Case No: TLQ/13/0359 
Neutral Citation Number: [2013] EWHC 3376 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 05/11/2013

Before :

MR JUSTICE FOSKETT
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Between :

	Alegro Capital LLP
	Claimant	
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	AllProperty Media Pte Limited
	Defendant	

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James Stuart (instructed by Greenberg Traurig Maher LLP) for the Claimant
Matthew Parker (instructed by Gibson & Co) for the Defendant

Hearing dates: 8-10 October 2013
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Judgment
MR JUSTICE FOSKETT: 
Introduction
1.	The Claimant is a limited liability partnership based in the City of London engaged in the business of providing corporate finance and mergers and acquisitions advisory services to clients throughout the world.  
2.	The Defendant is a company incorporated in Singapore trading under the name “PropertyGuru” and operates an online estate agency business for properties in Asia.  
3.	In August/September 2011 the Claimant and the Defendant entered into a contract reflected in an “engagement letter” sent by the Claimant to the Defendant on 25 August and signed on behalf of the Defendant by Mr Stephen (‘Steve’) Melhuish, the Defendant’s Co-Founder and Chief Executive Officer.  The contract related to the role that the Claimant might play in securing an injection of capital into, or in relation to, the Defendant and the circumstances in which it would be entitled to a “success fee” in the event of introducing an investor or investors. 
4.	It is the interpretation of the contract embodied in that letter that lies at the heart of the present dispute.
The general background to the engagement letter
5.	Mr Melhuish’s fellow Co-Founder was Mr Jani Rautiainen.   They founded the company in 2006 and by 2011 their respective shareholdings were 26% and 39%.  In other words, they owned 65% of the company.  They had been joined in 2008 by certain other “founding shareholders” including Mr Stephen Diggle (the Co-Founder of a very large Singapore-based Hedge Fund), Professor Hellmut Schütte, Tigris Capital Pte. Ltd (represented by Mr William Klippgen), Finn Evdemon Capital Partners Pte. Ltd (represented by Mr Chris Evdemon) and Upstream Pioneer Fund Pte. Ltd (represented by Mr Pierre Hennes and Mr Carmelo Pistorio).  A few other individual shareholders with small shareholdings joined in due course.  By 2011 the only other significant shareholder was Mr Diggle (or, more accurately, his company, Vulpes Testudo Fund) with just over 23.5% of the shareholding.  Professor Schütte owned approximately 3% of the shareholding, but all other shareholders held about 1% or less.
6.	The company had plainly enjoyed some significant success in the period from its inception and by 2011 was operating in Malaysia, Indonesia and Thailand as well as Singapore.  It had “partner” websites in India, Macau, Hong Kong and Australia.
7.	Putting the matter simply and neutrally for present purposes, during 2011 the Defendant wanted an injection of capital of S$15 million. This became known as “the Capital Raise”.  It was in that context that it had engaged certain advisory vehicles (including one in China and one in Australia) to seek investors.   The advisory vehicle in China was Supersonic Ventures in Shanghai and in Australia was Hall Capital Strategies Pty Ltd in Sydney.  Those two advisers concluded letters of engagement on or about 8 August 2011 and 17 August 2011 respectively.  It was also in that context that the Defendant, through Mr Melhuish, and the Claimant, through Mr Patrick Martin, Head of the Media Department of the Claimant, had discussions about the Claimant’s involvement as an adviser in this process.
8.	In late June or early July 2011, Mr Melhuish telephoned Mr Richard Titus who is an entrepreneur and businessman experienced in digital media and IT sectors.  It is common ground between them that Mr Melhuish described the progress the Defendant was making in its online property portal and website selling and renting real estate in Asia.  Mr Melhuish described the Defendant’s recent growth and plans for continued expansion and told Mr Titus that the Defendant wanted to raise money for working capital for its planned growth.  There is an issue about whether the conversation went further than this, but I will return to that issue later (see paragraphs 88 and 99).
9.	On 5 July Mr Titus introduced Mr Melhuish and Mr Martin to each other by e-mail and on 8 July 2011 they had their first telephone conversation (the ‘First Call’) which was a conversation between the two of them only. Mr Martin had no previous knowledge of the Defendant and the First Call was simply an introductory conversation during which Mr Melhuish outlined the background and growth of PropertyGuru, his involvement in it and his intention to raise capital.  Mr Martin made a handwritten note of the main points of that conversation which ties in with what Mr Melhuish told him.  I will return to that note later (see paragraph 89 below).
10.	On the following day Mr Melhuish sent Mr Martin by e-mail the Defendant’s Investment Memorandum.  It was one of a number produced during the year, but this one was dated 3-7 July.  It set out the history of the company, described its current activities and its plans for the future.  The following aspects are of relevance to the background to the issue that has arisen in this case.  First, its goal was set out as follows at the foot of the Executive Summary:
“The Company’s goal is to reach S$1bn market valuation, and to be a strong number 1 in at least 8 Asian countries, by 2018.  The Company plans to IPO, or exit via trade sale, within 2 years at a valuation of at least S$350m.”
11.	‘IPO’ stands for initial public offering.
12.	Second, its “Exit Plans” were described as follows:
“The Company plans to exit within 3 years and via two clear exit options for investors:
1.	IPO – Estimated market capitalization of S$350m on IPO within 2 years and over S$500m by 2015.
2.	Trade Sale – The Business has been approached by a number of larger companies for initial exit discussions over the last 12 months.  However, the Company has decided not to exit but to focus on international expansion and maximize shareholder value/return by 2015.  Clear potential acquirers comprise local, regional and international media companies, online real estate players (many are publicly listed), and telecom companies moving to more content related businesses ….”
[Some examples of “potential acquirers” are then given.]
13.	Third, its funding requirements were set out in the following way:
“The Company is seeking S$15m cash investment at S$120m valuation.  The Company expects valuation to exceed S$500m by 2015 ….  
The Company will use the funds mainly in three areas:
1.	International expansion – mainly staff and marketing plus some product development costs to increase strength in its core 4 countries initially and support expansion to additional countries thereafter.  It takes roughly 18 months for a country operation to become self-sustaining.
2.	Scaling up management – the Company will invest in senior management roles to scale operations in multiple countries and to strengthen its market positions.
3.	Acquisitions – the Company may selectively pursue 1-2 additional acquisitions to accelerate market entry into certain countries, where it is feasible or relevant to do so.”
14.	I should, perhaps, record that the goals had by 3-7 July become a little more ambitious than the goals set out in the version of the Investment Memorandum dated 3-17 April, but the essential message was the same and substantially in the same terms as an Investment Memorandum subsequently promulgated in October (see paragraph 36 below).
15.	There is no mention in the Investment Memorandum sent to Mr Martin of any desire on the part of any of the shareholders in the Defendant to sell the whole or any part of their shareholding at that stage.   For reasons to which I will refer later (see paragraph 98 below) it would, in my judgment, have been surprising if any reference to such a desire had been included in the Investment Memorandum even if the desire existed at the time, but the fact is that no such reference was made.
