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The sub-brokerage agreement was partly written and partly oral, with its terms changing over time. The final agreement provided for Cenkos to pay 70% of its commission (which was 7% of the total funds raised) to Crema, amounting to GBP882,000. Crema successfully procured two investors who invested the required total of GBP18 million. Unfortunately GPV never paid Cenkos and subsequently became insolvent. Consequently, Cenkos refused to pay Crema. Crema sued for his GBP882,000.
Cenkos sought to imply a term to the effect that a sub-broker would not be paid until the broker received payment from the client (“the term”). Interpreting evidence of writing and conversations forming the terms of the agreement, Jonathan Hirst QC, the judge at first instance, agreed with Cenkos. Expert evidence was adduced to show a general market practice in London in Cenkos’ favour, though Hirst QC the judge disclaimed any reliance on it.
Crema appealed, claiming that evidence of market practice should not be considered in the construction of a contract and that Hirst QC the judge had wrongly implied the term.
'''Judgment'''
However, there are limits to the usefulness of evidence of market practice. On the facts, neither expert had ever encountered a case where the client failed to pay the broker and the broker consequently failed to pay the sub-broker. Therefore, the expert evidence was merely hypothetical and did not assist Cenkos.
Crema v. Cenkos reiterates the Belize position on implying terms into a contract. Aikens LJ’s statement (at [54]) may however warrant closer consideration.
