Lissack v Manhattan Loft Corporation Ltd [2013] EWHC 128 (Ch)

[2013] EWHC 128 (Ch)Case No HC11C01704
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 31/01/2013
Before
MR JUSTICE ROTH
Between
CHARLES LISSACKClaimantMANHATTAN LOFT CORPORATION LTDDefendant
Alan Boyle QC and David Drake (instructed by Peters & Peters LLP) for ClaimantIan Mill QC and Jane Mulcahy (instructed by SNR Denton UK LLP) for DefendantHearing Hearing dates: 16-19, 22 and 24 October 2012
Judgment

INTRODUCTION

[1]The large building fronting St Pancras station, originally the Midland Grand Hotel, was designed by Sir George Gilbert Scott and is generally regarded as one of the most impressive examples of Victorian Gothic architecture in London. Under the extensive renovation and refurbishment carried out in the first decade of this century as part of the construction of St Pancras International station, the building, known as St Pancras Chambers, now houses a new hotel with residential apartments on the upper floors. This claim arises from the alleged introduction by the claimant of the defendant as the developer of St Pancras Chambers, on the basis of which the claimant contends that he is entitled to a share of the defendant’s net profit on the project.

FACTUAL BACKGROUND

[2]Many of the facts that provide the context and circumstances of this dispute are uncontentious. The claimant, Mr Charles Lissack, was for many years an estate agent in London. In 1989, he relinquished his partnership in the well-known estate agency, Benham & Reeves, and soon afterwards began working as a consultant to property investors, making use of his extensive network of contacts in the property market.[3]The Farlane Group is a group of connected companies engaged in property dealing and development. For most of the relevant time, it was run by Mr John Hitchcox and Mr Harry Handelsman. Farlane Property Group Ltd (“Farlane”) was set up in 1991 and was jointly owned (through intermediate companies) by Mr Hitchcox and Mr Handelsman. At least initially, Farlane was principally concerned in dealing in properties, carrying out only minimal refurbishment. The defendant, Manhattan Loft Corporation Ltd (“MLC”), was established in 1992 to carry out refurbishment and development of older, often formerly industrial properties to create loft-style apartments of the kind fashionable in New York. That explains the choice of name, and MLC was a pioneer in successfully introducing such loft-style residential accomodation in London. MLC was owned, indirectly, by Mr Handelsman, but Mr Hitchcox was the managing director and the two agreed that profit from MLC would be shared between them. Although both men were involved in both companies and, in particular, in taking the decisions as to specific property acquisitions, Mr Hitchcox concentrated more on the running of Farlane whereas Mr Handelsman devoted his time and energy primarily to MLC, which was involved in more ambitious projects requiring considerable design input.[4]Mr Hitchcox had met Mr Lissack while the latter worked at Benham & Reeves and in mid-1995 he approached him with a proposal to work with the Farlane Group. This resulted in Mr Lissack starting to work as a self-employed consultant to Farlane in about October 1995. His basic role was to find opportunities for Farlane to trade by using his knowledge of the property market and network of contacts to source suitable properties. Mr Lissack was based at the Farlane Group’s offices, at 12 Queen Anne Street in Marylebone. However, the arrangement was non-exclusive: he was not required to introduce opportunities only to Farlane. Equally, Farlane Group was under no obligation to take up an opportunity introduced by Mr Lissack: that was entirely a matter for Messrs Hitchcox and Handelsman.[5]It is common ground that the remuneration agreed when Mr Lissack started working with Farlane was that if an opportunity for property dealing that he introduced was taken up, he would receive a 35% share of the net profits from the resulting transactions and would be responsible for 35% of any losses generated. The balance would then be divided equally between Messrs Hitchcox and Handelsman.[6]Mr Lissack said that he received a letter at the time he started working with Farlane confirming the arrangement and his remuneration, but his copy was lost when a fire destroyed his home at the start of 1997. Mr Handelsman could not recall any such letter and there was no copy in the Farlane Group files. I do not think it matters whether there was such a letter but, although MLC expressed reservations, I see no reason to doubt Mr Lissack’s evidence on this. I think it is unlikely that he would have started on what was a new venture for him, taking up most of his time, without some confirmation in writing of the basic terms of his engagement.[7]Mr Handelsman viewed the arrangement with Mr Lissack, introduced to him by Mr Hitchcox, as something of an experiment to see if it would advance the property dealing side of their business. However, that experiment clearly proved successful. Mr Lissack introduced a large number of trading opportunities, although he emphasised that he explored and investigated many more potential deals in order to identify and select those which he considered suitable for proposal to Messrs Hitchcox and Handelsman. Moreover, through the proposals that he did introduce, although only some 10-20% of those were taken up, the business of Farlane prospered. Mr Lissack, for his part, did well out of his 35% share and although contractually free to do so, he did not in practice seek to introduce opportunities to others. He effectively came to work as part of the small team at the Group’s Queen Anne Street offices, where he was based between late 1995 and 2008.[8]The majority of opportunities presented by Mr Lissack were trading opportunities (i.e. for purchase and resale) with only a limited development aspect, such as an application for planning permission to add value or, sometimes, limited conversion or extension works. The life cycle of such transactions from initial presentation to final sale, and thus realisation of profit, would be between a couple of months and two years. On those transactions, Mr Lissack’s main point of contact was Mr Hitchcox until the latter became less involved in the business in the late 1990s. Mr Lissack said that over the years he worked with Farlane, they completed between 70 and 100 such opportunities, some of them leading to multiple transactions as various units within a property were sold or let. For those transactions, Mr Lissack was remunerated according to the 35% share of profit/loss agreement.[9]However, Mr Lissack also introduced to Messrs Hitchcox and Handelsman a smaller number of opportunities that would involve a much greater degree of development. Those were more ambitious projects that involved more complex negotiation, planning and design work, with attendant delay and greater commitment in terms of capital and manpower. The first such project, introduced by Mr Lissack in late 1995, was City Cloisters (the potential development of an office building near the Old Street roundabout into residential apartments). In the end, however, that property was sold on without the development being carried out. The others (apart from St Pancras) included, in summary, a property in Charlotte Street in mid-1996 (a substantial proposed development of flats, offices and restaurant space); a series of church developments that came to Mr Lissack through one of his contacts, Mr John England: Cricklewood Baptist Church; Once planning permission was obtained for this church development, Farlane was approached by a potential purchaser and so sold on the property without the development being carried out. Westbourne Grove Church; St Philip’s Church, Earl’s Court Road; Abbey Road Baptist Church; and St Andrew’s Church, Short Street, London SE1; and in September 2003 a very different kind of development on a large site at Trewcn in Wales.[10]Some of these developments were pursued under the “Manhattan Loft” brand by special purpose vehicles (SPVs) incorporated as subsidiary companies. It is common ground that remuneration of Mr Lissack as regards such projects was not covered by the general agreement for his 35% net profit share on trading opportunities. In general, these were covered by particular agreements for remuneration made with Mr Lissack by either Mr Hitchcox or Mr Handelsman. How much Mr Lissack was obliged to do, as a condition of his remuneration, as regards the negotiation, development and marketing of these properties was a matter of dispute. However, he clearly had a direct interest in the successful completion of the projects and in practice he was often involved in assisting over the negotiation at the outset and the marketing of the developed units at the end.