My Protection Guru Limited v LifeSearch Partners Limited

1. From 2017 until 2022, the Claimant was one of the appointed representatives of the Defendant, an insurance intermediary. During this period, the Claimant earned commission through the sale of products on behalf of the Defendant, for which purpose it used the Defendant’s administrative systems and relied on its regulatory permissions and authorisations.

2. The issues in this case revolve around what commission is due between the parties. In particular, the Court is concerned with: 2.1. The allegation that certain written contracts were either varied or superseded by oral agreements; 2.2. The allegation that the Defendant did not account to the Claimant for commission;

3. The structure of this judgment is to consider: 3.1. The Parties; 3.2. The written contracts between the parties and a summary of their alleged oral variation; 3.3. A summary of the other matters in dispute between the parties; 3.4. The issues as defined by the parties and as revised by me; 3.5. The evidence given at trial, summarising both the documentary evidence and the evidence of witnesses in respect of each of the issues to which the oral evidence is said to be relevant; 3.6. An analysis of each of the issues with reference to the relevant law and the cases advanced by each party; 3.7. A summary of my findings and conclusions on each issue. THE PARTIES

4. The Defendant is authorised by the Financial Conduct Authority under the Financial Services and Markets Act 2000 (“FSMA”) to carry out regulated activities in relation to insurance business (including assisting in the administration and performance of contracts of insurance). Its business involved selling insurance products such as life insurance In the rather charming language of the industry, customers who do not currently have what is considered to be adequate life insurance cover are called “unprotected families.” and income protection. To provide this service to customers, the Defendant works with website-based price comparison businesses such as Money Supermarket, Compare the Market and, of particular significance to this case, Quote Life Cover (“QLC”). These businesses are described by the Defendant as “Partners” and they provide the Defendant with details of customer requirements, known as “Leads,” from people who have made enquiries about insurance.

5. The Defendant lists Leads on a database called the Agent Call Login Administrator (known as “ACLA”). It both employs advisers to contact and advise customers and provides Leads to third party franchises, who are known as “Appointed Representatives.” Advisers can select Leads from ACLA in accordance with their particular terms of engagement by the Defendant. Appointed Representatives can both select Leads from ACLA and source their own Leads (what are known as “Self-Generated Leads”).

6. If a prospective customer purchases an insurance product (a “Product”), the Lead is said to have been “converted.” From each converted Lead, the Defendant receives commission from the relevant Insurer. The rate at which Leads are converted is an indication in part of the quality of the Leads that the Partner is supplying and in part the work of the adviser or Appointed Representative who achieves the sale.

7. In terms of payment to the various actors: 7.1. From each converted Lead, the Defendant receives commission from the relevant Insurer, out of which payment is made to Partners or to the Appointed Representatives, as the case may be. 7.2. The Defendant pays its Partners either, (a) A fixed cost for the Leads provided (“Lead Costs”), or (b) A proportion of the commission received from Insurers upon the sale of a Product (“Commission Payaway”). 7.3. On a monthly basis, the Defendant pays Appointed Representatives a percentage of the commission which it receives from their converted Leads, deducting sums that may include any costs paid by the Defendant to the Partner to purchase Leads and a reserve retained by the Defendant to meet amounts which may become repayable to the insurer if the Product is cancelled within four years of its start date. The amount due is set out in a monthly statement which is sent to the Appointed Representative. It is common ground that such statements often require correction. The evidence from the Claimant is that there was a high level of inaccuracy. 7.4. The Defendant became entitled to additional commission, known as Trail Commission, after products had been in place for 4 years.

8. Within the Defendant, several people played an important role in respect of the matters referred to in this judgment, including: 8.1. Alastair Smart, Head of Franchise for the Defendant from 2016 to 2020 and now its Chief Advice Officer. 8.2. Gareth Jones, Head of Customer Engagement with the Defendant. 8.3. Tom Baigrie, Chief Executive Officer and latterly Chair of the Bord of the Defendant. 8.4. Jonathan Shovell, Head of Payroll and Franchise Remuneration for the Defendant.

9. The Claimant is a company that was incorporated on 27 July 2017. It was established by Jamal Shahein, a former employee of the Defendant and was set up to trade as one of the Defendant’s Appointed Representatives. Mr Shahein explains in his witness statement that, having been employed by the Defendant as an adviser from 2009 to 2013, he later worked for them as a franchisee through a company called Safe Step Protection Limited until the Claimant was formed in 2017. Mr Back left the Defendant to join Mr Shahein at the Claimant company in that same year, at the time of the Commercial Review referred to further below.

10. From October 2017 until August 2022, the Claimant was retained by the Defendant pursuant to contractual arrangements described more fully below. Its number of employees has varied with time, Mr Shahein stating that there were 6 advisers in 2017. THE CONTRACTS AND THEIR ALLEGED VARIATION IN SUMMARY

11. The largest part of the Claimant’s claim (and the focus of most of the evidence and submissions) relates to commissions payments for QLC Leads, which the Claimant alleges has been systematically underpaid by commission being calculated with reference not to the parties’ written agreements but rather to alleged oral agreements. The Claimant contends that those alleged oral agreements were in fact non-binding informal arrangements entered into by the parties.

12. It is not in dispute that the parties entered three successive written agreements, known within this litigation as the 2017 Agreement, the 2018 Agreement and the 2020 Agreement. I shall address those first before turning to alleged oral agreements that are said by the Defendant to have superseded the written agreements in respect of certain aspects of the dealings between the parties. The 2017 Agreement

13. The first contract between the Claimant and the Defendant with which this claim is concerned is a tripartite so-called Self-employed Agents’ Agreement entered into in 2017 (“the 2017 Agreement”). The parties to the 2017 Agreement were the Defendant and the parties named in Schedule I (the “Company”, which in context was the Claimant) and Schedule II (the “Individual”, in essence self-employed agents These agents were also known as “Advisers.” introduced by the Company to provide Services). Schedules I and II are blank in the copy of the 2017 Agreement before the Court and the contract itself is unsigned. It is nevertheless common ground that this document represents the terms on which the parties contracted in October 2017. The exact date of the agreement is unclear, save that it is common ground that it postdates the email of 15 October 2017, said by the Defendant to evidence a different agreement in respect of QLC Leads. This much is apparent from the fact that the draft contract was sent by Mr Smart to Mr Shahein and Mr Back under cover of email of 16 October 2017.

14. Relevant clauses of the 2017 Agreement included the following: 14.1. By clause 2.1, the Defendant engaged the Company and the Individual to provide the Services described in clause 4.1, which in essence are the marketing and servicing of products to the Defendant’s customers. 14.2. By clause 3.1, the parties agreed that in carrying out what are called “LifeSearch Regulated Activities” (defined in the interpretation clause as “ Regulated activities for which [the Defendant] has permissions under FSMA The Financial Services and Markets Act 2000 as amen d ed or replaced fr o m time to time. from the FCA The Financial Conduct Authority of the United Kingdo m or any successor entity or entities thereto. ”) and the Services as described in clause 4.1, the Individual was a self-employed agent of the Defendant. 14.3. By clause 5.1, the Defendant was obliged “ in its complete and unfettered discretion ” to provide a pool of Leads which could be used by the Individual “ as he requires” in the provision of the Services. 14.4. Payment of commission was governed by clauses 6.1, 7.1, 7.2 & Schedule III. (a) By clause 6.1, the Defendant was required to pay the Claimant commission in accordance with Schedule III. (b) By clauses 7.1 and 7.2, the Defendant was required to pay commission each month by providing a commission statement in accordance with Schedule III. 14.5. Schedule III set out the process for calculation of commission each month: (a) Part A (paragraphs 1 to 5) set out a five-stage calculation of the commission to which the Claimant was to be entitled in each month: a. The first stages, constituting the Net Agent Gross Commission (“NAGC”) due to the Claimant was calculated as the sum of: i. “ The monthly Agent Gross Commission generated by it from leads sourced by LifeSearch shall have all associated lead costs deducted from it and then be separately multiplied by the appropriate Commission Entitlement as per Part B of this Schedule . I n this and other passages quoted from documents and from the transcript of the trial, I have maintain ed the original text notwithstanding spelling and other errors. ” ii. “ The monthly Agent Gross Commission generated by LifeSearch through its relationship and retention teams, on behalf of those Individuals choosing to use the services, multiplied by 30%.” iii. “ The monthly Agent Gross Commission generated by its Individuals from leads sourced by the Company multiplied by 90%. Once the total amount of Agent Gross Commission under this point 3 reaches £20,000 multiplied by the number of Individuals in the Company in any LifeSearch Financial Year this multiplier shall reduce to 86%. For the avoidance of doubt, at the beginning of each new LifeSearch Financial Year the multiplier shall re-start at 90 %.” iv. “ The monthly Agent Gross Commission generated by its individuals from leads reviewed after year 4 that were originally purchased by the franchise owner of the Company multiplied by 90%.” (b) From this figure, the following were to be deducted: “A. A maximum of 10% of the total monthly Agent Gross Commission irrespective of who sourced the leads, at LifeSearch’s sole discretion, should the Agent’s standards of advice be demonstrably threatening to LifeSearch’s reputation, such judgment to be determined by the LifeSearch Best Practice team and signed off by a director of LifeSearch; and B. All Clawback Clawback is defined as “ …commission that is repaid by [the Defendant] to an insurer as a result of the cancellation of a Product at any time within the period of four years commencing on the date upon which such Product was arranged .” during the month, for the avoidance of doubt this shall be deducted in the same proportions as the original commission share; and C. A monthly payment of £775 (inclusive of Vat) for the first Individual and £75 (inclusive of Vat) for each additional Individual payable to satisfy the costs under Clause 8. For the avoidance of doubt this shall be reviewed each year in line with the costs of these services and it is due whether any commission has been earned by the Company each month or not; and D. Any amounts due under clause 8.1; and E. A Clawback Reserve Clawback Reserve is defined as “ a reserve held by [the Defendant] that will be offset against future Clawback for the 4 years following termination of this Agreement… ” of 6% of the total monthly Agent Gross Commission irrespective of who sourced the leads. For the avoidance of doubt LifeSearch reserves the right to review the level of Clawback Reserve once every 12 months and following the review to amend such level at its sole discretion by giving the Individual 30 days notice in writing; after 4 years LSL will stop reserving for claw but reserve the right to review the need to adjust an agents Clawback Reserve on a quarterly basis after 4 years; and F. Any costs of training and loans at rates to be agreed from time to time. G. Any new Individuals which join The Company must attend a LifeSearch Induction, the costs of which are £1,000 for the first Individual the Company puts on the induction, £850 for the second Individual and £700 for any further Individuals during the financial year. These payments are subject to VAT…” 14.6. The multiplier for Agent Gross Commission was set at 84% of LifeSearch Gross Commission (net of Lead Costs), LifeSearch Gross Commission being stated in the interpretation clause of the contract to be “ the total amount of commission paid by an insurance company to [the Defendant] as a result of a sale of a Product …” 14.7. By clause 13.6, if at any time within the period of 4 years after termination the Clawback Reserve was insufficient to meet any clawback claim suffered by the Defendant, the Claimant undertook to pay the Defendant on demand a sum equal to 6% of NAGC or, if larger, the sum of £10,000. 14.8. Under Part B of Schedule III, the payment made to the Claimant in the final month of each quarter was to include an adjustment (“the Quarterly Adjustment”) to reflect performance, calculated as follows: “ At the end of each quarter of the LifeSearch Financial Year the average monthly LifeSearch Gross Commission generated by each individual for the quarter just ended, excluding any commissions paid under points 3 and 4 in Part A, shall be reviewed and compared with the table below. The corresponding Commission Entitlement shall then be used in the payment made in the final month of the quarter to ameliorate any over or underpayment as per Part A of this Schedule.” The Table following sets out the following commission entitlement: Average monthly LifeSearch Gross “Commission Entitlement” Commission Zero to £3,499 40% £3,500 to £3,999 41% £4,000 to £4,499 42% £4,500 to £4,999 43% £5,000 to £5,499 44% £5,500 to £5,999 45% £6,000 to £6,499 46% £6,500 to £6,999 47% £7,000 to £7,499 48% £7,500 to £7,999 49% £8,000 to £11,499 50% £11,500 to £11,999 51% £12,000 to £12,499 52% £12,500 to £12,999 53% £13,000 to £13,499 54% £13,500 to £13,999 55% £14,000 to £14,499 56% £14,500 to £14,999 57% £15,000 to £15,499 58% £15,500 to £15,999 59% £16,000 to £16,499 60% £16,500 to £16,999 61% £17,000 to £17,999 62% £18,000 to £18,999 63% £19,000 to £19,999 64% £20,000 plus 65% “

15. LifeSearch Gross Commission is defined in the definition section of the agreement as: “ The total amount of commission paid by an insurance company to LifeSearch as a result of a sale of a Product, which can differ from insurer to insurer .”

16. Clause 17 of the 2017 Agreement, headed “ ENTIRE AGREEMENT” states: “17.1 This agreement constitutes the entire agreement between the Parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter. 17.2 Each Party acknowledges that in entering into this Agreement it does not rely on, and shall have no remedies in respect of, any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this Agreement. 17.3 Nothing in this clause 16 (sic) shall limit or exclude any liability for fraud. ”

17. Clause 18, under the heading “ GENERAL” includes at 18.6 the following: “ No variation of this Agreement shall be effective unless it is in writing and signed by the Parties .” The 2018 Agreement

18. The 2018 Agreement was termed an “Appointed Representative Agreement”. The parties were the Claimant and the Defendant. No individual was a party. Save in that respect, clauses 2.1, 3.1, 4.1 and 5.1 were in similar form to the 2017 Agreement and the terms governing payment of commission were in similar though not identical form. A significant variation is that the commission adjustment under Part B of Schedule II, previously stated to be calculated on the basis of commissions generated by the “individual,” is now varied to be commission generated “ by the Company.” Clauses 17 Save for the correction of clause 17 to refer to “ this clause 17 . ” and 18.6, the entire agreement clause and the no oral modification clause, are identical.

19. Again, the copy of the 2018 Agreement in the bundle is unsigned but it is common ground that it contains the terms on which the parties contracted. The 2020 Agreement

20. The 2020 Agreement was again in the form of an Appointed Representative Agreement and was in all material respects in the same terms as the 2018 Agreement, save that: 20.1. The Agent Gross Commission was 83.3% (rather than 84% as previously) of LifeSearch Gross Commission. 20.2. The multiplier in part B (that is the Commission Entitlement by which the monthly Agent Gross Commission generated by the Claimant from Leads sourced by the Defendant, net of associated lead costs, was to be multiplied) was a percentage range from 40% to 68% increasing in 1% increments from £3,449 to £24,000 by reference to the average monthly LifeSearch Gross Commission. 20.3. Clawback Reserve at Point E of Schedule III was increased to “ 8% of the total monthly Net Agent Gross Commission defined by points 1,2 3 & 4 of Schedule III Part A Note that the previous version of the agreement included the words “ irrespective of who sourced the leads ” . For the avoidance of doubt LifeSearch reserves the right to review the level of Clawback Reserve once every 12 months and following the review to amend such level at its sole discretion by giving the Company Compare the 2017 Agreement where the word “ Individual ” is used in the corresponding place . 30 days notice in writing; after 4 years LifeSearch will stop reserving for claw but reserve the right to review the need to adjust the Company’s Clawback Reserve on a quarterly basis after 4 years .”

21. Termination of the 2020 Agreement was provided for in clause 13: 21.1. Either party was entitled to terminate by giving 180 days written notice pursuant to clause 13.1. 21.2. The Defendant only was entitled to terminate the 2020 Agreement with immediate effect and without notice by reference to the ten prescribed circumstances set out in clauses 13.2.1 to 13.2.10.

22. By clause 13.5, following the Termination Date, the Claimant will be paid commission in accordance with Schedule III for a further period of 3 months.

23. Again, the copy in the bundle before me is unsigned but it is agreed that it contains the terms of a binding agreement. The QLC Lead agreement

24. It is common ground between the parties that discussions took place in respect of commission due on QLC Leads. The Defendant contends that Mr Smart and Mr Marsh of the Defendant agreed with Mr Shahein of the Claimant the following payment terms: 24.1. During a trial period of six months until May 2018, QLC Leads would be paid in accordance with the agreed payment terms. 24.2. The trial period would be subject to progress reviews on a monthly basis, with an overall review after six months, when a conversion rate of 26% would be necessary for the trial to be considered a success. 24.3. During the trial period, five of the Claimant’s Advisers would work solely on QLC Leads; 24.4. The payment terms for converted QLC Leads were a variable percentage commission rate, based upon the average monthly gross commission earned by the agent for a given month, starting at 31% (for agents who earned up to £19,999, reflecting a conversion rate of up to 20% on Leads provided) and increasing in 1% increments to a maximum of 41% (for agents earning £32,000 and above, reflecting a conversion rate of 32% or higher), but with no upfront charge to the Claimant for Leads.

25. The Defendant calls this the QLC Lead Agreement, a term which I adopt in this judgment, though without presupposing that in fact any enforceable contract was entered into that was specific to QLC Leads. The QLC Lead Agreement is said to be evidenced by an email from Mr Smart to Mr Shahein dated 15 October 2017. The commission rates are not recorded in that email, though it refers to there being “ no upfront cost but … a reduced commission entitlement .”

26. The Claimant agrees that trial arrangements were agreed in respect of QLC Leads and that the parties envisaged different payment terms than those set out in the 2017 Agreement with a reduced rate of commission but no upfront Lead Costs. However, the Claimant contends that these arrangements did not comprise a binding contract and that it is entitled to payment in accordance with the 2017 Agreement for reasons explored further below. In essence, it suited both parties that they were not committed to a different payment structure than that set out in the 2017 Agreement. The Amended QLC Lead agreement

27. The Defendant contends that the QLC Lead Agreement was superseded in May 2018 with a further oral contract by which such Leads continued to be paid without upfront costs but with a commission at the flat rate of 41% (“the Amended QLC Lead Agreement”, again a term that I adopt without any presumption that specific contractual terms relating to QLC Leads were entered into).

