England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY

		Civil Justice Centre The Priory Courts 33 Bull Street Birmingham B4 6DS
		23rd January 2015

HHJ SIMON BARKER QC :

1. These proceedings concern the property investment arrangements between G & A Properties (UK) Ltd, the claimant, which I shall refer to as G & A, and Ms Teresa Rolland, the first defendant. Neither G & A nor Ms Rolland, by her counterclaim, seek any relief against Kenneth John Ranns, the second defendant, and he has not participated as a party in these proceedings. He has attended to give evidence and I observe at this stage that it is unclear to me why he should remain a party to the proceedings.
2. The trial before me, heard over the four days 19^th to 22^nd January 2015, was of the following preliminary issues ordered by District Judge Ingram at a case management hearing on 14^th February last year : (1) whether the first defendant entered into any contract or joint venture with the claimant and (2) if so, the terms of the contract or joint venture. It is and has throughout been the case that both G & A and Ms Rolland contend that they are parties to a contract. What they disagree about is the form of the contract, the date when it was made and, crucially so far as concerns the matters for the future, the terms of the contract.
3. G & A's pleaded case is that if the arrangements between G & A and Ms Rolland are not governed by a contract they are joint venturers on the terms of the contract as contended for by G & A in its primary case. In opening the case for G & A, Mr Robert Sterling, G & A's counsel, explained that joint venture is really a fall-back position. In his closing submissions, Mr Sterling made no submissions as to the joint venture aspect of G & A's claim. The phrase "joint venture" is not a term of art either in business or in a legal context; rather, the existence or otherwise of a joint venture is to be determined from the facts and circumstances of the particular case. See in this context the Court of Appeal decision in Ross River Ltd v Waverley Commercial Ltd [2013] EWCA Civ 910 and in particular the judgment of Lloyd LJ at paragraph 34. No facts or circumstances are urged upon me as supportive a of joint venture and I understand the consequence of Mr Sterling's light touch in opening and silence in closing to amount to abandonment of the joint venture claim. Had that not been the case, I would have rejected it.
4. Mr Sterling recognised in opening that it is open to me to find that there is no agreement between the parties; for example, if I am not satisfied that there was a consensus between them. On the issues between the parties and the evidence as it has unfolded at this trial, such a conclusion could not be justified by reasons. Before turning to the preliminary issues, I should set the scene with a summary of the background and my impression of and findings as to the parties and the witnesses.
5. Starting with the background, G & A's business, at least insofar as it is relevant to this case, is sourcing and arranging property investment opportunities for individuals. The scheme is that G & A does the work. It finds the property, it assists in arranging finance, it organises refurbishment or other works as necessary, it finds the tenant, and it manages the property --- when I say it manages the property, it does this directly or through a related company. All the investor has to do is decide whether a particular property offered as an investment is suitable and, if so, invest.
6. The contractual basis of the arrangement is termed by G & A an "armchair investment agreement" which I shall refer to as "AIA". Although an AIA may concern only one property, the usual form of agreement is for several, up to five, properties to be bought in sequence over a period of time. The point of a sequence is that appreciations in value are realised by mortgaging or re-mortgaging a property to generate funds for the deposit on and refurbishment of the next property with the rental income covering the mortgage cost and yielding a return as net rental income. The armchair investor derives both income and capital growth on an increasing basis.
7. As the past decade has demonstrated, property values and prices can go down as well as up. However, G & A's AIA scheme does not depend upon a rising market. The scope for capital appreciation is based upon sourcing properties where the price is negotiable or already below the willing buyer / willing seller open market value. More specifically, target properties are re-possessions or forced sales. In order to fund the initial purchase before refurbishment, G & A frequently advertises for funds at high rates of interest, one per cent or one and a half per cent per calendar month, to be secured on a property and expected to be repaid within a matter of months; i.e., short term, high interest secured loans. On G & A's case, such lending may form part of the AIA. Ms Rolland does not take issue with that but does contend that such an arrangement was no part of her AIA but, in her case, was the subject of a free standing loan agreement. That is a material area of dispute between the parties.
