Walker & Ors v Mills & Anor [2018] EWHC 998 (Ch)

Case No C30MA840[2018] EWHC 998 (Ch)IN THE HIGH COURT OF JUSTICEVenue BUSINESS AND PROPERTY COURTS IN MANCHESTERBUSINESS LIST (Ch D)Venue Manchester Civil Justice Centre1 Bridge Street WestVenue Manchester M60 9DJDate 17 th May 2018
Before
HIS HONOUR JUDGE EYRE QC (sitting as a Judge of the High Court)
Between
RONALD DAVID WALKER2) CLARION WEALTH PLANNING LIMITED3) CLARION INVESTMENT MANAGEMENT LIMITEDClaimantMARK RICHARD MILLS2) INSURANCE & LEGAL SERVICES LIMITEDDefendantGiles Maynard-Connor (instructed by JMW Solicitors LLP) for ClaimantsDavid Casement QC (instructed by DWF LLP) for DefendantsHearing Hearing dates: 9 th, 10 th, 11 th, 12 th, 13 th, and 16 th April 2018
JUDGMENTHH Judge Eyre QC:Introduction.
[1]The dispute in this case relates to a claim for sums said to be due under an agreement (“the Introduction Agreement”) reached in December 2012. It is said that either the First Defendant or the Second Defendant is liable to make payments to the First Claimant or to the Second or Third Claimants in respect of introductions whereby the Defendants were introduced to Mr. Nigel Wilson resulting in payment being obtained by the Defendants for services provided to Mr. Wilson. In addition, the Claimants seek a declaration that the First Defendant held shares and loan notes in Mini-Cam Enterprises Limited on trust as to two-thirds for himself and one-third for the First Claimant with the consequence that the First Claimant is entitled to one-third of the proceeds of the sale of those shares and loan notes. The Background History.[2]The First Claimant (“Mr. Walker”) has been engaged in financial services for some thirty years. For many years he had provided those services through a company called Clarion Plc. There were two sides of Clarion Plc’s operation: one was the provision of financial planning (or wealth planning) advice to clients and the other was the management of investments on behalf of clients. In the latter part of 2012 there was concern in the financial services industry about the potential impact of the Retail Distribution Review (a programme of changes in regulations being brought in by the Financial Services Authority). In the light of that it was decided to separate the financial planning and investment management sides of Clarion Plc’s business. That restructuring led to the Asset Purchase Agreements which were made in March 2013 between Clarion Plc and the Second and Third Claimants respectively. The Second Claimant acquired Clarion Plc’s wealth planning business while the Third Claimant acquired the investment management business.[3]On 25th November 2013 Clarion Plc changed its name to “Clarion Knutsford Plc”. However, I shall continue to refer to it as Clarion Plc throughout this judgment. Clarion Plc entered Members’ Voluntary Liquidation on 17th July 2014. Mr. Walker resigned as a director on 12th March 2015. On 2nd January 2018 Clarion Plc moved from Members’ Voluntary Liquidation to Creditors’ Voluntary Liquidation. This was because H M Revenue & Customs had levied assessments in respect of Employer Financed Retirement Benefit Schemes (“EFRBS”) which had been operated by the company. In relation to those it is said that approximately £1.5m is owed in unpaid tax. It has been asserted by the Defendants that Mr. Walker knew of the likely tax liability at an early stage and that part of the motivation for the restructuring in the Spring of 2013 was to move assets from a potentially insolvent company. It is also said that Mr. Walker deliberately concealed the insolvency of Clarion Plc. I do not accept that characterisation of the history. It became apparent in the course of the trial that although there was a possibility that a tax liability would arise because of the EFRBS Mr. Walker and the company were receiving advice that this was unlikely to arise. Accordingly, I do not accept that in 2013 Mr. Walker was deliberately manipulating matters to remove assets from a company which he knew to be insolvent or likely to be insolvent. However, I do not exclude the possibility that Mr. Walker’s recollection and his evidence as to whether Clarion Plc was a party to the Introduction Agreement are now influenced by his knowledge that Clarion Plc appears to be insolvent. I will also address below the impression I derived from Mr. Walker’s evidence of his knowledge of the potential liability.[4]It is common ground that the First Defendant (“Mr. Mills”) is a successful businessman and entrepreneur. He made a substantial sum of money having built up and then sold the business of Cardpoint Plc. Since then he has been engaged in various business ventures. Relevant for present purposes is an activity which can be described as company grooming. In essence Mr. Mills would engage with the owners of companies to improve their businesses and to arrange matters (such as the structure of the business or the resolution of outstanding litigation) so that the company in question would be attractive to potential purchasers (typically from the Private Equity or Venture Capital markets). A sale of the company would then be effected. Mr. Mills would receive payment for this company grooming work in two ways. There would be a monthly consultancy fee for work done in the period before sale and then a lump sum would be payable on sale. Typically Mr. Mills would agree with the owners of the business that he would receive no lump sum on sales below a particular sum but that on sales above that amount he would receive a sliding percentage of the surplus.[5]It was the evidence of Mr. Mills that he had been operating his company grooming operation as a private individual but that in late 2011 or early 2012 he came to the conclusion that it would be better to do so through a limited company. He said that this was in part so that he could get other similarly skilled people to engage together with him. Mr. Mills said that he came up with the trading style “Comerga” from the term “Companies, Mergers, and Acquisitions”. Mr. Mills already owned the Second Defendant and decided to use that company as a vehicle for the Comerga operation. On behalf of the Claimants Mr. Maynard-Connor made a sustained attack on this aspect of the evidence of Mr. Mills. Mr. Maynard-Connor referred to various documents and to a promotional video posted on You Tube. He said that these showed that the nature of Mr. Mills’s operation was that he operated as an individual and that he was the brand being sold. In addition, Mr. Maynard-Connor pressed Mr. Mills about the use of the names “Comerga Consulting” and “Comerga Capital” and the fact that the Second Defendant had also traded as Violet Recruitment. The thrust of this line of attack was to the effect that in reality Mr. Mills conducted his business affairs as an individual and that he did not make it plain that “Comerga” was a trading style of the Second Defendant (indeed the Claimants say that it was a trading style which Mr. Mills used in his individual capacity). I will address below the effect of this line of argument on the issues in the case. It suffices to say at this stage that I accept that Mr. Mills did not deal as comprehensively as he could and should have done in his witness statement with the activities of the Second Defendant and the various forms of the Comerga name which were used. It is also correct that at various points in his dealings with others, including Clarion Plc and Mr. Walker, Mr. Mills placed considerable emphasis on what he was doing as an individual without always spelling out as clearly as would have been desirable the connexion with the Second Defendant or Comerga (an aspect I will consider when determining who were the parties to the Introduction Agreement). Nonetheless, I am satisfied that Mr. Mills’s account of the origin of the Comerga name and of the decision to move to trading through the Second Defendant was honest and accurate. The brand being promoted was, indeed, “Mark Mills” but by the end of 2012 that brand was being promoted under the Comerga banner with that name being seen as a trading style of the Second Defendant. I am satisfied that by that time Mr. Mills intended to provide his company grooming services through the Second Defendant trading as Comerga. Whether that intention was achieved in relation to the Introduction Agreement or whether there was a return to the former individual style of operation is a matter on which I will in due course have to make a finding.[6]Clarion Plc’s accountants were Hurst & Company Accountants LLP (“Hurst”). Mr. Mills was the non-executive chairman of Hurst and in 2011 he and Mr. Walker met through that connexion. There were exchanges between them. Initially these appear to have taken the form of Mr. Walker seeking to persuade Mr. Mills to use Clarion Plc’s financial planning services. In any event in December 2011 Clarion Plc and Mr. Mills entered a “Non-Executive Chairmanship and Equity Arrangement in the Event of Sale”. Mr. Mills was to serve as the non-executive chairman of Clarion Plc in return for a monthly fee and was to receive a percentage on a sliding scale of the surplus if a sale of the company were to be achieved at a price of £10m or more.[7]The engagement of Mr. Mills provided that he was to spend two days a month on the business of Clarion Plc. One of those days normally involved attendance at what was described as a Board Meeting but which appears to have operated as a management overview session. Such meetings seem to have taken place in the mornings and at the end of Mr. Mills’s visits to Clarion Plc he and Mr. Walker would frequently adjourn for lunch to Piccolino, a restaurant conveniently close to the premises of Clarion Plc.[8]In the course of those dealings Mr. Mills and Mr. Walker became friends. They on occasion joined together in social functions outside their work relationship and were on some of these occasions joined by their wives. There was a marked contrast between the descriptions of this relationship which the two men set out in the statements of case and in their witness statements. Mr. Walker said that there was a “close and strong friendship” between them whereas Mr. Mills said that the relationship was “a business one” and “simply professional”. The conflict as to the nature of the two men’s relationship is relevant in that the Claimants rely on the closeness of the relationship as a factor making it likely that the Introduction Agreement was concluded orally and was between Mr. Walker and Mr. Mills as individuals. My conclusion as to the nature of the relationship is also relevant to my assessment of the witnesses’ respective credibility. When he was cross-examined on the nature of the relationship Mr. Walker remained adamant that it was a close friendship. In his oral evidence Mr. Mills accepted that there was more to the relationship than he had said in his witness statement. He agreed that there was a friendship but maintained the stance that it was not at the level for which Mr. Walker contended. Mr. Mills agreed that his witness statement was incorrect to that extent that it had said the relationship was purely a business one. He said that he had downplayed the nature of the relationship in response to what he saw as the “over-egging” of the friendship by Mr. Walker and because by the time of his witness statement he was looking back at matters with a jaundiced view of Mr. Walker’s actions. It is my assessment that the revised characterisation of matters by Mr. Mills comes closer to the truth than Mr. Walker’s description. It is apparent from the e-mail exchanges; from the cards; and from the nature of some of the social events that a friendship had developed between the two men. It was, however, a friendship based on their business relationship and a number of the social occasions on which they met can be seen as business networking or entertaining. When the two men had lunch at Piccolino each was having lunch with a man whom he liked and whom he regarded as a friend but I am satisfied that the relationship was predominantly one of two men engaged in business together and not one of a friendship unrelated to that business relationship.[9]The differing responses of Mr. Walker and Mr. Mills to cross-examination about the nature of the relationship are noteworthy. Mr. Walker was adamant that his characterisation of matters was correct and he was not prepared to concede that the friendship might not have been as close or strong as he had said. Mr. Mills, albeit after being pressed by Mr. Maynard-Connor, was prepared to accept that his witness statement was not correct. In my judgment this was indicative of a willingness on the part of Mr. Mills to reflect on matters and to make appropriate concessions as a result of that reflection. This gave force to his oral evidence though at the price of the concession that matters had been expressed too starkly in his witness statement. Mr. Walker’s unwillingness to accept that the position was in any way different from his original contentions was apparent in other aspects of his oral evidence and caused him to maintain various assertions which were not credible in the light of the documents or the inherent likelihood of how the dealings were conducted.[10]On the morning of Friday 7th December 2012 Mr. Mills attended at Clarion Plc’s premises. The reason for his attendance was a regular meeting in his capacity as non-executive chairman and there was discussion of the affairs of Clarion Plc. At the end of the morning Mr. Mills and Mr. Walker went to Piccolino for lunch and engaged in further discussions. One of the central issues of fact between the parties is what happened at that lunch. The Claimants say that there was discussion about the possibility of payment being made in return for the introduction of clients to whom Mr. Mills would provide his company grooming services. The Claimants say that the discussions were the culmination of a series of discussions in which this possibility had been raised. They say that agreement was reached orally at the lunch and that it was an agreement between Mr. Walker and Mr. Mills in their personal capacities. The agreement was for Mr. Walker to introduce to Mr. Mills potential clients for the latter’s company grooming business on terms that if the introductions resulted in the engagement of Mr. Mills then Mr.Walker would receive 25% of any consultancy fees together with one-third of any capital sums payable on a sale of the relevant company. It is the Claimants’ case that at this lunch meeting Mr. Mills was told the names of Nigel and Janice Wilson and of their business, Mini-Cam Ltd. The Defendants accept that there was discussion at this lunch about a potential agreement in respect of payment for introductions. Mr. Mills accepted that there had been some mention of this possibility previously but said that it had only been by way of passing references. He says that on this occasion he explained the arrangements he was making to operate his company grooming business through the Second Defendant trading as Comerga. It was this, which Mr. Mills says, triggered more detailed discussions at the lunch. It is the Defendants’ case that the discussions were with a view to an agreement being made between Clarion Plc and the Second Defendant but that no agreement was reached at the lunch. Mr. Mills says that he was not told the names of the Wilsons nor of Mini-Cam Ltd but was told that Clarion Plc had clients who had a “micro camera” business and who might be interested in his services.[11]7th December 2012 was a Friday. At 19.30 on Monday 10th December 2012 Mr. Mills sent an e-mail from his “mark@mark.tv” e-mail address bearing the heading “Our agreement – Comerga”. It said:
“Ron Further to our discussion, if you provide me with a lead for a Comerga client, I will share with you, upon receipt of funds, 25% of any fees I generate plus 33% of any lump sums fees earned in the event of the sale of that company. I suggest when you have one, such as the micro camera people, you email me and I confirm these terms back and that I do not know them nor have been introduced to me before. Thank you and here’s to a successful set of sales. Kind regards Mark”
Kind regards Mark”[12]Mr. Walker replied in the following terms at 14.08 on 21st December 2012 in an e-mail bearing the subject line (being a reply) of “RE: Our agreement – Comerga”. “Dear Mark Deal agreed. I don’t think we need to worry about potential scenarios in which you already know the client in some way; it should be evident if our introduction/re-introduction and endorsement is the thing that makes it happen and I’m sure we will both recognize if that is the case. I am sure we are going to have some successes and also enjoy the journey. Kind regards Ron” Kind regards Ron”

Kind regards

[13]Mr. Walker’s e-mail appears to have been sent twice. Certainly, it exists in two almost identical versions. The trial bundle contains those two versions. They are identical as to timing and the text of the message. One purports to come from the address “rwalker@clarionwealth.com” and the other from “rwalker@clarionplc.com” -nothing in my view turns on that. Under Mr. Walker’s signature on each appear the words “Clarion plc, Marble Arch, King Street, Knutsford, Cheshire WA16 6HD”. There are then a telephone number and a fax number with a link to the website of Clarion Plc. There is a reference to Clarion Plc being authorised and regulated by the Financial Services Authority and the company’s registered number together with a confidentiality notice on behalf of Clarion Plc. The version sent from the “clarionwealth.com” address also bears links to Clarion Plc’s Twitter, LinkedIn and Facebook pages.[14]At 15.38 on 20th December 2012 Mr. Walker had sent an e-mail from his iPad to Nigel and Janice Wilson. This was headed “Corporate Finance” and had said:
“Hope to be in work tomorrow and will call you. In the meantime google Mark Mills Cardpoint. Mark is our non exec chairman and I think it would be good for you to meet him.”