28. Again, the Claimant denies that any such contract was entered into but rather that the terms discussed were simply an informal arrangement that suited the parties but were not binding on them. THE OTHER AREAS OF DISPUTE

29. In summary the other areas of dispute are: 29.1. Whether the Claimant was entitled to payment flowing from the receipt by the Defendant of Trail Commission; 29.2. Whether by virtue of a change in the 2018 Agreement to payment on a company-wide rather than an individual basis, the Claimant has been underpaid commission for non-QLC Leads; 29.3. Whether the Defendant withheld more money by way of clawback reserve than it was entitled to; 29.4. Whether, in around December 2021, the agreement between the parties was varied by agreement between Mr Back on behalf of the Claimant and the Defendant; 29.5. If the contract was not so varied, whether the Claimant was underpaid commission and overcharged franchise fees in manners referred to below; 29.6. The circumstances of the termination of the parties’ contractual relationship; 29.7. The Claimant’s claim for loss of earnings for May to August 2022; 29.8. The Claimant’s claim for loss of profits on termination; 29.9. The so-called self-generated orphan claw claim; 29.10. Whether, in the event that the 2017 and subsequent agreements were not orally varied, such that the Claimant’s true entitlement to payment for QLC Leads was in accordance with Schedule III, the Defendant was entitled to deduct Lead Costs from any commission due to the Claimant, such that it may counterclaim against the Claimant’s claim for QLC Lead Costs; 29.11. If so, the amount of any such counterclaim. THE ISSUES AS DEFINED FOR THE PURPOSE OF THIS JUDGMENT

30. For the purpose of the trial, the parties agreed a list of issues as follows: The QLC Lead Agreement

1. The exis tence , applicability and enforceability of the QLC Lead Agreement, including: 1.1 In the period between July and October 2017, did the parties agree that for an initial period of six months (i.e. until May 2018) the commission due on QLC leads would be calculated by reference to a rate starting at 31% (zero to £19,999) and increasing in 1% increments to a maximum rate of 41% (£32,000 and above) in consideration for which the Defendant would not charge the associated Lead Costs in respect of QLC leads? 1.2 Did the parties conduct themselves in accordance with the QLC Lead Agreement from 24 October 2017 until May 2018? 1.3 Was the QLC Lead Agreement made by the parties’ written exchanges comprising the parties’ written exchanges with respect to the monthly statements? 1.4 Was the QLC Lead Agreement a separate agreement collateral to the 2017 Agreement and did the parties intend for it to be legally binding? 1.5 Did the parties have a common continuing intention in respect of the terms governing the payment of commission to MPG in relation to the QLC leads set out in the QLC Lead Agreement which, by mistake, Schedule III of the 2017 Agreement did not record such that Schedule III to the 2017 Agreement falls to be rectified? 1.6 To the extent that the QLC Lead Agreement is not enforceable, is the Claimant estopped from asserting that the QLC Lead Agreement is not binding on it and/or has the Claimant waived any entitlement to do so? The Amended QLC Lead Agreement 2 The existence, applicability and enforceability of the QLC Lead Agreement, including: 2.1 By 22 May 2018, did the parties agree to fix the commission payable to MPG in relation to QLC leads at the rate of 41%? 2.2 Was the Amended QLC Lead Agreement made by the parties’ written exchanges comprising the parties’ written exchanges with respect to the monthly statements? 2.3 By their conduct after 22 May 2018 and at all times prior to this dispute, did the parties agree that the Amended QLC Lead Agreement would continue with MPG continuing to be paid commission in relation to QLC leads on the terms of the Amended QLC Lead Agreement? 2.4 Was the Amended QLC Lead Agreement a separate agreement collateral to the 2018 and 2020 Agreements, and did the parties intend for it to be legally binding? 2.5 Did the parties have a common continuing intention in respect of the terms governing the payment of commission to MPG in relation to the QLC leads set out in the Amended QLC Lead Agreement which, by mistake, Schedule III of the 2018 Agreement and the 2020 Agreement did not record such that Schedule III of the 2018 and 2020 Agreement fall to be rectified? 2.6 To the extent that the Amended QLC Lead Agreement is not enforceable, is the Claimant estopped from asserting that the Amended QLC Lead Agreement is not binding on it and/or has the Claimant waived any entitlement to do so? The Variation Agreement 3 The existence, applicability and enforceability of the Variation Agreement, including: 3.1 Did the parties agree to variations identified at paragraph 34 of the Amended Defence and Counterclaim following a commercial review in or around December 2021? 3.2 Did the parties conduct themselves on the basis that the Variation Agreement applied to determine the calculation of commissions due to MPG under the January 2022 monthly statement, and thereafter? 3.3 To the extent that the Variation Agreement is not enforceable, is the Claimant estopped from asserting that the Variation Agreement is not binding on it and/or has the Claimant waived any entitlement to do so? 4 Has the Defendant breached clause 1.1 of the 2020 Agreement in respect of rate at which Agent Gross Commission was calculated from January 2022 and onwards? 5 Did the Defendant breach points 4 and 5 of Part A of Schedule III of the 2020 Agreement in respect of the deductions from the Agent Gross Commission and the failure to multiply the Agent Gross Commission pursuant to Schedule 4? 6 Is the Defendant in breach of Points A-G inclusive of Part A to Schedule III of the 2020 Agreement in respect of the sums deducted on a monthly basis? Issues concerning the calculation of commission 7 Do the following terms fall to be implied into the 2020 Agreement: 7.1 A term that the Claimant and Defendant would each co-operate to ensure the performance of the 2020 Agreement and/or that each would do nothing to prevent the other performing? 7.2 A term that any discretion would be exercised within parameters and would not be exercised arbitrarily, capriciously, perversely, irrationally or unreasonably? 7.3 A term of good faith to the effect that the parties would act honestly, deal fairly and openly with each other, not engage in conduct which would be regarded as commercially unacceptable by reasonable and honest people, act with fidelity to the bargain and not undermine the bargain or the other party’s legitimate expectations? 8 Properly construed, does the term “LifeSearch Gross Commissions” include Trail Commission received by the Defendant? 9 Properly construed, did Point E of Schedule III to the 2020 Agreement require the Defendant to stop reserving for claw in October 2021 or in October 2024? 10 Was the Defendant entitled to increase the clawback reserve level from 8% to 34% by letter dated 22 July 2022 under Point E to Schedule III of the 2020 Agreement? Alleged Breaches of the 2020 Agreement 11 Properly construed, did clause 16 of the 2020 Agreement require any notice or communication sent to be actually received in order for any such notice or communication to be valid? 12 Did either the Defendant’s 29 April 2022 Letter (in response to the Claimant’s letter received on 5 April 2022) and/or May 2022 The letter is dated 6 May 2022. Letter constitute a repudiatory or anticipatory repudiatory breach of the 2020 Agreement? 13 Did the Defendant’s 6 May 2022 Letter give valid notice to terminate upon 180 days’ written notice pursuant to clauses 13.1 and 16 of the 2020 Agreement? 14 Was the Defendant’s decision to cease the provision of leads to Claimant from 5 May 2022 onwards a breach of clause 5.1.1 and/or any of the alleged implied terms of the 2020 Agreement? 15 Was the alleged blocking of Mr Shahein’s access to the Defendant’s system in April 2022 a breach of clause 5.5.1 and/or any of the alleged implied terms of the 2020 Agreement? Termination of the 2020 Agreement 16 When and by whom was the 2020 Agreement terminated: 16.1 If proven, did the Defendant’s aforementioned alleged breaches of contract, either taken individually, together or in combination, constitute a repudiation? 16.2 Insofar as the Defendant was in repudiatory breach, was the Claimant entitled to and did the Claimant elect to terminate the 2020 Agreement by letter dated 26 August 2022 or, instead, did MPG elect to affirm the 2020 Agreement and to treat it as continuing rather than electing to accept any alleged breaches in order to bring the 2020 Agreement to an end? 16.3 Did the Claimant’s letter dated 26 August 2022, and delivered by hand on 30 August 2022, constitute a repudiation and/or renunciation of the 2020 Agreement? Loss and Damage 22 It is not entirely clear why the numbering jumps from 16 to 22, but I have retained the same numbering to avoid confusion. Has the Claimant been underpaid commissions to which it is entitled, if so, how is it to be calculated and, as a consequence, is the Defendant liable to the Claimant in damages and, if so, in what amount? 23 To the extent that the Claimant accepted a repudiatory breach by the Defendant to terminate the 2020 Agreement (see Issue 16 above), what is the sum to which the Defendant is liable to the Claimant in damages? C ounterclaim 24 If the Claimant is now permitted to resile from its earlier representations and/or conduct with respect to the QLC Lead Agreement and the Amended QLC Lead Agreement (see Issues 1 and 2 above), and is entitled to rely on the terms of the Schedule III with respect to QLC Leads: 24.1 Did the Defendant pay the Claimant commission in relation: to QLC leads on the mistaken basis that it was under an obligation to pay such commission to calculate and pay the Claimant separately pursuant to the terms of the QLC Lead Agreement and the Amended QLC Lead Agreement without deducting the QLC Associated Lead Costs Sum? 24.2 Do the sums in fact paid by the Defendant to the Claimant as commission pursuant to the QLC Lead Agreement and the Amended QLC Lead Agreement exceed the sums that would have been payable by the Defendant to the Claimant had all commission been paid pursuant to Schedule III of the Agreement? 24.3 Has the Defendant overpaid Claimant commission (the “Commission Overpayments ”)? 24.4 Is the Defendant entitled to the Commission Overpayments from the Claimant as money had and received by the Claimant under a mistake of fact and/or law? 24.5 If so, what is the sum to which the Defendant is entitled for the Commission Overpayments in restitution? 25 Is the Defendant entitled to damages for the loss of revenue the Defendant was deprived of earning in the period between 26 August 2022 and 5 November 2022 as a result of the premature termination of the 2020 Agreement and, if so, how is it to be calculated? 26 Is the Defendant entitled to the sum invoiced to the Claimant under clause 13.5 of the 2020 Agreement in the three-month period post-termination?

31. The Defendant however reworded the issues within its written opening, dividing the Claim into 10 parts, encompassing various issues of liability and/or quantification, with an additional issue relating to the Counterclaim. For the purpose of this judgment, I have divided the issues, broadly following the Defendant’s approach, but have separated out the issues of the alleged variation of the contract in late 2021/early 2022 and termination of the contract in 2022 as discrete issues of principle. These are dealt with in chronological order, and the consequences of my findings in respect of the various claims that flow from my decisions on the issues of principle are dealt with as separate issues following the relevant issue of principle. I have also incorporated quantum arguments into the various issues rather than separating them out.

32. This leads to a series of issues which I define and identify as follows: Issue Value of Claim (where relevant) A. QLC Lead Claims £1,341,947.00 B Trail Commission £351,885.54 C Non-QLC Leads Teams Underpayments Claim £70,885.56 D Clawback Reserve Claim £207,345.26 E Variation F Review Underpayments Claim £16,682.05 G Agent Gross Commission Rate Claim £19,649.47 H Franchise Fee Overpayment £5,265.00 I Termination J May-August 2022 Loss of Earnings Claim £295,878.56 K Loss of Profit Termination Claim £198,145.00 L Self-generated Orphan Claw Claim £8,355.04 M The Counterclaim THE EVIDENCE

33. In summarising relevant evidence in the next section, it is possible largely to deal with evidence on the discrete issues. There are however some issues of overlap particularly between the evidence relating to Clawback reserve and that relating to the termination of the contract. QLC Leads

34. At the trial, the Claimant called Jamal Shahein and Liam Back, its founders and directors. The Defendant called Alistair Smart, currently its Chief Advice Officer A role that Mr Smart states meant that he was responsible for overseeing and managing both the Defendant’s A ppointed R epresentatives and its employe d advisers . but between 2016 and 2020 its Head of Franchise A role i n which Mr Smart had responsibility simply for the Defendant’s A ppointed R epresentatives. , and Jonathan Shovell, Head of Payroll and Franchise Remuneration.

35. As noted above, both Mr Shahein and Mr Back had working relationships with the Defendant for some time when the Claimant was formed. The Claimant worked as a franchisee, as part of which the Defendant and it conducted commercial reviews on an annual basis. Mr Shahein explains in his witness statement that, at the time of the 2017 Commercial Review discussions, which began in July of that year, he was keen to expand the business and that he wished to obtain a larger number of QLC Leads. It is the Claimant’s case (and is accepted by the Defendant) that the Claimant had a good rate of conversion of Leads to sales. In the 2017 Commercial Review, Mr Shahein proposed to the Defendant that they provide the Claimant with a guaranteed number of QLC Leads (his figure was 1,400 per month) and did so without charging a fee. Mr Shahein’s reasoning was that, given the Claimant’s good rate of conversion of Leads to sales, both their business and the Defendant’s business would be more profitable with such an arrangement. Mr Shahein put the proposal to the Defendant by way of a PowerPoint presentation in July 2017. He proposed a rate of commission of 42.5% but with no deduction for Lead Costs.

36. Mr Shahein’s evidence is that the discussions in the Commercial Review led to the conclusion of the 2017 Agreement, with commission entitlement as set out in Schedule III to that Agreement, but also to the agreement to conduct a six-month trial in respect of QLC Leads. Mr Shahein accepted that the agreement to conduct a trial was recorded in Mr Smart’s email of 15 October 2017. The email refers to the logic and terms of the trial as follows: “ With our QLC MPG trial likely to begin last week I thought I would put an email together to keep in 1 place the process, objective and measure of this trial. The trial will last 6 months and will see 5 MPG advisers work solely on QLC unprotected families with no upfront cost but with a reduced commission entitlement. We will review the progress in our monthly franchise reviews and will have an overall review of the 6 month trial in May. In order for the trial to be a success we must see a UF M r Shahein explained that “UF” was an abbreviation for Unprotected Family – in effect, a lead. to risk rate of 26% with an average case size of £595. ... MPG historically has had the best conversion rate when working QLC unprotected families, currently 26.3% UF to risk. This will be our main measure of success of the trial. We are both in agreement if this conversion remains at 26% then both LS & MPG will significantly benefit financially. As conversions increase the benefit to both increases too should conversions fall then the benefit falls too. Therefore we have agreed the attached quarterly adjustment which incentivises conversion rates with a higher commission rate paid for higher conversion. These banking numbers are based on 8 net unprotected families per day and have the required conversion rates in brackets … Up until the end of November we expect to be able to deliver 38 net protected families per adviser per week… ”

37. At [7] of his witness statement, Mr Shahein stated that the new arrangements in respect of QLC Leads came into effect from 24 October 2017.

38. Mr Shahein accepted in cross examination that the reference in the email to an “attached quarterly adjustment” was a reference to the document headed “ proposed commission adjustment” which contained a table with the following commission rates: Average monthly LifeSearch Gross Commission Commission Entitlement Zero to £19,999 (0-20%) 31% £20,000 to £21,999 (21%) “ 32% £22,000 to £22,999 (22%) 33% £23,000 to £23,999 (23%) 34% £24,000 to £25,499 (24%) 35% £25,500 to £27,999 (25-27%) 36% £28,000 to £28,999 (28%) 37% £29,000 to £29,999 (29%) 38% £30,000 to £30,999 (30%) 39% £31,000 to £31,999 (31%) 40% £32,000 plus (32%+) 41%

39. As noted above, the 2017 Agreement was entered into after the email from Mr Smart dated 15 October 2017, although the exact dates on which the agreement was concluded and on which it became effective are unclear. It is the Claimant’s pleaded case that it is the 2017 Agreement rather than the QLC Lead Agreement that contains the terms on which commission for the QLC Leads was to be paid.

40. However, Mr Shahein’s evidence as to whether the email from Mr Smart and its enclosure evidence a separate binding agreement between the parties relating to QLC Leads was ambivalent: 40.1. In his witness statement, he says of the trial in respect of the QLC Leads: “(5) … The trial was a temporary arrangement which was outside of the 2017 Agreement. There was no discussion about including this arrangement in the 2017 Agreement, nor any intention to do so. (6) I should point out we were not in control of drafting the 2017 Agreement nor any of the subsequent agreements we made with Lifesearch (in 2018 and 2020). All of these agreements were drafted by Lifesearch (in particular, Alistair Smart who I believe may hold some sort of legal qualification) and then I also believe were submitted to their solicitor for final approval. Whilst we were able to negotiate basic commercial terms (such as our commission entitlement in Schedule III) we are not lawyers nor otherwise experienced in drafting legal agreements. In the circumstances and in respect of the rest of the 2017 Agreement (and the later 2018 Agreement and 2020 Agreement) we simply went along with what Lifesearch wanted. In particular, we went along with Lifesearch’s requirement that (notwithstanding the agreed trial period) the 2017 Agreement constituted “the entire agreement between the parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral relating to its subject matter” (2017 Agreement clause 17.1) and further that there could be “no variation of this Agreement shall be effective unless it is in writing and signed by the Parties” (2017 Agreement clause 18.6). The omission of the trial from the 2017 Agreement was no mistake because we both understood that neither of us could force the other to continue if they wished to cancel the trial at any time and also that the 2017 Agreement was the only legally binding agreement between us .” 40.2. In an early part of his cross-examination, Mr Shahein agreed with the proposition put to him that, in respect of QLC Leads, there was, as evidenced by Mr Smart’s email, “ an agreement, but it related to the trial period only,” the agreement being for the payment of commission at a rate of 41% of Agent Gross Commission with no deduction of Lead Costs and no quarterly adjustment. According to Mr Shahein, the Defendant indicated that there would be 866 Leads per month The email from Mr Sm a rt referred to 5 advisers and “ 8 net unprotected families per day” ; it also refereed to delivering “ 38 net unprotected families per adviser per week.” Neither of these seem to equate to 866 L eads per month. The inconsistency is unexplained but not of any particular significance beyond its relevance to the reliability of Mr Shahein’s evidence. . As I have noted, the Claimant was seeking a guaranteed figure of 1,400 Leads per month, but Mr Shahein later stated, “ it was agreed at 866 odd in the trial.” 40.3. But Mr Shahein later stated, “ my position is, that there wasn't a separate legally binding agreement. And if there was a separate legally binding agreement, then that agreement only had the terms to pay a flat rate of 41%, which was never what happened anyway.” He stated that the rate of 41% was agreed and was in fact the rate paid throughout for QLC Leads and that the banded rates referred to in the document titled Proposed Commission Adjustment were never in fact applied. 40.4. The apparent contradiction in Mr Shahein’s evidence as to whether he accepted that there was a binding agreement to pay a different rate for QLC Leads was explored further during cross examination, including during interventions from the bench and Mr Shahein’s concluded position appeared to be that there was an agreement to pay at the 41% rate without deduction of lead costs, but that this agreement was not legally binding because it was not incorporated into a written contract. 40.5. Mr Shahein acknowledged that the claim brought by the Claimant had been reduced to reflect the payment of commission at the 41% rate, without deduction for Lead Costs or any subsequent quarterly adjustment, for the period of 6 months from October 2017. This represented a reduction of £132,000 on the claim as originally pleaded.

41. During cross examination, Mr Shahein was also asked about payment in respect of QLC Leads during the trial period. 41.1. Mr Shahein accepted that, if his contention that the QLC Lead Agreement did not operate so as to bind the parties as to the calculation of the relevant costs during the 6 month period from October 2017 (or indeed in the later period to which the Amended QLC Lead Agreement was alleged to apply), the Defendant would have been entitled to deduct Lead Costs against the Claimant’s claim for commission calculated in accordance with the 2017 Agreement, or later the 2018 and 2020 Agreements. 41.2. He further accepted that the Defendant had not in fact deducted Lead Costs on QLC cases, and that this was apparent from the documents submitted by the Defendant By way simply of example, in an email of 13 November 2017 fr o m Mr Andy Leaks, at the time H ead of Payroll and Commission with t he Defendant, to Mr Back and Mr Shahein, a reference is made to the statements attached only charging QLC Lead Costs up to 15 October 2017. , though he considered that to be the Defendant’s choice in how it accounted to the Claimant. 41.3. Mr Shahein was asked whether he realised that the QLC Leads were being paid at the 41% rate at the time, rather than at the rate set out in the 2017 Agreement. He acknowledged that he did know this, but says that he did not appreciate that Schedule III Quarterly Adjustments were not being applied and did not at first appreciate that Lead Costs were not being deducted, though there came a time (which he could not recall) when he was aware of the latter. 41.4. Further, Mr Shahein conceded in cross examination that the terms of the QLC Lead Agreement (whether or not binding) were that there was no reconciliation process to which the usual Quarterly Adjustments would apply.

42. Of the expected numbers of potential customers referred to the Claimant by the Defendant through the trial, Mr Shahein said that he was seeking access to the entirety of the QLC Leads that the Defendant was receiving, though there was a problem with this because some of them had to be referred to the Defendant’s Cape Town office and that in any event, the Defendant had not committed to a minimum figure.

43. Mr Smart asserted on behalf of the Defendant at paragraph 54 of his witness statement that “ Both parties saw the terms of the QLC trial as legally binding and both acted as such.”

44. Whilst the Defence pleaded that the commission payable under the QLC Lead Agreement was the sliding scale referred to in the document headed “ proposed commission adjustment”, Mr Smart’s written evidence was that at an early stage, a fixed rate of 41% was agreed and his oral evidence was that in fact it was probably always 41% that was paid as commission on QLC Leads.

45. As regards the terms on which the parties dealt in respect of QLC Leads after the expiry of the 6 month trial period, Mr Shahein’s statement is to the effect that the trial ended on 24 April 2018, it having not been a success from the Claimant’s point of view because “ the volume of the leads provided was not only insufficient, but Lifesearch’s supply of them was irregular and unreliable.” He also describes the trial as having “ fizzled out.”

46. Mr Shahein agreed in cross examination with the proposition that “ the QLC agreement which had been operating during the trial continued to operate in the same way as before up to the date of the execution of the 2018 written agreement.” The 2018 Agreement was executed at some point in late 2018. The exact date is in issue but does not matter for current purposes.

47. Mr Shahein was asked whether the end of the trial was an abrupt event (as the reference to a specific date would imply) or to a gradual parting of ways on the issue (as “ fizzled out” might suggest). Mr Shahein said, “ We was waiting for a review. I can't say whether a review actually took place, because there's a supplementary witness statement that was submitted after reading my witness statement with disclosure that has been put in after the disclosure date. When I have read through those extra documents, which are emails between, I believe, me and Ally, I believe, in I think about June maybe, they don't confirm that a meeting actually took place. I think one of them says that, ‘I'm sorry that I missed you yesterday’. So I can't confirm whether a meeting took place, but looking at the email from Tom Baigrie to Sean in July, he makes it clear that he is going to ignore an email that I sent in terms of resurrecting this, because we haven't done what we've said we're going to do .”

48. Mr Shahein emailed Mr Smart on 22 May 2018 and raised the question of the QLC Leads. “ Could you or Gareth or somebody come back to us about QLC. TBH Im a bit pissed off with the way we are bong treated and so are our advisers.”

