Parker Lloyd Capital Ltd v Edwardian Group Ltd

Introduction

One day in late 2012 three men met in the bar of the May Fair Hotel in Stratton Street in the West End of London. Two of them, Rajnikant Hansraj Mehta and Pravin Mokar Shah, were, inter alia, consultants to and agents of the Claimant company. The third, Jasminder Singh OBE, was the chairman and chief executive officer of the Defendant company, whose subsidiaries own various hotels, including the May Fair Hotel itself.

The Claimant says that the words spoken by those three men over coffee on that day constituted a contract between the Claimant and the Defendant with the following terms:

“a.

That the Claimant would seek to find and introduce to the Defendant a funder able and willing to provide long-term finance in the sum of approximately £250 million, or such other sum as was required, for the purpose of refinancing hotels within the Edwardian Group.

b.

That upon the drawdown of funds by or upon a facility being made available to the Defendant or a company within the Edwardian Group as a result of an introduction by the Claimant a success fee equivalent to 1% of the funds advanced or made available, would be immediately due and payable to the Claimant.”

The Claimant did not put this alleged agreement in writing. However, it says that the same three men met again in the same bar on 2 April and 2 May 2013 and on each occasion confirmed the existence of this contract.

The Claimant found and introduced to the Defendant a funder, namely Metropolitan Life Insurance Company (“MetLife”), represented by Laxfield Capital Limited (“Laxfield”). In December 2013 MetLife provided a £200million facility to the Defendant, which formed part of a larger refinancing of the Defendant’s debt. Consequently, the Claimant alleges that a fee of £2million (i.e. 1% of £200million) is due to it from the Defendant.

The Defendant denies that any such contract was made. It is not disputed that the three men had authority to make a contract binding on the parties. It is simply denied that they did so.

The Defendant also pleaded an alternative case that, even if there was such a contract, no fee was due because: (a) the Claimant did not introduce MetLife to the Defendant; (b) the facility was not made available “as a result of” any such introduction; and/or (c) the Claimant was not the effective cause of the facility being made available. However, by the end of the trial that alternative case was no longer pursued.

It is appropriate to say a little about the parties and their previous dealings.

The Claimant is one of a number of companies which operate under the Parker Lloyd name and which are referred to as the Parker Lloyd Group, although they are not in common ownership. According to Mr Mehta, about 20 people work for the Parker Lloyd Group. The Claimant’s turnover in the years to 31 March 2012 and 2013 was £106,036 and £258,191 respectively. Its profit for those years was £8,388 and £13,227 respectively. Those figures indicate that, as Mr Mehta accepted, the alleged contract was a highly significant contract for the Claimant.

The Claimant’s business is to assist its clients to find sources of financing. The Claimant is usually remunerated by way of a success fee, payable when the facility in question is sanctioned or drawn down. A fee of 1% of the amount advanced is not unusual for companies who do such business. The Claimant’s contracts with its clients are sometimes made in writing, and sometimes orally. Mr Mehta said that 80-90% of the Parker Lloyd Group’s contracts were oral. Mr Loftus and Mr Rahul Mehta also put the figure at 90%. I do not accept these percentages, but I accept that companies in the Parker Lloyd Group did enter into oral contracts.

It is relevant to note that at least one other company in the Parker Lloyd Group was also involved in the hotel finance business. A company called Parker Lloyd Limited was engaged in February 2011 in connection with the re-financing of the Grosvenor House Hotel, in return for a success fee of 1% of the funding arranged.

The Defendant is the parent company of the Edwardian group of companies. The Edwardian Group owned and operated 12 hotels in England and was about to start building a thirteenth, in Leicester Square, on a site acquired in early 2012. The Defendant’s accounts for 2015 show assets of £898million and revenue of £177million.

In 2012, the Edwardian Group had the benefit of a syndicated loan facility (“the 2004 Facility”), with an associated interest rate swap. The lenders were RBS, Nationwide, HSBC, Deutsche Hypo and Allied Irish Banks. The term was 15 years from 2004. Mr Singh was interested in further borrowing for two reasons: to finance the development of the Leicester Square project; and to assist with succession planning by putting long term finance in place before Mr Singh’s proposed retirement.

Prior to late 2012, none of the Parker Lloyd companies had ever done any business with the Defendant. Nor had Mr Mehta or Mr Shah. There was some acquaintance between Mr Mehta and Mr Shah on the one hand and Mr Singh on the other hand. The extent of this was the subject of some discussion:

Since 2010 or 2011, Mr Mehta and Mr Shah would see Mr Singh from time to time in the bar of the May Fair Hotel (which I will refer to simply as “the Bar”). Mr Singh was in the habit of sitting there and seeing various people. Mr Mehta and Mr Shah also met clients there, and took the opportunity from time to time to approach Mr Singh. Mr Singh accepted that their meetings could be characterised as “quick chats”. Mr Mehta said that they would discuss business from time to time, but he produced no documents to substantiate this. Mr Shah said that they introduced Mr Singh to potential deals and contacts, but could not identify any specific examples.

As examples of their dealings with Mr Singh, Mr Mehta and Mr Shah referred to the following:

On the other hand, with the exception of the alleged lunch, they did not suggest that their acquaintance with Mr Singh was so close that he ever invited them to any social event or, say, to his home or to his children’s weddings.

Mr Singh was obviously happy to talk to Mr Mehta and Mr Shah, but he said that he was wary of them. This was because he had been told in 2010 or 2011 by a fellow director of the Defendant, Mr Shashi M Shah, that they had a reputation for not being trustworthy. I accept this evidence.

MetLife is an American insurance company. As such, it was able and willing to lend money for longer periods than many banks. Neither the Claimant nor the Defendant had done any business with MetLife before 2013. Indeed, their only contact with MetLife was as follows:

In 2013 MetLife’s preference was for potential borrowers to deal with its agent, Laxfield. It appears that this was because MetLife only had a small office in the United Kingdom.

Laxfield is a company with 25 years’ experience in the real estate debt market, acting for lenders. In particular, in 2013 Laxfield had a non-exclusive mandate from MetLife to source new business for MetLife.

The Claimant called: (1) Mr Mehta; (2) Mr Shah; (3) Christopher John Loftus (a director of the Claimant); and (4) Rahul Mehta (another director of the Claimant, and Mr Mehta’s son). The Defendant called: (1) Mr Singh; (2) Andrew Hart (a director of the Claimant); (3) Peter Michael Anscomb (an employee of one of the Defendant’s subsidiaries); and (4) Alexandra Elena Lanni (an employee of Laxfield).

Each of the witnesses faced the difficulty that they were giving evidence about things which were said over four years ago. Many of their answers were phrased in terms of what they must have done, or would have done, rather than what they actually remembered. In some cases, they were able to point to documents which they produced at the time. However, as I will explain, the Claimant contended that I should be wary of documents produced by the Defendant’s witnesses after 3 May 2013, once it became apparent that there might be a dispute about the Claimant’s claim to a fee.

Against that general background, it is appropriate that I should say something about each of the witnesses and the evidence which they gave.

Mr Mehta was described by Mr Loftus as the main gentleman behind the Parker Lloyd Group. His background was in tax. He set up the Parker Lloyd business in 1984, when it was an accountancy practice. His main role in relation to the Parker Lloyd Group in 2012-13 was to bring in clients.

On 7 December 2004 Mr Mehta was made the subject of a disqualification order (“the Disqualification Order”), which was for 12 years, from 28 December 2004 to 27 December 2016. It prohibited him during that period from being a director of a company or from in any way, whether directly or indirectly, being concerned in, or taking part in the management of, a company.

The Disqualification Order arose out of his directorship of European Technology Corporation Plc, which went into liquidation. Mr Mehta’s evidence was that the problems at that company were the fault of the other directors, and not him, and that his then solicitors wrongly failed to resist the making of the Disqualification Order. He said that he had no documents to back this up, because he had given them all to his lawyers at the time.

In fact, however, the two men whom Mr Mehta blamed for the failure of the company were not directors of the company. He could not explain why he said that they were directors. The only directors were Mr Mehta himself and M & M Registrars Limited, a company of which he was the director.

In his witness statement, Mr Mehta said as follows:

“At no stage have I contravened the disqualification order, whether in carrying out the actions relied upon by [the Claimant] in this claim, or otherwise.”

