I think this is what BM getting at, and why he believes an answer should be given as to why the others not available for selection.
http://www.socawarriors.net/forum/index.php?topic=28964.0 Commercial: Breach of Contract.
« on: July 01, 2007, 09:14:53 AM »
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Commercial: Breach of Contract.
Filing Attorney: Farid Scoon (SCF1992050)
Mansfield House
24 Abercromby Street
Port of Spain
Tel: 868 627 6854: 868 684 3817
FAX: 868 627 8191
Email: fscoon@hotmail.com
In the Republic of Trinidad and Tobago
In the high court of Justice - No: CV 2007 – [ ]
Between:
Marvin Andrews
Christopher Birchall
Atiba Charles
Cyd Gray
Ian Cox
Cornell Glen
Shaka Hislop
Avery John
Stern John
Kenwyne JonesKelvin Jack
Collin Samuel
Brent Sancho
Aurtis WhitleyEvans Wise
Anthony Wolfe
Claimants
-and-
(1) The Trinidad andTobago Football Association (also known as ‘The Trinidad and Tobago Football Federation’)
(2) Oliver Camps (trading as ‘Trinidad and Tobago Football Federation’)
Defendants
______________________________
Statement of Case/Particulars of claim
______________________________
The Parties
1. The Claimants are all professional football players who were all selected by the First Defendant to represent Trinidad & Tobago at the finals of the FIFA World Cup which were held in Germany during the months of June and July 2006 (“the 2006 Finals”).
2. The First Defendant is a body corporate incorporated by Act No. 17 of 1982 (“the Act”) with offices at No. 24 - 26 Dundonald Street, Port of Spain, in the Island of Trinidad. Section 3 of the Act sets out the aims and objectives of the First Defendant as, inter alia, ‘to regulate and control the conduct of football in Trinidad and Tobago (under the Federation Internationale de Football Association system)…” The Federation Internationale de Football Association (FIFA) is the world governing body for the sport of football. The First Defendant is the sole FIFA affiliated governing body for the sport of football within Trinidad and Tobago. The First Defendant styles itself as the Trinidad and Tobago Football Federation or T&TFF.
3. The Second Defendant is the President of the First Defendant and the apparent proprietor of an unincorporated business trading as ‘Trinidad and Tobago Football Federation’ registered in his name under the Registration of Business Names Act 1932 on the 5th of April 2006. In his application for registration (a copy of which is hereto attached and marked “A”) the Second Defendant stated that the nature of his business was that of a ‘Football Association’.
4. The First Defendant is responsible for the selection of the Trinidad & Tobago national football team. The expression ‘team’ includes not only those football players that actually play in any match but the squad of players selected for each competition, tournament or match. The squad will typically consist of a larger number of players than are ultimately involved in the team that actually plays (or are ‘on the bench’ as a potential substitute) in any match. The First Defendant is also responsible for making all the necessary arrangements to enable the national team to compete in the various competitions and friendly international matches in which it participates.
5. The First Defendant’s responsibilities include entering into contracts and other arrangements with players selected to make up the Trinidad & Tobago national team. In addition to paying the costs involved in participating in these matches this will typically include such matters as the financial compensation payable to players by way of a match fee, bonuses and other incentives, reimbursement of expenses, and such matters as sharing commercial revenue generated by the commercialisation of the players’ and/or the team’s name, fame and reputation, including sponsorship, product endorsement and what are sometimes referred to as player ‘image rights’ deals.
6. At all material times the Claimants (and other players making up the squad that had been selected by the First Defendant for the Finals but who have not joined in with these proceedings) in their dealings with the First Defendant were represented by a committee (the Players Committee) which had authority to act for all the Claimants. The Players Committee was formed during the Summer of 2005 to represent the interests of the Trinidad & Tobago team especially in relation to their participation in the Finals, if qualification was achieved, and for the purpose of conducting such negotiations and concluding such contracts as may be expedient. The players making up the Players Committee were Messrs Andrews, Hislop, Sancho, Dennis Lawrence and Stern John.
7. Mr Jack Warner was at all material times and remains the controlling will and mind of the First Defendant, and also of a company known as LOC Germany 2006 Limited (Company #1138631) and possibly other companies and entities with an involvement with Trinidad and Tobago football. LOC Germany 2006 Limited appears to the Claimants to have been some form of commercial agent of the First Defendant.
The Background to the Contract between the Parties
8. On 16th November 2005 Trinidad and Tobago qualified for the 2006 Finals by beating Bahrain 2-1 on aggregate over the two matches played against them. Qualifications for the World Cup Finals are hotly contested and 2006 was the first time that Trinidad and Tobago had ever qualified for the final stages of the senior football World Cup.
