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On 26th March 1997, in a judgment reserved after a trial extending over 23 days and ending on 18th December 1995, some 15 months earlier, Mr Justice Harman rejected all the plaintiff's claims and dismissed this action. Although it is obvious, and now well recognised, that such a period between the end of a hearing and delivery of judgment is far too long, it has not been suggested, save in one minor and unsubstantiated respect, that the delay in this case affected either the judge's recollection of the evidence and the arguments or the quality of his judgment.

The dispute between the parties has arisen out of a management buy-in ("MBI") in which the plaintiff initially participated but from which he was ultimately excluded. He claimed at trial that his exclusion gave him causes of action against the defendant in breach of contract, breach of confidence, quantum meruit, equitable fraud or equitable estoppel. On his appeal to this court he has relied on breach of contract, quantum meruit and equitable estoppel, principally on quantum meruit. Although the success or failure of the plaintiff's case primarily depends on events which occurred between 3rd and 5th February 1993, the story starts some three months earlier, at the beginning of November 1992. The material facts can be taken mainly from the judge's judgment and, for the purposes of the issues still in dispute, can be stated more briefly than they were stated by him.

Until 1983 the plaintiff, George Dunne Cameron Hosking, was employed by Unilever. In that year he left that employment and, with his wife, Ita Rosemary Hosking, set up a consultancy business as Cameron Consultants Ltd. By 1992 he was experienced in management and as a consultant in business strategy, with particular experience of the detergents and toiletries industry, cost control, profit maximisation and corporate turnaround. Before then Cameron Consultants, principally through Mr Hosking, had carried out various studies for parts of the business carried on by British Petroleum Co Plc ("BP") and had given consequential advice to BP's subsidiaries both in England and abroad.

On 4th November 1992 Mr Hosking received a telephone call from S G Warburg & Co Ltd, in which he was told that they were acting for BP in the proposed sale of part of BP Nutrition known as the Consumer Products Division ("CPD"), whose business was the making of detergents and household products, and that a limited number of bidders were being invited to make indicative offers to Warburgs by 8th December. The immediate result of the conversation was that Mr Hosking got in touch with an associate of his, Michael Handley, a businessman for whom Cameron Consultants had done work on more than one occasion, his purpose being to see whether he and Mr Handley could assemble a group of venture capital investors who would form a company ("Newco") and make a bid for CPD. On 12th November Mr Hosking had a meeting with James Normand, the vice-president of the London branch of Bank Julius Baer & Co ("BJB"), and asked him to assist in raising finance for the proposed bid. Between 13th and 16th November Mr Hosking and Mr Handley had discussions together about the proposed venture, Mr Hosking's view of it being that, although their rewards would be equal, he would be chairman of Newco and responsible for overall strategy with Mr Handley reporting to him as chief executive. On 16th November Mr Hosking wrote to Mr Normand informing him that Mr Handley was interested in the acquisition opportunity and enclosing copies of their cvs.

It was at this point that the defendant, Legal & General Ventures Ltd ("LGV") a venture capital investor, came onto the scene. Mr Normand sent copies of the cvs to Adrian Johnson, a director of LGV and a former colleague of his at 3i. On 17th November there was a first meeting between Mr Hosking, Mr Handley, Mr Normand and Mr Johnson. Having received a memorandum containing details of CPD's business from BP, Mr Hosking, Mr Handley and Mr Johnson set about recruiting a syndicate of investors to acquire CPD through Newco and formulating terms on which a bid could be based. In relation to the period until the end of November the judge found:

On 8th December, the closing date for indicative offers, Mr Johnson wrote to BP on LGV writing paper. The letter was headed in capital letters "Subject to due diligence, Investment Committee approval and contract". After referring to CPD the letter was expressed to be written on behalf of Newco, a company to be formed by LGV and by Mr Hosking "and a business partner whom you have met", the two of whom were called the MBI team, to make an indicative offer for CPD. The amount of Newco's offer was stated to be £250m, payable as to not less than £200m in cash on completion and not more than £50m on performance. The letter then referred to assumptions set out in a first appendix, stated that the equity would be provided by institutional investors led by LGV and repeated that the offer was subject to due diligence, investment committee approvals and legal documentation. It was said that due diligence would include meeting the management of CPD, site visits, an accountant's report, environmental report and customer references. A list of detailed questions and further information requirements were set out in a second appendix. Under the heading "Other matters" appeared the following:

