Factual and Procedural Background
Respondent, a property dealer and developer, orally contracted with Company A, the owner of “Nash House.” The only express term found by the trial judge was that if Respondent introduced a purchaser who completed a sale at £6.5 million, Company A would pay Respondent £1.2 million. The contract was unilateral; Respondent undertook no promise to act and could not be sued for breach.
Respondent introduced Company B, which ultimately purchased Nash House for £6 million after discovering a potential HS2 rail-link issue. Because the price fell below £6.5 million, Company A refused to pay anything (though it offered £400,000 ex gratia, which was declined).
The High Court held that Respondent was entitled to no payment. The Court of Appeal unanimously reversed, awarding £435,000 on the ground of unjust enrichment (two judges also mentioning a possible implied contractual term). The executors of Company A’s director appealed to the Supreme Court. The present document is the dissenting opinion of Judge Burrows, who would dismiss the appeal.
Legal Issues Presented
- Whether, in a unilateral introduction/commission contract, a term is implied by law obligating the principal to pay reasonable remuneration when the expressly agreed trigger for a larger payment is not met.
- If no such contractual term exists, whether Respondent can recover on a restitutionary quantum meruit for unjust enrichment, and whether the contract excludes that remedy.
- Whether section 15 of the Supply of Goods and Services Act 1982 directly applies, or alternatively guides the implication of a common-law term.
Arguments of the Parties
Appellant’s Arguments
- The contract was an “if, but only if” arrangement in the strong sense: payment of any sum was conditional upon a £6.5 million sale price, so no remuneration is due.
- No term for reasonable remuneration can be implied because the express terms cover the consideration; the parties intentionally assumed the risk that the price might be less.
- Section 15 of the 1982 Act does not apply because (a) the agreement was unilateral—Respondent never “agreed to carry out a service”—and (b) consideration was already “determined by the contract.”
- The authorities relied upon by Respondent (e.g., Firth v Hylane) are distinguishable; the present facts resemble Cutter v Powell.
Respondent’s Arguments
- A term for reasonable remuneration is implied by law, closely analogous to section 15 of the 1982 Act, and necessary to this type of introduction contract.
- The express promise of £1.2 million is not inconsistent with, and therefore does not exclude, a default obligation to pay a reasonable sum when the price falls below £6.5 million.
- Alternatively, Company A has been unjustly enriched: the basis on which Respondent conferred the benefit (sale at £6.5 million and payment of £1.2 million) failed.
- Past authority (Firth v Hylane, Dennis Reed v Goody, Devani v Wells) supports reasonable remuneration for a successful introduction absent contrary express terms.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|
| Arnold v Britton [2015] UKSC 36 | Objective/contextual contract interpretation | Cited to show express terms do not grant payment below £6.5 m. |
| Wood v Capita Insurance Services [2017] UKSC 24 | Integrated approach to interpretation | Supports limitation of express terms to £6.5 m trigger. |
| Marks & Spencer plc v BNP Paribas [2015] UKSC 72 | Tests for terms implied in fact | Explains why implication in fact fails. |
| Liverpool CC v Irwin [1977] AC 239 | Terms implied by law where necessary to the type of contract | Analogy for implying a remuneration term in introduction contracts. |
| Scally v Southern Health Board [1992] 1 AC 294 | Further example of terms implied by law | Illustrates judicial implication based on policy. |
| Mahmud v BCCI [1998] AC 20 | Standardised terms implied by law as default rules | Terminology adopted (“standardised term”). |
| Supply of Goods and Services Act 1982 s.15 | Statutory implication of reasonable charge | Treated as strong analogical support. |
| Firth v Hylane Ltd [1959] | Implied entitlement to reasonable commission | Relied on as closest factual analogue. |
