[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Cheverney Consulting Ltd v Whitehead Mann Ltd [2007] EWHC 3130 (Ch) (07 December 2007) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2007/3130.html Cite as: [2007] 3 WLR 317, [2007] EWHC 3130 (Ch)

[New search] [Help]

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice
		7th December 2007

SIR DONALD RATTEE:

1. The dispute giving rise to this litigation has already been apparently determined by a trial conducted by Mr. Nicholas Davidson QC sitting as a deputy High Court Judge on which he gave judgment for the claimant on 8^th November 2005. The defendant, however, appealed and on 11^th October 2006 the Court of Appeal directed that a new trial should be conducted of the claimant's claim. That new trial has taken place before me.
2. The dispute between the parties concerns the nature and effect of certain agreements entered into for the purchase by Whitehead Mann SARL (WM SARL), a French company associated with the defendant, of an executive recruitment business carried on in France for many years by one Jean-Michel Beigbeder (M. Beigbeder), latterly through a French company called Beigbeder & Partners SA. Both WM SARL and the defendant are subsidiaries of Whitehead Mann Group plc (WM plc). WM plc is a public quoted company engaged, through itself and its subsidiaries, in the business of executive recruitment in the United Kingdom and abroad.
3. The claimant is a company which was formed for the purpose of the rather complex structure which was developed to give effect to the purchase of the Beigbeder business by WM SARL. It is owned beneficially by members of M. Beigbeder's family through a trust, the details of which do not matter for present purposes.
4. M. Beigbeder became a director of the claimant on 3^rd November 2000. The final structure of the arrangements for the purchase by WM SARL of the business of Beigbeder & Partners SA evolved in the course of negotiations of which I shall have to say more. But the final form of the deal comprised at least three written agreements. The claimant contends there was a fourth. The three the existence of which is common ground can be summarised as follows: (1) an asset sale agreement, known in French as an Acte de Cession de fonds de commerce, by which WM SARL acquired the business and goodwill of Beigbeder & Partners SA. (2) an employment contract whereby WM SARL employed M. Beigbeder to work for it as a senior consultant responsible for developing the business of WM SARL by securing new assignments with new or existing clients and carrying them out. (3) a consultancy agreement between the defendant (defined as "the company"), the claimant (defined as "the consultancy"), and M. Beigbeder under which the claimant was, by M. Beigbeder, to provide consultancy services to the defendant.
5. The following provisions of the consultancy agreement are material. Clause 1 is headed: "Appointment of Consultancy" and provides as follows:

"1.1 The Company hereby engages the Consultancy and the Consultancy hereby accepts such engagement upon the terms and conditions contained in this Agreement to supply the services specified in Clause 2.1 of this Agreement to or at the direction of the Company.

"1.2 Subject to termination as hereinafter provided, such engagement shall take effect from 1^st July 2000 and shall be for a period of 36 months expiring on 30^th June 2003 ('the duration')."

6. Clause 2 is headed: "Consultancy's Obligations". Clause 2.1 provides:

"The Consultancy shall provide such advice and assistance to the Company by means of Mr Beigbeder in relation to consultancy recruitment in the UK, Europe, the United States of America and any other place in the world but outside France as the Board may require (the 'Services'). The Services will cover in particular: 2.1.1 developing business for the Company by obtaining assignments from new clients and/or from existing clients of the Company (the 'Source of Business Services'); and 2.1.2 performing and completing such assignments and/or any assignments obtained by the Company and handed over to the Consultancy from time to time at the discretion of the Board (the 'Performance Services')."

7. Clause 2.1 contains further provisions which are not material for present purposes.
8. Clause 2.2 provides:

"The Consultancy shall render the Services specified above in this Clause at such times as shall be agreed between the parties and in default of agreement at such times as the Company may require save that the number of full (i.e. 8 hour) working days, Mr Beigbeder may be required to provide the Services hereunder shall not exceed on average 1 day (or equivalent) per week during the period of this Agreement."

9. Clause 3 is headed "Fee", and so far as material provides as follows:

"3.1 The Company shall pay to the Consultancy for the Services performed between 1^st July 2000 and 30^th June 2001 a retainer of £110,000 payable by quarterly instalments in arrears (exclusive of VAT) within 14 days of the Company receiving the Consultancy's invoice in respect thereof.

"3.2 The Company shall pay to the Consultancy for the Services performed between 1^st July 2001 and 30^th June 2002 a retainer equal to 40% of the Business Generated in that time less £110,000. This retainer shall be payable by quarterly instalments, within 14 days of the Company receiving the Consultancy's invoice in respect thereof.

"3.3 The Company shall pay to the Consultancy for the Services performed between 1^st July 2002 and 30^th June 2003 a retainer equal to 33% of Business Generated in that time less £110,000. This retainer shall be payable by quarterly instalments, within 14 days of the Company receiving the Consultancy's invoice in respect thereof.

"3.4 In no event shall the retainer payable further to Clauses 3.2 and 3.3 be below £60,000 per year.

"3.5 In addition, the Consultancy will be eligible at the end of the Duration to a stock consideration comprised of a grant of a certain number of shares of Whitehead Mann Plc payable by the Company. The maximum number of shares that may be granted to the Consultancy is 162,295 shares with a nominal value of 5 pence (the 'stock consideration').

"3.6 The Stock Consideration will vary downwards following the amount of Source of Business generated in the time of the Duration according to the following formula. Source of Business £1,400,000 or over, Downwards Adjustment 0%, Source of Business between £1,300,000 and £1,399,999 Downwards Adjustment 50%, Source of Business between £1,200,000 and £1,299,999 Downwards Adjustment 75%, Source of Business below £1,200,000 Downwards Adjustment 100%."

10. Clause 12.5 of the agreement provides as follows:

"This Agreement constitutes the entire agreement between the parties to it with respect to its subject matter and shall have effect to the exclusion of any other memorandum agreement or understanding of any kind between the parties hereto preceding the date of this Agreement and touching and concerning its subject matter."

11. Clause 13.1 defined "Business Generated" in these terms:

"… means in any determined period and excluding VAT, the aggregate of 60% of all fees collected relating to the performance and completion of assignments obtained pursuant to the Source of Business Services and 40% of the fees collected relating to the direct performance and completion by the Consultancy of assignments pursuant to the Performance Services as computed by the Company."

12. The same clause defined "source of business" in these terms:

"... means in any determined period and excluding VAT, the amount of fees collected relating to the performance and completion of the assignments obtained further to the Source of Business Services."