8. G & A attracts investors by, or including by, attending property investment shows or forums. G & A and others make presentations and G & A staff, including Mr Greg Armstrong, G & A's principal witness, remain at stands to explain G & A's schemes and attract investors. Mr Armstrong spoke on behalf of G & A at such an event, billed as "Property Giants" in mid-July 2009. Mr Armstrong's wife, Amanda Armstrong, is G & A's sole director and sole shareholder. However, on behalf of G & A, it is conceded that she has little or no actual knowledge of the affairs of G & A and that Mr Armstrong is the driving force managing G & A as de facto or shadow director; which of the two does not matter for present purposes.
9. Ms Rolland attended at the Property Giants event. After the presentations, she introduced herself to Mr Armstrong and had a lengthy discussion with him about property investment in the bar of the venue that evening. It is common ground that Ms Rolland introduced herself as a potential armchair investor having significant cash and looking for an investment in order to generate both income and capital growth.
10. At that time, Ms Rolland had, in addition to her own home in Jersey, other property investments in Jersey (a guest house and developed plots), an in train property investment in Brazil (two properties bought off plan), and a significant cash balance, which included a then relatively recent inheritance. Ms Rolland's cash had been yielding her eight per cent per annum on fixed term investments, which income was in the year before the events of 2009, on her evidence, some £80,000; but, that fixed investment had matured recently. As from the latter part of 2008, interest rates had tumbled and as from March 2009 the base rate was at 0.5 per cent. In those circumstances, Ms Rolland was looking for alternative investment opportunities combining safety and a good return.
11. She had no prior experience of property investment in England but, having seen and heard Ms Rolland give evidence, she is not the sort of person who would act on a whim. She had run a guesthouse profitably, she had built up property investments and, taking account of her age, then at or approaching 60 years, she was looking to secure her financial position for the future. My impression of Ms Rolland chimes with the submission of Mr Sterling in his closing submissions that, in the management of her financial affairs, Ms Rolland is no fool.
12. It was with the need to find a new use for her liquid funds and with her future in mind that Ms Rolland also attended another property investment event in mid-August 2009 at Heathrow. In mid-July, shortly after Property Giants, Ms Rolland had arranged a further meeting with Mr Armstrong at G & A which was to follow on from the Heathrow event. It is now common ground that this meeting occurred on 17^th August 2009. That evening Ms Rolland had dinner with Mr and Mrs Armstrong at their home and she stayed with them overnight. Subject to a dispute as to the date, whether it was the 17^th or 18^th August, it has always been common ground that the meeting occurred in the morning, and that Mr Mike Penn of G & A took Ms Rolland to see three properties, one of which was 19 Broad Water in Milton Keynes, on that same day.
13. I turn now to my impression of the parties and the witnesses. Neither side has put forward entirely satisfactory evidence. Mr Armstrong's evidence was quickly exposed as flawed in cross-examination. At least in part this was the product of inefficient record keeping at G & A; however, it is also the case that, when uncertain of facts or circumstances, Mr Armstrong asserted those he believed to be in his best interests or in G & A's best interests rather than admit uncertainty. Mr Sterling's gloss on this is that Mr Armstrong did his best to recreate the true position with hindsight based on the material available to him; and, Mr Sterling criticised, not without justification, inadequacies in the disclosure given by Ms Rolland. However, the plain fact remains that statements not based on knowledge or genuine recollection but based on reconstruction using hindsight are not factual evidence.
14. As to Mrs Armstrong, although she is the formal embodiment of G & A, she does not participate in or know about G & A and its business. In her evidence, she stood by Mr Armstrong's account of the date of Ms Rolland's visit to her home without any independent consideration of the particular date. Her evidence added nothing positive to G & A's case.