[11]In December 1996, Mr Lissack set up Lonsdome Ltd (“Lonsdome”), and it is common ground that from April 1997, on his accountants’ advice, he provided all his services through Lonsdome. He arranged for any money due for pre-1997 work to be paid to Lonsdome. Lonsdome was dissolved on 6 May 2008. From about 2007 payments were made, on Mr Lissack’s instructions, to Lissack Properties LLP. St Pancras Chambers[12]In September 1996, Mr Lissack was put in touch with the individuals at Lynton plc, a member of the BAA group (“BAA Lynton”), who were putting together a consortium to bid for the refurbishment of St Pancras Chambers for which London & Continental Railways (“LCR”) had launched a competition. This was a major, capital intensive project to refurbish and convert a Grade 1 listed building. The introduction of MLC was proposed on the basis that it would be the specialist developer concerned with converting the 4th-6th floors into apartments.[13]After some discussion, MLC agreed to form part of the BAA Lynton consortium (known as the “Chambers Consortium”). A major part of the Chambers Consortium bid was the construction of a hotel on the 1st-3rd floors, for which Whitbread as a member of the consortium was to be responsible. On 24 December 1996, the Chambers Consortium’s bid was short-listed by LCR and eventually, in late 1997 or early 1998, it was selected to carry out the development of St Pancras Chambers.[14]Progress on the St Pancras Chambers project suffered substantial delay, for planning and other reasons. Over that period, there were very significant changes in the nature of MLC’s involvement to which it will be necessary to refer in more detail below. First, MLC agreed to be responsible for refurbishing and developing also the 3rd floor as apartments (previously designated part of the hotel). Then, in June 2003, Whitbread pulled out of the project altogether. This created a major crisis and the prospect that LCR would re-tender the whole project. In the end, MLC undertook the entire development, making it by far the largest project which the company had ever undertaken. Work finally started in August 2006 and the finished St Pancras Chambers was formally opened on 5 May 2011.[15]It is common ground that following a letter dated 15 May 1997 written by Mr Lissack on behalf of MLC to BAA Lynton as regards a confidentiality undertaking, Mr Lissack had no further involvement at all with the St Pancras Chambers project. Relations between Mr Hitchcox and Mr Handelsman[16]After working closely together for many years, tensions developed between Mr Hitchcox and Mr Handelsman in the late 1990s. Mr Handelsman was concerned that Mr Hitchcox was devoting less time to Farlane as he spent extended periods in Paris exploring his own business interests. By 1999, he had set up a new business called Yoo, with the French designer Philippe Starck.[17]In March 1999, Mr Hitchcox resigned as managing director of MLC to become a non-executive director, but at that point it was agreed that he would continue to run Farlane and be primarily responsible for dealing with Mr Lissack. However, in order to resolve the continuing problems, a mediation was held between the two men, which led to a confidential settlement agreement, concluded on 14 July 2000 and intended to establish a clear way forward for their respective responsibilities for Farlane and the ongoing MLC projects.[18]Nonetheless, relations between them again deteriorated and in 2006 Mr Hitchcox commenced High Court proceedings against Mr Handelsman and MLC. One of his claims was for a 50% share in the profits from St Pancras Chambers on the basis that this project came within their joint venture arrangements. The case was settled in October 2007 on the eve of the trial. Departure of Mr Lissack[19]In 2007, Mr Lissack was largely running the Farlane business in the absence of Mr Hitchcox. However, in early 2008 he decided to join Mr Hitchcox in his Yoo business, where he is apparently now carrying out a similar role. He accordingly left the Farlane Group. There is no suggestion that his departure was acrimonious.

THE PRESENT PROCEEDINGS

[20]The claim form in the present case was issued in May 2011, shortly after the official opening of St Pancras Chambers which attracted considerable publicity. Mr Lissack had not previously written to Mr Handelsman making a claim, nor did his solicitors write a letter before issuing proceedings. The Claim[21]Mr Lissack’s primary claim was described by his Counsel as resting on a “straightforward contractual basis”. It alleges that following various letter agreements covering existing developments made with Mr Lissack in mid-2000 (some of which are dated 14 July 2000), Mr Hitchcox made an oral agreement with Mr Lissack as regards other development opportunities that he had introduced whereby Mr Lissack’s remuneration for those projects was determined at 25% share of net profit (or contribution to net loss). This was pleaded as an oral agreement made with Mr Hitchcox at his offices in Bentinck Street, London W1. On that basis, Mr Lissack claims a declaration that he is entitled to a 25% share in the net profits derived by MLC from the St Pancras Chambers development, and an account.[22]As an alternative claim, introduced into the pleadings by formal amendment shortly after the start of the trial but foreshadowed in the original Particulars of Claim, Mr Lissack claims a restitutionary entitlement by way of quantum meruit for his services “in introducing the St Pancras opportunity.” This was expressed on the basis that it should reasonably have been obvious to Mr Hitchcox and Mr Handelsman (and through them, to MLC), alternatively they must reasonably have appreciated, that Mr Lissack’s services in introducing that opportunity were not being provided gratuitously but in the expectation that he would be remunerated. It is alleged that the quantum meruit should be assessed as a percentage of the profit made by MLC, either from the St Pancras Chambers project as a whole or (as explained in argument) from the portion of it that constitutes residential apartments. The Defence[23]To this claim, a whole series of defences were advanced. The primary defence is that no such oral agreement was ever made. Further, it is contended that if there were such an agreement:(a) it was with Lonsdome not Mr Lissack personally; and(b) it covered only projects where Mr Lissack was the effective cause of the introduction, which was not on the facts the case with St Pancras Chambers. Further, it was contended that Mr Lissack was only entitled or could expect remuneration when he was obliged to do further work on a project and not simply introduce the opportunity, whereas it is accepted that he did no effective additional work on St Pancras Chambers. Moreover, the final project carried out by MLC was fundamentally different from the opportunity presented in late 1996 so as to break the chain of causation that would entitle Mr Lissack to any remuneration. Finally, various estoppels were relied on to defeat the claim. Most of the same arguments (other than the first) were relied on, mutatis mutandis, in answer to the alternative, quantum meruit claim. THE TRIAL[24]Mr Lissack gave evidence himself and was extensively cross-examined. He served statements from three further witnesses: Mr Michael Bonehill, a solicitor and senior partner in H Montlake & Co, who acted on many of the transactions in which Mr Lissack was involved and was introduced by Mr Lissack to Farlane and MLC; Mr Jonathan Hall, a chartered surveyor who worked with Mr Lissack at the Farlane Group’s Queen Anne Street offices (he now also works with Mr Hitchcox in Yoo); and Mr John England, the estate agent who had introduced the church properties to Mr Lissack. Mr England was not called for cross-examination.