49. In response, in an email of 22 May 2018 from Mr Smart to Mr Shahein, Mr Smart referred to the prospect of a meeting stating, “ it is going to happen but I am busy doing the work before that meeting.” In the same email, Mr Smart states that the Defendant is “paying for all costs of QLC’s and paying a flat 41% commission for all advisers as things stand and have been open with you on how it’s viewed by Sean & Tom”. Mr Shahein was asked about this email in cross examination. He agreed that Sean was a reference to Sean Marsh and Tom was a reference to Tom Baigrie, the latter being a director/owner of the Defendant and both of them being key decision makers.

50. The intended meeting was again referred to in an email of 31 May 2018 from Mr Smart to Mr Shahein and Mr Back where he asks whether they are available on 21 June for “ your QLC review”, which he describes as “ the meeting you’ve been waiting for.” It is further referred to in an email exchange between Mr Smart and Mr Shahein (with Mr Gareth Jones and Mr Back copied in) on 20 June 2018, where Mr Smart states: “ Strap yourselves in for a busy one tomorrow. He’s (sic) the agenda I have, anything else that anyone would like to add? • Review MI from start of trial ◦ Overall ◦ Individuals • Benchmarking – what does good look like? ◦ What level needed to display to be added to model? ◦ What level needed to display to be kept on model? • Delivery ◦ Number required ◦ How can we ensure number is delivered and stability ◦ Separate pot? ◦ Duff & RTR planning • Commercials ◦ Commercial overview ◦ Quarterly Adjustment formula ◦ Minimum cost ◦ Client data • Improvements ◦ Ad-codes • AOB ”

51. Mr Shahein responded on 20 June stating: “ I would like to go through the advisers we have earmarked along with the numbers we would like for each. I would also like to go through QLC leads and what practises achieve the best results. Once I have taken you through that I would like help in shaping the hours allocations, delivery etc. I think it would be best to start with QLC leads and the practises that get the best results as it will help us agree adviser caveats .”

52. Mr Back accepted that he also had put something on the agenda for the intended meeting in an email of 20 June 2018 where he refers to so-called “ inbounds ” and that, on the day of the proposed meeting, he had emailed Mr Smart saying, “ Any chance we can grab you 15min before the meeting ?”

53. There is no record of a meeting on or about 21 June 2018. However, in an email of 22 June 2018 from Mr Jones to Mr Smart, copying in Messrs Shahein and Back, reference is made to “ benchmarks for staying/getting on to QLC.” The Defendant takes this as evidence that the parties continued to consider that a specific agreement was in place for QLC Leads.

54. As noted above, Mr Shahein was unable to recall whether a meeting had in fact taken place and made clear that he was dependent on the documents to recall what had happened in 2018 but was keen to tell the court that there was no document in the bundle that confirmed that the meeting had happened. Mr Back equally could not recall whether a meeting took place. He thought that there was “ a strong possibility” that the meeting had not taken place because of the absence of any correspondence after the meeting referring to it having taken place. Both witnesses for the Claimant pointed out that they had a great many meetings, though Mr Back accepted that this was an important meeting, dealing as it did with the QLC Leads Trial.

55. Mr Shahein’s attention was drawn to an email to Ms Natalie Welham dated 25 June 2018, shortly after the alleged meeting date, when Mr Shahein referred to the Claimant “ having an agreement in place with life search that we don’t have to pay for quote life cover leads any more but receive less commission. ” Mr Shahein accepted that this email had been written at a time when the Claimant was looking to recruit Ms Welham as an adviser. When asked in cross examination about the reference to there being “ an agreement in place ,” Mr Shahein said, “ I’m presuming that I’m talking about the trial period, which only ended very briefly before then .” Mr Back (who was copied into the email with Ms Welham) thought that the email was consistent with QLC Leads being paid under the terms of the 2017 Agreement rather than the QLC Lead Agreement.

56. Mr Shahein agreed that the trial agreement in respect of QLC Leads was “ a good deal for everybody involved” and he accepted that this included the Claimant if they got “delivered numbers that we needed.” Further, he acknowledged that this seems to show the senior management of the Defendant viewing the QLC Lead Agreement in a positive light and that the documents relating to the intended meeting in June 2018 did not suggest an intention to cease the QLC-specific agreement. But Mr Shahein drew the court’s attention to emails in July 2018. 56.1. The first, dated 17 July 2018, is an email from Mr Shahein to Mr Marsh, copying in Messrs Smart, Jones Head of Customer Engagement at the Defendant. , Baigrie and Back. In that email, Mr Shahin states : “I hope you are well. I write to you in the spirit of openness and with a view to trying to resurrect what I see as an opportunity being wasted with the QLC unprotected families. As you are aware we have both worked hard to get the QLC trial to the position it is now. My advisers have achieved the conversion levels set down by you but the volumes we were promised just haven’t been met at any point during our agreement. My own view here is that we simply haven’t put enough pressure on James at British insurance to deliver on these volumes and the communication about what volumes and when haven’t been forthcoming. I have the advisers to make this work for both of us and as a business partner of yours I truly want this to succeed but at the moment I don’t see anyone owning the relationship or really driving it forward. For instance we know the different ad codes perform differently and by having more information we know we can protect more families. Please can we talk and arrange a face-to-face meeting quickly to work this out and drive the numbers up further. ” 56.2. The second is from Mr Baigrie to Mr Marsh dated 18 July 2018 under the subject line “FW: QLC UFs” stating “for Info, ill ignore this. Gareth and Ally are responding as James hasn’t done what he said he would to enable this.” Mr Shahein stated that this indicates that the Defendant was not positive about the QLC arrangement.

57. It is common ground that, notwithstanding the terms of the 2018 Agreement, the Defendant continued to account to the Claimant for commission using the formula of the alleged QLC Lead Agreement. The Defendant continued to provide statements thereafter to the Claimant in respect of QLC Leads which made no deduction for Lead Costs and calculated commission entitlement at 41%. In spite of Mr Shahein sending queries to the Defendant about the calculation of commission, the method of charging QLC Leads was not queried and indeed the Claimant repeatedly stated in those documents that commission for QLC Leads should be calculated without Lead Costs and applying the 41% commission figure. Further the existence of a continuing arrangement relating to QLC Leads is touched upon in other communications, for example an email from Mr Shahein of 6 September 2018 where he refers to the Claimant having “ had to give up a lot for our QLC arrangement like a quarterly adjustment.”

58. Mr Back’s attention was drawn to an email from him to Mr Smart dated 22 January 2019 where he had stated, “ we’ve been playing with that table you sent over for the proposed QA on QLC leads.” He agreed that “ QA ” was a reference to quarterly adjustment but did not accept that this email implied that the parties were talking about the introduction of quarterly adjustments for QLC Leads that was not taking place. He stated that this reference could have been to a modification of an existing Quarterly Adjustment arrangement “ for all I know.”

59. Mr Back was asked about a proposal from the Claimant in respect of the proposed 2019 Commercial Review contained in a PowerPoint presentation. The document refers in respect of QLC Lead cases to a start date of 24 October 2017 and an increase in commission to 45%. Mr Back accepted that this was a proposal to increase the commission paid for QLC Leads but did not accept that it was consistent only with the QLC Lead Agreement continuing in force in a manner separate from the 2017 or 2018 Agreements.

60. Equally Mr Back was asked about an email from him dated 26 November 2021 and headed “QLC Proposal” to which was attached a document headed “Improved QLC Commercials for MPG”. The document sets out data relating to the period “ since MPG took over responsibility of working QLC on 24/10/2017 to today” and which goes on to refer to the fact that the Claimant had “ been on a flat of 41% (of the 83.3%) since we took over.” Again, he did not accept that this was consistent with there being a continuing agreement relating to QLC Leads from 2017, rather than his own assertion that at some point the calculation of commission had resorted to the terms of the written agreement.

61. Mr Smart, when asked about the situation in May 2018 and the state of negotiations relating to QLC Leads accepted that the word “ fluid” would be a fair description. However the case that he advanced was that the parties remained bound by the terms of the QLC Lead Agreement even after the expiry of the trial period and that no other terms were negotiated until much later, He could not specifically recall whether the meeting referred to in emails had taken place in June 2018.

62. Internal emails within the Defendant show some concern about how the QLC Leads were being paid in 2018. For example: 62.1. In an email exchange on 24 July 2018, Mr Jones, Head of Customer Engagement at the Defendant emailed Mr Marsh, stating “ were you aware…that we‘ve been paying MPG the highest possible comms rate (41%) on QLC since this trial started ?” to which Mr Marsh responded , “ No!! how come? Assume they haven’t reached the conversion levels to warrant this ?” 62.2. Mr Smart’s email of 29 July 2018 acknowledges that 41% commission is being paid on QLC’s leads “ however partner quarterly adjustment payments on partners much lower – Ryan Wood 0% for example. Issue is we’re not delivering on volume we agreed as part of the trial so quarterly adjustment banking level cant be met and are being pro-rata’ed… Gareth & I have agreed the following with MPG at the start of the month. We have agreed a new quarterly adjustment…guarantee of 41% will end. £1 cost per unprotected family taken will added to statements …”

63. It is apparent that from 2018 onwards the possibility of an alternative basis for charging commission on QLC Leads was considered. But at no point is there any express agreement as to an alternative basis for payment. QLC Leads were not separately mentioned in the 2018 Commercial Review. They were mentioned in the 2019 Commercial Review as a proposed area for change, but thereafter the parties appear to have begun to contemplate that Google Leads would replace QLC Leads as a source of work for the Claimant’s advisers, a point made clear in 2020 where there was reference in an email of 30 October 2020 to the Claimant receiving “ greater access to Google families to make up shortfall of QLC families.”

64. At an internal meeting of the Defendant’s “Chiefs” including Mr Baigrie, Mr Marsh and Mr Price on 23 July 2020, Mr Marsh referred to QLC having blown up” and that it “ needed dealing with.” The context of these comments is not clear.

65. Thereafter there is reference from time to time to the falling number of QLC Leads and it was suggested that the Claimant may have been better off dealing directly with QLC over its Leads. By the 2021 Commercial Review, the QLC Leads were not being mentioned. Trail Commission

66. It is common ground that Trail Commission is a sum payable by an insurer where an insurance product has been in place for more than four years. There is no dispute that the Defendant did not pay the Claimant Trail Commission which it received. The issue that arises is whether it was liable to do so.

67. The issue was raised by Mr Shahein in an email of 26 May 2018 to Mr Smart, where he asked, “ what is our trail commission as a franchise over the past 12 months please.” In reply, Mr Smart said, “ Trail commission, no easy report and waiting for accounts to get back to me, wont have this by today.”

68. The issue of the payment of trail commission was referred to in the 2018 Commercial Review when, using the alternative name Renewal Commission, the following appears: “ Renewal commission – having some sort of value to our business. Some reason to stay on board and stay loyal. Not having to produce same numbers. Renewal commission is soon to kick in. Can advisers benefit from this too? • AS, TP & SM to consider but this is unlikely to be shared. ◦ Confirmed as a no. ”

69. Mr Shahein agreed in the course of cross examination that the beginning of this passage involved the Claimant enquiring about whether it could be paid trail commission and that the bullet point Beginning “ AS, TP & SSM ” is a reference to Alastair Smart, Tamsin Parker and Sean Marsh, senior managers with the Defendant. Mr Shahein did not accept that the comment “ confirmed as a no” truly represented the position between the parties about trail commission. During cross examination he said this: “ The full story is that we requested multiple times to know what trail commission was. We got told not to worry about it numerous times, saying that it was literally pennies and it's not worth thinking about. The reality is that it's definitely worth more than pennies, and we obviously didn't know this until they changed the system in 2021 .”

70. Mr Shahein denied that the Claimant had been told consistently by the Defendant that it would not be paid trail commission. Rather, the pattern was of the Claimant seeking payment of Trail Commission and the Defendant not responding. He denied that he understood that the Defendant would not pay Trail Commission; rather he said that because he had been told that it was “ pennies” he had not pressed the case for payment, though he had repeatedly asked for payment.

71. The issue was raised more fully in the 2020 Commercial review when, in a document apparently dated 8 June 2020 the following appears: “ Trail Commission:

6. What we propose: 1.MPG to receive same commercial % of trail comms

7. Why we propose it:

2. This is discussed year on year and disregarded with no real justification. The energy we put into MPG over the 6 years has dragged it to where it is now, which generates a very healthy annual trail commission. Now we believe that should be shared.

3. Fair

4. Share to partners, incentive to separate us from the rest

5. Helps mitigate MSM loss

8. What it does for MPG & what it does for LS:

1. More money for MPG, pulling power for partners, more resource for growth, more incentive for sticky advice/reducing claw and improving retention

2. Adviser retention – 2 – 4 year period hits infinitely harder in the franchise world, this would be a great retention pull for advisers getting itchy feet. Also saves LS and MPG money and energy in advisers leaving/being replaced with new starters .”

72. On 30 October 2020, Mr Smart emailed Mr Shahein and Mr Back in respect of the Commercial Review and referred amongst other things to “ a change to renewal commission taken by LS upfront. This remains LS commission as agreed with Partners & Franchises and initial commission will remain clear on ACLA.”

73. Mr Shahein accepted in cross examination that this was part of so-called Project Zero, by which the payment of trial commission by insurers to the Defendant changed such that it received trail commission up front. Mr Shahein further accepted that Mr Smart was saying in this email that there would be no change in the position relating to the payment of trail commission to franchises such as the Claimant (in other words that it would still not be passed on by the Defendant) but stated that they were not raising any objection because they had been told that the amount of money involved was minimal. Mr Shahein said that the position in this regard changed when, with the changed system of upfront payment of Trail Commission, he realised that the sums being talked about were substantial.

74. Mr Shahein accepted that it would have been possible to work out from the monthly statements that trail commission was not being paid but that this would have taken a considerable amount of time because it would have involved him in looking at each product that had been sold to calculate what was due and whether trail commission should have been paid.

75. Mr Shahein however denied that, by agreeing monthly statements (or at least not querying the absence of trail commission) he was accepting that Trail Commission was not payable. Clawback Reserve

76. Clawback reserve, sometimes abbreviated to “claw”, is commission which is repayable by the Defendant to an insurer where a product is cancelled. Clawback reserve is a reserve held back by the Defendant from commission that would otherwise be payable to its representatives in order to cover the contingency that clawback becomes payable by the Defendant to an insurer.

77. Clawback reserve was referred to in point E of the deduction section of Schedule III to the 2017, 2018 and 2020 Agreements. Early on in the parties’ relationship, it seems to have operated without any difficulty on the basis that claw reserve was deducted for individual advisers.

78. In the 2021 Commercial Review, the Defendant indicated a change of basis for calculating Clawback Reserve: “2.2.1 Quarterly Adjustment Following Advice from our consultants it is clear we should no longer renumerate your Franchise based on the performance of each individual Adviser. … 2.2.2 Claw Reserve As above we should no longer renumerate your Franchise based on individual Adviser performance, nor should we reserve for claw on an individual basis. As discussed previously, this means a model where claw reserve is either turned on or turned off for your whole Franchise based on whether enough is reserved. We have calculated that at current levels of business written by your Franchise £435,350 is required in your reserve pot. Currently we have a claw reserve pot of £263,085 meaning a gap of £172,265 This means all revenue will attract a claw reserve until we reach this level, and we will reserve at the current rate next financial year.”

79. Mr Shahein was cross examined on how he had responded to this: “ Q: You didn’t say at that point, hang on a minute, you’ve got no right contractually to do that, did you? A: We requested a meeting with Tom Baigrie, from memory. … Q: And is it your evidence then that at that meeting you took to Mr Baigrie a proposal in respect of claw reserve? A: I have to say I don’t know off by heart. Q: I suggest that you did not in fact object to this decision recorded here as to what was going to happen in respect of claw reserve. A: We objected to the decision of the whole commercial review and the commercial as a whole and we never agreed to go ahead with them at any point. Q: But not specifically this decision? A: We agreed to go ahead with none of the commercials which is why we remained on the same contract .”

80. It is the Defendant’s case that claw reserve was thereafter deducted on the basis of the Claimant’s overall performance, a change to which the Claimant did not expressly object.

81. By letter dated 6 May 2022, the Defendant gave notice of termination of the 2020 Agreement (which at that stage governed the relationship between the parties in respect of the payment of commission). The termination date was 5 November 2022.

82. By letter dated 22 July 2022, the Defendant wrote to the Claimant about clawback reserve, stating so far as relevant: “ As you are aware, under the Agreement the Clawback Reserve is a reserve held by LifeSearch that will offset against future Clawback (i.e. commission that is repaid by LifeSearch to an insurer as a result of the cancellation of a Product at any time within the period of four years commencing on the date upon which such Product was arranged) for the 4 years following termination of the Agreement. The Commercial Review allows for the Clawback Reserve to be turned on or off for your whole franchise. LifeSearch is entitled to review the level of Clawback Reserve on an annual basis and, following the review, may amend the Clawback Reserve level at its sole discretion by giving you 30 days’ notice in writing. Our letter to you dated 6 May 2022 gave notice of our termination of the Agreement and in light of the Termination Date on 5 November 2022, we have reviewed the level of the current Clawback Reserve. We have calculated that, based on the projections set out at Annex 2, a Clawback Reserve of £514,421 is required. In May 2022, the Clawback Reserve was at £354,527, leaving a deficit of £159,894. Consequently, LifeSearch hereby gives 30 days’ written notice of increasing the Clawback Reserve level from 8% to 34% starting from 25 August 2022, which equates to reserving £40,000 extra per month. For the avoidance of doubt, this letter is written in accordance with the Agreement and therefore LifeSearch shall use its best endeavours to ensure any Clawback Reserve amount that remains 4 years following termination of the Agreement will be repaid to the Company .” Variation

83. The Defendant contends that, in or around December 2021, meetings took place between representatives of the Claimant and the Defendant at which the 2020 Agreement was varied. The case is pleaded thus in the Defence and Counterclaim: “34. In or around December 2021, following a commercial review, Mr Alistair Smart and Mrs Paula Bertram-Lax acting on LifeSearch’s behalf and Mr Back acting on MPG’s behalf agreed in the course of meetings via Microsoft teams (“the Variation Agreement”): 34.1. to vary the rate for agent gross commission from 83.3% in the 2020 Agreement to 82.8%; 34.2. to vary the flat rate to 64%; 34.3. to vary the sums of the franchise costs which LifeSearch was permitted to deduct from the monthly ‘Net Agent Gross Commission,’ in the following amounts (exclusive of VAT): Franchise Costs – exclusive of VAT Franchise Fee £750 + £75 / Adviser Equipment & Licensing Fee £25 / head Induction Costs £700 Recruitment Costs – Core to Franchise £3,500 Use of LS Office £20 / day Client Incentives Full Cost IAR Registration Fee £75 34.4. to apply the aforesaid variations to the rate for agent gross commission and the franchise costs from the January statement (inclusive) for 2022 .”

84. The Defendant contends that these discussions were followed by Mr Smart sending to Mr Back a table updating Schedule III of the 2020 Agreement to record the terms of the variation under cover of an email of 3 February 2022 inviting Mr Back to sign the document. Whilst Mr Back did not in fact sign the document, no one on behalf of the Claimant objected to these variations. Thereafter not only did they form the basis of the Defendant’s calculation of the sums due to the Claimant but also, on or around 24 February 2022, Mr Smart and Mr Back had a conversation in which Mr Back confirmed the Claimant’s agreement to the changes.

85. The detail of these meetings is dealt with in Mr Smart’s witness statement. In essence, he states that the sequence of events was: 85.1. During the commercial review discussion in October 2021, there was a “ heated exchange ” with Mr Shahein; 85.2. After this, Mr Back indicated an intention to distance himself from Mr Shahein – as Mr Smart puts it in his statement at [86], “ the relationship between James [Shahein] and LifeSearch had broken down” and “ we were told by Liam [Back] that there was a breakdown in their relationship.” 85.3. The parties agreed to vary the terms of the 2020 Agreement in the manner pleaded at [34] in the Amended Defence and Counterclaim at a meeting on 16 December 2021.

86. It was put to Mr Back in cross examination that his relationship with Mr Shahein had broken down during the commercial review in 2021 with the result that he had been the person dealing with the Defendant on behalf of the Claimant. Mr Back accepted that there were difficulties between Mr Shahein and the Defendant by this time but denied that his own relationship with Mr Shahein was difficult. Mr Back accepted that, within the context of the Commercial Review in late 2021, the Defendant had raised issues about how changes in insurance costs and FCA fees meant that the Defendant was proposing to increase commission from 16.7% to 17.2%; that advisers would be paid at a flat rate of 64% rather than a variable rate; that they would incur a 40% “payaway” fee As noted above, “payaway” is a method of paying Partners for the provision of Leads. ; and that franchise fees would be varied. In each case these were variations along the lines referred to in [34] of the Amended Defence and Counterclaim.