15. Mr Mike Holt works for G & A sourcing and purchasing properties. He gave evidence in a straightforward way and, in my judgment, was a reliable witness. However, I regard his evidence as neutral in terms of the issues before me.
16. Mr Kenneth Ranns, the second defendant, gave evidence supporting G & A's case. His witness statement is short and goes to Ms Rolland (a) having met him at G & A's office; (b) already knowing that she was going to purchase 19 Broad Water; (c) having been aware that someone else would be the initial purchaser and that she would provide the funding by way of loan to the 'someone else'; and, (d) having understood that the purchase, with cash to be provided by her, was to happen very quickly. Apart from the statement that Mr Ranns met Ms Rolland at G & A's offices, there is no indication of how Mr Ranns is able to speak to what Ms Rolland knew and understood. In other words, it is unclear from his written evidence whether or not Mr Ranns' account is based on what he said and heard in conversation with Ms Rolland. In cross-examination, Mr Ranns said that he remembered joining Mr Armstrong and Ms Rolland in a meeting at which they (that is Mr Ranns and Ms Rolland) were introduced and that in that meeting he signed a loan agreement for £80,000 with Ms Rolland. His oral evidence was that (a) he was introduced as the initial purchaser of 19 Broad Water, i.e. the 'someone else' referred to in his witness statement; (b) a formal loan document for £80,000 was on the table and that he signed it; (c) the price of the property was known to be £79,000 and its value to be about £100,000; and, (d) the meeting was in the morning. In oral evidence, Mr Ranns also said that although he had business cards on him, he did not give one to Ms Rolland.
17. Whilst I am prepared to accept that Mr Ranns met Ms Rolland at G & A's office on the morning of 17^th August 2009, I regard the remainder of his evidence as unreliable. In particular : (1) it is striking that in his written evidence he refers to the borrower and initial purchaser as 'someone else', i.e. someone other than Ms Rolland or G & A, but in oral evidence at trial, some seven months after his witness statement and five and a half years after the event itself, for the first time he asserts that he was identified at the meeting as the borrower and initial purchaser; (2) no one else has contended that a formal written loan agreement for the first property was on the table and signed by at least Mr Ranns on 17^th August; (3) indeed, as Mr Sterling was careful to point out in closing submissions, it is G & A's case that Mr Armstrong declined to make any agreement with Ms Rolland on 17^th August and wanted her to go away and think about the AIA, including a lending arrangement, for a couple of days - in other words, Mr Armstrong was anxious for Ms Rolland to have a cooling off period before deciding whether or not to proceed; and, (4) it is G & A's case that the selection of 19 Broad Water was agreed orally, not in writing, at the meeting on 17^th August. In making these findings as to Mr Ranns' evidence, I have no evidential basis for concluding that his fanciful oral embellishments are other than the product of Mr Ranns acting on a frolic of his own. Nevertheless, they do expose Mr Ranns as unreliable and undermine his written evidence. I attached no weight at all to the evidence of Mr Ranns.
18. Helen Wilkinson gave evidence for G & A. She had no contemporaneous knowledge of the 2009 events. Her evidence was that in the course of trying to resolve the impasse between G & A and Ms Rolland she asked Ms Rolland to forward the email that Ms Rolland had received on 17^th August 2009 with a copy of the AIA attached and that no such email has been forthcoming. I accept that evidence and bear in mind that Ms Rolland's evidence is to the effect that on her two email accounts she has a massive accumulation of emails which are not filed. That is no answer for not forwarding the email and no excuse for not disclosing it.
19. Before turning to Ms Rolland's evidence I note that Mr Mike Penn, also of G & A, who met with Ms Rolland on 17^th August 2009 and who took her to view three properties, including 19 Broad Water, on that day and who was a party to much of the email interchange between G & A and Ms Rolland, has not been a witness. Evidently he was asked to be a witness by Ms Rolland but declined. For the purposes of this trial I do no more or less than take his email correspondence at face value.
