The Rest Is Silence ' Supreme Court Declines To Imply Term For Reasonable Remuneration (Podcast)

• Law Firm: Gowling WLG
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Contracts and Commercial Law, Trials & Appeals & Compensation
• Author: Mr David Lowe and Andrew Smith
• Published date: 03 March 2023

Party A agrees to pay Party B a large fee if B introduces a purchaser who buys A's property for '6.5 million. If B introduces a purchaser who pays less, is B entitled to a fee? That was the question the Supreme Court grappled with recently in Barton & Ors v Morris & Anor [2023] UKSC 3. In the process, it gave useful guidance on when a court will imply terms into a contract, and the scope of the doctrine of unjust enrichment.

Commercial lawyer David Lowe and commercial litigator Andrew Smith explore the key points of the case and the subsequent decision in this podcast.

A more detailed insight into this case, as well as a full transcript of this podcast, can be found below.

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Background facts

Foxpace Ltd was selling a property known as Nash House. Foxpace entered into an oral agreement with a Mr Barton to the effect that, if Mr Barton introduced a purchaser who then bought Nash House for '6.5 million, Foxpace would pay Mr Barton '1.2 million. It should be noted that Mr Barton was not an estate agent, and this '1.2 million fee represented deposits and other sums which Mr Barton had lost on two previous unsuccessful attempts to buy Nash House himself.

Ultimately, Mr Barton did introduce a purchaser for Nash House, but due to genuine issues identified in the due diligence for purchase, the sale completed at the lower sum of '6 million. The question arose what sum, if any, Mr Barton was entitled to for introducing the purchaser.

Lower court decisions

In the High Court, the judge concluded that Mr Barton was not entitled to any fee - the contract was silent on what would happen if Nash House sold for less than '6.5 million and so there was no contractual obligation on Foxpace to pay anything. The judge determined that if the parties had intended for any sum to be payable in other circumstances, they could have provided for it. The judge also declined to award any sum on the basis of unjust enrichment, as to do so would undermine the parties' agreement.

The Court of Appeal allowed Mr Barton's appeal. It concluded that allowing the unjust enrichment claim would not undermine the parties' agreement because the agreement was silent as to the effect of a lower sale price. Accordingly, they awarded Mr Barton a reasonable sum ('435,000) for the introduction. Two of the judges also thought the same result could be reached by implying a term for reasonable remuneration into the parties' agreement (an argument that Mr Barton had not pursued in the High Court).

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