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||Neutral Citation Number:  EWHC 1980 (Comm)
||Case No: 2009 Folio 1172
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
MR JUSTICE WALKER
|| PLAYUP INTERACTIVE ENTERTAINMENT (UK) PTY LIMITED
||- and -
Mr Edmund Cullen (instructed by Wiggin LLP) for the Claimant
Mr Duncan McCall QC (instructed by Clarke Willmott LLP) for the Defendant
Hearing dates: 1-4 November 2010, 28 January 2011
HTML VERSION OF JUDGMENT
Crown Copyright ©
Mr Justice Walker:
- This case concerns alleged breaches of contract. The contract in question was in writing, and was described by the parties on its cover sheet as a sponsorship agreement relating to the Professional Footballers' Association "Fans Awards". I shall refer to it as "the Sponsorship Agreement". It was dated 4 February 2008 and made between two companies, both of them incorporated in England and Wales. The first was the defendant, which I shall refer to as "GMF". The second was the claimant, which I shall refer to as "PlayUp". At the outset of the Sponsorship Agreement GMF was defined as "the Company" and PlayUp was defined as "the Sponsor". It has been suggested however that later in the Sponsorship Agreement each of these expressions was used on at least one occasion in a wider sense.
- The Sponsorship Agreement was for a term commencing on 4 February 2008 and ending on 29 June 2010, this being thirty days after the last match of the 2009/10 football season. It had been preceded by a presentation which I shall call "the Sponsorship Proposal." Under the Sponsorship Agreement "the Sponsor" was required to pay £1.034 million in four tranches. In return "the Company" was required to provide "the Sponsor" with a range of marketing benefits. Among these benefits were what I shall call "the data programme rights". They concerned monthly programmes of at least 1m emails and bimonthly programmes of at least 250,000 short message service ("SMS") messages. In the second half of 2008 disputes arose about the data programme rights. On 28 November 2008 PlayUp gave notice of termination of the Sponsorship Agreement. At that stage it had paid £692,000 to GMF. It says it is entitled to certain repayments under the Sponsorship Agreement, and to damages for breach. GMF denies any breach, and hence any entitlement on the part of PlayUp to repayments or damages. It counterclaims for the remaining instalment in the sum of £342,000 plus VAT.
- This judgment deals with matters arising as follows:
| A: The parties and those associated with them
| A1: PlayUp
| A2: GMF
| B: The Sponsorship Agreement
| C: The disputes
| C1. The link between GMF and programme recipients
| C1.1 PlayUp's contentions as to bought-in data
| C1.2 GMF's contentions as to bought-in data
| C2. Telephone numbers of SMS programme recipients
| D: Principles of interpretation
| E: The Sponsorship Proposal
| F: The Official Website
| G: Other aspects of the factual background
| H: Meaning of the data programme rights
| H1. The link between GMF and programme recipients
| H1.1 Can "targeted" mean what GMF says?
| H1.2 Opting-in through the Official Website
| H1.3 Consent notifications provided specifically to GMF
| H1.4 Bought-in data: consent to receive marketing from whom?
| H1.5 An alternative meaning of "targeted"
| H2. Telephone numbers of SMS programme recipients
| I: Witness and other evidence about GMF's breaches
| J: Attributes of data subjects: evidence
| J1. The IPT Licence and the SNM/IPT Data
| J2. Clarke Willmott's letter of 11.2.09
| J3. The witness statements of Messrs Chalfin and Thain
| J4. GMF Data: position in October 2007
| J5. Data in the first weeks of the Sponsorship Agreement
| J6. Merged data and the Email Bureau software
| J7. Use of data: reports prepared using Email Bureau software
| J8. Data starts being imported into the eCircle system
| J9. Ms Medricky's figures of 21 April 2008
| J10. May to August 2008
| J11. Counts of data subjects in October and November 2008
| J12. SMS messages in October and November 2008
| J13. Post-termination evidence of data subjects' attributes
| J13.1: December 2008
| J13.2: February to June 2009
| J13.3: April and May 2010
| J13.4: September and October 2010
| K: Attributes of data subjects: analysis
| K1. Honesty and reliability of Mr Chalfin and Mr Thain
| K1.1 Conduct of Mr Chalfin and Mr Thain in November 2008
| K1.2 The October 07 spreadsheet
| K1.3 Conclusions as to the honesty of Mr Chalfin and Mr Thain
| K2. Attributes of data subjects in October 2007
| K3. The initial period of the Sponsorship Agreement
| K4. May to August 2008
| K5. September to November 2008
| K6. Which data would meet the criteria?
| K7. SMS message recipients
| L: Was PlayUp entitled to terminate?
| L1. Clauses 3.3, 7 and 8
| L2. Contract and common law
| L3. Seriousness of GMF's breaches
| L3.1 Value of bought-in data
| L3.2 Other benefits under the Sponsorship Agreement
| L4. Entitlement to terminate at common law
| L5. Contractual right to terminate
| M: Consequences of termination
| M1. Failure to supply what was promised
| M2. Wasted costs and expenses
| N: Conclusion
A: The parties and those associated with them
- Mr Edmund Cullen on behalf of PlayUp explained that it operates an interactive gaming business providing mobile telephone and internet-based interactivity. Its games involve the player predicting the outcome of a sporting event or particular occurrences within the event. The player pays a fixed price (subject to a daily cap) and, if successful, wins a share of the pool on the event concerned. Playing in this way also gives a right to receive information about the progress of the event, details of the players involved and the result of the event. The games are played, and the information supplied, in two ways. The first is via mobile phones, through SMS or wireless access protocol ("WAP") technology. The second is via computers online. It is thus vital to PlayUp's business that it can target potential players through their mobile phones and via internet media including email. Achieving a large volume of players is important for the success of the games themselves (to make the pools lucrative) and for PlayUp's business to be profitable.
- PlayUp was incorporated in January 2007 as part of a group that had been founded in Australia. Mr George Tomeski was founder and managing partner of PlayUp's parent company, and Mr Luke Bunbury was Chief Executive Officer of that company. Working with them as head of strategy and planning was Mr Bill Butler.
- At PlayUp itself, Ms Pip Watkins was Commercial Director until 9 May 2008. Mr Charlie Allen was Product Manager, Mr Bjorn Mordt was Operations Manager, and Mr Jonty Harbinson was Graphic Designer.
- Mr Duncan McCall QC on behalf of GMF explained that it is a joint venture between the Professional Footballers' Association ("the PFA") and Sports New Media Limited ("SNM"). GMF hosts several websites, including the official website of the PFA.
- Mr Gordon Taylor, Chief Executive of the PFA, was a director of GMF. The PFA is the professional footballers' trade union. The PFA's Fans Awards enable football fans to vote online for their Player of the Month in each of four English professional football leagues in England and Wales. The four leagues are the Premiership, the Championship, Division One and Division Two. In each league a monthly award is presented to the player who gets most votes. At the end of each season there is then a vote by fans for the Player of the Year in each league. Each month, and at the end of the season, fans vote by identifying their selection on an Award page forming part of GMF's website at www.givemefootball.com.
- Other directors of GMF were Mr Jae Chalfin and Mr Nick Thain. They are also directors of SNM, which is an online media company. Among others, SNM employed Ms Lizzy Medricky.
- In addition to the Player of the Month and Player of the Year Awards, in mid 2007 GMF ran what was described as the "Legends" campaign – sometimes called the "Team of the Century" campaign. For this purpose a company called Interactive Prospect Targeting Limited ("IPT") was a "technical partner": the websites on which people voted or registered for the Legends campaign were hosted and operated by IPT and designed as GMF websites. Data gathered from the Legends campaign was shared by GMF with IPT. Mr Thain had been a cofounder and was a former director of IPT. It is a direct marketing company which operates the "myoffers.co.uk" website. Mr Thain had been working as a director of IPT for eight and a half years prior to February 2008, when he joined and started working for SNM and GMF.
B: The Sponsorship Agreement
- The cover sheet for this document read:
Sponsorship Agreement Relating to the Professional Footballers' Association "Fans Awards"
After stating the date and the parties, the agreement began with four recitals, (A) to (D). Recital (C) stated that "the Company" owned and controlled the "Official Website" and all rights in and to the "Awards." "Official Website" was defined in clause 1.1 to mean "www.givemefootball.com and all other website(s) which are in any manner associated with the Awards which shall, in all cases be owned or controlled by the Company". "Awards" was defined to mean the PFA Fans Player of the Month and Player of the Year Awards. Recital (D) stated:
(D) The Sponsor wishes to acquire certain sponsorship rights in relation to the Awards and the Company wishes to grant such rights upon the terms and conditions of this Agreement.
- Further definitions were set out in clause 1 and the term of the agreement was set out in clause 2.
- By Clause 3.1 "the Company" granted "to the Sponsor the Sponsorship Rights… on a sole and exclusive basis." "Sponsorship Rights" was defined in clause 1 to mean the rights set out in Schedule 1 to the agreement. I shall return to those rights below. In addition clause 3.3 made special provision as to what might happen if "the Company" were unable to deliver any of the Sponsorship Rights precisely as set out in Schedule 1. I shall set out this clause in more detail later in this judgment. In broad terms it envisaged that "the Company" should offer "the Sponsor" similar rights to an equivalent value, adding that if they were not reasonably acceptable to "the Sponsor" then it might exercise a right of termination.
- Clause 4 dealt with sums payable by "the Sponsor" to "the Company".
- Clause 5 was headed, "Obligations of the Company." It included the following:
5.1 In consideration of the payment of the Sponsorship Fee the Company represents, warrants and undertakes to the Sponsor as follows:
5.1.1 subject to clause 3.3, to deliver or procure the delivery of the Sponsorship Rights to the Sponsor on a sole and exclusive basis;
5.1.2 to host and maintain (or otherwise procure the same) at its cost (save as otherwise provided in this Agreement) and to a good professional standard at all times the Official Website;
5.1.12 that it has the right (including under the relevant data protection laws and third party agreements) to licence all personal data as outlined in Schedule 1 for the permitted use by the Sponsor for the Term in accordance with the terms and conditions of this Agreement and that the numbers of data subjects set out in Schedule 1 have provided the Company with prior notifications of their consent to receiving direct marketing from the Sponsor and that the said total numbers in the Company databases available to the Sponsor hereunder will not decline below the numbers set out herein during the Term; and
- Clause 6 dealt with obligations of "the Sponsor". Clause 6.3 set out an "approvals process" for any "branding produced by or on behalf of a party under this Agreement".
- Clauses 7 and 8 dealt with termination of the Sponsorship Agreement and the consequences of termination. I shall return to those clauses later in this judgment.
- Clause 9 dealt with intellectual property. Clause 10 made provision for force majeure. Clause 11 set out a limitation of liability, which does not arise in the present case.
- Clause 12 concerned data protection. It made reference to the Data Protection Act 1998, and assigned to the expressions "Data Controller", "Personal Data", and "Processing and process" the meanings set out in section 1 (1) of that Act. It also defined "Data Subject" as "an individual who is the subject of Personal Data." Clause 12.2 contained an acknowledgment by both parties that for the purposes of the Act "the Company" was the Data Controller and "the Sponsor" was the Data Processor of any Personal Data made available by "the Company" to "the Sponsor". Clause 12.3 obliged "the Sponsor" to process Personal Data only as necessary for the purposes of the Sponsorship Rights and in accordance with "the Company's" instructions (such instructions to be reasonable and not to conflict with provisions of the Sponsorship Agreement).
- Clause 12.4 concerned requests by the Company which were required by legislation, codes of practice, standards, guidelines or regulations (in each case having the force of law) or other specified regulations, or made "pursuant to the terms and conditions of any licence or agreement between the Company and any third party relating to the Personal Data." It provided:
12.4 subject always to clause 5.1.12, the Sponsor shall promptly comply with any [such] request… requiring the Sponsor to amend, transfer or delete the Personal Data which is in the Sponsor's possession or control.
- Clause 13 dealt with assignment. Clause 14 concerned announcements and confidentiality. Clause 15 identified Jae Chalfin as the point of contact for "the Company" and Pip Watkins as the point of contact for "the Sponsor", and Clause 16 dealt with notices. Clause 17 contained a number of general provisions, including an entire agreement clause. Clause 18 provided that the Sponsorship Agreement was to be governed by and construed in accordance with English law, and that the parties submitted to the exclusive jurisdiction of the courts of England.
- There were four schedules to the Sponsorship Agreement. I need refer only to Schedule 1, which set out the Sponsorship Rights. These included certain data rights which were expressed in this way in paragraph 5:
5.1 Subject to the provisions of all relevant data protection regulations, the Sponsor meeting the reasonable cost of production of content to be included and clauses 6.3 and (to the extent applicable) 12 of this Agreement, the Company will provide or procure the following targeted marketing opportunities and benefits to the Sponsor:
5.1.1 twelve (12) e-mail shot programmes, each to be sent to the e-mail addresses of at least one million (1,000,000) opted-in recipients who are contained in databases owned or controlled by the Company, to occur on a monthly basis during each year during the Term;
5.1.2 six (6) SMS message programmes, each to be sent to the Mobile Devices of at least two hundred and fifty thousand (250,000) opted-in recipients, who are contained in databases owned or controlled by the Company, to occur on a bi-monthly basis during each Year during the Term. The Sponsor shall be solely responsible for the agreed costs of broadcasting the SMS message programmes and shall reimburse the Company for such agreed amounts upon receipt of an invoice or demand from the Company; and
5.1.3 the results of one hundred thousand (100,000) completed prospect data surveys relating to the Sponsor's business. Details of the content of the relevant survey(s) shall be discussed between the parties, subject to final editorial control (to be exercised reasonably) of the Company. The Sponsor must obtain the Company's express written consent (not to be unreasonably withheld or delayed) to all intended contact with persons who have completed the prospect data surveys prior to any proposed contact.
5.2 For the avoidance of doubt, all data and other information which is provided by the Company to the Sponsor pursuant to item 5.1 above shall remain at all times the property of the Company and/or its licensors. The Sponsor acknowledges and agrees that:
5.2.1 strictly subject to clause 5.1.12 its use of data and other information provided to it under item 5.1 shall be subject to the terms and conditions of use which apply to such data and information including the provisions of any licence or other agreement between the Company and any third party licensor and as specified by the Company, the Company to act reasonably and in good faith in this regard; and
5.2.2 without prejudice to any other provision in this Agreement, upon expiration of the Term or earlier termination of this Agreement, the Sponsor will cease using all data and other information provided to it by the Company under item 5.1 and shall return at its expense or otherwise delete all copies (in whatever format) of such data and information.
- These data rights featured among a range of other Sponsorship Rights in Schedule 1. The other Sponsorship Rights can be grouped under the following heads:
1) associated with the naming of the Awards as "The PFA 2Up Fans Awards" there was a commitment from "the Company" to use this title in every reference to the Awards, and to instruct its media partners to do so (paragraph 1.1);
2) the right to use particular branding in connection with "the Sponsor's" products and services (paragraphs 1.2 and 1.3);
3) the right to place one full-page advertisement and (subject to PFA consent) one editorial per year in the PFA's Official Magazine (paragraph 2);
4) tickets to matches at which an Award is presented and hospitality rights (paragraph 3);
5) the right to use 50% of all available banner inventory on the Official Website (paragraph 4.1);
6) the establishment of reciprocal hyper-text links between the Official Website and "the Sponsor Website home page" (paragraph 4.2.1);
7) the establishment within the Official Website of "an official Award page about the Award and "the Sponsor…" (paragraph 4.2.2);
8) the right to introduce SMS voting for the Awards via "the Sponsor's SMS Voting Facility" (paragraph 6);
9) the right to stage a press conference announcing "the Sponsor's sponsorship of the Awards" (paragraph 7.1); and
10) the right to create an effective media relations campaign around this announcement and the actual sponsorship (paragraph 7.2).
C: The disputes
- Disputes between the parties arise as to:
1) The true meaning of the data programme rights in paragraphs 5.1.1 and 5.1.2 of Schedule 1 to the Sponsorship Agreement and in clause 5.1 of that Agreement;
2) The extent and nature of data held by GMF at relevant times;
3) Whether PlayUp was entitled to terminate the Sponsorship Agreement; and
4) The consequences of that termination.
- In the remainder of this section I set out the rival contentions as to the meaning of the data programme rights. In subsequent sections of this judgment I deal with the legal principles governing the interpretation of what the Sponsorship Agreement said about those rights, I comment on the Sponsorship Proposal and other aspects of the factual background, and I set out my conclusions as to the true interpretation of the data programme rights. I then turn to consider the remaining disputes identified above.
- The issues as to the meaning of the data programme rights concern one or other or both of the monthly e-mail shot programmes and bi-monthly SMS message programmes described in paragraphs 5.1.1 and 5.1.2 respectively of Schedule 1. I shall refer to these programmes individually as the "email programme" and the "SMS programme" respectively, and generally as a "programme" or "programmes". Similarly I shall refer to "email programme recipients" and "SMS programme recipients" respectively, and generally to "programme recipients".
- The data programme rights are found not only in paragraphs 5.1.1 and 5.1.2 of Schedule 1. They also feature in clause 5.1 of the Sponsorship Agreement. As set out above, clause 5.1 contained a number of representations, warranties and undertakings by "the Company" to "the Sponsor". These included at clause 5.1.1 an obligation, subject to clause 3.3, to deliver or procure the delivery of the Sponsorship Rights "to the Sponsor on a sole or exclusive basis", and at clause 5.1.3 an obligation "to host and maintain (or otherwise procure the same) … to a good professional standard at all times the Official Website". Additional data programme rights were in Clause 5.1.12, which comprised three representations, warranties and undertakings by "the Company". For convenience I set them out separately below, inserting reference indicators in square brackets. They were:
[RWU 1] that "it has the right (including under the relevant data protection laws and third party agreements) to licence all personal data as outlined in Schedule 1 for the permitted use by the Sponsor…"
[RWU 2] that "the numbers of data subjects set out in Schedule 1 have [a] provided the Company with prior notifications of their consent to receiving direct marketing [b] from the Sponsor"; and
[RWU 3] that "the said total numbers in the Company databases available to the Sponsor hereunder will not decline below the numbers set out herein during the Term".
- The principal issue as to the meaning of the Sponsorship Agreement concerns how close a link there had to be between GMF and programme recipients. A second issue as to the meaning of the Sponsorship Agreement concerns the telephone numbers of SMS programme recipients. I deal with them in turn.
C1. The link between GMF and programme recipients
- It was common ground that there was a contrast between GMF's obligations to provide or procure the programmes under paragraphs 5.1.1 and 5.1.2 of Schedule 1 and its obligations under paragraph 5.1.3 as regards prospect data surveys. In relation to this "prospect data" GMF would supply to PlayUp details of respondents to the surveys which PlayUp could, subject to restrictions, use for marketing purposes. As regards the data for the programmes (referred to in the Sponsorship Proposal as "solus data"), however, performance of paragraphs 5.1.1 and 5.1.2 of Schedule 1 did not require the supply to PlayUp of data about the programme recipients. What GMF had to do in that regard was to provide or procure the programme, and for that purpose it did not need to provide PlayUp with data. Thus it was for GMF to select the programme recipients, and PlayUp would not necessarily know who they were.