[25]For MLC, Mr Handelsman gave evidence and was extensively cross-examined. Ms Nicola Tindale, who worked at BAA Lynton at the time of the initial contact with Mr Lissack regarding the Chambers Consortium, and Mr Alan Crawford, the architect who was involved in putting Mr Lissack in contact with BAA Lynton, both gave evidence (the latter with the permission of the Court since a witness statement from him was served only the day before the trial). Witness statements were also served from Mr Paul Bowes, the acting managing director of MLC between May and August 2007 (who was briefly cross-examined); Mr Lloyd Hunt, the finance director of MLC, and Lord Fink, who in 2008 became an investor in the St Pancras Chambers project. Neither Mr Hunt nor Lord Fink was cross-examined.[26]In addition, both sides served notice of intention to call Mr Angus Boag who, apart from a brief period in 1999, worked for MLC from 1993 until April 2007. Mr Boag declined to give a statement to either side and in the event Mr Lissack called him as a witness. Mr Boag gave extensive evidence in chief in response to questions from Mr Boyle QC and was also cross-examined by Mr Mill QC.[27]I do not consider it necessary in this case to set out separately my view of each witness who gave oral evidence. But I think it is relevant to do so as regards Mr Lissack, Mr Handelsman and Mr Boag, whose combined testimony accounted for the majority of the oral evidence heard at trial. Mr Lissack[28]Mr Lissack said himself, and this was borne out by some other witnesses, that he is not a person used to considering details. His success in the property world is due to his ability to develop contacts, to which he has devoted much time and effort, and his assessment, based on his experience, of what is likely to be an attractive and viable property deal. Mr Lissack was in the witness box for over a day. He stood up well to cross-examination in what was for him an unusual environment. However, I found some of his answers and explanations inherently implausible, and there are other parts of his evidence which, as I shall explain, I cannot accept as correct when assessed against the contemporary documents and evidence given by others. Mr Handelsman[29]Mr Handelsman is clearly an individual of considerable intelligence who can be very determined in his business affairs. He was occasionally defensive in his evidence, and initially not very forthcoming regarding the resolution of his dispute with Mr Hitchcox, perhaps because he regarded that as confidential and failed to appreciate its relevance to this action. He was clearly annoyed at facing what he regarded as an opportunistic claim brought by Mr Lissack, whom he felt he had treated very fairly. Taking all this into account, I found him to be an honest witness, seeking to give a true account of what had occurred. Mr Boag[30]Mr Boag is a chartered engineer. He explained that he had not wished to give a witness statement to either party as he did not wish to be seen as taking sides in what was, in effect, a dispute between two individuals both of whom he had known well for many years. That approach was borne out by the manner in which he gave his evidence. He gave clear, careful and direct answers, doing his best to assist the Court. I found him to be not only an entirely honest but also an impartial and reliable witness. His evidence, in particular as regards the St Pancras Chambers project in which he was closely involved, was very helpful. Unsurprisingly, neither side sought to criticise his evidence.[31]Mr Hitchcox was not called by either side. In view of the substance of the dispute, his evidence would clearly have been very relevant. It is understandable that MLC had not sought to call him, given the breakdown in his relationship with Mr Handelsman. Since Mr Lissack is now working for (or with) Mr Hitchcox, he might have been expected to call him. The explanation given by Mr Lissack was that he had asked Mr Hitchcox a number of times if he would give evidence but that his final response was that he looked at this on a commercial basis and would give evidence for “the highest bidder”. In the light of that, it was considered inappropriate to call him. Although MLC was in no position to challenge that account, it is a serious allegation against Mr Hitchcox and I think it would be wrong to find that it is correct when Mr Hitchcox has not been given the opportunity to refute it. Nonetheless, in the light of that evidence, I consider that it would be inappropriate to draw any inference against Mr Lissack from the failure to call Mr Hitchcox to support his case, on the basis of Wisniewski v Central Manchester Health Authority (1998) Lloyd's Rep Med 223.[32]I should add that I canvassed with Counsel whether the Court might call Mr Hitchcox but it was common ground that the Court has no power to do so without the consent of both sides: Re Enoch and Zaretsky, Bock & Co’s Arbitration [1910] 1 KB 327, the effect of which had not been changed by the CPR. Here, neither side wished that course to be taken.

THE PRIMARY CASE: ORAL AGREEMENT

[33]The original agreement that Mr Lissack would have a 35% share in trading opportunities that he introduced was, on Mr Lissack’s own case, confirmed in writing. Although this was a small business working in an informal atmosphere, it is notable that Mr Hitchcox took care to record most of the subsequent agreements made with Mr Lissack in writing, at least in 2000 when his relations with Mr Handelsman came under strain.[34]Mr Lissack in his evidence said that he had three discussions with Mr Hitchcox in 2000 regarding his remuneration. The first concerned the Charlotte Street development. This project had a complicated history. Mr Lissack introduced it in 1996, as the opportunity to purchase and develop a large, unmodernised property between Charlotte Street and Rathbone Street. As observed above, it was to be a substantial development and the planning process became prolonged. In late 1999, Mr Hitchcox decided that he no longer wanted to co-finance the deal on a 50-50 basis and brought in an additional joint venture partner, Mr Nabil Fattal. On that basis, Messrs Hitchcox and Handelsman considered that Mr Lissack’s profit share (and liability for losses) should be determined at 25% after Mr Fattal had received his 1/3 share. This was recorded in a one page letter agreement, described as a “joint venture [JV] agreement”, dated 10 April 2000 prepared by Mr Hitchcox and signed by Mr Lissack. Accordingly, the first oral discussion with Mr Hitchcox was duly reflected in a written, letter agreement. (Mr Lissack quite understandably could not recall the date of that discussion, but presumably it must have preceded this letter.)[35]The second discussion concerned the church properties. Those had all come to Mr Lissack through Mr England, and then in turn he had introduced them to MLC and they were subject to development by a particular SPV company. Mr England was himself given joint venture participation on the basis of a 25% share. Letters were produced dated 21 December 1999 for Abbey Road Church, 27 April 2000 for the Westbourne Grove Church and 14 June 2000 for St Philip’s Church, Earl’s Court Road, each from the respective MLC SPV and stating that Mr Lissack’s JV share was 35% after deduction of Mr England’s 25%. However, on 14 July 2000, Mr Hitchcox produced for signature four letters in the same form from the relevant MLC SPV for each of four church developments: Abbey Road Church, Westbourne Grove Church, St Philip’s, and St Andrew’s in Short Street. The first three reduced Mr Lissack’s JV percentage share from the 35% set out in the previous letters to 33.33%. (Thus, after Mr England’s share, the balance would be subject to a three-way split as between Mr Hitchcox, Mr Handelsman and Mr Lissack.) The last letter similarly provided for a 33.33% share (after deduction of Mr England’s 25%) for St Andrew’s. Accordingly, as with Charlotte Street, following the oral discussion Mr Hitchcox produced a series of specific written agreements concerning individual church projects.[36]Mr Lissack said that the oral agreement on which he claims was the subject of the third of these discussions with Mr Hitchcox, that took place in the months after 14 July 2000. He said of this discussion in his evidence:
“It was a simple, short discussion that related to the treatment of development situations going forward. It was not particularly protracted. I had a number of discussions with him surrounding a whole raft of different issues through that period, I was in very regular contact with him in those days, and he merely emphasised the fact that he felt it was perfectly correct and proper that if there were to be any fresh development situations or existing outstanding ones that they would be treated on the same basis as our discussions pertaining to Charlotte Street and the churches.”
