at p 364) amply justify this proposition.
53 Mr Lopian did not really contest otherwisehis main point being
that because the deal was collateral there was no breach of duciary duty at
all. That I have rejected.
B
Question 5: should there be a deduction from the secret prot to reect the
value of the work done to make it?
54 Below Mr Recorder Walker held there should be such a deduction,
whereas Underhill J held otherwise. What then are the principles which
govern a deduction when a duciary has received a secret prot in breach of
his duty of delity?
C 55 The basic principle is beyond dispute, that, in the words of Snells
Equity, at para 7-127: A duciary is bound to account for any prot that he
or she has received in breach of duciary duty.
56 Snell, at para 7-131, also sets out the general rules about when an
allowance for skill and e›ort will be made:
a duciary who has acted in breach of duciary duty, and against
D whom an account of prots is ordered, may nevertheless be given an
allowance for skill and e›ort in obtaining the prot which he has to
disgorge where it would be inequitable now for the beneciaries to step
in and take the prot without paying for the skill and labour which has
produced it.The quotation is from the judgment of Wilberforce J in
Phipps v Boardman [1964] 1 WLR 993, 1018.This power is exercised
E
sparingly, out of concern not to encourage duciaries to act in breach of
duciary duty. It will not likely be used where the duciary has been
involved in surreptitious dealing . . . although, strictly speaking, it is
not ruled out simply because the duciary can be criticised in the
circumstances. The duciary bears the onus of convincing the court
that an accounting of his or her entire prots is inappropriate in the
circumstances. (I have omitted the authorities cited in the footnotes
F to this passage.)
57 Mr Lopian did not contest any of this. In his skeleton argument he
took us to OSullivan v Management Agency and Music Ltd [1985] QB 428,
468 where Fox LJ said: Nor do I think that the principle [of making an
allowance] is only applicable in cases where the personal conduct of the
duciary cannot be criticised. I think the justice of the individual case must
G be considered on the facts of that case. Mr Lopian particularly relied on the
last sentence. But Fox LJ went on to say: Accordingly, where there has been
dishonesty or surreptitious dealing, or other improper conduct . . . it might
be appropriate to refuse relief; but that will depend on the circumstances.
The present case is, of course, one of surreptitious dealing.
58 Mr Lopian also took us to Murad v Al-Saraj [2005] WTLR 1573 for
the warning of the High Court of Australia in Warman International Ltd v
H
Dwyer (1995) 182 CLR 544 that the remedy of an account should not be
allowed to become a vehicle for the unjust enrichment of the plainti›.
59 Mr Lopian submitted that the work done in getting the work permit
was of benet to Mr Jack. It was this circumstance which meant that
Imageview should be given credit for the work done. But, as Underhill J
1050
Imageview Management Ltd v Jack (CA) [2009] Bus LR
Jacob LJ

pointed out, the work involved was never anything Mr Jack was expecting A
to pay for. It was something which he surely knew had to be done before
he could play. But it was not a benet which accrued to him nancially.
How Dundee arranged for the permit was simply a matter for Dundee.
60 So, like the judge, I cannot see any reason for exercising the power
one to be exercised sparinglyto make an allowance. The onus of justifying
the allowance is far from discharged.
B
61 So I would dismiss this appeal in its entirety.

DYSON LJ
62 I agree.

MUMMERY LJ
63 I totally agree.
C
64 The stringent agency duties so brilliantly expounded in Boston Deep
Sea Fishing and Ice Co v Ansell (1888) 39 Ch D 339 by the greatest
constitution of the Court of Appeal in the 19th century and in Rhodes v
Macalister (1923) 29 Com Cas 19 by the greatest constitution of the Court of
Appeal in the 20th century apply to the facts of this case. It is inspiring to
read their judgments. I would not qualify them in any respect. I cannot
improve upon them in any way. D
65 Only one regret, and that is that it is still necessary, in the 21st
century, to remind agents of what was said by the greatest of all the judges,
Bowen LJ in the Boston Deep Sea Fishing case, at p 362, about conicts of
duty and interest and the necessity for transparency in the dealings of
agents, if condence in them is to continue. In our age it is more important
than it ever was for the courts to hold the precise and rm line drawn
E
between payments openly, and therefore honestly, received by agents, and
undeclared payments received by agents secretly, and therefore justly liable
to all the legal consequences owing from breaches of an agents duciary
obligations.
Appeal dismissed with costs.
F
24 June 2009. The Appeal Committee of the House of Lords (Lord
Phillips of Worth Matravers, Lord Mance and Lord Collins of Mapesbury)
dismissed a petition by the claimant for leave to appeal.
KM