Dean & Dean Solicitors v Dionissiou-Moussaoui

The Court of Appeal considered an employment contract dispute about commission payable to a solicitor and whether a signed one-page letter of 27 January 2005 was the contractual document or merely evidence of an oral agreement. The court reiterated the fundamental distinction between construing a written contractual document and seeking to rectify it to reflect an alleged antecedent oral agreement: a plea of rectification must be clearly pleaded and proved. The trial judge had treated the 27 January letter as the contract but then departed from its clear terms by rewriting thresholds and the billing/collection requirements based on what he thought was a sensible commercial result, rather than by findings of primary fact. For that reason the Court remitted the claim and counterclaim for retrial by a different judge.

The claimant, Ms Sofia Dionissiou-Moussaoui, was employed as a solicitor by Dean & Dean. She claimed unpaid commission under the parties' agreement; the defendant firm counterclaimed £10,000 for failure to meet a minimum billing guarantee. The operative documentation comprised telephone notes, emails and a contemporaneous one-page letter of 27 January 2005 signed by both parties. The letter set out salary, commission percentages, a £100,000 billing minimum and references to thresholds expressed in terms of collected billings.

The case was tried before His Honour Judge McMullen QC in the Central London County Court. Principal issues were: (i) whether the £100,000 guarantee related to the claimant's own clients only or to all billings; (ii) whether the commission threshold(s) required fees to be billed only or both billed and collected; (iii) whether there were one or two separate thresholds (for own clients and firm clients); and (iv) whether trainee billings counted.

The trial judge accepted that the letter of 27 January was the contract but interpreted its terms by reference to surrounding negotiations and the perceived commercial purpose of the arrangement. He concluded there was a single threshold of £192,500 based on fees billed (not collected) and construed the £100,000 guarantee to require collection but not limited to own clients. On appeal the Court of Appeal held that the judge had erred in departing from the clear wording of the signed memorandum without a pleaded and proved case of rectification or appropriate findings of primary fact. The Court allowed the appeal in part and remitted the claim and counterclaim for retrial by another judge. The judgment also noted practical concerns (including Law Society intervention and the partner's ability to meet any liability) and commented on costs, leaving them to the retrial judge's discretion with a provisional procedure for assessment of the Court of Appeal costs.

Appeal allowed in part and the claim and counterclaim remitted for retrial by a different judge. Rationale: the trial judge treated the signed 27 January 2005 letter as the contract but then effectively rewrote clear contractual terms (notably as to one versus two thresholds and the requirement for fees to be 'collected') on the basis of perceived commercial fairness and surrounding negotiations rather than by proper findings of primary fact or a pleaded claim for rectification. Rectification requires clear pleading and proof; antecedent negotiations may inform context but cannot displace unrectified written terms.

Appeal from the Central London County Court (trial before His Honour Judge McMullen QC; trial in April 2008; order dated 9 September 2008). The appeal was heard in the Court of Appeal (Civil Division) and resulted in remittal for retrial [2011] EWCA Civ 1331.