In fact, it transpired that he was guilty of multiple breaches of the Disqualification Order. Although he was not a director of the Claimant company, Mr Mehta accepted (and Mr Loftus and Mr Rahul Mehta confirmed) that he was a shadow director. He was thereby concerned in the management of the Claimant, contrary to the Disqualification Order.

In addition, he described himself as Chairman of the Claimant or as “Chairman, Parker Lloyd Group” in letters which he wrote in 2011. He was described as a director of the Parker Lloyd Group in a memorandum of understanding dated 29 November 2012 which he signed and as Managing Director of Parker Lloyd in a memorandum of understanding which he signed on 28 January 2014. He said that these were just titles. However, he accepted that this was prohibited by the Disqualification Order.

In further breach of the Disqualification Order:

It is particularly striking that Mr Mehta remained a director of M & M Registrars Limited, because that company, which acted as nominee shareholder for many Parker Lloyd Group companies, had been the majority shareholder in, and director of, European Technology Corporation Plc, the very company whose demise had led to the Disqualification Order in the first place.

For the purposes of this action, the relevance of these matters is the light which they shed on Mr Mehta’s credibility as a witness. I have to say that his evidence about these matters was thoroughly unimpressive. When he was asked why he became or remained a director of these companies, his evidence was that he believed that it was alright for him to be a director of a dormant company. He did not claim to base this belief on any legal advice, and I do not accept that it was a belief which he genuinely held.

In any event, the relevant annual reports and financial statements demonstrated that many of these were not dormant companies. This was the case, in particular, in relation to:

Mr Mehta eventually accepted that he knew that he was committing a criminal offence when he signed these documents.

In relation to Parker Lloyd Limited, he said that he believed that he could continue to be a director of this company because it was the main company where he earned income. This supposed belief was said to be based on advice from an unidentified source. I do not accept that it was genuinely held. In any event, the company’s balance sheets strongly suggested that it was not his main source of income, although he did not accept this.

In connection with Tividale Tirupathi Balaji Temple, which was a charitable company, he accepted that he was holding himself out to prominent members of the Indian community as somebody who could become a director of a company.

Although he did not mention it in his witness statement, he revealed from the witness box that the Insolvency Service had commenced a prosecution against him for alleged breach of the Disqualification Order. (I was not provided with details of the breaches alleged by the Insolvency Service, which may or may not have been as extensive as those explored at trial.) The prosecution was discontinued in February 2017 because it was not considered to be in the public interest, in the light of evidence relating to Mr Mehta’s ill health. The Insolvency Service did not take this decision because of any doubts that Mr Mehta had in fact breached the Disqualification Order. Mr Mehta made his witness statement just over 3 months later, on 2 June 2017.

In these circumstances, it is surprising that Mr Mehta felt able to say in his witness statement that “At no stage have I contravened the disqualification order”. It is even more surprising that he felt able to say, as he did in cross-examination, that in his mind he had not misled the Court when he said this in his witness statement.

A troubling feature of Mr Mehta’s evidence was that he appeared to have convinced himself that he had not done anything wrong. Some people deal with inconvenient facts by subconsciously persuading themselves that the facts were different or that their actions were somehow justified. It may well be that Mr Mehta is such a man. When challenged, however, he sought to justify himself by reference to whatever explanation came to mind, regardless of the truth. I need not decide whether he was consciously lying or whether he was the victim of his own subconscious delusions. Either way, he was far from being a reliable witness.

Mr Shah’s background was as an accountant. He became involved with the Parker Lloyd Group after meeting Mr Mehta about 15 to 20 years ago. He worked mainly on the public relations and client management side of the business. His main role was to bring in clients.

Like Mr Mehta, and, indeed, like the Claimant’s other witnesses, Mr Shah was dogmatic about the central elements of the Claimant’s case, but could be dismissive of many of the points which were put to him in cross examination. However, cross-examination revealed that there were a number of respects in which the evidence which he gave was unreliable. For example:

In addition, I have already explained that I do not accept his claim, first advanced at trial, that he was invited to lunch with Mr Singh and his wife.

Mr Loftus has worked in financial services since 1999. He has been a mortgage broker for over 14 years. He joined the Parker Lloyd Group in 2007. He owns 50% of the shares in the Claimant. In 2012-13 he was a director of the Claimant and of Parker Lloyd Financial Services Limited.

Mr Loftus began his cross-examination by asserting that there was a meeting between himself, Mr Mehta, Mr Shah and Mr Rahul Mehta on the day after the alleged contract was made. He could not explain why this meeting was not mentioned in his witness statement. He had referred in paragraphs 24 to 26 of his statement to a meeting between himself and Mr Mehta in Mr Mehta’s office, but not to a meeting between all four of the Claimant’s witnesses. No other witness gave evidence of a meeting involving all four of them. Indeed, Mr Shah said that he was not at the meeting between Mr Mehta and Mr Loftus. I do not accept that this alleged meeting between all four of the Claimant’s witnesses took place. Indeed, Mr Loftus ended up admitting that he had no recollection of this meeting.

This aspect of his evidence was one of the reasons for doubting the reliability of Mr Loftus’ recollection generally. Another, as I will explain in relation to the meeting on 4 April 2013, was that there were aspects of his evidence which were inconsistent with the contemporary documentary evidence.

There was also an element of exaggeration in Mr Loftus’ evidence. When dealing with the approaches which he made to potential lenders, Mr Loftus said:

“I would not have committed the resources of [the Claimant] (a company of which I am a part-owner) to searching for possible lenders unless I knew that a fee had been agreed.”

This suggested that significant resources had been committed to the alleged contract. In fact, as I will explain, the only resources committed were a few hours of (primarily Mr Loftus’ own) time.

Mr Rahul Mehta has been a director of the Claimant since 2010. He owns 50% of its shares. He is a director of twelve Parker Lloyd companies. Some of them are his father’s businesses and some of them are his own businesses.

He said that he was unaware until the trial that his father was subject to a director’s disqualification order. Yet he said that when he became a director of the Claimant he had a conversation with his father in which he expressly gave his father and Mr Shah power to sign contracts on behalf of the Claimant as a director or, in Mr Mehta’s case, chairman or managing director. Indeed, he said that he had a similar conversation with his father whenever he became a director of a Parker Lloyd company. I do not accept this evidence, which was frankly incredible and seemed to be motivated simply by a desire to support his father.

Mr Rahul Mehta was another witness who gave evidence about the meeting on 4 April 2013 which was inconsistent with the contemporary documentary evidence. In addition, he said for the first time in cross-examination that he had given this matter to an analyst or analysts in the office to work on and that they had produced a spreadsheet. But this was not in his witness statement and I do not accept this evidence. He was asked to produce overnight the spreadsheet which he said had been produced in 2012. He produced a word document which dated from 2014 and which had no relation to this case. He said that he could no longer access the document which he said was produced in 2012.

Another respect in which his evidence at trial varied from (and, indeed, contradicted) what he had said in his witness statement concerned his knowledge of the terms on which HSBC had offered finance to the Defendant. He referred to HSBC in an email dated 11 October 2012. In his witness statement, he said that he did not know at that stage that HSBC were not able to offer Mr Singh a term in excess of 10 years. But at trial he said that “it was quite common knowledge in the market that HSBC would not be advancing more than ten years.”

Mr Singh was the founder of the Edwardian Group. He was very much the driving force behind the Group. He was also for a time a non-executive director of HSBC. His remuneration from the Defendant included a bonus of £1.3 million agreed on 12 June 2012 as a result of his introducing HSBC to the Defendant and obtaining bank facilities for the purchase of the Leicester Square site at what were considered to be favourable rates. On the whole, Mr Singh was not personally involved in meetings with potential funders, but he was kept up to date and it was something he was involved with in that sense.

Mr Singh was in the habit of spending time in the Bar and meeting people there. He normally sat at the corner table. Mr Singh’s own evidence was that he “meet[s] regularly with [his] senior management team on an informal basis, usually over breakfast on a Wednesday morning, where [they] discuss and address any day-to-day issues affecting the business.” These meetings took place in the Bar. Mr Singh accepted that he tends to do business orally. No email or letter emanating from Mr Singh has been disclosed in these proceedings.