16.	The first documentary reference to the possibility of the sale of some shares as part of the Defendant’s plans at that stage came in an e-mail from Mr Melhuish to his fellow shareholders in the Defendant dated 26 July, reporting on discussions he, Mr Rautiainen and others had been having with possible investors.  The e-mail included this question: 
“Could you please let us know whether you would consider a partial or full cash-out at this stage, and if so at what valuation/terms?  Some of the investors have asked whether we’d be willing to take a bigger investment than S$15m.”
17.	It appears that those discussions with possible investors had not involved any advisers of the sort appointed in the period August/September, but had been conducted directly.  It also appears that some of those with whom there had been discussions raised the question of whether a full or partial “cash-out” might be possible which, of course, generated the question to which I have referred.  In an e-mail of a similar nature some 10 days earlier (on 16 July), Mr Melhuish had made no reference to any possible sale of shares.  However, on 8 August he sent a very similar e-mail to the same recipients asking their views on a full or partial “cash-out”.  The only response to the question came from Mr Hennes of Upstream Ventures on 11 August who stated that “UV will consider early exit/cash out at the next round – valuation depends on the round’s pricing.”
18.	In the meantime on 22 July Mr Melhuish had e-mailed Mr Martin asking whether he had had a chance to review the Investment Memorandum and on 28 July Mr Martin replied saying the following:
“I have reviewed your documents again and would be interested in pursuing further how we can work together on this. How far along are you in the process?  Your valuation expectation is quite ambitious but I think it might be achievable with the right support. I would be happy to represent your company for this capital raise.  On a capital raise we usually charge a monthly retainer fee as well as a success fee on closing.  Please let me know if this is of interest to you and if you would like to set up another call to discuss further.”
19.	Mr Melhuish replied saying this:
“Thanks for the follow-up.  As you know, we started the process 3 weeks ago (you were one of the first I spoke to), so it is relatively early in the process.  Saying that, I would expect to get into term sheet discussions within the next 5-6 weeks given initial interest.
I’m in the process of finalizing [a] corporate finance advisor who’s focused on Australia, so I’m open to exploring Europe-centric investment support.  I can talk on the weekend, or early next week?”
20.	This e-mail exchange led to another telephone call on either 2 or 3 August (the ‘Second Call’) in which Mr Melhuish and Mr Martin participated, together with Mr Christian Kraus, then a Director and Lead Execution Banker with the Claimant.  There is an issue about what was discussed and in what terms in that conversation to which I will turn later (see paragraphs 89, 93 and 98 below).
21.	On 5 August Mr Martin sent Mr Melhuish by e-mail a draft engagement letter which had been drafted by Mr Kraus.  I should say that Mr Kraus had little recollection of this, though he accepted that the internal documentation of the Claimant confirmed that he had produced it.  The letter, he said, was adapted from one of the standard templates that the company used.  The proposal in the draft engagement letter involved a one-off engagement fee of £25,000 and a 6% success fee.
22.	On 10 August Mr Martin chased a response to his e-mail and on 16 August Mr Melhuish informed Mr Martin that the Defendant had selected an alternative adviser largely because the Claimant was more expensive than another firm that had “similar domain experience + EU network”.
23.	Mr Martin reacted quickly to that e-mail and invited Mr Melhuish “to have a quick chat” about “our fee letter and potentially future co-operation” which he followed up by saying that he had “very good contacts” and asking to set up a call.
24.	This exchange led to the ‘Third Call’ in which Mr Martin and Mr Melhuish were the only participants.  It took place on 24 August and lasted 36 minutes.  There are some issues about this call to which I will refer later (see paragraphs 90-91, 94-96 and 100-101 below).  However, it did result in the Defendant engaging the Claimant albeit on terms different from those proposed in the earlier draft engagement letter.  On 25 August Mr Martin e-mailed a revised version of the engagement letter to Mr Melhuish and on 6 September Mr Melhuish e-mailed a scanned copy of the new engagement letter signed by him on behalf of the Defendant. The same document was signed by its Managing Partner, Christian Bergmann. 
The engagement letter
25.	I have introduced the general background to the engagement letter and in the process have indicated that certain factual issues about what was or was not said in various conversations prior to it being signed arise.  The extent to which things said or done in the negotiations leading to a contract such as that reflected in the letter are relevant and admissible is, of course, essentially a legal issue and there are some well-established rules governing the relevance and admissibility of such matters on the interpretation of the agreement.  I will return to that later.
26.	Before turning to the disputed issues and their relevance and/or admissibility, if any, on the construction of the contract, the material parts of the agreement as signed need to be recorded.  There are three particular paragraphs in the letter to which it is necessary to refer.  First, the first paragraph that defines the parties.  It reads as follows:
“Pursuant to our recent discussion, we are pleased to confirm the arrangements under which Alegro Capital LLP (“Alegro”) is engaged by you, Allproperty Media Pte Ltd (the “Company”) as your non-exclusive financial adviser in connection with a possible capital raise (the “Capital Raise”) from external investors (the “Investors”) (the “Transaction”).”
27.	Second, the paragraph that defines the circumstances in which the “Cash Success Fee” became payable is the crucial paragraph.  That paragraph reads as follows:
“Upon completion of any Transaction Alegro will charge the Company a Cash Success Fee (the “Cash Success Fee”) of 3.5% of the Capital Raised (the “Capital Raised”).  The Capital Raised is defined as the total capital provided to the Company by Investors that have been introduced to the Company by Alegro directly or indirectly (including but not limited to any equity, debt and/or mezzanine capital) and transferred to, or for the benefit of, the Company at the closing of the Transaction and any subsequent instalments received by the Company.  The Investors are listed in Appendix A.”
28.	I should, perhaps, observe at this stage that the words “directly or indirectly” did not appear in the first draft (see paragraph 21 above) and, according to Mr Martin, were added by him in the light of the Third Call (see paragraph 24 above).  His account is that he added those words to “reflect and make clear the agreement with Mr Melhuish that any money from investors, whether that money was paid to Property Guru or the shareholders would trigger the Success Fee.” Whatever other arguments there may be about the use to which matters occurring in the pre-contract period might be put for the purposes of interpretation, it has not been suggested (correctly, in my view) that the change in the drafting would be an admissible or relevant matter on the interpretation of any part of the agreement.  What those words mean in the context of the agreement is, of course, relevant (see paragraphs 52, 62, 69 and 78 below).