The principal events between 8th December 1992 and 3rd February 1993 were the following. On 10th December there was a meeting at Warburgs, at which the indicative offer contained in the letter of 8th December and the future progress of the sale process were discussed. On 23rd December Mr Johnson wrote to BP stating that LGV's view was that Newco's final offer would comprise a cash price of £220m with a correspondingly reduced amount payable on performance. On 24th December BP wrote to Mr Johnson confirming that on the basis of its indicative offer LGV had been shortlisted as one of a limited group of potential purchasers to be taken forward to the final stage of the disposal process for CPD, after which LGV would be asked to submit a binding offer in early March.

Meanwhile, on 16th December, Mr Normand had written to Mr Hosking and Mr Handley outlining the terms of reference for the engagement of BJB as their corporate finance adviser on the proposed acquisition. The letter stated what it was expected BJB's role would be by reference to three phases described as "formulating an offer", "short-listed" and "agreement to acquire reached with vendors" respectively. Under phase III appeared the following:

The judge said that that letter could only be read as indicating that, down to the time when Newco had agreed the terms of purchase of CPD with BP, Mr Normand did not expect to give any detailed advice to the MBI team as to their rewards and a fortiori to negotiate any agreement on behalf of his clients with the backers of Newco. He added:

The judge said that a great deal of activity continued at all times from the announcement by BP that Newco was on the short list of bidders for CPD, observing that within LGV and in discussion the possible acquisition by Newco of CPD was referred to as "Project Cleaner". He said that discussions took place in particular between Mr Hosking and Mr Handley and by each of them with Mr Johnson and many others. He added that during the whole period from the start of the bidding process LGV was trying to put together, and having assembled keep together, a suitable syndicate of financial backers for Newco.

It was recognised by all concerned that the due diligence involved in the project would be the responsibility of Mr Hosking, who had developed a method of assessment of working systems which he called "Cogent". On 14th January the manager of LGV wrote Mr Hosking a letter confirming arrangements they had recently made concerning some of the due diligence costs. The letter said that it was now in order for Cameron Consultants to instruct the parties detailed in section B of the attached schedule to commence their work. That schedule set out in three columns headed "Transaction Costs", "Work", and "Fee" respectively the names of the parties concerned, the work they had to do and the amount of their fees on the alternative bases of "Abort" and "Success" respectively. The letter confirmed that abort costs up to a maximum of £80,000 (in respect of the parties detailed in section B) would be covered by LGV and other members of the syndicate. It ended thus:

In the light of the arguments advanced in this court it is important to record that the schedule did not refer to any fees being payable to Cameron Consultants.

On 19th January a meeting took place between Mr Hosking, Mr Handley and Mr Normand, at which Mr Normand informed the others that LGV had decided that Mr Hosking would not be a suitable chairman of Newco and that a high-profile non-executive chairman would be recruited. A structure with Mr Hosking as deputy chairman was then discussed. There was also discussion as to the shareholdings in Newco. Mr Hosking's note of the meeting includes a calculation showing 10 per cent of the equity being allotted to management, including 6 per cent to Mr Handley and himself. However, the judge said that the whole conversation must have been very tentative.

The judge gave a brief description of LGV's internal method of operation under its managing director, Charles Peal, who had throughout been in touch with the progress of Newco's intended bid for CPD. The judge said:

On Friday 22nd January there was held at Kingswood what the judge called a substantial meeting between Mr Peal, Mr Johnson, Mr Hosking and Mr Handley. Mr Normand did not attend. The judge described the meeting thus:

The judge also referred to Mr Johnson's file note of that meeting, from which it appeared that Mr Hosking's power on the board of Newco would have been much diluted by the structure then being proposed.

On Sunday 31st January Mr Hosking had an important telephone conversation with Mr Handley, of which he made a contemporary note. Having referred to certain passages in it, the judge said:

Mr Hosking's first step was to fax Mr Johnson on the following day, Monday 1st February, setting out a proposed division of responsibilities between himself and Mr Handley to which, following the meeting on 22nd January, Mr Normand had attempted to obtain their mutual agreement. Having stated that he, Mr Hosking, would find the suggested division of responsibilities entirely acceptable, the letter continued:

The letter ended with a request that it be circulated to other members of the syndicate, since its implications would need to be discussed at a meeting with them on the following Thursday, 4th February.

