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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Crema v Cenkos Securities Plc [2010] EWCA Civ 1444 (16 December 2010) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2010/1444.html Cite as: [2011] Bus LR 943, [2011] 1 WLR 2066, [2010] 2 CLC 963, [2011] CILL 2980, [2010] EWCA Civ 1444

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IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION (COMERCIAL COURT)
MR JONATHAN HIRST QC (Deputy Judge)
[2010] EWHC 461 (Comm)

		Royal Courts of Justice Strand, London, WC2A 2LL
		16/12/2010

Lord Justice Aikens :

Synopsis of the case.

1. This appeal from an order dated 16 May 2010 of Mr Jonathan Hirst QC, sitting as a Deputy High Court Judge in the Commercial Court, concerns the basis on which the appellant ("Mr Crema") and the respondent ("Cenkos") agreed that Mr Crema would be paid a fee for acting as a sub-broker for Cenkos in raising funds for a venture capital company called Green Park Ventures ("GPV") in 2007-2008. Cenkos is a large, well-established stockbroker and corporate finance adviser based in the City of London. It is well-known for specialising in raising capital for small and mid-cap companies. Cenkos engaged Mr Crema, who has worked as an investment banker in the City for 20 years, as a "sub-broker" to find investors who would be prepared to finance a project of GPV's to refine low quality used cooking and vegetable oils for use as bio-diesel. It is accepted that there were two contracts concerning commission. First, there was a contract between Cenkos and GPV. Secondly, there was a contract between Cenkos and Mr Crema. It is accepted, moreover, that Mr Crema's fee was eventually agreed as 70% of Cenkos' final commission payable by GPV, which was fixed at 7% of the total of £18 million raised for GPV.
2. It is not in dispute that Mr Crema's fee would be payable after GPV received the total funds from the investors, which in the event was on 12 June 2008. It was always accepted that Mr Crema introduced Elettra Sviluppo SrL who invested £2 million in GPV on 22 February 2008. The judge found that Mr Crema was also instrumental in introducing BlueCrest Capital Management Ltd ("BlueCrest") to GPV and that BlueCrest paid £16 million to GPV in two tranches: £11 million on 1 April 2008 and £5 million on 12 June 2008.^[1] That conclusion is not appealed. It is also agreed that it is Cenkos, not GPV, that is liable to pay Mr Crema his fee.
3. The only dispute is whether Mr Crema became entitled to be paid his commission by Cenkos only upon the total brokerage fee being actually received by Cenkos from GPV, or whether he became entitled to payment of his commission by Cenkos even if Cenkos itself had not received payment of the commission from GPV. This problem has arisen because GPV refused to pay Cenkos any commission, even though GPV received, on time, all the £18 million funds raised through Mr Crema as sub-broker for Cenkos. GPV then collapsed into insolvent administration in 2009, albeit after Cenkos had started proceedings against it in attempt to recover the commission Cenkos said was due.
4. The total fee claimed by Mr Crema is £882,000. He also claims interest on that sum.
5. There was a six day trial before Mr Hirst QC. The judge heard oral evidence from Mr Crema and Mr Joe Nally, who was the Head of Natural Resources in Cenkos from 2007 to 2009. The judge found them both to be honest witnesses but he concluded that neither was entirely reliable. He considered both tended to exaggerate and that Mr Crema was inclined to a degree of wishful thinking.^[2]
6. The judge also heard "expert evidence" from Mr Glenn Cooper, on behalf of Mr Crema, and Mr Adam Hart on behalf of Cenkos. Mr Cooper and Mr Hart gave evidence on the general industry practice in the City of London on when a sub-broker would be paid his commission by a broker when the sub-broker had been instrumental in raising finance for a client of the broker. Neither witness suggested that there was a settled "trade custom" in the sense of an invariable, certain and notorious usage, such as could imply a term into a contract, provided that it was not inconsistent with an express term. However, the judge accepted that when a broker and a sub-broker are involved in raising finance for a client on a commission basis then there is a general market practice or understanding in the City of London that a sub-broker is not paid until the broker receives payment from the client. Moreover, the judge accepted the evidence that if a sub-broker were paid in advance of receipt of the fee by the broker, that would be regarded as an "indulgence"; it would be most unlikely to occur unless the broker was certain that he would receive payment from the client fairly shortly.^[3]
7. There were discussions between Mr Crema and Cenkos about the terms on which Mr Crema would be paid his commission by Cenkos from October 2007 until 13 March 2008. The judge analysed them and reached the following main conclusions. First, that a contract between Mr Crema and Cenkos was concluded on 25 October 2007. Secondly, its terms evolved as a result of the discussions between the parties over the period from 25 October 2007 until Cenkos sent Mr Crema a letter dated 11 March 2008. Thirdly, that the terms of that letter were themselves modified as a result of a telephone conversation between Mr Crema and Mr Nally on 13 March 2008.
8. Fourthly, the judge held, at [84], that the "sense" of this letter "and of the earlier letters and discussions" was that the broker and sub-broker, Cenkos and Mr Crema "were in it together".^[4] Mr Hirst's judgment continues:

"Any other arrangement would be rather uncommercial, placing the whole risk of non-payment by GPV on Cenkos. There was an expected fund of brokerage to be received from GPV. They would share in it 70:30 in relation to investments raised by Mr Crema….".^[5]

9. The judge therefore held, fifthly, that Mr Crema was not entitled to be paid his sub-brokerage whether or not Cenkos received payment from GPV. He held that "the contract between Mr Crema and Cenkos entitled him to take a 70% share of the 7% brokerage received from GPV, assuming of course that "his" investors made the expected investments. He had no independent right to payment of brokerage" .^[6]
10. The judge said that he had ignored the evidence on market practice in reaching this conclusion, although he said that it strongly supported it. He added that the evidence of market practice suggested that "City practice would be that a clear agreement would be needed if (improbably) a sub-broker was to be entitled to payment of commission irrespective of whether the broker received payment of commission".^[7]
11. Having reached that conclusion, the judge then considered Mr Crema's alternative case. This was that Cenkos was in breach of implied terms of the contract between it and Mr Crema to the effect that Cenkos would take all possible or reasonable steps to ensure that it and Mr Crema would be paid and/or act in this regard as a prudent company would act; alternatively that Cenkos owed Mr Crema a duty of care. Mr Hirst rejected the specific duties that Mr Crema argued must be imposed upon Cenkos by virtue of implied terms in the contract between them. Instead he held that there were two other implied terms to the contract between the parties. The first was that Cenkos would take all reasonable steps to recover the fees due. The second was that Cenkos would do nothing to prevent payment of its fees with the result that Mr Cream was deprived of his fees.^[8] However, the judge held that neither of those terms assisted Mr Crema on the facts. He therefore dismissed Mr Crema's claim.
12. Mr Crema appeals to this court with the permission of Sir Richard Buxton.

