Silvercloud Finance Solutions Ltd (t/a Broadscope Finance) v High Street Solicitors Ltd

In this case, the Claimant seeks to recover the sum of £100,000 plus interest said to be due to it pursuant to a written contract dated 13 July 2017 by which, in specified circumstances, the Defendant was liable to pay a fee for the introduction of a lender who offered a loan to the Defendant, alternatively a sum by way of quantum meruit for such services.

This is the second case to have been tried as part of the Capped Costs Pilot Scheme provided for by CPR PD 51W in the Manchester Civil Justice Centre, the first being Faiz v Burnley Borough Council [2020] EWHC 407 (Ch).

In all, five witnesses gave oral evidence (Mr Alan Woods and Mr Paul

Of Mr Goodman’s evidence, I ruled at the outset of the trial that his statement was inadmissible either as opinion evidence or as irrelevant, save for paragraphs 1 to 6, 13, 16 to 19, 21, 22, 25, 28, 33 to 35, 41, 42, 47 and 48. Numerically that is well less than half of the statement and even a lot of the material that was not excluded is simply by way of background. This is not the only witness statement parts of which offend against the principle set out at paragraph 39 of the judgment of the current Master of the Rolls, the then Chancellor, in J D Wetherspoon plc v Harris [2013] EWHC 10088 (Civ), though it is the most egregious.

The trial was comfortably accommodated within the two day period anticipated by the pilot. As in Faiz, the parties in this are to be commended for

The Claimant is a private limited company, which operates as a specialist financial brokerage, and an appointed representative of AFS Compliance Ltd. It is owned by Mr Alan Woods and is one of a number of companies that work under the umbrella of Synergy Commercial Finance Limited. Mr Paul Goodman is a Director of Synergy.

One of the lending platforms with which the Claimant worked was a peer to peer lender called ArchOver. As its COO, Mr Ian Anderson, explains at paragraph 5 and 6 of his witness statement, that company does not itself provide lending facilities but would rather vet enquiries for lending and, if they were accepted, post the investment opportunity to their platform, inviting lenders to invest. This mode of business is referred to in a contract between ArchOver and Synergy dated 3 November 2015.

The Defendant is limited company through which a solicitors’ practice trades. The solicitors are based in the Liverpool area and specialise in personal injury and similar areas of work. At the relevant time, though not currently, the managing director of the Defendant was Mr Sean Rogers. Mr John Coxhead is a director and shareholder of the Defendant.

Mr Woods and Mr Rogers had met through the former’s brother, James. They had become friends (or at least, in Mr Rogers’ words, “friends in a business context”) and had had previous professional dealings by which the Claimant had arranged funding facilities for the Defendant.

In 2017, the Defendant had lending facilities with NatWest secured by a first debenture, various unsecured lending, a facility with VFS Legal Funding and a facility with Novitas secured by a second debenture. In cross examination, Mr Rogers estimated the total lending to be about £2 million. He said that the company was keen to discharge the Novitas lending which was expensive but that a new lending facility would probably need to discharge the lending from NatWest as well so that an adequate debenture could be executed. Thus, the Defendant was looking in all for about £2 million.

In around March 2017, Mr Woods and Mr Rogers began to speak about the Claimant seeking to secure a new funding facility for the Defendant in line with the needs identified in the previous paragraph. Suggested lenders included ArchOver, Growth Street Exchange Limited or Thincats Group. The

As a result of this discussion, the Claimant was authorised to approach ArchOver to investigate possible funding options. The response from ArchOver to this enquiry was to seek further information about the

By mid July 2017, the Defendant was happy to authorise the Claimant to make a formal approach to ArchOver. The Defendant had, according to Mr Woods, received the “BQ” referred to an email of 12 July 2017, this being a detailed form required by ArchOver – Mr Woods said that he remembered seeing the form that was provided, but it was not available in the bundle, nor could he recall whether it had been completed.

