Moorgate Capital (Corporate Finance) Ltd v H.I.G. European Capital Partners LLP

A commercial adviser who provides services without a contract does not ordinarily acquire a restitutionary right to payment merely because the recipient requested or accepted them. The court must identify an unjust factor; unjust enrichment does not create a contract the parties could have made but did not.

Where services are supplied in anticipation of a contract, payment may be ordered if justice requires it, but the court must consider the parties’ expectations, the nature of the services and benefit, the risk undertaken, and the circumstances in which the anticipated contract failed. Any award is confined to the objective market value of services actually provided, assessed by reference to the transaction that occurred, not a hypothetical contract for wider services.

Moorgate provided corporate finance and mergers and acquisitions advice to HIG in connection with the possible acquisition of Bezier. It claimed a £1 million success fee under an alleged oral agreement made on 30 March 2011. Alternatively, it claimed a quantum meruit in unjust enrichment for services including introducing Bezier’s management and providing information.

HIG denied that any contract existed and disputed both the value of the services and the existence of any unjust factor. The principal issues were whether the alleged agreement was made, whether HIG’s receipt of Moorgate’s services was unjust in the absence of a contract, and, if so, how the enrichment should be valued.

1. Contract. The claim for the alleged £1 million Fees Agreement failed. The court preferred the objective documentary evidence and inherent probabilities to recollections of a conversation several years earlier. The absence of any contemporary record, the commercial setting, the lack of reliable financial information, the absence of negotiation, and Moorgate’s conduct after completion all weighed against the alleged agreement.
2. Unjust enrichment. The absence of a contract did not itself establish an entitlement to reasonable remuneration. The law of unjust enrichment does not make a contract for parties who were able to contract but did not do so. Payment may nevertheless be ordered where services were provided in the parties’ confident anticipation of a contract, or in other circumstances where justice requires it.
3. The relevant inquiry required consideration of whether the services were ordinarily free, the terms of any request or assurance, the reality of the benefit, the risk undertaken by the claimant, and the circumstances in which the anticipated contract failed. Moorgate was a sophisticated commercial party which could have sought an engagement or declined to act. It remained free to deal with other potential purchasers and had not shown that either party expected payment absent an agreement.
4. The services were not the effective cause of the acquisition that occurred. The eventual transaction arose through Deloitte’s accelerated debt and equity sale process and was materially different from the bilateral transaction initially contemplated. That was an additional reason against imposing a non-contractual payment obligation.
5. Even if a quantum meruit had been available, the proper valuation would have concerned the limited services actually supplied in relation to the completed transaction, whose enterprise value was £16 million. It would not have been based on a hypothetical £1 million success fee for a full range of services and a transaction valued at £100 million. The alternative valuation would have been £25,600.
6. The claim was dismissed.