Bruce MacInnes v Hans Thomas Gross (First Defendant)
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Coulson |
| Judgment Date | 27 January 2017 |
| Neutral Citation | [2017] EWHC 46 (QB) |
| Docket Number | Case No: HQ14X05015 |
| Court | Queen's Bench Division |
| Date | 27 January 2017 |
[2017] EWHC 46 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Rolls Building,
Fetter Lane, London, EC4A 1NL
The Hon Mr Justice Coulson
Case No: HQ14X05015
Gavin Mansfield QC (instructed by Pitmans) for the Claimant
Tom Weisselberg QC (instructed by DWF LLP) for the First Defendant
Hearing dates: 5, 6, 7, 8, 9 and 13 December 2016
Judgment Approved
INTRODUCTION
In these proceedings, the claimant seeks €13.5 million pursuant to an oral contract said to have been made over dinner in a Mayfair restaurant on 23 March 201The claimant's case is that it was agreed that he would personally provide services to the first defendant and/or the second defendant company with a view to maximising the defendants' return on the sale of the business (to which I shall refer generically as "RunningBall"), and would receive in exchange remuneration calculated by reference to a formula which gave him 15% of the difference between the 'strike' (or target) price of RunningBall and the actual sale price. For a variety of reasons, the first defendant denies that there was any binding contract between himself and the claimant, either in the terms alleged or in any terms.
In the alternative, the claimant has a quantum meruit claim. This claim also seeks to recover the €13.5 million figure, on the basis that, even if there was no contract, he had an entitlement to a quantum meruit, and that the best evidence of the market value of his services was the €13.5 million calculated by reference to the formula that was allegedly agreed on 23 March 2011. The first defendant denies that there is any sustainable basis against him for a quantum meruit, either for the €13.5 million or at all.
In the written openings, as confirmed on the first day of the trial, it was apparent that there was an issue between the parties as to whether or not the claimant had an alternative quantum meruit claim, for some lesser sum, calculated in a different way. As more fully set out in Section 7.4 below, I ruled on the first day of the trial that there was no pleaded claim for a quantum meruit in any lesser sum, and no admissible or useful evidence to support a proper calculation of any claim other than the €13.5 million. Accordingly, whether by accident or design, the claimant's case was pleaded and presented as an "all-or-nothing" claim for €13.5 million, with no possibility of a halfway house.
These proceedings were commenced and continued against both the first and the second defendants. The latter is the company which held the first defendant's shares (amounting to 95% of the total shares) in the RunningBall companies. I am told that the claim against the second defendant was compromised on a 'drop hands' basis in the summer of 2016. I explain the potential importance of the second defendant in Section 3 below, and one of the effects of this compromise in Sections 5 and 7 below.
This Judgment is set out as follows. In Section 2, because it was a matter stressed by leading counsel on both sides, I deal with wider issues of credibility. In Section 3 I set out the factual background. In Section 4 I summarise the law relating to contract formation and, thereafter, in Section 5, I deal with the central issue as to whether or not a binding contract was made at the dinner on 23 March 2011. At Section 6, I deal with the legal principles relating to a claim for a quantum meruit and then, in Section 7, analyse whether, on the facts of this case, the claimant is entitled to a quantum meruit.
CREDIBILITY
In the written and oral closing submissions, each party subjected the other to a sustained personal attack. It was suggested, at different times and in different ways, that both the claimant and the first defendant were lying, in order to improve their positions in the case and to minimise the evidence that was unhelpful to them. Various examples of these alleged untruths were cited by both leading counsel.
For my part, having seen both men subjected to rigorous (but entirely proper) cross-examination, I am unable to find that either the claimant or the first defendant was deliberately lying to the court. As set out in greater detail in Sections 3 and 5 below, there are some issues on which I make findings of fact in favour of the claimant, and other issues where I make findings of fact in favour of the first defendant. Overall, I consider that both men strived to tell the truth. In some instances, their recollections were faulty, and neither man was assisted by the absence of anything other than a handful of truly relevant contemporaneous documents.