C1.1 PlayUp's contentions as to bought-in data
- PlayUp said it was not permissible for GMF to use what it called "bought-in data" as a source for the selection of programme recipients. By "bought-in data" it was referring to data which was supplied by the data subject not to GMF but to another entity (which I shall call "X") and provided by that entity to GMF. PlayUp said that such data would not comply with the Sponsorship Agreement because:
1) when paragraphs 5.1.1 and 5.1.2 of Schedule 1 referred to "opted-in recipients" they were referring to opting-in through the Official Website, something which had not occurred in the case of bought-in data; or
2) the wording in RWU 2 to the effect that "the numbers of data subjects set out in Schedule 1 have [a] provided the Company with prior notifications …" was not apt to include the kinds of notifications given in the case of bought-in data, for such prior notifications would have been provided by the data subjects to X, not to GMF; or
3) the wording in RWU 2 to the effect that "the numbers of data subjects set out in Schedule 1 have provided the Company with prior notifications of their consent to receiving direct marketing [b] from the Sponsor" was not apt to include the kinds of consents given in the case of bought-in data, for such consents would have stated that marketing could be sent by X and entities associated with X in some way, whereas PlayUp was not associated with X in any way.
C1.2 GMF's contentions as to bought-in data
- There were occasions when GMF appeared to say that programme recipients could comprise anyone who had indicated to one business entity willingness to receive marketing from that business entity or others. Thus paragraph 21 of GMF's written closing referred to "two possible (i.e. realistic) scenarios" as regards email programme recipients:
21.1 Scenario 1 is that GMF agreed to provide a database of 1 million data subjects all of whom had 'opted in' specifically to GMF.
21.2 Scenario 2 is that GMF agreed to provide a database of 1 million data subjects who had 'opted in' on third party websites indicating willingness to receive marketing from other companies.
- However it was clear from other passages in GMF's written closing, and from the stance taken in GMF's oral closing submissions, that GMF did not go this far. It accepted that the Sponsorship Agreement contemplated some limitation on who might be a programme recipient. GMF's contention was that this limitation could be found in the word "targeted". This word appears in paragraph 5.1 of Schedule 1 as a qualification on the "marketing opportunities and benefits" which "the Company will provide or procure…". GMF's contention was that the word "targeted" indicated "the objective intention that the emails and SMS messages had to be capable of being sent to people with known sporting interests, particularly (but not exclusively) in football."
C2. Telephone numbers of SMS programme recipients
- This issue turns on the construction of particular words in paragraph 5.1.2 of Schedule 1 to the Sponsorship Agreement. That paragaph, when describing the SMS programme, requires that SMS messages be "sent to the Mobile Devices of at least 250,000 opted-in recipients". PlayUp contends that if a number used for the purposes of the SMS programme did not actually correspond to a Mobile Device of an opted-in recipient (e.g. because the number was simply fictitious), then a message sent to it cannot, in any ordinary sense, be described as having been "sent to [a] Mobile Device of an opted-in recipient". GMF responds that it did not promise to deliver messages: it promised merely to send them.
D: Principles of interpretation
- Relevant principles governing the interpretation of contracts were common ground:
(A) The applicable legal principles were set out by Lord Hoffmann in ICS v West Bromwich BS  1 WLR 896 at 912-3:
I do not think that the fundamental change which has overtaken this branch of the law, particularly as a result of the speeches of Lord Wilberforce in Prenn v. Simmonds  1 W.L.R. 1381, 1384-1386 and Reardon Smith Line Ltd. v. Yngvar Hansen-Tangen  1 W.L.R. 989, is always sufficiently appreciated. The result has been, subject to one important exception, to assimilate the way in which such documents are interpreted by judges to the common sense principles by which any serious utterance would be interpreted in ordinary life. Almost all the old intellectual baggage of "legal" interpretation has been discarded. The principles may be summarised as follows.
(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
(2) The background was famously referred to by Lord Wilberforce as the "matrix of fact," but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.
(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd.  AC 749.
(5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Compania Naviera S.A. v. Salen Rederierna A.B.  A.C. 191, 201:
"if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense."
(B) In considering the meaning of a contract, the court is seeking to give effect to the intentions (objectively judged) of the parties. This will involve considering all the evidence as to the commercial purpose of the contract. As Lord Wilberforce put it in Reardon Smith Line Ltd v Yngvar Hansen-Tangen  1 WLR 989 at 995-6:
No contracts are made in a vacuum: there is always a setting in which they have to be placed. The nature of what is legitimate to have regard to is usually described as "the surrounding circumstances" but this phrase is imprecise: it can be illustrated but hardly defined. In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.
(C) In Chartbrook Ltd v Persimmon Homes Ltd  1 AC 1101, a head-on challenge to the traditional rule about excluding evidence of pre-contractual negotiations was mounted. The House of Lords rejected this and (for policy reasons as much as anything else) reaffirmed the rule that pre-contractual negotiations are excluded from consideration: see Lord Hoffmann at para 41. The rationale behind the rule is to avoid disputes over who said what to whom in the course of the negotiations and/or over distinguishing between statements of aspiration and expressions of consensus: see per Lord Hoffmann para 38. However, relevant commercial background (as described in ICS v West Bromwich) remains admissible. Moreover, evidence from negotiations is admissible to prove, for example, that a party knew something that formed part of the relevant background: see para 42.
(D) Recently Chartbrook has arisen for the further consideration in the Supreme Court in Oceanbulk Shipping & Trading SA v TMT Asia Ltd  SC 44;  3 WLR 1424. The particular issue in that case was whether there was an exception to the "without prejudice" privilege to allow disclosure/admission of "without prejudice" negotiations for the purpose of construing an agreement resulting from those negotiations. The court decided that there was such an exception and that the negotiations could be admissible for the purpose of establishing the factual matrix, even if they were not admissible as subjective statements of intent. Lord Clarke stated:
38 It is not in dispute that, where negotiations which culminate in an agreement are not without prejudice, the exclusionary rule applies to the correct approach to the construction of the agreement. Nor is it in dispute that in those circumstances evidence of the factual matrix is admissible as an aid to interpretation even where the evidence formed part of the negotiations. The distinction between objective facts and other statements made in the course of negotiations was clearly stated by Lord Hoffmann in para 38 of the Chartbrook case:
"Whereas the surrounding circumstances are, by definition, objective facts, which will usually be uncontroversial, statements in the course of pre-contractual negotiations will be drenched in subjectivity and may, if oral, be very much in dispute."
39 Trial judges frequently have to distinguish between material which forms part of the pre-contractual negotiations which is part of the factual matrix and therefore admissible as an aid to interpretation and material which forms part of the pre-contractual negotiations but which is not part of the factual matrix and is not therefore admissible. This is often a straightforward task but sometimes it is not. In my opinion this problem is not relevant to the question whether, where the pre-contractual negotiations that form part of the factual matrix are without prejudice, evidence of those negotiations is admissible as an aid to construction of the settlement agreement. The two questions are, as I see it, entirely distinct.
40 In these circumstances, I see no reason why the ordinary principles governing the interpretation of a settlement agreement should be any different regardless of whether the negotiations which led to it were without prejudice. The language should be construed in the same way and the question posed by Lord Hoffmann should be the same, namely what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean. That background knowledge may well include objective facts communicated by one party to the other in the course of the negotiations. As I see it, the process of interpretation should in principle be the same, whether the negotiations were without prejudice or not. In both cases the evidence is admitted in order to enable the court to make an objective assessment of the parties' intentions.
(E) As was stated by Lord Hoffmann, giving the advice of the Privy Council in Attorney General of Belize v Belize Telecom Ltd  1 WLR 1988:
The court has no power to improve upon the instrument which it is called upon to construe, whether it be a contract, a statute or articles of association. It cannot introduce terms to make it fairer or more reasonable. It is concerned only to discover what the instrument means." (paragraph 16)
E: The Sponsorship Proposal
- On 8 October 2007 Jae Chalfin emailed Pip Watkins a document which I shall refer to as "the Sponsorship Proposal". It was forwarded by Pip Watkins to George Tomeski and Luke Bunbury on 11 October 2007, and both of them read it once it had been received. It consisted of a series of slides which at trial were numbered as 31A to 31R, and I shall adopt that numbering in this judgment.
- It was common ground that the Sponsorship Proposal formed part of the relevant background which the court should take into account when determining the true meaning of the Sponsorship Agreement. In the paragraphs which follow I set out some of the features apparent to a person reading the slides in the Sponsorship Proposal.
- The slide at page 31B, "Manage Your Media Plan" listed the 4 elements in the "Team":
The Goalie – Registered Users
With over 500,000 registered users, you know you're hitting the right audience.
The Striker – Display Advertising
Serve customers everything from rich media banners to front-page customer events.
The Midfield – Behavioral Targeting
Provide you with a tailored list of prospects, opted in to your brand, with permission to contact.
The Defender – A High Profile Brand
When it comes to high profile organisations within football, they don't come much bigger than the PFA.
- Slide 31D was headed "Endorsement." It comprised four bullet points:
- Involves Football Supporters Across 92 Clubs
The "PFA Fans' Awards Manifesto" was described at slide 31E. It stated:
- Endorsed by The Federation of Football Supporters
- Interact and engage with every football fan, who supports the professional game
- Provide a loyal, highly engaged and responsive customer base
Slide 31F was headed "The Fans Who Vote". It stated:
- Enhance fans' enjoyment of the football season
The slide at page 31H described the "Key Sponsorship opportunities". In relation to "Direct Response", these were:
- 360k unique fans voted in 2006/7
- Access to a bespoke high volume opt-in database
"Online Sponsorship Opportunities" were described at slide 31J, including:
- Access to personalised email, postal and SMS communications
Slide 31K was headed "Mobile Offering". It comprised four bullet points:
- Branding on all email activity, this can be targeted by:
- The ability to deliver audiences and the tools to find them.
- Ability to increase ARPU (average revenue per user).
- Targeting users with individual content. Allowing them to keep up with their club.
"Prospect Data Opportunities" were described on the slide at page 31L. It comprised five bullet points:
- Greater experience for consumers and more revenues for operators.
- We will build you bespoke high volume database, opted in to your brand, for your use
- Permission to contact by email, postal direct mail, SMS or telephone.
- We anticipate 100,000 completed surveys – that's 100,000 potential sales leads.
- You can ask anything you like.
The slide at page 31M was headed "Solus Data Opportunities." It comprised three bullet points:
- You'll have exclusive use of the data for up to 12 months.
- 1,000,000 opt-in email base – Increasing by 20,000 per month
- Data can be targeted by football club supported
- - Manchester United 50,000 fans
The slide at page 31P was headed "Sponsorship Package." It comprised nine bullet points:
- - Tottenham Hotspur 12,000 fans
- Attendance at PFA Fans Player of the Year presentation
- Sponsorship association of all fan award presentations and awards.
- Corporate hospitality at each fans presentation and tickets to games.
- Corporate table at the PFA Players Player Of The Year Awards Gala Dinner
- Full Page Colour Advert In Awards Dinner Commemorative Brochure
- Company And Individual Photo Opportunities With Players Player Award Winners
- Company Branding On Official Press Photo Shoot Backdrops
- Corporate team at the PFA Golf Challenge
The slide at page 31R was headed "Costs." It comprised two bullet points:
- And many more other amazing opportunities
- - £280,000 (£1.08 Mil estimated value)
- - Sky Sports coverage £190,000
- - Online promotion £250,000
- - Solus emailing £200,000
- - Corporate Package £20,000
F: The Official Website
By way of background Mr Chalfin explained in his statement that what the Sponsorship Agreement called the Official Website was the official website of the PFA. It had been live since 2001 and was a well known site among football fans. It acted as an information outlet for the PFA, and fans visited it to obtain up to date news about football. The PFA had introduced the Awards in 2001. To vote, a football fan could visit the Award pages of the Official Website. The first such page asked the fan to vote for a favourite player, by completing and submitting a form online. The website then directed the fan to a second page – "the registration page". On this page the fan could enter contact and other personal details, including name, home address, telephone number, age, gender, team supported and sporting interests. At the bottom of the registration page the fan had the option of ticking a box and opting-in to the receipt of marketing messages. It was only if the fan ticked this box and thereby opted-in that the fan's personal details (known as "solus data") would be stored by GMF. The fan would then be directed to a third page, which gave the fan the option of completing a survey or questionnaire. If a fan voted there was no obligation to register, and if a fan registered there was no obligation to opt-in.
Mr Chalfin identified two additional features:
1) GMF had made arrangements with other organisations so that those organisations' websites would act as "partner websites" with a link to the Award pages. Thus fans did not have to visit the Official Website directly in order to vote: they might well reach the Award pages of the Official Website after being sent to those pages by a partner website.
2) By voting online the football fan entered into a prize draw to win the chance to present the Fans' Award to that particular fan's favourite player.
G: Other aspects of the factual background
As noted earlier, it was common ground that the Sponsorship Proposal formed part of the factual background when determining the true meaning of the Sponsorship Agreement. It seems to me important to set both these documents in the context of the general marketing background. Neither side adduced expert evidence in this regard. However two aspects of the marketing background were not, in the end, in dispute. The first of these concerned the regulatory regime, and the second the commercial context.
As regards the regulatory regime, RWU 1 in Clause 5.1.12 referred to "personal data" as outlined in Schedule 1, while RWU 2 referred to "data subjects set out in Schedule 1". I mentioned earlier that Clause 12 defined "Data Subject" as "an individual who is the subject of Personal Data", and adopted meanings for "Data Controller", "Personal Data", and "Processing and Process" set out in the Data Protection Act 1998. In this judgment I will do the same. It is convenient here to note that the definition in that Act of "Personal Data" is:
data which relate to a living individual who can be identified (a) from those data or (b) from those data and other information which is in the possession of, or is likely to come into the possession of, the data controller
At my request I was provided with materials concerning statutory and regulatory measures and guidance about databases and the use of data. It was not suggested by either party that there was a need to examine the detail of these provisions. A database is a collection of data arranged in a systematic or methodical way. Regulatory measures and guidance focus, among other things, on the use of data. The key feature is that use of data in the manner contemplated by the Sponsorship Agreement would not be permissible if that use amounted to the making of "unsolicited communications" to Data Subjects. Accordingly one purpose of the provisions in the Sponsorship Agreement was to ensure for the benefit of both sides that the agreement, and performance of it, would not infringe this prohibition.
Turning to the commercial background, one of the benefits of the Sponsorship Agreement which made it attractive to PlayUp was that it offered access to Data Subjects who could be contacted by email or by SMS messaging. The commercial value of such access would be affected by a number of factors. Among those factors might be the identity of the sender of the email or SMS message, and whether the Data Subject had had dealings in the past with that sender. PlayUp advanced a proposition that a positive response is more likely if a Data Subject receives an email or SMS message from a sender with which the Data Subject has had dealings in the past. Mr Thain in cross-examination said he would "definitely agree" with this proposition. Mr Chalfin did not go so far, and GMF's written closing submissions said that expert evidence would be needed on the point. In his oral closing submissions Mr McCall accepted that the proposition was "probably true". I consider that expressed as it is in terms of what is "more likely", the proposition is correct.
In addition to the Sponsorship Proposal, PlayUp suggested that three other documents passing between the parties formed part of the relevant factual background. These were a first draft of a "Letter of Intent", a second draft of such a letter, and an "event launch plan" sent by PlayUp to GMF on 27 November 2007. However neither of the drafts of the "Letter of Intent" was a document on which the parties reached agreement. They, and the event launch plan, may give some insight into the subjective intentions of one or both of the parties, but I do not consider that they offer any substantial assistance, additional to what may be found in the Sponsorship Proposal, in determining the meaning of the data programme rights.
H: Meaning of the data programme rights
H1. The link between GMF and programme recipients
H1.1 Can "targeted" mean what GMF says?
GMF's concession that there must be some limitation on who might be a programme recipient was an acknowledgement of commercial reality. Without such a limitation GMF could have selected programme recipients from email addresses and SMS telephone numbers using any type of data supplied to it by anyone – which it acknowledged would be a commercial nonsense. While GMF criticises PlayUp for proposing limitations which give particular meanings to words used in the Sponsorship Agreement, GMF itself has to give a particular meaning to "targeted" in order to arrive at the limitation it contends for. This immediately cuts away from GMF one of its main points in answer to PlayUp, a claim that PlayUp is asking the court to improve on the agreement, something which the court has no power to do merely to make the contract fairer or more reasonable (see Lord Hoffmann in Belize). Of course each side will argue for a construction advantageous to it, but once GMF accepts that some sort of particular meaning is necessary to make commercial sense then it is accepting that this is a case where the court must examine alternative constructions so as, in Lord Hoffmann's words, to "discover what the instrument means."
GMF stressed that on its construction the word 'targeted' related to the sporting interests of the data subjects, and said nothing about their connection with (or lack of connection with) GMF.
The contention by GMF that programme recipients need have no connection with it so long as they have "known sporting interests" appears to me to involve a substantial and surprising departure from the essential purpose of the Sponsorship Agreement – and indeed to ignore that purpose. The essential purpose of the Sponsorship Agreement was to give PlayUp access to commercial opportunities associated with the Awards. GMF was the entity set up to run the Awards. As was observed by PlayUp:
the commercial context is a sponsorship agreement with GMF, whereby GMF is promising to provide targeted marketing to opted-in recipients. … There is nothing in the commercial context to indicate that the target would be an amorphous group of "football fans", still less "sports interest fans".
GMF sought to answer this by pointing out that its obligation to provide or procure the programmes formed part only of the rights given to PlayUp under the Sponsorship Agreement. Schedule 1 set out a wide range of other rights – naming of the Awards as "The PFA 2Up Fans Awards" and use of this title in every reference to the Awards, branding in connection with PlayUp's products and services, a full-page advertisement and one editorial per year in the PFA's Official Magazine, tickets to matches at which an Award is presented and hospitality rights, 50% of all available banner inventory on the Official Website, reciprocal hyper-text links between the Official Website and PlayUp's home page, the establishment within the Official Website of an official Award page about the Award and PlayUp, the right to introduce SMS voting for the Awards via PlayUp's SMS Voting Facility, the right to stage a press conference announcing PlayUp's sponsorship of the Awards, and the right to create an effective media relations campaign around this announcement and the actual sponsorship of the Awards.
I readily accept that Schedule 1 set out a wide range of other rights given to PlayUp. Some were set out in the paragraphs which preceded paragraph 5. Others were set out in subsequent paragraphs. Their common feature – presaged in Recital (D) - is that they were all commercial advantages associated with the Awards. That common feature suggests that a reasonable reader of Schedule 1 would assume that the data rights too were associated with the Awards. The mere fact that there were many other rights granted to PlayUp under the Sponsorship Agreement does not to my mind provide any basis for an inference that GMF's obligations in relation to the data rights could be fulfilled by using data which were not associated with the Awards. In other words, taking the agreement as a whole, including the recitals, its essential purpose was to give PlayUp access to commercial opportunities associated with the Awards. The mere fact that many other rights associated with the Awards were granted to PlayUp under the Sponsorship Agreement does not give reason to think that the provisions about data rights were intended to depart from that purpose.
GMF further submitted that its interpretation of "targeted" was supported by slide 31M ('Solus Data Opportunities') in the Sponsorship Proposal. That slide said: "Data can be targeted by football club supported", and then referred specifically to the supporters of five top football clubs. There was, said GMF, no suggestion in this slide, nor elsewhere in the Sponsorship Proposal, nor in the Sponsorship Agreement, that the requirement for marketing to be 'targeted' required any connection to exist between GMF and the data subjects. In my view, however, slide 31M points to the contrary conclusion. It was one of a series of slides exploring the benefits of sponsorship – things that only a sponsor would get. Accordingly the natural reading of slide 31M was that the Awards data, which only a sponsor would have the benefit of, was data which would enable targeting "by football club supported."
