The concept of secret commission is usually associated with an agent. The term agent is often interchangeable with the terms of representative or consultant. But not all payments of secret commission mean that the recipient is an agent.
This was highlighted in a recent High Court judgment involving the supply of golf equipment. What makes the judgment interesting is the way the court approached the question of duties owed by someone whose relationship with his commercial client fell outside the usual boundaries of agency. Despite that, the court still concluded that he had taken secret commissions.
Not an agent
In Charles Claire LLP and Lynx Golf Limited v Kevin Wolgar the starting point is understanding why the court said that Mr Woolgar was not an agent.
The law of agency requires authority granted by a principal that enables the agent to affect the principal’s legal position, typically by entering into contracts on the principal’s behalf. It is this power to bind the principal that distinguishes agency from other forms of commercial assistance.
But in this case the consultancy agreement under which Mr Woolgar operated conferred no such authority. He could neither contract in the first claimant’s name nor commit it to any legal obligations. Further he had no power to make or vary contractual terms on its behalf. His role involved sourcing manufacturers, liaising with factories, and conveying information. It did not extend to representing the claimants in a way that created legal relations for them. The court therefore decide that he lacked the defining element of agency.
This clarification is crucial because it frames the more subtle legal issue at the heart of the case.
Obligations
Although the absence of agency prevented the imposition of fiduciary duties arising automatically from that relationship, it did not relieve Mr Woolgar of other obligations that flowed from his contractual role. The consultancy structure created expectations of honesty, loyalty, and fair dealing. The claimants were entitled to rely on the accuracy of the information Mr Woolgar supplied, particularly in relation to pricing. When he negotiated with suppliers, he did so not as an independent trader pursuing his own interests but as a representative undertaking work that fed directly into the claimants’ commercial decisions. The lack of power to bind the claimants did not diminish the reliance placed upon him, nor the vulnerability that reliance created. That reliance supplied the foundation for the duties that he later breached.
In this context, the court concluded that the duties that restricted him from receiving secret profits arose from contract and trust, rather than from agency.
Secret commission
The consultancy agreement gave Mr Woolgar responsibility for identifying suitable manufacturers and communicating specific pricing information to the claimants.
Acting under his consultancy agreement, Mr Woolgar identified an overseas factory to manufacture a line of golf heads for Charles Claire LLP. He negotiated with the supplier to agree the genuine base price at which the goods would be provided. However, without informing Charles Claire LLP, he arranged for a higher figure to appear on the pro-forma invoice supplied to them. This higher figure came from Atop Far East, a company he did not own but with which he had a close working connection, and from which he obtained pro-forma invoices showing the increased price. By using Atop Far East in this way, he was able to add an extra amount on top of the real factory price while hiding the fact that this uplift was intended to benefit him.
When he relayed pricing information Charles Claire LLP, he presented the higher figure as the true factory cost and advised it to proceed on that basis. Charles Claire LLP, believing that the invoice accurately reflected the price charged by the manufacturer, paid the full amount. In reality, only the lower, negotiated price was received by the factory, and the added portion was retained for Mr Woolgar’s benefit through the arrangement involving Atop Far East. Because Charles Claire LLP not told about the connection or the advantage he obtained, the extra sum amounted to a secret commission.
The case also revealed the consequences of Mr Woolgar’s decision to delete or withhold records that would have shown the true scale of the commissions received by him. The court drew the obvious inference that the missing documents would not have helped his position. Because precise quantification was impossible, the court adopted a broad estimation of the sums retained, applying an average margin across the relevant period. The principle deployed was simple but powerful: a wrongdoer will not be permitted to benefit from obscuring the evidence of their wrongdoing!
Agent, representative, and consultant can be interchangeable – but
The judgment therefore stands as a reminder that commercial reality drives the legal analysis. Technically a person may not be an agent, yet the nature of the role may still give rise to duties akin to those imposed on agents. The dividing line lies not in job titles but in whether the individual occupies a position in which another party reasonably relies on them to act with integrity, disclose material information, and refrain from acting for their own undisclosed benefit. Where those expectations arise from the structure of the relationship, the law will enforce them. The Woolgar decision is a clear example of that approach.
Ultimately, the most striking feature of the judgment is that the absence of agency did not prevent the court from concluding that secret commissions had been received unlawfully.
Had Mr Woolgar been an agent, the duties would have been fiduciary by default. Because he was not, those duties arose instead from the contract itself and from the trust placed in him. The outcome was the same because the underlying conduct was the same: a person engaged to serve the interests of another used that role to secure an undeclared financial gain. The court’s response confirms that commercial relationships built on trust and reliance cannot be exploited through the technical avoidance of agency.
The law is concerned not with terminology but with fairness, transparency and the proper conduct of those who act for others in any meaningful sense.
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