Coupers Partnership Ltd v Erol Basarik (t/a Uppers Bistro)

A success-fee contract for rating appeals must be construed in its commercial and rating-scheme context. For the current five-year valuation period, the fee was earned only if the reduction obtained from the start of that period was capable of subsisting throughout it. A reduction lasting only until an intervening increase, which the appeal did not affect, did not satisfy the bargain. No implied term imposed positive duties on the client to discover or supply relevant information. Any remaining doubt was to be resolved against the drafting experts seeking substantial remuneration.

The appellant operated a restaurant and contracted with the respondent on a no-reduction-no-charge basis to pursue reductions in rateable value. The contract provided different remuneration arrangements for past valuation periods and for the five-year period beginning 1 April 2000.

The lower courts entered judgment against the appellant on the mistaken assumption that a reduction agreed in April 2002 applied throughout the five-year period. Fresh evidence showed that the reduction applied for only ten months, before a later increase in rateable value which the respondent’s work did not affect. The central issue was whether the respondent had earned its contractual fee.

Disposition. The majority allowed the appeal. The court granted an extension of time and permission for the second appeal because the lower decisions had proceeded on a materially inaccurate factual basis.

1. Construction of the contract. Waller LJ and Lawrence Collins LJ held that the issue was one of construing the written contract, not implying an additional term. The agreement contemplated that work on the current valuation period would seek a reduction normally effective for the whole five years beginning 1 April 2000.
2. Entitlement to remuneration. The majority held that the respondent’s 25 per cent fee was earned only where the reduction obtained from 1 April 2000 was capable of subsisting for the full five-year period. The respondent obtained a reduction lasting only until 6 February 2001, and that reduction did not affect the later increased valuation. It therefore had not performed the contractual condition for payment.
3. Prevention and implied duties. The respondent could not recover on the basis that the appellant had prevented it from earning the fee. That argument would require a positive implied duty on the appellant to discover and provide information about the increase. The respondent claimed expertise in rating appeals and could have checked the position before concluding its negotiations.
4. Contractual ambiguity. Waller LJ added that, if the wording were doubtful, the contract should be construed against the respondent as its author and as the party seeking the substantial payment.

Dissent. Latham LJ considered that the contract based the fee on the reduction in valuation achieved as at 1 April 2000. In his view, the later increase did not defeat the entitlement, particularly since the valuation authority should have taken the earlier reduction into account. He would have dismissed the appeal.

• Court of Appeal (Civil Division): The appeal from the judgment of His Honour Judge Simpson was allowed by a majority, with Waller LJ and Lawrence Collins LJ in agreement and Latham LJ dissenting: [2007] EWCA Civ 40.
• Mayor and City of London County Court: Deputy District Judge Gambrill gave judgment on 17 October 2003. His Honour Judge Simpson subsequently gave judgment on appeal on 15 April 2005. Both decisions proceeded on an inaccurate assumption about the period for which the rateable-value reduction applied.