Case No: HQ10X02354 APPEAL REF. QB/2010/0738
Neutral Citation Number: [2011] EWHC 1600 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 24/06/2011
Before :

THE HONOURABLE MRS JUSTICE COX DBE
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Between :

	HEATHER KILLEN	Claimant/
Respondent	
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	HORSEWORLD LIMITED

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HORSEWORLD (UK) LIMITED

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TOBY VINTCENT

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RICHARD WORRALL 	First Defendant

Second Defendant

Third Defendant/
First Appellant

Fourth Defendant/
Second Appellant	
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Mr Matthew Hardwick (instructed by Kingsley Napley, Solicitors) for the Claimant/Respondent
Mr Richard Hill (instructed by Davenport Lyons, Solicitors) for the Defendants/Appellants
RICHARD WORRALL IN PERSON

Hearing dates: 19th May 2011
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Judgment

Mrs Justice Cox : 

1.	In this case the Third Defendant, Toby Vintcent, is appealing by permission of Dobbs J. against the judgment of Deputy Master Rose, dated 19 November 2010, dismissing his application for an order striking out the Claimant’s claim against him pursuant to CPR 3.4 or, alternatively, for summary judgment pursuant to CPR 24.2.  The Claimant and Mr Vintcent were both represented by counsel before me.
  
2.	The Fourth Defendant, Richard Worrall, applied for identical relief on the same grounds and the Master also dismissed his application.  Mr Worrall then applied, out of time, for permission to appeal.  On the papers, Slade J. (a) refused to extend time, no good grounds having been shown for giving permission out of time; and (b) stated that she would have refused permission in any event, on the basis that the appeal had no real prospect of success and that there was no other compelling reason why an appeal should be heard.  

3.	On Mr Worrall’s renewal of these applications, the Claimant not then being represented, Foskett J. adjourned both applications, to be listed together with the hearing of Mr Vintcent’s appeal.  At the hearing before me Mr Worrall appeared in person, relying on the grounds of appeal advanced by Mr Vintcent.

The Relevant Background

4.	 The Claimant is the co-founder and partner of a private equity and corporate advisory firm, Hemisphere Capital LLP, which provides consultancy services to new media and technology companies.
  
5.	On 22 June 2010 she issued a claim against the four named Defendants seeking just compensation by way of a quantum meruit claim for professional services rendered.  The claim is for the sum of £380,000 together with reimbursement of expenses, which total just under £50,000.  

6.	The First Defendant was incorporated on 24 May 2005 and the Second Defendant on 17 January 2007.  Mr Vintcent and Mr Worrall are directors and shareholders of both corporate Defendants.  

7.	The Particulars of Claim are extremely detailed but the Claimant’s pleaded case is essentially as follows.

8.	In about 2005 Mr Vintcent and Mr Worrall came up with an idea to develop a leisure and retail theme park involving horses, which they referred to as “The Horseworld UK Theme Park.”  They considered that, in addition to the specialist equestrian sector, there was a vast and relatively untapped market in events involving horses.  Their idea was to create a large, indoor and outdoor, purpose built venue designed to showcase every aspect of equestrianism, but targeted at the general public and as a family attraction.

9.	They needed to raise approximately £40 million of capital investment, in order to develop and launch the theme park, and a further £20 million of capital to fund its start-up operations.  However, by August 2006, they had yet to raise any funds.

10.	At around this time they met the Claimant and, in the course of an introductory meeting in London in early August 2006, they outlined to her their developing business plans and requested that she advise them as to their viability and as to the prospects of raising the necessary capital.  The Claimant agreed to undertake this advisory work.

11.	She proceeded to review the plans and, during a subsequent meeting on 5 February 2007, she advised them that they had no realistic prospect of raising anywhere near the sums needed on the basis of the current plans.  She also advised them that the only viable way forward was to develop the media and on-line components of the business.  This they could do at relatively modest cost; and it would more rapidly generate funds.

12.	Thereafter, the Claimant alleges that Mr Vintcent and Mr Worrall asked her to continue to apply her expertise to this concept, commenting in an email to her on 19 February 2007 that “…your experience in building businesses is something that we are very grateful to be able to draw upon…” and referring to how they might “…begin to crystallize how our relationship might develop as we go forward…”  The Claimant agreed to offer her consultancy services.  She also offered to become CEO of the new business and, if she became CEO, to consider investing her own funds in the business.

13.	She alleges that it was in these circumstances that, from February 2007 until 16 August 2008, she provided her consultancy services to Mr Vintcent and Mr Worrall personally, in anticipation of negotiations that would lead to the conclusion of a contract, pursuant to which she would receive proper compensation for those services.  In an email sent on 9 March 2007 Mr Worrall wrote to the Claimant stating that:
“…the potential of working with you to drive the Horseworld business is very exciting…We are very keen to progress our discussions and negotiations with the view of reaching a positive outcome and getting our collective sleeves rolled up!...I would expect that we are looking to reach a point to start discussions shortly after Easter…We very much look forward to moving our discussions on and to reaching agreement in the next few weeks.”

