H&P Advisory Limited v Barrick Gold (Holdings) Limited [2025] EWHC 1330 (Ch)

[2025] EWHC 1330 (Ch)Case No BL-2022-002009IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONBUSINESS AND PROPERTY COURTS OF ENGLAND AND WALESCOMPANIES COURTVenue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 30/05/2025
Before
MR SIMON GLEESON
Between
H&P Advisory LimitedClaimantBarrick Gold (Holdings) Limited (formerly Randgold Resources Limited)Defendant
Matthew Hardwick KC and Ryan Ferro (instructed by Squire Patton Boggs (UK) LLP) for ClaimantGeorge Spalton KC and Joshua Folkard (instructed by Norton Rose Fulbright LLP) for DefendantHearing Hearing dates: 8th & 14th May 2025
Approved JudgmentThis judgment was handed down remotely at 10.30am on [date] by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................MR SIMON GLEESON

Mr Simon Gleeson:

[1]This is my Judgment as regards consequential matters in this case, following on from my substantive Judgment ([2025] EWHC 562).[2]I should record that the hearing as regards consequential matters was somewhat complex. Before explaining the details, I would like to record my very significant gratitude to counsel for the way in which this litigation was conducted. The issues which confronted them required a degree of imaginative thinking and genuine co-operation on their part in order to progress matters within the confines of court procedure. I entirely understand that the challenge of robustly pursuing every issue on behalf of a client whilst at the same time co-operating to accommodate the efficient hearing of the matter confronts counsel with a challenge, and in this case counsel rose magnificently to that challenge.[3]This hearing presented some challenges. The Claimants, although they failed on their substantive contractual case, nonetheless demonstrated that they were entitled to a restitutionary quantum meruit of US$2m. The Defendants had made a Part 36 offer on 5 May 2023 to pay US$2m plus an amount of US$230,000 in respect of interest accrued to date. The question of whether the Claimants could be said to have beaten this offer or not therefore came down to some fairly fine points about(a) the calculation of interest and(b) the extent to which other payments (notably a claim for expenses) could be included in this calculation. This created a challenge for counsel, since it became necessary for them to ask me to determine a number of detailed matters of fact and law without explaining why they needed these issues resolved. The approach which was agreed was that there should be a split hearing, in the first part of which I was asked to determine the necessary matters of detail which would enable the Part 36 calculation to be completed, and in the second part of which I should be presented with the full picture as regards the Part 36 offer and the position as regards correspondence without prejudice save as to costs. The adoption of this approach gave rise to a point as to possible unfairness raised by Mr Hardwick, to which I will return below.[4]In the course of the relationship leading up to the merger, H&P dealt sometimes with Barrick, sometimes with Randgold, and sometimes (I think) with both. The question of their actual counterparty is moot following the merger. I therefore use the term “Barrick” to describe H&Ps client from time to time.[5]The facts are set out at length in my substantive judgment, and I do not repeat them here. There is a point which I would like to emphasise, since it forms the basis of much of what follows. Prior to the announcement of the Barrick/Randgold deal, the managements of Barrick and Randgold had agreed that H&P’s contribution to the deal was such that they deserved some remuneration for their efforts. The figure upon which they settled was US$2m. Consequently, when the deal was announced, Dr Bristow almost immediately telephoned Mr Hannam and made an offer to H&P of an ex-gratia payment to reward his efforts. Mr Hannam refused that offer, and instead asserted that he was contractually entitled to a fee of some US$18m. He then embarked on extensive litigation, originally in the courts of Wyoming and then in this court, seeking to establish that contract. He was entirely unsuccessful in that aim. However, it is not disputed that Mr Hannam could have had this amount from Barrick on the 27th September 2018 just by asking for it.

Detailed issues regarding costs

[6]There are two sets of issues which I have to determine. One relates to the precise quantum of expenses. It is agreed that Barrick had entered into a binding contract with H&P to pay H&P’s reasonable expenses in respect of the transaction, and that H&P were entitled to claim this amount over and above any quantum meruit. It therefore became necessary to establish exactly what this amount might have been in order to establish the value of the claim that H&P had succeeded in. The second relates to the claim for pre-judgment interest, since this amount should also be included in this calculation.