87. In each case, Mr Back accepted that he was agreeable to the prospective changes but described it as no more than a “ conditional agreement.” Mr Back also agreed that the proposals sent to him in the email of 3 February 2022 under the heading Franchise Commercials were in certain respects more favourable to the Claimant than the previous terms of business because commission for self-generated business (in other words, Leads that the Claimant itself had obtained) was set at 100% so that the Defendant made no deduction from such commission and further that the Claimant was to be paid 25% of trail commission on self-generated Leads. However, he was adamant that the Claimant had not agreed to the terms of business in the email of 3 February 2022.

88. In support of his contention that the Claimant had not agreed to these revised terms, Mr Back referred to an email from him to Mr Smart and Ms Bertram-Lax dated 3 December 2021 in which he explained the overall effect of the proposed changes and the loss in income to the Claimant that would ensue. Mr Back referred to this as evidence both that he had not agreed to the proposed revised terms and as evidence that he would not in fact have done so. The terms were simply too unfavourable to make them commercially viable for the Claimant.

89. In his witness statement, Mr Smart referred at [85ff] to discussions about varying the 2020 Agreement that took place in late 2021. “[85] The agreement to vary the 2020 agreement was reached through a series of commercial review conversations, taking into account things MPG wanted and things we wanted. … 85.1 I remember that the initial review didn't go so well on 25th of October 2021, it led to a heated exchange with James, which is why they were talking to Tom. We then had a commercial review on the 26th of November 2021. That was a Teams meeting and in attendance was Paula, myself, Jake Austin, Tom Baigrie for the first hour, James and Liam and I have recalled this looking at the Teams diary entry in my calendar. They were having a series of conversations with Tom, CEO level, as well that James and Liam were having and Liam was signalling his intent to break away from James.

86. After the first meeting there were interim conversations with Liam to set the relationship with MPG back on track. Paula and I were approached by Liam who offered the information that he would like to negotiate himself with a plan for James to exit MPG operationally. Both parties felt this would be constructive. The relationship between James and LifeSearch had broken down. We have been told by Liam that there was a breakdown in their relationship, hence the conversations with Tom and Liam individually and why after that meeting, we then were just having conversations with Liam in commercial reviews, so that situation, for my recollection, wasn't just about James and LifeSearch's relationship. It was also about James and Liam's relationship. 86.1 I can see from my calendar entries that we also had a commercial review with Paul and Liam and myself on the 16th of December at 9:00 AM to make the final agreement. All outstanding points would have been agreed in this meeting. The need for the meeting on 16 December was because we wanted it all tied off before the New Year. The agreement to vary the terms of the 2020 Agreement was made orally at the 16th of December 2021 meeting and confirmed via email. It was agreed orally with Liam that the new terms would come into effect in January 2022 and would be paid in February 2022's statement.

87. We would have followed up internally to draft the contract and make the amendments, initially likely a group of us together working through each of the 2021 commercial review agreements around a desk. We would also have confirmed with the CFO that the agreements could be ratified financially. I produced a table for teams in LifeSearch about all the different variations that we agreed with ARs. I offered to go through the summary and get this added to SiSense. We go through a period of time where we're getting this ready.

88. In response to the February 2022 statement James came back with queries saying certain things did not apply. We told him there had been an agreement and Liam had confirmed it was to be paid at that amount. Liam told me personally on the phone that there was an agreement.”

90. When Mr Smart was cross examined about this issue, he had difficulty in separating what he remembered of the meeting from what was in his witness statement, a problem that is prefigured in the statement where he says of the negotiations what “would have” happened rather than what did happen. He appeared in cross examination to be stating that he recalled that an agreement was reached at that meeting, but it appeared that in fact he was drawing an inference that an agreement had been reached from subsequent communication, specifically the fact that Mr Smart had referred to an updated version of Schedule II being sent to Mr Back in an email of 3 February 2022 and an associated document headed “franchise commercials” which summarised the terms referred to in [34] of the Amended Defence and Counterclaim.

91. In any event, Mr Smart agreed in cross examination that the amended version of Schedule III had been sent to Mr Back for him to sign using Docusign but that he had not signed and returned the document. However, he drew attention to an email from Mr Back to him dated 6 January 2022 stating, “ re commercial review/trail – what was agreed in the end ?” This might be thought to be suggestive that an agreement had indeed been reached at least in respect of Trail Commission prior to the date of that email albeit that Mr Back could not remember what it was that had been agreed. Termination

92. By letter dated 5 April 2022, solicitors on behalf of the Claimant intimated a claim against the Defendant. The letter asserted that the relationship between the parties was governed by the 2017, 2018 and 2020 Agreements. It went on: “ Our client has undertaken a detailed review of the relationship and found that in breach of the various agreements there has been: • A proliferation of commission underpayment and/or non-payment and a series of incorrect calculations of the quarterly commission adjustment and inaccurate management information in breach of section 6,7 and Schedule 3. • Our client has received only a fixed 41% commission on Quote Life Cover products sold and not the tapered percentages as set out in Schedule 3 to the various agreements • Our client has not received a commission payment on the trail commission payment LifeSearch receives from insurers, in breach of Section 6 of the agreements • Our client’s contribution to clawback reserve pot has continued beyond the 4-year period set out in Schedule 3, Part a, Subsection E. Our client’s claim: It is our client’s case that LifeSearch has acted in breach of the Agreement and as a result our client has suffered damage and losses. At stage, we are unable to fully quantify our client’s losses, but we expect thsre to be in the region of £1.5-£2 million. Our client is seeking • Termination of the Agreement by consent with immediate effect. • Your consent to continue to trade and carry-on business immediately, continuing to work with existing partners and clients • Access to all data and intellectual property necessary to trade. • Payment of the underpaid and unpaid commission including Quote Life Cover and trail back commission. • A satisfactory settlement in lieu of future commission on renewals.”

93. Mr Back was asked during cross examination about this letter and its likely effect on the parties’ relationship. “ Q: And you also understood, I would suggest, that the decision to issue a pre-action letter had made the continuing relationship untenable so that it was readily comprehensible that LifeSearch would wish to stop providing leads to MPG. A: I think that’s probably a fair assumption to make. If you are going to serve an action on somebody for any particular reason I would expect the other party to not respond overly positively to that. ”

94. On 5 April 2022, Mr Shahein’s access to the Defendant’s system was removed. It was Mr Smart’s evidence that this was “ a joint decision between Liam and I and under Liam’s instructions Transcript , day 3 at page

82. . ” The fact that this was the same day as the Claimant sent the letter of claim was mere coincidence. However Mr Back denied that it was his suggestion to terminate Mr Shahein’s access, saying “ I've known Jamal long enough to know that that would be a ridiculous thing to do and I've worked in business long enough to know that just to say turn his computer off is not going to be a long term solution to a fruitful relationship. Transcript, day 2, page 142. ”

95. A series of WhatsApp messages from Mr Smart to Mr Back on that day are potentially relevant: 95.1. At 09.38: “ Hi mate, just to let you know James’ system being closed today, Is he in the loop? Was emailing this morning. 95.2. Also at 09.38 : “Hope you have a good holiday.” 95.3. At 16.22: “ Know you’re away but worth us talking urgently.” 95.4. At 16.23, “ Not sure if you’re aware of the letter just sent by your solicitor.”

96. On 29 April 2022, the Defendant responded to the letter of claim, asserting that the payments that it had made for commission were calculated in accordance with the terms agreed by the parties. The letter goes on: “ We note that your client seeks termination of the Agreement with immediate effect (Termination Proposal). Our client accepts your client's unilateral termination of the relationship. Our client will treat the Termination Date (as defined in the Agreement) as 5pm GMT on Wednesday 4 May 2022. Your client's post-termination obligations will continue to be in force as per the Agreement, including but not limited to clauses 9,10,11. In addition, in accordance with clause 13.4, your client will be required to (1) deliver to our client all LifeSearch Property (as defined in the Agreement) in its possession or under its control; and (2) delete any Confidential Information (as defined in the Agreement) stored on your client's computer systems or other electronic equipment…”

97. The Defendant stated that the removal of access to Mr Shahein was said to be an error. This was identified almost immediately and thereafter the Defendant endeavoured to reinstate his access. This was achieved on 27 April 2022.

98. On 5 May 2022, Mr Smart emailed Mr Back stating that, in accordance with what was said to be the Defendant’s contractual right, it was stopping the Claimant from accessing Leads. Thereafter the Claimant’s access to Leads ceased.

99. On 6 May 2022, the Defendant contends that it served notice of termination of the 2020 Agreement, which it stated would terminate on 5 November 2022. In its written opening, the Claimant denies receiving this letter. However within the Amended Particulars of Claim it is acknowledged that the letter was sent by email to the Claimant’s solicitors, albeit that notice by that means was not valid notice pursuant to Clause 16 of the 2020 Agreement (which required contractual notice to be served at the party’s registered office).

100. On 22 July 2022, the Defendant served the letter relating to clawback reserve referred to above.

101. By letter dated 26 August 2022, the Claimant purported to accept the Defendant’s alleged repudiatory breach which was put thus: “ Our client is of the view that by letter dated 22 July 2022 and in breach of point E in Part A of Schedule III to the 2020 Agreement and in breach of the implied terms. You purported to give our client 30 days’ written notice of an increase in the level of Clawback Reserve from 8% to 34% in circumstances where the review of the level had taken place in September 2021 and/or an election not to increase the level had already been made and/or any period for notifying an increase had expired. This is the latest in a series of breaches, particularised below: - • By letter dated 6 May Letter, you threatened and continue to threaten, in repudiatory or anticipatory repudiatory breach of the 2020 Agreement, to stop your performance of the 2020 Agreement on 5 November 2022. • In breach of point E in Part A of Schedule III to the 2020 Agreement, you did not stop in October 2021, and have still not stopped, reserving for claw. • You have failed to include and continue to not include trail commissions received from insurers in your calculations of “LifeSearch gross commissions,” “agents gross commissions” and “net agents gross commissions.” • Since January 2022, you stopped continuing not to adjust commissions due to our client pursuant to Part B of Schedule III. • In breach of clause 1.1 computed agent gross commission at 82.8% of the LifeSearch gross commission and not 83.3%. • Deducting 40% from the monthly agent gross commission on reviews in breach of points 4 and 5 of Part A of Schedule III. • Failed to multiply the agent gross commission by the percentages set out in Schedule IV. • In breach of Point C in Part A of Schedule III and from January 2022 started deducting £900 per month whereas the Agreement entitles a deduction of only £825 per month. • On 5 April 2022 and in breach of clause 5.5.1 stopped our client’s Director, Mr. Shahein, from accessing your systems. • By email dated 5 May 2022 and in breach of clause 5.1.1. stopped providing our client with leads. • Despite numerous requests from our client and in breach of clause 7.3 you have failed to permit our client inspection of any relevant accounting records. All of the breaches identified above are continuing. Taken individually, all together or in combinations, they have caused our client not to trade with the same number of advisors, not to trade at previous levels of profit or at all, or to trade reasonably profitably no longer and taken all together or in combinations they are and continue to be repudiatory in nature. These breaches have deprived our client of substantially all the benefit of the agreement and you are therefore in repudiatory breach of contract. By this letter, our client terminates the agreement at common law on grounds of your repudiatory breach. Our client will also seek damages and other remedies and reserve their rights and remedies in relation to your numerous breaches. This letter was received by the Defendant on 30 August 2022.

102. By letter dated 21 September 2022, the Defendant denied that any breach of contract on its part entitled the Claimant to terminate the contract but purported to accept the Claimant’s alleged repudiatory breach in these terms: “8. By virtue of the termination notice addressed to MPG on 6 May 2022, and in line with the notice period provided for in clauses 13.1 (requiring 180 days' written notice) and 16.2.2 (deemed service of notice sent by post) of the Agreement, the Agreement is presently due to terminate pursuant to our client’s valid exercise of its contractual entitlement on 5 November 2022 (your client’s Letter purporting to terminate the Agreement with immediate effect without any legal basis to do so being ineffective to bring the Agreement to an end forthwith for the reasons addressed above).

9. Notwithstanding the foregoing, in light of your client's conduct subsequent to our client’s termination notice and by virtue of your client’s material breaches, repudiation and / or renunciation of the Agreement as set out above, our client hereby exercises its right to terminate the Agreement under clause 13.2.1 with immediate effect and without notice and this notice of termination has also been sent by our client to your client direct. In the alternative, pursuant to common law, our client accepts your client's repudiation and/or renunciation of the Agreement and is therefore entitled to treat the Agreement as at an end with immediate effect and seek recovery of damages and loss from your client caused to our client as a result of your client's unlawful repudiation.

10. Consequently, and for the avoidance of doubt, we confirm that the date of this letter is the Termination Date as defined in the Agreement .” Quantum

103. The evidence on quantum in this case was given by Mr Shahein for the Claimant and by Mr Shovell for the Defendant. Each party criticises the position taken by the witness for the other party. In reality the position of neither party was satisfactory. In particular, neither witness gave clear evidence as to how they had reached their calculations. Instead, their evidence in effect invited the listener to trust them to have got the calculations correct. It followed that neither advocate was able clearly to define the issues that arose in respect of quantum. Mr Shovell’s calculations appeared to me to be somewhat broad brush and at a level of generality as to the deduction of costs that did not enable me to analyse the figures accurately. Mr Shahein produced a large number of new calculations at the beginning of his evidence without any adequate explanation as to how he had reached the figures referred to.

104. By the end of the trial, I had indicated that the issues of quantum could only be properly resolved by the parties narrowing the issues, as noted by the Defendant in closing submissions at [317]. Notwithstanding this, the closing written submissions for the parties do not provide sufficiently clear common ground to compare the calculations, nor is there a sufficiently clear definition of the issues to enable me to resolve some of the questions that might be in issue were I to be wrong on the broader issues dealt with in this judgment.

105. Since reserving judgment, I have spent a considerable amount of time trying to understand and reconcile the positions taken by the parties in particular in respect of the calculation of what commission the Claimant would have been entitled to for QLC Leads under Schedule III and what Lead Costs would properly have been deductible, as well as what Trail Commission would have been payable. In the event that these figures needed calculating, it would in my judgment be necessary for the court to give further directions for defining and narrowing the issues in order to enable the court to resolve them. THE WITNESSES

106. There were numerous points during the evidence where witnesses for each side ventured an opinion as to the true meaning of the contractual arrangements of the parties. In a case of this kind that is hardly surprising and is certainly not unusual. However, this evidence was mostly unhelpful. It is clear that the witnesses' evidence of their subjective intention in entering into contractual arrangements (and still more their subjective interpretation of those arrangements) is not in itself admissible evidence as to the true construction of their agreements, albeit that it may provide relevant evidence to the factual matrix.

107. I deal with each witness in turn, noting in particular areas where I had concerns about placing reliance on their evidence in so far as it is not corroborated by other material. (a) Jamal Shahein

108. Mr Shahein was an engaging witness with an obvious passion about the business that he was operating with Mr Back and a close interest in the detail of calculation of the commission due to the Claimant. But his evidence was unsatisfactory in several respects.

109. First, as a number of the passages cited above show, Mr Shahein was very keen to argue the case that he wanted to advance. However repeatedly his evidence merely amounted to an expression of his belief as to the legal effect of what had happened. For example, his acknowledgment that there was an agreement in respect of the trial period from October 2017 in respect of QLC Leads but that it was not legally binding appears to be based on his understanding and interpretation of the clauses of the contract rather than to be a consequence of any particular aspect of the negotiation between the parties.

110. Indeed, it became apparent during Mr Shahein’s evidence that he had with him in the witness box a document that contained references to what he considered to be important and that this was assisting him in responding to questions by referring to particular documents in the bundle. This is not necessarily to criticises Mr Shahein – it is clear that in a document heavy case a witness may well be assisted by an aide memoire to take them to relevant documents, but it demonstrated a tendency not simply to respond to what he was being asked but to try instead to lead the cross examination to the point that he wished to make.

111. Second, his evidence as to whether the arrangement as to the payment of the QLC Leads continued to be governed by the terms of the trial agreement (even in what he considered to be its non-legally binding character), appeared at odds with an acceptance that he had known at the time that the Defendant was paying QLC Leads in accordance with that agreement. Indeed, whilst the Claimant had originally sought to recover what it had said were underpayments of commission on QLC Leads for the trial period of 6 months, it had later changed its case to abandon that aspect of the claim. Mr Shahein was unable to give a satisfactory account to reconcile his assertion as to the non-binding nature of the agreement with his actual conduct in treating the trial agreement as determining the basis of calculation of commission.

112. One other aspect of Mr Shahein’s evidence was his assertion that the monthly commission statements provided by the Defendant had high levels of inaccuracy. Mr Shahein accepted that, on the Claimant’s side, he was the person with the greater knowledge of the contents of the monthly statements and that he was responsible for checking them. He queried many entries in the statements, relying on the provisions that the Claimant had a 30-day period to challenge the contents. He contended that the statements were incorrect “ every single month.”

113. Having heard his evidence and that of Mr Shovell, as well as having looked at the material in the bundle, it appears to me that there was a high level of inaccuracy in the statements. This probably reflects the complexity of the calculations and the differing arrangements for the payment of commission that were in place. I can understand why Mr Shahein may have been frustrated by such a level of inaccuracy.

114. This is not to say that the Claimant could not work out how the Defendant was calculating commission in respect of particular leads (Mr Shahein accepted that he could), but it does create a difficulty for the Defendant in its argument that the Claimant’s failure to challenge particular aspects of the statements shows that it either accepted the Defendant’s case or is to be treated as estopped from denying it. (b) Liam Back

115. Mr Back gave evidence in a straightforward fashion. There was nothing in his manner of giving evidence to suggest that he was not trying to assist the court. However, his evidence about the variation of the contract (the principal issue which he addressed) was somewhat unsatisfactory. In particular, he did not explain the apparent inconsistency between his assertion that there had been no agreement to vary the contract in the Commercial Review that took place in late 2021 and his email of 6 January 2022 querying what had been agreed (though in fairness that email was not put to him in cross examination).

116. More seriously, in respect of the termination of Mr Shahein’s access to the Defendant’s IT system, I found his evidence to be unconvincing and probably deliberately misleading for reasons dealt with below. (c) Alastair Smart

117. Mr Smart studied law at university. He clearly considered that this qualified him to speak to legal issues in the case, at least to the extent that he believed that he had sufficient understanding of the basics of contract law to comment on whether the parties had reached a binding contract. He accepted that the Defendant was not keen to enter into binding contractual arrangements in respect of relationships with partners unless, as it was suggested to him, “ it knew what the outcome was.” He was asked during cross examination why he considered the QLC Lead Agreement to be “ legally binding ” (the phrase used in his witness statement as noted above) in the following exchange with counsel: “Q. …Now I'm going to ask you why do you say both parties regarded these arrangements as legally binding? A. In my opinion I saw two parties, LifeSearch and MPG, act in accordance to those. It perhaps is not my place to say "legally binding" but in my opinion what I saw at this point in time was two parties making an agreement and acting in accordance to that agreement. Q. Now, what you are actually saying when you say both parties saw the terms of the QLC trial as legally binding, is it your place to tell the court what Mr Shahein and Mr Back thought of these arrangements? A. It's likely not. And I don't expect my opinion to have the gravitas that would decide upon this but my opinion is that we both saw it as legally binding. That's purely my opinion .”

118. Mr Smart’s opinion on the contract is clearly not admissible evidence. I do not criticise him for expressing an opinion in circumstances where the parties had agreed that the court should not take a strict line on excluding such evidence on admissibility grounds, but the difficulty that flows from it is that it tends to suggest that the witness was saying that which he wanted to be the case (or thought was the case as a matter of law) rather than being evidence about what actually happened or was said.

119. This difficulty played itself out in the issue about the alleged variation of the 2020 Agreement in late 2021 or early 2022. Mr Smart’s witness evidence read as though he had an independent recollection of having come to an agreement. However, during his cross examination it became increasingly apparent that Mr Smart’s belief was that an agreement had been reached, but that this was belief based largely on documents sent by the Defendant and the Claimant’s apparent failure to query payments made thereafter. (d) Jonathan Shovell

120. Mr Shovell gave evidence in a straightforward fashion. For reasons noted below however there are considerable difficulties about his approach to quantification. ISSUE A – THE QLC LEAD AGREEMENT The Claimant’s Case

121. The Claimant contends that the unambiguous meaning of the words used in Schedule III of the 2017 Agreement, as repeated in the later written agreements, is that all leads, including QLC Leads ought to be paid in accordance with the formula for calculation in that schedule. In response to the Defendant’s contention that this was not the parties’ intention - rather they intended that all leads other than QLC Leads be remunerated on this basis and that the QLC Leads were the subject of the separate oral agreement referred to above - the Claimant argues that the very words of the “entire agreement” and “no oral modification” clauses in the 2017 Agreement and later written contracts demonstrates that this was not so, since they would not have agreed to those words had they intended any separate agreement.