[37]Mr Lissack said that in that short discussion the existing, outstanding development projects were not identified, and that in fact there were only two at the time, St Pancras Chambers and Honor Oak. But he then agreed that Honor Oak was a church development which was therefore covered by his earlier discussion with Mr Hitchcox. Accordingly, as Mr Lissack accepted, the only other “existing, outstanding” development was St Pancras Chambers, which even at that stage was potentially a significant project although not much was happening on it at that particular time. However, Mr Lissack does not suggest that in their discussion Mr Hitchcox referred to St Pancras by name: on the contrary, his evidence is that no such reference was made and that it was a very general discussion. I find that surprising; and I regard it as still more surprising that Mr Hitchcox did not take care to document as regards St Pancras Chambers the agreement allegedly made in this further conversation, as he had done for the agreements as regards Charlotte Street and the existing church projects (except for Honor Oak). But this becomes all the more improbable in the light of the mediation settlement entered into by Mr Hitchcox with Mr Handelsman on 14 July 2000.[38]The circumstances of that settlement emerged only after Mr Lissack had given his evidence but as the settlement was confidential the details were obviously not known to him at the time. It included a provision that all the projects listed in an earlier letter of Mr Handelsman of 8 March 1999 would continue to be managed in accordance with the existing arrangements, and that all profits from such developments would be distributed to Mr Hitchcox and Mr Handelsman in accordance with the percentages set out in that letter. The referenced list of properties included Charlotte Street, the Earl’s Court Road Church (St Philip’s), the Westbourne Grove Church and St Pancras, in each of which their respective interests were specified as 50:50.[39]Charlotte Street was the subject of the 10 April 2000 letter agreement with Mr Lissack. It seems to me too much of a coincidence to suppose that Mr Hitchcox’s preparation of replacement letter agreements for Abbey Road Baptist Church, St Philip’s, Earl’s Court Road and the Westbourne Grove Church on the same day as this settlement agreement was not prompted by his wish to have those arrangements correctly documented now that they were covered by this agreement with Mr Handelsman, and he evidently took the opportunity to prepare a letter agreement for St Andrew’s, Short Street, at the same time. If Mr Hitchcox entered into a discussion that was to be considered as creating an agreement with Mr Lissack covering St Pancras Chambers shortly after 14 July 2000, I regard it as very unlikely that he would not similarly have prepared a letter agreement covering that important project. Although Mr Lissack sought to emphasise that these were “rough and ready discussions” held with Mr Hitchcox in an informal atmosphere, that evidently did not cause Mr Hitchcox to refrain from recording the remuneration terms which he agreed with Mr Lissack in letter agreements which they both signed.[40]Further, as set out above, Mr Lissack’s evidence was that this agreement covered also further development opportunities with MLC that had not yet arisen. However, under the settlement agreement, Mr Hitchcox relinquished all interest or claim as regards MLC save for the specified developments, and thus had no interest in future development projects which MLC might undertake thereafter. Therefore, it seems to me extremely unlikely that he would subsequently have made an agreement with Mr Lissack governing Mr Lissack’s remuneration for such projects.[41]Moreover, Mr Lissack said in his evidence that this meeting and discussion took place in Mr Hitchcox’s offices in Bentinck Street. This was stated in a response to a Part 18 request for further information regarding the Particulars of Claim and repeated in Mr Lissack’s witness statement. In his Counsel’s opening skeleton argument, the alleged agreement was indeed referred to as “the Bentinck Street agreement”. However, it was demonstrated at trial that Mr Hitchcox did not move into his Bentinck Street office until 2001. Accordingly, it was impossible that any such meeting or agreement in 2000 was made in that office, and Mr Lissack then accepted that he may be wrong about the location. I recognise that when parties have a large number of discussions over several years, it is possible to be confused in one’s recollection as to the location of a particular meeting. But given that this meeting is central to Mr Lissack’s claim, this error as to where he alleged it took place does not give confidence as to the accuracy of Mr Lissack’s evidence about the meeting as a whole.[42]Next, if the alleged agreement had been made, it meant that Mr Lissack not only was entitled to 25% of the net profits from St Pancras Chambers but also was liable for 25% of net losses. When Whitbread withdrew from the consortium in 2003 and MLC decided to take over responsibility for the whole development, that required very substantial investment from MLC and exposed it to greatly increased risk: see further paras 75-76 below. As part of the small team working at the Queen Anne Street offices at the time, Mr Lissack was of course aware of these events, and indeed would ask Mr Boag in general terms how things were going on St Pancras. But if he had indeed been subject to such potential liability, I regard it as inconceivable that he would not have requested more specific information about what was at stake, and sought some reassurance as to his position. However, it is common ground that he made no such inquiries and did not seek to be involved in any detailed discussion of the project. Mr Lissack sought to explain this on the basis that even when, as he put it, the costs of the development “ballooned”, he had great respect for Mr Boag and was confident that MLC would deliver the project. That may be so, but I find that wholly unconvincing as an explanation for his conduct if he had been exposed to 25% of a potential loss.[43]Furthermore, by early 2008 when Mr Lissack left the Farlane Group, work on St Pancras Chambers, now as a project entirely run by MLC, was well under way, and contracts for sale of most or all of the apartments had been exchanged. It was clearly a very significant project which, despite the high risk, was also capable of generating significant profits. However, it is common ground that Mr Lissack never raised or mentioned to Mr Handelsman at the time of his departure his continuing financial interest in that project by reason of his remuneration agreement. This seems particularly astonishing since, on his case, that was a purely oral agreement made with Mr Hitchcox who had by then parted ways with Mr Handelsman in acrimonious circumstances. Nor, indeed, does Mr Lissack suggest that he ever mentioned the subject to Mr Handelsman at any time thereafter, although he kept in touch with Mr Handelsman for a while. His claim was first raised by the claim form in these proceedings, issued without any prior letter from Mr Lissack to the individual with whom he had worked in a small business over many years. In my judgment, that is a strong indication that this agreement had never existed.[44]In addition, Mr Handelsman gave evidence that in early 1999, he raised with Mr Lissack the question of whether he was expecting anything by way of remuneration for his role in bringing the St Pancras opportunity. He said that this arose in the context of a discussion concerning a property in St John Street, Clerkenwell. Mr Lissack had brought the St John Street property as a trading opportunity to Farlane but Mr Hitchcox had turned it down. By that stage, as mentioned above, Mr Hitchcox was devoting less time and effort to Farlane because of his own business interests in Paris, and the Farlane business, which accounted for much of Mr Lissack’s income, was suffering as a result. Mr Lissack indeed referred to an “aura of depression and negativity hanging over the building [i.e. the Farlane Group offices], certainly so far as I was concerned.” Mr Lissack was disappointed by the response to his St John Street proposal; and he said that he knew the vendors very well and felt there was an issue of personal credibility for him. Mr Handelsman said that he had sympathy for Mr Lissack’s position and felt he was not being fairly treated; and he thought that this building might make a decent investment. Accordingly, he offered to buy it for his personal portfolio, and then discussed with Mr Lissack the level of commission he would receive. They agreed that Mr Handelsman would pay him a fee of £5000 for the introduction, corresponding to a commission of about 1% of the purchase price. Mr Lissack explained that in those circumstances he was ready to accept that as a one-off token payment which was very different from his usual remuneration.[45]Accordingly, the circumstances and substance of the conversation about St John Street are not in dispute. But Mr Handelsman said that it was in this context that he asked Mr Lissack what he was expecting as regards St Pancras. At that stage, planning permission for the St Pancras development had not been granted and it was unclear how far that project would go. Mr Handelsman said he mentioned it because he felt that although Mr Lissack’s limited involvement in St Pancras would not justify a substantial profit share, it might similarly be appropriate to give him a small fixed fee. Mr Handelsman’s evidence as to Mr Lissack’s response was as follows:
“In fact, Charles said that he was not expecting anything as he had no involvement in St Pancras other than to pass on to us Lynton’s interest in involving MLC and attending a couple of meetings.”
