Grosvenor v High-Point Rendel Group Plc

A carefully negotiated written agreement may be treated as the complete record of the parties’ contract, preventing reliance on an inconsistent collateral agreement. Negotiating correspondence may be admissible to prove a collateral agreement, but it must show a concluded agreement intended to create legal relations.

Where commission is payable when fees become due before termination, delayed receipt does not defeat the entitlement. A term granting commission on fees which become due only after termination will not be implied unless necessary to give the contract business efficacy. Whether post-termination commission is payable depends on the contract, the parties’ status and the express termination provisions.

The claimant was engaged by the defendant consultancy under an oral arrangement from February 1999 and later under a written agreement dated 1 August 2000. The written agreement provided for a retainer and commission on fees earned as a direct consequence of the claimant’s services, including repeat business, for an initial fixed term ending on 1 August 2001.

The claimant sought commission for introductions made before the written agreement, for the period after its expiry, and for several contracts obtained by the defendant. The defendant contended that no earlier commission agreement existed and that, from August 2001, the claimant agreed to continue receiving the retainer without commission. The issues concerned the alleged earlier and collateral agreements, the effect of the August 2001 oral agreement, the qualifying introductions, post-termination commission and declaratory relief.

1. The claim succeeded in part. Judgment was entered for the claimant in the sum of £1,251.58, representing commission on the Burges Salmon and S J Berwin work, together with VAT and interest. All other claims were dismissed.
2. There was no binding agreement to pay commission in December 1998 or February 1999. The absence of any contemporaneous assertion, the terms of the September 1999 memorandum and the claimant’s evidence supported that conclusion.
3. The written agreement was intended to be a complete record of the parties’ contract. The alleged collateral agreement backdating commission to February 1999 was inconsistent with the fixed term beginning on 1 August 2000. Although the negotiation correspondence could be considered on the existence of a collateral agreement, it recorded only an intermediate stage of negotiations and did not establish a binding agreement.
4. “Direct consequence” required a sufficient connection between the claimant’s services and the transaction. The claimant need not have been the immediate cause. The Pfizer work was causally connected to the claimant’s introduction, but no commission was payable because the relevant services predated the commission period. The BTP and NAO claims also failed. The Burges Salmon entitlement was triggered before 1 August 2001 and was unaffected by the later oral agreement. The S J Berwin claim was supported by the claimant’s continuing promotion of the defendant’s business during the contractual period.
5. There was an oral agreement in August 2001 that the claimant would continue to receive his retainer but would have no entitlement to commission on introductions after 1 August 2001. The agreement was prospective, not retrospective.
6. A term allowing commission on fees due before termination but received afterwards was necessary to give the contract business efficacy. No term allowing commission on fees becoming due only after termination could be implied. The claimant’s status, the fixed contractual term and the six-month notice provision supported that conclusion. No declaration concerning future repeat business was justified.

First-instance decision. The judgment itself does not state any prior appellate proceedings.