29.	Third, the fourth paragraph on the second page of the letter reads as follows:    
“Our services hereunder may be terminated with or without cause by you or by us at any time and without liability or continuing obligation to you or to us (except for compensation earned and expenses incurred by us prior to the date of termination) and except, in the case of termination by you other than where we have breached the terms of this letter, for our right to fees, including Success Fees, pursuant to this letter for our right to fees, including Success Fees, pursuant to this letter for any Transaction of a type referred to in this letter effected within 18 months of such termination and promoted by you and provided that the indemnification, confidentially and governing law provisions will remain operative regardless of any such termination.”   
30.	Mr Stuart suggests that this paragraph illustrates that the letter was “sloppily drafted”.  For example, he says (correctly) that the Claimant’s only right is to charge the “Cash Success Fee” referred to in the paragraph quoted above.  There is no other “right to fees”.   He says (again correctly) that the expression “Success Fees” is not a defined expression or even a term used in the rest of the letter.  He says that the word “including” implies that there are some other fees payable beyond the “Cash Success Fee”, but there are no such fees.  I will return to this in due course (see paragraph 71 below).    
31.	Finally, it is important to note the terms of the Appendix to the letter. ‘Appendix A’ identified various companies which, with their affiliates, subsidiaries and group companies, were defined as “Alegro Introduced Investors”.  The list of companies set out in the Appendix was preceded by these words:
“The following companies, including any affiliated companies such as shareholders, subsidiaries or group companies, are defined as Alegro Introduced Investors.”
32.	One of the companies listed was the German telecommunications company, Deutsche Telekom.  A company called Immobilien Scout GmbH (‘ISG’) was a subsidiary company of Deutsche Telekom.
33.	Perhaps I should add that the letter contained a provision to the effect that the letter was to be “governed and construed in accordance with the laws of England and Wales”.
The events after the engagement letter
34.	So far as the Claimant was concerned, on 1 September Mr Martin e-mailed a potential investor, Martin Lechner, in Singapore stating that the Claimant had been “mandated” by the Defendant to help raise “a Series E round of expansion financing on their way to an IPO or trade sale in the next 2 to 3 years”. The Claimant also produced a “teaser” document for investors (a document used to introduce an investment or acquisition opportunity to financial or strategic buyers) which Mr Martin e-mailed to Mr Melhuish on 3 September and which summarised the Investment Memorandum.  Mr Melhuish reviewed it quickly, made a few comments in an e-mail also sent on 3 September, expressed his thanks and wished Mr Martin “good luck”.  On or around 12 September, the Claimant (through Piotr Nowosad) telephoned Axel Scheuermann, Vice President of M&A/Corporate Finance at Deutsche Telekom, based at Deutsche Telekom’s head office in Bonn.  Nothing appears to have resulted from this contact and it is accepted that, as a matter of fact, the Claimant had not introduced ISG to the Defendant.  Certain other avenues were pursued by the Claimant though nothing came of the overtures made.
35.	At this time, the Defendant’s other “advisers” (see paragraph 7 above) would also have been pursuing investment avenues and the Defendant’s case is that it too was pursuing other avenues independent of those advisers.  In that latter context on 1 October Mr Melhuish e-mailed Mr Dirk Hoffmann, the Chief Operating Officer of ISG (see paragraph 32 above) saying that he wanted “to explore 2 potential ideas”: a strategic investment and international partnership.  Mr Melhuish had in June 2010 telephone calls and e-mail discussions with ISG about a potential collaboration, but these had not come to anything at that time. His e-mail of 1 October initiated further discussions between the Defendant and ISG about the possibility of a strategic investment.  As will appear, this did lead to the transaction that underlies the dispute in this case and is not linked in any way with the Claimant’s initiative referred to in paragraph 33 above.
36.	To follow through the sequence of events relating to ISG, on 7 October Mr Melhuish e-mailed Mr Hoffmann a copy of the Defendant’s Investment Memorandum.  As previously indicated (see paragraph 14 above), this was substantially in the form of the one provided to the Claimant in August.  Negotiations started thereafter and continued.  On 11 November 2011, 2 January 2012 and 23 March 2012, ISG sent letters of intent to the Defendant outlining the terms of the proposed transaction.  From early October 2011 until the signing of the Subscription and Share Purchase Agreement (‘SSPA’) in May 2012 (see paragraph 42 below) Mr Melhuish acted on behalf of the Defendant in the negotiations.
37.	I will return to the result of those negotiations shortly, but in the meantime Mr Martin had contacted Mr Melhuish on 19 November by e-mail in the following terms:
“I just wanted to ping you an email and find out where you are with your capital raise.  Did you get any traction with the European publishers through the other advisor.
I spoke to DMGT/AN Digital here who own FindaProperty but they are busy with the integration of Zoopla here in the UK right now.
Shall we continue looking or are you done.
If you are stilling looking, please let me have updated info should there be any new developments.”
38.	Mr Melhuish replied the same day in the following terms:
“Thanks for the update.  We currently have 10 proposals (6 strategics and 4 institutional investors) with valuations ranging from S$75m to S$120m pre-money.  Our challenge is now to make sense and make decisions in next 2-3 weeks …
I appreciate your support to date!  And good luck for the future … let’s stay in touch.”
39.	This reply was expressed in terms that suggested that there was nothing further for the Claimant to do, a “goodbye and thank you” message as Mr Melhuish put it in one of his witness statements.  Indeed Mr Martin did not suggest that the Claimant did anything significant thereafter in trying to find investors for the Defendant.
40.	By February 2012 the Defendant had received five offers from potential investors. On 20 February Mr Melhuish e-mailed the Defendant’s shareholders summarising the five offers.  In due course this led to the acceptance of an offer from ISG.
41.	On 20 March Mr Martin e-mailed Mr Melhuish asking whether he had “closed” his “round”.  It does not appear that Mr Melhuish replied.  That was hardly surprising as the negotiations with ISG were at a delicate stage.
42.	On 30 May the Defendant, the Defendant’s existing shareholders and ISG entered the SSPA by virtue of which in summary (a) ISG agreed to subscribe for and purchase 239,526 newly issued shares in the Defendant for just over S$18 million and (b) Mr Melhuish agreed to purchase 495,022 existing shares for just under S$36 million from the shareholders.  In other words, there was, as a result of this transaction, an injection of capital into the company of around S$18 million and a cash-out payment to shareholders of about S$36 million.
43.	The result of the transaction was that ISG owned just over 41% of the shares, with Mr Rautiainen owning 23%, Mr Melhuish 15% and Mr Diggle 13%.  The balance was held in a number of much small shareholdings.
44.	In June 2012 Mr Martin noticed in the online media reference to the transaction with ISG.  Since ISG was a subsidiary or group company of Deutsche Telekom, one of the defined “Alegro Introduced Investors” in Appendix A to the engagement letter, it seemed to him that the Claimant was entitled to a “success fee” even though, in fact, the Claimant had not been instrumental in introducing the Defendant to ISG.
