Parker Lloyd Capital Ltd v Edwardian Group Ltd

An alleged oral contract is established only if, viewing the evidence objectively and in the round, the court is satisfied on the balance of probabilities that the parties reached agreement on sufficiently certain terms. The court may consider subsequent conduct, documents, the parties’ dealings and the commercial context when deciding whether the agreement was made. Uncertainty about the contracting parties, absence of contemporaneous confirmation, failure to act consistently with the alleged retainer and unclear communications about remuneration may cumulatively demonstrate that no contract was formed. Where no contract is established, no success fee is payable.

The claimant, a finance-arranging company, claimed a 1% success fee from the defendant hotel group. It alleged that an oral agreement had been made at a meeting in late 2012 under which it would find long-term refinancing and receive a fee if funding was made available following its introduction.

The claimant relied on subsequent meetings, its introduction of the defendant to Laxfield Capital, and the eventual provision of a £200 million facility by MetLife. The defendant denied that any contract had been made. The central issue was whether the conversations, assessed with the subsequent evidence and conduct, created a binding contract between the parties.

1. No contract was formed. The court considered all the evidence in the round and concluded that the alleged agreement was not made at the 2012 meeting. Nor did the defendant’s chairman subsequently confirm the existence of such an agreement.
2. The alleged contract was not recorded in writing, and there was no contemporaneous internal or inter-party document referring to it. Even on the claimant’s case, the identities of the contracting companies had not been addressed and remained uncertain. That uncertainty was inconsistent with the alleged agreement.
3. The parties’ subsequent conduct did not support the existence of a contract. The defendant’s chairman did not tell the person responsible for arranging finance that the claimant had been instructed. The claimant was not given, and did not request, information needed to perform the alleged retainer. There was also no communication about the alleged contract for more than six months.
4. The claimant’s conduct in dealing with Laxfield was inconsistent with its case. At the end of the 3 May meeting, the claimant’s representative gave the impression, and was found to mean, that no fee was expected from anyone, including the defendant. The claimant’s later communications also did not clearly assert the alleged contract when a fee dispute first arose.
5. The limited work undertaken by the claimant was consistent with an attempt to identify a possible funder in the hope of receiving recognition or a fee, rather than performance of an existing contract. The court rejected the claim that the conduct was inexplicable without a binding agreement.

The claim was dismissed. No success fee was due.

First-instance decision. No prior appellate decision is stated in the judgment.