Prophecy Networks Ltd v Revera Ltd
[2015] NZHC 215
•19 February 2015
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2014-485-709 [2015] NZHC 215
BETWEEN PROPHECY NETWORKS LTD
Plaintiff
AND
REVERA LTD Defendant
Hearing: 9 and 10 February 2015 Counsel:
CR Carruthers QC and JLW Wass for Plaintiff
JA Craig and SSR Meares for DefendantJudgment:
19 February 2015
JUDGMENT OF BREWER J
This judgment was delivered by me on 19 February 2015 at 3:30 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
Solicitors: Quigg Partners (Wellington) for Plaintiff
Simpson Grierson (Auckland) for Defendant
PROPHECY NETWORKS LTD v REVERA LTD [2015] NZHC 215 [19 February 2015]
Introduction
[1] In 2013, the defendant (“Revera”)1 sold its business to Telecom for
$96.5 million. As a result, the plaintiff (“Prophecy”) sent an invoice to Revera for
$3,600,914.50. Prophecy maintains it is entitled to this sum under an agreement with Revera entered into on 12 August 2007. The agreement was for the supply of services by Prophecy’s principal, Mr Giesbers, to assist Revera to sell its business. Revera denies liability. It says that the agreement does not apply to the Telecom sale, and in any event was terminated in 2008 or was otherwise abandoned.
Issues
[2] The issues for me to decide are:
(a) Does the agreement apply to the sale to Telecom? (b) Was the agreement terminated in 2008?
(c) Was the agreement abandoned?
Does the agreement apply to the sale to Telecom?
[3] The background to the agreement is important because it gives the context for its interpretation. Revera, in 2007, was owned as to 76.84 percent by Mr Cockayne and Mr Norrie. Another company, Hewlett-Packard, expressed interest in buying Revera’s business. Mr Cockayne and Mr Norrie were acquainted with Mr Giesbers, a chartered accountant. At that time he was employed by Allied Farmers, but he also did work on his own account through Prophecy. It was agreed that Mr Giesbers would assist Revera with selling its business. Mr Cockayne and Mr Norrie also wanted Mr Giesbers to look out for their personal interests as majority shareholders in Revera.
[4] Mr Giesbers drew up the agreement himself. It was executed on behalf of
Revera by Mr Cockayne. There is no evidence that Revera took legal advice. There
1 In 2007, the defendant was called Rock Group Ltd. I will use “Revera”, its current name, in this
judgment.
is no evidence that Mr Giesbers had ever advised a client in this way before, nor that Messrs Cockayne and Norrie had ever previously sought advice of this kind. I take it that Mr Giesbers produced an agreement which he thought would answer the situation, Messrs Cockayne and Norrie thought that it did, and so it was executed on behalf of Revera.
[5] The catalyst for the agreement was the approach by Hewlett-Packard. However, the agreement does not refer to Hewlett-Packard but is more general in its scope. As I will come to, the generality of the agreement is a very important aspect of the dispute between the parties.
[6] The agreement is for the provision of services. These are set out in a schedule. There are three kinds of services. The first is to facilitate the amalgamation of Revera and a subsidiary. This was done. The second is to prepare an Information Memorandum describing Revera’s business “to be released to potential purchasers”. This was done.
[7] The third is:
To manage the sale process and front buyer enquiry as needed. Steps are:
· Teaser flyer
· Non Disclosure Agreement
· Information Memorandum with draft Sale and Purchase Agreement
· Due Diligence
· Bid Close
· Negotiations
· Deal Close
[8] In fact, Mr Giesbers took no part in the negotiation with Hewlett-Packard. The chairman of Revera’s board of directors, upon returning from overseas, decided that he wanted a team of people known to him to assist with the negotiation. Mr Giesbers was informed of this and was essentially put on standby to assist as needed. As it happened, the negotiation with Hewlett-Packard came to naught and no bid was made by it.
[9] The schedule of services sets out how Prophecy would be paid:
The Agreed Amount will be calculated based on the highest bid received
(regardless of a sale being completed) as follows:
a)The reference price is $15,000,000 being the approximate business value based on current performance.
b)If the highest bid received is less than $20,000,000, or no bid is received, the Agreed Amount will be $25,000 plus GST.
c)If the highest bid received is $20,000,000 or more, the Agreed Amount will be calculated at 5% of the difference between the highest bid and the $15,000,000 reference price multiplied by
76.84% (the percentage of the total shares on issue held by Roger
Cockayne and Wayne Norrie at the date of this agreement) plus GST.