Being no doubt greatly concerned at the contents of that letter, Mr Johnson replied on the same day, stating that the issue needed to be resolved as soon as possible and as a matter of priority, and that he would not be circulating the letter until it was resolved. It was in those circumstances that a meeting on Wednesday 3rd February, which the judge described as one of the most important events in the whole action, came to be held. It took place in the late afternoon at LGV's offices in City and was attended by Mr and Mrs Hosking, Mr Peal and Mr Johnson. Mr Hosking's primary case at trial was that mainly at that meeting and in part during the course of three telephone conversations between himself and Mr Johnson on 5th February he reached a binding oral agreement with LGV.

Before dealing with this and the other claims made by Mr Hosking, I should state that in relation to none of those which are still maintained is it necessary to refer extensively to events after 5th February 1993. In each case the claim, if good, depends on events which occurred on or before that date. I should, however, record, first, that by the end of the following April Mr Hosking and Cameron Consultants had been altogether excluded from participation in the project (which ended in a successful bid by Newco for CPD on 26th May 1993) and, secondly, that shortly before the trial Cameron Consultants, which had been a joint plaintiff with Mr Hosking, accepted, in full satisfaction of all its claims in the action (including its claims for fees earned up to the end of March 1993 plus interest), the sum of £250,000 paid into court by LGV.

The agreement alleged was that, in return for Mr Hosking's continued support for the bid and his due diligence work in relation thereto, and provided that the bid succeeded, LGV, as the equity investor leading the bid, would use its best endeavours to procure for Mr Hosking, first, a nil cost option to subscribe for a 2 per cent equity stake in Newco exercisable over a two-year period at the same price per share as that which would be payable by Mr Handley (amounting to a total of £80,000) and, secondly, a non-executive directorship in Newco for two years. It was also alleged that LGV agreed to use its best endeavours to procure for Cameron Consultants, first, payment of its fees at normal rates for all its work prior to the final bid for CPD with no abort fee (ie no payment at all if the bid failed) and, secondly, a contract between Newco and Cameron Consultants for Mr Hosking's consultancy services after the acquisition of CPD by Newco at a fee equivalent to what was then proposed as Mr Handley's salary, namely £150,000 per annum.

Mr Justice Harman rejected the claim in contract on two main grounds: first, because he found that the terms agreed were understood and intended by both sides to be subject to contract; secondly, because he thought that the terms were in any event too imprecise and omitted too many important matters to constitute a binding contract. Although the claim in contract was maintained in this court, Sir Nicholas Lyell QC, who appeared for Mr Hosking but did not appear below, acknowledged that his task in persuading us to reverse the judge's decision on this question was a formidable one. For my part, while I think it more doubtful that the second ground of the decision can be upheld, I am satisfied that the first ground is unimpeachable in this court. My reasons can be briefly stated.

The third telephone conversation between Mr Hosking and Mr Johnson on 5th February took place at 12.05 pm. At 12.26 pm Mr Johnson faxed a letter to Mr Hosking and Mr Handley recording his understanding "of the terms that have been agreed between us regarding George's ongoing involvement" in Project Cleaner. That letter was headed in capital letters: "Subject to contract and Investment Committee approvals". Mr Johnson asked the addressees to confirm their understanding of the terms he had set out by returning a signed copy of the letter to him immediately. At 3.45 pm Mr Johnson faxed Mr Hosking again, saying he was delighted that they were back on the road and that he had arranged for the members of the syndicate to come for a presentation by him and Mr Handley on the following Monday. At 4.56 pm Mr Hosking faxed a letter to Mr Johnson referring to his fax at 12.26 pm and raising a number of points on the terms as there set out. Mr Hosking's letter was headed, again in capital letters, "Subject to contract Without prejudice".