There was some suggestion that the BQ referred to related to different lending that had nothing to do with the Defendant. Rather, there is mention in an email between Mr Woods and Mr Lucas timed at 15.43 on 13 July 2017 of beer supply, and the Defendant suggested that the “B” of “BQ” stood for beer.

This interest from the Defendant led to the Claimant submitting a contract

The CBIN provides in the relevant clauses as follows:

You are in agreement to pay the Appraisal Fee as stated in Section

The CBIN concludes with a declaration that the signatory agrees to the charges stipulated. It also contains a repeat of the declaration as to the

As to setting the appraisal fee at zero, Mr Woods statement indicates that he did not consider that an appraisal fee was appropriate because he “regarded and trusted [Mr Rogers] as a friend.”

In cross examination, Mr Rogers said of the agreement that he understood it to mean that, if Mr Woods raised funding of £2 million for the Defendant from ArchOver or another source, the Claimant would be entitled to £100,000.

On the same day, 13 July 2017, Mr Woods emailed Mr Lucas at ArchOver, attaching two documents which related to the Defendant’s funding application. The first is described in the email as being “a comprehensive business plan and summary of their activities,” the second as a WIP report. The email also contains further information that might assist in valuing the WIP, assessing the solvency of the Defendant and understanding its lending needs. This is the primary document relied on by the Claimant as “the lending proposal” for the purpose of the CBIN and its entitlement to payment. As Mr Woods put it in cross examination, “I am saying, here is the details of the firm, here is what they do, this is what they want to do, please give them finance. It is asking the lender to ask for finance for them… This is going to be a proposal.” Whilst Mr Woods acknowledged that the email said that the information was being provided “to gauge interest,” he intended to mean that he wanted to see if they would lend the money; he acknowledged that it was likely that further information would need to be provided. Following this email, Mr Woods’ evidence was that he understood ArchOver to have had no reservations about the operation or the finances of the Defendant. They simply needed to do “due diligence” on whether they would commit to the lending.

Thereafter, there was a series of efforts by the Claimant and the Defendant to provide further information to ArchOver:

Mr Woods was asked in cross examination about the reference to “numerous” phone discussions between him and Mr Lucas at paragraph 25 of his witness statement. He thought there were perhaps five or six such calls up to the end of October 2017.

Towards the end of 2017, it is apparent that Mr Woods was exploring other potential lending opportunities for the Defendant. There was some evidence addressed to the issue as to how urgent the funding requirement was. Certainly Mr Woods referred to the cost of the Novitas funding to the Defendant and Mr Coxhead referred to there being financial difficulties in November 2017, albeit that his concern was to raise finance for expansion, not for day to day cashflow issues.

In any event, on 17 November 2017, Mr Woods emailed Growth Street, to explore possible lending on behalf of the Defendant. He also appears to have raised a similar query of a lender called D & D Leasing on 23 November 2017 and to have pursued an enquiry with a lender called RateSetter which was declined, this being evidenced by an email from Mr Woods to Mr Rogers on 24 November 2017. In cross examination, he said that such enquiries were being made because the Defendant was in “desperation” to sort out its lending facilities. He agreed that the enquiry to GrowthStreet was comparable to that being pursued with ArchOver.

Mr Rogers gave evidence that, around the end of November 2017, he and Mr Woods had a conversation in which the latter had said that the anticipated deal with ArchOver was “dead.” Mr Woods denied any such conversation saying

Meanwhile, Mr Coxhead, as a director of the Defendant, approached a broker called Norman Kenvyn at VFS Legal Limited to investigate funding arrangements. He proposed an approach to ArchOver. The circumstances of this contact and the implications of the previous dealing by the Defendant via the Claimant with ArchOver were explored in cross examination of Mr Coxhead. He denied that the contact was merely an attempt to get the previous negotiations with ArchOver “over the line.” Mr Coxhead said that it happened to be the case that Mr Kenvyn had himself obtained funding through ArchOver and that they were therefore his obvious first point of contact. Mr Coxhead accepted that there were no internal documents within the disclosure that showed the circumstances in which Mr Kenvyn was approached but denied that this was the result of a deliberate attempt to suppress relevant documentation which would prove embarrassing to the Defendant in that it would show that the decision to approach Mr Kenvyn and, through him, ArchOver was made in the full knowledge of the previous efforts made by the Claimant to secure funding from ArchOver and in the belief that a deal to get the funding proposal on their platform was nearly secure.