[15]It appears that there had been the proposed telephone call because at 14.09 on 21st December 2012 (and so one minute after the e-mail beginning “deal agreed”) Mr. Walker sent Mr. Mills an e-mail from the “Clarionplc.com” address with the heading “Mini-Cam” and saying “Can you make a meeting with my clients Mini-Cam at their place of business at 5pm on 22nd January?” Mr. Mills replied the next day saying “Yes – great, thanks”.[16]That meeting took place and led to an agreement dated 21st February 2013 which was signed by Mr. Wilson and Mr. Mills. Thereafter Mr. Mills engaged in the grooming of Mini-Cam Ltd. This resulted in a sale of Mr. Wilson’s interest in that company in an exercise codenamed “Project Delta”. I need not rehearse the full details of the sale arrangements. In short terms Mr. Wilson sold his interest in Mini-Cam Ltd and received a combination of cash and a holding in a new company, Mini-Cam Enterprises Limited. A success fee of £2.2m was payable pursuant to the agreement of 21st February 2013. Of this £1.8m was paid to the Second Defendant and the balance of £400,000 used to fund the acquisition by Mr. Mills of shares in and loan notes issued by Mini-Cam Enterprises Limited in circumstances which I will consider more fully below. The sum of £606,250 (being based on 33% of £1.8m and some unpaid monthly payments) was paid by the Second Defendant. An invoice for this amount was rendered by the Second Claimant and payment was made to that company with the funds subsequently being transferred to Techline, a partnership between Mr. Walker and his wife.[17]As part of the process of the sale of Mr. Wilson’s interest in Mini-Cam Ltd two documents were signed by Mr. Mills and Mr. Wilson on 23rd July 2015. The first of these has been described as the “Mills-Wilson agreement”. It provided that the obligation to make payment to Mr. Mills under the 21st February 2013 agreement would be to pay the aforesaid sum of £2.2m and that thereafter there would be no obligation or payment rights flowing from that agreement. The balance of the Mills-Wilson agreement set out terms as to payments to be made to Mr. Mills in the event of the refinancing of Mini-Cam Enterprises Limited and/or the sale of Mr. Wilson’s interest in that company. The second document was signed by Mr. Mills under the words “Insurance and Legal Services Limited” with the words “t/a Comerga Consulting” having been struck out. Mr. Mills’s signature was above the words “Mark Mills, Director”. That document set out the entitlement to a success fee of 40% of the surplus received above £15m on the sale of Mr. Wilson’s interest in Mini-Cam Ltd.[18]There were meetings between Mr. Walker and Mr. Mills in July and October 2015 at which the sale of Mr. Wilson’s interest in Mini-Cam Ltd; the creation of Mini-Cam Enterprises Limited; Mr. Mills’s shares in and loan notes from that company; and his rights under the Mills-Wilson agreement were all discussed. There are conflicting accounts of what was discussed at those meetings and even more so as to what, if anything, was agreed. I will set out my findings as to that dispute in due course. In short terms the Defendants say that Mr. Walker accepted that any entitlement under the Introduction Agreement was limited to a 33% share in the sum of £1.8m and that although Mr. Walker sought agreement from Mr. Mills for payment of a share in respect of the further sums to come to Mr. Mills no such agreement was reached. They say that no further sums are due and that Mr. Walker has no claim on the proceeds of the shares and loan notes. The Claimants say that there was no such acceptance that the rights under the Introduction Agreement had come to an end. In addition they say that Mr. Mills agreed that he would hold his shares and loan notes for himself and Mr. Walker in the proportions 2:1.[19]There was a refinancing of Mini-Cam Enterprises Limited and a subsequent sale of Mr. Wilson’s interest in that company. Mr. Mills received sums totalling £1m as a result of the refinancing and £1,359,826 in respect of the sale by Mr. Wilson. The Claimants say that these sums are lump sum fees flowing from the introduction effected to Mr. Wilson and that payment of 33% of those sums is due to them pursuant to the Introduction Agreement. In addition a claim is made to a share in consultancy payments received by Mr. Mills. Mr. Mills realised £2,560,208 from the sale of his shares and loan notes and from the payment of interest on the loan notes and the Claimants say that Mr. Walker is entitled to one-third of this sum by reason of the agreement that the shares and loan notes would be held in the proportions 2:1. The Defendants deny both these claims.[20]In April 2013 Mr. Walker had introduced Mr. Mills to Steven Welsby of Catalloy Limited (“Catalloy”). This introduction resulted in an agreement for the provision of company grooming services to Mr. Welsby and Catalloy. This was a markedly less successful exercise for the Defendants than the dealings with Mr. Wilson and Mini-Cam Ltd. Mr. Mills became unhappy about Mr. Welsby’s attitude in respect of dealings with the Health and Safety Executive. He terminated the agreement with Mr. Welsby and Catalloy. Mr. Mills came to the view that Mr. Walker was not being sufficiently supportive of him in his dealings with Mr. Welsby. Mr. Walker appears to have taken the view that Mr. Mills was overreacting to some extent and does not accept that he was insufficiently supportive of Mr. Mills. In any event there was an exchange of e-mails between them culminating in an e-mail of 22nd October 2015 headed “resignation and termination” in which Mr. Mills said that he was bringing an end to “any and all agreements with you and Clarion”. The Claimants have asserted that this was something of a ploy on the part of Mr. Mills. They say that he was using the problems with Mr. Welsby as a pretext to end his dealings with the Claimants so as to escape his liabilities in respect of the funds derived from the dealings with Mr. Wilson and Mini-Cam Ltd or to avoid giving Mr. Walker written confirmation of the agreement which, on the Claimants’ case, had been reached about the shares in Mini-Cam Enterprises Ltd. I reject this interpretation of Mr. Mills’s actions. I make no finding as to whether Mr. Mills was justified in his criticism of Mr. Welsby or in his belief that he was receiving insufficient support from Mr. Walker. However, I do accept that Mr. Mills genuinely believed that he had been let down by Mr. Walker and I find that the e-mail of 22nd October 2015 was a response to that belief and not a ploy attempting in some way to escape his obligations. I accept that Mr. Walker then sought to rebuild relations but Mr. Mills was adamant and the parties’ relationship came to an end at that time. Assessment of the Central Witnesses.[21]No challenge was made to the honesty of most of the witnesses who were called. Other than Mr. Walker and Mr. Mills the witnesses were giving evidence about matters which had happened some little time ago and where their attention had not been focused on the points now in issue. Such limited criticism as there was of the evidence of those witnesses was by way of suggestion that there might be doubt as to the accuracy of their recollection by reason of the passage of time. Those witnesses were able to provide only very limited assistance on the central questions of the dealings between Mr. Walker and Mr. Mills.[22]The position was rather different in respect of the evidence of Mr. Walker and Mr. Mills. On behalf of the Defendants I was invited to conclude that Mr. Walker was deliberately giving evidence which he knew to be untrue and that he had fabricated documents. It was said that Mr. Walker had adopted a policy of secrecy in respect of his dealings with the Defendants and with others and that he had been deliberately hiding the truth. I was invited to conclude that he had been acting dishonestly in the period from 2012 onwards. In return it was said on behalf of the Claimants that Mr. Mills was giving an account which he knew to be untrue in serious respects. It was also contended that he had engineered a parting of the ways with Mr. Walker in October 2015 so as to avoid paying sums which he knew were due.[23]In assessing the reliability of the evidence of Mr. Walker and of Mr. Mills I bear in mind the common human capacity and tendency for a witness to convince him or herself that events actually occurred in the way in which the witness now with hindsight believes they should have occurred. In this case that tendency has been exacerbated by the fact that there has been a falling out between two men who formerly had a friendship. Each is now convinced not only that the other was to blame for that falling out but that the other had been engaged in deception well before the break in relations came. I also bear in mind that the accuracy of any witness’s evidence is to be tested against the picture shown by the contemporaneous documents and by an assessment of the way in which events normally occur and that considerable caution must be exercised before placing undue weight on the perceived demeanour of a witness when giving evidence.[24]There were a number of aspects of the evidence of both Mr. Walker and Mr. Mills which raised question marks as to the reliability of that evidence. I am not, however, satisfied that either was engaged in a deliberate and long-planned deception of the kind alleged by the other side.[25]There were a number of respects in which Mr. Walker’s evidence was unpersuasive and which led me to the conclusion that I could not place reliance on that evidence. i) As I have already explained Mr. Walker was not prepared to accept that his account of the strength of the friendship with Mr. Mills might have been overstated. This was an attitude which he manifested in other parts of his evidence in that he was not prepared to countenance any deviation from the account put forward in his witness statement even when confronted with material inconsistent with that account. I formed the firm impression that Mr. Walker was unwilling to give an answer which he thought might weaken his case or which might mark a departure from the account set out in his witness statement. Even if that unwillingness is not seen as being a conscious stance it did demonstrate an inability to consider matters objectively in that having persuaded himself of a matter Mr. Walker maintained that position even when it was demonstrably unrealistic. ii) On 3rd August 2015 the Second Claimant rendered an invoice to the Second Defendant in the sum of £606,250. This related to the 33% share of £1.8m due under the Introduction Agreement following the sale of Mr. Wilson’s interest in Mini-Cam Ltd. This invoice was raised by the Second Claimant following instructions from Mr. Walker to Matthew Sherratt who was the Second Claimant’s finance manager. If Mr. Walker’s case is right then he was personally entitled to that payment and it was Mr. Mills rather than the Second Defendant who was liable to pay it. Mr. Walker was unable to provide a credible explanation for why the invoice was rendered by the Second Claimant or rendered to the Second Defendant. In his witness statement he had said that in his eyes he was Techline and the Second Claimant and that it made little difference to him where the monies were received. In that statement he also said that he was “just keen to get the money in” and that the Second Claimant “provided the easiest and most visible means of doing so.” He said that it was easier to arrange an invoice from the Second Claimant. The Techline partnership didnot have online bankingbut the Second Claimant did and so by using the Second Claimant it would be possible to see when the payment had cleared. I found the suggestion that it was somehow quicker for an invoice to be rendered by the Second Claimant and for payment to be made to that company than for Mr. Walker raise an invoice and for payment to be made to his own bank account unrealistic. Indeed, in cross-examination he was markedly reluctant to engage with this matter. In part Mr. Walker’s explanation came down to saying that he thought this would be more tax efficient because Corporation Tax would be paid by the Second Claimant at a lower rate than he would pay income tax if he had received the funds personally. He went on to say that the money was paid out shortly after as a dividend and so would have been liable to income tax in his hands. In that regard I note that although dividend payments were made by the Second Claimant there did not appear to be a payment which could be seen as coming shortly after the payment of the £606,250 and as corresponding to that amount. The invoice in its terms is inconsistent with Mr. Walker having a personal entitlement to payment and Mr. Walker’s unconvincing attempts to explain why he directed it to be rendered if he believed that he was the person entitled to payment detract from his credibility. At its best for Mr. Walker the arrangements made for payment of this sum and his explanations for those show that he failed to distinguish between sums owed to him personally and those owed to the various companies. iii) During the course of the engagements with Mini-Cam Ltd and Catalloy consultancy payments had been made by those companies to the Second Defendant. The Introduction Agreement provided for 25% of these sums to be paid to the other party to that agreement. In satisfaction of that obligation sums totalling £88,125 had been made in the period from March 2013 to July 2015. At the request of Mr. Walker those payments were made to Techline. In the Reply the Claimants said that Mr. Walker had done this “as he considered, after taking advice, that this would be a tax efficient method of receiving the monies due to him.” In a reply (confirmed by Mr. Walker’s signature of a statement of truth) to a request for further information it was said that the advice had been given by Rachel Murphy of Hurst. In that reply Mr. Walker set out the advice which he alleged had been received saying that this was to the effect that it would be more tax efficient for him to receive money through Techline rather than to him directly and that it would be beneficial if Techline received payments from other sources in addition to from Clarion Plc. Miss. Murphy