9. Upon qualifying for the 2006 Finals the First Defendant became entitled to a participation award from FIFA in the sum of Swiss Francs (FIFA being based in Zurich, Switzerland) CHF 7,000,000 (approximately US$ 5,600,000). Qualification also means a guarantee of world wide television and mass media exposure for the team and the players making up the national squad. There is an inevitable commercial spin off to this in that companies (especially, but certainly not exclusively, sporting goods manufacturers) will pay very large sums of money to be associated with any of the teams that have made it through to the Finals.
10. In anticipation of Trinidad & Tobago qualifying for the 2006 Finals, and particularly the commercial benefits that would accrue to the First Defendant if that was to happen, a series of meetings took place. The first meeting was held on the 9th November 2005 at the Crown Plaza Hotel, Wrightson Road, Port of Spain between the Players Committee of the one part and Mr Jack Warner and Mr Richard Groden representing the First Defendant of the other part. The second meeting was held on the 8th January 2006 at the Mandarin Oriental Hotel, London between the Players Committee on the one part and Jack Warner, Richard Groden, Bruce Aanensen (team manager) and Mike Berry (a United Kingdom Football Association Licensed Agent and the agent to a number of the T&T players playing in British Leagues and in another capacity a business adviser and assistant to the First Defendant) representing the First Defendant of the other part. A third meeting was held on the 9th January 2006 at the Hilton Hotel, Dartford, England, and by telephone conference, between the Players Committee of the one part and Bruce Annansen representing the First Defendant of the other part. In these meetings, the Claimants and the First Defendant agreed terms of remuneration for the team in connection with their participation in the 2006 Finals.
The Contract between the Parties
11. At the meetings of 9th November 2005 and 8th January 2006 the following terms were agreed (“the Agreement”):
i. If the Team qualified for the 2006 Finals the players who had participated in the qualification games would collectively receive a payment equivalent to 50% of the CHF 7,000,000 participation award to be paid to the First Defendant by FIFA;
ii. If the Team qualified for the 2006 Finals the players who made up the World Cup squad for the 2006 Finals would collectively receive:
a. A payment equivalent to 50% of the profit arising from the six warm-up games that were to be arranged and played as part of the team’s preparation for the Finals (these warm up games were to be against Iceland, Peru, Wales, Slovenia, FC St. Pauli and the Czech Republic and because of the huge interest in the team that had been created by their qualification these matches were expected to be well attended, televised, and commercially successful); and
b. A payment equivalent to 30% of the commercial revenue generated as a consequence of the team’s participation in the 2006 Finals. Commercial revenue in the context of this agreement meant the value of revenue generated by all commercial agreements whether in money or goods or services being paid to or made available to the First Defendant (or any other company or entity mentioned at 11 vii. below) as a consequence of the team’s qualification to the Finals. This would include for instance the value of clothing and other kit supply deals and other deals made in return for commercial/brand exposure which would become available to the First Defendant because the national team had qualified for the Finals, other corporate sponsorship and payments and licensing and merchandising revenues.
iii. The Claimants would be paid their various entitlements including those under (i) and (ii) immediately above within a reasonable time of the various sums being received by the First Defendant (or any other company or entity described at 11 vii. below).
iv. The First Defendant was obliged to keep the Claimants informed of the amounts and likely payment dates for the various revenues, and in the case of the match revenues to calculate the profits on these matches using standard and accepted accounting procedures.
v. The First Defendant was obliged to maintain proper accounts of all the revenues which it had agreed to share with the players (whether that revenue was paid to the First Defendant or another party) and to allow inspection of those accounts for the purpose of verifying the total amount due to the players.
vi. In so far as the First Defendant used the services of a third party (such as a commercial sponsorship agent) it would do so acting at all times in the best interests of the First Defendant and would contract with any such agent on normal arms length commercial terms.
vii. The First Defendant would account to the Claimants in respect of all revenue of the type covered by the Agreement whether that revenue was paid to the First Defendant, the Second Defendant or:
a. to a company, or companies, that were owned by the first and/or second Defendants, or, were owned or controlled, legally or beneficially, individually or together, by Jack Warner and/or the Second Defendant and/or Richard Groden or any nominee of any of them;
b. to Jack Warner and/or the Second Defendant and/or Richard Groden, individually or together, legally or beneficially, and/or to an agent acting on their behalf; or
c. any other party under the effective ownership or control of or serving as agent of the First Defendant, the Second Defendant, Jack Warner and/or Richard Groden.
viii. The First Defendant would use its best endeavours to maximise the revenue which was to be shared with the players under the Agreement.
ix. Payment of all sums due to the players would be made without deduction or set off save where this was specifically agreed.
x. That if any officer, employee, adviser or agent of the First Defendant was to establish any business in the name of the First Defendant (or a name confusingly similar to the name of the First Defendant) or otherwise hold himself out as the First Defendant then the First Defendant and that officer, employee, adviser or agent would be liable to account to the players for monies received by him in the same way as the First Defendant under the Agreement.