122. Clauses such as the “entire agreement” and “no oral modification” clauses here are capable of having legal effect (see MWB Business Exchange Centres v Rock Advertising [2018] UKSC 24 ). The clauses reflect an intention on the part of both parties that each of them is “ entitled to assume throughout their dealings that if something is not agreed to and that agreement reduced into signed writing in terms which look like an agreement then the arrangements in question are not going to be given legal effect Claimant opening at [60]. .” Such clauses are important because they enable the parties to understand their rights and obligations without having to look through the “ undergrowth” of communications, whether written or even oral, to seek to discern whether the parties’ written contract has in fact been varied.

123. The Claimant’s case is neatly summarised in counsel’s closing submissions where the court is invited to make the finding of fact that “ both [the Claimant] and the Defendant did not intend the QLC arrangements to have any contractual effect….Such a finding disposes of and is a complete answer to [the Defendant’s] contentions about express alternative agreement; formation of a separate contract by a course of conduct; collateral agreement; estoppel and/or waiver; rectification; and unjust enrichment.” It is later said of the trial in respect of payment of QLC Leads that “ at best … [it] became an extended road-test of negotiations with tabling of proposals and unfulfilled expectations or hopes on both sides. In reality by 2020 it was totally becalmed.”

124. The Claimant contends that this finding is consistent with clauses 17 and 18.6 of each of the 2017, 2018 and 2020 Agreements. It is also consistent with the lack of clarity as to what the terms of the alleged agreement relating to QLC actually were. There are repeated proposals and counter proposals with agreement never being reached.

125. Furthermore, the Claimant contends that it suited both parties to trade on terms that were not contractually binding. From the Claimant’s point of view, the altered terms of payment in respect of QLC Leads in the trial period were always dependent upon a minimum number of leads being provided but that number was never reached.

126. From the Defendant’s point of view, as Mr Smart accepted, the discussions and negotiations in respect of QLC Leads were “ fluid.” Again, the Claimant relies upon this as an indication that the parties did not reach any concluded legally binding arrangement in respect of QLC Leads that differed from the terms of the 2017 Agreement and the later written contracts of 2018 and 2020.

127. The Claimant contends that, just as there was no enforceable QLC Lead Agreement in 2017, there was no continuation of any such agreement from 2018. The Claimant draws attention in particular to the following: 127.1. Whilst the Claimant continued to seek a minimum or guaranteed number of leads, this was never achieved. 127.2. Mr Shahein indicated in his email of 22 May 2018 that he was “ pissed off” demonstrating the Claimant’s unhappiness with how QLC Leads were being treated. 127.3. The reference in the email of 17 July 2018 to an attempt to “resurrect” QLC arrangements is inconsistent with there being any existing contractual arrangements specific to such leads. 127.4. In his email of 18 July 2018, Mr Baigrie was unhappy with the QLC arrangements to the point that he was going to ignore the idea of “resurrection”; regarding MPG as not having fulfilled what they had promised; 127.5. In their email exchange on 24 July 2018, Mr Jones and Mr Marsh of the Defendant were evidently not happy with the QLC arrangements and the payment of 41% and they assumed MPG was not meeting the required level of conversions to justify payment at this level; 127.6. There was no mention of the QLC arrangements in the 2018 commercial review; 127.7. On 29 July 2018, Mr Smart referred to the guaranteed 41% commission payment coming to an end and noted that the Defendant was not delivering sufficient leads. 127.8. By July 2020, Mr Marsh referred to QLC as having “blown up”. 127.9. By October 2020, the parties’ emphasis appears to have been more on Google leads than QLC leads and thereafter the QLC Leads appear to have reduced to the extent that they did not merit mention in the 2021 Commercial review.

128. As the Claimant puts it in closing submissions, “ in short, the QLC arrangements never worked to the satisfaction of either party and in their endeavours to make it work, neither of them identified or settled upon arrangements which both felt would work.” This is consistent that with the Claimant’s case that the QLC Leads arrangements were never intended to be contractually binding. The arrangements were too uncertain and unstable to constitute a concluded contract, even if (which of course the Claimant denies) they had contractual effect in the trial. The Defendant’s Case

129. The Defendant contends that the parties came to a clear agreement that for a period of 6 months, commencing on 24 October 2017, QLC Leads would be paid at a rate of 41% of Agent Gross Commission (that being 84% of the Defendant’s Gross Commission), subject to the deduction of clawback reserve, with no deduction for Lead Costs and no Quarterly Adjustment. There was no agreement as to a guaranteed minimum number of leads and no agreement that QLC Leads would exclusively be referred to the Claimant, but the trial would be subject to monthly review. This was the basis on which QLC Leads were paid from 24 October 2017, and indeed it was this calculation of commission that Mr Shahein’s queries were seeking to ensure was accurate. These were sufficiently certain terms.

130. The Defendant contends that the parties should each be taken to have intended that this agreement be legally binding. The following are argued to be relevant indicia: 130.1. Whilst the Claimant initially pleaded its claim for underpaid commission to include commissions calculated in accordance with Schedule III of the 2017 Agreement for the trial period, it subsequently reduced its claim by £132,000 to reflect the calculation of commission in accordance with the QLC Lead Agreement for the trial period. This is only consistent with the Claimant acknowledging that the QLC Trial Agreement had legal effect. 130.2. Both parties considered the agreement to be important and were looking to make it a permanent agreement. 130.3. The QLC Lead Agreement was carefully negotiated between business people with a back and forth of emails. 130.4. The agreement was recorded in writing, principally Mr Smart’s email of 15 October 2017. 130.5. Commission was in fact paid by the Defendant and calculated by the Claimant in accordance with the terms of the QLC Lead Agreement rather than the 2017 Agreement.

131. In so far as the Claimant relies on the “entire agreement” terms of Clause 17.1 of the 2017 Agreement, the Defendant makes the following submissions: 131.1. The starting point is to note that, on the face of it, there are two agreements between the parties, the written and the oral, concluded almost contemporaneously during the negotiations that comprised the 2017 Commercial Review. 131.2. Where there is more than one agreement in play, the entire agreement clause should be considered in light of the analysis of Carnwath LJ in Cheverny Consulting Ltd v Whitehead Mann Ltd [2006] EWCA Civ 1303 at [91]. The relevant written clause “ …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…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. ” 131.3. Given that the parties clearly intended to enter into two agreements at the same time, the principle in Cheverny Consulting should be applied so as to exempt the QLC Lead Agreement from the category of agreements that are excluded by Clause 17.1.

132. If this were incorrect, the Claimant has either waived reliance on the entire agreement clause or is estopped from asserting such reliance. 132.1. In terms of waiver, the Defendant relies on the judgment of Hildyard J (with whom Gross LJ agreed) in J N Hipwell & Son v Szurek [2018] EWCA Civ 674 at [51], citing SAM Business Systems v Hedley & Co [2002] EWHC 2733, in support of the proposition that such a clause may be waived. The reduction of the claim in respect of the commission for the period of the QLC Trial Agreement to meet the terms of that agreement is “ the strongest possible evidence” of waiver of reliance on the clause. 132.2. In terms of estoppel, the Defendant relies on the elements as summarised in Tinkler v HMRC [2021] UKSC 39 at [45]-[53]: (a) the express sharing of a common assumption between the parties whose assent to the assumption is manifested by something ‘crossing the line’ between them; (b) the expression of the common assumption by the party alleged to be estopped must be such that the party may properly be said to have assumed some element of responsibility for it in the sense of conveying to the other party that he expected the other party to rely upon it; (c) the person alleging the estoppel must in fact have relied upon the common assumption; (d) that reliance must be in connection with some subsequent mutual dealing between the parties; (e) the person alleging the estoppel must have suffered some detriment or the party alleged to be estopped some benefit, so as to make it unconscionable for the latter to assert the true position. 132.3. Here, the parties expressly and unequivocally traded on the terms of the QLC Lead Agreement as if that alone determined the payment of commission in respect of such Leads and was binding. In those circumstances, there is the clearest sharing of a common assumption that crosses the line, for which both parties assume some responsibility, upon which both parties relied in their dealings, including calculation and accounting for commission, and which it would be unconscionable to allow either party to resile from given their mutual dealings and accounting now around 8 years ago.

133. In the further alternative, the Defendant contends that Clause 17.1 of Schedule III to the 2017 Agreement should be rectified to reflect the true intention of the parties, namely that it did not apply to QLC Leads, which fell within the QLC Lead Agreement. The suggested rectification is the addition of the words, “Save in relation to the QLC Lead Agreement, to which this clause does not apply” to the beginning of clause 17.1. In support of this argument, the Defendant contends: 133.1. A written contract may be rectified on the basis of a common mistake if it is shown that the parties, when they executed the contract, had a common intention in respect of a particular matter (manifested by an outward expression of accord) which, by mistake, the document did not accurately record (see the judgment of Peter Gibson LJ in Swainland Builders Ltd v Freehold Properties Ltd [2002] 2 EGLR 71 ). 133.2. The parties intention, manifested in their express reference to the agreement in respect of QLC Leads, the email of Mr Smart dated 15 October and their subsequent conduct in acting as thought they had contracted on the terms of the QLC Lead Agreement, was common and outward, but the 2017 Agreement failed accurately to record their true accord.

134. The Defendant contends that, following the expiry of the 6-month trial period to which the QLC Lead Agreement applied, the parties simply continued to operate on the same basis, applying the method of calculation recorded above in respect of QLC Leads. There is, the Defendant contends, abundant evidence that, notwithstanding the parties having discussions about revising their terms of dealing relating to QLC Leads, in fact they continued to deal on the basis of the 41% commission with no Lead Costs deducted: 134.1. The meeting in June 2018 (which, the Defendant contends, the court should conclude did take place notwithstanding the fact that neither Mr Shahein nor Mr Smart could remember it) did not lead to any change in the basis of payment; 134.2. Mr Shahein’s email to Ms Welham dated 25 June 2018 shows that he understood that a specific payment regime was in place in respect of QLC Leads; 134.3. Equally Mr Jones’ email of 22 June 2018 shows that the Defendant’s understanding was that there was a specific regime in place for QLC Leads; 134.4. The email from Mr Shahein of 6 September 2018 is particularly telling because it shows a clear acknowledgement on his part that the Quarterly Adjustment arrangement did not apply to QLC Leads; 134.5. Mr Back’s communication of 22 January 2019 and the Claimant’s PowerPoint presentation for the 2019 Commercial review strongly point to QLC Leads being paid in a different manner than set out in the 2018 Agreement, given the reference to a “proposed QA” in the former and increased commission for QLC Leads in the latter would not make sense if in fact payments relating to QLC Leads were paid for in accordance with Schedule III; 134.6. Mr Back’s email of 26 November 2021, referring to the Claimant having been “ on a flat of 41% (of the 83.3%) since we took over” is only consistent with his believing that the QLC Leads were to be paid by a term to that effect; 134.7. Alongside these particular events, the parties continued in fact to seek and make payment on the basis of the 41% rate with no deduction for lead costs, neither party querying this basis of payment; 134.8. Correspondingly, the Claimant has been unable to identify any document consistent with an intention or attempt to charge for QLC Leads in accordance with the terms of Schedule III. Discussion

135. The communication referred to show the clear agreement of the parties to terms that, for a period of 6 months from October 2017 there was to be a trial arrangement by which QLC Leads would be paid at a flat rate of 41% of Agent Gross Commission (that is to say 84% of the Defendant’s Gross Commission), with no deductions for Lead Costs and no quarterly adjustment, but deduction for claw reserve. No minimum number of Leads was specified though both parties realised that the number of Leads was important to the Claimant and might have affected the viability of the trial. Those terms are stated in outline in Mr Smart’s email of 15 October 2017 and were the terms on which the parties dealt with QLC Leads thereafter. Whether this is seen as an oral contract or (more probably) as a contract partly reached orally and partly reflected in the conduct of the parties, it is not disputed that these were the terms on which QLC Leads were provided and were paid. Notwithstanding the Claimant’s denial of any clear terms being reached, the actual conduct of the parties in paying and accepting payment in accordance with this mechanism is a clear indication of a course of dealing which was consensual and which reflected these terms.

136. I turn to the parties' intentions, which is the central part of the Claimant’s denial of the existence of a binding contractual arrangements relating to QLC Leads. It appears to me that the evidence before the court is capable of leading to any of the following three conclusions: 136.1. That the parties intended all Leads from whatever source to be remunerated in accordance with Schedule III; 136.2. That the parties intended all leads other than QLC Leads to be remunerated in accordance with schedule III, the QLC Leads to be remunerated in accordance with the separate oral agreement referred to above; 136.3. that although the parties intended the remuneration scheme to be as (b), they did not intend this to be a legal, binding arrangement, but that rather either or both parties could insist on payment in accordance with Schedule III. (In theory at least it is possible that the parties in fact had different intentions from each other: for example, that the Claimant did not intend the oral agreement to be legally binding, but the Defendant did. For reasons dealt with below, I can reject those possibilities and the complications that would flow therefrom.)

137. The third of these possibilities may seem unlikely. Why would commercial parties agree a specific system for remuneration of one type of lead but not intend that to be legally binding? One would expect that to cause an undesirable level of uncertainty. Indeed, it does so if one follows through the implications of the Claimant’s case, as I note below. On the other hand, it was at times the evidence both of Mr Shahein and of Mr Back that indeed although they expected the QLC Leads to be calculated in accordance with the oral agreement, they did not consider this to be a binding basis of calculation.

138. However, Mr Shahein in particular was less than wholehearted in his advocacy of this interpretation of the parties’ dealings. At other points in his evidence, he accepted that, at least during the trial period, the calculation of remuneration for QLC Leads in accordance with the oral agreement was what the parties had intended. Mr Back appeared to take this view at certain points in his evidence as well, although his final position appears to have been that set out at (c) above.

139. None of this evidence from Mr Shahein and Mr Back is based upon any relevant factual material as to the true construction of the contractual arrangements. Rather it is an expression of their belief, whether now or at an earlier time, as to the true nature of those arrangements. Such evidence is notoriously unreliable. If a witness gives evidence as to their belief as to the interpretation of a contract, that evidence is likely, as well as being inadmissible, to be inherently unreliable as an expression of the case that best suits the witness. If the witness is talking as to their belief as to the true interpretation of the contract at some point in the past, the inherent unreliability of such evidence is still further complicated. As Leggatt J, as he then was, said in Gestmin v Credit Suisse [2013] EWHC 3560 , “ memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs.”

140. In reality, both the inherent probabilities and the conduct of the parties point strongly in favour of the conclusion that that the parties intended all leads other than QLC Leads to be remunerated in accordance with Schedule III, the QLC Leads to be remunerated in accordance with the separate oral agreement. 140.1. First, the parties’ exchanges about the QLC Leads took place very shortly before the 2017 Agreement was signed. It is inherently improbable that the parties would have gone to the trouble of negotiating a specific method of remuneration for the QLC Leads, only to abandon that in favour of calculation in accordance with Schedule III in the following days. 140.2. Second, if the parties had intended the terms for payment of QLC Leads to be as Schedule III, it is highly likely that they would have discussed this when agreeing the 2017 Agreement. There is no contemporaneous documentation showing that the issue was flagged up, and no witness suggests that there was a discussion to that effect. Whilst it is perfectly possible that any such discussion would have been forgotten with the passage of time, the importance of this issue is such that the inability of any witness to recall such a discussion tends to suggest that it did not happen, a conclusion bolstered by the absence of any written record of such a discussion. (Of course, it might be argued that, if the parties had not intended Schedule III to supersede the terms for payment that had been agreed orally, someone would have flagged this up when reading the terms of the 2017 Agreement. In reality, experience suggests that people often do not read boilerplate clauses of a contract with the same attention to detail as they do in respect of bespoke clauses.) 140.3. Third, the parties openly conducted themselves from October 2017 on the basis that the QLC Leads were not to be paid in accordance with Schedule III. The amounts stated within the monthly statements clearly reflect the terms of the oral agreement in that the Claimant’s fees were charged at 41% rather than the rates set out in Schedule III, no Lead Costs were applied, and no quarterly adjustment was made. That evidence is only consistent with the Defendant, as the party who prepared the documents, believing that the orally agreed rates applied. As regards the Claimant, as the recipient, the monthly statements were clear and unambiguous as to what was being charged yet the Claimant never queried those rates. I bear in mind Mr Shahein's evidence as to the many inaccuracies within the monthly statements. Regardless as to whether these are to be treated as an inevitable consequence of the complexity of the exercise involved (as the Defendant’s witnesses would have) or were the result of careless input of data on the defendants side (as the Claimant contends), I have no doubt that the consequent uncertainty as to the accuracy of the figures and work that was generated by this were matters of considerable disruption and frustration on both sides. Nevertheless, Mr Shahein's convincing evidence is that he had a mastery of the monthly statements. That does not mean that he would identify every miscalculation, but it would be highly surprising had he not identified the basis on which QLC Leads were being calculated within the monthly statements, given the three features of difference between that scheme of remuneration and the scheme in Schedule III that I have noted in this paragraph. Indeed, Mr Shahein has not suggested that he did not realise the basis upon which the Defendant was invoicing. I am left in no doubt that he knew that from October 2017, the Defendant was calculating payment for QLC Leads in accordance with the terms agreed orally. Had he objected to this method of invoicing, there would be evidence to this effect. There is none, suggesting that he agreed that this was the correct basis of calculation. 140.4. Fourth, and further bolstering the previous point, Mr Shahein and Mr Back both on occasions positively asserted that payment of QLC Leads was on a different basis than other leads.

141. It follows from this that I am satisfied that both the Claimant and the Defendant considered the so-called QLC Lead Agreement to govern the payment for QLC Leads, notwithstanding the terms of Schedule III.

142. As I have indicated above, to the extent that Mr Shahein and/or Mr Back believed that this oral agreement was not legally binding, I see nothing to support that beyond the mere assertion within their evidence. The result would, as I have indicated above, be commercially bizarre. It would have been obvious from the outset that such an arrangement might have worked a considerable injustice on either party, since if the arrangements were not in fact legally binding, it would give rise to the possibility that the parties could have conducted themselves on the basis that fees were chargeable in accordance with the QLC Lead Agreement terms but then later reneged on that and argued for the use of the Schedule III terms. Indeed, that is exactly what the Claimant has done.

143. That has a particularly serious consequence when one sees how the Claimant puts its case on Lead Costs. The Claimant is forced to accept, by the terms of Schedule III, that the Defendant would in principle be entitled to deduct Lead Costs from the amount due to the Claimant. The Defendant did not do so (for the clear and obvious reason that this was not the method of remuneration agreed for QLC Leads). Now that the Claimant contends that Schedule III in fact applies to such Leads, the Defendant, in a belt and braces approach by which it seeks to value the claim on the assumption that the Claimant is correct about the contractual terms, understandably seeks in that calculation to deduct Lead Costs in accordance with what would have been payable under Schedule III.

144. The Claimant’s response is to contend that the Defendant cannot now deduct such Lead Costs because it did not do so at the time. If this argument is correct, the Defendant has acted significantly to its commercial disadvantage as a result of the continued dealings between the parties on the basis that the proper mode of calculation of the sums due was that agreed orally. Whilst I accept the possibility that, for reasons identified by the Claimant in the passage at [60] in its written opening cited above, the parties could have been content to deal on the basis that the informal trial was not contractually binding in respect of QLC Leads such that they could at any time have insisted upon enforcement of their strict contractual rights in accordance with the 2017 Agreement. But I do not accept that this was in fact the case. It is highly unlikely that the parties would have left open the possibility that either of them could retrospectively have required the other to abide by a different basis of commission payment than that actually being communicated between the parties at the time. Accordingly, I reject the argument that either party did not intend the oral agreement to be legally binding.