45.	Accordingly, on 21 June 2012 he sent an e-mail to Mr Melhuish congratulating him on the completed “Capital Raise” of S$60 million and sending him an invoice for 3.5% of the capital raised as the “Cash Success Fee” which amounted to S$2.1 million.  As at that date that sum was equivalent to just over £1.05 million.  Mr Martin’s e-mail ended by asking when Alegro could expect the transfer.
46.	I have not seen Mr Melhuish’s reply to the e-mail, but his witness statement says that he was “astonished” to receive it and laughed out loud when he read it.  He said that he replied “expressing [his] surprise and disappointment at the raising of an invoice for in excess of S$2 million when [he] had not heard from Alegro for months and it had not carried out any work on behalf of [the Defendant] for such a long time.”  He made it clear that the Defendant would not be paying the invoice.
The proceedings
47.	The Claimant issued a Claim Form, together with Particulars of Claim, seeking the full sum of just over £1.05 million on 25 September 2012.  Mr Parker’s helpful Skeleton Argument encapsulates the Defence served in response to the claim by saying that the Defendant claimed that, on a proper construction of the engagement letter, the fee was only payable if the Claimant had been an effective cause of the transaction or, alternatively, if it had in fact introduced the eventual investor to the Defendant.  Alternatively, the Defendant claimed that there were implied terms to that effect.
48.	On 6 December 2012 the Claimant issued an application for summary judgment for a fee of 3.5% based on the S$18 million paid directly by ISG to the Defendant as a company.  It was recognised on behalf of the Claimant that there was a triable defence as to the balance of the claim. That application was heard by Master Leslie on 6 March 2013 when he held that the Defendant’s defence to the claim for a fee of 3.5% based on the S$18 million stood no real prospect of success and granted judgment for £316,708 plus interest, representing 3.5% of the S$18.0m paid by ISG to the Company.  That decision was not appealed and that sum has since been paid.  This trial has, of course, been about the balance.
49.	For completeness, I will summarise Master Leslie’s reasoning for reaching the conclusion he did.  I think it can be deduced from two particular passages.  First, paragraph 8 of his judgment contains the following passage:
“ … This is a contract where the fees payable are decided by the identity of the eventual purchaser.  If it is an investor who happens to have been introduced by the claimant company, then the claimant company are entitled to their fees.  If it is an investor, who is not, then the claimant is not entitled to his fees.  That, it seems to me, is the only sensible way of looking at the contract as it was signed in August 2011.”
50.	The second passage is in paragraph 13 and is as follows:
“It has been submitted … on behalf of the defendant company that the phrase “Alegro introduced investors” that appears in the Appendix is meaningless.  I disagree.  There can only be one meaning to it.  If, as I find to be the case, appendix A is part of the agreement, it is the very list of investors who are or have been introduced to the company by Alegro.  They are defined in the appendix and they can only be the list which is referred to in the third paragraph of the agreement as investors that have been introduced to the company by Alegro ….  there is, in my judgment, very little doubt about it now.  It cannot mean anything else.”  
51.	Master Leslie was, of course, addressing only one part of the engagement letter, namely, the part which related to the circumstances in which an investor was to be regarded as having been “introduced” to the Defendant.  He was not addressing, because it was not relevant to the issue before him, the question of the meaning of the expression “Capital Raise” or the relevance of the words “to the Company” in the definition of that expression.  That has formed the focus of the argument before me.
52.	Master Leslie identified the issue to be tried as follows:
“ … the issue to be tried is whether the Claimant is entitled to a Cash Success Fee of 3.5% of the Capital Raised from the Deutsche Telekom/ISG Transaction (Referred to at Paragraph 9 of the Particulars of Claim and Paragraph 12 of the Defence), but that the Defendant contends that the $35,886,840.00 referred to at Paragraph 12(a)(i) of the Defence is not “Capital Raised” from such transaction because it is not “capital provided to the Company … directly or indirectly (including but not limited to any equity debt and/or mezzanine capital) and transferred to, or for the benefit of, the Company at the closing of the Transaction and any subsequent instalments received by the Company” as provided in the Engagement Agreement.”
53.	Mr Parker has complained vigorously that the Claimant’s approach to the arguments concerning the letter of engagement has been inconsistent and tantamount to an abuse of the court’s process. He cites Mr Martin’s own evidence in the summary judgment application which contained expressions such as that the engagement letter is “absolutely clear and means what it says” and that it contains “very clear and specific terms” and that it had been submitted on the Claimant’s behalf in that application that “there is no ambiguity of wording” in the engagement letter.  He submits that for the Claimant now to contend otherwise “would be an abuse of process”.  
54.	He also submits that when it applied for summary judgment the Claimant had submitted that “evidence of prior negotiations is not admissible or relevant in construing the engagement letter” and that, the agreement having been reduced to writing, “the rule is that pre-contractual negotiations must be excluded as inadmissible”, but having succeeded on its summary judgment application, it is now seeking to rely on precisely such evidence and that this is an abuse of process.
55.	Whatever might be said of the intrinsic merits of the Claimant’s claim (about which views might reasonably differ), I do not think that these criticisms are really justified.  Mr Stuart answers them by saying that whilst the relevant wording of Appendix A to the agreement “simply could only bear one meaning” (which was what was submitted to Master Leslie and what he accepted) the same cannot be said of the provisions in the main body of the letter relating to circumstances in which the “Cash Success Fee” would fall to be paid.  If, as he contends, that part of the letter of engagement is unclear and ambiguous, he submits he is entitled to rely upon the exceptions to the general rules referred to in paragraph 54 above to make good the construction for which he contends.
56.	I agree.  I see nothing abusive about the way this aspect of the claim is presented.  The central issue, to which I must now turn, is whether the relevant part of the letter of engagement is unclear and ambiguous and whether the construction for which Mr Stuart contends is made out such that the Claimant is entitled to the balance of the claim.
57.	The first issue is whether the natural and ordinary meaning of the words in the engagement letter giving rise to the entitlement to the “success fee” is such that, in the events which happened, the Claimant is entitled to the full sum claimed.
The competing arguments on the entitlement to the “success fee”
58.	Mr Stuart’s primary analysis of the relevant part of the engagement letter runs as follows.  First, the “success fee” is payable “Upon completion of any Transaction”.  Here, he submits, the transaction was the SSPA (see paragraph 42 above), it was one transaction and, accordingly, is the transaction when determining the Claimant’s “Cash Success Fee” entitlement.   
59.	Second, since the success fee was to be “3.5% of the Capital Raised”, that means 3.5% “of the value of the transaction”, namely, the transaction as a whole and not just that part of the transaction that benefits the company (in contradistinction to the shareholders) directly.  He contends that the situation is no different from the circumstances permitting any percentage commission fee earned by an estate agent or recruitment consultant to be charged and asks rhetorically why should the clause be construed in a way that would enable the Defendant to avoid paying 3.5% of the full value of the transaction simply by allocating part of that value to the purchase of existing shares rather than new shares?   If an estate agent is entitled to a percentage commission on the sale of a property, but the vendor and purchaser agree that the property is to be purchased for £1 and the contents for £999,999, would, he asks, the court construe the agreement to mean that the fee applied only to £1?   The court, he submits, must look at the commercial reality of what the Claimant was engaged to do “in connection with” a possible capital raise transaction.