When cross-examined about this, Mr Handelsman said that he particularly recalled Mr Lissack’s answer because he thought it was a very decent response. Mr Lissack, however, denied that any such conversation regarding St Pancras took place.[46]I bear in mind that the witnesses were giving evidence regarding a conversation over 12 years previously, and the dangers of self-persuasion. Nonetheless, having regard to the way Mr Handelsman gave his evidence and the view that I formed of him and Mr Lissack as witnesses, I accept his account and find that such an exchange did occur, albeit that Mr Lissack may well not have been so specific in spelling out the reason why he was not expecting payment for St Pancras (and it was of course not suggested by Mr Handelsman that he could recall Mr Lissack’s express words). Such a conversation does not in theory preclude an agreement being reached between Mr Lissack and Mr Hitchcox over a year later that provided for him to be remunerated for St Pancras, but in practice it makes it unlikely.[47]Taking all these aspects together, and some are clearly of more weight than others, I therefore reject Mr Lissack’s evidence of the oral agreement and find that no such agreement was made.[48]That finding determines the principal ground of this claim. But although it is perhaps unnecessary to do so, I shall also address three further arguments that were raised, some of which relate also to the alternative, restitutionary claim: i) If there were an agreement, was Mr Lissack contracting personally or on behalf of Lonsdome? ii) If there was an agreement, what were its terms as regards Mr Lissack’s role in being the “effective cause” of the “introduction” of an opportunity, and on the facts was Mr Lissack sufficiently responsible for the introduction of St Pancras Chambers to MLC to qualify for remuneration? iii) Was the development carried out in the end by MLC materially different from the original project proposed so as to break the chain of causation? Lonsdome[49]On the assumption that, contrary to my finding, Mr Lissack did conclude an oral agreement with Mr Hitchcox, it is clear that there was no express reference as to the identity of the contracting parties. Mr Hitchcox was obviously not contracting personally, and as the agreement concerned development projects, he can be presumed to be acting on behalf of MLC. But what of Mr Lissack? The question is to be considered objectively. All the letter agreements which Mr Hitchcox prepared and Mr Lissack signed in the months preceding this conversation were signed by Mr Lissack on behalf of Lonsdome. Mr Lissack accepted that for all new opportunities that he introduced after April 1997 he was acting through his company and not personally. Every payment from a Farlane Group company made after that date in respect of Mr Lissack’s services was made to Lonsdome. In short, Mr Lissack decided, evidently on his accountant’s advice, to provide his professional services through the company and not on his own account.[50]In those circumstances, I consider that on any objective view of the alleged agreement, Mr Lissack was contracting on behalf of Lonsdome. Mr Lissack accepted, as I understood his evidence, that he traded through Lonsdome as regards any new opportunities introduced after April 1997, but sought to distinguish St Pancras Chambers on the basis that that introduction was made in 1996. However, on his evidence, the agreement with Mr Hitchcox was a general one, covering both existing (undefined) projects and future development projects. I do not see that it can sensibly be construed as giving rise to a contract with Mr Lissack personally for existing projects insofar as introduced before April 1997 (even if the only existing project was St Pancras Chambers) and a separate contract with Lonsdome for future projects.[51]If any observer had asked Mr Lissack and Mr Hitchcox at the time of the conversation whether the agreement was to be with Mr Lissack personally or his company, I have no doubt that the answer would have been that it was the company, as in the case of the various letter agreements which had recorded the effect of the previous oral conversations.[52]Mr Boyle sought to escape from this conclusion on the basis that the conversation simply fixed the percentage of remuneration and that Mr Lissack would not have agreed to give up his “personal contingent right”, going back to 1996, to be remunerated for the introduction of St Pancras to MLC. However, in the first place, this begs the question whether Mr Lissack had such a right to remuneration in the absence of a contractual agreement: that is addressed below in consideration of his secondary case on quantum meruit. Secondly, on his own case, Mr Lissack had no contractual right prior to this agreement. It is therefore a question of construction, considering all the surrounding circumstances, including that at the time when the agreement was made he was trading only through Lonsdome, whether the agreement of 2000 was made in his personal capacity or on behalf of the company. In my judgment, it was clearly the latter.[53]On this ground also, Mr Lissack’s contractual claim therefore fails. I have little doubt that if Lonsdome had not been dissolved in 2008, the company would at the least have been joined as an alternative claimant. The introduction of the St Pancras “opportunity”[54]There was a degree of conflict and indeed confusion in some of the evidence regarding the details of the way in which BAA Lynton came to be introduced to MLC. Apart from Mr Lissack, evidence on that was given by Ms Nicola Tindale and Mr Alan Crawford. I have no doubt that both Ms Tindale and Mr Crawford were doing their best to remember what happened and some of the inconsistencies are therefore explicable on the basis that they, and indeed Mr Lissack, were giving evidence about events that happened 16 years ago and of which there was no written record. Moreover, many of the details as to which there were differences of recollection are not, in my judgment, important.[55]What is clear is that in the early 1990s, Mr Lissack met Mr Crawford through a mutual contact called David Snowden. Mr Crawford is an architect who in 1995 worked with a Mr Graham Harris in the practice called SSH. Mr Crawford and Mr Lissack had kept in touch, and after Mr Lissack started at the Farlane Group, Mr Crawford took some development opportunities to him while Mr Lissack for his part asked Mr Crawford to look at a few properties for him.[56]Mr Crawford said that his practice was proactive in seeking out opportunities and that he learnt about St Pancras Chambers from an advertisement in one of the architectural journals. In summary, that resulted in his getting in touch with Ms Tindale, who was then working in the new business team at BAA Lynton. She was involved with her colleague, Richard Page, in putting together a consortium to bid for the opportunity to develop St Pancras Chambers in response to the invitation from LCR. The objective, as she explained it, was:
“… to put together a consortium of developers/operators for the different parts of the scheme being proposed by Lynton for the redevelopment of the St Pancreas Chambers building: a hotel developer/operator for the historic and main rooms; an operator for the conference/serviced offices above this; and a developer for the residential apartments on the top three floors. The idea was that Lynton would co-ordinate the bid.”