14.	The Claimant continued to provide her services, liaising with and advising Mr Vintcent and Mr Worrall on the telephone or by email on a daily basis and meeting them regularly; meeting potential business partners; and inspecting potential sites for the theme park.  On 30 October 2007 she was appointed to the Board of Directors of the Second Defendant and, from approximately the same date, she was appointed CEO of the First Defendant.
  
15.	However, ten months later on 16 August 2008, the Claimant’s involvement with the business was summarily terminated, with the result that no contract for services was ever finalised.  Further, and despite an email sent to her on 18 September 2008 in which Mr Vintcent advised her that “…we are also prepared to offer you a plan for remuneration of your investment (time and expenses) in Horseworld to date, these details to be addressed offline…” the Claimant’s case is that she was never paid her expenses, and has never been given any remuneration for her investment.

16.	Her pleaded case is therefore that it would be unconscionable for her not to be compensated for all the services which she provided throughout this 18 month period, in anticipation of a contract being agreed.  

17.	Those, then, are the pleaded facts in the Particulars of Claim.

18.	There is no dispute as to the applicable law.  In his judgment Master Rose reminded himself of the relevant legal principles governing quantum meruit claims, summarised in Chitty on Contracts 30th edition, 2008 at paragraph 29-071:

“…in a contract for work to be done, if no scale of remuneration is fixed, the law imposes an obligation to pay a reasonable sum (quantum meruit). The circumstances must clearly show that the work is not being done gratuitously before the court will, in the absence of an express contract, infer that there was a valid contract with an implied term that a reasonable remuneration would be paid; this principle may extend to services performed in anticipation that negotiations will lead to the conclusion of a contract, provided that the services were requested or acquiesced in by the recipient…”

19.	The Master also referred to further guidance as to the correct test for a quantum meruit claim in anticipation of a contract which does not materialise, as set out by Nicholas Strauss QC sitting as a Deputy High Court Judge in Countrywide Communications Ltd. v ICL Pathway Ltd [2000] CLC 324 and adopted by Christopher Clarke J. in MSM Consulting Ltd. v United Republic of Tanzania [2009] EWHC 121 (QB):
  
“…in deciding whether to impose an obligation and if so its extent, the court will take into account and give appropriate weight to a number of considerations which can be identified in the authorities.  The first is whether the services were of a kind which would normally be given free of charge.  Secondly, the terms in which the request to perform the service was made may be important in establishing the extent of the risk (if any) which the plaintiffs may fairly be said to have taken that such services would in the end be unrecompensed.  What may be important here is whether the parties are simply negotiating, expressly or impliedly ‘subject to contract’, or whether one party has given some kind of assurance or indication that he will not withdraw, or that he will not withdraw except in certain circumstances. Thirdly, the nature of the benefit which has resulted to the defendants is important, and in particular whether such benefit is real (either ‘realised’ or ‘realisable’) or a fiction….Plainly, a court will at least be more inclined to impose an obligation to pay for a real benefit, since otherwise the abortive negotiations will leave the defendant with a windfall and the plaintiff out of pocket.  However…..the performance of services requested may of itself suffice to amount to a benefit or enrichment.  Fourthly what may often be decisive are the circumstances in which the anticipated contract does not materialise and in particular whether they can be said to involve ‘fault’ on the part of the defendant, or (perhaps of more relevance) to be outside the scope of the risk undertaken by the plaintiff at the outset….the law should be flexible in this area, and the weight to be given to each of these factors may vary from case to case.”

20.	It is clear from paragraph 16 of the Particulars of Claim that the Claimant relies on these principles as applying in her claim; and it is common ground that the Master directed himself correctly as to both the relevant law and its application to the pleaded facts.  Further, it was conceded by Mr Matthias QC, appearing below for Mr Vintcent and Mr Worrall, that there is a properly arguable claim in quantum meruit as against the two corporate Defendants.  The issue is whether she should be permitted to pursue her claim against Mr Vintcent and Mr Worrall personally.  I return to the pleadings.
  
21.	On 23 July 2010 the First and Second Defendants served a Defence and Counterclaim denying the quantum meruit claim; contending that Mr Vintcent and Mr Worrall had all times been acting in their capacities as directors of the corporate Defendants and not in any personal capacity; and asserting that a legally binding agreement had in fact been reached between the Claimant and the First Defendant, pursuant to which the Claimant offered to become an investor in the Horseworld business on the terms pleaded, which were accepted.  Under this alleged agreement the Claimant was to be appointed CEO of the First Defendant and was to invest a substantial sum in the business in return for a shareholding, to be agreed.  Her main function was said to be to raise funds to implement the business plan of the corporate Defendants and, when she had raised sufficient third party funding, she would be entitled to remuneration, at a rate to be agreed.