GMF added that while it accepted that PlayUp's interests lay particularly in targeting football supporters, the fact should not be overlooked that PlayUp was also marketing the 2Up game to a wider audience of people interested in sport. This too ignores the essential purpose of the Sponsorship Agreement. The agreement involved payment by PlayUp of substantial sums of money, in return for precisely defined benefits gained by association with the Awards. True, PlayUp had commercial interests beyond football. That mere fact gives no basis for thinking that GMF could meet its obligation to provide these precisely defined benefits by supplying data which had nothing to do with the Awards.
Thus the position is that while GMF accepts that the Sponsorship Agreement contemplated some limitation on who might be a programme recipient, the limitation GMF suggests runs counter to the essential purpose of that agreement: access to benefits associated with the Awards. I turn to consider PlayUp's arguments as to ways in which the Sponsorship Agreement required that programme recipients be limited in a way consistent with that essential purpose.
H1.2 Opting-in through the Official Website
Both sides noted that the requirement in paragraphs 5.1.1 and 5.1.2 that recipients be "opted-in" did not expressly deal with the question, "Opted-in to what?" In broad terms PlayUp's submission was that, in context, "opted-in" plainly contemplated someone who had interacted with the Official Website so as to give consent to the receipt of emails (paragraph 5.1.1) or SMS messages (paragraph 5.1.2). To my mind this is the obvious inference in the light of the considerations identified above when discussing the meaning of "targeted". It is also supported by the commercial consideration that a positive response is more likely if a Data Subject receives an email or SMS message from a sender with which the Data Sender has had dealings in the past.
GMF submitted that PlayUp's interpretation of "opted in" was inconsistent with provisions in Schedule 1 contemplating that data might be owned by someone other than GMF, with GMF being the licensee of that entity. Paragraphs 5.1.1 and 5.1.2 refer to databases "owned or controlled by the Company". Paragraph 5.2 provided that "...data ... shall remain at all times the property of the Company and/or its licensors". Paragraph 5.2.1 provided that " ... [the Sponsor's] use of the data ... provided to it under item 5.1 shall be subject to the terms and conditions which apply to such data and information including the provisions of ... any third party licence or other agreement between the Company and any third party licensor ...". Similarly GMF said that PlayUp's interpretation was inconsistent both with the reference in RWU 2 to GMF having "the right (including under … third party agreements) to licence all personal data as outlined in Schedule 1 ..." and with the reference in clause 12.4 to complying with requests made "pursuant to the terms and conditions of any licence or agreement between the Company and any third party relating to the Personal Data."
GMF contended that in paragraphs 5.1.1 and 5.1.2 the word owned might (arguably) be said to carry with it the suggestion that the data subjects had a pre-existing connection with GMF, the same could not be said of the word controlled, a word which entailed that, in performing its obligations, GMF was entitled to use data which it did not own. If it did not own the data, it must have been licensed, or obtained in some other way, from a third party. This inconsistency with PlayUp's interpretation was said to be all the more apparent in the other provisions relied on, which made express reference to data being licensed to GMF. To my mind this contention misses the point. It is not necessary to derive PlayUp's interpretation of "opted-in" from the words "owned or controlled". They simply indicate that it was important that GMF controlled the databases it used to select programme recipients, either by ownership or in some other way. There might be all sorts of reasons why GMF might want to transfer "ownership" of a database it used to select programme recipients. As Mr Cullen submitted, it was good sense for the draftsman to cover the bases. Mr McCall commented that in this context the draftsman would be taking account of an incredibly fine distinction. I do not think this is an apt expression to describe a transfer of ownership, but even if it were it remains good commercial practice for those who draft agreements to be on the alert for fine distinctions. It is increasingly common in the commercial world to find transfers of ownership accompanied by licences or other agreements conferring rights on the transferor. Such a transfer would be of no concern to PlayUp so long as GMF benefited from a licence or some other arrangement to ensure that it continued to control the database and would thus be able to fulfil its obligations in relation to data rights. Accordingly the provisions relied on by GMF in this regard are not incompatible with "opted-in" referring to someone who had interacted with the Official Website so as to give consent to being a programme recipient.
A further argument for GMF noted that words used in paragraph 5.1 of Schedule 1 to describe the obligation imposed on it in relation to the programmes were that it was to "provide or procure" the programmes. By offering an alternative of procuring the programmes rather than providing them, the Sponsorship Agreement was, submitted GMF, contemplating that the data might be obtained from a source other than GMF itself. In my view no such conclusion arises. The words in question simply contemplate that it would be possible for GMF either to deliver the programmes by sending emails and SMS messages itself or to contract with another entity to do this.
Next, GMF turned to the obligation in clause 5.1.1, subject only to provisions in clause 3.3 about alternative performance, to provide the Sponsorship Rights to PlayUp on a "sole and exclusive" basis. This meant, said GMF, that it was obliged to grant the package of Sponsorship Rights to PlayUp and to no one else. I agree. GMF submitted that it did not inform the meaning of the data rights set out in Schedule 1. This is a submission which I cannot accept. Clause 5.1, and the similar provision in clause 3.1, are designed to ensure that PlayUp is getting added value in the sense that the Sponsorship Rights cannot be given to anyone else. There is no reason to think that this added value was not to apply to the data programme rights. On GMF's construction, however, the added value in relation to data programme rights would be likely to be worthless. Having bought in data and used it to select programme recipients GMF could say with hand on heart that it had not granted to anyone else the right to use the bought-in data. That protestation would be hollow in relation to bought-in data which – in the absence of some contractual provision to the contrary – the vendor would remain at liberty to licence to others.
Reliance was also placed by GMF on Clause 3.3 of the Sponsorship Agreement. As will be seen below, this clause addressed the position if "for whatever reason the Company is unable to deliver any of the Sponsorship Rights precisely as set out in Schedule 1…". In that event, Clause 2.2 said that "…the Company shall offer to the Sponsor alternative rights as similar as possible to the Sponsorship Rights…". GMF said that on PlayUp's interpretation Clause 3.3. would be unworkable with regard to database rights. If all data subjects had to be specifically opted in to GMF, it would obviously be impossible for appropriate similar rights to be offered under Clause 3.3. In my view this argument breaks down in two places. First, all that Clause 3.3 contemplates is that alternative rights must be offered which are "as similar as possible" to the Sponsorship Rights. Second, and in any event, it is not difficult to contemplate some technical breach as regards the database rights which had little or no impact on their value.
GMF then submitted that PlayUp's interpretation of "opted in" was inconsistent with the Sponsorship Proposal. It pointed to contrasts between different concepts in particular slides. Slide 31B referred to "over 500,000 registered users." Slide 31F said that "360k unique fans voted in 2006/7." Slide 31H offered access to two different things. The first was "a bespoke high volume opt-in database" – which PlayUp acknowledged was a reference to the prospect data contemplated by paragraph 5.1.3 of Schedule 1 and elaborated upon in slide 31L. The second was access to "personalised email, postal and SMS communications." This was a reference to the "Solus Data Opportunities" in slide 31M, including the statement on that slide that there was a "1,000,000 email base".
GMF noted that registered users numbered 500,000 in slide 31B, plainly far fewer than the 1m email base in slide 31M, and were said to enable the Sponsor "to know you are hitting the right audience." It also noted that in slide 31L the opt-in for prospect data was specific (i.e. 'opted in to your brand'). By contrast slide 31M when referring to the '1,000,000 opt-in email base' made a claim about targeting data by football club supported which was less strong than the claim at slide 31B, and did not identify to whom the email base was opted-in. GMF submitted that an objective reader of the Sponsorship Proposal would conclude that the opt-in applicable to the '1,000,000 opt-in email base' on slide 31M was not specific, either to the prospective sponsor or to GMF.
I do not consider that these contrasts advance GMF's case. It is correct that slide 31B showed a lower number of "registered users" than the 1m email base on slide 31M. However, as I have noted above when considering GMF's interpretation of "targeted", the natural reading of slide 31M is that it is concerned with benefits that only a sponsor would get. Moreover, slide 31B must be read in the context of the Sponsorship Proposal as a whole. The ordinary reader would regard it as a presentation designed to entice potential sponsors. Slide 31B was depicting various enticements. So was slide 31M. So was slide 31F, introducing "360k unique fans [who] voted in 2006/7". So also was slide 31D, which suggested that the sponsor would "interact and engage with every football fan, who supports the professional game". These enticements were not couched in precise language. Thus slide 31F did not tell the reader whether the 360k formed part of either the "registered users" or the 1m "opt-in email base."
One important difference was made very clear. The different terminology on slides 31H and 31M reflected the difference between prospect data and solus data. Prospect data would emerge when the survey contemplated at slide 31L had taken place, expected to result in 100,000 people giving permission specifically to PlayUp to contact them by email, postal direct mail, or telephone. By contrast, at the start of the Sponsorship Agreement no-one would have given such permission specifically to PlayUp. Consistently with this, slide 31M made no reference to any such specific permission.
Other differences might or might not exist, and were not made clear in the Sponsorship Proposal. Nor would the reader expect a marketing document like this to do so.
Moreover, slide 31M claimed that the opt-in email base is "increasing by 20,000 per month". This would be nothing to write home about if it could comprise bought-in data. Its value lay in the clear inference that this was a monthly increase in the numbers opting in via the Official Website.
GMF relied upon answers given by PlayUp's witnesses when they were asked in cross examination about their understanding of the Sponsorship Proposal. I doubt whether such evidence is admissible. The principles of construction set out earlier require the court to consider what a reader of the Sponsorship Proposal might objectively understand it to mean. They do not permit evidence about the subjective understanding of particular individuals. As to that understanding, however, the evidence given by PlayUp's witnesses varied in a number of respects. The variations in my view simply reflect the differences that might be expected when individuals are asked to recollect their impressions of a document which used loose terminology to describe the attractions of the proposed deal.
Finally on this point, GMF submitted that PlayUp's interpretation of "opted in" was inconsistent with evidence of usage of that term by PlayUp internally and evidence given orally by Mr Tomeski when cross-examined. Again, I doubt whether such evidence is admissible, but even if it were it does not advance GMF's case. The evidence shows that data can be referred to as "opted-in" so long as consent is given to receipt of direct marketing. Whether the circumstances and terms of that consent suffice for a particular purpose is quite another matter. As GMF itself acknowledges, usage of the term "opted-in" does not answer the question, "opted-in to whom?"
Accordingly I conclude that PlayUp is correct in its contention that "opted-in recipients" in paragraphs 5.1.1 and 5.1.2 of Schedule 1 to the Sponsorship Agreement referred to people who had interacted with the Official Website so as to give consent to the receipt of marketing.
H1.3 Consent notifications provided specifically to GMF
PlayUp says that in RWU 2 the words "… the numbers of data subjects set out in Schedule 1 have provided the Company with prior notifications of their consent to receiving direct marketing from the Sponsor" require that consent notifications be provided by data subjects specifically to GMF. On GMF's case, the natural and commercially-sensible way of reading RWU 2 is that it means: "... the numbers of data subjects set out in Schedule 1 have provided [a class of which the Company is a member] with prior notifications of their consent to receiving direct marketing from [a class of which the Sponsor is a member]."
Nowhere in Schedule 1 is express reference made to "data subjects." However paras 5.1.1 and 5.1.2 refer expressly to numbers of "recipients who are contained in databases …" and I understand it to be common ground that these recipients are the "data subjects" referred to in RWU 2.
The "consent" which was to be the subject of prior notification was a "consent to receiving direct marketing from the Sponsor". I noted earlier that the performance of paragraphs 5.1.1 and 5.1.2 of Schedule 1 did not require supply to PlayUp of data about the programme recipients. What GMF had to do in that regard was to provide or procure the programme. For present purposes it may be added that the programme was not expressly required by the Sponsorship Agreement to involve emails or messages sent or purporting to be sent from either GMF or PlayUp.
GMF contended that in these circumstances the word "from" does not mean "sent by", but instead identifies "a class of marketing material of which PlayUp's marketing material forms part." This contention seems to me to defy the language of RWU 2. That language has already identified a type of marketing material – namely "direct marketing", and is concerned to ensure that the consent is to receipt of that type of material "from the Sponsor". I am not persuaded that "from" must refer back to some more specific type of marketing material. Giving the word "from" its ordinary meaning of "sent by", it seems to me that RWU 2 sought to allow for the possibility that programme emails or messages might be, or might be treated as if they were, from "the Sponsor." Thus I would be willing to read "from the Sponsor" as extending both to material actually sent by PlayUp and to material purporting to be sent by PlayUp. In my view the word "from" does not go further than this.
GMF noted that PlayUp had withdrawn an earlier contention that RWU 2 required that the "prior notifications" must have been notifications of a consent to receive direct marketing from PlayUp specifically. What PlayUp was now accepting, said GMF, was that it sufficed that the consent was "to receiving direct marketing from a class of which PlayUp is a member." That being the case, it followed that prior notifications could be given to "a class of which GMF is a member."
PlayUp commented that it would be odd for GMF to warrant that it has an email database of 1,000,000 data subjects and an SMS database of 250,000 data subjects if, in fact, any shortfall in the numbers could simply be purchased. Putting that on one side, PlayUp's first response was that it had not accepted that it sufficed that the consent was "to receiving direct marketing from a class of which PlayUp is a member." What it had said was that one simply looked at the terms of the consent and identified whether PlayUp fell within it.
I am not persuaded that PlayUp's first response provides an answer to this part of GMF's contentions. PlayUp's earlier contention (that RWU 2 required that the "prior notifications" must have been notifications of a consent to receive direct marketing from PlayUp specifically) was bound to fail, for it took no account of the timeline. RWU 2 looks to the position at the date of the agreement. On that date it would be nonsense to suggest that GMF must already have numbers of data subjects who have given consent to receipt of direct marketing from PlayUp specifically, for there had been no prior relationship between GMF and PlayUp. What was clearly contemplated was that, as is common in this industry, GMF would have obtained prior notifications of consent to receive direct marketing not merely from GMF itself but also from a class of entities associated with it in some way e.g. consent to receive direct marketing "from us and our clients" or " from us and our business partners". Thus RWU 2 in context can be seen as stating that GMF had already secured consents to receipt of direct marketing from a class of entities, and that upon signature of the Sponsorship Agreement PlayUp would become part of the class. Accordingly what is contemplated is that if one asked on 3 February 2008 whether the prior notifications then in existence provided consent to the receipt of direct marketing from PlayUp, the answer would be that they did not. If one asked that question on 5 February 2008 the answer would be that they did. The reason for the difference is simply that it was only on and after 4 February 2008 that PlayUp became a member of the relevant class.
Thus I agree with GMF that the words "the Sponsor" in RWU 2 refer to "a class of which PlayUp is a member." Does it follow that the words "the Company" in RWU 2 similarly refer to "a class of which the Company is a member"? Here PlayUp responds that it is nonsensical in this context to speak of data subjects providing prior notifications to "a class of which GMF is a member". Mr McCall replied that it was natural to put a gloss on the meaning of these words; they were not the wrong words but merely words that had to be read non-literally.
I am not persuaded that GMF has identified good reason to read "the Company" in RWU 2 as "a class of which the Company is a member". The special factors which required a particular reading of "the Sponsor" do not apply: by 4 February 2008 GMF had been running the Official Website for some years. I find it difficult to envisage how there could be any class of which GMF was a member in this regard, but if there were such a class I can see no reason for it to extend to suppliers of "bought-in" data. Accordingly I conclude that "the Company" in RWU 2 means "GMF", and for this reason too use by GMF of bought-in data is incompatible with the Sponsorship Agreement. In reaching this conclusion I put on one side the initial comment made by PlayUp that there would be little point from PlayUp's perspective in GMF warranting an email database of 1,000,000 data subjects and an SMS database of 250,000 data subjects if, in fact, any shortfall in the numbers could simply be purchased.
H1.4 Bought-in data: consent to receive marketing from whom?
For the reasons given above I agree with GMF that the words "the Sponsor" in RWU 2 refer to "a class of which PlayUp is a member." That class will identify a link of some kind: for present purposes I will loosely use the term "associate of" as a shorthand for a link which may well be expressed in more precise wording. Does it follow that GMF will be able to use bought-in data when selecting programme recipients? PlayUp said that such data would not comply with the Sponsorship Agreement because consents would have stated that marketing could be sent by X and associates of X, whereas PlayUp was not an associate of X at all. GMF, by contrast, said it sufficed that GMF was able to use the bought-in data for the purposes of marketing PlayUp's games.
Here it seems to me that neither side is necessarily right. It is possible to conceive words of consent which extend to consent to receive direct marketing not merely from associates of X, but also from associates of those associates. If the words of consent extended that far, GMF were an associate of X, and PlayUp were an associate of GMF, then RWU 2 could be complied with. I examine below whether this was the case. I do so only briefly because this may be described as a relatively minor contention on the part of PlayUp: it would only have significance if my conclusions on PlayUp's other contentions about bought-in data were wrong.
H1.5 An alternative meaning of "targeted"
Under cross-examination Mr Chalfin said that under the Sponsorship Agreement the data subjects had to be football fans. While PlayUp denied Mr Chalfin's suggestion that the criterion for a qualifying recipient was to be a "football fan", it added that even if that were the criterion, then GMF's attempts to show that it had sufficient numbers to meet it "failed dismally". GMF said it was not open to PlayUp to adopt this position. As I have held that PlayUp succeed on their main arguments as to the criteria, no question arises as to there being some alternative criterion of being a football fan. Had it been necessary for PlayUp to contend for this alternative criterion, for example by saying that it was what was contemplated by the word "targeted", I would have permitted it to do so. It would cause no prejudice to GMF. As explained below, the number of programme recipients who were football fans was in issue already for other reasons.
H2. Telephone numbers of SMS programme recipients
PlayUp relies on the words "sent to the Mobile Devices of at least 250,000 opted-in recipients" in paragraph 5.1.2 of Schedule 1 to the Sponsorship Agreement. Clause 1 explains that:
"Mobile Devices" means any portable wireless communications device, the primary purpose of which is to receive and send voice and/or data communications over Mobile Networks and which is designed to be used while the user in motion;
"Mobile Networks" means any cellular telecommunications system which an operator is authorised to run but for the avoidance of doubt excluding the internet.
GMF submitted that the word 'sent' should be interpreted literally, and that there is no basis for reading in to GMF's obligations a duty to ensure that messages were delivered. This, said GMF, reflects the fact that delivery could never have been guaranteed – particularly in the case of SMS messages – because of factors beyond GMF's control. Mr Butler had acknowledged in cross-examination that a 65% delivery rate for SMS messages was acceptable. From that premise GMF claimed that if 250,000 SMS messages had to be delivered then many more would have to be sent.
This submission by GMF does not address PlayUp's contention. PlayUp did not contend that the message had to be delivered. Delivery might be impaired for all sorts of reasons. PlayUp's contention was different: it was that the messages had to be sent to a Mobile Device of an opted-in recipient. If a message was sent to a number which was not a number of a Mobile Device of an opted-in recipient then the message in question had not been sent to the thing that paragraph 5.1.2 required. Taking the words of paragraph 5.1.2 at face value that appears to me plainly correct. GMF must send messages to numbers given by opted-in recipients, but that alone does not fulfil its obligation. It will only do that if 250,000 of those messages were sent to actual Mobile Devices as defined in clause 1.
It may well be that in practical terms a delivery rate of 65% is regarded as acceptable. In the absence of any case that there is a customary meaning, however, that rate does not assist in establishing what paragraph 5.1.2 required in this regard. GMF's contention would be right if paragraph 5.1.2 had said "sent to numbers supplied by opted-in recipients for messages using Mobile Networks". However paragraph 5.1.2 did not say this, and the principles of interpretation identified above do not permit the court to redraft paragraph 5.1.2 in that way.