Having referred to Mr Hosking's evidence as to the words "Subject to contract" at the top of Mr Johnson's fax at 12.26 pm, the judge found that he clearly knew at the time that the suggested terms were not intended to form a binding contract. Having then referred to Mr Hosking's own fax headed "Subject to contract Without prejudice", the judge repeated his finding that Mr Hosking understood perfectly well what Mr Johnson's letter meant at the time he received it. Largely on the basis of this exchange between Mr Johnson and Mr Hosking, the judge found that they did not intend to enter into a binding agreement during the telephone conversation at 12.05 pm. In my view it is impossible for this court to upset this finding of the judge, based as it was not only on the terms of the two faxes but also on his view of Mr Hosking's oral evidence. I would therefore reject the claim in contract.

Having then rejected the claim in breach of confidence, the judge dealt with the claim in equitable estoppel, for which he could see no basis, and the claim in equitable fraud, which he thought was wholly unsustainable. Finally, he considered and rejected the claim in quantum meruit. Of these other claims only those in equitable estoppel and quantum meruit are now maintained.

Sir Nicholas Lyell, realistically in my judgment, concentrated on the claim in quantum meruit. My initial view, which has remained unchanged, was that if Mr Hosking could not succeed in quantum meruit he could not succeed in equitable estoppel. In substance and effect there is little to choose between the two bases of claim. But the facts of this case, if they can be viewed as Mr Hosking would have us view them, are more easily recognisable as the foundation of a quantum meruit than an equitable estoppel. It is also both unnecessary and unhelpful to introduce equitable concepts, with the added complications they sometimes bring, into areas where the common law can give the plaintiff everything he seeks. For reasons broadly similar to those now to be stated in relation to the claim in quantum meruit, I would reject the claim in equitable estoppel.

The claim in quantum meruit was based by Sir Nicholas Lyell on the following passage in the judgment of Robert Goff J in British Steel Corp. v. Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504, 511B:

In regard to the quantification of the claim Sir Nicholas, relying on Way v. Latilla [1937] 3 All ER 759, argued that the amount recoverable should be based on what the parties themselves regarded as reasonable remuneration for the work requested, i.e. the option to subscribe for 2 per cent of the equity in Newco. On that footing he submitted that a just result would be to award Mr Hosking a monetary sum equivalent to the value of 1 per cent of the equity.

In order to see whether these principles can apply to this case I must now return to the meeting of 3rd February, for which the judge's description is a convenient starting-point.He said:

The family money referred to by Mrs Hosking was the £80,000 which would have to be subscribed for Mr Hosking's share in the equity of Newco (then thought to be 2.5 per cent). Mrs Hosking's note of the meeting records that she said that she would not agree to putting that sum into the deal if Mr Hosking did not have an executive role, as she had little confidence in Mr Handley's consistence of business judgment if he was not contained. In response, Mr Peal said to rest assured that LGV would control Mr Handley and that Mr Hosking's objections would be overcome by converting Mr Hosking's shareholding to an option. The note also records Mr Peal's agreement that, if Mr Hosking acceded to Mr Handley's demands, subject to the team's bid succeeding, the Hoskings would be fully reimbursed at their normal fee rates (ie no uplift for success) for all preparatory work.

The judge's description of the meeting and Mrs Hosking's record of it are uncontroversial. The controversy is over the construction which should be put upon the parties' overall intentions. LGV's case is that Mr Hosking, as a member of the MBI team, acted throughout at his own risk, not only of the bid's not being successful, but also, if the bid were successful, of the investors' excluding him from participation in Newco; and that he was prepared to take those risks in the hope of receiving very considerable rewards if the bid succeeded and Newco prospered. Mr Hosking's case is that, while that was a correct view of the position up to 3rd February, there was then a fundamental change in the relationship which resulted in his ceasing to be a promoter and joint venturer and becoming, in the words of Mr Peal (see below), "a superior form of consultant". On that footing, Mr Hosking claims that he ceased to act at his own risk and, pursuant to LGV's request, thereafter carried out work on the project in mutual anticipation of a contract under which he would not only receive fees for his consultancy work but an option to acquire a share of the equity in Newco. Thus, when no contract was entered into, LGV, in accordance with the principle stated by Robert Goff J, was liable to pay him a reasonable sum for the work he had done.