22.	Mr Vintcent and Mr Worrall also served short Defences in substantially the same terms and adopting the Defence and Counterclaim of the first two Defendants.  

23.	These pleadings clearly disclose substantial disputes of fact between the parties as to the nature of the services performed by the Claimant and the basis upon which her work was undertaken.  Mr Vintcent and Mr Worrall deny that they ever asked the Claimant to give either them or the corporate Defendants any advice; or that she ever did give advice or provide consultancy services, as claimed.  Rather, the Defendants plead a positive case that a binding agreement was in fact entered into between the Claimant and the First Defendant and that, in breach of that agreement, she failed to make any investment of capital or secure any investment in the company.

24.	Before receiving the Claimant’s Reply Mr Vintcent issued his application to strike out, or for summary judgment.  This was supported by a short witness statement from Roger Billins of Davenport Lyons, the solicitors acting for the first three Defendants.

25.	The Claimant then served a lengthy Reply and Defence to Counterclaim dated 13 August 2010, setting out a detailed response to the positive case pleaded by the Defendants, denying all their assertions and maintaining that she was at all times advising Mr Vintcent and Mr Worrall personally, in their capacity as individual entrepreneurs, in relation to the viability of their embryonic business plans.

26.	By Application Notice issued on 2 September 2010 Mr Worrall also applied to strike out the Claim, relying on the same grounds as Mr Vintcent.

The Master’s Judgment

27.	At the hearing below, in addition to the pleadings, the Master had before him a detailed witness statement from the Claimant herself dated 27 October.  Mr Billins also served a longer witness statement dated 9 November.  No evidence was served from Mr Vintcent or Mr Worrall personally.

28.	The first submission on behalf of the individual Defendants was that, notwithstanding the factual disputes apparent from the evidence, a line could and should be drawn between the position of the corporate Defendants and that of the individual Defendants, against whom no cause of action was shown on the pleaded case.

29.	The Master rejected that submission, concluding that the Particulars of Claim alleged a case which, if proved at trial, would justify a remedy upon a cause of action for quantum meruit against the individual Defendants.  

30.	On the basis set out in his carefully reasoned judgment the Master also rejected the individual Defendants’ further submission that the Claimant could not succeed against them in fact or law.  The Master set out the Defendants’ main argument in resisting the claim, namely that on the evidence there was a binding contract between the Claimant and the First Defendant for investment by her in that company and, that being so, it can only have been a contract with the corporate Defendant.  Referring to the evidence and the competing contentions as to this issue in the witness statements, the Master held that he could not decide “this important and disputed issue of fact” at the hearing of an application to strike out the claim. 

31.	He then turned to consider the submission that, even though the Claimant had an arguable claim in quantum meruit against the corporate Defendants, she could not succeed as against the individual Defendants.  Rejecting that submission, he said as follows:

“16….The services rendered on that basis were clearly requested by the third and fourth defendants.  The question is whether such request leads to a fair imputation of personal liability on a quantum meruit against them.  Mr Matthias submitted that the claimant’s position would drive a coach and horses through the law laid down in Salomon v. Salomon [1897] AC p22.”  

32.	Citing a passage from the judgment of Lord Herschell in that case, and also referring to the decision of the Court of Appeal in JH Rayner (Mincing Lane) Limited v Department of Trade and Industry [1989] 2 WLR 72, the Master’s conclusions, at paragraphs 19-23 of his judgment, were these:

“19. The question, in my judgment, is one of fact.  Here the claimant seeks to make the imputation of liability from the facts pleaded in the particulars of claim, the reply and defence to counterclaim and her witness statement, which is before me on this application.  A director may in contract commit himself to personal liability to a third party upon a contract made by the company.  If this were a case of a claim in contract it would be necessary to consider the intention of the parties.  I refer in particular to Bowstead and Reynolds on Agency, 16th Edition at paragraph 9-005, and I read the first paragraph under that enumeration, under the rubric: “Agent may be liable or entitled”: The learned authors say:
“As has been stated in the Comment to the previous Article, there is no reason why an agent should not be entitled and/or liable on the contract which he has made for his principal, or upon a separate but related contract: ‘In all cases the parties can by the express contract provide that the agent shall be the person liable either concurrently with or to the exclusion of the principal’.  The question whether an agent who has made a contract on behalf of his principal is to be deemed to have contracted personally and, if so the extent of his liability, depends on the intention of the parties, to be deduced from the nature and terms of the particular contract and the surrounding circumstances, including any binding custom.  As in all matters of formation of contract, the test is objective.  The rules can be most easily articulated in relation to written contracts where the use of a particular form of words may constitute an agent a contracting party though it is on the underlying facts doubtful whether he intended to become such.”
  		
