Cavendish Corporate Finance LLP v Gil Investments Ltd [2009] EWCA Civ 368 (07 May 2009)

Cavendish Corporate Finance LLP v Gil Investments Ltd [2009] EWCA Civ 368 (07 May 2009)

The definition of 'consideration' in the Engagement Letter is limited to amounts actually received by shareholders, directly or indirectly, in cash or in kind. Bank loans, HP liabilities, and notional values not received by shareholders are not included. The Engagement Letter does not support using enterprise value as the basis for commission. Cavendish is entitled only to the minimum fee.

Citation
[2009] EWCA Civ 368
Parties
Claimant/respondent: Cavendish Corporate Finance LLP; Defendant/appellant: GIL Investments Ltd
Jurisdiction
England and Wales
Judgment Date
07 May 2009
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal allowed. High Court order set aside. Judgment for Cavendish for minimum fee only.
Legal Topics
Interpretation of Commission Agreements, Calculation of Consideration, Share Sale Transactions
Contract Law Commercial Law Interpretation of Commission Agreements Calculation of Consideration Share Sale Transactions

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Parties

Cavendish Corporate Finance LLP

Claimant/respondent

GIL Investments Ltd

Defendant/appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)

Legal Issues

  1. 1 Proper construction of 'consideration' in a commission agreement for share sale
  2. 2 Whether enterprise value or actual sums received by shareholders forms the basis for commission calculation
  3. 3 Inclusion of bank loans, hire purchase liabilities, and notional share values in consideration

Ratio Decidendi

The definition of 'consideration' in the Engagement Letter is limited to amounts actually received by shareholders, directly or indirectly, in cash or in kind. Bank loans, HP liabilities, and notional values not received by shareholders are not included. The Engagement Letter does not support using enterprise value as the basis for commission. Cavendish is entitled only to the minimum fee.

Court Disposition

Appeal allowed. High Court order set aside. Judgment for Cavendish for minimum fee only.

Orders

  • Permission to amend Notice of Appeal granted.
  • Order of His Honour Judge Davies dated 22 July 2008 set aside.