Although it may not have been as extensively deployed as it was before us, that was substantially how Mr Hosking's case in quantum meruit was put before Mr Justice Harman. Having referred to the submission of leading counsel then appearing for Mr Hosking that from 5th February the whole project had changed and that there was not in truth any MBI team, the judge said:

So the judge rejected the claim in quantum meruit on the facts. Although Mr Sher QC, for LGV, relied on the decision of Rattee J in Regalian Properties v. London Docklands Development Corporation [1995] 1 WLR 212, which he submitted was closely analogous to this case and in which British Steel Corporation v. Cleveland Bridge and Engineering Co Ltd was distinguished, there was little dispute between counsel as to the law. Sir Nicholas Lyell acknowledged that he had to establish that the judge's findings were against the weight of the evidence, his particular complaint being that he ignored or attached insufficient weight to important evidence on this issue. His submissions were mainly directed towards showing, first, that the quid pro quo for the due diligence work to be carried out by Mr Hosking and Cameron Consultants prior to completion was not limited to payment of their normal fees but included the grant of the equity option and, secondly, that, on the evidence, the only tenable view of Mr Hosking's position after 5th February, subscribed to by both the Hoskings and LGV, was that he had ceased to be a promoter and joint venturer acting at his own risk and had become a consultant acting at the risk of LGV.

In relation to the first of those two contentions Sir Nicholas relied principally on passages in Mr and Mrs Hosking's witness statements, Mrs Hosking's note of the meeting on 3rd February and passages in the cross-examinations of Mr Peal and Mr Johnson. For my part, I think that that evidence clearly established that the quid pro quo did indeed include the grant of the equity option. I did not understand Mr Sher to argue to the contrary. His position was that the nature and extent of the quid pro quo was not determinative of the question of risk. On that question Mr Sher submitted that the judge's findings could not be reversed by this court. I should add that Mr Sher did not flinch from asserting that Cameron Consultants was just as much at risk for its fees as Mr Hosking was for his 2 per cent of the equity. He maintained that Cameron Consultants had had no entitlement at all to the £250,000 gratuitously paid into court.

In support of the second contention Sir Nicholas relied, first, on an extract from paragraph 23 of Mr Peal's witness statement, in which he referred to the meeting on 3rd February. In order to put it in context, I read a somewhat longer extract:

Secondly, Sir Nicholas relied on a passage in the draft of a letter to Mr Hosking dated 31st March 1993 which Mr Johnson prepared but did not send:

Thirdly, Sir Nicholas relied on unchallenged passages in Mr and Mrs Hosking's witness statements dealing with the meeting on 3rd February, as accepted and confirmed by Mr Peal in cross-examination. He said that it was crucial to bear in mind that it was in consequence of the change in Mr Hosking's role that a question which had hitherto not arisen for discussion, namely payment or recompense for due diligence work, was specifically raised by Mrs Hosking at that meeting.

In paragraph 85 of her statement Mrs Hosking said:

In paragraph 86 Mrs Hosking effectively confirmed what had been recorded in paragraph 11 of her note of the meeting:

In paragraph 293 of his statement Mr Hosking said:

In paragraph 294 Mr Hosking confirmed Mrs Hosking's evidence as to his request for an abort fee and Mr Peal's refusal of that request.

Sir Nicholas submitted that this evidence showed that at the meeting on 3rd February the parties did address the issue of risk to Mr Hosking, the risk being that, if the bid failed, there would be no abort fee for Cameron Consultants; conversely, that no reference was made to any risk that, if the bid succeeded, Cameron Consultants' fees would not be paid. Accordingly, he submitted, the risk profile did change after 5th February. He said that the basis upon which Mr Hosking continued to perform the due diligence work after 5th February was not as a joint venturer or promoter of the bid but as a consultant acquiring a status similar to the other consultants referred to in LGV's manager's letter of 14th January. He relied on what Mrs Hosking succinctly said in paragraph 193 of her statement:

In my view these submissions overlook the essential fact that inherent in Mr Hosking's participation in the project as a promoter and joint venturer were two risks, not one. The first was that the bid would not be successful; the second that the members of the syndicate would exclude him from participation in Newco. Sir Nicholas's submissions did not grapple with that second risk, which Mr Hosking took from the start and was not displaced by anything which happened between 3rd and 5th February. It was because the investors ultimately regarded him as unsuitable that he was excluded from participation. The fact that no reference was made to that risk at the meeting on 3rd February does not assist Mr Hosking. It would have been necessary for him to be given an express assurance that it was one to which he was no longer subject.

