FCL (London) Ltd v Voice

The terms of an entirely oral agreement are matters of fact. The court must determine what the parties actually agreed from the evidence as a whole.

Relevant considerations include the witnesses’ evidence, contemporaneous and subsequent documents, and the inherent probabilities. These considerations interact. Where one alleged agreement would produce extreme or commercially improbable consequences, that may materially affect the factual assessment.

FCL (London) Ltd claimed payment of further fees from Lisa Voice under an alleged oral agreement concerning tax advice and assistance with disclosure of offshore funds to HMRC.

The parties agreed that the claimant had undertaken work and was entitled to some remuneration. They disputed the basis on which the fee was to be calculated and whether the original agreement had subsequently been varied in 2008 and 2009.

The central issues were the terms of the July 2007 agreement, the alleged variations, and whether any further sum was payable.

1. Applicable approach. The terms of an oral agreement are questions of fact, rather than questions of law. The court must determine what the parties actually agreed. The principles stated in Thorner v Major [2009] 1 WLR 776, Carmichael v National Power plc [1999] 1 WLR 2042 and BVM Management Ltd v Yeomans [2011] EWCA Civ 1254 were not disputed.
2. The assessment required consideration of three interacting matters: the evidence of witnesses present when the agreement was made; contemporaneous and pre-litigation documents; and inherent probabilities. The more extreme the consequences of one suggested agreement, the less likely it was that the parties intended those consequences.
3. The claimant’s evidence about the July 2007 agreement was rejected. It was commercially improbable that the defendant would agree to pay 10 per cent of savings which the claimant had not achieved, including a substantial fee dependent solely on HMRC’s decision not to pursue a possible capital tax liability.
4. The defendant’s account was accepted. The agreement was for a fee of 10 per cent of savings achieved through the claimant’s intervention, with an initial payment of £30,000 and further payments only if agreed. The subsequent documents materially supported that account.
5. The alleged oral variations in August 2008 and August 2009 were also rejected. The claimant’s contemporaneous correspondence was inconsistent with those alleged agreements and with the alleged fixed fee.
6. On the agreed basis, the claimant had already received more than was due. The claim therefore failed and was dismissed.