20. Finally, in G & A's evidence I turn to the email from Samir Boston to Mr Armstrong on 17^th August 2009 timed at 15.23 hours which states, "Ms Rolland [and gives her phone number] wants to know if she can re-arrange for tomorrow." This is challenged by Ms Rolland as a falsified email, the allegation being that "re-arrange for tomorrow" is a false amendment or revision replacing words to the effect of "be collected." It is common ground that there was a prior arrangement for Mr Armstrong to collect or arrange for Ms Rolland to be collected, after lunch, at a designated place in response to a phone call from her. This email was the subject of expert evidence following Ms Rolland's falsification allegation which expert evidence opines in favour of its authenticity. As Mr Sterling observed : in her oral evidence Ms Rolland complained of the district judge's conduct of the case management conference at which expert evidence was ordered but she did not appeal the decision; Ms Rolland also attacked the independence of the expert and the integrity of his report; and, Ms Rolland she maintained in her evidence that the email was falsified. That is not how her case was advanced by Mr Neil Fawcett, her counsel, or through her solicitors. It does, however, reveal a lack of objectivity on Ms Rolland's part. Not unfairly, Mr Sterling urges me to approach her evidence with some caution. As to the so-called Boston email, it is perfectly possible that Mr Boston, knowing nothing of Mr Armstrong's arrangements with Ms Rolland, misunderstood her message when she rang in.
21. The evidence of three of Ms Rolland's witnesses, Deidre McChristie, Thor Portas and Michael Royce, was not challenged. That evidence established that Ms Rolland could not have dined with or stayed at the home of Mr and Mrs Armstrong on 18^th August 2009 and, therefore, fixed their meeting as having been on 17^th August.
22. Although a witness summons was issued to call a Ms Sue Maxwell Smith, a former employee of or consultant for G & A, she was in the end not called by Ms Rolland.
23. Ms Rolland also made a late application for the court to hear Mr Francis Loisel give evidence by Skype from Brazil. So far as is material, his evidence was effectively along the lines of similar fact evidence. After I expressed the view that such evidence would not assist me at all on the questions of (a) whether a contract was made and (b) given that it is common ground that contracts were not in a standard form, what the terms of any contract between G & A and Ms Rolland in fact were, Ms Rolland decided against pursuing this application. Ms Rolland also did not call a Mr John Hatchard whose witness statement was also similar fact in nature.
24. Mr Tony Orchard was called because his evidence but went beyond similar fact evidence in that he also recounted having been offered 19 Bridge Water in March 2011 at £115,000 and evidently would have proceeded with that property, albeit with some reservation, but did not do so because he was unable to obtain a mortgage because the mortgagee, or intended mortgagee, would not lend on timber framed properties.
25. The final witness for Ms Rolland was a Ms Vanessa Warwick who describes herself as a landlord and as co-founder, with her husband, of Property Tribes Ltd, which operates an online forum for property landlords and investors. She gave evidence as to what Ms Maxwell Smith had said to her and beyond that, expressed opinions about Mr Armstrong and G & A. On the material before me, the opinion expressed by Ms Warwick as her conclusion is unfounded, it betrays a misunderstanding of the scheme underlying G & A's AIAs and, being opinion evidence from a non-expert witness, is inadmissible. Although it may be said that this statement could have been challenged and struck out at the case management stage, the plain fact is it should never have been adduced.
26. Mr Sterling submits that the character attacks on Mr Armstrong, being unwarranted and irrelevant, evince an approach on Ms Rolland's part tantamount to a vendetta, and that this renders weaknesses in her evidence, including wanting disclosure, worse than merely unreliable. There is no doubt that a more than fleeting degree of antipathy underlies Ms Rolland's conduct of this litigation to date. I bear that in mind, but when deciding on what is reliable and what is not, I must not allow a dust cloud of chaff, however dense, to obscure the wheat. As to Mr Sterling's submissions about the shortcomings in Ms Rolland's evidence, just as a margin is to be allowed to Mr Armstrong to recollect events at several years remove, so, too, must a margin be allowed to Ms Rolland.