In addition to the decisive passage already quoted, other passages in the judge's judgment confirm that he took the same view. In reference to the claim in contract he said:

In dealing with the claim in equitable estoppel, the judge found that Mr Hosking entered into the project on the basis that the rewards for himself and Mr Handley would be agreed when Newco's bid for CPD had been accepted by BP, which basis was never altered. That was clearly a reversion to his earlier comments on Mr Normand's letter to Mr Hosking and Mr Handley of 16th December. Later, in relation to the same claim, he found that Mr Hosking acted after 5th February:

Finally, in relation to the claim in quantum meruit itself the judge said:

In my judgment the judge's findings were not only not against the weight of the evidence, but were consistent with what could reasonably have been expected to be the parties' intentions. At the beginning of February nothing had been settled. None of the financial institutions which were members of the syndicate had committed itself to anything. Many important steps remained to be taken, in particular, as the judge pointed out, the due diligence to be carried out by Mr Hosking and the presentations to be made by him and Mr Handley. It is true that Mr Hosking's role, as compared with that which had been previously projected for him, had largely become that of a consultant. But he was not like the other consultants, whose roles would end with the acquisition. He was to continue as a consultant to Newco and, as with his non-executive directorship, that was a role in which the members of the syndicate had a direct interest. It is difficult to see why, just because Mr Hosking was no longer to have an executive role in Newco, their right to exclude him from the project should have been curtailed.

It was not part of Mr Hosking's case in this court that LGV, by 5th February, had already decided to exclude him. That decision was not embarked upon before the end of March and, when it was made, it was one in which other members of the syndicate participated. While it is natural, on a view of the case as a whole, to understand the affront to Mr Hosking's feelings which was caused by his exclusion from a project which he had originated and in which he had expended so much time and energy, I am satisfied that Mr Justice Harman was correct to dismiss his claim in quantum meruit, equally with all his other claims.

I would therefore dismiss this appeal.

Lord Justice Judge:

Mr Hosking made a significant contribution to the successful management buy-in of the Consumer Products Division (CPD) of British Petroleum PLC by the new company (McBride Limited) on 26th May 1993. Nevertheless, although his company Cameron Consultants Limited, derived financial benefit, he personally received none.

The target of this litigation is Legal & General Ventures Limited (LGV), the lead equity investor, which brought together and organised the syndicate of financial institutions which together invested approximately £250 million in the new company. The possibility of success of the management buy-in, and subsequent profitable trading by the new company, lay in the future when, in November 1992, the plaintiff brought LGV critical information about British Petroleum's intention to sell their CPD, and proposed arrangements for the management buy-in which were adopted, then developed, and amended, and eventually culminated in the successful bid. In view of the high risks there was no certainty that the support necessary to achieve a successful bid would be forthcoming. The immediate requirement was to persuade potential investors in the project that their support for it would be commercially justified. The identity of those responsible for the running of the proposed new company, and the quality of its management, were essential considerations. For Mr Hosking, the enterprise represented an exciting, potentially highly profitable business opportunity, requiring heavy personal commitment. Nevertheless he knew as well as any one that the prospect of substantial personal profit had to be set against the risk that his efforts would be entirely unrewarded. Nothing was guaranteed. An appropriate syndicate might not be organised to support the proposed new investment. Again, even if the syndicate could be organised, there was no certainty that its bid would succeed or that, if it did, he would achieve the place in management of the new company which he envisaged when he first took his idea to LGV. Harman J found that "....... the whole of the venture was ....... conducted on the basis that there were no fixed entitlements or other contractual obligations agreed at all".

The question for resolution in this litigation is whether during the period between 3rd and 5th February 1993, and certainly by the end of 5th February, the change in the role envisaged for Mr Hosking in the management buy-in created a legal entitlement to financial reward from LGV. In essence his claim is based on the assertion that during this week LGV accepted, or an enforceable obligation was created, to provide a financial reward for him, whether or not his involvement in the management buy-in came to an end, as it eventually did, before the buy-in was concluded.