| Luxor (Eastbourne) Ltd v Cooper [1941] AC 108 | Difficulty of generalising estate-agent commission | Discussed but distinguished. |
| Dennis Reed Ltd v Goody [1950] 2 KB 277 | Usual entitlement to commission on completion | Supports implication of reasonable remuneration. |
| Devani v Wells [2019] UKSC 4 | Confirmation of Dennis Reed principle | Cited to bolster entitlement to commission. |
| Cutter v Powell (1795) 6 TR 320 | High-reward/high-risk “all or nothing” contracts | Appellant’s analogy; dissent rejects relevance. |
| Howard Houlder & Partners v Manx Isles Steamship [1923] 1 KB 110 | No commission where contract expressly limited entitlement | Distinguished; different express wording. |
| Samuels v Davis [1943] KB 526 | Statute may codify common-law implication | Cited in discussion of statutory analogy. |
| South Pacific Manufacturing v NZ Security [1992] 2 NZLR 282 | Court may apply statute by analogy | Supports reliance on s.15 analogy. |
| Dargamo Holdings v Avonwick [2021] EWCA Civ 1149 | Contract can nullify unjust-enrichment claim | Used to illustrate when enrichment claim is barred. |
| Benedetti v Sawiris [2013] UKSC 50 | Elements of unjust enrichment | Framework for restitution analysis. |
| Investment Trust Cos. v HMRC [2017] UKSC 29 | Three-element structure of unjust enrichment | Same purpose as above. |
| Samsoondar v Capital Insurance [2020] UKPC 33 | Restatement of unjust-enrichment elements | Cited in same vein. |
| Barnes v Eastenders Cash & Carry [2014] UKSC 26 | Failure of basis as unjust factor | Analogous to present failure of £6.5 m basis. |
| Sharma v Simposh Ltd [2011] EWCA Civ 1383 | Definition of failure of consideration/basis | Adopted in explaining unjust factor. |
| Roxborough v Rothmans (2001) 208 CLR 516 | High Court of Australia on failure of basis | Cited by Respondent’s counsel; supports analysis. |
| Pan Ocean Shipping v Creditcorp (The Trident Beauty) [1994] 1 WLR 161 | Contracts can exclude restitution claims | Forms backdrop to exclusion discussion. |
| MacDonald Dickens & Macklin v Costello [2011] EWCA Civ 930 | Exclusion of unjust-enrichment remedies | Same purpose as above. |
Court's Reasoning and Analysis
Judge Burrows proceeds in two stages.
(1) Contractual analysis. A term for reasonable remuneration is implied by law because such a term is “necessary to the type of contract” (an introduction or commission contract, even if unilateral). Section 15 of the 1982 Act, though arguably inapplicable to unilateral contracts, strongly indicates the common-law default. Precedent such as Firth v Hylane illustrates that silence on remuneration below a target price does not exclude payment of a reasonable sum. The express £1.2 million clause is inconsistent only with payment of that sum if the price is below £6.5 million; it is not inconsistent with paying a lesser, reasonable amount.
(2) Unjust-enrichment fallback. Assuming no implied term, the same £435,000 would be recoverable in restitution. The enrichment and its valuation were not disputed. The unjust factor is “failure of basis”: both parties proceeded on the shared assumption that the sale would be at £6.5 million, an assumption that failed when the price was £6 million. The contract does not expressly allocate the risk of that failure, nor does it exclude restitution. The doctrine of free acceptance is rejected as a distinct unjust factor.
Because a contractual term is implied, the restitution claim is unnecessary and would in any event be barred by the existence of the implied contractual right.
Holding and Implications
HOLDING: Appeal Dismissed.
Judge Burrows would affirm the Court of Appeal’s award of £435,000 to Respondent, holding that a term for reasonable remuneration is implied by law and is not excluded by the express £1.2 million clause. The dissent underscores the courts’ willingness to imply “standardised” terms where necessary to prevent parties from receiving valuable, requested services for nothing. As a minority opinion, it sets no binding precedent but offers a detailed roadmap for future argument on implied terms and failure-of-basis restitution.