BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | ||
England and Wales Court of Appeal (Civil Division) Decisions |
||
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Quantum Advisory Ltd v Quantum Actuarial LLP [2023] EWCA Civ 12 (19 January 2023) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2023/12.html Cite as: [2023] EWCA Civ 12 |
[New search] [Printable PDF version] [Help]
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN WALES
BUSINESS LIST (ChD)
HHJ Jarman QC
Strand, London, WC2A 2LL |
||
B e f o r e :
LADY JUSTICE WHIPPLE
and
LADY JUSTICE FALK
____________________
QUANTUM ADVISORY LIMITED |
Claimant/ Appellant |
|
- and – |
||
QUANTUM ACTUARIAL LLP |
Defendant/Respondent |
____________________
Andrew Butler KC (instructed by Acuity Law) for the Respondent
Hearing date: 13 December 2022
____________________
Crown Copyright ©
Lady Justice Falk
Introduction
HHJ Jarman's decision
"I do, however, make this comment. Any relational contract of this character is likely to be of massive length, containing many infelicities and oddities. Both parties should adopt a reasonable approach in accordance with what is obviously the long-term purpose of the contract. They should not be latching onto the infelicities and oddities, in order to disrupt the project and maximise their own gain."
The Services Agreement
"Quad has resolved to appoint the LLP to carry out certain responsibilities for and on behalf of Quad in relation to its business, and the LLP agrees to carry out such responsibilities (the Services, as defined below) in consideration for the payment by Quad of the Administration Fees and any other payments due to Quad pursuant to this Agreement."
"With effect from the Effective Date, Quad confirms the appointment of the LLP to be (subject to the provisions of clause 2.8 below) solely responsible for the provision to Quad of the services set out in Schedule 7 to this Agreement to the extent that they:- (a) relate to any engagements of Quad by the Clients, or (b) are referred to Quad or the LLP by any of the Introducers during the Extended Period (save where any Introducer receives a bone fide substantive financial reward from the LLP), or (c) relate to the Pipeline Business, together with such other services as the parties may agree from time to time in writing that the LLP is to perform for Quad (the "Services"). Quad confers upon and grants to the LLP such power and authority as is necessary or desirable for providing the Services. The LLP hereby accepts the appointment to provide the Services to Quad, subject to the terms and conditions set out in this Agreement."
i) existing clients, being clients and schemes to which Quad had provided services prior to 1 April 2007;
ii) clients attributable to "Pipeline Business" comprising:
a) "Prospects", being entities targeted as potential new clients during the 12 months leading up to the date of the Services Agreement; and
b) entities introduced to Quad or the LLP by Introducers during the Extended Period.
The concept of Introducers covers, broadly, a) clients and b) other persons to whom Quad had pitched for business at a face-to-face meeting during the 12 month period prior to 31 March 2007. Non-exhaustive lists of existing clients and Prospects are set out in Schedule 2 to the agreement.
"The Services
Provision of pensions consulting, actuarial, administrative and investment services including, by way of example:
Actuarial
Compliance per Institute of Actuaries Guidance notes
Consulting Actuary work for Company
Investment & Life assurance
For trusts
For individuals
Risk benefits for companies
Pensions Consultants
Compliance for trustees
Pensions administration
Record keeping
Benefit calculations
Routine member communications
Litigation support
Other
Benefit design consultancy and advice to company and trustees (that is not necessarily compliance).
Accounting and payroll
Other member communications — other than routine
Liaison with investment managers, legal advisers
For the avoidance of doubt the above does not include taxation related advisory work.
Quad Administration
Preparation of (a) monthly and annual accounts for Quad in such format as Quad may reasonably request from time to time and (b) VAT/Corporation Tax/ statutory returns for Quad and provision of such other administrative support as Quad may reasonably require from time to time.
Handling of any claims against Quad
Preparing professional indemnity insurance proposal form and dealing with any actions against Quad (whether by any Client or otherwise) including notification of any actual or potential claim to professional indemnity insurers."
"• Lecture tours, meeting with senior level Client contacts…
• Instigation of strategic project work for Clients…
• Soliciting Prospects for Quad (until the expiration of the Extended Period)…".
"The LLP shall provide the Services in a professional, competent, diligent and efficient fashion in accordance with Best Industry Practice and shall devote such time and efforts as it deems reasonably necessary for the efficient operation of Quad's business."
"This Agreement and the documents referred to in it constitute the entire agreement between the parties and supersedes all prior arrangements, written or oral with respect thereto. All other terms and conditions, expressed or implied by statute or otherwise, are excluded to the fullest extent permitted by law."
The applicable legal principles
"19. Thus the court is concerned to identify the intention of the parties by reference to what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean. The court's task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. This is not a literalist exercise; the court must consider the contract as a whole and, depending on the nature, formality, and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning. The interpretative exercise is a unitary one involving an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences investigated."
The parties' submissions
Quad's submissions
The LLP's submissions
Discussion
"(ii) The reliance placed in some cases on commercial common sense and surrounding circumstances should not be invoked to undervalue the importance of the language of the provision which is to be construed. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract…"
"(v) While commercial common sense is a very important factor to take into account when interpreting a contract, a court should be very slow to reject the natural meaning of a provision as correct simply because it appears to be a very imprudent term for one of the parties to have agreed, even ignoring the benefit of wisdom of hindsight. The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed. Accordingly, when interpreting a contract a judge should avoid re-writing it in an attempt to assist an unwise party or to penalise an astute party;"
"… an implication of a duty of good faith will only be possible where the language of the contract, viewed against its context, permits it. It is thus not a reflection of a special rule of interpretation for this category of contract."
"Putting that another way, it might be said that the elusive concept of good faith should not be used to avoid orthodox and clear principles of English contract law."
Conclusion
Lady Justice Whipple
Lord Justice Snowden