England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		21/12/2007

Mr Justice Briggs :

Introduction

1. This is a claim for the specific performance and damages for breach of two linked and contemporaneous agreements made in November 2003 for the sale of duct and the lease of fibre-optic cable forming part of a communications network which had recently been constructed by the Defendant Abovenet Communications UK Ltd in and around London. The Claimant, euNetworks Fiber UK Ltd, is the purchaser and lessee under the two agreements. Both companies have changed their names since the agreements were made. Then, they were called Metromedia Fiber Network UK Ltd and Global Voice Networks Ltd. I shall refer to them by abbreviations of their then names, as "MFN" and "GVN". I shall refer to the agreement for the sale and purchase of duct as "the Purchase Agreement" and to the agreement for the lease of fibre-optic cable as "the Private Network Agreement". I shall refer to them collectively as "the 2003 Agreements".
2. Both agreements were made as the result of the grant in December 2002 of a Call Option by MFN to an associated company of GVN, Real Capital International Ltd ("RCI"), which RCI exercised on 31 August 2003. The Call Option Agreement contained, in appendices, forms of the Purchase Agreement and Private Network Agreement. RCI was entitled to nominate a purchaser and lessee when exercising the Call Option, and Clause 5 of the Call Option Agreement provided for completion 21 days after exercise, at which (inter alia) a duly executed Purchase Agreement and Private Network Agreement would be delivered by MFN to RCI or its nominee. In fact, a limited process of re-negotiation occurred at the time of the exercise of the Call Option, so that the 2003 Agreements were in the event completed in slightly different form from the drafts in the appendices to the Call Option Agreement.
3. The principal issue between the parties concerns the extent both of the duct and of the fibre-optic cable respectively purchased and leased by GVN from MFN. In a nutshell, GVN claims that it purchased duct and leased cable over substantially the whole of MFN's London network, with the exception of what are called 'laterals'. By contrast, MFN claims that GVN purchased duct and leased cable only over that part of its London network which it defines as 'the backbone', but not over what it describes as 'the mesh', nor over laterals, subject to exceptions necessary to connect the backbone with a small number of named buildings.
4. In order to make that dispute intelligible, it is necessary first to provide a basic technical introduction. That task is complicated by the fact that there are no accepted standard industry definitions of the words network, backbone, mesh or laterals. By contrast, the phrase 'fibre-optic cable' has a settled meaning. It is because its use as a means of data communication is relatively recent that there has yet to develop a precise, settled vocabulary descriptive of the way in which different companies have sought to establish fibre-optic communications networks in European cities, including London.
5. The transmission of non-voice data otherwise than by radio signal between terminals in buildings was developed initially by the use of existing copper cable networks which had themselves been developed originally for telephone communication. A fibre-optic cable consists of a number of fibre-optic strands along which data is transmitted by light rather than by electrical impulse. A fibre-optic cable network consists of lengths of fibre-optic cable in ducts, which are plastic pipes laid underground, usually along the route of public highways. Ducts are accessible by chambers constructed at intervals along their length, which permit access for pulling cable along originally empty duct, for connecting ("splicing") lengths of cable together, as well as for maintenance and inspection. Access to chambers is obtained from ground level through what are traditionally called manholes. The process of running fibre optic cables through ducts is called fibreing.
6. Like any other system providing services in pipes in a built-up area, a fibre-optic communications network has to be connected to buildings, occupied either by single customers or by data centres which may serve the needs of a number of customers. This access is normally achieved by fibred ducts known as laterals. These are likely to consist of single ducts, by contrast with the multiple duct structures used for the network itself, and the cables are likely to consist of a greatly reduced number of fibres, compared with the number of fibres used in the rest of the network. The needs of an individual customer may be sufficiently served by one or two fibre strands within a cable, although the requirements of a data centre will typically be larger.
7. MFN began constructing its London network in late 1999 as part of a larger project for the construction of fibre-optic networks in and between a number of European cities undertaken by the group of which it formed part, of which the parent was Metromedia Fiber Network Inc ("MFN Inc"), holding its interest in MFN through a Dutch intermediate holding company, ("MFN BV").
8. By the end of 2001 MFN's London network of ducts was (ignoring laterals) substantially complete. The network covered a total route of 200 kilometres. It stretched from just west of the Heathrow Airport approach road, just north of Pentonville Prison, the eastern edge of the Isle of Dogs and the centre of Lewisham in the southwest. Save in certain limited places where site constraints made this impossible, the network consisted, at any point along the route, of a trench containing four plastic reinforced ducts of 114 mm external diameter, arranged in cross section in a rectangular form with two on top and two beneath. The lower two ducts were each sub-divided into four 32 mm internal diameter sub-ducts. The places where site constraints made this configuration impossible are generally known as "pinch points".
9. Much the greatest part of the expenditure involved in a construction of fibre-optic network is employed in the civil engineering work required for the laying of the ducts in their protected trenches, and the construction of the chambers, of which there were some 1,455 on the London network, together with the obtaining of the necessary legal rights such as wayleaves. I was told that this absorbed in excess of 90 per cent of the total capital expenditure, whereas the cost of obtaining and running the necessary fibre-optic cables amounted to less than ten per cent. Nonetheless, the network was by no means fully fibred by the end of 2001. Those parts which had both been constructed first, and which were regarded as likely to carry the heaviest communications traffic, had been fibred with a single 432 strand cable. Other parts had been fibred with a 216 strand cable. Other parts had not been fibred at all and, as financial constraints began to impinge on the MFN group's activities in 2001, a policy had been adopted of fibring only to meet specific customer requirements.
10. In addition to distinguishing between the main network and laterals, as I have described them above, it had by 2002 become customary among MFN's staff in London to make an additional conceptual distinction within the network itself between, on the one hand, the main routes likely to carry the heaviest traffic, which I shall call "the rings", and additional routes constructed mainly but not exclusively within the rings, for the purpose of bringing the network closer to the buildings likely to be occupied by MFN's prospective customers, for example, within the City of London, the West End and Docklands. I shall call these routes "the distribution network" for the purpose of distinguishing them from the rings. There was a tendency within MFN in London to describe the rings as 'the backbone' and the distribution network as 'the mesh'.
11. This distinction between the rings and the distribution network had no particular practical purpose or utility in relation to duct, because the same four duct configuration was used throughout both the rings and the distribution network. For the purposes of duct, the only relevant distinction lay between the network (including both rings and distribution network) and laterals. In relation to fibre, the distinction had a degree of practical utility, because of the policy first to fibre the rings, and then, because of increasing financial constraint, to fibre the distribution network only as necessary to meet customer requirements.
12. It should not be assumed, however, that there was a settled and unchanging consensus among MFN's London staff as to precisely which parts of the London network route constituted the rings, and which parts constituted the distribution network. Although there were by mid 2002 maps purporting to show the route of the entire network, and a schematic drawing purporting to show which parts of it had by then been fibred, and the number of strands used in those parts, there appears to have been a continuing uncertainty as to which of the parts not yet fibred would in the end constitute the rings, and which parts the distribution network. Furthermore, it appears that the schematic drawing (to which it will be necessary to refer later in some detail) did not even accurately describe which parts of the network had been fibred, since it included, as having been fibred to the standards to be expected of the rings, significant parts which GVN now claims to be unfibred, and therefore to be mesh, rather than backbone.
13. The most that can therefore be said about the 'backbone v mesh' terminology used within MFN at the material time, at least until September 2003, was that it was a rough and ready conceptual distinction used internally at MFN in London to distinguish between different parts of the network, of value when considering fibreing rather than ducting issues, but which no-one had apparently thought it necessary to reduce to any precise or permanent delineation in terms of route. The distinction did not even appear in MFN's own technical manuals, which distinguished only between backbone and laterals, so that, by implication, backbone included the distribution network.
14. The first occasion upon which it appears that any attempt was made at a precise distinction on a physical drawing in terms of route (rather than concept) between the rings and the distribution network for the delineation of duct is to be found in two maps, entitled respectively "UK/LON/0000/GIS/088A" and "UK/LON/0000/GIS/089A", bearing date 15 September 2003. I shall refer to them separately as "Maps 88A and 89A" and collectively as "the A Maps". They distinguish between the rings and the distribution network simply by omitting the latter. It may be that MFN had mapping software from which it could easily have been done earlier, but if so, no earlier physical maps survive.
15. It is common ground that the effect of the omission of the distribution network is to reduce the route area from 200 km to about 125 km. It was also common ground that, in terms of cost of construction, the distribution network is more expensive per kilometre than the rings, because it is concentrated upon the most crowded and congested parts of the London street map, in particular in the City and the West End.

The Contractual Framework

16. With that introduction, it is now possible to describe the contractual structure in meaningful terms, to the extent necessary for the determination of the issues, beginning with the Call Option Agreement. This is dated 18 December 2002 and expressed to be made between RCI and MFN. For a nominal premium of $1, MFN granted to RCI the right to require MFN at any time within 180 days from execution "to sell to RCI or its nominee the London Assets in accordance with the provisions of this agreement and the terms of the Purchase Agreement for the Purchase Price". The form of Purchase Agreement was attached as Appendix 1.
17. Clause 3.1.2 provided that, upon completion of the exercise of the Call Option, MFN would enter into a ten year private network agreement with RCI (or its nominee) "for the use by RCI or its nominee of twelve strands of dark optical fiber in London for a nominal charge of $1 in the form or substantially in the form of the agreement attached as Appendix 3". Clause 3.1.3 gave RCI or its nominee the right to call for the construction of between 180 and 200 additional chambers for the fixed price of $500,000, upon detailed terms set out in Appendix 4. Clause 5 provided that completion should take place on the 21^st business day (as defined) after delivery of the Call Option exercise notice, for the exchange of a duly executed Purchase Agreement and Private Network Agreement, together with payment in full of the purchase price.
18. Clause 1.1. contained the following relevant definitions:

"Purchase Agreement"	The purchase Agreement attached at Appendix 1
"London Assets"	All MFN's right, title and interest in the duct forming part of MFN's backbone metropolitan fiber optic network in London, England, details of which are attached as the Appendix to the Purchase Agreement
"Purchase Price"	Three Million Five Hundred Thousand United States Dollars ($3,500,000).

19. Appendix 1 consisted of the agreed form of Purchase Agreement, expressed to be made between MFN and the intended nominee of RCI, namely a British Virgin Islands registered company to be called Global Voice Networks Limited as purchaser. Section 2, headed "Purchase and Sale" provided for the Vendor to sell and the Purchaser to "purchase the Duct" as defined. Section 1 contained the following relevant definitions:

"Duct"	All MFN's right, title and interest in the duct forming part of MFN's backbone metropolitan fiber optic network, details of which are attached as Appendix A;
"Consideration"	Three million five hundred thousand United States Dollars ($3,500,000) payable in cash at completion;
"MFN Network Information Pack"	The information pack describing MFN's backbone metropolitan fiber optic network, details of which are attached as Appendix B;
"Route Drawing"	The route drawing attached at Appendix C.

20. It is necessary to set out Appendix A in full. Under the heading "Description of Duct", it provided as follows:

"One (1) duct of 110 mm diameter or equivalent capacity (see below) installed underground by MFN along the route shown on the Route Drawing, save as follows:

1. In respect of three of the reduced capacity areas (as set out in Section 4 of the Network Information Pack) where the duct acquired by the Purchaser shall be as follows:

• One (1) sub-duct of 32 mm diameter (together with fiber installed within the sub-duct) - Greenwich Foot Tunnel

• One (1) sub-duct of 32 mm diameter - Cutty Sark Car Park

• One (1) sub-duct of 32 mm diameter - Stockley Road Bridge

"2. In respect of the remaining three of the alternative capacity areas (as set out in Section 4 of the Network Information Pack), namely Blue Bridge, Marsh Wall and London Bridge, where no duct will be acquired by RCI and instead, MFN and RCI will enter into a ten (10) year product order for leased fiber (24 pairs of fiber), such fiber to be provided on the terms of the private network agreement entered into between the parties dated the same date as this Agreement.

3. In respect of the sections where MFN has a right to use duct infrastructure pursuant to agreement with Fibreway (as set out in Section 4.3 of the Network Information Pack), MFN will, upon written request from RCI and subject to the following provision, enter into a ten (10) year product order for leased fiber (24 pairs of fiber), such fiber to be provided on the terms of the private network agreement entered into between the parties dated the same date as this Agreement.

For the purposes of this Appendix "equivalent capacity" shall mean:

"4 x 32 mm diameter duct or sub-duct

2 x 50 mm diameter duct or sub-duct

1 x 90 mm diameter duct

1 x 96 mm duct

(as indicated on the Route Drawing)"

21. Appendix B consisted of the Network Information Pack. It is apparent from its front page that it contained detailed information about the London MFN city network, but it was originally produced on 27 May 2002, and revised into Rev 2.0 on 2 July 2002. It was a marketing document designed to provide a concise description of MFN's London network. The only references to it anywhere else in the Call Option Agreement or in the attached Form of Purchase Agreement are those which appear in Appendix A, for the purpose of identifying the reduced capacity areas, the alternative capacity areas and the agreement with Fibreway. It was, however, the document around a black and white version of which the early negotiations of the Call Option Agreement took place, and the entirety of its contents therefore constitute an admissible part of the background matrix of fact relevant to the interpretation of the agreement. It does not purport to describe the subject matter of the sale, but rather the whole of MFN's London City network, of which the duct to be sold, and the fibre to be leased, formed only a part. Since both parties relied upon parts of the Network Information Pack in support of their arguments on construction and, separately, rectification, I shall briefly describe all those parts of it relevant to the issue whether duct was sold, or fibre leased over the route of the distribution network.
22. Section 1 headed "Executive Summary" began as follows:

"The London network infrastructure covers approximately 145,000 m of the most densely populated business area's (sic) of central London. A further 55,000 m ring extends out to Heathrow passing a number of key business locations, creating a total 210,000m London network. The network was specifically planned to pass within 500m of the top one thousand companies in London."

No-one has been able to explain the arithmetical error in the above passage. Section 1 then describes the typical 4 duct configuration as I have already done, and provides a cross-sectional diagram by way of illustration. The text then continues:

"This duct system is supplemented by approximately 1,455 chambers; 1,055 are on the London network and 400 on the Heathrow network. This gives an average distance between chambers of approximately 137 m."

There follows a cross-sectional diagram of a typical chamber.

23. Section 2 headed "Introduction" includes these sub-paragraphs:

"The purpose of this document is to give detailed information about the London and Heathrow MFN network infrastructure.

Much of the geographic detail of the network is contained within the Maplnfo and AutoCAD systems. The text of this document should be read in conjunction with this information to give a comprehensive overall picture of the London network."

24. Section 3 headed "Maps" introduces five sets of maps by way of brief narrative introduction, followed by a very small scale print-out from one or other of the Maplnfo and Auto CAD mapping systems. The first three sections are split into two, one for the Central London network and the other for the Heathrow network. The remaining two maps illustrate aspects of the Central London network only.
25. Section 3.1 headed "CityNet London, Overview" continues:

"Based on Maplnfo, scale can be zoomed, general route layout showing backbone and distribution networks."

There then follow two maps which show the whole of the Central London and Heathrow networks - that is the rings and the distribution network - without distinguishing between the two. The coloured version of the Network Information Pack shows the route of the networks as blue lines.

26. Section 3.2 headed "CityNet London, Fibre Overview" states that:

"Based on Maplnfo, the mapping shows fibred routes within London."

There follow two further maps which, on a black and white version of the Network Information Pack are indistinguishable from the two maps forming part of Section 3.1. The coloured version shows part of the network route in red, and part in green. There is a very loose, but by no means precise or accurate correlation between the red part and the distribution network, but there is no key or other means for the reader to ascertain with certainty whether the use of red lines was to indicate fibred or non-fibred parts of the route.

27. Section 3.3. headed "CityNet London, As Built Maps", provided two more maps very similar to those in Section 3.1, at least on the scale in which the maps appear in the Network Information Pack, but based upon Auto CAD rather than MapInfo data.
28. Section 3.4 contains a "pinch-point" map of the Central London network only. The text describes pinch-points as areas where "we typically have a deviation from the general specification. This maybe (sic) the use of directly buried sub-duct or just the identification of a shallow bridge crossing".
29. Finally, Section 3.5, headed "CityNet London, Backbone Ring Map", begins with the words:

"This maps (sic) shows the fibre backbone mapping together with the appropriate fibre count and also includes PoP locations."

There then follows a schematic diagram (rather like the well-known London underground diagram) purporting to show those parts of the fibre backbone (rather than duct) which had already been fibred either with 432 strand cable or 216 strand cable. PoP locations are places where major fibre intersections are made in an above-ground room sized chamber called a PoP, or 'point of presence'. Section 6 adds the following information, under the heading "Sections already fibered":

"All backbone rings are fibred, in service and monitored by our SLGX. Each ring contains 432 fiber except for the Heathrow and Lewisham rings. Here each ring contains 216 fibers. The distribution network will contain fiber in certain sections."

30. The schematic diagram in Section 3.5 does not, even in diagrammatic form, accurately distinguish between the rings and the distribution network, or even accurately identify those parts of the network which had by then been fibred. In particular, eight parts of what MFN now claims to be the distribution network are shown as having already been fibred either in 216 strand cable or 432 strand cable, whereas MFN's case and evidence is that those parts had not in 2002 been fibred at all, and have not even been fibred now. Furthermore, a careful comparison between the diagram in Section 3.5 and the Central London map in Section 3.2 fails to show a precise correspondence between any single colour used in Section 3.2 and the diagrammatic indication of the fibred parts of the network in Section 3.5. For example, there is what MFN maintains is a distribution route which starts just east of Euston Station and loops northwest, northeast and then south east so as to re-join the main network just north of the City Road roundabout, which is shown in red in the Central London map in Section 3.2, but as having been fibred with 216 strand cable in the diagram in Section 3.5, as if it was part of the fibre backbone.
31. Section 4.1 states under the heading "Ducts available":

"from the standard layout of 4No. x 114 mm, typically 2No. x 114 mm, or equivalent capacity, are available. This is subject to alteration as and when further duct sales may be made".

Section 4.3 of the Network Information Pack is the part to which reference is made in Appendix A to the form of Purchase Agreement. It sufficiently explains the meaning of reduced capacity areas, alternative capacity areas and the agreement with Fibreway, as used respectively in paragraphs 1, 2 and 3 of Appendix A. It is unnecessary to set that explanation out in detail, since nothing turns on it.

32. Section 7 provides that "there are no missing gaps in the backbone section of the London and Heathrow networks". Section 9 explains that the network is covered by a 24/7 in-house call out system controlled by MFN's Network Operations Centre in Amsterdam, together with an approved contractor ready with stand-by civils and cable gangs. The relevance of this provision to the construction of the Call Option Agreement is only that it shows the entirety of the network being maintained under a single arrangement.
33. Finally, Section 10 states under the heading "Title of Duct" that the network is a wholly owned asset of MFN. The Network Information Pack then concludes with two numbered attachments, each of which is a much larger scale map broadly corresponding with those in Section 3.1, in which the entirety of the London and Heathrow networks respectively (that is, rings and distribution network) are highlighted in blue in the coloured edition. The highlighting appears clearly in black in the black and white version.
34. It will be recalled that in the definition section of the form of Purchase Agreement annexed to the Call Option Agreement the "Route Drawing" is defined as the route drawing attached at Appendix C. In fact no drawings were attached as Appendix C. Rather, the appendix consists of a single page text as follows:
"APPENDIX C Route Drawing Drawing Number UK/LON/OOOO/GIS/088 and Drawing Number UK/LON/0000/GIS/089, both dated 11 December 2002"
35. It is common ground that by the date of the Call Option Agreement, there were in existence two drawings dated 11 December 2002 having the numbers identified in Appendix C. I shall refer to them individually as "Maps 88 and 89", and collectively as "the Original Maps". They show by the use of blue lines the entirety of the routes of the London and Heathrow networks respectively, making no distinction between rings and distribution network. A box headed 'Legend' shows that the blue line depicts the "MFN Network". A very careful observer might notice, on scales larger than A3 that, generally, the distribution network is shown in thinner blue lines than the rings, although this distinction is by no means precise, accurate or consistent, and no reference is made to it in the Legend. There is no material difference between the routes shown in blue on the Original Maps and the routes shown in blue on the two maps appended to the Network Information Pack.
36. There is no difficulty, nor even any need for extrinsic evidence, in concluding that the Original Maps were incorporated as the Route Drawings by the reference to them in Appendix C. This is because the same two drawings are physically attached in a later part of the appendices to the Call Option Agreement on an A4 scale upon which their distinguishing numbers and date clearly appear.
37. Appendix 2 to the Call Option Agreement consists of a form of Co-Location Agreement upon which nothing turns. Appendix 3 consists of the Form of Private Network Agreement providing for the lease of fibre. It consists in the main of general terms and conditions applicable to any MFN lease of fibre on any part of its network, but in relation to these parties, it is supplemented by Product Order No. l, which contained the following relevant provisions. It begins as follows:

"This Product Order, and all attachments and exhibits hereto, alone is not an agreement between the parties and is incorporated by reference into the Private Network Agreement between the parties with an effective date of 2002"

The lease term is defined as 10 years from the acceptance date. The number of leased fibres is defined as:

"12 dark fiber strands along the route shown in the Exhibit A."

Under 'Customer Locations:' the text is:

"Not applicable - backbone only."

The Product Order is stated to be made between MFN and RCI or its nominee.