I: Witness and other evidence about GMF's breaches
I have concluded above that PlayUp's main contentions, both as to bought-in data and as to the need for SMS messages to be sent to an actual Mobile Device, are correct. GMF accepted that if I were to reach this conclusion it would be in breach of the Sponsorship Agreement. Issues arise, however, as to the extent of relevant breaches, and as to their consequences. Much of the evidence in this regard is documentary. In addition, written and oral evidence was given by Messrs Tomeski, Bunbury and Butler for PlayUp and Messrs Chalfin and Thain for GMF.
The evidence given by Messrs Tomeski, Bunbury and Butler was for the most part straightforward. GMF said that all of them were, to varying degrees, evasive and unwilling to answer simple questions. There were occasions when, in my view, it might be right to describe their approach to answering a question as excessively cautious. In general, however, I found their evidence to be credible and reliable.
Turning to GMF's witnesses, I have concluded that both Mr Chalfin and Mr Thain lied to the court. I explain later in this judgment my reasons for this conclusion and the approach which I take to their evidence in consequence.
J: Attributes of data subjects: evidence
Under this head I note some features of the evidence about the attributes of programme recipients, or potential programme recipients, during the term of the Sponsorship Agreement. I have held above that in order to meet the requirements made by the Sponsorship Agreement concerning programme recipients, it is necessary for the recipient to be a person who has:
1) opted in using the Official Website; and
2) given a prior consent notification specifically to GMF; and
3) consented to receive direct marketing from a class of which PlayUp is a member.
I shall refer to these requirements as criterion (1), criterion (2), and criterion (3) respectively. Consistently with its stance in these proceedings, GMF did not take any steps either before or during the Sponsorship Agreement specifically designed to ensure that all potential programme recipients met criterion (1) or criterion (2).
Prior to the Sponsorship Agreement the Awards had not had a sponsor. During that period GMF had been gathering data. In addition to this, however, Mr Chalfin explained at paragraph 83 of his witness statement that he wanted "to licence in data so that it could be used by GMF in any future sponsorship deal."
J1. The IPT Licence and the SNM/IPT Data
The data which Mr Chalfin decided to "licence in" for a future sponsorship deal came from IPT. An agreement ("the IPT Licence") was entered into between SNM and IPT on 28 September 2007. It comprised a "Data Order Confirmation" and a document entitled "Data Licences Terms and Conditions."
The Data Order Confirmation identified the data type as "Email and append SMS and postal where available." Immediately below this it identified as "Selection/Question Criteria" what was described as the "Entire sports interest file and football supporters file. Aged 20 – 70." Against an entry for "Licence and Usage" the Data Order Confirmation stated "Multi Use." Against "Special Instructions" it stated:
Client will take file in its entirety. Sports New Media will be allowed up to 60 broadcasts over a 12 month cycle. (A maximum of 180 broadcasts over a 3 year cycle). Also Sports new media will have the same usage on SMS. Unsubscribers to be taken off within 48 hours of request. Sports New Media will be supplied with free amendments and updates every 2 months to ensure the list is always accurate and correct. A review of this contract will occur exactly 12 months after commencement. Data will be deployed with pfa appearing as the domain name. Also the base origination opt out will appear at the bottom of all creatives along with an unsubscribe to sports new media or associated affiliates. A total of £65,000 will need to be paid for the first year. At any stage of the agreement Sports Newmedia can release itself from the contract.
The Data Order Confirmation also stated against an entry for "Quantity" the figure "896,696," and against "Cost Per Record" it stated "0.1729" – this being the cost in pence for each record.
The Data Licences Terms and Conditions began with an interpretation clause. It included the following:
Clauses 2 and 3 read as follows:
|"The Confirmation of Order"
||means the Confirmation of Order form to which these Terms and Conditions are attached;
||means the data to be provided by IPT pursuant to this Agreement as specified in The Confirmation of Order or as otherwise agreed from time to time between IPT and the Licensee;
|"Intellectual Property Rights"
||means all know-how, patents, trade marks, service marks, registered designs, copyright, business names and other intellectual property rights;
||means any of: -
(a) use in email marketing products and for resale to third party customers;
||means the "Client" as specified in the Confirmation of Order, and where appropriate members of the "Clients" Group of Companies.
|"The Licensor" or "IPT"
||Means Interactive Prospect Targeting Limited;
2. IPT'S OBLIGATIONS
2.1 In consideration of the obligations undertaken by the Licensee in this Agreement, IPT agrees with the Licensee to provide the Data to the Licensee on the terms of the Agreement
3. THE LICENSEE'S OBLIGATIONS
3.1 In consideration of the obligations undertaken by IPT in this Agreement, the Licensee agrees with IPT: -
3.1.1 to utilise the Data only for the Permitted Purpose and for no other purpose, including;
Clauses 8 and 9 included the following:
3.1.2 not to use the name "IPT" or any of IPT's Intellectual Property Rights in the marketing and promotion of its services.
INTELLECTUAL PROPERTY RIGHTS
8.1 The Data, (and all Intellectual Property Rights therein) shall at all times remain the sole property of and be vested in IPT and the Licensee shall not acquire any proprietary rights therein.
9.1 IPT warrants to and undertakes with the Licensee that it is entitled to deal with the Data in the terms provided by clause 3 without infringing any third party Intellectual Property Rights.
I shall use the term "the SNM/IPT Data" to refer to data supplied by IPT under the IPT Licence. GMF's case is that as a member of SNM's group of companies it was a licensee of IPT under the IPT Licence. Moreover, Mr Chalfin says he told IPT that he wanted the SNM/IPT Data so that it could be used by GMF in any future sponsorship deal, and this may well mean that there was an obligation on the part of IPT to ensure that the SNM/IPT Data could be used for marketing both by GMF and by any future sponsor of the Awards. In any event, it was GMF's case that SNM through Mr Chalfin made the SNM/IPT Data available to GMF for PlayUp's marketing purposes.
As to what was in the SNM/IPT Data, in his witness statement Mr Thain said that in September 2007, when he was still working at IPT, he conducted a data count. The result of the count was that approximately 680,000 of the data subjects in the SNM/IPT data were football fans.
J2. Clarke Willmott's letter of 11.2.09
What kinds of data did GMF have available at the start of, and during, the Sponsorship Agreement? A letter dated 21 January 2009 was sent by Wiggin, solicitors for PlayUp, to Clarke Willmott, solicitors for GMF, asking among other things how many programme recipients had not "opted in directly to the GMF website." Clarke Willmott replied to this and other questions on 11 February 2009 in a letter which included this passage in paragraph 37:
37 … the data breakdown was:
37.1 GMF data 251,582
37.2 Licensed Third party data 1,027,501
The source of the licensed data was IPT. The majority of this data was collected as a result of the PFA Legends Campaign.
In a letter dated 9 June 2009 Clarke Willmott advised Wiggin that:
… the mobile data breakdown was:
GMF mobile data - 39,450
IPT mobile data - 217,895
These letters were treated by PlayUp as admissions that no more than 251,582 email programme recipients, and no more than 39,450 SMS programme recipients, met what PlayUp contended (and GMF denied) were relevant criteria. On that basis PlayUp launched these proceedings in September 2009. In the course of the proceedings, however, GMF has contended that what was said in the letter of 11 February 2009 was mistaken; that while the licensed data did indeed comprise in excess of 1m data subjects, this did not include data collected as a result of the Legends campaign; and that throughout the term of the Sponsorship Agreement no fewer than 450,000 data subjects had opted in through the Legends campaign and the Awards.
This difference may be significant not merely in terms of numbers, but also in determining the consequences of failure to meet the criteria. GMF says that such a failure would not of itself entitle PlayUp to terminate, and relies upon an assertion that email programme recipients in fact included at least 1m football fans. In order to make good that assertion GMF may need to demonstrate that what was said in the letter of 11 February 2009 was mistaken, and that the correct figure for data gathered by GMF involved well in excess of 251,582 data subjects.
J3. The witness statements of Messrs Chalfin and Thain
Mr Chalfin's statement said:
I understand that Nick Thain will deal with the databases that were owned or controlled by GMF in his witness statement and therefore, I do not propose deal with this issue in great detail.
Without, therefore, going into "great detail" about databases "owned or controlled by GMF", his statement at paragraphs 80 and 82 identified two separate databases controlled by GMF. The second of these "only included" the SNM/IPT Data.
The first database identified by Mr Chalfin was what he called "GMF's database": data provided by fans when voting for the Awards or when voting as part of the Legends campaign. He and Mr Thain both said similar things about this database and data in their witness statements. I shall refer to them as "the GMF Database" and "the GMF Data." Messrs Chalfin and Thain said that the GMF Data comprised approximately 450,000 to 500,000 football fans at the outset of the Sponsorship Agreement. Mr Chalfin added that this increased thereafter because more fans were voting for the Awards. Other than this, neither Mr Chalfin nor Mr Thain gave any details about the number of data subjects on the GMF database at the outset of the Sponsorship Agreement.
Thus neither of the GMF witness statements gave a precise figure for the number of data subjects included in the GMF Data at the start of the Sponsorship Agreement on 4 February 2008. Nor did GMF produce anything which could be described as a contemporaneous record of the number of data subjects included in the GMF Data at the start of the Sponsorship Agreement on 4 February 2008. I shall therefore turn to look at the position prior to the Sponsorship Agreement, and in particular in October 2007, a period for which GMF said that it had contemporaneous evidence – and also the period in which the Sponsorship Proposal was sent to PlayUp.
J4. GMF Data: position in October 2007
At a very late stage – about 6 weeks before the trial – Clarke Willmott sent Wiggin a letter dated 23 September 2010 enclosing as Appendix 3 a spreadsheet showing "a breakdown of the data contained in the GMF database in October 2007." I shall refer to this as "the October 07 Spreadsheet". Clarke Willmott's letter of 23 September 2010 said that the October 07 Spreadsheet confirmed that there were 425,576 football fans in the GMF database as of October 2007, adding:
We refer you to the highlighted section of that document (212,788 + 203,300 +9488 = 425,576).
In cross-examination Mr Chalfin was, step by step, taken through an analysis which demonstrated beyond doubt that the October 07 Spreadsheet did not give the confirmation asserted by Clarke Willmott. He was constrained to accept that the second and third highlighted figures (203,300 and 9,488) appeared to be subdivisions of the first figure (212,788), that the total in the database appeared to be 212,788, and that it appeared to be illegitimate to double that number and reach 425,576. In answer to these points he said that while the October 07 spreadsheet contained data about teams, there had been another database of fans that hadn't necessarily provided the team they supported. He added that he had not "put this document together." He agreed that it appeared to show that there were 212,788 people on the GMF Database. Mr Chalfin said that he did not know where the October 07 spreadsheet was from, but agreed that presumably it was either in existence in October 2007 or could have been printed then in that form.
Later in cross-examination when asked about the figure of 251,582 given in Clarke Willmott's letter of 11 February 2009 Mr Chalfin said it looked wrong, as the complete GMF database was not that low at any time when dealing with PlayUp. Also in cross-examination Mr Chalfin, when dealing with a different document which was said to be part of a merged database, said that he knew the figures of the database but didn't know the working of the system or the breakdowns. Towards the end of cross-examination he added that Mr Thain was the database expert. In re-examination Mr Chalfin was asked to identify who at GMF dealt chiefly with the content of the databases. His first response was to say that Ben Blackham "technically ran all the counts for me but I essentially was more focused on the database." Further questions were asked in re-examination about the role of Mr Thain once he had joined GMF at the time of the Sponsorship Agreement in February 2008, and in response to those questions Mr Chalfin said it was Mr Thain who ran the counts and understood the system, and was best placed to answer questions on documents concerning databases.
Mr Thain gave oral evidence the day after Mr Chalfin. In cross-examination he accepted that the October 07 spreadsheet did not give the confirmation asserted by Clarke Willmott. That confirmation, he said, was "a mistake." He said he had been responsible for the paragraph which contained the confirmation and "[i]t was my mistake." His initial explanation of the mistake was that when he authorised the confirmation to be given he was:
[a]dding the PFA Legends data … approximately 300,000, with the old GMF database, and those together got approximately 500,000."
I could not understand Mr Thain's initial explanation of what his mistake was, for it bore no apparent relation to what was said in the confirmation. In response to further questioning by Mr Cullen, Mr Thain said that he had had in mind that there were three parts to the GMF Database. The first comprised what he called "GMF old" and I shall refer to as "GMF Old Data" – data gathered prior to the Legends campaign. At a later stage in cross-examination Mr Thain sought to explain that while the Legends data had all been gathered by August 2007, it was not until November 2007 that it was merged with the GMF Old Data.
I shall set out in the next main section of this judgment what Mr Thain said under cross-examination about when it was that he realised he had made this "mistake." Returning to Mr Thain's evidence asserting that there were three parts to the GMF Database, he said that the second part comprised data from the Legends campaign, numbering around 300,000 records, and that the third part comprised data from the Awards for the 2007/08 football season which had just started. He added that the GMF Old Data numbered about 250,000 data subjects, and that the October 07 spreadsheet showed data for some but not all of them.
Mr Thain then said that rather than confirming 425,576 football fans in the GMF database as of October 2007, the number should have been higher. This answer was, I think, predicated on something which was more or less explicit in Mr Thain's evidence. This was that if his evidence were true then the confirmation should not have referred only to the October 07 spreadsheet when deriving the total number of football fans in the GMF Database. What I understood Mr Thain eventually to be saying was that Clarke Willmott's letter ought to have said that the total figure in the October 07 spreadsheet was 212,788, that this formed part of the GMF Old Data which totalled around 250,000 football fans, and that when the GMF Old Data was added to Legends data for another 300,000 fans the total was in the region of 550,000 before allowing for additional fans opting-in during the 2007/2008 season.
In support of this explanation Mr Thain said in cross-examination that it was only in respect of the GMF Old Data that a question had been asked about whether the fan subscribed to Sky Sports. In re-examination he was asked further questions about this: I shall describe his answers in the next main section of this judgment.
The other piece of evidence concerning this period is the Sponsorship Proposal. It was sent by Mr Chalfin to Ms Watkins on 8 October 2007. As noted earlier, slide 31B referred to "over 500,000 registered users," slide 31F referred to "360k unique fans" voting in 2006/7, and slide 31M referred to a "1,000,000 opt-in email base – increasing by 20,000 per month." Mr Chalfin's witness statement gave an explanation of "registered users" in line with the description of the Official Website earlier in this judgment. As regards the numbers who had "opted in", Mr Chalfin confirmed in cross-examination that he had told Ms Watkins that "there were over 1 million people in the database and these individuals had opted in through a number of different channels."
J5. Data in the first weeks of the Sponsorship Agreement
On 4 February 2008 the Sponsorship Agreement was made. Thereafter in February and March 2008 there were initial campaigns of emails about PlayUp's games sent by GMF to programme recipients. There were also test campaigns of SMS messages which, exceptionally, were sent by PlayUp to a small quantity of numbers supplied by GMF for test purposes. The evidence of PlayUp's witnesses was that the results of both were disappointing and that it was decided not to incur the costs of further SMS campaigns until some improvement was made in the response to the email campaigns.
As to the numbers of data subjects, GMF's evidence dealt with two different categories. The first concerned the numbers of data subjects when the GMF Database was merged with the SNM/IPT data. The second concerned the numbers on the GMF Database alone.
The position for the first category was that there were checks on the total number of data subjects obtained when the GMF Database was merged with the SNM/IPT data. Mr Thain's statement explained that there was an automatic daily count to ensure that this number never fell below 1m. In cross-examination Mr Thain added that there was a drop down, and that:
When you log into the system it tells you how many total fans you have got.
In relation to those totals Mr Thain's statement said that, at the start of the Sponsorship Agreement, they comprised about 1.3 to 1.5 million people. Of that number, about 1.1 million were football fans i.e. about 75 to 85% of the total. However, because the content was regularly updated, the number of individuals contained within the total increased or fluctuated at any given time.
When describing the second category Mr Thain said that the first thing he did on joining SNM – or indeed before joining – was to ask Mr Chalfin, "How many data subjects are in the GMF Database?" Mr Chalfin had told him that there were half a million. Mr Thain added that he checked the figure by running a count himself – it was the first thing he had checked, because he understood the value and power of the PFA brand. Later in his cross-examination he maintained that the GMF Database contained 450,000 to 500,000 people, saying:
I base that on knowing when I joined the company. It is a very important number for me to know. I also base it on daily workings with the data. It was a common -- very common number that we all knew internally. It is something we all worked off. And running -- it was our kind of day-to-day number. We all knew this and it was the first thing I checked when I joined Sports New Media.
Mr Chalfin consistently maintained in his oral evidence what he had said in his witness statement:
GMF's database contained approximately 450,000 to 500,000 football fans at the outset of the Agreement.
J6. Merged data and the Email Bureau software
Mr Thain's statement said that GMF owned the GMF database. He then added that GMF controlled "GMF's and SNM's databases", which he said were in practice treated as the same database. The data was uploaded into a software package that allowed GMF to manage the data and to select the recipients for the email programmes. He explained that neither SNM nor GMF had proprietary software to send an email campaign. GMF initially used a software package from a subsidiary of IPT called Email Bureau.
A decision, however, was taken to move to a different software package provided by a firm known as eCircle. Arrangements for the transition began in March 2008, and from July 2008 onwards GMF used the eCircle software package and ceased using the Email Bureau software package.
When Mr Thain was asked about absence of records during the initial period he replied that Email Bureau no longer existed and the servers that held the data had been wiped and sold. Mr Chalfin said that data had been moved physically "so there is no track." He added that he did not believe that eCircle could provide the information.
J7. Use of data: reports prepared using Email Bureau software
Some records from the initial period were available. Reports were prepared setting out information about emails that had been broadcast and SMS messages that had been sent. One such document gave a "Campaign Report" from early February to early April 2008. It showed, in relation to a "Broadcast ID" described as "SPORTS NEW MEDIA", the numbers of emails sent on particular dates. For each such date a figure was given for "volume delivered" and a consequent delivery rate. The number of opened emails was then set out, and an "Open Rate" was derived by expressing that number as a percentage of the volume delivered. The number of "Unique Clicks" was then set out, and what was described as a "CTR" was derived by expressing the number of Unique Clicks as a percentage of the number of opened emails.
These figures showed that during the period from 14 March 2008 to 4 April 2008, by contrast with the period from 6 February 2008 to 7 March 2008, there had been an improvement in the delivery rate from 84% to 91%, the Open Rate had remained much the same at 6%, and the CTR had improved from 6% to 16%. It also showed that the largest volume broadcast on any one day had been 1,096,250 emails on 28 March 2008, of which 996,524 had been delivered, a delivery rate of 91%. Of these 65,458 had been opened, an Open Rate of 7%. Following on from that the report showed that 14,896 of the opened emails had given rise to Unique Clicks, a CTR of 23%.
Further campaign reports were produced during the initial period. One such report showed that between 11 April and 2 May 2008 emails were sent to 876,915 recipients. Another showed that between 6 and 27 June 2008 emails were sent to 1,191,139 recipients.
J8. Data starts being imported into the eCircle system
In March 2008 GMF began putting arrangements in hand to utilise eCircle's software package. For this purpose it was necessary for GMF to ensure that the data it wished to use was imported into the eCircle system. Once that had happened, GMF would be able to utilise eCircle's software to deliver PlayUp's campaigns. It would also be able, ordinarily, to import additional data, or changes to data previously uploaded. The mechanics of delivering an email campaign using eCircle were described by Mr Thain in oral evidence as follows:
You logged into a website … called EC Messenger. [When logged in, first] I would select the IPT data. I would set the criteria. So in this case "Interested in football".