Reasonable Expenses

[7]Although I suggested in my judgment that this should be capable of being agreed between the parties, this proved impossible. Consequently, H&P have provided an itemised list of the expenses which they wish to claim, and I am asked to determine which of these expenses should be paid by Barrick under this agreement. The contract in relation to this can be construed as an undertaking by Barrick to pay “reasonable” expenses. The question before me is therefore simply as to what in this context constitutes a “reasonable” expense.[8]The most significant expense which H&P claim to have incurred is in respect of their subscription to a service called “MineSpans” operated by McKinsey, which cost US$75,000 per annum. MineSpans appears to be a service used by a number of mining teams across the city – it provides a series of financial models constructed on a mine-by-mine basis for different metals. H&P took out a subscription to the Gold and the Copper services. There is no doubt that their access to this service significantly enhanced the quality of the service which they were able to provide to Barrick. However, it is clear from the internal discussions within H&P that their decision to subscribe to MineSpans was motivated both by a desire to impress Barrick and by the perception that access to this service would enable them to offer a premium service to other companies in the mining industry (which was H&P’s major area of focus). The debate is primarily as to whether this expense was in fact attributable to Barrick. H&P say that the subscription was taken on as part of the service provided to Barrick, and is therefore properly attributable to Barrick as an expense. Barrick say that the subscription was taken on for the general corporate purposes of H&P, and that it is no more a cost for them than H&P’s office rent.[9]It is clear to me that Barrick are broadly correct on this point. Not only are there internal e-mails within H&P which discuss the idea that access to this service will enable them to provide an improved level of service to clients generally, but it is the case that, after discovering that they were not instructed on the Barrick merger, H&P continued to subscribe for the service on an uninterrupted basis. However, I think it is the case that H&P did subscribe for the service at the time that they did because of their desire to augment the level of service which they provided to Barrick at the relevant time. I therefore think that there should be some recognition of the fact that, had it not been for the time at which the services to Barrick were required, they might not have subscribed for it at the time at which they did. I therefore think that US$12,500 – representing roughly the usage of the service over the period of H&P’s close engagement – should be recoverable by H&P from Barrick.[10]There are two other items of expense which are in dispute. One is the costs of Mr Hannam’s journey to New York to meet with Mr Klein, and the other is the costs of Mr Humphries’ journey to Jackson Hole along with Mr Hannam.[11]As regards the costs of Mr Hannam’s trip to meet Mr Klein, there is no doubt that Barrick were extremely keen for this meeting to take place, and Mr Thornton had pressed Mr Hannam on a number of occasions to arrange it. Mr Klein was based in New York, and Mr Hannam in London, so the necessary implication is that the meeting would involve travel costs. The issue which arises is that it seems that Mr Hannam had had a trip to the United States arranged for family reasons at about the same time, and Barrick say that the only costs which he can reasonably claim for the meeting are the costs of his diversion from his pre-planned trip.[12]I think that on this point Barrick’s arguments are misconceived. If a client asks an advisor to make a trip to attend a meeting, the client must reasonably expect to pay the advisor’s costs of that trip. The position would be different if the client’s approach to the advisor were on the basis that “since you will be there anyway, could you drop in and see X?”, but it is not suggested in this case that that was Barrick’s position. I therefore think that the cost of Mr Hannam’s travel to New York for the meeting and back clearly falls within the class of reasonable expenses which Barrick were committed to cover.[13]The third issue is as to the costs of Mr Humphries’ travel to Jackson Hole. Barrick say – reasonably – that they wanted Mr Hannam to come to Jackson Hole, but the decision to bring Mr Humphries was entirely that of Mr Hannam. This is true, to the extent that Mr Hannam never asked Barrick whether it was appropriate for him to bring Mr Humphries. However, it seems to me that applying the test of reasonableness, the position of Barrick must be that if Mr Hannam believed that the presence of Mr Humphries in Jackson Hole was necessary or important for the work to be done for the benefit of Barrick, then, provided that Mr Hannam’s decision in this regard was reasonable, they should pay for it. I note in this regard that the work done by H&P at this time was both substantial and significant, and was recognised as such by Barrick. In broad terms, if a client has agreed to pay the reasonable expenses of an investment bank and a senior banker at that bank decides that the attendance of a junior at a meeting is necessary, the client is committed to pay the costs of that junior’s attendance at that meeting.

