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England and Wales Court of Appeal (Civil Division) Decisions


You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Regent Associates Ltd v Brazier & Ors [2002] EWCA Civ 999 (17 June 2002)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/999.html
Cite as: [2002] EWCA Civ 999

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Neutral Citation Number: [2002] EWCA Civ 999
A2/2001/1745/B

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
(MR STUART BROWN QC, Sitting as a Deputy High Court Judge)


Royal Courts of Justice
Strand
London WC2

Monday, 17th June 2002

B e f o r e :

LORD JUSTICE SCHIEMANN
LORD JUSTICE MANCE
-and-
SIR SWINTON THOMAS

____________________

REGENT ASSOCIATES LTD
- v -
(1) MORNA BRAZIER
(2) PAUL BRAZIER
(3) ANNE HOLMES

____________________

(Computer Aided Transcript of the Stenograph Notes of
Smith Bernal Reporting Limited
190 Fleet Street, London EC4A 2Ag
Telephone No: 020 7421 4040
Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

MR T MOWSCHENSON QC and MR A PARSONS (instructed by Bretherton Price Elgoods, Cheltenham GL50 3PR)
appeared on behalf of the Appellant
MR R de LACEY QC and MISS A GREEN (instructed by Bates Wells & Braithwaite, London EC2V 6BB)
appeared on behalf of the Respondent