[57]Mr Crawford said that following discussion with Ms Tindale and/or Mr Page, they approached a company called Frogmore Estates plc (“Frogmore”) to be the developers of the apartment floors, but that after some initial exploratory work Frogmore decided it was not interested. Ms Tindale could not recall this. But it seems clear that Mr Crawford considered that the proposed residential floors of St Pancras Chambers was the sort of project which might interest MLC, as he knew of MLC’s work in creating loft apartments. Mr Crawford said that he therefore rang Mr Lissack and arranged a meeting for him with Ms Tindale and, possibly, Mr Page. Mr Lissack said that the first contact came from Mr Snowden who had called him to tell him of Mr Crawford’s wish to meet, but Mr Crawford said that Mr Snowden was not involved. Further, Mr Lissack thought that his first meeting on St Pancras was with Mr Crawford alone, before he had a further meeting with Ms Tindale.[58]I do not think that it really matters which account is correct. It is clear that as a result of the initial exchanges (involving Mr Lissack and no one else from MLC), a meeting was held in around autumn 1996 where Mr Lissack met Ms Tindale to discuss the potential for MLC to become a member of the consortium responsible for the proposed residential floors. It seems likely on the evidence that Mr Crawford was at this meeting and it is clear that neither Mr Hitchcox nor Mr Handelsman was present. Ms Tindale told Mr Lissack more about the St Pancras Chambers project; she knew of MLC’s reputation and that it had experience in converting listed buildings which made her and Mr Page consider it a suitable participant; and Mr Lissack says (and I accept) that he confirmed to her that MLC was indeed well suited for such work, referring to examples of projects it had carried out. Mr Lissack told Ms Tindale that he would take the matter back to Messrs Hitchcox and Handelsman.[59]It is common ground that at the time Mr Handelsman was heavily engaged in submitting a bid for a site in Greenwich, so Mr Lissack dealt primarily with Mr Hitchcox. He explained the project to him; Mr Hitchcox was interested and asked Mr Lissack to set up a meeting for him with BAA Lynton. As a result, a further meeting was arranged with Ms Tindale (and perhaps others) attended by Mr Hitchcox and Mr Lissack. Mr Lissack said that he did not himself play an active role at that meeting other than making the relevant introductions. Following that meeting, Mr Lissack wrote on behalf of MLC expressing their enthusiasm for the project and enclosing a bank reference and details of other projects with which MLC was involved. That information was incorporated in the full proposal prepared by BAA Lynton and submitted to LCR, of which a copy was sent to Mr Lissack at MLC on 13 November 1996.[60]Although Mr Lissack remained the point of contact for BAA Lynton in early 1997, by then Mr Hitchcox and Mr Boag had become involved in the project and he does not suggest that he did anything substantive thereafter. He had no further involvement at all after he signed on behalf of MLC a requested confidentiality undertaking on 15 May 1997.[61]MLC submitted that an individual who is potentially entitled to commission for bringing about a transaction is entitled to such commission only if his services were the effective cause of that transaction, unless the contract specifies otherwise. For that proposition, reliance was placed on Bowstead and Reynolds on Agency (19th edn, 2010), para 7-027. However, as the commentary there makes clear, the proposition is simply an example of the wider principle that the terms of the individual’s remuneration depend upon the particular contract, and there are contracts to which the position does not apply. There was no such express term in the alleged oral agreement, and the submission for MLC was therefore that such a term should be implied.[62]For the purpose of this discussion, it is of course to be assumed (contrary to my earlier finding) that the oral contract alleged by Mr Lissack was in fact made. On that assumption, it may not in the end matter whether the issue is addressed by asking whether it was implicit that Mr Lissack would only be entitled to remuneration if he was the “effective cause” of an introduction, or by considering what “introduction” should be interpreted to mean in the context of this particular contract since it imports a causative element. Both sides referred to passages in cases that are mostly concerned with contracts between agents and vendors, and in many of them the courts’ approach is clearly affected by a concern to avoid the vendor being liable for double commission to two agents. See the observations of Longmore LJ in County Homesearch v Cowham [2008] EWCA Civ 26, [2008] 1 WLR 909, at [14] and [16] (with whose judgment Sir Anthony Clarke MR and Richards LJ agreed).[63]The factual circumstances underlying those judgments seem to me far removed from the present. Here, the service supplied by Mr Lissack was that of seeking out and bringing to MLC potential opportunities for property development. He was expected to do so by cultivating his network of contacts, so as to learn of potential opportunities, and then using his experience, so as to assess whether a particular opportunity might be of interest and value. The latter process of filtering opportunities was important. MLC had acquired a strong and distinctive reputation for its skill in conversion of older buildings into high-class apartments. As Mr Lissack stated (and I accept):
“From the beginning, contacts regularly referred properties to me because of my association with Manhattan Loft: this was a brand people were keen to be associated with.”
[64]Here, Mr Crawford was a personal contact that Mr Lissack had maintained, and I have found that it was Mr Crawford who initiated the approach to MLC regarding the St Pancras Chambers development by contacting Mr Lissack (whether directly or through Mr Snowden). It was also, on my finding, Mr Crawford who suggested MLC to Ms Tindale, and who helped to set up the initial meeting attended by Mr Lissack, who as a result took the proposal back to Mr Hitchcox.[65]MLC submitted that Mr Lissack was not entitled to any commission on the basis that BAA Lynton would in all probability have come to it in any event because of its particular (and arguably unique) skill in carrying out such conversion of a listed building; and because, as it was expressed in Counsel’s closing submissions, “Ms Tindale was knocking at an open door since St Pancras Chambers was exactly the sort of project that Mr Handelsman would be keen to take on: it perfectly fitted [MLC’s] profile.” However, I do not consider that Mr Lissack’s contractual entitlement to commission on this, or any other, development depended on whether it would have come to MLC in his absence, or on whether Mr Lissack had to persuade the other party to deal with MLC; or on how enthusiastically MLC welcomed that approach: any such assessment would introduce a level of complexity and uncertainty which I think was commercially unreal and contrary to the way the parties dealt with each other on other developments. For example, although the first church development may have come to MLC from Mr England only because of Mr Lissack’s personal contact with him, by the time of the third or fourth development Mr England was well acquainted with MLC and what they could do and would no doubt have come back to them even if Mr Lissack was no longer there: nonetheless the relevant MLC SPV company contracted to pay Mr Lissack a commission.[66]As regards specifically MLC’s dealing with BAA Lynton to join the Chambers Consortium, Mr Boag’s evidence was that when Mr Hitchcox first spoke to him about it in 1996, he presented it to Mr Boag on the basis that “this was a deal that Charles had brought in”. And he said that there was in the office:
“a general understanding that the role had come via Mr Lissack to Mr Hitchcox, and that was the way in which the opportunity had arrived at MLC’s doorstep.”