38. Exhibit A headed 'Routes and Distances' simply contains copies of the Original Maps, identifying the entirety of the network, without any distances stated on them. Again, they make no distinction between the rings and the distribution network.
39. Paragraph 7.2 of Product Order No.l entitled 'Building Access' provides that:

"MFN has provided Customer with a list of the buildings currently connected to the MFN network, a copy of which is attached hereto at Exhibit B. Customer has the right to lease eight (8) strands of dark fiber in eleven (11) of the connected buildings (one such building being the MFN data centre at the Global Switch I Building, East India Dock, London El4), at no cost..."

40. Exhibit B headed 'List of buildings currently connected to the MFN Network' then listed some 19 buildings.
41. The 180 day period for the exercise of the Call Option was extended by agreement on 4 June 2003 so as to expire on Sunday, 31 August 2003. Following a meeting on 29 August, the parties agreed amendments to the Call Option Agreement which, in summary, provided that if the Call Option was exercised by 31 August, then:-

(a) There would be an extension for the time for completion until 22 September, upon receipt of cleared funds for the first instalment of the Consideration.

(b) MFN's obligations in relation to Co-Location and the Private Network Agreement would be deferred until its receipt of the entire Consideration of $3.5 million, and its obligation to construct chambers would be deferred until receipt of the first instalment of $250,000 for its construction.

(c) The Purchase Agreement was to be amended by providing for Consideration to be payable in three instalments, with interest on overdue payments at an agreed rate.

(d) MFN was to be given a charge over the Duct until the whole of the £3.5 million Consideration was received.

42. Those amendments having been agreed by an exchange of e-mails, the Call Option was duly exercised on 31 August 2003 by RCI, for the benefit of GVN as its nominee.
43. Completion of the transaction did not occur strictly as contemplated by the Call Option Agreement, as amended. GVN paid the first instalment of $1 million on 19 September. Nothing happened on the agreed completion date of 22 September. The second instalment was paid on 30 October (within the timetable contemplated by the amendments agreed on 31 August). The third instalment was not paid until 2007, and even then under protest. The Purchase Agreement, Private Network Agreement, Product Order No. 1 and the Mortgage and Charge were all signed by Mr Christopher Nightingale on behalf of GVN at GFN's London Offices on 28 November 2003, together with a written Addendum to the Call Option Agreement, incorporating the amendments agreed by the e-mail exchange on 31 August.
44. There are issues whether Mr Nightingale signed those agreements in escrow, and whether they were simultaneously signed on behalf of MFN on the same day, or later. There is a much more important issue as to what, precisely, the agreements consisted of at the moment when Mr Nightingale signed them, specifically in relation to the Route Drawings referred to in the Purchase Agreement, and which should have been attached as Exhibit A (Routes and Distances) to Product Order No.l, pursuant to the Private Network Agreement.
45. It is common ground that Appendix C to the Purchase Agreement at least included precisely the same Route Drawing document, identifying the same Original Maps as had been referred to in Appendix C to the form of Purchase Agreement attached to the Call Option Agreement in December 2002.
46. MFN's case is that, in addition, the A Maps (as I have defined them above) were also physically attached as part of Appendix C, and that they were also physically attached as part of Exhibit A to Product Order No. 1, by the time the documents were signed by Mr Nightingale on 28 November. Alternatively, MFN's case is that neither the Original nor the A Maps were physically attached by that date, but that the A Maps were incorporated as part of both the Purchase Agreement and Product Order No. 1 (and therefore as part of the Private Network Agreement), by reason of what took place on 28 November shortly before Mr Nightingale signed the agreements. In summary, (but I shall have to address this evidence in more detail in due course) • MFN's case is that Mr John Dowbiggin, its Managing Director, had the A Maps spread out on his conference table, and in Mr Nightingale's presence identified them as the plans showing the route referred to in the agreements, shortly before he signed the agreements.
47. GVN's primary case is that the Original Maps were still physically attached to Product Order No. 1 (as they had been when the Product Order was annexed to the Call Option Agreement in 2002) and that they were expressly incorporated by reference to the description of them in Appendix C to the Purchase Agreement, on 28 November 2003. Its alternative case is that the Original Maps continued to be incorporated as Exhibit A to Product Order No. 1, even if not physically attached, essentially because, there being an existing contractual relationship between the parties constituted by the grant and the exercise of the Call Option, the inclusion of the Original Maps as part of that existing contractual relationship is enough to fill any gap which might arise in Product Order No. 1 if they were, in fact, not physically attached as at 28 November 2003.
48. Neither party asserts any knowledge whether or not the Original Maps or the A Maps were in fact physically attached to the Purchase Agreement or to Product Order No. 1 as at 28 November 2003. It is common ground that a copy of the contractual documentation sent by MFN to GVN in February 2004 included copies of the A Maps as part of Exhibit A to Product Order No. 1, having by then been signed by Mr Dowbiggin on behalf of MFN. It is also common ground that there exist no copies of the A Maps signed by or on behalf of GVN, nor any surviving copy of the Purchase Agreement to which the A Maps are physically attached. Both parties invite me to deal with the question of physical attachment as a matter of inference.
49. Had there been no disputed claim for rectification, advanced by GVN in the alternative to its case on construction, I expect that the evidence relevant to the limited question as to the physical attachment of maps to the Purchase Agreement and to Product Order No. 1 would have been of a very limited compass. As it is, the alternative rectification claim has opened up the most detailed forensic analysis of the whole of the parties' negotiations of the composite transaction in issue, both in 2002 and 2003. It is impossible to exclude that evidence altogether from a consideration of the inferences to be drawn as to physical attachment of maps in November 2003, but it is equally important when addressing the parties' cases on construction of the contractual documents to exclude evidence of their negotiations, save to the doubtful extent permitted by the supposed private dictionary principle.

The Issues

50. On the case as pleaded at the beginning of the trial, it was common ground that a Purchase Agreement and Private Network Agreement, incorporating a Product Order No. 1, had been made on 28 November 2003 (and backdated to 22 September 2003). The issues then raised were:

(1) whether the Original or A Maps were physically attached to those agreements, or incorporated into them by reference;

(2) whether on their true construction those agreements provided for the sale of duct and the lease of fibre over the entire network, (as shown on the Original Maps) or only over the rings (as shown on the A Maps);

(3) if the latter, whether the agreements should be rectified so as to include duct and fibre over the distribution network as well, as shown on the Original Maps.

51. At a late stage in the hearing of evidence, I raised with the parties whether there was a possible factual outcome to the effect that if Purchase Agreement and Private Network Agreements were in a different form when signed respectively by GVN and MFN, whether in those circumstances any written agreements had been made between them in November or December 2003, and, if not, whether the exercise of the Call Option on 31 August 2003, the amendments agreed by e-mail exchange at the same time, and the subsequent payments by GVN of two of the three instalments of the purchase price constituted GVN a contracting purchaser of duct and contracting lessee of fibre, and if so, whether over the entire network, or only over the rings. In their closing submissions counsel for both parties urged me not to go down that route. They agreed that I should assume that binding agreements had been made in the form which they bore when Mr Nightingale signed them on 28 November 2003, regardless whether they were delivered in escrow, and regardless of any alterations made before Mr Dowbiggin signed them, if later.
52. By order of Master Teverson dated 24 January 2007 the trial of this claim was split so that issues of construction, liability and general remedial entitlement were to be decided first, followed by a separate trial in relation to quantum issues. The issues of incorporation, construction and rectification all fall within the confines of this first trial. There are also a number of further, quite separate, issues for determination at this trial. They are:

(1) whether, if entitled to duct and fibre over the distribution network, GVN is entitled to specific performance;

(2) whether GVN is entitled to tracing or proprietary remedies, or to an account of profits made by MFN in exploiting any duct or fibre wrongfully withheld from the Claimant;

(3) whether claims for monetary compensation by MFN are limited by reference to Section 11 of the Purchase Agreement;

(4) whether the running of time under certain provisions relating to the inspection of, and access to, the duct contained in the Purchase Agreement should be postponed until delivery of duct on the entire network had been completed by MFN;

(5) whether GVN is entitled to restitution of the sum of $1,056,250 with interest, being the third instalment of the purchase price paid under protest in 2007.

Since none of these issues depend upon the determination of particular factual questions, but all of them depend upon the determination of the main issues, they call for no further introduction at this stage.

The Witnesses

53. GVN relied upon the evidence of five witnesses, four of whom were cross-examined. The first to be called was Mr Noel Flannan Meaney. At the time of the negotiation of the Call Option Agreement he was a director of RCI and its principal point of contact with MFN during those negotiations. He occupied the same role, by then on behalf of RCI and GVN, in the discussions which took place from the end of August to the end of November 2003 in connection with the exercise and completion of the Call Option. From September 2000 until the end of 2001 he had been the Managing Director of the MFN Group's Irish subsidiary, during the completion by that company of the construction of its Dublin fibre-optic network. I shall refer to that company as "MFN Ireland". During the first part of 2002, by this time as a consultant to the MFN Group, Mr Meaney negotiated the sale of MFN Ireland to RCI and, shortly after completion, joined RCI as a director, and was appointed Chief Executive Officer of MFN Ireland. He is now the Chief Executive Officer of the group of which GVN is the UK operating subsidiary.
54. Mr Meaney appeared to be a well prepared, clear and articulate witness with an apparently good memory of relevant events. The reliability of his evidence was undermined to some extent by certain respects in which his apparently clear memory of particular matters was at variance with contemporary documents, or in one respect, with a letter of his own in November 2004, after the dispute began but much nearer in time than now to the relevant events. In cross-examination, Mr McCall for MFN sought not merely to undermine Mr Meaney's reliability, but also to challenge his integrity, in particular by suggesting that Mr Meaney had played an improper part in seeking to persuade GVN's next witness, Mr Cernicky, to change his evidence in GVN's favour.
55. I have concluded that Mr Meaney did not intend by his evidence to mislead the court, but that his evident enthusiasm for GVN's case may well have caused him unconsciously to gild the lily to an extent which requires me to treat his evidence with considerable caution. Nonetheless, his description of the principal aspects of the relevant negotiations, and in particular of his own understanding from time to time of their subject matter (i.e. the extent of the network being acquired, and the fibre being leased) was generally in accordance with the contemporaneous documentary evidence, and inherently credible.
56. The same cannot unfortunately be said of GVN's next witness, Mr Charles ('Chuck') Cernicky. From February 2001 until mid-2003 he was employed by MFN's European subsidiary, MFN BV, having previously worked for MFN in the USA. He described himself as VP of Network Services for Europe. MFN BV was MFN (UK)'s immediate parent company, and Mr Cernicky played a principal role on behalf of MFN (UK) in the negotiation of the Call Option. During the last quarter of 2003 he was employed by an unrelated Texas based communications company called Broadwing. From 1 January 2007 he has been Vice President of Operations for GVN Ireland, but with responsibilities in relation to all the Global Voice Group communications networks in Europe.
57. Although Mr Cernicky professed to have a detailed recollection of relevant events, I found his evidence to be thoroughly unreliable. It was, frequently, irreconcilable with contemporaneous documents, including e-mail correspondence emanating from him, and also irreconcilable with statements which other more reliable witnesses told me he made to them at the material time. When pressed with these inconsistencies in cross-examination, he was driven to assert that he had deliberately misled his colleagues at MFN (UK), in particular its Managing Director, John Dowbiggin and its in-house lawyer, Claire Trotter, in order, as he put it, to keep the negotiations on foot, on the instructions of his superiors in the USA.
58. Other more reliable evidence showed that Mr Cernicky had on different occasions offered to give evidence supporting the rival contentions of each side in this litigation. I have been driven to the conclusion that his statements, both at material times and when giving evidence, have been driven more by a perception of his own interests, his differing loyalties from time to time, and his apparent strong dislike of Mr Dowbiggin, than by a determination to tell the truth. That conclusion does not merely deprive his evidence of any reliability, but it seriously undermines the reliance which may be placed upon his statements, both orally and in writing, at the material time. As will appear, misguided reliance by his colleagues at MFN upon Mr Cernicky's description in 2003 of his negotiations with Mr Meaney the previous year played a principal part in bringing about this unfortunate dispute.
59. GVN's next witness was Mr Christopher Nightingale, GVN's Executive Chairman since its incorporation in July 2003. He is also a director of Global Voice Group Ltd ("GVG"), a Singapore based company which is GVN's ultimate parent, and he was and remains a controlling shareholder in RCI, which holds 24 per cent of the shares in GVG. He practised as a solicitor between 1983 and 1995, initially in London and then in Hong Kong. Having acquired MFN Ireland for RCI in May 2002, and thereafter secured Mr Meaney's services for RCI, he played a less active but ultimately controlling role in the negotiation of the Call Option in 2002, and in the discussions following its exercise in late 2003.
60. Mr Nightingale gave his evidence with quiet, almost clipped, precision, after what appeared to be careful preparation. Generally, I found his evidence to be both consistent with the contemporary documents, internally cohesive and credible. My only reservation in placing unqualified reliance upon his evidence arises from what appeared to be a slight tendency to hide from difficult areas of questioning behind protestations that he lacked the requisite technical understanding of the subject matter of the negotiations. He did indeed have no previous experience or technical grounding in fibre-optic communications, and his interest in the acquisition of cable networks was essentially that of an investor. Nonetheless there were occasions upon which his contemporary correspondence displayed a greater facility with the detailed subject matter than that which he professed in the witness box.
61. Nor did Mr Nightingale claim to have a particularly good recollection of past events. In this respect, however, I consider that the occasions upon which he stated in cross-examination that he lacked relevant detailed recollection involved no attempt to hide or evade, but merely reflected the truth.
62. GVN made a late decision to call Thomas Byrnes, who was until 5 September 2003 the Vice President of Sales, Marketing and Business Development for MFN Inc, and President of its International Department. He was on the point of leaving MFN when the Call Option was exercised and, unsurprisingly, had little recollection of relevant events. I found him to be an honest and straight-forward witness, but with little relevant evidence to contribute. To the extent that it matters, I accept his evidence.
63. GVN relied finally upon a witness statement from David Stewart, of its solicitors Olswang, to explain the circumstances in which it came to make significant amendments to the Particulars of Claim. This evidence was not challenged, and Mr Stewart did not therefore need to be called.
64. The Defendants called six witnesses, all of whom were cross-examined. The first in time was Miss Claire Trotter, an in-house lawyer for MFN between late 2000 and April 2003. She provided MFN's drafting input into what became the Call Option Agreement and its various appendices, other than maps. Since she now lives in New Zealand, she gave her oral evidence by video conference. She was a straightforward, honest and intelligent witness but, due to the lapse of time and her relatively slight involvement in the matters in dispute, she had little to offer by way of recollection beyond that capable of being re-constructed from the documents.
65. Next came Mr Pirn Berger, Managing Director at all material times of MFN BV. The sole purpose of his evidence was an attempt to demonstrate that at European management meetings within MFN, Mr Meaney had, prior to the negotiation of the Call Option, used and understood the expressions backbone and mesh in relation to the London and other European city networks as meaning rings and distribution network.
66. I did not find Mr Berger's evidence to be particularly reliable. The relevant part of it was based upon a very slight degree of interaction with Mr Meaney which took place a long time ago. Furthermore, Mr Berger appeared to me to demonstrate, but not to be prepared to admit, a degree of antipathy towards Mr Meaney which substantially undermined the impartiality of his evidence.
67. The first to be called of MFN's two most important witnesses was Mr Jayraj ('Jay') Negandhi. He is a Chartered Accountant of more than 20 years' experience and acted as MFN's finance director (now described as Vice President Finance Europe) at all material times. He was involved in the negotiation of the Call Option in 2002, although to a lesser extent than Mr Cernicky, his main point of contact within RCI being Mr Nightingale. He played an important part in the events following the exercise of the Call Option, during the latter part of 2003.
68. Mr Negandhi was a quiet, careful and precise witness. He appeared determined when giving evidence to place the requirements of probity and integrity ahead of his loyalty to MFN, where in his view those conflicted. In particular, he was prepared frankly to admit, without much pressure from his cross-examiner, that aspects of the manner in which MFN had dealt with GVN after the exercise of the Call Option fell short of the standards to be expected between businessmen, to the extent of amounting to sharp practice, albeit falling short of outright dishonesty.
69. It may fairly be said that Mr Negandhi made no attempt to hide his view that Mr Dowbiggin rather than he himself was responsible for those shortcomings in MFN's conduct, and I have therefore had to consider whether the reliability of Mr Negandhi's evidence was tainted by an inappropriate desire to clear his own yardarm. In my judgment, Mr Negandhi is to be acquitted of this. In particular, he was ready to acknowledge, once it was pointed out to him, that his failure to correct a statement made to Mr Meaney after the exercise of the Call Option when it became untrue two days later, involved him having seriously misled him. Generally, I have approached conflicts between Mr Negandhi's oral evidence and those of other witnesses with a disposition to prefer the former, save where the documents or the probabilities of the matter clearly suggest otherwise. The same goes for most of Mr Negandhi's written evidence, save in certain respects where he departed from it in cross-examination.
70. Mr Negandhi was followed by his Managing Director, Mr John Dowbiggin. His services had originally been obtained by the MFN Group when it acquired Site Smith Ltd, of which he was Managing Director, early in 2001. He became Managing Director of MFN UK later that year, by which time he had over ten years' experience working in the telecommunications industry, for employers including Telewest Communications plc and Cable & Wireless plc. Since his responsibilities included the supervision of MFN's activities in France and Ireland, he was for a short period Mr Meaney's boss. He in turn reported to Mr Byrnes.
71. Although (as will appear) Mr Dowbiggin sought to influence the outcome of the negotiations for the Call Option, he played no part in the face-to-face negotiations between MFN and GVN in 2002. He exercised a decisive role in MFN's conduct of the discussions which followed the exercise of the Call Option in 2003, but again largely behind the scenes, until the meeting on 28 November 2003, when Mr Nightingale signed the Purchase Agreement and Private Network Agreement in his presence. It is, therefore, only on that occasion when his evidence is of central importance to my conclusions as to what took place between the parties.
72. In the witness box, Mr Dowbiggin came across as a quick thinking, clever, commercially astute and articulate witness. He could and did provide vivid and helpful descriptions of technical aspects of the network. By contrast, he neither demonstrated nor pretended a good recollection of chronological events or meetings, having in particular to be rescued from an erroneous assumption that he had participated in one meeting, by having it pointed out in re-examination that he was then still on holiday abroad. Like Mr Meaney, he fell into the trap of gilding the lily, and in his case about a crucial aspect of his evidence. The reliability of his evidence, in particular as to what occurred on 28 November in his office, was therefore not demonstrably high, but nor did I feel that he was deliberately misleading the court. Although clearly a less reliable witness than Mr Negandhi, and a little less than Mr

Nightingale, my choice between his account and that of Mr Nightingale as to what occurred on 28 November 2003 has been dictated more by the probabilities of the matter than by any clear preference, from the point of view purely of their respective demeanour, for one over the other.

73. The next to be called was Mr Leeland Pavey, the Operations Manager of MFN at the material time, and now its Director of Operations. As Operations Manager, Mr Pavey was, as he himself readily acknowledged, a relatively junior member of MFN's management team. By 2002 he had over ten years' experience in the telecommunications industry, and joined MFN in March 2000 as a construction manager with responsibility for overseeing construction of the networks in London and Dublin, becoming Operations Manager after completion of the construction. He prepared the Network Information Pack to which I have already referred, and at Mr Cernicky's request gave instructions to a more junior colleague to prepare the Original Maps for inclusion within the annexes to the Call Option Agreement. In 2003 he was, again, responsible for the preparation by the same colleague of the A Maps, and liaised with a Mr Gerry Murray of GVN in discussions about operational issues likely to arise upon the acquisition by GVN of duct and fibre after the exercise of the Option.
74. Mr Pavey proved to be a slightly disappointing witness. He had neither a good memory, nor had he prepared himself for giving evidence by any careful pre-reading of relevant documents. He had an unfortunate capacity for misinterpreting questions which not infrequently led to his answers being difficult to understand. Generally, his evidence was not particularly reliable, but nor was it dishonest. On several occasions he provided useful information on matters of technical detail.
75. MFN's final witness was Mr William La Perch, the President and Chief Executive Officer of MFN Inc, who had lengthy experience of the telecommunications industry, following graduating in engineering at the United States Military Academy at West Point. Mr La Perch was called, with the leave of the court, at a very late stage, to deal with aspects of Mr Cernicky's evidence which had emerged for the first time in cross-examination, although, for completeness, Mr La Perch's witness statement covered wider ground as well. He played no direct role in any of the relevant negotiations or discussions, and his evidence was therefore of limited relevance.
76. I found Mr La Perch to be a sophisticated and highly experienced businessman, whose evidence was a little undermined by what appeared to me to be a highly developed skill at avoiding the substance of a difficult question while appearing to address a limited interpretation of its ambit. It was not in the end necessary for me to decide whether to reject any particular part of his testimony, because of its limited relevance.