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Monday, 17th June 2002

  1. LORD JUSTICE SCHIEMANN: The appellants were the principal shareholders in a company called Swan Software Group Ltd and wished to sell their shares in that company. In May 1999 they engaged the claimants to help them in that endeavour by providing "corporate finance and strategic advice". They concluded a service agreement which set out the terms under which the claimants agreed to act. Later that year the defendants sold all their shares for £8m or so to a company called Infor. It was common ground that the claimants had neither introduced nor had any part in the negotiations with any sale to Infor. The claimants nevertheless sued for a success fee of some £220,000 to which they said they were entitled under the service agreement. In their pleadings and at first instance the defendants raised a whole variety of defences. They all failed. Mr Stuart Browne QC, sitting as a judge in the High Court, held the claimants to be entitled to the success fee. He held that they were so entitled on a proper construction of the service agreement.
  2. The defendants put in a notice of appeal which, although it contained no less than ten grounds, in effect argued that the judge had misconstrued the agreement. The remaining points which had been argued before the judge were not pursued. The defendants were given leave to appeal on the misconstruction point. They have now brought in Mr Terrence Mowschenson QC and wish to be allowed to amend their notice of appeal. They seek permission to strike out the whole of their existing notice and substitute a new one. The new notice does two things. First, it reformulates the misconstruction point. There is no objection to that amendment and I would grant permission to make it. Second, it seeks to raise a new point which I shall call the suspension point with which the judge did not deal because it did not appear on the pleadings and was not clearly argued before him. It turns on the effect of a telephone conversation in June 1999 between the parties concerning putting the agreement "on hold". The claimants object to the making of that amendment. For reasons which will appear later this judgment I will refuse permission to make that amendment so as to allow them to take the suspension point. The claimants put in a cross-appeal in relation to Value Added Tax but this has been compromised and I need say no more about it.
  3. The clauses of the agreement which have been debated in front of us are clauses 1, 2, 3, 5, 8, 11, 12 and 17, which provide as follows:
  4. "1. The Directors of Swan Software on behalf of the shareholders of Swan Software agree to retain Regent to provide corporate finance and strategic advice in support of its intention to dispose of some or all of the shares or assets of Swan Software.
    2. Regent will maintain and update a list of companies, investor organisations or management groups ("prospective purchasers") of Swan Software and upon request provide an up-to-date list to you. The list of Prospective Purchasers will include the names of senior officers of the Prospective Purchasers who have been approached to effect introductions and for the purposes of this Service Agreement those senior officers are also Prospective Purchasers. All companies and individuals on this list of Prospective Purchasers are deemed to have been introduced to Swan Software by Regent for the purposes of this agreement unless and until agreed otherwise in writing.
    3. The above comprises the full extent of the obligations of Regent under this agreement. Any variation to these instructions will be advised to Regent by Swan Software and must be agreed by both parties in writing.
    5. On the completion of each and every sale of some or all of the shares or assets of the Swan Software ("Disposal"), Swan Software agrees to pay Regent a corporate finances fee ("Success Fee") of:
    5% of the first £1,000,000
    4% of the next £1,000,000
    3% of the next £1,000,000
    2% thereafter
    of the Aggregate Consideration of the Disposal subject to a minimum fee of £100,000 per Disposal payable at completion of the Disposal. Your attention is also drawn to the paragraph 11 of this letter concerning Disposals within 2 years of the date of termination of this agreement.
    8. If following an introduction of a Prospective Purchaser by Regent to Swan Software no Disposal occurs, but whilst this agreement is in force or within two years from the date of termination an alternative agreement ("Alternative Agreement") for example, frequent, a royalty, licensing, trading, marketing, joint venture, agency, distribution, outsourcing or project management agreement is concluded between a Prospective Purchaser and Swan Software, Swan Software agrees to pay to Regent a Success Fee of 5% of the revenue receivable by Swan Software resulting from the Alternative Agreement for a period of two years, commencing when Swan Software first derives the benefit from such agreement.
    11. This agreement may be terminated by either party giving one month's prior notice to be served at any time on or after the end of the second month after this agreement comes into force. However, if Swan Software proceeds with and completes a Disposal or Alternative Agreement at any time within the period of engagement or within two years from the date of termination of this agreement for whatever reason with a Prospective Purchaser, Swan Software will pay to Regent the sums referred to in paragraphs 5 and 8 above and for the avoidance of doubt where the context permits all of the terms of this Agreement will survive any termination.
    12. If, this agreement is formally cancelled in writing by Swan Software without a Disposal, Regent will be paid for undertaking this agreement up to the greater of, a maximum of £30,000 calculated on a per diem rate of £1,000 for executive time, or the aggregate of the retainer fees payable pursuant to paragraph 4. This is payable in addition to the sums payable pursuant to paragraphs 5, 8, 10 and 13.
    17. References to Swan Software and "Prospective Purchaser" shall, where the context permits, include references to all other companies in the same group of companies as Swan Software and "Prospective Purchaser" respectively; such that if, for example, Swan Software concludes a Disposal of assets to a subsidiary of the Prospective Purchaser the fees referred to in this letter will still be payable."