13. It is contended by the claimant that a further agreement, "the side agreement", was entered into between it and the defendant as part of a series of agreements which also comprised the three written agreements to which I have referred. It is the claimant's case that the alleged side agreement modified what would otherwise have been the effect of the consultancy agreement in the following way.
14. As appears from the quotations I have made from the consultancy agreement, clause 3 of it provided for what was called a stock consideration to be payable to the claimant. The amount of the stock consideration was to vary according to the amount of business generated by the claimant pursuant to its consultancy obligations under Clause 2 of the consultancy agreement. Clause 2 limited such obligations to the provision of consultancy services outside France. Hence any work done by the claimant through M. Beigbeder in France was not to be taken into account in particular for the quantification of the stock consideration.
15. It is the claimant's case that the alleged side agreement had the effect of extending the class of work to be taken into account for the stock consideration to include work done anywhere in the world including France. This is in fact the essential issue between the parties: were consultancy services provided by the claimant through M. Beigbeder to the defendant in France to be taken into account in quantifying the stock consideration pursuant to Clause 3 of the consultancy agreement?
16. It is common ground that if they were not, the amount of fees generated relevant for the purpose of Clause 3.6 of the consultancy agreement was less than £1.2 million, so that no stock consideration was payable to the claimant. It is also common ground that if, on the other hand, services provided in France were to be included then the total relevant fees exceeded £1.4 million and the maximum amount of stock consideration was payable.
17. Unfortunately for the claimant it has been unable to produce or identify any signed written side agreement. There is, however, in evidence a written, unsigned letter, "the side letter", dated 1^st July 2000, typed under the letterhead of WM plc and addressed: "To the attention of Jean-Michel Beigbeder" in the following terms. I quote an English translation from the original French.

"Dear Jean-Michel, I refer to the different agreements signed between the Whitehead Mann Group, the company Beigbeder & Partners and yourself. I confirm that when the said agreements refer to certain levels of performance to realise in order to give you, directly or indirectly, certain rights, the amounts to consider will be the total amounts directly or indirectly realised by you to the benefit of the Whitehead Mann Group taken as a whole. Yours sincerely"

18. And then a space was left for an intended signature by Gérard Clery-Melin, Chief Executive Officer of WM plc.
19. But the letter in question was never signed. The claimant's case is, firstly, that it is to be inferred from the circumstances surrounding the creation of the document that a copy of it must have been signed by M. Clery-Melin. Alternatively, the claimant contends that the unsigned letter is evidence of an unwritten agreement, in its terms binding on the defendant. The defendant denies the existence of any such agreement.

The facts.