Further, or alternatively, the terms set out at 11 iii – x above are to be implied into the Agreement by reason of being the obvious intention of the parties and also as a matter of business efficacy.
12. The Claimants provided consideration for the Contract by playing for the team (or being available to play for the team and duly qualifying for the Finals).
The Variation of the contract
13. At a meeting held on the 12th day of June 2006, in the team hotel in Rottenberg, Germany, the Players Committee and Mr Jack Warner (acting on behalf of the First Defendant) agreed to vary a term of the Agreement so that the collective entitlement of the players making up the World Cup squad, including the Claimants, to 30% of the commercial revenues set out at paragraph 11(ii)b., would be increased to 50%. The consideration for this variation agreement was that the players agreed to accept late payment of monies due under the Agreement payment being promised until after the 2006 Finals.
The Participation Player Agreement
14. At the end of March or in the beginning of April 2006, the players who had been selected to play in the finals were obliged to sign a ‘Player Agreement.’ A copy of this Player Agreement is attached hereto and marked “B”. The Player Agreement was expressed to run until 31st July, 2006.
15. The Player Agreement did not cover the matters dealt with in the Agreement. The terms of the Player Agreement had no relevance to the terms of the Agreement, nor did the fact that the players entered into the Player Agreement in anyway limit the obligations of the First Defendant under the Agreement.
Withholding of monies from the FIFA participation award
16. The First Defendant (or someone on its behalf) was paid the sum of CHF 7,000,000 by FIFA as compensation for its participation in the 2006 Finals, 50% of which was due to the team. Mr Warner told the Claimants that the First Defendant would suffer a deduction from this payment of an amount equal to 26.5% in respect of (1) withholding tax applied by the German tax authorities (being at the rate of 21.5%) and (2) as a mandatory payment towards players medical/health insurance (5%). The First Defendant appears to have made a deduction of this amount in full from the one half share due to the players and in any event the First Defendant has only paid to the team the sum of CHF 2,000,000. In fact no such deductions were made by FIFA or the German tax authorities and the Claimants are owed the amount of CHF 755,550 (referred to as ‘the Tax/Insurance Withholding’) being the amount of their entitlement wrongfully withheld by the First Defendant.
17. At the request of the Claimants (and other players not participating in these proceedings) the First Defendant withheld the sum of US$ 36,000 (referred to as ‘the Charity Withheld Sum’) from the amount due to the players from the CHF 7,000,000. The intention of the players at the time of the request was to have this money paid to charity but they had not at that time decided which charities should benefit. Of the Charity Withheld Sum, the sum of US$ 26,608.70 is the proportion due to the Claimants.
18. By letters dated 6th December 2006, 23rd January 2007, 30th January 2007 and 28th February 2007, the Claimants, through their solicitors, have requested the First Defendant to pay the due proportion of the Charity Withheld Sum to the Claimants but the First Defendant has neglected or failed or refused to do so. A true copy of each of these letters is hereto annexed as a bundle marked “C”.
Duty to account and the inadequacy of accounts that have been provided
19. In order to determine whether or not the First Defendant has complied with its obligation under the Agreement, the Claimants are entitled to receive from the First Defendant, and from the Second Defendant in respect of any monies covered by the Agreement received by his apparent sole trader business, on request, an account of any sums received by any party which is, or may be, subject to the terms of the Agreement.
20. On or about the 23rd August 2006 the First Defendant produced what it purported to be an account of the gross revenues earned by the First Defendant and the share of those revenues which were allegedly due to the players (‘the Player Account’). That account is hereto attached marked ‘D’.
21. In the ‘Summary’ box the Player Account states that the TTFF made a ‘Net Profit of $950,403.49, 50% of which will be for equal distribution amongst the players and officials, and 50% to the T&TFF’.