MR JUSTICE WALKER: So you get a screen which offers you the opportunity to select one or more databases?
A. You start with the database you know you want to see. So I knew I wanted to start with IPT database. We would start with that database because it would take longer to do a count.
… So in this case I am selecting to have the member status of that group. So the data subject status must be "active". … "inactive" is someone who has potentially unsubscribed.
… I do the IPT count and then I do the same [for] the Givemefootball … We then wait until they have finished their counts and you then create a message. … I then put the date and time I would like it to go out. I put in the subject line. In this case you might have one, two or three different subject lines. If I have three subject lines, I specify that I want to have 10,000 email addresses for each three subject lines, and then depending on the best open rate, the system will automatically trigger and send the remaining 95 per cent of data to the best performing subject line.
… You then tell the system which data pool to use. So you say: I want it to use the IPT data and the Givemefootball data. Then you hit send and it will put the two data sets together in the system. If there are any duplicate addresses at that point, for some reason the system would tell you … Then you get a report of how many [were sent].
MR JUSTICE WALKER: Does the report differentiate between those that came from IPT data and those that came from -
A. No, just the same total.
The initial importation of data in March 2008 was not straightforward. On 5 March 2008 Nick Thain emailed eCircle asking about the format to be used when sending "the data over to you", adding:
The files is about 250,000 records…
On 7 March 2008 Ben Blackham, a data processor who had first been employed by GMF some years previously, emailed Mr Chalfin and Mr Thain. His email stated, with a correction sent on 18 March 2008 shown in square brackets:
The data is in the FTP site now. Called: gmfcompletesubscribed_20080307.csv ( records)
Mr Blackham noted that those using the data should be aware that there were two age indication systems. He had started working on the data in November 2005, by which time a date of birth system was in use. This allowed easy selection of people based on age. Age was important for PlayUp's campaigns, as communications about gambling could not be sent to those under 18. Where data did not include date of birth a less accurate "age" column could be used, but this involved age ranges which were constantly drifting out of date. When making use of the "age" column Mr Blackham used a tolerance of +3 to +6 years, and a larger margin of error when dealing with sensitive age selections such as gambling campaigns.
On 19 March 2008 Mr Blackham emailed Ms Medricky advising that "there are actually 254,960 records in the file that eCircle have." It is apparent from the email that at this stage only 30,000 of these records were being used, and Mr Blackham recommending using only the newer records which included a date of birth.
In cross-examination Mr Thain said that the records Mr Blackham was dealing with in March 2008 were the GMF Old Data – whereas (as noted above) he had earlier said that the Legends data and the GMF Old Data were merged in November 2007. This led to further questions and answers:
Q. Why, on 19th March 2008, is only what you are now calling the old GMF database being uploaded by eCircle?
A. I didn't understand the question.
Q. These two databases, the old and new, they were merged you say in November  and yet here we have just the old being uploaded by eCircle. Why just the old one and not the new one as well?
A. The old one comes from Ben. You want to make sure you have got all the records. It is quite common for a junior data processer, that Ben Blackham was, and Lizzy Medricky -- you can see here they are making typos. You just want to double check. You want to double check you've got all your records, so you go back to, in this case, Ben Blackham was the original source and you are just double checking yourself. You asking Ben to upload the records. Also it is to do with the processing power of the machines you have got. Ben had a more powerful machine, my Lord, than Lizzy. So it is quicker in some cases. There are a number of reasons why you might ...
Q. Did Ben Blackham have what we are now calling the new GMF data?
A. No, Ben was only responsible for the old Givemefootball data.
A. Ben was an employee of Givemefootball historically. I do not know the date when he left Givemefootball. That was his responsibility. He was based in Leamington Spa as well. Ben's responsibility was the old Givemefootball database.
Q. You told his Lordship earlier that they had been merged once before this?
A. Jae was working from London at this time. So it was kind of end of 2007 really they merged. Jae was working from London, Ben was in Leamington Spa. So it was important for Jae to have the merged data because he was the one who would need to know the total numbers of Givemefootball.
Q. Pausing there, Mr Thain. Mr Chalfin has said that he really can't help with the databases, he is not that technical; he doesn't have the knowledge.
Q. Why would he be the one who has the merged database but Mr Blackham, who I think is in control of the more technical side of things, he only has the old database?
A. Good question. The difference there is Jae needs to know the total number, so that is why he needs to know the merged. Ben is dealing with just the old Givemefootball database and if Jae needed a specific in-depth count of the data, then he would have to transfer the Givemefootball PFA Legends data to Ben Blackham, if that was what he wanted to do. Jae was concerned with the total numbers. He was essentially in this case the sales side of Sports New Media.
Q. And Ben Blackham was responsible for sending out the messages?
A. No, Ben was kind of -- it is better to ask Jae this, not me -- but Ben was there to do ad hoc requests with data, he was a technical --
Q. Who was at this stage responsible for sending out the messages --
A. Actually sending out the messages, it was me. Ben and Lizzy are junior employees, my Lord. The buck stops with me on sending out messages.
Q. Before eCircle became involved in March 2008, there was an entity, I think it was Email Bureau, who sent out the messages; yes?
Q. Then you changed to eCircle?
Q. Am I right in thinking therefore that Email Bureau would have had a merged database of both the new and old GMF databases?
A. Absolutely, Email Bureau did have a merged database.
Q. So when you changed provider to eCircle, presumably, that data would have been uploaded in one go by eCircle?
A. It depends on your requirement at the time. I can't say categorically "yes". [trans 4/82/7 to 4/85/9]
Mr Thain's re-examination on this topic was as follows:
Q. Mr Thain, you had already explained that back in late 2007 the old GMF data and the PFA Legends data had been merged, and the question which arises, therefore, is why, several months after that merger, was Ben Blackham, in March 2008, dealing with a database of the old GMF data. What is the answer to that?
A. The answer to that is -- Ben only dealt with the old Givemefootball database, and when you are going from -- we wanted to make sure we had the maximum possible records, so making sure we went back to the original source with Ben, and then getting Ben to transfer all the old Givemefootball records over to a newer system that we were testing and wanting to ...
Q. Was Ben also dealing with the PFA Legends data?
Mr Chalfin said nothing in his witness statement and oral evidence about Mr Blackham being only involved in handling the GMF Old Data. Under cross-examination he initially agreed that the documentary evidence indicated that the complete GMF database contained 254,960 records at this time, but then maintained that on the "active" GMF database there were 450,000 to 500,000 records.
J9. Ms Medricky's figures of 21 April 2008
On 21 April 2008 Ms Medricky sent Mr Thain an email stating
See attached. Below is the total number of supporters in the database for each league.
Premiership - 169076;
Championship - 32099;
League 1 - 23874;
League 2 - 9306;
Anything else - 8359
The total of the figures given by Ms Medricky in the email of 21 April 2008 was 242,714. In a letter dated 26 April 2010 Clarke Willmott asserted that this email was describing "a proportion of the data contained within GMF's database". A more detailed explanation was given by Clarke Willmott in a letter dated 29 October 2010:
The email in question concerns a count of the GMF database. However, the count was not undertaken of the entire GMF database. To confirm, it was not a complete count of all of the football fans in the database and only part of that database was counted.
When voting and registering for their favourite player, a football fan may confirm that he/she is a football fan but may decide not to answer any further questions. For example, the football fan may not indicate whether they are a fan of a particular football team and whether that is in the Premiership, Championship, and so on. Such individuals would not have been included in the count undertaken by Ms Medricky.
PlayUp accepted that the email would not include numbers of data subjects who failed to give information as to the team they supported. Those numbers, said PlayUp, are inherently likely to be small. This point was put to Mr Chalfin, who replied that he could not comment because he did not know what the email was referring to.
Mr Thain was cross-examined about the email:
Q. I suggest to you that that records the total number of supporters in the database for each league, and by database I mean GMF database, new and old; is that right?
A. This is not related to PlayUp, this particular conversation between myself and Lizzy. This is actually showing the Givemefootball actives as well. So it is showing the active number of football fans within the Givemefootball database that have what -- opened or clicked an email within a given period. It is not showing the total number of data subjects broken down by club in the Givemefootball database.
Q. Let's look at what it says. It says: "Below is the total number of supporters in the database for each league." Is that not an accurate description of what it is?
A. For the combined Givemefootball database. So, when I am giving Lizzy an instruction, I am asking her for -- I would not ask for a League 1 and League 2 count for PlayUp. It has nothing to do -- League 1 and League 2, even though PlayUp told us they were going to have a game for other leagues, you know, they -- PlayUp were only ever worried about Liverpool, Manchester United, Tottenham Spurs and Chelsea, the top, kind of, five teams. Here I am asking for Championship, League 1, League 2 and anything else. It was a count I asked Lizzy for. Specifically for Givemefootball, for another purpose, and looking at what we call the active user base. So these are the fans that have opened or clicked within a given period, normally three months is the parameter that I would give to what I class as an active user. [trans 4/106/19 to 4/107/25]
In re-examination Mr Thain said that a newsletter was sent to active fans weekly, and to inactive fans once a month.
J10. May to August 2008
On 9 May 2008 Ms Watkins resigned and her employment at PlayUp came to an end.
On 30 July 2008 Ms Medricky emailed eCircle:
We have a new database (of 1 million) that needs to be imported into the eCircle system. James, I've found out I'm unable to import this data myself since it's such a large amount. This data will have different fields to the Givemefootball database (different sports that people are interested in, 'rugby', 'football' 'cricket' etc). Can you please include this and all other relevant data when mentioned yesterday, emails sent from this group are to come from Givemefootball (firstname.lastname@example.org).
Please let me know if you've got any problems with this – we need it imported into the system today.
James Maxwell of eCircle replied on the same day:
I am a concerned of where you got 1 million email addresses from all of a sudden. I have spoken to my line manager and he is a very concerned over the quality of the email address due to your system being on ecircle IP range. Therefore if the quality of the addresses are poor it will effect many clients deliverability and not just Givemefootball domain. If you can provide me with some background of the email addresses that would be great?
An email exchange between James Maxwell and Mr Thain on 31 July 2008 confirmed that the relevant electronic file had reached eCircle and would be imported by eCircle shortly. It is common ground that this file comprised the then current SNM/IPT Data, which by this time amounted to slightly over a million records.
In August 2008 the launch occurred of PlayUp's "Givemefootball 2008/9 Kick-off Campaign." In order to send SMS messages as part of this campaign, PlayUp asked that GMF provide it with telephone numbers which PlayUp could send SMS messages to. GMF refused to do this.
J11. Counts of data subjects in October and November 2008
As at 8 October 2008, according to a letter sent by Clarke Willmott on 23 September 2010, an extract from "the eCircle database" showed a count of the SNM/IPT Data indicating a total of 648,878 with the description "Interested in Football".
Mr Thain said in cross-examination that this count could only have come from the IPT/SNM Data, because the count was made from a 'Group' entitled 'email@example.com', and the only data within that group was the IPT data. His witness statement said that the total for a similar count in September 2007 had been 680,000. As to the reason why it had reduced to 648,878 in October 2008, he said:
It could be twofold. So, yes, it has gone down. There can be two -- either unsubscribes, that comes from IPT, so as part of the agreement we have to take those off. Also, it is how Sports New Media classify an active user. We have more stringent policies when it comes to sending email data than other data companies.
Mr Thain said in his statement that between 29 October and 7 November 2008 emails were sent to 1,231,010 recipients. This was supported by a campaign report. On campaign reports generally Mr Thain said in cross-examination:
Consistently throughout the term of the agreement, myself and Jae always wanted to overdeliver. The e-mail reports that we send through regularly to Pip at PlayUp detailed that we were regularly sending more than a million. [4/169/6-10]
In answer to questions from me Mr Thain said that he would then perform a count of the "active" users on the GMF database, create messages, trial them, and have the best performing message sent to both the 648,878 SNM/IPT data subjects interested in football and the GMF "active" users. On the footing that the GMF database held 500,000 data subjects in February 2008, and had increased since then at the rate of 20,000 per month, Mr Thain claimed that in October 2008 the GMF database comprised 660,000 – and at least "well over 600,000". Then on his analysis when merging these two sets of data there would be at most 1.31m recipients.
Mr Thain was cross-examined about one such report which recorded that between 17 October 2008 and 7 November 2008 "Generic" emails numbering 1,320,023 and "Team-Specific" emails numbering 267,492 had been sent, a total of 1,587,515 emails. It was put to him that the total figure must have included people who had received the same message twice. He denied this, observing that his statement said that at the start of the Sponsorship Agreement the total in the merged database was 1.3 to 1.5 million people, and that number was increasing and fluctuating over time:
MR CULLEN: At page 768, the big number one sees at the bottom, 1,587,000, is that likely to include people who received messages twice?
Q. How can you say that?
A. I think it is in my witness statement that I say it is about 1.5 million total email addresses. It is something we are conscious of.
Q. You are sending to football fans, Mr Thain, is that right?
Q. These figures come from October to November 2008, yes?
A. They do.
Q. We have looked at the people interested in football figure, 648,000 odd. Let's adopt, for the sake of argument, your 600,000 figure for the GMF database. Add those together and you get about 1.2 million, don't you?
Q. So here we see messages sent to 1.5 million.
A. I didn't put this report together, this would have been Lizzy. So I would need to see the specific breakdown of this. I can't --
Q. Why can't you --
A. -- say to you categorically yes or no.
Q. Why can't you just accept from me that the likelihood is that this includes people who have received the same message twice?
A. No, I don't accept that. You would need to look at the detail of it and you would need to go through it.
As to the position in November 2008, additional eCircle screen shots dated 25 November 2008 were provided during disclosure. They showed a "Group" described as "Sports New Media Database." On the top line of a window next to the words "Per Group" this name appeared, accompanied by "| sportsnewmediadb | (1508880)". Mr Thain said that the figure of 1,508,880 represented the "approximately 1.5 million data subjects that, at that time, I considered a good user. He acknowledged that on the second line there appeared "Sporting Interests | sporting_interests | (1350843)." It could not, however, be assumed that this lower figure comprised all those with sporting interests, it would depend on the rules created to arrive at this figure.
A little lower down in this window there appeared "Givemefootball | confirm | (166932)". As to this, Mr Thain in cross-examination referred to a page on the Official Website where fans were asked to verify their email address. He continued:
What we are doing there is essentially - it is called a double opt in. So the fan opts in to Givemefootball specifically, so the user then gets to the fourth step, … where the website is asking the user to verify their email address. That is illustrated in that we have 166,932 people, from the beginning of 2008 onwards, that have hit that page, gone to their hotmail or gmail account as instructed on that page, and clicked on a link from Givemefootball. And the term is "double opt in". The reason we do double opt in is double opt in -- or started doing it -- it is not a necessity, it is for the US audience.
J12. SMS messages in October and November 2008
Meanwhile on 18 October 2008 GMF sent SMS messages to twenty thousand numbers. Of these, 11,074 were delivered, a delivery rate of approximately 55%. Following this Mr Butler emailed Mr Chalfin on 31 October 2008:
I would like to clarify again that we require you to deliver 250,000 messages to the mobiles of 250,000 opted-in recipients. To be clear about this, the contract requires that 250,000 Givemefootball fans should receive this SMS. In the last SMS push, with 20,000 numbers, only 55% of the messages were delivered to a recipient.
Mr Butler added:
If you cannot be sure that all of the SMS numbers that you use will be valid then you need to offer us an alternative that we can consider (see clause 3.3 of our agreement). Based on present information, it may be that you need to supply some 455,000 SMS numbers to us, such that 55%=250,000 receive the SMS but we'd need reassurance from you that this would work. We will also consider any other alternative that you may wish to propose that is acceptable to us. By the same token we require 1 million email recipients to receive the newsletter being delivered this week.
Mr Chalfin replied on the same day:
I am sending a file over to Dialogue as agreed of over 250,000 records (exactly 259,509). We will be sending the 1 million this week as discussed and have already sent 350,000 this month with one week left to go for our monthly broadcasting cycle. It would be impossible for anyone to guarantee 100% delivery on any campaign especially mobile. However we are always willing to discuss how we can make the sponsorship work more effectively whether it is on the contract or not.
In cross-examination Mr Chalfin said that the SMS numbers then available comprised the figure of 259,509 noted in this email plus the 20,000 sent earlier that month, i.e. 279,509 in total.
A first attempt at sending an SMS programme to 250,000 recipients was made on 1 November 2008. One batch of 65,000 failed. A total of 192,407 messages were sent, of which 124,642 were delivered. The batch of 65,000 was eventually sent on 5 November 2008. The overall result was that 166,828 (out of 257,345) messages were delivered. Mr Butler noted that this exercise resulted in 1,396 "stop all" responses from recipients.
On 6 November 2008 Mr Chalfin emailed PlayUp:
When do you want to do another mobile campaign? As we will need to supply Dialogue more data to cover the numbers that are deemed inactive.
Mr Butler responded on 10 November 2008:
The results of the campaign are in: the message was delivered to only 166828 recipients – a material shortfall from the required 250000 recipients. Please respond with a proposal for an alternative as per our request below dated 31 October 2008. To be clear this is in accordance with clause 3.3 of our agreement and we reserve our right to consider the proposed alternative.
On 11 November 2008 Mr Chalfin and Mr Thain met Mr Butler and Mr Mordt to discuss the results of the SMS campaign. Mr Chalfin agreed to send additional mobile data to Dialogue in order, as he said in his witness statement, "to get the relationship back on track". Later that day he emailed Mr Butler:
As agreed we will send additional mobile data to Dialogue over and above the numbers that were unable to be delivered in the last SMS campaign. Please respond letting us know that this will satisfy your concerns in accordance with clause 3.3.
Mr Chalfin's evidence about this was that on 10 November he had sought from IPT and was supplied with 118,563 more data subjects for whom the data included mobile phone numbers, and that they were all football fans.
Within PlayUp doubts arose as to how Mr Chalfin "can just get hold of the 1000s of numbers to make up the shortfall." There was concern that he was simply buying them in, in which event they did not qualify as GMF opted in – and the same concern arose as regards the original 250,000. These concerns were reinforced by evidence suggesting "many of the recipients from the recent campaign who opted out did so because they don't like football". This led to an email from Mr Butler to Mr Chalfin on 13 November 2008 :
… you need to deliver mobile numbers to Dialogue this week that will make up the shortfall below 250000. Please confirm also that these numbers are fully opted in to receiving direct marketing from the Sponsor. Dialogue will select a number of the mobiles and request the Opt-in logs after a number of complaints were received from the last send.
Mr Chalfin replied at 1229 GMT that day:
I will be sending the data over to Dialogue today. The data is all opted-in and therefore happy for Dialogue to ask for any information they need.
Mr Butler sent a follow-up email to Mr Chalfin at 1245 GMT on 13 November 2008:
please clarify opted in; have the owners of these numbers opted in on GMF's site to receive our marketing, or did the owners opt in via other channels to receive third party marketing?
An email was sent by Mr Chalfin on 14 November 2008 in response:
All data has been opted-in to us to receive third party marketing. To clarify the data is not specifically opted-in to Play2Up, you are in this case a third party. Users can opt-in to us by a number of channels and partners such as Sky Sports, AOL, Premier League club websites etc.
On 18 November 2008 Mr Butler emailed Mr Chalfin:
Could you just confirm if the opt-in via Sky Sports etc is used for all forms of communications, e.g., mobile and email, and what do users do to opt-in?
Mr Chalfin had to be chased for a reply. When he did reply on 20 November 2008 at 1031 GMT, this is what he said before turning to other topics:
I can confirm that are opt-in is for all forms of communication e.g. mobile and email.
