England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		20/05/2009

Mr Justice Morgan:

Heading	Para
The case in outline	1
The St Mary le Port site	8
The companies and individuals involved	12
The evidence	25
The documents	34
The oral evidence	166
- Mr Peacock	167
- Mr Ashcroft	174
- Mr Delafield	179
- Mr Costain	187
- Mrs Riley	192
- Witnesses who were not called	194
Discussion and analysis	200
- Was there a fee sharing agreement or agreements?	201
- Did LPE make the agreements as principal?	214
- Did LPE have authority to act on behalf of SSP?	215
- Delegation of authority	221
- The scope of LPE's authority	227
- Ratification	235
The overall result	248

The case in outline

1. Norwich Union Life & Pensions Limited ("Norwich Union") claims against Strand Street Properties Limited ("SSP") the sum of £643,353.63, inclusive of VAT, which is said to represent 50% of the costs paid by Norwich Union in progressing a proposed development scheme in relation to a site known as St Mary le Port, Bristol. Norwich Union contends that this sum is payable pursuant to an agreement made between Norwich Union and SSP. Norwich Union contends that the agreement, which is binding on SSP, was made on SSP's behalf by London & Paris Estates Limited ("LPE"). Norwich Union also claims interest pursuant to section 35A of the Supreme Court Act 1981.
2. LPE was also sued by Norwich Union as a Second Defendant to this claim. The claim against LPE was in the alternative to Norwich Union's main claim which was against SSP. The alternative claim was said to arise in the event that SSP established that the agreement, on which Norwich Union relied, although purportedly made by LPE on behalf of SSP, was an agreement which LPE did not have the authority of SSP to make. In that event, Norwich Union claimed damages from LPE for breach of warranty of its authority to act on behalf of SSP. LPE initially participated in these proceedings and served a detailed defence to the claim against it. However, shortly before the matter came to trial, LPE went into liquidation. The liquidator indicated that LPE proposed to take no part in the trial. LPE's former solicitors went off the record. In the event, Norwich Union has not at the trial presented any claim against LPE and has not invited the Court to make any findings in relation to, or make any determination of, any such claim. Norwich Union is content that its claim against LPE be simply dismissed. Accordingly, the only claim which has been tried and the only claim which is the subject of this judgment is Norwich Union's claim against SSP.
3. SSP denies that there was any relevant agreement as to the payment to Norwich Union of a contribution towards costs incurred by Norwich Union in progressing a development scheme in relation to the site. Further, SSP contends that if there were a relevant agreement between Norwich Union and LPE, that agreement is not binding on SSP. SSP contends that the principal agreement, or one of the agreements, being put forward by Norwich Union was allegedly made in early July 2001. As to that, SSP contends that the matters discussed did not result in a concluded agreement. It is said that there were too many matters which were not discussed and not agreed. It is also said that in relation to matters which were discussed there was no true meeting of minds between the parties to the discussion. It is also contended that any apparent agreement does not have contractual force and effect because there was no consideration moving from Norwich Union for the alleged agreement. On a point of detail it is contended that if there were a contractual arrangement, it provided for a liability to pay, only after the taking of an account and the agreement did not create any present liability to pay an accrued debt.
4. Quite apart from issues as to the existence and content of any alleged agreement, SSP makes various points as to whether or not SSP was thereby bound. It contends that LPE did not purport to contract as agent for SSP but purported to contract as principal in its own right. If that is wrong, SSP contends that LPE did not have any actual authority, express or implied, to make the alleged agreement on behalf of SSP. It should be noted that Norwich Union does not contend that LPE had any ostensible or apparent authority to bind SSP so that any case of authority is confined to a case of alleged actual authority, express or implied. SSP contends that it had duly instructed an agent to act for it in connection with a possible development of the site. However, it is said, that agent was Topside Properties Limited ("Topside") and not LPE. It is further said that Topside's authority did not extend to the making of a contract binding SSP in the way which has been alleged. Accordingly, even if Topside had delegated its authority to LPE, the authority so delegated could not be more extensive than Topside's own authority which, as indicated, did not extend to the making of the alleged contract. Further, SSP contends that Topside could not delegate, and did not delegate, its authority to LPE. Accordingly, even if Topside had authority to make the alleged contract, there was no delegation of that authority to LPE and any action on the part of LPE does not bind SSP.
5. To meet some of the contentions put forward by SSP, Norwich Union contends that the conduct of LPE in making the alleged agreement on behalf of SSP, if initially unauthorised by SSP, was consequently ratified by SSP. SSP contends that ratification has not been established on the facts of the case.
6. Finally, SSP raises a question of limitation. SSP accepts that if Norwich Union has a valid claim to sue for the recovery of an accrued debt then Norwich Union's claim is not statute barred. However, as indicated earlier, SSP contends that even if Norwich Union is otherwise right in asserting the existence of an agreement binding SSP, SSP's liability under that agreement is to pay the sum which is found to be due on the taking of an account. Thus, Norwich Union's cause of action, it is said, is a claim to an account and any such claim to an account would now be statute barred. If this submission were correct, then it should be noted that Norwich Union does not claim an account in the present proceeding and, notwithstanding SSP's analysis to the effect that Norwich Union's true claim can only be a claim to an account, Norwich Union have deliberately not sought permission to amend to claim such an account. Norwich Union rests upon its pleaded claim to recover a debt allegedly due from SSP.
7. Mr Clark appeared on behalf of Norwich Union and Ms Hayes appeared on behalf of SSP. Following the conclusion of the trial, counsel for both parties made lengthy written submissions on the matters in issue.

The St Mary le Port Site

8. The site in Bristol which was the subject of relevant discussions between Norwich Union and LPE has been described as "the St Mary le Port site". The site is roughly rectangular, bounded on the north by Wine Street, on the west by High Street, on the south by the Floating Harbour and on the east by the remains of St Peter's Church and, further to the east, Castle Park. The site includes a number of buildings which include Norwich Union House, a building referred to as the Bank of England building or Bank House and further bank premises, to the east of Bank House, and facing onto Wine Street.
9. The site has a very lengthy planning history going back some decades and has received the attention of Bristol City Council as the local planning authority over the years. It is not necessary to record that detail in this judgment.
10. It may be helpful to refer briefly to the ownership, from time to time, of the principal land interests in the site. At all material times, the freehold of the site has been owned by Bristol City Council and Norwich Union has held a long lease of Norwich Union House and there have been long leases of what has been described as the Bank House property and of the Wine Street property. In a little more detail, the lease to Norwich Union of Norwich Union House was granted in 1964 and was for a term to 2062. The lease of Bank House was granted in 1979 to the Governor and Company of the Bank of England for a term to 2163. That lease came on the market in 1997 and was bought by London & Paris Investments Limited ("LPI") around that time. On 9^th February 1998, LPI became the registered proprietor of that lease. The shares in LPI were later acquired by SSP on 3^rd April 2000 and the 1979 lease was assigned by LPI to SSP, who became the registered proprietor on 3^rd May 2000. The 1979 lease was subject to certain long underleases. The first was granted in 1980 to Lloyds Bank Plc for a term to 2056. Following the purchase by LPI from the Bank of England at the beginning of 1998, LPI had granted an underlease back to the Bank of England for a term to 2056. Later, LPI began negotiations with the Bank of England to purchase that underlease. Those negotiations were taken over by SSP in place of LPI. In the event, the term of the Bank of England underlease was assigned to SSP on 20^th December 1999 and SSP was registered as proprietor in relation to that underlease on 21^st January 2000.
11. There was a separate headlease in relation to the bank premises fronting Wine Street. That lease was granted in 1964 and was for a term to 2163. The original lessee was the Governor and Company of the Bank of England. The Bank of England negotiated to sell its headlease to LPI but the negotiations became protracted due to "a technical legal issue" in relation to the headlease. By the time this issue was resolved, LPI allowed SSP to take over the negotiations and the term of this headlease was assigned to SSP on 20^th December 1999 and SSP became the registered proprietor in relation to the lease on 2^nd February 2000.

The companies and individuals involved

12. Norwich Union is a well known provider of life insurance policies and pension plans. It was a company in the Norwich Union Group of Companies. In around May 2000, Norwich Union Plc merged with CGU Plc to form CGNU Plc, now known as Aviva Plc. Prior to the merger, the fund management of the investment activity of the Norwich Union Group of Companies was undertaken by Norwich Union Investment Management Limited ("NUIM"). A similar function was performed for the CGU group of Companies by Morley Fund Management ("Morley"). Following the merger, the fund management activities of the combined group was amalgamated and undertaken by Morley. In practical terms, NUIM was integrated into Morley. The individuals who had particular responsibility on behalf of Norwich Union in relation to a possible development of the site were Mr Peacock, Mr Ashcroft and Mr Delafield. Mr Peacock had been a fund manager with NUIM and became a fund manager with Morley. He was involved with the development proposals in relation to the site in the period up to and including early July 2001, although he handed over principal responsibility to Mr Ashcroft at the end of June 2001. Mr Ashcroft had been employed as a fund manager by Morley. He began to familiarise himself with the development proposal in relation to the site from around June 2001. Mr Delafield worked first for NUIM and later for Morley. He was involved on behalf of Norwich Union in relation to the development proposal in relation to the site. His involvement continued until around April 2001 when he left Morley and so ceased acting on behalf of Norwich Union. He moved to a position with LPE where he continued to be involved with the development proposal but no longer on behalf of Norwich Union and instead on behalf of LPE. Mr Peacock, Mr Ashcroft and Mr Delafield gave evidence at the trial.
13. SSP, under its original name (Stanlare Limited) was formed as an off the shelf company on 10^th March 1992. It changed its name to Strand Street Properties Limited in June 1993. It appears to have been active from, but not before, that date. The company was incorporated in the Isle of Man under the Isle of Man companies legislation, namely, the Companies Acts 1931 to 1986. Its Articles of Association were in accordance with the relevant Table A for Isle of Man companies limited by shares, subject to specific amendments of those Articles. The relevant Table A was set out in the schedule to the Companies (Memorandum and Articles of Association) Regulations 1998 made under sections 5 and 7 of the Companies Act 1986. Regulation 70 provided that the business of the company was to be managed by the directors who could exercise all the powers of the company. By regulation 71, the directors were empowered, by power of attorney or otherwise, to appoint any person to be the agent of the company for such purposes and on such conditions as they determined, including authority for the agent to delegate all or any of his powers. By regulation 72, the directors were empowered to delegate any of their powers to any committee consisting of one or more directors. They could also delegate to any managing director or any director holding any other executive office such of their powers as they considered desirable to be exercised by him. By regulation 88, the directors were entitled to regulate their proceedings as they thought fit. By regulation 89, the quorum for the transaction of the business of the directors could be fixed by the directors but unless so fixed at any other number was to be a quorum of 2. By regulation 91, the directors were empowered to appoint one of their number to be the chairman of the board of directors.
14. The current directors of SSP are Mr Costain and Mrs Riley. Mr Costain and Mrs Riley both gave evidence at the trial. Mr Costain was appointed as an alternate director to another director, Mr Green, on 26^th January 2001 and as an alternate to another director, Mr Biscoe, on 11^th April 2001 and was appointed a director in his own right in 2004/2005. Mrs Riley stated that she was appointed on the 30^th October 2001.
15. The solicitors for the Norwich Union have prepared an analysis of the company documents so as to identify the persons who were directors of SSP, in particular, in 2000 and 2001. The company documents are not always clear as to when a particular individual became a director or ceased to be a director. The names which have been identified by this analysis are as follows: Mr Shrives, appointed 23^rd January 1996; Mr Biscoe, appointed 11^th April 2001 and resigned in 2004/2005; Mr Costain was an alternate director for Mr Biscoe and resigned as such in 2004/2005 and became a full director in 2004/2005; Mr Smalley, appointed 23^rd December 1993 and resigned in 2001/2002; Mr Stuart was an alternate director for Mr Smalley and was appointed as such on 22^nd August 1996; Mr Matthews, appointed on 22^nd March 1994; Mr Green, appointed on a date unknown and resigned on 11^th April 2001; Mr Jones was an alternate director to Mr Green from 26^th May 1993 to 2000/2001 and Mr Weatherill was an alternate director to Mr Shrives until 31^st August 1999. The company secretary was Douglas Trustees Limited which was based in the Isle of Man.
16. Mr Costain gave evidence that SSP was formed for the benefit of Ronald Berger and Peter Davidson. They appear, from his evidence, to have been the shareholders in SSP prior to January 1994. At that date, the shares were transferred to Tacto Investments Limited ("Tacto"). Tacto appears to have been a nominee for the trustees of the Ronald Berger Number 1 Settlement. The trustees for that settlement were resident in Switzerland. The legal owner of the shares has varied over the years. The combination of the evidence given by Mr Costain and the analysis carried out by the solicitors for the Norwich Union suggests that Tacto transferred its ownership of the shares to Ronald Berger Number 1 Settlement Trustees on 31^st March 2003 and they transferred their ownership of the shares to T & M Trusteeship & Management Services SA & Elias S Zilkha thereafter. However, whatever the identity of the nominal owner of the shares, the shares have been held for the trustees of the Ronald Berger Number 1 Settlement. The name of the settlement suggests that Mr Ronald Berger was the settlor. There was no material before the Court to describe the terms of the relevant trust nor to identify whether, and if so to what extent, Mr Berger himself had a beneficial interest under that trust.
17. Mr Costain gave evidence that the initial intended purpose of acquiring SSP in 1993 was to undertake an offshore property development at Strand Street, which is the main shopping street, in Douglas, Isle of Man. Between 1993 and 1995, a number of properties in Strand Street, Douglas were developed and the completed development was sold in 1996. Mr Costain stated that further projects were undertaken in Leeds and in Bath, both schemes involving urban commercial property. Mr Costain described that the projects in Leeds and Bath were structured and managed so that the proceeds of the development were treated by the Inland Revenue in the United Kingdom as non-resident landlord projects managed offshore. They were taxed at 22% on net rental income and not at 40% on income as, he said, would happen for a United Kingdom controlled development project. Mr Costain stressed that the tax affairs of SSP meant that it was not desirable for it to participate in a development in the United Kingdom, save as a non-resident landlord. If SSP became aware of a development opportunity, the actual development would have to be carried out through a separate company resident in the United Kingdom to which SSP would sell the relevant land at full value.
18. There was also evidence as to the activities of SSP, which evidence was given in other proceedings by Mr Dymond of LPE. I will refer to Mr Dymond again later in this judgment. The evidence which is relevant for present purposes is contained in a witness statement in proceedings in the Bristol County Court brought by Lloyds TSB Bank Plc against SSP. In those proceedings, SSP was the landlord and Lloyds TSB Bank Plc was the tenant. SSP had served a notice on Lloyds TSB Bank Plc pursuant to section 25 of the Landlord and Tenant Act 1954. The notice related to a tenancy of a part of the development site. Mr Dymond's witness statement was prepared on behalf of SSP and he stated that he was authorised to make the statement on behalf of SSP. Mr Dymond stated that SSP became active with the object of undertaking development projects in the Isle of Man and on the United Kingdom mainland. He described how SSP had successfully completed substantial town centre developments in Douglas, Leeds and Bath, all in collaboration with LPE. Mr Dymond appeared to be describing a situation where SSP was itself the developer and, indeed, in his witness statement, he described how SSP intended to develop the site at St Mary le Port in Bristol. It seems quite possible that Mr Costain, as an accountant, was well aware of the reasons why SSP should not itself conduct the property development in the United Kingdom but, as he himself admitted, others acting for SSP, including Mr Shrives, tended to lose sight of that point.
19. LPI was a property investment and development company. Until 3^rd April 2000, LPI was a subsidiary of Adaptdart Ltd. In that period, of the 100 issued shares, 99 shares were owned by Adaptdart Ltd and the remaining share was jointly owned by Adaptdart Ltd and Mr Berger. On 3^rd April 2000, the shares in LPI were transferred to SSP. The directors of LPI up to 15^th April 2000 (i.e. shortly after the share transfer of 3^rd April 2000) were Peter Davidson and Mr Dymond. On 15^th April 2000, they were replaced as directors by Mr Berger. Mr Berger had also been a director during an earlier period from 30^th November 1991 to 1^st April 1999.
20. LPE appears to have engaged in the business of property management. It went into liquidation on 26^th November 2008. At the relevant time in 2000 and 2001, the directors of LPE were Peter Davidson and Mr Dymond. Mr Berger had been a director at an earlier time, from 30^th November 1991 to 1^st April 1999. At the relevant time in 2000 and 2001, LPE was a subsidiary of Adaptdart Ltd. Of the 100 issued shares, 99 were owned by Adaptdart Ltd and the remaining share was jointly owned by Adaptdart Ltd and Mr Berger.
21. Adaptdart Ltd, which owned LPI and LPE at the times described above, was owned by trustees for the Peter Davidson Number 1 Settlement, by trustees for the Ronald Berger Number 1 Settlement and by Mr Dymond. Mr Davidson's settlement trustees had 40 shares, Mr Berger's settlement trustees also had 40 shares and Mr Dymond had 20 shares. Mr Dymond transferred his shares to Terrestrial Holdings Ltd on 3^rd September 2003 and the trustees for the two settlements, which I have referred to, transferred their shares to Terrestrial Holdings Ltd on 3^rd September 2003. The shares in Terrestrial Holdings Ltd were owned by Rebus Finance Ltd and the shares in Rebus Finance Ltd were vested in various trust corporations. From 3^rd September 2003, the directors of Adaptdart Ltd were Mr Davidson (as continuing director) and Mr Berger (appointed with effect from 3^rd September 2003).
22. Finally, in relation to the various companies involved, I refer to Topside. At the material times in 2000 and 2001, Topside was a wholly owned subsidiary of Adaptdart Ltd. In 2000 and 2001, Peter Davidson and Mr Dymond were the directors of Topside. Mr Berger had been a director from 18^th November 1991 to 1^st April 1999 and became a director again on the 3^rd September 2003 but he was not a director of Topside in 2000 and 2001.
23. The following is the position in summary in relation to directorships held by Mr Dymond. He was a director of LPI until 15^th April 2000. In 2000 and 2001 he was a director of LPE and Topside.
24. The position in summary in relation to Mr Berger is as follows. He was a director until 1^st April 1999 of LPI, LPE, Adaptdart and Topside. He was a director of LPI from 15^th April 2000. He jointly owned one share in LPI until 3^rd April 2000 and he jointly owned one share in LPE until 30^th June 2003. The Ronald Berger Number 1 Settlement owned all the shares in SSP and owned 40% of the shares in Adaptdart.

