A company which specialises in sourcing financial products for independent financial advisers has triumphed in a claim for damages and unpaid commission in respect of its efforts in successfully marketing a student accommodation investment fund.
The fund had only recently been set up by company B when company A introduced a number of clients, including a very large overseas investment fund. Following protracted negotiations, a draft contract was circulated by email which dealt with commission and other matters; however, it was never formally executed.
Following the end of the companies’ trading relationship, a dispute arose as to commissions due and company A launched proceedings. Ruling comprehensively in favour of company A, the High Court found that the terms of the agreement between the parties were embodied in the draft contract.
The introductions made by company A had been effective and it was entitled to uncapped commission at the agreed rate on the value of all the business placed by relevant clients with company B. The latter had also breached the contract by failing to give reasonable notice of termination.
The Court rejected arguments that company A had repudiated the contract by also marketing another property-based investment fund which company B viewed as a competitor. There was no exclusivity clause in the contract and, in the context of a short-term and sales-driven trading relationship, company A owed no fiduciary duty to company B. Remaining issues as to the amount of commission and damages due to company A was left over for argument on another day.