Mr Butler responded at 1100 GMT the same day:
Sorry my question was relating to where and how the people opted in for the original set of numbers and for the emails; were these also via Sky and AOL and how do those sites relate back to Givemefootball?
When Mr Chalfin replied on 21 November 2008 at 1012 GMT, this is what he said before turning to another topic:
I am a little confused by your line of questioning? If you can be more specific and let me know exactly what you are trying to find out?
In the meantime can I refer you to clause 5 in Schedule 1 "licence of database rights".
Mr Butler took the matter up with Mr Thain, emailing him on 24 November 2008:
We are awaiting information from you regarding the mobile data. I've sent an email to Jae to ask where and exactly how recipients are opting in to receive marketing from us. Could you please send this information through?
On 25 November 2008 Mr Thain replied:
I believe that Jae has answered your questions several times? Jae has asked for more detail from you. Please can you give this then I'm sure Jae will be able to answer any questions you have.
Mr Thain and Mr Butler spoke by telephone on 26 November 2008, following which Mr Thain emailed Mr Butler:
Hopefully this will clear up the points we discussed on the phone. Here's a small selection of the articles that link back to the PFA 2Up Fans Award
In his witness statement Mr Thain said that this selection was sent to show Mr Butler the type of media exposure that the Fans' Awards generated on other websites and on GMF's partner channels.
Mr Butler responded on 27 November 2008:
Thanks for the information below – I notice that the links on these sites all lead to the GMF awards website. Could you please confirm that all of the mobile numbers that you have came through the GMF awards website? Is this also the case for email addresses?
GMF did not answer these questions. Mr Thain said in his witness statement that this was because he was taken ill and was out of the office.
J13. Post-termination evidence of data subjects' attributes
On 28 November 2008 PlayUp gave notice terminating the Sponsorship Agreement "pursuant to clause 7.1.1". Thereafter correspondence took place between Wiggin and Clarke Willmott. It is convenient to refer to features of the correspondence at particular stages.
J13.1: December 2008
On 19 December 2008 Clarke Willmott reiterated the gist of what had been said by Mr Chalfin on 14 November 2008. This was that the offer to send a further 118,563 SMS messages comprised registrants who had opted in by a number of channels and partners such as Sky Sports, AOL, and Premier League websites.
On 23 December 2008 Wiggin asked about the source of the initial and subsequent numbers used during the previous November for SMS messages. The reply from Clarke Willmott on 24 December 2008 was that the first batch of SMS numbers the previous November consisted of "opted in registrants to the GMF website and from data licensed-in from IPT." The second batch consisted of "opted-in data licensed-in from IPT."
J13.2: February to June 2009
On 11 February 2009 Clarke Willmott sent the letter quoted above, adding in response to requests about the mobile phone numbers that they had been collected from the GMF website.
However on 11 March 2009 Clarke Willmott wrote correcting what had been said about mobile phone numbers: 30% of SMS numbers were collected from the givemefootball website and 70% from IPT websites (95% of which came via myoffers.co.uk). Then on 9 June 2009 Clarke Willmott advised (as mentioned earlier) that the mobile data breakdown was 39,450 GMF and 217,895 IPT. They did not say, but it can readily be calculated, that the breakdown given on 9 June 2009 involves a 15% share coming from GMF and the remaining 85% coming from the SNM/IPT Data.
Whenever asked about the figure of 251,582 given for GMF Data in the letter of 11 February 2009 GMF's witnesses refused to accept it as correct. Thus Mr Chalfin said in cross-examination, when shown the letter of 11 February 2009:
From what point in time is it relating to? That, to me, looks wrong because our database -- the complete GMF database was not that low at any time with dealing with PlayUp.[ 3/100/3-6]
Mr Thain said in cross-examination that there were two mistakes in the relevant passage from the letter of 11 February 2009. He described the first mistake in the following exchange:
Q. And the GMF data then was 251,582; is that right?
A. Minus -- again, this is a mistake. I should have included -- I didn't include it and I do not know why -- PFA Legends data, my Lord. [4/109/7-10]
The second mistake Mr Thain described was that, contrary to the impression given in the letter, the data licensed from IPT did not include the PFA legends data:
MR CULLEN: What you are in fact saying is that the PFA Legends campaign data is within the 1 million-odd figure licensed in from IPT; isn't that right?
MR CULLEN: That is what it says.
MR JUSTICE WALKER: When you look at the sentence --
A. I can absolutely see by looking at the sentence --
MR JUSTICE WALKER: That is what it appears to say.
A. It is a mistake.
MR CULLEN: That is the way it was being treated when this letter was written; that is right, isn't it?
A. No, it is a mistake.
Q. The truth is that the PFA Legends data was treated as within the data that was licensed from IPT; that is the truth, isn't it?
A. No, my Lord, it was not treated as that at all.
J13.3: April and May 2010
On 26 April 2010 Clarke Willmott advised that the GMF database contained approximately 450,000 fans at the outset of the agreement but this increased thereafter. SNM had licensed IPT's entire sports interest and football supporters file. The licensed data included 896,696 recipients, approximately 680,000 of those were football fans. Therefore, they explained, the total number of recipients in the database was about 1.3 to 1.5 million, of which approximately 1.1 million were football fans.
On 28 May 2011 witness statements were signed. I have already mentioned that those for GMF asserted that the GMF Data comprised approximately 450,000 to 500,000 football fans at the outset of the Sponsorship Agreement, and that Mr Chalfin said that this increased thereafter because more fans were voting for the Awards. In addition Mr Thain said that as at the date of his statement "the number of people who are interested in sport and football now stands at over 1.5 million."
J13.4: September and October 2010
On 23 September 2010 Clarke Willmott advised that:
1) Mr Thain knew that 75% of IPT's entire sports interest and football supporters files were football fans at the outset of the agreement because he had working knowledge of the database at that time.
2) There were 425,576 fans in the GMF database in October 2007 – as noted above, this assertion was based on the October 07 spreadsheet.
3) The SNM/IPT Database included 648,878 individuals interested in football in October 2008.
4) The total number of football fans in October 2008 in the composite database would have exceeded 1,074,454.
On 29 October 2010 Clarke Willmott wrote the letter mentioned above concerning Ms Medricky's email of 21 April 2008. The letter also set out information about the My Offers website, and disclosed various documents concerning the Legends campaign.
K: Attributes of data subjects: analysis
K1. Honesty and reliability of Mr Chalfin and Mr Thain
Each of Mr Chalfin and Mr Thain makes an assertion that at 4 February 2008 and thereafter GMF had records of at least 450,000 data subjects whose data had not been bought from IPT but had been provided as part of the Awards process or during the Legends campaign. No contemporaneous document supports this assertion. It is contested by PlayUp, which says that neither Mr Chalfin nor Mr Thain is an honest witness. I examine below the two principal matters that PlayUp relies upon. For convenience I explain my conclusions as the discussion proceeds; in reaching those conclusions I have taken account of general points made by GMF, as I explain below.
K1.1 Conduct of Mr Chalfin and Mr Thain in November 2008
On 13 November 2008 Mr Butler was told by Mr Chalfin that the data he was sending to Dialogue was "all opted in." This led Mr Butler to raise a specific query: "… have the owners of these numbers opted in on GMF's site to receive our marketing?" Mr Chalfin's response of 14 November 2008 said:
All data has been opted-in to us to receive third party marketing. To clarify the data is not specifically opted-in to Play2Up, you are in this case a third party. Users can opt-in to us by a number of channels and partners such as Sky Sports, AOL, Premier League club websites etc.
It is impossible for this to have been a truthful answer on the part of Mr Chalfin. Nor in his evidence was he able to justify it. He admitted that the first sentence quoted above was untrue. Moreover, he was fully aware that the new data came from IPT and had not been opted in on "Sky Sports, AOL, Premier League club websites etc". I acknowledge that in the email Mr Chalfin frankly explained that PlayUp was not specifically opted-in, and only benefited from the opt-in as a third party, but he nevertheless lied in saying that the data was opted-in "to us" in order to give consent to third party marketing. GMF in effect suggests that Mr Chalfin can hardly have been foolish enough as to be guilty of a deliberate lie in this regard. Here, however, the context is important. The crucial question was a follow-up question. The nub of the follow-up question was whether the new data subjects had opted in on GMF's site, and Mr Chalfin knew perfectly well that the true answer had to be, "No, they have not."
It is in my view plain that Mr Chalfin thought that the true answer would lead to an adverse reaction by PlayUp. At various times GMF claimed that Ms Watkins had been told that opt-ins came through different channels. In that regard there can be no doubt that PlayUp had been told about the "partner websites" and how they linked to Award pages of the Official Website. Opt-ins coming from other channels would only be a cause for concern if the channel had nothing to do with the Awards. The conduct of GMF in November 2008 in my view makes it clear that GMF was well aware that PlayUp had not prior to November 2008 appreciated that there was any such cause for concern.
This was the motive for lying. It was indeed foolish, for the lie was bound to be found out. I do not accept that because telling such an untruth was so foolish it follows that Mr Chalfin cannot have done it deliberately. On the contrary, a deliberate attempt on his part to avoid an adverse reaction by PlayUp is in my view the most likely explanation for Mr Chalfin saying what he knew to be untrue.
The lie in the email of 14 November 2008 was not just a one-off response by Mr Chalfin. His final email of 20 November 2008 studiously avoided answering the question in Mr Butler's email of 18 November 2008. It was a further follow-up question, asking about where and how people opted in. Mr Chalfin claimed both in his email of 20 November 2008 and in his oral evidence to me that he was confused by Mr Butler's "line of questioning," but Mr Butler's question was perfectly clear. I have no doubt that on 20 November 2008 Mr Chalfin's response was again a deliberate lie seeking to avoid an adverse reaction by PlayUp, a lie which he maintained when giving evidence about it. The claim by Mr Chalfin that he was confused was both a contemporaneous lie and a lie on oath in evidence in these proceedings.
Mr Thain then became involved. His email of 25 November 2008 sought to justify Mr Chalfin's position. If he had read the previous emails he would have realised that Mr Chalfin's position could not be justified. Even assuming, however, that on 25 November 2008 Mr Thain had not grasped PlayUp's concerns, once he had spoken to Mr Butler on 26 November 2008 he was fully aware of them. He nevertheless emailed Mr Butler later that day expressing the hope that "a small selection of articles that link back to the PFA 2Up Fans Award" would "clear up the points we discussed …"
Mr Thain's witness statement had maintained that he had sent this selection "to show Bill Butler the type of media exposure that the Fans' Awards generated on other websites and on our partner channels." In cross-examination Mr Thain was compelled to accept that "one of the purposes" of sending Mr Butler the selection was to try to demonstrate to him that the selection showed how people arrived at the Givemefootball website to vote. Even then he tried to maintain that there was a second purpose "to show the type of brand exposure, the mark got -- the joint mark of the PFA 2UP". In the context of Mr Butler's questions the purpose advanced by Mr Thain in his witness statement was simply untrue, and his oral evidence about it being a "second purpose" was dishonest. When set in context it is plain that the only purpose of his email was to persuade Mr Butler that these types of links to GMF were the source of the data. It follows that the email was – as PlayUp rightly contended - a deliberate attempt to mislead Mr Butler away from the truth that the vast majority of data was bought from IPT and had nothing to do with these links.
I conclude in relation to both Mr Chalfin and Mr Thain that their conduct in November 2008 was deliberately dishonest. So was their written and oral evidence to the court about that conduct. Moreover it was foolishly dishonest, for the dishonesty was bound to be exposed.
K1.2 The October 07 spreadsheet
Clarke Willmott's letter of 23 September 2010 gave disclosure for the first time of the October 07 spreadsheet and said that it confirmed that there were 425,576 football fans in the GMF database as of October 2007. The letter was sent long after GMF's witness statements had been served. No application was made for service of supplementary witness statements. GMF's first witness, Mr Chalfin, was asked supplementary questions in examination-in-chief, but none of them concerned the October 07 spreadsheet. When Mr Cullen asked about it in cross-examination he suggested to Mr Chalfin that it was an important document "because, according to your side, it is the only document we have which shows the total numbers on the GMF database?" Mr Chalfin's answer was, "Correct." He then added a qualification, "Well, I believe so unless there are further documents."
The qualification is immaterial: what is clear is that Mr Chalfin was asked to agree, and did agree, that his side was saying that the October 07 spreadsheet showed the total numbers on the GMF database. If he had any reason to think that it did not, now was the time to say so. He did not say so. On the contrary, when the three numbers relied on by Clarke Willmott were pointed out to him, he agreed without demur that these were identified by GMF's solicitors as the numbers to be added up in order to get the numbers on the database. It was at this stage that he was taken through the step by step analysis described in the previous section of this judgment, and realised that far from assisting GMF's case, the document suggested that the total numbers of GMF Data in October 2007 were in the region of 213,000 – obviously incompatible with his suggestion that by February 2008 the total number was at least 450,000. He tried to explain the apparent incompatibility by saying that while the October 07 spreadsheet contained data about teams, there had been another database of fans that hadn't necessarily provided the team they supported. This suggested explanation made no sense. The spreadsheet was concerned with various different attributes, only one of which was the team supported – and as to that particular attribute showed unsurprisingly that a small number failed to identify a team that they supported. Mr Thain did not suggest that Mr Chalfin's explanation was correct, nor did GMF's closing submissions seek to do so.
Neither Mr Chalfin nor GMF has identified any grounds whatever on which Mr Chalfin could have believed that there was "a further database of fans that hadn't necessarily provided the team they supported." I conclude that he did not believe that there was any such database and that it was dishonestly invented by Mr Chalfin in an attempt to find a way out of a corner.
In relation to the October 07 spreadsheet Mr Chalfin acted foolishly in supposing that it had been right for GMF to say that it showed a total GMF database of 425,576 data subjects. He acted foolishly and dishonestly in his oral evidence when the error was demonstrated and he chose to advance an invented explanation.
I turn to Mr Thain's evidence about the October 07 spreadsheet. As noted in the previous section of this judgment, he said it was his mistake which led to Clarke Willmott giving the erroneous confirmation in their letter of 23 September 2010. When asked in cross-examination about when he realised that the confirmation was erroneous he made a false start – referring to the period before he wrote his witness statement. He was reminded that his witness statement had been signed in May. The cross-examination continued:
Q. So 23rd September this letter is written and this document is provided to us. I am just trying to understand when you realised that you made this error.
A. The answer is I do not know when I knew I made the error. I could not give you a specific date.
Q. Some weeks ago?
A. I wouldn't be able to give you any specific date.
Q. Before this trial started?
A. Absolutely before the trial started, yes.
Q. Why weren't we told?
A. I very much felt like I did tell you. I told Wiggin that we had a number of datas in Givemefootball subjects, the number of data in IPT, how that broke down. I felt like I explained it over and over and over again and nothing was good enough. So I very much did feel like I explained the numbers of data subjects, which database, whether it was the combined Givemefootball football database or the IPT database, how they were broken up. I very very much felt I did explain.
Q. This document is sent to us on 23rd September to persuade us that the GMF database had 425,000 odd subjects in October 2007; agreed?
A. It was a mistake that I made in the letter --
Q. And at some point before this trial started, you realised it did no such thing, yes?
Q. And you didn't tell my solicitors?
Q. Why not?
A. I felt like I answered their questions. I really did feel like I answered their questions. It was 450,000/500,000 is the Givemefootball database, the IPT database, we talked about this; it is a mistake.
Q. Mr Thain, the reality is that you were trying to deceive my clients into believing that your reference about the numbers in the database was correct, that is right isn't it?
A. Not at all. At no point was I trying to deceive anyone, my Lord. It is not true. [trans 4/103/11 to 4/105/19].
GMF's written closing submissions observed that Clarke Willmott had previously stated in their letter of 26 April 2010 that the GMF database contained approximately 450,000 football fans at the outset of the Sponsorship Agreement, and as the numbers in the October 07 spreadsheet appeared to add up to 425,576 it was easy to see how the mistake was made. I am prepared to accept that it was a genuine mistake on the part of GMF to have allowed their lawyers to say what was said in the letter of 23 September 2010 about the October 07 spreadsheet. If Messrs Chalfin and Thain had studied the October 07 spreadsheet in any detail before that letter was sent they would have realised that far from supporting their case it was apparently incompatible with it. My conclusion is that in September 2010 GMF was desperate to find anything which might support a figure of 450,000 for GMF Data at the start of the Sponsorship Agreement, and when the October 07 spreadsheet was identified GMF made the mistake of not stopping to study it in detail. Mr Chalfin and Mr Thain have behaved so foolishly in other respects that I am prepared to accept that they did indeed make such a mistake – a mistake which in Mr Chalfin's case only became apparent to him during the course of cross-examination.
In the oral evidence quoted above Mr Thain admitted that he became aware of the mistake prior to the trial. It follows from my conclusion above that he did not tell Mr Chalfin about it. When asked why PlayUp had not been told, his answer – "I very much felt like I did tell you" – was obvious and foolish nonsense. I conclude that it was a dishonest invention. Like Mr Chalfin he had found himself in a corner, and like Mr Chalfin his instinctive reaction was to resort to a foolish lie under oath. What was the explanation for the failure to tell PlayUp about the mistake? The overwhelming likelihood is that Mr Thain did not tell anyone about the mistake, but instead hoped that either the error would not be spotted or that if it were spotted he would be able to reconcile the October 07 spreadsheet with there being a figure of 450,000 data subjects in the GMF database in February 2008. This hope was another example of Mr Thain's foolishness.
K1.3 Conclusions as to the honesty of Mr Chalfin and Mr Thain
GMF's closing submissions sought to deflect PlayUp's criticisms of Messrs Chalfin and Thain. Two general points were made.
First, PlayUp's cross-examination focused on errors made by GMF in relation to GMF's disclosure and in inter-solicitor correspondence. GMF complained that PlayUp had not made any disclosure-related application to the court, waiting until trial to use some errors in disclosure and inconsistencies in solicitor's letters to put points which should have been raised, if at all, at an earlier stage in specific disclosure applications. It was not surprising, said GMF, that witnesses faltered when confronted with questions which they had clearly not been expecting.
I accept that Mr Chalfin was surprised by the questions he was asked about the October 07 spreadsheet. He ought not to have been. Had he given any thought to the inter-solicitor correspondence or to the spreadsheet itself he would have appreciated that it was a very important document. Mr Thain was not surprised in the least by questions on this topic – on the contrary, he had realised there was a mistake in what Clarke Willmott had said about the October 07 spreadsheet and was well aware that it would be a legitimate topic for questioning. Nor do I accept that either Mr Chalfin or Mr Thain had any reason to be surprised by other questions. GMF cannot complain about its own failings in disclosure and inaccuracies in letters it instructed its solicitors to write. For the reasons given above, Mr Chalfin and Mr Thain did not merely falter when asked the questions I have identified – they took the decision to lie on oath.
The second general point is that a long time was spent cross-examining Mr Chalfin, who was said to be the wrong witness to deal with details of the databases. It was asserted that by doing this PlayUp attempted to create an impression that GMF had no explanation to offer to the points that were being put, whereas in fact Mr Thain, giving evidence after Mr Chalfin, was able to answer all the questions put to him.
Although at times I wondered whether it was profitable, in my view it was legitimate for PlayUp to question Mr Chalfin about databases. Mr Thain only joined GMF in February 2008. As noted above, in re-examination Mr Chalfin was asked to identify who at GMF dealt chiefly with the content of the databases. His first response was to say that Ben Blackham "technically ran all the counts for me but I essentially was more focused on the database." The points put to Mr Chalfin were also put to Mr Thain, and there was nothing unfair about this procedure.