The plaintiff's claim in contract was dismissed by Harman J. For the reasons given by Nourse LJ Mr Hosking failed to establish that LGV owed him any contractual obligation arising from the continuing work done by him in connection with the venture after 5th February. I agree with that conclusion. The appeal against it was not more than faintly argued. I shall therefore add nothing to Nourse LJ's reasoning.

The starting point for the claim based on a quantum meruit is that after 5th February Mr Hosking undoubtedly continued to work for the success of the venture. The problem however is that his work was undertaken as part of his personal involvement in the proposed management buy-in. Although his position in the team was revised, and indeed reduced to a non executive consultative role, he continued to be and regarded himself as an integral member of the intended management buy-in team. His work during February and March 1993 was not predicated on a fresh, notional consultancy basis. Although he was to take on different responsibilities to those envisaged when the arrangements were under consideration at earlier stages, unlike other consultants employed from time to time in the course of the venture, Mr Hosking's contribution followed from his continued participation in the buy-in. In other words he remained a member of the buy-in team, and worked accordingly after 5th February, in the anticipation of substantial profits arising from its successful conclusion. As Harman J found in relation to his work after 5th February, "still I hold that Mr Hosking so acted not in any belief that he was entitled to rewards but in the conscious hope that rewards would in future be allotted to him. Mr Hosking knew, in my judgment, that he had no legal right to his hoped-for rewards. He hoped to be awarded them......", a finding reinforced later in the judgment;

It was critical to the success of the claim on a quantum meruit that as a result of the meetings and discussions in the week ending 5th February the nature of the project, and Mr Hosking's participation in it, had changed. Indeed it was submitted to Harman J on his behalf that from that date onwards no management buy-in team was in existence any more, and that LGV sought to conceal the change from the proposed syndicate members, who would, understandably, have been extremely anxious if they had discovered the difficulties which had given rise to the changes in Mr Hosking's role, and indeed the underlying problems which led to it. This therefore meant that Mr Hosking continued to be treated as if he were part of the management buy-in team when he had in fact ceased to be so.

The Judge emphatically rejected these contentions. They were not "a true reflection of the facts as they emerged" and he accepted the evidence of Mr Peal from LGV that "he did not consider that there was no longer any M.B.I. Team after 3rd February". He rejected "the claim that all parties were proceeding on a fundamentally different footing after the discussion on 3rd to 5th February. There were differences but both Mr Handley and Mr Hosking had ongoing roles to play in Newco".

Despite the detailed analysis of the evidence undertaken by Sir Nicholas Lyell QC no basis for interfering with these factual conclusions has been shown. It is clear that after 5th February Mr Hosking himself believed that he was still participating in the same commercial venture as before, the "superior" form of consultancy representing the basis on which he could and would continue to participate in the venture, subject to the same risks but hoping for very substantial profits following a successful buy-in. These conclusions are demonstrated by considering the contemporary documents.

The crisis that blew up at the beginning of the week, 1st February, had been developing for some time. The problem was not that LGV had decided to dispense with Mr Hosking's services, but the gradual breakdown in the working relationship between him and Mr Handley, in particular in relation to their respective roles in the new company. From LGV's point of view it was critical that these differences should be resolved, with both playing a role in the arrangements which would culminate in a successful bid.

On 1st February Mr Hosking acknowledged that he and Mr Handley had been asked to "go away and agree a form of power sharing within the new Newco board" and that an agreement about power sharing should be brokered between himself and Mr Handley. LGV (through Mr Johnson) responded in unequivocal terms that the issue, that is, the arrangement between Mr Hosking and Mr Handley, "needs to be resolved as soon as possible as a matter of priority". According to the note typed by Mrs Hosking on 4th February after the meeting in the late evening of 3rd February between her and her husband, and Mr Peal and Mr Johnson of LGV (and ignoring any other issues which may arise about this note) Mr Peal reviewed where "our" team stood in the bidding, and assessed "our" chances of success. He spoke of having sold a "two-man M.B.I. team to the financial team" which he intended to deliver. The members of the two man team were Mr Hosking and Mr Handley. Mr Peal did not want to have to "choose one over the other and intimated that he would prefer to walk away from the deal than consider that". Both he and Mr Johnson expressed their dissatisfaction at having been drawn into the disagreements. Although they could impose a solution they preferred that the MBI team, again, Mr Hosking and Mr Handley, should produce their own. The remainder of the note is replete with references which underline that the team was to continue, and that LGV were concerned that Mr Hosking should remain part of it. Hence comments about "subject to our team's bid succeeding", "subject to our bid succeeding", and "if the bid succeeded". Unlike other consultants no "abort" fee would be paid to Mr Hosking or his company if the bid failed. The basis of this decision, accepted by Mr and Mrs Hosking, was that "we stood to gain much more if the bid succeeded - a lucrative consulting contract and an equity stake". Mr Hosking's role would be that of a non-executive director in the new company with a consultancy contract of equal value with Mr Handley's salary package.