provided a witness statement in which she said she “did not specifically provide” that advice. In his witness statement Mr. Walker explained that he had not received advice about the particular payments under the Introduction Agreement but maintained that he had received the advice as to the tax efficiency of payments being made to Techline. In his oral evidence Mr. Walker said that the advice had been given in general terms. In her oral evidence Miss. Murphy accepted that there had been general conversations about the existence of Techline and about the reason for its existence and accepted that these might have given the impression that it would be better for Techline to receive income from sources other than Clarion Plc. However, Miss. Murphy did not recall discussions about the tax efficiency of the arrangement. I am satisfied that in this regard Mr. Walker sought in the Reply and in the Further Information to give the impression that he was acting upon advice and that he sought to portray that advice as being more closely related to the making of these payments to Techline than was in fact the case. This reflects on the credibility of Mr. Walker’s evidence. However, I must and do take account of the fact that in his witness statement and his oral evidence Mr. Walker accepted that the advice was not as directly focused as he had indicated in the pleadings. iv) Mr. Walker asserted that he had told Mr. Mills of the liquidation of Clarion Plc and went so far as to say that this had been mentioned several times. However, he was wholly unable to give any details of when or in what circumstances Mr. Mills had been told nor was he able to give any details of the way in which Mr. Mills reacted to this news. This evidence was unpersuasive. Mr. Mills denied that he had been told of the liquidation and I prefer his evidence on this question to that of Mr. Walker. It may be that Mr. Walker had come to believe that he had told Mr. Mills of the liquidation but I cannot accept that he had actually done so. In that regard it is of note that although Clarion Plc had gone into Creditors’ Voluntary Liquidation by the time of his witness statement Mr. Walker made no reference to that fact in that statement although there were at least two references to the date when the company had gone into Members’ Voluntary Liquidation. v) In September 2012 insolvency practitioners, Duff & Phelps, were engaged to provide advice to Clarion Plc. That advice was given in the context that the company was considering a move into liquidation. A report dated 26th September 2012 was provided and there was to be a meeting attended by Mr. Walker, representatives of Duff & Phelps, and staff from Hurst on 1st October 2012. In preparation for that meeting Hurst prepared a document setting out questions arising from the Duff & Phelps report. The significance of this document is that it states that Miss Murphy of Hurst and Mr. Walker recalled Duff & Phelps having given contradictory advice in an earlier meeting. It is said that the earlier meeting or meetings “took place between September 2009 and February 2010 and related to both Clarion Plc and Catalloy Ltd”. It goes on to say “Notes of these meetings show…”. The Defendants say that this shows that Mr. Walker had been aware of the potential insolvency of Clarion Plc from early 2010 and had concealed that knowledge throughout. I have already explained that I do not accept that Mr. Walker had been deliberately concealing knowledge of insolvency. However, what is relevant for present purposes is that when asked about this document Mr. Walker gave answers which were unconvincing. Miss. Murphy said that she believed that the document had been prepared by her colleague Miss. Gallagher. She could not at this stage recall the dates of the first occasion when the advice of Duff & Phelps had been sought in respect of the affairs of Clarion Plc. However, she believed that the document would have been compiled by reference to Hurst’s records. In the light of that evidence and by reference to the terms of the document it is my conclusion on the balance of probabilities that the document was referring to meetings which had taken place in late 2009 or early 2010 with Duff & Phelps; that the advice which had been given then related in part to Clarion Plc; and that the compiler of the document had referred to notes of those meetings in preparing it. Mr. Walker was not prepared to accept that there had been consideration of the position of Clarion Plc at that stage and contended that the compiler of the note must have made a mistake. He said that the earlier conversations had related to a client or clients of Clarion Plc and not to that company. In my judgment this was an instance where Mr. Walker sought to explain away inconvenient material and where he strove to avoid giving an answer which he thought might be harmful to his case rather than reflecting on the true position. vi) As I will explain below the terms of the e-mail exchanges in December 2012 have compelled me to reject Mr. Walker’s assertions that he told Mr. Mills of the Wilsons’ name at the meeting on 7th December 2012 and that he had told the Wilsons about Mr. Mills before his e-mail of 20th December 2012. Mr. Walker’s account of these matters could not be accepted once the contemporaneous documents had been considered. As with other matters Mr. Walker failed to engage with the documents when he was asked about them but instead persisted in assertions which could not be accepted. vii) There were a number of matters in respect of which Mr. Walker’s answers in cross-examination were evasive. In assessing Mr. Walker’s oral evidence I have reflected on the stress of giving evidence (and Mr. Walker did appear a nervous witness certainly at times) and warned myself again of the danger of placing excessive weight on the demeanour of a witness. Nonetheless, I was compelled to conclude that Mr. Walker failed to engage with or respond directly to questioning about his knowledge of Clarion Plc’s potential tax liability; his knowledge of Comerga; about what he meant when he said to Mr. Mills in an e-mail dated 19th March 2013 that he had spoken to another potential client about the “Comerga offering”; and about what he meant by saying that he understood that Comerga and Mr. Mills were separate entities. In these respects Mr. Walker sought to avoid giving answers which might have an adverse effect on his case.[26]In the light of those matters I have grave concerns as to the reliability of the evidence given by Mr. Walker. I do not conclude that Mr. Walker was giving me an account which he consciously believed to be false. However, there are a number of respects in which I am satisfied that his current account is not reliable. I have concluded that I must exercise considerable caution in accepting that account and that I will not be able to accept Mr. Walker’s account of matters in relation to questions in dispute where it is not supported by either documentary confirmation or by an assessment of inherent likelihood.[27]I do not accept all the criticisms which the Defendants made of Mr. Walker’s evidence. I have already said that I do not accept that Mr. Walker deliberately manipulated matters so as to remove assets from Clarion Plc believing that the company was likely to be insolvent. I also reject the Defendants’ contention that I should view with caution documents produced by Mr. Walker. I do not accept that there is any basis for concluding that Mr. Walker has fabricated documents to support his case. On 26th January 2018 Mr. Walker spent 3½ hours with Mr. McGoldrick who is a solicitor but who was not acting as Mr. Walker’s solicitor in the proceedings. At that time Mr. Walker had sought an extension of time for the filing of his witness statement saying that he was too ill to work on the statement. The Defendants invited me to conclude that Mr. Walker had misled the court and that Mr. McGoldrick was attending to assist in the preparation of a witness statement. There is no basis other than suspicion on which I could come to that conclusion. I have already said that it is apparent that both Mr. Walker and Mr. Mills are now willing to think the worst of the other. The explanation given by Mr. Walker that Mr. McGoldrick was providing him with moral support is not inherently incredible and I have no basis for rejecting that explanation.[28]On behalf of the Defendants Mr. Casement QC relied on the decision in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 and argued that I should draw inferences adverse to the Claimants from their failure to adduce evidence from Steven Walker, Carole Loynd, and Simon Baggott. They were respectively: Mr. Walker’s fellow director in Clarion Plc and in the Second and Third Claimants; the Client Support Administrator of Clarion Plc; and the former Operations Manager of Clarion Plc and of the Second Claimant. Mr Casement QC invited me to conclude that these persons might have been expected to have been able to give material evidence on the issue of whether the Introduction Agreement was between Mr. Walker and Mr. Mills or between Clarion Plc and the Second Defendant and also, in the case of Steven Walker, on the interpretation of the Asset Purchase Agreements. Those persons would, he argued, have been able to say in particular how the Introduction Agreement was regarded at Clarion Plc. Mr. Matthew Sherratt did give evidence. He was a finance manager with the Second Claimant but had been appointed in January 2015 and so well after the making of the Introduction Agreement. Moreover, it was apparent that he was acting on instructions from Mr. Walker and Mr. Baggott so his evidence did not advance matters greatly. The absence of evidence from these persons (and especially Steven Walker) does mean that there was no evidence from a person of authority at Clarion Plc to support Mr. Walker’s account of matters. Thus Mr. Walker’s case as to the parties to the Introduction Agreement lacked support from other “Clarion” witnesses and stands alone in that regard. I have had regard to the approach laid down in Wisniewski. In doing so I have to take account of the matters actually in issue in this case. In that regard I note that the crucial questions will turn on my findings about dealings between Mr. Mills and Mr. Walker themselves whether face to face at meetings where they were the only people present or by way of correspondence between the two of them. Steven Walker, Carole Loynd, and Simon Baggott would have been able to throw little if any direct light on those dealings and would have been largely explaining their understanding and/or recounting matters told them by Mr. Walker. In those circumstances other than noting the absence of supporting evidence for Mr. Walker it would not, in my judgment, be appropriate to draw inferences adverse to the Claimants on the case generally by reason of the absence of these potential witnesses.[29]There is, however, one aspect of the evidence of Mr. Walker where it is, in my judgment, appropriate to give greater weight to the absence of evidence from Messrs Steven Walker and Baggott. In his witness statement at [122] – [126] Mr. Walker addressed the fact that the sum of £606,250 due under the Introduction Agreement was paid into the account of the Second Claimant. At [124] Mr. Walker said that he had made it clear to Messrs Walker and Baggott that “the money was not being received as part of [the Second Claimant]’s business activity.” He said that he had told them that it was not money earned by the Second Claimant and that it would not count as the company’s income for the purpose of calculating bonus payments. This was an assertion Mr. Walker repeated in his oral evidence. If such an explanation had been given to Messrs Walker and Baggott it would on the face of matters have been a straightforward exercise for one or other or both of those gentlemen to have given evidence confirming this. No explanation was given for their absence. In those circumstances and to that limited extent I have concluded that it is appropriate to treat the absence of supporting evidence as materially weakening Mr. Walker’s evidence that he gave such an explanation when the payment was made.[30]The deficiencies in the evidence of Mr. Mills were not as pervasive as those in the evidence of Mr. Walker but there were nonetheless deficiencies. This was particularly so in terms of the wording of Mr. Mills’s witness statement. In his oral evidence Mr. Mills accepted that in the statement he had downplayed the friendship which he had with Mr. Walker. Similarly, in the witness statement and through the case being put by his counsel in cross-examination of Mr. Walker it was being said that before the discussions at lunch on 7th December 2012 there had been no mention of Comerga and no mention of the possibility of Mr. Mills being introduced by Mr. Walker to persons who might make use of Mr. Mills’s company grooming services. However, in his oral evidence Mr. Mills accepted that there might have been mention of Comerga and also mention of the possibility of such introductions being made. He said that such matters were mentioned in passing rather than in detailed discussions. However, the point is that Mr. Mills accepted that the picture he had painted in his witness statement was too stark and to that extent was not accurate. As will be seen below I have reservations about the reliability of Mr. Mills’s account of his dealings with Mr. Walker in the summer of 2015. In addition I found Mr. Mills’s responses to questioning about the treatment of the sum of £400,000 which was used to buy shares and loan notes in Mini-Cam Enterprises Ltd unimpressive. Mr. Mills failed to address the contentions that this sum had been held to the order of the Second Defendant. He sought to say that because the sum of £400,000 had not physically been received into the account of the Second Defendant he believed that it was not caught by the provision in the Introduction Agreement that 33% of lump sum fees was payable to the other party on receipt. In the light of Mr. Mills’s substantial business experience I found his explanation of his understanding of matters in this regard unconvincing.