(Oral)

Gopal Sri Ram JCA:

This is the judgment of the court.

When argument began before us on 6 August 2002 counsel on both sides informed us that this case turns on the construction of a phrase in a document. Indeed the learned judge in the court below proceeded on that basis.

After having considered the matter very carefully, we find ourselves in disagreement with counsel before us. We find that this case has nothing to do with the construction of a document but rather has to do with the legal consequences of the document in question.

But before we state our reasons for disagreeing with the counsel, we must advert to the facts of the case before us. The facts are plain and straightforward and can be summarized in one paragraph.

By an agreement dated 1 August 1992 made between the appellant and the respondent, it was agreed that; and here we summarise; the appellant shall be paid a fee upon a third party investing in the respondent. The relevant clause giving rise to the dispute reads as follows:

3. Your professional fees shall be as follows:

(a) An initial fee of $150,000.00 for advising, preparing and structuring of corporate package for presentation to a potential investor or joint venture partner.

Payment of the $150,000.00 shall be on $5,000 per month. Any balance of payment shall be fully settled upon success. Either party could terminate in writing by giving notice of 30 days and any future monthly fees of $5,000.00 thereto payable against the initial fee of $150,000.00 would in consequence thereto be terminated.

(b) Upon the success of an investor or joint venture partner investing into our Company, you will be entitled to a success fee of 3% to be based on gross investment fund. Such fee to be paid to your Company in proportion to the gross investment fund received. The investment fund may be either the acquisition of our company's shares or our company's assets. Any liabilities assumed or taken over by the investors or any set-off or contra of account with the investors will be deemed to be the investment fund received by us.

We will not hold you as guarantor nor do we have any implicit guarantee from you for the success of the investment fund.

(c) You will also be given an open option of buying up to 10% investment in our company after the valuation of our Company at the new market value.

4. The investor or joint venture partner maybe introduced by you or by us or by any other third party. Our Company would only be responsible for a total gross commission of 3%, wherein you would be responsible between yourself and any third party for their share of any introduction fee or commission.

The parties to this agreement are private limited companies. The importance of this element will emerge shortly. After the agreement was entered into, the shareholders regularly disposed of their shares.

Later, the issue arose as to whether cl. 3(b) had been triggered so that appellant was entitled to receive the fee which the respondent had contracted to pay. The learned judge in a well reasoned and comprehensive judgment came to the conclusion that the appellant (plaintiff in the court below) should fail. He dismissed the action. The appellant has now appealed to us. We find it, for the reasons we will give shortly, unnecessary to go into the reasoning of the learned judge. Suffice to say that we agree with his conclusion for different reasons.

The point overlooked by counsel on both sides, which they ought to have drawn to our attention, turns on an elementary principle of company law. It is called the Salomon doctrine. It finds its genesis in the singularly most important case in company law, Salomon v. Salomon & Co Ltd [1897] AC 22. It established the proposition that a company is a separate and distinct personality from its shareholders.

Let us apply that proposition to the facts of this case. The agreement in question, co