My conclusions are that PlayUp is right to impugn the honesty of Mr Chalfin and Mr Thain. For the reasons I have given above I am satisfied that in November 2008 they acted dishonestly in their dealings with PlayUp. At some stage between 23 September 2010 and the start of trial Mr Thain dishonestly decided not to reveal that Clarke Willmott's letter of 23 September 2010 was erroneous. Both Mr Chalfin and Mr Thain lied on oath to the court. All of this dishonesty occurred in an attempt to advance GMF's position in circumstances where it was obviously foolish to do so. These conclusions make it impossible for me to accept anything of a self-serving nature said by Mr Chalfin or Mr Thain in the absence of strong independent reasons for believing it to be true.
K2. Attributes of data subjects in October 2007
I have explained above why I cannot accept Mr Chalfin's suggestion that the October 07 spreadsheet omitted records on a separate database of those who had not identified a team they supported. I turn to Mr Thain's claim that the October 07 spreadsheet was derived exclusively from GMF Old Data, represented only part of that data, and ignored both around 300,000 data subjects from the Legends campaign and additional data subjects who had opted-in via the Award pages after the start of the 2007/8 season.
In support of the October 07 spreadsheet being derived exclusively from GMF Old Data Mr Thain pointed to a column in the October 07 spreadsheet which related to a question, "Are you a Sky Sports subscriber?" That question, he said, had only been asked on an old version of the GMF website prior to October 2007 and had not been asked in relation to the Legends campaign. In re-examination he clarified for me that the October 2007 spreadsheet showed that 123,892 people gave information in response to questions about Sky Sports, while 88,895 had not. He was then taken to a document reproducing a screen shot "in association with Sky Sports," and which he said was dated 29 September 2006. The document had a second page asking "Are you a Sky Sports subscriber?" However, even accepting that some of the 123,892 may have interacted with the screen shot of September 2006 or something similar prior to the Legends campaign, there is no documentary proof that all of them did so, nor is there any document at all to suggest that the 88,895 had done so. Mr Thain's re-examination does not provide such independent evidence as would enable me to accept Mr Thain's self-serving statement that the October 07 spreadsheet was derived exclusively from GMF Old Data, and represented only part of that data.
Nor is there any such independent evidence in October 2007 as would enable me to accept Mr Thain's self-serving statements that the October 07 spreadsheet ignored both around 300,000 data subjects from the Legends campaign and additional data subjects who had opted-in via the Award pages after the start of the 2007/8 season. I have no contemporaneous documentary evidence as to how the figures in the Sponsorship Proposal were derived and I do not consider that on its own it offers independent evidence of any value. On GMF's own case the reference to a 1m email base was a reference to a merged database which included the data licensed from IPT – the figure of 1m thus does not assist GMF to show that it had more than 212,788 records which had not been bought in. Other slides in the Sponsorship Proposal included slide 31B referring to "over 500,000 registered users," and slide 31F referring to "360k unique fans" voting in 2006/7. Mr Chalfin's witness statement explained that more people voted than registered, and more people registered than opted in. Thus the figures given, even if they were accurate, do not demonstrate that GMF must have had more than 212,788 records which had not been bought in.
In these circumstances I conclude that in October 2007 the GMF Data comprised at least 212,788 data subjects, which for convenience I round up to 213,000. There is no reason to doubt that through the IPT Licence GMF had access to at least 896,696 data subjects, which for convenience I round up to 897,000. The total of these two figures is 1.11m. I shall return below to the questions whether there was duplication and whether data gathered as part of the Legends campaign ("Legends data") or by opt-ins on the Award pages for the 2007/8 season ("2007/8 opt-ins") formed part of the total in the October 07 spreadsheet.
K3. The initial period of the Sponsorship Agreement
The reports prepared using Email Bureau software provide some documentary evidence about numbers of email programme recipients in the initial period of the Sponsorship Agreement. I do not think that totals over a period of weeks offer any great assistance: they could well have been sent to some recipients more than once during that period. The largest volume broadcast in a single day was just under 1.1m on 28 March 2008. This is consistent with the total volume of data subjects available to GMF being the 1.11m identified above for October 2007, but of course it would also be consistent with that total volume being greater. I conclude simply that it does not provide independent evidence to support the self-serving assertions by Messrs Chalfin and Mr Thain that the GMF Data in February 2008 comprised at least 450,000 records and that the automatic daily count merging the databases comprised at least 1.3m records. The similar assertions in Clarke Willmott's letter of 26 April 2010 are not supported by independent evidence, nor are they attributed to anyone. It is likely that they derived from information supplied by Mr Chalfin and Thain. They provide no basis for me to conclude that Clarke Willmott are correct when they say that GMF's database contained approximately 450,000 football fans at the outset of the Sponsorship Agreement, that approximately 680,000 of the data subjects of the SNM/IPT data were football fans, that the total number of recipients when GMF's database and the SMN/IPT data were taken together was about 1.3 – 1.6m, and that approximately 1.1m of these were football fans.
There are, however, in my view strong pointers elsewhere which satisfy me that the GMF Data, including the Legends data and the 2007/8 opt-ins, comprised no more than 255,000 data subjects by the end of February 2008. The first is that what Mr Blackham was importing into eCircle in March 2008 was a file of 254,960 records whose name spoke for itself – "gmfcompletesubscribed." PlayUp notes that some of these records had to be "deactivated", but I cannot say how many. Second, Ms Medricky on 21 April 2008 gave figures for "the total number of supporters in the database for each league" totalling 242,714. I agree with PlayUp that the numbers of data subjects who failed to give information as to the team they supported are inherently likely to be small. Third, Mr Thain accepted that the Legends data had been merged with the GMF Old Data no later than November 2007. Fourth, in the ordinary course the 2007/8 opt-ins would be added to the GMF database progressively as they opted in, and there is no logical reason to think that the 2007/8 opt-ins would be omitted from the file which Mr Blackham imported.
In the preceding main section of this judgment I have set out Mr Thain's answers when he was cross-examined about Mr Blackham's file of March 2008. There is no independent evidence for his assertion that Mr Blackham was dealing only with GMF Old Data. The reason advanced in re-examination for importing the GMF Old Data separately when the Legends data had already been merged with it was, "we wanted to make sure we had the maximum possible records, so making sure we went back to the original source with Ben, and then getting Ben to transfer all the old Givemefootball records over to a newer system that we were testing …". There is no hint of this in any of the contemporaneous emails.
As to Ms Medricky's email of 21 April 2008, the explanation given by Mr Thain in cross-examination was that he had asked her for a count of the "active user base." There is no hint of this in the contemporaneous documents. Nor was there any suggestion of it when Clarke Willmott in their letter of 29 October 2010 gave an entirely different explanation, referring only to those who did not indicate which team they supported.
Thus in both these cases Mr Thain's account is not supported by independent evidence. I am accordingly unable to accept that account.
I turn to Clarke Willmot's letter of 11 February 2009, giving a figure of 251,582 for GMF data. No explanation as to how this figure was computed was given in evidence before me or, with one exception, in the letter. The exception is that it appears from Clarke Willmott's letter of 11 February 2009 that Clarke Willmott thought that data gathered as part of the Legends campaign was not part of the GMF database but instead formed part of the data licensed by IPT. For that reason, I do not treat it as an unequivocal admission that only 251,582 records met criteria (1) and (2). As explained above, however, in the absence of this letter the evidence satisfies me that the GMF data, including the Legends data and the 2007/8 opt-ins, comprised no more than 255,000 data subjects by the end of February 2008. The letter offers no cogent evidence to the contrary. Mr Thain gave an account in oral evidence under which the letter, when two mistakes were corrected, would support GMF's case. There is no independent support for the alleged mistakes. I am accordingly unable to accept Mr Thain's account.
On the footing that by the end of February 2008 the GMF database comprised 255,000 data subjects, I return to the figures discussed earlier for October 2007. The October 07 spreadsheet shows that at that time there were at least 212,788 data subjects in the GMF database – which I round up to 212, 800. How is the difference of 42,200 made up? PlayUp suggested that this might be partially explained by the addition of the Legends data in November 2007. I consider this to be likely. Mr Thain's evidence that Legends data was not included in the GMF database until November 2007 is self serving. It is not supported by any independent evidence. The Legends campaign lasted just over two months in mid-2007 – "June, July and a little bit of August". Mr Chalfin's evidence in cross examination was that it caused the GMF database to increase by about 20,000 data subjects per month. The process of adding these data subjects to the GMF database, including the removal of duplications, would not have been lengthy. For commercial reasons it was desirable to complete it as early as possible in the 2007/8 football season. I conclude that it is likely to have been complete before October 2007. Thus 40,000 of the 42,200 can be contributed to the Legends data, leaving a balance of 2,200.
As to 2007/8 opt-ins, it seems to me inherently likely that the figure of 212, 788 included opt-ins at least up to the end of September 2008. On that footing, the balance of 2,200 represents an average of 440 net new opt-ins per month from October to February. In order to err on the side of caution I round this figure up to 500.
I deal below with the evidence about the SNM/IPT data and the extent to which this data comprised data subjects who opted in during the course of the Legends campaign, or who described themselves as football fans.
K4. May to August 2008
There is no independent evidence as to the size of the GMF database during the period May to August 2008. I am not able to say that it comprised substantially fewer than 255,000 data subjects. It is likely to have comprised more than this as a result of new opt-ins on the Award page of the Official Website either directly or from being sent there by "partner websites". I am not able to accept GMF's contention that this increase would have averaged 20,000 per month. As noted earlier, Mr Chalfin said that this figure applied to the Legends campaign – a campaign which was entirely different and much more high profile than the regular Awards. I proceed on the footing that, for the reasons given above, the likely net monthly increase was no more than an average of 500 per month.
As noted above, it is common ground that the file which by 31 July 2008 had reached eCircle comprised the then current SNM/IPT data, which by that time amounted to slightly over 1m records. Mr Thain claimed that in September 2007 the relevant files at IPT contained 680,000 football fans. This is not supported by independent evidence and I cannot accept it. I have no evidence enabling me to determine how many of the 1m odd records in July 2008 concerned data subjects who described themselves as football fans.
K5. September to November 2008
I accept that as at 8 October 2008 an eCircle count showed that the SNM/IPT data included 648,878 data subjects with the description "interested in football". If the total number of SNM/IPT data subjects was still just over 1m, it follows that those interested in football represented 65% of that data.
Mr Thain's assertion that by this time the GMF database numbered in excess of 600,000 data subjects is not supported by independent evidence and I cannot accept it. For the same reason I reject his assertion in cross examination that the figures did not include people who had received the same message twice.
I am not significantly assisted by the eCircle screenshots concerning the "sports new media database" at 25 November 2008. With one possible exception, there is no independent evidence as to the origin of the data giving rise to the figure 1,508,880. The possible exception is that 166,932 appear to have come from the GMF database and to represent those who had performed "a double opt-in". So far as the SNM/IPT data is concerned, I have no reason to think that in October and November 2008 it included significantly more than around 650,000 data subjects who had expressed an interest in football.
As to the GMF database, if the average net monthly increase continued at 500 per month, then by the end of November the total number of opted-in data subjects would have increased since the end of February by 4,500. Rounding this up to 5,000 I reach a total figure of 260,000 data subjects on the GMF database at the end of November 2008.
Can one simply add 260,000 from the GMF database to 650,000 from the SNM/IPT data and say that by the end of November 2008 there were available to GMF 910,000 data subjects who were interested in football? PlayUp says not, as the SNM/IPT figure might easily include data subjects who also appeared on the GMF database. I think it likely that it included approximately 40,000 from the Legends campaign. It is common ground that Legends data was shared between GMF and IPT, and it can therefore be expected that it was included in IPT's "entire sports interest file and football supporters file".
GMF's witnesses gave an account of a "de-duplication" exercise. It was not, however, an eradication exercise of the kind said by Mr Thain to have occurred when Legends data was merged with the GMF Old Data. Instead there was a process under which the GMF and SNM/IPT data continued to be held separately, with "de-duplication" achieved by a procedure carried out at the stage when the data from the two databases were combined in order to send out an email programme. Thus the exercise would not prevent duplicated items being present in the two databases prior to the email programme going out.
It may be that there was some coincidental duplication beyond the Legends data, but I cannot put any figure on it. I therefore proceed on the basis that at the end of November 2008 GMF had available to it a total of around 870,000 potential email recipients who were interested in football.
K6. Which data would meet the criteria?
At this point I return to criteria (1), (2) and (3). As regards the SNM/IPT data, plainly it did not meet either of criteria (1) or (2). Nor in my view did it meet criterion (3). GMF, for reasons given earlier, probably received the SNM/IPT data on the basis that it could be used by a sponsor. However the data subjects had only given consent to use by "MyOffers and its clients." SNM was a client, and I am prepared to accept that GMF can be brought within SNM for this purpose. Even so, the sponsor was a distinct entity with only a contractual link to GMF. It cannot in my view be described as a "client of MyOffers."
As regards GMF data other than Legends data, for reasons given earlier, it plainly met criteria (1) and (2). The opt-ins occurred on the official website – whether the data subject went there directly or was sent there by a "partner website". They gave a prior consent notification specifically to GMF, and they consented to receipt of direct marketing from a class which included PlayUp. Accordingly criterion (3) also was satisfied.
Turning to the Legends data, I consider that these data met criterion (1). Although the website for the Legends campaign was hosted by IPT, it fell within the definition of "official website" in Clause 1 of Sponsorship Agreement. First, it was "associated with the awards." Second, as the website was the subject of contractual arrangements between GMF and IPT, I think it reasonable to infer that it was "controlled" by GMF.
As to other criteria, however, the only material presented in evidence shows that those who opted-in during the Legends campaign notified MyOffers of their consent to receive marketing from "MyOffers and its clients". Mr Thain said that this, too, was a mistake. However GMF has disclosed no other record of the terms of the opt-in during the Legends campaign. Mr Thain's evidence was self serving, it is not supported by any independent evidence, and I cannot accept it. It follows that the Legends data did not meet either criterion (2) or criterion (3).
K7. SMS message recipients
As noted earlier, PlayUp relies on the admission in Clarke Willmott's letter of 9 June 2009 that "the mobile data breakdown" comprised "GMF mobile data – 39,450" while the remaining 217,895 SMS messages sent were attributable to "IPT mobile data", and that all of the additional 118,563 SMS messages offered concerned data coming "from third party sources (namely IPT)." In my view PlayUp is fully entitled to rely upon this as an admission that no more than 39,450 of the SMS messages sent in November 2008 were sent to data subjects who had opted-in through the Official Website. It is possible that some of these were gathered during the Legends campaign rather than as part of the awards. I cannot say how many data subjects may have fallen into that category.
Moreover, it is clear that for some of the potential SMS message recipients GMF did not send the SMS message to an actual mobile device. Again, however, I cannot say how many were in this category.
Mr Chalfin asserted that the 118,563 additional data subjects to whom it was proposed to send SMS messages were all football fans. This was a self serving assertion on his part. There is no independent evidence to support it, and I cannot accept it. On the footing that 65% of SNM/IPT data records concerned data subjects who said they were interested in football, I am prepared to hold that 141,632 out of the 217,895 actually sent using "IPT mobile data" were sent to data subjects who were football fans, this being 65% of that number. In the absence of any independent evidence as to the origin of the additional proposed 118,563 SMS messages, I am not prepared to make any finding as to the extent to which any of them were football fans.
L: Was PlayUp entitled to terminate?
L1. Clauses 3.3, 7 and 8
Provision was made in the Sponsorship Agreement as to alternative performance, termination and consequences of termination in clauses 3.3, 7 and 8:
3.3 Notwithstanding anything to the contrary set out herein, in the event that for whatever reason the Company is unable to deliver any of the Sponsorship Rights precisely as set out in Schedule 1 (including in the circumstances envisaged in Clause 5.1.9 [developments or changes to the Awards]). The Company shall offer to the Sponsor alternative rights as similar as possible to the Sponsorship Rights to an equivalent value (including publicity/exposure value to the Sponsor) without penalty, subject to the approval of the Sponsor of the alternative rights offered (such approval not to be unreasonably withheld or delayed). In the event that the alternative rights offered by the Company are not acceptable to the Sponsor (the Sponsor acting reasonably in this regard) then the right of termination under clause 7.2 may be exercised by the Sponsor.
7.1 Either party shall have the right at anytime to terminate this Agreement immediately by giving written notice to the other in the event that:
7.1.1 the other party has committed a material breach of any obligation under this Agreement which breach is incapable of remedy; or
7.1.2 the other party has committed a material breach of any of its obligations under this Agreement and has not remedied such material breach (if the same is capable of remedy) within 14 days of being required by written notice so to do; or
7.1.3 the other party goes into liquidation whether compulsory or voluntary or is declared insolvent or if an administrator or receiver is appointed over the whole or any part of that other party's assets or if that other party enters into any arrangement for the benefit of or other compounds with its creditors generally or ceases to carry on business or threatens to do any of these things.
7.2 Without prejudice to the Sponsor's other rights and remedies hereunder or at law the Sponsor may terminate this Agreement pursuant to clause 10.3 [force majeure] and also in the event that the Company is unable to provide Sponsorship Rights or acceptable alternative rights in the nature of the Sponsorship Rights to an equivalent value as described more particularly in clause 3.3 and for the avoidance of doubt if the Sponsor exercises its right of termination under clause 10.3 or this clause 7.2, the provisions of clause 8.2.5 shall apply in such circumstances.
8 Consequences of termination
8.1 The expiry or termination of this Agreement shall be without prejudice to any rights which have already accrued to either of the parties under this Agreement.
8.2 Upon expiry or termination of this Agreement:
8.2.1 the Sponsor's right to exercise the Sponsorship Rights shall forthwith terminate and all Sponsorship Rights shall forthwith revert to the Company;
8.2.2 the Sponsor shall not use or exploit its previous connection with the Company or the Awards, whether directly or indirectly;
8.2.3 the Company shall be entitled to grant all or any of the Sponsorship Rights to any third party;
8.2.4 each of the Company and the Sponsor will promptly return to the other all of the property of the other within its possession; and
8.2.5 Without prejudice to the Sponsor's other rights and remedies and clause 7.2, if this Agreement is validly terminated by the Sponsor due to a material breach by the Company of this Agreement which has not been remedied or pursuant to clauses 3.3 and 7.2 or 10.3, (but not in any other event or circumstance), the obligation of the Company to pay future instalments of the Sponsorship Fee (if any remain unpaid) shall cease and the Company shall repay to the Sponsor the portion of the Sponsorship Fee already paid that relates to the unelapsed Term, as determined by:
R = Total Amount of Sponsorship Fee x A/B
Where R is the repayment, A is the number of days remaining from the date of termination until the end of the Term and B is the aggregate number of days in the Term, with any unpaid Sponsorship Fee instalments to be credited against R. VAT is applicable on the repayment. For the avoidance of doubt, such repayment is in no sense intended by the parties to be and is not a penalty.
L2. Contract and common law
It was common ground that when seeking to justify its termination of the Sponsorship Agreement PlayUp was not confined to matters raised in its letter of termination. It was also common ground that termination would be justified if PlayUp could bring itself within either Clause 7.1.1 of the Sponsorship Agreement or general common law principles as to termination for repudiatory breach.
As to whether a breach was "material" for the purposes of Clause 7.1.1, GMF noted that Dalkia Utilities v Celtech International Limited  1 LLR 599 contains (at paragraphs 90 – 102) a useful summary of the authorities on the meaning of 'material breach'. In determining whether a breach is material, a court must look to the magnitude of the commercial consequences of the breach. It is relevant to consider not only of what the breach consists but also the circumstances in which the breach arises.