[31]So I have concluded that in the wording of the witness statement Mr. Mills allowed his recollection to be coloured by hindsight and by the current disagreement with Mr. Walker and I have found aspects of his oral evidence to have been unimpressive. Accordingly, in respect of his evidence as with that of Mr. Walker I have taken care to consider the extent to which it is either supported by the contemporaneous documents or by inherent likelihood. However, I did find persuasive the concessions which Mr. Mills made. Where he accepted that the true picture was different from that portrayed in his witness statement I concluded that the concessions were the result of reflection and were a genuine attempt to convey an accurate impression in the light of Mr. Mills’s recollection. The Making of the Introduction Agreement.[32]The Claimants say that the Introduction Agreement was concluded on 7th December 2012 in discussions between Mr. Walker and Mr. Mills at Piccolino. The Defendants accept that there were discussions between those gentlemen over lunch at Piccolino on that day and that those discussions related in part to consideration of an agreement whereby clients would be introduced in return for reward. Their position is that no agreement was reached at that lunch. Instead they say that the Introduction Agreement was constituted by the e-mail of 10th December 2012 from Mr. Mills being an offer and the reply of 21st December 2012 from Mr. Walker which accepted that offer.[33]Mr. Walker said that by December 2012 he and Mr. Mills had already discussed on “several occasions” the possibility of introductions being made to Mr. Mills of persons known to Mr. Walker who might be interested in using the company grooming services of Mr. Mills. He says that the more detailed discussions about this on 7th December 2012 were the culmination of a continuing process of discussion. The impression given by Mr. Mills’s statement is that 7th December 2012 was the first occasion on which this possibility had been discussed and that the discussion was in the context of him telling Mr. Walker of the Comerga venture. In his oral evidence Mr. Mills accepted that there had been “bits and pieces of conversations” about the possibility of him being put in touch with persons known to Mr. Walker who might benefit from his services. He maintained the stance that 7th December 2012 was the first time this was discussed in detail and that this discussion was taking place in the context of his explanation of the Comerga operation.[34]I accept Mr. Walker’s evidence that there had been earlier discussion of the possibility of introductions being made. It would have been apparent to both Mr. Walker and to Mr. Mills from a very early stage of their dealings that the former had contacts who had the potential to be clients of the latter’s company grooming business. It is apparent that both men were adept at seeking out opportunities for new business and it would have been surprising in the extreme if the possibility of such introductions being made had not occurred to both of them and also unlikely that there had been no mention at all of this in the year from December 2011 to December 2012. However, I found persuasive Mr. Mills’s revised evidence that 7th December 2012 was the first time that there had been a structured or detailed discussion of this with a serious view to an agreement being reached and that this discussion was in the context of his explanation to Mr. Walker of the arrangements which he, Mr. Mills, was making to conduct his company grooming business through a company trading as Comerga.[35]The only persons present at the discussions on 7th December 2012 were Mr. Walker and Mr. Mills. They gave directly contrasting accounts as to whether an agreement was reached. I have already said that there are aspects of the evidence of each of those gentlemen which I found unreliable. The consequence is that in determining when and in what form the Introduction Agreement was made I derive substantial assistance from the contemporaneous documents and from the parties’ actions. When those are considered I conclude that the Introduction Agreement was not concluded orally on 7th December 2012 but was concluded in the exchange of e-mails of 10th and 21st December 2012 for the reasons set out below.[36]In my judgment Mr. Walker’s account cannot be accepted in the face of the documents and his actions at the time. The most natural reading of the 10th December 2012 e-mail from Mr. Mills is that it is proposing terms following discussions in which a potential agreement had been considered but not concluded. The language used is not necessarily incompatible with an agreement having already been reached at the lunch with the e-mail being a confirmation of that agreement. However, that is not the more natural reading of the e-mail. The more natural reading is that the e-mail is making a proposal in the light of the earlier discussions. This is particularly the case with regard to the second paragraph where Mr. Mills talks of the need for him to “confirm these terms back”. If there were already a concluded agreement there would be no point in Mr. Mills contemplating further e-mails in which the terms would be confirmed. This assessment is reinforced by the language of Mr. Walker’s e-mail in reply of 21st December 2012. In my judgment the only sensible and credible explanation for Mr. Walker’s use of the words “deal agreed” is that he was indicating acceptance of a proposal which had been set out in Mr. Mills’s 10th December 2012 e-mail.[37]I agree with the argument which Mr. Casement QC made on behalf of the Defendants that the exchanges between Mr. Walker and the Wilsons and the e-mail at 14.09 on 21st December 2012 mentioning Mini-Cam Ltd to Mr. Mills reinforce this conclusion. The most natural interpretation of the contemporaneous documents seen together is that Mr. Walker received the proposal on 10th December 2012; he then reflected on matters; he contacted the Wilsons by e-mail on 20th December 2012 inviting them to look up Mr. Mills and suggesting that it would be good for them to meet Mr. Mills; and that there was a telephone discussion with Mr. Wilson on the morning or early afternoon of 21st December 2012 in which a meeting was provisionally fixed. It was after having that discussion with Mr. Wilson that Mr. Walker sent at 14.08 the e-mail beginning “deal agreed” which he followed one minute later with an e-mail proposing a meeting with “my clients Mini-Cam” at a time and on a date which must have already been discussed with the Wilsons. The response of Mr. Mills to this saying “Yes – great, thanks” indicates that he was treating this as the Introduction Agreement being put into operation. These exchanges and their timing show Mr. Walker investigating the possibility of making an introduction and setting up a potential meeting before accepting the proposal and following up that acceptance immediately with a potential introduction.[38]Mr. Walker said that he had mentioned the names of the Wilsons as people who might be interested in Mr. Mills’s services at the lunch meeting. In that regard it is relevant to note that his electronic diary had a note in relation to the meeting on 7th December 2012. This recorded various matters which Mr. Walker was intending to raise with Mr. Mills at the meeting such as a skiing trip and attendance at the Clarion plc Christmas party. It also said “Wilsons (joint venture with MM for exceptional cases)”. I accept that this note was written in advance of the meeting. For the Defendants Mr. Casement QC invited me to view it with suspicion pointing to a delay in disclosure and raising the possibility of it having been created after the event. I reject that suggestion and conclude that it was written in advance of the meeting. It reinforces Mr. Walker’s assertion that there had already been some discussion of the possibility of introductions being made (which Mr. Mills now accepts). It also indicates that Mr. Walker had been reflecting on suitable people to introduce to Mr. Mills for company grooming purposes. It was, however, a note for Mr. Walker and was not a shared agenda for the meeting or anything of that kind. I accept that at the lunch Mr. Walker mentioned that he was aware of clients who might benefit from Mr. Mills’s services and whom he might be able to introduce. I also accept that he had the Wilsons in mind when he said this. I do not accept that Mr. Walker mentioned them by name to Mr. Mils nor that he mentioned the business by the name “Mini-Cam”. I come to this conclusion in the light of the language of Mr. Mills’s e-mail saying “… when you have one, such as the micro-camera people”; the timing of Mr. Walker’s exchanges with the Wilsons followed by the “deal agreed” e-mail; and particularly the language of Mr. Walker’s 14.09 e-mail “can you make a meeting with my clients Mini-Cam …?”. That language is consistent with that e-mail having been the disclosure of the name of the potential contact and would have been surprising language for Mr. Walker to have used if he had already mentioned the Wilsons or their company by name.[39]The conclusions that the Wilsons were not mentioned by name at the lunch meeting and that the Introduction Agreement was reached in the exchange of e-mails and not at that meeting reinforce each other. They both follow from consideration of the e-mail exchanges and my conclusion as to what those exchanges indicate. If an agreement had been concluded at the lunch with the Wilsons having been mentioned at that stage one would have expected Mr. Walker to have replied to Mr. Mills’s e-mail with a single e-mail saying that he had fixed up a meeting with the people already mentioned. Mr. Walker’s account is not compatible with his action in sending two separate e-mails in the terms of those he sent. The Discussion of “Comerga” at Piccolino.[40]What discussion was there of Comerga at the lunch meeting? What discussion was there of the fact that Mr. Mills was operating his company grooming business through the Second Defendant trading as Comerga? Mr. Walker says that there was no mention of any corporate entities nor any mention of Comerga. Mr. Mills says that the discussion was in the context of his explanation that he had changed his way of operating the company grooming business and that he was doing so through the Second Defendant trading as Comerga. On this question I prefer the evidence of Mr. Mills to that of Mr. Walker. I have already explained that I have accepted the account of Mr. Mills that by this time he had decided to operate the company grooming business through a limited company; that the company was to be the Second Defendant; and that it was to use the trading style of Comerga. In those circumstances it is intrinsically unlikely that there would not have been mention by Mr. Mills of such matters at the lunch meeting. Indeed, a failure to mention them would have been bizarre conduct on the part of Mr. Mills. Conversely the contention by Mr. Mills that he went into rather more detail than previously in explaining these matters to Mr. Walker not only accords with inherent likelihood but also provides a context and explanation for the fact that the lunch involved a more detailed conversation about the possibility of introductions being made than had occurred previously. In this respect the e-mail which he sent on 10th December 2012 provides powerful support for Mr. Mills’s account of the conversation. That e-mail was headed “our agreement – Comerga” and made reference to a lead for a “Comerga client”. This would make complete sense if there had been mention of Comerga at the lunch meeting but would be puzzling if, as Mr. Walker asserts, there had been no discussion about Comerga at the lunch. The Parties to the Introduction Agreement.[41]The Claimants say that the parties to the Introduction Agreement were Mr. Walker and Mr. Mills in their personal capacities. The Defendants say that the agreement was made between two companies: Clarion Plc and the Second Defendant. Although the parties have, understandably, approached the case on the footing that the Introduction Agreement was either made between two companies or two individuals there are, in fact, two separate questions to be considered. Was the party agreeing to make the introductions Clarion Plc or Mr. Walker in his personal capacity? Was the party agreeing to make payment in return for introductions Mr. Mills acting personally or the Second Defendant trading as Comerga? It would be open to me to conclude that the Introduction Agreement was between Mr. Walker and the Second Defendant or that it was an agreement between Mr. Mills and Clarion Plc.[42]Mr. Walker and Mr. Mills give directly conflicting accounts on these questions. Mr. Walker says that he and Mr. Mills both knew that they were dealing as individuals whereas Mr. Mills says that the dealings were clearly on the basis that he was acting on behalf of the Second Defendant and that Mr. Walker was acting on behalf of Clarion Plc. The questions have to be answered primarily by reference to an objective assessment of the documents constituting the agreement taking account of the background circumstances at the time the agreement was made. In addition I have had regard to the subsequent actions of those involved but I remind myself that such actions are relevant only as indicative of the understanding of those taking those actions and that such understanding might have been mistaken. It is not, however, suggested that in this case there has been any misunderstanding. The Defendants say that Mr. Walker was well aware that he was making the Introduction Agreement on behalf of Clarion Plc and that he is now seeking a benefit which belongs to that company. The Claimants say that the Defendants knew that the agreement was with Mr. Walker and not with Clarion Plc and that the denial of this is a deliberate ploy to escape liability.