20. I must now relate the facts as I find them surrounding the creation of the three written agreements between the parties, and the side letter to which I have referred.
21. M. Clery-Melin and M. Beigbeder had known each other since the 1970s when they had both worked in the Paris office of a company engaged in the field of executive recruitment. Later, in 1986, M. Beigbeder set up his own executive recruitment business which he carried on very successfully under the name of Beigbeder & Partners SA. In 1999 he decided he wanted to sell that business. He entered into discussions relating to such a sale with M. Clery-Melin, who had recently become chief executive officer of WM plc, which was based in the United Kingdom. Part of M. Clery-Melin's remit as such was to develop the Whitehead Mann Group's executive recruitment business abroad, i.e. outside the United Kingdom.
22. In the remainder of this judgment I shall refer to the group and its constituents simply as "WM", except where the identity of a particular company in the group is material.
23. Negotiations for sale of the Beigbeder business to WM continued in the summer of 1999 until, on 21^st February 2000, M. Clery-Melin on behalf of WM wrote to M. Beigbeder, what has been called a first draft letter of intent. That letter proposed a purchase by WM SARL of all the issued share capital of Beigbeder & Partners, referred to in the letter as "Beigbeder & Associates", for a consideration of FrF 10 million, subject to variation depending on the future volume of business attributable to three named consultants employed by Beigbeder & Partners, one of whom was M. Beigbeder. The consideration payable by WM was to be satisfied partly in cash and partly in shares in WM SARL.
24. Further negotiations followed this first letter of intent. Each party instructed lawyers. M. Beigbeder instructed a French law firm, Latournerie Wolform & Associates, in the person of a M. Pascal de Moidrey. WM instructed Clifford Chance in the person of M. Jonathan Olier. WM also instructed to advise on the negotiations one M. Dominic Rongier, who was an independent financial consultant.
25. After such negotiations a further letter of intent, "the second letter of intent", was written on 30^th March 2000 by M. Olier of Clifford Chance to M. de Moidrey of M. Beigbeder's lawyers, with copies to M. Beigbeder, M. Clery-Melin, Mr. Brassington (chief financial officer of WM plc) and one Marcus Billam, a tax partner in Clifford Chance. The letter of intent was said by M. Olier to be in a "final version satisfactory to my client".
26. The second letter of intent incorporated a change of heart on the part of WM. It was now proposed that instead of WM SARL buying the issued shares in Beigbeder & Partners, it would instead buy the latter company's business assets and goodwill, known in French as its fonds de commerce, for a consideration of between FrF4-5 million, the figure to be determined by accountants. M. Beigbeder would enter into a service contract with WM SARL at a salary and bonus, and further consideration should be payable to M. Beigbeder in the form of shares in WM SARL, the number of such shares depending on the amount of business generated by M. Beigbeder pursuant to his service contract. There was to be no territorial restriction of the business which would qualify for this purpose.
27. On 4^th May 2000 M. Olier wrote a letter to M. Rongier enclosing two new draft letters of intent further changing the structure of the proposed deal. One letter of intent dealt with the proposed purchase by WM SARL of Beigbeder & Partners' fonds de commerce, and M. Beigbeder's employment by WM SARL. There was no relevant change in these proposals from those in the second letter of intent, save that the bonus payable to M. Beigbeder should now be fixed by reference to business generated by him "on the French market".
28. The second new letter of intent proposed new arrangements for additional considerations in the form of shares in WM plc to be paid to or for the benefit of M. Beigbeder. These new arrangements were proposed to be included in a consultancy agreement to be entered into between the defendant and a new company to be set up by M. Beigbeder for the purpose in England.
29. The claimant became that company. Under the consultancy agreement the claimant undertook to provide through M. Beigbeder consultancy services to the defendant anywhere in the world outside France. The defendant would be obliged to transfer to the claimant by way of a stock consideration a number of shares in WM plc depending on the business generated by M. Beigbeder pursuant to the consultancy agreement, i.e. business generated outside France.
30. This latter proposal clearly differed in a significant way from the previous proposals in that it would make M. Beigbeder's or the claimant's entitlement to stock consideration dependent on business generated outside France only. Since the bulk of M. Beigbeder's work had been and continued to be done in France, this proposed change was clearly likely to have a prejudicial effect on M. Beigbeder's interest.
31. Why was the change proposed? According to M. Beigbeder, it was proposed by WM because M. Clery-Melin and his advisers considered that it would have tax advantages for WM. This was the evidence of M. Beigbeder, though he frankly said that he did not understand what the tax significance of the change was thought to be. On the other hand, it is the case of the defendants, supported by the evidence of M. Clery-Melin and Mr. Brassington (who was appointed chief financial officer of WM plc in January 2000) that the change of structure reflected in May 2000 draft letters of intent was proposed by M. Beigbeder because he thought it would have tax advantages for him.
32. I have no hesitation in preferring the evidence on this point of M. Beigbeder to that of M. Clery-Melin and that of Mr. Brassington. As for the latter, in the course of his cross-examination, Mr. Brassington admitted that he played very little part in the acquisition of M. Beigbeder's business and that he had no actual recollection of M. Beigbeder proposing the final change of structure embodied in the May 2000 letters of intent. He also admitted that he did not know whether the change was suggested by M. Clery-Melin, though he did not remember M. Clery-Melin telling him that he had suggested it. It became clear from such cross-examination that Mr. Brassington could not give any reliable evidence on the point.
33. So far as the evidence of M. Clery-Melin is concerned, it became clear from his cross-examination that he played very little part in the negotiation of the structure of the proposed deal between WM and M. Beigbeder. He accepted that, as he put it, he relied on the lawyers to come up with a mutually acceptable deal. He insisted that the change of structure to include the consultancy agreement and draw the distinction between work generated by M. Beigbeder inside France and that generated outside France was required by M. Beigbeder because WM was happy with the original structure.
34. However, M. Clery-Melin admitted that he had no recollection of M. Beigbeder requiring the change, but he said he assumed the requirement came from him because it did not come from WM. The change was, he said, proposed by lawyers.
35. I was left, by this cross-examination, with the clear impression that M. Clery-Melin had no knowledge of whose lawyers it was who proposed the change and that his evidence that the proposal came from M. Beigbeder was wholly unreliable, like a lot of his evidence on other points in issue with which I shall deal. I did not find him a careful and candid witness. On matters on which he had no real knowledge he was quite prepared to speculate in a manner which he thought would further WM's case and to put that speculation forward as knowledge on his part.
36. As I say, I have no hesitation in preferring the evidence of M. Beigbeder whom I found a frank and convincing witness.
37. I should, at this point, refer to letters that had been written to their respective clients for use in these proceedings by M. Beigbeder's French lawyer, M. de Moidrey, and WM's French lawyer, M. Olier. Both lawyers are apparently forbidden by a rule of the Paris Bar (to which they are both subject) to act as a witness in proceedings brought outside France concerning matters on which they have acted as lawyers, even at the request of their respective clients. Instead, each has written a letter setting out his evidence on certain of the matters in issue, including which party it was that proposed the change in structure of the deal between WM and M. Beigbeder. They cannot be cross-examined on such "evidence".
38. This clearly seriously limits its usefulness, particularly since on the question of who proposed the change the evidence of one is in complete conflict with that of the other. M. de Moidrey says that the change in structure of the deal was proposed by WM; M. Olier that it was proposed by M. Beigbeder. In these circumstances, I do not consider that the evidence of either is of any assistance in resolving any of the issues I have to resolve on which their statements are in conflict, or indeed on which their evidence is in conflict with other credible evidence.
39. On the other evidence before the court which I have described, I find it more likely than not that the change of structure of the deal to incorporate the consultancy agreement with its distinction for the purpose of the stock consideration between work done by M. Beigbeder outside France on the one hand, and work done by him within France on the other, was proposed by WM's lawyers as a requirement of their client for the purpose of minimising that client's liability to tax as a result of the arrangements for the purchase of the fonds de commerce of Beigbeder & Partners.
40. The precise tax point in issue was not apparent to M. Beigbeder or M. Clery-Melin, and did not become entirely clear in the course of the trial. But it seems to have been considered by those advising WM that their client might be liable to a social charge under French tax law if it appeared that the stock consideration eventually to be paid pursuant to the consultancy agreement depended on work done by M. Beigbeder in France. Even M. Clery-Melin accepted in cross-examination that the revised structure had tax advantages for WM, though he denied – falsely in my view – that WM or its lawyers had proposed it for this purpose.
41. It may well be that, as suggested also by M. Clery-Melin, it had tax advantages for M. Beigbeder, but I am satisfied on the balance of probabilities that it was WM's side that required the change. M. Beigbeder was aware that the exclusion of his work in France from the computation of the stock consideration could have a prejudicial on his or his company's (the claimant's) entitlement to such consideration, because the major part of his work would continue to be in France, where his experience and contacts were most useful to WM. In fact, as M. Beigbeder said convincingly in his evidence, the deal made no commercial sense if his French work was excluded, because it was clear that the claimant would have no hope of qualifying for the stock consideration on the basis of the computation required by the proposed consultancy agreement if no account was taken of his French work.
42. The distinction now to be drawn between work done by M. Beigbeder in France and work done by him outside France was discussed at a meeting some time in May 2000 attended by M. Beigbeder, M. Rongier, M. Olier and M. de Moidrey of which an undated manuscript note made by M. Beigbeder is in evidence. The note is not easy to construe, but an English translation of it contains the following:

"(1) An asset sale is preferred at 5 million rather than 4 million. (2) Two service contracts but the second one UK should be made with a new British entity to be incorporated. Owners unimportant. To provide services for international activity as opposed to activity in France. Remunerated. Stock grant 5 million. Transfer to be conditional. Notion of business brought over, volume of activity brought over, not to be achieved in France but by WM."

43. Then it continues with further words that are not important for present purposes.
44. I find this difficult to understand. However, it is in my judgment significant that when, in the course of the cross-examination of M. Clery-Melin, this note was put to him by counsel he (M. Clery-Melin) accepted that at the meeting M. Beigbeder was being told that his work done for WM in France would be treated for the purpose of the proposed consultancy agreement as work performed outside France. Quite how this would be achieved was not explained in the note or by M. Beigbeder or M. Clery-Melin in their evidence. However, the admission by M. Clery-Melin is consistent with the claimant's case that it was understood by M. Beigbeder and by WM's representatives that the proposed revision of the consultancy agreement excluding M. Beigbeder's French work from the calculation of stock consideration would not in practice be operated so as prejudicially to affect the claimant's entitlement to such consideration. It is also, of course, consistent with the claimant's case that such understanding was embodied in the side letter.
45. On 25^th May 2000 M. Olier on behalf of WM sent to M. de Moidrey on behalf of M. Beigbeder a draft of the asset sale agreement for his comments. On 29^th May 2000 M. Olier similarly sent M. de Moidrey a draft of the consultancy agreement. Those two lawyers had a meeting to discuss the draft on 21^st June 2000, and the next day M. Olier wrote to M. de Moidrey a letter enclosing further drafts of the proposed agreement. M. de Moidrey wrote a manuscript note on this letter from M. Olier saying (in translation):

"The side letter is missing. For the Consultancy Agreement - Source of Business in France is taken into account. For the Employment Contract foreign business is taken into account for the 'WM equity participation plan'."