The arguments and the Issues on the appeal.

13. The issues in this case should be short and comparatively simple. They should have been identified first in the pleadings and then refined in the List of Issues. ^[9] Unfortunately the pleadings served only to confuse things. The Amended Particulars of Claim run to 44 paragraphs in all and plead vast quantities of evidence instead of concentrating on the claimant's case on when and how precisely the contract was concluded, what its express and implied (if any) terms were said to be and the alleged breaches of contract by Cenkos. It is only at paragraph 16 of the Particulars of Claim that it is pleaded that the contract between Mr Crema and Cenkos was one in writing. It is alleged (contrary to Mr Crema's current case) to be "contained in or evidenced by" an email exchange between Mr Crema and Mr Nally on 22 to 23 November 2007 and a letter from Mr Nally to Mr Crema of 25 November 2007. There then follows a prolonged recital of meetings and events between November 2007 until 13 March 2008. It is only at paragraph 39 that the claimant pleads that "in the premises" the sum of £882,000 is "due and owing by Cenkos to Mr Crema under the agreement of March 13, alternatively March 11 2008, alternatively the sum of £900,000 is due and owing under the agreement of 23 November 2007 alternatively 25 November 2007". The pleading then sets out the alternative case of implied terms and breach of those by Cenkos.
14. The amended Defence contains 27 paragraphs in all. It does not state Cenkos' positive case on when and how the contract was made. It does, however, plead that it was agreed and "understood" between the parties that Mr Crema would not receive a fee unless and until Cenkos was paid its fee. It does not identify precisely when or how that agreement and understanding were concluded. The claimant did not seek further information on when this agreement was made or how. He did ask for further information of what was meant by "it was understood". Cenkos gave an uninformative response.
15. At paragraph [33] of his judgment the judge sets out the List of Issues that had been settled by the Commercial judge at a Case Management Conference. This List identifies 13 issues for decision. However it fails to identify the most basic issues, viz. (1) when was the contract concluded between Mr Crema and Cenkos, and (2) whether it was in writing or oral or a mixture of the two, and (3) what were its express and implied terms. The judge recognised that this list of 13 issues was not as precise as it could be and at [38] of his judgment he formulated five issues for consideration. However, I respectfully suggest that he did not specifically identify the three most basic issues, which I have set out above.
16. The consequence of this is that the judge's conclusions on the first two of those three issues are perhaps not as focused as they could be, at least for the purposes of this appeal. Thus when Mr Hugo Page QC opened the appeal on behalf of Mr Crema, he was asked what his case was on when and how the contract was made and whether it was in writing or oral. Mr Page stated that Mr Crema's primary case was that the contract was contained in the terms of the letter of 11 March 2008 as amended in the telephone conversation between Mr Nally and Mr Crema on 13 March 2008. He submitted that, insofar as the judgment of Mr Hirst found that the contract was based on what had happened in October 2007 and subsequently, it was wrong. Therefore, he submitted, all the communications, by letter or email or orally that took place between October 2007 and 11 March 2008 were simply part of the negotiations and irrelevant to the determination of the express and any implied terms of the contract. Mr Page accepted, of course, that the court had to construe the contract against the factual background in which the parties operated. But he submitted that, as a matter of law, it was impermissible for a court to consider expert evidence on "usual market practice" either for the purposes of construing the express terms of a contract or to assist on the nature and scope of any implied terms, unless it was asserted that there was a "trade usage or custom", which was not alleged in this case.
17. Mr Gledhill, for Cenkos, submitted to us that it was and always had been Cenkos' case that the contract between the parties was partly oral and partly in writing and that its genesis was in an oral and written agreement made between the parties on 25 October 2007. He submitted that it was common ground below that from that date there was an enforceable contract between the parties relating to Mr Crema's commission. However, he accepted that the contract was modified as the months passed until 13 March 2008. Therefore it was necessary to consider in detail all the communications between the parties from October 2007 until March 2008. He further submitted that a court could take account of expert evidence on usual market practice for the purposes of deciding on the construction of express terms of a contract or whether there were any implied terms and, if so, their nature.
18. In my view the following issues arise on this appeal: (1) What are the findings of the judge on the formation and terms of the contract between Cenkos and Mr Crema? (2) When and how does a court imply a term in a contract, whether it is wholly in writing or is partly oral and partly in writing? (3) Can a court take into account expert evidence on "market practice" for the purposes of (a) the construction of the express terms of a contract; or (b) whether there was an implied term to the contract? (4) In the light of the conclusions on (1) to (3), can the judge's conclusions on the nature of the contract between the parties and its terms be impugned? (5) If, on the true construction of the contract between Mr Crema and Cenkos, or as a matter of implication, there is a term that he would only be paid his commission of 70% of 7% of the final investment in GPV only once Cenkos had been paid the total commission due to Cenkos from GPV, were there other implied terms imposing duties on Cenkos and if so, what were they? (6) Was Cenkos in breach of any term? If so, what are the consequences?

Issue (1): What are the findings of the judge on the formation and the terms of the contract between Cenkos and Mr Crema.