The evidence

25. There was a considerable number of documents which explained the dealings between Norwich Union and LPE in relation to the development project. There were some, but not many, documents which threw light on the relationship between LPE and SSP.
26. I heard oral evidence from Mr Peacock and Mr Ashcroft on behalf of Norwich Union and I also heard from Mr Delafield who originally worked for Norwich Union, and then worked for LPE, and who gave evidence on behalf of SSP. I also heard oral evidence from Mr Costain and Mrs Riley, who are current directors of SSP.
27. I will make brief comments, at this stage, on the degree to which I derived help from the various witnesses and the importance of the documents in resolving the issues.
28. Mr Peacock and Mr Ashcroft were not themselves directly involved in the making of the alleged original fee sharing agreement. They were able to give some useful oral evidence as to what they had been told about the original agreement. However, the most useful evidence as to the alleged original agreement is what is shown by the documents.
29. Mr Peacock and Mr Ashcroft were important witnesses as regards oral discussions on 2^nd July 2001 and a conversation on 6^th July 2001. However, the recollection of these two witnesses was heavily reliant on what the documents showed as to the content of the discussion and the conversation.
30. I did not find Mr Delafield to be a reliable witness as regards many of the details which are in dispute. In relation to his evidence, I will place greater weight on what is shown by the contemporaneous documents.
31. Mr Costain professed not to know very much about the dealings between Norwich Union and LPE over the years. Accordingly, his evidence was not of any real help on that subject. Furthermore, compared with other directors or representatives of SSP he was much less involved with LPE than those others were. Those others were not called by SSP to give evidence. I feel sure that Mr Costain's evidence does not provide me with the complete picture as to the relationship between SSP and LPE and so I will have to look carefully at the documents to see what assistance they provide.
32. Mrs Riley gave evidence on one limited topic only.
33. In these circumstances, I have concluded that I should pay considerable attention to the picture as revealed by the documents and then assess the assistance I received from the witnesses. For this reason, I will set out the facts as they are revealed by the documents before I recount the oral evidence which I heard.