Mr Singh appeared to be doing his best to give truthful evidence. However, a significant part of his evidence consisted of him saying what he might have said, or what he would not have said, to Mr Mehta and Mr Shah. There are obvious limitations on such evidence. Mr Green did not suggest that I should accept everything which Mr Singh said, as I will explain.

Mr Anscomb worked for NatWest for 24 years and for RBS for a further 12 years. While at RBS he helped to put together the 2004 Facility. He joined the Edwardian Group on 12 September 2012. By then, he had 25 years’ experience in hotel financing and had known Mr Singh for about 25 years. He took the lead role in considering and then arranging finance for the Edwardian Group.

Mr Anscomb’s employer was Edwardian London Management Services Limited, a subsidiary of the Defendant. His job title was “Senior Corporate Director”, but he was not a director of any company in the Edwardian Group. He reported directly to Mr Singh. He was not the Finance Director of the Edwardian Group, but he was sometimes referred to as such, for example by Ms Lanni.

I treat Mr Anscomb’s evidence with some caution, because in his evidence at trial, perhaps as a result of a reluctance to accept propositions put to him in cross-examination, he said some things which were inconsistent with his witness statement:

Mr Hart is a solicitor. He worked for Baker & McKenzie and became a partner there. He left in 2000 and became a director of the Defendant on 12 June 2001. He did not work full-time for the Edwardian Group, but he was not a non-executive director (despite being described as such in an organogram prepared in 2013). Instead, Mr Hart was involved in a number of operational matters for the Defendant. For example, he assisted senior management in contract negotiations. However, he was not involved in the Defendant’s efforts to obtain financing.

Mr Hart gave evidence in a trial in 2008 before Mr Roger ter Haar QC, sitting as a Deputy High Court Judge: Westoak Holdings Ltd v. Demetroudi [2008] EWHC 2924 QB. Mr Hart’s evidence and his conduct in relation to disclosure in that case were the subject of criticism: see paragraphs 13 to 16, 34 to 40, 128, 129, 132, 135 and 137 of the judgment. This included a finding that on one matter he had not been trying to tell the truth.

Mr Hart’s evidence in this case was concerned with confirming the accuracy of a number of file notes which he made. These were dated 22 and 28 May 2013 and 8 and 9 January 2014. I will refer to their contents later. The explanations which he gave of how these notes were created and circulated (or not) were entirely plausible. In the case of the last 3 notes, he converted them from Word to PDF format and deleted the version in word format, thereby deleting the associated metadata. In the case of the last two, this was when they were sent to Baker & McKenzie, after the letter before action was sent.

It was suggested to Mr Hart that he was involved with Mr Singh and Mr Anscomb in preparing a paper trail. However, I have no doubt that he accurately set down in those notes what he was told at the time by Mr Singh or Mr Anscomb, as the case may be.

Ms Lanni qualified as an accountant. She worked for PricewaterhouseCoopers for 3 years and for Bank of Scotland for 5 years before joining Laxfield in 2011.

Laxfield has no ongoing business relationship with the Edwardian Group. Nevertheless, Ms Lanni was cross-examined about some of the expressions which she used in her witness statement, with a view to suggesting that she was partial towards the Defendant and unfairly critical of the Claimant. However, I saw no reason to doubt that she was doing her best to give truthful evidence and that her recollection of relevant events was reliable. Moreover, as I will explain: (a) her evidence in relation to the meetings on 4 April and 3 May 2013 was supported by the contemporary documents; and (b) her own contemporary emails were largely accepted as accurate by the Claimant’s own witnesses.

I turn now to the evidence about the meeting at which the contract was allegedly made. The Claimant could not identify the date of this meeting, nor the time. Indeed, Mr Mehta and Mr Shah could not say whether it took place in the morning or the afternoon. However, the Claimant contended that it must have taken place before 11 October 2012, when Mr Rahul Mehta sent the email to which I will refer later. I will refer to it as the 2012 Meeting.

Mr Singh had no recollection of the 2012 Meeting. Mr Mehta’s evidence about it was clear in parts, but also vague in a number of respects, with a number of his answers in cross-examination expressed in terms of what must have, or would have, happened. Mr Shah’s evidence was similar. There were also discrepancies between their evidence. For instance:

As with other similar meetings, Mr Mehta and Mr Shah did not have an appointment to see Mr Singh. They had been in the Bar to see other (unidentified) clients or contacts. Mr Singh was at his usual table in the corner. They sat down and joined him.

During this conversation, the Claimant’s case is that:

I note that it is not suggested that in the 2012 Meeting the term of 15 years was mentioned. As for the amount of borrowing, Mr Mehta said in his witness statement that Mr Singh said that the amount of borrowing was at that stage uncertain, but Mr Mehta also said that he believed that Mr Singh mentioned a figure of £250million. At trial, his recollection on this latter point had become more certain. The Defendant submitted that this was surprising. Mr Shah said in his statement that Mr Singh did mention the figure of £250million.

Mr Singh accepted that he had such meetings with Mr Mehta and Mr Shah in the Bar from time to time. In his witness statement, he accepted that it was not unlikely that he did speak to them in 2012 in general terms about the market and the way in which the Edwardian Group was financed. For example, he believed that he mentioned that the Group was fortunate to have a 7 year unexpired term compared to the market norm at the time of 5 years.

He also accepted in his witness statement that he might have told them in high level terms that the Defendant was considering the possibility of refinancing some of its hotels. But he said in cross-examination that it was unlikely that he would in 2012 have discussed with them any particular financing (e.g. long term) which the Edwardian Group was seeking or any figures (e.g. that the Group was looking for £200million or £250million). Notwithstanding this evidence, Mr Green accepted in his closing submissions that it was likely that in the context of a discussion of refinancing Mr Singh mentioned both that the Defendant was interested in longer term financing and the approximate sum that the Defendant was interested in finding.

On 22 May 2013 Mr Singh gave an account of a meeting to Mr Hart, who recorded it in a file note as follows:

“JS confirmed he had talked to them about financing in what was either late 2011 or early 2012 around the time of us raising finance with HSBC to do with buying FTH, NPW and LSQ [i.e. the Leicester Square project], when the market was tight ie money available for not more than 5 years fixed. No agreement was made to appoint them or on any fee.”

The reference to late 2011 or early 2012 appears to have been a mistake for late 2012 or early 2013. Mr Singh accepted that the market was tight and that money was not available for more than 5 years fixed. This is clearly something which he said in the 2012 Meeting. However, Mr Singh said that he would not have enlisted the assistance of Mr Mehta and Mr Shah and that he would not have entered into an agreement with them.

It is relevant to note that it is not suggested by the Claimant that there was any discussion in the 2012 Meeting (or subsequently) about the following matters, nor any provision of documents or arrangements made for provision of documents in relation thereto:

These were documents and information which the Defendant submitted one would expect to see provided, if one company was being instructed to try to find finance for another, both to assist that company in its efforts and to prevent its activities from interfering with the efforts which were already being made to obtain finance. The Claimant submitted that they were unnecessary, because the request for finance was at a high level. That explanation does not apply, however, in the case of information as to which lenders the Edwardian Group had already approached.

It is also relevant to note that Mr Mehta and Mr Shah did not suggest in their evidence that there was any mention in the 2012 Meeting of the Claimant as the company in the Parker Lloyd Group which would enter into the alleged contract, nor of the Defendant as the company in the Edwardian Group which would be entering into the alleged contract.

Indeed, Mr Mehta said as follows:

When asked when he believed that he was acting for Parker Lloyd Capital Limited, Mr Mehta said, “When I actually mentioned it to Mr Loftus because he was in my mind that he’s the one that I would actually give it as a project for him to run.” Of course, Mr Mehta’s subjective views are not directly relevant to the question whether a contract was formed, but they lend support to the view that nothing was said in the 2012 Meeting which, viewed objectively, amounted to an agreement that the Claimant would be a contracting party.

As for the identity of the Edwardian Group company which was to enter into the alleged contract, it is relevant to note the following:

Before setting out my findings as to whether a contract was made at the 2012 Meeting, I will address the subsequent events which were relied on by the parties.

It will be recalled thatMr Anscomb joined the Edwardian Group on 12 September 2012 and that he took the lead role in considering and then arranging finance for the Edwardian Group. However, it was not suggested that, after the 2012 Meeting, Mr Singh told him or anyone else within the Edwardian Group about the alleged contract or the alleged request to the Claimant to assist in sourcing finance.