19. Because the parties were so fundamentally at odds on the question of when and how the contract between Mr Crema and Cenkos was concluded, as well as its terms, we necessarily heard arguments about what the judge actually found and whether he was entitled to make the findings he did. It is therefore necessary first to analyse in some detail the judge's findings of fact and the conclusions he drew from them. It is a little difficult to summarise the findings of the judge because he deals with the relevant events twice over. Thus, for example, he refers to the events of 25 October 2007 at [66] and again at [79] and those of 23 November 2007 at [68] and then again at [80].
20. The first relevant finding is that before 25 October 2007 there had been discussion between Mr Crema and Mr Nally of Cenkos on the terms of the sub-brokerage and commission agreement between Mr Crema and Cenkos, but nothing had been agreed before that date. The judge found that there were written communications, ie. e-mails, that day which resulted in a contract, which was an informal but contractual agreement between Mr Crema and Mr Nally that Mr Crema would be entitled to share in a 5% fee.^[10] The judge's use of the verb "share" is important, as becomes clear later in his judgment. The judge thus found that there was a " contract in place, albeit informal" from 25 October 2007. He stated that it was telling that Mr Crema was told the percentage fee that GPV had agreed to pay Cenkos, with the "clear implication" that Mr Crema "would be sharing in the fee earned by Cenkos".^[11] The judge did not find, at that stage, that the parties had expressly agreed a term of the contract that Mr Crema would only be paid his commission once Cenkos had been paid the total commission due from GPV. Nor is there an express finding that this was then "clearly understood" between Mr Crema and Mr Nally.
21. Mr Page submitted, first, that the judge did not find that, before 11 or 13 March 2008, there was a pre-existing agreement between Cenkos and Mr Crema for the payment of a fee to Mr Crema for his services. In my view that argument is unsustainable in view of the clear findings at [66] and [79] of the judgment. Secondly, he submitted that the material before the judge, in particular the e-mail exchange between Mr Crema and Mr Nally on 25 October 2007, could not support the judge's finding that there was an informal but binding contract between the parties on 25 October 2007. I do not accept that submission. The e-mail exchange is brief, but it contains material on which the judge could make the finding he did.
22. The second relevant finding of the judge is that there was an important exchange of correspondence between the parties on 23 November 2007. On behalf of Cenkos, Mr Nally sent Mr Crema a letter which stated: "In relation to your proposed participation in the fund raised for V Fuels, [viz. GPV] pending our agreement with the company, we would pay you 5% of funds raised by yourselves" [sic]. The judge found that this letter, which he characterised as "not well written", was composed by Mr Nally.^[12] Mr Crema sent an e-mail response which stated: "It looks fine and thank you". 45 minutes later he sent a longer e-mail. It introduced some potential investors, Hutton Collins Partners LLP ("Hutton Collins"). At the end of the message Mr Crema said: "Joe, [Mr Nally] thanks again for sending me the fees commitment letter. As it is a commitment from you/ Cenkos Œpending [sic] agreement from the client, I fully trust that V-Fuels is bound to you and hence me".
23. The judge noted that Mr Crema thought that the "Œ" was present as a result of a computer glitch.^[13] At [80] the judge first says that the letter of 23 November, "looked at in isolation" might point more strongly to Cenkos accepting liability to pay Mr Crema in respect of funds raised by him. However, the paragraph continues:

"..but I find Mr Crema's more considered response…telling. The e-mail [of Mr Crema] is not well written, but, as I read it, Mr Crema was recognising that from his point of view ("hence me") it was critical that GPV/V-Fuels was bound to Cenkos, otherwise he would not be paid. If he thought that the arrangement was that he was entitled to be paid whatever happened between GPV and Cenkos, it is difficult to see why he would have raised the point with Mr Nally".

24. It is clear, and I think Mr Page accepted, that by this time there was an agreement between Mr Crema and Cenkos that it would pay him 5% of the funds he raised "pending our agreement with the company", which must mean GPV. I understand the comments of the judge to be that Mr Crema was anxious that GPV and Cenkos had a binding agreement that GPV would pay Cenkos a commission for the introduction of investment for GPV's project, because if there was not, then neither Cenkos nor Mr Crema would be paid. I do not read them as adding anything to the judge's earlier findings on any express or an implied agreement to the effect that Mr Crema would only be paid his commission by Cenkos once Cenkos had been paid by GPV. As Mr Page rightly pointed out, Mr Crema's anxiety is irrelevant to whether there was a contract and what terms were agreed.
25. The next important findings concern a meeting that took place at the Stafford Hotel in St James's on 12 December 2007 between Mr Crema and Mr Nally. The judge said that he did not find either witness' recollection of that meeting at all reliable.^[14] That conclusion was not seriously challenged on the appeal. He found that Mr Nally stated that Mr Crema would be paid "upon a successful completion".^[15] The judge held that "upon a successful completion" meant upon completion of the investment and also payment of the commission to Cenkos by GPV. But the judge also found that "little in my view can be derived from the meeting at the Stafford Hotel…".^[16] The judge stated that the possibility of a payment by broker warrants, to be issued by GPV, was raised and the agreement was that they would be shared 50/50.^[17] He also found: "…I do not consider that either way much should be read into what was said at a meeting over drinks in the hotel…", the main purpose of which was to assure Mr Crema that he would not be cut out of the deal "…and that Cenkos would honour its promise which now included half any broker warrants obtained".^[18]
26. The judge does not find that the agreement to pay "upon successful completion" was the foundation of an express contractual term that Mr Crema would only be paid once Cenkos had been paid its commission by GPV. Overall, the judge appears to conclude that nothing significant was agreed at the Stafford Hotel meeting.
27. Mr Page attacked the judge's finding on what was meant by the words "upon successful completion", submitting that it was agreed by the two experts that this term meant simply once the investors had paid over the funds to GPV and did not include the payment of the commission by GPV to Cenkos. In my view the judge's preferred interpretation of the phrase may be of minor importance, because he made it clear that he gave so little weight to what was said at that hotel meeting.
28. The judge's next important findings concern a telephone conversation between Mr Nally and Mr Crema on 29 January 2008, in which Mr Davis and Mr Ward of GPV also took part. That telephone conversation was recorded. The judge found that the discussion reflected what had previously been agreed. At [72] the judge stated that shortly after the discussion a 70/30 split of the commission from GPV was agreed, plus a 50/50 split of any broker warrants issued. At [82] the judge finds that the telephone conversation confirmed that "…there was to be a brokerage fund of 5% . If Mr Crema was successful with Hutton Collins and therefore produced most of the investment, the 5% would be cut in his favour". Mr Page attacked the judge's finding that the telephone conversation confirmed that there was to be a brokerage fund of 5%. He submitted that the transcript of the telephone conversation did not support that conclusion. I do not accept that. Mr Nally said, at a late stage in the conversation, concerning fees: "with your [Mr Crema's] involvement the thought was of 5% all the way through; we will obviously have to cut that in your favour to the extent that you are incredibly persuasive to Hutton Collins". Mr Crema replied: "Ok, Well that's fair enough. You and I can easily figure that part out". That exchange justifies the judge's finding. Although it is not spelt out, it is capable of being read as confirming that which the judge has found had been agreed before. However, the finding that the parties agreed that there would be a "brokerage fund" of 5% does not, it seems to me, amount to a specific finding that the parties had by then expressly agreed that Mr Crema would be paid his cut only upon Cenkos' receipt of the "brokerage fund" from GPV.
29. The last major finding on the chronology concerns the letter of 11 March 2008, as modified in the telephone call of 13 March 2008. In the letter of 11 March from Mr Nally of Cenkos to Mr Crema, Mr Nally states that "Your [Mr Crema's] Introduction Fee for raising the funds" is to be as follows:

"1. A one off payment of £630,000, this is based on 70% of the final commission of 5% of the final commission raised.

