Amin & Anor v Amin & Ors

A quantum meruit for services provided to a family business is assessed by reference to the value of the benefit to the business, not automatically by the service provider’s full market remuneration. Market value is a useful starting point, but the court may consider the particular family, business and profitability, including the remuneration which the recipient could reasonably have obtained from the claimant. Long hours do not necessarily justify multiplying an ordinary market rate. The assessment remains a broad-brush valuation of the benefit received. Interest ordinarily runs from the date the claim was made, subject to the circumstances of the litigation.

This consequential judgment followed the court’s main judgment, [2009] EWHC 3356 (Ch). The court had held that Harshika, a member of the family involved in Cashco, was entitled to a quantum meruit for services provided to the business, but had rejected remuneration based on the full value claimed. The further hearing concerned the proper quantification of the benefit, interest, and the possible tax consequences of the payment.

The central issues were whether the court could depart from its earlier approach, how the value of the services should be assessed, when interest should run, and whether tax consequences should presently affect the award.

1. Earlier determination binding in the same proceedings. The court could not depart from the approach stated in its main judgment. The conclusion that Harshika was not entitled to a quantum meruit equal to the full value of her services formed part of the decision and governed the subsequent quantification exercise.
2. Assessment of value. The relevant question was the value of the services to Cashco. Market remuneration was an appropriate proxy in an ordinary case, but it was not conclusive. The court could consider the distinctive circumstances of the family and business, the family’s approach to retaining profits, the business’s ability to pay, the comparative contributions of the family members, and the remuneration which Harshika would reasonably have accepted.
3. The court rejected a simple calculation based on the number of hours worked by an ordinary employee. Harshika’s long hours reflected the nature of the family business and did not justify proportional multiplication of an ordinary weekly market rate. The Office for National Statistics survey provided the most reliable guide, although the exercise remained approximate and broad-brush.
4. The appropriate 2005 market figure was £20,000. Applying an estimated reduction for earlier years produced £105,000 for the six-year period. No further reduction was appropriate because that figure was already modest compared with the amount originally claimed.
5. Harshika was entitled to interest from the date in May 2005 when she first pleaded the quantum meruit claim. The court declined to award interest for the earlier period because of the substantial delay before the claim was asserted.
6. The court made the award without presently adjusting it for tax. Either side could return to court if the final tax position showed that an adjustment was necessary. An appropriate order was to be settled after submissions on its form.

The judgment was consequential upon the court’s main first-instance judgment, [2009] EWHC 3356 (Ch), which had established Harshika’s entitlement to a quantum meruit but left its quantification for further determination.