145. I also reject the contention for the Claimant that the terms of the QLC Lead Agreement were too imprecise as to be capable of giving rise to a binding contract. If the terms agreed by the parties are taken together with their conduct in fact making and receiving payments calculated in accordance with those terms, it is clear that the parties considered the agreement to be a workable formula. It is correct that the express terms of the contract did not cover all eventualities. For example, it is not clear whether the alleged contract provided any terms for its termination. But the mere fact that an agreement does not cover all eventualities does not rob it of binding effect. Instead, the court will, if necessary, use its arsenal of powers, including the implication of terms in respect of circumstances that are not expressly dealt with, in order to give the contract effect. I see no bar in this respect to a finding that the parties intended to be bound by their agreement.

146. It follows that, in respect of QLC Leads, I am satisfied that the terms of the 2017 Agreement with its “entire agreement” clause did not reflect the intention of the parties at the time that it was entered into. This points to a series of arguments on the Defendant’s part as to how the parties’ true agreement should be given effect, any one of which is sufficient to make out the Defendant’s case that the QLC Lead Agreement was binding.

147. I consider these arguments in the following order: 147.1. The true interpretation of the entire agreement clause; 147.2. Rectification; 147.3. Waiver; 147.4. Estoppel.

148. On the issue of true interpretation of the entire agreement clause within the 2017 Agreement, having found that it did not reflect the intention of the parties that it included within its ambit QLC Leads, I consider whether the true interpretation is, as contended for by the Defendant, that QLC Leads were excluded from its ambit. If that argument is successful, none of the other arguments need to be considered on the basis that they would not be necessary to the resolution of the issues between the parties.

149. In considering the true interpretation of the 2017 Agreement, the overwhelming factors are that the parties entered into that agreement just days after negotiating the QLC Lead Agreement and that thereafter the parties in fact treated it as not applying to QLC Leads and were able to deal on this basis for several years. These are powerful arguments in favour of the conclusion that the true intention was that the agreement did not apply to QLC Leads. Indeed, apart from invoking the “no oral modification” and “entire agreement” clauses, the Claimant has been unable to advance any convincing case as to why the 2017 Agreement did not exclude the QLC Leads from its ambit. Given the clear evidence of the parties’ true intention. I do not consider that there is any bar to the interpretation of the 2017 Agreement (and indeed the later written agreements) advanced by the Defendant.

150. If I were wrong on the interpretation issues, I turn to consider the question of rectification. It is self-evident on my earlier finding that, if clause 17.1 includes within its ambit the oral agreement relating to QLC Leads, the terms of the 2017 Agreement did not reflect the true intention of the parties. This is the starting point for invoking the remedy of rectification, as noted by Peter Gibson LJ in Swainland Builders Ltd v Freehold Properties Ltd [2002] 2 EGLR 71 .

151. The doctrine has certain limits: 151.1. It will not be ordered where the subsequent written agreement was intended to supersede the terms of the earlier agreement, but that is a conclusion which I have already rejected on the facts of this case. 151.2. It will not (generally) be ordered where the mistake as to the contents of the written agreement can be said to be unilateral rather than mutual. This however is a clear case of mutual mistake. 151.3. It will not be ordered if the conflict between the face of the document and the true intention of the parties can be resolved by applying principles of contractual construction. Accordingly, if I am correct on the true interpretation of Clause 17.1, the rectification argument could not succeed but it would of course not be necessary for the Defendant to rely on it in that scenario.

152. On the facts here: 152.1. I have no doubt that the parties’ true intent both at the time of agreeing terms as to payments for QLC Leads and at the time of signing the 2017 Agreement was that QLC Leads be paid in accordance with the oral agreement; 152.2. There was an outward expression of that accord through the emails referred to above; 152.3. The failure of the 2017 Agreement to reflect that common intention was a simple mistake which was common to both parties, probably resulting from the fact that a specific trial arrangement for particular QLC Leads did not need to be expressed separately; 152.4. The 2017 Agreement was not intended to supersede the oral agreement; 152.5. The mistake on the face of the terms of the 2017 Agreement could not be resolved by a process of construction.

153. The effect of the terms of the rectification of the 2017 Agreement is that QLC Leads were to be paid in accordance with the oral agreement between the parties. As indicated, that agreement was for a trial period. At the end of the trial period, the parties negotiated as to whether it should continue. It was clearly a matter of increasing concern to the Claimant that the Defendant was not delivering on QLC Leads at a rate that it considered to be viable. Notwithstanding this, the Defendant continued to calculate remuneration in accordance with the oral agreement, as remained apparent to the Claimant from the terms of the monthly statements. It remained the case that the rate of 41% was charged, no Lead Costs were applied and there was no quarterly adjustment to come out, all of which are consistent with the oral agreement but inconsistent with the terms of the 2017 Agreement.

154. In his evidence, Mr Shahein accepted that he was aware that remuneration was being calculated in accordance with the oral agreement after the expiry of the six month period. It was not his case that at any point either the Claimant or the Defendant stated that the parties were to switch to terms under the 2017 Agreement. It follows that the only basis upon which the 2017 Agreement can have superseded the oral agreement in or after April 2018 (the expiry of the trial period) could be the effluxion of time.

155. Rectification is of course an equitable remedy which may be denied in the exercise of the court's discretion. In particular, delay is likely to be a relevant criterion. However, I can see no delay in the Defendant seeking rectification here. It is a response to a claim brought by the Claimant.

156. It follows that I am satisfied that the remedy of rectification is available and would be appropriate on the facts of this case. In the event that the argument as to the true meaning of the 2017 Agreement were wrong, it would most naturally meet the resolution of this issue from that since it reflects what the parties clearly intended.

157. The third argument that I consider, estoppel by convention, arises where both parties to a transaction “ … act on assumed state of facts or law, the assumption being either shared by both or made by 1 and acquiesced in by the other” (see Republic of India v India Steamship (The Indian Endurance) (No. 2) [1998] AC 878 at 913). In Revenue and Customs Commissioners v Benchdollar Ltd , Briggs J, in a passage which Lord Burrows cited with approval in Tinkler v Revenue and Customs Commissioners [2021] UKSC 39 at [45], stated, “ [51] (i) it is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly shared between them. (ii) the expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely upon it. (iii) the person alleging the estoppel must in fact have relied upon the common assumption, to a significant extent, rather than merely upon his own independent view of the matter. (iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties. (v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position.”

158. In respect of the first of these points, as the Court of Appeal stated in Dixon v Blindley Health Investments Ltd [2015] EWCA Civ 1023 at [92] (again approved in Tinkler at [49] – [50]) , “something must be shown to have ‘crossed the line’ sufficient to manifest an assent to the assumption.”

159. It is a precondition of the success of this argument for the Defendant that the true legal position was other than that QLC Leads were payable in accordance with the oral agreement. Accordingly, if the Defendant succeeds on the argument for rectification, no question of estoppel could arise. However, had I found otherwise on the rectification argument, in my judgment this is a clear case for the application of the doctrine of estoppel by conduct: 159.1. The parties continually dealt on the assumption that the oral agreement applied to QLC Leads in the period October 2017 to May 2018 (if not beyond, an issue dealt with under Issue 2); 159.2. That assumption was repeatedly shared through the provision of monthly statements by the Defendant’s and the Claimant’s responses to those statements which corrected other matters but did not seek to change the underlying basis of calculation of QLC Leads: 159.3. The parties communicated an expectation that the other would rely upon the common assumption, as manifest in their exchanges about the monthly statements in an attempt to correct them so as to calculate the sums due in accordance with the oral agreement: 159.4. Both parties relied on the common assumption that the oral agreement applied in not seeking to correct the monthly statements so as to comply with the alternative basis of calculation in Schedule 3.

160. Both parties acted to their detriment in relying upon the common assumption in that they did not seek to recalculate the sums due in accordance with Schedule 3. There is a particular and obvious detriment to the Defendant in circumstances where, as noted above, the Claimant contends that its failure at the time to seek to deduct lead charges in accordance with Schedule III now prevents them from doing so on a recalculation of the sums due had Schedule III applied.

161. It follows that, if the Defendant had not succeeded on the issues of interpretation and rectification, it could have successfully argued the case on the basis of estoppel by convention.

162. The final argument advanced by the Defendant of waiver is more problematic. True waiver (as opposed for example to estoppel) is a doctrine that is founded in the iniquity of permitting a party to insist upon contractual performance in accordance with a right that it has previously abandoned (see the analysis of Potter LJ in Flacker Shipping Ltd v Glencore Grain Ltd [2002] EWCA Civ 1068 at [64]-[68]).

163. I am however not persuaded that the Defendant shows this case to fall squarely within either of the two types of waiver with which the court was there concerned, unilateral waiver or waiver by election, the former because this was not a case of the Claimant abandoning a contractual right but rather the parties agreeing an alternative means of performing the contract, the latter because there was no election open to the Claimant between two course of action.

164. The Defendant originally argued that there was an “ Amended QLC Lead Agreement that reflected the fixed rate of commission of 41% rather than the variable rates set out in Schedule III ”. However, as has been noted, during the course of the evidence it became clear that this was not the Defendant’s case, in that the supposed variation from a sliding scale of commission to a fixed rate of 41% was in fact the rate in place from the beginning of the trial period.

165. Whilst I bear in mind that this inconsistency with how the Defendant puts its case might suggest uncertainty as to the terms on which the parties were dealing, the oral evidence of Mr Shahein and Mr Smart made clear that in fact the parties dealt throughout on the same terms in respect of QLC Leads. The misstatement of the Defendant’s case then seems to be a genuine misunderstanding of the evidence that was being advanced rather than a result of a change in that evidence.

166. The most important point for this aspect of the case is the continuing conduct of the parties after the expiry of the original 6-month QLC Lead Agreement. There is nothing in the evidence that causes me to conclude that the parties either expressly or impliedly contracted in September 2017 so as to bring the oral agreement to an automatic conclusion at the expiry of the 6 month period or that they subsequently varied the original agreement to this effect. Their conduct in continuing to pay and accept payment in accordance with the terms of the oral agreement is inconsistent with them having intended such a term (whether as agreed at the outset or as a result of a variation of the original agreement). This course of conduct is best judged as a variation of the oral agreement such as to cause it to continue beyond the trial period. Such a variation would not be prevented by the “entire agreement” clause in the 2017 Agreement since, if, as I have found, when that agreement is properly rectified so as to exclude QLC Leads as provided for in the oral agreement, the variation of the oral agreement to extend its term would equally be permitted under the 2017 Agreement as rectified.

167. Furthermore, it is more probable than not that the parties met on or about 21 June 2018 and that their discussion on that day were consistent with an intention on both sides to continue to pay QLC Leads in a different way than other Leads that were subject to the parties’ written agreement. That conclusion is consistent with the compelling evidence of emails leading up to the date that a meeting was to take place and with the reference by Mr Shahein in his email to Ms Welham of 25 June 2018. Neither Mr Shahein nor Mr Smart recalled the meeting specifically. This is not surprising since both accept that they had many meetings. Whilst this meeting may have been more significant than many, given the anticipation of it within the emails referred to above and the obvious desire for the parties to have clarity about what was happening in terms of QLC Leads, in a commercial relationship with considerable contact between the parties, it is perfectly plausible that both Mr Shahein and Mr Smart would not recall the meeting, in particular where it did not in the event lead to any new arrangements between the parties and the arrangements relating to the payment of QLC Leads continued as before. I am not persuaded that this meeting in any way varied the terms upon which the parties traded – they simply continued to deal with QLC Leads as before, whatever concerns were being expressed about the arrangements.

168. It is correct, as the Claimant has pointed out, that Mr Smart was less than unwavering in his evidence that the QLC Lead Agreement unequivocally bound the Defendant to pay commission in accordance with its provisions. He described the position in May 2018 as “ fluid” and he accepted that there were negotiations between the parties and discussions both between the parties and internally within the Defendant as to the terms on which QLC Leads were paid.

169. It is equally clearly the case that representatives of both the Claimant and the Defendant had, at various times, some doubt about whether the QLC Leads ought to be dealt with differently. But at no time does one see any evidence of a party seeking to agree a change of the terms on which QLC Leads were being paid from those agreed for the trial period.

170. I accept that the existence of the underlying 2017 Agreement meant that the parties could readily have terminated the oral agreement and reverted to charging in accordance with Schedule III. In order to give commercial sense to the parties’ arrangements, the court should imply a term that either party could terminate the oral agreement on reasonable notice (after expiry of the trial period), such notice being the minimum required to allow the Defendant, once it had issued a monthly statement for one month, to revert to the alternative calculation as the basis of the statement for the following month. There is no evidence that any such notice was given. It follows that, subject to the effect of the 2018 Agreement and the 2020 Agreement, I conclude that the oral agreement remained in force in respect of QLC Leads.

171. As I have noted, like the 2017 Agreement, the 2018 and 2020 Agreements contain “entire agreement” clauses. Accordingly, the quartet of issues referred to in respect of the QLC Lead Agreement fall for consideration here as well, namely: 171.1. The true interpretation of the entire agreement clause; 171.2. Rectification; 171.3. Waiver; 171.4. Estoppel.

172. The 2018 and 2020 Agreements clearly fall to be considered separately from the 2017 Agreement and from each other, not least because the greater the passage of time, the more powerful the argument that the purpose of the entire agreement clause is being undermined by “ thrashing the undergrowth” and finding a “ long-forgotten” remark.

173. But in reality, each of the conclusions reached above in respect of the trial period apply with equal force to the continuing operation of the QLC Lead Agreement. The conduct of the parties in continuing to apply the oral agreement over a considerable period of time if anything underlines the fact that this reflected the parties’ continuing true intention and one that was openly expressed through their course of conduct. Further, acknowledgement of the oral terms was repeated even after the 2017 Agreement had been superseded – see for example, Mr Shahein’s email 6 September 2018 where he states that the Claimant “ had to give up a lot for our QLC arrangement like a quarterly adjustment.” . Thus, I see no difficulty in rectification applying to the later written agreements as well.

174. Accordingly, I accept that the parties were contractually bound by the terms of the QLC Lead Agreement both during the initial trial period and thereafter. ISSUE B – TRAIL COMMISSION The Claimant’s Case

175. The Claimant contends that Trail Commission forms part of “ the total amount of commission paid by an insurance company to LifeSearch as a result of a sale of a Product, which can differ from insurer to insurer ,” this being the definition of LifeSearch Gross Commission within the 2017. 2018 and 2020 Agreements. The payment of Trail Commission is an incentive to advisers to achieve sales of products that last into the long term and it is fair that they should be rewarded for this.

176. Further, the Claimant raised the issue of the payment of Trail Commission on several occasions, but the Defendant did not contend that it had no liability to pay it until 2020. The Defendant’s Case

177. The Defendant contends that: 177.1. Trail commission does not fall within the definition of LifeSearch Gross Commission; 177.2. If in fact that is wrong, the Claimant is estopped from claiming trail commission.

178. In dealing with the first point, the Defendant identifies the relevant factual matrix as being that the Claimant had sought to be paid trail commission but told that it would not be paid. All of the communications referred to in the evidence section above relating to trail commission are consistent with the Defendant stating that it would not pay Trail Commission and the Claimant understanding this to be the case, even though it sought such payment. This factual matrix points in the direction of a construction of LifeSearch Gross Commission that excludes Trial; Commission.

179. That interpretation is a proper one for several reasons: 179.1. Trail commission payable upon a contingency which might never happen and in any event would not happen until four years after the sale of a product does not naturally fall within the meaning of commission ‘paid by an insurance company to LifeSearch as a result of a sale of a Product’. 179.2. If trail commission were payable, it would require the parties to engage in a minute accounting exercise in respect of tiny amounts of trail commission that might never become payable. That does not make business sense. 179.3. When it came to renegotiating the 2020 Agreement, whilst the payment of such commission upfront may have made it less problematic to pass it on to franchises, the Defendant again made clear that Trail Commission was not included in the definition for LifeSearch Gross Commission and there is no basis to infer a change in the contractual position.

180. In the alternative, the Defendant contends that the Claimant is estopped from claiming trail commission: 180.1. The parties expressly shared the assumption that trail commission was not included in the definition of LifeSearch Gross Commission, by excluding from the monthly statements which formed the basis upon which the Defendant was paid. 180.2. The Claimant assumed a responsibility for this assumption by agreeing to being paid on the basis set out in the monthly statements and then receiving payments on that basis, without objecting to the exclusion of trail commission. 180.3. The Defendant relied on this common assumption by calculating the commission payable to the Claimant each month, and paying that commission, on the basis that trail commission was excluded. 180.4. The Defendant suffered a detriment by foregoing the opportunity to negotiate an amendment to the definition of LifeSearch Gross Commission which would have explicitly excluded trail commission from the definition. Discussion

181. I accept Mr Shahein’s evidence that he was told that the amount due by way of Trail Commission would be little. It is probably the case that the word “pennies” was used, though I have some doubt either that, if the word was used, it was meant to imply that the commissions would be less than a pound or that Mr Shahein took the statement that way. But I accept that he later discovered that the figures involved were rather more than he had realised, and that this, together with the breakdown of the relationship between the Claimant and the Defendant more generally, caused him to seek to recover the money that he had previously thought would be minimal and quite probably not worth the expense and trouble of pursuing.

182. However, Mr Shahein’s belief that he ought to have been paid this money (because his representatives had earned it) cannot be the basis for construing the contract in the way he contends. Rather the court must look to the true meaning of the contract in light both of the factual matrix and the words used.

183. The difficulty for the Claimant is in my judgment twofold: 183.1. The words used in the definition of LifeSearch Gross Commission, whilst capable of including trail commission on the basis that they were payments made to LifeSearch by an insurer which would not have been paid but for the sale of an insurance product, are not however unequivocal, since the word “ paid” is used in the past tense and there is no reference to payments made subsequent to the sale of the product . They are capable of referring only to the amount paid by the insurer on the sale of the product, rather than as any further payment arising from loyalty on the part of the Customer. 183.2. This interpretation fits the factual matrix of what was said by the Defendant (and not queried by the Claimant) at various points during the parties’ relationship as identified above. The Claimant’s failure to take the issue that it was entitled to the payment of Trail Commission (rather than that it thought it would be fair for it to be paid Trail Commission) is consistent with a common understanding between the parties that Trail Commission was not in fact payable as of right. That common understanding forms part of the factual matrix which aids the interpretation of what I consider to be an ambiguous or at least equivocal clause in the contract.

184. The Claimant makes the point that the evidence is that, from around January 2021, Trail Commission was paid by insurers as an upfront payment at around the time of the point of sale of the product. If it had been the case that Trail Commission had been paid to the Defendant at the point of sale form the very beginning of the commercial relationship between the Defendant and the Claimant, that would have undermined the force of the argument that the sue of the word “paid” relates to an amount paid by the insurer in the past. But since, at the outset of the relationship, this was not the case, the fact that the later change of practice to make the payment at or around the point of sale has less force. On my analysis that at [183], Trail Commission was not payable to the Claimant at the outset of the parties’ relationship. I do not see how the change in the practice of when insurers paid Trail Commission to the Defendant during the relationship could somehow act as a variation of the contractual terms relating to Trail Commission.

185. Having regard to this factual matrix, I am satisfied that the true construction of the 2017 and 2018 Agreements, reflecting the common belief of the parties as to its effect and not being inconsistent with the express words of the contract, is that trail commission was not in fact included within the calculation of LifeSearch Gross Commission and therefore did not fall to be accounted for in payments made to the Claimant.

186. The argument in respect of the 2020 Agreement is slightly different and stronger. By the time of that agreement, the Defendant had expressly stated that Trail Commission was not included within the calculation of LifeSearch Gross Commission. The failure of the Claimant to challenge that is a stronger argument for the court to construe the contract in the light of a factual matrix where the parties accepted that trail commission was not included in the parties’ accounting.

187. If I were wrong about this, the question of an estoppel would arise. Whilst I consider that there was a common understanding between the parties, I am not persuaded that the estoppel argument can be made out here for the following reasons: 187.1. The Claimant cannot truly be said to be responsible for the common assumption that trail commission was not to be accounted for between the parties. I accept Mr Shahein’s evidence that the complexity of the monthly statements was such that, without considerably more work on his part, he did not necessarily know whether the Defendant was accounting for trail commission. 187.2. In any event, the Defendant does not show the necessary detriment to found an estoppel. If in fact the Trail Commission fell within the definition of LifeSearch Gross Commission, the failure of the Defendant to realise that the Claimant would pursue recovery of such sums might be said to have prevented the Defendant from proposing an amendment to the agreements binding the parties but I see no reason to think that the price of that amendment would have been anything other than the true cost to the Claimant of foregoing trail commission – in other words the probability is that the Defendant suffered no detriment because it would have had to pay out equivalent sums in any event. ISSUE C - NON-QLC LEADS TEAMS UNDERPAYMENTS CLAIM The Claimant’s Case

188. The basis of this claim is set out at [66] and [67]. The Claimant argues that the Defendant has failed to adjust the commission entitlement in accordance with the contractual entitlement under the 2018 and 2020 Agreements.

