IN THE SUPREME COURT OF JUDICATURE
CHANCERY DIVISION
Royal Courts of
Justice
Strand, London, WC2A 2LL
28th June 2001
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J Crystal (instructed by DMH, Brighton) for the Claimant
E Cullen (instructed by Clintons) for the Defendants
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1. Parties and
dramatis personae
Allwood, Miss Mandy Allwood, the claimant, who in mid 1996 was pregnant
with octuplets.
Clifford, Mr Max Clifford. First defendant. Well known practitioner in
publicity and public relations.
Hall, Mr Phil Hall, editor of the News of the World in 1996.
Hudson, Mr Paul Hudson, father of the babies. Lives with Miss Allwood.
MCA Max Clifford Associates Limited. Second Defendant. Company through
which Mr Clifford carries on his business activities.
Wooldridge, Mr Michael Wooldridge. Solicitor. Friend of Miss Allwood
and Mr Hudson.
2. In 1996 Miss Allwood was pregnant with octuplets. It was potentially a big news story. Mr Clifford, through his company, MCA, was engaged to act as her publicity agent and adviser. The two of them have since fallen out, and this case is one consequence of the falling out. Originally large sums were claimed by Miss Allwood, but by now, although there is a lot of ill-feeling behind the case, the actual sums in issue are quite small. There is a claim and a counter claim.
3. So far as the claim is concerned Miss Allwood claims for three amounts, but the only one of any substance is £15,000 which was paid to MCA by the News of the World in circumstances which I will describe below. Miss Allwood says that MCA is liable to account to her for the £15,000. In the evidence and the argument Mr Clifford was accused of all sorts of misconduct and impropriety in connection with the £15,000 - secretly taking money on the side and the like. I do not agree with these attacks on Mr Clifford's honesty and reputation. However, I do think that, for reasons of a more technical nature which I will explain later, and which do not in my view impact adversely on Mr Clifford's standing in his business, MCA is liable to account to Miss Allwood for the £15,000. Thus her claim in this respect succeeds, though not by any means for the more extravagant among the reasons which were advanced in support of it. Of Miss Allwood's other two claims, one for £200 is admitted. The other fails. I will briefly explain about it later. It is not of sufficient significance to merit being described in this overview.
4. The counterclaim is a claim by MCA for several sums by way of unpaid commissions. They total £4,970. Some of them are by now admitted and I will not describe them at this point. Two are disputed on the ground that, although they were payable, Miss Allwood has paid them, doing so in cash. Mr Clifford says that they were not paid. The burden of establishing that Miss Allwood did pay them lies on her. There is a conflict of evidence which I cannot resolve. It follows that on this issue Miss Allwood fails, and I will uphold the counterclaim in full.
5. I wish to stress that this does not amount to a finding by me that Miss Allwood and Mr Hudson were lying when they said that they paid the two disputed sums of commissions in cash. I have some doubts about their evidence, but the central point is that on this issue I cannot be sure where the truth lies. In those circumstances I must decide this part of the case against the party on whom the evidential burden of establishing the contested fact lies. Under the counterclaim that is Miss Allwood. There is, in a sense, an equal but opposite point which goes against Mr Clifford and MCA on the other part of the case. I will explain this more fully later, but a defence by MCA against Miss Allwood's claim for the £15,000 paid by the News of the World depends on another disputed question of fact. This question is one on which the burden rests on MCA. It is another dispute which I do not feel able to resolve, so that part of the case must go against MCA.
6. In April or May of 1996 Miss Allwood learned that she was pregnant, and that it would be a multiple birth. Mr Hudson was the father of her babies. The two are not married, but they live together in the manner of husband and wife and are very much a couple. They lived in the Midlands at the time, and I believe that they still do. At some time, and certainly by the beginning of August, they learned that Miss Allwood was expecting octuplets. She took the brave decision to attempt to carry all the babies through to birth.
7. She and Mr Hudson were well aware of the unique nature of her case. At some time in the first week of August Mr Hudson contacted the news division of Central Television to discuss with them the possibility of making a programme about it. He said in evidence that he had in mind some sort of documentary, and he had not realised that there might be financial advantages to him and Miss Allwood from publicity. In the event nothing came of the approach to Central Television, but matters moved swiftly, to the extent that on Sunday 11 August the News of the World carried a big story about Miss Allwood and the octuplets whom she was carrying. The publicity machine, and all the financial implications which went with it, were in full swing.