60.	Third, Mr Stuart says that “The Capital Raised” is defined as the “total capital provided”, not part of it.
61.	Fourth, he says that the words “to the Company” must include the shareholders and should not be confined to what he says is “merely the artificial limited company meaning”.  He argues that the court is dealing in this case with a commercial agreement (drafted to an extent by German-speaking members of the Claimant), not a statute or a pleading in a legal case (and certainly not a selected dictionary definition), and when commercial businessmen refer to “the company” (here Allproperty Media Pte Ltd) “in real commercial terms, that includes the members/shareholders of the company”.   He submits that there is evidence that all the other relevant parties (including Hall Capital, Supersonic Ventures and ISG) were using the term ‘Allproperty Media Pte Limited’ in their documentation in the sense which the Claimant says that the Claimant and the Defendant also used the term.
62.	Fifth, in relation to the expression “directly or indirectly (including but not limited to any equity, debt and/or mezzanine capital)” he submits that the words “directly or indirectly” are plainly intended to refer to the provision of the capital and not to the introduction of the investor for three reasons: (i) the phrase in parenthesis which follows immediately after the word “indirectly” “presumably qualifies” the word “indirectly” and is referring to the provision of the capital; (ii) there is no need for any refinement of how the investor is introduced because the “Alegro Introduced investors” are already listed in Appendix A; (iii) the initial drafting (and the insertion of the words) was undertaken by a German speaker so that attaching significance to the sequence of sub-clauses needs to be treated with caution.  Finally, in this context he contends that capital used to purchase shares from existing controlling shareholders is provided “indirectly” to the Company in the sense that it is being paid at the Company’s direction to the shareholders.   The phrase was, he argues, included to clarify that the money did not have to be provided directly to the Company, but could be “provided indirectly”  - in other words, as directed by the Company.   
63.	Sixth and finally, in relation to the expression “and transferred to or for the benefit of the Company”, he submits that money paid to existing shareholders as part of a global transaction from which “the Company” derives benefit is money paid “for the benefit of the Company”.   Even if, contrary to the argument above (see paragraph 61), the shareholders are not to be considered part of “the Company” for these purposes, nonetheless “the Company” benefits.   His argument is that ISG would not have invested money in buying new shares from the Company without acquiring sufficient shares from the existing controllers to give ISG a controlling (or very substantial) percentage of the overall shares and the “new” money to be used by “the Company” is entirely linked with the money paid out to the shareholders.   
64.	As I understand his argument, Mr Stuart submits that the construction for which he contends is the correct one and it is not, in the first instance, necessary to have regard, to the extent permitted by established authority, to have regard to the factual matrix or the previous negotiations.  It would only be if I thought that the phraseology of the provision in question was unclear or ambiguous that I would have to look at those matters.  If I looked at them, I would, he argues, be satisfied that the construction for which he contends is correct.
65.	I will turn to Mr Parker’s response to these contentions shortly, but I should say at the outset that I cannot see how the fact that Mr Martin and, perhaps, Mr Kraus, were both German-speaking men can have any bearing at all upon the construction of the “engagement letter” in the composition of which each may have played a part.  It may explain confusions and misunderstandings, but it cannot go to the interpretation of an agreement expressed to be governed by English law.  Since it was fashioned from a template, it may well be that the template was drafted by an English lawyer in any event.  However, all that is speculative.  I do not understand how the nationality and native-language of the draftsman can have a bearing on the interpretation of a letter said expressly to be governed by English law.
66.	Mr Parker submits that the claim turns on a simple issue of construction and the issue is whether the S$35.9 million paid by ISG under the SSPA was part of the “the total capital provided to the Company … and transferred to, or for the benefit of, the Company”.  He contends that there is no ambiguity: it plainly was not, but it was paid to the shareholders and for their benefit alone.  
67.	He argues that the expression “the Company” is defined specifically in the engagement letter as “Allproperty Media Pte Ltd”, namely, the Defendant, that this was a commercial contract concluded between experienced commercial parties and if they had intended the expression “the Company” to include reference to its shareholders, they would have defined it as such.  (He adds that it was negotiated on the Claimant’s side by Mr Martin, a qualified lawyer, but I should say that, as with Mr Stuart’s argument that I rejected in paragraph 65 above, I do not think that matter has any significance from the point of view of construction.)  He does, however, add to this by saying that it is universally understood that a company is not the same thing as its shareholders, that it is a fundamental principle of English law (the governing law of the engagement letter) that a company is a legal entity distinct from its shareholders and that businessmen and lawyers understand, therefore, that the mere reference to a company does not include reference to its individual shareholders.
68.	He argues that there is contextual support within the engagement letter that supports the foregoing proposition in that Appendix A makes express reference to various identified companies and to “any affiliated companies such as shareholders” (see paragraph 31 above). The parties must, therefore, be taken to have understood that the mere reference to a company did not include reference to its shareholders.
69.	In response to Mr Stuart’s argument concerning the use of (and the location of) the expression “directly or indirectly”, Mr Parker contends that the syntax of the sentence overall demonstrates that the requirement was that the investors should have been introduced “directly or indirectly”, not that the capital had been provided to the Company “directly or indirectly”.
Conclusion on this part of the argument
70.	Mr Stuart invites me to conclude that there are aspects of the engagement letter that are, as he put it, “sloppily drafted” (and he highlights the matters to which I referred in paragraph 30 above as one instance) and says that if, taken as a whole, the letter contains aspects that are not sufficiently clear, then I should approach the issue of the meaning and effect of its terms by reference to “the now well-established principles of English law.”  He says that provided I approach the case from that starting point, I will arrive at the proper conclusion.  He submits that the commercial reality of the situation in this case will provide the obvious answer to the construction issue.
71.	I agree with Mr Stuart that the provision highlighted in paragraph 30 is difficult to interpret and might, if the subject of this case, give rise to some difficult arguments.  However, the mere fact that one provision may be difficult to interpret does not mean that the agreement as a whole may not be capable of an unambiguous construction.  It is, of course, well established that a meaningless provision in a contract can be disregarded if the rest of the agreement is clear:  Nicolene Ltd v Simmonds [1953] 1 QB 543.  However, he is, in my view, effectively inviting me to look at the ‘business sense’ of the agreement reflected in the engagement letter before considering whether there is any ambiguity or other lack of clarity in the words the parties have used.  That is not a permissible approach.   As Lord Clarke of Stone-cum-Ebony said in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, at paragraph 23, “Where the parties have used unambiguous language, the court must apply it”.  It is well-established, however, that where the ordinary meaning of the contract “flouts business common sense” the Court will seek to give effect to what is presumed to have been the true intention of the parties (ICS v West Bromwich Building Society [1998] 1 WLR 896, 913D-E) and where there is real ambiguity in the words used in an agreement, the Court can have regard to the “factual background” to determine what those words should be taken to mean.
