A View from the Exchange: Barrick Gold ordered to pay H&P $2m plus expenses for restitution claim 

On 12 March 2025, the High Court handed down its decision in H&P Advisory Limited v Barrick Gold (Holdings) Limited [2025] EWHC 562 (Ch), a dispute which raised a number of interesting legal questions around unjust enrichment in the context of the services provided by investment banks prior to, and in the hope of securing, a formal appointment.

The Parties

The Claimant was H&P Advisory Limited ("H&P"), a London boutique investment bank founded by Ian Hannam. Mr Hannam's name may be familiar as in 2012 he was fined by the FSA for sending emails that contained inside information, although the Judge did not consider this a reason to question his testimony because the FCA's findings that he acted dishonestly or without integrity were overturned on appeal.

The defendant was Barrick Gold (Holdings) Limited ("Barrick Gold"), a Jersey headquartered company which was formed from a 2019 merger between mining companies Randgold Resources Limited ("Randgold") and Barrick Gold Corporation ("Barrick").

The Decision

It was the merger that created Barrick Gold which gave rise to this dispute. Mr Hannam argued that he introduced the merger parties and provided a significant amount of information and analysis on the potential deal in the expectation of being mandated as a core adviser. He claimed $18 million from Barrick Gold on the grounds that his work on the transaction created a contract between them, and even if no such contract arose, he would nevertheless be entitled to restitutionary quantum meruit (i.e. a reasonable sum in return for the services provided).

Barrick Gold denied that a contract had arisen and argued that H&P could not be entitled to restitution because it was a "disappointed risk-taker" which provided services at its own risk in the hope of a contract which did not eventuate.

The Judge, Mr Simon Gleeson, rejected H&P's argument that there was a contact between H&P and Barrick Gold under which H&P was appointed as an advisor, or any contract under which any fee was to be paid to H&P other than a contract under which it would be reimbursed for its expenses.

H&P succeeded, however, on its restitution argument because the Judge agreed with H&P that there had been a failure of basis (a ground for unjust enrichment where a claimant transfers a benefit to the defendant qualified by a condition or "basis" and that basis fails to materialise):

• H&P's work in promoting the transaction did confer a benefit on both Randgold and Barrick. In recognition of this, internal Randgold documents discussed making a one-off discretionary payment to H&P of $2 million for Mr Hannam's efforts in acting as a go-between in the early stages of the transaction.
• a basis was established that H&P was providing its services on the condition that it would be instructed as financial advisor and paid accordingly. In a conversation between Mr Hannam and Randgold employee, Graham Shuttleworth, Mr Hannam indicated that he regarded himself as appointed by Randgold and sought to discuss remuneration. When Mr Shuttleworth had the opportunity to correct Mr Hannam, he failed to do so.

A point of contention between the parties was whether the claim in restitution was limited to the value of the services provided by H&P after the basis had been established or extended to all services performed. The Judge found in favour of H&P as it was normal practice in the banking industry for appointments and fees to be agreed some time after services have begun to be provided.

In deciding the quantum of the claim, the Judge rejected the submissions of both side's experts and awarded H&P $2 million (plus expenses) as $2 million was the amount that the Defendant appeared to ascribe to H&P's services itself.

Comment

Mr Simon Gleeson described investment bankers as "in the main, like teenage lovers [who] pour out their efforts, almost without limit and in response to the slightest encouragement in the hope of reaching the nirvana of a mandate". While this judgment is unlikely to deter bankers and other advisors from showering love (unpaid work) on clients and potential clients, it will encourage them to formally document arrangements when they believe they have been appointed. The Judge found it difficult to explain why Mr Hannam did not even propose entering into a retainer letter at any point.

The judgment also contains a lesson for potential clients. Investment banks are risk-takers who can go from being a disappointed risk-taker to a gratified risk-taker if a basis of agreement is established, even if this agreement falls short of being a contract. If an advisor has a good reason to think that they have been appointed then the onus is on the client to let the advisor know that they have not reached their nirvana.