8. I will attempt to identify the main stages which led to the News of the World article, but I should say that several things happened in quick succession, and the witnesses (the principal one for this stage being Mr Hudson) are not certain of all the exact dates or the exact sequence.
9. Mr Hudson had a friend who was a solicitor, Mr Wooldridge. He knew about the pregnancy, and he said that there was obvious publicity value in it. With the agreement of Miss Allwood and Mr Hudson he contacted the News of the World. I think that this may have been on Monday 5 or Tuesday 6 August. He saw a representative of the newspaper. No agreement was concluded, but a financial offer was made.
10. It seems that Miss Allwood and Mr Hudson were uncertain what to do (understandably so), and Mr Hudson spoke on the telephone to another solicitor who acted for him in some connection which I do not know in detail. He thought that she might be more familiar than Mr Wooldridge with the area of press and publicity which he and Miss Allwood were considering entering. She (the solicitor) said that it was potentially a very big story, and that there could be a lot of money to be earned from it. Miss Allwood ought to secure the services of Mr Clifford to act for her. She asked if she could contact Mr Clifford. It seems that she must have telephoned him straight away, because within a matter of minutes Mr Hudson received a telephone call from Mr Clifford. A meeting was arranged.
11. The meeting took place on Wednesday 7 August 1996 at a coffee bar in Wimbledon. It was attended by Miss Allwood, Mr Hudson, Mr Wooldridge and Mr Clifford. It lasted half an hour or a little longer. Mr Clifford explained about his business and his contacts and offered to act for Miss Allwood. He said that he would negotiate publicity arrangements for her with newspapers, radio, television and the like, and would look after her generally during the period of high public exposure which was ahead. He said that it was necessary for them to move fast, because the story would break, and the value in an exclusive contract with a newspaper could easily be lost. He said that his terms were a commission of 20% on earnings from contracts arranged by him. Mr Hudson asked about a written contract. Mr Clifford believes that he said that Miss Allwood could have one if she wanted, but that he did not go in for written contracts with his clients. He did business on the basis of a handshake.
12. Miss Allwood liked Mr Clifford at the time. (Justifiably or unjustifiably she has changed her mind since). She did not engage Mr Clifford to act for her there and then, but by the evening she had decided to do so. The next day, Thursday 8 August, Mr Wooldridge sent a fax on her behalf to Mr Clifford instructing him to act "in connection with the marketing of her story at the agreed 20% charging rate". He described the offer which the News of the World had made to him a few days earlier, and he spelt out a few detailed matters which Miss Allwood wanted, in particular the provision for the rest of her pregnancy of accommodation in London near to her gynaecologist. As well as Mr Wooldridge confirming the engagement of Mr Clifford in that way, Miss Allwood or Mr Hudson telephoned Mr Clifford and confirmed it to him directly.
13. Mr Clifford immediately set to work. At some time in the course of the Thursday he had negotiated terms with the News of the World. He dealt with Mr Hall, the editor of the newspaper whom he knew personally. The terms were recorded in a written agreement between the News of the World and Miss Allwood, which Miss Allwood signed the next day, the Friday.
14. I digress at this point to consider how far the services of Mr Clifford were financially beneficial to Miss Allwood. A theme which underlies a lot of the submissions of Mr Crystal, her counsel, is that they were scarcely beneficial to her at all, and that, on the contrary, the main beneficiary from Mr Clifford acting for her was Mr Clifford himself.
15. The terms of the News of the World contract were quite similar to those which had been offered to Mr Wooldridge a few days earlier. For the initial interview and exclusive story (which appeared in the paper three days later) the fee to Miss Allwood was the same,£50,000. Mr Crystal says that almost all the improvements which Mr Clifford negotiated with the News of the World were for the financial benefit of MCA and Mr Clifford, not of Miss Allwood. I am not so sure about that. As Mr Clifford sees it, a big improvement to the previously offered payments which he secured was the agreement of the News of the World that, as well as paying the agreed sums to Miss Allwood, it would pay to MCA the commissions which it (MCA) was contractually entitled to receive from Miss Allwood. On the initial £50,000, if Miss Allwood had paid the commission to MCA, she would have received £50,000 and paid away £10,000 (and possibly a further 17.5% for VAT) to MCA, leaving her with £40,000 (or possibly only 82.5% of £40,000). Under the terms negotiated by Mr Clifford, she received the £50,000 and kept all of it. The News of the World, and not Miss Allwood, paid to MCA its 20% commission.