(eg if the highest bid received is $20,000,000, then the Agreed
Amount will be (5% * (20,000,000 – 15,000,000) * 76.84%) + GST
= $192,100 + GST)
If Rock Group terminates this agreement as per clause 1.4 the amount due to
Prophecy on termination will be $25,000 + GST.
However if Rock Group terminates this agreement as per clause 1.4 and then reactivates a sale process within 12 months of the termination date, the Rock Group will pay the Agreed Amount to Prophecy (as defined above) as if the sale had been concluded as part of this agreement.
[10] The reference price of $15 million originated from a valuation said to have been made by another party (known to Revera’s managing director) who apparently considered bidding for Revera’s business. At the time the agreement was prepared by Mr Giesbers, Messrs Cockayne and Norrie thought that $15 million was the current approximate value of the business. The figure of $20 million is in the agreement because Messrs Cockayne and Norrie at the time thought that that would be a good price. It became the trigger price for Prophecy receiving a fee greater than
$25,000 plus GST. It is the figure used by Mr Giesbers in his example of the operation of the fee payment formula.
[11] It is a feature of the agreement that only Revera had the right to terminate the agreement, and could do so at any time without cause:2
Rock Group has the right to terminate this Agreement at its option at any time. In the event of termination, Prophecy and Rock Group will agree an effective date on which services will cease. Any moneys due up to the effective date of cessation of services will be paid by Rock Group to
2 Clause 1.4.
Prophecy without right of setoff for any claim that Rock Group may have against Prophecy.
[12] So, if Revera did terminate the agreement then Prophecy would be due the fee of $25,000 plus GST which, under clause 3.1, would be payable “on the 20th after receipt of a GST invoice from Prophecy”.
[13] The final aspect of the fee structure is the provision that if “a sale process” is reactivated within 12 months of a clause 1.4 termination then the fee calculation formula would also be reactivated.
[14] Prophecy’s case can be summarised:
(a) The agreement is of indefinite duration. It continues, unless a bid is received, until such time as Revera terminates it pursuant to clause
1.4.
(b)The agreement does not relate solely to the Hewlett-Packard approach. The Information Memorandum describing Revera’s business was prepared for the purpose of releasing it to “potential purchasers”. This is consistent with the agreement being ongoing.
(c) Prophecy’s obligation, having completed the Information Memorandum, was to provide the further services relating to the sale process “as needed”. It does not matter that they were not needed.
(d) The agreement does not require a causative link between
Mr Giesbers’s activities and the attraction of a purchase bid.
[15] Prophecy’s case, therefore, is that when Hewlett-Packard’s interest did not result in a bid the agreement continued in effect and, although no further services were required, the right to payment in accordance with the formula was triggered in
2013 when Revera’s business was sold to Telecom.
[16] The law on interpreting contracts is set out helpfully by the Court of Appeal:3
[31] The approach to contractual interpretation in New Zealand is based on the principles set out in Investors Compensation Scheme Ltd v West Bromwich Building Society.4 The Investors Compensation principles were accepted as applying in New Zealand in Boat Park Ltd v Hutchinson5 and were most recently considered by the Supreme Court in Vector.6
[32] The majority of the judges in Vector adopted the approach in Investors Compensation whereby the language the parties have used must be read in the context of the document as a whole and the surrounding circumstances. Under that approach, the wider background and circumstances should always be considered, even if there is no ambiguity or other interpretive difficulty with the words used by the parties. Evidence of background circumstances is not, however, relevant if it does no more than tend to prove what individual parties subjectively intended or understood their words to mean or to prove what a parties’ negotiating stance may have been at a particular time.
[17] In my view, the agreement does not bear the construction contended for by Prophecy. Instead, given the background to the agreement, and the focus on the short term, my view is that the agreement related to the Hewlett-Packard bid and to any other bids that might be received in the immediate period.
[18] The requirement to prepare the Information Memorandum describing Revera’s business is a requirement to produce a document with a limited shelf life. I accept the evidence of Mr Cameron-Brown that an Information Memorandum which purports to value a business based on forecasts using assumptions (in this case average EBIT) soon becomes out of date as actual performance overtakes forecast performance. It is true, as Mr Carruthers QC submits, that the sale price to Telecom five years after the Hewlett-Packard interest had dissipated was within the range calculated by Mr Giesbers. But that range ($63 million to $165 million) was too wide to be useful, was not included in the revised Information Memorandum eventually supplied to Hewlett-Packard, and was based on assumptions made in
2007.