2. 1% warrant over the company at 30% premium to the issue or completion price".

30. On 13 March 2008 the terms were modified as a result of a telephone call between Mr Crema and Mr Nally in which Mr Nally said that there would be no broker warrants, so that GPV had agreed to pay Cenkos a 7% commission. The final terms of the letter are agreed to be in the following terms:

"Your [viz. Mr Crema's] Introduction Fee for raising the funds is as follows:

1. A one off payment of £882,000, this is based on 70% of the final commission of 7% of the final investment raised".

At [74] the judge stated that this was "the final version of the agreement between the parties. It did not change thereafter".

31. Mr Page submitted that there is nothing in the wording of the letter of 11 March, as modified, to warrant the conclusions that the judge reached at [84] and [85] of his judgment that (a) Mr Crema and Cenkos were "in it together"; (b) that there was a "fund of brokerage to be received from GPV"; and that (c) the contract between Mr Crema and Cenkos entitled him only to receive 70% of the 7% brokerage actually received from GPV, but not to any independent right to payment of brokerage from Cenkos if GPV did not pay Cenkos. He also submitted that there was no evidence to warrant a finding that Mr Nally had orally stated those terms to which Mr Crema had agreed, although he accepted that Mr Nally did give evidence that those terms should have been "deduced" from what was discussed.
32. When Mr Nally was cross-examined by Mr Page, he was asked why there was nothing in any of the emails sent or the letter of 11 March 2008 to the effect that Mr Crema would only be paid his commission once Cenkos had been paid by GPV. Mr Nally accepted that there was no express statement to that effect. He said that was because he and Mr Crema had a "contractual understanding", which was "long term" to that effect.^[19] That evidence reflected what Mr Nally had said in his witness statement.^[20] In his oral evidence he did not elaborate on when this "understanding" arose nor on the details of its terms.
33. The judge went on to hold that the arguments that arose after it had become clear that no payment would be forthcoming from GPV did not assist him in determining the true nature of the arrangements between Mr Crema and Cenkos. Mr Gledhill submitted that in the case of a contract that is either totally or partially oral, it is permissible to adduce evidence of things said and done after the contract had been concluded in order to test what was said to have been agreed between the parties.^[21] Mr Gledhill also submitted that some assistance in testing the terms of the contract between the parties could be gained from the actions and attitude of Mr Crema in the course of the litigation that was instituted by Cenkos against GPV to recover the commission due to Cenkos from GPV.
34. I accept that there may be occasions when evidence of things said and done after a wholly or partially oral contract has been concluded may assist a court in testing what is said to have been agreed by the parties at the time the contract was made. Statements and conduct after the contract cannot, of course, help a court on questions of construction. But whether "after the event" evidence does help a court decide on what was said to have been agreed will depend on the nature of the evidence. The trial judge is in the best position to determine the utility of that. The judge here held that it was no help to him and nothing persuades me that his assessment was so unreasonable that we would be entitled to interfere with it.
35. I draw the following conclusions from the judge's findings: first, there is no finding of fact that, at around 25 October 2007, there was an oral contract which expressly contained a term of the kind the judge has effectively found at [85]. Secondly, there is no finding of fact that it became an express term thereafter. Thirdly, the judge does not say that such a term can be construed from the express wording of the letter of 11 March 2008 as modified by the conversation on 13 March 2008. Fourthly, the judge's conclusion that the contract contained the term found appears to arise largely as a result of his finding that both parties accepted that they were "in it together" and that there was a "brokerage fund". For my part, however, I do not see how it follows from those findings that there must be an express term of the type the judge appears to have found. It does not follow a matter of construction. Therefore, fifthly, I conclude that if there is a term as found by the judge it must be an implied one, because that is what the contract must mean in relation to the events (perhaps unforeseen) which have happened. I elaborate on this below.

Issue (2): When and how does a court imply a term in a contract?

36. The question of when and how a court decides whether there is an implied terms in a written instrument has been considered recently by the Privy Council in Attorney General of Belize v Belize Telecom Ltd,^[22] ("the Belize case"). That analysis and approach was adopted by the Court of Appeal in the case of Mediterranean Salvage & Towage Ltd v Seamar Trading and Commerce Inc (The "REBORN").^[23] That case concerned a charterparty, ie. a contract entirely in writing.
37. In the Belize case, the Privy Council was dealing with the question of how a court should decide whether a term is to be implied into the Articles of Association of Belize Telecommunications Ltd. But, in giving the advice of the Board, Lord Hoffmann made it clear that the principles he set out were applicable to all types of written instrument, including contracts wholly in writing and statutes. However, in my view the principles stated by Lord Hoffmann at [16]-[18] of the Board's advice are equally relevant to contracts that are partly oral and partly in writing and also those that are wholly oral, with any necessary modifications to suit specific cases.
38. The principles are: (1) A court cannot improve the instrument it has to construe to make it fairer or more reasonable. It is concerned only to discover what the instrument means. (2) The meaning is that which the instrument would convey to the legal anthropomorphism called "the reasonable person", or the "reasonable addressee". That "person" will have all the background knowledge which would reasonably be available to the audience to whom the instrument is addressed. The objective meaning of the instrument is what is conventionally called the intention of "the parties" or the intention of whoever is the deemed author of the instrument. (3) The question of implication of terms only arises when the instrument does not expressly provide for what is to happen when some particular (often unforeseen) event occurs. (4) The default position is that nothing is to be implied in the instrument. In that case, if that particular event has caused loss, then the loss lies where it falls. (5) However, if the "reasonable addressee" would understand the instrument, against the other terms and the relevant background, to mean something more, ie. that something is to happen in that particular event which is not expressly dealt with in the instrument's terms, then it is said that the court implies a term as to what will happen if the event in question occurs. (5) Nevertheless, that process does not add another term to the instrument; it only spells out what the instrument means. It is an exercise in the construction of the instrument as a whole. In the case of all written instruments, this obviously means that term is there from the outset, ie. from the moment the contract was agreed, or the Articles of Association were adopted or the statute was passed into law.
39. Lord Hoffmann went on to make two further points at [21] – [27] . The first is that the phrases which courts have used as "tests" to decide whether a term should be implied, (eg. that the term is necessary to give "business efficacy" to the contract, or that the term is one was "obvious"), can detract from the task that the court has to undertake. That is to see whether the proposed implication spells out what the instrument would reasonably be understood to mean. Lord Hoffmann emphasised that those tests are not free-standing. Secondly, the oft-expressed requirement that an implied term must not just be reasonable but be "necessary" simply reflects the requirement that the court has to be satisfied that the term must be implied because that is what the contract must mean.
40. There can be problems determining the terms of a contract when it is not wholly written, but is either entirely oral or is partly oral and partly in writing, particularly when it is a business contract between two people who are used to dealing in a particular business or trade. This is because commercial men frequently use their own kind of shorthand.^[24] There may well be common assumptions about what is to happen in certain circumstances and neither the particular circumstances, nor what is assumed will happen if they occur, are articulated expressly when the contract is agreed orally or some of its terms are put in writing.
41. However, it seems to me that the logic of Lord Hoffmann's approach in the Belize case must apply where the contract is either wholly oral or is partly oral and partly in writing, so the task of the court is no different from a case where the contract is entirely in writing. In all instances the question is: what would the meaning of the contract be to the "reasonable addressee" who had all the background knowledge which would reasonably be available to the two parties who concluded the contract at the time when they did so. In this case, given my conclusions above, the contract between Mr Crema and Cenkos was partly in writing and partly oral. It is clear that the parties did not agree expressly on what was to happen about Mr Crema's commission, payable by Cenkos, if GPV failed to pay to Cenkos the commission to which Cenkos was entitled. Therefore the court has to work out what, from the viewpoint of the "reasonable addressee", the parties intended should happen in that event. The judge's answer, in terms of Lord Hoffmann's analysis, is that the contract, on its proper meaning, provides that Mr Crema was not entitled to be paid until Cenkos had received the commission from GPV to which it was contractually entitled. I consider whether that is correct or not under Issue (4).