16. Mr Crystal criticises that way of looking at the matter. He says that, if Miss Allwood had never used the services of Mr Clifford but had instead simply accepted the offer which the News of the World had made to Mr Wooldridge a few days earlier, she would have received £50,000 from the newspaper, and neither she nor anyone else would have paid any commission to MCA. In my view, however, that is an incomplete analysis. Mr Clifford, with his contacts and expertise, was engaged to do, and did do, much more for Miss Allwood than just to finalise one contract with the News of the World. He was able to provide a far more advantageous general service for her than Mr Wooldridge could have provided, as I am sure Mr Wooldridge would be the first to acknowledge. He got the editor of the News of the World to agree that Miss Allwood could give interviews to other media outlets if the News of the World consented, such consent not to be unreasonably withheld. Thereafter he arranged many such interviews, and secured the consent of the News of the World for Miss Allwood to give them. He got the editor to agree to the newspaper providing several other benefits which were important to Miss Allwood, such as a house or flat near her gynaecologist, and care for her 5 years old son during the remaining months of her pregnancy. It seems to me to have been entirely reasonable for Mr Clifford to take the view that, given that he was going to represent Miss Allwood generally over the months ahead and achieve a lot for her, his representation should start with the initial News of the World contract. It also seems entirely reasonable that he should expect to receive a commission by reference to that contract as well as by reference to other contracts made with other parties in future. I think that it is fair for him to say that the arrangement which he negotiated with the editor of the News of the World meant that the initial News of the World payment to Miss Allwood was worth £50,000 to her, whereas without the arrangement it would have been worth only £40,000 or less.
17. Mr Clifford's evidence was that over the period of five months or so for which he acted for Miss Allwood his contracts earned for her a total of £190,000 after all commissions. Only £50,000 of it came from the News of the World contract. I do not suppose for a moment that, without Mr Clifford, Miss Allwood and Mr Hudson (with or without the assistance of Mr Wooldridge) would have earned anything like that figure.
18. I return to a chronological account of the facts. I have described how, on Thursday 8 August 1996, Mr Clifford negotiated with Mr Hall, the editor of the News of the World, a contract between the newspaper and Miss Allwood. He negotiated another contract with the News of the World on the same day. It was a contract between his own company, MCA, and the News of the World. This was the contract under which MCA was paid the £15,000 which is the only significant element of the claim before me. So this part of the facts is important. Mr Clifford's account is that, in the course of his conversation with Mr Hall (which I think was on the telephone) Mr Hall said that, when the paper ran the Mandy Allwood exclusive story, there could be a substantial stir in the media, and that the News of the World would need some public relations advice and representation itself. Would Mr Clifford take on this role for the paper? The fee to his company for this would be £15,000.
19. Mr Hall gave evidence, and he confirmed Mr Clifford's account of the matter. His evidence was not challenged in cross-examination, and I wish to read an extract from his witness statement:
(omitted)
At a later point Mr Hall says:
It is absolutely not true that Max Clifford received any 'kickback' for placing the story with the News of the World.
20. Mr Clifford agreed to act for the News of the World as Mr Hall had requested. He said that it was subject to his informing his clients, Miss Allwood and Mr Hudson, and being told that they had no objection. Mr Hall said nothing about Mr Clifford having spelt out this reservation, and I do not think that I can positively find as a fact that Mr Clifford did spell it out. Whether or not Mr Clifford said anything to Mr Hall about it on 9 August does not seem to me to be in itself as important as Mr Crystal would have me consider it. If Mr Clifford had said nothing to Mr Hall about needing the consent of Miss Allwood and Mr Hudson, but asked them for that consent the next day and was refused it, I am confident that he could have spoken to Mr Hall and apologised for having to say that he could not represent the News of the World after all. I do not think that in that situation Mr Hall would have said that it was too late, and that Mr Clifford would have to represent the News of the World, as well as Miss Allwood, because he had already committed himself to do so. The point that really matters is whether Mr Clifford ever said anything to Miss Allwood and Mr Hudson about it. I come to that later.