[67]On the proper interpretation of the (assumed) contract, I consider that on the facts Mr Lissack’s role was sufficient to constitute the “introduction” of BAA Lynton and of the opportunity to join their consortium, and that it fulfilled the necessary causative element, however that is defined. The actual St Pancras Chambers development and material change[68]Mr Lissack is claiming a percentage of the profit on the final St Pancras Chambers development. As explained above, although in the events which happened MLC came to undertake the whole development, that was not the basis on which it became involved in the project at the outset. The approach by BAA Lynton, with which Mr Lissack was involved, concerned only the conversion of the 4th-6th floors of the building into residential apartments. Accordingly, MLC submitted that the development which it ultimately undertook was very substantially different from the much more limited “opportunity” introduced by Mr Lissack in late 1996, such that the contract cannot be interpreted as entitling him to 25% of the net profit on the St Pancras Chambers development which it carried out. Put another way, it is said that Mr Lissack cannot be regarded as the introducer to MLC, or effective cause, of the development which it finally undertook so that there was a break in the chain of causation.[69]The key facts in this regard are as follows. The initial scheme put forward by the Chambers Consortium led by BAA Lynton, in which MLC participated, was summarised by Mr Handelsman:
“(a) [BAA] Lynton would develop the retail space at platform and concourse level; (b) A hotel operator would develop a hotel, using the historic rooms on the first to third floors of the Chambers building; and (c) MLC would develop the residential apartments on the 4th to 6th floors of the building (the main development being on floors 4 and 5 with a small space on the 6th floor as a mezzanine for one of the apartments).”
[70]That was the detailed tender which the Consortium submitted to LCR in July 1997, and which was selected by LCR in late 1997 or early 1998. MLC was the smallest member of the Consortium, alongside BAA Lynton and Whitbread Hotel Company (“Whitbread”). Mr Boag was heavily involved in going to meetings with the Consortium partners on this basis. However, by 1999 there were considerable uncertainties over the proposal for what was referred to as the “West Wing” extension which was fundamental to the viability of the project but was encountering planning objections. By the time Mr Boag temporarily left MLC in 1999, he said that there was a question-mark over the future of the project.[71]Mr Boag helpfully explained the subsequent chronology in his evidence. Progress on the project was very slow, because of problems with English Heritage and the planning authority. In about 1998/99, BAA Lynton dropped out because BAA was being restructured; it had been interested in operating the retail space but LCR insisted that they would retain the management of this for themselves. Whitbread then took over as leading the consortium.[72]In about 2002, it was decided that the 2nd-3rd floors should also be converted to residential apartments instead of forming part of the hotel. That followed an economic assessment by DTZ, which expressed concern about the viability of a large hotel in the economic climate post 9/11 and therefore suggested a greater proportion of residential space. Further, it was suggested that some of the double height rooms on the lower floors were better suited to residential use. Mr Handelsman along with Mr Boag agreed to MLC taking on this additional involvement. Previously, the project involved the creation of 49 residential units; the additional two floors increased that number to 67 but approximately doubled the total area of saleable residential space (i.e. the lower floor apartments were much larger).[73]In mid-2003, Whitbread told MLC that it was going to pull out. That was a major shock for MLC, which had been involved in the project for some six years although the costs invested at that stage were relatively low. There was a serious risk that the whole scheme would collapse and LCR would re-tender the project.[74]In the end, after anxious consideration, and carrying out various appraisals, MLC decided to take on the whole project. It also had to persuade LCR that it had the financial strength and experience to undertake this and itself obtain the necessary finance. MLC had to secure an agreement for management of the hotel, as to which MLC initially negotiated heads of terms with Whitbread but which was finally the subject of a contract with Marriott. MLC had to manage the difficult planning application, which was finally granted in the first half of 2005. It became responsible for all the professional fees (the majority of which were previously borne by Whitbread) and was engaged in negotiation with banks to fund what was an unusual and ambitious project.[75]As Mr Handelsman emphasised, the project so far as MLC was concerned, was transformed. Previously, it had been the junior partner, involved only in the conversion and refurbishment of residential apartments on the upper floors of an existing building. Now it was the lead developer and involved in the construction of a 245 bedroom hotel, including the building of a new West Wing.[76]The very significant change which this brought about to MLC’s financial commitment is illustrated by the position of Mr Boag. Under his agreement with MLC, Mr Boag was entitled (through his own company) to participate by way of joint venture in MLC development projects. That participation involved a true investment, whereby Mr Boag put up a share of the capital and was entitled to an equivalent share of the eventual profit (or liable correspondingly to contribute to a loss). Prior to his leaving MLC for a brief period in 1999, he had agreed to participate in MLC’s St Pancras Chambers development on that basis to the extent of 4%. When he returned to work for MLC after an interval of some six months, he agreed with Mr Handelsman to increase his participation to 10%. By 2008, he had invested just under £1 million on this basis. However, after MLC took on the total development of St Pancras Chambers, the project assumed such a scale, with greatly increased costs, that substantially more capital was required. It proved very difficult to raise the necessary funding from banks and Mr Handelsman had to inject very substantial sums from his own resources. Mr Boag could not afford to maintain his participation by providing further monies and so he negotiated with Mr Handelsman the release of his share and repayment of the equity he had put in.[77]When MLC’s involvement in the project with Whitbread was expanded to encompass the creation of residential apartments on the 2nd-3rd floors, I think it is arguable that this could be seen as an extension (or amendment) of the opportunity presented by Mr Lissack in 1996. However, it is unnecessary to decide that point, because I am entirely clear that once Whitbread pulled out and MLC undertook the entire St Pancras Chambers development, including the hotel and the construction of the new West Wing, this was a very different project from that which Mr Lissack had introduced to MLC from BAA Lynton. I have no doubt that it would be wrong to construe the agreement allegedly made between Mr Lissack and Mr Hitchcox in 2000 as binding Mr Lissack to a liability for 25% of the net loss MLC might make on this development; and thus equally it did not entitle Mr Lissack to a 25% share in the net profit. Post-introduction work[78]There was a yet further ground raised by MLC in opposition to Mr Lissack’s claim. This was that to qualify for a commission under the arrangements he had with MLC, Mr Lissack had to do more than introduce (or be the effective cause of the introduction of) the development project: he had to take an active part in what was referred to as “driving the project through”: being involved in negotiation of the deal and helping to bring it to fruition, and indeed, in some cases at least, taking part in the discussion as to the most appropriate form of conversion from a marketing perspective.[79]MLC’s case was that by 2000 when the alleged agreement was made, such a requirement of Mr Lissack as a condition of his remuneration was established by a course of dealing. Accordingly, the Court heard a lot of evidence as to what Mr Lissack did on the various MLC developments that he introduced and for which he was remunerated on a commission basis. Although some aspects of MLC’s case on this point were disputed, I accept that on the whole Mr Lissack did significantly more than simply bring to Messrs Hitchcox and Handelsman’s notice the details of the development opportunity and facilitate the initial meetings.[80]However, that is not the same as finding that he was under a duty to provide additional services in order to be entitled to his commission. For Mr Lissack, it was pointed out that the written letter agreements concluded with Mr Hitchcox regarding other MLC developments make no mention of such an obligation. Those letters were written well after the developments concerned had been introduced to MLC, and the agreement to provide Mr Lissack with a commission (and its amount) may well have reflected the nature of his personal involvement in each case. But that does not, in my judgment, convert such involvement into an implied contractual obligation. Mr Lissack had in any event a strong personal incentive to do all he could to bring the opportunity which he had introduced to MLC to fruition. Counsel for Mr Lissack referred to the observation of Lord Donaldson MR (with whose judgment Balcombe LJ agreed), made in another context in Hughes v London Borough of Greenwich (1993) 65 P&CR 12 at 15: An appeal to the House of Lords was dismissed: [1994] 1 AC 170. “… whilst the parties may have a mutual intention and expectation that a particular state of affairs shall exist throughout the duration of the contract and such continued existence may be necessary in order to give business efficacy to that contract, this does not lead to the inevitable conclusion that it is necessary for there to be a contractual term to this effect. There are more ways than one of killing cats or achieving fundamental objectives and it is only if the contractual approach is necessary that a term can be implied. As Mr Michael Hart QC, appearing for Mr Hughes put it, ‘If the carrot is sufficiently delicious, you have no need of the [contractual] stick’.” Although that observation is directed at the question of the implication of a term other than by course of dealing, it seems to me nonetheless apposite to the present case.[81]In addition, it appears that for a number of the other developments Mr Lissack was asked to become involved in such negotiations, whereas it was not suggested that he was requested to do anything further as regards St Pancras Chambers.[82]I would not find this an easy question to decide. But in the light of my holdings above that the claim falls to be dismissed on a number of independent grounds, it is unnecessary to reach a view on this additional point. It is also unnecessary to address MLC’s defence based on estoppel.