The documents

34. In late 1997, the leasehold interests vested in the Bank of England were put on the market for sale and LPI agreed to buy them. As indicated earlier, the sale of the headlease of Bank House went through without difficulty but the sale of the headlease of the Wine Street bank premises did not complete at the same time.
35. By January 1998, Norwich Union as head lessee of Norwich Union House considered itself to be "working jointly", with LPI who were described as having "recently established an interest in part of the site".
36. In February 1998, Mr Delafield on behalf of the Norwich Union met Mr Dymond who was referred to as being the representative of LPE. LPE was plainly acting on behalf of LPI. Norwich Union regarded LPI as the "developer".
37. In September 1998, LPE wrote to Mr Delafield at Norwich Union referring to the question of the costs of the project. LPE stated that it had been funding the speculative stage of the project but LPE would like to explore with Norwich Union whether Norwich Union would provide funds to take the scheme forward up to the stage of making a planning application. By December 1998, it seems from the correspondence to be clear that Norwich Union was at that stage prepared to make a contribution towards the costs of the project.
38. In February 1999, Norwich Union wrote to LPE referring to the fact that Norwich Union had spent certain sums in relation to costs and LPE had spent the same amount, if not more.
39. In March 1999, LPE sent an invoice to SSP in relation to a project management fee and a share of the profit in relation to the development carried out on behalf of SSP at Leeds. The documents indicate that the fee was payable to Topside rather than to LPE although the documents also indicate that LPE appeared to be acting on behalf of Topside in claiming the fee. Further, although the documents indicate that Topside was entitled to the fee, it will be remembered that when Mr Dymond made his witness statement on behalf of SSP in the County Court proceedings brought by Lloyds TSB Bank Plc, Mr Dymond stated that the development had been carried out in collaboration between SSP and LPE, rather than Topside.
40. As explained earlier, on 1^st April 1999, Mr Berger who had until then been a director of LPI, LPE and Topside, ceased to be a director of those three companies.
41. On 25^th August 1999, SSP wrote to Mr Dymond at LPE in relation to the site at St Mary le Port. LPE had plainly introduced the site to SSP for its consideration. The letter of 25^th August 1999 shows that there had been negotiations and an agreement in principle between SSP and LPE. The SSP letter is written by Mr Green, a director of SSP. SSP's note paper indicated that SSP's directors at that time were Mr Green, Mr Smalley and Mr Shrives. Mr Green and Mr Shrives worked in Jersey and I understand that Mr Smalley worked in the Isle of Man. The letter of 25^th August 1999 discussed the possible development of the site and the arrangements to be made between SSP and LPE. The letter refers to SSP appointing LPE as project managers. It seems clear that the appointment did not take effect from the date of the letter but the letter contemplated a future appointment to be effective from the date of exchange of contracts, pursuant to which SSP would buy the interests initially held by the Bank of England. The work to be done by LPE as project managers was described as involving managing the properties, coordinating the professional team, reporting on progress to SSP, preparing appraisals (if required) and negotiating financial and lease terms with the other principals involved in the development. In addition to a fee to be earned as project managers, it was agreed in principle that LPE would take a share in the fruits of the completed development. The letter went on to refer to an agreement in principle to SSP buying the interests originally held by the Bank of England and having an option to purchase the shares in LPI.
42. On 24^th September 1999, LPE replied to SSP. LPE stated that it was proceeding in its "overall project management role".
43. On 8^th October 1999, there was a meeting of the board of directors of SSP attended by Mr Green and Mr Shrives. The board approved the purchase by SSP of an interest held by the Bank of England in the site. On 13^th October 1999, solicitors for SSP confirmed that contracts had been exchanged for the Bank of England interest. Completion appears to have been due on the 20^th December 1999.
44. On 22^nd October 1999, LPE wrote to SSP. This was following exchange of contracts as contemplated by the letter of 25^th August 1999 and, accordingly, LPE were acting as project managers for SSP. LPE reported on recent developments in connection with the development proposal.
45. On 9^th November 1999 Mr Shrives of SSP wrote to Mr Dymond addressing him as a representative of Adaptdart Ltd. Mr Shrives wanted to update the letter of 25^th August 1999. The appointment in the letter of 9^th November 1999 differed in a number of respects from what had been said in the letter of 25^th August 1999. In particular, the company appointed as project managers was Topside, and not LPE. The work to be done by Topside was otherwise expressed as the same work as was described in the letter of 25^th August 1999. In addition, Topside was to receive in certain circumstances a share in the proceeds of the development. The letter also referred to an option in favour of SSP to acquire the shares in LPI.
46. On 12^th November 1999, shortly after Topside was appointed by SSP as its project manager, LPE, rather than Topside, wrote to Mr Delafield at Norwich Union. The letter concerned recent developments in connection with the development proposal.
47. On 25^th November 1999, an internal memorandum of Norwich Union discussed the arrangements with "L&P" and the appointment of various professionals acting in connection with the development site. The memo stated that Norwich Union had not made a formal appointment of anyone connected with the scheme and did not have a formal agreement in place with "L&P".
48. On 13^th December 1999, in anticipation of completion of SSP's purchase on 20^th December 1999, SSP wrote to Mr Dymond at Topside asking Topside to arrange insurance cover on behalf of SSP. On 16^th December 1999, LPE, rather than Topside, sent a fax to Stuart Smalley & Co who were acting for SSP confirming that insurance cover had been arranged. SSP's purchase was completed on 20^th December 1999. On 22^nd December 1999, LPE wrote to SSP confirming that LPE had arranged for insurance cover. LPE's letter also dealt with a number of other matters arising in relation to the premises.
49. On 18^th January 2000, SSP wrote to LPE, rather than Topside, confirming SSP's instruction to LPE to collect rent due in relation to premises being part of the site, sublet to Lloyds Bank Plc. SSP has submitted to me that this shows that SSP instructed Topside as property manager and separately instructed LPE as rent collector. I do not read the letter of 18^th January 2000 in that way. In my judgment, what the letter of 18^th January 2000 shows is that, in general terms, SSP did not make a distinction between Topside and LPE. SSP appears to have been well aware that the work which Topside was formally appointed to do under the letter of 9^th November 1999 was in fact being carried out by LPE. That work included collection of rent, as part of the task of managing the properties. It seems to me to be likely that the reason why SSP wrote a formal letter of instructions to LPE in connection with rent collection was that LPE could use the letter to demonstrate to tenants, when asked to pay rent, that it had authority on behalf of SSP. There is no suggestion in the documents that LPE was able to charge a fee, separate from any management fee the subject of the letter of 9^th November 1999 in return for its duties as rent collector. Following the letter of instruction of 18^th January 2000, LPE duly demanded rent from tenants of the premises asking them to make their cheques payable to LPE's client's account.
50. On 3^rd April 2000, Adaptdart Ltd as owner of 99 shares in LPI transferred those shares to SSP. Adaptdart Ltd and Mr Berger as joint holders of one share in LPI transferred that share to SSP. Up to that point, LPI and LPE were both subsidiaries of Adaptdart but from that date, LPI ceased to be a subsidiary of Adaptdart whereas LPE remained a subsidiary of Adaptdart.
51. On 7^th April 2000, LPE wrote to SSP confirming that LPE had collected rent from Lloyds Bank.
52. On 15^th April 2000, Mr Dymond ceased to be a director of LPI and Mr Berger became a director of LPI. These changes were consequential upon the acquisition of LPI by SSP.
53. On or about the 14^th April 2000, the headlease of Bank House was transferred by LPI to SSP who became the registered proprietor of that lease on the 3^rd May 2000.
54. In around May 2000, Norwich Union Plc merged with CGU Plc.
55. On 17^th May 2000, a security firm wrote to SSP care of "London & Paris". On 22^nd May 2000, LPE wrote to SSP confirming that certain invoices were in order for payment. One of the invoices was the invoice from the security firm. In my judgment, that indicated to SSP that LPE was dealing with the management of the properties, something which was within the scope of the appointment of Topside as property managers.
56. On 2^nd June 2000, LPE wrote to Stuart Smalley & Co on behalf of SSP asking for SSP's formal letter of authority instructing LPE to collect rent in relation to a part of the property.
57. On 4^th August 2000, LPE wrote to SSP confirming that certain invoices were in order for payment. This again was an example of LPE to SSP's knowledge carrying out a property management function, the subject of Topside's appointment as property manager.
58. On 21^st August 2000, solicitors for SSP wrote to LPE in relation to their fees in respect of the acquisition by SSP of the premises vested in the Bank of England.
59. On 29^th August 2000, Topside prepared an invoice addressed to SSP for Topside's project management fee in accordance with the letter of 9^th November 1999. A copy of this invoice was sent by LPE to SSP on 19^th September 2000. It is not clear whether the invoice was sent twice, first on 29^th August 2000 and then on 19^th September 2000. On the balance of probabilities, it seems likely that the invoice was sent to SSP only once, that is when it was sent by LPE on 19^th September 2000. Not only did LPE act on behalf of Topside in sending Topside's invoice, the letter of 19^th September 2000 confirms to SSP that the invoice was in order for payment. Accordingly, LPE appears to be acting on behalf of SSP in relation to its arrangements with Topside.
60. Around the same time, on 14^th September 2000, LPE wrote to SSP confirming that certain invoices were in order for payment. Again, the invoices related to matters of property management.
61. On 28^th September 2000, LPE wrote to SSP in relation to management issues and also in relation to the question of potential redevelopment of the site. The letter was a detailed letter dealing with many specific points. It showed that LPE was acting as property manager and also project manager in relation to the development proposal. The letter stated that LPE together with Norwich Union had sought to advance the development proposals. The letter referred to draft heads of terms prepared by Norwich Union and LPE in connection with Bristol City Council for the purpose of realigning the various property interests to enable redevelopment to occur. The heads of terms which accompanied the letter have not been produced on disclosure by SSP or LPE. LPE sought SSP's instructions in relation to the heads of terms. The letter stated that Norwich Union had expressed a desire to fund any development by offering institutional finance with a view to retaining the completed investment. SSP was identified as the proposed developer in connection with the development. At the end of the letter, LPE referred to "our appointment as your project managers" and referred to the letter of 9^th November 1999. LPE were effectively equating Topside and LPE and making no distinction between the two companies. LPE suggested that it be reappointed until 31^st December 2001.
62. It is worth commenting at this point that the documents make it clear that the negotiations which were being conducted, ostensibly on behalf of SSP with both Bristol City Council and Norwich Union were conducted by LPE and not by Topside. In fact, Topside itself appears to have done nothing. Another way of describing the matter is that all the negotiations were conducted by Mr Dymond who was the moving force behind both LPE and Topside and he used the name and notepaper of LPE and not the name and notepaper of Topside.
63. On 2^nd October 2000, LPE wrote to Bristol City Council in connection with the proposed heads of terms for a development agreement to which Bristol City Council would be a party. That letter included a version of those heads of terms. I have earlier commented that the version of the heads of terms sent by LPE to SSP has not been produced but it is much more likely than not that the heads of terms sent to SSP were similar to the heads of terms attached to the letter of 2^nd October 2000. The heads of terms referred to the parties as Bristol City Council, Norwich Union and "Strand Street Properties Limited (London & Paris Estates Limited)". This statement in the heads of terms would have shown SSP, when they received similar heads of terms on 28^th September 2000, that SSP's interests were being represented by LPE. The heads of terms referred to the intended involvement of the various parties. Bristol City Council were to perform the role of the freeholder, making the land available, Norwich Union was described as the "fund" and SSP as the "developer". The heads of terms indicated that Norwich Union and SSP would be responsible for appointing various professional consultants. The heads of terms referred to Norwich Union and SSP at their own expense progressing the detailed design and application for detailed planning permission.
64. On 3^rd October 2000, SSP replied to LPE's letter of 28^th September 2000. It is clear from the terms of this reply that SSP had seen the heads of terms and an appraisal. SSP did not take any point to the effect that it did not wish LPE to act on its behalf or that the only authorised agent for SSP was Topside. SSP then turned to the request from LPE for an extension of the arrangement between SSP and Topside/LPE. SSP said that it was prepared "to give your company an extension of the current arrangements". Of course, the current arrangements were recorded in the letter of 9^th November 1999 and were between SSP and Topside and not between SSP and LPE. A question could arise whether the letter of 3^rd October 2000, on its true construction was an extension of the arrangement with Topside or the appointment of LPE to act as project manager and property manager on the terms of the earlier appointment of Topside. What is clear, however, is that SSP did not regard a distinction between Topside and LPE as being of any importance in practice. The letter of 3^rd October 2000 referred to "the substantial costs incurred by us" which showed that SSP had been kept informed, at least to some extent, of the fact that LPE was expending sums on costs and fees in relation to the proposed development.
65. On 11^th October 2000, Mr Delafield acting for Norwich Union wrote an internal memorandum which referred to matters being progressed with "London & Paris" on an equal financial and resource basis. The memo also referred to the London & Paris interests extending to 65% of the site compared with Norwich Union's interests extending to 25% of the site, with Bristol City Council making up the remaining 10%. The memo also recorded that Mr Delafield had asked "London & Paris" to indicate whether or not they were prepared to invest any further money in the development process on, say, a 50/50 basis.
66. In October 2000 a schedule of fees was prepared showing the fees incurred by Norwich Union and the fees incurred by "London & Paris". I infer that this schedule was prepared by Norwich Union. The fees incurred by Norwich Union were a little under £115,000 and the fees incurred by LPE were a little under £116,000. Thus, at that stage, there was approximate equality in the levels of expenditure incurred.
67. In October 2000, Mr Delafield asked a Mr Wagstaff to prepare a budget of the costs needed to take the development project up to the grant of planning permission. Mr Wagstaff had been employed by Norwich Union or Morley although shortly after this date he left that employment to set up his own consultancy, known as Proactive PM Limited. As a consultant he continued to be involved in connection with the costs of the development project. Mr Wagstaff prepared a budget as requested with a breakdown of the costs for various heads of expenditure. On 20^th November 2000, Mr Delafield sent Mr Wagstaff's figures to LPE. A hand written note on the letter of 20^th November 2000 states that this matter was discussed at a meeting attended by Mr Delafield and Mr Dymond of LPE on 29^th November 2000.
68. On 30^th November 2000, LPE wrote to SSP in connection with payment of rent and other property management matters. There was a similar letter from LPE to SSP on 22^nd December 2000.
69. On 3^rd January 2001, Mr Delafield on behalf of Norwich Union prepared an internal document for the use of Norwich Union. Mr Delafield was seeking authority to incur expenditure on fees in relation to the development project. His report referred to the scheme having been worked up with LPE on an equal 50/50 basis over a period of two years. He stated that all costs had been shared to date and he gave figures for the costs incurred by Norwich Union and by LPE as being just under £115,000 and just under £116,000, respectively. He also stated that LPE had "confirmed" that they were prepared to continue to share on an equal basis further capital expenditure through the planning application stage. It seems more likely than not that the time when LPE confirmed this was at the meeting on 29^th November 2000 referred to above. Mr Delafield stated that Norwich Union had to invest time, resources and capital expenditure. He referred to the future work falling into two stages, the first being up to the completion of an agreement for lease with the Courts Service (who were a prospective tenant of part of the intended development) and the second stage being up to planning, with the costs involved being of the order of £500,000. The breakdown of the figure of £500,000, which apparently accompanied this note, has not been produced.
70. On 8^th January 2001, Mr Delafield sent a copy of his memorandum to a Mr Drysdale. Mr Drysdale had been present at the meeting on 29^th November 2000 and the note of 8^th January 2001 to Mr Drysdale stated that the note followed on from a meeting with Mr Dymond of LPE, which must have been that meeting. Also on 8^th January 2001, Mr Delafield wrote to Mr Dymond at LPE. His letter stated that Mr Delafield and Mr Dymond had discussed the principle of sharing costs at the meeting with Mr Drysdale which, again, must have been the meeting of 29^th November 2000. These documents, taken on their own, amount to a statement by Mr Delafield that Mr Dymond of LPE at a meeting on 29^th November 2000 confirmed that LPE was prepared to continue to share on an equal basis further expenditure through the planning application stage.
71. By 11^th January 2001, it had apparently become clear that Mr Delafield would leave Norwich Union/Morley by the end of March 2001.
72. On 12^th January 2001, there was a meeting between Mr Delafield and Mr Wagstaff. One of the topics discussed at the meeting was as to which parties would bear the burden of the fees involved to carry the project up to the planning application stage. A note of the meeting records a strategy whereby Norwich Union and LPE would be on risk as to fees up to late February 2001 when it was possible that the Courts Service would sign an agreement for lease and from late February 2001 up to early July 2001, all or perhaps some of the design costs would be recoverable from the Courts Service under the terms of the agreement for lease.
73. On 19^th January 2001, LPE wrote to SSP approving invoices for payment. LPE were acting as property manager for SSP.
74. On 23^rd January 2001, there was a meeting between Mr Dymond, Mr Delafield and Mr Wagstaff. The strategy as to the possibility of getting the intended tenant to pick up design-related costs from the end of February 2001 was agreed. That meeting also identified a large number of professionals and consultants who were to be engaged in connection with the project.
75. On 26^th January 2001, Mr Costain was appointed in relation to SSP as an alternate director to Mr Green.
76. In around January 2001, a project directory was compiled identifying the many professionals and other consultants involved with the project. The "client" was stated to be Norwich Union and LPE, the latter acting on behalf of SSP.
77. In February 2001, Mr Wagstaff communicated with Mr Delafield on behalf of Norwich Union and Mr Dymond on behalf of LPE in relation to professional fees. On 15^th (or possibly 16th) February 2001, Mr Wagstaff sent a fee budget up to the stage of the planning application. The budget figure was £1,983,000. Mr Wagstaff followed this up with a further e-mail to Mr Delafield and Mr Dymond on 28^th February 2001. There had been a meeting with the Courts Service in February 2001, which was disappointing from the point of view of Norwich Union and LPE. The new strategy identified by Mr Wagstaff involved getting the Courts Service to commit to fees in relation to the design of its building, but with effect from late February 2001 rather than with effect from 21^st April 2001.
78. On 21^st February 2001, LPE wrote to SSP confirming invoices for payment. LPE was acting as property manager for SSP.
79. A project team meeting was held on 6^th March 2001. This was the first of several such meetings. The meeting was attended by several professionals or consultants and also by Mr Delafield on behalf of Norwich Union, Mr Dymond of LPE and Mr Wagstaff. The minutes of this meeting, which were later approved at the second project team meeting, stated that Norwich Union and "L&P" were currently working at risk and had been sharing costs 50:50 up to that date.
80. On 11^th March 2001, Mr Wagstaff sent an e-mail to Mr Delafield on behalf of Norwich Union and Mr Dymond of LPE. Mr Wagstaff referred to a discussion he had with Mr Delafield and which Mr Delafield had with Mr Dymond on 6^th March 2001. The suggestion was that "the joint client" would authorise expenditure of £445,000 and Mr Wagstaff attached a breakdown of that figure. The breakdown showed £445,000 as fees up to 21^st April 2001, which was the date when it was envisaged, pursuant to the strategy earlier identified, that the Courts Service would become committed and responsible for design fees for its intended building. Mr Wagstaff in his e-mail referred to the figure of £445,000 being for the period up to 21^st April 200, at which stage he envisaged that the process of authorising expenditure would have to be gone through again.
81. Following the identification of the figure of £445,000, Mr Delafield sought internal authority from the Norwich Union for the incurring of expenditure on fees. He referred back to his earlier request for authority on 3^rd January 2001. He referred to a planning application date of September 2001 and to the period between January 2001 and September 2001 being divided into two phases. The first phase was to take the scheme up to the end of April 2001 when the Courts Service was, if all went well, to become liable for abortive costs in the event that they later pulled out. The second phase was from the end of April 2001 up to the planning application in September 2001. Mr Delafield stated that "London & Paris" had agreed to continue to share costs on a 50:50 basis and the figure to be budgeted for was £325,000 each. Mr Delafield stated that the authority which would be needed for the second phase, which would involve the bulk of the detailed design work, would be of the order of £1.5 million. The figure of £325,000 each was identified in an appendix to Mr Delafield's memorandum. If one added Mr Wagstaff's figure of £445,000 to fees which were outstanding in the sum of £152,000 and £50,000 for miscellaneous costs, one arrived at £647,000 of which 50% was approximately £325,000. The figure of £1.5million referred to by Mr Delafield for the second phase is consistent with the other figures in that if one adds £445,000 as future expenditure to this £1.5million, one arrives at a figure similar to the predicted future expenditure of £1,983,000.
82. By 16^th March 2001, it had emerged that Mr Delafield would be leaving Norwich Union/Morley in order to join "London & Paris" at the end of March 2001.
83. On 16^th March 2001, Mr Delafield wrote to Mr Dymond of LPE describing the way ahead and stressing the importance of having the Courts Service committed by April 2001 to meet certain abortive costs.
84. On 19^th March and 20^th March 2001, LPE wrote to SSP confirming invoices as being payable. The letter of 19^th March 2001 shows LPE acting as property manager for SSP. The letter of 20^th March 2001 refers to quantity surveyors' fees. The invoice was attached to the letter of 20^th March 2001. The invoice was addressed to SSP and referred to "St Mary le Port Bristol" and was stated to be the 4^th interim payment on account. This invoice therefore related to the development project and not to property management. It was in due course paid by SSP. The letter of 20^th March 2001 shows LPE acting on behalf of SSP in connection with the development project.
85. There was a second project team meeting on 20^th March 2001 when the minutes of the first meeting were approved.
86. On 23^rd March 2001, Mr Wagstaff wrote to Mr Delafield on behalf of Norwich Union and Mr Dymond of LPE. Mr Wagstaff suggested that invoices would be passed to "London and Paris" for validation and thereafter would be paid by a cheque from Norwich Union.
87. On 25^th March 2001, Mr Wagstaff prepared a report on the development project and stated that the "JV partners" were not willing to expend too much money until a pre-let (i.e. to the Courts Service) was agreed.
88. The third project team meeting took place on 3^rd April 2001. Mr Delafield told the meeting that he had left Norwich Union/Morley that day and would join "L&P" on 9^th April 2001. He stated that Norwich Union would continue as a funder of the development, possibly with a less active role but "L&P" would lead the development process.
89. On 11^th April 2001, Mr Dymond of LPE e-mailed Mr Wagstaff telling him that it was not appropriate to use the name "London & Paris Investments" in connection with the development, as that company had had no involvement with the project for some time. The correct position was to refer to SSP care of LPE.
90. On 11^th April 2001, Mr Green resigned as a director of SSP and Mr Costain resigned as his alternate. Mr Biscoe was appointed as a director of SSP and Mr Costain was appointed as Mr Biscoe's alternate.
91. The fourth project team meeting took place on 17^th April 2001. It will be remembered that the earlier strategy had referred to obtaining a commitment from the Courts Service to the payment of fees either from 21^st April 2001 or from the end of April 2001. By the time of this project team meeting, it was clear that those dates could not be achieved. Mr Delafield, on behalf of LPE, told the meeting that an agreement would be signed with the Courts Service before the planning application in September 2001 but it was not known when that would be achieved before September 2001. It was also stated that a planning application in September would be difficult to achieve.
92. On 26^th April 2001, Mr Wagstaff sent an e-mail to Mr Delafield and Mr Dymond of LPE. The e-mail raised various questions as to uncertainty as to the form of instructions to professionals and consultants and as to invoicing procedures. Mr Wagstaff stated that neither his original budget of £1,983,000 nor his budget up to 21^st April 2001 of £445,000 had ever been "signed off" by LPE. However, Mr Wagstaff stated that "verbal agreement" had been given on a number of occasions to the figure of £445,000 up to 21^st April 2001. Mr Wagstaff added that approximately £450,000 worth of work had now been executed on the project and fees were outstanding. Mr Wagstaff pointed out the 21^st April 2001 date had been passed and he asked for confirmation as to how LPE wished to proceed. He stated that his budget which showed the figure of £1,983,000 needed to be updated, but if he had approval to a general figure of about £2 million, he could proceed to negotiate with the professionals and consultants. He also attached a schedule of fees said to be outstanding. Figures in the schedule were not always precisely given but the total of those figures came to about £850,000.
93. Mr Delafield of LPE wrote to Mr Peacock of Norwich Union on 26^th April 2001. This letter referred to the importance of getting the Courts Service to take on a commitment as to fees. The letter suggested that this might be achieved by 20^th May 2001. Mr Delafield referred to the time when he was with Norwich Union and prepared a draft authority as to the fees to be incurred by Norwich Union. He stated that parties needed to agree how invoices for fees were to be paid. He then added this sentence:

" The issue that complicates this is of course is the contribution to fees during this period from London and Paris."

It is not clear what "issue" Mr Delafield had in mind. Up to that point it was clear that LPE, on behalf of SSP, was agreeing to bear 50% of fees incurred. It was clear by the date of this letter that the commitment from the Courts Service would not be achieved by the end of April 2001. It was also clear that the development project was continuing and the project team meeting minutes recorded that the day to day control of the project was in the hands of LPE, rather than Norwich Union.