These references to the success of the bid underlined that the "deal" reflected the arrangements which would come into force if the bid succeeded, and involved Mr Hosking's participation in the new company. His intended presence on the board of the new company was lent emphasis by the letter written by LGV (Mr Johnson) to one of the proposed investors, Swiss Bank Corporation, on 4th February. Mr Hosking was to be a member of the board, Mr Handley being clearly identified as chief executive and Mr Hosking, "in a less prominent role". Ignoring for present purposes the question whether there was any contractual arrangement between the parties, the subsequent documents underlined the continued participation of Mr Hosking in the management buy-in. By letter written both to him and Mr Handley dated 5th February, the basis of Mr Hosking's "ongoing involvement" in the project was set out. The arrangements anticipated a successful completion, including a non-executive directorship in a company which would not be formed unless the management buy-in were successful, with no "abort costs" to be paid to Cameron Consultants. So LGV, too, were plainly looking to the completed bid. The facsimile to Mr Hosking himself recorded LGV's delight that "we are back on the road", and confirmed the arrangements for the financial institutions to attend a presentation by Mr Hosking and Mr Handley jointly. Mr Hosking's response, again ignoring for present purposes "subject to contract without prejudice", is plainly directed to his future "involvement" in the project, and anticipates a successful bid. Precisely the same conclusion emerges from the letter from James Normand dated 8th February to Mr and Mrs Hosking. What has been achieved is "a modus operandi ...... for your continuing involvement". Mr Hosking confirmed this understanding by his letter dated 8th April, after the bids had been submitted. He wrote to Mr Peal at LGV referring to "our bid", the need if that bid were accepted, to learn the problems "should we succeed", and the danger that "we have probably created a situation which maximises the relevance of management's weaknesses while failing to harness their strengths". Taking one further reference as an example, he refers to the differences between himself and Mr Handley "of what is necessary to succeed ...... post-acquisition" and sorting out difficulties "in the interests of building a successful business post-acquisition".

There was no finding that during the course of the meetings and correspondence during the week beginning 1st February LGV had dissembled, or that their professed adherence to the two-man team of Mr Hosking and Mr Handley was, or subsequently became a sham. Although it explains why Mr Hosking received no reward, the circumstances in which it was decided that he should not play any further part in the new company need no further analysis in this judgment. The decision represented the conclusion of the syndicate making a hard commercial judgement about the best prospects for the success of the new company. It meant that Mr Hosking was unable to satisfy one of the prerequisites on which his reward depended, continuing participation in the enterprise after the success of the bid.

Although in a general sense Mr Hosking worked at LGV's request, and indeed with their encouragement, his purpose in doing so was to bring the commercial enterprise in which LGV was jointly involved with him and others, and he with them, successfully to fruition. His personal financial reward for his efforts depended on his involvement in and arrangements with the new company, not with LGV. That represented the limit of his expectation, and he performed the work for which he now seeks to be rewarded on that understanding.

None of the authorities drawn to our attention suggests that he should nevertheless be entitled to be awarded a quantum meruit or that a promissory estoppel can be established against LGV.

I should dismiss the appeal.

Lord Justice Tuckey:

I agree that this appeal should be dismissed for the reasons given in both judgments.

Order: appeal dismissed with costs; £100,000 paid into court as security for costs pursuant to the order of 16.3.98 plus interest to be paid out to the defendant's solicitors; leave to appeal to the House of Lords refused.