20.  Mr Matthias submitted that the claimant here cannot be in a better position in her claim under quantum meruit than she would be if the claim were in contract.   In my judgment, on this application to strike out the claim in quantum meruit, the issue of the intention of the parties is relevant.  If that view is right it must be arguable, and I say no more than arguable in my judgment, at this stage, that the claimant in this case in quantum meruit may rely on the requests by the third and fourth defendants to advise in raising funds for companies in which they themselves were investing to show that those defendants are personally liable.
  
21. Mr Matthias submitted further that a conflict of interest might arise as between the third and fourth defendants (on the one hand) and the companies in those circumstances,  but that is not a necessary conclusion – that is to say that a conflict of interest would arise or did arise on the facts of this case before me.  It is a matter which would require to be considered on all the evidence at trial.

22.  Mr Matthias also submitted that the claimant’s demands by way of an invoice and a statutory demand demonstrated that she perceived her claim to be only against the first defendant.  That is precisely a point which should be categorised as one to be investigated at trial and upon cross-examination of the claimant.

23.  Let the case be tried to ascertain the truth of the matter and the intention of the parties at the time when the discussions to raise funds were taking place….”

The Appeal of Mr Vintcent

33.	Three grounds of appeal are advanced and developed in the skeleton argument lodged on Mr Vintcent’s behalf, as follows: (i) the Master was wrong in finding that it was necessary to look at the intentions of the parties at the outset of the case to determine the status of the Third and Fourth Defendants in their dealings with the Claimant; (ii) the Master took no or little account of all the evidence exhibited to the witness statements which showed, with no evidence adduced to the contrary, that Mr Vintcent and Mr Worrall were dealing with the Claimant throughout only as directors of the corporate Defendants; (iii) the Claimant’s bare assertions in her pleadings that she was dealing with the individual Defendants personally were without foundation in law or fact and unsupported by any evidence.  The Master therefore erred in failing to find that no reasonable grounds for bringing this claim against them personally were disclosed; and that there was no other compelling reason why the case as against them on liability should be disposed of at a trial.
  
34.	In his oral submissions on behalf of Mr Vintcent, Mr Hill, who did not appear below, carried out a close analysis of the contemporaneous documentary evidence in support of his submission that the Claimant had “an impossible claim” as against the individual Defendants.  I summarise the main points.

35.	There is no dispute that the First Defendant was incorporated on 24 May 2005, more than a year before the Claimant arrived on the scene in August 2006. “Briefing Notes” prepared for the Board by the individual Defendants, between April and June 2006, show the gradual conception and development of the Horseworld project, and concerns as to the need to protect the “Horseworld idea”.  By the time of the End of Year Report on 20 December 2006, the “Horseworld team” was noted to be “solely focussed on seeking out and pitching investors to raise equity funding.” The Claimant’s name is listed amongst those already approached or yet to be approached.

36.	Mr Hill submits that the emails to the Claimant from Mr Worrall, dated 19 February and 9 March 2007, reflect the discussions that had taken place between them as to her offer of investment in the Horseworld business, subject to contract.  The two strands to these discussions, he submits, are that the Claimant is coming in as an investor, and that she is becoming part of the management team for the company’s business.

37.	Thereafter, he submits that it is clear from the further briefing updates prepared for the Board that the work being carried out by the Claimant is all work on the company’s business.  The update of 22 May 2007, for example, refers to the Claimant’s offer of investment funding and her offer to be “our Chief Executive”.  The expertise, experience and reputation of the Claimant are referred to in glowing terms, as is the work she has done to date.  

38.	By 30 October 2007 the Report to the Board for the meeting of that date contains the information that the Claimant has accepted the Chairman’s invitation to her formally to join the Horseworld Board.  The Report refers in addition to discussions with the Claimant, who joined this meeting, as to the value of registering Horseworld as an off-shore, possibly BVI business and as to available funding.  This, submits Mr Hill, shows that the Claimant was well aware of the commercial realities and of the “start-up” nature of this enterprise and her role within it.  From this time on she was working as the First Defendant’s Chief Executive and was working on business for that company.
  
39.	The Report from Mr Vintcent in June 2008 refers to significant progress having been made, including the establishment by the Claimant of a streamlining service for Badminton Horse Trials.  However, just two months later, on 16 August 2008, Mr Vintcent and Mr Worrall are writing to the Claimant expressing their unease with her “management style” and with her approach to executing her role in representing Horseworld; and informing her of their decision to “terminate your proposed role as Chief Executive Officer of Horseworld Ltd and indeed any company that is or was planned to be directly or indirectly associated with or linked to Horseworld and any of its business strategies.”