The Detailed Facts

1. The Negotiation of the Call Option

77. These negotiations began in early October 2002 and ended with the signing of the Call Option Agreement on 18 December.
78. The immediate commercial background to those negotiations is that, having acquired MFN Ireland, and thereby the MFN network in Dublin, RCI wished to acquire similar communications networks from MFN elsewhere in Europe, including London, Paris and various cities in Germany, but lacked the financial resources to do so. For its part, MFN Inc had entered into Chapter 11 bankruptcy in the USA in May 2002. Although not themselves in any form of insolvency process, its European subsidiaries, headed by MFN BV, were therefore starved of resources from the USA, and obliged to raise money by asset sales, while seeking to retain if possible the core of the group's European communications business, in particular in London.
79. Since the London network had been based upon a four-duct structure, there was considerable scope for selling off parts of that network, while retaining sufficient of the remainder to serve as the basis for a profitable communications business in the future. In relation to London, paragraph 4.1 of the Network Information Pack in both its July and August 2002 revisions, described two out of the four ducts as available for sale, subject to alteration as and when duct sales were made in the meantime.
80. There are two issues which need to be resolved concerning RCI's thinking at the outset of the negotiations. The first is whether it envisaged a need to acquire anything more than the rings, it being MFN's case that RCI (and in due course GVN) intended throughout to connect customers to its communications network by means of wireless technology, in substitution both for laterals and for the distribution network. This case was based upon observations reported to have been made by Mr Meaney when announcing the acquisition of MFN Ireland, and upon remarks made by Mr Nightingale at a meeting in Ireland just after the acquisition of MFN Ireland, on 21 May 2002, attended by Mr Negandhi, among others.
81. It is clear that Mr Nightingale was, through RCI, seeking to put together a combined communications business to be named Global Voice which included both fibre-optic cable networks and a wireless communications business. I also accept that Mr Nightingale and Mr Meaney had formed the outline of a plan to make wireless communications available by connecting a wireless system with fibre-optic networks, but that this was at an embryonic stage, depended upon proving the relevant wireless technology, which was then in an early state of development in Australia, and obtaining licences for the necessary bandwidth in Europe, upon which they had not even embarked.
82. I am satisfied that this outline possibility was not at any stage contemplated either by Mr Meaney or by Mr Nightingale as a possibly complete solution for connecting their customers to fibre-optic communications networks in a way that avoided the use both of laterals and a distribution network, and which justified limiting their ambitions with regard to MFN's London network merely to the rings. It is possible that during the negotiations a view was formed among those in charge of MFN that this is what RCI and GVN intended, but if they formed that view they were, in my judgment, wrong. For example, it was wholly improbable that wireless technology would provide either the data transfer rate or the security requisite for serving the communications needs of major customers like banks, even if, for more modest customers, it might have offered a cheaper alternative to the construction of a dedicated lateral serving their premises.
83. The second issue is whether either Mr Meaney or Mr Nightingale made any distinction in their minds, when considering MFN's London network, between the rings and the distribution network, or backbone and mesh, to use MFN's internal jargon. This is an important issue because it colours the interpretation of the subsequent negotiations.
84. MFN's case is that Mr Meaney had become accustomed to that distinction, and to the disjunctive use of backbone and mesh to describe it, while working for MFN until mid-2002. Reliance was also placed upon the Network Information Pack, as making that distinction itself, albeit without reference in terms to mesh.
85. Mr Nightingale's evidence was that, as a relative newcomer to fibre-optic cable networks, he was wholly unaware of the distinction. Mr Meaney's evidence was that, as someone primarily concerned with sales of communications services by a network provider to customers, he distinguished only between laterals and the rest of a communications network, referring to everything except laterals as the backbone. He supported this evidence by saying that the network with which he was most familiar, in Dublin, did not in his view have a distribution network separate and distinct from the backbone. His evidence was that, if for example Mr Cernicky used the word backbone to him during negotiations, he assumed that it meant everything except laterals, and that if Mr Cernicky used mesh, in contra-distinction to backbone, he assumed that it meant laterals, or a particular group of laterals.
86. I have not been persuaded to disbelieve Mr Meaney's evidence on this point. My reasons follow. First, although Mr Pavey suggested that the Dublin network was, from a construction perspective, divided into backbone and distribution network, (in terms not of ducting, but of the amount of fibre likely to be used in the different parts at the planning stage), the Dublin network was on any view very much simpler than the London network. Mr Pavey said that financial constraints in fact led to a hand-to-mouth approach to fibreing once the duct route had been completed, and I can well understand Mr Meaney thinking in terms only of backbone and laterals when considering how to exploit the Dublin network by providing a communications service to customers.
87. Mr Meaney's customer based perspective gained some (probably unintentional) support from Mr Berger, whose evidence was that in dealings with a customer, the only relevant distinction was between the existing network, which the customer may well call backbone, and the lateral necessary to connect it with his business premises.
88. To someone with an understanding of the present dispute based on hindsight, and who is therefore looking for signs of the relevant distinction, paragraphs 3.1, 3.5 and 6 of the Network Information Pack might well be thought to adopt a distinction between the rings and backbone on the one hand and the distribution network on the other hand. But no reference at all is made to mesh, and there is no suggestion anywhere in the Network Information Pack that the duct available for sale was limited to the rings or the backbone, rather than the network as a whole. As I have already explained, and as the Network Information Pack makes clear, the dimensions and physical layout of the multiple duct structure is the same both in the rings and in the distribution network. The only apparent relevance of the distinction between rings and distribution network in the Network Information Pack is that whereas the rings are described as fully fibred, the distribution network is described as containing fibre only in certain sections.
89. Negotiations began at the beginning of October with a meeting in Dublin between Mr Meaney and Mr Cernicky, using a black and white version of the Network Information Pack for the purposes of discussion. The negotiations throughout 2002 were part of a larger negotiation relating to options to acquire communications networks from the MFN Group around Europe. In the event, RCI acquired options both in relation to Paris and several German cities, but details of these are immaterial.
90. It is common ground that at the outset the negotiations were simply about a sale and purchase of duct, although at the various pinch points referred to in paragraph 4 of the Network Information Pack, where there was no room for a full 4 x 114 mm duct structure, it might be necessary for GVN to make do with sub-duct or what was briefly described as "fibre work-a-rounds".
91. I consider it clear that at the early stages of the negotiations, both during and after that initial meeting, the discussion was simply in terms of a sale of one of MFN's four ducts around its entire network (excluding only laterals). Both Mr Meaney and Mr Cernicky said so, and there is no documentary or other evidence to the contrary. Furthermore, as late as 26 November 2002, Mr Meaney was e-mailing Miss Trotter, Mr Negandhi, Mr Cernicky and Mr Nightingale, describing the "deliverables" in London as including "1 x Duct around the entire network". He used the same phrase in relation to seven German cities, and it has not been suggested that the options obtained there were limited so as to exclude any part of those networks, other than laterals. As will appear, this remained Miss Trotter's understanding until 4 December.
92. Leaving aside the use of fibre for dealing with pinch points, the prospect of a general lease of fibre by MFN to RCI or its nominee arose some time later than the initial negotiation about the purchase of duct. The duct purchase negotiations were for empty duct, even though MFN had fibred at least the rings through one or more adjacent ducts which were not to be the subject of the sale. The purpose of the general lease of fibre was to give RCI or its nominee a springboard or jump-start into its communications business, so that it could begin acquiring customers for a communications service before it had undertaken the fibreing of its own purchased duct.
93. Initially, the negotiations contemplated a lease of 12 pairs of fibre (i.e. 24 strands) around the entire network. This much appears from the same e-mail from Mr Meaney of 26 November 2002, as part of his description of the London deliverables. His proposed definition for the fibre to be leased was "12 fibre pairs on the entire city network". There appears to have been no focus on either side at that stage upon the warning in the Network Information Pack that only parts of the network had yet been fibred.
94. It is, however, clear that during the later part of the negotiations it was decided within MFN to seek to limit the subject matter of the sale to the route along the rings only, and thereby to exclude the distribution network. The initiative to limit the sale in this way came from Mr Dowbiggin, and the reason for it appears not to have been the lack of sufficient fibre round the network, but a desire to limit the subject matter of the sale to RCI or its nominee in such a way as to prevent them becoming an effective competitor with MFN for the provision of network communication services in London. Without the acquisition of duct over the distribution network, Mr Dowbiggin considered (probably correctly) that GVN would be faced with the time-consuming and very expensive task of constructing its own distribution network so as to bring its service within commercially useable proximity to the. principal communications users in the City, the West End and in Docklands.
95. The first documentary indication of this change of mind on MFN's part appears in a complicated exchange of e-mails which began on 3 December 2002. Miss Trotter e-mailed Mr Cernicky with a large number of questions relevant to her drafting of the Option Agreements for London and for two German cities. Under 'London', she asked:

"1. I understand RCI are to receive 1 x 110 mm duct on entire city network. However the information pack refers to 114 mm external diameter duct. Is the reference to 110 mm (and the measurements below) internal diameters?"

96. Mr Cernicky replied on 4 December, and in response to that question he said:

"The industry refers to the duct as 110 mm. In order to remain consistent that is how this duct should be referenced. The 'entire city network' does not include the mesh network, only the backbone."

97. Later, on 4 December, Mr Cernicky e-mailed his exchange with Miss Trotter to Mr Meaney who was abroad at the time, under the message:

"Noel,

It would be nice to get these schedules discussed and completed as soon as possible. Please review my answers to Claire so that we may finalise any issue you have with these."

98. Later on the same day, but at 0430 in the morning in his local time, Mr Meaney replied to Mr Cernicky, and his response to the exchange between Miss Trotter and Mr Cernicky which I have quoted above was as follows:

"Did we not agree that we would have some of the laterals to allow us connect to the buildings, with a non-compete clause -otherwise we will have to build the laterals when we go to fibre our own duct - can you include an element of the mesh network in the city area."

99. All three participants in this exchange were cross-examined about it at length. Miss Trotter said that it caused her to insert the word "backbone" both in the Call Option Agreement (in the definition of "London Assets") and in the form of Purchase Agreement (in the definition of "Duct"). Since however she did not know the precise distinction in terms of route between backbone and mesh, she deliberately drafted the agreement so that the precise route of the duct and fibre being sold would be identifiable by reference to drawings.
100. Mr Cernicky admitted that his understanding of the word backbone was roughly equivalent to that depicted in the schematic drawing in paragraph 3.5 of the Network Information Pack, so as, broadly but not precisely, to exclude the distribution network. He said that he did not thereby intend to confine the subject matter of the sale of duct to the rings, but wanted simply to be appearing to Mr Dowbiggin (if he read the e-mail exchange) to be conceding Mr Dowbiggin's insistence that that should be so. He provided a long and complicated explanation of how he believed it to be his job to secure a sale at all costs, even if that meant misleading Mr Dowbiggin and even Miss Trotter. Save that I accept Mr Cernicky's admission as to his understanding of the word backbone, and as to his instructions to secure a deal if at all possible, I do not accept the rest of that evidence.
101. Mr Meaney said that his participation in this exchange did not alert him to the meaning of backbone and mesh as used internally within MFN in London. He thought that Mr Cernicky's reference to the "mesh network" referred to laterals. His request for an "element of the mesh network in the City area" for the purpose of avoiding RCI having "to build laterals when we go to fibre our own duct" makes sense if he thought that "mesh" was a reference to the laterals. Otherwise one would have expected him to refer to the need for RCI to build not only its own laterals, but its own distribution network. I accept Mr Meaney's evidence as to his frame of mind when participating in this exchange. It follows that from then on, if those who on behalf of MFN and RCI thereafter used the words backbone and mesh in their mutual negotiation of the Call Option Agreement, they did so thinking, wrongly, that they meant the same thing by those words.
102. There followed further exchanges before the Call Option Agreement was signed on 18 December, and in particular the exchange of a revised draft of the Call Option Agreement and form of Purchase Agreement including for the first time the word backbone in the way that I have described. From Mr Meaney's perspective, the addition of that word added nothing by way of derogation from what he thought he was negotiating for in terms of purchase of duct, and its inclusion passed without comment.
103. The clearest documentary evidence that Mr Meaney continued to think in terms of the acquisition of rights in relation to the whole of MFN's London network (rather than just over the route of the rings) is to be found in an e-mail exchange between him and Mr Cernicky on 11^th December 2002, only a week before the signing of the Call Option Agreement. Mr Cernicky sent Mr Meaney draft forms of Product Order No. 1 for London and a number of German cities (without maps attached), pointing out some amendments to provide for connection to certain buildings, and asking for his approval of the forms. Mr Meaney replied (early on 12 December Singapore time) as follows:

"I am ok with the attached, and assume the exhibit A is as I have previously seen - the London map."

Mr Meaney had throughout been working with a black and white version of the Network Information Pack. All the maps in it, with the exception of the schematic diagram which was not really a map at all, showed the whole of the network, including the distribution network. In particular, the only maps in larger than postage stamp scale were those appended at the end of the Network Information Pack, which showed substantially the same route as that depicted by the Original Maps which were shortly thereafter attached as Exhibit A to Product Order No. 1. In my judgment Mr Meaney was referring in his e-mail to the maps appended to the end of the Network Information Pack. That is what he said in evidence, and that is the natural interpretation of the e-mail exchange, in its context. Although the subject matter of the exchange was fibre rather than duct, the common understanding that the fibre lease was to be a jump-start for RCI or its nominee while it fibred its own duct means that Mr Meaney cannot have had a more modest expectation as to the route of the duct than he had in relation to fibre, save only at pinch points.

104. Meanwhile, although Mr Cernicky again confirmed to Mr Dowbiggin on 11 December that RCI was obtaining backbone only and no mesh, the instructions given by him to Mr Pavey, and by Mr Pavey to his draftsman, Mr Stephen Norman, were to prepare maps showing the entire MFN London (and Heathrow) network, without distinction between rings and distribution network. While Mr Pavey struggled to suggest that, if looked at on a large enough scale, a difference in thickness of blue line is discernible between ring and distribution network, it is plain that he was not instructed to illustrate that distinction on the Original Maps, which bear a simple legend showing that the blue line is the MFN network. The Maps were prepared and dated 11 December 2002, checked by Mr Pavey (as they both state in terms) and attached to the Product Order No. 1 as Exhibit A, as Mr Meaney had specifically requested, by his reference to the substantially identical "London map". Their unique identifying numbers and date of preparation were then included in Appendix C to the Form of Purchase Agreement, so that together they constitute the Route Drawing referred to in the detailed definition of the duct being sold, in Appendix A. No-one at MFN (other than Mr Pavey and possibly Mr Cernicky) noticed that the Original Maps incorporated by reference and exhibited to the annexes to the London Call Option Agreement depicted the entirety of the network (other than laterals) rather than only the rings. Mr Pavey thought at that time that the subject matter of the transaction was duct and fibre over the entire network. It is not clear with what attention the Original Maps were studied at the time of the signing of the Call Option Agreement by either Mr Nightingale or Mr Meaney, but if they had studied them, they would have appeared substantially the same, albeit larger, than the maps at the end of the Network Information Pack, which had been on the table in front of Mr Meaney and Mr Cernicky at the initial negotiating meeting in Dublin in October, and to which Mr Meaney had referred in his 11 December (12 December Singapore time) e-mail.
105. Mr Cernicky's evidence was that he had always intended that the sale should include the distribution network, and that his statements to the contrary in e-mails to Miss Trotter and Mr Dowbiggin (knowing broadly the internal MFN London meaning of backbone and mesh) were part of a strategy of misleading Mr Dowbiggin. I have not accepted this evidence, but no other explanation has been forthcoming for Mr Cernicky's instruction to Mr Pavey, and it must remain a matter of speculation why, if Mr Cernicky intended to comply with MFN (UK)'s Managing Director's instruction to limit the sale of fibre and the lease of duct to the rings, he instructed Mr Pavey to. produce maps which depicted the entire network. I can well understand that Mr Cernicky may have found himself in a position of some awkwardness, having originally negotiated a sale of duct over the entire network and then later been instructed by Mr Dowbiggin to limit it to the rings, while still being pressed by Mr La Perch to conclude a sale. In the event he failed either to bring home to Mr Meaney the change in his negotiating brief, or in fact to implement it.
106. Mr Meaney was pressed by Mr McCall in cross-examination with the proposition that he must have known that he could not expect to have obtained a lease of fibre over the entire network, having been informed in the Network Information Pack that the network (and in particular the distribution network) was not fully fibred. Mr Meaney's response was that he had not taken on board any clear understanding in his mind as to the extent to which MFN had completed fibring of the network and that, if there was fibring still to be done if and when RCI exercised the Call Option, then no doubt MFN would have to carry out the minimal fibring necessary to provide the 12 strands (reduced from 24 strands) called for by Product Order No. 1.
107. I have concluded, but less easily than in relation to duct, that Mr Meaney's evidence is also to be accepted on this point. There are indications elsewhere in the e-mail communications passing between the parties during the 2002 negotiations, and in a letter from Mr Meaney to Mr Cernicky in November 2004, that RCI had less concrete and possibly less extensive expectations in terms of the lease of fibre, than in relation to the purchase of duct. In my judgment, however, the sale of duct lay always at the heart of the transaction from RCI's perspective, and having regard to the relative unimportance of the lease of fibre, I consider that Mr Meaney's rather rough and ready expectations as to how it was in practice to be provided is, on balance, to be believed.
108. My conclusions on the contentious issues relating to the 2002 negotiations may therefore be summarised as follows:

1. At all times RCI bargained for and expected to receive duct across the entire MFN network (excluding only the laterals).

2. That was also MFN's original intention, but it changed during negotiations, at Mr Dowbiggin's insistence, to an intention that the distribution network should be excluded from the route of the duct to be sold. This change of intention was not brought home to RCI, which remained unaware of it.

3. RCI or its nominee wished to obtain a "jump-start" lease of fibre over as much of the entire network as they could obtain by negotiation.

4. MFN may never have intended to lease more fibre to RCI than it had already laid, but failed to make this clear to RCI.

5. The parties were therefore not ad idem as to the subject matter either of the sale or of the lease, at least during the latter part of the negotiations, due mainly to a genuine misunderstanding by Mr Meaney as to what Mr Cernicky meant in the early December e-mail exchanges by his use of the words backbone and mesh.

6. Mr Cernicky failed to implement MFN's wish to limit the ambit of the sale or lease by giving appropriate instructions to Mr Pavey for the preparation of maps.

2. Events in 2003

109. The period for exercise of the Call Option was due to expire on 18 June 2003. Mr Meaney sought and obtained from Mr Negandhi an extension until August 2003, ostensibly on the grounds that RCI lacked the resources to perform due diligence on the London Assets. In fact, RCI was engaged in a protracted process of raising funds in the Far East, which involved listing the Global Voice Group on the Singapore Stock Exchange. This was the principal focus of Mr Nightingale's and Mr Meaney's attention in the second half of 2003. The exploitation of the communications network by then purchased (in Ireland) and subject to option (in London and Germany) depended upon a successful outcome to this fundraising process. Neither RCI nor its nominee GVN had the resources to pay the sum of $3.5 million due on the exercise of the Call Option, either in June or August 2003, and it was this, rather than the lack of any technical resources with which to conduct due diligence, that led to the request for an extension.
110. The same shortage of cash also led to a negotiation for payment of the purchase price in instalments, coupled with security for outstanding instalments by a mortgage of the Duct to MFN. These amendments (about which there is no contentious issue) Were negotiated between Mr Nightingale and Mr Negandhi at a meeting on 29 August 2003, and confirmed by an exchange of e-mails shortly thereafter.
111. Just prior to that meeting, and in anticipation of the likely exercise of the Call Option by RCI, Mr Pavey (and probably others within MFN) re-read the Call Option Agreement, and Mr Pavey noticed what to his mind was a tension between references to the backbone in the general description of the duct, and the depiction of the entire MFN network in the Original Maps both annexed to, and referred to, in the appendices. Mr Pavey's understanding until then had been that duct was to be sold across the entire network. Mr Pavey discussed the apparent ambiguity with Mr Negandhi, who had assumed that the duct sale was limited to what in MFN was called the backbone only. This occurred just before Mr Negandhi's meeting with Mr Nightingale. Although aware of the ambiguity, Mr Negandhi was unsure of his ground in relation to it, so he discussed the amendments to the payment terms being requested by Mr Nightingale without making any reference to the ambiguity. In cross-examination Mr Negandhi said that he decided not to refer to the ambiguity so that he could check the facts first.
112. For brevity I shall adopt Mr Negandhi's description of the contrast between the use of the word backbone and the Original Maps in the Call Option Agreement as an ambiguity. As will appear when I come to construe that agreement, I consider that there was in truth no real ambiguity at all. But to the mind of someone who was accustomed to use the word backbone as jargon for the rings, and thereby to exclude the distribution network, I can well understand why there appeared to be an ambiguity.
113. Following that meeting Mr Negandhi telephoned Mr Cernicky (by then no longer employed by MFN) to ascertain whether the negotiations between him and Mr Meaney had proceeded on the basis of a sale of duct on the entire network, or only on what he called the backbone. I accept Mr Negandhi's evidence that Mr Cernicky told him that the transaction had been limited to the sale of duct and the lease of fibre only on the backbone (i.e. the rings). Mr Dowbiggin was on leave abroad, so Mr Negandhi raised the matter with Mr Byrnes in the USA. Mr Byrnes authorised him to conclude a negotiated amendment of the payment provisions in any event. He was within a week of leaving MFN, and said in cross-examination that he had not given the matter detailed attention.
114. Being by then on the point of exercising the Call Option, Mr Meaney and Mr Nightingale still expected to obtain thereby a duct and fibre across the entire network, as appears from instructions which Mr Meaney gave by e-mail to a Mr Stephen Murray of Ernst & Young in connection with a valuation of the London Call Option, in which he said:

"The network that GVN is buying to support its business in London consists of:

1 x full duct covering 210 km comprising of 6 inter-connection rings running from Dockland to Heathrow.