3 Trustees Executors Ltd v QBE Insurance (International) Ltd [2010] NZCA 608.
4 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL)
at 912-913.
5 Boat Park Ltd v Hutchinson [1999] 2 NZLR 74 (CA).
6 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444.
[19] The obligation “to manage the sale process and front buyer enquiry as needed” should not be read in isolation from the context. The context is the interest shown by Hewlett-Packard and the preparation of an Information Memorandum which would have a limited period of relevance in attracting a bid from Hewlett- Packard or from any other contemporary potential purchasers.
[20] I do not accept the submission that because Revera had an unqualified right to terminate the agreement then without termination the agreement continued indefinitely. In my view, the right to terminate simply allowed Revera to break its association with Prophecy during the life of the agreement with the consequence of paying the $25,000 plus GST fee.
[21] The next point relates to the dollar amounts used to structure Prophecy’s fee entitlement. The parties thought that the approximate value of the business in 2007 was $15 million and that $20 million would be a good return. Obviously, if the business went unsold for any significant period of time then those values would change. They are in the agreement because the parties did not contemplate that it would continue to apply years into the future.
[22] I accept Mr Craig’s submission that the reference in the Agreed Amount’s wording to the “highest bid received” refers to the highest bid received from those potential purchasers who were provided with the Information Memorandum. Mr Giesbers was asked in cross-examination:7
Q. So it was anticipated that … your information memorandum would be released to potential purchasers, and it would be those potential purchasers making the bids on which your commission would be assessed upon?
A. Well, that’s right. I mean once you’ve written an information
memorandum and passed it to the company, they can issue it to whomever they please.
[23] It is submitted on behalf of Prophecy that in the meetings between Mr Giesbers and Messrs Cockayne and Norrie prior to Mr Giesbers producing the agreement, Mr Cockayne envisaged a sale price of up to $40 million. This, it is
submitted, points to an intention that the contractual relationship under the agreement was intended to last beyond 2007/2008 if no bid were received.
[24] To an extent this submission begs the question of the context in which the
agreement was made. Mr Cockayne’s evidence is:8
15.During early 2007 Revera was approached unofficially by Hewlett- Packard with a view to a complete buy out of Revera. I felt that Revera needed to be prepared just in case an official approach was forthcoming from Hewlett-Packard as their intentions became more formal. Also Revera needed to follow up on its plan to simplify the company structure which had been approved by our Board by this time.
16.This view was reinforced in August 2007 when Hewlett-Packard made a formal approach to Revera with regards to a potential purchase of the company. Deadlines were set for the presentation of an Information Memorandum to Hewlett-Packard to satisfy their request for information.
17.In order to meet these timeframes Rock Group (which was still the owner of Revera at that time) engaged Prophecy to assist in the creation of an Information Memorandum. While Mr Giesbers states at paragraph 25 of his brief of evidence that he considered Prophecy’s engagement as an ongoing retainer relationship, this is not how I saw things. Rather this was a specific engagement of Prophecy to assist in 2007/2008 with the potential sale of Revera to Hewlett-Packard or other purchasers at that time (although there were no other purchasers at the time).
[25] Mr Giesbers was asked about the reference in the agreement to “other potential purchasers”:9
Q. And in 2007, when that agreement was prepared, the only potential purchaser you were aware of at the time was Hewlett-Packard?
A. Hewlett-Packard was the most serious of the interest but it wasn’t
the only name that we talked about at that time as possible buyers.
[26] I infer that because Mr Giesbers had been involved in talks about other
possible buyers, he drafted the agreement to refer to “potential purchasers” rather
than to Hewlett-Packard.
8 Brief of evidence of Roger Cockayne, dated February 2015.
[27] Further, Mr Cockayne’s email to Mr Giesbers of 19 July 2007, in which he suggested a fee based on a percentage of sale price on an ascending scale between
$20 million and $40 million, is related to the Information Memorandum:
Preparation of the Company memorandum and support to maximise the outcome at a trade sale – see the next bit …
[The “next bit” being the table of percentage based fees]
[28] Mr Cockayne then adds:
If no sale is made then a flat fee of $25,000 is paid.