40.	Mr Hill places considerable reliance on two emails which then passed between the parties in September 2008, following further telephone discussions between them.  In the first, dated 18 September, sent to the Claimant and headed as coming from “horseworld”, but clearly written by Mr Vintcent, suggestions are made as to how they might now go forward if the Claimant wished to re-associate with the project.  Mr Vintcent wrote,

“You would join the team as a Board member and managing principal, specifically tasked with:
a.  Supervision of investor Relations 
b.  Supervision of Mergers and Acquisitions
Should you wish to invest in Horseworld as per the previous design, we would suggest the title of “Managing Principal” be applied to yourself, myself and Bernie until such time as the final executive team is determined……We are also prepared to offer you a plan for remuneration of your investment (time and expenses) in Horseworld to date……I am representing this opportunity to you on behalf of Horseworld and with the full endorsement of Bernie Uechtritz……he has remained steadfast in his support of you both personally and professionally and within the vision we all share.  This is appropriate given your previous association with Horseworld was via Richard Worrall and myself.”
   
41.	In her lengthy reply of 25 September, sent to Mr Vintcent and Mr Worrall before she had taken any legal advice, the Claimant referred to the need to come to terms as to their past relationship, before contemplating the possibility of any future joint venture.  She set out a number of “agreements” upon which she considered their past relationship had been based.  These included the agreements as to her becoming the “CEO of the venture and…entitled to appropriate compensation as such when third party investment funds into the business made this possible”, and being appointed to the Board of Horseworld UK;  the fact that the “funds I advanced on behalf of Horseworld for services performed by third parties were to be convertible into stock….”; and the fact that she had “worked on Horseworld business…pretty much full time from November 2007 until the middle of August 2008”.  Towards the end of this email she stated,

“In your email…you appear to suggest that you will only compensate me for the time and financial outlays I have already given you if I become a “Managing Principal” in your new endeavour, but not if I decline.  This cannot be correct.  We had an agreement between ourselves, which would lead to my receiving a share of the business and financial reward for my ongoing work as CEO.  I must insist on the terms of this agreement being met.”  

42.	Mr Hill submits that it is clear from this email, (a) that the Claimant was describing her past relationship, both before and after her appointment as CEO, as being with Horseworld rather than with the individual Defendants; (b) that she understood that she would be compensated as CEO of the business when third party funds made this possible; and (c) that she had advanced funds on behalf of Horseworld, for services performed by third parties, which were to be convertible into stock.  This, he suggests, is wholly inconsistent with the case now being put forward by the Claimant in her pleadings and her witness statement.  

43.	Further confirmation that she regarded herself as working for Horseworld and on the company’s business appears, in his submission, in her email of 20 January 2009, attaching “an invoice for services I have provided to Horseworld Limited over the past 18 months”.  All the expenses referred to in the invoice are clearly debts of the company, which were discharged by the Claimant on behalf of the company.  She also made a statutory demand, subsequently withdrawn, but sent on 29 January 2009 to the company secretary, Horseworld Ltd, in respect of amounts due to her for “services purchased on your behalf”.
  
44.	Against this background Mr Hill submits that the allegations made in the Particulars of Claim, and then in the subsequent Reply, simply “lump all the Defendants together” collectively, even during the period that the Claimant was the CEO of the First Defendant, and in respect of services which, as is clear from the documentation, were provided to the company.  He submits that there is nothing pleaded to support the contention now made that her work as CEO was on behalf of the individual Defendants.   

45.	In respect of the invoices claims, whilst it can legitimately be argued that the company had a restitutionary obligation towards her, he submits that it is impossible to see how such a claim can be made out against the Third and Fourth Defendants as individual shareholders.  Similarly, her claim in respect of professional fees incurred after her appointment as CEO can relate only to the restitutionary obligation of the company in respect of the work done by her on the company’s behalf.  Even in respect of her consultancy fees for work done prior to her appointment as CEO, the documents show that she was engaged on company business, in anticipation of joining the management team.

46.	Mr Hill contends that the position is not improved for the Claimant by the evidence she has lodged.  Mere assertions, unsupported by any contemporaneous evidence, do not indicate that there is an issue for trial if they are shown to be baseless, as he submits these are.  Further, he points out that the Claimant does not attempt to explain the contents of her email of 25 September 2008.

47.	Thus, he contends that the Master erred in his approach to Mr Vintcent’s application in this case.  Whilst he was wrong as a matter of law to attribute relevance to the subjective intention of the parties (ground one), the more fundamental error lay in his failure properly to understand this claim, and in his objective assessment of the evidence before him (grounds two and three). The reference to “requests” in paragraph 20 of his judgment is of no relevance in determining whether, after the Claimant’s appointment as CEO, individual shareholders can be liable in restitution for consultancy fees incurred, or invoices discharged on behalf of the company.  No evidential or legal basis was disclosed for the claim that the sums incurred, after her appointment as CEO, were payable by the individual Defendants; and the Master failed properly to address the issues.  Even in respect of those fees incurred before her appointment as CEO, the Master failed to recognise that they were still incurred for company work; that she was claiming for that work from the corporate Defendants; and that her own email of 25 September confirmed that she was doing work for the company in that period.

