Le demandeur, de nationalité britannique, travaillait comme agent de la défenderesse, une société française, depuis environ six ans. A la suite de la résiliation du contrat d'agence par la défenderesse, le demandeur engagea une procédure d'arbitrage par laquelle il réclamait des arriérés de paiement de commissions minimums garanties et une indemnité de résiliation du contrat d'agence ainsi qu'une indemnité couvrant l'amortissement des frais. La défenderesse soutenait qu'elle avait résilié le contrat d'agence équitablement et que le demandeur lui devait de l'argent.

Les arriérés de paiement de commissions minimums garanties

'The first issue is arrears of the so-called guaranteed minimum commission payment. The request for arbitration states, and it was [Claimant]'s evidence that, as a result of negotiations with Mr [X of Defendant company], a guaranteed minimum commission payment entitlement of £5,000 was agreed. The request for arbitration states that "in response to my question Mr [X] agreed that no part of this sum would be re-payable if the total commissions earned failed for any reason to reach £60,000 in any year". . . .

The Defendant on the other hand denied in written argument that there was in any way a guaranteed minimum commission and points out that no where does the Agreement refer to "guaranteed minimum commission payment" and emphasises that where the agreement to a minimum of £5,000 is made, it is made as a "draw on commission". The Defendant states that the Agreement goes on further to provide that "the amounts of money so drawn in excess of commission due is reimbursable as soon as the commission due is higher than £60,000". . . .

Dealing first with the wording of the Agency Agreement I would like to concentrate on the payment provisions. The paragraph entitled "FOURTH" states:

"The Representative shall be entitled to receive a commission upon sales in his territory whether by the Representative or by direct orders of the customers to the Company or otherwise" (emphasis added) . . .

Clause "SEVENTH" states, inter alia, "the Company shall pay to the Representative a commission computed on all sales as indicated in paragraph FOURTH above (see annex: Commission)". The annex provides, in clause order:

(1) for a basic commission of 6% in with [sic] reductions for discounts allowed to customers;

(2) for non repayable starting subsidies (the word used is "subsidiaries" but this was said to be "subsidies" by [Defendant's counsel]) for the first three years; and

(3) "draw on future commissions".

The two main sentences to be construed state "the Company agrees to pay a minimum commission of £5,000 - per month as draw on commission (my emphasis). The amount of money so drawn in excess of commission due is reimbursable as soon as the commission due is higher than £60,000 for the year".

[Defendant's counsel] emphasised the difference between a "draw on commission" implying some temporary nature to the payment, as an advance payment and the concept of guaranteed minimum commission. I must say I agree with him on this point.

The other question is the extent to which the "excess commission" is now due to be reimbursed as claimed by way of "offset" . . .

Under the terms of the Agreement it is quite clear that the event for reimbursement of the commission that is the money is "reimbursable as soon as the commission due is higher than £60,000 for the year", and that this event never took place.

It is my opinion and judgment that the words "draw on commission" would not have been used by the parties if they meant "guaranteed minimum commission". The evidence from [Claimant] was that it was a negotiated agreement, the wording was drafted by Mr [X] and he accepted it. To my mind the normal English notion of a "draw on commission" implies an advance, even to those who are not schooled in the law. My view on its meaning is confirmed, amongst other sources, by Black's Law Dictionary, 1990, which states:

Draw

To withdraw money, i.e., to take out money from a bank, treasury, or other depository in the exercise of a lawful right and in a lawful manner. To periodically advance money on a construction loan agreement or against future sales commissions. See also Drawing account.

Drawing account

Fund of money from which salesperson or other employees may draw in anticipation of future earnings or commissions; may be used to pay current expenses.

The crux of the matter then is what happens to a draw which, upon termination, has not become repayable under the terms of the Contract. The events described in the second sentence of clause 3 of the annex have not taken place - the commission never went above £60,000 per year. It was also agreed during evidence that the way in which the agreement operated was that whenever commissions for a particular month went above £5,000, the surplus amount was credited to [Claimant] against the outstanding debit balance.

The termination provisions in the Agreement are quite extensive, considering the length of the Agreement as a whole.

"TENTH" does not deal with commissions on termination.

"TWELFTH" does deal with commissions on termination but only states:

TWELFTH

Upon termination of this Agreement, the Representative shall not be entitled to receive any further commission from the Company except in respect to orders actually accepted by the Company prior thereto, and in such cases, only if and when such commissions would otherwise become due as herein provided.

Any controversy or claim arising out or relating to this contract, or the breach thereof, shall be settled by arbitration in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce and the decision rendered by the Arbitrator(s) may be entered in the Court having jurisdiction in FRANCE.

Paragraph "TWELFTH" does not provide for repayment of "draw on commission" but does emphasise payment of commission for "orders actually accepted" and the difference between the draw and what was earned does not fit into this description.

[Claimant] also stated quite candidly in evidence that he had always intended to re-pay the difference between the commissions he actually earned on the commission calculation and the £5,000 per month (when his income went above £60,000/yr). Here I believe I should review some relevant law. The parties agreed that the contract is governed by English law, which is a conclusion I would have reached in any event, and it is not surprising that similar situations have arisen in the past.