46. On 26^th June 2000 M. Olier sent to M. Rongier (the financial consultant who was acting for WM) a draft side letter for comment. M. Rongier gave evidence at the trial before me. I formed the view that his recollection of the events surrounding the production of the draft side letter was, not surprisingly having regard to the time that has elapsed since it was first produced, very patchy. There were clearly unsatisfactory aspects of his evidence at the first trial of this action, which I consider were the result of M. Rongier attempting to make good the gaps in his recollection rather than admitting them, particularly when making his first witness statement without the benefit of seeing contemporaneous documents.
47. I consider he was an honest witness who, before me, was doing the best he could to give truthful evidence. He said he did not now know who first suggested a side letter as a means of reintroducing M. Beigbeder's work in France into the computation of the stock consideration under the consultancy agreement. But he was clear in his evidence that that was its intention. He said he did not discuss it with M. Beigbeder. He remembered speaking to either Mr. Brassington or M. Clery-Melin on behalf of his client, WM, about the proposed side letter. I accept evidence he gave under re-examination to the effect that he realised that, having regard to the way in which the stock consideration was to be computed, if M. Beigbeder's activities in France were to be excluded there would be no stock consideration.
48. Unfortunately M. Beigbeder's evidence is of little help in relation to the genesis of the side letter. He had no recollection of who first suggested a side letter as a means of counteracting the effect of the consultancy agreement in excluding his French work from the computation of the stock consideration. This is consistent with his approach to the deal, which became clear from his evidence, that he was content to leave the means of effecting his intentions to his lawyers. However, he was adamant that he understood that by some means or other work done by him in France would be included in the computation of the stock consideration. Otherwise he would not have entered into the deal with WM. He could have sold to someone else. If his work in France were to be excluded, he said, the deal would have made no sense from his point of view. I accept his evidence.
49. Whoever first suggested the device of the side letter, it is clear that M. Olier produced the draft of it as a means of counteracting the exclusion of M. Beigbeder's work in France from the computation of the stock consideration under the terms of the consultancy agreement. Hence, his sending a draft of such a letter to M. Rongier on 26^th June 2000, as I have mentioned.
50. A meeting at which the contractual documents were intended to be completed was scheduled for 28^th June 2000. The day before, 27^th June, M. Olier wrote to M. Rongier and M. de Moidrey a letter in the following terms. I quote from an English translation.

"On the agenda for the meeting tomorrow: finalising the schedules to the Acte de Cession de Fonds; signature of the Acte de Cession de Fonds and presentation of the cheque to be held in escrow, signature of the Work Contract; initialling of the Consultancy Agreement and entrusting this to Clifford Chance until documents are given which satisfactorily prove the existence of the English company; signature of the side letter. The signatories are expected to arrive at 11.00 a.m. I will leave it to you to inform the interested parties. With a view of preparing as well as possible for tomorrow's meeting, I should be grateful if you would send me the schedules which have already been finalised, so that I can have these copied. I am available for any comment or further discussion with kind regards. Jonathan Olier."

51. In my judgment, it is clear from this letter that WM's lawyer, M. Olier, considered that the relevant parties had agreed the terms of the side letter as forming part of the overall deal that was being entered into between WM, M. Beigbeder and their relevant associated companies, and had agreed that the side letter should be signed at the completion meeting.
52. In his evidence letter, written for the purpose of these proceedings, to which I have already referred as being of very little evidential value, M. Olier says that he had not spoken to M. Clery-Melin or Mr. Brassington or his client about the side letter. He assumed that M. Rongier had already spoken to them about it. Both M. Clery-Melin and Mr. Brassington in their evidence denied having any recollection of discussing the side letter with anyone before the completion meeting. However, M. Rongier's evidence under cross-examination was to the effect that he had discussed it with either M. Clery-Melin or Mr. Brassington, and I accept this evidence.
53. In general, I found neither M. Clery-Melin nor Mr. Brassington a convincing witness on this part of the case. Not only is M. Olier's letter to M. de Moidrey of 27^th June evidence that M. Olier considered that his client had agreed to the terms of the side letter as part of the overall deal with M. Beigbeder and his companies, it also constituted a very clear representation of the fact of such agreement by WM's lawyer to M. Beigbeder's lawyer. Why else should the former have included the signature of the side letter in the completion meeting agenda?
54. The completion meeting on 28^th June 2000 was attended by Mr. White (a director of WM SARL), M. Olier, M. Beigbeder, M. de Moidrey, and an escrow agent, M. Dubois. Mr. White signed the asset sale contract and the employment contract on behalf of WM SARL. M. Beigbeder signed the asset sale contract on behalf of himself and Beigbeder & Partners SA, and the employment contract and the consultancy agreement on his own behalf. He was not, by that time, a director of the claimant. The consultancy agreement was not at the meeting signed by anyone on behalf of the claimant or the defendant, either was the side letter signed by M. Clery-Melin.
55. From 6^th July 2000 the business of Beigbeder & Partners SA was carried on as part of WM SARL. On that date M. Olier wrote to Mr. Brassington a letter in the following terms:

"Side letter Beigbeder & Partners. Please find enclosed the side letter in two originals for execution by M. Gerard Clery-Melin. You will also be receiving from Cheverny Consultancy Ltd the Consultancy Agreement in 3 originals for execution as a deed by Whitehead Mann Ltd. (execution by two directors or by a director and the secretary). These documents should be sent back to my attention and I will despatch them to the relevant parties."

56. On the same day M. Olier wrote a letter to the claimant enclosing three engrossments of the consultancy agreement to be executed on behalf of the claimant and forwarded to Mr. Brassington for execution on behalf of the defendant. On 17^th July 2000 the consultancy agreement executed by the claimant was received by Mr. Brassington on behalf of the defendant. On 4^th August 2000 that agreement was executed by the defendant.
57. As I said earlier in this judgment, there is no direct evidence that the side letter was ever signed. No-one has produced a signed original or copy. On the other hand, there is no evidence that either Mr. Brassington or M. Clery-Melin expressed to M. Olier, or to anyone on behalf of M. Beigbeder or the claimant, any objection to its being signed. This seems to me quite extraordinary if in fact, as they now maintain, neither M. Clery-Melin nor Mr. Brassington had ever agreed that it should be signed.
58. If what they say is true, one would have expected vociferous objection to be expressed to their lawyer, M. Olier, when he sent the side letter to Mr. Brassington for signature by M. Clery-Melin. Mr. Brassington said in his evidence that he would have passed the side letter on to M. Clery-Melin for signature when he received it from M. Olier.
59. M. Clery-Melin dealt with what he says was his first sight of the side letter in his second witness statement in the following words.