21. All of that was on the Thursday. I have already recorded that on the Friday a written agreement between Miss Allwood and the News of the World was signed. Also on the Friday Mr Hall wrote a letter to Mr Clifford. It is important in relation to the £15,000, and I ought to read it in full:
(omitted)
I should explain that the first item in the letter, relating to £10,000, was the way that Mr Hall expressed the News of the World's agreement that it would pay to MCA the 20% commission which would otherwise have been payable to MCA by Miss Allwood.
22. I continue with events on the Friday. The News of the World was very anxious to carry the exclusive Mandy Allwood story on the Sunday, because it felt that if it did not the story would become public knowledge anyway. Various things happened on the Friday, some of which Miss Allwood said had an air of cloak and dagger about them. She and Mr Hudson met with representatives of the News of the World in the morning at the Belfry Hotel in the Midlands. I think, but am not sure, that that is where she did the interview which was the basis for the story in the paper on the Sunday. It seems that there were journalists from other newspapers around, so obviously the story was starting to leak. Miss Allwood was driven away from the hotel by News of the World personnel with her face concealed under a coat. First they went to a hotel in Oxford, but if I have the facts correctly, by the evening of the Friday they had moved on to a hotel in Wimbledon.
23. The facts which I have described so far are largely uncontroversial, although there are disputes about the motivations that did or did not lie behind some of them. I now come to a matter where there is a direct and important conflict between two versions of the facts. Mr Clifford says that, when Miss Allwood and Mr Hudson were at the hotel in Wimbledon, he asked them to go to the coffee bar where he had met them on the Wednesday (which was only a short walk from the hotel) to meet him. There he told them about his second agreement with Mr Hall, whereby he was to provide public relations advice and representation to the News of the World, and his company was to be paid £15,000. They had no objection. That is his account. Miss Allwood and Mr Hudson say that this never happened: they did not go to the coffee bar a second time; they did not see Mr Clifford there; he did not tell them there or anywhere else that his company was to be paid a further £15,000 by the News of the World. The first that they heard about the £15,000 was in connection with the pleadings or other documentation for this case.
24. There is a related dispute of fact, which goes to the same issue. Mr Clifford says that, as well as telling Miss Allwood and Mr Hudson at the coffee bar about the second agreement and the £15,000, at some time which he cannot pin-point exactly he also telephoned Mr Wooldridge and told him about the same things. Mr Wooldridge voiced no objection. Mr Wooldridge's evidence was that he had no recollection of Mr Clifford making this telephone call, and he had no attendance note of it. It is his practice as a solicitor to make attendance notes of important matters, and he considers that, if he had been told these things by Mr Clifford on the telephone, he would have thought them important enough to be recorded in an attendance note.
25. The main News of the World story duly appeared on the Sunday, and a mass of publicity for Miss Allwood followed over the ensuing weeks. It involved many appearances and interviews, going (as she explained in evidence) far beyond anything that she had ever imagined, and proving to be very tiring for her, especially in her condition. Payments were made from the News of the World and from other sources. As I understand it payments for Miss Allwood were usually directed to Mr Wooldridge. Payments to MCA were made pursuant to invoices which it issued. Most of these were for its commissions, but because Mr Clifford had successfully negotiated with the News of the World for it to pay his commissions, he invoiced the newspaper and not Miss Allwood. He said that where he could he did the same with commissions on payments from other media outlets, and some of the documents before me bear this out.
26. I ought to refer specifically to MCA's invoice to the News of the World, since Mr Crystal says that it is misleading and (as I think he would say) in some way dishonest as between MCA and Miss Allwood. The invoice is dated 13 August 1996 (the Tuesday after the Sunday when the story was published). It is addressed to Mr Hall as editor of the News of the World. It is for £25,000 plus VAT, and the description is:
For arranging exclusive pictures and interview re 'I'm going to have all my 8 babies'.
I would agree with Mr Crystal if his submission was that the wording of the invoice was incorrect. The £25,000 was the aggregate of the two sums in Mr Hall's letter of 9 August 1996 (quoted in para 21 above). £10,000 of the £25,000 was in effect the News of the World paying to MCA the commission which would otherwise have been payable by Miss Allwood (although the letter of 9 August did not really describe it in that way). The other £15,000 was for Mr Clifford agreeing to look after the interests of the News of the World in connection with the Mandy Allwood story. I agree with Mr Crystal up to a point: those realities as to what the invoice was for are not reflected in the wording of it. However, I do not agree that the invoice is dishonest and misleading in the way that Mr Crystal says. The invoice was not sent to Miss Allwood, so it cannot have been intended to deceive or mislead her. On the contrary, it was addressed personally to Mr Hall, the editor of the News of the World. He had himself negotiated with Mr Clifford what payments the News of the World was going to make and what they were for. He was not going to be deceived or misled by the inaccurate description in the invoice.