Pre-Judgment Interest

[14]The other set of issues relates to pre-judgment interest. This breaks down into three sub-issues, these being the appropriate period for which any such interest should be paid, the base rate to be used in calculating it, and the extent of any uplift to be applied to that base rate.[15]The basis of any award of pre-judgment interest is, as Lord Herschel LC said in London, Chatham and Dover Ry Co v South Eastern Ry Co [1893] A.C. 429 at 437 that interest should be awarded to a successful claimant not as compensation for the damage done but as compensation for being kept out of money which ought to have been paid to them. This principle has been reiterated many times since, but its application is not always free from difficulty.[16]The first issue is as to the rate of interest to be awarded. Mr Spalton, for Barrick, points out that in practice H&P is a UK business with no overseas commitments, revenues or borrowings. If it had been paid US$2m, the only thing that it would or could have done with that sum would have been to convert it into sterling for the purposes of either using it to meet its expenses (which were entirely sterling) and/or to distribute it to its partners (also in sterling). He therefore argues that the only possible true measure of the cost to H&P of non-payment must start with a sterling base interest rate.[17]Mr Spalton is entirely correct in his submissions. However, standing in his way is the formidable obstacle of Mr Justice Foxton. In LoneStar Communications Corporation LLC v Kaye & Ors [2023] Costs LR 1317, following an extended review of the Commercial Court authorities, the Judge explained that:
“14. There are some contexts (for example which side of the road to drive on) when the existence of a clear default rule is important, even if there is much which can be said for both competing options. I am satisfied that the default interest rate for US$ awards in the Commercial Court going forward should be US Prime, irrespective of whether the claimant has a US place of operations or not and irrespective of whether the claim is a maritime claim or not.”
[18]With respect, I agree. Although I accept Mr Spalton’s argument that the application of a US Prime rate in this case does not in fact constitute a proxy for the cost to H&P of being kept out of its money, I think the policy objective of preventing arguments of this kind in a plethora of future cases is more important. I also think that it would be intolerable if a different approach were applied to this issue in the Chancery Division than that which is applied in the Commercial Court. Consequently, since the obligation is denominated in US dollars, the base interest rate to be applied for the purposes of this calculation is US Prime Rate.[19]The second issue is as regards the uplift to be applied. It is accepted that US Prime Rate is the rate at which US banks will lend to the most solvent and largest counterparties. Since in reality no normal business will be able to fund its activities at US Prime Rate, it is conventional to recognise this fact by awarding pre-judgment interest at some mark-up over this rate. This does, however, raise the question as to what extent any such mark-up should be arrived at by considering the position of the business concerned.[20]In general, I should not conduct any detailed enquiry into this point. Andrew Smith J explained in Fiona Trust & Holding Corp v Privalov [2011] EWHC 644 (Comm) at [15] “the courts do not have regard to the rate at which a particular recipient of compensation might have borrowed funds”. Equally, in Carrasco v Johnson [2018] EWCA Civ 87 at [17] the Court of Appeal (per Hamblen LJ) set out the position as follows (at [27]):
“27. The Appellant’s arguments in this case highlight the importance of the principle that the court does not inquire into the detailed financial position of the claimant, but looks only at general or class attributes. To examine properly, for example, the claimant’s financial position throughout the relevant period; the borrowing carried out by her, when and on what terms; whether and how she needed so to borrow; the uses to which she might otherwise have put the money and the financial consequences of so doing; the extent to which any of these matters were known or in the reasonable contemplation of the Respondent etc. would have required a mini or indeed major trial, consumed significant time and expense and may well not have resulted in definitive answers. The broad approach which the court adopts is fair, practical and proportionate.”
[21]I think that where this leaves me is that I cannot and should not look at the economics of the business of H&P. I can, however, consider the nature of H&P’s business as a representative of a class of businesses whose financial characteristics are very similar.[22]The starting point here is that the vast majority of the businesses with which this court is concerned (and certainly the majority of the companies in existence) are what might be described as commercial companies – they begin with an amount of capital, they raise credit, they sell on credit, and employ the revenues they receive either to fund further business or in reduction of their borrowings. It is an almost universal characteristic of such firms that at least part of their business is funded by credit of one form or another, and therefore that a lack of cash will result, mutatis mutandis, in an increase in borrowings, and therefore of cost of borrowings. In the case of firms of this kind, the question as to how to calculate the cost to them of having been kept out of their money is simply the likely cost of such increased borrowings.[23]That is not the business model of H&P, or indeed of the universe of professional advisory firms. This is a substantial grouping, embracing lawyers, architects, surveyors and a wide variety of other professional partnerships. The common denominator of the economics of such firms is that they exist to generate income, which is applied first to discharge office expenses and then as distributions to those engaged in the business. They do not have substantial balance sheets, they do not hold stock, they do not (generally) have substantial creditors, and they do not (generally) borrow. Cash received is held for a short period and then paid out. They have an entirely different business and financial model to ordinary commercial companies, and it would be perverse to apply to them a model derived from the business of ordinary commercial companies. This is why I found the analysis provided by the Claimants which addressed the issue of the cost of commercial funding of smaller US commercial companies to be completely irrelevant to the issue before me.