[29] In my view, Mr Cockayne is focusing on the immediate future and the Hewlett-Packard interest. It was this email that caused Mr Giesbers to draft the agreement.
[30] The next relevant indication of intended duration is the entitlement of Prophecy to its base fee “if the highest bid received is less than $20,000,000, or no bid is received, …”. If the agreement were of indefinite duration then the phrase “or no bid is received” would be out of place. It makes sense only if the agreement is of short duration; in this case, the period in which the Information Memorandum would be current. I do not accept Prophecy’s submission that the phrase means “or no bid is received on the termination of the agreement”. Prophecy’s entitlement to its base fee upon the termination of the agreement is provided for specifically in the succeeding paragraph.
[31] I think it relevant also that the formula for calculating an increased fee relates specifically to the percentage of shares in Revera held by Messrs Cockayne and Norrie at the date of the agreement. Shareholdings change. If the agreement were of indefinite duration save for termination then it would be obsolete as soon as either Mr Cockayne or Mr Norrie sold or purchased shares. Indeed, at the time of the Telecom purchase, their shareholdings had reduced in total to around 50 percent.
[32] There is no evidence that the parties agreed that this was to be an agreement of indefinite duration. There is no evidence that the duration of the agreement was ever discussed. My conclusion is that, interpreted objectively on its face but in the
context of the circumstances in which it came to be in existence, the agreement simply secured Mr Giesbers’s services to assist with attracting a bid from Hewlett- Packard and from any other potential purchasers who might make an appearance around that time.
[33] Commercially absurd interpretations should be avoided if possible.10 In my view, any different interpretation would lead to commercial absurdity. Prophecy provided the first two sets of services pursuant to the agreement and was not called upon to provide any of the third set of services. To say that being available to perform the third set of services entitles Prophecy to a fee based on the Telecom purchase price five years later would be commercially absurd. This was highlighted in the cross-examination of Mr Giesbers when he accepted the proposition that on
Prophecy’s interpretation of the agreement:11
If a billion dollar bid was received for Revera in 30 years time, and the agreement hadn’t been terminated, your position is you would be entitled to the commission on that bid?
Was the agreement terminated in 2008?
[34] I will address this issue because it is not related to the first issue and provides
an alternative means of deciding Prophecy’s claim.
[35] As related, when Revera’s chairman assumed responsibility for negotiations with Hewlett-Packard, Mr Giesbers was not called upon to provide any of the third type of services. But the agreement was not terminated at that time because Mr Cockayne and Mr Norrie thought that he might prove useful (at least to them) if a bid was received. In an email sent on 23 October 2007, Mr Cockayne advised Mr Giesbers that the Managing Director of Revera would use his own team to negotiate with Hewlett-Packard. He added:
I want to ensure that we apply as much brain power to this exercise as we can without having too many cooks.
By this he meant that Mr Giesbers might still be needed if a bid were received.
10 Firm PI 1 Ltd v Zurich Australian Insurance Ltd T/A Zurich New Zealand [2014] NZSC 147 at
[93].
11 Notes of evidence, at 36.
[36] Around mid February 2008, Mr Cockayne told Mr Giesbers by telephone that Hewlett-Packard had withdrawn from the sales process and that Revera was not now for sale. He followed this with an email sent on 3 March 2008 in the following terms:
The HP thing has gone off the boil so we are cooling our heels on the thoughts of selling for the time being. I get down to Wellington for a week every month, next due down at the end of March, catch up then?
[37] Mr Giesbers replied:
Thanks for the update. Pity about HP – is there anyone else hopping about? I wouldn’t mind a copy of the final Information Memorandum (or whatever the document ended up being called) – just to read through.
[38] It seems that Mr Cockayne did not reply to the email.
[39] There was, eventually, a meeting between Mr Cockayne and Mr Giesbers some time in 2008. The date is uncertain, and there is a difference in evidence as to what was said at the meeting. Mr Cockayne’s evidence is:12
36.In any event, I recall that the catch-up with Mr Giesbers took place in Revera’s Wellington offices. My recollection of our verbal discussion at this meeting is as follows:
(a) I reiterated that Hewlett-Packard had withdrawn from the sales process, and Revera was not now for sale (our Chairman Mr Clements had been clear to me on this);
(b) As a result, I said that Prophecy’s payment of $25,000 in the event of the Agreement being terminated was due, and Prophecy should send Revera its bill;
(c) Mr Giesbers then said that Prophecy could not send Revera the bill as only Revera had rights to terminate the Agreement;
(d) I said, “You mean that we don’t have to pay you”; (e) Mr Giesbers confirmed that this was the case;
(f) I said, “That’s crazy, send me the bill because we are done, we are not for sale”. When I said “we are done”, I meant that the Agreement with Prophecy was at an end because the sale to Hewlett-Packard was not proceeding. I left the
12 Brief of evidence of Roger Cockayne, dated February 2015.
meeting with the understanding that Mr Giesbers would arrange for Prophecy to send through its invoice to us.