27. I now have to record the sad fact that at the beginning of October Miss Allwood miscarried and lost all of the babies. There was still considerable media interest, and after she had recovered she gave a number of other interviews. Some of them are involved in the counterclaim by MCA against her for unpaid commissions, and I will explain the relevant facts in detail when I come to that part of the case.
28. In December 1996 the retainer of MCA by Miss Allwood was terminated. I do not know much in detail about this, but it is clear that, rightly or wrongly, she had lost confidence in Mr Clifford. Eventually these proceedings were commenced. I have mentioned already that originally Miss Allwood was advancing much larger claims. By now most of them have fallen away, and only comparatively small sums have been in dispute before me. It seems to me that the case is being continued out of personal animosity (in both directions, but mostly directed from Miss Allwood and Mr Hudson towards Mr Clifford) rather than anything else.
29. There is one other fact to record. Mr Hall had anticipated that during the period when the story was current there would be attacks on the News of the World. He was right. There were, and I was told that Mr Clifford made statements in defence of the newspaper to the press, on radio and on television. Mr Hall wrote to thank him for what he had done. The letter was dated 15 October 1996, and I quote the main parts of it:
(omitted)
30. The starting point of Miss Allwood's argument is that Mr Clifford, or more strictly MCA, was the agent for her when he spoke to Mr Hall and agreed to perform services for the News of the World in return for a fee. She argues that therefore MCA cannot keep the fee for itself, but is accountable for it to its principal, namely herself. Mr Crystal seeks to reinforce the argument by allegations of corruption and dishonesty against Mr Clifford. It is suggested that Mr Clifford negotiated for a secret payment on the side, in the nature of a bribe, for placing the Mandy Allwood story with the News of the World. It will be apparent from much that I have said already that I do not accept these charges against Mr Clifford. I find on the basis of the evidence of himself and Mr Hall that Mr Clifford had no intention of behaving dishonestly or corruptly towards his client. The payment was offered by Mr Hall for services to the News of the World, services which were not perceived by Mr Hall or Mr Clifford as being incompatible with Mr Clifford's primary status as the agent for Miss Allwood.
31. However, it can happen under the law of agency that a payment received by an agent from a third party may be one which the agent is not allowed to keep for himself, notwithstanding that the agent had no consciously improper motive in accepting it, and notwithstanding that the agent may have believed - possibly correctly - that there would be no damage to the interests of his client from what he has agreed to do for the third party. In my opinion this is such a case.
32. Both counsel (Mr Crystal for Miss Allwood and Mr Cullen for Mr Clifford and MCA) were content to accept that the law can be taken from the judgment of Leggatt J in Anangel Atlas Compania Naviera SA v. Ishikawa-Harima Heavy Industries Co Ltd [1990] 1 Lloyd's Rep 167. The judge reviewed the case law extensively in his judgment, and I accept that I can simply base myself on the Anangel case itself. The basic principle is that, if an agent acting for a principal in a transaction between the principal and a third party agrees to accept a payment from the third party, the principal can, subject to an important exception, recover the payment from the agent or (as was claimed in the Anangel case itself) from the third party. The important exception is that, if the principal knows about the arrangement between the agent and the third party, including the fact that the third party will be making a payment to the agent, and if the principal gives a 'fully informed consent' to the agent receiving the payment, then the principal cannot turn round and demand that the agent should account to him for the payment.
33. As I understood Mr Cullen's argument for MCA, his main ground for resisting Miss Allwood's claim to the £15,000 is that Miss Allwood did know about the arrangement between Mr Clifford and the News of the World, and had no objection to it. In Mr Clifford's evidence he said that the sort of arrangement which he made with Mr Hall was not uncommon in MCA's business. He had done it before Miss Allwood's case, and he has done it since. He did not think that there was anything wrong with it. But he did accept that he would always think it right to tell his client. It would, he said, be "underhand" not to. Consistently with this he said that he had told Miss Allwood and Mr Hudson about the services which he had agreed with Mr Hall to provide to the News of the World. He says that he told them about it at the second meeting at the Wimbledon coffee bar, probably on Friday 9 August 1996.