[24]As regards businesses of this kind, the fact is that the way in which such a business would deal with a US dollar inflow would be to hold it for a period and then pay it out to its principals as quickly as possible. It might be argued that this fact pattern suggests that the correct rate to be applied should be the investment rate, as reflecting a loss of investment income on the amount held. However, I think that would be an extreme approach. The fact that businesses of this kind do not generally have substantial borrowings does not mean that they do not have borrowings, or that the deprivation of cash may not negatively affect their cost of operations. Examination of the accounts of H&P might answer those questions for me in this specific case, but I regard myself as debarred from making any such examination. Consequently, I think that the appropriate rate to apply here is 1% above US Prime Rate, to reflect the uncertainty surrounding the actual impact of the non-receipt on H&P.[25]The third issue is the question of the period for which this interest rate should be allowed. The general position as regards an award of pre-judgment interest is that interest should run on an award for economic loss (which this is) from the date of the loss - although the court has a discretion to award interest from the date upon which the cause of action arose or any proper later date (BP Exploration Co (Libya) Ltd v Hunt [1982] 1 All E.R. 925, HL). There is a bountiful accumulation of authorities on this issue, which were reviewed in Kuwait Airways Corp v Kuwait Insurance Co [2000] Lloyd’s Rep. I.R. 678 (Langley J).[26]The principle which I think is most relevant in this case is that set out in the White Book at 16AI.6. This reads as follows:
“A relevant factor in the exercise of the court’s discretion as to interest is whether the successful claimant has sought payment of the money in question promptly. Where they have chosen not to pursue a claim for their own reasons and have made that known to the defendant, so that their own failure to prosecute their claim is the predominant cause of being kept out of their money, a court may decide not to award interest (see Sawiris v Marwan [2010] EWHC 89 (Comm) (Teare J) at [59] and authorities referred to there).”
[27]I need to deal in passing with the (surprising) submission of Mr Hardwick that there was in fact no US$2m offer made by Randgold immediately upon the announcement. His point here is that no such offer was formally recorded by Barrick, and that there is no direct evidence of any such offer (the figure is not mentioned in Dr Bristow’s voicemail), and that it is therefore wrong to treat H&P as being in receipt of such an offer. This is partially correct, in that although it is clear that Barrick’s board had approved the making of such an offer, there is no document in existence which constitutes any such offer. However, it is entirely clear that H&P were in no doubt that they had in fact received such an offer. In their formal letter to Randgold of 26 October 2018 they say that:
“[Dr Bristow] in a telephone call to [Ian Hannam] on 27 September 2018 proposed to pay either $2m plus expenses or, if contested, nothing other than expenses.”
I therefore do not accept that there was ever any ambiguity in the minds of H&P as to what they had been offered, and that the decision to reject it was taken formally and with the benefit of advice. The position set out in the letter was that H&P had entered into a contract with Barrick for it to act as advisor on the transaction on terms which involved a fee of US$18m, that this was now due, and that they therefore rejected the offer of US$2m.[28]There are, in effect, four periods of time here. The first is from the initial announcement of the deal and the offer of US$2m by Barrick to the commencement of the Wyoming proceedings. The second is the period of the Wyoming proceedings. The third is the period between the end of the Wyoming proceedings and the sending of the letter before action in this case. The fourth is the period from that date onwards.[29]My initial findings on this point were as follows. The first of these periods began when Barrick offered H&P the US$2m which they subsequently recovered in this action, and they rejected that offer. It would seem to me to be bizarre to award H&P interest over this period, when it was H&P’s own actions which were the cause of their not receiving this money. The second period begins with the commencement of the Wyoming action, and ends with its discontinuance. The Wyoming action did not embrace the payment of the US$2m, and was concerned only with the question of whether Barrick had entered into a binding contract with H&P to pay it (in effect) US$18m. At no point in this action did H&P press (or even raise) an alternative claim for US$2m. As far as Barrick were concerned, H&Ps position was that it had abandoned its claim for US$2m and were now pursuing a purely contractual claim. The Wyoming proceedings were eventually discontinued on the basis that the Wyoming courts lacked jurisdiction. I note in passing that I have to assume that, had the Wyoming proceedings not been discontinued, H&P would have been entirely unsuccessful in their claim (as they were on the same claim before me). There then followed a third period between the discontinuation of the Wyoming proceedings and the commencement of the UK proceedings (which I take to be the date of the sending of the letter before action). I think it is fair to say that the receipt of this letter by Barrick was the first time that it was clearly communicated to them that a claim for restitutionary quantum meruit was being pursued.[30]I think that pre-judgment interest should run for only the last of these periods.[31]In this context I note the decisions of the various LLJs in Benedetti v Sawiris [2010] EWCA Civ 1427 in the Court of Appeal. Lady Justice Arden expressed what I think is the orthodox view that: “I do not consider that the successful claimant's refusal of an offer which meets his claim should be disregarded simply because the claimant wished to pursue another claim which did not succeed. For this purpose, it does not seem to me that the court needs to consider whether he was acting properly or in good faith or not. If he was erroneous in proceeding with the other claim, he should not be treated as entitled to do so on the basis that he will nonetheless not be subject to the withholding of interest from the defendant on the claim which does succeed. Although the defendant has had the use of that money, in principle, where there is acceptable offer, it is the claimant who should bear the risk and cost of failure. He has taken a deliberate decision not to accept an offer which would satisfy the claim which he can establish in law.” [130(6)].