THE SECONDARY CASE: QUANTUM MERUIT

[83]If his primary case of an express contract was rejected, Mr Lissack put forward an alternative claim for a quantum meruit, but still on the basis of a percentage share of MLC’s net profit from the St Pancras project. Mr Boyle accepted that this percentage might be lower than 25% which applied to the contractual claim, since on this basis Mr Lissack was not at risk of a share in the liability for a net loss and so the reward could not reasonably be expected to be as high.[84]This alternative claim emphasised the informal nature of the relationship between the two parties as at 1996-97, and the trust which existed between them. It was submitted that it was the understanding or expectation of the parties that Mr Lissack would receive remuneration in the form of a percentage of profit if one was made and that his service in effecting the introduction was not being rendered gratuitously.[85]It was contended in the closing submissions of Counsel for Mr Lissack that:
“The point at which the legal rights of the parties have to be analysed is self-evidently the point at which [Mr Hitchcox] and Mr Handelsman agreed to proceed with the opportunity introduced to them by [Mr Lissack].”
And further, that at that date, Mr Lissack “had a right to remuneration on a quantum meruit basis, if but only if the development was carried out and made a profit.”[86]It is unnecessary for present purposes to consider whether a quantum meruit in this sense is properly analysed as a personal remedy for unjust enrichment or as giving rise to a distinct claim: see per Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752 at [3] and [40]-[42]; cp Goff & Jones, The Law of Unjust Enrichment (8th edn, 2011), para 1-29; and see Burrows, The Law of Restitution (3rd edn, 2011) at 377-78. On either view, quantum meruit is a restitutionary remedy which will be granted only where justice requires that the claimant should receive payment (as much as he deserves) from the defendant for the services provided or goods supplied, since there was no question of the claimant providing the defendant with that benefit gratuitously. See also per Christopher Clarke J in MSM Consulting Ltd v United Republic of Tanzania [2009] EWHC 121 (QB), 123 Con LR 154, at [171].[87]There are, in my judgment, at least two independent obstacles to such a claim on the part of Mr Lissack in the present case. First, as the formulation put forward on behalf of Mr Lissack rightly recognises, the claim is dependent upon MLC having carried out the development opportunity introduced to it by Mr Lissack. However, on my findings above, the St Pancras Chambers project carried out by MLC was of a fundamentally different nature from the opportunity introduced by Mr Lissack. It was undertaken in 2003 as a result of circumstances far removed from those with which Mr Lissack had been involved in 1996-97. Nor do I think that it is necessary to contemplate a complex apportionment of the potential net profit to some share notionally attributable to the residential element. Once MLC became the overall developer, financing the project as a whole, I do not think that the conversion and sale of apartments on the 2nd-6th floors, or the 4th-6th floors, can be considered to be segregable such that Mr Lissack could be regarded as having introduced that part of the project.[88]Secondly, for the denial of remuneration to Mr Lissack to be unjust, it must be shown that that Mr Lissack expected to be paid for what he did in bringing to MLC the opportunity to join the BAA Lynton consortium, and that MLC ought reasonably to have known this. That is indeed expressly alleged in Mr Lissack’s Particulars of Claim. However, I am not satisfied on the evidence that this was the case. This question has to be addressed on the facts as they appeared in late 1996 or early 1997. It is a distinct question from that discussed above in the context of Mr Lissack’s primary claim: i.e., if there was a contract entered into in 2000 providing in general terms for Mr Lissack to be remunerated at the rate of 25% for all outstanding introductions of development opportunities that he had made, whether he effectively was responsible for introducing the St Pancras Chambers development.[89]Mr Lissack was earning well through his successful efforts in bringing trading opportunities to Farlane, which was the role for which he had been engaged in late 1995. As Mr Lissack began also to introduce opportunities for development by MLC rather than simpler, trading opportunities, the parties made ad hoc arrangements for particular developments as to his remuneration or joint venture participation (i.e. right to a share in the profits but with a corresponding liability for any loss). Those arrangements generally came to be made well after the development had started, and reflected such matters as whether there were other participants (e.g. Mr England in the case of the church developments and Mr Fattal for Charlotte Street) and also, in my view, the extent of practical involvement which Mr Lissack had with the project (whether or not such post-introduction services were a contractual obligation). As regards the introduction of BAA Lynton and St Pancras Chambers, it is common ground that Mr Lissack in practical terms did rather little. Given his close involvement in a small, cooperative team working out of the Queen Anne Street offices, I do not think that Mr Lissack at the time expected additional remuneration for the limited service which he provided in that particular case. In that environment, what he did was the sort of thing that would be done as a matter of good will, while pursuing other projects that took much more of his time and energy. That is reflected in the exchange which he had, as I have found, with Mr Handelsman in 1999. Accordingly, justice does not demand that Mr Lissack be compensated for that specific activity: Mr Lissack did not expect it, and MLC should not reasonably have assumed that he expected it.[90]I should add that if I had concluded that Mr Lissack was entitled to claim for a quantum meruit, I would not have found that this should be quantified on the basis of a percentage of net profits from the development. On the evidence, when the profit share basis of commission was applied by Farlane and MLC, it was on the basis of a so-called joint venture whereby Mr Lissack would also be liable for a corresponding share of any loss. The arrangement regarding the property at Trewcn was a combination of a fixed fee of £125,000 and a 2.5% share in the profit/loss. Manifestly, Mr Lissack would not be exposed to such liability in the absence of a contract, if his claim was only for quantum meruit. However, Mr Lissack expressly disavowed seeking anything other than a percentage share of profit for this alternative head of claim, perhaps because a claim to a fixed sum for services rendered in 1996-97 would encounter problems of limitation.

CONCLUSION

[91]For the reasons set out above, both Mr Lissack’s primary claim in contract and his alternative claim to a quantum meruit are dismissed.

Cited in 3 later judgments