34. If I felt able to find that the meeting did indeed take place and that Miss Allwood and Mr Hudson, upon being told that MCA would be receiving a fee from the News of the World, had no objection to it, I would consider that to be a sufficient defence against Miss Allwood's claim to be paid the £15,000. But as I have indicated in my account of the facts, Miss Allwood and Mr Hudson said in evidence that there was no second meeting at the coffee bar, and that they were never told that MCA would be receiving £15,000 or any other sum for services provided by Mr Clifford, not to them, but to the News of the World. Mr Cullen says that I ought to disbelieve Miss Allwood and Mr Hudson on this. There are some other things said by them in evidence where I do not accept what they say, but I am not prepared to reject their evidence on this point. Mr Clifford's account of this part of the case may be correct, but the fact is that I do not know where the truth lies on it. There is some indirect support for Miss Allwood and Mr Hudson in Mr Wooldridge's evidence, not disputed on behalf of Mr Clifford and MCA, that he has no attendance note of Mr Clifford telephoning him and telling him about the arrangement, although Mr Clifford said in evidence that he had done so.
35. It seems that Mr Clifford likes to do business verbally where he can. He proceeds on the basis of handshakes rather than written contracts, and the impression which I glean from the documents before me (several letters to MCA and Mr Clifford from Mr Wooldridge and the News of the World, but little other than invoices in writing from MCA) is that Mr Clifford does not write many business letters: he seems to conduct his business more on the basis of meetings, telephone calls and personal attendances. There is absolutely nothing wrong with that, and I can imagine that most of his clients will be much more comfortable with a publicity agent who talks to them in preference to writing letters to them. However, it does carry the risk that, if Mr Clifford ever needs to prove that something happened but it was not documented, he may not be able to prove it.
36. To make good this defence against Miss Allwood's claim for the £15,000 he needs to establish that he told her about his arrangement with the News of the World. The evidential burden of proof on this issue falls on him. He has not discharged it, and therefore I cannot dismiss Miss Allwood's claim on the ground that she and Mr Hudson, with knowledge of the situation, consented to the agreement under which the News of the World paid £15,000 to MCA.
37. Mr Cullen says that that is not the end of the matter. He says that, even if it cannot be established that Mr Clifford told Miss Allwood and Mr Hudson about this point, Mr Clifford acted honestly and in good faith (which I accept), and there was in fact no conflict between his duty to his client (Miss Allwood) and what he agreed with the News of the World to do for it. He says that, if that is true, the Anangel case shows that MCA is entitled to retain the £15,000. In that case the principal was held not to be entitled to recover a commission paid to the agent by the third party, a shipbuilder. However, the facts of the case were special and not sufficiently comparable to those of the present case. The agent had had a long-established relationship with the shipbuilder pursuant to which he received the payment which the case was about, and in any event Leggatt J considered that the principal knew about it or ought to have known about it.
38. I do not accept that the Anangel case establishes that, as long as in practice no conflict arises between the agent's duty to his principal (here MCA's duty to Miss Allwood) and his interests under his relationship with the third party (here the News of the World), the agent is entitled to retain the payment from the third party. I also consider that, although Leggatt J sometimes uses the word 'bribe' to characterise the sorts of payments he is considering, he does not mean that an agent can only be required to account to his principal for a receipt from a third party if the receipt is infected by the sort of dishonesty normally associated with the pejorative word "bribe".
39. These points about the Anangel case are, in my view, demonstrated by noting a submission advanced on behalf of the agent which Leggatt J did not accept. It was summarised in these terms:
The law should allow the third party or the agent to defeat a claim by the principal to recover any payment made by the third party to the agent by showing that the agent at all times acted in the best interests of the principal notwithstanding the payment.
It seems to me that that is in essence the submission which Mr Cullen advances to me. However, Leggatt J did not accept it, and nor do I. Leggatt J said that the:
submission is not only unsupported by decided cases, but is at variance with them. The court has never permitted a finding that the agent acted in the best interests of his principal, notwithstanding the receipt of secret commission, to avail either the agent or the third party when sued in respect of it by the principal.
I add that I interpret the word "secret" in the context merely as meaning commission which the principal does not know about, not as meaning commission which has been deliberately and dishonestly concealed.