72.	However, it is also established authoritatively that considerable caution should be observed before too readily moving from the language of the parties into the uncertain waters of “business common sense” and the “factual background” or “factual matrix”.  As to the first, in BMA Special Opportunities Hub Fund v African Minerals Finance [2013] EWCA Civ 416, at paragraph 24, Aikens LJ said this:
“… I would agree with the statements of Briggs J, in Jackson v Dear [2012] EWHC 2060, first, that “commercial common sense” is not to be elevated to an overriding criterion of construction and, secondly, that the parties should not be subjected to “… the individual judge’s own notions of what might have been the sensible solution to the parties’ conundrum”. I would add, still less should the issue of construction be determined by what seems like “commercial common sense” from the point of view of one of the parties to the contract.”
73.	As to the second, in Chartbrook Ltd and another v Persimmon Homes Ltd and another [2009] 1 AC 1101, Lord Hoffmann (with whom Lord Hope of Craighead, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Baroness Hale of Richmond agreed) said that it “clearly requires a strong case to persuade the court that something must have gone wrong with the language” of the agreement.  He went on to say this:
“It is fortunately rare because most draftsmen of formal documents think about what they are saying and use language with care. But this appears to be an exceptional case in which the drafting was careless and no one noticed.”
74.	It follows that the starting point must be whether, in the first instance, the provision of the engagement letter under consideration in this case is capable of interpretation such that, applying the natural and ordinary meaning of its words, a “reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract” (see ICS v West Bromwich Building Society) would understand its meaning.
75.	If it is, that is effectively the end of the matter unless the court is satisfied that, as drafted, the provision flouts business commonsense.  If so, it would be necessary to consider such material as is properly admissible under established principles to endeavour to give effect to the presumed intention of the parties.
76.	In my judgment, notwithstanding Mr Stuart’s able argument, I do not think that the relevant provision falls foul of either of the two effective starting points to which I have referred.   Notwithstanding the analysis that he put forward (see paragraphs 58-64 above), involving the breaking down of the relevant provision into discrete sections, in my judgment, the danger of doing so is that it distorts the way it should be read.   It must be read as a whole and when it is, in my view the meaning is clear and unambiguous and does not flout business common sense.
77.	In the first place, as I have indicated, I do not consider that the provision setting out the terms upon which the success fee might be earned is unclear or ambiguous.  It is, to my mind, plain that whatever Mr Martin might have thought he was agreeing to, the agreement entitled the Claimant to a “success fee” upon the completion of any transaction that involved the provision “to the Company” (in other words to the Defendant) of capital and it was upon the amount of that capital (in other words “the total capital provided to the Company”) that the success fee would be calculated.  The concept of the shareholders of a company being distinct from the company itself is such an established concept in English law that it is inevitable, in my judgment, that any reasonable person reading the engagement letter by reference to English law would see that distinction maintained by the words used in the letter. 
78.	I agree with Mr Parker’s submission concerning the positioning of the words “directly or indirectly” in the relevant provision.  If the expression was intended to relate to the capital, it would have been placed between the phrase “the total capital provided” and the phrase “to the Company by Investors” rather than where it was placed.  Where it was placed shows that it was designed to qualify the word “introduced”.  One can see why.  If the contact between the investor and the Defendant had been established by an introduction through a shareholder of the investor, but not by some officer of the investor company, it would seem wrong for the claimant not to be able to claim a fee in such circumstances if the shareholder was alerted by the Claimant to the possibility of the company of which he was a shareholder making an investment in the Defendant.  However, be that as it may, it seems to me that the meaning of the provision is clear and unambiguous.  
79.	Does the provision as understood in its clear and unambiguous sense flout business commonsense?  I do not think so.  An argument can be made that without the $36 million paid to shareholders, the $18 million invested in the company would not have materialised.  However, it is the materialisation of that investment of $18 million that was the objective of the “Capital Raise”, not because Mr Melluish has said so, but because that is what would be discerned from the express terms of the engagement letter itself.  If the shareholders secured an unexpected bonus in the process of achieving that, then that was their good fortune.  It does not mean, as it seems to me, that an agent responsible (in the manner defined in its agreement with the Defendant) for making the introduction of the investor to the company is entitled to a commission on that bonus.  
80.	(I might, however, add for the sake of completeness that I do not accept Mr Parker’s contention that the meaning contended for by the Claimant necessarily flouts business common sense. He argues that if the Claimant’s construction of the letter were accepted, it would receive a £630,000 windfall, effectively for doing nothing. The Defendant’s shareholders did subsequently sell some of their shares, but under a transaction which Alegro did nothing to bring about and in which it had no involvement.  It seems to me that if the parties agreed, as they did, that the Claimant was entitled to a success fee if it introduced an investor as defined in the letter, and an investor came within that definition even if the Claimant played no material part in effecting the introduction, then that was their choice.  A court might raise the figurative eyebrow, but should it re-write what may to many to seem an unwise bargain?  I think not.)
81.	Mr Stuart’s suggestion that an interpretation to this effect could result in the kind of arrangement referred to in paragraph 59 above does, with respect, seem somewhat fanciful.  However, whilst I have not heard argument on the issue, I would be surprised if the law did not provide a remedy if there was clear evidence that the company that obtained capital against the background of such an agreement so arranged matters as deliberately to prevent the agent earning its fee. 
82.	For those reasons, I do not consider that it is necessary to look beyond the terms of the engagement letter itself:  they are sufficiently clear and unambiguous to deny the Claimant the relief it seeks in this part of its claim.
If the agreement flouted business common sense
83.	Should I be wrong in that assessment, I should address the case advanced on the Claimant’s behalf that, if recourse is had to appropriate background material (“the factual matrix”), the true interpretation of the engagement letter would be to the effect that any capital paid by an investor to the Defendant’s shareholders was part of the “Capital Raise” and should be treated as paid “to the Company”.  On that basis, it is said that the Claimant is entitled to the success fee.
84.	The high point (and, it is accepted, the crucial point) in the background from the Claimant’s point of view is the suggestion that Mr Melhuish “expressly agreed and understood” that the 3.5% would apply to both aspects of the “Capital Raise”.   It is argued that if I should find that this was expressly discussed and agreed as part of the factual matrix in which the engagement letter was drafted and signed/executed, then any construction of the agreement that ignores that basic factual occurrence would be wholly artificial. Reference to this aspect of the background would, it is suggested, demonstrate the effect of the “Cash Success Fee” clause the meaning of which is unclear.