The furthest that I would be prepared to go, by way of negative comment on the claimant and on the first defendant, is this. I consider that, over time, the claimant has persuaded himself more and more of the rightness of his case and, in part because of his knowledge of the documents, he was sometimes prone to give answers that appeared to be designed to retro-fit those documents. He was also obliged to rely on various conversations to which he had not previously drawn attention, in order to fill some of the potentially significant gaps in his case. Such a tendency is not uncommon in a case of this kind, where documentary evidence is thin and the stakes are high, but it meant that the claimant's answers were not always reliable.
As for the first defendant, I find that, throughout, he believed (whether rightly or wrongly) that he had no binding contract with the claimant. In consequence, as time went on, he considered that he was in the dominant position which led him, on occasion, to minimise the nature and extent of the claimant's role in an unattractive way. This again meant that his answers were not always reliable.
Accordingly, I am unable to deal with this case on the basis that either the claimant or the first defendant was lying, and that the case can be resolved accordingly. It is, as is often the way in commercial disputes of this kind, much more nuanced than that. Putting the point another way, the credibility of the two main protagonists does not provide the answer to this case.
Finally, on the question of credibility, I should refer to the evidence of Mr Marty, the man who owned the remaining 5% of the shares in RunningBall. In my view, Mr Marty was a clear and careful witness. I accept his evidence without reservation. On two important matters, namely the extent of the claimant's early knowledge of the RunningBall structure and ownership, and what the first defendant was telling others within RunningBall about the nature of any possible arrangement with the claimant, he gave clear evidence, which I accept, and which was of assistance to the first defendant. That is explained in greater detail in Sections 3 and 5 below.
THE FACTUAL BACKGROUND
Individuals and the Relevant Companies
The claimant is an experienced investment banker. At the time of the dinner on 23 March 2011, and until the end of July of that year, he was an employee of Investec, an investment bank. On the face of it, therefore, all his dealings during this period were as an employee of Investec. For a brief period, between August 2011 and early 2012, he was Chairman of the Board of two of the RunningBall companies, as more fully set out below. There was no documentation of any kind to indicate that he ever had a formal role with the second defendant.
The first defendant is an Austrian national and the principal figure behind the RunningBall group of companies. His shares in the group were owned by the second defendant, which was previously called HTG Ventures. It owned 95% of the shares in RunningBall Holding AG ("RBHAG"), the principal RunningBall holding company. The other 5% of the shares in RBHAG were owned by a company controlled by Daniel Marty, who also gave evidence at the trial.
RBHAG then owned a number of subsidiary companies including RunningBall AG ("RBAG"), the principal operating company. As noted above, between August 2011 and early 2012, the claimant was Chairman of both RBHAG and RBAG.
2008
The claimant and the first defendant first met in 2008. The evidence was that the first defendant had minority shareholders that he wished to buy out and he was looking to raise finances to purchase their interests. On 4 November 2008, the claimant emailed the first defendant to say he was looking forward to taking the project forward "to see what kind of financing we can provide in-house at Investec in the first instance".
There was a dispute over whether the first defendant suggested to the claimant that he might personally buy shares in RunningBall. However, as with many of the disputes in the case, the difference was only one of emphasis because, although the claimant said that the first defendant did not to go that far, he accepted that the first defendant did suggest to him that "there might be an opportunity" for investment. It therefore seems clear that the first defendant did have in mind, at this early stage, some form of personal investment on the part of the claimant. However, that did not happen, and, for various reasons, Investec did not provide a loan. The two men had no further contact after January 2009.
The Build-Up To The Dinner On 23 March 2011
Two years later, on 28 January 2011, the claimant contacted the first defendant again saying that he "had been hearing great things about RunningBall on the grapevine. It would be great to catch up." The first defendant replied on 1 February 2011 in which, amongst other things, he said:
"There is strong interest in my company from some big players in the market but we have reached valuations which now leaves me little options for alternatives and...
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