Conclusions
  
48.	I do not consider, first, that the Master misdirected himself in law when referring to the intentions of the parties.  He was neither suggesting nor applying a subjective test.  The challenged phrase, in the second sentence of paragraph 20 of his judgment, follows immediately upon the extract from Bowstead and Reynolds cited in the previous paragraph.  Read in that light, it is clear to me that the Master was recognising the necessity for an objective assessment of the parties’ intentions in their dealings with each other, on the basis of the surrounding circumstances and all the evidence before him.  

49.	Further, the remainder of paragraph 20 seems to me to be an entirely correct legal direction, when considering a claim in quantum meruit, as to the relevance of requests said to have been made by the individual Defendants to the Claimant, to advise them in raising funds for companies in which they themselves were investing.  He was referring there to the principles which he had already set out in paragraph 11, when referring to the decision in the Countrywide Communications case.
  
50.	It is common ground that the Master correctly summarised the legal principles governing a claim in quantum meruit, as set out above.  In referring to the judgment of Nicholas Strauss QC in the Countrywide Communications Limited case, he recognised that the second, relevant consideration to have regard to, in deciding whether to impose an obligation upon a defendant to make payment of an amount which the claimant deserved to be paid, would be “…the terms in which the request to perform the services was made”.  

51.	In MSM Consulting Limited v United Republic of Tanzania [2009] EWHC 121 (QB), Sir Christopher Clarke accepted Mr Strauss’s analysis of the principles to be gleaned from the authorities as helpful and added this proposition, with which I agree, at paragraph 171 (c) of his judgment:

“The court is likely to impose such an obligation where the defendant has received an incontrovertible benefit (e.g. an immediate financial gain or saving of expense) as a result of the claimant’s services; or where the defendant has requested the claimant to provide services or accepted them (having the ability to refuse them) when offered, in the knowledge that the services were not intended to be given freely;”

52.	 This, in my view, was what the Master was identifying when referring, at paragraph 20, to the Claimant’s ability to rely on requests for advice made to her by Mr Vintcent and Mr Worrall personally.  No error of law is therefore disclosed in that paragraph.
  
53.	In fact, the real focus of Mr Hill’s submissions on appeal were the second and third grounds of appeal, relating to the alleged lack of any legal or factual basis for the Claimant’s assertions of personal liability, and to the Master’s assessment of the evidence.  All of the evidence, he contends, points to the fact that Mr Vintcent and Mr Worrall always dealt with the Claimant as directors and shareholders of the corporate Defendants.

54.	On behalf of the Claimant, Mr Hardwick submits that, despite his extensive trawl through the background documents, Mr Hill has in fact been unable to point to anything other than the Claimant’s email of 25 September, her invoice of 20 January 2009, made out to Horseworld Limited, and the statutory demand, also sent by the Claimant in January 2009, in support of his submission that “all the evidence” pointed only one way in this case.  

55.	Further, he submits that these documents cannot in any event bear the weight which Mr Hill seeks to place upon them, or indeed the interpretation he now gives them.  Cross-examining the documents in this way is, he submits, an inappropriate exercise in pursuing an application to strike out, or for summary judgment. In any event, the Master was taken to these documents and dealt entirely properly with them in arriving at his decision to dismiss the Defendants’ application to strike out the claim against the individual Defendants.

56.	I consider first the invoice dated 20 January.  Mr Hill draws attention to the heading on the invoice, namely “For Services Rendered”; and, in addition, to the Claimant’s covering email and her reference to attaching an invoice “…for services I have provided to Horseworld Limited over the past 18 months.”   

57.	However, I agree with Mr Hardwick that it is plain from the contents of this invoice that this is not in fact an invoice for advisory or consultancy services rendered, whether for the corporate or the individual Defendants.  Rather, it is a claim for reimbursement, because the invoice lists six invoices which had been presented to the First Defendant by various third parties for a variety of services, including artwork and technical services, and which had been paid by the Claimant on that Defendant’s behalf.  In addition, these third party invoices relate to services performed between February and May 2008.  This is relatively late in the history of the Claimant’s involvement with these Defendants, and the provision by her of those professional services for which she now claims, her advice having first been requested, allegedly, in August 2006.

58.	I accept that these six invoices may be said to demonstrate that it was the perception of the third parties who issued them that they were dealing with the First Defendant.  In my view, however, it is not possible, even when read together with the other documentary evidence to which Mr Hill referred, to infer from the invoice of 20 January that, from August 2006 onwards, the Claimant had at all times rendered services to Mr Vintcent and Mr Worrall only in their capacity as directors and shareholders of that Defendant, or indeed of the Second Defendant.  

59.	In relation to the statutory demand, Mr Hardwick acknowledges that the Claimant, who was not at that time in receipt of legal advice, in particular as to the existence of quantum meruit, erroneously adopted the wrong procedure and in the wrong form.  It was sent on notepaper formally headed with the name of her partnership, Hemisphere Capital LLP, although the business was not itself owed any sums, and yet the demand refers to the “Amount owed to me for purchases purchased on your behalf”.  Further, the Claimant had no undisputed right to reimbursement of sums which she had paid on behalf of the First Defendant.