Mr Rogers said in cross examination that he had told his fellow executive directors, Mike Wilson and Tom Hardwick, about the approach to ArchOver, including the discussion with Andrew Baker, though he could not say whether they would have known of Mr Woods’ (and therefore the Claimant’s) involvement in the approach.

Mr Coxhead’s evidence, both in his witness statement and in cross examination, was that he did not know of the previous contact with ArchOver when he approached Mr Kenvyn. Mr Kenvyn’s statement was to the like effect that he had not known of the previous contact between the Defendant and ArchOver through the Claimant.

On 25 January 2018, Mr Kenvyn emailed Mr Angus Dent at ArchOver, stating that “a long standing and reliable client” (meaning the Defendant) wished to

Mr Dent replied in an email of 25 January 2018, the material parts of which are:

“Alex has had an initial look at the numbers and from a security perspective it looks as though we could fund. However, we’re a bit concerned about the turnover, currently less than last year and massively below budget. This may be reflected in the WIP, professional office pressure of billing prior to the year end doesn’t help when trying to make a loan. Doesn’t mean we can’t do it, just makes it harder. …

Novitas have the first charge and at end Dec had advanced £933k, the first raise would need to be £1m, minimum, to take them out and take the first charge. Thereafter its NatWest and then half a dozen or so other lenders (the loan stacking needs to be addressed and will give Charlotte/credit committee the hebeegeebees). Feels to me like a series of loans over the platform in say an eight week period (quicker if we can) to replace all of the borrowing and thereafter provide some additional working capital. As you’ll gather not an instant fix and a situation we’ve dealt with successfully before.”

Thereafter there were a series of communications between the Defendant and ArchOver providing material that had been requested:

In March 2018, a Project Funding Request was finalised for uploading to ArchOver’s platform. Shortly after this, on 29 March 2018, a facility agreement was entered into between the Defendant and unidentified lenders through the ArchOver platform. The facility agreement is signed by ArchOver Limited which is described both as “representative” and “security trustee” and is said to represent each lender. This is one of a series of five such agreements, each containing a maximum drawdown amount of £400,000, such that the total facility was £2,000,000. The Directors of the Defendant were required to invest 10% of each tranche through the ArchOver platform. The terms of the lending are set out at paragraph 26 of Mr Anderson’s statement.

Mr Anderson was unable to say in cross examination whether the information that the Defendant had provided to ArchOver via Mr Kenvyn’s lead was materially different to that provided via Mr Woods. However he maintained (as stated in paragraph 21 of his statement) that there was a change in

During the period that the contact between the Defendant and ArchOver via Mr Dent was taking place, Mr Woods maintained that he had continued to have contact with Mr Lucas. In particular:

In cross examination, Mr Woods accepted that these conversations were not mentioned in the Particulars of Claim. He said that this was a consequence of how his solicitor had chosen to prepare the document rather than an indication that his account had been inconsistent.

Mr Woods also gave evidence of a discussion that he had had with Mr Rogers over a meal in Chester on 9 April 2018, Mr Lucas mentioned that the

In cross examination, Mr Rogers said that he recalled having a meal with Mr Woods in Chester. He maintained that he had not said that the Claimant would be paid in any event and had not asked Mr Woods to take a back seat – as he put it, “there was no back seat to be taken.”