Mr Mehta and Mr Shah did not follow up the 2012 Meeting with a letter confirming what they say was agreed. Nor did they produce any internal communication or note to that effect or open a file. Mr Shah did not recall speaking to anyone in the Claimant’s offices about what they had just agreed.

Mr Mehta and Mr Loftus said in their statements that, shortly after the 2012 Meeting, they had a meeting, in which Mr Mehta told Mr Loftus the following:

Mr Mehta’s evidence at trial was less definite: he said that he believed that he had such a meeting with Mr Loftus and that he must have done so. As I have said, Mr Loftus’ evidence at trial was unreliable: he said that Mr Shah and Mr Rahul Mehta were also at this meeting.

On 11 October 2012, Mr Rahul Mehta sent Mr Loftus an email with the subject “mayfair hotel refinancing”, which said:

“Hi chris, I have just been told hsbc will be refinancing jasminders hotels , not sure of the rate and duration , but I think you were speaking with areal bank so let’s beats. Hsbc, bank of china did do the financing of grovenor house”

Mr Rahul Mehta said that it was his father who had told him that HSBC would be refinancing Mr Singh’s hotels. The Claimant did not disclose, and does not claim to have produced, any other internal document relating to its efforts in 2012 to find a lender for the Defendant (save for the spreadsheet allegedly produced for Mr Rahul Mehta, which I have already dealt with). Having learnt that HSBC would be refinancing Mr Singh’s hotels, the Claimant took no steps to find out from Mr Singh what terms HSBC was proposing to offer.

Mr Loftus, Mr Mehta and Mr Rahul Mehta approached banks and others whom they considered might be potential lenders to the Defendant, but without success:

The reasons given by these potential lenders for turning down the Claimant’s approaches were that they could not lend the amount of money requested or for the period requested, or both. It should be noted that the Defendant had already contacted Aareal Bank, and so a favourable response from Aareal Bank could not in any event have resulted in a fee for the Claimant.

Mr Shah was not involved in these approaches. The Defendant submitted that this was not the behaviour of someone who had agreed a contract which might be worth £2.5million. Mr Shah said that he personally spent no more than about 2 hours on the alleged contract between the 2012 Meeting and May 2013. That time was spent talking to Mr Mehta and Mr Loftus about their efforts to find funding for the Defendant.

The Claimant contended that it was unlikely that it would have done this work if it had not been instructed to do so and if a fee had not been agreed. I do not consider that this contention carries much weight, given the limited time spent by the Claimant on the alleged contract and the fact that the Claimant took no steps to identify potential lenders (such as Aareal Bank) who had already been contacted by the Defendant. The Defendant submitted that the Claimant would have done much more if it had secured a contract. The Defendant submitted that what really happened was that Mr Mehta and Mr Shah decided, on the basis of the limited information they had, to see whether they might be able to find a lender, with the hope that, if they were successful, they would be able to charge Mr Singh a fee to recognise their contribution.

Mr Mehta and Mr Shah did not claim in their witness statements that they had any meetings with Mr Singh in the period between the 2012 Meeting and 2 April 2013 at which they discussed the alleged contract. In cross-examination, Mr Mehta said that he recalled that he and Mr Shah did see Mr Singh during this period in the Bar and gave him an update. I do not accept this evidence. Mr Shah said that they met Mr Singh regularly in the Bar, but that they probably did not say anything about the alleged contract, because they had nothing to report. I find that they did not discuss the alleged contract with Mr Singh during this period. The Defendant relied on this as a factor which suggested that the Claimant did not believe that it had a contract with the Defendant.

In early 2013, Mr Rahul Mehta read an article in the Sunday Times which mentioned Laxfield. On 4 February 2013 he sent an email to Laxfield’s “info” email address, saying:

“I would like to arrange a meeting, to find out more about the Laxfield capital lending programme, as I have various HNW clients looking for financing on various property transactions” .

This did not initially elicit a response. Mr Rahul Mehta then met an individual from Laxfield at a party. Subsequently, on 25 March 2013 he received an email from Ms Lanni, which said:

“Many thanks for your note, it would be good to hear about Parker Lloyd too. Would you be available to come to our offices (address below) to discuss the programme further?”

This led to a meeting on 4 April 2013.

Mr Mehta and Mr Shah say that they went to see Mr Singh in the Bar on 2 April 2013. The Claimant says that at this meeting (“the Alleged 2 April Meeting”):

I note that it is not suggested that the figure of £250million was mentioned in this meeting, nor the term of 15 years.

The Defendant denies that this alleged meeting took place. Mr Singh’s evidence was that he had no recollection of such a meeting. I am not persuaded that this alleged meeting took place. If it had, the Claimant would surely have been quicker than it was to mention the Defendant to Laxfield and to arrange a meeting between the Defendant and Laxfield.

The printout from Laxfield’s website which Mr Mehta says that he showed Mr Singh gave the names of three companies from whom Laxfield held mandates. MetLife was one. The others were Cornerstone and Munchener Hypothekenbank eG. Mr Mehta said that he told Mr Singh that the potential lender was MetLife, but that this was based on his hunch. Mr Rahul Mehta (who had been in court while Mr Mehta gave evidence) volunteered in cross-examination that he had done research on all three lenders, which indicated that MetLife was, but neither Cornerstone nor Munchener Hypothekenbank eG was, a potential lender to the Defendant. He could not explain why he did not mention this research in his witness statement. I do not accept this evidence.

On 4 April 2013, Mr Rahul Mehta and Mr Loftus went to Laxfield’s offices and met Ms Lanni and her colleague Edmund Bacon. I will refer to this as the 4 April Laxfield Meeting. Mr Loftus and Mr Rahul Mehta told Ms Lanni about the Parker Lloyd Group and Ms Lanni told them about Laxfield. Mr Loftus and Mr Rahul Mehta accepted the accuracy of what Ms Lanni said about this meeting in paragraph 1 of her email of 13 May 2013 to Mr Anscomb, i.e.:

“Chris Loftus and Rahul Mehta came to our offices. They made the approach to us to understand what our lenders offered in the context that they had a number HNW private clients who were often looking to refinance or lever acquisitions.”

There was a dispute as to whether the Defendant was mentioned in the 4 April Laxfield Meeting. The Claimant’s case on this point is that:

Ms Lanni’s evidence was that Mr Loftus and Mr Rahul Mehta did not mention the Edwardian Group in the 4 April Meeting or in a telephone conversation thereafter. Ms Lanni said that, had they done so, she would have remembered, because it would have been of interest to Laxfield and would have advanced the discussions. She accepted that there might have been some discussion of hotel financing and of a Mr Kevin Eakin, who had arranged finance for the Intercontinental Hotel in St. James.

Moreover, Ms Lanni’s evidence was that the first time that the Defendant’s name was mentioned to her was almost a month later, on 1 May 2013. Her evidence on this point is supported by the following documents:

I find that the Claimant did not mention the Defendant or the Edwardian Group to Laxfield until 1 May 2013.

On 18 April 2013, Ms Lanni called the Claimant and spoke to Mr Rahul Mehta, who notified Mr Loftus by email on 19 April 2013. Mr Loftus said that he then spoke to Mr Mehta and told him about: (i) the 4 April Laxfield Meeting; and (ii) the fact that Ms Lanni had confirmed that MetLife were interested in the Edwardian Group refinancing. Mr Mehta was pleased, and said that he would contact Ms Lanni directly in order to arrange a meeting. I do not accept this evidence, given my finding that the Edwardian Group had not by this stage been mentioned to Laxfield.

On 1 May 2013 Mr Loftus sent an email to Ms Lanni which read:

“Can you please give me a call when you get a chance. I have got a couple of decent deals to discuss with you.”

Ms Lanni did telephone Mr Loftus on 1 May 2013. He could not recall specifically the contents of that conversation. Ms Lanni said that he told her that the borrower was the Edwardian Group and that it was seeking £250million for a term of 15 years. I accept Ms Lanni’s account of this conversation:

As I have said, Ms Lanni’s email had, as its subject, “It’s the Edwardian Hotel Group which owns the Mayfair”. It read as follows:

“Refinance of a number of hotels in central London

We can choose 3 of the hotels

£250m – sub 50% LTV

Looking for a 15 year commitment

Private Indian Family owned – Edwardian Group

Radisson Blu – Ox St & Covt Gard, Tott Court Rd, Leicester Sq, Heathrow, Bloomsbury, C Wharf, Marble Arch, South Ken & Guildford, Mayfair Hotel

http://www.radissonblu-edwardian .com/feature.do?feature=ourhotels

HSBC being refinanced away from Hugh Zachariah

ASAP refi

Will sign up to exclusivity for us to look at which assets to refi.”