60.	Mr Hardwick points out that, once she had instructed solicitors, the statutory demand was withdrawn and that is accepted.  Since then the Claimant has consistently and unambiguously based her claim on a quantum meruit.
 
61.	In the circumstances, I reject the suggestion that this demand provides conclusive evidence of the Claimant’s recognition that she was at all times acting on behalf of the First, corporate Defendant and not dealing with the individual Defendants in their personal capacities.

62.	Clearly, and for the reasons advanced by Mr Hill, both these documents raise questions, which would fall to be considered at trial as part of the evidence as a whole.  This is what the Master found, in my view correctly, at paragraph 22 of his judgment when stating that these documents raised points which should be categorised as points “to be investigated at trial and upon cross-examination of the claimant.”  The submission that the Master took little or no account of the evidence is in my view unsustainable.

63.	In relation to the email from the Claimant dated 25 September 2008, it is correct that the Master made no express reference to it in his judgment.  Nor is it referred to expressly in any of the evidence filed by the parties.  This document cannot sensibly be read in isolation however.  It was preceded by the letter of 16 August from the individual Defendants terminating the relationship, referring to it being “impossible for us to continue to work with you” and stating, “We…wish to terminate your proposed role as Chief Executive Officer of Horseworld Ltd and indeed any company that is or was planned to be directly or indirectly associated with or linked to Horseworld and any of its business strategies.  Further, this is our formal notice to you to cease and desist from holding out or representing, in any form whatsoever, that you are associated with Horseworld.”   

64.	The terms of this letter seem to me to raise a number of issues when considering the Defendants’ pleaded case.  Further, I bear in mind that the Claimant’s email of 25 September was written only 5-6 weeks after her services were terminated and before she had had the benefit of legal advice.  There is no doubt that it invites cross-examination as to its terms but, in my view, it cannot trump the Claimant’s pleaded case, now verified, that there was no agreement concluded, that she has a valid quantum meruit claim, and that she no longer pursues the points being made in this email.  In my judgment this single email cannot be said to render the Claimant’s pleaded claim unarguable as against the individual Defendants.   

65.	In considering Mr Hill’s submissions as to the lack of any basis in fact or law for the Claimant’s claim against the individual Defendants, it is important to bear in mind the following.  

66.	First, the cause of action relied upon is quantum meruit, which is as effective against an individual as against a corporate defendant. This is not a case where there is no legally recognisable claim.

67.	Secondly, although her claim is denied, it appears to be conceded on behalf of the First and Second Defendants that, on the facts pleaded and the law relied upon as against those Defendants, the Claimant has a real prospect of success in her claim against them.  At paragraph 9 of his first witness statement Mr Billins states that,

“Clearly there is a basis in law for the Claimant to argue she should receive some remuneration for acting for the First and Second Defendants either as Chief Executive Officer of the First Defendants or as a director of both Defendants or as a consultant to both Defendants.  She was providing services to those companies in order to further their business.  Similarly one can see that the Claimant has a potential claim against the corporate Defendants in relation to expenses which she says she incurred on their behalf….”

68.	Further, in his second witness statement, he states at paragraph 5 that,

“….there is a basis in law for the Claimant to at least argue that she should receive some remuneration for acting for the corporate Defendants.” 
 
69.	The Claimant’s evidence, however, is that she was providing advisory and consultancy services to Mr Vintcent and Mr Worrall personally.  Before the Master those Defendants therefore had to show that the sustainable claim she is acknowledged to have against the corporate Defendants is unarguable as against them individually.  This is a heavy onus, which they were unable to discharge below.  The question is whether the Master erred in concluding as he did on the pleadings and evidence before him.
  
70.	In her Particulars of Claim the Claimant refers, at paragraphs 6-9, to Mr Vintcent and Mr Worrall having conceived an “idea”, for which they had no particular experience or track record in raising funds, and in respect of which in August 2006 they “requested her to advise as to the viability of their business plans…” At this point the First Defendant was not trading and the Second Defendant was not yet in existence.
  
71.	Thereafter, it is pleaded at paragraph 10 that the Claimant provided professional services to the individual Defendants, applying her expertise to their “idea” and advising them on the best approach to take to develop the concept.

72.	Mr Worrall’s email to the Claimant of 19 February 2007 does not seem to me to indicate, as alleged, only that the Claimant is a potential investor in the company or companies.  The references (i) to the value of the Claimant’s “experience in building businesses” as something they are “grateful to be able to draw upon”; and (ii) to crystallizing “how our relationship might develop as we go forward” appear, at this stage, to be equally consistent with the Claimant giving advice to both men in their personal capacity as individual entrepreneurs, in respect of how to take their idea forward and build their business.  Whilst, by this stage, the Second Defendant had been incorporated for about four weeks (since 17 January 2007), the company accounts in the bundle suggest that it was a dormant company.  Further, the Claimant did not become the CEO of the First Defendants until eight months later. 
  