189. The claim is asserted but unexplained in the Claimant’s opening. In its written closing submissions, the case is put thus: “ Team Underpayment is at the tab “Team Underpayment all sources”: £70,885.56. The 2017 contract says the payment would be calculated on an individual basis. The 2018 contract changed the calculation to be done on a franchise (or “team”) basis. However, LS failed to apply the calculation on the team basis for the relevant period. Accordingly, the claimant claims the difference between those two calculations as set out within the Claim Master Statement.”

190. The reference to the Claims Master Statement is to an Excel spreadsheet setting out the quantification of the Claimant’s case. It is dated 15 June 2025. It is not verified by a statement of truth. Nor is it referred to in Mr Shahein’s witness statement (which in point of fact is dated earlier than that document in any event). One page within that spreadsheet is the page headed “Team Underpayment All Sources” and it amounts to an assertion of the underpayment of sums relating to the specific advisers and specific sales. The document purports to show that in respect of what appear to be 10,417 sales on which commission is paid, the figures are misstated by the total sum of £70,885.56. The Defendant’s Case

191. The Defendant’s closing submissions note the lack of explanation of this claim in the Claimant’s opening. The Defendant contends that this remains the case after oral submissions. The court is simply not in a position to understand and assess this claim and it must be dismissed. Discussion

192. I appreciate that, in a claim that relates to many transactions on which commission is claimed and where there are many issues of the court to consider, it is unsurprising that some issues receive less attention than others. But this is an issue on which there is complete lack of clarity. In effect the Claimant’s case is that the court must trust that it has got the calculation right and that it has been underpaid. But those calculations are not backed up by evidence as to who carried them out and how. I would be willing to draw the inference that it was Mr Shahein’s work, given the evidence that he took a lead for the Claimant in terms of the calculation of the amount of commission. But there is simply no admissible evidence that has been identified to me from which I can draw the inference that the Claimant has been underpaid in the manner pleaded in the Amended Particulars of Claim.

193. It is of course true that the Defendant had the opportunity to cross examine Mr Shahein. But that does not oblige the Defendant to make the Claimant’s case on its behalf by seeking to challenge a document that is not formally put in in evidence.

194. It may be that there are source documents which, analysed with regard to this issue, might show that there were unjustified deductions to commission in the manner alleged. It may be that, were the court to be taken through those primary documents, the Claimant could provide its case in this regard. But that has not happened. It follows that I am not satisfied that the Claimant makes out a case in respect of this head of loss. ISSUE D – CLAWBACK RESERVE CLAIM The Claimant’s Case

195. As the Claimant points out, clawback reserve is set in the 2017 Agreement at 6% of the total Monthly Agent Gross Commission. Point E of Schedule III provides that “ after 4 years [the Defendant] will stop reserving for claw ” but it reserves “ the right to review the level of clawback reserve once every 12 months and following the review to amend such level at its sole discretion by giving the individual 30 days notice in writing; after 4 years [the Defendant] will stop reserving but reserve the right to review the need to adjust an agents Clawback Reserve on a quarterly basis after 4 years.” The provision in respect of clawback reserve was the same in the 2018 Agreement; in the 2020 Agreement, the figure increased to 8%.

196. The Claimant contends that clawback reserve can therefore only be held for the period of 4 years after the initial commission was paid. It follows that, once a four year reserve of clawback had been established (in October 2021), the Defendant was not entitled to continue to exercise its right to reserve in respect of clawback unless the sums held were insufficient to meet a liability to repay commission.

197. This is said to be consistent with the interpretation in the document prepared by the Defendant for the 2018 Commercial Review, where the Defendant noted in respect of clawback: “ Discussion points: • We’re coming to the 4 year mark for several advisers These were individual advisers who had been working for the Defendant for approaching 4 years. This is to be contrasted with the claw back reserve for the Claimant itself which is the subject matter of this issue. . • What do we do with the claw reserve past the 4 year mark? • Do we have enough in the claw reserve? • Are there any further changes we need to make to the claw reserve to protect ourselves? Proposal • All advisers who reach the 4 year mark we have an initial review to assess whether we have enough claw reserve. Claw reserve may continue if we find a significant shortfall. • Once happy claw reserve will stop. • Adviser will then have a quarterly assessment comparing commission value falling out the 4 year period compared to new commission value • Claw reserve taken if new commission value is higher. • Claw reserve will to now be taken on quarterly adjustment.”

198. The Claimant contends therefore that the Defendant was not entitled to reserve for clawback beyond the four year period that expired in October 2021 unless it had a liability to repay the commission that it had received from insurers. However, the Defendant continued to deduct from clawback reserve after the expiry of the four year period at the rate of 6% increasing to 8% then, with effect from July 2022, at 34%. Apart from the fact that the Defendant was not entitled to reserve after the 4 year period (save in so far as the clawback reserve was inadequate to meet potential liabilities for clawback due to the Defendant repaying commission to insurers), there was no evidence for the need to increase to 34% and in any event that represented an increase which was not permitted by point E in Schedule III. The rate of the reserve had been increased in 2020 but was maintained at the same level in the 2021 Commercial Review. Having reviewed the level and not altered it, the limitation of point E to a single review in each period of 12 months prevented the Defendant from reviewing it again.

199. The Claimant notes that Mr Shovell accepted, in an email of 22 March 2019 that Claw Reserve should not have been deducted after four years.

200. In so far as the Defendant tried to set in place an alternative basis for the deduction of claw reserve in the 2021 Commercial Review, the Claimant described this as a variation that had been “ launched upon ” the Claimant but that the Claimant had never agreed to it. The Claimant objected to other aspects of matters referred to in the 2021 Commercial Review and no written contract was entered into following that review. The Claimant is not now bound by a contractual variation to which it did not consent.

201. In the alternative, the Claimant contends that the increase in Clawback Reserve from 8% to 34% in July 2022 was, in the context of other actions, in particular the termination of access and the deprivation of the Claimant’s access to Leads, a step taken not for any legitimate commercial purpose other than to vex and cause as much harm to the Claimant and its advisers as possible. The Defendant’s Case

202. The Defendant contends that the continuing deduction to reserve for clawback was a contractually permitted consequence of the Defendant’s decision to change from reserving for clawback on an individual adviser basis to reserving for claw across the whole of the Claimant’s franchise. I have referred above to the passage from the 2021 Commercial Review where this change of calculation was mentioned. The Defendant contends that the change is consistent with the terms of the contract between the parties and was one to which the Claimant acquiesced by accepting deduction of clawback reserve calculated on this basis.

203. The Defendant contends that, as a matter of construction, the right to reserve for clawback after 4 years was consistent with the terms of the contract between the parties, which did not either expressly or impliedly limit the right to reserve for only 4 years, instead referring to “ the right to review the need to adjust the Company’s Clawback Reserve on a quarterly basis after 4 years .” The fact that the Defendant indicated an intention not to reserve after 4 years can have been no more than a forbearance which the Defendant was entitled to disavow, as it did in the 2021 Commercial Review by indicating an intention to continue to reserve beyond the 4 year period in order to build up a sufficient reserve to bring the reserve pot up to £435,350.

204. In the alternative, the Defendant contends that the Claimant’s failure to challenge the change of basis of calculation of clawback reserve on an individual basis to calculating it on a franchise basis gave rise to an estoppel by convention since, after this change as set in place, the Defendant deducted claw reserve on the basis of the performance of the whole franchise and it is not now open to the Claimant to go behind this.

205. As to the increase in the rate of clawback reserve to 34%, the Defendant is not prevented from doing this by the express right of the Defendant “ to review the level of Clawback Reserve once every 12 months”. The Defendant had not reviewed the clawback reserve at the time of the 2021 Commercial Review. Accordingly, it retained the right to review the figure during the following 12-month period and this right was exercised by the increase to 34%. Discussion

206. The Claimant’s contentions give rise to four considerations: 206.1. The Defendant was not entitled to deduct for clawback reserve beyond 4 years save to the extent that the “pot” was depleted by repayments to insurers, yet the Defendant has not shown that there were such payments to justify continuing to reserve beyond 4 years; 206.2. The Defendant was not entitled to increase the rate of clawback reserve from 6% to 8% because the Claimant did not agree to this figure; 206.3. The Defendant was not entitled to increase the rate of reserve from 8% to 34% because the rate had already been reviewed in the 12-month period in which the increase was applied; 206.4. The Defendant was not entitled to increase the rate from 8% to 34% because this was an unlawful exercise of a contractual power.

207. On the first issue, it is clear that the purpose of the wording of point E of Schedule III was to allow the Defendant to maintain a pot for clawback reserve which was sufficient to meet the potential liability of the Defendant to repay insurers for commission. Whether that was to be determined on an individual basis or across the whole spread of a franchise’s agents differs as between the terms of the 2017 Agreement on the one hand and the 2018 and 2020 Agreements on the other, as is noted above. It is arguable that the continued calculation of clawback reserve on an individual rather than a company basis after the 2018 Agreement was signed is inconsistent with the terms of that agreement. But I can see nothing to prevent the Defendant from asserting and relying upon its express contractual right (indeed arguably its contractual obligation) to calculate clawback reserve across the whole of the Claimant’s business in 2021.

208. It follows that, in so far as calculating clawback reserve across the whole company gave rise to the need for a larger “pot” to meet that potential liability, the Defendant was entitled to increase the rate of clawback reserve to increase the pot.

209. In its 2021 Commercial Review, the Defendant indicated the need to increase the pot to meet the potential liability to insurers. The Claimant has not shown that the increase was not in fact justified. There is no material before the court to allow it to judge whether the additional amounts being claimed, whether by increased period of reserving or increased percentages were justified by the need to meet liabilities to insurers. Since the right to review the level of Clawback Reserve was a “discretion” afforded to the Defendant by the terms of point E of Schedule III, I see nothing in the contract that prevented the Defendant from putting into effect either type of variation other than the Braganza-type duty to exercise the power rationally.

210. It follows that, subject to the issue of whether the contractual power to vary was unlawfully exercised, the Defendant was entitled both to reserve for clawback after the four year period and to increase the rate of reserve from 6% to 8%.

211. It is therefore not necessary to determine the Defendant’s assertion that the Claimant is estopped from contending that the failure to challenge the calculation of clawback reserve on a franchise-wide basis gives rise to an estoppel by convention. Had it been necessary to decide this issue, I would have concluded that the Claimant’s silence without evidence of any implied assertion that it agreed with the basis of calculation would have defeated the application of the principle. In any event, as I have noted already, estoppel by convention required evidence of detrimental reliance (see the passage from the judgment of Briggs J as he then was in Revenue and Customs Commissioners v Benchdollar Ltd cited above). I can see no evidence of that here. It follows that the argument based on estoppel would have failed on either ground.

212. As to the argument that the increase from 8% to 34% announced by the letter of 22 July 2022 was an unlawful exercise of contractual powers, the Claimant’s contention that only one review is permitted in a 12 month period is clearly the correct reading of Point E of Schedule III. The Defendant does not dispute this. However as indicated above, it argues that in fact there had not been a “ review” within the meaning of the word in Point E in the previous 12 months, since the rate had been increased in the 2020 Commercial Review but not in the 2021 Commercial Review.

213. The difficulty with the Defendant’s argument in this regard is that it supposes that “ review” in this context means “ change” rather than “ consider whether to change.” On the Claimant’s case, if the Defendant had in the 2021 Commercial Review, considered whether to change the rate but decided not to, that would amount to a “review” and accordingly the increase to 34% would have been a second exercise of the power to “ consider whether to change.”

214. In my judgment, the Claimant’s interpretation of the word “ review” as meaning to “ consider whether to change” is the more natural meaning in this context. It is perfectly normal to speak of “ reviewing” something and deciding not to change it. Many powers, whether contractual or statutory, will require a person to review something but does not suppose that the review will lead to a change. In any event, in this particular context, the separate use of the word “ amend” to indicate a “ change” to the rate is indicative that reviewing and amending are not the same exercise.

215. In the Commercial Review conducted in or about September 2021 (therefore within the 12 month period preceding the amendment to the clawback reserve rate notified by the letter of 22 July 2022) the Defendant stated that, in order to achieve the figure of £435,350 which it asserted is the correct reserve pot, a shortfall of £172,265 needs to be made up. It goes on that, in order to achieve this, “ all revenue will attract a claw reserve until we reach this year and we will reserve at the current rate next financial year.” That sentence is indicative of a conscious decision on the Defendant’s part to keep the rate of clawback reserve at 8%. Given the true interpretation of “ review” in point E, it follows that this exercise exhausted the Defendant’s right to review and in consequence to amend the rate of reserve during the following 12 months and it follows that the increase to a rate of 34% was not permitted.

216. The loss to the Claimant that flows from the wrongful increase of clawback reserve from 8% to 34% has not been separately calculated within the Claimant’s schedule of loss, because the figure of £207,345.26 referred to in the Updated Schedule of Loss is the total for the entirety of the Claimant’s case in clawback reserve, including the other two issues (increase from 6% to 8% and reserving beyond 4 years) on which I have not found for the Claimant. It follows that the correct figure to compensate the Claimant for the wrongful deduction of 34% rather than 8% for clawback reserve is one which the parties will have to consider and if possible, agree consequential to this judgment.

217. The final issue, namely whether the increase to 34% was an unlawful exercise of a contractual power does not fall for consideration. ISSUE E - VARIATION The Claimant’s Case

218. I have summarised the factual evidence as to variation in late 2021/early 2022 above. The Claimant contends that there was no agreement to vary the 2020 Agreement on the terms of the document sent by email as alleged by the Defendant at [34] of the Amended Defence and Counterclaim. The Claimant points out that the Defendant relies on Mr Back’s alleged oral agreement to these changes rather than any contractual right to change the amount payable (for example in respect of the clawback reserve claim).

219. The Claimant argues that it did not so agree or that it cannot be taken as having agreed to the variation: 219.1. Again the “no oral modification clause” at clause 17 should operate to bar any such agreement taking effect; 219.2. In any event, Mr Back’s evidence that he did not in fact agree to a variation should be preferred; 219.3. That evidence is supported by Mr Back’s contemporaneous evidence (by way of the email of 3 December 2021 referred to above), which shows that he believed the terms not to be commercially viable and therefore the court can safely conclude that he would not have agreed to them; 219.4. In any event, the Defendant knew that Mr Back was only one of the directors of the Claimant company and should have been aware that he would have needed to consult Mr Shahein to agree any variation yet there was no indication that he had done so; 219.5. The Defendant recognised the need to get a variation in writing (as demonstrated by the invitation to Mr Back to sign the document in the email of 3 February 2022) yet failed to obtain a signature. The Defendant’s Case

220. As I have noted above, the Defendant contends that Mr Back agreed to the new terms on 16 December 2021 and confirmed that agreement in a later conversation with Mr Smart on or around 24 February 2022. Whilst it is accepted that some objections to payments in accordance with the alleged new terms were raised thereafter, in fact the payments of commission were made on the new terms, as the Claimant understood.

221. The Defendant suggests that, by the time of these negotiations there had been a disagreement between Mr Shahein and Mr Back and that they were looking to separate their business dealings. Mr Back was willing to deal with the Defendant (and did do so) but Mr Shahein was not.

222. If the Defendant’s case fails on this primary basis, it contends that the Claimant has waived the right to take an issue in respect of the variations. 222.1. The Claimant is estopped by convention from raising these issues. It has accepted payment in accordance with the new terms (which payments included some features which were of benefit to the Claimant as well as some of detriment). It cannot now challenge those terms. 222.2. The Claimant chose to accept payments on the varied terms, some of which led to it being paid larger sums than would have been paid but for the variation; accordingly the Claimant has waived the right to argue that the proper basis of payment is other than in accordance with the terms that the Defendant says amount to a variation. Discussion

223. The first issue for determination is whether there was in fact an agreement to vary the terms of the 2020 Agreement in the manner referred to in the documents relied on by the Defendant. In this respect there are evidential difficulties for both parties:

224. In respect of the Claimant’s position: 224.1. Mr Back’s evidence that he did not agree to (and would not have agreed to ) such variation is clear and consistent with his email of 3 December 2021 in which he indicated a significant problem with the effect of the proposed changes, as he also acknowledged in cross examination, the proposed changes were in some respects more favourable to the Claimant than the previous terms and therefore it is not self-evident that he would not have accepted the proposals; 224.2. His email of 6 January 2022 asking, “ what was agreed in the end ?” in respect of the commercial review is only consistent with a belief that something had been agreed; 224.3. Whilst it is correct that Mr Shahein raised some concerns about payments, the Claimant did not object to the Defendant’s method of calculation of making commission payments in accordance with the new document, even though it was aware that payments were being calculated on this basis. 224.4. The Claimant’s letter of claim of 29 April 2022 did not raise an issue that these payments did not correlate with the terms of the 2020 Agreement, suggesting that the Claimant was aware that that agreement had been varied.

225. As regards the Defendant’s position: 225.1. Mr Smart’s evidence of an agreement taking place on 16 December 2021 and subsequently being confirmed by Mr Back in a conversation is unconvincing and probably reflects what Mr Smart now believes happened rather than what actually happened at the time; 225.2. The failure to obtain a signed version of the contract in February 2022 not only indicates that the Defendant was aware of the need to obtain such a document so as not to offend the “no oral modification clause”, it is also indicative of a realisation that there was no clear agreement to the terms being propounded by the Defendant. 225.3. Through Mr Back’s email of 3 December 2021, the Claimant communicated a clear view that these terms were not acceptable.

226. As the party advancing the case that the 2020 Agreement was modified by oral agreement, the Defendant bears the burden of proving the variation. In my judgment it fails to do so: 226.1. I am unconvinced by the accuracy of Mr Smart’s recollection of the conversations with Mr Back, whether at the meeting on 16 December 2021 or in the supposed subsequent conversation. It may be correct that Mr Back was willing to agree to some of the terms being proposed, and that he said as much. To that extent there may have been agreement. But I am not satisfied that he was willing to agree to all of them and I cannot determine from the vague nature of the evidence which terms he was willing to agree to. 226.2. The Claimant’s silence in the face of the email of 3 February 2022 is as consistent with other difficulties in the relationship between the parties and problems in the relationship between Mr Back and Mr Shahein as it is with a tacit agreement to what was proposed in that document. 226.3. I am not persuaded that the Claimant’s subsequent failure to raise issues as to the calculation of commission are supportive of the conclusion that the Claimant had agreed to the terms of the alleged variation – it is clear as I have noted previously that there were many difficulties with the calculation of the commission that was due. The particular issues raised by these alleged variations are likely to have been minor compared with some of the other inaccuracies that the Claimant alleged in the commission statement and may well have been missed or disregarded as trivial. The lack of accuracy in the schedules of commission payments leads me to the conclusion that the Claimant cannot be said to have known clearly what sums were due and correspondingly cannot be taken to have realised that payments were in the wrong amount.

227. I should add that, on an important issue relating to termination, namely whether Mr Back agreed to the termination of Mr Shahein’s access to Leads, I prefer the evidence of Mr Smart. It follows that I consider that, in this respect at least, Mr Back has not been a reliable witness, and indeed he may have been deliberately misleading the court. On balance I consider it likely that his evidence on that issue was given out of a mistaken loyalty to Mr Shahein and unwillingness to accept his own involvement in the decision to terminate Mr Shahein’s access to Leads. That is not a matter that he is likely to have forgotten and it follows that his evidence indeed was probably deliberately misleading. That conclusion causes me to consider whether, on this issue too, Mr Back’s evidence may be unreliable if not deliberately misleading. On balance, given my assessment of the unreliability of Mr Smart’s evidence on the question of contractual variation, I am not persuaded that this is so.

228. Whilst I obviously accept (in line with my findings in respect of the QLC Lead Agreement) that the parties on at least one occasion did reach legally binding agreements outside of the bounds of their written contracts, that was because of the clear evidence of what the parties agreed to in an oral contract reached in circumstances that satisfied me that the parties intended to be bound by them. There is no such clear evidence here. It is therefore not necessary to invoke the “no oral modification clause” in respect of this aspect of the case. Suffice it to say that I consider that a sufficiently clear oral agreement may be capable of displacing the effect to that clause.