In an email dated 2 July 2018, Mr Anderson stated two matters of potential significance on behalf of ArchOver:

The Claimant contends that it contracted as principal; that it prepared a lending proposal and presented it to ArchOver; that ArchOver was a lender or

In closing submissions, the Defendant identified the issues in the case as follows:

It is common ground that this correctly identifies the issue that arise. I shall therefore analyse the case based on this, beginning though with an analysis of the reliability of the witnesses from whom I received evidence, in so far as that is relevant to resolving the issues before the court.

Evidence

The Claimant contends that Mr Woods was a reliable witness upon whose evidence the court can place reliance. In contrast:

Claimant was agent not principal

The Claimant contends that, on the face of the contract, it is clearly contracting as principal. Nothing about the wording of the contract indicates otherwise.

Whilst the Claimant acknowledges that Section 1 of the Financial Services and Markets Act 2000, relied on by the Defendant in support of its submissions referred to below, creates an additional liability in the manner of principal and agent, it does not create a relationship of principal and agent for the purpose of the law generally. In this regard reference is made to paragraphs 61 and 62 of the judgment of Ouseley J in R (ex p TenetConnect Services Ltd) v Financial Ombudsman [2018] EWHC 459, citing Judge Waksman QC as he then was in Ovcharneko v Investuk Ltd [2017] EWHC 2114.

Claimant has no right to fee under the contract

The Claimant’s case is that its conduct fulfilled all the conditions for payment under the contact, namely that a “finance offer” was made by “a Lender” and the broker had “presented” to that lender the “lending proposal.”

First, its work in preparing the email of 13 July 2017 and in subsequently sending information as required by ArchOver clearly amounted to making a

“lending proposal.” It provided detailed material in support of borrowing. What more could be required to meet the definition?

Second, whilst not accepting that it has to prove that the finance offer was made as a response to such lending proposal, the Claimant contends that it is clear that in reality the finance offer was a consequence of the contact that the Claimant had with ArchOver. In my judgment, this issue is indistinguishable from the third issue identified by the Defendant, that of “effective cause” and for reasons apparent from my conclusions on this issue, it is better considered under that heading.

Third, whilst not a lender itself, ArchOver was the agent for other lenders.

Fourth, whilst the actual facility differed in some details from the terms being proposed on behalf of the Defendant, there is no requirement that the finance offer be in the same terms as the lending proposal and in any event, the terms were sufficiently similar to meet any realistic need for the terms of the offer to match those of the proposal.

As to the Defendant’s fifth point about the timing of the finance offer, the Claimant rejects the suggestion that there is any restriction in the contract on the time within which the lending offer needs to be made.

Claimant was not the effective cause of the lending

The Claimant’s starting position is that it is not necessary for it to show that its actions were the effective cause of the transaction. It accepts the principle set out at Article 57 of Bowstead & Reynolds on Agency (21^st edition) that, “Subject to any special terms or other indications in the contract of agency, where the remuneration of an agent is a commission on a transaction to be brought about, he is not entitled to such commission unless his services were the effective cause of the transaction being brought about.” However on the facts of this case, the Claimant contends that the wording of the contract excludes the requirement of “effective cause”:

The Claimant draws my attention to the judgment of the Court of Appeal in Nahum v Royal Holloway and Bedford New College [1999] EMLR 252, especially pages 259 to 261 of the judgment of Waller LJ (with whom the remainder of the court agreed) where he drew the distinction between those cases involving consideration of which of two agents who were both involved in seeking to ensure the execution of the same transaction was entitled to commission (in which cases the court required the agent to show that they were the effective cause of the transaction) and those where the event entitling the agent to commissions was the introduction of a party who in fact entered into a transaction (where it was not incumbent on the agent to bring about the ultimate execution of the transaction, since control of contractual negotiations did not lie in the agent’s hands).

The Claimant draws attention to the fact that the principle in Article 57 comes about as a result of implying a term into the contract. The court should be cautious about implying a term to give business efficacy to an agreement, following the judgment of the Supreme Court in Marks & Spencer plc v BNP Paribas [2015] UKSC 72. The high hurdle set by that case is not met where, as here, parties have agreed terms that are inconsistent with a requirement that the acts of the Claimant be the effective cause of the transaction.