First of all I would consider the case of Clayton Newbury LD v. Findlay [1951] 1 C.L.C. 65. In this case the Plaintiff company manufactured fashion gowns which they sold to wholesalers in retail shops and appointed a new representative to cover their territory north of London up to the Scottish border. Apparently after discussion it was agreed that the Defendant should be paid a commission of 7½% on all orders executed and paid for by customers in his territory, and after the question of travelling expenses arose, it was arranged that the Defendant should be paid £25 per week to be placed against his commission. The Defendant wrote the Plaintiff stating "Will you please confirm my terms agreed upon … the drawing of the allowance of £25 per week when travelling to be placed against my commission account". The Plaintiffs wrote back stating, amongst other things, "We are arranging for you to draw £25 per week whilst travelling against the commission which will accrue to you from all accounts ….". Eventually the Defendant resigned his appointment and the total commission he had earned was only about one third of the total amount which had been paid to him. The Defendant denied that he was required to re-pay the money and McNair J. held that "The over-payment can only be recoverable if one can properly find in the arrangement made, whether orally or whether reduced into writing, some implied term under which the re-payment can be enforced." He went on to say "In the circumstances, the Plaintiffs having failed to satisfy me that the bargain which was made with the Defendant contained any agreement which covers the facts of this case in such a way as to entitle them to recover the amount of the payments which they made to the Defendant week by week, and there will be judgment for the Defendant, with costs".

This case was considered in a subsequent case, Rivoli Hats v. Gooch [1953] WLR 1190 by Hallett J. who reviewed the decision of McNair J. and disagreed with it. The facts of this case were that Mr Gooch was entitled to receive 10% commission "on all goods sold by him and delivered and paid for, after deduction of any discount allowed" and that by paragraph 4 of the letter agreement "a sum of £125 per month shall be paid on account of the commission which will accrue due to him". The Defendant terminated his agency at a time when more had been paid to him than he had earned.

Hallett J. observed "It is a common thing for what is called a drawing account to be arranged, whereby one party is allowed to draw from the other up to a certain amount on account of future earnings" and emphasised the words in the agreement "on account of the commission which will accrue due to him". He also said "In my judgment it is clear on principle, that if a payment is made in respect of something which it is expected will occur in the future, whereby money will be earned - and if that which is anticipated does not occur, and accordingly that in respect of which the money would have been earned never takes place the money which has been paid cannot be retained by the recipient".

I would observe here that there was of course the second limb of Clause 3 in the Annexe in the agreement between [Claimant] and [Defendant] providing for re-payment in the specified circumstances.

The Court of Appeal also considered this question in Bronester Limited v. Priddle [1961] 1 WLR 129 although in this case there was a clause in the agreement stating "upon any order going for any reason into abeyance or in the case of non-payment then any commission or bonus paid or credited to you in respect of that order shall become re-payable". The Court of Appeal held that on the construction of the agreement and on the particular facts of the case, the payments made were not payments to which the Defendant was entitled as of right, or gifts, but were advances made as a matter of commercial convenience, so that the Defendant must re-pay the amount by which he had been overpaid. It was implicit in the fact that the Defendant having asked for and received advance payments that he should be under a duty to account for any excess if and when his employment terminated. The Court of Appeal considered both of the cases . . . Clayton Newbury LD v. Findlay and Rivoli Hats v. Gooch and Holroyd Pearce L.J. stated that he agreed with the principle stated by Hallett J. in Rivoli Hats v. Gooch and said "I agree with that as a general principle subject to the limitation that in each particular contract one has to consider what its effect is in relation to advances made which are never in fact earned". The Judge also emphasised that in Bronester Limited v. Priddle the advances made were discretionary.

Willmar L.J. held that "It seems to me on the facts of this case it must be implicit in the fact of the Defendant having asked for and received advanced payments that he should be under a duty to account for any excess if and when his employment terminated". In his dissent Pearson L.J. recorded that he thought it was important that on the facts of this case there was specific provision for re-payment in certain events.

The Court of Appeal judgment makes it clear that every particular case has to be decided on its facts. I have considered for some time whether or not I should infer something from the fact that this was an agreement for an original term of only 1 year and that paragraph "TENTH" (d) clearly shows that the Company considered the possibility that the volume of sales may be too low to justify continuing. Despite this, I can find no other express reference to re-payment of the "drawn on future commission" referred to in Clause 3 of the Annexe. Further these cases indicate to me that the legal basis for return of funds is the notion of "money had and received" more commonly referred to these days as restitution or unjust enrichment. This Contract contains no hint that the draws are intended to be potentially permanent compensation, rather the contrary. Further, the "excess draw" account seems to have been maintained since day one of the Contract.