[32]Etherton LJ took a different view, apparently starting from the position set out by Lord Hope in Sempra Metals Ltd v Inland Revenue Commissioners [2007] HLUK 34 that for restitution, it is the gain that needs to be measured, not the loss of the claimant; that the claimant's remedy is the reversal of the defendant's gain; and that the process is one of subtraction, not compensation: [28] [33]. That gain is to be measured objectively, that is to say, what a reasonable person would pay for the benefit in question; and so, where there is a market, by reference to market rates. His position seemed to be that because a claim for restitution arises at the moment when the benefit is received by the recipient, it is necessary to impose interest at a commercial rate from that time onwards, otherwise the defendant will be unjustly enriched. I understand this position. However, it seems to me that, for the reasons set out by Lady Justice Arden, if an approach is taken whereby a party who has refused an offer of payment is entitled to claim interest on the amount offered as if they had accepted that offer, then that party is equally unjustly enriched – if their impoverishment is a result of their own deliberate act, it seems odd to suggest that they should benefit from that act. This sort of heads I win tails you lose outcome seems highly undesirable from a public policy perspective, if for no other reason.[33]The “tie-breaking” decision in Benedetti was delivered by Rimer LJ. He summarised his position as follows at [179], where he said: “Put simply, I do not accept that the refusal of an offer of X in order to pursue a bona fide claim for 3X should, when the claim for 3X fails and an award of X is made, ordinarily – or at any rate automatically — be regarded as a scenario in which the claimant can fairly be regarded as having so acted as to deprive himself of a claim to statutory interest on X”.[34]This is clearly correct in the usual case, where a party suing for US$10m is offered US$2m to discontinue the action. However, that is not this case. The offer of US$2m by Randgold was not conditional on H&P’s discontinuing any action – indeed, I think it is significant that when the offer was made no action was threatened, or even in prospect. As regards the initial offer, it is absolutely not the case that H&P rejected the offer in order to pursue a larger claim. They rejected the offer because they chose a path of litigation rather than discussion – a choice which has ended poorly for them.[35]I therefore think that it is the words of Arden LJ which apply most accurately to the (somewhat unusual) facts of this case, and which I should follow in this regard.[36]I should also note that Mr Hardwick made an application for interest in respect of the claim for expenses. I did not feel able to treat this any differently from the claim for interest on the primary amount due. I think that it is clear that in the discussions between H&P and Barrick which took place in the week following the announcement of the deal, Barrick were clear that they were prepared to pay H&P’s expenses – this is recorded as explicitly offered in Dr Bristow’s voicemail of the 27 September 2018 – and it is equally clear that the reason that his payment was not made was that H&P refused it. I think the same logic which applies to interest on the primary claim applies here – the purpose of pre-judgment interest is to compensate a claimant for being kept out of their money, and it should not be payable in circumstances where the reason for the non-payment is a refusal by the claimant to accept that payment.[37]Thus far I have set out my decision as reached in the first part of the split hearing. However, when it came to the second part, at which I was given disclosure of correspondence without prejudice save as to costs, Mr Hardwick was able to draw my attention to what he said was a new and significant fact – that being that, shortly after H&P had indicated their intention to commence proceedings in contract, Barrick reduced their offer to $1m in full and final settlement of H&P’s claim.[38]I note that this reduced offer was made in response to H&P’s letter of the 26 October 2018 in which H&P set out in some detail their argument that there was an enforceable contract in place between H&P and Barrick by which Barrick had appointed H&P to be their financial advisor, and that Barrick were obliged to pay them US$18m, or possibly more. I also note that this letter contained no indication by H&P that they were prepared to accept any lower fee – although the letter does refer to a possible quantum meruit claim, it suggests that such a claim would be in excess of US$18m. I think H&P’s position can be succinctly analysed as that they had determined to reject any proposal for an ex-gratia introducer fee and to take their stand on their claim to a contractual entitlement to payment.[39]I think that Mr Hardwick’s argument that I should attach no weight to the offer of US$2m on the basis that it was subsequently withdrawn is fatally undermined by the fact that it was withdrawn in response to a full-throated assertion by the Claimants that it was unacceptable and unaccepted. There is no point in speculating as to what the position might have been if the Claimants had changed their minds, because they did not – they fought their contractual claim to the end in these proceedings, and lost.[40]This takes me to the Part 36 offer made by the Defendants. Mr Hardwick says that it is wrong to elide the US$2m offered on 5 May 2023 with the US$2m offered in the days following the announcement because, he says, for the majority of the period between the two the offer on the table was only US$1m. However, this is irrelevant. It might in theory have been possible for H&P to progress negotiations on this point whilst pursuing their contractual action, but they did not do so, since accepting any such settlement would have implied the abandonment of their contractual action. In effect, H&P were presented with a choice – they could either pursue the claim for the “introducer fee” or pursue the claim that they were contractually appointed advisers. They rejected the first and adopted the second.[41]I therefore think that the Part 36 offer of US$2m plus interest clearly was an attempt to resurrect the “introducer fee” alternative for H&P should they wish to consider it. They did not.[42]I therefore do not accept that the fact of the reduction of Barrick’s offer to US$1m would have had any impact on my determination regarding interest had I been aware of it.