24 x strands of fibre on the existing MFN network on a 10 year IRU, connected to approx 60 existing buildings.

For comparison cost purposes:

The entire MFN London network cost in excess of £60m to build - this consisted of four ducts - we are buying 1/4 A 10 yr IRU of 24 strands of fibre on the entire 210 km network would cost approx 4m in upfront payment."

115. That e-mail was inaccurate in at least three respects. It contained the same 10 km mathematical error that appears in the Network Information Pack. By December 2002 the strands of leased fibre had been reduced from 24 to 12, and the connection rights fell well short of 60 buildings. Nonetheless the general impression that the duct was to be purchased and the fibre was to be leased over the entire MFN network is clear, and I am satisfied that Mr Meaney did not intend to mislead Ernst & Young in that fundamental respect.
116. Mr Negandhi's next step was to confirm MFN's agreement to the instalment payment amendments to the Call Option Agreement, in an e-mail sent to Mr Meaney and Mr Nightingale, and copied to Mr Dowbiggin and Mr Byrnes, at 7.29 am on Sunday 31 August 2003. That e-mail made no mention of the ambiguity. At 8.09 am, however, Mr Negandhi reported on it to all relevant staff at MFN, namely Messrs Dowbiggin, Byrnes, Wedge (in the Accounts Department) and Evan Sepion (MFN's Contracts Manager), marked Confidential, in the following terms:

"John,

There is ambiguity on the contract as to what the London Assets comprise. Chuck had told me that this was for the sale of one un-subducted main duct and the lease of 12 dark fibers on the backbone but NOT the mesh. The agreement refers to the London Assets as being on the backbone - but includes maps of the mesh as well! At the time we drafted the agreement last December, Claire had some difficulty engaging Chuck in reviewing what exactly we were selling/leasing. Leeland (Pavey) was unaware until 2 days ago that only the backbone was included in the Call Option.

After my meeting with Chris (Nightingale) on Friday morning, Leeland and I spoke with Chuck. Over the weekend, Evan has gone through the agreement in detail and found a map that defines the backbone (on the Agreement for the Acquisition of Duct at Appendix B, Clause 3.5). Nonetheless, we need to take care and avoid the risk of giving away assets not previously agreed to be sold.

Tom is aware of this risk but approved revisions to the Call Option terms, given our cash requirements."

The reference to the "map that defines the backbone" was of course to the schematic diagram at paragraph 3.5 of the Network Information Pack. In fact, it included not merely what MFN now claim to be the backbone (i.e. the rings) but also eight parts of what MFN now claim to be the mesh (i.e. the distribution network), as being fully fibred. Mr Pavey explained that these eight sections had been included in the schematic diagram because, at the time of its preparation, it had been planned to have them fibred to backbone standards, but that later in 2002, financial constraints had led to the fibreing of those sections being cancelled, and them therefore being relegated to the status of distribution network. This explanation illustrates the inherent flexibility of MFN's internal concepts of backbone and mesh. In each case the duct structure is identical, and the status of any particular section as backbone or mesh appears to depend upon the fibreing planned or, if completed, the state of fibreing actually carried out.

117. Mr Negandhi and Mr Dowbiggin were both cross-examined at length about their attitude to the ambiguity discovered by Mr Pavey. They shared three common concerns. The first was that nothing should be done which might risk the collapse of the transaction, because MFN stood in grave need of the cash injection which would be achieved by the sale of the Duct to GVN. The second was that, if the transaction was completed by using the Appendices attached to the Call Option Agreement, including of course the Original Maps, then Mr Meaney might later take advantage of the ambiguity in claiming substantially more than they believed that he had originally negotiated to purchase. Their third concern was that if the ambiguity was pointed out to GVN, coupled with a request to substitute what MFN believed to be correct maps, then again, Mr Meaney might seek to take advantage of the ambiguity by insisting on a completion which extended to the whole MFN network, under a threat not otherwise to proceed.
118. No solution to these concerns had been reached when at 7.43 pm on August 31^st Mr Nightingale exercised the Call Option by RCI in favour of its nominee GVN. The effect of that exercise was to constitute GVN the contracting purchaser of duct and the contracting lessee of fibre from MFN, in each case on the terms of the forms of Purchase Agreement and Private Network Agreement annexed to the Call Option Agreement, subject only to the amendments agreed that day by e-mail exchange in relation to the payment of the purchase price by instalments.
119. Mr Dowbiggin returned from holiday on 2 September. At about the same time Mr Negandhi instructed Mr Sepion to draft the amendments to the Call Option Agreement and the form of Purchase Agreement necessary to incorporate the agreed amendment in relation to instalment payments. He sent a draft Addendum to the Call Option Agreement to Mr Negandhi on 8 September.
120. It is evident from the contemporary documents that Mr Negandhi wished to prepare for a completion pursuant to the Call Option Agreement on or before 21 September. The amendments agreed on 31 August contemplated completion on or before 22 September, and payment to MFN of the first instalment of the purchase price at the same time. With a rent quarter day fast approaching, Mr Negandhi acknowledged that MFN was in real need of the money.
121. On 9 September Mr Sepion sent Mr Negandhi a re-drafted Purchase Agreement to reflect the agreed amendments, and in the accompanying e-mail said:

"Leeland is aware that we will need revised drawings (showing Backbone only) to be included as Exhibit C of the Duct Purchase Agreement."

Later that evening he e-mailed Mr Pavey as follows:

"Ref our conversation this afternoon I have just been talking to Jay (Negandhi) and he confirms that final paperwork for the deal with RCI/Global Voice will be issued within the next week.

Would you please arrange for new drawings to be prepared (showing Backbone only) for inclusion in the Duct Purchase Agmnt."

122. In cross-examination Mr Negandhi said that it was Mr Dowbiggin's idea to replace the Original Maps with fresh drawings showing the backbone only, i.e. excluding the distribution network, for inclusion in the Purchase Agreement on completion. This was later confirmed by Mr Dowbiggin himself in cross-examination. Although Mr Negandhi knew by 9 September that instructions to prepare new drawings were being given to Mr Pavey, he had not at that stage discussed with Mr Dowbiggin how the ambiguity was to be resolved with MFN. His view was that it would be improper to do so with substitute maps, at least without fairly drawing the ambiguity in the Call Option Agreement and its appendices to GVN's attention.
123. On the morning of 10 September Mr Negandhi had a meeting with Mr Meaney and Mr Nightingale. He did not say anything to them about the ambiguity, or tell them that instructions had been given to prepare replacement maps. The most reliable summary of what he did say to them appears from an e-mail he sent to Mr Sepion and Mr Pavey, with copies to Mr Dowbiggin and Mr Wedge, immediately after the meeting, as follows:

"I have just been speaking to Noel Meaney & Chris Nightingale about the finalisation of documentation but have not yet sent it to them. Noel said that he would need to check the agreement to ensure that it was in accordance with last December's Call Option. I told him that the Duct Purchase Agreement would be in line. He said that he wanted to make sure that RCI had PoP and building access for the fibres. When I told him that RCI had just the ring, he said that Chuck had agreed to the building and PoP access for the fibres.

What does the agreement reflect?" (My underlining)

124. When pressed with the underlined passage of the above e-mail in cross-examination, Mr Negandhi said that, on 10 September, it had not been his intention that the Purchase Agreement should be changed by adding new drawings, but only by the amendments in relation to instalment payments which had already been agreed. He acknowledged that if he had on 10 September intended to add fresh drawings excluding the distribution network to the Purchase Agreement, his statement to Mr Meaney and Mr Nightingale, reflected in the underlined passage in his subsequent e-mail, would have been untrue. The later passage, "When I told him that RCI had just the ring" was put to him in cross-examination as a reference to fibre rather than duct. Mr Negandhi said that he was not sure. In my judgment, that is a correct reading of the e-mail, and is therefore likely to be a correct reflection of what was said at the meeting. On the same day, Mr Pavey delegated the preparation of the new drawings to his colleague, Stephen Norman. The new drawings, which I have already identified as the A Maps, were in fact prepared on, or at least by, 15 September.
125. Mr Negandhi and Mr Dowbiggin met to discuss how to deal with the problems raised by the ambiguity on 12 September, which was a Friday. Although no document records or refers to this meeting, they both agreed in cross-examination that such a meeting took place. Mr Dowbiggin's lack of recollection of dates prevented him identifying when it occurred, but Mr Negandhi remembered the date, and I accept that evidence. Mr Negandhi said in cross-examination that he told Mr Dowbiggin not to change the maps, but to leave the Purchase Agreement as it was, subject only to the amendments as to instalment payments. Mr Dowbiggin said that Mr Negandhi might have said something less forceful than that, but that he decided to proceed with the insertion of what became the A Maps. Mr Negandhi's evidence was that he suspected that Mr Dowbiggin did not intend to draw either the ambiguity in the existing Call Option Agreement represented by the inclusion of the Original Maps, or his intention to replace them with new maps, to GVN's attention. Mr Dowbiggin acknowledged that he was concerned at the risk that Mr Meaney would seek to re-negotiate if the ambiguity was drawn to his attention. He said merely that he expected the new maps to be available for inspection at a completion meeting. To the extent that Mr Negandhi's and Mr Dowbiggin's evidence about their 12^th September meeting differed (and it did not to any great extent), I accept Mr Negandhi's evidence. From that date, unless Mr Dowbiggin decided to change tactics (which in fact he did not), Mr Negandhi's statement two days earlier that the Purchase Agreement was to be "in line" with the Call Option Agreement became untrue, as he frankly acknowledged in cross examination.
126. The following Monday, 15 September, was only one working week away from the planned deadline for completion. That morning, Mr Negandhi sent the then drafts of the Purchase Agreement, Mortgage, Call Option Agreement and Addendum thereto to Mr Dowbiggin, including as an Appendix to the Purchase Agreement the same Appendix C referring to the Original Maps as it had done until that date. At the same time he pressed Mr Pavey with the urgent need for the appendices, meaning at least the A Maps. Mr Dowbiggin returned the drafts with minor amendments to Mr Negandhi later that morning, in a form which contemplated completion on 22 September. Later that day, Mr Negandhi sent the same four drafts to Mr Nightingale and Mr Meaney, minus their appendices, which he mis-described in his accompanying e-mail as "the numerous amendments" (as he acknowledged in cross-examination). The A Maps were not included, although their preparation and checking by Mr Pavey had been completed that day. It is clear from e-mail exchanges the following day that the A Maps were sent by Mr Pavey to Mr Sepion's secretary, Helen Pearce, on 15 or 16 September.
127. Mr Negandhi was in the meantime seeking to put together a complete package of the agreements to be signed, together with their appendices. He asked Mr Meaney and Mr Nightingale for a delivery address for the appendices on the afternoon of the 16^th, while at the same time seeking comments on the drafts already sent. On the same day Helen Pearce sent both Mr Negandhi and Mr Pavey electronic copies of all the documents which she understood to constitute the appendices required for the completion of the Call Option Agreement, and included the Original Maps as pdf attachments to her e-mail. Mr Pavey immediately responded to both Mr Negandhi and Helen Pearce, pointing out that the maps included in her e-mail were incorrect, and that the A Maps which he had already sent them, should be substituted.
128. On Wednesday 16 September, Mr Meaney e-mailed Mr Negandhi to say that he would like hard copies of the documents to be sent to him in Frankfurt, since he did not anticipate being back in Dublin until Saturday 20 September. It is necessary to describe these arrangements in some detail, because there is an issue whether the hard copies included any of the Maps, whether old or new.
129. At 1.21 pm on 17 September, Mr Negandhi e-mailed Helen Pearce saying:

"Please see me urgently. We need to print two copies of the agreement, charge and appendices. Leeland should do a final completeness check and then we have to courier to Noel in Dublin."

He copied that e-mail to Mr Pavey.

130. At 1.24 pm on the same day, Mr Negandhi again e-mailed Helen Pearce, sending her a copy of his e-mail of 15 September to Mr Nightingale and Mr Meaney, together with its four Word document attachments, namely:

1. The Purchase Agreement

2. The Charge

3. The Call Option Agreement

4. The Addendum to the Call Option Agreement ("the Addendum")

In his e-mail he said:

"We need to print everything other than the original call option agreement."

I infer that Helen Pearce read this as meaning that she had to print enclosures 1, 2 and 4, as described above, but not 3. The appendices, and in particular the Maps (which were in pdf format), were not attached at all.

131. At 2.25 pm on the same day Mr Negandhi e-mailed Mr Meaney, with a copy to Mr Nightingale as follows:

"Noel,

As discussed I have arranged for Helen Pearce to print two copies and courier these to Dublin for your review and signature. Please sign as soon as possible, or let me know in case of any questions."

I infer that Mr Meaney's request for the documents to be sent to Frankfurt must have been countermanded in a telephone conversation between him and Mr Negandhi.

132. On the following day, 17 September, Helen Pearce wrote, expressly on behalf of Mr Negandhi, to Mr Meaney at his Dublin address as follows:

"Dear Noel,

Agreement for the Acquisition of Duct

As arranged, please find enclosed the Purchase Agreement, the Deed of Mortgage and Charge, and the Addendum to the Call Option Agreement, all in duplicate.

Please arrange for each document to be signed, and initialled on each page, for on behalf of Global Voice Networks Ltd.

Please then return the documents to Jay at our new office address at the top of this page."

The letter referred to unidentified "Encs" at its foot. The precise identity of the enclosures to the letter is a matter of inference. Helen Pearce was not called as a witness.

133. In my judgment, the correct inference is that neither the Original nor the A Maps were enclosed with that letter. My reasons are as follows. First, there is an exact correspondence between the opening paragraph of the letter, referring to the Purchase Agreement, the Deed of Mortgage and Charge, and the Addendum, and the enclosures 1, 2 and 4 which, in his e-mail to Helen Pearce on the previous day, Mr Negandhi asked her to print. Secondly, the letter makes no reference at all to the Private Network Agreement, or to the Product Order No. 1. Until then, the Original Maps had formed part of Exhibit A to the form of Product Order No. 1 annexed to the Call Option Agreement (as part of the machinery contemplated by the Private Network Agreement), whereas no Maps had been annexed as an Appendix to the Purchase Agreement, Appendix C merely referring to the Original Maps by their 88/89 identification numbers and date. Thirdly, no copy of the Purchase Agreement has ever been found with either the Original or A Maps attached to it. All copies of the Purchase Agreement, right through to 28 November and beyond, have an Appendix C in the same form as that which was attached to the form of Purchase Agreement annexed to the Call Option Agreement. Finally, it follows that the only one of the four attachments to which I have referred above which would (had it contained all its appendices) have had Maps included within it, was the third attachment, and this is the one which Mr Negandhi instructed Helen Pearce not to print.
134. There is nothing particularly surprising in the omission of the Private Network Agreement and Purchase Order No. 1 from the package sent to Dublin in preparation for an intended completion by 22 September. MFN's concern was to obtain the first instalment of the purchase price, which was expressed in the agreements to be payable for the sale of the Duct, which was itself to be transferred on completion, and charged back to MFN as security for the balance of the price. By contrast, the fibre to be leased under the Private Network Agreement and Product Order No. 1 was to be for a nominal charge of $1, and the lease of it was to commence only after payment of the final instalment of the purchase price for the Duct. More generally, everyone regarded the purchase of the Duct as lying at the heart of the transaction, with the other related agreements being treated as ancillary and of lesser importance. Nonetheless, because the payment by instalments was the result of an express amendment to the Call Option Agreement, it is understandable why both the Addendum, which set out the agreed amendments in precise terms, and the Charge, which provided MFN's security for deferred payment, were included in the bundle sent to Dublin on 17 September.
135. It follows that, whether by accident or design (and this was not explored in cross-examination) the documents which Mr Negandhi arranged to be sent to GVN in readiness for an intended completion on 22 September neither drew GVN's attention to what he and Mr Dowbiggin regarded as an ambiguity in the existing contractual structure as to the extent of the duct to be sold, nor did anything to resolve it. The Purchase Agreement still referred to the Original Maps, and the A Maps were not sent to MFN, either electronically or in hard copy.
136. The documents sent to Dublin were not signed on behalf of GVN by 22 September, but on 19 September GVN paid the first instalment of the Purchase Price, in the sum of $1 million, albeit without VAT. This assuaged MFN's fears that GVN might, despite having exercised the Call Option, not proceed with the transaction, but it still left Mr Negandhi and Mr Dowbiggin with a concern that Mr Meaney might continue to seek to re-negotiate aspects of it, all the more so since the documents sent to Dublin had not been signed as expected. For its part GVN was in no hurry to sign, because the flotation in Singapore was still to be accomplished, and there was no certainty when funding for the further instalments would be available.
137. In early October 2003, Mr Meaney instructed a Mr Gerry Murray, whose job title was that of Operations Director at GVN, to liaise with MFN in relation to aspects of the operation of the communications network being acquired from MFN. There is a dispute both as to Mr Murray's status within GVN, and as to the nature of his brief. MFN's case is that he was a senior member of GVN's staff, instructed to carry out a due diligence on the assets being acquired. GVN's case is that he was a relatively junior member of staff rather than a decision maker, and that he was instructed to look into aspects of the day-to-day operation of the network once acquired, and in particular the necessary co-operation with MFN which the two companies' ownership of parallel ducts within the same network would inevitably necessitate.
138. On the first issue, the evidence tends to support GVN's case. In particular, Mr Pavey, who among MFN's staff had the closest dealing with Mr Murray, described himself as not being a senior person with MFN, in 2002 or 2003, and described Mr Murray as appearing to be of equivalent rank to him, within GVN. As for the extent of his brief, the evidence about what Mr Murray actually did is consistent with GVN's case as to his instructions, but there are examples in the evidence of his task being described in terms of due diligence, and he certainly became involved with the negotiation of outstanding minor technical issues. More generally, since he was only instructed after GVN paid the first instalment of the purchase price, and did not report back fully to Mr Meaney until after GVN had paid the second instalment, it hardly looks as if GVN was seeking to ascertain, by way of due diligence, whether MFN owned what it had contracted to sell, in advance of completion. Mr Murray described his own brief to Mr Dowbiggin in an e-mail on 7 October in the following terms:

"Hi. Noel Meaney has asked me to look at the network we have purchased from Abovenet."

While I can understand why Mr Dowbiggin may have thought that this was a due diligence exercise, it is equally consistent with Mr Murray's brief being as described by Mr Meaney.

139. The relevance of the issues as to Mr Murray's status and brief stems from the undoubted fact that he was, in response to a request for plans, sent the A Maps in electronic form on 15 October 2003 by Mr Pavey. By that date, surviving e-mails show that Mr Pavey had already become concerned that Mr Murray was asking questions about aspects of the network that were not on what he considered to be the backbone, and had drawn his concern to Mr Dowbiggin's and Mr Negandhi's attention on 14 October, early in the morning. He did so just before, and in anticipation of, a meeting scheduled to take place between Mr Negandhi and Mr Meaney at noon on the same day, for which Mr Negandhi had asked him to be on standby. The meeting took place at MFN's premises, and was attended by Mr Dowbiggin, Mr Negandhi, Mr Pavey and Mr Sepion for MFN, and by Mr Meaney (on his own) for GVN. Mr Meaney was unaware of any issue as to the extent of the route of the duct to be purchased and, while a number of issues relating to the transaction were discussed, none of MFN's representatives took any steps to bring what they regarded as the ambiguity to Mr Meaney's attention. Mr Negandhi explained in cross-examination that, notwithstanding having had the ambiguity re-drawn to his and Mr Dowbiggin's attention that very morning by Mr Pavey, the governing strategy was not to draw GVN's attention to the point. I infer that MFN's representatives' silence about this issue at that meeting was deliberate and calculated. Mr Negandhi accepted in terms that he believed that if GVN's attention had been drawn to the ambiguity, and GVN had been invited to resolve it as MFN wished, Mr Meaney would have objected.
140. For the reasons which I have already given, Mr Negandhi had not by this stage done anything to implement Mr Dowbiggin's decision to resolve the ambiguity by the use of the A Maps which had by then been produced, and which were on the point of being sent to Mr Murray. He appears to have thought that Mr Dowbiggin's strategy remained still to be achieved. He readily accepted in cross-examination that any process by which the A Maps might be inserted into the contractual structure, without the ambiguity and the change from the Original Maps being specifically drawn to GVN's attention, would amount to sharp practice, and something from which he was anxious to distance himself. Nonetheless, because he regarded Mr Dowbiggin's plan as being in substance the correction of an error so as to bring the documents into line with what he understood the parties had originally negotiated, he did not regard the strategy as dishonest. For his part, Mr Dowbiggin denied either sharp practice or dishonesty. His view was that it was sufficient at some stage to draw GVN's attention to the A Maps, without needing to point out the ambiguity in the Call Option Agreement and its attachments, and without needing to show how the A Maps differed from the Original Maps. In particular, he said that once the A Maps had been sent to Mr Murray, he assumed that Mr Murray would, as part of the due diligence process, have discussed the duct and fibre route shown on them with Mr Meaney, something which he would expect to have occurred in any business similar to that of his own. That observation completely ignored the fact that Mr Murray's counterpart within MFN, namely Mr Pavey, had been instructed to prepare the Original Maps in a manner inconsistent with Mr Dowbiggin's wishes in 2002, without the matter having been discussed with him, or drawn to his attention until many months later.
141. The second instalment of the purchase price was paid on 30 October 2003. On 3 November Mr Murray met Mr Pavey for a review of his work and, that afternoon, reported in an e-mail to Mr Meaney on what he regarded as relevant operational issues. They included for example:

"2. The issue of how many fibres we are getting on the backbone appears to be unclear. Abovenet say it's 12 strands whereas I understand this should be 24?"