73.	Shortly after this email, and at a time when she alleges that the corporate structure of this business was as yet undeveloped, the Claimant pleads, at paragraphs 11-13, that she advised on its development at a presentation on 7 March, which envisaged four distinct phases for the development of the “project”.  These are set out in detail and suggest substantial preparatory and advisory work by the Claimant.  The email from Mr Worrall of 9 March refers to their delight at the Claimant’s stated willingness to “make both a serious financial and hands on commitment to the Horseworld business going forward” and to their “reaching an agreement in the next few weeks.”

74.	Between March and October 2007 the Claimant pleads, at paragraph 13.2, that she was liasing with and advising both men “on a daily basis”. After her appointment as CEO of the First Defendant, she pleads at paragraphs 13.3 and onwards that she continued to provide her services until August 2008, when the relationship was terminated.  Having been taken to a number of the company documents in the bundle, it appears to be arguable that the First Defendant was a fledgling company, as the Claimant alleges, which had not at this stage traded or generated any revenue.  

75.	I accept that, in referring to the various emails and reports to the Board at meetings in 2006-2007, Mr Hill made a number of points which will merit consideration at trial.  The main problem for the individual Defendants, however, is that the extent to which, if at all, they have any personal liability to this Claimant will depend on the interpretation of all these documents and on the oral evidence of the parties.  Mr Hardwick pointed, by way of example, to what are apparently interchangeable references in the various reports, minutes and emails to one or other of the corporate Defendants on the one hand, but merely to the generic, “Horseworld” concept on the other.  

76.	This is not to suggest that Mr Hill’s points lack merit. Rather, it reflects the fact that it is not possible at this stage to conclude that only his interpretation of the documents can be correct.  Certainly, it cannot be said that all the evidence in this case points only one way, namely that the Claimant was at all times dealing with both men only as directors and shareholders of the company or companies.

77.	The oral evidence, in my view, discloses a fundamental dispute between the parties as to the nature of the services being provided by the Claimant, to whom they were provided and when, and upon what basis.  The Claimant’s evidence is clear and unambiguous.  She states at paragraph 23 of her witness statement that,

 “…I have no doubt that at this initial meeting in August 2006, Mr Vintcent and Mr Worrall asked me to advise them as individual entrepreneurs as to the viability of their business plan and their prospects of raising the required capital in their personal capacities as promoters of the Horseworld theme park concept – and not as directors of the fledgling Horseworld Ltd or the still non-existent Horseworld UK Limited.”

78.	Mr Billins is equally clear.  He states, at paragraph 10 of his first statement, that both men “were acting at all times as directors of the corporate Defendants and…this is not one of the occasions upon which directors can have personal liability for their actions and conduct of the business of a company.” The Claimant responds by referring to the embryonic nature of the business plans and to the fledgling corporate structure of the corporate Defendants.  
  
79.	In addition, in relation to the nature of the services performed, and the basis upon which they were provided, there is a fundamental dispute between the parties as to whether the Claimant was only ever acting as an investor and whether a legally binding agreement between the Claimant and the First Defendants was created, governing the basis of her involvement with Horseworld, as the Defendants plead.  Notwithstanding that pleaded averment at paragraphs 13-14 of the Defence, I note that Mr Billins refers at paragraph 6 of his witness statement to the Claimant’s oral agreement being with the Third and Fourth Defendants, acting at all times as directors of the first two Defendants.  

80.	All this, in my view, demonstrates a lack of clarity on the face of the documents, the extensive factual dispute between the parties, and the fact that the issues raised can be resolved only at a trial and upon hearing all the evidence.

81.	For all these reasons, I can identify no basis upon which it can be said that the Master erred in concluding as he did, or that he was wrong to dismiss the application to strike out the claim or for summary judgment.  It cannot be said either that the statement of claim discloses no reasonable grounds for bringing the claim, or that the claim has no real prospect of success.  Mr Vintcent’s appeal must therefore be dismissed.

82.	With regard to Mr Worrall’s renewed application for permission to appeal and for an extension of time, I have had regard to the written explanation he has provided to the court as to the delay and to those factors listed in CPR3.9.  Having regard to his explanation, I shall extend time and consider his renewed application on its merits.

83.	However, for the reasons given above, when considering Mr Vintcent’s appeal, I consider there to be no real prospect of success for Mr Worrall’s appeal, based as it is on exactly the same grounds as those advanced on behalf of Mr Vintcent.  In refusing permission on the papers, Slade J. stated that the Master rightly adjudged that there were relevant, disputed issues of fact which could not be resolved on the applications before him; that, even if acting as a director, Mr Worrall may have committed himself to personal liability to the Claimant; and that it was a question of fact as to whether he did so.  I entirely agree.  There is no real prospect of success for this appeal and permission to appeal is therefore refused.