The Part 36 Offer

[43]The determinations which I made as regards interest result in H&P having failed to meet the Part 36 offer, albeit by a whisker. I remind myself at this point that CPR 36.17 provides that: "(1) … this rule applies where upon judgment being entered— a claimant fails to obtain a judgment more advantageous than a defendant’s Part 36 offer; or judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer. For the purposes of paragraph (1), in relation to any money claim or money element of a claim, “more advantageous” means better in money terms by any amount, however small, and “at least as advantageous” shall be construed accordingly. … where paragraph (1)(a) applies, the court must, unless it considers it unjust to do so, order that the defendant is entitled to— costs (including any recoverable pre-action costs) from the date on which the relevant period expired; and interest on those costs.” interest on those costs.”[44]The precise breadth of the whisker is therefore unimportant, and I must proceed on the basis that the ordinary rules of CPR 36 should apply.[45]Mr Hardwick submits that the proviso to 36.17(3) applies, in that it would be unjust to make such an order. He says that when Randgold’s Part 36 Offer was made in May 2023, H&P could not make an informed assessment of that offer because at that time H&P knew nothing of Randgold’s internal discussions of the US$2m figure.[46]H&P accept that whether it would be “unjust” to order costs under CPR 36.17(3) imposes a “formidable obstacle”. But it is a “deliberate and important safety valve” which does not impose a test of exceptionality; and the Court adopts a pragmatic approach in all the circumstances.[47]I do not think that this argument holds water. It is entirely true that my conclusion in my judgment that the quantum meruit value of H&P’s services to Barrick should be set at US$2m, and that that assessment was heavily influenced by Barrick’s own assessment, the details of which were not at this time known to H&P. However, it seems faintly absurd to argue that an investment bank, whose entire business revolved around the delivery of transactional advisory services for value, could not have been reasonably expected to value its own services without access to the internal deliberations of its client. I therefore reject this argument.

Costs

[48]There are two periods for which I am required to determine entitlement to costs - one is the period before the making of the Part 36 offer, and the other is for the period after it.

Before the Part 36 Offer

[49]It is clear that the award which H&P secured in this action was a quantum meruit. However, there is some debate as to whether this was in fact the action on which they originally embarked. There is a somewhat technical point here as to the meaning of the term “quantum meruit” which requires to be clarified. In ordinary legal usage a claim in quantum meruit can arise in one of two ways. One of these is as a restitutionary claim which arises where one party has been in some way enriched by another in a way which falls outside the scope of any relevant contract. The other is as a contractual claim for damages, which arises within a contract where the price terms are sufficiently unclear that the court must estimate the amount due from one party to another.[50]Mr Hardwick argues that I am wrong to say that H&P pre-emptively abandoned their claim for a restitutionary quantum meruit in their letter, since a claim for quantum meruit was both mentioned in that letter and pleaded in the Wyoming proceedings. However, it seems clear to me that although the term “quantum meruit” was used, in both cases what is referred to is a contractual quantum meruit, and not any restitutionary claim. The letter is therefore a complete rejection of Barrick’s offer of a US$2m restitutionary quantum meruit payment. It was in response to this letter that, on 15 November 2018, Barrick wrote to H&P on a without prejudice basis offering US$1m. I therefore think that at all material times up to the sending of the letter before action in this action, H&P’s position was a clear rejection of any restitutionary claim, accompanied by an assertion that the claim that they had arise purely in contract. That claim has wholly failed.[51]The Defendants therefore say that that should be the beginning and the end of any discussion on costs, and that they should be entitled to their costs. They rely primarily in this regard on Benedetti v Sawaris, a restitution of unjust enrichment case on very similar facts to this. In that case Mr Sawaris offered to pay Mr Benedetti €75.1 million in October 2006 (additional to a €67 million ‘brokerage fee’ already received by Mr Benedetti) for facilitating the acquisition of a company by Mr Sawaris: [2010] EWCA Civ 1427, at [29]. Mr Benedetti did not accept that offer and fought the case to trial, recovering €75.1 million at first instance (without having to give credit for the brokerage fee): at [48]. The trial judge nevertheless awarded Mr Sawaris his costs of the claim: [2009] EWHC 1806 (Ch), at [22]. This was on the grounds that Mr Benedetti had recovered no more than he had been offered in October 2006: at [21]. Patten LJ held that:(i) “[t]he litigation and all of the costs are directly attributable to [Mr Benedetti’s] rejection of what he was offered in October 2006”; and(ii) “Mr Benedetti was offered and could have accepted in 2006 exactly what he has now been awarded in the action”; and “[t]he costs of the litigation were wholly avoidable and Mr Benedetti’s conduct prior to the action is a factor which I am required to take into account in determining what costs order to make”. Although Mr Benedetti’s quantum meruit claim had succeeded, “[t]he reality of the case is that Mr Benedetti has failed on his claims in contract and in equity”: at [19]. The successful restitutionary claim “was not his primary claim”: at [18].[52]This is not, however, of any direct relevance to me in this case. The Court of Appeal, as discussed above, upheld the trial judge’s determination as to costs, but did so on the basis of his findings as to Mr Benedetti’s conduct before action – not a consideration that is relevant here. Consequently, I do not think that Barrick have made out a claim for the whole of their costs.[53]H&P, as should be expected, argue that, because they have an award of US$2m, they are the successful party, and that they should therefore be entitled to their costs, less some possible discount. Barrick respond that H&P’s main claim was a contractual claim for the payment of US$18m, which they absolutely lost. In a perfect world it would be possible to separate the costs of the contract action and the costs of the restitutionary action, and award each party their respective costs. However, this is not a perfect world, and the issues which arose as regards these costs were so intermixed as to make such separation impossible.[54]I am therefore thrown back on my (admittedly subjective) assessment of the proceedings before me. I think the point which H&P sought to establish throughout the hearing was that they (and specifically Mr Hannam) had in fact been appointed as financial adviser, and were therefore entitled, either in contract or in restitution, to a fee equal to that which would have been paid to a fully appointed financial adviser. In particular, their argument was that their entitlement was either to the contractual fee that would have been paid to such an adviser, or to a restitutionary quantum meruit calculated on the basis that they had acted as such an adviser. They failed in this application. I made it clear in my judgment (at para 83) that by May 2018 H&P were no longer involved in the transaction, and that (at para 322-323) it was clear that H&P were neither appointed as financial advisors on the deal, nor treated as if they were by the other parties. I also found that their activities were not, separately or together, the causa causans of the deal, as Mr Hardwick argued. These are the facts which H&P would have had to establish in order to maintain their pleaded claim, and they completely failed to establish them. I think that it is therefore the case that H&P have failed on a substantial part of their claim. However, it is equally the case that Barrick have been forced to accept that the services provided by H&P were of some value to them, and I think that Mr Hardwick is correct that, once the offer of US$2m payment had been withdrawn by the substitution of a US$1m offer on the 15 November 2018, for the period between then and the expiry of the relevant period for the Part 36 offer on the 26 May 2023 H&P were fighting for what was rightfully theirs, and are entitled to their costs of that fight.[55]I therefore think that the most appropriate order in this regard is that Barrick should pay 50% of H&P’s costs for this period.