  5. The judge considered the circumstances in which the words "with a Prospective Purchaser" came to be included in clause 11 of the agreement. The defendants' case was that they had made plain that they were not willing to pay any fee (at any time) unless Regent were instrumental in affecting the sale. The claimants' case is considered by the judge in paragraphs 22 onwards of his judgment. He there said about the nature of the discussion:
  6. "22. He [the claimants' director, Mr Rowell] would never have agreed to limiting Regent's entitlement in the way alleged by the Defendants. He has never previously done so (nor have any of his colleagues). His reasoning requires to be explained. The services provided by Regent are set out in the Regent proposal."
  7. The judge then gives some references, and carries on:
  8. "It is important to understand that once an agreement has been entered into there is a real need for mutual trust and co-operation. Without such the venture would be doomed to fail.
    23. Mr Rowell asserted that if fees were only payable where there had been an introduction that necessary relationship could not exist. There would be nothing to prevent the client going behind Regent's back and negotiating a disposal 'on the strength of Regent's work' to a third party who might have learnt of the possible opportunity through Regent's work but who had not actually been introduced by Regent.
    24. By contrast Mr Rowell accepted that he was willing to consider the post-termination position in a different light and though his company would expect remuneration if a sale occurred (post-termination) that entitlement would only be pressed (? could only be justified) if (and I use a neutral phrase) Regent had played a part in it.
    25. He indicated (and his recollection was supported by Mr Stowell) [another director] that the concern raised by Mr Brazier was one directed at the post termination situation. Thus Clause 11 was amended in the way set out below.
    26. I am acutely conscious of the fact that in setting out the oral evidence as to this matter in some little detail I need to have strongly in mind the relevance of such."
  9. Then in paragraph 27 he goes on to say that he found Mr Rowell impressive, he had a clear recollection and one which would accord with his usual business practice. As the twenty-one contracts he produced show he was ready to look at clause 11 and amend it and indeed he may well have said, as the Braziers recall, something to the effect of "that should not be there" or "this is the wrong one". He continued:
  10. "28. I am quite satisfied he would not have agreed to any general limitation such as that suggested by the Braziers and certain that he would not, as alleged, have misrepresented the position. This was a reputable business being conducted along its usual lines. There were good reasons for not agreeing to the suggestion, if made, and no special circumstances, such as appertain in some of the twenty-one to a specific limitation on entitlement.
    29. By contrast I find the Braziers' recollection unsatisfactory and indeed confused. I have already found that the contract as appears in the bundle was that signed. The Braziers are, in my view, wrong in any contrary assertion (in the event only hesitantly advanced)."
  11. He then says at paragraph 32:
  12. "Of course I still have to construe the contract and in particular Clause 11 but I am quite satisfied that the amendment, whatever it means, was in fact agreed, was faithfully 'copied' into the signed version and was not contradicted by any contrary explanation to the Braziers."
  13. The judge said this about the circumstances in which the agreement was put on hold. At paragraph 34:
  14. "Why was the contract put on hold? It is common ground it was. The Braziers... may have been disappointed by the sort of figure... mentioned... If they were disappointed it was as to their belief that the company was (or could be) worth substantially more (as proved to be the case). I do not accept they were disappointed with the Claimant. Insofar as they now assert that they were, again their evidence is coloured by subsequent events and their being called upon to pay a fee which they regard as unreasonable. I do not accept, as they now assert, that they expressed any dissatisfaction. Had they done so then I see no reason why they should not have sought to cancel though I recognise there were practical (financial) reasons for not doing so. Put shortly I suspect that in the summer of 1999 they were still not certain whether to sell and even a low information 'guess' was enough to encourage further procrastination."
  15. Turning to construction, the judge said this in paragraphs 35 to 38:
  16. "35. Clause 5, if it stood alone, is clear. It entitled the Claimant to a fee on a sale of shares (disposal) whether or not Regent played any part (effectively introduced or placed on a list pursuant to Clause 2). That entitlement, as the note warns, may extend to two years post termination.
    36. In this regard clause 8 is different. Clause 8 specifies the fee payable in the event of an 'alternative agreement'. Here entitlement is dependent upon the new 'partner' being a 'prospective purchaser' (an actual introduction or on the 'list').
    37. Clause 11 in its original form would properly and without argument be construed as a termination clause. After providing for notice it merely repeated the substance of the obligation under Clauses 5 and 8.
    38. However the Defendants assert that by the addition of the words 'to a prospective purchaser' it should be read differently so that those words qualify not only Article 8 and post-termination transactions generally but also disposals 'within the period of engagement.'"
  17. The judge then deals with the principles of construction of documents and concludes that "oral evidence is frankly irrelevant to my task."
  18. The main issue between the parties was whether the claimants could recover the success fee on any sale or whether it was only to a sale to a prospective purchaser introduced or deemed to be introduced by the claimants. The judge concluded that any sale during the currency of the agreement would entitle the claimants to the success fee even in respect of someone such, as Infor, who had not been introduced by the claimants.
  19. His reasoning was essentially as follows: Clause 5 is clear and deals with sales during the currency of the agreement. It makes no mention of prospective purchasers. Clause 11 deals with termination and provides for two different regimes: 1) a regime which runs during the period prior to the expiration of the notice of termination; and 2) a regime which applies thereafter.