40. There is one other point of a more detailed nature which I wish to make about this part of the case. Mr Cullen in his submissions and Mr Clifford in his evidence describe the £15,000 payment as being simply for Mr Clifford agreeing to provide public relations services for the News of the World in the event of its being criticised for its part in the Mandy Allwood story. That was certainly a part of it, and, as Mr Hall's letter of 26 October 1996 confirms, Mr Clifford did indeed provide valued public relations representation for the paper. Nevertheless, it was not the only thing in return for which the News of the World agreed to pay £15,000 to MCA, and it was not the thing which seems to have had most importance in Mr Hall's mind when he agreed upon the payment. In his letter of 9 August he said that looking after the News of the World's interests during the life of the story meant:
in particular ... ensuring that she undertakes no interviews with other newspapers without our consent.
The flavour of this to me is of the News of the World paying MCA for ensuring that its client did what she had contracted to do under the contract negotiated on her behalf by MCA. It does not seem to me at all incongruous or formalistic for the law to say that, if a payment to an agent of that sort is not agreed to in advance by the principal, the agent will be accountable to the principal for it.
41. For those reasons I consider that Miss Allwood's claim against MCA to recover the £15,000 succeeds.
42. After Miss Allwood's sad miscarriage her sister gave an interview to the Sun. The interview was arranged by Mr Clifford. The sister was paid a fee by the Sun, and MCA received a commission. As with the commissions on Miss Allwood's fees from the News of the World, Mr Clifford arranged that the Sun would pay his commission. MCA invoiced the Sun for it, and the paper paid it. The amount was £1,000. Miss Allwood claims that MCA must pay it to her. I do not understand on what basis this claim is made or how it can be expected to succeed. MCA's and Mr Clifford's client in respect of the interview with the Sun was not Miss Allwood. It was her sister. Both Miss Allwood and her sister agreed in evidence that they knew that the Sun would be paying a fee to the sister, and that MCA would be entitled to a commission. There is no justification for this element in the claim, and I dismiss it.
43. The other element is £200, and is agreed. An error of £200 was made in calculating a commission in respect of services to Miss Allwood - a commission to which it is agreed that MCA was contractually entitled. Because of the error Miss Allwood paid £200 too much. MCA agrees that she is entitled to have it paid back.
44. The overall result on the claim is that it succeeds in the two amounts of £15,000 and £200, a total of £15,200.
45. MCA claims judgment against Miss Allwood for several sums by way of commission to which it says it was entitled, but which it says Miss Allwood has not paid. Mr Clifford explains his general position in this way: he says that, if Miss Allwood had not started the present action against him and his company, he would not be pursuing these commissions, but given that the action has been started and that very damaging allegations are being made against him in it, he has thought it appropriate to advance the counterclaims.
46. Several of the sums claimed are admitted, or at least are not disputed, and I need not go into them. The amounts are mostly quite small. A total of £1,170 is now admitted to be due. To that must be added the disputed items, because for the reasons which I am about to explain I consider that the disputed counterclaims succeed. There are two disputed items, one of £1,000 and the other of £2,800.
47. First, however, there is one matter which I wish to mention about a counterclaim which is not now disputed. Miss Allwood received a fee from Talk Radio for presenting a programme in the course of a week in November 1996. She says in her witness statement that she arranged the engagement herself and that Mr Clifford had nothing to do with it. However, it is absolutely clear from a fax from Talk Radio to Mr Clifford that he had negotiated the arrangement. Miss Allwood's witness statement was certainly incorrect on this point, and if I understood Mr Crystal correctly he no longer disputes this element in the counterclaim. I mention the point because it illustrates one point about the case. I fear that I have to approach the evidence of Miss Allwood and Mr Hudson with a degree of caution. They are prone to make assertions some of which (like this one) can be shown to be wrong, and others of which are very difficult to reconcile with things that they have said on other occasions.
48. This links up with the two disputed counterclaims. They are both in respect of commissions which Miss Allwood agrees were contractually owed to MCA, but where she says that they were paid in cash. Mr Clifford's evidence is that they were not paid, either in cash or in any other form. There is a straight dispute of evidence about them.