The Part 36 Offer

[56]Barrick made a Part 36 Offer on 5th May 2023 in the sum of US$ 2,230,000. H&P were awarded total expenses of US$57,143.03 and interest at 1% over the United States Prime Rate (“US Prime”) from 5 April 2022 (the date of H&P’s Letter Before Action). In determining whether CPR Part 36 consequences apply, interest should be calculated up to 26 May 2023. As at that date (expiry of the 21-day ‘relevant period’ of Barrick’s Part 36 offer) the interest amounted to US$170,601.97. Accordingly, H&P’s recovery as at that date is US$2,227,745. H&P has accordingly failed to obtain a judgment more advantageous than Barrick’s Part 36 Offer pursuant to CPR 36.17(1)(a), so the costs consequences set out in CPR 36.17(3) apply. CPR 36.17(2) provides that “‘more advantageous’ means better in money terms by any amount, however small”.[57]A court must apply the costs consequences set out in CPR 36.17(3) “unless it considers it unjust to do so”, taking into account the circumstances set out at CPR 36.17(5). For that test to be met, “[t]here must be something about the particular circumstances of the case which takes it out of the norm”: Downing v Peterborough & Stamford Hospitals NHS Foundation Trust [2014] EWHC 4216 (QB) at [61] (Sir David Eady). The injustice requirement is “a formidable obstacle to the obtaining of a different costs order” because otherwise the “salutary purpose” of Part 36 “would be undermined”: Webb v Liverpool Women’s NHS Foundation Trust [2016] EWCA Civ 365 at [38] (Sir Stanley Burnton). “[I]t is not open to judges to take into account” in applying the injustice test “the amount by which a Part 36 offer has been beaten”: JLE (A Child) v Warrington & Halton Hospitals NHS Trust Foundation Trust [2019] EWHC 1582 (QB) at [44] (Stewart J).[58]Mr Hardwick argues that this is a case where the application of the ordinary Part 36 rule would be unjust for two reasons. The first of these (which I have already dealt with in part) is that H&P should not be penalised for not accepting the Part 36 offer since, in order to know whether the offer was acceptable, H&P would have had to have access to the Barrick internal correspondence which was relied upon at trial to establish the US$2m figure, and they did not get any such information until well into the trial itself. He therefore says that they were not in a position to assess the offer as at 26 May 2023, and it would be unjust to penalise them for not accepting it.[59]I reject this argument. I cannot see any injustice in expecting a professional services firm whose speciality is the valuation of commercial opportunities to value such an opportunity. The point about access to litigation documents does not arise in this context. I also note that, since almost all Part 36 offers are necessarily made before the parties to the offer have had full disclosure of the other side’s documents, a finding that this constituted injustice would have the effect of vitiating the Part 36 regime.[60]Mr Hardwick’s second ground for suggesting different treatment on grounds of justice related to the fact that the determination as to whether the offer had been beaten or not turned on some late and unrelated determinations as to the calculation of interest. It is entirely clear that the basis of the Part 36 offer made by Barrick was that they would pay H&P the US$2m which they regarded as being their due plus accrued interest. However, because of the then-existing provisions of CPR 36, they were required to offer a specific sum, and were therefore required to produce a pre-estimate of interest due. The argument here is that a determination of this kind which is reached by taking into account entirely extraneous considerations (such as the fluctuations of base rates) clearly embodies an element of injustice.[61]I cannot dispute the fact that if the calculation of the interest entitlement on the amount awarded were such that Barrick’s offer of US$2m plus their pre-estimate of interest had fallen short of that amount by even a penny, then the Part 36 offer would not have been met. However, in a case such as this, where the amount offered is equal to the principal claimed, and the only debate is as to whether the amount of interest offered by the Defendant is equal to the amount to which the Claimant is entitled, I cannot imagine that I would be prepared to disturb the ordinary application of Part 36 on the basis of “injustice”, as he suggests. Consequently, even if it could be shown that my findings on the issues concerning interest calculations were challengeable, I would not regard my recognition of the Part 36 offer as being unjust.[62]Consequently, the Claimants have failed to beat the Part 36 order, and the usual consequences should follow.