  20. So far as the first of these regimes is concerned it provides that any sale entitles the claimants to a success fee. So far as the second regime is concerned it is only sales to prospective purchases which entitle the claimants to a success fee. The judge said:
  21. "45. I am quite satisfied that, taken as a whole, the contract has the meaning contended for by the Claimant and entitles them to their fee. My reasons are these:-
    i) Clause 5 comes first; it is clear and has no limitation.
    ii) It accords with good common business sense; the nature of the services offered must be borne in mind. They were extensive and went far beyond mere introduction. The company had to be analysed and then 'positioned'; Regent would conduct negotiations.
    iii) Those services could not properly be performed unless there was mutual trust and co-operation; that could not subsist if there was doubt as to whether a success fee was payable according to who effected the first approach.
    iv) Clause 8 covers an entirely different situation. Joint ventures may arise independently of the one 'partner' being 'on the market'. In that situation 'introduction' would be an appropriate guide to whether a fee was 'fairly' claimable.
    v) Clause 11 is a termination clause. That is how it begins. Mr Parsons argues it is an activating clause but I cannot so regard it. It provides for cancellation. It follows clauses 5 and 8 and merely clarifies (and restricts) the entitlement post termination. Though it would be happier if there were no reference to 'within the period of engagement' those words are mere surplusage and cannot as a matter of good business sense fundamentally alter the nature of the obligation clearly imposed (again as a sound commercial allocation of benefit/liability) by Clause 5.
    vi) Mr Parsons pointed to the fact that the fee is described (both in the agreement and elsewhere) as a 'success fee' but this begs the question as to whose success? In my view the success is a sale not a sale introduced by Regent.
    vii) I see nothing dramatic or exceptional in the idea of a 'windfall'. Sometimes Regent will have to work hard for their fee but on other occasions they will 'strike lucky'. Their list could be exhaustive and by sheer good fortune include a name but if the name was not there and a sale ensued they would still be entitled. Quite possibly that sale (to a non-named, non-introduced third party) might well have arisen as a direct consequence of their marketing endeavours albeit there had been no direct contact. A fee should be payable, the parties would, I find, objectively have been happy to agree thereto. This is an important matter, construed as I have done, there is no need to embark upon the difficult exercise of determining how the third party came onto the
    scene.
    46. I understand the Defendants' irritation. They could however have cancelled (and thereby made the commitment less open ended); had they done so then in those circumstances they would not have been liable (though they would have had to pay a not insubstantial cancellation fee). They chose not to and as all parties agree this is an all or nothing case with no scope for quantum meruit. They are now liable, as I find, to pay what must seem to them a grossly inflated fee."
  22. Mr Terrence Mowschenson QC, who appears with Mr Parsons for the appellant, submits that the judge misconstrued the agreement. He submits that the key to this agreement is clause 2. That clause provides for a list of prospective purchasers. It is common ground that the claimants were free to put on that list anyone who was mentioned to the claimants by the defendants as a possible purchaser. Mr Mowschenson submits that the last sentence of clause 2 is only explicable on the basis that underlying the whole agreement was the concept that before the claimants were entitled to the success fee they had to have introduced the purchaser. He submits that because of this the concept of a deemed introduction has been incorporated into the clause in order to permit the claimants to recover a success fee in certain circumstances where they had not in fact introduced the purchaser. He points out that Infor was not on the list. He then submits that in those circumstances there having been no actual or deemed introduction of Infor the claimants are not entitled to the success fee. They had not succeeded in anything.
  23. Mr Mowschenson invites the court to consider the sale of a small parcel of shares to an employee and points out that the minimum fee of £100,000 seems high in such circumstances. The short answer to that point is that such a sale was not envisaged by either party at the time of the drafting of the agreement and it is inappropriate to construe the agreement in the light of such a possibility, and moreover, that considerable work may have been done in those circumstances by the claimants before even that offer appeared.
  24. Mr Richard de Lacey QC, who appears with Miss Green, submitted that the right approach is to consider first where in the agreement one finds the concept of introductions expressly mentioned. The only significant mention is that in clause 8. That clause cannot operate unless there has been an introduction. It was therefore perfectly sensible to introduce the concept of a deemed introduction if it was desired to enable the claimants to recover a success fee where a sale had not eventuated as a result of negotiations with someone on the list but that instead a profitable alternative agreement with that person had been arrived at.
  25. Mr de Lacey points out that this is not a normal estate agent's case where the estate agent is appointed in order to find a buyer. The expertise of the claimant and their primary obligation under paragraph 1 of the agreement, is centred around the provision of advice so as to make the company into an attractive proposition for sale and so as to achieve a variety of other matters. This it was envisaged would take some months. The retainer of a monthly £5,000 was a retainer and not a notional compensation for all that the claimants had agreed to do. That is clear from the fact that it was designed to be payable as well as the success fee in any normal case where everything had gone to someone who was indeed on the list.