As to the common law ability to terminate for a repudiatory breach of contract, GMF relied on following passage from Treitel's The Law of Contract (12th Edition, paragraph 18-026):
When failure is substantial. The question when a failure in performance "substantially" deprives a party of what he bargained for, or (as it is sometimes put) "frustrates" his purpose in making the contract gives rise to very great difficulty. The frequent references in the cases to breaches which "substantially" deprive a party of what he bargained for or "go to the root" of a contract are not particularly helpful in analysing the law or in predicting the course of future decisions. It is submitted that the courts, in applying the general requirements of substantial failure, generally classify a failure in performance with an eye on the consequences. On the one hand, they consider whether termination (as opposed to damages) is necessary to protect the injured party and, on the other hand, they take into account the prejudice which termination will cause to the other party.
As to what may constitute repudiatory breach in relation to the SMS text messages, GMF relied upon Shawton Engineering v DGP International  BLR 1. In that case May LJ said this:
Where time is not of the essence and where the party said to be in breach by delay is nevertheless making an effort to perform the contract, it is intrinsically difficult for the other party to establish a fundamental breach ...
A similar point was made in Astea (UK) v Time Group  EWHC 725 where HHJ Seymour Q.C. said this:
... if considerable work has been done in performance of a party's contractual obligations and what is alleged to amount to a repudiation is not a flat refusal to perform, but an indication of an intention to continue to perform at a speed considered by the other party to be unreasonably slow, it may be very difficult to conclude that in those circumstances what is being offered will deprive the other party of substantially the whole benefit of the contract. On the contrary, it may appear that the innocent party will eventually gain exactly the benefit contemplated. The question will be whether, by reason of the time which will need to elapse before that happens, in commercial terms the party entitled to performance will be deprived of substantially the whole of the benefit which it was intended he should derive from the contract.
L3. Seriousness of GMF's breaches
Both under Clause 7.1.1 and at common law it is necessary to assess the seriousness of the breach. My findings earlier in this judgment are that email programmes were delivered by GMF to at most 260,000 qualifying recipients rather than the 1m promised, and at most 39,450 qualifying SMS message recipients rather than the 250,000 promised.
GMF relies on two main arguments in contending that these breaches were insufficiently serious to justify termination. First, it says that bought-in data filled the gap. Second, it points out that the data programme rights were only part of the benefits promised to and gained by PlayUp under the Sponsorship Agreement.
L3.1 Value of bought-in data
In his witness statement Mr Butler contrasted the limited value of bought-in data with data concerning the "avid football fans" who opted in to the Official Website:
The MyOffers website (located at www.myoffer.co.uk) offers its members entry into prize draws in return for completing short self-profiling questionnaires. I understand from the IPT website that each questionnaire is sponsored by a client who in turn determines the type of data they wish to collect. From visiting the "MyOffers" website I found that the entrant simply answers questions from selecting the most appropriate answer from those provided and then gives their mobile number or email address. Individuals registering via the "MyOffers" site do so for purposes entirely unrelated to GMF/the PFA. Whilst some may express a general interest in football, this is entirely different to the avid football fans that were engaged with GMF/the PFA that PlayUP UK needed.
Mr Butler went on to compare the number of visits to PlayUp's website (in terms of what he called "unique pageviews") which in his view PlayUp gained from the Sponsorship Agreement with those that had been or could have been gained in other ways:
57. On a scale very much reduced from what would have been expected had GMF honoured the contract, PlayUP did receive some measurable traffic to our website from GMF. On 20 November 2008, I estimated that 2,000 unique pageviews per month were generated on an on-going basis from GMF (see my email from Bill Butler to Bjorn Mordt, 20 November 2008 at 11:56am). The basis of this calculation was as follows:
57.1 In the previous month, the PlayUP website had received 10,500 unique views. Of these:
57.1.1 5,000 were direct visits to the PlayUP site; and
57.1.2 1,300 were generated by a Google campaign.
57.2 I assumed that the remaining 4,000 or so unique views were generated by GMF. Given that GMF had sent an extra 1 million addresses during the relevant period (see email from Jae Chalfin dated 31 October 2008), and so theoretically had sent twice the number of emails as would usually be the case, I calculated that in a normal month GMF would generate on average 2,000 unique views per month.
58. The 1,300 unique pageviews generated by the Google campaign were generated by PlayUP placing Internet banner ads through Google's generic Internet ad placement service. The cost of the Google campaign was £1,760.
59. Based on the cost of the Google campaign, the cost per unique pageview is approximately £1.35. On this basis, the cost of 2,000 unique page views (equivalent to what I estimated the GMF marketing was generating) would not exceed £2,700 per month (or £32,400 to run the campaigns for a full year, or £23,700 for the 38 weeks of the Premier League season).
60. It is important to note the contrast in capabilities to market PlayUP's services that ought to have separated GMF from Google. Whereas GMF was to have a large database of fans familiar with their brand and sponsor and that had opted-in to receive marketing from the same, Google had no prior relationship with the audience to whom it was serving Internet ads. Whereas GMF could address their fans at their own Internet site, in regular newsletters, PlayUP's emails and by SMS, Google could address the fans only by Internet banner ads and only on those websites willing to place them, which by their nature had no relationship with PlayUP. Whereas GMF demanded PlayUP's commitment to a three year, £1,034,000 contract with prepayment with no guarantee of performance, Google demanded no contract, accepted payment only where performance was delivered and measured and PlayUP was free to terminate the arrangement at any time.
61. A similar contrast is noted when comparing the GMF campaigns to those provided by other Internet marketing companies. In 2008, eCircle ran a campaign on a range of Internet sites inviting users to give their email address and to opt-in to receive marketing from PlayUP. eCircle originally gathered 7,000 emails for a total price of £1,000 which included fixed costs to establish the campaign. eCircle later offered PlayUP a further 20,000 emails for £1,200 (email from Andrew Turner to Jono McLean and Bjorn Mordt 12/11/2008) (an offer of 30,000 at £0.05 per lead was later made). Bjorn Mordt (email from Bjorn Mordt to Bill Butler on 17 March 2009, 11:11pm and 11:26pm) stated that, on the basis of these offers, we would be able to purchase the right to 1 million emails and 250,000 SMS numbers for £62,500 in perpetuity. Again, eCircle did not enjoy any long-term contract nor large pre-payment, and payment was entirely contingent on performance. On this basis, it cannot be said the value of the database actually provided by GMF exceeded £62,500.
GMF contends that while it may not have delivered programmes to recipients who met the precise requirements of the Sponsorship Agreement, it nevertheless delivered the balance required to data subjects who had said that they were football fans. For the reasons given earlier in this judgment, I am not satisfied that more than 870,000 potential email recipients were interested in football. As to the potential SMS message recipients, 39,450 of these were on the GMF database and thus were football fans, and I add to this the figure of 141,632 derived by taking 65% of the 217,895 data subjects derived from IPT to whom SMS messages were sent in November 2008. That gives a total of 181,082 football fans to whom SMS messages were sent. Thus in neither case did the delivery by GMF achieve the numbers required by the Sponsorship Agreement, even if the only criteria had been that the recipients were football fans. More importantly, however, the attempt by GMF to rely upon the delivery of programmes merely to those who said they were football fans takes no account of the important points made by Mr Butler in his witness statement. The whole purpose of the Sponsorship Agreement was to offer something which was obtainable only by association with the Awards. The difference here between the "avid football fans" who opted-in to the Official Website and the members of the public who, enticed by the lure of a prize draw, happened to say that they were football fans, was in my view of a fundamental nature.
Thus it is of no assistance to GMF to point out that PlayUp had an interest in sports fans generally. A further point made by PlayUp was that Mr Butler in the passage quoted earlier had made reference to Internet sites used by eCircle which related to general sports as well as football, a point which Mr Butler acknowledged in cross examination. To my mind this observation cannot assist GMF: the point being made by Mr Butler in the passage cited above was that PlayUp was able, relatively cheaply, to gain the benefits of a marketing campaign directed to those who were not "avid football fans".
L3.2 Other benefits under the Sponsorship Agreement
A summary at the end of Mr Chalfin's witness statement sought to place the data programme rights in context:
179. PlayUp agreed to pay a sponsorship fee of £1,034,000.00 for a number of sponsorship rights. The targeted opportunities provided to PlayUP under Clause 5.1 of the Agreement only made up part of those rights.
180. The sponsorship deal gave PlayUp mass exposure to the football market in the UK and gave it creditability. This in itself was worth the sponsorship fee it paid. Furthermore, PlayUp wanted to be associated with the PFA above everything else. This is demonstrated by the inclusion of the PFA's name in the SMS message campaign that PlayUp sent in November 2008 without approval … .
181. PlayUp's association with the PFA opened up doors that would have otherwise been closed and allowed PlayUp to speak to the likes of The Sun Newspaper and Setanta Sports, which it would have difficulty doing had it not been for the Agreement.
182. The sponsorship deal provided PlayUp with a platform to promote its brand not only through the targeted marketing opportunities provided under clause 5.1 of the Agreement but also through the other rights provided under the Agreement. For example, PlayUp's sponsorship of the Fans' Awards reached a weekly audience of 5 million people on Sky Sports (television) and on www.skysports.com (website). This gave PlayUp maximum exposure to football fans across all of the professional leagues … .
183. The aim was never to provide PlayUp with direct sales. This is why there are not any performance related clauses in the Agreement relating to delivery or to any other key performance indicators.
GMF added that any breach in relation to the number of SMS message recipients needed to be seen in context. After initial SMS message campaigns at the start of the Sponsorship Agreement there had been no further SMS message campaigns until November. GMF suggested that this was because PlayUp bore the cost of sending the SMS messages.
More generally, GMF's closing submissions drew attention to the wide range of Sponsorship Rights. This echoed points made earlier in the context of the meaning of "targeted", and I have set out in Section H of this judgment an account of the wide range of rights found in Schedule 1. GMF said that the most significant of these rights was the right to attach PlayUp's name to the Awards.
These points made on behalf of GMF are not without merit. As Mr Butler acknowledged, PlayUp gained some benefits despite the breaches by GMF of the Sponsorship Agreement. Nevertheless, it seems to me appropriate to describe the breaches in relation to the email programmes as very significant. In my view an objective reader of the Sponsorship Agreement with knowledge of the commercial background would unhesitatingly say that the "targeted" opportunities as regards the opted-in email base would be of vital importance to PlayUp in seeking to establish itself in a new market. The SMS message programmes appear to me likely to be of less significance, although of some significance nonetheless.
L4. Entitlement to terminate at common law
The passage cited from the twelfth edition of Treitel's The Law of Contract highlight the difficulties which can sometimes arise when applying the test of whether a failure in performance "substantially" deprives the innocent party of what was bargained for or "frustrates" the innocent party's purpose in making the contract. In the present case, however, the combination of failure to provide both what PlayUp contracted for as regards email recipients and what it contracted for as regards SMS message recipients in my view points clearly to the conclusion that the common law test is met. It is true that PlayUp gained some benefits from the performance of the Sponsorship Agreement. I recognise, too, that GMF asserts a failure by PlayUp to deploy those benefits – particularly in relation to opportunities to acquire prospect data – in a commercially advantageous way. Even if GMF's contentions were correct in that regard, it nevertheless appears to me that PlayUp lost a major proportion of what it was fully entitled to regard as a vital benefit. Indeed, so important does the email programme appear to me to have been that I would have reached this conclusion in relation to a failure to provide at least two thirds of the promised email recipients. The failure to provide SMS message recipients does not appear to me to be sufficient on its own, however, to amount to a repudiation.
L5. Contractual right to terminate
As I have held that PlayUp were entitled to terminate at common law it is not necessary for me to explore the contractual right to terminate in any detail. I mention only that in my view the use of bought in data by GMF in relation to each of the email programme and the SMS message programme constituted a material breach. The commercial consequences of both were significant. I do not accept that the breach in relation to the SMS messages was simply a matter of delay: there was no question of GMF being able to find SMS numbers for additional people who had opted-in through the Official Website. More generally, the best that GMF could seek to do by way of remedy was to find data subjects who had professed an interest in football. This is so different from what was promised that it cannot in my view be regarded as the sort of performance which was contemplated in Clause 3.3. The breaches by GMF in this regard are in my view plainly incapable of remedy.
PlayUp also drew attention to its entitlement to terminate under Clauses 3.3 and 7.2. The argument in this regard was not developed in detail by PlayUp. As it is not necessary to decide the point, I do not think it is appropriate to try to explore it in this judgment.
M: Consequences of termination
It is common ground that, liability having been established, a sum is due to PlayUp under Clause 8.2.5 amounting to £340,251.14 plus VAT. In addition PlayUp claims damages for failure to supply what was promised and for wasted costs and expenses. I deal with each in turn.
M1. Failure to supply what was promised
The general nature of the claim for damages for failure to supply what was promised was set out in paragraph 19.1 of the particulars of claim. It identified two alternatives.
The first alternative was the difference between "the part of the Sponsorship Fee attributable to the Sponsorship Rights…" and "(i) the value of the data in fact supplied…". PlayUp says that it is entirely orthodox to make a claim for the difference between the value of the contractual benefits promised and the value of what was in fact delivered. This is indeed an orthodox approach in cases where there is a market for a commodity or where the court is in a position to identify both the realisable value of what was promised and the realisable value of what was delivered. However PlayUp does not seek to adduce evidence of any of these matters.
What PlayUp has done in the relevant part of an amended Schedule of Loss is to say that the total of the promised SMS message recipients and email recipients amounted to 1,250,000. PlayUp then says that the court should identify the total number of records in the GMF data for SMS numbers and email addresses, the former being 39,450 (as admitted in Clarke Willmott's letter of 9 June 2009) and the latter, if Legends data is included, being 260,000 (as found earlier in this judgment). The resultant total is 299,450, which I round up to 300,000. It is then possible to compute that figure as a proportion of the 1.25m total promised: on my calculation, it amounts to 24%.
The next stage of this aspect of PlayUp's claim involves the computation of a sponsorship fee attributable to the operative period of the Sponsorship Agreement. This is said to be £351,748.86, being the difference between the actual payments made by PlayUp and the amount due to be repaid to it under Clause 8.2.5. PlayUp then computes that the value attributable to what was delivered by GMF as 24% of the attributable Sponsorship Fee. On my computation this gives a figure of £84,420. PlayUp having received benefits worth £84,420, and having paid the attributable Sponsorship Fee of £351,749 for those benefits, it says that it has lost the value of the difference between those two figures, which on my computation amounts to £267,329.
In my view this suggested way of computing PlayUp's claim is not an orthodox approach. It is a rough and ready approach. As noted earlier, PlayUp does not say either that the Sponsorship Rights constitute a commodity or that the court is in a position to identify both the realisable value of what was promised and the realisable value of what was delivered. Nevertheless the approach suggested by PlayUp has several merits. First, it is the case that what GMF delivered fell significantly below what PlayUp was entitled to expect, and this is likely to have meant that PlayUp did not get the value that it was paying for. Second, adopting the orthodox approach and seeking to prove values for what was promised and what was delivered would be likely to involve complex and expensive expert evidence. Adopting the orthodox approach would also be likely to result in a conflict of evidence which would take up court time and expense to a disproportionate extent. Third, PlayUp's approach proceeds upon the assumption that the Sponsorship Agreement was worth what PlayUp paid for it. There is no suggestion by GMF that this is an inappropriate assumption. I add that I have included the Legends data even though it did not in my view meet criteria (2) and (3). Those opting-in as part of the Legends campaign are likely to have thought they were dealing with GMF. Only a tiny minority would have studied the small print and established that they were dealing with MyOffers. It is accordingly appropriate to assimilate the Legends data with data derived from the Awards when assessing the damages payable to PlayUp for failure to deliver what was promised.
There are two difficulties with the approach. First, it assumes that the value of the whole of the Sponsorship Rights as delivered depends proportionately and solely upon a comparison of the number of qualifying programme recipients and the number of promised programme recipients. Here it seems to me that GMF is right to say that this makes insufficient allowance for the other benefits of the Sponsorship Agreement. Exposure through Sky Sports, for example, would bring benefits which were not related to the volume of qualifying programme recipients. Second, it also makes no allowance for such benefit as may have been gained by the sending of emails and SMS messages to recipients who were not data subjects on the GMF database.
It is nevertheless possible, in my judgment, to make an allowance for the two types of benefit ignored in PlayUp's formula. The Sponsorship Proposal at slide 31R attributed to "solus emailing" a value of £200,000 out of a total £1.08m. Given that the Sponsorship Agreement included SMS messages as well as emails, I think it is highly unlikely that there would be any injustice to GMF in attributing to the email and SMS message programmes a value of 20% of the Sponsorship Agreement as a whole, and by so doing allow for both types of benefit ignored in PlayUp's formula. I should not be taken in this regard as making a finding that this was the value of those aspects of the Sponsorship Rights – it will be apparent from earlier sections of this judgment that in my view, putting the Sponsorship Agreement in a commercial context where it was known that PlayUp was seeking to enter a new market, they were worth substantially more. For the purposes of a rough and ready exercise, however, I am simply saying that there is no injustice to GMF in adopting such a value in order to allow for the two types of benefit ignored in PlayUp's formula. On that footing I would be prepared to award PlayUp, as regards this particular head of claim, a sum of £53,000 – this being roughly 20% of £267,329.
The alternative way in which PlayUp computed its claim for failure to deliver what was promised appeared at paragraph 19.1(ii) of the particulars of claim. This was the difference between "the part of the Sponsorship Fee attributable to the Sponsorship Rights…" and "the price which PlayUp would have had to pay to acquire the data delivered by GMF directly from third party licensors rather than indirectly by way of sub-licence. In this regard PlayUp identified three alternative ways in which it could have obtained the "non-GMF" data. One method would have been to utilise the services of eCircle. Another would have been to purchase data from IPT at the rate described in the IPT licence. A third method identified figures derived from the results of the Google campaign described by Mr Butler. For each of these methods PlayUp assumed that it had paid during the sponsorship period a total which on my calculation amounts to £267,329 for the "non-GMF" data records utilised by GMF for the performance of the Agreement. Here, too, it seems to me that there is no sufficient allowance for the other benefits that were provided. Nor, as it seems to me, do the eCircle or Google computations provide a safe basis for assessing what the cost would have been of acquiring the equivalent of the IPT data. As to the actual cost of the IPT data, I do not think it can be assumed that PlayUp would have been able to purchase this at the relatively low price in the IPT licence. For all these reasons, I do not feel confident that I can make any assessment of loss to PlayUp based on this alternative method of computation.
M2 Wasted costs and expenses
By way of additional claim, PlayUp says that it spent £4,637.25 plus VAT on sending SMS messages to recipients who had not opted-in through the Official Website. Here it seems to me that it would be double counting to allow both this claim and the head of claim for failure to provide the benefits promised. In order to have the benefit of the Sponsorship Agreement which forms the basis for the latter claim, PlayUp would have had to spend the sum of £4,637.25 as part of the cost of sending SMS messages to a total of 250,000 recipients. Accordingly there is no entitlement in this regard.
For the reasons given above I conclude that GMF failed to perform its obligations in relation to the data programme rights, that PlayUp was entitled to terminate the Sponsorship Agreement, that PlayUp is entitled to payment of £340,251.14 plus VAT under Clause 8.2.5 of the Sponsorship Agreement, and that PlayUP is entitled to damages in the amount of £53,000. GMF's counterclaim fails because PlayUp was entitled to terminate the Agreement, and accordingly that counterclaim must be dismissed.
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