22. The basis of the revenue sharing which is set out in the said ‘Summary’ is wrong in that the Claimants’ entitlement is as set out in the Agreement referred to at paragraph 11 above. The parties did not agree to share ‘Net Profit’ but to share certain revenue generated from the team’s participation in the Finals. The overall T&TFF ‘profit’ was for the First Defendant to manage based on revenue received by it and its control of expenditure. The amount of profit the First Defendant would be able to generate depended on factors outside the control of the Claimants such as: in relation to the qualification matches how the income or expenditure was to be generated, the price of the tickets for admission, the sale of advertising, television or other rights, or the choice of suppliers or cost of the various services required to put on the matches; or in the case of the commercial revenues, the terms of the commercial agreements entered into by the First Defendant, its agents or associated companies and the amount of its general office overhead costs it chose to attribute to World Cup matters rather than to its other functions. In relation to profit, this would also depend on the amount of public subsidy by way of Government grants which were available to the First Defendant and costs would be partially offset by the payment of the FIFA CHF 7,000,000 participation award. Further, the suggestion in the Summary Box that the Agreement contained any provision to distribute money to ‘players and officials’ is wrong. The Agreement was entered into between the First Defendant and the Players Committee on behalf of the players and dealt with the entitlement of the players only. It did not involve the team officials who were not a party to the Agreement.
23. The Player Account that was provided to the players was defective and failed to discharge the First Defendant’s duty to provide an accurate account of all monies due to the players under the Agreement. The Player Account was incomplete and inaccurate in a number of ways, in particular:
23.1 In relation to the players’ entitlement to a share of the revenue arising from the Warm-Up Games as set out in paragraph 11(ii)(a) above:
23.1.1 The Player Account failed to identify in any detail the revenue attributable to the Warm-Up Games. Under the heading ‘B Aanensen Warm Up Games’ there is a global figure of $9,258,100 for income for all the games which confusingly appears in the column for ‘Sponsorship’. This global figure is given without any break down by ticket sales, on-site advertising, hospitality, television, sponsorship or other commercial revenue, bar and catering receipts. In the circumstances it is simply impossible to begin to establish the accuracy of the figure;
23.1.2 Equally the expenditure attributed to the Warm-Up Games in the Player Account is incomplete and does not include many of the items of expense that would normally be associated with a football match and are identified against the earlier qualification matches in the same document;
23.1.3 Such revenue as is included as having been earned from the Warm Up games was set off in the Player Account against expenditure and losses incurred for the 12 qualification matches which were not part of the Agreement. These qualification matches produced an overall loss to the First Defendant based on the disclosed accounting. The players never agreed that the losses apparently relating to these qualification matches were part of the Agreement.
23.2 In relation to the players’ entitlement to a share of the commercial revenue as set out in paragraphs 11(ii)(b) and 13 above, the Player Account fails to disclose any such commercial revenue at all. There is no reference to the income from the team’s sponsors, such as Adidas, KFC, Carib, and eBay among others. There is no mention of licensing and merchandising revenues or of any specific product endorsement income, or any other revenue of this type.
23.3 According to the Player Account, the sum to be shared with the players (and officials) is just TT$ 475,201.75.
24. At around the same time as the Player Account was given to the players a different set of accounts appeared on the First Defendant’s web site at
www.socawarriorstt.com. This account, ‘the Web Site Account’, is attached hereto and marked “E”.
25. It is not clear what the purpose of the Web Site Account was intended to be. It was addressed to Mr Warner in his capacity as President of CONCACAF (the Confederation of North, Central American and Caribbean Association Football). It was apparently sent under cover of a letter to Mr Warner on the 5th October 2006. However the following matters appear relevant for the purpose of these proceedings;
25.1 The Web Site Account, like the Player Account, deals in the main with profit and loss accounting for the 12 Qualification Matches, which are irrelevant to the calculation of what the Claimants are owed under the Agreement.
25.2 The words ‘Amount Due @ 50%’ appear on the document although what is referred to is not clear.
25.3 The Web Site Account does attempt to separately identify the sponsorship income and lists the following sponsors with the following revenue set out next to their names;
Adidas - $1,800,000;
TSTT/BMobile - $4,000,000;
Busta - $1,000,000;
KFC - $1,000,000;
Carib - $3,000,000;
T&TEC - [blank];
NGC - $500,000;
BHP Billinton - $150,000;
Petrotrin - $1,000,000;
Titan Methanol - $15,000;
British Gas - $ 250,000;
Ebay - $300,000.
25.4 These figures for sponsorship revenue appear to be substantially understated. For instance, it was widely reported in the press and confirmed in the First Defendant’s own press release of 9th December 2005 (attached hereto and marked “F”) that the Adidas deal alone was worth US$11.5 million and not TT$1,800,000 (approximately US$290,000). The total for all sponsorship revenue is stated to be a mere TT$13,015,000 which the Claimants believe is a substantial understatement of the true position.
