Williams Corporate Finance Plc v Adler

An oral agreement to procure finance is construed by reference to the parties’ essential commercial requirements as they developed. A fee becomes payable where the finance obtained satisfies those essential requirements, even if the lender’s terms differ from initial proposals. A disputed debt may also be compromised by an oral agreement supported by consideration, and the consideration need not be expressly stated. A purported release or waiver must be founded on contractual intention or detrimental reliance; a vague reference to preserving goodwill is insufficient.

Williams Corporate Finance plc claimed £26,000 plus VAT from Mr Adler as a brokerage fee for procuring finance for a property redevelopment. The High Court, before Holland J, found an oral contract between WCF and Mr Adler, but held that the fee had not become due because the finance obtained did not match the stipulated package.

WCF appealed. The central issues were the essential terms of the oral agreement, whether the Dunbar facility triggered the fee, whether subsequent telephone discussions compromised any disputed debt, and whether a later letter from WCF’s director released or waived the fee.

1. Appeal allowed. The judge below had correctly found an oral contract between WCF and Mr Adler under which WCF was obliged to obtain funding. The judge had, however, misunderstood the essential stipulations and the sequence in which the proposed transaction developed.
2. The essential requirement was that the requisite finance should be obtained, subject to the revised commercial arrangements which Mr Adler had accepted, including the possibility of personal guarantees and collateral security. The Dunbar facility therefore satisfied the contractual requirement and made the £26,000 fee payable.
3. Even if the fee had initially remained disputed, the telephone discussions referred to in WCF’s letter of 19 September amounted to an agreement compromising a disputed debt, supported by consideration. The fact that the consideration was not expressly stated in the letter was immaterial: Williams v Roffey Brothers [1991] 1 QB 1.
4. Mr Holland’s letter of 14 October did not release or waive the fee. Its vague reference to maintaining goodwill did not make it contractual, and there was neither pleading nor evidence that Mr Adler had detrimentally relied upon it.
5. Judgment was entered for WCF for £26,000, with interest at the judgment rate from 1 January 1997. WCF received its costs here and below, subject to the stated qualifications, and an interim costs order of £7,500 was made.

• Court of Appeal (Civil Division): [2001] EWCA Civ 1666. Appeal allowed; judgment entered for WCF for £26,000 with interest and costs.
• High Court, Queen’s Bench Division: Holland J dismissed WCF’s claim against Mr Adler and Central Link Properties Ltd on 28 November 2000.