Christopher Gary Hoole v Meredith Charles Limited & Ors

A contractual obligation to pay commission may survive termination where the contract expressly provides for that result. A party cannot rely on repudiatory termination without proving a repudiatory breach, acceptance of that breach, and compliance with any contractual notice requirement.

Directors are generally protected from personal liability for procuring their company’s breach only where they act in good faith and within their authority. The protection does not apply where the director acts for personal gain, breaches the duty under Companies Act 2006, section 172, or acts dishonestly.

The judgment also applies the established elements of unlawful-means conspiracy and procurement of breach of contract.

The claimant, a financial intermediary, contracted with Meredith Charles Limited (“MCL”) as a sub-introducer for investors in a bond. MCL was to pay him commission. MCL paid £65,000 but later denied liability for further commission, relying principally on an alleged full and final settlement.

The claimant alleged that MCL had breached the commission agreement and that the individual and corporate defendants had caused or procured that breach. The defendants alternatively relied on an alleged termination of the underlying agreement between MCL and Pardus for repudiatory breach, and on the involvement of a third party, Mr Myers.

The central issues were whether MCL remained liable for commission and whether the other defendants were liable in tort for losses caused by MCL’s breach.

1. Claim against MCL. The alleged January 2020 settlement was not proved. The contemporaneous documents, including the invoice and subsequent messages, were inconsistent with a full and final settlement. MCL was therefore in breach of its obligation to pay commission.
2. Termination of the underlying Pardus/MCL agreement did not extinguish MCL’s obligations to the claimant. The agreement required written notice if MCL relied on termination of the underlying contract, and clause 3.13 expressly preserved the obligation to pay commission after termination. In any event, the underlying agreement had not been lawfully terminated for repudiatory breach. No breach by MCL, refusal to perform a future obligation, or written acceptance of repudiation was established.
3. Unlawful-means conspiracy. The elements were a combination, concerted unlawful action, an intention to injure the claimant, and damage. Mr Bold and Mr Bryce acted in combination to reduce or avoid commission payments and to benefit themselves and Pardus. They intended that MCL would breach its obligations to sub-introducers, including the claimant. The Pardus Companies participated in the scheme and were jointly and severally liable.
4. Procurement of breach. The defendants knowingly and without justification took active steps which caused MCL to breach its contractual obligation to pay commission. The required contract, breach, procurement, knowledge and realisation were established.
5. Director liability. The principle in Said v Butt protects a director who acts in good faith and within authority. The relevant good faith is good faith towards the company. Relevant factors include personal financial motivation, the nature and consequences of the breach, whether statutory duties were breached, and whether the conduct was deliberate and repeated. Mr Bold acted for personal gain, failed to enforce MCL’s rights, and acted in breach of section 172 of the Companies Act 2006. He was therefore not protected by the principle.
6. The unpleaded “Myers defence” did not assist any defendant. No contractual restriction concerning Mr Myers was proved, and the evidence showed that the defendants knew of his involvement before the alleged termination.
7. Mr Bold, Mr Bryce and the Pardus Companies were jointly and severally liable for losses caused by MCL’s breach. The claim for unlawful interference did not require separate consideration.