Other issues included aspects of access to buildings, PoP locations and use of chambers, as well as issues arising in relation to pinch points. None of those seem to me to be likely to have alerted Mr Meaney to any issue about the extent of the duct being purchased, having regard in particular to his understanding of the meaning of the word backbone. Furthermore, under the heading 'Use of chambers', Mr Murray described the network as being 200 Kms long in relation to the question how many chambers GVN would need in order to pull its fibre through the duct. Mr Meaney's response to Mr Murray, embedded in a copy of Mr Murray's own e-mail on 4 November, takes the matter no further.

142. On the same day Mr Pavey reported to Mr Dowbiggin on the meeting which had taken place on 3 November. Of two points which he regarded as requiring further discussion with Mr Meaney, one was in relation to chambers. Mr Pavey said this:

"They made no mention of the clause concerning chambers. However, they did say that they would be building chambers themselves. I then introduced the prospect of them purchasing chambers from us - it makes sense to them from a time to market, logistic and a cost point of view. They seemed interested. I quoted a cost of £3000 - £4000 per chamber. I expect them to come back and ask for a reduction in price on this. We obviously need to be careful that we don't push them into actually reading the contract on this point."

He concluded his e-mail as follows:

"They didn't really ask the real questions I was expecting i.e. the requirements for actually deploying a network in London and as such, I offered no advice. I have heard that Mr Trevor Powers has been in contact with them concerning employment opportunities. Again, we need to be careful here as Trevor is aware of some of the time bombs that are ticking in the contract."

In evidence, Mr Pavey said that his reference to time bombs was to the strict time limits for duct proving and inspection for defects in Section 6 of the Purchase Agreement. The impression which these observations of Mr Pavey must have created on Mr Dowbiggin was that GVN was not conducting a minute examination of its existing contractual rights, as contained in the exercised Call Option Agreement and its attachments.

143. On 21 November Mr Pavey sent to Mr Murray's assistant, Roger McDermott, copies of two further revisions of the Maps ("the B Maps") pursuant to his request. They were, in substance, revisions of the A Maps in which the route of the duct was divided into five sections, with each being given a precisely calculated distance. The aggregate of those distances was 124.62 kilometres. There is no evidence whether Mr Murray considered the B Maps, nor, if he did, whether he focused upon the difference between the aggregate distance there shown and the 200 kilometres which he had referred to in his report to Mr Meaney. Nor is there any evidence that he reported to Mr Meaney between 21 November and the signing of the Purchase Agreement, Addendum, Mortgage and Charge, Private Network Agreement and Product Order No. 1 by Mr Nightingale on 28 November, to which I must now turn.
144. The immediate background to this event is that there were, even by then, a small number of technical issues still outstanding between the parties. They were summarised in an e-mail from Mr Murray to Mr Dowbiggin on 24 November as arising under the headings: "1. Building access list; 2. Build of chambers; and 3. Pinch points". None of them related to the identification of the route, either of the duct or of the fibre. They were drawn to Mr Nightingale's attention by an e-mail from Mr Murray which enclosed his e-mail to Mr Dowbiggin, and described as "important points that we should win on in negotiations with Abovenet as they impact significantly on the utility of the network post signing of the contract". Mr Murray suggested sorting them out prior to the meeting, arranged that same day to take place on 28 November, and suggested in the alternative that he (Mr Murray) attend at that meeting to "support the discussions". It appears possible that the first and second of those issues may have been sorted out prior to 28 November, but it is clear that the third had not. Both sides therefore approached the meeting on the basis that at least one matter remained outstanding, albeit that it appeared to have been capable of being resolved by a side letter, rather than by an amendment to the agreements about to be signed.
145. The other important aspect of the background to the meeting was, and this is common ground, that there had not been any mention by anyone on behalf of MFN of its perception that there was an ambiguity in the Call Option Agreement, that the A Maps had been created for the purpose of replacing the Original Maps in order to resolve that ambiguity, or that the A Maps reduced an original aggregate route distance of 200 kilometres to an aggregate distance of slightly less than 125 kilometres, by excluding the entirety of the (more expensive) distribution network. There is an issue whether Mr Meaney had by 28 November seen the A Maps, or been told by Mr Murray of the large disparity between them and the Original Maps. I have described what Mr Dowbiggin described in evidence as his assumption about that point. Mr McCall submitted that I should conclude on the balance of probabilities, notwithstanding Mr Meaney's denial, that one or other of those events had occurred. In particular, it was submitted that I should resolve that issue against GVN, because the opportunity to call Mr Murray had not been taken.
146. Having considered the whole of the evidence, including the evidence about events after 28 November which I shall shortly describe, I have reached the contrary conclusion. In my judgment, although Mr Murray may himself have been working on the basis of the A Maps, he does not appear to have appreciated that MFN was proposing to offer delivery of a substantially shorter route network than it had contracted to deliver by the Call Option Agreement. Whether this was because he failed to consider the Original Maps, or failed to appreciate that the A Maps represented the whole of that which MFN were proposing to deliver, must remain shrouded in obscurity. Had he appreciated that disparity, I am satisfied that he would have reported it to Mr Meaney in writing, since it represented a far more important issue than those which he described by e-mail both to Mr Meaney and to Mr Nightingale as being of real importance. When (after the dispute had begun to emerge) he did sit down and compare the Call Option Agreement with the Private Network Agreement sent by MFN to GVN in February 2004, in a form which annexed the A Maps to Product Order No. 1, he made a detailed written report precisely identifying the point which lies at the heart of this litigation. Using the language of Mr Rubin in submissions, the penny simply had not dropped with Mr Murray before then. Since he was, apart from his assistant Mr McDermott, the only employee of GVN to have been shown the A Maps prior to 28 November, it follows, in my judgment, that there is no basis for the inference that the penny had dropped with Mr Meaney either. Since I have rejected the inference that Mr Meaney knew all along that MFN intended only to sell duct on the rings, rather than on the distribution network, it must follow that Mr Meaney and, a fortiori, Mr Nightingale, were both unaware, at least until 27 November, that MFN intended to offer a greatly reduced performance from that which they expected.

3. The 28 November Meeting

147. There are a number of important issues concerning what took place on 28 November. The shortest way of identifying them is by describing the parties' rival cases, and the competing evidence. GVN's case is that Mr Dowbiggin had on his conference table large-scale copies of the A Maps and that, before any signing took place, he drew Mr Nightingale's attention to them, ran his finger over the route of the backbone and said something like, "Chris, these are the drawings that show the route of the backbone as per the agreement". Mr Nightingale is alleged to have said something like: "That's fine, that looks right". Thus far, I have summarised Mr Dowbiggin's witness statement. In cross-examination he said:

"Well, I think I actually said: "Chris, these drawings better show the line of the backbone". I think I said words to that effect. Maybe not those exact words but words very similar to those. And at the same time those drawings were on my desk or my conference table which is not that massive, it's not that big, and we were sitting at that table and those drawings were on display and I put my hand on those drawings and I ran my finger across the lines, not all of the lines for the entirety of the routes but in general across those lines saying, "These plans better show the route of the backbone", or words to that effect." (My underlining)

Mr Rubin submitted that the introduction (twice) of the adverb "better" in that passage amounted to an unsatisfactory piece of gilding the lily. I agree.

148. Mr Negandhi recalled being present for part of the meeting, and sitting around the conference table with Mr Dowbiggin and Mr Nightingale. He recalled going out for lunch with Mr Nightingale after the meeting. He could not recall whether there had been plans, let alone the A Maps, on the table, nor any part of Mr Dowbiggin's reference to them, whether by word or by pointing. Mr Pavey remembered Mr Dowbiggin and Mr Nightingale sitting at the conference table, and that there had been some drawings (but he could not say which) laid out on the table.
149. Both Mr Dowbiggin and Mr Negandhi, recalled Mr Nightingale signing the Agreements (that is the Purchase Agreement, the Mortgage and Charge, the Addendum, the Private Network Agreement and Product Order No. 1). Mr Negandhi thought that Mr Dowbiggin also signed the agreements on the same occasion, but he recognised (as is the case) that the documents strongly suggest otherwise. On 12 December 2003 Mr Negandhi e-mailed Mr Nightingale in terms which make it clear that Mr Dowbiggin did not counter-sign the Purchase Agreement until 15 December at the earliest.
150. MFN's witnesses could offer no assistance as to the precise form of those agreements when signed by Mr Nightingale on 28 November, and MFN's pleading stated that it did not know, for example, whether the A Maps were at that time physically attached. The inference MFN invites me to draw is either that they were attached, or that no maps were attached.
151. GVN's case, and evidence, about the signing meeting is as follows. Mr Nightingale said that he attended MFN's offices to sign on his way through London, in effect as an aspect of the completion formalities, rather than with any intent to negotiate anything. He said his expectation was that the documents would be in exactly the same form as the attachments to the Call Option Agreement, save for the agreed amendments concerning instalment payments and security, the form of which had already been circulated.
152. Mr Nightingale said in his witness statement that he met Mr Dowbiggin and Mr Negandhi in Mr Dowbiggin's office, and that the meeting was informal. He said he told them that he would not be "signing off on the technical aspects of the Purchase Agreement" and that the pinch points issue would have to be approved by Mr Meaney, since he, Mr Nightingale, lacked the necessary technical knowledge.
153. He said in his witness statement that he could not recall whether or not there were large scale maps on Mr Dowbiggin's desk, but that he was sure that Mr Dowbiggin neither drew his attention to them, nor ran his finger along any route, nor used the words which I have referred to and quoted above. He denied saying, "That's fine, that looks right". His reason for being sure that he did not do so was that he regarded the precise route of the network as a technical matter with which he was not familiar. There was no relevant distinction between Mr Nightingale's witness statement and his evidence in cross-examination, save that although he was sure that Mr Dowbiggin had not run his finger along any route, he could not rule out the possibility (although he had no recollection of it) that Mr Dowbiggin might have pointed to plans.
154. Mr Nightingale said that he made it clear that he was signing the documents only in escrow, pending a resolution of the outstanding technical issues between MFN and Mr Meaney. Although there was debate about whether the technical term escrow had been used, it is clear from an e-mail from Mr Negandhi to Mr Pavey on 2 December that something of that kind occurred, because Mr Negandhi told Mr Pavey:

"Chris Nightingale has already signed the agreements (but subject to final release)".

155. Neither Mr Nightingale nor (therefore) GVN could offer any positive case about the precise form of the agreements on 28 November. GVN invites me to infer, first, that no maps were annexed to the Purchase Agreement and secondly, in relation to the Private Network Agreement, either that the Original Maps were still appended, or that no maps were appended.
156. I make the following findings of fact about the meeting on 28 November. First, I find that neither side approached or conducted the meeting on the basis that it was an occasion for any diligent inspection of the contractual documentation (for the purpose for example of comparing its conformity with the Call Option Agreement and its attachments). Still less did either party approach the meeting on the basis that it was an occasion for any negotiation or re-negotiation of anything.
157. Secondly, I accept Mr Nightingale's evidence that he assumed throughout that the documents which he was signing were in all material respects the same as the attachments to the Call Option Agreement, save to the extent necessitated by the agreed amendment concerning instalment payments and security. Implicit in that finding is that neither Mr Dowbiggin nor any other of MFN's representatives did or said anything which actually disabused him of that assumption. More specifically, I find that Mr Dowbiggin did nothing which would have led a reasonable person in Mr Nightingale's position to be disabused of that assumption.
158. Thirdly, I find (on the basis of Mr Pavey's corroboration of Mr Dowbiggin) that he probably did have on his desk or conference table copies of the A Maps, and that, as Mr Nightingale accepted that he could not rule out, Mr Dowbiggin probably pointed to them in general terms. He did not however state (and his evidence does not suggest otherwise) that he specifically identified those maps as maps which were to be attached to the agreements, nor did he run his finger along the network route shown on them, still less did he say that those maps "better" showed the route of the network than any other maps. I find that his objective was to refer to the A Maps in such a way as to avoid giving any impression that they were replacements for the Original Maps, or that they differed from them in any material respect, or that the Original Maps had in any way been inaccurate, and that he implemented that objective by his conduct.
159. I find further that it was not his intention at any time to lure GVN into contracting for a lesser network than that which he believed it had intended to acquire. His intention was, in my judgment, simply to avoid doing anything which would cause GVN minutely to compare the A Maps with the Original Maps or to focus upon what he regarded as the ambiguity between the Original Maps and the reference to backbone in the general description of the London Assets and of the Duct.
160. I reject Mr Dowbiggin's evidence that he assumed by 28 November, on the basis that Mr Murray had been in receipt of the A Maps for a considerable time, that they had been drawn to Mr Meaney's attention, and compared with the Original Maps. The e-mail from Mr Pavey on 4 November (extracts from which I have quoted above) suggested to him that GVN had been anything but careful in comparing that which was on offer from that which it had contracted to acquire.
161. As for the constitution of the documentation signed by Mr Nightingale on 28 November, I find, first, that no maps were attached to the Purchase Agreement, and that Appendix C continued, as it had always done, to refer to the Original Maps. Secondly, on the balance of probabilities, I find that no maps were attached to the Private Network Agreement, whether by being exhibited to Product Order No. 1, as they should have been, or otherwise.
162. The first of those inferences is an easy one, because no copy of the Purchase Agreement has ever been produced with any maps attached. All of them, without exception, including importantly the copy sent by MFN to GVN in February 2004, simply had Appendix C in unaltered form, referring to the Original Maps by their identification numbers and date.
163. The second inference is more difficult. In favour of a conclusion that the A Maps were attached as Exhibit A to the Product Order No. 1 are the facts that this was the natural method of achieving the objective which Mr Dowbiggin had decided to pursue from, at the latest, 12 September, and that the earliest version of the documentation to pass between the parties after 28 November, namely that sent in February 2004 to GVN, did contain the A Maps as Exhibit A.
164. In favour of the inference that, on 28 November 2003, the Original Maps remained attached as Exhibit A is the fact that they were so attached as part of the annexes to the Call Option Agreement, and continued to form part of the attachments circulated by Helen Pearce, Mr Sepion's secretary, as late as 17 September, after the A Maps had been prepared. I regard this, however, as the least likely inference. Helen Pearce was very quickly corrected by Mr Pavey by reference to the A Maps, as I have already described, and the conclusion that the Original Maps continued to be attached to the Private Network Agreement in November 2003 would require an assumption that MFN's staff displayed a quite extraordinary level of incompetence in seeking to achieve their Managing Director's wishes, or that someone deliberately undermined them.
165. My conclusion that the correct inference is that no maps were attached to the Private Network Agreement is based upon the following reasoning. When the A Maps were included as Exhibit A to Product Order No. 1 in the version of the documentation sent to GVN in February 2004, they bore only Mr Dowbiggin's signature. Had they been attached on 28 November, the natural expectation would be that they would then have been signed by Mr Nightingale, but probably not then by Mr Dowbiggin, since the documentary evidence strongly suggests that he signed none of the documents until, at the earliest, 15 December. The natural inference therefore is that the A Maps were first attached to Product Order No. l between 28 November and 15 December, so as to be available for Mr Dowbiggin's signature by then.
166. This conclusion also requires an assumption that MFN's team acted incompetently in preparing documents for signing on 28 November, but incompetence there undoubtedly was. No legally qualified member of MFN's staff was involved in the preparation of the documents for signing. Mr Sepion the Contracts Manager was in charge of the preparation of the documents, but he neither attended the meeting on 28 November, nor gave evidence. Had a competent drafting exercise been carried out for the purpose of achieving Mr Dowbiggin's objective to limit the route of both the duct and fibre network to the rings, then the A Maps would have been annexed not merely to Product Order No. 1, but also as Appendix C to the Purchase Agreement, which they clearly were not. Of those who did attend the signing meeting, Mr Dowbiggin appeared (if credit is to be given to his evidence) to be focused upon maps on his table, rather than maps attached to the agreements themselves. Mr Negandhi regarded the process as involving sharp practice and wanted as little involvement as possible, and Mr Pavey appears to have played nothing more than a walk-on part. There was, on any view, plenty of room for incompetence in the documentary completion of a substantial transaction without any lawyers present for MFN.
167. It may fairly be said that the conclusion that no maps were attached to Product Order No. 1 also necessitates an assumption of some incompetence on the part of Mr Nightingale, who was an experienced lawyer. Had he taken the time carefully to read the documentation, he should have noticed that Product Order No. 1 made little sense without some drawing showing a route as part of Exhibit A. But bis evidence, which I accept, is that he assumed that, save in relation to the agreed amendment concerned with instalment payments and security, the documentation would be in substantially the same form as it had been when attached to the Call Option Agreement, therefore calling for no further or careful examination. While that does not absolve him of carelessness, it does go a long way to explain why he, like everyone else, missed the point.
168. Although not perhaps technically part of the process of forensic factual analysis, I am comforted that the dictates of justice lead naturally to the same conclusion. Where a party wishes to rely, as included in a written contract, upon a particular document or provision, but fails to ensure that the document in question is either clearly attached to or incorporated by reference within the contract, or signed by the party alleged to be bound by it, it seems to me no more than fair to require the party relying upon the document to bear the evidential burden of proving its attachment or incorporation. In the present case, both sides having attended to the signing of the contracts on 28 November with a significant degree of incompetence, neither of them has persuaded me that their preferred version of the Maps was attached to Product Order No. 1 on 28 November.
169. The position seems to me to be a fortiori in relation to MFN's case that I should infer that the A Maps were attached. Immediately prior to the 28 November meeting, the parties were quite plainly bound contractually to a lease of fibre pursuant to the form of Private Network Agreement and Product Order No. 1 attached to the Call Option Agreement, as a result of the exercise of the Call Option on 31 August, and the payment, by November, of two out of the three instalments of the purchase price. Although the fibre lease was to be rent free, it was plainly part of the quid pro quo for the payments being made by GVN, viewing the transaction as a whole. MFN wishes to prove that a substantially different and more restrictive map (in terms of fibre network route) was attached to the documents when signed by Mr Nightingale on 28 November than that by which MFN was already bound. It seems to me no injustice at all to conclude that MFN have failed by a very considerable margin to discharge the burden of proving, without reference to any relevant re-negotiation of the route, that such a different document was attached when the contracts were signed on behalf of GVN.

4. The Aftermath

170. I can deal quickly with the remaining relevant facts. It is common ground that the parties' respective rights and obligations crystallised at the moment when Mr Nightingale signed the contracts on 28 November, even though Mr Dowbiggin signed at a later date, and, on my findings, he signed a Product Order No. 1 in a materially different form than that which Mr Nightingale had signed. Having invited the parties to consider whether on the factual hypothesis that the A Maps were attached only after 28 November, there was no consensus achieved by the parties signing, on different dates, contracts in different form, both sides urged me to pursue that legal analysis no further. It was their counsel's common invitation to me that I should treat the contractual position as having crystallised when Mr Nightingale signed on 28 November, and I shall therefore do so, even though the agreements remained in a form of escrow or suspense for a short period thereafter. In fact, the parties dated the agreements as if they had been made on the contractual date for completion, namely 22 September 2003, rather than 28 November or such later date as the condition for the escrow was satisfied. That they did so is one of a number of features which show that, although not beyond the continued negotiation of certain technical matters (such as pinch points), the parties regarded themselves as having entered a binding contractual relationship by virtue of the grant and exercise of the Call Option, so that the process of settling and then signing the Purchase Agreement, the Private Network Agreement and the Charge, together with the Addendum recording the instalment payment amendment, was in substance a process of recording in agreed documents a transaction which had already taken place, rather than reaching a fresh agreement for the first time.
171. The seeds of the present dispute had already been laid by 28 November, because the parties had yet to conclude their discussion about the pinch point issue. It was the continuation of this discussion which brought to the surface a fundamental difference in understanding as to the agreed route of the network, both for duct and fibre.
172. On 12 December 2003, Mr Negandhi copied to Mr Nightingale and Mr Meaney a list of seven pinch points through which MFN proposed to offer 48 strands of fibre, in lieu of duct. Although London Bridge had been described as a pinch point in the Network Information Pack, and was referred to as an alternative capacity area in paragraph 2 of Appendix A to the Purchase Agreement, it was not included in that list. By e-mail on 17 December to Mr Negandhi and Mr Dowbiggin, Mr Murray requested its inclusion. On the following day Mr Dowbiggin replied as follows:

"London Bridge is not on the backbone and therefore your duct does not connect to this location and therefore does not form part of the agreement."

Mr Murray replied, on the same day:

"Re the London Bridge if this is not on the network, why was it included in the list and not eliminated when we had our discussions in London?"

Mr Dowbiggin replied:

"London Bridge is excluded and I don't know why it was not excluded in the meeting mentioned."

Mr Dowbiggin sought Mr Pavey's assistance, since he had attended the meeting. In an e-mail to Mr Dowbiggin on 23 December, Mr Pavey said:

"London Bridge is an odd one ... it is in our "London MFN Network" document because it is a pinch point on the MFN network. However, this is not part of what we are selling to RCI so I don't consider it part of the agreement. However, having read Noel's eMail it seems to me that he thinks he is getting the whole network ...?!?!?"