  26. Mr de Lacey submits that the agreement provides in clauses 11 and 12 a regime which could have been operated by the defendants at any time so as to terminate the agreement. In that case the claimants would in general have been entitled to a maximum fee of £30,000. The defendants chose not to operate that regime. Mr de Lacey submits that nothing could usefully be gained from the phrase "success fee". The defendants have succeeded in selling their shares at an acceptable price to them. In the normal course of events in which there would have been no decision by the defendants to put the agreement or part of it on hold, the claimants would have been busy advising on how to make the company ready for sale and would indeed have done the substantial part of what was expected of them. The very fact that after that time the ultimate sale went to someone whom the defendants had known all along was interested and of whose existence they had informed the claimants would not have disentitled the claimants to their fees.
  27. For my part I would accept those arguments of Mr de Lacey and dismiss the appeal essentially for these reasons given by the judge.
  28. That leaves outstanding the different matter of the amendment proposed so as to raise the suspension defence. The matter was put thus in the defendant's skeleton argument:
  29. "21. A further reason why the Success Fee is not payable upon the Disposals is that the parties had agreed to suspend the Agreement. That can be the only explanation for the parties agreement that the obligation to pay Regent the retainer fee of £5,000 plus Value added tax should be suspended. As noted above, it was only paid for May 1999."
  30. We are then referred to various passages in the evidence and it is said the effect of putting the agreement on hold was to suspend Regent's obligation to provide corporate finance and strategic advice and to maintain and up-date the list of prospective purchasers. Those were the matters which the parties hoped would produce the disposal which would entitle Regent to the success fee. The agreement to suspend the agreement suspended the obligation also. Regent's contention that it is entitled to a success fee upon a sale of the shares to a person whom Regent had not played any part in introducing during a period when the agreement had been suspended is a very odd conclusion and one which the court should only accept if it finds some clear wording providing for that result.
  31. What is said by the applicants in short is that the Agreement to suspend the agreement suspended any obligation to pay a success fee.
  32. The pleadings as was accepted by Mr Mowschenson while the defence runs to no less than six specific defences do not take the suspension defence clearly. Indeed they do not take it at all. Nor was the suspension defence taken clearly before the judge or indeed dealt with in his judgment. It is clear from the pleadings that there was a difference between the parties as to the effect of that telephone conversation, but there was no reason to suppose from the pleading that the point would be of any significance. The relevant passage is in a part of the pleadings concerned with the history of the case, if I can put it that way, before the individual defences are set out.
  33. Mr Mowschenson relies on various passages in the claimant's own evidence which he says indicate that the claimants accepted that they had temporarily foregone many of their rights under the agreement. I do not accept that the passages quoted point to this clearly. Nor do I consider it fair, if that point is to be taken, for the claimant to be stuck with some words in their written statement which were drafted at a time when it was by no means clear that this was a central matter. Indeed all the indication was to the contrary.
  34. The judge referred to the point as peripheral - understandably so in the light of what had transpired in front of him. The point was not taken in the original notice of appeal and is not a matter on which Clark LJ gave leave to appeal. For my part I would not allow the amendment to take this appoint.
  35. LORD JUSTICE MANCE: I gratefully adopt Lord Justice Schiemann's statement of the facts and issues. I agree that it is too late to seek to raise in this court for the first time a defence that any obligation otherwise existing to pay commission on a sale within clause 5 was suspended by virtue of the parties' agreement to put into abeyance "projects" or "further work under the project" in such a way as to suspend at any rate further retainer payments. I found the proper interpretation of that agreement more troublesome. Clause 5 refers to the completion of each and every sale and to Swan Software's agreement to pay Regent a corporate finance fee ("success fee") payable at such completion.
  36. During the course of the submissions I saw considerable attraction in Mr Mowschenson's argument that clause 5 could be construed as applying to the completion of a sale (or, in the light of clause 9, conclusion of a sale agreement) in some way involving Regent, in particular involving Regent as a result of their "success in introducing a purchaser" (or under clause 2 being deemed to have done so by virtue of the inclusion of the purchaser's name on a list of prospective purchasers).
  37. On the other hand there is to my mind a significant contrast between the generality of clause 5 and the specific references in clauses 8 and 11 to prospective purchasers, coupled in the case of clause 8 with a reference to the introduction of such. Mr Mowschenson laid stress on the presence at or near the beginning of this agreement of clause 2 defining prospective purchasers and providing that all companies and individuals on the list were deemed to be introduced to Swan Software by Regent. He submitted that this shows that clause 5 should in context be confined to sales to prospective purchasers. But what is notable is that it is only in clauses 8 and 11 that prospective purchasers are mentioned in the context of commission, and not in clause 5. The further reference to prospective purchasers in clause 17 is general and may, it seems to me, simply refer back to clauses 8 and 11, so it does not assist.
  38. It is true that clauses 8 and 11 cover both certain situations arising during the currency of the engagement and the two-year period thereafter. But clause 8 deals with the making not of a sale but of some "alternative" agreement such as a royalty licencing trading marketing agreement etc. So it seems to me understandable that the appellants' obligation should be limited in that context to prospective purchasers introduced by Regent within the expanded meaning of clause 2, in respect of any alternative agreement made during or after Regent's engagement. (I would add that I do not think that one can derive from the first 16 words of clause 8 any inference that the introduction of the prospective purchaser is a necessary prerequisite to entitlement to commission on any disposal otherwise falling within clause 5).