94. The fifth project team meeting took place on 1st May 2001. The meeting was attended by Mr Dymond and Mr Delafield of LPE. There was no representative from Norwich Union, although Mr Wagstaff was acting for both Norwich Union and LPE. The meeting discussed the continuation of the development proposal and it is clear that the matter was being taken forward by LPE, notwithstanding the fact that matters had now passed the end of April 2001, which had earlier been thought to be a key date.
95. On 3^rd May 2001, Mr Delafield of LPE wrote to Mr Peacock of Norwich Union. The letter proposed "clarity" to the arrangements as to the payment of fee invoices. Point 4 of the letter referred to Norwich Union invoicing "London & Paris" for 50% of the amount paid by Norwich Union "on the basis that we have agreed to share costs during this stage". The letter referred to the parties moving forward on a two stage approach. Based on how matters were described in earlier communications, the first stage was up to the time when the Courts Service would commit to being responsible for certain fees. That event had not been achieved by 21^st April 2001 nor the end of April 2001 and it is clear that LPE were proceeding on the basis that the 50/50 split of fees was continuing to cover fees which continued to be incurred. There was also no limitation in Mr Delafield's letter to a budget of £445,000 nor a contribution of £325,000. Indeed, Mr Delafield stated that he had asked Mr Wagstaff to give a new forecast as to the expenditure to be incurred. Mr Delafield added that it might be possible to achieve an agreement with the Courts Service by 20^th May 2001.
96. Also on 8^th May 2001, Mr Delafield of LPE wrote to Mr Wagstaff referring to a schedule of fees for LPE and Norwich Union. He referred to the fees to be paid and described these as being "up to the end of April, £445,000" but he also referred to the fees to be paid beyond that date up to the planning application in September 2001.
97. There was a meeting between Mr Delafield of LPE and Mr Peacock of Norwich Union sometime between 8^th May 2001 and 14^th May 2001, as described in a letter of 14^th May 2001. Mr Delafield stated in his letter that "we are jointly employing the team and paying fees as we go". A reference to "we" appears to be a reference to Norwich Union and LPE.
98. On 14^th May 2001, Mr Wagstaff sent an e-mail to Mr Delafield and Mr Dymond of LPE enclosing new budgets as to fees. The fees to the end April 2001 were given as £360,150 and the accumulated fee to the planning stage was given as £2,296,900.
99. The sixth project team meeting took place on 15^th May 2001. The meeting was attended by Mr Dymond and Mr Delafield of LPE and Mr Wagstaff, but no representative of Norwich Union. The meeting discussed the continuation of the development project.
100. On 21^st May 2001, Mr Wagstaff sent an e-mail to Mr Dymond and Mr Delafield of LPE; the e-mail was copied to Mr Peacock of Norwich Union. Mr Wagstaff stated that he was assuming that the budget sent by e-mail on 14^th May 2001 was acceptable and he was proceeding on this basis. There does not appear to have been any written response which challenged Mr Wagstaff's assumption.
101. On 24^th May 2001, LPE wrote to SSP confirming payment of invoices. LPE was acting as property manager for SSP.
102. Mr Wagstaff met Mr Peacock of Norwich Union on 18^th May 2001. They discussed the strategy of the Courts Service taking on a commitment to pay certain of the professional fees.
103. On 29^th May 2001, Mr Wagstaff prepared a report on the project. It stated that the "JV Partners" were not willing to expend too much money until a pre-let had been agreed and concern was expressed about obtaining a decision from the Courts Service.
104. The seventh project team meeting took place on 5^th June 2001. Mr Dymond of LPE and Mr Wagstaff were present; there was no representative of Norwich Union. The meeting discussed the continuation of the development proposal.
105. In early June 2001, there were many communications between Mr Wagstaff and Mr Delafield of LPE on the subject of professionals and consultants pressing for payment of their fees. In general, Mr Wagstaff and Mr Delafield approved the relevant invoices. There was no suggestion from Mr Delafield of LPE that LPE was not itself liable to contribute to the fees. Also during June 2001, progress was made in negotiating heads of terms with the Courts Service. It was suggested that agreement might be reached with the Courts Service by mid June 2001. LPE tried to put pressure on the Courts Service to bring forward the date of its commitment.
106. The eighth project team meeting took place on 19^th June 2001. The meeting was attended by Mr Dymond and Mr Delafield of LPE and by Mr Wagstaff but there was no Norwich Union representative present. There was discussion about difficulties with professionals and consultants due to their fees not being paid. The absence of Norwich Union was considered. LPE stated that they had given Norwich Union an open invitation to attend any meetings but Norwich Union was satisfied that LPE was dealing with matters. The meeting discussed the continuation of the development project.
107. By 20^th June 2001, it was suggested that an agreement with the Courts Service could be reached by 29^th June 2001.
108. Mr Wagstaff had a conversation with Mr Delafield on 21^st June 2001. They discussed the question of paying the professionals' and consultants' invoices. Mr Delafield did not raise any question as to LPE's liability to contribute to these fees. The tone of the conversation appears to have been that LPE wished to continue with the development and would have to persuade Norwich Union to remain committed.
109. By 21^st June 2001, it had been arranged that there would be a multipartite meeting on 2^nd July 2001 and, in particular, a meeting between Norwich Union and LPE. The meeting was to discuss many of the features of the development project including the financial structure involving Norwich Union as funder. On 21^st June 2001, LPE wrote to Mr Peacock at Norwich Union describing what was envisaged for the meeting of 2^nd July 2001. Point number 8 of that letter dealt with expenditure on the project up to the planning stage. Mr Delafield pressed Mr Peacock to arrange for payment of outstanding fees. He added this:

"From Strand Street's point of view, with financial resources obviously more limited than yours, we need to discuss the current state of play and how we might move forward. As you know Strand Street have to date [shared] costs 50/50 in addition to purchasing the surrounding buildings (with Prudential Buildings now under offer also)."

The reference to SSP purchasing buildings was a reference to SSP acquiring the three interests originally vested in the Bank of England. The reference to Prudential Buildings was that SSP was negotiating to purchase a nearby building, outside the development site, for the purpose of offering alternative accommodation to Lloyds Bank, who had premises within the development site.

110. This reference in the letter of 21st June 2001 appears to be the first real attempt by LPE to move away from the previously agreed 50/50 sharing of costs, whether up to the date of securing commitment from the Courts Service or up to the planning application.
111. The letter of 21^st June 2001 referred to a schedule of fees which had been earlier prepared by Mr Wagstaff. That appears to have been the schedule prepared by Mr Wagstaff on 14^th May 2001 which showed a cumulative fee up to the stage of planning of £2,296,900.
112. On 26^th June 2001, LPE wrote to Mr Davey who was performing legal services in house for Norwich Union. LPE stressed that it was important to finalise the drafting of documents to obtain a commitment from the Courts Service by the 29^th June 2001.
113. On 28^th June 2001, Mr Wagstaff sent an email to Mr Delafield of LPE. Mr Wagstaff was continuing to have difficulties from professionals and consultants who were pressing for payment of their fees. He stated in the email that Norwich Union had said they would not pay any further invoices until "London & Paris" had reimbursed them for 50% of those already paid.
114. On 29^th June 2001, the Courts Service wrote to Norwich Union giving a certain level of commitment in relation to taking premises within the development. The Courts Service confirmed its intention to enter into negotiations with a view to settling an agreement for lease. This information was also passed to Mr Delafield of LPE by an e-mail on 29th June 2001.
115. A series of meetings occurred on 2^nd July 2001. The agenda for those meetings shows that the day was to be divided into two parts. The first part of the day involved a large number of presentations by the professionals and consultants as to the proposed development. The second part of the day was taken up with what was described as a "financial meeting". There were many items on the agenda for this financial meeting. One such item was the issue of expenditure. Mr Peacock and Mr Ashcroft took part in this meeting on behalf of Norwich Union and Mr Dymond and Mr Delafield took part on behalf of LPE. There is no reliable note of the meeting. The documents include a copy of the agenda for the financial meeting with some very limited manuscript annotation. Mr Ashcroft made relevant notes which read:

"Fee exposure

50/50 so far

£350,000 this year - more next year

£887,000 - so far"

The documents also include many handwritten notes apparently made by Mr Wagstaff. Mr Wagstaff was not called to give evidence to explain these notes. The notes are not always easy to interpret. Further, it is not wholly clear whether all of the notes relate to what was said at the meeting on the 2^nd July 2001 or whether some parts of the notes were added later. Mr Wagstaff's notes did contain a list of fees incurred, which total £887,000. The same note referred to the possibility of standing down the professional team and states that Norwich Union was anxious to avoid this. The alternative was to pay the professional team which was something that Norwich Union would do. The note stated that Norwich Union needed cash from L&P and someone has added the words:

"Unlikely to get it - take bigger cash premium as a result".

The note then continued by stating that Norwich Union will pay the

invoices "currently in".

116. On 2^nd July 2001, Morley on behalf of Norwich Union raised an invoice addressed to SSP for 50% of certain fees. The sum said to be due from SSP was £49,717.19. The fees which were the subject of this invoice for a contribution had been passed for payment by Mr Delafield of LPE, on an earlier date.
117. On 3^rd July 2001, Mr Ashcroft for Norwich Union wrote to Mr Dymond of LPE. The letter stated:

"We have agreed that fees to date and up to 16/7/01 are being split 50/50 however looking forward we like you are unwilling to speculate further fees without a clear understanding of the overall viability of the project, the potential for phasing and importantly the financial structure and risk profile to achieve this."

The letter of 3^rd July 2001 referred to a further meeting between that date and 16^th July 2001 when there was an important public consultation due to take place.

118. There was a progress meeting attended by Mr Dymond of LPE, Mr Wagstaff and certain professionals and consultants on 3^rd July 2001. This referred to a further meeting with Norwich Union on 12^th July 2001. An agreement with the Courts Service was described as being necessary to secure funding for a fee for the "next stage" i.e. the stage after the making of the agreement with the Courts Service. LPE instructed the professional team to limit the amount of work for the time being.
119. On 4^th July 2001, Mr Dymond of LPE wrote to Mr Ashcroft for the Norwich Union. The letter of 4^th July 2001 did not refer to Mr Ashcroft's letter of 3^rd July 2001 and it seems that the letters crossed in the post. The letter of 4^th July 2001 did not refer to the question of fees in any way. The letter described the agreement with the Courts Service as being a key matter.
120. On 5^th July 2001, Mr Peacock telephoned Mr Delafield. This conversation was referred to in a letter written by Mr Delafield to Mr Ashcroft on 5^th July 2001. The letter of 5^th July 2001 acknowledged the earlier letter of 3^rd July 2001 in which Mr Ashcroft had referred to an agreement to pay 50% of the fees to date and up to 16^th July 2001. In the telephone conversation on 5^th July 2001 (according to what was stated in the letter) Mr Peacock asked Mr Delafield to confirm "London and Paris's" agreement to sharing fees on a 50/50 basis. The letter of 5^th July 2001 did not itself record any such agreement or commit LPE to paying fees on a 50/50 basis. Instead, the letter appeared to be designed to avoid giving that commitment. The letter stated that Mr Wagstaff was preparing a schedule of costs to date and for the near future. The letter then stated that LPE had established a budget allowance of £200,000 to cover these initial costs and they would review that when they had the information from Mr Wagstaff. The letter went on to state that fees owed to the team for work already carried out should now be paid. It was stated that these fees had been discussed at the recent meeting, which appears to have been the meeting of 2^nd July 2001.
121. Mr Peacock telephoned Mr Delafield following receipt of the letter of 5^th July 2001. The telephone call was on 6^th July 2001 and Mr Peacock noted the following on his copy of the letter of 5^th July 2001:

"He confirmed L&P would pay 50% of all invoices passed for payment to date."

122. On 11^th July 2001, Morley on behalf of Norwich Union invoiced SSP for sums said to be 50% of fees being paid by Norwich Union. The figure invoiced to SSP was £336,160.64. On various dates in June 2001, the invoices which made up this total had been passed by Mr Delafield for payment.
123. At a meeting on 10^th July 2001, Mr Delafield discussed with the Courts Service the question of a contribution to fees from the Courts Service.
124. On 13^th July 2001, Mr Delafield sent a number of invoices to Mr Wagstaff seeking confirmation that the invoices should be paid.
125. On 16^th July 2001, Mr Ashcroft wrote to Mr Dymond of LPE referring to the question of fees. The level of expenditure was to be reviewed at a meeting the following day. Mr Ashcroft stated in the letter that the parties had previously agreed that fees would be split on a 50/50 basis and a large proportion of the fees had been invoiced to LPE.
126. In July 2001, a form of agreement to be made between Norwich Union, SSP and the Courts Service was prepared. Various drafts of this agreement made different provision for a contribution by the Courts Service to fees.
127. On or about 18^th July 2001, the various professionals and consultants were told not to do further work which would incur fees.
128. On 18^th July 2001, LPE wrote to a Mr Jones, a fund director at Morley, on behalf of Norwich Union. He stated that there had been a frank discussion that morning. The letter stated that Mr Dymond mentioned that SSP had limited cash resources available making it very difficult to continue to match Norwich Union on a 50/50 basis in terms of fees and costs. The letter then mentioned that SSP had contributed 50% to date, had put in time and resources and had purchased Prudential Buildings with a view to re-housing Lloyds Bank. A note of that meeting recorded that "L&P" had funded 50/50 to date but could not continue.
129. Also on 18^th July 2001, Mr Delafield asked Mr Wagstaff whether it was appropriate to pay another set of invoices for fees.
130. On 19^th July 2001, LPE wrote to SSP confirming payment of certain invoices in relation to property management.
131. On 26^th July 2001, Mr Delafield sent further invoices to Mr Wagstaff seeking confirmation that they should be paid.
132. On 1^st August 2001, LPE wrote to SSP confirming that certain invoices relating to property management could be paid.
133. On 2^nd August 2001, Mr Ashcroft wrote to Mr Delafield of LPE referring to the question of fees. The letter stated that it had been agreed that the costs of assessing the feasibility of the project would be split equally between Norwich Union and LPE. Mr Ashcroft stated that fees involved since February were approximately £800,000 and there seemed to be another £300,000 or so to come before the team was paid up to the date the project was stopped.
134. On many occasions in August 2001 and thereafter, there were communications between Norwich Union, LPE and Mr Wagstaff as to the various invoices for fees that had been sent in by the professionals and consultants. It is not necessary to refer to the details of those communications.
135. On 14^th August 2001, Mr Ronald Berger wrote to Mr Dymond. This is one of several letters passing between Mr Berger and Mr Dymond. It is obvious from these letters that Mr Berger and Mr Dymond had been in very regular contact over the months and years prior to 14^th August 2001 and, in particular, Mr Dymond had reported to Mr Berger on many occasions, whether over the telephone or at meetings, on the detailed position in relation to St Mary le Port both as regards the management of the existing properties and as regards the development project. Neither Mr Berger nor Mr Dymond were called to give evidence about these exchanges but it is possible to draw certain inferences from statements made in the letters to which I will refer.
136. In his letter of 14^th August 2001, Mr Berger referred to "the situation" at Bristol. It is clear from his letter that he considered himself to be fully informed about the detailed position. He referred in his letter to a number of points in particular which involved matters of detail. He said that these matters required "immediate decisions on the part of Strand Street". He also stated that he was happy himself to continue to deal with these matters whether over the telephone or at meetings from time to time. He suggested that it was not necessary for Mr Dymond to write to Mr Berger or to Mr Shrives every time a decision on the part of SSP was needed. Thus, Mr Berger was telling Mr Dymond that if a decision was needed to be made on behalf of Strand Street, it was Mr Berger who should be asked to make the decision. Mr Berger plainly thought that he had power and authority to make a decision on behalf of SSP. The point of Mr Berger's letter of 14^th August 2001, was to request from Mr Dymond a written report as to the up to date position in relation to SSP and the relevant property. Mr Berger referred to the fact that the project management arrangement was due for renewal and he said he wanted to assess "my position". That suggests that in Mr Berger's eyes, his personal position was essentially the same as the position of SSP.
137. On 14^th August 2001, the in-house lawyer for Norwich Union wrote to a firm of solicitors, Stepien Lake Gilbert & Paling. The name of this firm had obviously been given to Norwich Union as the firm to contact in connection with SSP/LPE's involvement in an agreement with the Courts Service. Stepien Lake Gilbert & Paling replied to this letter on 17^th August 2001 confirming they were instructed and stressing that their client was SSP acting through its UK agent LPE. This indicates that those solicitors regarded themselves as having been duly instructed for SSP and the persons who were able to give instructions on behalf of SSP had also told the solicitors that LPE was the agent of SSP. The solicitor's letter of 17^th August 2001 was copied to Mr Delafield and Mr Dymond of LPE.
138. As requested by Mr Berger on 14th August 2001, Mr Dymond of LPE sent on 29^th August 2001 a written report on St Mary le Port. A copy of this letter was sent to Mr Shrives of SSP. The letter referred to "your original purchase" of the buildings as an investment and the possibility of participating in a major urban regeneration project. The statement that it was Mr Berger's purchase of the buildings suggests that SSP was a vehicle for Mr Berger personally. Mr Dymond wrote that he would report on general management issues, then the St Mary le Port proposal, then the proposed purchase of Prudential Buildings, the possibility of re-financing SSP's borrowings and the project management role of Mr Dymond. The letter was, as was routinely the case, written on the note paper of LPE. The letter continued with a short report on building management and then went into detail in relation to the development scheme. Mr Dymond stated that LPE had been "working jointly with your adjoining landowner and proposed funding partner, Norwich Union/Morley". In a number of places, the letter uses the phrase "as you are aware" which signifies that Mr Berger was aware of a great deal of detail as to the development proposals. Mr Dymond reported that certain professionals had been "stood down" while matters were explored in connection with the proposed development. Mr Dymond hoped that the matters to be explored would be sufficiently advanced to allow the professional teams to recommence detailed design works within a month or so. On the question of SSP's contribution to fees and charges, Mr Dymond said this:

"Turning to development funding, up until quite recently you have been covering costs on a 50/50 basis with Norwich Union/Morley and we established a latest budget of a further £200,000 with you in respect of such costs. With the architectural teams recently having been stood down as detailed above, a significant number of invoices have now been received and these are currently being coordinated with Norwich Union/Morley. The agreed process is that Norwich Union will pay them in the first instance and then invoice yourselves for 50%. As the project has been greatly advanced over the past few months expenditure has moved ahead of the budgets previously established and thus one of the key discussions with NU/Morley on September 6^th will be to reach agreement on covering these costs. We have made it clear to NU/Morley that your company has limited resources to fund costs such as these and indeed we have put forward your argument that by pursuing the purchase of Prudential Buildings (which is essential in unlocking Lloyds TSB and thus allowing the scheme to proceed) you are in fact investing significant further monies in the project which should be taken into account when assessing these initial cost sharing arrangements. The next stage is to establish the most economical budget to planning application stage and we would propose to seek to negotiate that NU/Morley as the likely project funder should now take over the role as development financier with Strand Street undertaking the role of "developer" ".

139. There are parts of the passage quoted in the last paragraph which may be open to interpretation. When that passage describes the commitment made by SSP to Norwich Union, it appears to describe a commitment whereby SSP would pay the costs on a 50/50 basis. This was said to be the commitment "until quite recently" and a liability up to 16^th July 2001 is entirely consistent with that phrase.
140. The reference in the passage I have quoted to a budget of "a further £200,000" is less clear. This does not seem to be put forward as any part of the arrangement between SSP and Norwich Union but is instead put forward as a budgeting matter between SSP and LPE. It is not clear what was the date of the "latest budget" nor is it clear as to what extent the £200,000 was "further" to an earlier budget. The passage quoted also refers to the possibility of an agreement with Norwich Union on 6^th September in relation to that part of the costs which exceeds SSP's budget. It seems that Mr Dymond of LPE thought that the way forward was for SSP to contribute less than the full 50% of the fees and charges with that matter being taken into account in the financial terms agreed with Norwich Union as a funder. The passage quoted also refers to Mr Berger's "argument". This is a reference to the point that SSP's costs in acquiring the Prudential Building should somehow be taken into account in comparing the respective contributions of Norwich Union and SSP. It will be remembered, that this point had been put forward on 21^st June 2001 by LPE on behalf of SSP and the letter of 29^th August 2001 now makes it clear that the inspiration for that came from Mr Berger on behalf of SSP. This also reveals that Mr Berger was informed about some at least of the detail of the discussions about the 50/50 contribution to costs and fees, at an earlier point in time than the date of this letter, 29^th August 2001.
141. Mr Dymond's letter then dealt with the project management arrangement. The letter was drafted on the basis that LPE was the project manager and no distinction is drawn between LPE and Topside. Mr Dymond stated that although the prior agreement ran out in June 2001, since that date, with Mr Berger's agreement, LPE had continued to advise SSP. The letter then proposed new terms as to a project management fee and a profit share.
142. On 4^th September 2001, Mr Berger replied to Mr Dymond's letter of 29^th August 2001. The letter does not state that it was copied to or provided to Mr Shrives but it seems likely from Mr Shrives' letter of 27^th September 2001 to Topside that Mr Shrives saw the letter of 4^th September 2001 as he used a figure in his letter of 27^th September 2001 which appeared in the letter of 4^th September 2001 and did not appear in any other document which has been produced. Mr Berger's letter of 4^th September 2001 discussed various points in relation to the development and in relation to Mr Dymond's involvement as project manager. It is not necessary to quote passages from this letter. The letter made it clear that Mr Berger regarded himself as being able to make decisions on behalf of SSP as he stated that he was prepared to do certain things or conversely that he was reluctant to do other things. He stated what SSP was prepared to offer by way of project management fee and profit share. He also invited Mr Dymond to keep up his "regular phone contact".
143. On 5^th September 2001, Mr Ashcroft on behalf of Norwich Union wrote to Mr Delafield of LPE discussing the proposed development. At the end of the letter, Mr Ashcroft stated that he understood that Mr Delafield was arranging for payment of the Norwich Union invoices for 50% of the professionals' fees. On 6^th September 2001, Morley on behalf of Norwich Union sent to SSP a further invoice in this respect. There were later such invoices from Morley to LPE on behalf of SSP but it is not necessary to list all of them.
144. On 10^th September 2001, LPE sent to SSP the invoice from Morley dated 2^nd July 2001, to which I have referred earlier, for the sum of £49,717.19. The covering letter sent to SSP described this as "Morley fund management – professional fees". Accompanying the invoice were the original invoices from the professionals to Norwich Union care of LPI or LPE and these invoices were endorsed with a statement that they were passed by Mr Delafield on behalf of LPE as suitable for payment. Mr Costain of SSP gave evidence that when he saw the invoice from Morley, it was not accompanied by the other invoices.
145. On 10^th September 2001, Mr Dymond of LPE wrote to Mr Shrives. The heading to the letter referred to SSP and Long Acre Developments which was a subsidiary of Adaptdart Ltd. At this time, Mr Dymond was a director of Long Acre Developments. The letter stated that "we" would like to proceed with a renewal of the project management role on the revised basis as discussed. Mr Dymond asked Mr Shrives to arrange to have a formal letter of appointment issued by SSP to Topside in relation to the consultancy fees and confirmation of the profit sharing arrangements with Long Acre Developments. Mr Dymond's letter referred to the earlier letters of 29^th August 2001 and 4^th September 2001 but did not attach copies. Mr Shrives did not subsequently ask for copies of these letters and when Mr Shrives replied on 27^th September 2001 he must have been aware of the contents of those letters. The letter of 10^th September 2001 was copied to Mr Berger.
146. On 14^th September 2001, LPE wrote to Morley. The letter referred, amongst other things, to the question of expenditure on fees. The letter stated that Mr Dymond of LPE had told Mr Jones (of Morley) of SSP's concerns about continuing the 50/50 initial funding especially in light of the commitment to purchase Prudential Buildings and stated that SSP was not in a position to match Norwich Union on all the accounts currently rendered.
147. On 27^th September 2001, Mr Shrives on behalf of SSP wrote to the directors of Topside appointing Topside as property consultants and property managers for the proposed development for the period up to 30^th June 2002. The fee was expressed to be with effect from 1^st July 2001. The fee was to be £75,000 for the year rising in certain circumstances to £200,000. That letter did not deal with the profit share apparently to be in favour of Long Acre Developments Ltd.
148. On 27^th September 2001, LPE wrote to Mr Ashcroft of Morley on behalf of Norwich Union expressing frustration at the lack of progress in negotiations between Norwich Union and SSP. LPE put forward an offer on behalf of SSP to buy Norwich Union's interest in the site.
149. On 3^rd October 2001, SSP wrote to the directors of Long Acre Developments Ltd dealing with certain terms as to re-financing earlier loans and providing for Long Acre Developments Ltd to have a profit share in the development of St Mary le Port. The letter was countersigned by Mr Dymond, on behalf of Long Acre Developments Ltd, accepting the offered terms.
150. Mr Ashcroft on behalf of Norwich Union met Mr Delafield and Mr Dymond on 4^th October 2001. Mr Ashcroft stated that Norwich Union was not prepared to pursue further negotiations with "London and Paris" until such time as the outstanding sums pursuant to the fee sharing arrangement were received. On 8^th October 2001, Morley on behalf of Norwich Union wrote to Mr Dymond of "London and Paris" restating Norwich Union's position and expressing disappointment that the fee sharing arrangement had not been honoured. On 12^th October 2001, LPE replied stating that SSP had on a number of occasions stated that it would not be in a position to keep matching Norwich Union on a 50/50 basis.
151. On 29^th November 2001, LPE on behalf of SSP made a further offer to purchase Norwich Union's interest in the development site.
152. On 28^th February 2002, Topside invoiced SSP for project management fees for the period 1^st October 2000 to 30^th June 2001. The sum invoiced was paid by SSP on 19^th March 2002.
153. On 18^th July 2002, LPE wrote on behalf of SSP to Mr Ashcroft of Morley on behalf of Norwich Union. LPE put forward a further offer by SSP to buy Norwich Union's interest in the site.
154. On 19^th July 2002, Mr Max Davidson apparently on behalf of LPE e-mailed Mr Berger enclosing an updated cost schedule for the site showing the actual costs incurred to date. The e-mail referred to an estimate having been provided to Mr Berger in May 2002.
155. On 14^th October 2002, Mr Dymond made a witness statement in the County Court proceedings brought by Lloyds TSB Bank Plc against SSP in which Lloyds TSB Bank Plc sought a new tenancy pursuant to part II of the Landlord and Tenant Act 1954. The background to Mr Dymond's witness statement was that SSP had served a notice under section 25 of the 1954 Act on Lloyds TSB Bank Plc on 7^th March 2002 seeking to terminate the tenancy on 29^th September 2002 and opposing the grant of a new tenancy on the redevelopment ground contained in section 30(1)(f) of the 1954 Act. Lloyds TSB Bank Plc had duly applied for a new tenancy on 2^nd July 2002.
156. Mr Dymond made his witness statement on 14^th October 2002 and stated that he was duly authorised to do so by SSP. He said he was the managing director of LPE. He said that SSP intended on the termination of the tenancy to demolish the relevant premises. Mr Dymond referred to SSP's decision to acquire the interests of the Bank of England in the development site. He explained that LPE had earlier acted for LPI in connection with these premises and in the interests of continuity SSP engaged LPE to advise on and manage the progress and implementation of the project to develop the site. Mr Dymond stated that he had had responsibility for the day to day control of the performance by LPE of its functions in its relationship with SSP.
157. Mr Dymond then referred to the large number of professionals and consultants whom SSP were said to have engaged for the purpose of the development. Mr Dymond stated the expenditure incurred in relation to the fees of these persons was in the order of £2 million plus VAT. He exhibited a statement which showed the fees invoiced by the professionals and consultants and the payments made by Morley on behalf of Norwich Union and SSP. The exhibit added together SSP's expenditure and Morley's expenditure to identify a total expenditure in progressing the development. The schedule referred to invoices which Morley had sent to SSP and there is a reference to "the perceived 50/50 split between the total fee expenditure". SSP's expenditure included project management fees said to have been paid to "London & Paris".
158. Mr Dymond then exhibited a large number of reports and similar material prepared by members of what were described as "the defendant's professional team". These reports bore various dates including dates in 1998, 1999 and 2001.
159. On 9^th December 2002, LPE wrote to SSP attaching invoices which were recommended for payment. The letter explained there had been a meeting at LPE's offices with Mr Berger on 6^th December 2002 and following that meeting the invoices were paid direct to the various consultants from the LPE account. LPE appear to be relying upon Mr Berger's authority to bind SSP to reimburse LPE for these invoices.
160. On 11^th December 2002, LPE wrote to Mr Ashcroft of Morley on behalf of Norwich Union. The letter made an offer on behalf of SSP to buy Norwich Union's interest in the site.
161. On 28^th January 2003, there was a further letter from LPE to Mr Ashcroft of Morley making a further offer on behalf of SSP to buy Norwich Union's interest in the site.
162. In April 2003, SSP served an expert's report in the County Court proceedings brought by Lloyds TSB Bank Plc. The expert's report was from an architect, Lifschutz Davidson. The expert's report stated that the expert had worked as project architect on the development since 2001. At paragraph 5.02 of the report, the expert stated that London and Paris Estates Ltd were acting on behalf of SSP when the development was being progressed jointly by Norwich Union and LPE.
163. On 13^th April 2004, LPE wrote to Morley on behalf of Norwich Union making a further offer on behalf of SSP to buy Norwich Union's interest in the site.
164. Norwich Union demanded payment from SSP of the sums it now claimed and Norwich Union relies in particular on a letter dated 1^st March 2004 from Morley on behalf of Norwich Union to LPE.
165. There was correspondence between solicitors for the parties before the present proceedings were brought. On 31^st October 2005, Hamilton Downing Quinn, solicitors for SSP wrote to the solicitors for the Norwich Union and stated that it was not in dispute that "L&P", which was a reference to LPE, was appointed by SSP as project managers to carry forward the development of the site. That admission was later withdrawn and Norwich Union's contention that LPE was acting as project managers for SSP is now challenged by SSP.