49. I must precede my account of the facts which underlie the disputed payments by referring to one other commission which was admittedly paid in cash, and which is said by Mr Crystal to support Miss Allwood's case in that it demonstrates a propensity by Mr Clifford to carry out cash transactions. Mr Clifford arranged three interviews with Miss Allwood by a German television station, Pro Sieben. For two of them the station was invoiced for the fee and paid it by cheque in a conventional manner. However, on one occasion the representative of Pro Sieben handed the fee in cash to Miss Allwood and Mr Hudson at the end of the interview. The interview had taken place at a hotel where Mr Clifford had arranged for them to stay, at no expense to themselves, after Miss Allwood had come out of hospital having lost her babies. Mr Clifford came to the hotel, and Miss Allwood and Mr Hudson paid his 20% fee to him in cash, taking it out of the cash which had been handed to them by Pro Sieben. (The amount was £8,000, although it ought to have been £7,800. This was the £200 error which I have mentioned at an earlier point.) For Mr Clifford to have been paid in cash on this occasion seems natural, given that Pro Sieben had chosen to pay Miss Allwood and Mr Hudson in cash. I do not think that it is sinister, or that it displays a suspicious propensity by Mr Clifford to go in for cash transactions.
50. A significant matter which I must mention is that Mr Hudson, in his witness statement, said that Mr Clifford told him and Miss Allwood that he was not going to put it through the books, and they should do the same. Miss Allwood says nothing about this in her witness statement, but she nevertheless described it to me in her oral evidence. The fact is that Mr Clifford and MCA did put the £8,000 through the books. There is an invoice in respect of it in the documents before me. It is in my view apparent that, despite the evidence of Mr Hudson and Miss Allwood, Mr Clifford did not say that he was not going to put the cash receipt through the books. This is another example of the unreliability of their evidence.
51. Towards the end of October 1996 Miss Allwood and Mr Hudson travelled to Spain to give an interview on a Spanish television channel, Tal Cual. The fee was £5,000, which was paid to them in cash by the Spanish company. They say that when they returned to this country they saw Mr Clifford at a fitness centre of which he was a member, and paid him £1,000 in cash by way of his commission. Mr Clifford's evidence was that this never happened. This is one of the amounts disputed upon the counterclaim.
52. The other arose in the following way. Under the contract between Miss Allwood and the News of the World she was entitled to further fees calculated by receipts of the newspaper from syndication of her story. MCA was in its turn entitled to a 20% commission on these fees. The arrangement for the News of the World to pay MCA's commission did not apply to these fees, so MCA would expect to collect them from Miss Allwood. Mr Clifford's evidence is that they have never been paid. Miss Allwood received a syndication payment of £14,000 from the News of the World on 26 October, which would have given rise to a commission of £2,800 to MCA. Miss Allwood and Mr Hudson say that they paid this in cash on 12 December 1996, leaving the cash in an envelope at Mr Clifford's office for his staff to hand to him. They say that the cash was taken from the money which had been paid to them in October by the representative of Pro Sieben, the German television company. They still had quite a lot of that money in their house. This is the second of the disputed issues in the counterclaim, since Mr Clifford's evidence is that no envelope with £2,800 in cash in it was ever left with his staff at his office.
53. On this matter the burden of proving that the disputed amounts were paid rests on Miss Allwood. If her assertion that they were paid in cash is disputed, as it is, and she cannot prove it, she fails to make good her defence to two elements in the counterclaim, namely £1,000 of commission owed in respect of the fee from Tal Cual and £2,800 of commission owed in respect of syndication income from the News of the World. In the circumstances which I have described I cannot possibly conclude that she has proved that those two amounts of commission were paid. There are no receipts, and no other forms of documentary evidence. It is simply a matter of the assertions of herself and Mr Hudson against the denials of Mr Clifford.
54. I do not think that Miss Allwood's case is supported by the fact that Mr Clifford agrees that he received MCA's commission on the Pro Sieben fee in cash. It is perhaps worth adding that, in response to a formal request by Mr Clifford and MCA for further information in the course of the pleadings, it was stated that Miss Allwood did not know whether MCA had received commissions in respect of Miss Allwood's fee from Tal Cual and her syndication money from the News of the World. She confirmed the accuracy of her answer by signing a statement of truth. In her evidence to me she was saying that she did know whether MCA had received the commissions: it had, in cash. This is, I fear, another example of the unreliability of things said by Miss Allwood and Mr Hudson in the course of this case.
55. I therefore uphold the counterclaim in respect of the disputed amounts of £1,000 and £2,800, as well as in respect of the other amounts liability for which is not disputed. The total for which MCA is entitled to judgment on the counterclaim is £4,970.