85.	I am not entirely sure that I can accept the proposition that if matters were discussed as suggested then the (unclear) agreement becomes clear.  Equally, if the agreement concluded in writing after the relevant conversation failed accurately to reflect the antecedent oral agreement, the remedy lies in the rectification of the written agreement.  No such remedy is sought.
86.	However, I will assume for present purposes that a discussion of this nature could have the effect suggested.  The question is whether such a conversation took place.
87.	I will deal with the way the matter was put in the witness statements of Mr Martin, Mr Kraus and Mr Titus in the first instance.
88.	Mr Titus said that in the conversation he had with Mr Melhuish to which I referred in paragraph 8 above Mr Melhuish told him that he wanted to raise money for working capital for the planned growth of the Company and that he and his founder partners were looking for a “liquidity event, by which he meant an opportunity to recover some of their investment by selling some of the shares they held personally.” Mr Titus said that he mentioned the amount that he and the Company hoped to raise and that they discussed “a range of valuations”.  Mr Melhuish, when answering this in his third witness statement, said that he had not approached Mr Titus looking for “liquidity” and suggested that it would be unlikely that he would have mentioned that this was something that he and some of his shareholders wished to achieve in addition to the “capital raise”, although he accepted that a “cash out” was something which the shareholders hoped to arrange at some point in the future.  When challenged about this Mr Titus, doing the best he could, said that the effect of what Mr Melhuish was saying was that it would be “nice to get some cash for the shareholders and that it would be part of the goal”.  I will come back to my conclusions about this after reviewing the evidence of Mr Martin and Mr Kraus about their evidence concerning conversations with Mr Melhuish.
89.	Mr Martin dealt with this in his second witness statement, his first having been drafted in relation to the summary judgment proceedings which did not reflect on this particular aspect of the background.  There are two features of his versions of these conversations that the Claimant seeks to rely upon.  First, Mr Martin says that whenever he and Mr Melhuish spoke they “both agreed and understood that we were using the term ‘the Company’ to include both the legal entity of the Defendant limited company itself and also its existing shareholders.”  Second, he said that Mr Melhuish said in the telephone conversation referred to in paragraph 20 above that he and his business partners wanted “to take money off the table through the proposed Capital Raise”.  Mr Kraus said in a witness statement dated 15 July 2013 that he confirmed Mr Martin’s account of this conversation without giving further details, but then in a witness statement dated 21 August 2013 he said that he did “specifically recall that [in the telephone conversation] Steve Melhuish mentioned that he and some of his core investors were seeking an opportunity to sell some of their shares.”  Mr Martin, in his third witness statement, having reflected upon the matter, said that the discussion about the terms “the Company” and “Capital Raise” took place during the third call rather than an earlier call.  He did, however, say that when Mr Melhuish told him and Mr Kraus that he and his business partners wished to “take money off the table”, he (Mr Martin) added a note to this effect in his notebook (see paragraph 9 above) by adding the words “+ liquidity for investors”.  His evidence that he added that expression to his note following the Second Call was not challenged.
90.	So far as the Third Call is concerned, it became established that the only participants were Mr Martin and Mr Melhuish and according to Mr Martin they went through the proposed engagement letter and that during the course of the conversation they “specifically discussed and agreed that ‘Capital Raised’ meant any money put on the table by investors, which would include any money paid to [the Defendant] and any money paid to the shareholders.”  Mr Martin said that they “agreed” that the engagement covered both.
91.	Mr Melhuish said that he did not believe that he ever used the term “the Company” to mean both the Company and the shareholders and, incidentally, that he had never (as Mr Martin had also suggested that he had) purported to represent the shareholders.  (I interpose by saying that it is difficult to see how he could have bound the shareholders to an obligation to pay the “success fee” in accordance with the mutuality of obligations created by a contract without having been clothed with actual or ostensible authority to do so.  There is no evidence of either.  That does not, as it seems to me, prevent him from binding the company to pay a “success fee” based on money paid to the shareholders, unusual though such an arrangement might be.)  He also asserted that it was “untrue that I stated that the capital raised would ideally include an amount to allow the existing shareholders to recover some of their investment in the Company ….”  In that witness statement he did go on to say that he “may, on occasion, have indicated to Mr Martin, that in addition to the capital raised, the Defendant’s shareholders might be looking to recover some of their investment in the Company at some stage in the future … [but] this was not part of the anticipated ‘Capital Raise’ and it [was] not what the Claimant was engaged to achieve.”
92.	As will be apparent, the witness statements were replete with suggestions that what the other side of a conversation said about that conversation was “untrue”, the implication being that a deliberate falsehood was being advanced.  However, whilst Mr Parker examined the extent to which Mr Titus, Mr Kraus and Mr Martin might stand to gain financially as a result of a positive outcome of the case in the Claimant’s favour, he drew back from suggesting that deliberate lies were being told.  The same general comment can be made of the cross-examination by Mr Stuart of Mr Melhuish.  
93.	It is often more revealing to see what witnesses actually say when questioned in the witness box than what they have put in a witness statement.  Mr Kraus, of course, was involved in only one telephone conversation and he admitted that his memory was not entirely clear on certain matters.  He did say that the topic of the sale of shares appeared to be new topic in the conversation in which he participated, which I understood to mean that it did not appear to him to have been raised before.  It was put to him that all Mr Melhuish had said, or might have said, during the telephone conversation was that the shareholders might be prepared to sell some of the shares, but that they were not actively seeking to do so.  His recollection was that the intent was more positive than that.  He said that it was very clear that the shareholders would be interested in selling shares in the context of the capital raised.
94.	Mr Martin accepted that he could not remember verbatim the conversation but was clear that the issue of money for the investors was mentioned because he made a note of it (see paragraph 89 above).  It was put to him that what Mr Melhuish was saying was that there was willingness to consider a “cash out” but that it was not a specific objective.  Mr Martin’s recollection was that Mr Melhuish was more specific and that “he wished to achieve this if possible” and that he was “looking for liquidity for the investors”.
95.	Consistent with the case that was put to Mr Martin and Mr Kraus, Mr Melhuish said that the sole objective of the capital raised when it was embarked upon was to raise capital for the company.  There had been considerable expenditure on expansion recently and it was necessary for an injection of capital into the company to support what had been done and to continue that process.  He said that during the process they were asked if there was an interest in selling shares and that is how the issue came to arise.  He repeated that it was not the objective to get money out.  
96.	It is, perhaps, worth recording the way that Mr Melhuish put the matter in his first witness statement when, after describing the basis for needing a capital injection of $15m - $20m, he said this:
“Separately, [Jani Rautiainen] and I and our seed investors hoped for a partial cash out or return on our investment.  Many seed investors expect a return within 5 years, so we also wanted if possible to agree a sale of some of the existing shares in [the Defendant].”