Issue (3): Can a court take into account expert evidence on "market practice" for the purposes of (a) the construction of the express terms of a contract; or (b) whether there was an implied term to the contract?

42. The Belize case confirms that a court must consider all the background knowledge which would be reasonably available to the parties when deciding whether or not a wholly written contract is to be interpreted so as to contain a term which is implicit. The same must be true of a contract which is partly oral and partly in writing or even wholly oral. Only in that way can a court be put in the position of being what Lord Hoffmann calls the "reasonable addressee" in the Belize case at [18]. It seems to me that it must follow that, in either case, a court will be entitled to receive independent expert evidence of what "market practice" is if that is relevant background knowledge for the purposes of interpreting the terms of the contract, both explicit and implicit. Contrary to the submission of Mr Page, I think that this will be particularly so if there is a dispute about the "market practice" between the rival parties to the litigation.
43. In my experience, it has been common practice for the Commercial Court to hear evidence of "market practice", which does not amount to evidence of an alleged "trade usage or custom", in order to assist the court with a full understanding of the factual background to the proper construction of a written contract. The landmark decision of the House of Lords in Prenn v Simmonds^[25] reminded both judges and practitioners that written contracts were not to be interpreted "divorced from the matrix of facts in which they were set and interpreted purely on internal linguistic considerations". Therefore, evidence of the factual background known to the parties at and before the date of the contract, including evidence of the "genesis" and objectively the "aim" of the transaction, but not of negotiations, was admissible.
44. Soon after that decision there was a trial before Mocatta J in the Commercial Court on the scope of an aviation insurance affected in the Lloyd's aviation market on three aircraft which were effectively destroyed in an Israeli army raid on Beirut airport in December 1968.^[26] Extensive evidence was heard by the judge from witnesses experienced in the Lloyd's aviation insurance market on the "surrounding circumstances" as an aid to the construction of the laconic Lloyd's slips which contained the relevant insurance terms. The evidence also covered negotiations and the past history of the terms. In the Court of Appeal,^[27] Roskill LJ said that evidence was "plainly admissible" to explain the meaning of the "insurance market shorthand" of the slip, for the purpose of converting it from "shorthand" to "longhand". He referred to the recent decision of Prenn v Simmonds and confirmed that "surrounding circumstances pointing to the correct construction might legitimately be proved by oral evidence strictly limited to that purpose", but that there should not be evidence of negotiations.^[28] This use of expert evidence "from witnesses familiar with the shorthand used in the aviation market" was approved without comment by Lord Diplock, who gave the leading speech on the case when it reached the House of Lords.^[29] In a more recent case Moore-Bick J (as he then was) stated in Kingscroft v Nissan Fire & Marine (No 2)^[30] that an expert witness: "can, and indeed should inform the court of any aspects of the commercial background which have a bearing on the construction of the contract and explain their relevance". A very recent reported example of this use of expert evidence is Equitas Ltd v R&Q Reinsurance Co (UK) Ltd^[31] which concerned the correct construction of 26 Excess Loss ("XL") retrocession insurance contracts in the London market.
45. If expert evidence is admissible to provide the background against which to construe a wholly written contract, including the exercise of construction which involves determining whether there is an "implied term" as analysed by Lord Hoffmann in the Belize case, then it seems to me that the same exercise must logically be permissible in the case of construing a partly written and partly oral contract. What the parties agreed, expressly or implicitly, can only be judged against the factual background they knew, which must include practices of any particular market in which they operate and in which the agreement was made.
46. Mr Page submitted that this exercise was impermissible and he cited a number of cases in support of that proposition. I have re-read the passages in the various cases to which we were referred.^[32] They do not support the broad proposition that expert evidence is never admissible to demonstrate the factual "market" background for the purposes of construing a written contract. Insofar as Timothy Walker J stated in The "OAKWELL" that expert evidence of market practice can only be used for this purpose if it is agreed, I think he was wrong. If there is a disagreement on what a market practice is, then the judge must decide whether a particular market practice exists or not. If it does, then it is again up to the judge to decide if it is useful background evidence against which to construe the contract in question.
47. In contrast to those cases there is the persuasive statement of Lord Hoffmann in Lloyd's TSB v Clarke^[33] that evidence from witnesses on the meaning of a "sub-participation agreement" was admissible as part of the background against which the agreement in issue had to be construed. In that case the phrase was not a legal term of art, but was a term commonly used in the relevant financial market in which the contract was concluded.
48. It is now necessary to consider the judge's findings with these principles in mind.

Issue (4) In the light of the analysis in (1) to (3), can the judge's conclusions on the nature of the contract between the parties and its terms be impugned?