[43]What material is there to assist in determining between those accounts? I will set out separately those factors which operate for and against the contention that the contracting party on the one side was Clarion Plc rather than Mr. Walker and those which operate for and against the contention that the party on the other side was Mr. Mills rather than the Second Defendant. However, there is a degree of overlap and various of the factors suggesting that the contracting party on one side was or was not the individual concerned will also support the view that the contracting party on the other side was or was not the private individual. Moreover, a conclusion that the party on one side was a private individual or the company as the case may be will provide some very limited support for the conclusion that the party on the other side was also the individual or the company as the case may be. This is because it would, for example, to a limited extent be more likely that if Mr. Mills were entering the Introduction Agreement in his private capacity he would have been regarded as contracting with Mr. Walker in his private capacity.[44]Was the party offering to make the introductions Mr. Walker as a private individual or Clarion Plc? The Claimants rely on a number of matters which they say support the conclusion that Mr. Walker was acting in his personal capacity and on his own behalf. i) It is said that the relationship between Mr. Walker and the persons to be introduced was a personal one based on the dealings which Mr. Walker had had with those persons over a number of years. The force of the introduction and the benefit of it to Mr. Mills or the Second Defendant was that it was an introduction being made by Mr. Walker himself. ii) Neither Mr. Mills nor the Second Defendant would be concerned as to whether the person being introduced was a client of Clarion Plc or a person known to Mr. Walker in some other capacity. The benefit of the introduction to the Defendants was that it gave an opportunity to receive payment for providing company grooming services. It follows that the Defendants would, the Claimants say, have been willing to contract with Mr. Walker in his personal capacity. Indeed, if the Introduction Agreement had been confined to Clarion Plc the Defendants would have been restricting the range of potential introductions. iii) The Claimants rely on the wording of the 10th December 2012 e-mail from Mills which was addressed to “Ron” and which repeatedly said “you” – thus “… if you provide me with a lead … I will share with you…”. The Claimants say that this shows the intention was that it would be Mr. Walker who would provide the leads and he who would receive the fees. iv) Mr. Walker said that he had discussed with Mr. Mills the introduction of persons whom he knew but who were not clients of Clarion Plc. He says in particular he had mentioned Rob Noble of a business called Great Fridays; Tim Crutchley and his business called Hot Drops; and other persons who were his contacts rather than contacts of Clarion Plc. He referred to the notes of a Board Meeting of 23rd October 2012 on which Mr. Mills had written “GreatFridays.com – Rob Noble”. Mr Mills did not accept that there had been discussion of introductions to these people. He accepted that the names Rob Noble, Great Fridays, and Tim Crutchley had been mentioned to him but he said that they had been raised in the context of services which they could provide to Clarion Plc rather than in that of them being potential recipients of his company grooming services. On this issue I prefer Mr. Mills’s explanation of the context in which those names had been mentioned. If an introduction to Mr. Mills for company grooming work had been contemplated one would have expected there to have been exchanges akin to those about the Wilsons and Mini-Cam Ltd and there were no such exchanges. I am reinforced in coming to this conclusion by the contrast between Mr. Walker’s oral evidence about these matters and the impression given by his witness statement. In his oral evidence Mr. Walker listed a number of individuals and their businesses saying that he had mentioned them to Mr. Mills as persons to whom he could introduce Mr. Mills for company grooming purposes. However, in the witness statement Mr. Walker said, at [61], that he and Mr. Mills “had discussed on several occasions the possibility of me introducing potential clients to him” but he did not say that any persons had been mentioned by name and did not refer to any of the persons whom he told me he had mentioned by name to Mr. Mills. That contrast is noteworthy. If there had been discussions in which Mr. Walker had spoken to Mr. Mills about Mr. Noble or the others by name I would have expected reference to this to have been in the witness statement rather than the very much more generalised discussion to which reference was made. In any event in my judgment the possibility that Mr. Walker might in his personal capacity introduce persons who were not clients of Clarion Plc and receive payment in respect of them provides only very limited assistance in determining who were the parties to the Introduction Agreement because as I will explain below it was in my reading clear that the focus of that agreement was on Clarion Plc clients. v) William Handley is an accountant who provided tax advice to Mr. Walker in respect of the latter’s personal tax position. He provided a witness statement in which he said that Mr. Walker had spoken to him in early 2014 seeking advice about dealing with a potential tax liability arising from an agreement between him and Mr. Mills. In his oral evidence Mr. Handley explained that this was the impression he had formed at the time but that he could not say that Mr. Walker had actually spelt out that the agreement was a personal one. Mr. Handley also explained that his focus at that stage had been on advising as to potential arrangements for the future and for the receipt of funds in the future. This evidence does not advance matters greatly save to indicate that in early 2014 Mr. Walker was giving the impression that the Introduction Agreement had been a personal matter between himself and Mr. Mills. vi) The introduction of Mr. and Mrs. Wilson and Mini-Cam Ltd led to the agreement dated 21st February 2013 signed by Mr. Mills and Mr. Wilson. As I will explain below I have concluded that this was an agreement between Mr. Wilson and the Second Defendant. However, what is relevant at this stage is that in the section of that letter detailing fee proposals Mr. Mills wrote “I suggest this level [sc of fees] as Ron Walker kindly introduced us…”. The Claimants say that this is to be seen as an acknowledgement that the introduction came from Mr. Walker and not from Clarion Plc. vii) Mr. Maynard-Connor laid stress on the fact that as at December 2012 the restructuring of the business of Clarion Plc was being arranged. He says that both Mr. Walker and Mr. Mills knew that there was to be a transfer of Clarion Plc’s clients to the Second and Third Claimants. In those circumstances, Mr. Maynard-Connor says, it would not have made sense for the agreement to have been made with Clarion Plc as it would no longer have clients to introduce after the restructuring. I do not believe that this factor can bear the weight which Mr. Maynard-Connor placed on it. The restructuring had not yet taken place and as at December 2012 the connexion with the clients was that of Clarion Plc. In this regard it is noteworthy in my assessment that an imminent introduction was expected. Both sides are agreed that there was mention on 7th December 2012 of a potential contact. There is disagreement as to whether the Wilsons and their company were mentioned by name or just by reference to the kind of business but there was mention of a potential lead. Moreover, the introduction to the Wilsons took place in January 2013. It follows that the fact that a future potential transfer of the clients of Clarion Plc was in contemplation does not mean that there was no point in the Introduction Agreement being made on behalf of that company in December 2012. viii) On 22nd October 2015 Mr. Mills sent the e-mail headed “resignation and termination”. This concluded with the words “…I have decided to bring any and all agreements with you and Clarion to an end now and you should accept this e-mail as my immediate resignation and termination.” On behalf of Mr. Walker it is said that this demonstrates a belief on the part of Mr. Mills that there was at least one agreement with Mr. Walker in addition to any agreement with “Clarion”. Otherwise why would Mr. Mills have referred to ending agreements with “you and Clarion”? In that regard it is to be noted that the reason for the termination was Mr. Mills’s concern about the consequences of his involvement with Mr. Welsby and Catalloy an involvement resulting from an introduction under the Introduction Agreement and in respect of which payment would have been due under that agreement. The wording of the e-mail is, indeed, a factor to be taken into account but in doing so I must take note of the context in which the e-mail was sent. It was sent at a time when Mr. Mills believed that he had been let down by Mr. Walker in his dealings with Mr. Welsby and Catalloy and it was expressed in angry terms. On behalf of the Defendants it is said that the e-mail should be regarded as having been a “belt and braces” exercise in which Mr. Mills was seeking to make it clear that all dealings with Mr. Walker were now at an end rather than the result of a careful consideration of the identity of the parties to the agreement or agreements he had.[45]The following factors operate to support the view that the contracting party was Clarion Plc rather than Mr. Walker. i) The e-mail of 21st December 2012 which I have found was the acceptance of the offer contained in Mr. Mills’s e-mail of 10th December 2012 had a number of features indicative of the acceptance being made on behalf of Clarion Plc. There were in fact two e-mails but both were from “Clarion” e-mail addresses – one from rwalker@clarionwealth.co.uk and the other from rwalker@clarionplc.com. Mr. Walker said that this was because he did not have a personal or non-Clarion e-mail account and that he used those addresses for all e-mails whether sent in his personal capacity or on Clarion Plc business. The fact of the matter, however, is that he was writing from a Clarion e-mail account. Not only was the e-mail address a Clarion address but the e-mail bore the name and address of Clarion Plc with links to that company’s website and Clarion Plc’s confidentiality notice as I have set out above. The position is equivalent to that which would appertain if this had been an agreement reached by an exchange of letters with the response from Mr. Walker being sent on the headed notepaper of Clarion Plc. This is a powerful indication as to the party on whose behalf the acceptance was being made. ii) In the body of the e-mail Mr. Walker refers to “our introduction/reintroduction”. He could have written “my introduction” and that fact that he did not do so is an indication that he was talking of an introduction made by Clarion Plc. iii) The business of providing wealth planning and/or investment management services was operated by Clarion Plc. Mr. Walker was not a sole trader engaging in personal contracts with the sundry clients. The clients were clients of Clarion Plc and had their contracts with that company. A number of consequences flow from this. The first is that all involved would have known that the clients were clients of Clarion Plc and would have anticipated that the introductions were being made on behalf of that company. Also Mr. Walker had chosen to engage in the provision of wealth planning and investment management services to the clients with whom he dealt by way of a limited company (and had done so for a number of years). For the Introduction Agreement in respect of those clients to be made by that company would be consistent with that approach whereas for it to have been made by Mr. Walker personally would not have been. Finally, in this regard Mr. Walker was a director of Clarion Plc and owed that company fiduciary duties. The opportunity to receive payment for making introductions to the clients of Clarion Plc had come to Mr. Walker in his capacity as a director of that company. This is because his knowledge of the clients had come to him by reason of that capacity and also because his dealings with Mr. Mills had been as director of Clarion Plc. It follows that Mr. Walker would have to account to Clarion Plc for the benefits derived by him from the Introduction Agreement (at least so far as he made introductions of Clarion Plc clients) if he made that agreement in his personal capacity – Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443. This would not necessarily preclude a finding that Mr. Walker had entered the agreement in his personal capacity but it is a factor indicating that he is unlikely to have done so. iv) It is apparent that Mr. Walker was not the only person who had contact with clients in the Clarion Plc operation and there were others, such as Mr. Walker’s co-director Steven Walker, Kevin Neill, and Michael Brooke, who dealt with clients and who had clients whom they “looked after” (in Mr. Walker’s words) under the umbrella of Clarion Plc. It is inherently more likely that Mr. Mills or the Second Defendant would have entered an agreement covering introductions to all such clients and not just to those clients for whom Mr. Walker was the point of contact. v) One of the ways in which Mr. Mills sought to persuade financial advisers to provide him with introductions was to emphasise that there would be a benefit to them if the company grooming was successful. This was not only because a share of the fees or lump sums would be paid but because if there was a sale of the client’s business at a good price then the client would have a substantial fund available. The client would then be in need of further financial advice and would have funds to place for investment. It is clear that Mr. Mills emphasised the potential for funds to be realised which would be placed with the financial adviser and which would increase the latter’s “funds under management”. Such matters would have been a benefit to Clarion Plc but not, or at least not directly, to Mr. Walker in his personal capacity. vi) The preceding factors relate to the wording of the documents constituting the Introduction Agreement and to the context at the time the agreement was made. They are powerful factors in themselves but are supported by the subsequent actions implementing the agreement which indicate the parties’ understanding of the agreement. The first of these factors is the language of Mr. Walker’s 20th December 2012 e-mail