Cooke v Hopper

A contractual commission cannot be replaced by a quantum meruit merely because the contractual condition for commission has failed. The court must distinguish work performed within the contractual undertaking from additional work requested outside it. Additional work undertaken at the defendant’s request, for which the contract fixes no remuneration, may be compensated on a quantum meruit. That remains so where the claimants mistakenly believe they are acting under the contract, but the defendant knows the work is being requested for a different purpose. The amount may be assessed by the value of the benefit in the round rather than solely by hours and hourly rates.

Property consultants agreed with a landowner that they would market land and earn 1% if their efforts caused or affected a sale at a higher price. The buyer’s £3 million offer was agreed before the consultants passed on information about gravel deposits, so the Slough County Court dismissed the £30,000 contractual claim. The judge nevertheless awarded £6,000 on a quantum meruit for later investigative work and a meeting requested by the landowner. The landowner appealed, contending that all services fell within the contract and that no quantum meruit could be awarded when the commission condition failed. The central issue was whether the later work was extra-contractual and separately remunerable.

1. Disposition. Lord Justice Lloyd dismissed the appeal. Lord Justice Aikens and Sir John Thomas agreed. The contractual commission failed because the increased offer had been agreed before the gravel information was supplied and was not affected by the claimants’ efforts.
2. Contractual boundary. Where an agency contract provides commission for negotiating a sale, a quantum meruit is not a substitute for that commission in respect of work performed under the contract. Distinct work done at the defendant’s request may, however, be remunerated separately. This was consistent with Debenham, Tewson & Chinnocks v Rimington [1990] 2 EGLR 21, where work connected with discussing value, rather than negotiating price, supported a quantum meruit when remuneration was not provided for.
3. Application. Until 18 November the claimants acted under the contract and at their own risk. After the defendant agreed the £3 million price, he asked for immediate information about the net value of the gravel and agreed to a meeting on 26 November. That meeting could not realistically have been intended to increase the already agreed price. It was requested for the defendant’s own information and went beyond the contract. The claimants’ mistaken belief that they were still acting under the contract did not prevent recovery.
4. Valuation. As the later work was outside the contract and no price or remuneration had been fixed for it, a quantum meruit was proper. The judge was entitled to assess the benefit in the round, rather than by hours and hourly rates alone. There was no appeal on quantum, and the criticism did not demonstrate an error of principle. The £6,000 award was justified.
5. Postscript. The court noted apparent non-compliance with s.18 of the Estate Agents Act 1979 and regulations made under it. It was unnecessary to decide the effect of non-compliance because the commission claim had failed and the point was not taken.

1. Court of Appeal (Civil Division): Appeal against the county court order dismissed; the £6,000 quantum meruit award upheld. [2012] EWCA Civ 175.
2. Slough County Court: HHJ Harris QC dismissed the £30,000 contractual claim and awarded £6,000 on a quantum meruit.