49. I have effectively already concluded that the judge's finding that the contract was made on 25 October 2007 and then modified until the final version of 13 March 2008 cannot be impugned. The contract was, therefore, partly in writing and partly oral. There was plainly no express term in the contract about whether Cenkos was liable to pay Mr Crema 70% of the 7% commission fee GPV was liable to pay to Cenkos if, in fact, GPV failed to pay Cenkos what it was due. Without any implied term, Mr Crema would be entitled to his commission once the finance had been paid over to GPV. The only way that conclusion can be avoided is by the implication of a term to make his entitlement to commission conditional on Cenkos being paid its commission.
50. Should a term be implied? Given my analysis of how the court must approach the question of implied terms, that question must be considered in the light of the expert evidence on "market practice", so that the court can put itself in the position of the "reasonable addressee" of the contract between Mr Crema and Cenkos. But it is important to recognise the limits of that evidence. First, both experts accepted that they had never encountered a case where a broker had not been paid and had then had to consider whether the broker had to pay a sub-broker his "sub-brokerage".^[34] Secondly, the two experts could therefore only deal with the normal practice on the sequence of payments when things went according to plan and so the broker was paid its commission. Hence the judge's finding, at [56], that there is a general market practice that a sub-broker is not paid until the broker receives payment from the client. The experts' views on what might be the case when the broker was not paid but the sub-broker had done his work and the client had been paid by the investors introduced by the broker and sub-broker were therefore entirely hypothetical and not based on market experience. Thirdly, the judge makes only a tentative and general conclusion at [85] on market practice on the issue in question. It is that the expert evidence "suggests" that City practice "would be that a clear agreement would be needed if (improbably) a sub-broker was to be entitled to payment of commission irrespective of whether the broker received payment of commission". In other words, the expert evidence did not drive the judge to the conclusion that the parties to this contract must have meant that, when Cenkos was not paid by the principal, Mr Crema as sub-broker had no right to his sub-commission under the separate contract between broker and sub-broker.
51. So, it is necessary to ask: is the only meaning of the contract between Cenkos and Mr Crema, consistent with its other provisions and taken against the relevant background, including the expert evidence of market practice, that Mr Crema is only entitled to his sub-commission if Cenkos has been paid its commission under its contract with GPV? ^[35] I have concluded that it is impossible to say that is the only thing that the contract must mean. There are several reasons for this conclusion.
52. First, the default position is that there is no implication and there has to be some good reason why the contract must mean something more than what has been expressly stated. Secondly, the two contracts for commission are, on the face of it, entirely independent, in the way that any other principal and broker and broker and sub-broker contracts would be. One asks, rhetorically, if the broker is not paid by the principal, but the sub-broker has performed his contract and the money paid over to the client, then why should the sub-broker not be able to enforce his independent contract and let the losses lie where they fall, at the feet of the broker? There is, in my view, no obvious reason why not.
53. Thirdly, Mr Gledhill has provided no plausible reason why, implicitly, the contract between Cenkos and Mr Crema must mean that payment of Cenkos by GPV is a pre-condition to Cenkos' liability to pay Mr Crema. He relied on the judge's reasons, but, with respect, I find those unconvincing. The judge effectively gave four reasons for implying the term. First he says, at [84], that "any other arrangement would be rather uncommercial, placing the whole risk of non-payment by GPV on Cenkos". But I note that there was nothing in the agreement between Cenkos and Mr Crema to give him any control over Cenkos' arrangements with GPV for payment of Cenkos' commission. So he could not do anything to ensure GPV paid Cenkos. On the other hand, Mr Crema had done the work for Cenkos and had introduced Elettra and BlueCrest successfully to GPV and they had paid over the £18 million to GPV. On the face of it, his sub-brokerage commission would become due once the payments to GPV had been made. In those circumstances I would say it is right that the risk of non-payment by GPV should be placed upon Cenkos unless otherwise specifically agreed. The second reason given by the judge, also at [84], is that Cenkos and Mr Crema were "in it together." In the loose sense that both were working to obtain finance for GPV in return for commission, that is correct. But they were not partners or joint-venturers. At no stage did Mr Crema have a direct contract with GPV, who made their arrangements with Cenkos, not him. The third reason given, also at [84], is that there was a "fund of brokerage". I can understand that it was contemplated that Cenkos would use the brokerage sum paid by GPV to fund its payment to Mr Crema. But I find implausible the idea that there would be a fund over which both Cenkos and Mr Crema had some kind of proprietary interest. Fourthly, although he does not say so expressly in [84] and [85], the judge may have relied on his finding that Mr Nally said, at the Stafford Hotel meeting, that Mr Crema would be paid "upon a successful completion", and the judge preferred Mr Gledhill's submission that this meant "completion of the investment and payment of the commission to Cenkos".^[36] In my view the obvious meaning of those words is completion of the investment and they have nothing to do with payment of the commission by GPV to Cenkos. I note that the experts did not entirely agree on the interpretation of those words,^[37] but both appear simply to put forward their view on interpretation rather than a view based on "market understanding" of the meaning of the words.^[38]
54. The fourth reason for my conclusion is that if there is to be an implied term as the judge found, it means (as was conceded by Mr Gledhill) that there have to be other implied terms in the contract. At a minimum, (and as the judge found) these would impose duties on Cenkos to take reasonable steps to recover fees due from GPV and also not to do anything that would prevent payment of fees by GPV to Cenkos with the consequence that Mr Crema was deprived of his sub-commission. The fact that the implication of one term requires yet more implied terms raises again the question: is that what the parties must have meant by the contract? In my mind the obvious response is to throw doubt on whether the contract must mean that it contained the first suggested "implied" term.
55. Accordingly, contrary to the judge, I have concluded that the contract between Cenkos and Mr Crema is not to be interpreted to mean that it is implicit that Mr Crema is only entitled to his sub-commission once Cenkos has been paid by GPV. Therefore, I would allow the appeal.

Issues (5) and (6): Are there other implied terms and was Cenkos in breach of them and with what consequences?

56. Given my conclusion above, I do not need to consider these two issues in detail. On the appeal, Mr Page appeared to accept the judge's conclusion on the two terms that would be implied in the contract between Cenkos and Mr Crema if there was an implied term that Mr Crema would only be entitled to receive his commission from Cenkos once it had been paid its commission by GPV. Mr Page concentrated on two alleged breaches of the implied terms as found by the judge at [96]. First, an alleged failure of Cenkos to obtain a written agreement between itself and GPV concerning the payment of commission to Cenkos. Secondly, Cenkos' alleged failure to set up an arrangement for an escrow account in which the commission would be paid.
57. I doubt whether these terms can be implied at all. There is no convincing reason why the contract between Cenkos and Mr Crema must mean that Cenkos undertook to reduce to writing its contract concerning commission with GPV, particularly as Mr Crema knew there was no written agreement. Nor is there any convincing reason why the contract between Cenkos and Mr Crema must mean that Cenkos undertook to set up an escrow account into which commission would be paid. Again, Mr Crema knew there was no such arrangement and he never sought one.
58. The fact that it is impossible to justify even these implied terms, let along the more elaborate ones pleaded by Mr Crema as part of his alternative case only reinforces my conclusion that the principal suggested implied term is unsustainable.