"(45) The first time I became aware of the contents of the Side Letter itself was at some point in June 2000 when Matthew Brassington came into my office waving a piece of paper explaining that Jean-Michel was asking us to 'vary' the Consultancy Agreement to include France in the Source of Business calculations. I recall Matthew saying to me 'you're not going to agree to this, are you?'. I read the side letter and said to him clearly 'no'. Neither Matthew nor I ever had any intention of agreeing to this. I do not know what happened to this copy of the Side Letter."

60. The blatant untruth of this was made clear by Mr. Brassington when he said in the course of his cross-examination that M. Clery-Melin's evidence in that passage of his witness statement cannot be true because he, Mr. Brassington, could not read a word of French, the language in which the side letter was written . I believe him. This confirms my view that M. Clery-Melin was a very unreliable witness whose evidence on any matter in issue can be given no weight unless corroborated. His evidence that, although according to him he had never agreed to sign the side letter when his lawyer sent it to him for signature, he neither signed it nor made any complaint to M. Olier that he had been sent it for signature beggars belief.
61. Neither am I prepared, despite the contents of his evidence letter, to accept that M. Olier of Clifford Chance included the side letter in a list of documents to be executed at the completion meeting and later sent it to Mr. Brassington for signature by M. Clery-Melin without satisfying himself that its terms were agreed by his client. Such would clearly have amounted to a serious breach of duty by M. Olier.
62. I am satisfied on the balance of probabilities that the terms of the side letter had been agreed on behalf of WM by M. Clery-Melin before the completion meeting and that he had agreed that such letter should be signed by him as part of the execution of the documents incorporating the deal agreed between WM and M. Beigbeder.
63. This conclusion is further supported by evidence, the truth of which I accept, given by M. Sylvain Dhenin, who joined WM SARL as a consultant in April 2001 and six months later was promoted to the position of partner in the firm. He gave evidence to the effect that, on a date he could no longer recall he had a conversation with M. Clery-Melin in which M. Clery-Melin told him that as part of the deal whereby WM SARL purchased the business of Beigbeder & Partners "a side letter had been written to take into account JMB's [M. Beigbeder's] activity in France which had been agreed as part of the deal, but that when it was presented to GCM [M. Clery-Melin] for signature he lifted his pen to sign it but was persuaded not to by Matthew Brassington (CFO of WM)."
64. M. Dhenin also gave evidence that M. Clery-Melin had told him that on one occasion M. Beigbeder had asked WM's lawyers, Clifford Chance, for a copy of the side letter and that he, M. Clery-Melin, was furious that Clifford Chance had sent a copy to M. Beigbeder. I found M. Dhenin an impressive and convincing witness, and I accept this evidence of his, despite denials by M. Clery-Melin.
65. My conclusion that M. Clery-Melin on behalf of WM had agreed that a side letter in the terms of the draft produced by M. Olier for signature by him should be signed so as to be binding on the defendant is, in my judgment, confirmed by some of the later events to which I must now refer.
66. In early 2001 a dispute arose between M. Beigbeder and Philip Marsden, a consultant working in the London office of WM, over the correct allocation of credit for work done for a client, Merrill Lynch. M. Beigbeder had recommended to Merrill Lynch an individual to be appointed as chairman of Merrill Lynch in Paris. However, Mr. Marsden had apparently had an ongoing business relationship with Merrill Lynch. The details and merits of the dispute as to how much credit for the recommendation by M. Beigbeder should go to him and how much to Mr. Marsden do not matter. The significance of it for present purposes arises from an email dated 27^th February 2001 from Mr. Marsden to some executive committee of WM. In that email Mr. Marsden says this:

"As a result, notwithstanding any role I might have played in the assignment, to allocate Jean-Michel [M. Beigbeder] 50% of that fee was already extremely generous. Moreover, to allocate any more creates a number of issues you probably want to avoid. (1) It inflates the performance of the Paris office; (2) It increases our liability on the purchase of the Beigbeder company."

67. Mr. Marsden referred to a third issue which is of no relevance for present purposes.
68. Clearly, the terms of issues (1) and (2) referred to by Mr. Marsden are consistent only with an understanding by Mr. Marsden that work done by M. Beigbeder in the Paris office of WM SARL would be taken into account in the computation of the stock consideration payable to the claimant under the consultancy agreement, which of course would be so only on the footing that the express terms of that agreement were to be read as modified by the side letter.
69. M. Clery-Melin sought to explain this away on the basis that the work for Merrill Lynch was billed through the London office of WM because of Mr. Marsden's pre-existing arrangement with Merrill Lynch, so that it would be treated as work done outside France for the purposes of the consultancy agreement. I reject this explanation. It is clearly inconsistent with the reference in Mr. Marsden's email to any further allocation of credit to M. Beigbeder inflating the performance of the Paris office and, by implication, thereby increasing WM's liability for the stock consideration.
70. In July or August 2000 M. Beigbeder had attended a meeting of all the consultants and partners of WM at which a revision to the bonus or compensation scheme previously operating in the group was discussed. The details of this do not matter for present purposes. What does matter is that M. Beigbeder was concerned that the change should not affect the computation of the stock consideration to which the claimant was entitled under the consultancy agreement. M. Beigbeder raised this concern at a meeting some time in the second half of 2001 with M. Clery-Melin and Mr. Brassington.
71. M. Beigbeder gave evidence to the effect that at that meeting M. Clery-Melin assured him that under the terms of the consultancy agreement the computation of the stock consideration would not be affected by the change in the bonus scheme. M. Clery-Melin accepted that he did give such an assurance. However, according to M. Beigbeder's evidence on this meeting, M. Clery-Melin also told M. Beigbeder that in fact he had already met the £1.4 million target set by the consultancy agreement for the maximum stock consideration, so that he no longer had to worry about it. This would indeed have been the case if work in France was included, but not of course otherwise.
72. M. Clery-Melin and Mr. Brassington denied that this was said by M. Clery-Melin. Again, I clearly prefer the evidence of M. Beigbeder on the point. I find that he was told by M. Clery-Melin at this meeting, probably in October 2001, that he had already met the stock consideration target. It follows that I find that, in giving this assurance to M. Beigbeder, M. Clery-Melin was acting on the basis that the express terms of the consultancy agreement were to take effect subject to the modification provided by the side letter.
73. Included in the documents in evidence is a copy invoice dated 20^th September 2001 from the claimant addressed to Mr. Brassington in respect of the amount said to be due from the defendant to the claimant for retainer and bonus under the consultancy agreement. The invoice bears a manuscript note by Mr. Brassington which he accepted in cross-examination as explicable only on the basis that he assumed that it was appropriate that work done by M. Beigbeder in France should be included in the computation of what was due to the client under the consultancy agreement.
74. On 5^th August 2002 Mr. Brassington wrote a memorandum to M. Clery-Melin dealing with M. Beigbeder's rights through the claimant under the consultancy agreement. That memo draws no distinction between work done by M. Beigbeder in France and that done outside France. It says, inter alia:

"The Cheverny contract can be terminated for cause, but no provision covers payment for early termination. I imagine we would be forced to deliver the shares in full and probably pay out the contract to end June 2003."