In the alternative, the Claimant contends that its actions plainly were the effective cause of the finance offer.

Unjust enrichment

The Claimant’s pleaded case for an award pursuant to the doctrine of unjust enrichment is effectively on the basis of a quantum meruit for the services that it provided. This was not pursued either in the Claimant’s skeleton argument nor in closing submissions. For the sake of completeness I deal with the issue below.

The evidence

The Defendant’s starting point is to contend that the evidence of Mr Woods is obviously unreliable. In several respects his oral evidence was said to be at odds with his written evidence or at least to include detail that was not present in the written evidence of his statements of case. Further, the account of emails in his oral evidence suggested that there had not been full disclosure and/or that he had failed to take care in preparing his account of them in his written statement.

In so far as Mr Woods referred to conversations at paragraphs 37 and 38 of his witness statement in early 2018, these are not mentioned in either the Particulars of Claim or the Reply, and are, the Defendant contends, a clear attempt to rebut the inference from the chronology that once Mr Kenvyn became involved, the proposal led quickly to a completed deal. Mr Woods’ explanation that they were not mentioned because this was how his solicitor had chosen to draft documents was a convenient excuse that he resorted to on other occasions when he had difficulty with dealing with inconsistencies. I should reject as unreliable Mr Woods’ evidence of these conversations and, perhaps more significantly, his denial of a conversation with Mr Rogers in late

2017 during which he is said to have described the deal with ArchOver as

“dead” and his account of the meal with Mr Rogers in Chester in April 2018 when he claims he was told to take a back seat but that the Claimant would be paid in any event.

The Defendant urges me to place greater weight on the written documents than on the oral evidence. That demonstrates, they suggest, that there was no great interest or excitement about the proposed lending from ArchOver. Indeed, Mr Woods himself showed no great urgency in progressing matters in late 2017 and had to be chased by Mr Rogers. This is indicative of the fact that the lack of a firm agreement by then coupled with ArchOver’s procrastination was indicative of the fact that the proposed deal was not likely to progress. This would be consistent with Mr Rogers’ account of a conversation when Mr Woods had described the deal as “dead” and the approach to Growth Street and other lenders, to seek out an alternative route to achieve the lending.

In so far as the Claimant seeks to place reliance on the lack of documentary evidence (or at least of disclosed documents) of the circumstances of Mr

Claimant was agent not principal

The Defendant contends that a party who contracts as agent cannot bring a claim as principal – it would have no standing to bring the claim. This is consistent with Article 97 of Bowstead and Reynolds on Agency (21^st edition) where, it is stated:

“In the absence of other indications, when an agent makes a contract, purporting to act solely on behalf of a disclosed principal, whether identified or unidentified, he is not liable to the third party on it. Nor can he sue the third party on it.”

If one looks at the contract, one sees that it refers to “the firm” acting as credit broker. The only definition of “the firm” arises by implication from the concluding words of the contract, where AFS Compliance Limited’s firm number is given. Thus, “the firm” is a reference to that company.

Further, the Claimant is described as an “appointed representative” of AFS

Section 39(3) provides:

“The principal of an appointed representative is responsible, to the same extent as if he had expressly permitted it, for anything done or omitted by the representative in carrying on the business for which he has accepted responsibility.”

The Defendant draws from this that the relationship of and AFS Compliance Ltd and the Claimant is clearly one of principal and agent and, construed objectively, the Claimant has contracted as agent and therefore does not have standing to sue. The court is bound to give effect to that (see Sports Mantra India Private Limited v Force India [2019] EWHC 2514 (Civ)).

