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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Seyfried v Euro-IB Ltd. [2010] EWHC 553 (Ch) (18 March 2010) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2010/553.html Cite as: [2010] EWHC 553 (Ch) |
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CHANCERY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
MANFRED SEYFRIED |
Claimant |
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- and - |
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EURO-IB LIMITED |
Defendant |
____________________
Mark Vinall (instructed by Doyle Clayton) for the Defendant
Hearing dates: 23-26 February, 1-2 March 2010
____________________
Crown Copyright ©
MR. JUSTICE ARNOLD :
Introduction
The parties
The witnesses
i) Elizabeth Merica. Ms Merica was a director of EuroIB from March 2000 to February 2009.
ii) Frank Eckertz. Mr Eckertz worked for EuroIB as a consultant from 2006. He is now the general manager of EIBG.
iii) Markus Pins. Mr Pins worked for EuroIB as a consultant from 2003-2007.
iv) Roger Jones. Mr Jones has been a director of EuroIB since 2006.
v) Stavros Efremidis. Mr Efremidis is a director of KWG Kommunale Wohnen AG ("KWG"). I shall explain KWG's role in the matter below.
EuroIB's business prior to the relationship with Dr Seyfried
Dr Seyfried's employment by Advantage
"Mr Seyfried shall conscientiously dedicate his entire professional efforts (with express exclusion of any secondary employment) to the company "
It is common ground that it is clear from the original German that the parenthesis means that Dr Seyfried was prohibited from undertaking secondary employment.
The First Conversation
"(1) In or around April 2004 Advantage, as nominee of Dr Seyfried, and Euro-IB Limited ('the Company') entered into an agreement ('the Agreement') pursuant to which Dr Manfred Seyfried would provide services to the Company.
(2) The Agreement was concluded orally between Dr Seyfried acting as managing partner of Advantage, and Mr Alexander von Ungern-Sternberg, Director of the Company.
(3) The Agreement between Advantage and the Company was terminated on 30 September 2006 when Dr Seyfried left Advantage and sold his share in Advantage. It is also Advantage's understanding that the Agreement ended on 30 September 2006; on that date all contractual obligations between Advantage and the Company from the Agreement were fulfilled, i.e. all services commanded by the Company had been delivered by Dr Seyfried up to this date on behalf of Advantage and the Company had paid all invoices which Advantage was entitled to render under the Agreement.
(4) No further claims outstanding debits against the Company by Advantage resulting from the work of its former managing partner, Dr Seyfried, do exist. "
The Second Conversation
The Third Conversation
The directorship contract
"2. Generally, you will be required to attend Board Meetings four times per annum or as required from time to time during the year
3. Whilst the appointment will not be of a full-time nature, you will be required to devote such of your time to the appointment as is deemed necessary to perform your duties to the satisfaction of the Board. I anticipate your duties will necessitate you being available for an equivalent of five meetings per year .
4. You will at all times be expected to comply with the lawful and reasonable requests of the Board, to act in the best interests of the Company and not do anything which is harmful to the Company or its business.
5. The fee for your services will be 5,000 per annum payable as agreed between the Company and yourself, such fees to be paid less any tax and national insurance contributions the Company is obliged to deduct.
9. Notwithstanding the provisions of this letter, your appointment may be terminated in accordance with the provisions of the Articles of Association of the Company and on such termination no notice or fees (other than those already accrued) will be due to you. The appointment and the payments will also cease if you commit a serious or persistent breach of your duties or any of the obligations set out in this letter. If for a reason related to your illness, disability or injury, you are unable to carry out your duties, payment of any fees during any period of incapacity will be at the discretion of the Board.
11. If any time you are considering taking up a post with any other Company in competition with the Company, you must first discuss the matter with the Board and must not take up the post without prior Board approval.
The Fourth Conversation
The termination of Dr Seyfried's employment by Advantage
"2. Up until 30.09.2006, the person appearing at 2 [i.e. Dr Seyfried] is bound to the obligations ensuing from his managing director's contract of employment and from the company's statute. The person appearing at 2 gives his assurance that he will have earned fees of EURO 150,000.00 ('target earnings') from his activities until 15.09.2006 ('closing date'). The term fees means billed consultancy fees; outside services, sales from advertising, travel costs and production sales are not included and not considered in the target earnings. Only those consultancy fees paid, or at least accepted, by the customer up until 15.9.2006 will be considered.
The person appearing at 2 is permitted to expedite the founding of a financial consultancy business, the aim being that said company is able to commence its business activity after 30.09.2006. Up until 30.09.2006, however any secondary professional activity for the account of the company to be founded or for his own account is impossible.