27. Putting aside her hostility to Mr Armstrong and my view as to her being astute in the management of her financial affairs at all material times, which is not a criticism but, rather, an observation to explain how the parties come to be in their present position, on the straight forward issue of deciding on conflicts of evidence between Ms Rolland and Mr Armstrong, I consider Ms Rolland's evidence to be the more reliable. My primary reason is that her account is most consistent with the available documentation. In this context, and in reaching this decision, I have taken into account that Ms Rolland's disclosure is not free from valid criticism for omission. However, the critical difference is that her account of events is not undermined by the available documentary material on a fair reading. The same cannot be said of Mr Armstrong's evidence.
28. I turn now to when and how the contract was made. Mr Armstrong's unchallenged evidence is that on the day after the meeting, now agreed to be 18^th August 2009, he and Ms Rolland parted on the basis that he had told her to go away and mull over what they had discussed for a day or two before committing herself one way or the other, and that she left with a hard copy of AIA in her possession in addition to the copy sent to her by e-mail. This, Mr Sterling submits, signifies that no agreement was made before or on that day. I agree.
29. Mr Sterling's primary submission is that by causing £50,000 to be remitted to G & A, which sum represented the fee and working capital specified in Ms Rolland's AIA, she formally accepted G & A's offer by conduct. This would have been on 19^th August 2009, or possibly shortly afterwards if the HBOS transfer was not for same day value. By that means, Ms Rolland entered into an agreement comprising terms orally finalised in discussion on 17^th August and substantially, but by no means entirely, contained or evidenced in writing by the document given to her on 17^th August and sent to her by email later that day. Mr Sterling submits that that makes sense and accords with G & A's case because Ms Rolland recognised and acted upon the urgent need to progress the purchase and refurbishment of 19 Broad Water, the terms of which, on G & A's case, were discussed and finalised orally on 17^th August.
30. Mr Fawcett's initial submission in closing was that the agreement between G & A and Ms Rolland was made in writing in the form of the document signed by Ms Rolland; Mr Fawcett also submitted that G & A's signature by an authorised person was unnecessary to the formation of the agreement. Implicit in this submission was a submission that posting by Ms Rolland constituted acceptance of G & A's offer; in other words, Mr Fawcett relied on the general rule in contract law relating to acceptance by post. In this context, see Chitty on Contracts, 31^st Edition volume 1 at paragraph 2-048. After hearing Mr Sterling's closing submissions, Mr Fawcett refined his submission and submits that the correct legal analysis is that the document given to and emailed to Ms Rolland on 17^th August constituted and comprised G & A's offer which Ms Rolland accepted either by paying £50,000 on 19^th August or by signing and posting back two copies of the agreement in late August or early September. G & A do not accept that Ms Rolland ever did post two copies of the agreement signed by her. However, on the evidence before me I am satisfied that she did and in so finding, I accept Ms Rolland's evidence to that effect.
31. There is considerable force in Mr Sterling's legal analysis. Ms Rolland's email of 19^th August informing G & A that she had instructed her bank to transfer the money, i.e. the £50,000, did not express any condition attached to the remittance such as that it be held pending the receipt by her of G & A's countersigned AIA. The explanation given by Ms Rolland herself for making the payment is that having met Mr Armstrong and discussed investing through G & A, she trusted him.
32. I find that the agreement was made by the transfer of £50,000 by Ms Rolland to G & A on 19^th August. As noted, it may have been that the transfer arrived on a day or two afterwards if the instruction to HBOS was not for same day value, but I regard that as an immaterial detail.
33. I turn now to the terms of the agreement. There are seversal areas of dispute.
34. The first is whether the AIA embraced, in addition to written terms, an oral agreement by which Ms Rolland would fund the purchase of 19 Broad Water with a loan of £80,000 secured on that property and bearing interest at 1.5 per cent per calendar month for a maximum period of eight months, which in turn would lead to G & A purchasing and refurbishing that property and letting it for single occupancy, following which Ms Rolland would raise funds on a mortgage and buy the refurbished property, and following which G & A would seek to secure permission from the mortgagee and the local authority for conversion to multi-occupancy letting.
35. This aspect of the alleged agreement is set out as to its claimed terms at the particulars of claim, paragraph 2, sub-paragraphs 6 to 15 in the following way:

(6) On receipt of the payment the claimant would provide the first defendant with details of a house in Milton Keynes as potentially suitable for investment by the first defendant and which was on the market at a price of £105,000 but which Mr Armstrong firmly believed the claimant could buy for substantially less and whose market value as refurbished was approximately £110,000;

(7) the first defendant would loan the claimant the sum of £80,000 for the claimant to buy the property, the loan being secured by a first legal charge of the property;

(8) The claimant would pay the first defendant interest on that loan for a maximum of eight months at the rate of 1.5 per cent per month, during which period the property would be refurbished for occupation under a single letting and a tenant found; the interest was to be paid on redemption of the loan;

(9) on the claimant's purchase the first defendant would apply to the Royal Bank of Scotland for a buy-to-let mortgage loan of 85 per cent against mortgage valuation, on the strength of the first defendant's earned income figures which, prior to the meeting, had been given by her to Mr Armstrong and which had already been accepted in principle by RBS on the basis of such loan to value;

(10) the claimant, having completed its own purchase but before the first defendant's purchase and any valuation of the property by a lender, would refurbish the property for occupation under a single letting, the working capital being used to meet the refurbishment cost;

(11) on obtaining the loan, the first defendant would purchase the property from the claimant in the amount of the mortgage loan valuation;

(12) on completion the first defendant would be credited by the claimant with the difference between the purchase price, being the said mortgage valuation figure and the mortgage loan offer; the legal mortgage and survey costs on the first defendant's purchase would also be paid out of the working capital:

(13) after completion of the first defendant's purchase, the claimant would approach the lender and the local authority to arrange, if possible, for the property to be used and tenanted as a multiple letting:

(14) the cost of the further work to refurbish the property as a multi-letting would be paid for by the first defendant; and,

(15) on the basis of a mortgage valuation of £110,000 and a loan to valuation mortgage of 85 per cent, the difference between the amount of the mortgage and the purchase price of £79,000 would be applied in repaying the first defendant's loan and interest and the costs of refurbishment for occupation as a single letting and the legal mortgage and survey costs on purchase, any surplus being added back to the working capital of £20,000.