to Mr. and Mrs. Wilson. In this he refers to Mr. Mills as “our non exec chairman”. This is a clear indication that the introduction is being made by Clarion Plc. The terms of that e-mail are also inconsistent with Mr. Walker’s contention that he had already mentioned Mr. Mills by name to the Wilsons. If he had done so he would not have been suggesting that they google Mr. Mills or explaining who he was. The language used in that e-mail is on any sensible reading most compatible with the e-mail having been the first mention of Mr. Mills to Mr. and Mrs. Wilson. As explained above this is one of the factors which has caused me to regard Mr. Walker’s evidence as unreliable. vii) On 27th December 2012 Mr. Walker e-mailed the Wilsons to confirm the meeting fixed for 22nd January 2013 at which Mr. Mills was to be introduced. That e-mail was copied to Carole Loynd. Miss. Loynd was an administrator employed by Clarion Plc. Mr. Walker said that he copied Miss. Loynd in so that the matter would be “appropriately recorded on the client file.” He went on to say that all contact with clients was recorded as part of the “contact history” and that “anything I wanted recorded, whether it was personal or to do with Clarion Plc, it would go into what’s called contact history”. I found this explanation unpersuasive. The position was that Mr. Walker was copying a Clarion Plc employee into an e-mail relating to the making of an introduction and was doing so to enable that employee to record that contact on the file which Clarion Plc held in relation to the client in question. In short the arrangements for the introduction of Mr. Mills to the Wilsons were being treated as if the matter was Clarion Plc business. viii) Various of the documents relating to the Introduction Agreement and disclosed by the Defendants had “Clarion” written on them in Mr. Mills’s handwriting. This is of particular note in respect of Mr. Walker’s e-mail of 21st December 2012 but there a number of others. In his witness statement Mr. Mills said that he had written the word “Clarion” on these documents because he had separate files for separate ventures and he wrote on various documents the name corresponding to the file so that his personal assistant would know in which file to place the document. Mr. Mills says that he wrote “Clarion” rather than “Ron Walker” on these documents because he believed that the agreement was with Clarion Plc and not with Mr. Walker. I accept Mr. Mills’s account of his practice and the writing of “Clarion” on these documents is a strong indication that Mr. Mills regarded the Introduction Agreement as a part of the continuing relationship with Clarion Plc and not a new and separate arrangement with Mr. Walker personally (the latter being the Claimants’ case). ix) A similar point can be made in relation to the note which Mr. Mills wrote on the copy he obtained of Catalloy Ltd’s accounts. This said “recommended by Clarion”. Again this is an indication of Mr. Mills’s understanding of the arrangement. x) I have already referred to the rendering by the Second Claimant to the Second Defendant of an invoice for £606,250 and to Mr. Walker’s failure to explain why this was done. The rendering of this invoice by the Second Claimant is not compatible with a belief on the part of Mr. Walker that he was personally entitled to this payment. xi) A further factor, albeit one of limited weight, is that Mr. Wilson said that he regarded himself as having been a client of Clarion Plc and that he regarded the introduction of Mr. Mills or the Second Defendant as having been made by Clarion Plc. Mr. Wilson also said that as far as he was concerned “Ron Walker [was] Clarion Plc”. This is an indication of Mr. Wilson’s understanding of the body providing him with financial advice but it carries little weight because it was apparent that Mr. Wilson had not been concerned about the distinction between Mr. Walker and Clarion Plc and that it was of no concern to him at the time whether the introduction was being made on behalf of the company or by Mr. Walker in his personal capacity.[46]In my judgment the factors I have set out in support of the contention that Mr. Walker was contracting on behalf of Clarion Plc and not in his personal capacity are compelling and I find that the Introduction Agreement was entered by Clarion Plc.[47]What material supports the contention that Mr. Mills was personally a party to the agreement? i) The e-mail of 10th December 2012 was sent from the e-mail address “mark@mark.tv”. It was signed “Kind Regards Mark” above the words “Mark Mills” and there is a link to a website which was a personal website promoting Mr. Mills. ii) That e-mail says “… if you provide me with a lead” and “I will share with you…”. The Claimants say that this is most naturally read as a reference to Mr. Mills personally rather than to a limited company. There is considerable force in this point. iii) Mr. Maynard-Connor relied on the You Tube video and on Mr. Mills’s promotion of himself as indicating that Mr. Mills was trading in his personal capacity or was regarded as doing so. I have already explained at [5] that I accept that Mr. Mills was intending to operate his company grooming activities through the Second Defendant trading as Comerga. The argument for the Claimants is that even if that was what Mr. Mills intended it is possible (and the Claimants say it was the case) that particular dealings viewed objectively gave rise to an agreement to which Mr. Mills was a party personally. iv) The Claimants rely on the wording of the agreements which were entered with Mr. Wilson and Mr. Welsby. That with Mr. Wilson was on Comerga headed paper. The final version in the papers had the Comerga name and logo at the top of the page together with the Second Defendant’s business address. It was said to be “from the office of Mark Mills, Chairman”. That version did not bear at the foot of the page the words “Comerga is the trading name of Insurance and Legal Services Ltd” followed by the Second Defendant’s registered number. This did appear on an earlier version and it may be that those words were lost in scanning of the papers. That with Mr. Welsby was not on this paperwork and bore Mr. Mills’s home address. Each of the agreements bore at the foot of each page the name “Mark Mills” and was signed by Mr. Mills. The agreements each make reference to “my fee”; contain a table setting out the “success fee” payable on sales at different values and describe this as being “Mark Mills Payment”; and talk of that fee being “still payable to Mark Mills” in certain circumstances. Each also repeatedly uses the words “I” and “me” or “my”. However, each also is in the form of a letter signed in the following form. “Yours sincerely, [there is then a manuscript signature “Mark” by Mr. Mills] Mark Mills Insurance and Legal Services Limited trading as Comerga” [there is then a manuscript signature “Mark” by Mr. Mills] Mark Mills Insurance and Legal Services Limited trading as Comerga” Mr. Mills says that the bulk of the format of the letter was copied over from the engagement letters he had been using before he decided to conduct his company grooming operation through the Second Defendant and that he did not get round to revising the references to “my” and “I” nor to altering the references to a “Mark Mills payment” to his fee. I accept that this is how the documents came to have the form which they did. However, the Claimants say that considered objectively the documents show that the agreements with Mr. Wilson and Mr. Welsby were being made by Mr. Mills personally. They go on to argue that this should be regarded as indicating that the Introduction Agreement was also made by Mr. Mills in his personal capacity. I do not find this argument persuasive. The letters are not well-drafted for the purpose of demonstrating an agreement with the Second Defendant but they do achieve that effect. Regardless of the presence or absence of the headed paper each concludes with a signature from Mr. Mills above the Second Defendant’s name and a description of the Second Defendant trading as Comerga. In my judgment they are to be seen as offers from the Second Defendant which were accepted by Mr. Wilson and Mr. Welsby. v) The Claimants also rely on the fact that the Mills-Wilson agreement was undoubtedly an agreement between Mr. Mills and Mr. Wilson in their personal capacities. They say that this shows Mr. Mills entering agreements personally despite having said that he was operating his company grooming business through the Second Defendant. There is force in this argument but it does have to be seen against the context in which the Mills-Wilson agreement was made. The Defendants say that the arrangements at that stage were focused on Mr. Mills’s continuing personal involvement in Mini-Cam Enterprises Ltd and so it was more natural for this to be a personal agreement.

Mark Mills

[48]What is there to support the view that the agreement was being made by the Second Defendant? i) The starting point must be the language of the e-mails which constituted the Introduction Agreement. The e-mail of 7th December 2012 is headed “our agreement – Comerga” and makes reference to “a lead for a Comerga client”. This is significant in the light of my finding that Mr. Mills had explained at lunch on 7th December 2012 that he was going to be operating his company grooming business through a limited company and that this was going to be trading as Comerga. In those circumstances the references to Comerga are powerful indications that a proposal was being made on behalf of that company. ii) I have already set out some parts of the agreements which were entered with Mr. Wilson and Mr. Welsby and my conclusion that those documents effected agreements to which the Second Defendant was party. The conclusion as to the identities of the parties to those agreements is of only limited assistance in determining whether Mr. Mills or the Second Defendant was the party to the Introduction Agreement. It does, however, provide some support for the view that the latter agreement was with the Second Defendant. iii) On 19th March 2013 Mr. Walker e-mailed Mr. Mills. The e-mail referred to Mr. Welsby but also mentioned a further client to whom Mr. Walker had spoken “regarding the Comerga offering”. In the light of my finding as to Mr. Walker’s knowledge that Comerga was the trading style of the Second Defendant this indicates that Mr. Walker knew that the company grooming activities were being undertaken by the Second Defendant. iv) I have already explained that Mr. Walker caused the Second Claimant to invoice the Second Defendant in August 2015 for the sum of £606,250 due in relation to the Introduction Agreement. This is a potent indication that the Second Defendant was regarded as the party liable to make payment under that agreement.[49]In my judgment the key factor is my conclusion that by the end of lunch on 7th December 2012 Mr. Walker knew that Mr. Mills was operating his company grooming business through a limited company trading as Comerga. Although there are elements in the e-mail of 10th December 2012 which would suggest Mr. Mills was making an offer on his own behalf that finding coupled with the use of the term Comerga in that e-mail leads me to the conclusion that it was the Second Defendant and not Mr. Mills who was the party to the Introduction Agreement.[50]It follows that I find that the Introduction Agreement was made between Clarion Plc and the Second Defendant. The Terms of the Introduction Agreement.[51]At the start of the trial with the assistance of counsel I identified the terms of the Introduction Agreement as being a matter in issue between the Claimants and the Defendants. However, the scope for debate about the terms has been markedly reduced by my conclusions as to who the parties were and as to whether the agreement was made orally or by the exchange of e-mails. In reality the parties are not in dispute as to the terms of the Introduction Agreement (given those findings). Rather there is dispute as to the effect of the events in 2015 on the payment obligations of the Second Defendant and I will consider that dispute when I address the effect of those events.

Was there an Assignment of the Benefit of the Introduction Agreement?

[52]The Claimants’ primary case is that the Introduction Agreement was made by Mr. Walker in his personal capacity and that he is entitled to enforce that agreement. That line of argument cannot stand in the light of my conclusion that the agreement was made by Clarion Plc and not by Mr. Walker in his personal capacity. The Claimants put forward an alternative case contending that the benefit of the Introduction Agreement was assigned on 31st March 2013 either to the Second Claimant or to the Third Claimant by one or other of the two Asset Purchase Agreements executed on that date between Clarion Plc and the Second Claimant and between Clarion Plc and the Third Claimant.[53]Clarion Plc was in Members’ Voluntary Liquidation at the time these proceedings were started and it is now in Creditors’ Voluntary Liquidation. Neither the company nor its liquidators are parties to these proceedings and there has been no input from them on the question of whether rights under the Introduction Agreement passed to the Second or Third Claimants under the Asset Purchase Agreements or remained with Clarion Plc. I have concluded that this should not influence my construction of those agreements but it does mean that there is no concession by or agreement on behalf of Clarion Plc that its rights passed to the Second or Third Claimants.[54]It is common ground that there was no express mention of the benefit of the Introduction Agreement in either of the Asset Purchase Agreements. The question of whether there was an assignment is to be determined by construction of those agreements. In undertaking that exercise I must consider the language used in its commercial context.[55]The Asset Purchase Agreement between Clarion Plc and the Second Claimant defined the former as the Seller and the latter as the Buyer. The relevant terms of the agreement were as follows. At recital B:
“The Seller has agreed to sell and the Buyer has agreed to purchase the Business (together with the Assets) as a going concern subject to and on the terms of this agreement.”