Claimant has no right to fee under the contract

The Defendant contends that, however one looks at the obligations under the contract, the Claimant does not show that it is entitled to payment. In particular:

The Defendant agrees with the Claimant’s description of the contract as unhappy. In so far as there is ambiguity, this should lead to any doubt as to the meaning being resolved against the person proposing the document and the meaning on which it seeks to rely to its benefit, in this case the Claimant (see Chitty on Contracts, paragraph 13-05 and Nobahar-Cookson v Hut Group Ltd [2016] EWCA Civ 128 though note in each the doubt expressed about overreliance on the rule, in particular in the context of commercial contracts).

First, the Defendant contends that the document relied on by the Claimant, the email of 13 July 2017, intended, in Mr Woods words, to do no more than

“gauge interest” in the lending opportunity, ahead of a detailed questionnaire being prepared. Thus, it was not a lending proposal in any meaningful sense of the phrase.

Second, the finance offer made was in response to Mr Kenvyn’s introduction, not that of the Claimant.

Third, ArchOver is a peer to peer lending platform rather than a lender and so any offer made was not a finance offer. It did not negotiate individual offers of finance on behalf of the lenders and was not itself a lender and cannot be said to have made a finance offer.

Fourth, the lending offer that was made was not what the Claimant had canvassed in its email of 13 July 2017. Whereas Mr Woods was advancing a proposal for a single loan with no investment from the Defendant’s directors, in fact what was achieved via Mr Kenvyn’s introduction was a series of five loans of £400,000 each with investment from the Defendant’s directors equivalent to 10% of the lending.

Fifth, for the CBIN to make commercial sense, there must be a time limit within which any finance offer must be made. Since clause 2.2.2.4 allows for a full refund of the arrangement fee if a finance offer has not completed within six months, it follows that the there is no entitlement to the arrangement fee if the finance offer is not made within 6 months of the lending proposal. The time scale here exceeds six months and hence the fee is not payable.

Claimant was not effective cause of lending

The Defendant’s starting point is the principle set out at Article 57 of Bowstead & Reynolds on Agency (21^st edition): “Subject to any special terms or other indications in the contract of agency, where the remuneration of an agent is a commission on a transaction to be brought about, he is not entitled to such commission unless his services were the effective cause of the transaction being brought about.” This principle can be drawn from cases

The Defendant contends that it is clear that Claimant’s actions were not the effective cause of the finance offer made through ArchOver for the following reasons:

The Defendant invites me to reject Mr Woods’ evidence of contact with Mr Lucas in early 2018 as being a recent invention intended to bolster the case that, as far as Mr Lucas was concerned, a deal was still on the cards then.

Unjust enrichment

The Defendant denied that the Claimant was entitled to any sum for unjust enrichment. The only basis for it to be rewarded was under the contractual terms.

The evidence

There are four significant issues of primary fact in this case, all relevant to whether the Claimant was the effective cause of the finance offer being made:

There might be suggested to be a fifth relevant issue, namely whether Mr

The first and fourth of these issues involve a direct conflict of evidence between that of Mr Woods and that of Mr Rogers. The second and third involve a consideration of the inherent plausibility of the evidence of Mr Coxhead and Mr Kenvyn in the light of other circumstances (including the alleged failings in disclosure).

In assessing the evidence in this case, I am conscious that one of the consequences of the time limits contained in the Capped Costs Pilot is that there is less opportunity to explore the reliability of witnesses than might otherwise be the case. That said, where there are factual disputes the court has to make findings of which evidence is to be preferred and, where appropriate should not shy away from making findings that people have been dishonest with the court.

I also bear in mind on the disclosure issue that the costs limits within the pilot mean that disclosure may have taken place on a more limited basis than might otherwise be the case; equally a party dissatisfied with the other’s disclosure may be more hesitant to make an application to provide specific disclosure.

During the course of their oral evidence, none of the witnesses struck me as being obviously untruthful, notwithstanding that counsel for both parties conducted forceful, if necessarily brief, cross examination. I was particularly struck that Mr Rogers gave evidence in a straightforward fashion and I found no reason on the face of that evidence to disbelieve what he had to say.