173. Time for payment by GVN of the final instalment of the purchase price of $1,750,000 passed on 15 December, without payment being made. On Mr Dowbiggin pointing this out to Mr Meaney on 24 December, Mr Nightingale replied that the contract was still in escrow, so that GVN was not in breach of it. On 30 December Mr Negandhi e-mailed Mr Nightingale and Mr Meaney to say that, at their request, it had been released from escrow on 17 December, and continued:

"As discussed, John is ready to meet with Noel to clarify some minor issues, which RCI should have clarified at the time the Duct Purchase Agreement was drafted in December 2002 or prior to its exercise of the Call Option on August 31, 2003. These issues should not be used to delay payment of the remaining 50%+ of the purchase consideration."

174. I have described how the penny dropped with Mr Pavey in August 2003. Mr Murray's further research into the reason for the disagreement about London Bridge led the penny to drop with him when in February 2004 he compared the version of the agreements by then sent from MFN to GVN with the Call Option Agreement and its attachments, his conclusions being expressed in an e-mail to Mr Meaney on 19 February 2004. I was pressed by Mr McCall with the submission that, carefully construed, Mr Murray's e-mail of that date falls short of demonstrating that he had not at some earlier date (for example in October or November 2003) made the same comparison. While that may be so if Mr Murray's e-mail of 19 February is read on its own, as part of a perusal of the whole of Mr Murray's written contributions to the documentation in this case, I am satisfied, even though he was not called to give evidence, that February 2004 is in fact when the penny dropped with him. There was, incidentally, also debate about the inferences to be drawn from Mr Murray's use of the words backbone, distribution and mesh in his February 2004 e-mail. In my judgment, textual analysis of it yields no clear conclusion, one way or the other. By then, the dispute had started to become focused in terms which eventually adopted MFN's jargon, by which they referred to the rings as the backbone and to the distribution network as the mesh. Attempts to read back from the use by representatives of GVN of those phrases after the dispute had arisen, so as to justify inferences as to what they understood those phrases to mean, for example in December 2002, are, in my judgment, misguided.
175. MFN's refusal to reinstate London Bridge as a pinch point, followed by GVN's refusal to pay the balance of the purchase price led eventually to a stand-off pursuant to which MFN also refused, pending payment in full, to provide any of the fibre to be leased pursuant to the Private Network Agreement, either on the rings or on the distribution network. In the meantime, on the basis that it had not obtained substantial delivery of the duct network which it had purchased, GVN decided not to initiate Duct Proving tests (as defined in Clause 6.1.1(b) of the Purchase Agreement) on that part of the duct network which it had received (namely the rings).
176. The evidence shows (albeit not in any detail) that despite the impasse, GVN has started to institute a limited amount of fibreing of its duct on the rings for the purpose of making customer connections. Furthermore, in January 2007, GVN decided, without prejudice to its rights, (by then the subject of this litigation), to pay the outstanding instalment of the purchase price together with interest as the quid pro quo for obtaining performance by MFN of the Private Network Agreement, in relation to fibre on the rings, but not on the distribution network.
177. I must deal finally with an isolated episode in November 2004, upon which some reliance has been placed by MFN in support of its submission that there was, as between Mr Cernicky and Mr Meaney, always a mutual understanding as to the meaning of the words backbone and mesh. It is, by way of background, clear that by November 2004 the parties had adopted MFN's use of those two words to distinguish between the rings and the distribution network in discussion about their dispute. In other words, MFN's internal jargon had become the jargon of the dispute.
178. On 30 November 2004 Mr Meaney wrote a letter (which in evidence he said had been drafted by Mr Nightingale) to Mr Cernicky, telling him about the dispute, and seeking "a brief note of your own recollections". The material part of the letter reads as follows:

"Our position is, that in common with other contracts across Europe which we negotiated at the time with MFN and which were subject to the original option agreement of 2002, that we contracted to purchase one duct across the whole of MFN's 210 KM London network including what is termed the mesh element.

In addition to this, it was agreed that to assist GVN achieve some basic operational capability in London prior to fibering out of our duct, that we also acquire an IRU based lease of 12 pairs of fibre across the outer rings of MFN's London network as MFN had not fibred the mesh element."

179. On 6 December 2004 Mr Meaney e-mailed Mr Cernicky to say:

"I know Tom (Byrnes) is meeting you later, he and I have talked and I have updated him and what you and I agreed. He will explain the finer points. I look forward to seeing you soon."

Later that day Mr Cernicky e-mailed Mr Meaney, attaching as a Word document Mr Meaney's letter of 30 November, and said, after pleasantries:

"I have reviewed the remaining documentation I have on the London sale and cannot find anything that disputes your recollection of the negotiations.

I am sorry there is dispute, however, not surprised. My recollection of that time period is that negotiations were lengthy and that continuity was an issue due to the fact that strategic personnel at MFN were constantly leaving, including Claire Trotter who was the attorney documenting the deal. I do recall your stated interest in the mesh." (My underlining)

Two days later Mr Cernicky sent a virtually identical e-mail, of which there exists a copy signed by him in manuscript, in which the sentence which I have underlined above had been removed.

180. Cross-examination about this episode confirmed that Mr Byrnes had met Mr Cernicky for a game of golf (although there was a curious disagreement about whether this occurred in Maryland or Texas), and Mr Byrnes said that he had become involved as an honest broker trying to mediate some solution to the dispute.
181. Mr McCall submitted first that Mr Meaney's letter of 30 November demonstrated a recollection that at least the fibre lease was to be limited to the rings, and therefore inevitably that Mr Meaney was recalling having made a distinction in 2002 between the rings and the distribution network, contrary to his evidence. Secondly, Mr McCall submitted that the two versions of Mr Cernicky's response, together with his meeting with Mr Byrnes, suggested that his evidence was being orchestrated by Mr Meaney and Mr Byrnes, and groomed so as to exclude references to the mesh, as something distinct from the rings, so as to conceal the reality of the matter.
182. In my judgment, Mr Meaney's letter of 30 November does suggest, taken on its own and in isolation from the rest of the evidence, that Mr Meaney understood in 2002 that the route of the leased fibre was to be limited to the rings, because that is all which, as he knew, MFN had by then fibred, whereas the route of the duct was to extend to the whole 200 km network. Weighed against the other relevant evidence, however, I have concluded on balance that, whether or not with Mr Nightingale's assistance, his recollection by November 2004 had become inaccurate. I have in mind in particular Mr Meaney's insistence, as late as 12 December 2002, that Exhibit A to the Private Network Agreement, in the form to be attached to the Call Option Agreement, should be the London Map, which I have concluded meant the maps broadly corresponding with the Original Maps, attached to the Network Information Pack.
183. I do not accept Mr McCall's other submissions in relation to this incident. I am not persuaded, having heard Mr Byrnes being cross-examined, that he participated in any process of grooming Mr Cernicky's evidence. It does appear likely that, in discussion between Mr Cernicky and Mr Meaney, Mr Cernicky removed one sentence from the first draft of his e-mail back to Mr Meaney. It seems to me highly unlikely however that he did so (whether or not requested to do so by Mr Meaney) so as to conceal any references to the mesh, since he attached to his e-mail Mr Meaney's letter of 30 November 2004, which made conspicuous reference to it. I have already concluded that Mr Cernicky's evidence is insufficiently reliable for me to attribute any weight to it. I am not persuaded that Mr Meaney acted in any way improperly in his dealings with Mr Cernicky in November 2004, so as adversely to affect the reliability of his evidence.

Analysis of the Main Issue

184. Since counsel were, as I have described, united in inviting me to conclude that a Purchase Agreement and a Private Network Agreement were both made on 28 November in whatever form I should conclude the documents took on that day, they both concentrated their submissions on the construction (and if necessary rectification) of those agreements. Nonetheless, it seems to me material to form a view about the true construction of the antecedent Call Option Agreement, because the effect of the exercise of the Call Option on 31 August 2003 was that, for the whole of the period up to and including 28 November 2003, and in particular once instalments of the purchase price came to be made from and after 22 September, there was a binding contractual relationship between the parties requiring each of them to perform all the obligations set out in the forms of the Purchase Agreement (as amended in relation to instalments) and (in due course) the Private Network Agreement as annexed to the Call Option Agreement. All that Mr Nightingale was doing on 28 November was signing documentation which should have been designed accurately to record a transaction which had already taken place on 22 September at the latest, as is reflected in their putting that date on all the agreements signed on 28 November. To my mind, the contractual relationship constituted by the grant and exercise of the Call Option forms a central part of the admissible background to the construction of the agreements signed on 28 November, and to the assessment whether, if not construed in the manner for which GVN contends, either of them should be rectified.
185. Furthermore, the construction of the Call Option Agreement is not bedevilled by uncertainties as to the form which it took when signed because, perhaps due to Miss Trotter's competent preparation of it, it was conventionally bound in a spiral backed mini-bundle which admits no uncertainty at all as to its physical contents. Furthermore, even if the Original Maps had not been included as Exhibit A to the 2002 form of the Private Network Agreement (as they undoubtedly were), there were no other maps capable of corresponding with the description in Appendix C to the form of Purchase Agreement in existence in December 2002, when the Call Option Agreement was signed.
186. Before directly construing the Call Option Agreement, it is convenient for me first to deal with certain principles of law which separated the parties, relating to the construction of contracts. Broadly speaking, they all related to the extent to which extrinsic evidence should be admitted for the purposes of construction.

Principles of Law

187. The first issue concerned the extent to which extrinsic evidence is admissible to identify the subject matter of a contract. It is well known that where a contract is, viewed without any assistance from extrinsic evidence, uncertain as to the precise identity of the subject matter, extrinsic evidence may be admissible to establish it. Thus, for example, in MacDonald v Longbottom (1860) 1 El.& El. 988, the only definition of the subject matter of the sale was "your wool". Plainly, extrinsic evidence was admissible to show what wool the seller then owned.
188. For present purposes the more important task is to identify the limits to that principle. In my judgment they are best expressed in Scarfe v Adams [1981] 1 All ER 843, by Griffiths LJ at page 851, as follows:

"The principle may be stated thus: if the terms of the transfer clearly define the land or interest transferred extrinsic evidence is not admissible to contradict the transfer. In such a case, if the transfer does not truly express the bargain between vendor and purchaser, the only remedy is by way of rectification of the transfer. But, if the terms of the transfer do not clearly define the land or interest transferred, then extrinsic evidence is admissible so that the court may (to use the words of Lord Parker in Eastwood v Ashton [1915] AC 900 at 913) 'do the best it can to arrive at the true meaning of the parties upon a fair consideration of the language used'."

189. The second question of legal principle concerns the existence and extent of what has come to be known as the "private dictionary principle" as an exception to the general rule that the parties' negotiations are inadmissible on a question of construction. In Chartbrook Ltd v Persimmon Homes Ltd [2007] EWHC 409 (Ch), I had occasion to review the authorities relating to this supposed principle, in connection with an attempt to have recourse to the parties' negotiations for the purpose of elucidating the meaning of a phrase which was itself a defined term in the contract in issue. I concluded, first, that it was open to serious doubt whether the supposed private dictionary principle was really a principle of construction at all, rather than an aspect of the law of rectification, but secondly, that even if it was, it did not enable the parties' negotiations to be used in relation to any word, phrase, clause or term which was itself the subject of an express definition in the contract itself: see paragraphs 22 to 45 of my judgment. It is an unfortunate irony that the Chartbrook case is the subject of an appeal which, at the time of the delivery of this judgment, has been heard but in which judgment is awaited. The parties before me have discouraged me from delaying the delivery of this judgment, unless I feel compelled to await the outcome of that appeal. For reasons which will appear, I do not feel so compelled.
190. Mr McCall submitted that I was simply wrong to exclude the use of the private dictionary principle in connection with defined terms. He said that to the extent that my reason for doing so was based upon the need, as a matter of policy, to protect third parties from exposure to adverse consequences of the private dealings between the original parties to an assignable contract, that policy had largely been overridden by the decision of the House of Lords in the ICS case.
191. I have not been persuaded by Mr McCall that I was wrong to exclude the application of the private dictionary principle to the construction of defined terms. I draw some comfort from the fact that Aikens J concurred with it, in Harper v Interchange Group Ltd [2007] EWHC 1834 (Comm), at paragraphs 86 to 88. Furthermore, although it is true that the admissibility of background circumstances generally may impede third parties from understanding the true construction of a contract, the admissibility of the original parties' private negotiations goes much further down that road, and the exclusion of such negotiations was expressly stated by Lord Hoffmann in the ICS case to be based on policy grounds. In any case, Mr McCall made no inroad by way of submission into the other reasons given in paragraph 45 of my judgment in the Chartbrook case for concluding that there was a defined term exception to the use of the parties' negotiations under the private dictionary principle, namely that the parties may by using an express definition reasonably be taken both to have agreed that the definition should prevail over any competing definition arrived at during the course of the negotiations, and because the use of an express definition in a commercial contract is a pointer towards the understanding of the parties to it that others will be entitled to rely upon those definitions, rather than investigate the parties' negotiations.
192. For his part, Mr Rubin submitted that there were two other established limitations upon the private dictionary principle. The first is that a private dictionary meaning may not be used to subvert the unambiguous meaning of a word, phrase or term in a contract, but only where the word, phrase or term is on its face capable of different meanings. This he derived from the following passage from Kerr J's judgment in the Karen Oltmann [1976] 2 Lloyds Rep 708, at 712:

"I think that in such cases the principle can be stated as follows. If a contract contains words which, in their context, are fairly capable of bearing more than one meaning, and if it is alleged that the parties have in effect negotiated on an agreed basis that the words bore only one of the two possible meanings, then it is permissible for the court to examine the extrinsic evidence relied upon to see whether the parties have in fact used the words in question in one sense only, so that they have in effect given their own dictionary meaning to the words as the result of their common intention."

193. Mr Rubin's submission has the merit that it marches hand in hand with a similar limitation upon the admissibility of extrinsic evidence to define the subject matter of a contract, as I have summarised it above. The difficulty with his submission is that the ICS case was decided after the Karen Oltmann, and marked a watershed in admitting background circumstances as the context for the purposes of construction, even in the absence of a patent ambiguity. Furthermore, in the more recent cases (since the ICS case) which have addressed the dictionary principle, the same clear restriction enunciated by Kerr J is not to be found. He himself said that the question whether an ambiguity existed depended upon considering the disputed words 'in their context'. I have not found it necessary to decide whether there is this additional restriction.
194. Mr Rubin's second point was that, for there to be established a private dictionary between the parties, it is necessary to show that the meaning which it is desired to be ascribed to the particular word, phrase or term is one upon which the parties expressly or by necessary implication agreed, rather than merely one about which, without any mutual discussion about it, they can be shown to have had a common understanding. He based this submission on the same passage in Kerr J's judgment which I have quoted above.
195. I am not persuaded that this is a rigid exclusionary rule. Kerr J used both the words of mutual agreement and common intention in his definition of the principle. In my judgment, if there is a private dictionary principle at all which admits evidence of the parties' negotiations in aid of construction, the better view is that the question whether the private meaning was expressly or impliedly agreed, or merely the subject of a common understanding, goes to the weight rather than to the admissibility of that evidence.

Construction of the Call Option Agreement

196. I consider that on its true construction the Call Option Agreement plainly conferred an option on RCI to acquire duct and to lease fibre over the entire MFN London (including Heathrow) network, including the distribution network, but excluding laterals, save where specifically included as a means of access to particular buildings.
197. Taking duct first, there is an unambiguous chain from the definition of Duct in Section 1.1 of the annexed form of Purchase Agreement, through Appendix A, to the route shown on the Route Drawing, defined by reference to Appendix C, which unmistakably incorporates the Original Maps both by their identification number and date of preparation, upon which the route is shown as including both the rings and the distribution network under a general description, "MFN Network". As for the lease of fibre, this is defined in Product Order No. 1 as lying along the route shown in the Exhibit A, which attaches the same Original Maps, with the same consequences.
198. MFN originally attempted to pursue the more limited construction which would exclude both duct and fibre along the route of the distribution network by seeking to establish by expert evidence that both backbone and mesh had a settled industry meaning such that 'the use of backbone' in the description of the London Assets, the Duct and the fibre to be leased in Product Order No. 1 was sufficient to prevail over the depiction of the route in the Original Maps. After exchange of experts' reports, this part of MFN's case was not pursued, and the experts were not cross-examined. For the reasons already given, I am satisfied that the word backbone did not have a private dictionary meaning as between the parties to the Call Option Agreement. Even if it had done, I am satisfied that evidence of such a private dictionary meaning would have been inadmissible as an aid to construction, since Duct is a term defined by reference to the detail of Appendix A, and to the Maps referred to in Appendix C, and 'backbone' forms merely a word in a phrase by which 'Duct' is more generally described. The point is not that 'backbone' is itself a defined word, but that it forms no essential part of the definition of 'Duct'. It is merely part of the general description of 'Duct' which is clearly intended to yield to the precise definition of the route to be derived from the reference to the Original Maps in Appendix C.
199. Mr McCall for MFN nonetheless pursued a submission that on the true construction of the Call Option Agreement, both duct and fibre in the distribution network were excluded by the following analysis. First, he submitted that 'backbone' in the general description of 'Duct' was a word which limited the generality of 'MFN's ... metropolitan fiber optic network' within a description which made it clear that it was not the whole of that network which was being sold, by the use of the words 'part of. Next, he submitted, by reference to the Network Information Pack attached as Appendix B, that 'backbone' had a different and more restricted meaning than the whole of MFN's network, by reference to paragraph 3.1 which referred to the 'backbone and distribution networks', to paragraph 3.5 which referred to the 'fibre backbone mapping' and contained the schematic plan, and to paragraph 6 which used the phrase 'backbone rings' by way of distinction from the distribution network. A careful reader would, he submitted, appreciate from that analysis that 'backbone' excluded the distribution network, and if he then scrutinised a sufficiently large scale copy of the Original Maps, he would be able to discern by reference to the thickness of the blue line used, which parts of the route were backbone (i.e. rings) and which were distribution network.
200. As for fibre, starting with the phrase 'backbone only' in Product Order No. 1, he submitted, again by reference to the same sections of the Network Information Pack, that a careful reader would have been looking for some indication within the Maps attached as Exhibit A for a distinction to be found between rings and the distribution network, all the more so because as a matter of common sense the Private Network Agreement could not lightly be construed as containing a promise to lease fibre which the Network Information Pack described as not yet having been laid.
201. Even if no sufficient distinction between the rings and the distribution network could be ascertained from a microscopic inspection of the thickness of the blue lines on the Original Maps, Mr McCall submitted that there was a sufficient subject matter ambiguity inherent in the tension between 'backbone' properly understood and the full network shown on the Original Maps to permit the admission of extrinsic evidence as to the true, more restricted subject matter of the sale and lease contracts.
202. Both sides attempted to reinforce their submissions by reference to other aspects of the contractual structure. For GVN, Mr Rubin QC relied upon the identification of London Bridge and Marsh Wall as two of the three alternative capacity areas referred to in Appendix A, in terms which suggest that they were a type of pinch point lying along the route of the duct to be sold. London Bridge is not connected to a ring at either end, but rather to parts of the distribution network, so that reference to it as an alternative capacity area along the route tended to support GVN's case. I was not persuaded that the same point carried any particular force in relation to Marsh Wall, which appears to lie not only upon the distribution network but also upon that part of the ring in which duct was to be substituted by fibre under paragraph 3 of Appendix A, namely the section governed by the agreement with Fibreway.
203. Mr Rubin's next point arose from the terms of Clause 9.1 of the form of Purchase Agreement headed "Maintenance of City Network Duct System", pursuant to which RCI or its nominee was to pay 25 per cent of the costs payable by MFN under its then current Maintenance Contracts (as defined), which were contracts for the maintenance of the entire network, including the distribution network. A 25 per cent contribution would sensibly reflect the purchase of one duct out of four along the entire network, but be an un-commercially excessive percentage contribution for the maintenance of the entire network, if RCI were to receive only a duct along the rings. Again, this was a point which lay marginally in GVN's favour. Its strength was undermined by the absence of copies of the Maintenance Agreements from the trial bundles. On a request for disclosure, MFN said they had been destroyed in a fire. If the contracts had been for the rings, as distinct from the distribution network, I have little doubt that MFN could have obtained them from its maintenance contractor.
204. For its part, MFN relied upon Clause 8.1 of the form of Purchase Agreement pursuant to which RCI or its nominee was entitled to require MFN to sell a sub-duct connection to eleven specified buildings, at no cost. In my judgment, Clause 8.1 was of, no assistance to MFN. If the distribution network was not included in the sale, GVN would become entitled to a series of miscellaneous sub-ducts within ducts along the distribution network, followed by extension of the sub-duct along a lateral to the relevant building. But the typical distribution network duct structure contained very limited provision of sub-ducts, which could easily become exhausted by that right, to the detriment of MFN's own use of the duct structure. By contrast, if the distribution network were included within the sale, access to specific buildings could be achieved by a sub-duct, within laterals constructed by MFN.
205. MFN's remaining point was that, if the Call Option truly provided for the acquisition of a 200 km network, then the provision in Clause 3.1.3 of the Call Option Agreement for RCI to obtain between 180 and 200 chambers constructed by MFN for a fixed price was a woefully inadequate number, whereas it was less inadequate for a 125 km network consisting only of the rings. Again, I found this point to be of limited weight. Mr Meaney said that the chambers construction agreement was in effect a horse trade sufficient to give RCI or its nominee a reasonable degree of access to the network at MFN's expense, recognising that if further chambers were needed, RCI or its nominee would have to pay for them.
206. None of these additional considerations, advanced by either side, were of decisive weight in relation to construction. In my judgment the answer depends upon a comparison between the straightforward and unambiguous identification of the route both of the duct and the fibre by reference to the Original Maps (as indeed Miss Trotter said she had intended when drafting the documentation), and Mr McCall's ingenious but ultimately unpersuasive alternative. In the end, everything depended upon the use of the word 'backbone' in relation both to duct and fibre being a sufficient trigger, by reference to the Network Information Pack, to require a microscopic examination of the Original Maps, for the purpose of ascertaining different thicknesses of blue line, a task expressly forbidden by the Legend on the Maps.
207. Mr McCall's best point was perhaps the apparent un-commerciality of a lease of fibre along routes (within the distribution network) which had yet to be fibred by the cash-strapped MFN. But since the Private Network Agreement provided only for a very modest number of strands to be leased, and since, once the duct and its access points have been constructed, pulling fibre through the ducts is a relatively straightforward process, that argument is, in my judgment, insufficient to prevail over what are" otherwise clear and unambiguous definitions, drawn by reference to the precise and detailed Original Maps.
208. A fatal flaw in MFN's submissions on construction, by which the focus is on 'backbone' rather than on the Original Maps as the key to an understanding of the route of the duct and fibre to be sold and leased, is the very uncertainty inherent even in MFN's use of the word as a piece of jargon. Backbone has within MFN a superficially clear conceptual meaning, by way of distinction with the distribution network, until an attempt is made to apply it in order to discern any clear route. At that point, as Mr Pavey's evidence made clear, everything depends upon MFN's fluctuating plans in relation to fibreing the duct already laid. When the schematic drawing at paragraph 3.5 of the Network Information Pack was prepared, no less than 8 sections which MFN now say are part of the distribution network were included as if they were part of the 'fibre backbone'. But financial constraints intervened, they were not fibred as planned and are 'therefore' (according to Mr Pavey), not part of the backbone at all. Even by the end of the trial it remained unclear whether one of those sections had in fact been fibred. Another example is the approaches on both sides of London Bridge, which were included as fibred backbone in the schematic diagram, and later excluded from the backbone because a decision was taken not immediately to fibre them.
209. Anyone reading the forms of Purchase Agreement and Private Network Agreement attached to the Call Option Agreement would expect to find a clear delineation of the subject matter, in terms of a route of the duct and fibre to be sold and leased. No reasonable reader would expect to find the answer in the word 'backbone' if, as here, both forms of contract incorporated a clear map of the relevant route. No reasonable reader would expect the extent of the assets to be acquired by the exercise of the fixed price Call Option to depend on the changing plans of MFN from time to time as to which parts of the duct to fibre.
210. The reference to the Original Maps in Appendix C of the Purchase Agreement, and the attachment of them as Exhibit A to Product Order No. 1 leads to the result that the route of both the duct and the fibre in respect of which RCI obtained a Call Option was (save in relation to the complications introduced by pinch points) identical. I have reached that conclusion separately in relation to duct and fibre, as a matter of the true construction of each of the 2002 forms of Purchase Agreement and Private Network Agreement, viewed separately. Although the option to acquire duct and to lease fibre formed parts of a single composite transaction, in particular because the price of $3.5 million for the duct included in substance payment for the lease of the fibre, there is no necessity to resolve any route ambiguity in one form of agreement by reference to the route identified in the other. The uniform result derives simply from the reference to, or use of, the same Original Maps in the appendices or exhibits to each form of agreement. As will appear, the question whether an ambiguity in the route of duct or fibre in one of those agreements can be resolved by reference to the route described in the other of them is of considerable relevance to the true construction of the 2003 Agreements, to which I now turn.

