Wollenberg v Casinos Austria International Holding GmbH

In a written commercial agreement, a success fee for a project “introduced” by a consultant ordinarily requires the consultant personally to be the effective cause of bringing the project to the company. Introducing an intermediary who later identifies a project is insufficient where the intermediary is engaged by the company.

Where the parties use the broader term “initiative”, the court must give effect to that language. An initiative may begin a process which later culminates in the acquisition of a business, even though other persons make further initiatives. A post-contractual exchange may support an estoppel only where reliance causes sufficient prejudice. Secretly recording a meeting may constitute a fundamental breach of a relationship of trust and confidence, but later conduct amounts to affirmation only if the innocent party, knowing of the right to terminate, unequivocally elects to continue the contract.

Mr Wollenberg, a solicitor and gaming-industry consultant, entered into two consultancy agreements with Casinos Austria International Holding GmbH. The 2005 agreement provided a 4 per cent equity success fee for each UK project introduced by him. The 2008 agreement extended his activities to international lottery and online businesses and provided a similar entitlement for businesses acquired or operated pursuant to his initiatives.

Mr Wollenberg claimed an interest in Apollo, a UK casino joint venture, and in Azurro, an Italian joint venture with Cogetech. He also challenged CAI’s termination of the agreements after discovering that he had secretly recorded a meeting. The issues were contractual interpretation, estoppel by convention, whether a later agreement had been concluded, undue influence, and repudiatory breach and affirmation.

1. UK project and Apollo. The phrase “each UK project introduced by you” required Mr Wollenberg personally to introduce the project and to be its effective cause. It did not extend to a project introduced by a consultant engaged by CAI, even where Mr Wollenberg had introduced that consultant. The distinction was between introducing a project and introducing a person who knew about a project. The Apollo claim therefore failed (paras [153]–[166], [185]).
2. Estoppel by convention. The February 2009 correspondence did not establish an estoppel. Although the parties appeared to share an interpretation, the projects relied upon had already been introduced. There was no evidence that Mr Wollenberg changed his performance or suffered real prejudice because of the alleged convention. The convention therefore had no causative effect (paras [167]–[176]).
3. Independent agreement. The November 2009 conversation did not create a separate contract. The language was tentative, the parties were uncertain about the existing agreement, and they contemplated later formalities and consideration by CAI’s advisers (paras [177]–[184]).
4. Azurro. “Initiatives” in the 2008 agreement was broader than “introductions”. Mr Wollenberg’s introduction of the Italian lawyer, whose match-making service led to CAI’s dealings with Cogetech, was the first step in an international expansion process. It was unnecessary for him to be the sole or effective cause of the eventual acquisition. He was therefore entitled to 4 per cent of CAI’s interest in Azurro (paras [186]–[197]).
5. Undue influence. CAI was a large, sophisticated commercial undertaking dealing with Mr Wollenberg principally as a business consultant. Any evidential presumption of influence was rebutted. The 2008 agreement was entered into with full understanding and free will, and Mr Wollenberg could rely upon it (paras [198]–[210]).
6. Termination. Secretly recording the November meeting seriously damaged the relationship of trust and confidence and was a breach of a fundamental contractual term justifying summary termination. Deployment of the MOU did not independently justify termination. CAI did not affirm the agreements merely by responding to correspondence or because Mr Wollenberg continued performing. Payment of the January retainer was equivocal, and CAI had not been shown to know of its right to terminate before the end of January. The claim for wrongful termination damages therefore failed (paras [211]–[218]).

The claim succeeded only to the extent of the entitlement to a 4 per cent share of CAI’s interest in Azurro (para [219]).