75. It was clear to Mr. Brassington by this stage that there could be no question of the claimant being entitled to the full or any stock consideration if only work outside France was to be included in his computation.
76. On 28^th November 2002 M. Beigbeder wrote an email to Mr. Brassington in which he said:

"I understand, as you indicated in Paris, that the shares would be remitted to me early July 2003."

77. In a reply of the same date Mr. Brassington said:

"Shares due under the Cheverny contract will be issued in early July in accordance with the contract."

78. Again, this clearly assumes that M. Beigbeder's French work was to be included in computing the number of shares due to the claimant since it was, by the date of these emails, abundantly clear that there would be no question of any shares being issuable otherwise.
79. At the end of November M. Beigbeder agreed with Mr. Brassington that his employment by WM SARL under the service agreement should be terminated as from 31^st December 2002, although the operation of the consultancy agreement would continue until June 2003. On 8^th July 2003 M. Beigbeder sent an email to Mr. Brassington saying that under the terms of the consultancy agreement 162,295 WM plc shares were to be issued to the claimant and asking for an assurance that this would be done promptly.

Mr. Brassington replied that he had a copy of the consultancy agreement but had yet to "check the conditions surrounding the number of shares to be issued". M. Beigbeder did not get the confirmation he was seeking.

80. The next available document is a further email from M. Beigbeder to Mr. Brassington, copied to M. Clery-Melin, in which M. Beigbeder says this:

"That condition was filled and recognised as such by Gerard in the middle of my second year when I passed the £1.4 million minimum fee required to justify the full consideration. Gerard, please confirm in writing. Thanks."

Gerard is a reference to M. Clery-Melin.

81. M. Clery-Melin, who had by that time ceased to be chief executive officer of WM Group plc and transferred to another company in the group, replied the next day:

"Jean-Michel, I am sorry that I cannot be helpful with this matter since I have not looked into your SOB performance for a long time and hence do not know whether your numbers of this year enable you to pass the minimum fee level you mention. I believe that Matt should be able to give you shortly your cumulative numbers. I however do not believe that you could have passed the number you mention in the middle of the second year. It would be equivalent to an annual run rate of £1 million per year which only one or two people did achieve at the time in the UK according to my recollection."

Matt is a reference to Mr. Brassington.

82. On 11^th July 2003 M. Beigbeder replied to M. Clery-Melin in these terms:

"You seem to have forgotten your verbal agreement that this issue had been satisfactorily resolved in the course of my second year with Whitehead Mann. Naturally, numbers are numbers and Matt has full access to them to make that determination. The wording of the contract takes absolute numbers of origination into account which were much in excess of the target established. I shall be delighted to provide that evidence when I am back in Paris, as I have in my archives the exact numbers. I am sorry that you did not attempt to provide this information, which is more readily accessible from your position than mine."

83. Included in the documents in evidence is an undated note by Mr. Brassington setting out a calculation of the stock consideration. What is significant about it for present purposes is that the calculation includes all M. Beigbeder's work and not only work outside France. However, the calculation reduces M. Beigbeder's performance figures by applying a discount which was applicable for the purpose of the previously revised bonus arrangements to which I have referred earlier in this judgment, but which at a meeting to which I have also referred M. Clery-Melin had assured M. Beigbeder would not be applicable for the purpose of calculating the stock consideration.
84. Secondly, Mr. Brassington's calculation reduced M. Beigbeder's performance figures by making an unexplained reduction said to be in respect of the Merrill Lynch assignment. In the course of his cross-examination, Mr. Brassington agreed that he could not suggest any basis on which this deduction could properly have been made. He said the calculation was entirely wrong. What is clear from the calculation is that at the time he made it Mr. Brassington clearly understood that M. Beigbeder's work in France was to be taken into account for the purpose of computing the stock consideration. It is significant that WM kept no records separating M. Beigbeder's work in France from that outside France.
85. On the basis of the evidence to which I have referred I find that throughout the period of subsistence of the consultancy agreement M. Beigbeder, on behalf of himself and the claimant on the one hand, and M. Clery-Melin and Mr. Brassington on behalf of WM on the other hand, dealt with each other in relation to the operation of the consultancy agreement on the footing that the express exclusion from the agreement of work done by M. Beigbeder in France was to be ignored in accordance with the terms of the side letter. This is entirely consistent, and consistent only, with my finding that in 2000, before any of the written agreements were signed, M. Clery-Melin on behalf of WM had agreed with M. Beigbeder on behalf of the claimant that the three written agreements actually signed eventually should take effect on the basis that the terms of the side letter produced by M. Olier on behalf of WM would also take effect as one of a set of four agreements embodying the terms agreed between the parties for the purchase of the business of Beigbeder & Partners.
86. On 8^th October 2003 Mr. Brassington sent an email to M. Beigbeder with a copy to Stephen Lawrence, who had taken over from M. Clery-Melin as chief executive officer of WM plc. It said this:

"Jean-Michel, I have now returned from holiday and Stephen has asked me to help him prepare in advance of tomorrow's telephone call. He has asked me to explain to him the meaning of clause 2.1 of the Cheverny Contract in so far that it refers to 'consultancy recruitment in the UK, Europe, the United States of America and any other place in the world but outside France'. I told him that it is my understanding that there was a 'side letter' which included France within the calculation, but that I do not have a copy of any such side letter and indeed have never seen such a letter. Assuming you have your originals of all such documents I shall be grateful if you could provide me with a copy so that I can pass it on to Stephen."