Construction of the 2003 Agreements

211. In relation to the route of the duct and fibre sold and leased, the first question is: what express terms did each agreement include? Mr Rubin described this in opening as a question of incorporation of terms, and I agree. I have decided that, as a matter of fact, the 2003 Purchase Agreement was, save only for the agreed amendments relating to instalment payments, in exactly the same form as the form of Purchase Agreement annexed to the Call Option Agreement. Specifically, it continued with an unaltered Appendix A and a single page Appendix C which referred both by identification numbers and date to the Original Maps. By contrast, I have concluded that the Private Network Agreement differed from its form as attached to the Call Option Agreement, because Exhibit A to Product Order No. 1 consisted only of a front sheet entitled "Routes and Distances" with no maps attached.
212. Mr McCall submitted for MFN that I should conclude, by reference to what he described as the admissible background, that the A Maps were incorporated by reference into both agreements. Mr Rubin submitted for GVN that the Original Maps should be treated as incorporated by reference into both agreements. It is necessary to address these issues separately in relation to each agreement, although the background facts upon which Mr McCall relied for MFN's case of incorporation by reference were the same in relation to both.
213. Taking MFN's submissions first, Mr McCall invited me to imagine a hypothetical scenario (not in fact supported by MFN's evidence, even if accepted in full) under which, shortly before Mr Nightingale signed, Mr Dowbiggin showed him the A Maps, identified the rings as the route shown on them, pointed out that they excluded the distribution network, and then agreed with him that those maps were, after signing, to be physically attached to both agreements. Against that background, he submitted that even the Purchase Agreement would be deemed to have included the A Maps, notwithstanding the description of the Original Maps by identification number and by their very different date in Appendix C. In response to my question how extrinsic evidence could be used in that way to contradict an apparently clear definition of the subject matter in Appendices A and C, he referred me to the definition of Route Drawing in Section 1.1 of the Purchase Agreement, which reads:

"The route drawing attached at Appendix C." (My underlining)

Since Appendix C did not have any drawings attached to it, but only a description of drawings by reference to their identification numbers and date of preparation, he submitted that there was a sufficient ambiguity in the definition of the subject matter of the Purchase Agreement to admit extrinsic evidence.

214. Mr McCall did not pretend that any express oral agreement to attach the A Maps to the Purchase Agreement had been made between Mr Dowbiggin and Mr Nightingale, but he submitted that the background facts as a whole, including the sending of the A Maps to Mr Murray, and the parties' supposed common understanding as to the meaning of backbone as excluding the distribution network, led to the same result.
215. While I admire the elegance and ingenuity of that submission, I disagree with every aspect of it. First, the reference in the definition of Route Drawing to a drawing 'attached' at Appendix C comes nowhere near giving rise to any real ambiguity as to subject matter. If the so-called background facts are set on one side for the moment, no-one reading the 2003 Purchase Agreement would think that the use of the word 'attached' in the definition of Route Drawing shed the slightest doubt on the identity of the drawings intended to be referred to as the Route Drawings in Appendix C, namely the Original Maps. Appendix C is in fact headed "Route Drawing" in heavy type. A reader would assume, without even pausing, that the drafter had simply found it more convenient to refer to possibly bulky maps by their date and identification numbers, rather than to bind them into the Agreement itself.
216. It follows, in my judgment, that there being no ambiguity as to subject matter disclosed by the Purchase Agreement itself (which, incidentally, contains an entire agreement clause at Section 13.8), an attempt by reference to extrinsic evidence to suggest that the very different and more restricted subject matter identified by the A Maps is that to which the agreement refers is a naked attempt to use extrinsic evidence to contradict a clear subject matter definition, contrary to the principle laid down by the Court of Appeal in Scarfe v Adams .
217. Secondly, even if Mr Dowbiggin's evidence was to be accepted in full as to what he had done at his meeting with Mr Nightingale on 28 November 2003, that would, in my judgment, have fallen well short of the requirements imposed by the law where a party seeks to bind another party to unusual terms in a document alleged to form part of a contract. The relevant authorities are summarised by Dillon LJ in Interfoto Library Ltd v Stiletto Ltd [1989] 1 QB 433, at 437, and encapsulated in the pithy observation of Denning LJ in J. Spurling Ltd v Bradshaw [1956] 1 WLR 461, at 466:

"Some clauses which I have seen would need to be printed in red ink on the face of the document with a red hand pointing to it before the notice could be held to be sufficient."

218. Those cases were of course about unusual clauses in standard forms of printed terms and conditions, and the principle to be found in them is only applicable to the present case by analogy. In my judgment the analogy is, however, apt. Mr Nightingale was aware of no attempt to re-negotiate the route of the duct or fibre which had been sold and leased to GVN as the result of the exercise of the Call Option and the payment, by then, of two instalments of the purchase price. He expected the 2003 Agreements as signed to include the same maps as had been included by reference in and attachment to the Purchase Agreement and Private Network Agreement in the forms which had been annexed to the Call Option Agreement. If a much more modest route (excluding the network around the principal client locations in the City, West End and Docklands) were to be identified in new plans to be attached to the 2003 Agreements, something akin to Lord Denning's red ink and red hand would have been required. At the very least it would have been necessary for Mr Dowbiggin to explain that the maps referred to in, and attached to, the earlier forms of agreement had been incorrect or ambiguous, and that the A Maps were designed to resolve those inaccuracies or ambiguities. Mr Dowbiggin did not suggest in evidence that he did anything of the kind.
219. Thirdly, my findings of fact, both as to what Mr Dowbiggin actually did on 28 November, and as to the mental assumptions made by Mr Meaney and Mr Nightingale as to what they thought they had already contracted for by way of network, fall well short of the sort of background circumstances upon which, even if admissible, it would have been necessary for Mr McCall to rely in support of a submission that the A Maps had been incorporated in the Purchase Agreement by reference, with anything like the clarity sufficient to displace the clear impression, to be gained by reading the Purchase Agreement itself, that the Original Maps were the ones referred to. It follows that Mr McCall's submission fails, both in fact and in law. The 2003 Purchase Agreement expressly and unambiguously incorporated the Original Maps by reference to them.
220. I turn to the more difficult question which arises from my conclusion that, in fact, no maps were physically attached, or referred to expressly, in the Private Network Agreement. All that there is, in Product Order No. 1, is the reference 'Backbone only' under the heading 'Customer Locations' in paragraph 4, and a reference in paragraph 3 to a route shown in Exhibit A, which then does nothing of the kind.
221. Viewing the Private Network Agreement on its own, there is, by contrast with the Purchase Agreement, a complete uncertainty as to subject matter, at least in relation to its route. All that is described is 12 dark fiber strands along a backbone, and backbone is nowhere defined. Neither party submitted that the Private Network Agreement was thereby rendered void for uncertainty, and both, legitimately in the light of Scarfe v Adams prayed in aid different parts of the background facts in support of their rival constructions.
222. Mr McCall relied, again, on MFN's case about the commonly understood meaning of 'backbone', GVN's knowledge that the distribution network had yet to be substantially fibred, the Murray episode and Mr Dowbiggin's evidence about reference to the A Maps on 28 November. For his part, Mr Rubin relied primarily as admissible background fact upon the terms and true construction of the Call Option Agreement which, as I have decided, contained an option to take a lease of fibre on the entire MFN network (including the distribution network), and which had been exercised and largely paid for by 28 November. Here, he submitted, was a simple case of a binding contract which precisely identified the subject matter, largely completed by payment, where maps which were annexed to the contract were simply accidentally omitted from the documents signed on completion.
223. In my judgment, Mr McCall's submission fails for all of the reasons for which I rejected the same submission in relation to the Purchase Agreement, except of course the first. On the admissible extrinsic evidence, I find that the A Maps were not sufficiently or properly identified as the intended subject matter of Exhibit A to Product Order No. 1 with anything approaching the clarity which their substantial departure from the Original Maps called for in the circumstances.
224. By contrast, I accept Mr Rubin's submissions. In my judgment, the internal process undertaken at MFN whereby the Original Maps were removed from their place in Exhibit A to the form of Product Order No. 1 as annexed to the Call Option Agreement, with a view to their substitution by the A Maps, should be regarded as in substance a single process. The result of the failure properly to draw GVN's attention to the unexpected changes to be wrought by the A Maps means not merely that the A Maps were not incorporated, but that the Original Maps remained incorporated, by reference to the central feature of the admissible background, namely their inclusion in the binding contract constituted by the exercise of the Call Option. I therefore conclude that the Original Maps were incorporated by reference in the Private Network Agreement, with the result that both agreements as signed on 28 November 2003 continued to have the same content, in terms of the intended route of the duct and fibre, as had the Call Option Agreement.
225. On that analysis, the outcome in terms of construction is the same as that which I have decided in relation to the Call Option Agreement itself. Both the sale of duct and the lease of fibre were recorded in the agreements signed on 28 November in such a way as to mean that, on construction, they extended along the whole of the route shown by blue lines (regardless of thickness) on the Original Maps.
226. That conclusion is sufficient to dispose of the main issue, and to make it unnecessary to deal with GVN's alternative claim for rectification. Nonetheless I have reached it by a long and, at times, tortuous route, which has involved findings of fact by means of inference, and a number of stages in the legal analysis of the process of incorporation of terms, admissibility of extrinsic evidence and private dictionaries, some or all of which may become the subject matter of appeal. I shall therefore briefly set out the conclusions which I would have reached on certain alternative factual and legal hypotheses, so as to ensure first that any necessary factual findings are available if a higher court should adopt a different legal or inferential analysis, and secondly, so that, upon any appeal, the higher court would be acting in a truly appellate capacity, rather than deciding important aspects of the case for the first time.
227. I deal first with the hypothesis that, contrary to my view, it is not possible to identify any maps as having been incorporated by reference into the 2003 Private Network Agreement, but that, because neither side alleges that it was void for uncertainty, an identifiable route of the fibre to be leased has to be discerned from a virtual vacuum. In those circumstances there would remain a clearly identifiable route for the sale of duct (namely that shown on the Original Maps) in the connected Purchase Agreement, coupled with admissible evidence of an existing contract, constituted by the exercise of the Call Option, under which the parties had agreed to adopt an identical route for both duct and fibre. Furthermore, the phrase "backbone only" in paragraph 4 of Product Order No. 1, although not itself defined anywhere in Product Order No. 1 or in the Private Network Agreement, is capable of being illuminated by the way in which "backbone" is used in the contemporaneous Purchase Agreement. There, it is part of the general description of the Duct, and by reference to the detailed definition of Duct can be seen to mean the whole of the network shown by the blue lines on the Original Maps, i.e to include the rings and the distribution network, but to exclude laterals.
228. If that meaning of backbone is applied to the phrase "backbone only" in paragraph 4 of Product Order No. 1, it makes good sense. It is laterals which connect with customer locations, not rings or distribution network, even though the distribution network comes nearer to most customer locations than the rings. It therefore makes good sense in a standard form document requiring customer locations to be identified for the particular words in this Produce Order to state "not applicable - backbone only" since if no building was to be physically connected by the fibre to be leased along the rings and distribution network, it would be unnecessary for customer locations to be specified. Of course, the same would be true if backbone merely meant the rings. The point is that "backbone" in the sense used in the Purchase Agreement works perfectly well in Product Order No. 1.
229. Perhaps more fundamentally, even if no specific map is to be treated as incorporated by reference into the Private Network Agreement, the fact remains that the parties were by then under a contractual engagement which required a lease of fibre along the whole of the network shown on the Original Maps, and this cardinal fact is, in my judgment, admissible as a conclusive aspect of the relevant background circumstances.
230. I have in that context considered whether the fact that the distribution network (as opposed to the rings) remained largely unfibred even in late 2003 requires a different conclusion. But for the existence and exercise of the Call Option, it would have been a powerful factor in favour of a conclusion that, by contrast with duct, fibre was only to be leased along that part of the network which had already been fibred. But MFN had, apparently with its eyes open and in unambiguous terms, granted an option in December 2002 which, if exercised, would require it to lease fibre along the whole of the network. By 28 November 2003, MFN had had almost a year in which to carry out any necessary fibreing, and more than two and a half months since the exercise of the Call Option. The point does not, therefore, as an aspect of the admissible background, prevail over the effect of the terms of the Call Option Agreement itself.
231. It follows that, if forced to choose a route as forming the subject matter of the Private Network Agreement if no map were capable of being identified as incorporated by reference, I would on balance have concluded that, as a matter of construction, the whole of the route of MFN's London network, excluding only laterals, was included.
232. Had I concluded that the correct inference as to physical attachment of maps was that, by 28 November the A Maps had been physically attached, either to the Purchase Agreement or to the Private Network Agreement, then as a matter of construction those agreements would have conferred rights to duct and fibre only over the 125 km route shown on those maps. Mr Rubin sensibly did not argue otherwise, at least in relation to the Private Network Agreement, and I would have rejected an argument that, if the A Maps had been physically attached to the Purchase Agreement, the description of the Original Maps in Appendix C would have prevailed.
233. On that analysis, it would have been necessary for me to decide whether GVN was entitled to rectification of each of those agreements, so as, in effect, to substitute the Original Maps for the A Maps in both of them.
234. GVN sought rectification only on what is commonly called the unilateral mistake basis, and it was common ground between counsel that the relevant principles applicable to such a claim are to be found set out in Thomas Bates & Son Ltd v Wyndham's Lingerie Ltd [1981] WLR 505, and more recently, in The Commissioner for the New Towns v Cooper [1995] Ch 259. I was also referred to George Wimpey UK Ltd v VIC Construction Ltd [2005] BLR 135.
235. It is important to distinguish between the underlying general principle justifying rectification as a remedy for the injustice caused by something falling short of a common mistake, from particular types of situation in which that principle has been held to be satisfied. For example, in Bates v Wyndham's (supra) at page 516, Buckley LJ said that it must be shown (inter alia) that the defendant to the claim for rectification knew that the omission or inclusion of the provision sought to be rectified was due to a mistake on the part of the claimant. In New Towns v Cooper (supra), the trial judge dismissed the claim for rectification on the basis that the defendant hoped and suspected, but did not know of the relevant mistake by the claimant. In the Court of Appeal, rectification was ordered because the defendant had sought to mislead the claimant into making the relevant mistake, the claimant had in fact made it, and this was sufficiently unconscionable conduct on the part of the defendant to render it liable to rectification.
236. Among the passages cited to me, I consider that the best description of the distinction between the principle and particular fact situations which satisfy it is to be found in the following part of the judgment of Stuart-Smith LJ in New Towns v Cooper, at page 277:

"In the case of unilateral mistake, that is to say where only one party is mistaken as to the meaning of the contract, rectification is not ordinarily appropriate. This follows from the ordinary rule that it is the objective intention of the parties which determines the construction of the contract and not the subjective intention of one of them. Also, it would generally be inequitable to compel the other party to execute a contract, which he had no intention of making, simply to accord with the mistaken interpretation of the other party: see Olympia Sauna Shipping Co SA v Shinwa Kaiun Kaisha Ltd [1985] 2 Lloyds Rep. 364, 371 per Bingham J. But the court will intervene if there are "additional circumstances that render unconscionable reliance on the document by the party who has intended that it should have effect according to its terms:" Spry, Equitable Remedies, 4^th ed. (1990), p.599. The debate in this case turns on what amounts to unconscionable conduct."

237. Mr McCall referred me to the following passage in the judgment of Sedley LJ in the George Wimpey case (supra), at page 147:

"58. There is, as it seems to me, a paradox in the notion of what an honourable and reasonable person would do in the context of an arm's length commercial negotiation. This is a context in which honour (or honesty) and rationality (or reasonableness) are frequently not on speaking terms....

60. The phrase 'honest and reasonable' is not a term of art. It is a judicial attempt to sketch a line beyond which conduct may be regarded as unconscionable or inequitable. Its duality, however, is recognition that honesty alone is too pure a standard for business dealings because it omits legitimate self-interest; while reasonableness alone is capable of legitimising Machiavellian tactics.

61. Mistake is a concept which sits awkwardly in this space. Absent a prior accord which has simply not been carried into effect, absent also a dishonest inducement to contract, one is looking for a mistake on the claimant's own part which the defendant was honour-bound, despite his own legitimate interests, to point out to him ...."