[40] Mr Giesbers’s evidence is:13
42. I do not recall meeting with Roger during the period April to June
2008. As noted above, I have referred to my detailed written diaries in preparing this statement. They confirm my recollection. As I recall, we may have discussed, at some point after 2007, some of the matters which Roger refers to in his description of the meeting. In particular, we may have discussed the withdrawal of Hewlett- Packard and the terms on which Prophecy would be entitled to be paid. If Roger had told me that Prophecy should invoice Rock Group, I would have responded that Prophecy had no right to do so until Rock Group terminated the contract.
43.However, I do not recall Roger ever saying what he describes at paragraph 36(f) of his affidavit. If he had terminated the contract, I would have arranged for Prophecy to issue an invoice.
…
47.I recall that on one or more occasions I asked whether the directors still wished for the contract to remain on foot or whether it should be terminated. The response was that the contract should remain on foot. I did not record these conversations.
48. Only Revera could terminate the contract and that never occurred.
49.Prophecy was only able to invoice for the work once the contract was at an end so the lack of termination by Revera meant Prophecy has never been paid for the work (although, as described below, subsequent to the sale of the business to Telecom, Revera did offer to pay).
[41] I make no adverse findings of credibility. In my view, the three principal witnesses did their best to recall events which occurred in 2007 and 2008, not all of which would necessarily be memorable. If recollections are in part shaped by perspective then that is only human. Few people have eidetic memories.
[42] I find, on the balance of probabilities, that Mr Cockayne and Mr Giesbers met sometime in 2008 to discuss the Hewlett-Packard situation. At that meeting, Mr Cockayne conveyed – or, rather, confirmed – to Mr Giesbers that Hewlett- Packard had withdrawn and that Revera was no longer on the market. They
discussed Prophecy’s entitlement to the $25,000 fee. I find that Mr Cockayne went
13 Brief of evidence of Wilhelmus Leonardus Giesbers, dated 21 November 2014 (references updated 9 February 2015).
to the meeting with the view that Prophecy was now entitled to its fee and he conveyed this to Mr Giesbers. I find also that Mr Giesbers, in accordance with his interpretation of the agreement, said that Prophecy could not send an invoice until Revera had formally terminated the agreement. These findings are consistent both with Mr Cockayne’s evidence at paragraph 36(c)-(e) of his brief of evidence and with Mr Giesbers’s evidence at paragraph 42.
[43] I find that Mr Cockayne left the meeting expecting that Prophecy would invoice Revera for its $25,000 fee. Mr Giesbers did not arrange for an invoice to issue because in his view there had to be a formal termination of the agreement, and Revera had not provided it.
[44] I do not accept that on one or more subsequent occasions Mr Giesbers asked whether the contract should remain on foot and received the response that it should:
(a) There was very little contact between Mr Giesbers and Messrs Cockayne and Norrie in the years following 2008. He was never their commercial mentor. He never occupied such a place in their business lives that they would want him to remain, as it were, on standby.
(b)There was one intermediate sale process between the Hewlett-Packard approach and the sale to Telecom. It was in 2010. Mr Giesbers was not involved in it and was never consulted about it. Mr Cockayne believes he told Mr Giesbers that Revera had engaged another adviser for the process. No mention was made by Mr Giesbers of the agreement. Mr Giesbers, however, says he did not know about the
2010 sales process until he read of it in this proceeding. If Mr Cockayne or Mr Norrie had told Mr Giesbers that they wanted the agreement to endure then they would at least have alerted him to possible involvement in the 2010 process as well as to possible involvement in the Telecom sales process (Mr Giesbers became aware of the sale to Telecom only when he read of it in the news media).