The one witness whose reliability (though not necessarily honesty) I had concern about was Mr Woods. As the Defendant pointed out, on several occasions Mr Woods had to deal with questions about apparent inconsistencies between what was said in his statement and what was said elsewhere. His response was to attribute any inconsistency to the manner in which his solicitor had drafted documents. However, this fails to have regard to the fact that the Claimant acknowledged that he had read or approved the various documents (the Particulars of Claim, the Reply and his witness statement.)

I have weighed these assessments of Mr Woods and Mr Rogers in the balance when considering the important factual questions identified above. I have also had regard to what seem to me the inherent probabilities in the light of other material available to the court.

Claimant was agent not principal

In my judgment, the Claimant is correct to contend that it contracted as principal not agent:

Claimant has no right to fee under the contract

In considering the Defendant’s five arguments as to why the Claimant is not entitled to payment under the contract, I bear in mind that the burden lies on the Claimant to prove that it has met the conditions of payment.

As to the first argument, that what the Claimant presented to the Defendant was not a lending proposal, it is clear that the court is not assisted by the lack of proper definition within the contract of what amounts to a lending proposal.

It is clear that the definition of the term “lending proposal” might give rise to a difficult task of construction of this contract. But given my finding on the issue of effective cause below, it is sufficient to conclude that “lending proposal” means an approach to a lender (either directly or via an agent) for the loan of money. Any narrower construction of the phrase is unnecessary because the need for the proposal to be the effective cause of the lending adequately filters lending proposals that might otherwise be excluded by the further definition.

The second, fourth and fifth of the Defendant’s arguments under this head are equally resolved by similar reasoning. The express terms of the contract do not require the finance offer either to be made as a result of the lending proposal, the offer to be in the same terms as the lending proposal or the offer to be

The third point, that ArchOver is not a lender and therefore, whatever the true nature of its response to the Claimant, this cannot be said to be “a finance offer made by a Lender to whom the Broker presented the Lending Proposal”, is not resolved by the issue about effective cause. The Claimant cannot evade the need to show that there was such an offer made by a lender to whom such a proposal was made.

In order to make out its case that a “finance offer” was made, the Claimant relies on the sample facility agreement dated 29 March 2018. That is signed on behalf of each (anonymous) lender by ArchOver. It argues that each such agreement when proposed to the Defendant amounted to a “finance offer.”

It is true that the lending proposal in the form of the original email of 13 July 2017 or that email together with the additional information provided by the

It follows in my judgment that, so long as the Claimant was the effective cause of the lending, it will show that it meets the contractual conditions for payment

Claimant was not effective cause of lending

In considering whether the Claimant’ actions were the effective cause of the lending, I deal first of all with the legal context. I am satisfied that it is necessary to give business efficacy to this agreement that it be implied in the agreement that the Claimant was only entitled to payment if it was the effective cause of the finance offer being made. I say so for the following reasons:

For these reasons, I am satisfied that the Claimant cannot recover without proving that it was the effective cause of the lending.

I turn then to the factual issues identified above.

As to whether Mr Woods told Mr Rogers that the deal with ArchOver was “dead” in late 2017, I bear in mind my concern over Mr Woods’ reliability referred to above. I also look at the context and the other material before the court. After an initial flurry of activity when Mr Woods first approached ArchOver, the picture is of considerably less activity in later 2017. Mr Woods provided information, particularly when prompted by Mr Rogers. But the picture given by the various meetings and communications is not of a deal that is on the brink of happening. To the contrary, the very limited communication from Mr Lucas gives the impression that these negotiations had stalled. The reference to his not being able to look into matters until 2018 does not give the impression that a deal was nearly at fruition, but rather that he was playing for time.

I am not persuaded that Mr Rogers’ behaviour was inconsistent with being told that the deal was dead. Again there are contrary indications, in particular in the approaches made to other lenders toward the end of 2017.