Conclusion.

59. I would allow the appeal. I should add that I have read in draft the judgments delivered by The Chancellor of the High Court and Hughes LJ. I have looked at the case of MGN Ltd v Grisbrook [2010] EWCA Civ 1399, mentioned by The Chancellor at [71] below, especially at [31] of judgment of The Chancellor in that case. I accept that the jurisprudential basis on which a term is implied in a contract created by conduct may well need further analysis in another case. In my view that issue does not arise in this case. My remarks at [36] – [41] above concerning the implication of terms in contracts that are partly oral and partly in writing are not intended (either expressly or impliedly) to extend to such cases.

Lord Justice Hughes:

60. I agree that this appeal should be allowed. I began this case, and have ended it, with the belief that it would be entirely unsurprising if these parties had agreed that Mr Crema was to be paid out of the money paid to Cenkos by GPV, and thus only when and if GPV did pay Cenkos. But that is not the test. Although it is sometimes possible to imply terms into a contract, it is not for the court to make for the parties the bargain which it thinks, with hindsight, they ought to have made. In any event, in the present case it would have been equally possible for them to have agreed, if they had confronted the issue, simply that Cenkos were to be responsible for paying Mr Crema. I am afraid that, like my Lords, I do not think that it is possible to spell out of the exchanges of Emails and letters any agreement on the critical point. It is clear that these parties never addressed the point explicitly; the judge did not find that they did, and Mr Nally's evidence did not really ever go so far as to claim it. It is of course true, as Mr Gledhill reminded us, that one party's evidence that he and the other spoke of a particular point and agreed it may be entirely credible although he is unable to remember the words, but Mr Nally never said more than that it was understood that payment to Mr Crema would be dependent on money being received from GPV; he never reached the point of asserting that either of them had ever mentioned the issue. Thus the case depends on whether a term to the effect claimed by Cenkos can properly be implied. I agree that the judge was entitled to look at market practice, but there was none because neither expert had ever encountered the question arising. I respectfully agree with both the Chancellor and Aikens LJ that it cannot be said that any objective observer would say that this was an agreement under which Mr Crema was not to be paid unless GPV paid Cenkos, whether because that was obvious to both the parties, or because it was necessary to make the contract effective, or for any other reason, nor did the judge hold that it was. In those circumstances, I do not think that any more general debate on the conceptual basis for the implication of terms into contracts arises.

The Chancellor of the High Court

61. I am grateful to Aikens LJ for his clear exposition of the facts and issues on this appeal. I agree with him that the appeal should be allowed but on slightly different grounds from those he has expressed. Accordingly it is necessary for me to set out some of the material facts again.
62. The starting point is the exchange of emails on 25th October 2007 to which the judge referred in paragraphs 66 and 79 of his judgment. In that exchange Mr Crema wrote to Mr Nally:

"In order to dedicate time to this I would ask that you or the company please send me an email confirming fees terms so we are as clear if possible."

Mr Nally replied:

"I can confirm that a fee of 5% has been agreed, but I am also hopeful but not yet agreed of a warrant will let you know of the progress on that."

The judge interpreted that exchange as an agreement that Mr Crema would be contractually entitled to share in the stated 5%. We were not referred to any oral evidence of either Mr Crema or Mr Nally to support that interpretation. On the face of the emails the question asked by Mr Crema was not answered by Mr Nally. Nor did his answer satisfy Mr Crema. On 19th November 2007 he asked Mr Nally for "a clearer fees confirmation". On 22nd November he sent to Mr Nally "another reminder to please forward the discussed fees letter re VFuels". For my part I do not consider that the judge's interpretation of the email exchange on 25th October 2007 was warranted.

63. The next relevant exchange was on 23rd November 2007. It is described by the judge in paragraphs 68 to 70 and 80 of his judgment. In that exchange Mr Nally simply wrote to Mr Crema

"In relation to your proposed participation in the fund raising for V Fuels, pending our agreement with the company, we would pay you 5% of funds raised by yourselves."

Two minutes later Mr Crema responded:

"It looks fine and thank you."

Forty five minutes later still Mr Crema wrote again:

"Joe, thanks again for sending me the fees commitment letter. As it is a commitment from you/Cenkos Œpending agreement from the client, I fully trust that V Fuels is bound to you and hence me."

64. The judge accepted in paragraph 80 of his judgment that the initial exchange between Mr Nally and Mr Crema pointed strongly to Cenkos accepting liability to pay Mr Crema. But he went on to conclude that such unconditional and accepted liability was qualified because, in his second response, Mr Crema was concerned to be satisfied that GPV was bound to Cenkos "and hence me". For my part I do not consider that this comment by Mr Crema can affect the unconditional promise made by Mr Nally on behalf of Cenkos and accepted by Mr Crema. There was never any question of a direct contractual liability of GPV to Mr Crema and there are many good commercial reasons why Mr Crema should have wanted to be satisfied that GPV was bound to Cenkos short of accepting that his entitlement to payment was dependent on GPV actually paying Cenkos.
65. The next relevant event was the meeting at the Stafford Hotel on 12th December 2007. This is described by the judge in paragraph 71 of his judgment. The judge rejected the account of that meeting given by Mr Crema. He accepted that Mr Nally had told Mr Crema that payment would be "upon a successful completion". The judge commented that this "of course rather leaves open what is meant by 'successful completion' in this context". I agree. This episode does not seem to me to carry the matter any further.
66. The fourth relevant event was the telephone conversation between Mr Crema and Mr Nally on 29th January 2008. This is described by the judge in paragraphs 72 and 82 of his judgment. In the latter paragraph the judge interpreted that conversation as confirming that:

"...,as the parties saw it, there was to be a brokerage fund of 5%. If Mr Crema was successful with Hutton Collins, and therefore produced most of the investment, the 5% would be cut in his favour. Shortly after that the cut was agreed as 70:30."

It appears that the concept of a brokerage fund of 5% arose from the other part of the telephone conversation to which the judge referred in paragraph 72, namely:

"...with your involvement the thought was of 5% all the way through..."