87. On 10^th October 2003 M. Beigbeder sent an email to M. Clery-Melin with reference to Mr. Brassington's email to him, M. Beigbeder, saying in French that he did not remember anything about it and that perhaps M. Clery-Melin had a copy, i.e. of the side letter.
88. One of the striking features of the story of the side letter is that M. Beigbeder never insisted on receiving a signed copy of it after the completion meeting on 28^th June 2000 and, as appears from this latter email, seems to have forgotten all about it. I am satisfied that the explanation for this is that M. Beigbeder (he now accepts not surprisingly unwisely) did not interest himself in the steps taken by the lawyers to implement the overall agreement reached between him and WM over the sale and purchase of his business. He was concerned only with the commercial fact that, as I find, he understood, as did M. Clery-Melin, that for the purpose of computing the stock consideration (which represented an important part of the price he was getting for his business) all his work, and particularly his work in France where the vast majority of his activity was, would be included, notwithstanding the change in structure of the deal required by WM for tax reasons.
89. On 16^th October 2003 M. Olier of Clifford Chance sent to M. de Moidrey (M. Beigbeder's lawyer) copies of the side letter and the consultancy agreement. In relation to the side letter M. Olier said in a covering letter: "Nous n'avons pas de version signee" - we do not have a signed version.
90. On 30^th October 2003 M. Beigbeder wrote to M. Clery-Melin and Mr. Brassington as follows:

"During a telephone conference with Stephen Lawrence this month concerning the issue of stock due to Cheverny Consultants Ltd relative to the Consultancy Agreement between Whitehead Mann plc, Cheverny Consultants Ltd, and myself, Stephen Lawrence asked me on what legal basis Cheverny were authorised to claim the shares inasmuch as the Consultancy Agreement linked the issuance of those shares to the attainment of a certain level of fees 'outside of France' which I had not achieved, as I essentially worked and billed for the Paris Office, which is well known and agreed. My understanding is that the attached Side Letter as part of the comprehensive package of 4 Agreements signed between us, modifies that clause and makes it clear that the fee threshold required is linked to 'the total amount (of fees) directly or indirectly realised by you for the benefit of the Whitehead Mann Group taken as a whole'. I enclose the Side Letter together with Clifford Chance correspondence and I would appreciate your confirming the above Side Letter agreed in good faith as an integral part of the deal relative to the purchase of my practice in Paris in July 2000 so that no misunderstanding remain concerning the interpretation of the Agreement and the issuance of shares provided it at the end of three years."

91. On 31^st October M. Beigbeder wrote to Mr. Stephen Lawrence the following letter:

"In response to your request for information on legal reasons why I deserve the stock allocation through Cheverny Consultants Ltd, I enclose the text of the side letter of July 2000 which has modified the contract to include all fees whether inside or outside of France. Matt and Gerard were the parties representing Whitehead Mann and they can confirm to you that it has always been intended that the amount to be used in calculating the fees threshold for stocks to be issued, in favour of Cheverny, was the total amount of fees, regardless from where it came from. The attached correspondence to Matt and Gerard is self-explanatory will I hope convince you of the validity of my request and therefore, I would appreciate to receive from you your agreement for the issuance of the stock as provided by the Consultancy Agreement as amended by the side letter."

92. Mr. Brassington's reply of 5^th November was in the following terms:

"I am writing further to your fax of 30^th October 2003. Without beating around the bush too much, I am not sure I can be very helpful to you. As you will recall, at the same time that we were in the process of acquiring Beigbeder and Partners we were in the process of acquiring GKR. Certainly the GKR transaction had my almost complete attention during that time and thus my recollection of the terms on which we acquired B&P are hazy to say the least. As a consequence, I can confirm only what signed paperwork I can lay my hands on, which is: the purchase agreement to the 'fonds de commerce' and the Cheverny contract [and] your service agreement. You will no doubt recall I asked you a couple of years ago about the clause in the Cheverny contract which states that the contract applies to the work you were undertaking outside France and in that time you told me about the existence of a side letter. At the time, I accepted your verbal assurance that such a letter existed, although for some reason I did not request a copy of it from you. It seems quite clear from the draft paperwork provided to you by Clifford Chance that we must have been contemplating signing a side letter but as to whether we actually did or not, or for what reason we would even have considered signing such a letter, I regret I cannot help. I am not in a position therefore to confirm that the draft letter you have supplied to me was executed or ever intended to be executed."

93. No resolution of M. Beigbeder's claim for the issue of the stock consideration was reached between the parties, and on 30^th July 2004 the present proceedings were started. By them the claimant claims damages for breach of contract consisting of the defendant's failure to transfer to the claimant the shares due in respect to the stock consideration on the footing that M. Beigbeder's work in France was to be included in the computation of that consideration. The sum claimed is £501,934.77. The quantum of the claim is not in dispute.
94. Counsel for the claimant put his case on three principal bases. (1) It is to be inferred from all the evidence that M. Clery-Melin did sign the side letter so that it became binding on WM as part of the series of agreements referred to in M. Olier's agenda for the intended completion meeting on 28^th June 2000. (2) Alternatively, even if the side letter was not signed, the evidence shows that it had been agreed by M. Beigbeder on behalf of the claimant and M. Clery-Melin on behalf of the defendant that the terms of the side letter should take effect as part of that series of agreements and that those terms took effect in accordance with that agreement together with the written documents executed on and after the completion meeting. (3) Alternatively, the conduct of M. Clery-Melin and Mr. Brassington on behalf of the defendant in dealing with M. Beigbeder and the claimant at all times during the subsistence of the consultancy agreement on the footing that the terms of the side letter were applicable as between the claimant and the defendant gave rise to an estoppel by convention disentitling the defendant from denying the contractual effect of the side letter by way of defence to the claimant's present claim.
95. The principal defences to these alternative cases of the claimant, put forward by counsel for the defendant are as follows. (1) The evidence does not justify a finding that the side letter was ever signed or a finding that its terms were ever agreed by anyone with authority to do so on behalf of the defendant. (2) Even if those terms were agreed, that was on the basis that they would be incorporated by a written document to be signed. The proper inference from the nature of the relevant transactions and the surrounding circumstances is that drawn by the majority of the Court of Appeal on the appeal from the first trial of this action, namely that the terms of the proposed written agreements would only become binding when those agreements had been executed by the parties. (3) In any event the terms of the side letter did not take effect because of the terms of the entire agreement clause in Clause 12.5 of the consultancy agreement. (4) The evidence does not justify any finding of an estoppel against the defendant.

Conclusions.