229. I turn then to the Defendant’s alternative arguments in this regard based on estoppel and similar principles. In respect of the argument for estoppel by convention, I have noted the applicable principles above . It follows from analysis of the significance of the Claimant’s failure to raise issues relating to the calculation of payments after the alleged variation that I am not persuaded that the Claimant can be held to have represented any contract position that could give rise to an estoppel. However, I accept that the fact that in some respects the Claimant received more generous payments because the figures were calculated in accordance with the new terms is capable of giving rise to an argument that the Defendant has acted to its detriment soi that, had there been a sufficiently clear representation an estoppel could arise.

230. As to the argument of waiver, I am not persuaded on the case advanced to me that the Defendant can show that the Claimant has knowingly elected to accept payment on terms that amount to waiving the right to claim in accordance with the strict terms of the contract. Waiver in this sense is a narrow doctrine and arguably cannot avail the Defendant at all unless it is shown that the Claimant had two clear choices of action and consciously and unequivocally took one when it could have chosen to take the other. But, having accepted the evidence from Mr Shahein that the calculation of payments within commission schedules involved frequent errors on the part of the Defendant which led to the need for clarification I cannot be satisfied that the Claimant’s failure to challenge these payments earlier was a result of a conscious choice rather than simple lack of clarity as to how commission payments were to be calculated. ISSUE F – REVIEW UNDERPAYMENT CLAIM The Claimant’s Case

231. On the basis that the Defendant wrongly calculated commission in accordance with the table sent out in February 2022 rather than the 2020 Agreement, the Claimant contends that its commission was underpaid. The combined combination of the imposition of the 40% deduction from the Agent’s Gross Commission and the calculation of commission using the percentages set out in the table sent in February 2022 rather than Schedule IV to the 2020 Agreement was to cause the Claimant’s commission to be underpaid by the sum of £16,682.05 (see paragraph 69 of the Amended Particulars of Claim and the Claimant’s revised Schedule of Loss). The Claimant seeks this sum. The Defendant’s Case

232. The Defendant does not dispute the figure claimed by the Claimant in this respect, Mr Shahein of 6 September 2018 where he refers to the Claimant having “had to give up a lot for our QLC arrangement like a quarterly adjustment, this being claim 7 in the Defendant’s analysis in opening which it states in closing is not subject to dispute on quantum (see closing submissions at [316]). Discussion

233. It follows from my finding on issue E that the contract was not varied and the undisputed evidence that the Claimant would have been paid £16,682.05 more but for the alleged variation, that I am satisfied that the Claimant is entitled to recover £16,682.05 in respect of this issue. ISSUE G – AGENT GROSS COMMISSION RATE CLAIM The Claimant’s Case

234. The Claimant’s case is that, as a result of the application of the terms of the alleged variation of the 2020 Agreement, the Defendant understated Agent Gross Commission by calculating it as 82.8% rather 83.3% (see Amended Particulars of Claim at [68] and the revised Schedule of Loss). The result is that the Claimant is entitled to a further sum of £10,649.47. The Defendant’s Case

235. The Defendant does not dispute the figure claimed by the Claimant in this respect, this being claim 8 in the Defendant’s analysis in opening which it states in closing is not subject to dispute on quantum (see closing submissions at [316]). Discussion

236. It again follows from my finding that the contract was not varied and the absence of dispute to the figure claimed that the Claimant is entitled to recover £10,649.47 in respect of this issue. ISSUE H – FRANCHISE FEE OVERPAYMENT The Claimant’s Case

237. The Claimant contends that the result of the calculation of franchise fees in accordance with the revised terms proposed in late 2021 rather than the terms of Schedule III of the 2020 Agreement, deduction of franchise fees have been overstated by £5,265 (see [70 and [71] in the Amended Particulars of Claim and the Revised Schedule of Loss). The Defendant’s Case

238. The Defendant does not dispute the figure claimed by the Claimant, this being claim 7 in the Defendant’s analysis in opening which it states in closing is not subject to dispute on quantum (see closing submissions at [316]). Discussion

239. It follows that I am satisfied that the Claimant is entitled to recover £5,265 in respect of this issue. ISSUE I - TERMINATION The Claimant’s Case

240. The Claimant contends that, from late 2021, the Defendant showed that it was no longer willing to work with Mr Shahein and sought to “ freeze him out of the relationship Claimant’s closing note at [ 117]. .” Once that decision had been taken it was impossible for the Defendant to continue working with the Claimant since the Claimant was a company with two directors, Mr Shahein and Mr Back, and the practical operation of the contract required both to be involved.

241. The Defendant’s intention to bring the contract to an end can be inferred from: 241.1. Animosity to Mr Shahein in the Commercial Review; 241.2. Unilateral variation of the contract (as alleged in Issue E); 241.3. Depriving Mr Shahein of access to the Defendant’s IT system; 241.4. Terminating access to the Defendant’s Leads altogether;

242. The Claimant invites the court to reject the evidence of Mr Smart that Mr Shahein and Mr Back were, in late 2021 and early 2022, looking to part company or that Mr Back was party to the decision to cease Mr Shahein’s access to the Defendant’s IT system.

243. As to the obligation to provide Leads, the Claimant contends that this was inherent in the contract. The Defendant had a high degree of control over the business and the nature of the services that the Claimant was expected to perform. This was a relational contract which “ cried out for the requirements for the parties to act in good faith, to cooperate and to exercise any contractual discretion reasonably not capriciously or vexatiously, or otherwise to further anything other than a legitimate commercial aim consistent with ongoing performance of the contract… Claimant’s opening at [141]. ”

244. In this regard, my attention is drawn to the approval by the Supreme Court in Braganza v BP Shipping Ltd [2015] UKSC 17 of the passage in the judgment of Socimer International Bank Ltd v Standard Bank London Ltd [2008] Bus LR 1304 at [60] – [66]. Rix LJ was concerned with cases where “ a contract allocates only to one party a power to make decision under the contract which may have an effect on both parties.” After considering a number of authorities, he concluded at [66]: “ The party who is charged with making decisions which affect the rights of both parties to the contract has a clear conflict of interest. That conflict is heightened where there is a significant imbalance of power between the parties as there often will be in an employment contract. The courts have therefore sought to ensure that such contractual powers are not abused. They have done so by implying a term as to the manner in which such powers may be exercised a term which may vary according to the terms of the contract and the context in which the decision-making power is given .”

245. In response to the Defendant’s case that it was not in fact obliged contractually to provide Leads to the Claimant, the Claimant contends that this is a misreading of the agreement. By clause 5.1.1 of the 2020 Agreement, the Defendant was obliged “ in its complete and unfettered discretion ” to provide a pool of Leads which could be used by the Individual “ as he requires.” The discretion was not as to whether any Leads were provided at all.

246. In any event: 246.1. The discretion to provide Leads had to be exercised in good faith; (see Braganza citing Socimer) . 246.2. The discretion to provide Leads had to be exercised in a way which is “ consistent with the justified expectations of the parties arising from this agreement… refusing to provide leads at all is not a step which bears any justification as having been taken in good faith or reasonably or not capriciously or vexatiously See Claimant’s opening submissions, [149] and [152[] .” The Defendant’s Case

247. The Defendant invites the court to prefer the evidence of Mr Smart about the breakdown of a relationship between Mr Shahein and Mr Back and of Mr Back’s involvement in the decision to terminate Mr Shahein’s access to the Defendant’s IT system. In any event the Defendant put this right when asked to do so and this cannot be seen as a repudiatory breach.

248. The Defendant invites the court to prefer the Defendant’s case on Issue E and to conclude that the Claimant, through Mr Back, agreed to the variation of the contract.

249. As to the argument that the Defendant was in repudiatory breach of contract through failing to provide Leads: 249.1. The Defendant was contractually entitled to do so under clause 5.1.1 given the wide discretion contained in that clause; 249.2. In any event, the withdrawal of access to Leads was not repudiatory since it did not wholly denude the parties’ contract of content – for example, by continuing to generate commission from its own Leads under the Defendant’s FCA permissions, pursuant to clauses 3.1 and 4.1.3 of the 2020 Agreement.

250. Even if the Court determines the issue of whether there was an implied Braganza -type duty , the Defendant contends that the relevant criteria set a low bar and that the court is entitled to and should look at why the Defendant made the decision to cease to provide Leads, the context in which that decision was made and the parties’ subsequent conduct. Of particular relevance are the following factors: 250.1. The Defendant relied on its Appointed Representatives such as the Claimant maintaining a high conversion rate of Leads in order to maximise commission. However, the Claimant’s performance had declined in the previous 12 months. 250.2. In April 2022, the Claimant had served a letter of claim on the Defendant. As noted above, Mr Back accepted that this was likely to make the continuing relationship between the parties untenable. 250.3. The Defendant maintained the Claimant’s access to its systems allowing it to earn commission from its own Leads. 250.4. The Defendant continued to allow the Claimant to market Leads received prior to 5 May 2022, a decision which was communicated by Mr Smart in an email of 29 June 2022.

251. Accordingly, the Defendant was entitled to take the decision that it did to terminate Leads.

252. In those circumstances the letter of 26 August 2022 was itself a repudiatory breach of contract by the Claimant, since it represented an attempt to bring the contract to an end in circumstances in which the party so attempting was not in fact entitled to (see the judgment of Fraser J as the then was in Imperial Chemical Industries Ltd v Merit Merrell Technology Ltd [2017] EWHC 1763 at [191]). Discussion

253. Given my conclusion that the Defendant was not entitled to rely on the alleged variation of the contract in late 2021, early 2022 (as determined under Issue E), it is arguable that the payment of commission in accordance with those terms was a breach of contract. But of course, that does not of itself render the breach repudiatory. Only a breach (whether repudiatory in terms of past conduct or renunciatory in respect of future conduct) which demonstrates an unwillingness to perform the contract either at all or in accordance with its terms could be such as to give rise to the right of acceptance of the breach by terminating the contract (see in particular Chitty on Contracts (35 th Ed) at [28-054] and Grand China Logistics v Spar Shipping [2016] EWCA Civ 982 at [72] – [78]).

254. On the issue of the withdrawal of IT access to Mr Shahein, the evidence within the WhatsApp messages referred to above strongly points in the direction that Mr Back was aware of the Defendant’s intention to do this. In particular the reference to Mr Smart asking Mr Back whether Mr Shahein was “ in the loop” is a strong indicator that not only was there a plan to remove the access from Mr Shahein but also that Mr Back knew of it, being himself “ in the loop.” Mr Back’s denial of this was firm but unconvincing. I consider it more probable than not that his evidence was motivated out of loyalty to Mr Shahein and a desire not to be seen to be suggesting that he knew of an action being taken of which Mr Shahein did not approve, but that in fact he was involved in the decision to cease the access. I have dealt earlier with the implication of this in respect of Mr Back’s evidence on other issues.

255. I am not persuaded that the Defendant’s imposition of altered terms of payment by the alleged variation of the contract amounts to such a breach or renunciation. It is clear that there were many discussions at different times about the terms of payment with repeated consideration of possible changes. A mistake as to the applicable basis of calculation of commission cannot readily be considered repudiatory.

256. In respect of the decision not to provide the Claimant with Leads, communicated in the email from Mr Smart to Mr Back dated 5 May 2022, I note in particular: 256.1. This is a contract like that contemplated by Rix LJ in Socimer where the power to provide the Leads lay entirely in the hands of one party. 256.2. The provision of Leads by the Defendant to the Claimant was a central feature of this contract; 256.3. The very fact that the contract had a 180 day termination provision shows that the parties acknowledged that the supply of Leads would not be suddenly terminated; 256.4. The contractual discretion in clause 5.1.1, while indicating a wide power in the Defendant in terms of the number of Leads it provided, does not on its face anticipate a decision by the Defendant to terminate the provision of Leads altogether.

257. Taking these factors together, the case is a classic example of a situation where the Court should imply a term that the Defendant should not act capriciously in terminating the supply of potential commission-earning work.

258. However, it is in my judgment not possible to conclude that the Defendant’s decision to terminate the provision of Leads was capricious. The available data shows a fall off in the Claimant’s performance. But much more significantly the Claimant itself had intimated an intent to terminate the contract. In a contract of this nature, that decision was a legitimate factor for the Defendant to bear in mind when exercising its contractual discretion as to the provision of Leads.

259. The Claimant, in submissions filed after this judgment was sent out in draft, has raised the question as to “ whether the foregoing breaches, cumulatively or individually together with the other matters raised by the Claimant as part of its case that the Defendant’s conduct between November 2021 and August 2022 evinced the Defendant’s intention not to abide by the relevant contract and cumulatively amounted to a course of conduct by the Defendant in repudiation of the Contract entitling the Claimant to terminate …” For reasons already given on this issue, I do not consider that the breaches of contract that I have found on the part of the Defendant evinced an intention not to be bound by the contract. I have been unable to identify any other factors which, whether individually or cumulatively with each other and the proven breaches, amount to repudiation of the Defendant’s intent to be bound by the contract.

260. Accordingly, the Claimant fails to show a repudiatory breach by the Defendant.

261. It further follows, as the Defendant contends that the 26 August Letter was itself a repudiatory breach of contract which the Defendant was entitled to accept. It did so, thereby bringing the contract to an end forthwith. ISSUE J – MAY – AUGUST 2022 LOSS OF EARNINGS CLAIM The Claimant’s Case

262. As noted above, the Claimant contends that the Defendant ceased to provide Leads from 5 May 2022. However, the contract with the Defendant was not terminated until 30 August 2022, when the Defendant received the Claimant’s letter of 26 August 2022 accepting the Defendant’s repudiatory breach of contract. It follows that the Claimant is, on its case, entitled to lost earnings for this period.

263. But for the Defendant’s alleged breach of contract in not providing Leads, the Claimant contends that the Defendant would have provided Leads as before the breach in May 2022. It calculates loss of earnings of £295,878.56, based on average commission for the period January 2022 to April 2022 of £73,696.64 per month.

264. The Claimant asserts that its loss is a loss of income not a loss of profits, because it continued to incur overheads yet did not receive income because of the failure of the Defendant to give access to Leads. The Defendant’s Case

265. The Defendant contends that the contract as terminated by its acceptance of the Claimant’s breach of contract in purporting to repudiate the contract by its letter of 26 August. That of course does not deprive the Claimant of the right to sue for a loss caused by a previous breach of contract (which the Claimant contends was caused by the failure to provide Leads from May to August 2022). However, in fact the failure to provide Leads was not a breach of contract at all for reasons referred to above and accordingly the Claimant has no claim in respect of Loss of Earnings in this period. Discussion

266. For reasons dealt with in respect of Issue I, the Defendant’s contention that it was not in breach of contract in failing to provide Leads is to be preferred. It follows that this claim cannot succeed. ISSUE K – LOSS OF PROFIT TERMINATION CLAIM The Claimant’s Case

267. The Claimant claims the sum of £198,145 as a loss of profit during the period from when it alleges that the contract terminated through acceptance of the Defendant’s repudiatory breach (August 2022) to the period when it could lawfully have been terminated by the giving of notice (180 days later).

268. The basis of this figure is the Claimant’s contention that it has suffered loss of profits because of the Defendant’s wrongful repudiation of the contract. The figure is based on the Claimant’s profit for the financial year August 2021 to July 2022 that is stated to be £396,290. The Claimant contends that a reasonable estimate of its loss of profit is 50% of that amount. The Defendant’s Case

269. The Defendant contends that this claim fails for the same reason as the claim dealt with under Issue J. The Defendant was not in breach of contract in a manner that gives rise to a claim for loss of profits on its termination because neither the termination nor the loss of profits flowed from any such breach. Discussion

270. Given my finding that the contract was terminated not by the Defendant’s repudiatory breach but by the Claimant’s breach, there is no recoverable for loss of profits for the alleged notice period and this claim must fail. ISSUE L – SELF-GENERATED ORPHAN CLAW CLAIM The Claimant’s Case

271. This is a modest claim in the sum of £8,355.04. The Claimant’s case is that the Defendant deduced clawback reserve on Leads that were generated by the Claimant itself. It is described in the Claimant’s Further Information dated 5 October 2023 as “ an overpayment that the Claimant were required, under protest, to make between Jan 2022 – Oct 2022. Please see Tab 3 of the attached Part 18 calculation Spreadsheet .” The spreadsheet referred to duly records payments totalling the sum of £8,355.04 but goes no further to explain the nature of the claim. Unfortunately, neither the Claimant’s written nor oral submission explain the case further. The Defendant’s Case

272. The Defendant’s written opening shows that it failed to understand how the case was being put on this issue. In closing, it acknowledged that Mr Shovell had referred to a “ mis-keying” of figures in a spreadsheet relating to this issue. However, it is unclear to me how this apparent mistake is said to have affected the payment of commission. Discussion

273. I have noted at footnote 10 above a change in the wording of Point E of Schedule III relating to Clawback Reserve. It may be that this claim arises from that change of wording and relates to an allegation that the Defendant has wrongfully deducted clawback reserve in respect of Leads that were generated by the Claimant itself rather than being provided by the Defendant. If this is correct, the wrongfully deducted sums would seem in principle to be recoverable by the Claimant.

274. However, the claim has not been explained in sufficient detail to give me confidence that I can properly make a finding that there has been a wrongful deduction, whether for this or any other reason, nor has the basis of the calculation of the figure been explained. In those circumstances, the claim must fail. ISSUES M - COUNTERCLAIM

275. The Defendant accepts that, if its primary claim as to the enforceability of the QLC Lead Agreement is successful, the Counterclaim does not arise for consideration, since the QLC Leads would be payable on the same basis as they were in fact paid and no question of the deduction of Lead Costs would arise (see the Defendant’s closing submission at [393]). However, for the sake of completeness, I consider the legal issue as to whether any sum could be recovered by way of counterclaim if I were wrong on the d QLC Lead Agreement.

276. It should be noted that other aspects of the pleaded counterclaim were not pursued before me. The Defendant’s Case

277. The Defendant argues that, if the Court finds that commission for QLC Leads should in fact have been calculated in accordance with Schedule III and that the Defendant, in breach of its contractual obligations, did not calculate payment in accordance with Schedule, the monies paid by the Defendant to the Claimant which should have been deducted as Lead Costs were paid as a result of a mistake and are recoverable in restitution as monies paid under a mistake of fact or law – see Goff & Jones, The Law of Unjust Enrichment (10 th edition) at [9-105]. Compensation will be recoverable on the basis of conventional “but for” causation – in this case, but for the mistake as to the basis on which the payments were calculated, would Lead Costs have been deducted? The Defendant says the answer is obviously “yes.” The Claimant’s Case

278. The Claimant contends that the Defendant calculated its payments for QLC Leads. The failure to deduct Lead Costs was not due to any mistake on its part but simply the conscious decision not to deduct those from the sums due to the Claimant. Discussion

279. It is self-evident that the Defendant calculated its payments to the Claimant on the basis of the QLC Lead Agreement rather than the 2017 Agreement and its successors – the Claimant accepts as much in evidence as I have noted above. In those circumstances, I agree with the Defendant’s contentions that, if I am wrong about the binding nature of the QLC Lead Agreement: 279.1. The Defendant made payments of commission without deducting Lead Costs on the basis of a mistake as to the nature of the contract that bound the parties; 279.2. As a result of that mistake, the Claimant has received a benefit, namely higher payment of commissions than it should have received under its contractual entitlement; 279.3. The Defendant is entitled to repayment of those sums under normal restitutionary principles.

280. Further, I do not accept the Claimants’ argument that the Defendant should be barred from recovery on the grounds that it was responsible for the calculation of the payments yet omitted to claim the Lead Costs. The very fact that its calculation was based on what is presumed for the purpose of this argument to be a mistake as to the operative agreement between the parties shows that this was not a payment without deduction of Lead Costs that was freely entered into in the sense of being a conscious overpayment of the sums due. Rather, it was the direct consequence of the mistake as to the applicable contract.

281. It follows that, if I am wrong on the issue of the QLC Leads Agreement, the Defendant is entitled to set off a counterclaim based upon the Lead Costs that would have properly been deducted had the Defendant calculated payments paid under the formula of Schedule III to the 2017 Agreement and its successors. The parties agreed that the calculation of any such claim would be by way of further submissions and calculation if needed. For reasons that I have identified, these arguments do not fall for consideration. CONCLUSION

282. It follows from my judgment above that the Claimant is entitled to judgment on the following issues: 282.1. Issue D to the extent that the Defendant was not entitled to increase Clawback Reserve from 8% to 34%, in a figure to be agreed by the parties or determined by the court; 282.2. Issue F, in the sum of £16,682.05; 282.3. Issue G, in the sum of £10,649.47; 282.4. Issue H, in the sum of £5,265.

283. On other issues, the claim fails and the Defendant is entitled to judgment.

284. I invite the parties to consider and to seek to agree quantum on Issue D and to seek to agree more generally an order consequential upon this judgment.