Wright v Rowland & Anor

A binding contract depends on what the parties objectively communicated and whether their words and conduct show an intention to create legal relations and agreement on essential terms. Where a complex commercial arrangement, particularly an option, is expected objectively to be recorded in writing, the absence of documentation may demonstrate that no binding commitment was made. A quantum meruit requires proof of enrichment of the defendant, at the claimant’s expense, in circumstances making restitution just, together with proof of the objective market value of the benefit when received. The value is that of the services, not any later profit.

Michael Wright claimed that David and Jonathan Rowland had agreed in 2008 to remunerate him for investment-related services and had subsequently granted him an option to acquire up to 5% of Banque Havilland S.A. He alleged that the option and related remuneration terms were agreed on board yacht 101 on 20 July 2009. He claimed damages for repudiation of that agreement and, alternatively, a quantum meruit for introducing the opportunity to acquire Kaupthing Bank Luxembourg S.A. and assisting with the resulting transaction.

The court considered whether the alleged agreements existed, whether the defendants personally benefited from the services, and whether the services had been given an ascertainable market value.

1. The contractual claim failed. The court found that there was no concluded “2008 Agreement”. The payments, employment arrangements and conduct were consistent with a loose and evolving relationship rather than a binding personal contract with the defendants.
2. The principles summarised in MacInnes v Gross [2017] EWHC 46 (QB), drawing on RTS Ltd v Milkerei Alois Muller GmbH and Co KG [2010] UKSC 14, required an objective assessment of the parties’ communications and conduct. The complexity of the proposed arrangements, the absence of agreed duration and grantor provisions for the option, and the parties’ contemporaneous conduct showed objectively that a written document was required before legal relations arose.
3. The court accepted that remuneration may have been discussed on the yacht and that David Rowland may have contemplated an option. It rejected, however, the alleged firm commitment to grant an option or to provide the other claimed benefits. The later emails and partial performance did not establish a binding agreement.
4. In assessing the evidence, the court followed the approach in UBS AG (London Branch) v Kommunale Wasserwerke Leipzig GmbH [2014] EWHC 3615 (Comm) and Gestmin SGPS S.A. v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm), placing principal weight on contemporary documents and inferences from known or probable facts.
5. The alternative quantum meruit claim also failed. Applying the principles summarised in MacInnes v Gross and Benedetti v Sawiris [2013] UKSC 50, the court found no proof that either defendant had personally been enriched. Any benefit was received by corporate entities which were not defendants. There was also no evidence establishing the objective market value of the services when received. The claims therefore failed.