The oral evidence

166. Norwich Union called Mr Peacock and Mr Ashcroft as witnesses and SSP called Mr Delafield, Mr Costain and Mrs Riley.

Mr Peacock

167. Mr Peacock was a surveyor/fund manager with NUIM and later with Morley. His involvement with the premises, and later the development opportunity, at St Mary le Port can be traced back to 1996 or 1997. He does not appear to have been in the front line of such discussions as there were between Norwich Union and, first, LPI and, later, LPE. Communications with LPI or LPE were in the earlier parts of the period 1997 to 2001 carried on by Mr Delafield rather than by Mr Peacock. In his witness statement prepared for these proceedings, Mr Peacock dealt in some detail with the position as shown in the relevant documents. I have already described what those documents show. In addition, Mr Peacock was able to confirm that he had been told by Mr Delafield that there was an agreement, between Norwich Union and LPE on behalf of SSP, that SSP and Norwich Union would share equally the cost of instructing the professionals and consultants from time to time. Mr Peacock was also aware of the existence of that agreement from seeing references to it in the documents.
168. Mr Peacock formally handed over responsibility for the St Mary le Port site to Mr Ashcroft at the end of June 2001. Before the end of June 2001, Mr Ashcroft began to acquaint himself with the history of the matter. Conversely, after June 2001, Mr Peacock remained involved to some extent to assist with the hand over to Mr Ashcroft and, accordingly, Mr Peacock was involved with the events of the first week of July 2001.
169. In his witness statement, Mr Peacock described that prior to the meeting of 2^nd July 2001, he and Mr Ashcroft wanted to ensure that there was clarity as to the arrangements between Norwich Union and LPE on behalf of SSP as to the liability for fees being claimed by various professionals and consultants. Mr Peacock attended the various meetings which I have described on the 2^nd July 2001. In particular, he attended a meeting along with Mr Ashcroft for the Norwich Union with Mr Delafield and Mr Dymond on behalf of LPE. The parties discussed a forthcoming public consultation due to take place on the 16^th July 2001. Mr Peacock was keen to secure confirmation that the fees which had been incurred and which would be incurred up to 16^th July 2001 were to be borne equally by Norwich Union and SSP. In his witness statement, Mr Peacock said in clear terms that it was agreed at the meeting on the 2^nd July 2001 that costs incurred up to 16^th July 2001 would be borne equally. This agreement was consistent with his understanding as to everything that had been agreed up to that time.
170. Mr Peacock received a copy of Mr Ashcroft's letter to Mr Dymond of 3^rd July 2001. He also received a copy of Mr Dymond's reply of 4^th July 2001. There was considerable pressure on Norwich Union to pay a large number of outstanding invoices issued by the professionals and consultants. Mr Peacock telephoned Mr Delafield and asked Mr Delafield to confirm in writing to Mr Ashcroft the agreement reached orally at the meeting on 2nd July 2001.
171. Mr Peacock saw Mr Delafield's letter of 5^th July 2001 and considered it to be unsatisfactory. He again telephoned Mr Delafield and asked Mr Delafield to confirm the position between the parties. Mr Peacock wrote on his copy of the letter of 5^th July 2001 what Mr Delafield said. Mr Delafield told Mr Peacock that LPE would pay 50% "of all invoices passed for payment to date". Norwich Union then paid the invoices that had been passed for payment and indeed invoices in relation to work done up to 16^th July 2001 which were passed for payment by Mr Delafield on behalf of LPE.
172. Mr Peacock confirmed the evidence in his witness statement when he was cross-examined in detail. He was asked various questions as to things which were or were not covered by the agreement and as to possible limitations upon the scope of the agreement. Mr Peacock restated that the agreement was that Norwich Union and SSP would pay 50% of the costs of professionals and consultants and at the meeting of 2^nd July 2001 a cut off date for that agreement was specified as being 16^th July 2001. He repeated this evidence when re-examined.
173. I find that Mr Peacock was a truthful witness genuinely seeking to recall the relevant events. In relation to the conversations in the first week of July 2001, Mr Peacock had available to him, as a reminder of the conversations, the correspondence that passed and the notes he made on the letter of 5^th July 2001. He frankly accepted that he could not recall when he gave his evidence the precise words used orally at the meeting of 2^nd July 2001 and the conversations in the first week of July 2001. His recollection was therefore considerably influenced by what he saw in the contemporaneous documents.

Mr Ashcroft

174. Mr Ashcroft took over as surveyor/fund manager with responsibility for the St Mary le Port site with effect from the end of June 2001. However, prior to that time, he began to read in to the matter and discuss it with Mr Peacock. He was told by Mr Peacock at this stage that Norwich Union had agreed with LPE on behalf of SSP that Norwich Union and SSP would share equally the costs of instructing professionals and consultants. Mr Ashcroft was present at the meeting with Mr Delafield and Mr Dymond on 2^nd July 2001. In his witness statement, Mr Ashcroft said that it was specifically agreed at that meeting that the fees of the professional team which had been incurred to date and which would be incurred up to a cut off date of 16^th July 2001 would be split 50/50. This agreement as to the sharing of costs reflected his understanding of the basis on which the process had proceeded up to that time.
175. Mr Ashcroft wrote his letter of 3^rd July 2001 to record the agreement reached at the meeting on 2^nd July 2001. Mr Ashcroft was aware of the correspondence between the parties and the conversations between Mr Peacock and Mr Delafield in the first week of July 2001.
176. Mr Ashcroft also referred in his witness statement to correspondence after the 6^th July 2001 in which the fee sharing agreement was referred to. Mr Ashcroft stated that the letters from the Norwich Union stated more than once that such a fee sharing agreement had been made and this was not contradicted by anyone on behalf of LPE. Mr Ashcroft referred to other points being made by LPE such as SSP's difficulties in continuing thereafter to pay 50% of fees and, possibly, SSP's difficulty in honouring the commitment as to the past in relation to fees and also SSP's suggestion that its costs in acquiring the Prudential Building should rank as an expense to be taken into account for the purposes of the arrangement as to sharing of fees.
177. Mr Ashcroft was cross-examined in detail. He accepted that the evidence he had given as to the discussion at the meeting on 2^nd July 2001 as to the sharing of costs was essentially based on what he had written to Mr Dymond in his letter the next day, 3^rd July 2001. He did not in the end profess to have an independent recollection of the discussion on 2^nd July 2001. He confirmed that his intention in writing the letter of 3^rd July 2001 was faithfully to record the agreement that had been made the previous day.
178. I find that Mr Ashcroft was a truthful witness who was doing his best to recall the events at the relevant time.

Mr Delafield

179. SSP called Mr Delafield as a witness. Until around April 2001, Mr Delafield had been involved with the development project at St Mary le Port, on behalf of Norwich Union. In around April 2001, Mr Delafield left Norwich Union and was employed by LPE. He later left LPE and now works as a consultant.
180. Mr Delafield stated in his witness statement that he was not in a position to give any relevant evidence as to the relationship between SSP and LPE. He had initially dealt with Mr Dymond of LPE rather than with the representatives of SSP.
181. Mr Delafield said in his witness statement that at the end of 1998 a verbal agreement was reached with Mr Dymond of LPE to the effect that the costs incurred by LPE and Norwich Union in assessing the feasibility of the development project would be shared. Mr Delafield added that both sides had in mind expenditure of some £100,000. Mr Delafield then gave evidence as to the position within Norwich Union as to the obtaining of authority for Norwich Union to incur expenditure. Mr Delafield also described some of the documents he had prepared whilst he worked for Norwich Union, in particular the documents dated 11^th October 2000 and 14^th March 2001. He stated that his report of 14^th March 2001 had confirmed that LPE had agreed to continue to share costs on a 50/50 basis. He added that he understood that Mr Dymond of LPE had limits on his ability to spend some on the development project. He referred to the meeting on 4^th April 2001 which discussed terms which might be agreed with the Courts Service.
182. In his witness statement, Mr Delafield suggested that it was the conduct of Norwich Union, rather than LPE, which lead to the carrying out additional work by professionals and consultants. He also suggested that LPE wanted to know how much was being spent and Norwich Union failed to give the necessary clarification. He referred to the meeting which took place on 2^nd July 2001 but his witness statement contained no detail as to what was discussed at that meeting. He said that he wrote to Mr Ashcroft on 9^th July 2001 but it is clear that he was intending to refer to his letter of 5^th July 2001. In relation to Mr Peacock's note on the letter of 6^th July 2001 referring to LPE paying 50% of all invoices passed for payment to date, Mr Delafield said that there was no commitment to pay for expenditure in excess of the amount referred to in the budget of March 2001. He said that Norwich Union had incurred the expenditure without the authority of LPE and, indeed, without any real control on expenditure.
183. Mr Delafield was cross-examined in detail. His evidence as to the meeting on 2^nd July 2001 was that he had no recollection of anyone mentioning at that meeting that the liability of SSP to contribute to the fees which had been incurred was limited to £325,000 or was limited by reference to the budget of March 2001. Mr Delafield said he had no recollection of the conversation with Mr Peacock on 6^th July 2001.
184. Mr Delafield stated on many occasions during his cross-examination that the agreement which existed between LPE (on behalf of SSP) and Norwich Union was that SSP was liable for one half of the relevant fees but up to a ceiling or limit of £325,000. Mr Delafield was taken to a large number of documents which tended to show that Norwich Union was proceeding on a basis contrary to what Mr Delafield suggested. Mr Delafield was asked why he or Mr Dymond had not pointed out on various occasions that SSP/LPE's liability to contribute was subject to a limit of £325,000. Mr Delafield stated that this matter had been repeatedly pointed out by LPE. On other occasions when he was asked why he or Mr Dymond had not responded in a particular way to a statement made by Norwich Union, he said he felt sure that the matter had been dealt with orally.
185. I did not regard Mr Delafield as a convincing witness. When faced with difficulties in his account of the relevant events, he was immediately ready to assert that something had been said or agreed orally when there was absolutely no trace of such a matter anywhere in the documents and where it seems improbable that the documents would have taken the form that they did if Mr Delafield's account were correct. I am not prepared to accept Mr Delafield's evidence where it is contradicted by the documents to which I have referred. Further, I prefer the evidence of Mr Peacock and Mr Ashcroft to that of Mr Delafield and in particular I accept the evidence of Mr Peacock and Mr Ashcroft as to what was said at the meeting on 2^nd July 2001 and in the telephone conversation on 6^th July 2001.
186. On the separate subject of the relationship between SSP and LPE, Mr Delafield stated that he was not aware of SSP when he first joined LPE but he later became aware that LPE were acting as agents for SSP. I accept this evidence that LPE regarded themselves as having authority to act on behalf of SSP.

Mr Costain

187. SSP called Mr Costain to give evidence on its behalf. Mr Costain stated that he was a director of SSP and had been responsible for the affairs of SSP during the time of the alleged agreement with Norwich Union. The records of SSP show that Mr Costain was appointed an alternate director for Mr Green on 26^th January 2001 and an alternate director for Mr Biscoe on 11^th April 2001. The first annual return which shows Mr Costain as a director otherwise than an alternate director is the annual return for the year ended 31^st August 2005.
188. In his witness statement, Mr Costain stated that SSP was formed for the benefit of Mr Berger and Mr Peter Davidson. He described the developments with which SSP had any involvement and the intended status and consequential tax treatment of SSP. He stated that he personally knew nothing of any arrangements between Norwich Union and LPE of the kind now relied on by Norwich Union in these proceedings and, further, that he had made enquiries of other directors and had investigated the records of SSP and found no trace of any agreement of the kind relied on by Norwich Union. He stated that LPE did not have authority to act on behalf of SSP save only as rent collection agents or, as he later described it, as administrators and rent collectors. He stated it was important for the activities of Topside and LPE to be kept separate. He was aware that LPE, rather than Topside, was almost invariably the entity from whom and to whom relevant correspondence was addressed but this was "sloppy practice". He referred to the substantial correspondence between Norwich Union and LPE as being "unauthorised". He added that it was either hidden from SSP or misreported. He described the time in September 2001, when he became aware of the invoice from Morley for £49,717.19. He made enquires from Mr Carter of LPE as to the background to this invoice and he said that Mr Carter told him that what was required was "a one off payment" which would be useful to the future value of the SSP properties. Mr Carter had stated that it was mutually advantageous to SSP to have certain works carried out in connection with Norwich Union as an adjoining landowner. He stated that the offers made by LPE purportedly on behalf of SSP to buy out Norwich Union's interests were "totally unauthorised". He described the development project at St Mary le Port as "this hidden project".
189. When cross-examined, Mr Costain said that the Berger No 1 settlement was a discretionary trust but he had not seen the trust documents. He stated that the Jersey directors of SSP were in contact with the shareholders of SSP and he was not. He was cross-examined about the distinction between Topside and LPE. It was Adaptdart Ltd, the parent company of Topside and of LPE which decided whether the project manager appointed by SSP was Topside or LPE. Which company it was did not matter to SSP. He understood that Adaptdart Ltd had chosen Topside as the person appointed as project manager was because Topside had tax losses which it could use. He was asked about the extent of his knowledge at the relevant time of the involvement of LPE in connection with a development project at St Mary le Port. He stated that his knowledge of that subject was "zero".
190. Mr Costain tried very hard to explain that he knew nothing at any relevant time of LPE purportedly acting on behalf of SSP in connection with a proposed development at St Mary le Port and, in particular, in connection with a collaboration with Norwich Union. He also stated that no one else at SSP was aware of what LPE was doing in those respects.
191. I am very doubtful indeed whether Mr Costain was entirely candid as to his own state of mind at the relevant time. However, even if I accepted that Mr Costain did not know of the activities of LPE purportedly on behalf of SSP in connection with St Mary le Port, I am not prepared to accept his evidence that nobody else who was dealing with the matter on behalf of SSP was aware of LPE's activities. In particular, if the documents placed before the Court justify a finding that other representatives of SSP had relevant knowledge of LPE's activities, I prefer to rely upon those documents rather than accept Mr Costain's statements to the effect that no one on behalf of SSP knew anything of what was going on.

Mrs Riley

192. SSP also called Mrs Riley. Mrs Riley stated that she was appointed a director on 30^th October 2001. In September 2001, Mrs Riley countersigned a cheque whereby SSP paid the Morley invoice for £49,717.19. Mrs Riley gave evidence that before she countersigned the cheque to make this payment, she asked Mr Costain for an explanation of what the payment was for. She stated that Mr Costain told her that the payment was a one off payment, that there was no further obligation to make payments and that LPE recommended SSP to make the payment because it had been advantageous for SSP to work with Norwich Union and this would be a benefit to SSP in relation to their plans for the property.
193. I accept Mrs Riley's evidence that Mr Costain did say something of that kind to her in September 2001.