  39. As for clause 11 that deals primarily, as Mr Mowschenson accepts, with circumstances where a notice of termination has been given. It is, as I have said, notable that in that context but not in clause 5 the words "with a Prospective Purchaser" appear. As a matter of fact these words were added, as my Lord has recited, at the appellants' request; but, even if one takes that consideration into account, it does not seem to me to assist in answering the question whether the words were intended simply to qualify the position regarding disposal after termination or also to qualify the position regarding disposals "within the period of engagement". The words "with a Prospective Purchaser" were probably not necessary in relation to the phrase "alternative agreement", since that by definition under clause 8 only relates to sales to a prospective purchaser anyway. Grammatically it seems to me that clause 11, as amended, can be read either way - that is either as the appellants or as the respondents contend. But, bearing in mind that clause 11 as a whole is dealing, as I see it, primarily to the situation after the giving of a notice of termination, and bearing in mind the absence of any other concomitant alteration of clause 5, it seems to me that the former interpretation, namely that the words "with a Prospective Purchaser" were intended simply to qualify the position regarding disposals after termination, is more probable.
  40. I have, I must say, been troubled by the fact that, as I read clauses 5, 11 and 12 together, the appellants could, by the simple expedient of giving notice of termination and waiting until after its expiry before concluding any disposal agreement have limited their liability to, in this case, £30,000 under clause 12. That is because the subsequent disposal would not have been to any prospective purchaser deemed to have been introduced by Regent. There was and would have been no obligation in law on the appellants to inform Regent of any approach from any potential purchaser who contacted them independently, or to give Regent any opportunity to put such potential purchaser on their list either before or when giving a notice of termination. In those circumstances it seems a high price to pay, for failing to take so simple a step as to give a notice of termination and to await its expiry, to have to pay £220,000 under clause 5.
  41. However I am on balance persuaded that this consideration is insufficient to affect the view that I have otherwise formed that clause 5 applies without any requirement that the purchaser should be a prospective purchaser as defined in clause 2 or should have been introduced by Regent in relation to sales during the period of engagement. As Mr de Lacey points out, the services to be provided by Regent were not strictly limited to finding a purchaser, Regent undertook other more general positive obligations. It seems ultimately comprehensible that they should require agreement to pay a full fee under clause 5 on any sale during their engagement, even if they were prepared to allow fairly ready and cheap cancellation by the appellants, at least after two months. In point of fact the argument may also be regarded as cutting both ways in this area, since the right to terminate at a cost of £30,000 may be seen as mitigating the otherwise onerous obligation to pay full clause 5 fees on any sale during the engagement. It is common ground that there is no special principle of construction regarding entitlement to commission in circumstances such as the present. It all depends on a proper interpretation of the contract as a whole. Where commission is payable for an introduction or for finding a purchaser, then there is a general presumption that the agent must at least be an effective cause: see for example Bowstead and Reynolds on Agency, 17th Edition (2001) Article 59. But here the issue is whether that was the true effective agreement. Clearly in some respects, for example as to the retainer fees, and also I think as to duties, this agreement went further than the basic agreement to find a purchaser contemplated in Bowstead and Reynolds.
  42. For these reasons and also those given by Schiemann LJ and not without residual doubt on my part I concur with the result which my Lord has indicated.
  43. SIR SWINTON THOMAS: Like Mance LJ I have not found this case easy to resolve. There is nothing unusual about that when the issue is one of construction. Mr Mowschenson has made a number of formidable points. However, in the end, I am persuaded for the reasons given by my Lords, that this appeal should be dismissed. I agree with Mr Mowschenson that the agreement must be read as a whole; but clause 5 is plain in its terms, namely, that the respondents are entitled to their fee on completion of the disposal of the shares in Swan Software. I am not persuaded that the other clauses in the agreement relied upon by the appellants modify that entitlement so that the fee is payable only if the respondents had produced the prospective purchaser or could be deemed to do so.
  44. I should perhaps add only for the record that I do not agree that the concession made by Mr de Lacey and referred to by Mance LJ that under the provisions of clauses 8, 11 and 12 the tenants were entitled to terminate the contract and that if there was a sale to a prospective purchaser not introduced by the claimants in the period of two years no commission was payable. Although the language used in those paragraphs is not altogether clear, it is reasonably plain to my mind that in those circumstances a fee was payable under either clause 5 or alternatively clause 8. However, that issue is not in any way essential to the issue of construction that is raised in this case so I will not set out my reasoning for that conclusion any more fully.
  45. For these reasons, and also those given by my Lords, I would allow the amendment to add ground 11 to the notice of appeal, but refuse permission to add ground 12 and I would also dismiss the appeal.
  46. (Appeal dismissed with costs; such costs to be assessed if not agreed; leave to amend the notice of appeal save that ground 12 is not permitted).


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