That statement is readily explicable by the facts that GPV were bound to pay Cenkos 5% and Cenkos had undertaken to pay Mr Crema 5%. I do not understand why it should support the further implication made by the judge of "a brokerage fund".

67. The fifth and final relevant stage was the exchange of letters dated 11th and 13th March 2008 and the amendment of the latter in consequence of the telephone conversation between Mr Nally and Mr Crema on 13th March 2008. They are fully set out in paragraphs 73 and 83 of the judge's judgment. As the judge noted in paragraph 74 of his judgment the amended letter dated 13th March was the final version of the agreement between Mr Crema and Cenkos. It states:

"Your Introduction Fee for raising the funds is as follows:

1. a one off payment of £882,000, this is based on 70% of the final commission of 7% of the final commission raised.

2. 1% warrant over the company at 30% premium to the issue or completion price."

68. In paragraph 84 of his judgment the judge concluded that:

"In my judgment the sense of this letter, and of the earlier letters and discussions, is that as broker and sub-broker, Cenkos and Mr Crema were in it together. Any other arrangement would be rather uncommercial, placing the whole risk of non-payment by GPV on Cenkos. There was an expected fund of brokerage to be received from GPV. They would share in it 70:30 in relation to investments raised by Mr Crema. The same was true of the warrants: when they were received by Cenkos they would be shared 50:50. The expectation of the warrants disappeared on 13 March to be replaced by a 7% brokerage fund to be shared 70:30, but nothing changed as to the overall arrangement."

69. Shorn of all the extraneous detail the concept of "sharing" can be seen to have originated in the exchange of emails on 25th October 2007. The "expected fund of brokerage" is derived from the telephone conversation of 29th January 2008. In neither case do the terms of the document and conversation justify the sense in which the judge understood them. But the outcome has been that three unqualified written communications from Mr Nally to Mr Crema, namely his emails of 25th October, 23rd November 2007 and 13th March 2008, have been treated by the judge as imposing only conditional obligations on Cenkos. Moreover that condition, namely that Mr Crema's entitlement to his commission was dependent on Cenkos being actually paid by GPV, is not one which was ever expressed either in writing or orally in the course of the negotiations which extended over six months.
70. I agree with Aikens LJ that, for the reasons he gives, the court in ascertaining and interpreting the terms of an agreement is entitled to have regard to market practices falling short of trade usage or custom. They are part of the factual context known to both parties. But the experts were agreed that they knew of no case in which the issue with which we are concerned had arisen. It follows that there was no relevant market practice. Even if there had been, I would have doubted whether it could have supported the judge's conclusion in the absence of any document or express words from which any such implication might be made.
71. The issue turns on the true interpretation of a handful of documents. In my view, neither individually nor collectively do they warrant the gloss put on them by the judge. I do not find it necessary to consider the wider questions to which Aikens LJ has referred in paragraphs 36 to 41 of his judgment. Whether or not the statements of Lord Hoffmann in Attorney-General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988 should be extended and with what modifications to contracts not wholly written does not arise. Further they would not seem to be easily adaptable to contracts implied from conduct, cf MGN Ltd v Grisbrook [2010] EWCA Civ 1399.
72. For these reasons I agree that this appeal should be allowed.

Note 1   [49] of Mr Hirst’s judgment.    [Back]

Note 2   [34] of the judgment.    [Back]

Note 3   [56].    [Back]

Note 4   [84].    [Back]

Note 5   [84].    [Back]

Note 6   [85].    [Back]

Note 7   [86].    [Back]

Note 8   [96]    [Back]

Note 9   This should have be prepared by the parties and then “settled” by the judge at the first Case Management Conference in accordance with the Admiralty and Commercial Court Guide (9th edition) section D.6.3: Supreme Court Practice 2010 vol 2 page 320.    [Back]

Note 10   [66].    [Back]

Note 11   [79].    [Back]

Note 12   [69].    [Back]

Note 13   [70].    [Back]

Note 14   [71].    [Back]

Note 15   [71].    [Back]

Note 16   [81].    [Back]

Note 17   [71].    [Back]

Note 18   [81].    [Back]

Note 19   Transcript Day 3 page 162.    [Back]

Note 20   At para 45.    [Back]

Note 21   Mr Gledhill relied on statements in Chitty on Contracts (13th Ed) para 12-126, and Maggs v Marsh [2006] Building Law Reports 395 at 400 per Smith LJ.    [Back]

Note 22   [2009] 1 WLR 1988.    [Back]

Note 23   [2009] 2 Lloyd’s Law Rep 639.    [Back]

Note 24   Cf. American Airlines Inc v Hope [1975] 2 Lloyd’s Rep 301, where Lord Diplock uses that very word: page 304.    [Back]

Note 25   [1971] 1 WLR 1381 at 1383H-1385H, per Lord Wilberforce, with whom all the other 4 law lords agreed.    [Back]

Note 26   American Airlines Inc v Hope; Banque Sebag v Hope [1972] 1 Lloyd’s Rep 253.    [Back]

Note 27   [1973] 1 Lloyd’s Rep 233     [Back]

Note 28   Ibid at 245.    [Back]

Note 29   [1974] 2 Lloyd’s Rep 301 at 305.    [Back]

Note 30   [1999] Lloyd’s Insurance and Reinsurance Law Reports 603 at 622.    [Back]

Note 31   [2010] 2 All ER (Comm) 855    [Back]

Note 32   Devonald v Rosser & Sons [1906] 2 KB 728; Cunliffe-Owen v Teather & Greenwood [1967] 1 WLR 1421 at 1437-1438 per Ungoed-Thomas J; SA Sucre Export v Northern River Shipping Ltd (The “SORMOVSKY 3068”) [1994] 2 Lloyd’s Rep 266 at 275 per Clarke J; Galaxy Energy International Ltd v Corona Trading Associates SA and another (The “OAKWELL”) [1999] 1 Lloyd’s Rep 249 at 252-253 per Timothy Walker J. Chitty on Contract (30th Ed) vol 112-129; 12-132 and 13-018.    [Back]

Note 33   [2002] 2 All ER (Comm) 992 at 996, para 15.    [Back]

Note 34   Joint Statement of Experts para 5.    [Back]

Note 35   See the Belize case at [18].    [Back]

Note 36   [81].    [Back]

Note 37   Experts’ Joint Statement para 22-23.    [Back]

Note 38   There is nothing in the cross-examination of the experts to suggest a “market understanding” of those words.    [Back]