At clause 1 various terms were defined including:
“Assets: the property, rights and assets of the Business to be sold and purchased pursuant to clause 2.1 excluding the Excluded Assets.” “Business: the business of the provision of advice and services relating to wealth planning carried on by the Seller at the Effective Time.” “Business Claims: all of the Seller’s rights, entitlements and claims against third parties arising directly or indirectly out of or in connection with the operation of the Business or relating to the Assets.” “Contracts: all contracts, arrangements, licences and other commitments relating to the Business entered into, on or before, and which remain to be performed by any party to them in whole or in part at, the Effective Time.” “Excluded Assets: the property, rights, and assets of the Business set out in clause 4.1”
Clause 2.1 provided that “the Seller shall sell … and the Buyer shall buy …the Business as a going concern together with the assets listed below … i) All other property, rights and assets owned by the Seller and used, enjoyed or exercised or intended to be used, enjoyed, or exercised exclusively in the Business … save for the Excluded Assets”. Clause 4 provided that certain assets were to be excluded from the sale and these included, at 4.1 (c) “all assets of the Seller not specifically transferred to the Buyer pursuant to this agreement.”[56]The Asset Purchase Agreement between Clarion Plc and the Third Claimant was in identical terms save that “Business” was defined as being “the business of the provision of advice and services relating to investment management carried on by the Seller…”.[57]It is to be noted that the agreements expressly provide that any assets not specifically transferred to the Second Claimant or the Third Claimant as the case may be are excluded from the sale. Neither agreement was made on the basis that the entirety of Clarion Plc’s operation was passing to either the Second Claimant or the Third Claimant. Indeed, the intention was that only part of the operation should pass to either of them because the purpose of the arrangement was to separate parts of Clarion Plc’s existing business. It is also of note that clause 4.1 (a) excluded from the sale “all the Seller’s cash in hand or at the bank or any other financial institution”. Accordingly, it was envisaged that some assets of Clarion Plc would remain with that company and also that neither the Second Claimant nor the Third Claimant would succeed to the entirety of Clarion Plc’s business but only to an aspect of that business.[58]It follows that the question to be asked is whether Clarion Plc’s rights under the Introduction Agreement relate to “the business of the provision of advice and services relating to wealth planning carried on by [Clarion Plc]”, in which case they would pass to the Second Claimant, or to “the business of the provision of advice and services relating to investment management carried on by [Clarion Plc]”, in which case they would pass to the Third Claimant. Unless the rights under the Introduction Agreement relate to one or other of those aspects of the business of Clarion Plc then they were not passed to either the Second Claimant or the Third Claimant and remained with Clarion Plc.[59]Mr. Maynard-Connor put forward two lines of argument in favour of the contention that Clarion Plc’s rights under the Introduction Agreement passed to the Second Claimant.[60]The first was that the introductions amounted to dealings with clients of Clarion Plc with payment being received for those dealings. Mr. Maynard-Connor contends that the purpose of the restructuring arrangement was that the clients of Clarion Plc would pass to the new companies and would not remain with Clarion Plc. Accordingly, he says that the restructuring should be regarded as having passed the benefit of Clarion Plc’s dealings with all its clients to one or other of the new companies.[61]In my judgment this argument is not borne out by the evidence and cannot stand in the light of the wording of the Asset Purchase Agreements. It is common ground that there was no express consideration of whether the benefit of the Introduction Agreement would pass to either the Second Claimant or the Third Claimant or would remain with Clarion Plc. Mr. Walker’s evidence was that the Introduction Agreement was with him personally and was not an asset of Clarion Plc and there is no suggestion that he discussed with his fellow director (the unrelated Mr. Steven Walker) the transfer from Clarion Plc of rights under that agreement. The various documents relating to the restructuring which have been put in evidence show an intention to separate the wealth planning and investment management aspects of Clarion Plc’s business. The restructuring did not mean that Clarion Plc should necessarily cease to exist. Indeed Appendix III to the application for clearance which was submitted to H M Revenue & Customs on 13th March 2013 expressly included Clarion Plc in the structure which would exist after the proposed transaction. It is to be noted that Clarion Plc did not enter Members’ Voluntary Liquidation until 17th July 2014 some sixteen months after the execution of the Asset Purchase Agreements. Moreover, as I have set out above, each Asset Purchase Agreement provided that assets not specifically transferred were excluded from the sale. I cannot, in those circumstances, approach the Asset Purchase Agreements on the footing that it should be assumed that all the rights of Clarion Plc were being transferred.[62]Mr. Maynard-Connor’s second argument is that the introductions are to be regarded as “the provision of advice and services relating to wealth management” and so passing to the Second Claimant under the Asset Purchase Agreement between it and Clarion Plc. It is said that a service is being provided to the client by putting him or her in touch with a person able to assist the client in growing wealth by grooming the client’s business for sale. Mr. Maynard-Connor invoked the description of financial or wealth planning given by Mr. Walker in his oral evidence when he said:
“it's essentially building a close relationship with a client, finding out the client's aspirations and hopes and goals in life, mainly … linked to finance but not all about finance, just generally what are clients trying to achieve in life and then formulating a plan that helps the client to achieve those goals and then staying with them throughout their life, hopefully, to help that plan come to fruition.”
[63]Mr. Maynard-Connor invited me to regard the introducing of clients to Mr. Mills/Comerga as part of that exercise. In addition he relied on the evidence of Mr. Sherratt that the Second Claimant acts as an intermediary and charges intermediary fees for its services when arranging financial services products for its clients. Mr. Maynard-Connor argued that I should regard the commission due under the Introduction Agreement as akin to those intermediary fees.[64]I am not persuaded by this argument. The actions of the Second Claimant in arranging financial services products for its clients as an intermediary between those clients and the providers of such products and the charging for those services clearly is part of the provision of services relating to wealth planning. The question remains whether what was being done under the Introduction Agreement was of the same nature or not or more directly whether it was “the provision of advice [or] services relating to wealth planning”. In my judgment to answer the question I need to consider the interrelation between Clarion Plc and a client in respect of the Introduction Agreement and to reflect on what Clarion Plc actually did under that agreement and what, at the time of the agreement, it was envisaged it would do. What happened was that Clarion Plc introduced a client to Mr. Mills (or rather to the Second Defendant trading as Comerga) indicating that Mr. Mills was potentially capable of providing the service of grooming a business for sale. The involvement of Clarion Plc ceased with that introduction. Whether the Second Defendant was to be engaged and if so on what terms was then a matter for negotiation between the client and the Second Defendant. It is not suggested that Clarion Plc was giving advice in this regard to the client beyond effecting the introduction and indicating that it believed that the Second Defendant’s services might be of interest to the client. This was rather different from, for example, setting out a range of potentially suitable financial services products and advising the client of the advantages and disadvantages of each. In effecting the introduction Clarion Plc was making use of the knowledge of a client’s affairs gained through its wealth planning and/or investment management work but that does not necessarily or inevitably mean that the use of that knowledge was part of the business of providing advice or services relating to wealth planning. What Clarion Plc was doing was providing the Second Defendant with an introduction to a client who might choose to use the Second Defendant’s services and providing the client with an introduction to the Second Defendant so that the client could consider whether using the Second Defendant’s services. In doing so it neither provided advice relating to wealth planning nor a service relating to that (still less to investment management).[65]I am reinforced in this view by the stance which Mr. Walker had taken in his witness statement. At [67] Mr. Walker was addressing the issue of the parties to the Introduction Agreement. He said this “The referral of individuals and their companies in such circumstances [sc the circumstances envisaged in the Introduction Agreement] was not something which fell within the business of Clarion Plc … and did not fit with the division of operations being implemented as part of the restructure. The introduction of such potential clients to Mark was unconnected to the services provided by Clarion Plc”. So at that stage Mr. Walker was expressly asserting that the making of introductions of the kind envisaged was not part of the wealth planning services provided to clients of Clarion Plc whereas Mr. Maynard-Connor was driven, on his behalf, to having to argue that it was.[66]It follows that Clarion Plc’s rights under the Introduction Agreement did not pass to either the Second Claimant or the Third Claimant. The Parties’ Dealings from July to October 2015.[67]In the period from July to October 2015 there were three occasions of significance on which Mr. Walker and Mr. Mills met at Piccolino. They met for lunch on 9th July 2015; for breakfast on 28th July 2015; and for breakfast on 12th October 2015. They give markedly different accounts of those meetings (and in particular of the latter two). In addition on 6th August 2015 they were together in London for a celebratory meal and drinks. Mr. Walker and Mr. Mills give slightly differing accounts of the day in London but those differences are not material because both are agreed that they were there to celebrate the successful outcome of Project Delta.[68]Mr. Mills says that his daughter was present at the lunch on 9th July 2015 because she had been doing work experience with him. At one point it was put to Mr. Mills that the lunch at which his daughter had been present was a different time and had been a purely social occasion. I accept Mr. Mills’s rejection of that assertion and accept his evidence as to how the meeting came about. He said that he had become concerned about matters with Mr. Welsby and Catalloy and phoned Mr. Walker to arrange a meeting at short notice resulting in the lunch. Mr. Mills said that the focus of the meeting was the problems with Catalloy but that there was also discussion of the imminent culmination of Project Delta. Mr. Walker placed the focus rather more on Project Delta than on the dealings with Catalloy. However, the differences about this meeting are not material because both men are agreed that there was discussion about the dealings with Mr. Wilson and Mini-Cam Ltd and about the substance of that discussion. They accept that Mr. Mills explained that Mr. Wilson was saying that the entitlement of Mr. Mills or the Second Defendant to fees would end with the sale of his interest in Mini-Cam Ltd and that payments would not be due as the result of any subsequent dealings in connexion with Mini-Cam Enterprises Ltd. They also accept that Mr. Walker urged Mr. Mills to hold Mr. Wilson to the 2013 agreement and to press for further payments.[69]The meeting on 28th July 2015 was after the sale of Mr. Wilson’s interest in Mini-Cam Ltd and after the setting up of Mini-Cam Enterprises Ltd. I have been shown a number of pages of manuscript notes which were written by Mr. Mills at the meeting and which were, by agreement between them, retained by Mr. Walker. The notes set out the amounts going to Mr. Wilson under the sale of Mini-Cam Ltd; the calculation of the sums of £2.2m and of the £1.8m; explain the figure of £606,250; and show the sums which Mr. Mills would in due course receive if Mini-Cam Enterprises Ltd were to be sold for £100m. At some point after the meeting Mr. Walker attached a Post-It note to the page detailing the calculation of £1.8m.The note reads “share of fees on Mark’s ongoing fee from Mini-Cam ?” and then separated by a line “still need side letter with MM re 2nd phase of Mini-Cam”. I accept that the Post It note was attached by Mr. Walker to the manuscript notes at some point after the meeting and before 12th October 2015.[70]Mr. Mills says that at the meeting he explained the arrangements which had been made with Mr. Wilson, Mini-Cam Ltd, and Mini-Cam Enterprises Ltd. He explained that the payment which was going to the Second Defendant was £1.8m and not £2.2m because £400,000 was having to be used to buy shares in Mini-Cam Enterprises Ltd. He explained that there was to be a new arrangement with Mr. Wilson about the dealings going forward and that all that would be due under the Introduction Agreement was 33% of £1.8m. Mr. Mills says that Mr. Walker was initially angry when he was told about this but that he eventually accepted the position save that Mr. Walker persisted in seeking to persuade Mr. Mills to enter a new agreement which would provide for payments being made by Mr. Mills out of the further payments from Mr. Wilson. Mr. Mills says that there was no agreement that his shareholding in Mini-Cam Enterprises Ltd would be held on trust nor that there would be any further payment. Indeed, he says that there was no discussion about the shares being held on trust.[71]Mr. Mills said that the manuscript notes had been written to explain to Mr. Walker what the new arrangements with Mr. Wilson were and to explain how the arrangements would work. He said that he and Mr. Walker were looking to future introductions, to future Project Deltas, and were considering how such operations might work. The notes were being used to demonstrate what could happen in such circumstances. He made the point that the first section of the Post It note was referring to future consultancy fees and relies on the presence of the question mark as an indication that no agreement had been reached.[72]Mr. Walker’s account is that Mr. Mills was nervous at the start of the meeting because he was trying to persuade Mr. Walker to forego his entitlement. However, the meeting became more amicable when Mr. Walker made it clear that he would not give ground and that he would require to be paid all that was due. The meeting then became constructive with a discussion about the way forward. Mr. Walker says that it was agreed that Mr. Mills would hold his Mini-Cam Enterprises Ltd shares and loan notes in the proportion 2:1 for himself and Mr. Walker and that they proceeded on the basis the Introduction Agreement would continue to apply to the future payments. He says that the manuscript notes and calculations were written in the context of the discussions about what would be due under the Introduction Agreement as the dealings with Mr. Wilson and Mini-Cam Enterprises Ltd progressed. They were written by Mr. Mills and retained by Mr. Walker to show what would be due. Mr. Walker says that he would not have retained those notes if he had not been going to receive anything from the future dealings. As indicating that agreement was reached in the terms he asserts Mr. Walker relies on his retention of the notes; the terms of the Post It note; and the fact that he paid for breakfast. He says that he would not have acted in that way if the outcome of the meeting had been that he was getting nothing further from the dealings with Mr. Wilson in circumstances where Mr. Mills stood to receive millions of pounds in further payments.