96. I am not satisfied that the evidence before the court does justify an inference that M. Clery-Melin ever actually signed the side letter. However, as I have already said, in my judgment that evidence does establish that M. Clery-Melin on behalf of WM, and the defendant in particular had, by the date of the completion meeting, agreed with M. Beigbeder on behalf of himself and the claimant the terms eventually incorporated by WM's lawyer M. Olier into the side letter produced by him.
97. So far as material for present purposes, those terms were that, despite the terms of the consultancy agreement, work done by M. Beigbeder in France as well as work done by him outside France should equally be taken into account in determining what level of performance M. Beigbeder had achieved for the purpose of quantifying his or the claimant's entitlements under the consultancy agreement. That M. Clery-Melin had so agreed was made plain to M. Beigbeder by WM's lawyer putting forward in the agenda for the completion meeting the side letter, together with the other three written agreements for execution.
98. I find that by 28^th June 2000 all parties to the proposed agreements referred to in that agenda intended that the side letter and the other three agreements should all take effect as part of an overall agreement between the parties. Consequently, in my judgment, once the asset sale agreement and the employment contract were signed at the completion meeting, the parties became bound by the terms of all the agreements including the side letter. It would, in my judgment, be regrettable indeed if this common intention were to be frustrated, either by M. Clery-Melin's subsequent reneging on that agreed intention by failing to sign the side letter, or by some application of some legal principle. In my judgment, it need not be.
99. An alternative correct analysis of the effect of the parties' intentions is, in my view, that suggested by Carnwath LJ in his dissenting judgment on the appeal from the first trial of this action. That is that by his agenda letter of 27^th June 2000 M. Olier, on behalf of his clients, the relevant companies in the WM group, offered to enter into the agreements set out in that letter, including the side letter. The offer was accepted by M. Beigbeder on behalf of himself and his relevant companies which were parties to the agreements by signing those agreements to which his signature was required. This gave rise to a binding obligation on the other parties to do the same and to give effect to all the agreements together in the meantime.
100. I do not consider that these alternative analyses are made impossible by the inference drawn by the majority of the Court of Appeal from the evidence then before them, namely that the parties did not intend any obligation to arise until all the proposed written documents had been executed. The evidence now before me, in my judgment, does not justify any such inference. On the contrary, as M. Clery-Melin accepted in his cross-examination, his understanding was, not surprisingly, that once the sale agreement or the employment contract which were before the completion meeting for signature was signed, the parties to the consultancy agreement were under an obligation to complete that. The same must of course apply to the side letter now that we know that it was one of the documents that all parties had agreed should be signed. I am satisfied that this was indeed the intention of M. Clery-Melin and M. Beigbeder and therefore of all relevant parties.
101. Is the common intention which I have found that the consultancy agreement should take effect subject to the terms of the side letter frustrated by the entire agreement provision in Clause 12.5 of the consultancy agreement? I will read that again:

"This agreement constitutes the entire agreement between the parties to it with respect to its subject matter and shall have effect to the exclusion of any other memorandum, agreement or understanding of any kind between the parties hereto preceding the date of this agreement and touching or concerning its subject matter."

102. Counsel for the defendant argued that if, contrary to its primary case, the true position were as I have held, it is that by 28^th June 2000 the parties had agreed the terms of the side letter, then necessarily that agreement preceded the date of the consultancy agreement and was rendered nugatory by Clause 12.5 of the latter agreement.
103. Carnwath LJ dealt with the effect of Clause 12.5 on the appeal from the first trial of this action in paragraphs 90 and 91 of the transcript of the Court of Appeal judgment, the reference to which is [2006] EWCA Civ 1303 in the following way:

"(90) I turn to the "entire agreement" clause. The judge's first reason for not applying the clause is that it was "literally untrue". That with respect seems beside the point. The whole purpose of such a clause is to exclude any factual inquiry into what other agreements or understandings there might be. That is apparent from the comments of Lightman J, cited by the judge (in the Inntrepreneur case [2000] 2 LlR 611, 613). As he said, such a clause "constitutes a binding agreement between the parties that the full contractual terms are to be found in the document containing the clause and not elsewhere..."

"(91) I agree with the judge, however, that the wording of the clause is important, and that it must be read in its context, against the background that it was designed as one part of a package of agreements intended to be concluded at the same time, and (on the view expressed above) in fact so concluded. Against that background, the words "any other agreement preceding the date of this agreement" are to be read as not excluding agreements which were part of that agreed package. I do not see it as material that the final signatures on the consultancy agreement were not achieved until some time later; that was a matter of mechanics not substance.

104. I respectfully agree entirely with the learned lord justice and greatly adopt his reasoning. It follows that in my judgment Clause 12.5 of the consultancy agreement did not prevent the parties' agreement of the terms of the side letter taking effect, and it did.
105. I should mention that at an earlier stage of this litigation it was argued that the side letter could not have had contractual effect between the claimant and the defendant because it was to be signed by M. Clery-Melin on the notepaper of WM Group plc, not of the defendant, and was addressed to M. Beigbeder personally and not to the claimant. I think, wisely, counsel for the defendant did not pursue this point before me.
106. In case I should be held in a higher court to be wrong in my conclusion that the side letter had contractual effect, I should consider the claimant's case on estoppel. In my judgment it is clear from the facts I have related earlier in this judgment that at all times during the subsistence of the consultancy agreement the parties dealt with each other in relation to that agreement in a manner consistent only with their having agreed that despite the express words of the consultancy agreement, work carried out by M. Beigbeder in France was to be included in the computation of the claimant's rights under that agreement in other words, consistent only with the defendant's being contractually bound by the terms of the side letter.
107. In my judgment this gives rise to an estoppel by convention within the principle expounded in Amalgamated Investment & Property Company v. Texas Commerce International Bank Ltd [1982] QB 84 with the result that the defendant is estopped from denying that it was bound by the terms of the side letter, even if, contrary to my conclusion, it was not so bound as a matter of concluded contract.
108. Counsel for the defendant submitted that this would be to allow estoppel to be used to create a cause of action contrary to the rule established in many cases such as Baird Textiles Holdings Ltd v. Marks & Spencer plc [2001] All ER D 352. I reject that submission. The conclusion I have expressed on estoppel in this case allows it not to create a cause of action in the claimant but to prevent the defendant from defending the alleged cause of action in contract by denying that it was contractually bound by the terms of the side letter.
109. Thus, in my judgment, the claimant is entitled to succeed in its claim. As I have said, there is no dispute as to the alleged quantum of that claim. There is, however, a dispute as to the rate of interest that should be awarded on the sum of £501,934.77. The dispute is as between a rate of 1% above Bank of England base rate from time to time sought by the claimant, and 1.5% above the Euribor rate from time to time which the defendants contends is the appropriate rate, having regard to the fact that the claimant is the alter ego of M. Beigbeder, who is resident in France, and whose other business activities are in France.
110. In my judgment, given that the claimant is not M. Beigbeder but an English company, the shares that should have been issued to the claimant were in an English company and, I accept, would have been sold by the claimant in England, the English rate is appropriate and I shall award interest at the rate of 1% over Bank of England base rate from time to time.
111. Accordingly, I shall give judgment for the claimant in the sum of £501,934.77 with interest at the rate of 1% over Bank of England base rate from time to time.
112. As we do not have anybody representing the parties here, what I shall do is to make an order in the terms I have indicated. I will give liberty to either party to apply to me in writing (I say in writing because I shall not be sitting after today), such application to be made within 28 days of today's date. I bear in mind of course that it will take some time before the parties' representatives can obtain a transcript of the judgment. If the delay in that results in the 28 days not being long enough in practice, then it will be a matter for whichever party wants to make an application to make a written application to me to extend that time.
113. I will order that the defendant shall pay the claimant's costs on the standard basis to be subject to detailed assessment if not agreed.