Mr Singh said that this information did not come from him. I have referred to the Claimant’s evidence that he mentioned the figure of £250million. However, the Claimant’s witnesses did not claim that he specifically mentioned the period of 15 years, or the 50% loan-to-value ratio or the proposal that the lender choose 3 hotels as security. Mr Green submitted that Mr Loftus was using poetic licence.

Also on 1 May 2013, and seemingly before Ms Lanni spoke to Mr Loftus, Mr Mehta telephoned Ms Lanni to introduce himself. It appears that, on this day, Mr Mehta printed out a copy of a page from Laxfield’s website and wrote on it Ms Lanni’s details. During this conversation, it is the Claimant’s case that:

Ms Lanni’s evidence was that she did not recall Mr Mehta mentioning the Edwardian Group by name and that she did not recall being told on 1 May 2013 that the owner of the Edwardian Group was Mr Singh.

Mr Rahul Mehta sent Ms Lanni a calendar invite for the meeting the following day, which was accepted.

On 2 May 2013, Ms Lanni and Mr Bacon went to the Claimant’s offices for a meeting with Mr Mehta and Mr Loftus (“the 2 May Laxfield Meeting”). Mr Shah attended for about 5 minutes at the end of the meeting.

The Claimant’s case is that, during the 2 May Laxfield Meeting:

However, Ms Lanni said, and Mr Loftus accepted, as do I, that the Claimant did not provide any detailed information about the type of loan sought by the Edwardian Group or the valuation or underlying performance of the assets. Ms Lanni’s evidence, which I accept, was that she was not given any further information at this meeting about the proposed loan than was set out in her email of 1 May 2013.

Ms Lanni set out her recollection of this meeting in paragraph 3 of her email of 13 May 2013 to Mr Anscomb:

“We attended a meeting at Parker Lloyd’s offices on Thurs 2^nd May, re-explained our lending parameters etc to Rajni (as we hadn’t met with him before, only his son Rahul). Rajni asked that rather than them “being a middle man” that we attend a further meeting with Jasminder the following day.”

Mr Loftus accepted that this was accurate, save that he did not recall the “middle man” comment. Mr Mehta contended that it was “not quite correct”, but I accept it as accurate.

At the end of the meeting, Mr Mehta suggested that the Claimant arrange a further meeting with the owner of the Edwardian Group in order to discuss the matter further. The meeting was concluded on the basis that Mr Mehta would confirm the date and time of the meeting once he and Mr Shah had spoken to the owner. Mr Mehta said that he mentioned Mr Singh by name. Ms Lanni said in her witness statement that Mr Singh was not mentioned, but at trial she accepted that he might have been.

It was common ground that at about this time there was a meeting in the Bar between Mr Mehta, Mr Shah and Mr Singh at which the Defendant’s potential borrowing was discussed. Indeed, as I have found, this was the first time they had discussed this subject since the 2012 Meeting. The date of this meeting was initially in dispute. However, in his closing submissions, Mr Green did not dissent from the Claimant’s contention that it took place on 2 May 2013, after the meeting with Laxfield on that day. I will refer to it as the 2 May Meeting.

During this meeting, it is the Claimant’s case that:

I note that it is not the Claimant’s case, even in the alternative, that a contract was made at the 2 May Meeting. Rather, the Claimant’s case is that at this meeting Mr Singh confirmed the existence of the contract which it says was made at the 2012 Meeting.

The Defendant’s case in relation to the Second Meeting is that:

Mr Singh’s recollection of the 2 May Meeting was recorded in the note of a telephone conversation which he had with Mr Hart on 22 May 2013, as follows:

“More recently, around the time of JS father being in hospital (April/May 2013), they came to see JS on that excuse and said they could help to introduce financing eg now for say 15 year money. JS said that could be of interest and asked what sort of fee they would be looking for, if they worked and effected such an introduction. They said 1%.

At that, JS told them to forget it, and there was a bit of giggling – presumably to disperse the embarrassment they suffered from Jasminder dismissing their suggestion immediately and unambiguously. JS also told them that in any event, he was not in a position to agree anything with them, because raising finance was now being dealt with in the group by former RBS bank person Peter Anscomb along with Robert Morley. So if they wanted to try to be involved with us, they would need to speak to and agree terms with Peter.”

I bear in mind the Claimant’s submission that this was a potentially self-serving document. However, it was suggested to Mr Singh in cross-examination that, in effect, the contents of the first paragraph were correct as far as they went. He accepted that it was not accurate insofar as it did not record that Mr Mehta and Mr Singh had said that they had found a funder. The fact that Mr Singh asked what fee the Claimant would be looking for certainly suggests that he did not have it in mind that he had already agreed to pay them a 1% fee.

The Claimant submitted that it was surprising that Mr Singh should have responded in the way described in this note if he had not previously asked these men to look for funding and if he did not trust them. It was also submitted that it was surprising that Mr Singh should have laughed, but that is at least a possible reaction to an unsolicited approach coupled with a request for a fee which would inevitably be a very large sum.

Mr Singh said that, following the 2 May Meeting, he telephoned Mr Anscomb and told him that Mr Mehta and Mr Shah might get in touch with him, making it clear that it was a matter for Mr Anscomb whether he talked to them or not, that any involvement of the Claimant in any refinancing and any fee would be subject to negotiation with Mr Anscomb, and that he could not vouch for their credibility. Mr Singh said that he told Mr Anscomb that they had asked for a fee of 1% and that he had laughed.

Mr Anscomb said that, in late April or early May, Mr Singh told him for the first time about some Indian gentlemen from the Claimant, that they had mentioned a connection with hotel finance, that Mr Singh had given them Mr Anscomb’s contact details in order to discuss whether they might be able to assist with sourcing financing, and that any fee proposal would be for discussion with Mr Anscomb. At trial Mr Anscomb said that he assumed that this discussion took place on 1 or 2 May 2013.

On 2 May 2013 Mr Mehta and Mr Anscomb spoke by telephone. During that conversation, it is the Claimant’s case that:

I note that it is not the Claimant’s case, even in the alternative, that a contract was made in the course of this telephone conversation. Indeed, the Claimant did not allege that there was any discussion of fees in this conversation.

Mr Anscomb made a diary entry for a meeting the next day with the subject “Parker Lloyd, lex Capital”. Mr Anscomb’s evidence was that:

Mr Anscomb’s subsequent email of 15 May 2013 to Mehta said as follows about this telephone conversation:

“… at the time of the initial telephone conversation when I advised that your detail regarding ‘required amount’ was incorrect, and that we had term sheets in place for all required sums, it was our intent to say that no meeting was appropriate.

The invitation to come up for discussion over coffee was accepted on the basis that it was made with the introduction of ‘long term friends of Jasminder’, and because it was then linked to MetLife who was a party that I had previously contacted as part of our testing of the market. As indicated at the beginning of that meeting, I had come up in good faith to discuss a concept, but emphasised that we had not under any circumstances a need for 250m of financing and had not asked anyone to source such. We had all necessary financing, but could explore other options on merit.

At no stage has any professional help re advising, structuring, negotiating debt requirement, been provided; the meeting was introduced re the background friendships, the opportunity for me to get together with Laxfield to explore possibilities directly, and as Parker Lloyd did not see any value in acting as an intermediary to such discussions. At no point was anything mentioned regarding payment of a fee (of any quantum, let alone something of such materiality as now proposed), and I can say quite categorically that if such suggestion had been made as a condition of the meeting, such meeting would have been declined.”

- … The request for a meeting included no suggestion of fees, and would not have occurred if fees were a condition ….. neither were fees mentioned within the meeting itself, as I could have closed the discussion at that point.”

“… I accepted an invitation to discussion over coffee, and I had understood it as no more than a friendly gesture with the coincidental benefit of it involving one of our existing target lenders.”