[73]I have already said that Mr. Walker and Mr. Mills differ as to how successful socially the time in London on 6th August 2015 was. However, they both agree that they were celebrating the successful outcome of Project Delta and were eating and drinking together to do so. Mr. Walker says that this demonstrates that he and Mr. Mills were still on very good terms personally and that they were celebrating. He says that he would not have been acting in this way if he was being cut out of any share in future payments. Mr. Mills says that even on his account of matters Mr. Walker had good cause to celebrate. He says that Mr. Walker (or Clarion Plc) was receiving £600,000 simply for making an introduction and for having been present at the initial meeting where the introduction was made. Mr. Mills says that Mr. Walker was a good salesman and that he was still pressing Mr. Mills to agree that he, Mr. Walker, should have a share of the future benefits. Moreover, they both contemplated similar successes resulting in the future from further introductions. They were considering how such arrangements should be structured. So, Mr. Mills says, Mr. Walker could see that there would be benefits from future dealings, potentially very substantial benefits, even if nothing more came to him or Clarion Plc from this project.[74]There was a further breakfast meeting on 12th October 2015. I have been provided with notes in Mr. Walker’s handwriting headed “MM 12-10-15”. The notes start with three bullet points. There is then a space and four further bullet points under the heading “Immediate Actions”. One of those reads “MM to write clarifying letter re ongoing shares/fees split etc re Mini-Cam”. Mr. Walker said that the top part of the page had been written in advance as an aide-memoire for matters to raise at the meeting. The entries under “Immediate Actions” were, he says, written at the meeting. Mr. Maynard-Connor contends that as no notice was served by the Defendants pursuant to CPR Pt 32.19 they are deemed to have admitted the authenticity of this document. However, in my judgment that does not advance matters greatly because it was described in the disclosure as “Handwritten notes ‘MM 12-10-15 Breakfast meeting at Piccolino’” and identified with the date 12th October 2015. The Defendants are deemed to admit that this was an authentic document but not to admit that the contents were written at the meeting. However, even without such deemed admission I accept that the section “Immediate Actions” was written by Mr. Walker at the meeting. At the very least it must have been written in advance of the meeting indicating Mr. Walker’s view as to the actions which needed to be considered. I accept the notes were written at the meeting and are accordingly powerful evidence in support of Mr Walker’s contentions which I will summarise below. I must, however, remember that they were Mr. Walker’s notes and are not akin to minutes or the like which were approved or agreed by Mr. Mills.[75]Mr. Mills says that he had wanted to focus on the problems with Mr. Welsby and Catalloy at this meeting. He says that Mr. Walker continued to press him to enter a new agreement providing for payment of a share of the future sums which Mr. Mills would receive from Mr. Wilson and/or Mini-Cam Enterprises Ltd but that he explained that he was not interested in discussing that.[76]In his witness statement Mr. Walker said that an agreement in relation to the holding of the shares and loan notes and as to future fees had already been agreed on 28th July 2015. He said that on 12th October 2015 he had mentioned to Mr. Mills the need for written confirmation of this and the “Immediate Action” bullet point referred to this. In his oral evidence Mr. Walker said that there had been a question in his mind as to whether agreement had been reached as to the sharing of future consultancy fees.[77]The Claimants’ case is that their entitlement to payment out of the sums received by Mr. Mills as a result of the refinancing and the sale of Mr. Wilson’s interest in Mini-Cam Enterprises Ltd derives from the Introduction Agreement and they do not say that new or separate obligations in this regard were created in the meetings between Mr. Walker and Mr. Mills. I have already found that the Introduction Agreement gave rights to Clarion Plc rather than to Mr. Walker and that those rights did not pass to the Second or Third Claimants. Nonetheless, it is remains necessary for me to make findings as to what, if any, agreement was made at the meetings. This is because Mr. Walker’s claim to a share in the proceeds of the realisation of Mr. Mills’s Mini-Cam Enterprises Ltd shares and loan notes is based on the trust which he contends arose from an agreement reached on 28th July 2015.[78]In support of his contentions Mr. Walker relies on the matters I have set out at [72]; points to the fact of the celebration outing on 6th August 2015; his payment for breakfast on 28th July 2015; and the writing of the Post It note and the Immediate Actions note. Account is also to be taken of the weakness of Mr. Mills’s stance in respect of the £400,000 difference between £2.2m and £1.8m. Although Mr. Mills did appear to have been genuine in his belief that the arrangements with Mr. Wilson and Mini-Cam Enterprises Ltd going forward were different from those which had been in place previously he must have realised that there was a strong claim to a 33% share in the £400,000 sum. In those circumstances it may be said that he would have been prepared to agree to the shares and loan notes bought with that sum being held in the same proportions as those into which the sum would have been divided.[79]The Defendants point to the absence of any e-mail or letter from Mr. Mills confirming the agreement which Mr. Walker says had been made. Even more so they point to the absence of any letter or e-mail from Mr. Walker chasing for such confirmation. They point out that the allegation that the shares and loan notes were held on trust was first raised on 17th June 2016 when draft Particulars of Claim were sent to the Defendants. They say that if there had been such an agreement it would have been asserted earlier and in particular they point out that there was no assertion of such a claim in the letter before action sent on 24th March 2016. Mr. Mills placed emphasis on how much Mr. Walker or Clarion Plc were getting for such little input. He said that he would not have agreed to an arrangement which gave Mr. Walker even more in the future in circumstances where there would be no further work done by Mr. Walker but where considerably more work was still needed on his, Mr. Mills’s, part. It is also relevant to note that in his witness statement, at [45] and [111], Mr. Walker said that both he and Mr. Mills knew that the shares and loan notes “were worth a lot more than £400,000”. Mr. Walker does not explain why Mr. Mills or the Second Defendant should have given Mr. Walker a one-third share of assets worth a lot more than £400,000 when the obligations in respect of that amount could have been discharged by paying £133,000 and where the circumstances were that the Second Defendant would have had approximately £1.2m available to use for this from its share of the sum of £1.8m.[80]I did not find persuasive Mr. Mills’s initial stance that Mr. Walker accepted and was given the manuscript notes just by way of explanation and for general information. That is not consistent with the Post It note nor with the “Immediate Action” note. I have already indicated that I also found unimpressive Mr. Mills’s attempts to say that Mr. Walker or Clarion Plc’s entitlement was to a share of only £1.8m rather than to a share of £2.2m.[81]However, I also found Mr. Walker’s explanation for the absence of any e-mail or letter confirming the alleged agreement about the shareholding unconvincing. He said that he had pressed for such confirmation on the telephone and in the meeting of 12th October 2015 and said that this accorded with his pleasant and gentle approach to such matters. It is, in my judgment, not credible that if there had been a firm agreement reached on 28th July 2015 as to the shareholding and if there had been a delay in confirmation from Mr. Mills Mr. Walker would not have sent an e-mail or letter setting out his understanding of the agreement and inviting confirmation. Such an e-mail could have been expressed in polite terms but it is not credible that Mr. Walker would not have sent an e-mail if there had been such an agreement and if he did not receive confirmation in response to his phone calls. It is apparent from the bundle that there was frequent e-mail communication between Mr. Walker and Mr. Mills, often about relatively unimportant matters. The absence of an e-mail about the important agreement which Mr. Walker says was reached is a powerful factor against acceptance of his case on this point.[82]I have reflected with care on the terms of the Post It note and the “Immediate Action” note. They provide powerful support for the view that there was discussion about the possibility of an agreement governing the future but they do not compel the finding that there was a concluded agreement. In my judgment it is significant that neither of them refers clearly or directly to there having been a clear and concluded agreement as to the holding of the Mini-Cam Enterprises Ltd shares and loan notes but it is Mr. Walker’s case that there had been such an agreement and that there was no doubt about that.[83]I find that in the meetings in July and October 2015 Mr. Walker did not accept that any right to payments had come to an end nor did he accept that the sum of £606,250 was the totality of what was due under the Introduction Agreement. He sought agreement from Mr. Mills that there would be further payments and was continuing to seek this in October 2015. However, I also find that no agreement had been reached in response to his requests. In particular I find that there was no agreement between Mr. Mills and Mr. Walker that the former’s Mini-Cam Enterprises Ltd shares and loan notes were to be held for himself and Mr. Walker. The Legal Effect of those Dealings and of the Events thereafter.[84]Mr. Mills has received a total of £1,000,000 as a consequence of the refinancing of Mini-Cam Enterprises Ltd. He has also received a payment of £1,359.826 pursuant to clause 3 of the Mills-Wilson agreement. The Claimants seek 33% of those sums. That entitlement is said to arise by reason of the Introduction Agreement in that the sums received by Mr. Mills are to be regarded as lump sum fees generated by the introduction of Mr. Mills to the Wilsons. The Claimants rely on the Introduction Agreement as the basis for this alleged entitlement and this aspect of the claim must fail. The first reason for this is that I have already concluded that the Introduction Agreement was made by Clarion Plc and not by Mr. Walker and that the benefit of that agreement has not been assigned to either the Second or the Third Claimant. It follows that even if payment of these sums is due under that agreement it is not recoverable by any of the current claimants. It appears to me that the claim to these sums fails on further grounds and I will summarise these briefly. In doing so I make it clear that I have not heard any argument from Clarion Plc in this case and in particular I have not heard any arguments which the liquidators of that company might wish to advance in support of a claim to these sums. Nonetheless, there appear to be two further reasons why a claim to these monies is not sustainable. The first is that the Introduction Agreement was between Clarion Plc and the Second Defendant. The payments in question have been made to Mr. Mills pursuant to the Mills-Wilson agreement. It is not readily apparent how payments made to Mr. Mills under an agreement which he entered in July 2015 can give rise to a liability on the Second Defendant under the Introduction Agreement. In addition the Introduction Agreement provided for payment to be made of “33% of any lump sums fees earned in the event of the sale of that company”. The term “that company” is a reference back to “a Comerga client” earlier in the sentence. In the context of the dealings with the Wilsons and Mini-Cam Ltd that must be a reference to the latter company. Although the opportunity for Mr. Mills to receive payment under the Mills-Wilson agreement derived ultimately from the introduction to the Wilsons those payments cannot be seen as lump sum fees earned on the event of the sale of Mini-Cam Ltd.[85]Under the terms of its agreement with the Wilsons the Second Defendant was entitled to receive £2.2m in July 2015. In fact it received funds of £1.8m with the remaining £400,000 being used for the purchase of shares and loan notes in Mini-Cam Enterprises Ltd in the name of Mr. Mills. The Second Defendant was treated as having received the full £2.2m for tax purposes and the sum of £400,000 was recorded in its accounts as a director’s loan made to Mr. Mills. Moreover, the sum of £400,000 was retained from the completion monies and was used to buy the shares pursuant to a Letter of Direction sent to Mr. Wilson by Mr. Mills. That letter was expressly said to be a direction made on behalf of the Second Defendant and the retention of the £400,000 and its use for that purpose were stated in the letter to operate in settlement of Mr. Wilson’s obligation to make payment in that amount to the Second Defendant. Mr. Casement QC sought to argue that the sum of £400,000 was not caught by the Introduction Agreement. He relied on the fact that the agreement provided that payment from the Second Defendant was due “upon receipt of funds” and argued that the Second Defendant had not received the sum of £400,000. This argument was simply untenable. The sum of £2.2m was held by Mr. Wilson to the order of the Second Defendant. As to £1.8m there was a transfer directly to the Second Defendant. The balance of £400,000 was also being held to the order of the Second Defendant and was expended in accordance with the directions of the Second Defendant. It cannot be said that the holding of the sum of £400,000 to the order of the Second Defendant and expenditure in accordance with its directions did not amount to the “receipt” of that amount for the purposes of the Introduction Agreement.[86]I have found that there was no agreement between Mr. Mills and Mr. Walker regarding the holding of the former’s Mini-Cam Enterprises Ltd shares and loan notes. Even if there had been such an agreement it would not have given rise to a constructive trust as alleged.[87]The assertion that there was a constructive trust in Mr. Walker’s favour was made by reference to the decisions of the House of Lords in Oughtred v Inland Revenue Commissioners [1960] AC 206 and of the Court of Appeal in Neville v Wilson [1997] Ch 144. However, those cases made it clear that such a constructive trust is founded on the existence of a specifically enforceable agreement to transfer an interest in property: see Oughtred v IRC per Lord Radcliffe at 227 and per Lord Jenkins at 240 and Neville v Wilson at 157G per Nourse LJ per curiam. In the circumstances of this case even if there had been an agreement of the kind alleged by Mr. Walker it would not have been specifically enforceable. The Introduction Agreement was between Clarion Plc and the Second Defendant. By July 2015 Mr. Walker was no longer a director of Clarion Plc. The purported consideration for the alleged agreement would have been the foregoing of Clarion Plc’s immediate right to payment of the sum of £133,000 being 33% of the £400,000. That right was the right of Clarion Plc and not a right of Mr. Walker and it follows that any purported foregoing of that right by Mr. Walker would have had no effect and would not have given rise to a specifically enforceable claim against Mr. Mills. Conclusion.[88]In those circumstances the claims of the Claimants all fail.