238. On the facts which I have found, the present case does not fall squarely within any of the factual categories established by the reported cases. In particular, it is not a case where MFN set out to cause GVN to enter into a contract on terms materially more disadvantageous than those which GVN believed that MFN thought it had negotiated. It is not even a case in which (on the assumption that one or other of the agreements signed in November 2003 provided for a route along that shown on the A Maps) MFN even believed that GVN was signing up to a lesser route than it had, subjectively, intended to acquire, and, with that knowledge, simply adopted a policy of calculated silence.
239. On the facts which I have found, the view within MFN (shared by both Mr Negandhi and Mr Dowbiggin) was that GVN had always intended to acquire a route only over the rings, rather than over the distribution network, but that a mistake in the preparation of the Maps referred to and attached to the forms of agreement annexed to the Call Option Agreement gave rise to an ambiguity, and thereby created a risk that agreements signed in that form might result in MFN selling and leasing to GVN more than either party had intended. That was "the risk of giving away assets not previously agreed to be sold" referred to by Mr Negandhi in his e-mail to Mr Dowbiggin on 31 August 2003. Further, both Mr Negandhi and Mr Dowbiggin thought that drawing the ambiguity to GVN's attention, coupled with a request to resolve it by more accurate maps, would create a risk that GVN would use the ambiguity as a bargaining counter.
240. MFN's subsequent conduct, in preparing the A Maps and encouraging GVN to sign a Purchase Agreement and Private Network Agreement by reference to them, first prior to the intended completion date of 22 September by a postal process, and later at the meeting on 28 November face to face, was undertaken in a manner designed to avoid the first risk, without incurring the second. That is, MFN intended to put right the ambiguity without drawing attention to it.
241. On the facts which I have found, MFN tried, but failed by a series of careless omissions, to achieve that objective, first by failing to enclose any maps with the documents sent for signature prior to 22 September, and secondly by failing either to attach or to take steps sufficient to have incorporated by reference the A Maps to the agreements actually signed on 28 November. The rectification issue arises only if, contrary to my inference as to what was or was not attached to the agreements signed in November, MFN succeeded rather than failed.
242. The legal question arising from those facts therefore is whether a party which perceives an ambiguity in an existing agreement or draft contract of which it believes that its counterparty is unaware, and who then seeks to put right the ambiguity without incurring the commercial risks associated with drawing it to the counterparty's attention, acts sufficiently unconscionably to incur a liability to submit to unilateral mistake rectification. The present case is, of course, not one where the ambiguity lay hidden in a mere draft contract, at a time when no contractual relationship had been formed between the parties. Here, the 'ambiguity' (if there really was one) lay in the terms of an exercised option, which already conferred contractual rights on GVN. Looked at from MFN's point of view, the risk created by the ambiguity represented a risk that, once the option had been exercised, MFN had already "given away assets not previously agreed to be sold".
243. It is sufficient for present purposes for me to conclude, as I do, that the adoption of a policy designed to cure an ambiguity in an exercised option contract by correcting it in a later contract designed to record completion of the earlier contact while deliberately avoiding drawing the ambiguity to the counterparty's attention, is sufficiently unconscionable to expose the perpetrator to rectification. I agree with Mr Negandhi's view that such conduct amounted to sharp practice, and I disagree with Mr Dowbiggin's view, and MFN's submission, that MFN's legitimate business interests justified taking that course. Accordingly, had it been necessary, I would have granted rectification as sought by GVN.

The Additional Issues

(1) Specific Performance

244. It appeared from opening submissions first, that MFN might contend that the general availability of specific performance would depend upon the adequacy of any remedy in damages. For that reason MFN sought to have this issue deferred to the trial of the quantum issues. I declined to accede to that invitation at the outset of the trial, and directed that any evidence and submissions relevant to the general availability of specific performance (rather to the minutiae of any order) be prepared and submitted during the first trial.
245. By the time of closing submissions, MFN had submitted no further evidence, and abandoned any suggestion that, if it lost on the main issue, specific performance should not generally be available. For its part, GVN limited its claim to specific performance in relation to fibre to a lease of fibre only in relation to those parts of the route already fibred.
246. In his closing for MFN, Mr McCall referred for the first time to a new plan which identified a number of mainly small parts of the distribution network which MFN feared would give rise to particular difficulties if it was subjected to an order for specific performance of the sale of duct over the entirety of the distribution network. Two types of difficulty emerged from Mr McCall's explanation. The first was that there were certain areas of the distribution network where MFN simply did not know whether there existed duct or not. Those included, but were not limited to, areas where the network ran through tunnels, rather than along a trench dug in the ground. The second type of difficulty consisted of mainly short parts of the route of the distribution network where, apparently, the structure consisted only of two rather than four ducts. Those areas included a substantial part of the distribution network on the Isle of Dogs. In relation to those parts, Mr McCall explained that MFN had, since 2003, sold one of the two ducts, and retained the other for its own active use, in the provision of a communications network service to customers who had no notice of GVN's claims. Specific performance in relation to those areas would therefore, according to Mr McCall, interfere with the rights of third parties, either the purchaser of the empty duct, or the network services customers of MFN along fibre already laid in the remaining duct. Mr McCall sensibly recognised that, albeit after some delay, MFN would have to construct a third duct along those routes, in order to comply with its obligation to transfer ownership and possession of an empty duct to GVN.
247. Understandably, GVN objected that none of these difficulties had been verified in any evidence, nor had GVN been given notice of them sufficient to enable it to respond to that case. It was, nonetheless, ultimately agreed that, if MFN lost on the main issue, I should make an order for specific performance first for the provision of duct along all parts of the distribution network not identified as being the subject of either of the above difficulties, and secondly in relation to fibre, requiring a lease of 12 strands along all parts of the entire network already fibred, and that I should defer to a further hearing issues as to specific performance in relation to duct along the problem areas identified on Mr McCall's recently submitted plan.
248. That is what I propose to do. It follows that there are no specific performance issues which need now to be decided, and I will hear submissions as to an appropriate form of order for specific performance, and submissions as to case management directions in relation to the problem areas.

(2) Proprietary Remedies

249. Perhaps mindful of potential difficulties arising from contractual restrictions as to the scope of a damages remedy (to which I refer below), GVN has pursued a claim for an account by MFN of profits made from the use of duct and fibre which should have been respectively sold and leased to GVN in 2003.
250. Mr Rubin put this claim broadly as follows. First, since the Purchase Agreement and Private Network Agreement are susceptible to specific performance, the effect of a contract for the sale of duct and lease of fibre is, pursuant to the equitable principle exemplified in Walsh v Lonsdale, to create an immediate equitable interest in the duct which should have been, but was not, transferred to GVN on completion, and in the fibre which should have been leased when the full purchase price had been paid. Second, because MFN retained legal title to the outstanding duct and fibre, it incurred the liabilities of a trustee in relation thereto, all the more so once instalments of the purchase price came to be paid, and if it then exploited those parts of the network for its own commercial advantage, it should be accountable for its profits.
251. MFN's response was as follows. First, on the true construction of the agreements, there never occurred any separation between legal and equitable title either to the duct or to the fibre, sufficient to give rise to the necessary fiduciary relationship. Secondly, as a matter of practice, (save possibly in relation to those small areas where MFN only ever laid two rather than four ducts) the duct wrongfully retained was merely an empty duct which, by definition, yielded no profit to MFN. Thirdly, since MFN's only obligation was to transfer one duct out of four, there has never been an appropriation to GVN of any particular duct. Fourthly, in relation to fibre, since the leasing obligation under the Private Network Agreement was limited only to 12 strands, and all fibred duct had very many more strands laid than that, ordinary principles would lead to the conclusion that MFN had made profitable use first of its own (free) strands rather than the 12 to be leased to GVN (which were, of course, never appropriated to GVN in any event).
252. In my judgment, both Mr McCall's legal and practical submissions on this point are formidable. Taking duct first, title was, as far as possible, to pass on the date of receipt by MFN of the first instalment of the purchase price, which was, as near as makes no difference, the date ascribed to the agreements, namely 22 September 2003. No distinction is made in Section 4 of the Purchase Agreement between legal and equitable title and, there having been no payment prior to completion, there was no point at which equitable title alone passed.
253. MFN's breach of the Purchase Agreement consisted of a failure to make physical possession of the disputed duct available to GVN. The failure to deliver physical possession of an asset promised to be sold sounds in damages, either for trespass (if the asset be immovable property) or in interference with goods (if a movable). True it is that damages may in an appropriate case be assessed upon the basis of the profit made by the defendant by virtue of his breach, but that does not of itself convert a damages remedy into a proprietary claim for an account of profits.
254. The same analysis holds good in relation to the fibre, save that it was to be leased only when the purchase price had been paid in full. As for Mr McCall's practical points, it seems to me far fetched solemnly to conduct an account of profits derived by MFN from a (largely) empty duct, still less from a metaphysical analysis of the question whether profit made by MFN from the use of the fibred parts of its network involved the illegitimate use of 12 strands of a very much larger cable which should have been made available to GVN.
255. These points were all debated with extreme brevity and with virtually no reference either to authority or evidence. For present purposes it is sufficient for me to say that I have not been persuaded that GVN is entitled to any proprietary remedy by way of an account of profits. For reasons which will become apparent when I address the question as to the limitations on damages, I very much doubt in any event whether it matters. I shall therefore decline to make the declaration sought by GVN at this stage, but reserve for further argument, in the unlikely event that it may become necessary, the question whether MFN's use, in those small parts of the distribution network where only two rather than four ducts were laid, of the only duct remaining after a sale of one of them gives rise to any proprietary claim.

(3) Limitations on Damages

256. Section 11 of the Purchase Agreement provides as follows:

"11.1 Subject to clause 11.2 below, in no event shall either Party be liable to the other Party in contract, tort (including negligence) or otherwise arising under or in connection with this Agreement for any loss of revenue, loss of actual or , anticipated profits (including for loss of profits on contracts), loss of use of money, loss of anticipated savings, loss of business, loss of opportunity, loss of goodwill, loss of reputation, loss of, damage to or corruption of data, or any indirect or consequential loss or damage howsoever arising.

11.2 Neither Party excludes or limits its liability to the other Party for liability for the tort of deceit or death or personal injury, caused by the negligence of either Party or any other liability, which cannot be limited or excluded by law.

11.3 With the exception of clause 11.2, each Party's maximum aggregate liability (other than Purchaser liability to pay the Consideration) to the other Party arising out of or in connection with this Agreement, whether in contract, tort (including negligence) or otherwise, shall be limited to a sum equal to the Consideration."

The Consideration is a defined term meaning $3.5 million.

257. The principles applicable to the construction and effectiveness of contractual limitations on liability such as Section 11 are to be found set out in detail in Photo Production Ltd. v Securicor Transport Ltd [1980] AC 827, and may be summarised as follows:

(1) There is no principle that a party may not exclude liability for fundamental breach of contract.

(2) In relation to a commercial contract (where the parties are usually bargaining on equal terms and free to insure against risks) the parties are at liberty to apportion the risks arising from breach of contract as they think fit, so that the extent of an exclusion clause is merely a question of construction.

(3) Nonetheless, if the effect of an exclusion clause is to deprive the agreement of the legal characteristics of a contract, by conferring on one party the liberty to ignore his obligations with impunity, the exclusion may be held to be repugnant to the contract and of no effect.

258. Turning therefore to the true construction of Section 11 of the Purchase Agreement it is, first, evident from Section 11.3, which assumes a potential damages liability and then caps it at $3.5 million, that it was not the intention of the parties to exclude damages liability altogether by Section 11.1. The heads of damage identified in Section 11.2 are neither excluded nor the subject of a cap. It is therefore both necessary and legitimate to construe Section 11.1 with some rigour, so as to ascertain the heads of damage not thereby excluded.
259. Secondly, Section 11.1 is aimed at excluding particular types of loss as qualifying for compensation in the form of damages, rather than excluding the measurement of a particular type of loss by a particular form of quantification method. Nor is Section 11.1 at all concerned with differentiating between particular types of breach.
260. Applying that analysis to a particular example, nothing in Section 11.1 in terms excludes liability for loss of use of duct, whether that be permanent, because possession of a particular section is never conferred on GVN, or temporary, where possession is conferred only after a long delay, followed by an order for specific performance. In either case, as Mr McCall acknowledged, compensation for loss of use of duct is recoverable, subject to the cap in Section 11.3.
261. The law imposes no set method of calculating or assessing compensation for loss of the use of movable or immovable property. Where there is an available market for that property, it is commonly assessed by reference to market value. If the loss of use is permanent it is the capital value. If the loss of use is temporary, it is the rental or hire value. Where such primary methods of assessment of loss are unavailable (for example because there is no capital or rental market for the relevant asset) compensation may be assessed by some other calculation method, which may include an analysis of the effect of that loss of use on the claimant's business, profits or goodwill. But resort to that method of calculation does not mean that compensation is being awarded for loss of profit, business or goodwill. It is simply the best means of calculating the appropriate damages for the loss of use of the asset.
262. Returning to Section 11.1, I consider that the exclusions are, as a class, all directed to avoiding the imposition on either party of liability for losses separate from, and potentially additional to, the appropriate compensation for loss of use of duct. I say 'either party' because it may be that while maintaining its own duct, GVN might damage duct belonging to MFN, such that MFN's loss of use of its adjacent duct would be a loss arising "under or in connection with this Agreement". Heads of loss additional to loss of use of duct are not difficult to imagine. For example, a temporary loss of use of duct, for which a modest rental based calculation would be appropriate, might also cause consequential loss of a major customer (loss of goodwill), loss of a nearly-negotiated contract with a new customer (loss of business or opportunity) or, obviously, loss of or damage to or corruption of data. Compensation for those losses, separately assessed, might be very much greater than the simple rental value compensation for a temporary loss of use of a section of duct. In my judgment it is the consequences of those losses from which Section 11.1 seeks to insulate the parties, rather than the straightforward compensation for loss of use of duct itself.
263. Mr Rubin's submission was that Section 11.1 was so widely drawn as to be repugnant. It could, he submitted, have the effect of enabling MFN to commit a deliberate breach of its obligations to deliver duct with impunity. For the reasons given above, I disagree. There is, in my judgment, no question of repugnancy arising from Section 11 of the Purchase Agreement. The only questions which arise are the questions of construction, which I have sought to address above.
264. It is necessary now to apply the construction of Section 11.1 which I have identified to the heads of loss specifically claimed in the Re-Amended Particulars of Claim. At a late stage in closing speeches, GVN sought to re-amend its particulars of loss by adding, first, a claim specifically for loss of use, enjoyment and value of the duct, to be assessed on the basis of a market or (if no market) reasonable rental value; secondly, damages for wrongful interference with the duct; and thirdly, damages calculated by reference to the profits made by MFN from the disputed duct, as an alternative to its claim to an account. Notwithstanding opposition from MFN on the grounds of lateness, I permitted those amendments to be made, on terms which ensured that MFN would have a proper opportunity to respond to them.
265. In my judgment neither the first nor the second of those heads of loss fall foul of Section 11.1 of the Purchase Agreement. They are both, in substance, claims for loss of use of the duct. Because of the order for specific performance which I intend to make, the loss in question will be temporary.
266. The third amendment does not identify the particular loss for which compensation is sought, but rather a means of calculating compensation for that loss by reference to MFN's profits, in accordance with the line of authority exemplified by Attorney General v Blake [2001] 1 AC 268. As such, it is impossible to say whether or not it falls foul of Section 11.1. If it is sought as a means of calculating an appropriate compensation for temporary loss of use of the duct it does not. If it is sought as a means of calculating a method of compensation for any of the types of loss referred to in Section 11.1, then it does.
267. Mr McCall submitted that all the fresh amendments constituted claims for loss of business or opportunity. Of course, it is possible to say that the temporary loss of use of a part of the duct network may cause GVN to lose business or opportunity, but such consequential losses are distinct from loss of use of the duct itself, even though they may be caused by it. They would be excluded by section 11.1, but the loss of use of the duct would not. Accordingly, and for the reasons given above when construing Section 11.1, I reject Mr McCall's submission.
268. I doubt whether it is necessary for this part of my judgment to be reflected in any particular form of declaratory order. In any proceedings relating to quantum which follow, this part of the judgment will be available to the court. In the meantime, it is to be hoped that it may assist the parties in settling their differences.
269. It follows from my conclusion that nothing in Section 11 gives rise to a question of repugnancy that the damages cap in Section 11.3 is, on the face of it, applicable to all or any losses which GVN may claim.

(4) Time Limits

270. Sections 6 and 7 of the Purchase Agreement purport to impose six month time limits, in each case running from the date of the agreement, first for "Duct Proving" as defined, and secondly for access to duct pursuant to the terms of MFN's private wayleave agreements (if any). In each case, on a literal reading of the agreement, those time limits expired in 2004.
271. It is common ground that some term needs to be implied to mitigate the uncommercial rigour of those time limits, in particular in relation to sections of duct to which access is provided to GVN later than on the completion date, as the result of breach of the Purchase Agreement by MFN. By the time of closing submissions, it became common ground that the expression 'the date hereof in the definition of Inspection Period in Section 6.1.1 and where used in Section 7.2 to trigger the six month private wayleave period, needed to be understood to mean the date of the making of the Agreement, or such later date upon which possession of the Duct is delivered.
272. The residual issue was whether that extended definition of the start date of the six month periods should be applied section by section, by reference to the date when possession of that section of duct was delivered, or rather to the date upon which possession of substantially the whole of the duct contracted for was delivered.
273. In favour of the section by section approach, Mr McCall submitted that there was no reason why Duct Proving (which, as defined, means pulling a wooden block called a mandrill through the duct by a string or rope to ascertain whether there are any significant obstructions inside it) should not have been carried out by GVN in relation to all the ring sections, possession of which was delivered in 2003; merely because there were other sections about which the parties were conducting a bona fide dispute. In that context, Mr McCall submitted (with some support from the evidence) that GVN had in fact started to put the sections which it had obtained in 2003 to limited commercial use, without waiting to obtain, by litigation, possession of the disputed section.
274. For GVN, Mr Rubin submitted that the duct contracted to be delivered was in commercial terms a single network, such that GVN should not be treated as required to inspect it for testing, or obtain access to it pursuant to private wayleave agreements (for example for fibreing) until possession of the network had, in substance, been delivered. There is, in my judgment, no doubt that the non-delivery of the duct in dispute meant that, in substance, possession of the network, viewed as an entity, had not been substantially provided in 2003, and still has not been now.
275. While I was initially attracted by Mr McCall's submission, particularly in relation to Duct Proving, (rather than access under Section 7.2, which he described as a red herring because there were no relevant private wayleave agreements), I have on balance been persuaded to the opposite view. As MFN well understood when seeking to exclude the distribution network from the sale in 2003, the practical utility of the rings to an intending provider to customers within London of a fibre-optic communications network service, critically depended upon obtaining the distribution network as well. It follows that the submission that the duct network contracted to be sold was in commercial terms a single entity rather than a series of individual, separately useable sections, is of real force, and implicitly acknowledged by MFN.
276. My second reason for concluding in GVN's favour on this point is that the question as to the ambit of the relevant implied term only arises in the event of a delayed delivery of possession of duct, and that can only occur by reason of a breach by MFN of its obligation to deliver possession on payment of the first instalment of the price, as unmistakably provided in Section 3.1 (a)(i) of the Purchase Agreement. I consider it no less than fair to resolve any difficult question as to the ambit of such an implied term in favour of the victim of the breach, and against the perpetrator of it.
277. It follows therefore that the periods for inspection under Section 6 and access pursuant to private wayleave agreements under Section 7 have yet to start running, in respect of any part of the duct network, and that they will only start to run when the network, viewed as a whole, has been substantially delivered into GVN's possession. I should add that there appears to remain an issue whether there are relevant private wayleave agreements to which the provisions of Section 7.2 could refer, and that it is impossible on the evidence before me to resolve that issue at this trial.

(5) Restitution

278. I have recorded how, following completion in November 2003, GVN declined to pay the third instalment of the Consideration under the Purchase Agreement, initially on the specious ground that the contracts remained in escrow, but thereafter upon the ground that MFN had failed to deliver possession of the disputed part of the duct. Then, in 2007, that third instalment was paid under protest and without prejudice to GVN's rights, so as to procure performance by MFN of its obligations under the Private Network Agreement, in relation to that part of the fibre network not in dispute.
279. GVN now seeks restitution of that final instalment, having succeeded on the main issue as to the disputed duct. In my judgment this claim is more theoretical than real. On obtaining possession of the disputed duct pursuant to an order for specific performance, GVN will become obliged in any event to pay the final instalment of the purchase price, as Mr Rubin acknowledged. Accordingly, that instalment will never become repayable to GVN, even if its case that it was obtained by economic duress on the part of MFN were well made. The question whether MFN was unjustly enriched by receiving the payment together with interest, and by enjoyment of the use of the money during 2007, can be sorted out on a final accounting between the parties at the conclusion of the trial on quantum, if necessary by way of addition to any capped damages, or by set off.
280. I suspect that GVN's pursuit of this theoretical claim to restitution has been motivated by a desire to ensure that any claim arising from what it regards as the early payment of the third instalment, and the inappropriate payment of accrued interest, should not be subject to the cap imposed by Section 11.3 of the Purchase Agreement. If that is the reason for the pursuit of the claim, then in my judgment it is misconceived.
281. The only legitimate basis which I can envisage for GVN's withholding of the final instalment of the purchase price in and after December 2003 was that it was entitled to a self-help set-off against its obligations to pay the Consideration, as damages for breach by MFN of its obligation to give possession of the disputed duct. Where a party declines to treat his counter-party's breach as giving rise to discharge of the contract by repudiation, but rather seeks to enforce the contract, he is not discharged from the continued performance of his own obligations. If that analysis is correct (and GVN did not come armed to deal with this necessarily preliminary to its claim based upon economic duress) then it follows that GVN's right of set-off, and therefore its right (if any) to withhold the third instalment of the Consideration, was always on account of damages, and therefore always subject to Section 11.3 of the Purchase Agreement.
282. It follows that, in my judgment, there is no sensible point in the pursuit of this theoretical restitution claim, in the light of GVN's success in obtaining specific performance, and I decline therefore to grant any declaration in relation to it. No examination of the facts surrounding GVN's payment in 2007 of the third instalment of the Consideration was conducted by either side, save for a brief reference to solicitors' correspondence, so that the question whether this is one of those rare cases for restitution of a payment made as the result of economic duress has not, in any event, been sufficiently ventilated by way of evidence. One of the difficulties in GVN's way is that MFN's obligation to lease fibre was expressed only to arise once the Consideration had been paid in full: see the Addendum to the Call Option Agreement. It was in order to obtain the lease of fibre that GVN paid the final instalment in 2007.
283. I will hear submissions on the form of an appropriate order to reflect the decisions which I have reached on the matters for determination at this first trial, either upon handing down of this judgment, or at some date thereafter, convenient to the parties and to the court.