Mr Hart’s file note of 9 January 2014 recording what Mr Anscomb said on that date about this telephone conversation is to similar effect.

Immediately after his conversation with Mr Anscomb, Mr Mehta telephoned Ms Lanni and informed her of the meeting at 1.00 pm at the Claimant’s offices the following day, which she confirmed that they would attend.

There was a meeting in the Claimant’s offices on 3 May 2013 (“the 3 May Meeting”), attended by: Ms Lanni and Mr Bacon from Laxfield; Mr Anscomb; and Mr Mehta, Mr Loftus and (briefly) Mr Shah from the Claimant. (Mr Shah arrived towards the end of the meeting and introduced himself to Mr Anscomb.)

Ms Lanni’s evidence was that the start of the meeting was odd, awkward, bizarre and extremely uncomfortable: “one of the most awkward meetings I’ve had in my career”. The parties were not introduced. When she explained who she was and that she understood that the Edwardian Group were looking for financing, Mr Anscomb was quite taken aback by that. There was then “an extremely awkward exchange where Mr Anscomb didn’t really know why we were there or who we were.”

However, there followed a discussion in which Mr Anscomb asked her questions about MetLife and she asked questions such as which of the Edwardian Group’s assets could be put up by way of security for the Defendant’s proposed borrowing. At the end of the meeting, Mr Anscomb agreed to contact Ms Lanni again to progress the discussions, and to send over some further financial information at Ms Lanni’s request.

This was the first time Mr Anscomb and Ms Lanni had met one another. Moreover, Ms Lanni and Mr Bacon were not expecting Mr Anscomb to be present. Ms Lanni was expecting to meet the owner of the Edwardian Group.

It was the Defendant’s case that Mr Anscomb was not expecting anyone from Laxfield to be present. The Defendant’s case was that Mr Anscomb went to the Claimant’s offices expecting to have an informal chat with the Claimant over coffee. He went because he did not want to offend any of Mr Singh’s Indian business contacts, particularly not one describing himself as an old friend.

The Claimant’s case was that Mr Anscomb had been told that he would be meeting someone from Laxfield both:

The Claimant’s case derives some support from an email which Mr Anscomb sent on 7 May 2013 to various colleagues, with the subject “Financing options”. It read:

“The attached is something I did at the weekend for Jasminder and Inderneel, as a precursor to an intended discussion today. It came about from various discussions re understanding options, and developed further once I found that the party behind the possible longterm funding was Metlife (and the same/person/team I had contacted last October), and the entity acting for them were knowledgeable ex hospitality sector bankers.”

The suggested inference from this email was that Mr Anscomb went into the 3 May Meeting knowing that there was “possible longterm funding” and learnt at that meeting that MetLife was the person behind it.

The account given by Mr Anscomb in his email of 15 May 2013 provides some support for the Defendant’s case. Mr Anscomb wrote as follows about the 3 May Meeting:

“… As indicated at the beginning of that meeting, I had come up in good faith to discuss a concept, but emphasised that we had not under any circumstances a need for 250m of financing and had not asked anyone to source such. We had all necessary financing, but could explore other options on merit.”

“The meeting was introduced as an opportunity to explore/discuss ….. not an acknowledgement that I had no right to continue approaches to met, other than under your ‘introduction’ ….. again that would not have been accepted.”

I accept that that was a letter written for the purpose of seeking to refute the Claimant’s claim for a fee. However, Ms Lanni’s evidence also supports the Defendant’s case. She recalled that “it was apparent that neither of us had expected each other to be present.” As I have said, she said that the beginning of the meeting was awkward and uncomfortable, with Mr Anscomb being defensive, because Mr Anscomb had not been expecting her or Mr Bacon to be there.

I find that Mr Anscomb was not expecting to meet anyone from Laxfield when he went into the meeting and that this was because he had not been told that anyone other than Parker Lloyd people would be at the meeting.

After Mr Anscomb left, there was a discussion about fees. Ms Lanni set out her recollection of this discussion in paragraphs 5 and 6 of her email of 13 May 2013 to Mr Anscomb, as follows:

“5.

After you left the meeting Rajni and P M Shah began a discussion of how we and they are remunerated. I clearly explained that Laxfield is remunerated by its lenders and that it makes no difference to a borrower whether they deal through Laxfield or deal with our Lenders direct. Rajni then turned to “how do we get remunerated” and I explained that his role was on the borrower side so he’d have to make arrangements with them direct and it wasn’t for us to opine on those arrangements. He explained they could have a good pipeline for us but would want to be noted in the term sheet that the borrower signed up to. I explained that we don’t operate these “affiliated arrangements” with agents/brokers and couldn’t achieve this as it would make our offer less competitive than if a borrower were to go to a lender direct.

6.

Rajni then went on to clarify that it wasn’t an issue for this deal as they were long term friends of Jasminder and there was no intention to make fees for the intro.”

Mr Shah accepted that this was correct. Mr Loftus accepted that paragraph 5 was correct, although he could not recall the matters set out in the fourth sentence of paragraph 5. Mr Mehta accepted that it was correct, save for the last sentence of paragraph 5. As for paragraph 6, Mr Loftus accepted that Mr Mehta said that “It wasn’t an issue”, but said that he understood that Mr Mehta was referring to a fee from Laxfield. Mr Mehta accepted that paragraph 6 was correct, but explained that what he was reported there as saying concerned the possibility of a fee sharing agreement with Laxfield, rather than a fee from the Defendant.

I find that what is recorded in paragraphs 5 and 6 of Ms Lanni’s email did happen. At trial, the Defendant relied on what Mr Mehta said as an indication that he was not expecting a fee from the Defendant. The Claimant contended that no such inference could be drawn because Mr Mehta was only talking about fees received as part of a fee-sharing arrangement with Laxfield. However, I find that Ms Lanni understood Mr Mehta to be saying that the Claimant would not be receiving a fee from the Defendant, and that that was the meaning of the words used by Mr Mehta. If Mr Mehta did not intend to give that impression, he did not express himself clearly.

I also accept Ms Lanni’s evidence that she found it odd and unprofessional for Mr Mehta to raise the question of fees after, rather than before, introducing Laxfield to Mr Anscomb. The fact that Mr Mehta was prepared to act in this way is relevant when considering the weight to be given to the Claimant’s submission that it would not have effected the introduction unless it had agreed a fee in advance with the Defendant.

Following the 3 May Meeting, Mr Anscomb prepared a briefing note for Mr Singh, in which he compared the different financing options for the Defendant. Mr Anscomb appeared to favour an approach involving a loan from MetLife, saying in his briefing note that:

“While day one cost is ‘high’, there is an opportunity to gain term stability to finance, remove the cashflow effect of historic swaps, reduce the refinance risks of the current syndicate deal, remove the need for ongoing syndicate approvals, create 3 key lending relationships, and secure access to a materially enhanced level of annual cashflow for the forward investment in the group…”

Mr Anscomb spoke to Mr Singh about MetLife by 7 May 2013, when he wrote in an email that Mr Singh was aware that he was progressing discussions with MetLife. As part of those discussions, Mr Anscomb sent an email to Ms Lanni and Mr Bacon on 7 May 2013 and met them for lunch on 10 May 2013. These discussions continued for the remainder of 2013.

The Claimant had no further involvement in these discussions. The Claimant’s case was that it had already effected the introduction and done all that was necessary in order to earn its success fee at the 3 May Meeting. As I have said, the Defendant did not pursue its alternative case that, if there was a contract, the Claimant had not earned its fee.

Ms Lanni’s understanding of the position was set out in an email which she sent on 14 May 2013 to someone at MetLife:

“I think we’re really well placed with this deal – they don’t have another fixed rate provider offering them terms they find acceptable and there is a clear appetite from Management to put fixed, longer term debt against their core assets. Target drawdown is end of July.”

I accept that Ms Lanni’s understanding was correct. In addition to the discussions between the Defendant and Laxfield, there were also discussions in 2013 between the Defendant and both its existing lenders under the 2004 Facility and certain other proposed lenders. The outcome of these discussions was that in December 2013 the 2004 Facility was repaid and replaced by a £200million facility for 20 years from MetLife and other facilities in the total amount of £250million from other lenders.