It seems from the Contract and from the whole of [Claimant]'s evidence that it was intended by both parties that [Claimant] would eventually earn the commission and repay the advances. I would again emphasise that the clause in question is entitled "Draw on future commission". As he never did earn the entire difference between earned commission and the £60,000.00 per year, it is my judgment he is not entitled to retain it. The term "guaranteed minimum commission" does not appear in the agreement, and reading the agreement as a whole, as well as carefully reflecting upon [Claimant]'s evidence, I find that the draw was meant eventually to be earned. The "excess commission" should be repaid. However, he asked in his letter of . . . to revert retrospectively to the former arrangements, and because his . . . agreement to the new system was "without prejudice" he was entitled to have a reversion to the £5,000/month advance payments. He was entitled to be paid the agreed £5,000.00 per month up to termination, and has suffered loss as a result of the failure of the Defendant's to revert to the original arrangements in this regard. That loss is primarily the loss of (temporary) use of the money, which can be compensated by interest payments.

. . .

Indemnity

The sum of £60,000.00 is claimed by way of statutory entitlement to Indemnity in consequence of the termination of the Commission Agency. [Claimant] claimed this under the Commercial Agents Regulations. He contended that the Indemnity entitlement should be calculated by reference to the Guaranteed Minimum Commission Payment of £60,000 a year and accepted that it should be limited to 1 year's annual average remuneration. He also referred in the claim for an indemnity to Clause 18 of the Regulations, which properly speaking refers to Compensation. It was accepted that [Claimant] was a Commercial Agent within the meaning of the Commercial Agents Regulations. The Defendant however relied on Clause 17(2) of the Commercial Agents Regulations as set out in Appendix B.

The Defendant observed that reading Clause 17 paragraphs (1) and (2) together there was provision only for an Indemnity as an alternative entitlement to compensation and that in the absence of a contrary provision in the Agency contract the agent's entitlement is "to be compensated rather than indemnified" (emphasis added). [Defendant's counsel] emphasised again at the hearing that Regulation 17(2) which states "except where the Agency Contract otherwise provides, the commercial agents shall be entitled to be compensated rather than indemnified". This Agency Contract does not "otherwise provide" and so I find that [Claimant] is not entitled to be indemnified. On the wording of these Regulations I agree with [Defendant's counsel]. It is my understanding that in some European jurisdictions indemnities are quite common, but this contract is governed by English law and the English Commercial Agents Regulations are those that need to be construed and applied. The fact that there is no provision in the Agency Agreement for indemnity means that [Claimant] only has an entitlement to be compensated. He does not have an entitlement to be indemnified.

Compensation

[Claimant] claims an entitlement to Compensation under the Commercial Agents Regulations. [Claimant] claimed the entitlement again on the wording of Clause 17 of the Commercial Agents Regulations and cited the provisions at some length. His claim was framed somewhat in the alternative and he said in Request paragraph III 2.2 that in the event that the claim for an indemnity is not allowed he contended that the Defendant is continuing to receive substantial benefits associated with his activities as a commission agent in particular:

(a) the establishment and maintenance of a nationwide network of retailers taking the Defendant's products;

(b) the opening of three specialist shops selling exclusively the products of the Defendant;

(c) acting as the Defendant's V.A.T. agent and dealing with H.M. Customs and Excise on their behalf as well as a number of other benefits. He positively pleaded that he is still liable for the rent on the leased premises and that the cost of surrender of the lease would be . . .

[Defendant's counsel]'s submissions in [sic] behalf of the Defendant were in line with the pleaded case as follows:

3.4.1. Plantiff's claim for compensation is an alternative demand in conjunction with his above claim for an indemnity on the cancellation of his commission agency contract. As has been explained [. . .] this claim for compensation would only come into consideration if Plaintiff's claim for an indemnity would fail.

3.4.2. Nevertheless, Defendant denies that Plaintiff is entitled to the compensation amount shown in his "Summary of Claim", on the grounds that Plaintiff failed to establish by adequate proof that: (i) he has suffered damages in the amount claimed, (ii) that the alleged damages were the result of the cancellation of the agency contract, (iii) that the costs and expenses he has alluded to, but not proven, were incurred in the performance of his agency contract on the advice of Defendant, and (iv) that the expenses he alleges to have incurred in the performance of his agency contract were not amortised during the course of such performance.

. . .

Under the Commercial Agents Regulations, [Claimant] is entitled to be compensated for the termination of his agency. According to Article 17(6) of the Regulations provides that his compensation shall be referable to the "damage he suffers as a result of the termination of his relations with his principals". The circumstances set out in Article 17(7)(A) and (B) have both occurred - namely [Claimant] has been deprived of commission which the proper performance of the agency would have procured and he has also provided substantial benefits (new shops which did not exist at the commencement of his agency) linked to his activity. He has also been unable to amortise the cost and expenses that he incurred in the performance of the Agency Contract "on the advice of his principal". Here I am referring of course to the same lease which he entered into and which has a number of years to run.

. . .

My judgment is that he is entitled to damages equivalent to 9 months' commission (based on his last year of commission income) plus 12 months of his actual lease payments as set out in the Schedule produced at the hearing. . . .'