Wtinesses who were not called

194. Mr Costain was the only witness who was called to give evidence as to the relationship between SSP and LPE. Mr Costain's evidence was to the effect that he did not know very much at all about the activities of LPE in relation to St Mary le Port. It is clear from the totality of the evidence that LPE had considerable dealings with someone on behalf of SSP but Mr Costain was not, he said, able to help with what those dealings might have been.
195. There are some obvious witnesses who seem to have known much more about the matter than Mr Costain says he did. The most obvious witness was Mr Shrives. He was not called to give evidence and SSP did not offer any explanation for this or suggest any difficulty in the way of Mr Shrives giving evidence. It is likely also that other directors of SSP, the ones based in Jersey, would have known more than Mr Costain says that he knew. Yet they were not called and their absence was not explained.
196. Another possible witness who almost certainly could have explained the dealings between SSP and LPE was Mr Berger. It is plain from the correspondence that he knew most if not all of the detail of what LPE was doing in relation to St Mary le Port. It is also clear from the letter of 29^th August 2001, in particular, that Mr Shrives of SSP knew that there was an established channel of communication between LPE and Mr Berger for the purpose of keeping SSP informed of what was going on. There is no evidence that Mr Shrives expressed any concern about this. Yet Mr Berger was not called by SSP to give evidence and no explanation for his absence was offered.
197. SSP suggested that there was no need to call Mr Berger as Norwich Union had not pleaded any allegation in relation to Mr Berger. I do not see that as being relevant. The simple fact is that the issues which have been pleaded required the court to make findings about the dealings between LPE and SSP and, in particular, as to SSP's knowledge of LPE's activities. The documents showed that Mr Berger was an obviously relevant witness. In any case, I do not think that SSP was in any way misled by the pleadings. The choice of Mr Costain as a witness in this case seems to me to have been made on the basis that Mr Costain would say that he knew very little about the relevant events and SSP would not call anyone who knew any more about those events. SSP's approach to the evidence was to keep everyone, including the court, as much in the dark as was possible.
198. It is well established that when one party calls evidence on a relevant issue, and that evidence establishes a case to be answered on that issue, and the other party does not call potentially relevant and available evidence on that issue, and offers no reliable explanation for that failure, the court can draw an adverse inference against that party, which inference strengthens the claim of the first party. The authorities on this point were reviewed in Wisniewski v Central Manchester Health Authority [1998] PIQR 324, and the relevant principles were further discussed in Benham Ltd v Kythira Investments Ltd [2003] EWCA Civ 1794.
199. It is also likely that Mr Dymond would have been able to give a great deal of relevant evidence as to the relationship between SSP and LPE but yet he also was not called. However, I do not draw any adverse inference against either party by reason of Mr Dymond's absence as a witness. LPE was the Second Defendant to these proceedings. It is understandable that Norwich Union did not feel that it could expect co-operation from Mr Dymond. The position is less clear in relation to SSP's reasons for not calling Mr Dymond. However, on balance, I think the fairer approach is not to draw any adverse inference against SSP by reason of Mr Dymond's absence.

Discussion and analysis

200. I will begin by considering whether any agreement in relation to fee sharing was made between Norwich Union and LPE. If I decide that those two parties did reach a relevant agreement or agreements, I will then consider whether LPE purported to make this agreement on its own behalf or on behalf of SSP and, in the latter case, whether LPE had authority to make such an agreement on behalf of SSP.

Was there a fee sharing agreement or agreements?

201. In the following passages, where I refer to an agreement being made between "LPE" and Norwich Union, I am not expressing any view as to whether that agreement was by LPE on its own behalf or on behalf of SSP. I will consider that question in due course. It would otherwise be inconvenient each time I refer to LPE making an agreement to have to explain that there remains an issue to be decided as to whether LPE was contracting on its own behalf or on behalf of SSP.
202. The possibility of fee sharing seems to have been raised for the first time in around 1998 between LPE, acting for LPI, and Norwich Union. The arrangement or understanding between those parties at that stage was not as clear as it later became. In the early stages, the arrangement appears to have been a looser one to the effect that both LPE, on behalf of LPI, and Norwich Union would invest some time and resources in exploring the possibility of a development of the site and that the expectation was that both sides would invest a similar amount in terms of fees.
203. I find that between October 2000 and January 2001 that LPE did agree with Norwich Union that both sides would continue to work towards a development in which both sides would be involved and that the fees involved in working towards the development would be shared equally between the two sides. I find that this agreement was made by Mr Dymond on behalf of LPE and Mr Delafield on behalf of Norwich Union and that the agreement was, on the balance of probabilities, made at a meeting on 29^th November 2000. The fact of this agreement is confirmed by a large number of references to it in documents (to which I have already referred) which came into existence after that time.
204. It has been suggested on behalf of SSP at the trial that the agreement as to fee sharing was subject to a number of different, possibly alternative, limitations. It was suggested that the fee sharing agreement was limited to fees up to April 2001. It was suggested that the fee sharing agreement was limited to fees up to the time that the Courts Service entered into an agreement which placed on the Courts Service responsibility for some fees. It has been suggested, particularly in the evidence of Mr Delafield, that the agreement had an upper limit so far as the liability of the LPE side was concerned, but not so far as the liability of Norwich Union was concerned, in the amount of £325,000.
205. I find that the fee sharing agreement was not subject to any one of the suggested limitations. It is right that there are references in the evidence to fees being assessed up to certain points and up to certain amounts. The parties were from time to time seeking to assess what the fees might be up to future dates. It is also the case that the parties hoped that they would be able to enter into some form of agreement with the Courts Service which would pass some of the responsibility for fees to the Courts Service and there were repeated predictions in the documents as to when that event might come about, although it never did come about. These deliberations did not, in my judgment, affect the basic contractual arrangement which was that the two sides were sharing fees 50/50 as they went along. The safeguard for each side was that either side was able to call a halt at any time. It was open to one side to say that it was not prepared to continue to see fees being incurred. Until that halt was called, the sharing agreement applied to fees which were incurred. I also reject Mr Delafield's evidence to the effect that it was expressly agreed between the parties that the liability of the LPE side would be capped at £325,000. His evidence on that point was unconvincing and was not supported by the contemporaneous documents.
206. I find that LPE and Norwich Union agreed at the meeting on 2^nd July 2001 that the fees up to that date and thereafter up to 16^th July 2001 would be split 50/50 between the two sides. I accept the evidence of Mr Peacock and Mr Ashcroft on that point and I reject any evidence from Mr Delafield to the contrary.
207. I find that on 6^th July 2001, Mr Delafield of LPE agreed with Mr Peacock of Norwich Union that LPE would pay 50% of all the fees invoices passed for payment to date. I hold that this agreement is not referring to the same fees as would be the subject of the agreement that all fees up to 16^th July 2001 would be shared 50/50 but, instead, I hold that the agreement of 6^th July 2001 was referring to the invoices that had been passed to Norwich Union up to 6^th July 2001 and which Norwich Union were being asked by LPE to pay. However, I also find that the agreement made on 6^th July 2001 was not by way of a variation of the earlier agreement or agreements as to fee sharing but was a specific agreement which was in relation to a specific group of invoices which Norwich Union was about to pay.
208. It was submitted on behalf of SSP that there was no agreement at any time because the parties were at cross purposes. This submission did not address the agreement which I have found was made in the period October 2000 to January 2001. I see no basis on which it could be said the parties were at cross purposes then. Further, I also see no basis for holding that the parties were at cross purposes in respect of the oral agreements reached on 2^nd July 2001 and 6^th July 2001. It is possible that Mr Dymond and Mr Delafield felt that, although they could not avoid confirming to Norwich Union in July 2001 that LPE's side would pay 50% of the fees, nonetheless there was still hope that the Courts Service might be persuaded to bear some responsibility for fees and, possibly, when it later emerged that LPE's side was unwilling to honour the fee sharing agreement, that LPE's side might be able to persuade Norwich Union to revise the arrangement and take on more than a 50% share in return for being given certain terms as to funding a development of the site. However, none of that thinking would affect the agreement which I have found which the parties expressed on 2^nd and 6^th July 2001.
209. SSP next submitted that the alleged agreement as to fee sharing was too uncertain to amount to a binding contract. I am unable to accept that submission. I have stated more than once what the express terms of the agreement amounted to. They seem perfectly clear to me. Further, it is not disputed by SSP that the invoices put forward by Norwich Union all come within the fee sharing agreement expressed in the way I have expressed it. A clear and certain agreement does not become void for uncertainty because it does not spell out what is to happen in all circumstances or that there are latent difficulties as to the extent of the agreement. It was suggested that the agreement was not clear as to fees incurred before 2001 or as to legal fees or as to the capital cost of one side acquiring a property in connection with the proposed development. I do not propose to decide any of those points because they are not issues which directly arise in this case. However, I can say that they do not seem to me to be difficult points to decide. But even if they were difficult points to decide, the court would decide them if they were relevant to the issues before the court and then the agreement would be declared to have effect in accordance with the decision of the court. The agreement would have contractual effect accordingly and would not be void for uncertainty.
210. SSP next submitted that there was no consideration for the fee sharing agreement. I did not understand this submission to be made in relation to the original agreement in the period October 2000 to January 2001. The submission was put forward on the basis that there was no fee sharing agreement prior to 2^nd July 2001 and when the parties reached an apparent agreement on that date the consideration moving from Norwich Union involved it paying third parties where it already owed a legal obligation to those third parties and in circumstances where LPE/SSP derived no benefit from the payment. Whatever about the legal basis for that submission, it fails on the facts. The submission presupposes it was completely clear that only Norwich Union and not LPE/SSP had a liability to the third parties to pay their fees. In fact, the evidence from the documents shows that the person who had instructed the third parties, and whether it was LPE/SSP or Norwich Union or both of them, was completely obscure. The benefit which LPE/SSP obtained from an agreement that Norwich Union would pay 50% of all of the fees owed to third parties was that LPE/SSP avoided a situation where LPE/SSP could end up having to pay 100% of a fee claimed by a third party who claimed that it had been instructed by LPE/SSP.
211. SSP next submitted that Norwich Union did not have a right under the agreement to sue for 50% of the invoices it had paid. It was said that Norwich Union's claim was not for monies due, a claim in debt, but was a right to claim an account and so that Norwich Union's entitlement to be paid would only arise when an account was taken. This submission was combined with a submission that any claim by Norwich Union to an account was now statute barred so that there could not be an account and so Norwich Union would never reach a point where it had an entitlement to be paid.
212. I do not accept this analysis of the fee sharing agreement and of the rights under it. In my judgment, LPE/SSP owed an obligation to Norwich Union under the fee sharing agreement to pay to Norwich Union when demanded 50% of the fees paid by Norwich Union. If LPE/SSP had itself paid fees which came within the fee sharing agreement, then it was open to LPE/SSP to demand 50% of those fees from Norwich Union. If LPE/SSP was entitled to be paid sums by Norwich Union then it was entitled to set off that entitlement against its liability to Norwich Union. On the facts, the only claim before the court is Norwich Union's claim for 50% of the sums it has paid. There is no cross claim or set off in relation to 50% of sums which SSP allegedly paid. The reason appears to be that SSP does not allege that it paid any fees in respect of which it can claim to be entitled to be paid 50% by Norwich Union. Further, SSP's argument that Norwich Union only ever had a right to an account (which it has not claimed) is contrary to the express agreement made on 6^th July 2001, although I accept that that agreement does not cover the full extent of the invoices on which Norwich Union now relies.
213. SSP relied on Green v Hertzog [1954] 1 WLR 1309 in support of its analysis that the only claim available to Norwich Union was a claim to an account. That case offers no assistance in the present case. It involved a consideration of the position where one partner lends money to the partnership, of which he is a member, and a consideration of section 44(2) of the Partnership Act 1890. Neither of these considerations is relevant here. SSP also relied on Concorde Graphics Ltd v Andromeda Investments SA [1983] 1 EGLR 53. That case involved the application of a contractual provision which required the amount of a service charge to be agreed or ascertained, in a particular way, before the service charge became due. There is no parallel provision in this case. In so far as the parties agreed on a machinery for the approval of the invoices for payment by Norwich Union followed by SSP paying its 50% share to Norwich Union, the agreed machinery was followed.

Did LPE make the agreements as principal?

214. The next question is whether the agreement which was made between LPE and Norwich Union was an agreement between LPE as principal rather than as a purported agent for SSP. It is clear beyond argument from the documents that LPE held itself out as acting as agent for SSP rather than as a principal.

Did LPE have any authority to act on behalf of SSP?

215. The conclusions I have so far reached now give rise to the question whether LPE had authority to make the agreement or agreements (which I have found were made) on behalf of SSP.
216. SSP submitted that LPE had no relevant authority at any relevant time. SSP submitted that the only authority (not relevant to the agreements relied on by Norwich Union) which LPE had was to collect rents, although Mr Costain also said that LPE could act as "an administrator", which he explained meant the performance of some limited "back room" functions.
217. SSP's position in relation to the limited authority of LPE is an odd one in view of the documents to which I have referred. SSP seeks to escape from this oddity by saying that the project manager who did have authority to act for SSP at all material times was Topside and not SSP. SSP points to the letter of 19^th November 1999 appointing Topside.
218. Mr Costain gave evidence, which I accept, that it did not matter to SSP whether the project manager was Topside or LPE. It was Adaptdart who selected Topside as the project manager because it had tax losses which it could use. In fact, to the knowledge of everyone at SSP the work, which was within the role of project manager, was done by LPE. It is clear to me from the documents I have seen that Topside did nothing at all. I think it is likely that that fact was also clear to everyone at SSP although it is possible that SSP might have thought that Topside did some work although certainly not the greater part of the work.
219. So far as formal appointments of a project manager are concerned, the documents suggest that the legal person appointed was, first, LPE by the letter of 25^th August 1999, then Topside by the letter of 19^th November 1999 and then either LPE or Topside (the position is not particularly clear) by the letter of 3^rd October 2000. The position following 30^th June 2001 until the letter of 27^th September 2001 is also not particularly clear. SSP's solicitors wrote on 17^th August 2001 to Norwich Union stating that LPE was the relevant agent for SSP. Further, on 29^th August 2001, Mr Dymond wrote to Mr Berger (with a copy of the letter to Mr Shrives of SSP) stating that since the end of June 2001, LPE had been acting for SSP. Accordingly, if it were necessary to decide the point, it might very well be right to hold that LPE rather than Topside was SSP's direct agent in the period October 2000 to January 2001 when the original fee sharing agreement was made and also on 2^nd and 6^th July 2001 when further agreements were made.
220. In my judgment, it is not necessary to decide the questions discussed in the last paragraph because there is a clear and certain foundation for the conclusion that LPE did have authority (the extent of which I will discuss below) to act for SSP at the relevant times. That basis is that if, as SSP submits, its agent was Topside, and not LPE, then Topside had authority to delegate, and did delegate, its agency to LPE.

