Walker & Ors v Mills & Anor

An agreement is construed objectively from its language and commercial context. Subsequent conduct may assist, but cannot replace the contractual documents. Where an agreement is made by a company, its benefit passes under an asset sale only if the agreement falls within the business or assets transferred. A constructive trust arising from an agreement to transfer property requires a specifically enforceable agreement. A sum is received for contractual purposes where it is held to the order of the recipient and expended in accordance with its directions, even if it is not paid into the recipient’s bank account.

The claimants sought payments under an introduction agreement concerning the introduction of clients to the defendants’ company-grooming business. They also claimed an interest in shares and loan notes acquired by the first defendant in connection with the sale and refinancing of a client’s business.

The court had to determine when the introduction agreement was made, who its parties were, whether its benefit passed under asset purchase agreements, whether later dealings created further payment obligations or a trust, and whether the relevant funds had been received for the purposes of the agreement.

1. Formation and parties. The introduction agreement was formed by the exchange of emails dated 10 and 21 December 2012, rather than orally at the earlier lunch. Objectively construed, the agreement was between Clarion Plc and Insurance & Legal Services Ltd trading as Comerga. The references to Clarion email addresses, Clarion’s clients and the Comerga trading name outweighed the personal references to the parties.
2. Assignment. The benefit of the agreement was not assigned to either claimant company under the asset purchase agreements. Those agreements transferred only the relevant wealth-planning or investment-management businesses and excluded assets not specifically transferred. The introduction service was distinct from advice or services relating to wealth planning or investment management.
3. Later dealings and receipt. No agreement was reached in 2015 that future payments would be shared or that the first defendant’s shares and loan notes would be held for Mr Walker. However, the £400,000 retained from the £2.2m success fee was received for the purposes of the introduction agreement. It was held to the order of the second defendant and expended in accordance with its directions.
4. Constructive trust. The alleged trust could not arise. Such a trust requires a specifically enforceable agreement to transfer an interest in property. Any supposed relinquishment by Mr Walker of Clarion Plc’s payment rights could not constitute effective consideration, because those rights belonged to Clarion Plc.
5. Applying the approach in Wisniewski v Central Manchester Health Authority [1998] PIQR P324, the absence of evidence did not generally justify adverse inferences, although it weakened Mr Walker’s evidence on one specific matter. All the claimants’ claims failed.

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