Mr Anscomb became aware of the discussion about fees which had taken place at the end of the 3 May Meeting. On about 13 May 2013 Mr Anscomb spoke by telephone with Mr Bacon to get an idea of what had been discussed on that occasion. (Mr Bacon no longer works for Laxfield. Neither party called him to give evidence. The Claimant invited me to draw an adverse inference from the fact that the Defendant did not call Mr Bacon. I do not consider it appropriate to do so.)

That led to Ms Lanni sending the email dated 13 May 2013 to which I have already referred, which had the subject heading “Parker Lloyd – Laxfield” and which she said that she was sending “just so you are fully furnished with the facts”. Ms Lanni was cross-examined extensively about why she wrote this email, but I am not persuaded that she intended to misrepresent or “spin” the facts in this email. Indeed, I have already dealt with what she said in this email about her contact with the Claimant between 4 April and 3 May 2013, and much of it was accepted as accurate by the Claimant’s witnesses.

On or around 13 May 2013 Mr Anscomb had a telephone conversation with Mr Loftus. Mr Ancomb sent the following email to Ms Lanni:

“I have now put in a call to Parker Lloyd (Chris) to confirm expectation.....ie that any expectation of fee could negate the ability to look at a transaction, as not only was MetLife on my original contacts, but at a pure economic level, any transaction would be at an additional cost to our current options and further cost would negate against the non financial rationales for considering. Initial response agreed with our understanding, but Chris wanted to refer it for final confirmation.....”

By saying to Mr Loftus that MetLife was on his original contacts, Mr Anscomb was arguing that the Claimant had not introduced him to MetLife. The Claimant suggested that it could be inferred that Mr Anscomb knew that a fee was due if the Claimant did introduce the Defendant to MetLife.

Mr Anscomb’s evidence was that in this telephone conversation Mr Loftus agreed with him that no fee was payable but then “he appeared to sound distracted and suddenly said that he would check the position with the Claimant’s directors.”

Mr Loftus said that:

Mr Loftus said that, following Mr Anscomb’s telephone call:

Mr Anscomb said that, following his call with Mr Loftus, he spoke to Mr Singh, who said that, when Mr Mehta and Mr Shah had approached him in late April or early May and suggested that they could assist with sourcing funding: they had mentioned a fee to him; he had laughed and said it was too high; but he had said that, if they wanted to discuss it with Mr Anscomb, they should contact him.

On 15 May 2013, Mr Mehta telephoned Mr Anscomb and left a voicemail message, saying that the Claimant’s fee would be 1%. This prompted Mr Anscomb to send a long email to Mr Mehta, in the following terms (omitting the passages which I have already quoted):

“I have to say that your earlier voice mail has taken me by complete surprise, and I am sending a response by email as I feel it is essential that we have total transparency across all parties and a quick resolution.

We do not utilise the services of third party arrangers/brokers in sourcing finance, …

…

This leaves us with a bit of a quandary. We clearly do not want any misunderstanding or ill feeling relative to fees you feel may be due, but for various reasons we cannot accept a fee proposal. By this, I mean

-

We did not give any mandate for the arranging or sourcing of debt

-

We had pre-existing term sheets from acceptable lenders

- We had previously contacted not only the same institution but the same underlying individual, and similar to a couple of other lenders that we have recently reverted to for updates, it is part of the due diligence to contact such parties for final checks re alternative availability prior to signing term sheets with final chosen parties. …

…

- No professional service/detailed information has been provided either to us re the debt or to Laxfield re us as borrower

- We are exploring with Laxfield/MetLife on the basis of possible non financial benefits of establishing a relationship, and thus making a strategic change to the renegotiation of our loans. There is a substantial cost to this, due to what we would have to extinguish with current lenders, and thus any additional fees would further destroy the economics.

-

I did ask Laxfield re roles and remuneration, and they advised that while you were looking to see if you could work a forward pipeline with them, PL had stated in the continuation meeting from the one I left that due to background relationship and the nature of introduction, no payment was expected on our discussions. I sought to confirm this with Chris, who said he had a similar understanding. We discussed his desire to keep open dialogue re anything that I may be able to assist him with re hotel finance/lenders/investors, and he said that he would need to confirm with colleagues their final understanding re fees etc, because there may be a desire to discuss something under their direct relationship with Jasminder. I advised that we specifically were not agreeing a fee and that any fee would negate the possibility of anything working with MetLife. Chris was going to call me back if understanding was any different, and under no circumstances did I say that fee negotiation should be with Jasminder, if that is what may have been thought.

Together with Laxfield, I have put in a lot of work in trying to flush out how something may work with Met, and Met have additionally done further work within their internal team. Accordingly, it is critical that we give early confirmation and explanation of reason, if we are put in a position of having to pull out of negotiations. From a relationship point of view, I feel this would be unfortunate across multiple levels and entities, but you will see from the above that there is really little option.

I would ask that you reconsider both the spirit and the relevance of any fee proposal, that we further clarify any informal financing market assistance I may be able to provide to Chris (to ensure no other potential for misunderstanding), and for my part I will ensure that we specifically enquire of you regarding any fee proposal in advance of any future meeting to allow us to either politely decline meeting or exceptionally agree a payment sized specifically on the profession input provided/expected.

Many apologies for any misunderstanding, but I honesty I am at a loss to see how it has occurred. I have never experienced the situation where such issues are raised after the event and where no specific underlying service has been requested or contracted. …

I trust that with further reflection we can find an alternative and more representative way of dealing with this.”

I do not accept Mr Mehta’s evidence that he said in his voicemail that the 1% fee had been agreed with Mr Singh. Mr Anscomb’s long email does not mention this allegation, as it would most likely have done if Mr Mehta had made it in his voicemail message.

I have already dealt with what Mr Anscomb said in this email about the telephone conversation on 2 May 2013 and the 3 May Meeting. The Claimant made a number of other submissions in relation to this email:

Mr Anscomb’s evidence in relation to his email was that he was trying to be polite in dealing with people whom he understood to be old friends of Mr Singh, and in a context where it had not been suggested to him that Mr Singh had agreed a fee with the Claimant. At 3.06 pm on 15 May 2013 Mr Anscomb forwarded his email to Mr Singh. In his covering email to Mr Singh, Mr Anscomb wrote:

“I have sent the below to Parker Lloyd.

Subsequent to our discussion after breakfast this morning, they left a voicemail on my phone saying their fees would be circa 1%.

I did not copy you directly into the email, as I thought that would give you different options if they are upset by any of my wording.

Laxfield and MetLife are continuing to work on proposal, and hope to have term sheet by tomorrow, so I did feel it appropriate to keep them abreast of potential implications on discussions should Parker Lloyd maintain their stance ….. as stated in email, Laxfield had always the same understanding as I did.”

At 4.14 pm on 15 May 2013, Mr Mehta replied to Mr Anscomb as follows:

“We do not want any misunderstanding in this matter either.

As your e-mail clearly indicates that no recognition will be made for introducing you to Lexfield, we will appreciate that you desist

discussions with them in this respect.”

The Defendant submitted that this was a surprising thing for Mr Mehta to write if he believed that the Claimant had a binding contract with the Defendant.

In the light of this exchange of emails on 15 May 2013, by 17 May 2013 Mr Singh asked Mr Anscomb to get the view of the Defendant’s solicitor, Hugh Stewart of Baker & McKenzie. This was followed by privileged communications between Mr Anscomb and Mr Stewart. The Claimant submitted that the Defendant consulted its solicitors at a surprisingly early stage, given that: (i) on the Defendant’s case, there had been no agreement to appoint the Claimant; and (ii) Mr Mehta had only left one voicemail and sent one email (in which he asked the Defendant to desist from negotiating with Laxfield). I do not consider it appropriate to draw any adverse inference from the fact that the Defendant consulted solicitors at this stage. The Defendant was facing a potential claim for what turned out to be £2million, which, if valid, would have adversely affected the economics of the proposed advance from MetLife.

On 21 May Mr Anscomb sent an email to Mr Mehta which had been drafted by Mr Hart and which read:

“With reference to my previous email, the detail contained therein remains apposite. I must therefore reconfirm that no person or company in our group conferred on your firm, or intended to confer on your firm, an appointment for your firm to find or introduce a possible source of finance for any part of our group’s business, nor did any person or company make, or intend to make, any agreement regarding a fee that could become payable to your firm.

I am maintaining my contact with MetLife and, at their discretion and direction, will liaise with Laxfield Capital as appropriate.”