26. To the extent that the Player Account or the Web Site Account purport to be an overall profit and loss account for the entire T&TFF 2006 World Cup campaign they both fail to include any income from government sources or FIFA.
27. The Claimants are unable to give further particulars of income which ought to have been included in either of the accounts and was not so included, or of other defects, omissions and inaccuracies with the Player Account or the Web Site Account until after receipt of a full and accurate account from the First Defendant, such account to include all revenues to be paid to the Claimants under the Agreement whether received by the First Defendant, the Second Defendant or individuals or companies listed at paragraph 11(vii) above.
The Requests for an Account
28. By a letter dated 24th October 2006, Michael Townley, a solicitor acting on behalf of the Claimants, wrote to the First Defendant setting out in detail the terms of the Agreement. In that letter Mr Townley stated that the players were dissatisfied with the account that had been produced and asked for proper accounts to be produced, this request was repeated in letters to the First Defendant dated 29th November 2006, 6th December 2006, 23rd January 2007, 30th January 2007 and 28th February 2007. To date no further account or accounting information has been provided by the First Defendant. These letters and the various responses of the First Defendant’s solicitors are hereto attached as a bundle marked ‘G”.
The Breach of Contract
29. The First Defendant and the Second Defendant have acted wrongfully, and in breach of the Agreement, as follows:
Particulars of Breach
29.1 The First Defendant and the Second Defendant have failed to account to the Claimants, in the manner requested or in any way that satisfies their obligation under the Agreement, for sums due to the Claimants under the Agreement;
29.2 The accounts which the First Defendant did provide to the Players were defective, incomplete and inaccurate in breach of the First Defendant’s obligation to properly account to the Claimants under the Agreement;
29.3 The First Defendant has not responded adequately to the Claimant’s solicitors repeated request for a proper account;
29.4 The First Defendant has failed to pay any sum at all to the Claimants under the Agreement in respect of the Warm Up match revenue or the commercial revenue;
29.5 The First Defendant has failed to pay to the Claimants the Tax/Insurance Withheld Sum of CHF 755,550;
29.6 The First Defendant has failed or refused to account to the Claimants for their share of the Charity Withheld Sum;
29.7 The First Defendant has failed to provide a separate account for revenue falling under the Agreement and received by the Second Defendant or by any individual or company listed in paragraphs 11(vii) above.
Particulars of loss
30. Save that in respect of the Tax/Insurance Withheld Sum and the Charity Withheld Sum where the Claimants loss is CHF 755,550 and US$26,608.70 respectively, the Claimants are unable to give particulars of their loss until receipt of a full and accurate account supported by evidence, and/or the provision of further information in this case.
And the Claimants claim:
A. An account of all sums due from the First Defendant to the Claimants under the Agreement including sums received by
a. any company, or companies, that were owned by the First and/or Second Defendants, or, were owned or controlled, legally or beneficially, individually or together, by Jack Warner and/or the Second Defendant and/or Richard Groden or any nominee of any of them;
b. Jack Warner and/or the Second Defendant and/or Richard Groden, individually or together, legally or beneficially, and/or by to an agent acting on their behalf; or
c. any other party under the effective ownership or control of or serving as agent of the First Defendant, the Second Defendant, Jack Warner and/or Richard Groden
B. An account of all sums paid to the Second Defendant of the type referred to under the Agreement.
C. An order for payment by the First Defendant and/or Second Defendant to the Claimants of all sums found to be due from the First Defendant and/or Second Defendant to the Claimants on the taking of the account under A above.
D. Payment of the Charity Withheld Sum, being US$26,608.70.
E. Payment of the Tax/Insurance Withheld Sum, being CHF 755,550.
F. Further, or alternatively, damages for breach of contract.
G. The Claimants further claim against the First Defendant interest pursuant to section [ ] of the [Supreme Court Act], on any sums found to be due to the Claimant, at such rate and for such period as the court thinks fit.
H. Costs
I. Further or other relief, including all further necessary or appropriate accounts, inquiries or directions.
Statement of Truth
We believe that the facts stated in these draft amended Particulars of Claim are true.
[I am duly authorised by the Claimants to sign this statement.]
Full Name: Farid Scoon
Name of Claimant’s solicitors firm: Farid Scoon
Mansfield House, 24 Abercromby Street, Port of Spain
Signed (Partner)
Dated [ ] June 2007