97.	The contemporaneous documentation, which is usually a more reliable guide to what was or was not said than what individuals say occurred through the prism of recollections put together some while after the material events, does, in my judgment, support Mr Melhuish’s position that it was not until the process was in existence that a potential “cash out” became a real possibility.  The internal e-mails to which I referred in paragraphs 16 and 17 above suggest that the issue was first raised at some point between 16 and 26 July.  What until then had merely been a hope on the part of some of the shareholders looked as if it might turn into a reality.  I have no doubt (and I so find) that the possibility of such a transaction was mentioned in the second call.  I did not really understand Mr Melhuish to deny that, but his position is that the emphasis was not upon that, but upon the real intent of the “Capital Raise”, namely, securing the investment for the Company.  The evidence (and the form of the one reply he received to his e-mail of 8 August:  see paragraph 17 above) suggests that there was no great enthusiasm or surge of support amongst the shareholders for such an event at that time.  At that stage, of course, ISG was not on the scene at all.  
98.	I am prepared to accept, as I have said, that there was discussion in the second call of the possibility of such a transaction taking place:  indeed it would have been odd if it had not been mentioned at all.  I am also prepared to accept that the discussion went so far as Mr Martin suggesting that a low profile should be given to any thought that the shareholders might be prepared to sell shares for the obvious reason that it could give the wrong impression to potential investors in the Company: that consideration makes obvious presentational sense.   Whether it was truly necessary for him to say that is, perhaps, open to doubt because I am prepared to accept that, notwithstanding the fact that this issue had been raised as a possibility, it was still not the principal objective of the Defendant.  Equally, in my judgment, what Mr Melhuish was considering at that stage, as at all stages, was how to raise the capital for the Company.  That was, on any view, the overriding objective at the time.
99.	I am also prepared to accept that Mr Melhuish probably mentioned to Mr Titus that some shareholders hoped to get some cash out of the process contemplated, but I do not believe that that was much more than a throwaway line in a conversation outlining the essential purpose of the “Capital Raise”.
100.	I do not accept that in the Third Call there was a line by line consideration of the engagement letter even though Mr Melhuish and Mr Martin spoke for 36 minutes (see paragraph 24 above). There were, it is common ground, discussions about the fees to be paid given the non-exclusive nature of the engagement and it was, of course, necessary to agree the names of the companies to be included in Appendix A.  That will have occupied quite a bit of that call-time. Equally, I do not think that there was an express discussion about the meaning of the term “the Company” and whether it included the shareholders.  I do not believe that Mr Melhuish or Mr Martin would have gone into that detail.  I am very doubtful about whether Mr Martin believed the two terms were effectively synonymous but, if he did, then he was mistaken about the position in English law, the law that governed the interpretation of the engagement letter.  However, I simply cannot accept that the words “directly or indirectly” (see paragraph 28 above) were placed into the engagement letter because of a conversation about the impact that a “cash out” would have on the entitlement to a “success fee”.  Their inclusion was for the reason I have given in paragraph 78 above.  If the engagement letter had included words such as “which, for the avoidance of doubt, shall include its shareholders” after the words “the Company”, then the position would have been different.
101.	I cannot accept as a matter of fact, therefore, that within the factual matrix forming the background to the agreement was a specific agreement by Mr Melhuish that the 3.5% would apply to both aspects of the “Capital Raise” and that they were using the term “the Company” to include both the legal entity of the Defendant limited company itself and also its existing shareholders. 
102.	The only matter of fact in the factual matrix forming the background to the conclusion of this agreement that, in my judgment, could arguably be of relevance, if the agreement was itself unclear or ambiguous, was that fact that the possibility of the shareholders receiving payment for some of their shares as a part of the overall “Capital Raise” project was discussed between Mr Melhuish, on behalf of the Defendant, and Mr Martin and Mr Kraus, on behalf of the Claimant prior to the conclusion of the agreement.  It would be necessary to conclude that knowledge of that fact by a reasonable person at the time of the contract would have led that person to the view that any receipt of cash by shareholders for the sale of shares was obviously to be included in the expression “the total capital provided to the Company by Investors”.  For the reasons I have given previously, I do not see how any such conclusion could be reached.
103.	However, even evidence of the fact to which I have referred seems to me either to offend or arguably offends the principle that the court will not admit evidence of the negotiations between the parties: see Prenn v Simmonds [1971] 1 WLR 1381, at 1385H, and Chartbrook Ltd and another v Persimmon Homes Ltd and another, where at paragraph 41 Lord Hoffmann states the reason for the rule and continues thus at paragraph 42:
“The rule excludes evidence of what was said or done during the course of negotiating the agreement for the purpose of drawing inferences about what the contract meant. It does not exclude the use of such evidence for other purposes: for example, to establish that a fact which may be relevant as background was known to the parties, or to support a claim for rectification or estoppel. These are not exceptions to the rule. They operate outside it.”
104.	If Mr Melhuish and Mr Martin were negotiating about the inclusion of the shareholders’ capital return in the expression “the total capital provided to the Company by Investors”, or even agreed that it should be so included, then that is merely evidence of the negotiations and nothing more.  If Mr Martin believed that they had agreed that it was to be included, that would be his subjective understanding.  Objective interpretation leads to a different result.
105.	In one sense, the argument turns full circle because, as it seems to me, the terms of the engagement letter themselves evidence what was said, and with what emphasis, in the conversations immediately preceding its re-formulation by the Claimant and its acceptance in due course by the Defendant.
106.	For those reasons, I do not consider that anything said in the antecedent negotiations avails the Claimant on this part of its claim.
107.	Lest it be thought that I have overlooked it, I should simply record that I am unable to see how the way other agreements with the Defendant made by other parties (i.e. Supersonic Ventures and Hall Capital Strategies) were phrased can assist with the interpretation of the agreement between the Defendant and the Claimant and neither do I see how that could constitute part of the factual matrix forming the background to that agreement.
Conclusion
108.	For the reasons I have given, I consider that the Claimant has not established its entitlement to any “success fee” based upon the sums paid to the shareholders of the Defendant in the transaction with ISG.
109.	This may be a case where the subjective beliefs of the two people negotiating the contract about what was agreed are shown, on an objective analysis, to be unfounded.  Mr Melhuish did not believe that he, on behalf of the Defendant, had agreed to something that entitled the Claimant to any “success fee” because it had not in fact made the introduction of ISG to the Defendant whereas the terms of the contract, looked at objectively, demonstrated that he had.  That was Master Leslie’s unappealed conclusion. Mr Martin believed that the terms of the contract entitled the Claimant to a success fee based upon any capital paid by an investor, whether to the Defendant company or its shareholders, but an objective analysis showed that it did not do so.
110.	It is unfortunate that a great deal of cost will have been expended in the dispute and that it will have generated bad feeling and distrust between the two sides.  It is, regrettably, a consequence of not sorting out the fine print of the agreement sufficiently in the commercial haste that gave rise to it.  There is a lesson to be learned.