6. The party being represented by the person appearing at 1 [i.e. Advantage represented by Mr Vardar] assures the person appearing at 2 that he will be relieved of his duties for the financial year 2006, insofar as he fulfils the points of this Agreement and he performs his activity with the due diligence of a prudent businessman up until his departure."
The novation of the consultancy contract
Project Heidi
i) there was a meeting between Dr Seyfried and Mr Sternberg in December 2006 at which the two men discussed Dr Seyfried's fee in respect of Project Heidi;
ii) Dr Seyfried brought to the meeting a print-out from a spreadsheet showing a calculation of 98,081 remaining to be paid to him on the basis of a success fee of 20% of EuroIB's success fee plus expenses;
iii) during the meeting Mr Sternberg annotated the print-out in manuscript with various figures;
iv) shortly afterwards, Dr Seyfried submitted the invoice for 90,000 mentioned above.
Project Neckar, Project Meistersinger and Project CBB
The Fifth Conversation: the Frankfurt Office Contract
The Sixth Conversation and Project Wolfsburg
"I applied the agreed general 20% rule and as you see, only deviated for Funkschneise and Wolfsburg, reflecting the degree of my activities."
There is no suggestion here that there was an agreement for 10% in respect of Project Wolfsburg.
Project Funkschneise
Dr Seyfried's resignation from EuroIB
"I hereby resign as a Director of Euro-IB Ltd., London. I ask you and Euro-IB to release me from my duties as of 30 April 2007, and to discharge me from my duties (ratify my acts) as a Director as provided by English law. As to any open issues I am sure that we will reach agreement in an amicable and professional manner.
If we can find common grounds, then naturally I should be willing to continue collaborating with Euro-IB in the future. After all, after a long time of only marginal revenues Euro-IB has been able to generate sizeable fee income since 2004 when we began our cooperation through professional competition to find the best solutions. If Euro-IB were to ask me, I would be willing to serve as a Director until the end of June 2007. Naturally I am willing and prepared to complete the projects or the phazes of projects for which I am responsible, namely:
- Funkschneise, as you know, I am quite close to the project, since I have been involved in it not only right from the beginning, but I was also instrumental in ensuring that the negotiations produced a transaction structure which will allow the transaction to succeed. Unfortunately we had differences of opinion about these matters. Time, however, has shown my views to be correct and fortunately this has assured our success fee of 400,000. This is surely worth a dispute on purely professional grounds.
- CCB - purchase of commercial real estate portfolios, as you know, I had proposed pursuing the project from the very beginning. However, I have pointed out on several occasions that the current strategy and arrangements make a successful conclusion quite unlikely. It would be advisable to pursue the project combining Herr Kazinakis and a domestic industry insider. On principle Herr R. Faktor would be interested. As agreed I had approached him and discussed the fundamentals of such a project. I feel a personal obligation towards Herr Kazinakis and his team, and naturally, Herr Faktor.
- Purchase of and funding for Wassily Kandinski, Berlin Weissensee by Mr Kazinakis' group.
- For the record please note that I had asked to be released from any obligations and further involvement in the projects 'Union' and those with Herr Werner Schmidt.
- Last but not least the leasing and start of a Euro-IB-office in Frankfurt. Naturally, this project is also close to my heart. But I know that Euro-IB can start with a wonderful office as a German GmbH in Frankfurt. With a little sorrow I look at this wonderful office whose benefit I shall not be able to share. However, from a professionally [sic] viewpoint I am proud of my services in searching for, selecting, negotiating and overseeing the full refurbishment and furnishing of his [sic] office."
Other bases of claim
Summary of Dr Seyfried's claims
i) Dr Seyfried's claim for 12,250 in respect of the directorship contract succeeds for the reasons given in paragraphs 49-51 above;
ii) Dr Seyfried's claim for 8,081 in respect of Project Heidi fails for the reasons given in paragraphs 55-59 above;
iii) Dr Seyfried's claim for 10,000 in respect of Project Neckar fails for the reasons given in paragraph 60 above;
iv) Dr Seyfried's claim for 5,000 in respect of Project Meistersinger fails for the reasons given in paragraph 61 above;
v) Dr Seyfried's claim for 10,000 in respect of Project CBB fails for the reasons given in paragraph 62 above;
vi) Dr Seyfried's claim for 25,000 in respect of the alleged Frankfurt Office Contract fails for the reasons given in paragraphs 63-67 above;
vii) Dr Seyfried's claim for 67,500 in respect of Project Wolfsburg fails for the reasons given in paragraphs 68-75 above;
viii) Dr Seyfried's claim for 126,000 in respect of Project Funkschneise fails for the reasons given in paragraphs 76-82 above.
Overall conclusion