The Reserved Costs

[63]There are two minor matters of reserved costs which also need to be addressed.[64]Paragraph 2 of Master Pester’s consent order dated 29 May 2024 provided that “The costs of the Claimant’s consequential amendments to its Reply arising out of the Amended Defence shall be paid by the Defendant up to £15,000 (exclusive of VAT). The costs of any further consequential work that may be required (including in relation to disclosure and/or witness evidence) are reserved”.[65]Randgold has paid the £15,000. As for the reserved costs (insofar as there are any such costs, which would fall for determination on assessment), if the ordinary rule that the amending party should bear the costs of and occasioned by the amendments (CPR PD 17 63) were not by itself sufficient, the short points are that (1) these costs were occasioned by Randgold’s Amended Defence served on 24 May 2024, which introduced new factual averments intended to support a new defence that “it would not be just for H&P to be compensated in any amount, even if (which is denied) it provided any services to Randgold”. Randgold did not advance this case at trial, as H&P noted in its written closing; and I rejected Randgold’s illegality defence based on Mr Humphries’ involvement.[66]H&P therefore seeks “costs of any further consequential work that may be required (including in relation to disclosure and/or witness evidence)”. Randgold’s position on this point is that there was no disclosure or further witness evidence in respect of these amendments; and in any event, the allegations made were upheld as facts by the Judgment, in particular at [129], although I concluded that, as a matter of law, those facts did not afford Barrick a defence.[67]I think that Barrick should be required to pay any such consequential costs which arose directly from these amendments, although, on the basis of the evidence that I saw at trial I cannot believe that they are significant.[68]The second item of reserved costs are those reserved by paragraph 3 of Master Pester’s consent order dated 20 August 2024. These are the costs of H&P’s application on 17 July 2024 for disclosure of documents comprising or evidencing the negotiation of Klein’s fees. The background to and basis for that application were explained by Mr Swart in his first witness statement. However, it is notable that the reason which he gives in that statement for requiring this disclosure is that H&P’s case was then that the ““Fee” payable to H&P under the Fee Agreement between H&P and Randgold was to be calculated by reference to the amount paid by Barrick to Mr Klein” (Swart 1 [17.1]). This was not a point which Barrick accepted. H&P eventually made an application, in response to which Randgold agreed to give the relevant disclosure, but it resisted paying H&P’s costs. H&P suggested that the Court should determine costs at the application hearing, which had already been listed, but Randgold resisted this course, contending that the resolution of costs arguments would require a half-day listing. In consequence, costs were reserved by consent. Following trial, H&P’s position on the costs of this application remains that the costs incurred by them in preparing their application were unnecessary, since Randgold should have given this disclosure, and should therefore be paid by Randgold.[69]Barrick’s position on this point is that although H&P pressed this disclosure application on the basis that documents relating to the negotiation rather than the amount, which had already been disclosed in accordance with the Disclosure Review of Klein’s fees were “essential for preparing [Mr Harman’s] … expert evidence [emphasis added]”:(i) H&P’s application for disclosure of these documents was made only 7 working days before the (then-current) deadline for exchange of the parties’ expert reports on 26 July 2024; and(ii) only one passing reference was made to one document in Harman 1 when the parties’ expert reports were exchanged on 3 September 2024. Barrick therefore say that their pragmatic decision to provide the documents to avoid the costs of a contested application should not give rise to negative consequences in costs for them.[70]On this point I agree with Barrick. The issue of negotiations with Mr Klein formed no part of the proceedings, and I do not think that they were in any way relevant to Mr Harman’s report. Consequently, I think these costs should simply be costs in the case.