(c) If Mr Giesbers had said to Mr Cockayne or Mr Norrie that he considered the agreement to be current then, given the fee structure, the overwhelming commercial imperative for Revera would have been to disagree and, as a safety measure, issue a formal termination notice.
[45] In my view, at the meeting in 2008 Mr Cockayne conveyed to Mr Giesbers that with the withdrawal of Hewlett-Packard the agreement was at an end and Prophecy was entitled to send its invoice. That was enough to terminate the agreement. Mr Giesbers’s view that formal termination was required is not correct. The agreement did not specify any particular form of termination. I accept that clause 1.4 provides that “in the event of termination” agreement would be reached on the effective date on which services will cease. In my view, this again goes to the agreement being of limited duration with termination under clause 1.4 being assumed to be during the sales process. It is not a condition precedent to termination, and no date would have to be agreed if the sale process had ended and services had ceased.
[46] In the absence of a specified mode of termination, a contract will be terminated if notice of termination (and it can be oral and informal) is sufficiently clear and unambiguous.14
[47] If Mr Cockayne used the words he believes he did (“That’s crazy, send me the bill because we are done, we are not for sale”) then that is sufficiently clear and unambiguous. Mr Giesbers does not recall Mr Cockayne saying this, but I am satisfied that whatever was said there were two clear messages conveyed:
(a) The Hewlett-Packard interest was at an end and accordingly the agreement was at an end; and
(b) Prophecy should render its invoice.
14 See HG Beale (gen ed) Chitty on Contracts (31st Ed, Sweet & Maxwell Ltd, London, 2012) Vol 1 at [22-051]).
[48] As I have said, my finding is that Mr Giesbers did not arrange for the invoice to issue because he thought a more formal termination was required. He was incorrect, and I find that Mr Cockayne terminated the agreement on behalf of Revera.
Was the agreement abandoned?
[49] In view of my findings on the other issues, I do not have to decide this one.
[50] However, I should say that if the agreement was of indefinite duration and had not been terminated then the concept of abandonment could not apply. On this issue I was persuaded by the submissions on behalf of Mr Giesbers.
[51] Revera submitted that the second way in which implied abandonment can be shown, as identified by Lord Brandon in Paal Wilson & Co A/S v Partenreederei: Hannah Blumenthal, The Hannah Blumenthal,15 applies to this case. That is to say, that Prophecy’s conduct has been such as to lead Revera reasonably to believe that Prophecy had abandoned the agreement – even though that was not Prophecy’s intention – and that Revera has significantly altered its position in relying on that belief. In other words, Prophecy created a situation in which it is estopped from asserting that it has not abandoned the contract.
[52] In this case, if the agreement was of indefinite duration and Revera had not terminated it (as it was entitled to do) then inactivity on the part of Prophecy cannot create an estoppel. The agreement does not call for activity on the part of Prophecy. The agreement requires Prophecy to be available to supply the third set of services at the requirement of Revera. If Revera chose neither to call for the services nor
terminate the agreement then it cannot raise abandonment by estoppel.16
[53] In this context, Prophecy’s failure to provide an invoice for its $25,000 fee
would be an indicator that it considered the agreement to be current.
15 Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal, The Hannah Blumenthal [1983] 1
All ER 34 (HL).
16 I note Jowada Holdings Ltd v Cullen Investments Ltd CA248/02, 5 June 2003 in which the Court of Appeal expresses the considerable difficulty of establishing estoppel based on inactivity alone.
[54] Mr Cameron-Brown’s evidence as to common practice in the investment banking field does not help Revera in this area. There is no evidence that Mr Giesbers could be expected to conform to such practice, nor that Revera relied upon it.
[55] The fact that after the Hewlett-Packard approach came to nothing Revera engaged other advisers for the two subsequent sales processes does not help Revera either. Regardless of whether Mr Giesbers knew about the subsequent sales processes, the agreement did not grant him an exclusive advisory role. Indeed, during the Hewlett-Packard period Revera appointed another adviser, informed Mr Giesbers of that, and specifically held Mr Giesbers in reserve in case he was needed.
Decision
[56] I answer the issues as follows:
(a) The agreement does not apply to the sale to Telecom. (b) In any event, the agreement was terminated in 2008.
(c) If (a) and (b) are wrong, the agreement was not abandoned. [57] The plaintiff’s claim is dismissed.
[58] Revera is entitled to costs. I fix these on a 2B basis. They are to be
calculated by the Registrar if the parties cannot agree.
Brewer J
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