Summary

On the proper construction of a contract, a company was entitled to payment for procuring the introduction of two companies.

Facts

The claimant (W) brought a claim against the defendant(G) for failure to make payment due under a contract.

W had operated a theatre under the terms of a lease. It entered into an agreement to rent the theatre to a production company (X) to stage a performance between January and April 2010. Subsequently, W's landlord gave notice that its lease was to terminate in December 2010. W entered into a contract with G, as the incoming tenant, which by cl.2 of the contract, provided that W was to receive payment from G for "procuring the introduction of X to G". Clause 5 of the contract also provided that "subject to the agreement of all documentation, completion should take place on or before 31st October". Prior to entering into the contract with W, G had entered into negotiations with X and had prepared a draft agreement to stage X's production. X had not signed the stage production agreement by the time G entered into the contract with W. X subsequently signed the stage production agreement with G.

G submitted that W was not entitled to payment under the procurement contract as it had not been responsible for the introduction of X, as required by cl.2. G argued that W would not be entitled to payment unless it had also delivered vacant possession of the theatre to G on or before October 31, 2010, as required by cl.5 on its proper construction.

Held

(1) The task of the court in construing cl.2 was not so much to analyse the meaning of the words used as to seek to ascertain what the clause conveyed to a reasonable person having all the background knowledge that was reasonably available to the parties. It was plain that, by committing itself to "procuring the introduction of X to G", W was agreeing to procure signatures on behalf of X in respect of the unsigned stage production agreement. What W had to do in order to be entitled to payment was simply that for which cl.2 provided; breach of any other obligation which W might have assumed would only expose it to liability in damages, and would not deprive it of entitlement to the sum specified in cl.2. Therefore, W's claim succeeded (see paras 58, 65-68 of judgment). (2) Clause 5 did not oblige W to deliver to G vacant possession of the theatre; rather, cl.5 meant that if all the documentation had not been completed by October 31, 2010 then there was no obligation to complete (paras 69, 71-72, 75). (3) There was no scope for implying into the procurement contract a term that W was to deliver to G vacant possession of the theatre on or before October 31, 2010. There was also no evidence that the failure to incorporate such a term amounted to a common mistake or unilateral mistake. Further, there were no grounds on which to justify a conclusion that the contract was void on the basis that W ought to have appreciated that G believed that the procurement contract contained such a provision (paras 76, 85, 92, 96-97).

Judgment accordingly