Delegation of authority

221. The law as to delegation of authority is usefully summarized in Bowstead & Reynolds on Agency, 18^th ed., at para. 5-001. An agent may not delegate his authority in whole or in part except with the express or implied authority of the principal, or the delegation may be ratified by the principal. The authority of the principal is implied in the following cases, in particular: (1) where the principal knows and accepts, at the time of the agent's appointment, that the agent intends to delegate his authority; and (2) where, from the conduct of the principal or of the principal and the agent, it may reasonably be presumed to have been intended that the agent should have power to employ a sub-agent.
222. In relation to delegation, the first question of fact is whether Topside did delegate its authority to LPE. It is clear to me that Topside did so. Topside did nothing itself, except present to SSP its claim to be paid its fee. All of the matters relevant to these proceedings were handled by LPE. These facts were known to Topside. Mr Dymond was the relevant director of both Topside and of LPE.
223. The next question of fact is whether this is a case where authority to delegate to LPE is to be implied into SSP's appointment of Topside. My conclusion on that question is that this is a case where SSP knew and accepted at the time that Topside was appointed as agent that Topside intended to delegate its authority. Further, the conduct of SSP and of Topside make it reasonable to presume that SSP and Topside intended that Topside should have power to employ LPE as a sub-agent.
224. I will now refer to the principal facts which are relevant to the conclusion expressed in the last paragraph. It was immaterial to SSP whether the matters which were to be attended to in relation to the St Mary le Port site were attended to by Topside or by LPE. SSP initially appointed LPE, by the letter of 25^th August 1999. The reason that Topside, rather than LPE, was appointed by the letter of 9^th November 1999 was that Topside had tax losses which it would be able to use in relation to any earnings it might make. The documents repeatedly show that, during the period governed by the appointment of 9^th November 1999, the matters which were attended to in relation to the St Mary le Port site, were dealt with by LPE, on behalf of SSP, and were not dealt with by Topside and SSP knew this to be the case. When SSP appointed a project manager by its letter of 3^rd October 2000, it does not distinguish between Topside and LPE and, indeed, the letter may have amounted to an appointment of LPE, rather than Topside. If that letter were held to have been an appointment of Topside, rather than LPE, then the position as to who attended to all the relevant matters during the period of the appointment was the same as before: it was LPE, to the knowledge of SSP. That appointment was for the period to the end of June 2001. After the end of June 2001, on 17^th August 2001, SSP's solicitors wrote to the Norwich Union stating that SSP's agent was LPE. The correspondence between Mr Dymond and Mr Berger treated LPE as SSP's agent and the letter dated 29^th August 2001 from LPE was copied to Mr Shrives of SSP.
225. My conclusion based on the above findings is that, if Topside rather than LPE was the direct agent of SSP, at the relevant times when the fee sharing agreements were made, then Topside had implied authority to delegate its agency to LPE and that it had done so.
226. For the sake of completeness, I add that if for whatever reason the delegation of the agency by Topside to LPE was not initially authorized, such delegation was ratified by SSP. I will deal later in this judgment with the law as to ratification. The findings of fact which I have already set out in relation to delegation lead to the finding that SSP knew that Topside had delegated authority to LPE and that SSP adopted or recognized the actions of LPE as done on SSP's behalf.

The scope of LPE's authority

227. SSP submitted that even if I held that LPE had authority to act for SSP, the making of an agreement with Norwich Union that SSP and Norwich Union should share the fees of professionals and consultants 50/50 was outside the scope of any actual authority enjoyed by LPE. Norwich Union does not rely on any alleged apparent or ostensible authority in this case.
228. The starting point for a consideration of the actual authority of LPE is to consider the terms of the three letters of appointment of 25^th August 1999, 9^th November 1999 and 3^rd October 2000.
229. The essential terms of the letters of 25^th August 1999 and 9^th November 1999 are the same and I will therefore consider the second of these letters. This letter appointed Topside rather than LPE but I have held that Topside delegated its authority to LPE and LPE's authority was therefore the same as that of Topside.
230. The letter of 9^th November 1999 contemplated that, during the appointment of the agent as project manager, steps would be taken with a view to obtaining planning permission for the site. Accordingly, the parties to the appointment would have appreciated that it would be necessary to engage professionals and consultants for the purpose of applying for planning permission. This fact is demonstrated by the part of the letter which appoints the agent to "co-ordinat[e] the professional team". Plainly, the agent was given express actual authority to co-ordinate the professional team which was appointed. That gives rise to the next question: who had authority to appoint the professional team? After Topside/LPE was appointed as agent, there is no sign that anyone other than LPE took any steps on behalf of SSP to appoint the professional team. Of course, one cannot rely on events after the appointment was made as an aid to construction of the letter of appointment. However, SSP and Topside and LPE had earlier dealt together with property developments, in particular, in relation to a property at Leeds. In the absence of any other evidence as to the background facts within the reasonable contemplation of the parties when the agent was appointed, I think there is a strong argument for holding that on the balance of probabilities it was expected that LPE would appoint the professional team, which it was given the responsibility to "co-ordinate". If I accepted that argument, then I would hold that Topside/LPE had implied actual authority to appoint the professional team.
231. If I held that Topside/LPE had authority to appoint the professional team, then I would also be prepared to hold that Topside/LPE had implied actual authority to agree the fees payable to the professional team. Further, I would be prepared to hold that Topside/LPE had implied actual authority to agree with Norwich Union to share the expense of those fees. The letter of 9^th November 1999 refers to the possibility of developing the site together with Norwich Union. If Topside/LPE had authority to appoint a professional team on terms that SSP would pay the fees involved, then it must have been implicit within that authority that the professionals could be appointed on terms that the fees would be borne as to 50% by SSP and as to 50% by Norwich Union.
232. In the event, I find that it is not strictly necessary for me to determine the scope of the actual authority, express and implied, conferred by the letter of 9^th November 1999. The authority conferred on Topside/LPE before the fee sharing agreement was made in the period October 2000 to January 2001 was conferred by the letter of 3^rd October 2000. By that time, certain professionals and consultants had already been appointed. The letter of 3^rd October 2000 expressly refers to "the substantial costs" incurred by SSP being beyond those anticipated. The reference to anticipated costs indicates that the costs referred to were the costs of progressing the development project rather than, for example, the costs of acquiring SSP's interests in the site. Accordingly, with this background to the letter of 3^rd October 2000 and a continuing instruction to "co-ordinate" the professional team, in my view, it is proper to imply into the appointment authority to off load some of the costs which might be involved in respect of the professional team by agreeing with Norwich Union that it would bear 50% of the costs of the professional team, of course in return for SSP bearing 50% of the total costs.
233. Accordingly, I hold that LPE had implied actual authority on behalf of SSP to make the fee sharing agreements which are relied upon by Norwich Union in this case.
234. The position as to the actual authority of LPE is not so clear as to allow me to leave matters there. Norwich Union submitted that even if the fee sharing agreements were initially unauthorized, they were in due course ratified by SSP so as to become binding on SSP. I will therefore go on to consider that possibility.

Ratification

235. The law as to ratification by a principal of unauthorized acts by an agent is set out in detail in Bowstead & Reynolds on Agency, 18^th ed., at paras. 2-047 to 2-098. There are two features of the law as to ratification which require attention in this case. The first relates to the knowledge which it must be shown that SSP had and the second relates to the statements or acts of the principal which amount to ratification.
236. As to the knowledge needed for the purposes of ratification, it must be shown that, at the time of the alleged ratification, the principal had full knowledge of all the material circumstances in which the act was done, unless he intended to ratify the unauthorized act and take the risk whatever the consequences might have been. Knowledge of the legal effect of the unauthorized act is imputed to the principal. It is not necessary that the principal should have notice of collateral circumstances affecting the nature of the act. The law is summarized in Bowstead & Reynolds at para. 2-067.
237. The acts which will constitute ratification are discussed in Bowstead & Reynolds at para. 2-070. Ratification may be express or by conduct. An express ratification is a clear manifestation by one on whose behalf an unauthorized act has been done that he treats the act as authorized and becomes a party to the transaction in question. The express manifestation need not be communicated to the third party or to the agent. Ratification will be implied from conduct where the conduct of the person on whose behalf the unauthorized act has been done, is such as to amount to clear evidence that he adopts or recognizes such act or transaction and such can be implied from the mere acquiescence or inactivity of the principal. The adoption of part of a transaction operates as a ratification of the whole.
238. These passages from Bowstead & Reynolds have consistently been adopted as accurate statements of the law: see, for example, Suncorp Insurance and Finance v Milano Assicurazoni SPA [1995] 2 Lloyd's Rep 225 at 234, Yona International Ltd v La Reunion Francaise SA [1996] 2 Lloyd's Rep 84 at 103 and 106 and Sea Emerald SA v Prominvestbank-Joint Stockpoint Commercial Industrial and Investment Bank [2008] EWHC 1979 (Comm) at [102] – [103].
239. I will now consider the state of the evidence as to SSP's knowledge of a fee sharing agreement or agreements between LPE, purportedly on behalf of SSP, and Norwich Union. The only witness called by SSP who professed to be able to speak of SSP's knowledge of relevant matters was Mr Costain. However, I have already explained that Mr Costain was not able to speak comprehensively as to who knew what at SSP in relation to the St Mary le Port site. Mr Costain gave evidence that he knew nothing about any fee sharing agreement but even if I accepted his evidence to that effect, I am not prepared to accept his suggestion that nobody at SSP knew anything. Indeed, I am entitled to take into account when assessing any positive evidence which I do have about the knowledge of representatives of SSP, that SSP has not called witnesses who would probably have been able to throw considerable light on this question and has not offered explanations to the court as to why such witnesses were not called. The principal witness missing in this respect is Mr Shrives. It is also obvious from the correspondence between Mr Dymond and Mr Berger that Mr Berger would have been able to give important evidence as to the role which he played and how much of that role was known to SSP. I am not at this point making a finding that Mr Berger was authorized to act on behalf of SSP or even that the knowledge of Mr Berger is to be attributed to SSP. I am instead making a narrower point that Mr Berger would have been a highly relevant witness as to the questions I am now considering but yet he was not called by SSP and no explanation was offered by SSP for his absence from the trial.
240. Mr Berger's letter of 14^th August 2001 suggests that Mr Dymond of LPE had written to Mr Berger and to Mr Shrives on earlier occasions. In addition, that letter makes clear that Mr Dymond had, over the years, numerous telephone conversations with Mr Berger and meetings with Mr Berger on the subject of the St Mary le Port site. On the balance of probabilities, I am prepared to find that it is more likely than not that a duly authorized representative of SSP knew of the substance of what was discussed from time to time. I am further encouraged to make that finding in view of the absence of Mr Shrives and Mr Berger from the trial. Mr Shrives and Mr Berger would have been able to give evidence to the contrary effect if, for some reason, what Mr Dymond had told Mr Berger had not been passed on to the directors of SSP and if Mr Berger had no authority to act for SSP. Yet Mr Shrives and Mr Berger were not called by SSP. I make the above finding either on the basis that the directors of SSP, and in particular Mr Shrives, were leaving it to Mr Berger to deal with the detail of the matter, or that Mr Berger informed the directors of SSP and in particular Mr Shrives of the substance of the matter, or indeed, both of these possibilities happened. As will be seen from a point made in Mr Dymond's letter of 29^th August 2001, one of the substantial matters discussed was the agreement between LPE on behalf of SSP and Norwich Union on fee sharing.
241. Quite apart from my general finding that a duly authorized representative of SSP was kept informed of the discussions between Mr Dymond and Mr Berger over the years, I have Mr Dymond's letter of 29^th August 2001. That letter was addressed to Mr Berger and copied to Mr Shrives. That letter showed Mr Shrives that Mr Berger was acting on behalf of SSP, in particular as the person on behalf of SSP who was to be kept informed by Mr Dymond on matters of detail in relation to St Mary le Port. The letter further stated that SSP was working jointly with Norwich Union in connection with the development proposals. The letter described the up to date position as to the work done by the professionals and consultants. The letter referred specifically to the 50/50 fee sharing agreement between LPE on behalf of SSP and Norwich Union. It is also clear from that letter that this was not the first occasion that SSP had been informed about the fee sharing arrangements. The letter referred to an earlier budget or budgets in that respect. The letter also referred to Mr Berger's negotiating point about taking account of the costs of acquiring buildings; that was a point that must have been put forward by SSP to Mr Dymond prior to 21^st June 2001 when Mr Dymond referred to the point in a letter to Norwich Union.
242. Based on the above findings as to communications between Mr Dymond and Mr Shrives and Mr Berger, and in particular the contents of the letter of 29^th August 2001, I find that Mr Shrives and Mr Berger knew that LPE had made, on behalf of SSP, a 50/50 fee sharing agreement with Norwich Union.
243. The law as to when the knowledge of a natural person may be attributed to a company was considered in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500. It has since been held, applying the principles laid down in Meridian, that the general rule is that the knowledge of one director of a company is to be attributed to the company: see Jafari-Fini v Skillglass [2007] EWCA Civ 261 at [98] and Lebon v Aqua Salt Co Ltd [2009] UKPC 2 at [24] – [26]. Applying that approach to the facts of this case, I hold that the knowledge of Mr Shrives is to be attributed to SSP. He appears to have been the director at SSP who took an interest in this development project. He also signed, as the sole signatory, the appointments of Topside or LPE as the project manager; I refer to the letters dated 25^th August 1999, 9^th November 1999, 3^rd October 2000 and 27^th September 2001 dealing with such appointments.
244. Although it is not necessary for me to go further than a finding in relation to Mr Shrives, I also hold that the knowledge of Mr Berger is to be attributed to SSP. It is clear from the letters between Mr Dymond and Mr Berger that SSP had allowed Mr Berger to act on its behalf as the person to be kept informed by Mr Dymond of the details of the proposed development.
245. As regards acts which amount to ratification, I make the following findings. Mr Shrives and Mr Berger were told in Mr Dymond's letter of 29^th August 2001 that the agreed process with Norwich Union was that Norwich Union would pay the invoices in the first instance and then invoice SSP for 50%. SSP allowed that process to take place. SSP did not take any action to prevent Norwich Union paying the invoices. That was to the benefit of SSP because it meant that the professionals and consultants were paid and would not claim payment from SSP. SSP also had the benefit of the agreement binding Norwich Union to pay 50% of the fees. If SSP had disowned the fee sharing agreement with Norwich Union, then SSP would have been exposed to claims from the professionals and consultants, or some of them, on the basis that SSP had appointed them. The facts as to whether SSP, acting through LPE, had or had not appointed the professionals and consultants were very far from clear. The fee sharing agreement with Norwich Union gave SSP the benefit of clarity that its liabilities would be equal to, but would not be more than, 50% of the fees. No one on behalf of SSP alleged that the fee sharing agreement made by LPE was unauthorized and not binding on SSP. In my judgment, this acquiescence on the part of SSP could, and did, amount to ratification of the fee sharing agreement.
246. In addition to the ratification referred to above, I also hold that Mr Dymond's witness statement of 14^th October 2002, which was authorized by SSP, amounted to ratification of the fee sharing agreement. I rely on paragraph 25 of that statement and the reference to the 50/50 sharing arrangement in exhibit CJD 7. Paragraph 25 refers to the fact that Norwich Union had borne a significant proportion of the fees "pursuant to its informal co-operation agreement with [SSP]". That paragraph does not spell out what the fee sharing agreement was but it accepts that there was a fee sharing agreement between SSP and Norwich Union. The passage of time from July or August 2001 to 14^th October 2002 does not prevent Norwich Union relying on this witness statement as ratification of the fee sharing agreement. Although the expiry of a reasonable period of time may in some circumstances prevent the principal relying on an act of ratification to bring into existence a contract between the principal and a third party, the same rule does not apply where the third party wishes to rely upon the ratification: see Bowstead & Reynolds at paras. 2-087 and 2-090.
247. In my judgment, the result of the above findings as to knowledge and as to acts of ratification is that SSP ratified, as authorized by SSP, the agreement made by LPE with Norwich Union that the fees of the professionals and consultants would be shared 50/50 between SSP and Norwich Union.

The overall result

248. The result of the above conclusions is that Norwich Union is entitled to judgment for the principal sum claimed by it in these proceedings. Following the handing down of this judgment, I will hear submissions in relation to the claim to interest on that sum, if the claim to interest is not agreed. I will also deal with all other consequential matters.