Mr Mehta responded on the same day by email. This email (which was typed by Mr Mehta’s secretary, who mis-spelt Mr Singh’s first name) said as follows:

“I refer to your email of today and do not accept your version.

We met Jaswinder late last year when he asked us to arrange a loan of GBP 250 million on condition that it would be for a period of 10 years or more. At that point, we did clearly tell him that we would assist and we would charge a fee of 1% of any amount raised.

We met him again a few weeks ago and said we had a lender who could provide loan for a period exceeding 10 years which met with his condition and at that point we clearly stated to him that we would charge a success fee of 1%. it was then he gave me your number to discuss the matter in detail and after which I contacted you and invited you to our offices to meet Laxfield Capital to discuss your requirements.

Jaswinder knows very clearly that we will charge a fee which is our charge for services provided…”

This was the first time that Mr Mehta told Mr Anscomb of the alleged contract. Mr Anscomb forwarded this email exchange to Mr Hart. The next day, 22 May 2013, was the day on which Mr Singh spoke to Mr Hart and Mr Hart made the file note to which I have referred. Mr Hart sent that file note by email to Mr Singh (with a copy to Mr Anscomb and Mr Stewart), asking Mr Singh if he had anything to add to the file note. It does not appear that Mr Singh responded.

The parties disagreed about the next meeting in the Bar between Mr Mehta, Mr Shah and Mr Singh. However, Mr Sweeting acknowledged in his closing submissions that after the 3 May Meeting the meetings were of more limited significance.

Mr Mehta and Mr Shah said that they went to speak to Mr Singh in the Bar and it was the Claimant’s case that, during this conversation:

Mr Mehta and Mr Shah said that they were left with the impression that Mr Singh was going to sort everything out, but that they did not hear anything further from him, and the suggested lunch did not materialise.

Mr Singh said that on 28 May 2013 Mr Mehta and Mr Shah approached him in the Bar. Also present was a business acquaintance of Mr Singh’s, Mr Uday Bhasin. The Claimant has disclosed a copy of the email exchange between Mr Mehta and Mr Anscomb (between 15 May and 21 May), which has Mr Bhasin’s contact details on the reverse. Mr Mehta and Mr Shah accept that it is possible that they met Mr Singh and Mr Bhasin on 28 May 2013. I find that they did. Moreover, I find that the meeting on 28 May 2013 was the first meeting between Mr Mehta, Mr Shah and Mr Singh after the 2 May Meeting.

Mr Singh was able to date the conversation because on the evening of 28 May 2013 he spoke to Mr Hart, who prepared a file note, which read as follows:

“JS advised he received visit from Rajni and partner at MF bar today. Also present Uday Bhaskin accountant friend of JS (based in Dubai).

JS took the initiative – if the topic is MetLife let me go first. JS said he reminded them of the previous two meetings he had with them. He reiterated he had never agreed to pay them a commission for introducing a lender nor had he appointed them to raise any finance for Edwardian. He reminded them of the laughter which followed a suggestion from Rajni at a previous meeting that his commission would be 1%.

JS also told them he was not responsible for PA’s manner of responding to their approach.

They acknowledged JS was right in his reminder of the previous meetings and discussion, and indicated they were keen to maintain good relations above all.”

The Claimant submitted that I should be sceptical of what was a potentially self-serving document. However, I am not persuaded that Mr Singh or Mr Hart simply made up the contents of this file note. As the only contemporary record, it represents the best evidence of what was said in this meeting. However, I bear in mind that I have not heard from Mr Bhasin. (I do not consider it appropriate to draw an adverse inference from the Defendant’s failure to call Mr Bhasin, given the limited significance of the meeting and the existence of a contemporary written record.)

The Claimant submitted that it was not credible that Mr Mehta and Mr Shah would have discussed their affairs in front of Mr Bhasin and would have meekly agreed to Mr Singh’s version of events in circumstances where they had previously contended that a fee was payable. I have considered this submission, but I do not find it to be a determinative consideration. The Claimant’s own case was that they had important meetings with Mr Singh in a public bar. Moreover, it was one thing for Mr Mehta to write an email to Mr Anscomb claiming that there was a contract, but another thing for Mr Mehta to disagree with Mr Singh to his face, especially given the respect which he and Mr Shah undoubtedly had for Mr Singh.

Ultimately, I agree with Mr Sweeting that this and subsequent meetings were of limited significance in relation to the issues which I have to decide. Both parties describe a meeting in which complaint was made about Mr Anscomb and in which the parties spoke of a wish to maintain good relations. Any discussion of the underlying issues took place in that context. I am not satisfied that either party admitted that there was, or was not, a contract between them.

The refinancing of the Edwardian Group closed in December 2013. This was public knowledge. Mr Singh said that Mr Mehta and Mr Shah came to see him in the Bar on 8 January 2014. Mr Mehta and Mr Shah denied this, but Mr Singh’s evidence was supported by Mr Hart’s file note made the same day, which read:

“re Mehta – came to May fair today and asked about MeLife [sic] financing – JS said it is in the press that it completed. Mehta indicated he expected something. JS told him JS would not discuss it further, but would ask AH to have a chat with Mehta about his interest.”

I accept that what Mr Hart recorded Mr Singh as saying on 8 January 2014 reflects what actually happened on that day. However, Mr Hart did not in fact contact Mr Mehta.

Mr Mehta and Mr Shah denied that there was a meeting on 8 January 2014, but said that there was a meeting in March 2014 at which they reminded Mr Singh that the Claimant was due its 1% fee and Mr Singh said that he would ask Mr Hart to contact them. Since I have found that Mr Singh mentioned Mr Hart at the meeting on 8 January 2014, I do not accept that there was a separate meeting in March as described by Mr Mehta and Mr Shah.

It was common ground that there was a meeting in the Bar between Mr Mehta, Mr Shah and Mr Singh in March 2014 at which Mr Singh confronted them about derogatory remarks which they had been making about him and the Edwardian Group in the Indian business community. Mr Singh explained that he was, in particular, concerned about what they had said to Mr Joginder Sanger and Mr Raj Dhillon.

Mr Mehta and Mr Shah also said that there was a further meeting in the Bar later in March at which: Mr Singh denied that anything was due to the Claimant; they said that he would have to honour their agreement; he told them to get lost; and they said that their only recourse would be to litigation. Mr Singh said that he had no recollection of this meeting. I make no findings about it, since nothing of substance turns on it.

As I have said, the letter before action was sent on 16 July 2014. The Claim Form was issued on 10 June 2016.

I now return to the question whether what was said in the 2012 Meeting gave rise to a contract between the Claimant and the Defendant. I have considered all of the arguments advanced by the parties in relation to the credibility of the various witnesses, the likelihood or unlikelihood of each other’s version of events, the significance of the various events which took place after the 2012 Meeting and the reliability or otherwise of the documents produced by the various witnesses.

I have referred to some of these matters already in the course of this judgment, but I do not propose to rehearse all of the parties’ arguments or to try to answer every point which arose in the evidence or in the submissions. I have to look at everything in the round and to form a view as to whether it is more likely than not that the alleged contract was made at the 2012 Meeting.

The result of that exercise is clear. I am satisfied that no contract was made at the 2012 Meeting and that Mr Singh did not confirm the existence of such a contract at any subsequent meeting. Among the factors pointing to that conclusion are the following:

I acknowledge, in reaching the conclusion that there was no contract, that it may well be that some or all of the Claimant’s witnesses were lying in some of the evidence which they gave. It is unnecessary for me to decide whether and, if so, in what respects, they were being deliberately untruthful, or were mistaken in their recollection or had subconsciously convinced themselves of the truth of matters which were in fact untrue. All of these would affect the reliability of their evidence, and I have already identified a number of grounds for regarding their evidence as unreliable.

For these reasons, I conclude that there was no contract between the parties and therefore no fee is due from the Defendant to the Claimant. I dismiss the Claimant’s claim.

As I said at the end of the trial, I am grateful to the lawyers on both sides for the efforts which they made in the preparation and presentation of this case.

I propose to send the papers in this action to the Insolvency Service for them to consider whether any action should be taken against Mr Mehta. It may be that, given what I have been told about the earlier prosecution, no further action would be appropriate, but that will be a matter for them to judge, and I say nothing about it.