36. Ms Rolland's case is that there was no such oral agreement and that although 19 Broad Water was identified as a possible first purchase for her on 17^th August 2009, the actual arrangement involving 19 Broad Water was in the event confined to a secured loan agreed later under an entirely separate agreement. There is nothing in the contemporaneous documents to support G & A's claimed oral agreement about 19 Broad Water. The contemporaneous emails are consistent with Ms Rolland's case that her loan to fund the purchase of 19 Broad Water arose later and is separate from the AIA.
37. Moreover, and equally tellingly, such an oral agreement would be inconsistent with at least two of the undisputed terms set out in writing in the AIA given to Ms Rolland on 17^th August 2009 and emailed to her on that day. Those are clauses 4.1 and 7.3. Clause 4.1 identifies Ms Rolland's obligations : "You are not obliged to purchase any property that we recommend to you pursuant to this agreement but should you refuse to do so, then we may extend the period provided in clause 3.1 above by a period of up to twelve weeks per such refusal." In other words, that term envisages properties being offered after not as part of the AIA. Clause 7.3 provides : "This agreement constitutes the entire agreement between you and us and supersedes any previous agreement or understanding and may not be varied except in writing between us. All other terms, express or implied by statute or otherwise, are excluded to the fullest extent permitted by the law." Mr Sterling submitted that as a matter of construction, I could and should attach no significance to this clause 7.3. In my view, to do so would be to do extreme violence to the terms provided to Ms Rolland.
38. Finally, I accept Ms Rolland's own evidence that there was no such oral agreement. What she said in cross-examination and the way that she said it had the ring of truth. In particular, I bear in mind that her desire was to be satisfied that the first property, 19 Broad Water, if it was to be such, would be suitable as a property for multi-occupancy before she proceeded with the purchase.
39. The next clause in dispute is clause 3.8, in respect of which G & A contends that there should be a final sentence, "Furthermore, the property must be let and managed by G & A Property throughout the period." It appears from clause 3.1 of the AIA, which identifies the services to be provided by G & A, that the purpose of clause 3.8 is there specified. Clause 3.1 provides : "We will use all reasonable endeavours to locate five suitable properties that can be purchased below market value and that meet the criteria as set out in clause 3.8 below within 30 calendar months from the date of this agreement in the area or such other area as you may agree." That makes sense as to the criteria in the first sentence of clause 3.8, namely that G & A will guarantee that each property purchased pursuant to the agreement will, during the period of six months from the date of purchase, produce a positive return upon the presumption that tenants are located to occupy the property paying the market value. That is a service provided by G & A and is consistent with the cross-reference to "criteria as set out at clause 3.8 below". However, the additional sentence contended for by G & A is not a service provided by G & A at all; it is an obligation on the part of the other contracting party, Ms Rolland, t is not within the scope of "criteria" which G & A "will use all reasonable endeavours to meet". In any event, clause 4.5 provides for Ms Rolland to have to instruct G & A Property to locate tenants and to manage the property, so clause 3.8 as contended for by G & A, is otiose. In my judgment, the proposed additional sentence concluding clause 3.8 was not in the document discussed with Ms Rolland or that emailed to her; it is not a term of the agreement.
40. Next in issue is clause 3.1(4) which provides, in the form contended for by Ms Rolland, "Until such time as you shall have purchased your first property pursuant to the terms of this agreement or until this agreement shall be terminated pursuant to the terms provided herein and provided that you shall have complied in full with your obligations pursuant to clause 2.1 above, we shall pay interest to you on the total of the fee and the working capital held by us at the rate of one per cent per month, such interest shall be payable to you on the last business day of every month being a Monday to Friday and not a Bank or other national holiday in England." G & A contend that although Ms Rolland sought interest on the £50,000, that is the fee and the working capital, when discussing the agreement, the final outcome was that there was no such interest to be paid.
41. Mr Armstrong's witness statement, at paragraph 15, contains a reference to interest being due under the AIA. In cross-examination, Mr Armstrong said that he was referring to a later concession made to try to resolve G & A's disputes with Ms Rolland. That is a possible reading of his witness statement. However, contemporaneously with the events on 10^th November 2009 and in response to an email from Ms Rolland to Mr Penn chasing interest on the £50,000, Mr Penn's reply was that payment of interest had slipped Mr Armstrong's mind. On the evidence before me, I find that clause 3.1(4) as contended for by Ms Rolland is a term of the AIA agreed between herself and G & A.
42. Finally, G & A contends for clause in the section of the AIA setting out Ms Rolland's obligations under the AIA as clause 4.8 with the existing clause 4.8 in the document promulgated by Ms Rolland being renumbered 4.9. Clause 4.8 contended for by G & A reads : "You [that is Ms Rolland] must not obstruct the normal course of the transaction nor delay before issuing instructions to your solicitor or mortgage broker. Should delays occur, G & A Properties (UK) Ltd reserve the right to add any additional interest, fees or other charges incurred as a result of the delay so caused to the fee [the reference to the fee is to £30,000 being part of the £50,000]. Should those charges exceed the remaining pool of fee monies, G & A Properties (UK) Ltd reserves the right to either terminate the agreement or to deduct the balance of the additional fees, interest or other charges from the balance of working capital remaining under the agreement."
43. In my judgment, it is striking that although clause 4.8 as contended for by G & A refers in terms to G & A Properties (UK) Ltd, that company is the subject of a definition at clause 1.1 of the AIA as "we, us or our," and throughout the agreement, save at the clause 4.8 contended for by G & A, the abbreviation to "we, us and our" is adopted. This includes no less than six occasions in the other sub-clauses of clause 4. I do not accept that the AIA between G & A and Ms Rolland contains a clause 4.8 as contended for by G & A.
44. That is my decision on the preliminary issues.