Taking these factors together, I conclude that it is more likely than not that Mr Rogers’ account of being told that the deal was dead was probably correct. I do not consider that I should necessarily draw the inference from this that Mr

On the second issue of whether Mr Coxhead caused or allowed Mr Kenvyn to approach ArchOver knowing of the previous communications with them via the Claimant, it is necessary to weigh in the balance the evidence of Mr Coxhead and Mr Kenvyn that this was not so with a failure of the Defendant to give disclosure of documents that would support this conclusion. I accept that it may well be the case that there were no documents detailing the basis for the decision that Mr Coxhead approach Mr Kenvyn. In a small firm, a relatively informal approach such as this might well go undocumented. In those circumstances, I see nothing to cause me to disbelieve the evidence of Mr Coxhead and Mr Kenvyn that neither knew of the previous approaches. I am not dissuaded from this conclusion by the mistaken assertions by Mr Anderson in his email of 13 July 2018. Those comments may have been made simply as a result of a misunderstanding, due to information communicated by Mr Lucas or because Mr Anderson deliberately misstated the position so as to cover up the close connection in time between the involvement of the Claimant and the offer made through ArchOver. However even if I made a finding that Mr Lucas and/or Mr Anderson had deliberately misstated the position in order to discourage the Claimant or Synergy from seeking payment from the Defendant, this would not lead me to the conclusion that I should reject the clear evidence of Mr Coxhead and Mr Kenvyn, since such conduct would be consistent with an attempt to bolster a true case that the Defendant had no such liability.

In considering whether the involvement of Mr Coxhead and, through him, Mr Kenvyn provided significant additional input to the decision by ArchOver to support the Defendant’s request for facilities, I have had regard to the fact that there is no absolutely clear and compelling evidence before the court of what it was that caused ArchOver to agree to promote the funding opportunity in 2018 when it had not agreed to do so in 2017. It would appear probable that there was a change of policy over WIP funding in 2018, but the positive response to Mr Kenvyn’s enquiry suggests that he had a better relationship with Mr Dent than Mr Woods had with Mr Lucas.

It is not possible to discern why this was so. It may well have been that Mr Dent trusted Mr Kenvyn and that he had a greater degree of influence over

Nevertheless, it follows that I am satisfied that the involvement of Mr Coxhead and Mr Kenvyn did bring additional input into the lending decision of ArchOver.

Finally, I consider whether, in the conversation over a meal in Chester, Mr Rogers said that Mr Woods should take a back seat over further dealings with ArchOver but would be paid in any event. On this issue, unlike the first of the factual issues, it is necessary to consider whether Mr Woods had constructed an account of a conversation in his mind which had not taken place, rather than forgotten one that did take place. Whilst it is possible to reconstruct events wrongly without meaning to tell lies, this is perhaps improbable and therefore I must bear in mind the inherent implausibility that a witness would lie in giving evidence. Further, Mr Woods’ account of the conversation was given in a straight-forward fashion without any apparent embellishment.

On the other hand, my findings about the first factual issue coupled with my doubts about Mr Woods’ reliability lead me to the conclusion that it is more likely than not that his account of such a conversation was incorrect. It is unnecessary for me to make a finding as to whether it is more likely that he was mistaken or that he was telling lies.

It is for the Claimant to prove that its lending proposal was the effective cause of the borrowing. In my judgment, given these findings of fact and the inherent plausibility of the situation, the Claimant fails to discharge the burden for the following reasons:

Given my finding on the issue of “effective cause”, the Claimant cannot succeed in a claim for unjust enrichment. The parties contracted on the basis that the Claimant was entitled to a relatively generous sum but only in circumstances in which it brought about the desired outcome. If it did not cause the outcome, there is nothing remotely unjust about it not being compensated for its services. Accordingly this claim cannot succeed.

For these reasons, the claim must fail.

The parties have lodged a draft order. In accordance with paragraph 3.10 of PD 51W they have anticipated the summary assessment of costs by filing relevant documents. Unfortunately there has been insufficient time for the court to deal with the summary assessment before handing down this judgment, so that will be dealt with on paper as soon as practicable.